Mar 31, 2013
A. Basis for preparation of accounts
The Financial Statements have been prepared in accordance with the
Generally Accepted Accounting Principles in India ("GAAP") under the
historical cost convention on an accrual basis and in compliance with
the provisions of the Companies Act, 1956 and the mandatory Accounting
Standards prescribed in the Companies (Accounting Standards) Rules,
2006 issued by the Central Government in consultation with the National
Advisory Committee on Accounting Standards. The Accounting Policies
have been consistently applied by the company and are consistent with
those used in previous year.
Accounting Policies not specifically referred to otherwise are
consistent with the generally accepted accounting principles followed
by the company.
b. Fixed Assets and Depreciation
Fixed Assets are stated at cost less accumulated depreciation and any
impairment loss where the recoverable amount of the asset is estimated
to be lower than its carrying amount. The cost of an asset comprises
its purchase price and any directly attributable costs of bringing the
asset to its working condition for its intended use. Land and Capital
Work-in-progress are not depreciated. Other assets are depreciated
using the Straight Line Method, at the following rates;
- Buildings - 1.63%
- Computers - 16.21%
- Office Equipments - 13.91%
- Vehicles - 9.50%
- Furniture - 6.33%
- Plant & Machinery - 4.75%
Assets acquired under finance lease are depreciated on a Straight Line
Method over the lease term. Where there is a reasonable certainty that
the company shall obtain ownership of the assets at the end of the
lease term, such assets are depreciated at the rates prescribed under
Schedule XIV to the Companies Act, 1956.
When assets are disposed or retired, their cost and accumulated
depreciation are removed from the financial statements. Gain or Loss
arising from the disposal of an asset is determined as the difference
between the net disposal proceeds and the carrying amount of the asset
and is recognized in the income statement for the relevant year.
c. Impairment of Assets
As at each balance sheet date, the carrying amount of assets is tested
for impairment so as to determine:
(i) the provision for impairment loss, if any, required; or
(ii) the reversal, if any, required of impairment loss recognized in
previous periods.
Impairment loss is recognized when the carrying amount of an asset
exceeds its recoverable amount.
Recoverable amount is determined:
(i) in the case of an individual asset, at the higher of the net
selling price and the value in use;
(ii) in the case of a cash generating unit (a group of assets that
generates identified, independent cash flows), at the higher of the
cash generating unit''s net selling price and the value in use.
(Value in use is determined as the present value of estimated future
cash flows from the continuing use of an asset and from its disposal at
the end of its useful life)
d. Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments and are carried
at lower of cost and fair value determined on an individual investment
basis whereas all other investments are classified as long term
investments and are carried at cost except provision for diminution in
value is made to recognize a decline other than temporary as specified
in Accounting Standard (AS-13) on "Accounting for Investments"
e. Leases
(i) Assets acquired under leases where the Company has substantially
all the risks and rewards of ownership are classified as finance
leases. Such assets are capitalised at the inception of the lease at
the lower of the fair value or the present value of minimum lease
payments and a liability is created for an equivalent amount. Each
lease rental paid is allocated between the liability and the interest
cost, so as to obtain a constant periodic rate of interest on the
outstanding liability for each period.
(ii) Assets leased out under operating leases are capitalised. Rental
income is recognised on accrual basis over the lease term.
f. Inventories
(i) Construction materials, Raw Materials, components, stores and
spares are valued at lower of cost calculated on First in First Out
Basis (FIFO) or Net Realisable Value. Costs comprise of all direct
costs incurred in bringing the inventories to their present location.
(ii) Contract Work in Progress are valued at Lower of Cost or Net
Realisable Value. Cost includes direct materials, labour, construction
expenses & other related overheads.
g. Trade Receivables
Trade Receivables are stated at their nominal value or discount value,
as reduced by appropriate allowances for estimated irrecoverable
amounts, if any.
h. Borrowings
Interest-bearing loans and overdrafts are recorded at the proceeds
received. Finance charges, including premiums payable on settlement or
redemption and direct issue costs, are accounted for on an accrual
basis to the Statement of Profit and Loss using effective interest
method and are added to the carrying amount of the instrument to the
extent that they are not settled in the period in which they arise.
i. Trade payables
Trade payables are stated at their nominal value.
j. Revenue Recognition
Revenue is recognised based on the nature of activity when
consideration can be reasonably measured and there exists reasonable
certainty of its recovery.
