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Accounting Policies of SKIL Infrastructure Ltd. Company

Mar 31, 2015

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Financial Statements are prepared as a going concern under historical cost convention on an accrual basis following the historical cost convention in accordance with generally accepted accounting principles (GAAP) and in compliance with the Accounting Standards referred in Section 133 and other provisions of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

1.2 USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires that the Management of the Company makes estimates & assumptions that affect the reported amounts of income & expenses of the period, the reported balances of assets & liabilities & the disclosures relating to contingent liabilities as of the date of the financial statements. Actual results could differ from estimates.

1.3 FIXED ASSETS

Fixed Assets are stated at cost of acquisition including expenses incidental to their acquisition less accumulated depreciation & impairment.

1.4 DEPRECIATION

a) The Company has changed its method of depreciation from Written Down Value Method ("WDV) to Straight Line Method ("SLM") with effect from 1st April 2014. As a result of the change in the method of depreciation, difference between the carrying value as per WDV Method and SLM Method has been recognized in the Proft & Loss Account.

b) Depreciation on tangible Fixed Assets is provided on Straight Line Method over the useful lives of the assets as prescribed under Part C of Schedule II of the Companies Act, 2013. Depreciation for assets purchased/sold during a period is proportionately charged. Further, the carrying value (net residual value) of assets whose remaining useful life is NIL as at 1st April, 2014 has been recognized in the opening balance of retained earnings.

c) Depreciation on Intangible Fixed Assets has been accounted as per AS-26-Intangible Assets.

1.5 INVESTMENTS

Current investments are carried at the lower of cost & quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the Management.

On disposal of investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

1.6 BORROWING COST:

Borrowing Cost that are directly attributable to the acquisition or construction of qualifying assets (net of income earned on temporary deployment of funds) are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial periods of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.7 REVENUE RECOGNITION

i. Revenues are recognised when it is earned and no significant uncertainty exists as to its ultimate collection and includes,

service tax, wherever applicable. ii. Interest income is recognized on a time proportion basis. Dividend is considered when the right to receive is established.

1.8 INVENTORIES

Inventories are measured at cost. Cost is determined on weighted average basis.

1.9 EMPLOYEE BENEFITS i. Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which relative service is rendered. ii. Post employment and other long term employee benefits are recognized as an expense in the Profit & Loss Account for the year in which the employee has rendered services. The expenses are recognized at the present value of the amount payable determined using the actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefit are charged to Profit & Loss Account.

1.10 IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.11 FOREIGN CURRENCY TRANSACTIONS:

i. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of the

transaction.

ii. Monetary items denominated in foreign currencies at the year end are restated at year end rates.

iii. Non monetary foreign currency items are carried at cost.

iv. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit & Loss Account.

1.12 DERIVATIVE INSTRUMENTS:

Derivative financial instruments are initially recorded at their fair value on the date of the derivative transaction and are re- measured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivatives are recorded in the Profit & Loss Account.

1.13 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.14 PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

1.15 PRELIMINARY AND ISSUE EXPENSES

Preliminary and Expenses related to issue of equity and equity related instruments are adjusted against Securities Premium Account.

1.16 INTANGIBLE ASSETS

Intangible assets are stated at cost of acquisition less accumulated amortization. Software, which is not integral part of the related hardware, is classifed as an intangible asset and is amortized over the useful life of three years. Amortization is done on straight line method.

1.17 LEASES

Where the Company is lessee

Leases where the lesser effectively retains substantially all the risk and benefits of ownership of the leased item, are classified as operating leases. Operating Lease payments are recognized as an expenses in the statement of Profit and Loss Account on a straight basis over the lease term.

1.18 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 year are adjusted for the effects of all dilutive potential equity shares.


Mar 31, 2014

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Financial Statements are prepared as a going concern under historical cost convention on an accrual basis following the historical cost convention in accordance with generally accepted accounting principles (GAAP) and in compliance with the Accounting Standards referred in Section 211 (3C) and other requirements of the Companies Act, 1956.

1.2 USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires that the Management of the Company makes estimates & assumptions that affect the reported amounts of income & expenses of the period, the reported balances of assets & liabilities & the disclosures relating to contingent liabilities as of the date of the financial statements. Actual results could differ from estimates.

