Accounting Policies of Omaxe Ltd. Company
Mar 31, 2023
Significant Accounting Policies
1 Corporate information
Omaxe Limited is mainly into the business of developing
real estate properties for residential, commercial and
retail purposes. The shares of the Company are listed
on the National Stock Exchange of India Limited and the
BSE Limited. The registered office of the Company is at
Shop No. 19-B, First Floor, Omaxe Celebration Mall,
Sohna Road, Gurgaon, Haryana-122001 and Corporate
Office is situated at 7, LSC, Kalkaji, New Delhi-110019.
2 Significant Accounting Policies :(i) Basis of Preparation
The standalone financial statements of the
Company have been prepared in accordance with
the Companies (Indian Accounting Standards)
Rules 2015 (''INDAS'') issued by Ministry of
Corporate Affairs (''MCA'').
The financial statements for the year ended 31
March 2023 were authorised and approved by
the Board of Directors on 26 May, 2023.
The standalone financial statements have been
prepared on a going concern basis in accordance
with accounting principles generally accepted
in India. Further, the standalone financial
statements have been prepared on historical cost
basis except for certain financial assets, financial
liabilities, derivative financial instruments and
share based payments which are measured at
fair values as explained in relevant accounting
policies. The standalone financial statements are
presented in Rupees and all values are rounded
to the nearest crore, except when otherwise
indicated.
The Company follows IND AS 115 for revenue
recognition.
Revenue towards satisfaction of a performance
obligation is measured at the amount of
transaction price (net of variable consideration)
allocated to that performance obligations. The
transaction price of goods sold and services
rendered is net of variable consideration on
account of various discount and scheme as part
of contract.
Point of Time:(a) Real estate projects
The company derives revenue from
execution of real estate projects. Revenue
from Real Estate project is recognised
in accordance with INDAS 115 which
establishes a comprehensive framework
i n determini ng whether how much and
when revenue is to be recognised. Revenue
from real estate projects are recognised
upon transfer of control of promised real
estate property to customer at an amount
that reflects the consideration which the
company expects to receive in exchange for
such booking and is based on following 6
steps :
1 . Id entification of contract with
customers:-
The company accounts for contract
with a customer only when all the
following criteria are met:
- Parties (i.e. the company and the
customer) to the contract have
approved the contract (in writing,
orally or in accordance with business
practices) and are committed to
perform their respective obligations.
- The company can identify each
customer''s right regarding the goods
or services to be transferred.
- The company can identify the payment
terms for the goods or services to be
transferred.
- The contract has commercial
substance (i.e. risk, timing or amount
of the company''s future cash flow is
expected to change as a result of the
contract) and
- It is probable that the company will
collect the consideration to which it will
be entitled in exchange for the goods
or services that will be transferred to
the customer. Consideration may not
be the same due to discount rate etc.
2. Identify the separate performance
obligation in the contract:-
Performance obligation is a promise to
transfer to a customer:
⢠Goods or services or a bundle of
goods or services i.e. distinct or
a series of goods or services that
are substantially the same and are
transferred in the same way.
⢠If a promise to transfer goods or
services is not distinct from goods or
services in a contract, then the goods
or services are combined in a single
performance obligation.
⢠The goods or services that is promised
to a customer is distinct if both the
following criteria are met:
- The customer can benefit from the
goods or services either on its own
or together with resources that are
readily available to the customer (i.e.
the goods or services are capable
of being distinct) and
- The company''s promise to transfer
the goods or services to the customer
is separately identifiable from the
other promises in the contract i.e the
goods or services are distinct within
the context of the contract.
3 Satisfaction of the performance obligation:-
The company recognizes revenue when (or
as) the company satisfies a performance
obligation by transferring a promised goods
or services to the customer.
The real estate properties are transferred
when (or as) the customer obtains control
of the property.
4 Determination of transaction price:-
The transaction price is the amount of
consideration to which the company expects
to be entitled in exchange for transferring
promised goods or services to customer
excluding GST.
The consideration promised in a contract
with a customer may include fixed amount,
variable amount or both. In determining
transaction price, the company assumes
that goods or services will be transferred
to the customer as promised in accordance
with the existing contract and the contract
can''t be cancelled, renewed or modified.
5 Allocating the transaction price to the
performance obligation:-
The allocation of the total contract price
to various performance obligation are
done based on their standalone selling
prices, the stand alone selling price is the
price at which the company would sell
promised goods or services separately to
the customers.
6 Recognition of revenue when (or as)
the company satisfies a performance
obligation:
Performance obligation is satisfied at a
point in time if none of the criteria out of the
below three not met.
- The customer simultaneously receives
and consumes a benefit provided by
the company''s performance as the
company performs.
- The company''s performance
creates or enhances an asset that a
customer controls as asset is
created or enhanced or
- The company''s performance doesn''t
create an asset within an alternative
use to the company and the company
has an enforceable right to payment
for performance completed to date.
The company disaggregates revenue
from real estate projects on the basis
of nature of revenue.
Performance obligation is satisfied over
time if one of the criteria out of the following
three is met:
- The customer simultaneously receives
and consumes a benefit provided by
the company''s performance as the
company performs.
- The company''s performance creates
or enhances an asset that a customer
controls as asset is created or
enhanced or
- The company''s performance doesn''t
create an asset within an alternative
use to the company and the company
has an enforceable right to payment
for performance completed to date.
Therefore the revenue recognition for
a performance obligation is done over
time if one of the criteria is met out of
the above three.
Construction projects where the Company
is acting as contractor, revenue is
recognised in accordance with the terms of
the construction agreements. Under such
contracts, assets created does not have an
alternative use and the Company has an
enforceable right to payment. The estimated
project cost includes construction cost,
development and construction material
and overheads of such project. The
Company uses cost based input method
for measuring progress for performance
obligation satisfied over time. Under this
method , the Company recog nises revenue
in proportion to the actual project cost
incurred as against the total estimated
project cost. The management reviews
and revises its measure of progress
periodically and are considered as change
in estimates and accordingly, the effect of
such changes in estimates is recognised
prospectively in the period in which such
changes are determined. However, when
the total project cost is estimated to exceed
total revenues from the project, the loss is
recognized immediately. As the outcome of
the contracts cannot be measured reliably
during the early stages of the project,
contract revenue is recognised only to the
extent of costs incurred in the statement of
profit and loss.
Revenue of Lease Rental is recognised
over a period of time on an accrual basis in
accordance with the terms of contract as and
when the Company satisfies performance
obligations by delivery services as per
contractual agreed terms.
(c ) project Management Fee
Project Management fee is accounted as
revenue upon satisfaction of performance
obligation as per agreed terms.
(d) Interest Income
Interest due on delayed payments by
customers is accounted on accrual basis
except in cases where ultimate collection is
considered doubtful.
Revenue from trading activities is
accounted as revenue upon satisfaction of
performance obligation.
Dividend income is recognized when the
right to receive the payment is established.
Borrowing cost that are directly attributable to the
acquisition or construction of a qualifying asset
(including real estate projects) are considered
as part of the cost of the asset/project. All other
borrowing costs are treated as period cost and
charged to the statement of profit and loss in the
year in which incurred.
(iv) Property, Plant and EquipmentRecognition and initial measurement
Properties, plant and equipment are stated at
their cost of acquisition. The cost comprises
purchase price, borrowing cost, if capitalization
criteria are met and directly attributable cost of
bringing the asset to its working condition for
the intended use. Any trade discount and rebates
are deducted in arriving at the purchase price.
Subsequent costs are included in the asset''s
carrying amount or recognised as a separate
asset, as appropriate, only when it is probable
that future economic benefits associated with the
item will flow to the Company. All other repair and
maintenance costs are recognised in statement
of profit or loss as incurred.
subsequent measurement (depreciation and
useful lives)
Property plant and equipment are subsequently
measured at cost net of accumulated depreciation
and accumulated impairment losses, if any.
Depreciation on Property Plant and Equipment is
provided on written down value method based on
useful life of assets as specified in Schedule II to
the Companies Act, 2013 as under:
The Company based on management estimates
depreciates certain item i.e. Shuttering Material
and scaffolding over estimated useful life of 5
years considering obsolence as against 12 years
specified in Schedule II to Companies Act, 2013.
The management of the Company believes that
the estimated useful life of 5 years is realistic and
reflects fair approximation of the period over
which the assets are likely to be used.
De-recognition
An item of property, plant and equipment and any
significant part initially recognised is derecognized
upon disposal or when no future economic
benefits are expected from its use or disposal.
Any gain or loss arising on de-recognition of the
asset (calculated as the difference between the
net disposal proceeds and the carrying amount
of the asset) is included in the income statement
when the asset is derecognized.
On transition to Ind AS, the Company elected
to fair value land within property, plant and
equipment and used at value as deemed cost.
(v) Intangible AssetsRecognition and initial measurement
Intangible assets are stated at their cost of
acquisition. The cost comprises purchase price,
borrowing cost, if capitalization criteria are met
and directly attributable cost of bringing the asset
to its working condition for the intended use.
Any trade discount and rebates are deducted in
arriving at the purchase price.
Subsequent measurement (amortization and
useful lives)
Intangible assets comprising of ERP & other
computer software are stated at cost of
acquisition less accumulated amortization and
are amortised over a period of four years on
straight line method.
(vi) Impairment of Non-Financial assets
The Company assesses at each balance sheet
date whether there is any indication that an asset
may be impaired. If any such indication exists,
the Company estimates the recoverable amount
of the asset. If such recoverable amount of the
asset or the recoverable amount of the cash¬
generating unit to which the asset belongs is less
than It''s carrying amount, the carrying amount is
reduced to its recoverable amount. The reduction
is treated as an impairment loss and is recognized
in the statement of profit and loss.
(vii) Financial Instruments
(a) Financial assetsInitial recognition and measurement
Financial assets are recognised when the
Company becomes a party to the contractual
provisions of the financial instrument and are
measured initially at fair value adjusted for
transaction costs. However, trade receivables that
do not contain a significant financing component
are measured at transaction price.
(1) Financial instruments at amortised cost - the
financial instrument is measured at the
amortised cost if both the following conditions
are met:
(a) The asset is held within a business model
whose objective is to hold assets for
collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on
the principal amount outstanding.
After initial measurement, such financial
assets are subsequently measured
at amortised cost using the effective
interest rate (EIR) method. All other debt
instruments are measured at Fair Value
through other comprehensive income or
Fair value through profit and loss based on
Company''s business model.
(2) Investment in equity instruments of subsidiaries
(including partnership firms), jointventures and associates
Investment in equity instruments of subsidiaries,
joint ventures and associates are stated at cost
as per Ind AS 27 ''Separate Financial Statements''.
Where the carrying amount of an investment is
greater than its estimated recoverable amount,
it is assessed for recoverability and in case of
permanent diminution, provision for impairment
is recorded in statement of Profit and Loss. On
disposal of investment, the difference between
the net disposal proceeds and the carrying
amount is charged or credited to the Statement
of Profit and Loss.
(3) Other Equity investments - All other equity
investments in scope of INDAS 109 are measured
at fair value. Equity instruments which are held
for trading are generally classified as at fair
value through profit and loss (FVTPL). For all
other equity instruments, the Company decides
to classify the same either as at fair value
through other comprehensive income (FVOCI)
or fair value through profit and loss (FVTPL). The
Company makes such election on an instrument
by instrument basis. The classification is made
on initial recognition and is irrevocable.
(4) Mutual funds - All mutual funds in scope of Ind-
AS 109 are measured at fair value through profit
and loss (FVTPL).
De-recognition of financial assets
A financial asset is primarily de-recognised when
the rights to receive cash flows from the asset
have expired or the Company has transferred its
rights to receive cash flows from the asset.
(b) Financial liabilitiesInitial recognition and measurement
All financial liabilities are recognised initially
at fair value and transaction cost that are
attributable to the acquisition of the financial
liabilities are also adjusted. These liabilities are
carried at as amortised cost.
Subsequent to initial recognition, these liabilities
are measured at amortised cost using the
effective interest method. These liabilities include
borrowings and deposits.
de-recognition of financial liabilities
A financial liability is de-recognised when the
obligation under the liability is discharged or
cancelled or expired. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or on
the terms of an existing liability are substantially
modified, such an exchange or modification is
treated as the de-recognition of the original
liability and the recognition of a new liability. The
difference in the respective carrying amounts is
recognised in the statement of profit or loss.
Compound financial instrument are separated
into liability and equity components based on the
terms of the contract. On issuance of the said
instrument, the liability component is arrived
by discounting the gross sum at a market rate
for an equivalent non-convertible instrument.
This amount is classified as a financial liability
measured at amortised cost until it is extinguished
on conversion or redemption. The remainder of
the proceeds is recognised as equity component of
compound financial instrument. This is recognised
and included in shareholders'' equity, net of Income
tax effects, and not subsequently re-measured.