(i) Revenue from construction/project related activity is recognised as
follows:
- Cost plus Contracts: Contract revenue is determined by adding the
aggregate cost plus proportionate margin as agreed with the customer.
Percentage of completion is determined as a proportion of cost
incurred-to-date to the total estimated contract cost. Full Provision
is made for any loss in the period in which it is foreseen. Variations
in contract work, claims and incentive payments are included to the
extent that they have been agreed with the customer. Where the outcome
of the contract cannot be estimated reliably, contract revenue is
recognised to the extent of contract costs incurred. Contract costs are
recognised as expenses in the period in which they are incurred.
(ii) Rent: Revenue is recognised on accrual basis.
(iii) Interest: Revenue is recognised on a time proportion basis taking
into account the amount outstanding and the rate applicable.
(iv) Scrap sales are accounted upon realization.
(v) Other items of income are accounted as and when the right to
receive arises.
k. Employee Benefits
Salaries, social security contributions, paid annual leave, bonuses are
recognised as an expense in the year when the employees have rendered
their services to the company. Sick leave is recognised when the
absence occurs.
The company contributes to an employee provident fund for the benefit
of its employees. The Company charges the cost of such contributions as
incurred.
Provision for gratuity is made on the basis of Management Estimates as
against actuarial valuation carried up to FY 2012
Provision for leave encashment is made on the basis of Management
Estimates as against actuarial valuation carried up to FY 2012.
l. Borrowing costs
Borrowing costs that are attributable to the acquisition, construction
or production of a qualifying asset are capitalised as part of cost of
such asset till such time as the asset is ready for its intended use or
sale. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognised as an expense in the period in
which they are incurred.
m. Foreign Currency Translations
(i) Conversion - All monetary items denominated in foreign currency are
reflected at the closing exchange rates prevailing on the Balance Sheet
date; the resultant exchange differences are recognized in the
Statement of Profit and Loss. Non-monetary items, which are carried in
terms of historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the transaction.
(ii) Initial Recognition - Income and Expenditure items involving
foreign exchange are translated at the exchange rate prevailing on the
dates of transaction.
(iii) Exchange Differences - Exchange differences arising on foreign
exchange transactions settled during the year are recognized in the
Statement of Profit and Loss for the year.
n. Taxes on Income
(i) Current Tax: Provision for Income Tax is determined in accordance
with the provisions of Income Tax Act, 1961.
(ii) Deferred Tax: Deferred Tax is recognised on timing differences
being the difference between the taxable incomes and accounting incomes
that originate in one year and are capable of reversal in one or more
subsequent years. Deferred tax assets are recognised only if there is a
reasonable certainty of their realization.
o. Use of Estimates
The presentation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Although these estimates are based
on management''s best knowledge of current events and actions the
Company may undertake in future, actual results ultimately may differ
from the estimates. Any revision to accounting estimates is recognised
prospectively in future periods.
p. Expenditure and provisions
Expenses are accounted on accrual basis and provisions are made for all
known losses and liabilities.
A provision is recognised when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
q. Segment Reporting policies
The main business of the Company is construction of residential and
commercial properties, operating and maintaining infrastructure
facilities and all other related activities which revolve around the
main business and as such there are no separate reportable segments as
specified in Accounting Standard (AS-17) on "Segment Reporting". The
Company is primarily operating in India, which is considered as a
single geographical segment.
Mar 31, 2010
(a) Basis for preparation of accounts
The Financial Statements have been prepared in accordance with the
Generally Accepted Accounting Principles in India ("GAAP") under the
historical cost convention on an accrual basis and in compliance with
the provisions of the Companies Act, 1956 and the mandatory Accounting
Standards prescribed in the Companies (Accounting Standards) Rules,
2006 issued by the Central Government in consultation with the National
Advisory Committee on Accounting Standards. The Accounting Policies
have been consistently applied by the Company and are consistent with
those used in previous year.