1.3 FIXED ASSETS

Fixed Assets are stated at cost of acquisition including expenses incidental to their acquisition less accumulated depreciation & impairment.

1.4 DEPRECIATION

Depreciation on Fixed Assets is provided on the Written Down Value Method, at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

1.5 INVESTMENTS

Current investments are carried at the lower of cost & quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the Management.

1.6 BORROWING COST:

Borrowing Cost that are directly attributable to the acquisition or construction of qualifying assets (net of income earned on temporary deployment of funds) are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial periods of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.7 REVENUE RECOGNITION

i. Revenues are recognised when it is earned and no signifIcant uncertainty exists as to its ultimate collection and includes, service tax, wherever applicable. ii. Interest income is recognised on a time proportion basis. Dividend is considered when the right to receive is established.

1.8 INVENTORIES

Inventories are measured at cost. Cost is determined on weighted average basis.

1.9 EMPLOYEE BENEFITS

i. Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which relative service is rendered.

ii. Post employment and other long term employee benefits are recognized as an expense in the profit & Loss account for the year in which the employee has rendered services. The expenses are recognized at the present value of the amount payable determined using the actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefit are charged to Profit & Loss Account

1.10 IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identifIed as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.11 FOREIGN CURRENCY TRANSACTIONS:

i. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of the transaction.

ii. Monetary items denominated in foreign currencies at the year end are restated at year end rates. iii. Non monetary foreign currency items are carried at cost. iv. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit & Loss Account

1.12 DERIVATIVE INSTRUMENTS:

Derivative financial instruments are initially recorded at their fair value on the date of the derivative transaction and are re- measured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivatives are recorded in the Profit & Loss account.

1.13 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements

1.14 PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

1.15 PRELIMINARY AND ISSUE EXPENSES

Preliminary and Expenses related to issue of equity and equity related instruments are adjusted against Securities Premium Account.

1.16 INTANGIBLE ASSETS

Intangible assets are stated at cost of acquisition less accumulated Amortization. Software, which is not integral part of the related hardware, is classifed as an intangible asset and is amortized over the useful life of three years. Amortization is done on straight line method.

1.17 LEASES

Where the Company is lessee

Leases where the lesser effectively retains substantially all the risk and benefits of ownership of the leased item, are classifed as operating leases. Operating Lease payments are recognized as an expenses in the statement of profit and loss account on a straight basis over the lease term.

1.18 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 year are adjusted for the effects of all dilutive potential equity shares.

2.3 Right to Equity Shareholders :

The Company has only one class of Equity Share having par value of Rs.10 per share. Each Equity shareholder is eligible for one vote per share held. In the event of liquidation of the Company, the Equity shareholders will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amount. The distribution will be in proportionate to the number of equity share held by the shareholders.

2.4 In terms of the Scheme of Amalgamation and Arrangement of erstwhile SKIL Infrastructure Limited ("SKIL"), Horizon Coun- trywide Logistics Limited ("HCWLL") and Fastlane Districts & Logistics Limited ("FDLL") with Horizon Infrastructure Limited (name changed to SKIL or "the Company"), the Company has issued and alloted 20,58,31,232 equity shares ofRs. 10/- each fully paid up of the Company to the shareholders of erstwhile SKIL, HCWLL, FDLL. Consequent upon the said allotment, the paid up share capital of the Company has increased from Rs.1,074 Lacs/- to Rs. 21,657.12/- Lacs only. The Company has received listing approval from National Stock Exchange of India limited vide letter dated January 7, 2014 for the said shares.

4.1 Term loan from Bank / Financial Institution and Inter Corporate Deposits referred to above and Rs.46,483.25 Lacs included in current maturities of long term debt in Note No. 9 are secured as under: i) Rs.11,000.00 lacs from a Bank is secured by way of pledge of investments of the company as mentioned in Note No.12.1 and by way of Equitable mortgage of land owned by other Body Corporates.

ii) Term loan of Rs.8,790.02 Lacs from a Bank is secured by :

Exclusive pari passu charge on the entire movable and immovable assets, current assets of the Company both present & future.