(d) Financial guarantee contracts
Financial guarantee contracts are those contracts
that require a payment to be made to reimburse
the holder for a loss it incurs because the
specified party fails to make a payment when due
in accordance with the terms of a debt instrument.
Financial guarantee contracts are recognised
initially as a liability at fair value, adjusted for
transaction costs that are directly attributable to
the issuance of the guarantee. Subsequently, the
liability is measured at the higher of the amount
of expected loss allowance determined as per
impairment requirements of Ind-AS 109 and the
amount recognised less cumulative amortization.
(e) Impairment of financial assets
The Company assesses on a forward looking
basis the expected credit losses associated with
its assets carried at amortised cost and FVOCI
debt instruments. The impairment methodology
applied depends on whether there has been a
significant increase in credit risk. Note 51 details
how the Company determines whether there has
been a significant increase in credit risk.
For trade receivables only, the Company applies
the simplified approach permitted by INDAS 109
Financial Instruments, which requires expected
lifetime losses to be recognised from initial
recognition of the receivables.
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 realize the
assets and settle the liabilities simultaneously.
Fair value is the price that would be received to
sell as 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.
The fair value of an asset or a liability is
measured using the assumptions that
market participants would use when
pricing the asset or liability, assuming that
market participants act in their economic
best interest.
A fair value measurement of a non¬
financial asset takes into account a market
participant''s ability to generate economic
benefits by using the asset in its highest and
best use or by selling it to another market
participant that would use the asset in its
highest and best use.
The company uses valuation techniques
that are appropriate in the circumstances
and for which sufficient date are available
to measure fair value, maximizing the use
of relevant observable inputs:
⢠Level 1- Quoted (unadjusted) market prices
in active markets for identical assets or
liabilities
⢠Level 2- Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is directly or
indirectly observable
⢠Level 3- Valuation techniques for which the
lowest level input that is significant to the
fair value measurement is unobservable
For assets and liabilities that are recognized in
the financial statements on a recurring basis,
the Company determines whether transfer have
occurred between levels in the hierarchy by re¬
assessing categorization (based on the lowest
level input that is significant to the fair value
measurement as a whole) at the end of each
reporting period.
For the purpose of fair value disclosure, the
Company has determined classes of assets and
liabilities on the basis of nature, characteristics
and risks of the asset or liability and the level of
the fair value hierarchy as explained above.
(ix) Inventories and Projects in progress(a) Inventories
(i) Building material and consumable stores
are valued at lower of cost and net realisable
value. Cost is determined on the basis of
the ''First in First out'' method.
(ii) Land is valued at lower of cost and net
realisable value. Cost is determined on
average method. Cost includes cost of
acquisition and all related costs.
(iii) Construction work in progress is valued at
lower of cost and net realisable value. Cost
includes cost of materials, services and
other related overheads related to project
under construction.
(iv) Completed real estate project for sale is
valued at lower of cost and net realizable
value. Cost includes cost of land, materials,
construction, services and other related
overheads.
(v) Stock in trade is valued at lower of cost and
net realisable value.
Projects in progress are valued at lower of
cost and net realisable value. Cost includes
cost of land, development rights, materials,
construction, services, borrowing costs and other
overheads relating to projects.
(x) Foreign currency translation(a) Functional and presentation currency
The financial statements are presented in
currency INR, which is also the functional
currency of the Company and presented in Crore.
(b) Foreign currency transactions and balances
i. Foreign currency transactions are recorded
at exchange rates prevailing on the date of
respective transactions.
ii. Financial assets and financial liabilities in
foreign currencies existing at balance sheet
date are translated at year-end rates.
iii. Foreign currency translation differences
related to acquisition of imported fixed
assets are adjusted in the carrying amount
of the related fixed assets. All other foreign
currency gain and losses are recognised in
the statement of profit and loss.
(xi) Retirement benefits
i. Contributions payable by the Company to
the concerned government authorities in
respect of provident fund, family pension
fund and employee state insurance are
charged to the statement of profit and loss.
ii. The Company is having Group Gratuity
Scheme with Life Insurance Corporation of
India. Provision for gratuity is made based
on actuarial valuation in accordance with
INDAS-19.
iii. Provision for leave encashment in respect
of unavailed leave standing to the credit of
employees is made on actuarial basis in
accordance with INDAS-19.
iv. Actuarial gains/loss resulting from re¬
measurement of the liability/asset are
included in other comprehensive income.
Mar 31, 2021
1 Corporate information
Omaxe Limited (âThe Companyâ) is a listed entity incorporated in India. Registered address of the Company is 19-B, First Floor, Omaxe Celebration Mall, Sohna Road, Gurgaon-122001, (Haryana) and Corporate Office is 7, LSC, Kalkaji, New Delhi-110019.
The company is into the business of developing real estate properties for residential, commercial and retail purposes.
2 Significant Accounting Policies :
(i) Basis of Preparation
The standalone financial statements of the Company have been prepared in accordance with the Companies (Indian Accounting Standards) Rules 2015 (âINDAS'') issued by Ministry of Corporate Affairs (âMCA'').
The financial statements for the year ended 31 March 2021 were authorised and approved for issue by the Board of Directors on 29th June, 2021.
(ii) Revenue Recognition
The Company follows IND AS 115 for revenue recognised
Revenue is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of returns and discounts to customers.
(a) Real estate projects
The company derives revenue from execution of real estate projects. Revenue from Real Estate project is recognised in accordance with INDAS 115 which establishes a comprehensive framework in determining whether how much and when revenue is to be recognised. Revenue from real estate projects are recognised upon transfer of control of promised real estate property to customer at an amount that reflects the consideration which the company expects to receive in exchange for such booking and is based on following 6 steps :
1. Identification of contract with customers:-
The company accounts for contract with a customer only when all the following criteria are met:
- Parties (i.e. the company and the
customer) to the contract have approved the contract (in writing, orally or in accordance with business practices) and are committed to
perform their respective obligations.
- The company can identify each
customer''s right regarding the goods or services to be transferred.
- The company can identify the payment terms for the goods or services to be transferred.
- The contract has commercial
substance (i.e. risk, timing or amount of the company''s future cash flow is expected to change as a result of the contract) and
- It is probable that the company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Consideration may not be the same due to discount rate etc.
2. Identify the separate performance
obligation in the contract:-
Performance obligation is a promise to transfer to a customer:
⢠Goods or services or a bundle of goods or services i.e. distinct or a series of goods or services that are substantially the same and are transferred in the same way.
⢠If a promise to transfer goods or services is not distinct from goods or services in a contract, then the goods or services are combined in a single performance obligation.
⢠The goods or services that is promised to a customer is distinct if both the following criteria are met:
- The customer can benefit from the goods or services either on its own or together with resources that are readily available to the customer (i.e. the goods or services are capable of being distinct) and
- The company''s promise to transfer the goods or services to the customer is separately identifiable from the other promises in the contract i.e the goods or services are distinct within the context of the contract.
3 Satisfaction of the performance obligation:-
The company recognizes revenue when (or as) the company satisfies a performance obligation by transferring a promised goods or services to the customer.
The real estate properties are transferred when (or as) the customer obtains control of the property.
4 Determination of transaction price:-
The transaction price is the amount of consideration to which the company expects to be entitled in exchange for transferring promised goods or services to customer excluding GST
The consideration promised in a contract with a customer may include fixed amount, variable amount or both. In determining transaction price, the company assumes that goods or services will be transferred to the customer as promised in accordance with the existing contract and the contract can''t be cancelled, renewed or modified.
5 Allocating the transaction price to the performance obligation:-
The allocation of the total contract price to various performance obligation are done based on their standalone selling prices, the stand alone selling price is the price at which the company would sell promised goods or services separately to the customers.
6 Recognition of revenue when (or as) the company satisfies a performance obligation:
Performance obligation is satisfied over time or at a point in time
Performance obligation is satisfied over time if one of the criteria out of the following three is met:
- The customer simultaneously receives and consumes a benefit provided by the company''s performance as the company performs.
- The company''s performance creates or enhances an asset that a customer controls as asset is created or enhanced or
- The company''s performance doesn''t create an asset within an alternative use to the company and the company has an enforceable right to payment for performance completed to date.
Therefore the revenue recognition for a performance obligation is done over time if one of the criteria is met out of the above three else revenue recognition for a performance obligation is done at point in time.
The company disaggregates revenue from real estate projects on the basis of nature of revenue.
Project Management fee is accounted as revenue upon satisfaction of performance obligation as per agreed terms.
Interest due on delayed payments by customers is accounted on accrual basis.
Revenue from trading activities is accounted as revenue upon satisfaction of performance obligation.
Dividend income is recognized when the right to receive the payment is established.
Borrowing cost that are directly attributable to the acquisition or construction of a qualifying asset (including real estate projects) are considered as part of the cost of the asset/project. All other borrowing costs are treated as period cost and charged to the statement of profit and loss in the year in which incurred.
(iv) Property, Plant and EquipmentRecognition and initial measurement
Properties, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognised in statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Depreciation on Property, Plant and Equipment is provided on written down value method based on the useful life of the asset as specified in Schedule II to the Companies Act, 2013. The management estimates the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in the case of steel shuttering and scaffolding, whose life is estimated as five years considering obsolence.
Cost of building constructed on land owned by third party under âBuild Own Transfer'' agreement is amortized over the period of the agreement.
An item of property, plant and equipment and any significant part initially recognised is derecognized
upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.
(v) Intangible AssetsRecognition and initial measurement
Intangible assets are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
Subsequent measurement (amortization and useful lives)
Intangible assets comprising of ERP & other computer software are stated at cost of acquisition less accumulated amortization and are amortised over a period of four years on straight line method.
(vi) Impairment of Non-Financial Assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than It''s carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss.
(vii) Financial Instruments(a) Financial assetsInitial recognition and measurement
Financial assets are recognised when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs
(1) Financial instruments at amortised cost - the financial instrument is measured at the amortised cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. All other debt instruments are measured at Fair Value through other comprehensive income or Fair value through profit and loss based on Company''s business model.
(2) Equity investments - All equity investments in scope of INDAS 109 are measured at fair value. Equity instruments which are held for trading are generally classified as at fair value through profit and loss (FVTPL). For all other equity instruments, the Company decides to classify the same either as at fair value through other comprehensive income (FVOCI) or fair value through profit and loss (FVTPL). The Company makes such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.
(3) Mutual funds - All mutual funds in scope of Ind-AS 109 are measured at fair value through profit and loss (FVTPL).
De-recognition of financial assets
A financial asset is primarily de-recognised when the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.
(b) Financial liabilitiesInitial recognition and measurement
All financial liabilities are recognised initially at fair value and transaction cost that are attributable to the acquisition of the financial liabilities are also adjusted. These liabilities are carried at as amortised cost.
Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method. These liabilities include borrowings and deposits.
De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or on the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
(c ) Compound financial instrument
Compound financial instrument are separated into liability and equity components based on the terms of the contract. On issuance of the said instrument, the liability component is arrived by discounting the gross sum at a market rate for an equivalent non-convertible instrument. This amount is classified as a financial liability measured at amortised cost until it is extinguished on conversion or redemption. The remainder of the proceeds is recognised as equity component of compound financial instrument. This is recognised and included in shareholders'' equity, net of Income tax effects, and not subsequently re-measured.
(d) Financial guarantee contracts
Financial guarantee contracts are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because
the specified party fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of expected loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognised less cumulative amortization.
(e) Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Note 47 details how the Company determines whether there has been a significant increase in credit risk.
For trade receivables only, the Company applies the simplified approach permitted by INDAS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
(f) 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 realize the assets and settle the liabilities simultaneously.
Fair value is the price that would be received to sell as 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.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The company uses valuation techniques that are appropriate in the circumstances and for which sufficient date are available to measure fair value, maximizing the use of relevant observable inputs:
⢠Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities
⢠Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
⢠Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfer have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosure, the Company has determined classes of assets and liabilities on the basis of nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
(ix) Inventories and Projects in progress(a) Inventories
(i) Building material and consumable stores are valued at lower of cost and net realisable value. Cost is determined on the basis of the âFirst in First out'' method.
(ii) Land is valued at lower of cost and net realisable value. Cost is determined on average method. Cost includes cost of acquisition and all related costs.
(iii) Construction work in progress is valued at lower of cost and net realisable value. Cost includes cost of materials, services and other related overheads related to project under construction.
(iv) Completed real estate project for sale is valued at lower of cost and net realizable value. Cost includes cost of land, materials, construction, services and other related overheads.
(v) Stock in trade is valued at lower of cost and net realisable value.
Projects in progress are valued at lower of cost and net realisable value. Cost includes cost of land, development rights, materials, construction, services, borrowing costs and other overheads relating to projects.
(x) Foreign currency translation(a) Functional and presentation currency
The financial statements are presented in currency INR, which is also the functional currency of the Company and presented in Crore.
