Mar 31, 2018
The financial statements have been prepared using the significant accounting policies and measurement basis summarized below. These were used throughout all periods presented in the financial statements, except where the company has applied certain accounting policies and exemptions upon transition to Ind AS.
a) Current versus non-current classification
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in Companies Act 2013. Deferred tax assets and liabilities are classified as noncurrent assets and non-current liabilities, as the case may be.
b) Property, plant and equipment (PPE)
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 assetâs 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 and loss as incurred.
Subsequent measurement (depreciation and useful lives)
Depreciation on property, plant and equipment is provided on the straight-line method, computed on the basis of useful lives (as set out below) prescribed in Schedule II to the Companies Act, 2013.
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year. De-recognition
An item of property, plant and equipment 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 recognized in statement of profit and loss when the asset is derecognized.
c) Intangible assets
Recognition and initial measurement
Intangible assets (softwares) 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)
The cost of capitalized software is amortized over a period in the four years from the date of its acquisition.
d) Inventories
Land other than that transferred to real estate projects under development is valued at lower of cost or net realizable value.
Real estate project under development includes cost of land under development, internal and external development costs, construction costs, and development/construction materials, borrowing costs and related overhead costs and is valued at lower of cost or net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and estimated necessary costs to make the sale.
e) Revenue recognition
Revenue is recognized when it is probable that the economic benefits will flow to the Company and it can be reliably measured. Revenue is measured at the fair value of the consideration received/receivable net of rebate and taxes. The Company applies the revenue recognition criteria to each nature of the revenue transaction as set out below.
Revenue from real estate projects
Revenue from real estate development projects is recognized on the percentage of completion method. Revenue is recognized in the financial year in which the agreement to sell or application forms (containing salient terms of agreement to sell) is executed, on the percentage of completion method which is applied on a cumulative basis in each accounting year to the current estimate of contract revenue and related project costs, once the conditions specified in â Guidance Note on Accounting for Real Estate Transactionsâ are satisfied.
The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.
Revenue from sale of land plots
Revenue from sale of developed land and plots is recognized in the year in which the underlying sale deed is executed and there exist no uncertainty in the collection of consideration from buyers. Where there is any remaining substantial obligations as per agreements, revenue is recognized on âpercentage of completion methodâ as per (a) (i) above.
Interest income
Interest on delayed receipts, cancellation/forfeiture income and transfer fees from customers are recognized on accrual basis except in cases where ultimate collection is considered doubtful.
Dividend income
Dividend income is recognized at the time when right to receive the payment is established, which is generally when the shareholders of the investee party approve the dividend.
Service revenue
Income from real estate projects advisory services is recognized on accrual basis. Marketing and lease management income are accounted for when the underline contracts are duly executed, on accrual basis when the services are completed, except in cases where ultimate collection is considered doubtful.
Income from sale of investment
Profit on sale of investment is recognized on the date of its sale and is computed as excess of sale proceeds over its carrying amount as at the date of sale.
f) Operating leases
Company is lessee
Assets acquired on leases where a significant portion of risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to statement of profit and loss on straight line basis except where scheduled increase in rent compensate the lessor for expected inflationary costs.
g) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is necessary to complete and prepare the asset for its intended use or sale. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the statement of profit and loss as incurred.
h) Impairment of non-financial assets
At each reporting date, the Company assesses whether there is any indication that an asset may be impaired, based on internal or external factors. If any such indication exists, the Company estimates the recoverable amount of the asset or the cash generating unit. If such recoverable amount of the asset or 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. If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the statement of profit and loss.
i) Foreign currency
Functional and presentation currency
The financial statements are presented in Indian Rupee (âINRâ or â?â) which is also the functional and presentation currency of the Company.
Transactions and balances
Foreign currency transactions are recorded in the functional currency, by applying to the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Foreign currency monetary items are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transaction.
Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise.
j) Investments
Investment in equity instruments of subsidiaries are stated at cost as per Ind AS 27 âSeparate Financial Statementsâ.
k) Financial instruments Financial assets
Initial recognition and measurement
All financial assets are recognized initially at fair value and transaction cost that is attributable to the acquisition of the financial asset is also adjusted.
Subsequent measurement
i. Debt instruments at amortized cost - A âdebt instrumentâ is measured at the amortised cost if both the following conditions are met:
- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
- 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.
ii. Equity instruments - All equity investments in scope of âInd AS 109 Financial Instrumentsâ (âInd AS 109â) 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).
iii. 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.
Financial liabilities
Initial recognition and measurement
All financial liabilities are recognized initially at fair value and transaction cost that is attributable to the acquisition of the financial liabilities is also adjusted.
Subsequent measurement - Amortized cost
Subsequent to initial recognition, financial liabilities are measured at amortized cost using the effective interest method.
De-recognition of financial liabilities
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or 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 and loss.
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.
l) Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss for financial assets.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive. When estimating the cash flows, the Company is required to consider -
- All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets.
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
Trade receivables
The Company applies approach permitted by Ind AS 109, which requires lifetime expected credit losses to be recognized for trade receivables.
Other financial assets
For recognition of impairment loss on other financial assets, the Company determines whether there has been a significant increase in the credit risk since initial recognition and if credit risk has increased significantly, impairment loss is provided.
m) Income taxes
Tax expense recognized in statement of profit and loss comprises the sum of deferred tax and current tax except the ones recognized in other comprehensive income or directly in equity.
Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations. Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity).
Minimum alternative tax (âMATâ) credit entitlement is recognized as an asset only when and to the extent there is convincing evidence that normal income tax will be paid during the specified period. In the year in which MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT credit entitlement. This is reviewed at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent it is not reasonably certain that normal income tax will be paid during the specified period.
Deferred tax is recognized in respect of temporary differences between carrying amount of assets and liabilities for financial reporting purposes and corresponding amount used for taxation purposes. Deferred tax assets on unrealized tax loss are recognized to the extent that it is probable that the underlying tax loss will be utilized against future taxable income. This is assessed based on the Companyâs forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognized outside statement of profit and loss is recognized outside statement of profit or loss (either in other comprehensive income or in equity).
n) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits, other short term highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
o) Employee benefits
Defined contribution plan
The Companyâs contribution to provident fund and employee state insurance schemes is charged to the statement of profit and loss or inventorized as a part of real estate project under development, as the case may be. The Companyâs contributions towards Provident Fund are deposited with the Regional Provident Fund Commissioner under a defined contribution plan.
Defined benefit plan
The Company has unfunded gratuity as defined benefit plan where the amount that an employee will receive on retirement is defined by reference to the employeeâs length of service and final salary. The liability recognized in the balance sheet for defined benefit plans as the present value of the defined benefit obligation (DBO) at the reporting date. Management estimates the DBO annually with the assistance of independent actuaries. Actuarial gain/losses resulting from re-measurements of the liability are included in other comprehensive income.
Other long term employee benefits
The Company also provides benefit of compensated absences to its employees which are in the nature of long -term employee benefit plan. Liability in respect of compensated absences becoming due and expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method as on the reporting date. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recorded in the statement of profit and loss in the year in which such gains or losses arise.
Short-term employee benefits
Short-term employee benefits comprise of employee costs such as salaries, bonus etc. is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.
p) Share based payments
Share based compensation benefits are provided to employees via Employee Stock Option Plans (ESOPs). The employee benefit expense is measured using the fair value of the employee stock options and is recognized over vesting period with a corresponding increase in equity. The vesting period is the period over which all the specified vesting conditions are to be satisfied. On the exercise of the employee stock options, the employees will be allotted equity shares of the Company.
Transition to Ind AS
On transition to Ind AS, the company has elected to not consider the charge related to employee stock options for which the vesting period is already over.
q) Provisions, contingent liabilities and contingent assets
Provisions are recognized only when there is a present obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are review at each reporting date and adjusted to reflect the current best estimates. Provisions are discounted to their present values, where the time value of money is material.
Contingent liability is disclosed for:
- Possible obligations which will be confirmed only by future events not wholly within the control of the Company or,
- Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are neither recognized nor disclosed. However, when realization of income is virtually certain, related asset is recognized.
r) Earnings per equity share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period 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 shares.
s) Significant management judgment in applying accounting policies and estimation uncertainty
The preparation of the Companyâs financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the related disclosures.
Significant managementâs judgments
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 Companyâs future taxable income against which the deferred tax assets can be utilized.
Evaluation of indicators for impairment of assets - The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.
Recoverability of advances/receivables - At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit losses on outstanding receivables and advances.
Defined benefit obligation (DBO) - Managementâs estimate of the DBO is based on a number of underlying assumptions such as standard rates of inflation, 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.
Provisions - At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However the actual future outcome may be different from this judgment.
Significant estimates
Revenue and inventories - The Company recognizes revenue using the percentage of completion method. This requires forecasts to be made of total budgeted cost with the outcomes of underlying construction and service contracts, which further require assessments and judgments to be made on changes in work scopes, claims (compensation, rebates etc.) and other payments to the extent they are probable and they are capable of being reliably measured. For the purpose of making estimates for claims, the Company used the available contractual and historical information.
Useful lives of depreciable/amortizable assets - Management reviews its estimate of the useful lives of depreciable/amortizable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utilization of assets.
Fair value measurements - Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.
Mar 31, 2017
a) Revenue recognition
i) Revenue from real estate development projects is recognized on the percentage of completion method. Revenue is recognized in the financial year in which the agreement to sell or application forms (containing salient terms of agreement to sell) is executed, on the percentage of completion method which is applied on a cumulative basis in each accounting year to the current estimate of contract revenue and related project costs, when the stage of completion of each project reaches a significant level which is estimated to be at least 25% of the total estimated construction cost of the respective projects. Revenue from constructed properties for all projects commenced on or after April 1, 2012 or project where the revenue is recognized for the first time on or after the above date, is recognized in accordance with the Revised Guidance Note issued by the Institute of Chartered Accountants of India (âICAIâ) on âAccounting for Real Estate Transactions (Revised 2012).â
The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.
ii) Revenue from sale of developed land and plots is recognized in the year in which the underlying sale deed is executed and there exist no uncertainty in the collection of consideration from buyers Where there is any remaining substantial obligations as per agreements, revenue is recognized on âpercentage of completion methodâ as per (a) (i) above.
iii) Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
iv) Dividend income is recognized when the right to receive payment is established, at the balance sheet date.
v) Profit on sale of investment is recognized on the date of its sale and is computed as excess of sale proceeds over its carrying amount as at the date of sale.
vi) Interest on delayed receipts, cancellation/forfeiture income and transfer fees from customers are recognized on accrual basis except in cases where ultimate collection is considered doubtful.
b) Inventories
Land other than that transferred to real estate projects under development is valued at lower of cost or net realizable value.