Exclusive charge on immovable property of other Body Corporate. First pari-passu charge on immovable property of subsidiary Company. Corporate Guarantee given by subsidiary and other Body Corporate Personal guarantee given by a Director

iii) Term loan ofRs. 18,799.46 Lacs from Banks are secured by :

First pari-passu charge on the entire present & future project movable and immovable assets and all right, title & interest of the FDLL related to CFS Project of the Company. Second charge on present & future current assets of the Company.

First pari-passu charge on immovable property of other body corporates, and further secured by personal guarantee given by a Director.

iv) Term loan of Rs.4,040.00 Lacs from a Bank is secured by :

First mortgage and charge on all immovable and movable properties of the HIL, both present and future. Exclusive charge on immovable property of Subsidiary. pledge of investment of Shares in Subsidiary. Personal guarantee given by a two Directors of the Company. v) Term loan ofRs. 19,600.00 Lacs from a Bank is secured by way of Equitable Mortgage of land owned by other Body Corporate and also by Corporate Guarantee given by the same Company.

vi) Rs.23,000.00 Lacs from a Financial Institution is secured by way of pledge of investments of the company as mentioned in

Note No.12.1 and of investments of a subsidiary (SKIL Shipyard Holdings Private Limited) in certain equity shares. vii) Term loan & ICD of Rs.20,821..20 Lacs is secured by way of- pledge of Investments of the company as mentioned in Note no.12.1 and investments of a subsidiary (SKIL Shipyard Holdings Private Limited) in certain equity shares and further secured by way of hypothecation of entire fixed assets of the company & equitable mortgage of land owned by other Body Corporate. viii) Term loan of Rs.4000.00 Lacs is secured by way of- pledge of Investments of the company as mentioned in Note no.12.1 and investments of a subsidiary (SKIL Shipyard Holdings Private Limited) in certain equity shares and further secured by way of hypothecation of fixed assets of the others

4.3 Vehicles Loans referred to above and Rs.30.38 Lacs included in current maturities of long term debts in Note No.9 are secured by way of the hypothecation of the Specific vehicles financed. The loans are repayable in 36 to 60 monthly installments (Including interest) as per repayment schedule

4.4 As on March 31, 2014, the company has overdue ofRs. 138.00 Lacs and Rs.7,511.57 Lacs towards principal and interest amount respectively.

4.5 The maturity date of term loan from a bank of Rs. 20000.00 Lacs due for repayment on 22/09/2013 was extended by bank as per letter dated 25/10/2013 in four quarterly installments beginning from 31/12/2014.

7.1 The above Secured Loan from Bank is secured by frst charge on all present & future immovable and movable properties of the Company and Secured Term Loans from a Financial Institution and Inter Corporate Deposits are secured by way of pledge of investments of the Company as mentioned in the Note No.12.1 and of investments of a subsidiary (SKIL Shipyard Holdings Pvt. Ltd) in certain equity shares. Further all the secured loans are guaranteed by one of the directors in his personal capacity. The said loans carry interest rates ranging from 14.50% to 20%.

7.2 As on March 31, 2014, the Company has overdue ofRs. 14,503.33 Lacs and Rs. 3,382.31 Lacs towards principal and interest amount respectively.

12.1 Details of shares pledged :

(a) Investment in Everonn Education Limited includes 40,00,000 shares (Previous Year 32,00,000 shares) pledged with the lenders of subsidiaries of an associate.

(b) Investment in Pipavav Defence and Offshore Engineering Co.Ltd. includes 12,16,50,500 ( Previous Year 12,16,50,500) shares pledged with the lenders of an associate of the Company, 1,83,33,846 (Previous year 1,83,33,846) shares pledged with lenders of the Company, 8,79,26,740 (Previous Year 9,94,00,538) shares pledged with the lenders of the Company and a subsidiary (SKIL Shipyard Holdings Pvt.Ltd.). 3,80,20,957 (Previous Year 3,31,10,647) share pledged with lenders of a subsidiaries of an associate Company.

12.2 Refer Note No.1.5 for the basis of valuation.

Defined Benefit Plan (Unfunded)

The Employees Gratuity Fund Scheme of the Company is a Defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the fInal obligation.