(b) Foreign currency transactions and balances
i. Foreign currency transactions are recorded at exchange rates prevailing on the date of respective transactions.
ii. Financial assets and financial liabilities in foreign currencies existing at balance sheet
date are translated at year-end rates.
iii. Foreign currency translation differences related to acquisition of imported fixed assets are adjusted in the carrying amount of the related fixed assets. All other foreign currency gain and losses are recognised in the statement of profit and loss.
i. Contributions payable by the Company to the concerned government authorities in respect of provident fund, family pension fund and employee state insurance are charged to the statement of profit and loss.
ii. The Company is having Group Gratuity Scheme with Life Insurance Corporation of India. Provision for gratuity is made based on actuarial valuation in accordance with INDAS-19.
iii. Provision for leave encashment in respect of unavailed leave standing to the credit of employees is made on actuarial basis in accordance with INDAS-19.
iv. Actuarial gains/loss resulting from remeasurement of the liability/asset are included in other comprehensive income.
(xii) Provisions, contingent assets and contingentliabilities
A provision is recognized when:
⢠the Company has a present obligation as a result of a past event;
⢠it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
⢠a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
Basic earnings per share are calculated by dividing the net profit 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 for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
The company has applied INDAS 116 w.e.f 01.04.2019. In accordance with INDAS 116, the company recognises right of use assets representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of right of use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before commencement date less any lease incentive received plus any initial direct cost incurred and an estimate of cost to be incurred by lessee in dismantling and removing underlying asset or restoring the underlying asset or site on which it is located. The right of use asset is subsequently measured at cost less accumulated depreciation, accumulated impairment losses, if any, and adjusted for any re-measurement of lease liability. The right of use assets is depreciated using the Straight Line Method from the commencement date over the charter of lease term or useful life of right of use asset. The estimated useful life of right of use assets are determined on the same basis as those of Property, Plant and Equipment. Right of use asset are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in Statement of Profit and Loss.
The company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the company uses incremental borrowing rate.
The lease liability is subsequently re-measured by increasing the carrying amount to reflect interest on lease liability, reducing the carrying amount to reflect the lease payments made and re-measuring the carrying amount to reflect any reassessment or lease modification or to reflect revised-in-substance fixed lease payments. The company recognises amount of re-measurement of lease liability due to modification as an adjustment to write off use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of right of use assets is reduced to zero and there is further reduction in measurement of lease liability, the company recognises any remaining amount of the re-measurement in Statement of Profit and Loss.
The company has elected not to apply the requirements of INDAS 116 to short term leases of all assets that have a lease term of 12 months or less unless renewable on long term basis and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense over lease term.
i. Provision for current tax is made based on the tax payable under the Income Tax Act, 1961. Current income tax relating to items recognised outside profit and loss is recognised outside profit and loss (either in other comprehensive income or in equity).
ii. Deferred tax is recognised 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 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. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
(xvi) Cash and Cash Equivalent
Cash and Cash equivalent in the balance sheet
comprises cash at bank and cash on hand, demand deposits and short term deposits which are subject to an insignificant change in value. The amendment to INDAS-7 requires entities to provide disclosure of change in the liabilities arising from financing activities, including both changes arising from cash flows and non cash changes (such as foreign exchange gain or loss). The Company has provided information for both current and comparative period in cash flow statement.
(xvii)Significant management judgement in applying accounting policies and estimation of uncertainty(a) Significant management judgements
When preparing the financial statements, management undertakes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.
(b) Estimation of uncertainty related to Global Health Pandemic from COVID-19
The company has assessed the possible effect that may result from pandemic relating to COVID-19 on carrying amount of receivables, inventory, investments, advances and other assets & liabilities. In considering the assessment, the company has considered internal information and is highly dependent on estimates and circumstances as they evolve.
(c) Recognition of deferred tax assets
The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilized.
(d) Recoverability of advances/receivables
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding receivables and advances.
(e) Defined benefit obligation (DBO)
Management''s estimate of the DBO is based on a number of critical underlying assumptions
such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
At each balance sheet date based on management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding warranties and guarantees However the actual future outcome may be different from this judgement.
Inventory is stated at the lower of cost or net realisable value (NRV).
NRV for completed inventory is assessed including but not limited to market conditions and prices existing at the reporting date and is determined by the Company based on net amount that it expects to realise from the sale of inventory in the ordinary course of business.
NRV in respect of inventories under construction is assessed with reference to market prices (by referring to expected or recent selling price) at the reporting date less estimated costs to complete the construction, and estimated cost necessary to make the sale. The costs to complete the construction are estimated by management.
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of INDAS 116. Identification of a lease requires significant judgement. The company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.
The company determines the lease term as the non-cancellable period of lease, together with both periods covered by an option to extend the lease if the company is reasonably certain
to exercise that option and periods covered by an option to terminate the lease if the company is reasonably certain not to exercise that option. In exercise whether the company is reasonably certain to exercise an option to extend a lease or to exercise an option to terminate the lease, it considers all relevant facts and circumstances that create an economic incentive for the company to exercise the option to extend the lease or to exercise the option to terminate the lease. The company revises lease term, if there is change in non-cancellable period of lease. The discount rate used is generally based on incremental borrowing rate.
Management applies valuation techniques to determine the fair value of financial instruments
(where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument / assets. Management bases its assumptions on observable date as far as possible but this may not always be available. In that case Management uses the best relevant information available. Estimated fair values may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.
(j) Classification of assets and liabilities into current and non-current
The Management classifies assets and liabilities into current and non-current categories based on its operating cycle.
Mar 31, 2018
1 Corporate information
Omaxe Limited (âThe Companyâ) is a listed entity incorporated in India. Registered address of the Company is 19-B, First Floor, Omaxe Celebration Mall, Sohna Road, Gurgaon-122001, (Haryana) and Corporate Office is 7, LSC, Kalkaji, New Delhi-110019.
The company is into the business of developing real estate properties for residential, commercial and retail purposes.
2 Significant Accounting Policies :
(i) Basis of Preparation
The standalone financial statements of the Company have been prepared in accordance with the Companies (Indian Accounting Standards) Rules 2015 (âInd AS'') issued by Ministry of Corporate Affairs (âMCA'').
The financial statements for the year ended 31 March 2018 were authorized and approved for issue by the Board of Directors on 23rd May, 2018.
(ii) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of returns and discounts to customers.
(a) Real estate projects
Revenue from real estate projects is recognized on the âPercentage of Completion method'' (POC) of accounting on fulfillment of following conditions:
(1) All critical approvals necessary for commencement of the project have been obtained.
(2) The expenditure incurred on construction and development is not less than 25% of the total estimated construction and development cost.
(3) At least 25% of the saleable project area is secured by way of contracts or agreements with buyers.
(4) At least 10% of the total revenue as per the agreement of sale or any other legally enforceable documents are realized at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties to such contracts will comply with the payment terms as defined in the respective contracts.
The estimates of the projected revenues, projected profits, projected costs, cost to completion and the foreseeable losses are reviewed periodically by the management and any effect of changes in estimates is recognized in the period in which such changes are determined.
Unbilled revenue disclosed under other current financial assets represents revenue recognized based on percentage of completion method over and above amount due as per payment plan agreed with the customers. Amount received from customers which exceeds the cost and recognized profits to date on projects in progress, is disclosed as advance received from customers under other current liabilities. Any billed amount against which revenue is recognized but amount not collected is disclosed under trade receivables.
(b) Interest Income
Interest due on delayed payments by customers is accounted on accrual basis.
(c) Sale of completed real estate projects
Revenue from sale of completed real estate projects, land, development rights and sale/transfer of rights in agreements are recognized in the financial year in which agreements of such sales are executed and there is no uncertainty about ultimate collections.
(d) Income from construction contracts
Revenue from construction contracts is recognized on the âPercentage of Completion method'' of accounting.
Income from construction contracts is recognized by reference to the stage of completion of the contract activity as certified by the client.
Revenue on account of contract variations, claims and incentives are recognized upon determination or settlement of the contract.
(e) Income from trading sales
Revenue from trading activities is accounted for on accrual basis.
(f) Dividend income
Dividend income is recognized when the right to receive the payment is established.
(iii) Borrowing Costs
Borrowing cost that are directly attributable to the acquisition or construction of a qualifying asset (including real estate projects) are considered as part of the cost of the asset/project. All other borrowing costs are treated as period cost and charged to the statement of profit and loss in the year in which incurred.
(iv) Property, Plant and Equipment Recognition and initial measurement
Properties, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognized in statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Depreciation on Property, Plant and Equipment is provided on written down value method based on the useful life of the asset as specified in Schedule II to the Companies Act, 2013. The management estimates the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in the case of steel shuttering and scaffolding, whose life is estimated as five years considering obsolesce.
Cost of building constructed on land owned by third party under âBuild Own Transfer'' agreement is amortized over the period of the agreement.
De-recognition
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.
On transition to Ind AS, the Company has elected to fair value land within property, plant and equipment and fair value as on transition date has been taken as carrying value and subsequent company follows cost model.
(v) Intangible Assets
Recognition and initial measurement
Intangible assets are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
Subsequent measurement (amortization and useful lives)
Intangible assets comprising of ERP & other computer software are stated at cost of acquisition less accumulated amortization and are amortized over a period of four years on straight line method.
(vi) Impairment of Non-Financial Assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than It''s carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss.
(vii) Financial Instruments
(a) Financial assets
Initial recognition and measurement
Financial assets are recognized when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs
Subsequent measurement
(1) Financial instruments at amortized cost - the financial instrument is measured at the amortized cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. All other debt instruments are measured at Fair Value through other comprehensive income or Fair value through profit and loss based on Company''s business model.
(2) Equity investments - All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are generally classified as at fair value through profit and loss (FVTPL). For all other equity instruments, the Company decides to classify the same either as at fair value through other comprehensive income (FVOCI) or fair value through profit and loss (FVTPL). The Company makes such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.
(3) Mutual funds - All mutual funds in scope of Ind-AS 109 are measured at fair value through profit and loss (FVTPL).
De-recognition of financial assets
A financial asset is primarily derecognized when the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.
(b) Financial liabilities
Initial recognition and measurement
All financial liabilities are recognized initially at fair value and transaction cost that are attributable to the acquisition of the financial liabilities are also adjusted. These liabilities are carried at as amortized cost.
Subsequent measurement
Subsequent to initial recognition, these liabilities are measured at amortized cost using the effective interest method. These liabilities include borrowings and deposits.
De-recognition of financial liabilities
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or on the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
(c) Compound financial instrument
Compound financial instrument are separated into liability and equity components based on the terms of the contract. On issuance of the said instrument, the liability component is arrived by discounting the gross sum at a market rate for an equivalent non-convertible instrument. This amount is classified as a financial liability measured at amortized cost until it is extinguished on conversion or redemption. The remainder of the proceeds is recognized as equity component of compound financial instrument. This is recognized and included in shareholders'' equity, net of Income tax effects, and not subsequently re-measured.
(d) Financial guarantee contracts
Financial guarantee contracts are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified party fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of expected loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognized less cumulative amortization.
(e) Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortized cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Note 48 details how the Company determines whether there has been a significant increase in credit risk.
For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables.
(f) 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 recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
(viii) Fair value measurement
Fair value is the price that would be received to sell as 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.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The company uses valuation techniques that are appropriate in the circumstances and for which sufficient date are available to measure fair value, maximizing the use of relevant observable inputs:
- Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
- Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfer have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosure, the Company has determined classes of assets and liabilities on the basis of nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
(ix) Inventories and Projects in progress
(a) Inventories
(i) Building material and consumable stores are valued at lower of cost and net realizable value. Cost is determined on the basis of the âFirst in First out'' method.
(ii) Land is valued at lower of cost and net realizable value. Cost is determined on average method. Cost includes cost of acquisition and all related costs.
(iii) Construction work in progress is valued at lower of cost or net realizable value. Cost includes cost of materials, services and other related overheads related to project under construction.
(iv) Completed real estate project for sale and trading stock are valued at lower of cost or net realizable value. Cost includes cost of land, materials, construction, services and other related overheads.
(b) Projects in progress
Projects in progress are valued at lower of cost or net realizable value. Cost includes cost of land, development rights, materials, construction, services, borrowing costs and other overheads relating to projects.
(x) Foreign currency translation
(a) Functional and presentation currency
The financial statements are presented in currency INR, which is also the functional currency of the Company.
(b) Foreign currency transactions and balances
i. Foreign currency transactions are recorded at exchange rates prevailing on the date of respective transactions.
ii. Financial assets and financial liabilities in foreign currencies existing at balance sheet date are translated at year-end rates.
iii. Foreign currency translation differences related to acquisition of imported fixed assets are adjusted in the carrying amount of the related fixed assets. All other foreign currency gain and losses are recognized in the statement of profit and loss.