Accounting Policies not specifically referred to otherwise are
consistent with the generally accepted accounting principles followed
by the Company.
(b) Fixed Assets and Depreciation
Fixed Assets are stated at cost less accumulated depreciation and any
impairment loss where the recoverable amount of the asset is estimated
to be lower than its carrying amount. The cost of an asset comprises
its purchase price and any directly attributable costs of bringing the
asset to its working condition for its intended use.
Land and Capital Work-in-progress are not depreciated. Other assets are
depreciated using the Straight Line Method, at the rates and in the
manner specified in Schedule XIV to the Companies Act, 1956 Assets
acquired under finance lease are depreciated on a Straight Line Method
over the lease term. Where there is a reasonable certainty that the
Company shall obtain ownership of the assets at the end of the lease
term, such assets are depreciated at the rates prescribed under
Schedule XIV to the Companies Act, 1956.
When assets are disposed or retired, their cost and accumulated
depreciation are removed from the financial statements. Gain or Loss
arising from the disposal of an asset is determined as the difference
between the net disposal proceeds and the carrying amount of the asset
and is recognized in the income statement for the relevant year.
(c) Impairment of Assets
As at each balance sheet date, the carrying amount of assets is tested
for impairment so as to determine:
(i) the provision for impairment loss, if any, required; or
(ii) the reversal, if any, required of impairment loss recognised in
previous periods.
Impairment loss is recognised when the carrying amount of an asset
exceeds its recoverable amount.
Recoverable amount is determined:
(i) in the case of an individual asset, at the higher of the net
selling price and the value in use;
(ii) in the case of a cash generating unit (a group of assets that
generates identified, independent cash flows), at the higher of the
cash generating unitÃs net selling price and the value in use.
Value in use is determined as the present value of estimated future
cash flows from the continuing use of an asset and from its disposal at
the end of its useful life.
(d) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments and are carried
at lower of cost and fair value determined on an individual investment
basis whereas all other investments are classified as long term
investments and are carried at cost except provision for diminution in
value is made to recognize a decline other than temporary as specified
in Accounting Standard (AS-13) on "Accounting for Investments"
(e) Leases
(i) Assets acquired under leases where the Company has substantially
all the risks and
rewards of ownership are classified as finance leases. Such assets are
capitalised at the inception of the lease at the lower of the fair
value or the present value of minimum lease payments and a liability is
created for an equivalent amount. Each lease rental paid is allocated
between the liability and the interest cost, so as to obtain a constant
periodic rate of interest on the outstanding liability for each period.
(ii) Assets leased out under operating leases are capitalised. Rental
income is recognised on accrual basis over the lease term.
(f) Inventories
(i) Construction materials, raw materials, components, stores and
spares are valued at lower of cost calculated on First in First Out
Basis (FIFO) or Net Realisable Value. Costs comprise of all direct
costs incurred in bringing the inventories to their present location.
(ii) Contract Work in Progress are valued at lower of Cost or Net
Realisable Value. Cost includes direct materials, labour, construction
expenses & other related overheads.
(g) Sundry Debtors
Sundry Debtors are stated at their nominal value or discount value, as
reduced by appropriate allowances for estimated irrecoverable amounts,
if any.
(h) Borrowings
Interest-bearing loans and overdrafts are recorded at the proceeds
received. Finance charges, including premiums payable on settlement or
redemption and direct issue costs, are accounted for on an accrual
basis to the profit and loss account using effective interest method
and are added to the carrying amount of the instrument to the extent
that they are not settled in the period in which they arise.
(i) Trade payables
Trade payables are stated at their nominal value.
(j) Revenue Recognition
Revenue is recognised based on the nature of activity when
consideration can be reasonably measured and there exists reasonable
certainty of its recovery.