Real estate project under development includes cost of land under development, internal and external development costs, construction costs, and development/construction materials, borrowing costs and related overhead costs and is valued at lower of cost or net realizable value.
Construction materials, stores and spares, tools and consumable are valued at lower of cost or net realizable value, on the basis of first-in first-out method.
c) Fixed assets
Recognition and measurement
Tangible fixed assets are stated at cost; net of tax or duty credits availed, less accumulated depreciation and impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation.
Intangible assets are stated at cost, net of tax or duty credits availed, less accumulated amortization and impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition.
Depreciation and Amortization
Till the year ended March 31, 2014, depreciation rates prescribed under Schedule XIV of Companies Act, 1956 were used for charging depreciation. From the year ended March 31, 2015, schedule XIV has been replaced by Schedule II of Companies Act, 2013. Schedule II of Companies Act, 2013 prescribed the useful lives of fixed asset which, in many cases, are different from lives prescribed under Schedule XIV.
Depreciation on fixed assets is provided on the straight-line method, computed on the basis of useful life prescribed in Schedule II to the Companies Act, 2013, on a pro-rata basis from the date the asset is ready to put to use subject to transitional provisions of Schedule II.
Intangible assets are amortized over the expected useful life from the date the assets are available for use, as mentioned below:
d) Investments
Investments are classified as non-current or current investments, based on managementâs intention. Investments that are readily realizable and intended to be held not more than a year are classified as current investments. All other investments are classified as non-current investments.
Current investments are stated at lower of cost and fair value determined on an individual investment basis. Noncurrent investments are stated at cost less provision for diminution in their value, other than temporary, if made in the financial statements.
e) Impairment of assets
At each reporting date, the Company assesses whether there is any indication that an asset may be impaired, based on internal or external factors. If any such indication exists, the Company estimates the recoverable amount of the asset or the cash generating unit. If such recoverable amount of the asset or 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 recognised in the statement of profit and loss. If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the statement of profit and loss.
f) Employee benefits
The Companyâs contribution to provident fund and employee state insurance schemes is charged to the statement of profit and loss or inventorized as a part of real estate project under development, as the case may be. The Companyâs contributions towards Provident Fund are deposited with the Regional Provident Fund Commissioner under a defined contribution plan.
The Company has unfunded gratuity (defined benefit plan) and compensated absences for its employees, the liability for which is determined on the basis of actuarial valuation, conducted annually, by an independent actuary using projected unit credit method, in accordance with notified Accounting Standard 15 (Revised 2005) - âEmployee Benefitsâ. Actuarial gains and losses are either recognized in the statement of profit and loss or inventorized as a part of real estate project under development, as the case may be.
Expense in respect of other short-term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.
g) Stock based compensation expense
Stock based compensation expense are recognized in accordance with the guidance note on âAccounting for employee share based paymentsâ issued by the Institute of Chartered Accountants of India (âICAIâ), which establishes financial accounting and reporting principles for employee share based payment plans. Employee stock compensation costs are measured based on intrinsic value of the stock options on the grant date. The compensation expense is amortized over the vesting period of the options.
h) Leases
Lease payments under operating leases are recognized as expense in the statement of profit and loss over the lease term.
i) Foreign currency transactions
Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the exchange rate between the reporting currency and the foreign currency at the date of the transaction to the foreign currency amount.
Conversion
Foreign currency monetary items are converted to reporting currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or any other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
Exchange Differences
Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise except those arising from investments in non-integral operations.
Exchange differences arising on monetary items that in substance forms part of the Companyâs net investment in a nonintegral foreign operation are accumulated in a foreign currency translation reserve in the financial statements until the disposal of the net investment, at which time they are recognized in the statement of profit and loss.
j) Taxes on income
Current tax
Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations.
Minimum alternate tax (âMATâ) credit entitlement is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent it is not reasonably certain that the Company will pay normal income tax during the specified period.
Deferred tax
Deferred tax resulting from timing differences between taxable income and accounting income is accounted for at the current rate of tax or substantively enacted tax rates as at reporting date, to the extent that the timing differences are expected to crystallize.
Deferred tax assets are recognized where realization is reasonably certain whereas in case of carried forward losses or unabsorbed depreciation, deferred tax assets are recognized only if there is a virtual certainty supported by convincing evidence that such deferred tax assets will be realized. Deferred tax assets are reviewed for the appropriateness of their respective carrying values at each reporting date.
k) Provisions, contingent liabilities and contingent assets
Provisions are recognized only when there is a present obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for:
- Possible obligations which will be confirmed only by future events not wholly within the control of the Company or,
- Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
l) Earnings per equity share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period 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 shares.
m) Share issue/buyback expenses
Share issue/buyback expenses are adjusted against securities premium account to the extent of balance available and thereafter, the balance portion is charged off to statement of profit and loss, as incurred.
n) Unbilled receivables
Unbilled receivables represents revenue recognized based on percentage of completion method as per policy on revenue, over and above the amount due as per the payment plans agreed with the customers.