(xi) Retirement benefits
i. Contributions payable by the Company to the concerned government authorities in respect of provident fund, family pension fund and employee state insurance are charged to the statement of profit and loss.
ii. The Company is having Group Gratuity Scheme with Life Insurance Corporation of India. Provision for gratuity is made based on actuarial valuation in accordance with Ind AS-19.
iii. Provision for leave encashment in respect of unveiled leave standing to the credit of employees is made on actuarial basis in accordance with Ind AS-19.
iv. Actuarial gains/loss resulting from remeasurement of the liability/asset are included in other comprehensive income.
(xii) Provisions, contingent assets and contingent liabilities
A provision is recognized when:
- the Company has a present obligation as a result of a past event;
- it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
- a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
(xiii) Earnings per share
Basic earnings per share are calculated by dividing the net profit 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 for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
(xiv) Operating lease
Lease arrangements where the risk and rewards incident to ownership of an asset substantially vest with the less or are recognized as operating lease. Lease rent under operating lease are charged to statement of profit and loss on a straight line basis over the lease term except where scheduled increase in rent compensate the less or for expected inflationary costs.
(xv) Income Taxes
i. Provision for current tax is made based on the tax payable under the Income Tax Act, 1961. Current income tax relating to items recognized outside profit and loss is recognized (either in other comprehensive income or in equity).
ii. 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 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 realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.
(xvi)Cash and Cash Equivalent
Cash and Cash equivalent in the balance sheet comprises cash at bank and cash on hand, demand deposits and short term deposits which are subject to an insignificant change in value.
The amendment to Ind AS-7 requires entities to provide disclosure of change in the liabilities arising from financing activities, including both changes arising from cash flows and non cash changes (such as foreign exchange gain or loss). The Company has provided information for both current and comparative period in cash flow statement.
(xvii) Significant management judgment in applying accounting policies and estimation of uncertainty
Significant management judgmentsâ
When preparing the financial statements, management undertakes a number of judgmentsâ, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.
The following are significant management judgments in applying the accounting policies of the Company that have the most significant effect on the financial statements.
(a) Revenue
The Company recognizes revenue using the percentage of completion method. This requires estimation of the projected revenues, projected profits, projected costs, cost to completion and the foreseeable losses. These are reviewed periodically by the management and any effect of changes in estimates is recognized in the period in which such changes are determined.
(b) Recognition of deferred tax assets
The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilized.
Estimation of uncertainty (a) Recoverability of advances/receivables
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding receivables and advances.
(b) Defined benefit obligation (DBO)
Management''s estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
(c) Provisions
At each balance sheet date based on management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding warranties and guarantees. However the actual future outcome may be different from this judgment.
(d) Inventories
Inventory is stated at the lower of cost or net realizable value (NRV).
NRV for completed inventory is assessed including but not limited to market conditions and prices existing at the reporting date and is determined by the Company based on net amount that it expects to realize from the sale of inventory in the ordinary course of business.
NRV in respect of inventories under construction is assessed with reference to market prices (by referring to expected or recent selling price) at the reporting date less estimated costs to complete the construction, and estimated cost necessary to make the sale. The costs to complete the construction are estimated by management.
(e) Fair value measurements
Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument / assets. Management bases its assumptions on observable date as far as possible but this may not always be available. In that case Management uses the best relevant information available. Estimated fair values may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.
(f) Classification of assets and liabilities into current and non-current
The Management classifies assets and liabilities into current and non-current categories based on its operating cycle.
# Land Rs. 1,000.00 mn (1,000.00 mn) is mortgaged against borrowing (refer note 17.1) $ Office Buildings are mortgaged against borrowings (refer note 17.1)
~ Plant & Machinery are hypothecated against working capital loans (refer Note 22.1)
* Vehicles are hypothecated against the vehicle loan (refer note: 17.1)
Mar 31, 2017
A Significant Accounting Policies : 1 Corporate information
Omaxe Limited ("The Company") is a listed entity incorporated in India. Registered address of the Company is 19-B, First Floor, Omaxe Celebration Mall, Sohna Road, Gurgaon-122001, (Haryana) and Corporate Office is 7, LSC, Kalkaji, New Delhi-110019.
The company is into the business of developing real estate properties for residential, commercial and retail purposes.
2 Significant Accounting Policies :
(i) Basis of Preparation
The financial statements of the Company have been prepared in accordance with the Companies (Indian Accounting Standards) Rules 2015 (âInd AS'') issued by Ministry of Corporate Affairs (âMCA''). The Company has uniformly applied the accounting policies during the period presented.
For all periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended 31 March 2017 are the first financial statements, the Company has prepared in accordance with Ind AS. For the purpose of comparatives, financial statements for the year ended 31 March 2016 are also prepared under Ind AS.
The financial statements for the year ended 31 March 2017 were authorized and approved for issue by the Board of Directors on 28th May, 2017.
As these are the first financial statements of the Company under Ind AS. Refer note 51 for an explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position and financial performance.
(ii) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of returns and discounts to customers.
(a) Real estate projects
Revenue from real estate projects is recognized on the âPercentage of Completion method'' (POC) of accounting.
Revenue under the POC method is recognized on the basis of percentage of actual costs incurred, including land, construction and development cost of projects under execution subject, to such actual cost being 30 percent or more of the total estimated cost of projects.
The stage of completion under the POC method is measured on the basis of percentage that actual costs incurred on real estate projects including land, construction and development cost bears to the total estimated cost of the project.
Effective from 1st April 2012, in accordance with the âGuidance Note on Accounting for Real Estate Transactions (Revised) 2012â (referred to as âGuidance Noteâ), all projects commencing on or after the said date or projects where revenue is recognized for the first time on or after the said date, Revenue from real estate projects has been recognized on Percentage of Completion (POC) method provided the following conditions are met:
(1) All critical approvals necessary for commencement of the project have been obtained.
(2) The expenditure incurred on construction and development is not less than 25% of the total estimated construction and development cost.
(3) At least 25% of the saleable project area is secured by way of contracts or agreements with buyers.
(4) At least 10% of the total revenue as per the agreement of sale or any other legally enforceable documents are realized at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties to such contracts will comply with the payment terms as defined in the respective contracts.
The estimates of the projected revenues, projected profits, projected costs, cost to completion and the foreseeable losses are reviewed periodically by the management and any effect of changes in estimates is recognized in the period in which such changes are determined.
Unbilled revenue disclosed under other current financial assets represents revenue recognized based on percentage of completion method over and above amount due as per payment plan agreed with the customers. Amount received from customers which exceeds the cost and recognized profits to date on projects in progress, is disclosed as advance received from customers under other current liabilities. Any billed amount against which revenue is recognized but amount not collected is disclosed under trade receivables.
(b) Interest Income
Interest due on delayed payments by customers is accounted on accrual basis.
(c) Sale of completed real estate projects
Revenue from sale of completed real estate projects, land, development rights and sale/transfer of rights in agreements are recognized in the financial year in which agreements of such sales are executed and there is no uncertainty about ultimate collections.
(d) Income from construction contracts
Revenue from construction contracts is recognized on the âPercentage of Completion method'' of accounting.
Income from construction contracts is recognized by reference to the stage of completion of the contract activity as certified by the client.
Revenue on account of contract variations, claims and incentives are recognized upon determination or settlement of the contract.
(e) Income from trading sales
Revenue from trading activities is accounted for on accrual basis.
(f) Dividend income
Dividend income is recognized when the right to receive the payment is established.
(iii) Borrowing Costs
Borrowing cost that are directly attributable to the acquisition or construction of a qualifying asset (including real estate projects) are considered as part of the cost of the asset/ project. All other borrowing costs are treated as period cost and charged to the statement of profit and loss in the year in which incurred.
(iv) Property, Plant and Equipment Recognition and initial measurement
Properties, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognized in statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Depreciation on Property, Plant and Equipment is provided on written down value method based on the useful life of the asset as specified in Schedule II to the Companies Act, 2013. The management estimates the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in the case of steel shuttering and scaffolding, whose life is estimated as five years.
Cost of building constructed on land owned by third party under âBuild Own Transfer'' agreement is amortized over the period of the agreement.
De-recognition
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.
Transition to Ind AS
On transition to Ind AS, the Company has elected to fair value land within property, plant and equipment.
(v) Intangible Assets Recognition and initial measurement
Intangible assets are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
Subsequent measurement (amortization and useful lives)
Intangible assets comprising of ERP & other computer software are stated at cost of acquisition less accumulated amortization and are amortized over a period of four years on straight line method.
Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of all its intangible assets recognized as at 1 April 2015 measured as per the provisions of Previous GAAP and use that carrying value as the deemed cost of intangible assets.
(vi) Impairment of Non Financial Assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss.
(vii) Financial Instruments
(a) Financial assets Initial recognition and measurement
Financial assets are recognized when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs
Subsequent measurement
(1) Financial instruments at mortised cost - the financial instrument is measured at the mortised cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. All other debt instruments are measured at Fair Value through other comprehensive income or Fair value through profit and loss based on Company''s business model.
(2) Equity investments - All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are generally classified as at fair value through profit and loss (FVTPL). For all other equity instruments, the Company decides to classify the same either as at fair value through other comprehensive income (FVOCI) or fair value through profit and loss (FVTPL). The Company makes such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.
(3) Mutual funds - All mutual funds in scope of Ind-AS 109 are measured at fair value through profit and loss (FVTPL).
De-recognition of financial assets
A financial asset is primarily de-recognized when the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.
(b) Financial liabilities Initial recognition and measurement
All financial liabilities are recognized initially at fair value and transaction cost that are attributable to the acquisition of the financial liabilities are also adjusted. These liabilities are classified as amortized cost.
Subsequent measurement
Subsequent to initial recognition, these liabilities are measured at amortized cost using the effective interest method. These liabilities include borrowings and deposits.
De-recognition of financial liabilities
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or on the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
(c) Compound financial instrument
Compound financial instrument are separated into liability and equity components based on the terms of the contract. On issuance of the said instrument, the liability component is arrived by discounting the gross sum at a market rate for an equivalent non-convertible instrument. This amount is classified as a financial liability measured at amortized cost until it is extinguished on conversion or redemption. The remainder of the proceeds is recognized as equity component of compound financial instrument. This is recognized and included in shareholders'' equity, net of income tax effects, and not subsequently re-measured.
(d) Financial guarantee contracts
Financial guarantee contracts are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified party fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of expected loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognized less cumulative amortization.
(e) Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortized cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Note 48 details how the Company determines whether there has been a significant increase in credit risk.
For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables.
(f) 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 recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
(viii)Inventories and Projects in progress
(a) Inventories
(i) Building material and consumable stores are valued at cost, which is determined on the basis of the âFirst in First out'' method.
(ii) Land is valued at cost, which is determined on average method. Cost includes cost of acquisition and all related costs.
(iii) Construction work in progress is valued at cost. Cost includes cost of materials, services and other related overheads related to project under construction.
(iv) Completed real estate project for sale and trading stock are valued at lower of cost or net realizable value. Cost includes cost of land, materials, construction, services and other related overheads.
(b) Projects in progress
Projects in progress are valued at cost. Cost includes cost of land, materials, construction, services, borrowing costs and other overheads relating to projects.
(ix) Foreign currency translation
(a) Functional and presentation currency
The financial statements are presented in currency INR, which is also the functional currency of the Company.
(b) Foreign currency transactions and balances
i. Foreign currency transactions are recorded at exchange rates prevailing on the date of respective transactions.
ii. Financial assets and financial liabilities in foreign currencies existing at balance sheet date are translated at year-end rates.
iii. Foreign currency translation differences related to acquisition of imported fixed assets are adjusted in the carrying amount of the related fixed assets. All other foreign currency gains and losses are recognized in the statement of profit and loss.
(x) Retirement benefits
i. Contributions payable by the Company to the concerned government authorities in respect of provident fund, family pension fund and employee state insurance are charged to the statement of profit and loss.
ii. The Company is having Group Gratuity Scheme with Life Insurance Corporation of India. Provision for gratuity is made based on actuarial valuation in accordance with Ind AS-19.
iii. Provision for leave encashment in respect of unveiled leave standing to the credit of employees is made on actuarial basis in accordance with Ind AS-19.
iv. Actuarial gains/losses resulting from remeasurements of the liability/asset are included in other comprehensive income.
(xi) Provisions, contingent assets and contingent liabilities
A provision is recognized when:
- the Company has a present obligation as a result of a past event;
- it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
- a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
(xii) Earnings per share
Basic earnings per share are calculated by dividing the total comprehensive income 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 total comprehensive income for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity share.
(xiii) Operating lease
Lease arrangements where the risk and rewards incident to ownership of an asset substantially vest with the less or are recognized as operating lease. Lease rent under operating lease are charged to statement of profit and loss on a straight line basis over the lease term except where scheduled increase in rent compensate the less or for expected inflationary costs.
(xiv) Income Taxes
i. Provision for current tax is made based on the tax payable under the Income Tax Act, 1961. Current income tax relating to items recognized outside profit and loss is recognized outside profit and loss (either in other comprehensive income or in equity)
ii. 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 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. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.