(i) Revenue from construction/project related activity is recognised as
follows:
- Cost Plus Contracts: Contract revenue is determined by adding the
aggregate cost plus proportionate margin as agreed with the customer.
- Fixed Price Contracts: Contract revenue is recognised using the
percentage completion method by adding the aggregate cost and
proportionate margin of the contract with an allowance for
contingencies as detailed below.
Project Completion % (PCP) Contingency Provision %
Less than 20% 100%
Between 20% and 75% 20%
Between 76% and 99% 15%
Percentage of completion is determined as a proportion of cost
incurred-to-date to the total estimated contract cost. Full Provision
is made for any loss in the period in which it is foreseen. Variations
in contract work, claims and incentive payments are included to the
extent that they have been agreed with the customer. Where the outcome
of the contract cannot be estimated reliably, contract revenue is
recognised to the extent of contract costs incurred. Contract costs are
recognised as expenses in the period in which they are incurred.
(ii) Rent : Revenue is recognised on accrual basis.
(iii) Interest: Revenue is recognised on a time proportion basis taking
into account the amount outstanding and the rate applicable.
(iv) Scrap sales are accounted upon realization.
(v) Other items of income are accounted as and when the right to
receive arises.
(k) Employee Benefits
Salaries, social security contributions, paid annual leave, bonuses are
recognised as an expense in the year when the employees have rendered
their services to the Company. Sick leave is recognised when the
absence occurs.
The Company contributes to an employee provident fund for the benefit
of its employees. The Company charges the cost of such contributions as
incurred.
Provision for gratuity is made on the basis of actuarial valuation and
the liability is funded through an insurance policy issued by Life
Insurance Corporation of India.
Provision for leave encashment is made on the basis of actuarial
valuation.
(l) Borrowing costs
Borrowing costs that are attributable to the acquisition, construction
or production of a qualifying asset are capitalised as part of cost of
such asset till such time as the asset is ready for its intended use or
sale. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognised as an expense in the period in
which they are incurred.
(m) Foreign Currency Translations
(i) Conversion - All monetary items denominated in foreign currency are
reflected at the
closing exchange rates prevailing on the Balance Sheet date; the
resultant exchange differences are recognized in the profit and loss
account. Non-monetary items, which are carried in terms of historical
cost denominated in a foreign currency, are reported using the exchange
rate at the date of the transaction.
(ii) Initial Recognition - Income and Expenditure items involving
foreign exchange are translated at the exchange rate prevailing on the
dates of transaction.
(iii) Exchange Differences - Exchange differences arising on foreign
exchange transactions settled during the year are recognized in the
Profit & Loss Account for the year.
(n) Taxes on Income
(i) Current Tax:
Provision for Income Tax is determined in accordance with the
provisions of Income Tax Act, 1961. No provision for Tax is made in
view of taxable loss for the Assessment Year 2010-11.
(ii) Fringe Benefit Tax:
Consequent to the abolition of Fringe Benefit Tax (FBT) by the Finance
Bill 2009, no provision has been made for Fringe Benefit Tax for the
year ended March 31, 2010.
(iii) Deferred Tax Provision:
Deferred Tax is recognised on timing differences being the difference
between the taxable income and accounting income that originate in one
year and are capable of reversal in one or more subsequent years.
Deferred tax assets are recognised only if there is a reasonable
certainty of their realization.
(o) Use of Estimates
The presentation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Although these estimates are based
on managementÃs best knowledge of current events and actions the
Company may undertake in future, actual results ultimately may differ
from the estimates. Any revision to accounting estimates is recognised
prospectively in future periods.
(p) Expenditure and provisions
Expenses are accounted on accrual basis and provisions are made for all
known losses and liabilities.
A provision is recognised when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
(q) Segment Reporting policies
The main business of the Company is construction of residential and
commercial properties, operating and maintaining infrastructure
facilities and all other related activities which revolve around the
main business and as such there are no separate reportable segments as
specified in Accounting Standard (AS-17) on "Segment Reporting". The
Company is primarily operating in India, which is considered as a
single geographical segment.
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