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Accounting Policies of Samruddhi Realty Ltd. Company

Mar 31, 2015

Basis of preparation of financial statements

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act ( to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a evision to an existing accounting standard requires a change in the accounting policy hitherto in use.

Use of estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported balances of assets and liabilities as on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Accounting estimates could change from period to period. Actual results could differ from these estimates.

The following significant accounting policies are adopted in the preparation and presentation of these financial statements:

1 Revenue recognition

Revenue from real estate projects is recognised when it is reasonably certain that the ultimate collection will be made and that there is a buyer's commitment to make the complete payment. 'Percentage of Completion Method' is used to recognise the revenues.

2 Fixed assets

(i) Fixed assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition and also include cost of installation wherever incurred.

(ii) Depreciation on fixed assets has been charged on written down value basis, as per the useful life of assets notified in Schedule II of the Companies Act, 2013. Leasehold land has been amortised over the period of the lease. Assets with individual value of less than Rs.5,000 are depreciated fully in the year of addition.

3 Inventories

The properties under development on the reporting date represents cost incurred in respect of the unsold area of the projects under development and cost incurred on the projects where revenue is yet to be recognised.

4 Investments

Long term Investments are valued at cost. Provision for diminution is made to recognise a decline, other than temporary, in the value of investments. Current investments are stated at lower of cost or market value.

5 Employee benefits

(a) Defined-contribution plans:

The Company has defined contribution plans (where Company pays pre-defined amounts and does not have any legal or informal obligation to pay additional sums) for post employment benefits (viz., Provident Fund), and the Company's contributions thereto are charged to Statement of profit and loss every year. The Company's contributions to State plan, namely, Employee Pension Scheme, 1995, are charged to Statement of profit and loss every year.

(b) Defined-benefit plan:

The Company has a defined benefit plan (viz., Gratuity) for employees, the liability for which is determined on the basis of valuation carried out by independent actuaries (under projected unit credit method) at the balance sheet date.

6 Foreign exchange transactions

(i) All receipts and expenditure in foreign currencies are recorded at rates prevailing on the date when the relevant transaction took place.

(ii) All monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at the year end and all exchange gains/ losses arising thereon are adjusted to the statement of profit and loss account.

7 Lease accounting

(i) Assets acquired under lease where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such lease is capitalised at the inception of the lease at the 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 and the interest cost is charged off to the Statment of profit and loss.

(ii) Assets acquired on lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating lease. Lease rentals on assets taken on operating lease are recognized as an expense in the Statement of profit and loss.

8 Borrowing costs

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of that asset till such time the asset is ready for its intended use. Other Borrowing Costs are recognised as an expense in the period in which they are

9 Taxes on income

Current tax -Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions as per the Income Tax Act, 1961, applicable rules and amendments thereof.

Deferred tax -Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are recognised and carried forward to the extent that there is a reasonable or virtual certainty, as may be applicable, that sufficient future taxable income will be available against which such deferred tax asset can be realised.

10 Earnings per share:

Annualized earnings/ (loss) per equity share (basic and diluted) is arrived at based on Net Profit/ (Loss) after Taxation to the weighted average number of equity shares.

11 Impairment of assets

An impairment loss is charged to the Statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

12 Provisions and contingent liabilities

Based on the best estimate of the management, provisions are determined of the outflow of economic benefits which are required to settle the obligation as at the reporting date. Where no reliable estimate can be made, disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possbile obligation that may, but probably will not, require an outflow of the Company's resources.

13 Cashflow

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities of the Company are segregated, accordingly.


Mar 31, 2014

Basis of preparation of financial statements

These financial statements are prepared under the historical cost basis of accounting and evaluated on a going concern basis, with revenues and expenses accounted for on their accrual to comply in all material aspects with the applicable accounting principles and applicable Accounting Standards notified U/s. 211(3C) of the Companies Act, 1956 and other relevant provisions of the Companies Act, 1956.

Use of estimates

The preparation of financial statements require estimates and assumptions to be made that affect the reported balances of assets as on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Accounting estimates could change from period to period. Actual results could differ from these estimates. Appropriate changes in estimates are made as and when the Managament becomes aware of the changes in the cirumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and if material, their effects are discolsed in the notes to the financial statements.