(xv) Significant management judgment in applying accounting policies and estimation of uncertainty Significant management judgments
When preparing the financial statements, management undertakes a number of judgments, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.
The following are significant management judgments in applying the accounting policies of the Company that have the most significant effect on the financial statements.
(a) Revenue
The Company recognizes revenue using the percentage of completion method. This requires estimation of the projected revenues, projected profits, projected costs, cost to completion and the foreseeable
losses. These are reviewed periodically by the management and any effect of changes in estimates is recognized in the period in which such changes are determined.
(b) Recognition of deferred tax assets
The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilized.
Estimation of uncertainty (a) Recoverability of advances/receivables
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding receivables and advances.
(b) Defined benefit obligation (DBO)
Management''s estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
(c) Provisions
At each balance sheet date on the basis of management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding warranties and guarantees. However the actual future outcome may be different from this judgment.
Mar 31, 2016
A. Significant accounting policies
a. Basis of preparation of financial statements
The financial statements are prepared under historical cost convention, in accordance with the Accounting Principles Generally Accepted in India (âIndian GAAP'') and the provisions of the Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules, 2014 to the extent applicable.
b. Use of estimates
The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.
c. Fixed assets
Fixed assets are stated at historical cost less accumulated depreciation. Cost includes purchase price and all other attributable cost to bring the assets to its working condition for the intended use.
d. Depreciation
Depreciation on fixed assets is provided on written down value method based on the useful life of the asset as specified in Schedule II to the Companies Act, 2013. The management estimates the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in the case of steel shuttering and scaffolding material, whose life is estimated as five years.
Cost of building constructed on land owned by third party under âBuild Own Transfer'' agreement is amortized over the period of the agreement.
e. Intangible assets
Intangible assets comprising of ERP & other computer software are stated at cost of acquisition less accumulated amortization and are amortized over a period of four years on straight line method.
f. Borrowing costs
Borrowing cost that are directly attributable to the acquisition or construction of a qualifying asset (including real estate projects) are considered as part of the cost of the asset/project. All other borrowing costs are treated as period cost and charged to the statement of profit and loss in the year in which incurred.
g. Impairment of assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss.
h. Investments
Long-term investments are stated at cost. Provision for diminution, if any, in the value of each long-term investment is made to recognize a decline, other than of a temporary nature.
Current investments are stated at lower of cost or market value.
i. Inventories
i. Building material and consumable stores are valued at cost, which is determined on the basis of the âFirst in First out'' method.
ii. Land is valued at cost, which is determined on average method. Cost includes cost of acquisition and all related costs.
iii. Construction work in progress is valued at cost. Cost includes cost of materials, services and other related overheads related to project under construction.
iv. Completed real estate project for sale and trading stock are valued at lower of cost or net realizable value. Cost includes cost of land, materials, construction, services and other related overheads.
j. Projects in progress
Projects in progress are valued at cost. Cost includes cost of land, materials, construction, services, borrowing costs and other overheads relating to projects.
k. Revenue recognition
i. Real estate projects
Revenue from real estate projects is recognized on the âPercentage of Completion method'' (POC) of accounting.
Revenue under the POC method is recognized on the basis of percentage of actual costs incurred, including land, construction and development cost of projects under execution subject, to such actual cost being 30 percent or more of the total estimated cost of projects.
The stage of completion under the POC method is measured on the basis of percentage that actual costs incurred on real estate projects including land, construction and development cost bears to the total estimated cost of the project.
Effective from 1st April 2012, in accordance with the âGuidance Note on Accounting for Real Estate
Transactions (Revised) 2012â (referred to as âGuidance Noteâ), all projects commencing on or after the said date or projects where revenue is recognized for the first time on or after the said date, Revenue from real estate projects has been recognized on Percentage of Completion (POC) method provided the following conditions are met:
1. All critical approvals necessary for commencement of the project have been obtained.
2. The expenditure incurred on construction and development is not less than 25% of the total estimated construction and development cost.
3. At least 25% of the saleable project area is secured by way of contracts or agreements with buyers.
4. At least 10% of the total revenue as per the agreement of sale or any other legally enforceable documents are realised at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties to such contracts will comply with the payment terms as defined in the respective contracts.
The estimates of the projected revenues, projected profits, projected costs, cost to completion and the foreseeable losses are reviewed periodically by the management and any effect of changes in estimates is recognized in the period in which such changes are determined.
Unbilled revenue disclosed under other assets represents revenue recognized based on percentage of completion method over and above amount due as per payment plan agreed with the customers. Amount received from customers which exceeds the cost and recognized profits to date on projects in progress, is disclosed as advance received from customers under other current liabilities. Any billed amount against which revenue is recognized but amount not collected is disclosed under trade receivable.
ii. Interest due on delayed payments by customers is accounted on accrual basis.
iii. Revenue from sale of completed real estate projects, land, development rights and sale/transfer of rights in agreements are recognized in the financial year in which agreements of such sales are executed and there is no uncertainty about ultimate collections.
iv. Income from construction contracts
Revenue from construction contracts is recognized on the âPercentage of Completion method'' of accounting.
Income from construction contracts is recognized by reference to the stage of completion of the contract activity as certified by the client.
Revenue on account of contract variations, claims and incentives are recognized upon determination or settlement of the contract.
v. Income from trading sales
Revenue from trading activities is accounted for on accrual basis.
vi. Dividend income is recognized when the right to receive the payment is established.
l. Foreign currency transactions
i. Foreign currency transactions are recorded at exchange rates prevailing on the date of respective transactions.
ii. Current assets and current liabilities in foreign currencies existing at balance sheet date are translated at year-end rates.
iii. Foreign currency translation differences related to acquisition of imported fixed assets are adjusted in the carrying amount of the related fixed assets. All other foreign currency gains and losses are recognized in the statement of profit and loss.
iv. Foreign Exchange difference arising as a monetary item that, in substance, form part of company''s net investment is a non-integral foreign operation and is accumulated in a Foreign Currency Translation Reserve in the financial statement and at the time of disposal of net investment, it is recognized as income or expense.
m. Accounting for taxes on income
i. Provision for current tax is made based on the tax payable under the Income Tax Act, 1961.
ii. Deferred tax on timing differences between taxable and accounting income is accounted for, using the tax rates and the tax laws enacted or substantially enacted as on the balance sheet date. Deferred tax assets are recognized only when there is a reasonable certainty of their realization. Wherever there are unabsorbed depreciation or carry forward losses under Tax laws, Deferred tax assets are recognized only to the extent that there is a virtual certainty of their realization.
n. Retirement benefits
i. Contributions payable by the Company to the concerned government authorities in respect of provident fund, family pension fund and employee state insurance are charged to the statement of profit and loss.
ii. The Company is having Group Gratuity Scheme with Life Insurance Corporation of India. Provision for gratuity is made based on actuarial valuation in accordance with Revised AS-15.
iii. Provision for leave encashment in respect of unveiled leave standing to the credit of employees is made on actuarial basis in accordance with Revised AS-15.
o. Provisions, contingent liabilities and contingent assets
A provision is recognized when:
-the Company has a present obligation as a result of a past event;
-it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
-a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
p. Operating lease
Lease arrangements where the risk and rewards incident to ownership of an asset substantially vest with the less or are recognized as operating lease. Lease rent under operating lease are charged to statement of profit and loss on a straight line basis over the lease term.
q. Earnings per share
Basic earnings per share are 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 year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity share.
Mar 31, 2015
A. Basis of preparation of financial statements
The financial statements are prepared under historical cost convention,
in accordance with the Accounting Principles Generally Accepted in
India (''Indian GAAP'') and the provisions of the Companies Act, 2013
read with Rule 7 of Companies (Accounts) Rules, 2014 to the extent
applicable.
b. Use of estimates
The preparation of financial statements in conformity with the Generally
Accepted Accounting Principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent liabilities on the date of
the financial statements. Actual results could differ from those
estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
c. Fixed assets
Fixed assets are stated at historical cost less accumulated
depreciation. Cost includes purchase price and all other attributable
cost to bring the assets to its working condition for the intended use.
d. Depreciation
Depreciation on fixed assets is provided on written down value method
based on the useful life of the asset as specified in Schedule II to the
Companies Act, 2013. The management estimates the useful life of the
assets as prescribed in Schedule II to the Companies Act, 2013 except
in the case of steel shuttering and scaffolding material, whose life is
estimated as five years.
Cost of building constructed on land owned by third party under ''Build
Own Transfer'' agreement is amortized over the period of the agreement.
e. Intangible assets
Intangible assets comprising of ERP & other computer software are
stated at cost of acquisition less accumulated amortization and are
amortised over a period of four years on straight line method.
f. Borrowing costs
Borrowing cost that are directly attributable to the acquisition or
construction of a qualifying asset (including real estate projects) are
considered as part of the cost of the asset/project. All other
borrowing costs are treated as period cost and charged to the statement
of Profit and loss in the year in which incurred.
g. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable
amount of the cash-generating unit to which the asset belongs is less
than its carrying amount, the carrying amount is reduced to its
recoverable amount. The reduction is treated as an impairment loss and
is recognized in the statement of Profit and loss.
h. Investments
Long-term investments are stated at cost. Provision for diminution, if
any, in the value of each long-term investment is made to recognize a
decline, other than of a temporary nature.
Current investments are stated at lower of cost or market value.
i. Inventories
i. Building material and consumable stores are valued at cost, which is
determined on the basis of the ''First in First out'' method.
ii. Land is valued at cost, which is determined on average method. Cost
includes cost of acquisition and all related costs.
iii. Construction work in progress is valued at cost. Cost includes
cost of materials, services and other related overheads related to
project under construction.
iv. Completed real estate project for sale and trading stock are valued
at lower of cost or net realizable value. Cost includes cost of land,
materials, construction, services and other related overheads.
j. Projects in progress
Projects in progress are valued at cost. Cost includes cost of land,
materials, construction, services, borrowing costs and other overheads
relating to projects.
k. Revenue recognition
i. Real estate projects
Revenue from real estate projects is recognized on the ''Percentage of
Completion method'' (POC) of accounting.
Revenue under the POC method is recognized on the basis of percentage
of actual costs incurred, including land, construction and development
cost of projects under execution subject, to such actual cost being 30
percent or more of the total estimated cost of projects.
The stage of completion under the POC method is measured on the basis
of percentage that actual costs incurred on real estate projects
including land, construction and development cost bears to the total
estimated cost of the project.
Effective from 1st April 2012, in accordance with the "Guidance Note on
Accounting for Real Estate
Transactions (Revised) 2012" (referred to as "Guidance Note"), all
projects commencing on or after the said date or projects where revenue
is recognised for the first time on or after the said date, Revenue from
real estate projects has been recognised on Percentage of Completion
(POC) method provided the following conditions are met:
1. All critical approvals necessary for commencement of the project
have been obtained.
2. The expenditure incurred on construction and development is not
less than 25% of the total estimated construction and development cost.
3. At least 25% of the saleable project area is secured by way of
contracts or agreements with buyers.
4. At least 10% of the total revenue as per the agreement of sale or
any other legally enforceable documents are realised at the reporting
date in respect of each of the contracts and it is reasonable to expect
that the parties to such contracts will comply with the payment terms
as defined in the respective contracts.
The estimates of the projected revenues, projected Profit s, projected
costs, cost to completion and the foreseeable losses are reviewed
periodically by the management and any effect of changes in estimates
is recognized in the period in which such changes are determined.
Unbilled revenue disclosed under other assets represents revenue
recognized based on percentage of completion method over and above
amount due as per payment plan agreed with the customers. Amount
received from customers which exceeds the cost and recognized Profit s to
date on projects in progress, is disclosed as advance received from
customers under other current liabilities. Any billed amount against
which revenue is recognised but amount not collected is disclosed under
trade receivable.
ii. Interest due on delayed payments by customers is accounted on
receipts basis due to uncertainty of recovery of the same and is
treated as part of operating income.
iii. Revenue from sale of completed real estate projects, land,
development rights and sale/transfer of rights in agreements are
recognised in the financial year in which agreements of such sales are
executed and there is no uncertainty about ultimate collections.
iv. Income from construction contracts
Revenue from construction contracts is recognized on the ''Percentage of
Completion method'' of accounting.
Income from construction contracts is recognized by reference to the
stage of completion of the contract activity as certified by the client.
Revenue on account of contract variations, claims and incentives are
recognized upon determination or settlement of the contract.
v. Income from trading sales.