Mar 31, 2012

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Financial Statements are prepared as a going concern under historical cost convention on an accrual basis following the historical cost convention in accordance with generally accepted accounting principles "GAAP" and in compliance with the Accounting Standards referred in Section 211 (3C) and other requirements of the Companies Act, 1956.

2. USE OF ESTIMATES

The preparation of financial statements in conformity with "GAAP" requires that the management of the company makes estimates & assumptions that affect the reported amounts of income & expenses of the period, the reported balances of assets & liabilities & the disclosures relating to contingent liabilities as of the date of the financial statements. Actual results could differ from estimates.

3. FIXED ASSETS

Fixed Assets are stated at cost of acquisition including expenses incidental to their acquisition less accumulated depreciation & impairment.

4. DEPRECIATION

Depreciation on Fixed Assets is provided on the Written Down Value Method, at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

5. INVESTMENTS

Current investments are carried at the lower of cost & quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

6. BORROWING COST:

Borrowing Cost that are directly attributable to the acquisition or construction of qualifying assets (net of income earned on temporary deployment of funds) are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial periods of time to get ready for intended use. All other borrowing costs are charged to revenue.

7. REVENUE RECOGNITION

i. Revenues are recognised when it is earned and no Significant uncertainty exists as to its ultimate collection and includes, service tax, wherever applicable.

ii. Interest income is recognised on a time proportion basis. Dividend is considered when the right to receive is established.

8. INVENTORIES

Inventories are measured at cost. Cost is determined on weighted average basis.

9. EMPLOYEE BENEFITS

i. Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which relative service is rendered.

ii. Post employment and other long term employee benefits are recognized as an expense in the profit & Loss account for the year in which the employee has rendered services. The expenses are recognized at the present value of the amount payable determined using the actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefit are charged to profit & Loss Account

10. IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identifed as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

11. FOREIGN CURRENCY TRANSACTIONS:

i. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of the transaction.

ii. Monetary items denominated in foreign currencies at the year end are restated at year end rates.

iii. Non monetary foreign currency items are carried at cost.

iv. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit & Loss Account

12. DERIVATIVE INSTRUMENTS:

Derivative financial instruments are initially recorded at their fair value on the date of the derivative transaction and are re-measured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivatives are recorded in the Profit & Loss account.

13. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements

14. PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

15. PRELIMINARY AND ISSUE EXPENSES

Preliminary and Expenses related to issue of equity and equity related instruments are adjusted against Securities Premium Account.


Mar 31, 2011

A. GENERAL

a) The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles "GAAP" & in compliance with the Accounting Standards referred in Section 211 (3C) & other requirements of the Companies Act 1956.

b) The preparation of financial statements in conformity with "GAAP" requires that the management of the company makes estimates & assumptions that affect the reported amounts of income & expenses of the period, the reported balances of assets & liabilities & the disclosures relating to contingent liabilities as of the date of the financial statements. Actual results could differ from estimates.

B. VALUATION OF FIXED ASSETS & DEPRECIATION

a) Fixed Assets are depreciated on the Written Down Value Method at the rates specified in Schedule XIV of the Companies Act, 1956.

b) Fixed Assets are valued at cost of acquisition inclusive of inward freight, duties, taxes and incidental expenses, less accumulated depreciation.

c) Expenditure related to and incurred during implementation of projects are included under Capital Work-in-progress and the same are capitalized under the appropriate heads on completion of the projects.

C. INVESTMENTS

Current investments are carried at the lower of cost & quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

D. TURNOVER

Turnover includes sales of goods and services inclusive of applicable taxes and net of trade discounts.

E. INVENTORIES

Inventories are measured at cost. Cost is determined on weighted average basis.

F. EMPLOYEE BENEFITS

i) Short term employee benefits are recognized as an expense in the profit and loss account of the year in which the related services is rendered.

ii) Post employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the profit and loss account.

G PROVISION FOR CURRENT AND DEFERRED TAXES.

Provision for Current Tax is made after taking into consideration benefits admissible under the provisions of Income Tax Act, 1961.

Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rules and laws that are enacted or substantially enacted as on the balance sheet date.

 
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