The following significant accounting policies are adopted in the preparation and presentation of these financial statements :

1 Revenue recognition

Revenue from real estate projects is recognised when it is reasonably certain that the ultimate collection will be made and that there is a buyer''s commitment to make the complete payment. ‘Percentage of Completion Method'' is used to recognise the revenues.

2 Fixed assets

(i) Fixed assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition and also include cost of installation wherever incurred.

(ii) Depreciation on fixed assets has been charged on written down value basis, pro-rata for the period of use, by adopting the revised rates of depreciation specified in Schedule XIV of the Companies Act,1956. Leasehold land has been amortised over the period of the lease. Assets with individual value of less than Rs.5,000 are depreciated fully in the year of addition.

3 Inventories

The properties under development on the reporting date represents cost incurred in respect of the unsold area of the projects under development and cost incurred on the projects where revenue is yet to be recognised.

4 Investments

Long term Investments are valued at cost. Provision for diminution is made to recognise a decline, other than temporary, in the value of investments. Current investments are stated at lower of cost or market value.

5 Employee benefits

(a) Defined-contribution plans:

The Company has defined contribution plans (where Company pays pre-defined amounts and does not have any legal or informal obligation to pay additional sums) for post employment benefits (viz., Provident Fund), and the Company''s contributions thereto are charged to Statement of profit and loss every year. The Company''s contributions to State plan, namely, Employee Pension Scheme, 1995, are charged to Statement of profit and loss every year.

(b) Defined-benefit plan:

The Company has a defined benefit plan (viz., Gratuity) for employees, the liability for which is determined on the basis of valuation carried out by independent actuaries (under projected unit credit method) at the balance sheet date.

6 Foreign exchange transactions

(i) All receipts and expenditure in foreign currencies are recorded at rates prevailing on the date when the relevant transaction took place.

(ii) All monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at the year end and all exchange gains/ losses arising thereon are adjusted to the statement of profit and loss account.

7 Lease accounting

(i) Assets acquired under lease where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such lease is capitalised at the inception of the lease at the 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 and the interest cost is charged off to the Statment of profit and loss.

(ii) Assets acquired on lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating lease. Lease rentals on assets taken on operating lease are recognized as an expense in the Statement of profit and loss.

8 Borrowing costs

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of that asset till such time the asset is ready for its intended use. Other Borrowing Costs are recognised as an expense in the period in which they are incurred.

9 Taxes on income

Current tax -Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions as per the Income Tax Act, 1961, applicable rules and amendments thereof.

Deferred tax -Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are recognised and carried forward to the extent that there is a reasonable or virtual certainty, as may be applicable, that sufficient future taxable income will be available against which such deferred tax asset can be realised.

10 Earnings per share:

Annualized earnings/ (loss) per equity share (basic and diluted) is arrived at based on Net Profit/ (Loss) after Taxation to the weighted average number of equity shares.

11 Impairment of assets

An impairment loss is charged to the Statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount

12 Provisions and contingent liabilities

Based on the best estimate of the management, provisions are determined of the outflow of economic benefits which are required to settle the obligation as at the reporting date. Where no reliable estimate can be made, disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possbile obligation that may, but probably will not, require an outflow of the Company''s resources.

13 Cashflow

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities of the Company are segregated, accordingly.

(c) As on the date of the Balance Sheet,

(i) The Company did not issue any equity shares as fully paid equity shares pursuant to contract(s) without payment being received in cash

(ii) Initial Public Offer (IPO)

During the year the company completed a public issue of 21,80,000 equity shares of Rs.10/- each for cash at a price of Rs.12/- each aggrerating to Rs.2,61,60,000/-. The premium of Rs.2/- per equity share amounting to Rs.43,60,000 has been credited to securities premium account. The share issue expenses have been set off against the securities premium account and the unabsorbed portion to the tune of Rs. 18,61,308 is debited to the statement of profit and loss for the year. Pursuant to the Public Issue, equity shares of the company have been listed on the Bombay Stock Exchange (SME) effective 12th April 2013.

(iii) The Company has issued 14,02,000 equity shares of Rs.10 each as fully paid-up bonus shares during the year. However, no buy back of any equity shares has been made as on the balance sheet date.