Revenue from trading activities is accounted for on accrual basis.
vi. Dividend income is recognized when the right to receive the payment
is established.
l. Foreign currency transactions
i. Foreign currency transactions are recorded at exchange rates
prevailing on the date of respective transactions.
ii. Current assets and current liabilities in foreign currencies
existing at balance sheet date are translated at year-end rates.
iii. Foreign currency translation differences related to acquisition of
imported fixed assets are adjusted in the carrying amount of the related
fixed assets. All other foreign currency gains and losses are
recognized in the statement of Profit and loss.
iv. Foreign Exchange difference arising as a monetary item that, in
substance, form part of company''s net investment is a non-integral
foreign operation and is accumulated in a Foreign Currency Translation
Reserve in the financial statement and at the time of disposal of net
investment, it is recognized as income or expense.
m. Accounting for taxes on income
i. Provision for current tax is made based on the tax payable under the
Income Tax Act, 1961.
ii. Deferred tax on timing differences between taxable and accounting
income is accounted for, using the tax rates and the tax laws enacted
or substantially enacted as on the balance sheet date. Deferred tax
assets are recognized only when there is a reasonable certainty of
their realization. wherever there are unabsorbed depreciation or carry
forward losses under Tax laws, Deferred tax assets are recognized only
to the extent that there is a virtual certainty of their realization.
n. Retirement benefits
i. Contributions payable by the Company to the concerned government
authorities in respect of provident fund, family pension fund and
employee state insurance are charged to the statement of Profit and
loss.
ii. The Company is having Group Gratuity Scheme with Life Insurance
Corporation of India. Provision for gratuity is made based on actuarial
valuation in
iii. Provision for leave encashment in respect of unveiled leave
standing to the credit of employees is made on actuarial basis in
accordance with Revised AS-15.
o. Provisions, contingent liabilities and contingent assets
A provision is recognized when:
- the Company has a present obligation as a result of a past event;
- it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation; and
- a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
p. Operating lease
Lease arrangements where the risk and rewards incident
to ownership of an assets substantially vest with the lessor are
recognized as operating lease. Lease rent under operating lease are
charged to statement of Profit and loss on a straight line basis over
the lease term.
q. Employee stock compensation cost
In respect of stock options granted by the Company, the intrinsic value
of the options (excess of market price of the shares over the exercise
price of the option) is treated as employee compensation cost and is
amortised over the vesting period.
r. Share issue expenses
Share issue expenses are adjusted against the securities premium
account.
s. Earnings per share
Basic earnings per share are 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 year attributable to equity shareholders and the weighted
average number of shares outstanding during the period are adjusted for
the effects of all dilutive potential equity share.
Mar 31, 2014
A. Basis of preparation of financial statements
The financial statements are prepared under historical cost convention,
in accordance with the Accounting Principles Generally Accepted in
India (''Indian GAAP'') and the provisions of Companies Act, 1956.
b. Use of estimates
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements. Actual results could differ from
those estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
c. Fixed assets
Fixed assets are stated at historical cost less accumulated
depreciation. Cost includes purchase price and all other attributable
cost to bring the assets to its working condition for the intended use.
d. Depreciation
Depreciation on fixed assets is provided on written down value method
in the manner and rates prescribed in Schedule XIV to the Companies
Act, 1956 except in the case of steel shuttering and scaffolding
material, which is treated as part of plant and machinery where the
estimated useful life based on technical evaluation has been determined
as five years.
Cost of building constructed on land owned by third party under ''Build
Own Transfer'' agreement is amortized over the period of the agreement.
e. Intangible assets
Intangible assets comprising of ERP & other computer software are
stated at cost of acquisition less accumulated amortization and are
amortised over a period of four years on straight line method.
f. Borrowing costs
Borrowing cost that are directly attributable to the acquisition or
construction of a qualifying asset (including real estate projects) are
considered as part of the cost of the asset/ project. All other
borrowing costs are treated as period cost and charged to the statement
of profit and loss in the year in which incurred.
g. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash- generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of profit and loss.
h. Investments
Long-term investments are stated at cost. Provision for diminution, if
any, in the value of each long-term investment is made to recognize a
decline, other than of a temporary nature.
Current investments are stated at lower of cost or market value.
i. Inventories
i. Building material and consumable stores are valued at cost, which is
determined on the basis of the ''First in First out'' method.
ii. Land is valued at cost, which is determined on average method. Cost
includes cost of acquisition and all related costs.
iii. Construction work in progress is valued at cost. Cost includes
cost of materials, services and other related overheads related to
project under construction.
iv. Completed real estate project for sale and trading stock are valued
at lower of cost or net realizable value. Cost includes cost of land,
materials, construction, services and other related overheads.
j. Projects in progress
Projects in progress are valued at cost. Cost includes cost of land,
materials, construction, services, borrowing costs and other overheads
relating to projects.
k. Revenue recognition
i. Real estate projects
Revenue from real estate projects is recognized on the ''Percentage of
Completion method'' (POC) of accounting.
Revenue under the POC method is recognized on the basis of percentage
of actual costs incurred, including land, construction and development
cost of projects under execution subject, to such actual cost being 30
percent or more of the total estimated cost of projects.
The stage of completion under the POC method is measured on the basis
of percentage that actual costs incurred on real estate projects
including land, construction and development cost bears to the total
estimated cost of the project.
Effective from 1st April 2012, in accordance with the "Guidance Note on
Accounting for Real Estate Transactions (Revised) 2012" (referred to as
"Guidance Note"), all projects commencing on or after the said date or
projects where revenue is recognised for the first time on or after the
said date, Revenue from real estate projects has been recognised on
Percentage of Completion (POC) method provided the following conditions
are met:
1. All critical approvals necessary for commencement of the project
have been obtained.
2. The expenditure incurred on construction and development is not
less than 25% of the total estimated construction and development cost.
3. At least 25% of the salable project area is secured by way of
contracts or agreements with buyers.
4. At least 10% of the total revenue as per the agreement of sale or
any other legally enforceable document are realised at the reporting
date in respect of each of the contracts and it is reasonable to expect
that the parties to such contracts will comply with the payment terms
as defined in the respective contracts.
The estimates of the projected revenues, projected profits, projected
costs, cost to completion and the foreseeable loss are reviewed
periodically by the management and any effect of changes in estimates
is recognized in the period in which such changes are determined.
Unbilled revenue disclosed under other assets represents revenue
recognized based on percentage of completion method over and above
amount due as per payment plan agreed with the customers. Amount
received from customers which exceeds the cost and recognized profits
to date on projects in progress, is disclosed as advance received from
customers under other current liabilities. Any billed amount against
which revenue is recognised but amount not collected is disclosed under
trade receivable.
ii. Interest due on delayed payments by customers is accounted on
receipts basis due to uncertainty of recovery of the same and is
treated as part of operating income.
iii. Revenue from sale of completed real estate projects, land,
development rights and sale/transfer of rights in agreements are
recognised in the financial year in which agreements of such sales are
executed and there is no uncertainty about ultimate collections.
iv. Income from construction contracts
Revenue from construction contracts is recognized on the ''Percentage of
Completion method'' of accounting.
Income from construction contracts is recognized by reference to the
stage of completion of the contract activity as certified by the
client.
Revenue on account of contract variations, claims and incentives are
recognized upon determination or settlement of the contract.
v. Income from trading sales
Revenue from trading activities is accounted for on accrual basis.
vi. Dividend income is recognized when the right to receive the payment
is established.
l. Foreign currency transactions
i. Foreign currency transactions are recorded at exchange rates
prevailing on the date of respective transactions.
ii. Current assets and current liabilities in foreign currencies
existing at balance sheet date are translated at year- end rates.
iii. Foreign currency translation differences related to acquisition of
imported fixed assets are adjusted in the carrying amount of the
related fixed assets. All other foreign currency gains and losses are
recognized in the statement of profit and loss.
iv. Foreign Exchange difference arising as a monetary item that, in
substance, form part of company''s net investment is a non-integral
foreign operation and is accumulated in a Foreign Currency Translation
Reserve in the financial statement and at the time of disposal of net
investment, it is recognized as income or expense.
m. Accounting for taxes on income
i. Provision for current tax is made based on the tax payable under the
Income Tax Act, 1961.
ii. Deferred tax on timing differences between taxable and accounting
income is accounted for, using the tax rates and the tax laws enacted
or substantially enacted as on the balance sheet date. Deferred tax
assets are recognized only when there is a reasonable certainty of
their realization. Wherever there are unabsorbed depreciation or carry
forward losses under Tax laws, Deferred tax assets are recognized only
to the extent that there is a virtual certainty of their realization.
n. Retirement benefits
i. Contributions payable by the Company to the concerned government
authorities in respect of provident fund, family pension fund and
employee state insurance are charged to the statement of profit and
loss.
ii. The Company is having Group Gratuity Scheme with Life Insurance
Corporation of India. Provision for gratuity is made based on actuarial
valuation in accordance with Revised AS-15.
iii. Provision for leave encashment in respect of unavailed leave
standing to the credit of employees is made on actuarial basis in
accordance with Revised AS-15.
o. Provisions, contingent liabilities and contingent assets
A provision is recognized when: the Company has a present obligation as
a result of a past event; it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation;
and a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
p. Operating lease
Lease arrangements where the risk and rewards incident to ownership of
an assets substantially vest with the lessor are recognized as
operating lease. Lease rent under operating lease are charged to
statement of profit and loss on a straight line basis over the lease
term.
q. Employee stock compensation cost
In respect of stock options granted by the Company, the intrinsic value
of the options (excess of market price of the shares over the exercise
price of the option) is treated as employee compensation cost and is
amortised over the vesting period.
r. Share issue expenses
Share issue expenses are adjusted against the securities premium
account.
s. Earnings per share
Basic earnings per share are 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 year attributable to equity shareholders and the weighted
average number of shares outstanding during the period are adjusted for
the effects of all dilutive potential equity share.
1.2 Terms / rights attached to shares
Equity
The company has only one class of equity shares having a par value of Rs.
10 per share. Each holder of equity shares is entitled to one vote per
share. The company declares and pays dividend in Indian rupees. The
dividend proposed by board of directors is subject to the approval of
the shareholders in the ensuing Annual General Meeting. In the event of
liquidation of the company, the holders of equity shares will be
entitled to receive remaining assets of the company, after distribution
of all preferential amounts. The distribution will be in proportion to
the number of equity shares held by the shareholders. During the year
ended March 31, 2014 the amount of proposed dividend recognised as
distribution to equity share holders is Rs. 0.50 per share (P.Y. Rs. 0.70
per share).
Preference
The Company has one class of preference shares and having a par value
of Rs. 10 per share. The preference shares carry a right to preferential
dividend of 0.1 % per annum in relation to capital paid on them and are
redeemable upon 20 years from the date of allotment with call and put
option for redemption after 10 years from the date of allotment. The
redemption of preference share shall be at a premium of 6% per annum
from the date of allotment over and above the total issue price per
preference share and premium will be prorate/proportionate to the
period of holding of these shares. The preference share holders shall
have a right to attend annual general meeting and vote on resolution
affecting their interest and on all resolution at every meeting where
payment of dividend are in arrears for specified period. The preference
shares cannot be redeemed unless they are fully paid or otherwise as
permitted by law from time to time. The premium payable on redemption
of preference shares shall be provided out of the profit of the company
or out of securities premium account before the preference shares are
redeemed. The company has chosen to pay premium on such redemption out
of securities premium account, therefore no appropriation out of profit
have been made. The terms and conditions may be modified/ varied/
amended with due approval.
1.5 Shares reserved for issue under options
The Company has adopted Omaxe ESOP Plan Beta in the Annual General
Meeting held on September 27, 2007. The total number of shares
available in the plan is 3% of the total issued and subscribed share
capital of the Company. However, no options have been granted till
date.
1.6 During the year ended March 31, 2014, the Company allotted
9,333,540 equity shares of Rs. 10/- each as bonus shares to the existing
share holders of the Company to the exception of promoter/promoter
group out of securities premium account, thereby, the paid up equity
share capital of the Company has increased by Rs. 93.34 mio. The Company
has not allotted any other fully paid shares except as above pursuant
to contract(s) without payment being received in cash and has neither
allotted any fully paid up shares by way of bonus shares nor has bought
back any class of shares during the period of five years immediately
preceding the balance sheet date. Earning per share for the previous
period/year has been restated for comparison purpose in line with AS-20
"Earnings per share".
Mar 31, 2013
A. Basis of preparation of financial statements
The financial statements are prepared under historical cost convention,
in accordance with the Accounting Principles Generally Accepted in
India (''Indian GAAP'') and the provisions of Companies Act, 1956.
b. Use of estimates
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements. Actual results could differ from
those estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
c. Fixed assets
Fixed assets are stated at historical cost less accumulated
depreciation. Cost includes purchase price and all other attributable
cost to bring the assets to its working condition for the intended use.
d. Depreciation
Depreciation on fixed assets is provided on written down value method
in the manner and rates prescribed in Schedule XIV to the Companies
Act, 1956 except in the case of steel shuttering and scaffolding
material, which is treated as part of plant and machinery where the
estimated useful life based on technical evaluation has been determined
as five years.