Mar 31, 2016
1. Company overview
India bulls Wholesale Services Limited ("the Company", "IBWSL") was incorporated on July 24, 2007.
The Company is developing real estate projects on land situated in Ahmadabad (Gujarat) and Hyderabad (Andhra Pradesh).
2. Basis of preparation of financial statements
a) Basis of accounting
The financial statements have been prepared on going concern basis under the historical cost basis, in accordance with the generally accepted accounting principles in India and in compliance with the applicable accounting standards as specified under section 133 of Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). 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 the Companies Act, 2013.
b) Use of estimates
The preparation of financial statements in conformity with 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 assets and liabilities, if any, on the date of the financial statements and the results of operations during the reporting periods. Although these estimates are based upon management''s knowledge of current events and actions, actual results could differ from those estimates and revisions, if any, are recognized in the current and future periods.
3. Significant accounting policies
a) Revenue recognition
i) Revenue from real estate development projects is recognized on the percentage of completion method. Revenue is recognized in the financial year in which the agreement to sell or application forms (containing salient terms of agreement to sell) is executed, on the percentage of completion method which is applied on a cumulative basis in each accounting year to the current estimate of contract revenue and related project costs, when the stage of completion of each project reaches a significant level which is estimated to be at least 25% of the total estimated construction cost of the respective projects. Revenue from constructed properties for all projects commenced on or after April 1, 2012 or project where the revenue is recognized for the first time on or after the above date, is recognized in accordance with the Revised Guidance Note issued by the Institute of Chartered Accountants of India ("ICAI") on "Accounting for Real Estate Transactions (Revised 2012)."
The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.
ii) Revenue from sale of developed land and plots is recognized in the year in which the underlying sale deed is executed and there exist no uncertainty in the collection of consideration from buyers Where there is any remaining substantial obligations as per agreements, revenue is recognized on ''percentage of completion method'' as per (a) (i) above.
iii) Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
iv) Dividend income is recognized when the right to receive payment is established, at the balance sheet date.
v) Profit on sale of investment is recognized on the date of its sale and is computed as excess of sale proceeds over its carrying amount as at the date of sale.
vi) Interest on delayed receipts, cancellation/forfeiture income and transfer fees from customers are recognized on accrual basis except in cases where ultimate collection is considered doubtful.
b) Inventories
Land other than that transferred to real estate projects under development is valued at lower of cost or net realizable value.
Real estate project under development includes cost of land under development, internal and external development costs, construction costs, and development/construction materials, borrowing costs and related overhead costs and is valued at lower of cost or net realizable value.
Construction materials, stores and spares, tools and consumable are valued at lower of cost or net realisable value, on the basis of first-in first-out method.
c) Fixed assets
Recognition and measurement
Tangible fixed assets are stated at cost; net of tax or duty credits availed, less accumulated depreciation and impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation.
Intangible assets are stated at cost, net of tax or duty credits availed, less accumulated amortization and impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition.
Depreciation and Amortization
Till the year ended March 31, 2014, depreciation rates prescribed under Schedule XIV of Companies Act, 1956 were used for charging depreciation. From the year ended March 31, 2015, schedule XIV has been replaced by Schedule II of Companies Act, 2013. Schedule II of Companies Act, 2013 prescribed the useful lives of fixed asset which, in many cases, are different from lives prescribed under Schedule XIV.
Depreciation on fixed assets is provided on the straight-line method, computed on the basis of useful life prescribed in Schedule II to the Companies Act, 2013, on a pro-rata basis from the date the asset is ready to put to use subject to transitional provisions of Schedule II.
Intangible assets are amortized over the expected useful life from the date the assets are available for use, as mentioned below:
Description of asset : Computer software Estimated life : 4 years
d) Investments
Investments are classified as non-current or current investments, based on management''s intention. Investments that are readily realizable and intended to be held not more than a year are classified as current investments. All other investments are classified as non-current investments.
Current investments are stated at lower of cost and fair value determined on an individual investment basis. Noncurrent investments are stated at cost less provision for diminution in their value, other than temporary, if made in the financial statements.
e) Impairment of assets
At each reporting date, the Company assesses whether there is any indication that an asset may be impaired, based on internal or external factors. If any such indication exists, the Company estimates the recoverable amount of the asset or the cash generating unit. If such recoverable amount of the asset or 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. If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the statement of profit and loss.
f) Employee benefits
The Company''s contribution to provident fund and employee state insurance schemes is charged to the statement of profit and loss or inventoried as a part of real estate project under development, as the case may be. The Company''s contributions towards Provident Fund are deposited with the Regional Provident Fund Commissioner under a defined contribution plan.
The Company has unfunded gratuity (defined benefit plan) and compensated absences for its employees, the liability for which is determined on the basis of actuarial valuation, conducted annually, by an independent actuary using projected unit credit method, in accordance with notified Accounting Standard 15 (Revised 2005) - ''Employee Benefits''. Actuarial gains and losses are either recognized in the statement of profit and loss or inventoried as a part of real estate project under development, as the case may be.