(iv) The Company has not issued any securities like Convertible Preference Shares, Convertible Debentures etc which are Convertible into equity / Preference Shares

2.11 Deferred taxes

Deferred tax is recognised subject to consideration of prudence on timing difference, being the difference between taxable income Deferred tax assets and deferred tax liabilities are offset when there is a legal enforceable right to set off assets against liabilities


Mar 31, 2013

Basis of preparation of financial statements

These financial statements are prepared under the historical cost basis of accounting and evaluated on a going concern basis, with revenues and expenses accounted for on their accrual to comply in all material aspects with the applicable accounting principles and applicable Accounting Standards notified U/s. 211 (3C) of the Companies Act, 1956 and other relevant provisions of the Companies Act, 1956.

Use of estimates

The preparation of financial statements require estimates and assumptions to be made that affect the reported balances of assets as on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Accounting estimates could change from period to period. Actual results could differ from these estimates. Appropriate changes in estimates are made as and when the Managament becomes aware of the changes in the cirumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and if material, their effects are discolsed in the notes to the financial statements.

The following significant accounting policies are adopted in the preparation and presentation of these financial statements:

1 Revenue recognition

Revenue from real estate projects is recognised when it is reasonably certain that the ultimate collection will be made and that there is a buyer''s commitment to make the complete payment. ''Percentage of Completion Method'' is used to recognise the revenues.

2 Fixed assets

(i) Fixed assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition and also include cost of installation wherever incurred.

(ii) Depreciation on fixed assets has been charged on written down value basis, pro-rata for the period of use, by adopting the revised rates of depreciation specified in Schedule XIV of the Companies Act, 1956. Leasehold land has been amortised over the period of the lease.

3 Inventories

The properties under development on the reporting date represents cost incurred in respect of the unsold area of the projects under development and cost incurred on the projects where revenue is yet to be recognised.

4 Investments

Long term Investments are valued at cost. Provision for diminution is made to recognise a decline, other than temporary, in the value of investments. Current investments are stated at lower of cost or market value.

5 Employee benefits

(a) Defined-contribution plans:

The Company has defined contribution plans (where Company pays pre-defined amounts and does not have any legal or informal obligation to pay additional sums) for post employment benefits (viz., Provident Fund), and the Company''s contributions thereto are charged to Statement of profit and loss every year. The Company''s contributions to State plan, namely, Employee Pension Scheme, 1995, are charged to Statement of profit and loss every year.

(b) Defined-benefit plan:

The Company has a defined benefit plan (viz., Gratuity) for employees, the liability for which is determined on the basis of valuation carried out by independent actuaries (under projected unit credit method) at the balance sheet date.

6 Foreign exchange transactions

(i) All receipts and expenditure in foreign currencies are recorded at rates prevailing on the date when the relevant transaction took place.

(ii) All monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at the year end and all exchange gains/ losses arising thereon are adjusted to the statement of profit and loss account.

7 Lease accounting

(i) Assets acquired under lease where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such lease is capitalised at the inception of the lease at the 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 and the interest cost is charged off to the Statment of profit and loss.

(ii) Assets acquired on lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating lease. Lease rentals on assets taken on operating lease are recognized as an expense in the Statement of profit and loss.

8 Borrowing costs

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of that asset till such time the asset is ready for its intended use. Other Borrowing Costs are recognised as an expense in the period in which they are incurred.

9 Taxes on income

Current tax -Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions as per the Income Tax Act, 1961, applicable rules and amendments thereof.

Deferred tax -Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are recognised and carried forward to the extent that there is a reasonable or virtual certainty, as may be applicable, that sufficient future taxable income will be available against which such deferred tax asset can be realised.

10 Earnings per share:

Annualized earnings/ (loss) per equity share (basic and diluted) is arrived at based on Net Profit/ (Loss) after Taxation to the weighted average number of equity shares.

11 Impairment of assets

An impairment loss is charged to the Statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount

12 Provisions and contingent liabilities

Based on the best estimate of the management, provisions are determined of the outflow of economic benefits which are required to settle the obligation as at the reporting date. Where no reliable estimate can be made, disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possbile obligation that may, but probably will not, require an outflow of the Company''s resources.

13 Cashflow

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities of the Company are segregated, accordingly.

 
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