Cost of building constructed on land owned by third party under ''Build
Own Transfer'' agreement is amortized over the period of the agreement.
e. Intangible assets
Intangible assets comprising of ERP & other computer software are
stated at cost of acquisition less accumulated amortization and are
amortised over a period of four years on straight line method.
f. Borrowing costs
Borrowing cost that are directly attributable to the acquisition or
construction of a qualifying asset (including real estate projects) are
considered as part of the cost of the asset/ project. All other
borrowing costs are treated as period cost and charged to the statement
of profit and loss in the year in which incurred.
g. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of profit and loss.
h. Investments
Long-term investments are stated at cost. Provision for diminution, if
any, in the value of each long-term investment is made to recognize a
decline, other than of a temporary nature.
Current investments are stated at lower of cost or market value.
i. Inventories
i. Building material and consumable stores are valued at cost, which is
determined on the basis of the ''First in First out'' method.
ii. Land is valued at cost, which is determined on average method. Cost
includes cost of acquisition and all related costs.
iii. Construction work in progress is valued at cost. Cost includes
cost of materials, services and other related overheads related to
project under construction.
iv. Completed real estate project for sale and trading stock are valued
at lower of cost or net realizable value. Cost includes cost of
materials, services and other related overheads.
j. Projects in progress
Projects in progress are valued at cost. Cost includes cost of land,
materials, construction, services, borrowing costs and other overheads
relating to projects. Due to applicability of Guidance note on
Accounting for Real Estate Transactions (Revised) 2012 selling costs
have been charged to statement of profit and loss. Selling costs
incurred upto 31st March, 2012 and included in the project in progress
have continued to be carried forward as such.
k. Revenue recognition
i. Real estate projects
Revenue from real estate projects is recognized on the ''Percentage of
Completion method'' (POC) of accounting.
Revenue under the POC method is recognized on the basis of percentage
of actual costs incurred, including land, construction and development
cost of projects under execution subject, to such actual cost being 30
percent or more of the total estimated cost of projects.
The stage of completion under the POC method is measured on the basis
of percentage that actual costs incurred on real estate projects
including land, construction and development cost bears to the total
estimated cost of the project.
Effective from 1st April 2012, in accordance with the "Guidance Note on
Accounting for Real Estate Transactions (Revised) 2012" (referred to as
"Guidance Note"), all projects commencing on or after the said date or
projects where revenue is recognised for the first time on or after the
said date, Revenue from real estate projects has been recognised on
Percentage of Completion (POC) method provided the following conditions
are met:
1. All critical approvals necessary for commencement of the project
have been obtained.
2. The expenditure incurred on construction and development is not
less than 25% of the total estimated construction and development cost.
3. At least 25% of the saleable project area is secured by way of
contracts or agreements with buyers.
4. At least 10% of the total revenue as per the agreement of sale or
any other legally enforceable document are realised at the reporting
date in respect of each of the contracts and it is reasonable to expect
that the parties to such contracts will comply with the payment terms
as defined in the respective contracts.
The estimates of the projected revenues, projected profits, projected
costs, cost to completion and the foreseeable loss are reviewed
periodically by the management and any effect of changes in estimates
is recognized in the period in which such changes are determined.
Unbilled revenue disclosed under other assets represents revenue
recognized based on percentage of completion method over and above
amount due as per payment plan agreed with the customers. Amount
received from customers which exceeds the cost and recognized profits
to date on projects in progress, is disclosed as advance received from
customers under other current liabilities. Any billed amount against
which revenue is recognised but amount not collected is disclosed under
trade receivable.
ii. Interest due on delayed payments by customers is accounted on
receipts basis due to uncertainty of recovery of the same and is
treated as part of operating income.
iii. Income from construction contracts
Revenue from construction contracts is recognized on the ''Percentage of
Completion method'' of accounting.
Income from construction contracts is recognized by reference to the
stage of completion of the contract activity as certified by the
client.
Revenue on account of contract variations, claims and incentives are
recognized upon determination or settlement of the contract.
iv. Income from trading sales
Revenue from trading activities is accounted for on accrual basis.
v. Dividend income is recognized when the right to receive the payment
is established.
l. Foreign currency transactions
i. Foreign currency transactions are recorded at exchange rates
prevailing on the date of respective transactions.
ii. Current assets and current liabilities in foreign currencies
existing at balance sheet date are translated at year-end rates.
iii. Foreign currency translation differences related to acquisition of
imported fixed assets are adjusted in the carrying amount of the
related fixed assets. All other foreign currency gains and losses are
recognized in the statement of profit and loss.
iv. Foreign Exchange difference arising as a monetary item that, in
substance, form part of company''s net investment is a non-integral
foreign operation and is accumulated in a Foreign Currency Translation
Reserve in the financial statement and at the time of disposal of net
investment, it is recognized as income or expense.
m. Accounting for taxes on income
i. Provision for current tax is made based on the tax payable under the
Income Tax Act, 1961.
ii. Deferred tax on timing differences between taxable and accounting
income is accounted for, using the tax rates and the tax laws enacted
or substantially enacted as on the balance sheet date. Deferred tax
assets are recognized only when there is a reasonable certainty of
their realization. Wherever there are unabsorbed depreciation or carry
forward losses under Tax laws, Deferred tax assets are recognized only
to the extent that there is a virtual certainty of their realization.
n. Retirement benefits
i. Contributions payable by the Company to the concerned government
authorities in respect of provident fund, family pension fund and
employee state insurance are charged to the statement of profit and
loss.
ii. The Company is having Group Gratuity Scheme with Life Insurance
Corporation of India. Provision for gratuity is made based on actuarial
valuation in accordance with Revised AS-15.
iii. Provision for leave encashment in respect of unavailed leave
standing to the credit of employees is made on actuarial basis in
accordance with Revised AS-15.
o. Provisions, contingent liabilities and contingent assets
A provision is recognized when:
- the Company has a present obligation as a result of a past event;
- it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; and
- a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
p. Operating lease
Lease arrangements where the risk and rewards incident to ownership of
an assets substantially vest with the lessor are recognized as
operating lease. Lease rent under operating lease are charged to
statement of profit and loss on a straight line basis over the lease
term.
q. Employee stock compensation cost
In respect of stock options granted by the Company, the intrinsic value
of the options (excess of market price of the shares over the exercise
price of the option) is treated as employee compensation cost and is
amortised over the vesting period.
r. Share issue expenses
Share issue expenses are adjusted against the securities premium
account.
Mar 31, 2012
A. Basis of preparation of financial statements
The financial statements are prepared under historical cost convention,
in accordance with the Accounting Principles Generally Accepted in
India ('Indian GAAP') and the provisions of Companies Act, 1956.
b. Presentation and disclosure of financial statements.
During the year ended 31 March 2012, the revised Schedule VI notified
under the Companies Act 1956, has become applicable to the company, for
preparation and presentation of its financial statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of these financial statements.
However, it has significant impact on presentation and disclosures made
in the financial statements. The company has also reclassified the
previous year figures in accordance with the requirements applicable in
the current year.
c. Use of estimates
The preparation of financial statements in conformity with the Generally
Accepted Accounting Principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent liabilities on the date of
the financial statements. Actual results could differ from those
estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
d. Fixed assets
Fixed assets are stated at historical cost less accumulated
depreciation. Cost includes purchase price and all other attributable
cost to bring the assets to its working condition for the intended use.
e. Depreciation
Depreciation on fixed assets is provided on written down value method in
the manner and rates prescribed in Schedule XIV to the Companies Act,
1956 except in the case of steel shuttering and scaffolding material,
which is treated as part of plant and machinery where the estimated
useful life based on technical evaluation has been determined as five
years.
Cost of building constructed on land owned by third party under 'Build
Own Transfer' agreement is amortized over the period of the agreement.
f. Intangible assets
Intangible assets comprising of ERP & other computer software's are
stated at cost of acquisition less accumulated amortization and are
amortised over a period of four years on straight line method.
g. Borrowing costs
Borrowing cost that are directly attributable to the acquisition or
construction of a qualifying asset (including real estate projects) are
considered as part of the cost of the asset/ project. All other
borrowing costs are treated as period cost and charged to the statement
of Profit and loss in the year in which incurred.
h. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of Profit and loss.
i. Investments
Long-term investments are stated at cost. Provision for diminution, if
any, in the value of each long-term investment is made to recognize a
decline, other than of a temporary nature.
Current investments are stated at lower of cost or market value.
j. Inventories
i. Building material and consumable stores are valued at cost, which is
determined on the basis of the 'First in First out' method.
ii. Land is valued at cost, which is determined on average method. Cost
includes cost of acquisition and all related costs.
iii. Construction work in progress is valued at cost. Cost includes
cost of material, services and other related overheads related to
project under construction.
iv. Completed real estate project for sale and trading stock are valued
at lower of cost or net realizable value. Cost includes cost of
materials, services and other related overheads.
k. Projects in progress
Projects in progress are valued at cost. Cost includes cost of land,
materials, construction, services, borrowing costs and other overheads
relating to projects.
l. Revenue recognition
i. Real estate projects
Revenue from real estate projects is recognized on the 'Percentage of
Completion method' (POC) of accounting.
Revenues under the POC method is recognized on the basis of percentage
of actual costs incurred, including land, construction and development
cost of projects under execution subject, to such actual cost being 30
percent or more of the total estimated cost of projects.
The stage of completion under the POC method is measured on the basis
of percentage that actual costs incurred on real estate projects
including land, construction and development cost bears to the total
estimated cost of the project. The estimates of the projected
revenues, projected Profits, projected costs, cost to completion and the
foreseeable loss are reviewed periodically by the management and any
effect of changes in estimates is recognized in the period in which
such changes are determined.
Unbilled revenue disclosed under other assets represents revenue
recognized over and above amount due as per payment plan. Progress
billings which exceeds the cost and recognized Profits to date on
projects in progress ,the same is disclosed as advance received from
customers under other current liabilities. Any billed amount not
collected is disclosed under trade receivable.
ii. Interest due on delayed payments by customers is accounted on
receipts basis due to uncertainty of recovery of the same and is
treated as part of operating income.
iii. Income from construction contracts
Revenue from construction contracts is recognized on the 'Percentage of
Completion method' of accounting.
Income from construction contracts is recognized by reference to the
stage of completion of the contract activity as certified by the client.
Revenue on account of contract variations, claims and incentives are
recognized upon determination or settlement of the contract.
iv. Income from trading sales
Revenue from trading activities is accounted for on accrual basis.
v. Dividend income is recognized when the right to receive the payment
is established.
m. Foreign currency transactions
i. Foreign currency transactions are recorded at exchange rates
prevailing on the date of respective transactions.
ii. Current assets and current liabilities in foreign currencies
existing at balance sheet date are translated at year-end rates.
iii. Foreign currency translation differences related to acquisition of
imported fixed assets are adjusted in the carrying amount of the related
fixed assets. All other foreign currency gains and losses are recognized
in the statement of Profit and loss.
iv. Foreign Exchange difference arising as a monetary item that, in
substance, form part of company's net investment is a non-integral
foreign operation and is accumulated in a Foreign Currency Translation
Reserve in the financial statement until the disposal of net investment
at which time it is recognized as income or expenses.
n. Accounting for taxes on income
i. Provision for current tax is made based on the tax payable under the
Income Tax Act, 1961.
ii. Deferred tax on timing differences between taxable and accounting
income is accounted for, using the tax rates and the tax laws enacted
or substantially enacted as on the balance sheet date. Deferred tax
assets are recognized only when there is a reasonable certainty of
their realization. Wherever there are unabsorbed depreciation or carry
forward losses under Tax laws, Deferred tax assets are recognized only
to the extent that there is a virtual certainty of their realization.
o. Retirement benefits
i. Contributions payable by the Company to the concerned government
authorities in respect of provident fund, family pension fund and
employee state insurance are charged to the statement of Profit and
loss.
ii. The Company is having Group Gratuity Scheme with Life Insurance
Corporation of India. Provision for gratuity is made based on actuarial
valuation in accordance with Revised AS-15.
iii. Provision for leave encashment in respect of unavailed leave
standing to the credit of employees is made on actuarial basis in
accordance with Revised AS-15.
p. Provisions, contingent liabilities and contingent assets
A provision is recognized when: the Company has a present obligation as
a result of a past event; it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation;
and a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
q. Operating lease
Lease arrangements where the risk and rewards incident to ownership of
an assets substantially vest with the lessor are recognized as
operating lease. Lease rent under operating lease are charged to
statement of Profit and loss on a straight line basis over the lease
term.
r. Employee stock compensation cost
In respect of stock options granted by the Company, the intrinsic value
of the options (excess of market price of the shares over the exercise
price of the option) is treated as employee compensation cost and is
amortised over the vesting period.
s. Share issue expenses
Share issue expenses are adjusted against the securities premium
account.