Expense in respect of other short-term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.
g) Stock based compensation expense
Stock based compensation expense are recognized in accordance with the guidance note on ''Accounting for employee share based payments'' issued by the Institute of Chartered Accountants of India (''ICAI''), which establishes financial accounting and reporting principles for employee share based payment plans. Employee stock compensation costs are measured based on intrinsic value of the stock options on the grant date. The compensation expense is amortized over the vesting period of the options.
h) Leases
Lease payments under operating leases are recognized as expense in the statement of profit and loss over the lease term.
i) Foreign currency transactions
Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the exchange rate between the reporting currency and the foreign currency at the date of the transaction to the foreign currency amount.
Conversion
Foreign currency monetary items are converted to reporting currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or any other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
Exchange Differences
Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise except those arising from investments in non-integral operations.
Exchange differences arising on monetary items that in substance forms part of the Company''s net investment in a non-integral foreign operation are accumulated in a foreign currency translation reserve in the financial statements until the disposal of the net investment, at which time they are recognized in the statement of profit and loss.
j) Taxes on income
Current tax
Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations.
Minimum alternate tax (''MAT'') credit entitlement is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent it is not reasonably certain that the Company will pay normal income tax during the specified period.
Deferred tax
Deferred tax resulting from timing differences between taxable income and accounting income is accounted for at the current rate of tax or substantively enacted tax rates as at reporting date, to the extent that the timing differences are expected to crystallize.
Deferred tax assets are recognized where realization is reasonably certain whereas in case of carried forward losses or unabsorbed depreciation, deferred tax assets are recognized only if there is a virtual certainty supported by convincing evidence that such deferred tax assets will be realized. Deferred tax assets are reviewed for the appropriateness of their respective carrying values at each reporting date.
k) Provisions, contingent liabilities and contingent assets
Provisions are recognized only when there is a present obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for:
- Possible obligations which will be confirmed only by future events not wholly within the control of the Company or,
- Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
l) Earnings per equity share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period 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 shares.
m) Share issue/buyback expenses
Share issue/buyback expenses are adjusted against securities premium account to the extent of balance available and thereafter, the balance portion is charged off to statement of profit and loss, as incurred.
n) Unbilled receivables
Unbilled receivables represents revenue recognized based on percentage of completion method as per policy on revenue, over and above the amount due as per the payment plans agreed with the customers.
(iii) Rights, preferences and restrictions attached to shares
The holders of equity shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company. In the event of liquidation of the Company, all preferential amounts, if any, shall be discharged by the Company. The remaining assets of the Company shall be distributed to the holders of equity shares in proportion to the number of shares held to the total equity shares outstanding as on that date. The holders of preference shares are entitled to receive dividends, but do not carry the right to vote. All shares rank equally with regard to the Company''s residual assets, except that holders of preference shares participate only to the extent of the face value of the shares..
(iv) Shares alloted as fully paid up, without payments received in cash
A scheme of arrangement between India bulls Real Estate Limited and the company and their respective shareholders and creditors under Sections 391- 394 of the Companies Act, 1956, was sanctioned by the Hon''ble High Court of Delhi at New Delhi on March 3, 2011, pursuant to which the company has allotted one (1) equity share of face value of '' 2 each credited as fully paid-up for every eight (8) equity share of face value of '' 2 each held by such shareholders in India bulls Real Estate Limited.
Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. The number of equity shares and potential diluted equity shares are adjusted for stock split, bonus shares and the potential dilutive effect of Employee stock option plans/schemes as appropriate.
Mar 31, 2015
A) Use of estimates
The preparation of financial statements in conformity with 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 assets and liabilities, if
any, on the date of the financial statements and the results of
operations during the reporting periods. Although these estimates are
based upon management's knowledge of current events and actions, actual
results could differ from those estimates and revisions, if any, are
recognized in the current and future periods.
b) Revenue recognition
Revenue from real estate project under development:
i) Revenue from real estate development projects is recognized on the
percentage of completion method. Revenue is recognized in the
financial year in which the agreement to sell or application forms
(containing salient terms of agreement to sell) is executed, on the
percentage of completion method which is applied on a cumulative basis
in each accounting year to the current estimate of contract revenue and
related project costs, when the stage of completion of each project
reaches a significant level which is estimated to be at least 25% of
the total estimated construction cost of the respective projects. The
estimates of the saleable area and costs are reviewed periodically and
effect of any changes in such estimates is recognized in the period
such changes are determined. However, when the total project cost is
estimated to exceed total revenues from the project, the loss is
recognized immediately.
ii) Revenue from sale of developed land and plots is recognized in the
year in which the underlying sale deed is executed.
Revenue from trading goods and products:
iii) Revenue from sale of goods/value added construction material is
recognized when all the significant risks and rewards of ownership of
the goods have been passed to the buyer, usually on delivery of goods.
The company collects all relevant applicable taxes etc. on behalf of
the Statutory Authorities and, therefore, these are not economic
benefits flowing to the company. Hence, they are excluded from revenue.
Revenue from services:
iv) Revenue from equipment hiring services (including relevant manpower
and supervision) is recognized when services is performed, usually on a
time proportion basis as per the terms of the contract. The Company
collects applicable taxes on behalf of Statutory Authorities and,
therefore, these are not economic benefits flowing to the company.
Hence, they are excluded from revenue.
v) Revenue from Facility Maintenance Services and other related
activities are recognized pro-rata over the period of contract as and
when services are rendered. The Company collects applicable taxes on
behalf of Statutory Authorities and, therefore, these are not economic
benefits flowing to the company. Hence, they are excluded from revenue.
vi) Revenue from software services comprises income from time and
material and fixed price contracts. Revenue with respect to time and
material contracts is recognized as related services are performed.
Revenue from fixed price contracts and fixed time frame contracts is
recognized in accordance with the percentage completion method under
which the sales value of performance, including earnings thereon, is
recognized on the basis of cost incurred in respect of each contract as
a proportion of total cost expected to be incurred. The cumulative
impact of any revision in estimates of the percentage of work completed
is reflected in the year in which the change becomes known. Provisions
for estimated losses are made during the year in which a loss becomes
probable based on current contract estimates. Revenue from annual
technical service contracts is recognized on a pro rata basis over the
period in which such services are rendered.
vii) Revenue from air transportation services is recognised in the year
in which the service has been rendered, and billed as per terms of
contract / arrangements with customers, provided that collection is
reasonably certain.
viii) Advisory service income is recognized on an accrual basis.
ix) Revenue from export of software services is recognized based on
software developed and billed to clients as per the terms of specific
contracts. In the case of fixed price contracts, revenue is recognized
based on the milestones achieved as specified in the contracts or on
the percentage of completion basis. Provision for estimated losses on
incomplete contract is recorded in the period in which such losses
become probable based on the current estimates. Revenues from product
licenses and related revenues are recognized as follows:
* License fees, on delivery and subsequent milestone schedule as per
the terms of the contract with the end user.
* Product maintenance revenues, over the period of the maintenance
contract.
Other revenue:
x) Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable.
xi) Dividend income is recognized when the right to receive payment is
established, at the balance sheet date.
xii) Profit on sale of investment is recognized on the date of its sale
and is computed as excess of sale proceeds over its carrying amount as
at the date of sale.
xiii) Interest on delayed receipts, cancellation / forfeiture and
transfer fees from customers is recognized, as per revenue recognition
principles laid down in Accounting Standard - 9 on "Revenue
Recognition", when certainty of its collection is established.
c) Inventories
Real estate project under development:
i) Land other than that transferred to real estate projects under
development is valued at lower of cost or net realizable value.
ii) Real estate project under development includes cost of land under
development, internal and external development costs, constructions
costs and development/ construction materials, borrowing costs and
related overheads costs and is valued at lower of cost or net
realizable value.
iii) Construction materials, stores and spares, tools and consumable
are valued at lower of cost or net realizable value, on the basis of
first-in first-out method.
Trading goods and products:
iv) Inventories are valued at cost or net realizable value, whichever
is lower. Cost of inventories is determined using the weighted average
cost method and includes purchase price, and all direct costs incurred
in bringing the inventories to their present location and condition.
d) Provision for shrinkages and shortages
Provisions for shrinkages and shortages are charged to the statement of
profit and loss based on historical data and management estimates.
Actual shrinkages and shortages are adjusted against such provisions.
e) Fixed assets
Recognition and measurement
Tangible fixed assets are stated at cost; net of tax or duty credits
availed, less accumulated depreciation and impairment losses, if any.
Cost includes original cost of acquisition, including incidental
expenses related to such acquisition and installation.
Intangible assets are stated at cost, net of tax or duty credits
availed, less accumulated amortization and impairment losses, if any.
Cost includes original cost of acquisition, including incidental
expenses related to such acquisition.
Depreciation and Amortization
Till the year ended March 31, 2014, depreciation rates prescribed under
Schedule XIV of Companies act, 1956 were used for charging
depreciation. With effect from current year, schedule XIV has been
replaced by Schedule II of Companies Act, 2013. Schedule II of
Companies Act, 2013 prescribed the useful lives of fixed asset which,
in many cases, are different from lives prescribed under Schedule XIV.
Depreciation on fixed assets is provided on the straight-line method,
computed on the basis of useful life prescribed in Schedule II to the
Companies Act, 2013, on a pro-rata basis from the date the asset is
ready to put to use subject to transitional provisions of Schedule II
Intangible assets are amortized over the expected useful life from the
date the assets are available for use, as mentioned below:
Description of asset : Computer software Estimated life : 4 years
Capital work-in-progress
Costs of fixed assets under construction are disclosed under capital
work-in-progress. Advances paid towards acquisition or construction of
fixed assets or intangible assets is included as capital advances under
long term loans and advances.
f) Borrowing costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets in accordance with notified Accounting Standard 16
"Borrowing costs". A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to the Statement of Profit and Loss as
incurred.
g) Investments
Investments are classified as non-current or current investments, based
on management's intention. Investments that are readily realizable and
intended to be held not more than a year are classified as current
investments. All other investments are classified as non-current
investments.
Current investments are stated at lower of cost and fair value
determined on an individual investment basis. Non- current investments
are stated at cost less provision for diminution in their value, other
than temporary, if made in the financial statements.
h) Impairment of assets
At each reporting date, the Group assesses whether there is any
indication that an asset may be impaired, based on internal or external
factors. If any such indication exists, the Company estimates the
recoverable amount of the asset or the cash generating unit. If such
recoverable amount of the asset or 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.