1.2 Terms / rights attached to shares
Equity
The company has only one class of equity shares having a par value of
-10/- per share. Each holder of equity shares is entitled to one vote
per share. The company declares and pays dividend in Indian rupees. The
dividend proposed by board of directors is subject to the approval of
the shareholders in the ensuing Annual general meeting. In the event of
liquidation of the company, the holders of equity shares will be
entitled to receive remaining assets of the company, after distribution
of all preferential amounts. The distribution will be in proportion to
the number of equity shares held by the share holders.
Preference
The company has one class of preference shares having a par value of
-10/-per share. Each holder of preference shares shall not be entitled
to vote at any general meeting of the members of the Company in
relation to any of the matters solely by virtue of holding preference
shares. The preference Shares shall be eligible for dividend at the
rates prescribed by the Board of the Company at the time of issuance.
The Preference Shares shall be redeemed as per the terms of the issue.
No preference share capital has yet been issued by the company.
1.5 Shares reserved for issue under options
The Company has adopted Omaxe ESOP Plan Beta in the Annual General
Meeting held on September 27, 2007. The total number of shares
available in the plan is 3% of the total issued and subscribed share
capital of the Company. However, no options have been granted till
date.
Mar 31, 2011
A. Basis of preparation of financial statements
The financial statements are prepared under historical cost convention,
in accordance with the Accounting Principles Generally Accepted in
India ("Indian GAAP") and the provisions of Companies Act, 1956.
b. Use of estimates
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements. Actual results could differ from
those estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
c. Fixed assets
Fixed assets are stated at historical cost less accumulated
depreciation. Cost includes purchase price and all other attributable
cost to bring the assets to its working condition forthe intended use.
d. Depreciation
Depreciation on fixed assets is provided on written down value method
in the manner and rates prescribed in Schedule XIV to the Companies
Act, 1956 except in the case of steel shuttering and scaffolding
material, which is treated as part of plant and machinery where the
estimated useful life based on technical evaluation has been determined
as five years.
Cost of building constructed on land owned by third party under 'Build
Own Transfer' agreement is amortized over the period of the agreement.
e. Intangible assets
Intangible assets comprising of ERP & other computer software's are
stated at cost of acquisition less accumulated amortization and are
amortised over a period of four years on straight line method.
f. Borrowing costs
Borrowing cost that are directly attributable to the acquisition or
construction of a qualifying asset (including real estate projects) are
considered as part of the cost of the asset/project. All other
borrowing costs are treated as period cost and charged to the profit
and loss account in the year in which incurred.
g. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash- generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the profit and loss account.
h. Investments
Long-term investments are stated at cost. Provision for diminution, if
any, in the value of each long-term investment is made to recognize a
decline, other than of a temporary nature.
Current investments are stated at lower of cost or market value.
i. Inventories
i. Building material and consumable stores are valued at cost, which is
determined on the basis of the 'First in First out'method.
ii. Land is valued at cost, which is determined on average method. Cost
includes cost of acquisition and all related costs.
iii. Construction work in progress is valued at cost. Cost includes
cost of material, services and other related overheads related to
project under construction.
iv. Completed real estate project for sale and trading stock are valued
at lower of cost or net realizable value. Cost includes cost of
materials, services and other related overheads.
j. Projects in progress
Projects in progress are valued at cost. Cost includes cost of land,
materials, construction, services, borrowing costs and other overheads
relating to projects.
k. Revenue recognition
i. Real estate projects
Revenue from real estate projects is recognized on the 'Percentage of
Completion method' (POC) of accounting.
Revenues under the POC method is recognized on the basis of percentage
of actual costs incurred, including land, construction and development
cost of projects under execution subject, to such actual cost being 30
percent or more of the total estimated cost of projects.
The stage of completion under the POC method is measured on the basis
of percentage that actual costs incurred on real estate projects
including land, construction and development cost bears to the total
estimated cost of the project. The estimates of the projected revenues,
projected profits, projected costs,
cost to completion and the foreseeable loss are reviewed periodically
by the management and any effect of changes in estimates is recognized
in the period such changes are determined.
ii. Interest due on delayed payments by customers is accounted on
receipts basis due to uncertainty of recovery of the same.
iii. Income from construction contracts
Revenue from construction contracts is recognized on the 'Percentage of
Completion method' of accounting.
Income from construction contracts is recognized by reference to the
stage of completion of the contract activity as certified by the
client.
Revenue on account of contract variations, claims and incentives are
recognized upon determination or settlement of the contract.
iv. Income from trading sales
Revenue from trading activities is accounted for on accrual basis.
v. Dividend income is recognized when the right to receive the payment
is established.
I. Foreign currency transactions
i. Foreign currency transactions are recorded at exchange rates
prevailing on the date of respective transactions.
ii. Current assets and current liabilities in foreign currencies
existing at balance sheet date are translated at year-end rates.
iii. Foreign currency translation differences related to acquisition of
imported fixed assets are adjusted in the carrying amount of the
related fixed assets. All other foreign currency gains and losses are
recognized in the profit and loss account.
iv. Foreign Exchange difference arising as a monetary item that, in
substance, form part of company's net investment is a non-integral
foreign operation and is accumulated in a Foreign Currency Translation
Reserve in the financial statement until the disposal of net investment
at which time it is recognized as income or expenses.
m. Accounting for taxes on income
i. Provision for current tax is made based on the tax payable under the
Income Tax Act, 1 961.
ii. Deferred tax on timing differences between taxable and accounting
income is accounted for, using the tax rates and the tax laws enacted
or substantially enacted as on the balance sheet date. Deferred tax
assets are recognized only when there is a reasonable certainty of
their realization. Wherever there are unabsorbed depreciation or carry
forward losses under Tax laws, Deferred tax assets are recognized only
to the extent that there is a virtual certainty of their realization.
n. Retirement benefits
i. Contributions payable by the Company to the concerned government
authorities in respect of provident fund, family pension fund and
employee state insurance are charged to the profit and loss account.
ii. The Company is having Group Gratuity Scheme with Life Insurance
Corporation of India. Provision for gratuity is made based on actuarial
valuation in accordance with Revised AS-1 5.
iii. Provision for leave encashment in respect of unavailed leave
standing to the credit of employees is made on actuarial basis in
accordance with revised AS-1 5.
o. Provisions, contingent liabilities and contingent assets
A provision is recognized when:
- the Company has a present obligation as a result of a past event;
- it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; and
- a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
p. Operating lease
Lease arrangements where the risk and rewards incident to ownership of
an assets substantially vest with the lessor are recognized as
operating lease. Lease rent under operating lease are charged to profit
and loss account on a straight line basis over the lease term.
q. Employee stock compensation cost
In respect of stock options granted by the Company, the intrinsic value
of the options (excess of market price of the shares over the exercise
price of the option) is treated as employee compensation cost and is
amortised over the vesting period.
r. Share issue expenses
Share issue expenses are adjusted against the securities premium
account.
Mar 31, 2010
A. Basis of preparation of financial statements
The financial statements are prepared under historical cost convention
on the accrual basis of accounting in accordance with the Companies
Act, 1956 ("the Act") and the Accounting Principles Generally Accepted
in India (Indian GAAP) and to comply with the Accounting Standards
prescribed in Companies (Accounting Standard) Rules 2006 issued by the
Central Government in exercise of power conferred under Section 642(1)
(a) and relevant provisions of the Act.
b. Use of estimates
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements. Actual results could differ from
those estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
c. Fixed assets
Fixed assets are stated at historical cost less accumulated
depreciation. Cost includes purchase price and all other attributable
cost to bring the assets to its working condition for the intended use.
d. Depreciation
Depreciation on fixed assets is provided on written down value method
in the manner and rates prescribed in Schedule XIV to the Companies
Act, 1956 except in the case of steel shuttering and scaffolding
material, which is treated as part of plant and machinery where the
estimated useful life based on technical evaluation has been determined
as five years.
Cost of building constructed on land owned by third party under Build
Own Transfer agreement is amortized over the period of the agreement.
e. Intangible assets
Intangible assets comprising of ERP & other computer softwares are
stated at cost of acquisition less accumulated amortization and are
amortised over a period of four years on straight line method.
f. Borrowing costs
Borrowing cost that are directly attributable to the acquisition or
construction of a qualifying asset (including real estate projects) are
considered as part of the cost of the asset/project. All other
borrowing costs are treated as period cost and charged to the profit
and loss account in the year in which incurred.
g. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the profit and loss account.
h. Investments
Long-term investments are stated at cost. Provision for diminution, if
any, in the value of each long-term investment is made to recognize a
decline, other than of a temporary nature.
Current investments are stated at lower of cost or market value.
i. Inventories
i. Building material and consumable stores are valued at cost, which
is determined on the basis of the First in First out method.
ii. Land is valued at cost, which is determined on average method.
Cost includes cost of acquisition and all related costs.
iii. Construction work in progress is valued at cost. Cost includes
cost of material, services and other related overheads related to
project under construction.
iv. Completed real estate project for sale and trading stock are
valued at lower of cost or net realizable value. Cost includes cost of
materials, services and other related overheads.
j. Projects in progress
Projects in progress are valued at cost. Cost includes cost of land,
materials, construction, services, borrowing costs and other overheads
relating to projects.
k. Revenue recognition
i. Real estate projects
Revenue from real estate projects is recognized on the Percentage of
Completion method (POC) of accounting.
Revenues under the POC method is recognized on the basis of percentage
of actual costs incurred, including land, construction and development
cost of projects under execution subject, to such actual cost being 30
percent or more of the total estimated cost of projects.
The stage of completion under the POC method is measured on the basis
of percentage that actual costs incurred on real estate projects
including land, construction and development cost bears to the total
estimated cost of the project. The estimates of the projected revenues,
projected profits, projected costs, cost to completion and the
foreseeable loss are reviewed periodically by the management and any
effect of changes in estimates is recognized in the period such changes
are determined.
ii. Interest due on delayed payments by customers is accounted on
receipts basis due to uncertainty of recovery of the same.
iii. Income from construction contracts
Revenue from construction contracts is recognized on the Percentage of
Completion method of accounting.
Income from construction contracts is recognized by reference to the
stage of completion of the contract activity as certified by the
client.
Revenue on account of contract variations, claims and incentives are
recognized upon determination or settlement of the contract.
iv. Income from trading sales
Revenue from trading activities is accounted for on accrual basis.
v. Dividend income is recognized when the right to receive the payment
is established.
l. Foreign currency transactions
i. Foreign currency transactions are recorded at exchange rates
prevailing on the date of respective transactions.
ii. Current assets and current liabilities in foreign currencies
existing at balance sheet date are translated at year-end rates.
iii. Foreign currency translation differences related to acquisition of
imported fixed assets are adjusted in the carrying amount of the
related fixed assets. All other foreign currency gains and losses are
recognized in the profit and loss account.
iv. Foreign Exchange difference arising as a monetary item that, in
substance, form part of companys net investment is a non- integral
foreign operation and is accumulated in a Foreign Currency Translation
Reserve in the financial statement until the disposal of net investment
at which time it is recognized as income or expenses.
m. Accounting for taxes on income
i. Provision for current tax is made based on the tax payable under
the Income Ta x Act, 1961.
ii. Deferred tax on timing differences between taxable and accounting
income is accounted for, using the tax rates and the tax laws enacted
or substantially enacted as on the balance sheet date. Deferred tax
assets are recognized only when there is a reasonable certainty of
their realization. Wherever there are unabsorbed depreciation or carry
forward losses under Tax laws, Deferred tax assets are recognized only
to the extent that there is a virtual certainty of their realization.
n. Retirement benefits
i. Contributions payable by the Company to the concerned government
authorities in respect of provident fund, family pension fund and
employee state insurance are charged to the profit and loss account.
ii. The Company is having Group Gratuity Scheme with Life Insurance
Corporation of India. Provision for gratuity is made based on actuarial
valuation in accordance with Revised AS-15 of The Institute of
Chartered Accountants of India.
iii. Provision for leave encashment in respect of unavailed leave
standing to the credit of employees is made on actuarial basis in
accordance with revised AS-15 of The Institute of Chartered Accountants
of India.
o. Provisions, contingent liabilities and contingent assets
A provision is recognized when:
* the Company has a present obligation as a result of a past event;
* it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; and
* a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
p. Operating lease
Lease arrangements where the risk and rewards incident to ownership of
an assets substantially vest with the lessor are recognized as
operating lease. Lease rent under operating lease are charged to profit
and loss account on a straight line basis over the lease term.
q. Employee stock compensation cost
In respect of stock options granted by the Company, the intrinsic value
of the options (excess of market price of the shares over the exercise
price of the option) is treated as employee compensation cost and is
amortised over the vesting period.
r. Share issue expenses
Share issue expenses are adjusted against the securities premium
account.
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
More Information on Omaxe Ltd.
-
Omaxe Ltd. Tools
- Bulk Deals
-
Omaxe Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- Bonus
- BSE Price History
- NSE Price History
-
Omaxe Ltd. Key Financial Ratios
- Ratios
-
Omaxe Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Omaxe Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Omaxe Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Omaxe Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