If, at the reporting date there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.
Impairment losses previously recognized are accordingly reversed in the
statement of profit and loss.
i) Employee benefits
The Group's contribution to provident fund and employee state insurance
schemes is charged to the statement of profit and loss or inventorized
as a part of real estate project under development, as the case may be.
The Company's contributions towards Provident Fund are deposited with
the Regional Provident Fund Commissioner under a defined contribution
plan.
The Group has unfunded gratuity (defined benefit plan) and compensated
absences for its employees, the liability for which is determined on
the basis of actuarial valuation, conducted annually, by an independent
actuary using projected unit credit method, in accordance with notified
Accounting Standard 15 (Revised 2005) - 'Employee Benefits'. Actuarial
gains and losses are either recognized in the statement of profit and
loss or inventorized as a part of real estate project under
development, as the case may be.
Expense in respect of other short-term benefits is recognized on the
basis of the amount paid or payable for the period during which
services are rendered by the employee.
j) Stock based compensation
Stock based compensation expense are recognized in accordance with the
guidance note on 'Accounting for employee share based payments' issued
by the Institute of Chartered Accountants of India, which establishes
financial accounting and reporting principles for employee share based
payment plans. Employee stock compensation costs are measured based on
intrinsic value of the stock options on the grant date. The
compensation expense is amortized over the vesting period of the
options.
k) Leases
Lease payments under operating leases are recognised as expense in the
Statement of Profit and Loss over the lease term.
l) Foreign currency transactions
Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the exchange rate between the reporting currency and the
foreign currency at the date of the transaction to the foreign currency
amount.
Conversion
Foreign currency monetary items are converted to reporting currency
using the closing rate. Non monetary items denominated in a foreign
currency which are carried at historical cost are reported using the
exchange rate at the date of the transaction; and non-monetary items
which are carried at fair value or any other similar valuation
denominated in a foreign currency are reported using the exchange rates
that existed when the values were determined.
Exchange Differences
Exchange differences arising on monetary items on settlement, or
restatement as at reporting date, at rates different from those at
which they were initially recorded, are recognized in the statement of
profit and loss in the year in which they arise except those arising
from investments in non-integral operations.
Exchange differences arising on monetary items that in substance forms
part of the Company's net investment in a non-integral foreign
operation are accumulated in a foreign currency translation reserve in
the financial statements until the disposal of the net investment, at
which time they are recognized in the statement of profit and loss.
Translation of non-integral operation
In respect of non-integral operation, assets and liabilities are
translated at the exchange rate prevailing at the date of the balance
sheet. The items in the statement of profit and loss are translated at
the average exchange rate during the year. The differences arising out
of the translation are transferred to foreign currency translation
reserve, in the balance sheet until the disposal of the net investments
at which time they are recognized as income or as expenses.
m) Taxes on income
Current tax
Current tax is determined as the tax payable in respect of taxable
income for the year and is computed in accordance with relevant tax
regulations.
Minimum alternate tax ('MAT') credit entitlement is recognized as an
asset only when and to the extent there is convincing evidence that
normal income tax will be paid during the specified period. In the year
in which MAT credit becomes eligible to be recognized as an asset in
accordance with the recommendations contained in guidance note issued
by the Institute of Chartered Accountants of India, the said asset is
created by way of a credit to the statement of profit and loss and
shown as MAT credit entitlement. This is reviewed at each balance sheet
date and writes down the carrying amount of MAT credit entitlement to
the extent it is not reasonable certain that normal income tax will be
paid during the specified period.
Deferred tax
Deferred tax resulting from timing differences between taxable income
and accounting income is accounted for at the current rate of tax or
substantively enacted tax rates as at reporting date, to the extent
that the timing differences are expected to crystallize.
Deferred tax assets are recognized where realization is reasonably
certain whereas in case of carried forward losses or unabsorbed
depreciation, deferred tax assets are recognized only if there is a
virtual certainty supported by convincing evidence that such deferred
tax assets will be realized. Deferred tax assets are reviewed for the
appropriateness of their respective carrying values at each reporting
date.
n) Provisions and contingent liabilities
Provisions are recognized only when there is a present obligation, as a
result of past events, and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for:
* Possible obligations which will be confirmed only by future events
not wholly within the control of the Company or,
* Present obligations arising from past events where it is not probable
that an outflow of resources will be required to settle the obligation
or a reliable estimate of the amount of the obligation cannot be made.
o) Earnings per equity share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting attributable taxes) by the weighted average number of equity
shares outstanding during the period. The weighted average number of
equity shares outstanding during the period is adjusted for events
including a bonus issue.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period 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 shares.
p) Share issue/buyback expenses
Share issue/buyback expenses are adjusted against securities premium
account to the extent of balance available and thereafter, the balance
portion is charged off to the statement of profit and loss, as
incurred.
q) Preliminary expenses
Preliminary expenses are adjusted against securities premium account
(net of tax) to the extent of balance available and thereafter, the
balance portion is charged off to the statement of profit and loss, as
incurred.
r) Segment reporting
The group identifies primary segments based on the dominant source,
nature of risks and returns and the internal organization and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/ loss amounts are evaluated regularly by the executive
management in performance assessment and decision making with regards
to resource allocation.
Mar 31, 2014
A) Statement of compliance
The financial statements are prepared under the historical cost
convention on an accrual basis, in accordance with the generally
accepted accounting principles in India and in compliance with the
applicable accounting standards as notified under the Companies
(Accounting Standards) Rules, 2006, as amended and as per Revised
Schedule VI to the Companies Act, 1956 ("the 1956 Act") (which continue
to be applicable in respect of Section 133 of the Companies Act, 2013
("the 2013 Act") in terms of commencement notification of Companies
Act,2013, dated 12 September, 2013 of the Ministry of Corporate
Affairs) and the relevant provisions of the 1956 Act and 2013 Act, to
the extent applicable . 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 the Revised Schedule VI to the 1956 Act.
b) Use of estimates
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities and disclosure of contingent liabilities as on the date of
the financial statements and the reported amount of revenues and
expenses during the reporting year. Differences between the actual
results and estimates are recognized in the year in which the results
are known or materialized.
3. Significant accounting policies
a) Revenue recognition
i) Revenue from real estate development projects and plots under
development is recognized in the financial year in which the agreement
to sell or application forms (containing salient terms of agreement to
sell) is executed, on the percentage of completion method which is
applied on a cumulative basis in each accounting year to the current
estimate of contract revenue and related project costs, when the stage
of completion of each project reaches a significant level which is
estimated to be at least 25% of the total estimated construction cost
of the respective projects.
ii) Revenue from sale of goods is recognized when all the significant
risks and rewards of ownership of the goods have been passed to the
buyer, usually on delivery of goods. The company collects all relevant
applicable taxes like sales taxes, value added taxes (VAT) etc. on
behalf of the government and, therefore, these are not economic
benefits flowing to the company. Hence, they are excluded from revenue.
iii) Revenue from sale of developed land and plots is recognized in the
year in which the underlying sale deed is executed.
iv) Interest income from deposits is recognized on accrual basis.
v) Dividend income is recognized when the right to receive the dividend
is unconditionally established.
vi) Profit on sale of investment is recognized on the date of its sale
and is computed as excess of sale proceeds over its carrying amount as
at the date of sale.
vii) Interest on delayed receipts, cancellation/forfeiture and transfer
fees from customers is recognized, as per revenue recognition
principles laid down in Accounting Standard - 9 on "Revenue
Recognition", when certainty of its collection is established.
b) Inventories
Land other than that transferred to real estate projects under
development is valued at lower of cost or net realizable value.
Cost includes cost of acquisition and internal and external development
costs, construction costs, and development/construction materials. Real
estate projects under development represents land under development,
cost incurred directly in respect of construction activity and indirect
construction cost to the extent to which the expenditure is related to
the construction or incidental thereto on unsold real estate projects
and land held for real estate development is valued at cost.
Construction materials, stores and spares, tools and consumable are
valued at lower of cost or net realizable value, on the basis of
first-in first-out method.
Inventories of trading goods are valued at cost or estimated net
realizable value, whichever is lower. Cost of inventories is determined
using the weighted average cost method and includes purchase price, and
all direct costs incurred in bringing the inventories to their present
location and condition.
c) Fixed assets
Recognition and measurement
Tangible fixed assets are stated at cost; net of tax or duty credits
availed, less accumulated depreciation and accumulated impairment
losses, if any. Cost includes original cost of acquisition, including
incidental expenses related to such acquisition and installation.
Intangible assets are stated at cost, net of tax or duty credits
availed, less accumulated amortization and accumulated impairment
losses, if any. Cost includes original cost of acquisition, including
incidental expenses related to such acquisition.
Depreciation and Amortization
Depreciation on fixed assets is provided on the straight-line method at
the rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956, on a pro-rata basis from the date the asset is ready to put
to use till the end of its useful life or till the asset is discarded,
whichever is earlier. Individual assets costing up to Rs. 5,000 per
item are fully depreciated in the year of purchase. Temporary
structures are depreciated over a period of twelve months, on a
pro-rata basis, from the date it is ready to put to use.
Intangible assets are amortized over the expected useful life from the
date the assets are available for use, as mentioned below:
Description of asset Estimated useful life
Computer Software 4 Years
Capital work-in-progress
Costs of fixed assets under construction are disclosed under capital
work-in-progress. Advances paid towards acquisition or construction of
fixed assets or intangible assets is included as capital advances under
long term loans and advances.
d) Borrowing costs
Borrowing costs attributable to the acquisition, construction or
production of qualifying assets are capitalised as part of cost of the
asset. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use. All other borrowing
costs are charged to statement of profit and loss.
e) Investments
Investments are classified as long term or current investments. Long
term investments are stated at cost. Provision for diminution in value
of long term investments is made only if such a decline is other than
temporary in the opinion of the management. Current investments are
stated at the lower of cost or fair value.
f) Impairment of assets
At each reporting date, the Company assesses whether there is any
indication that an asset may be impaired, based on internal or external
factors. If any such indication exists, the Company estimates the
recoverable amount of the asset or the cash generating unit. If such
recoverable amount of the asset or 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 recognised in the statement of profit and loss.
If, at the reporting date there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.
Impairment losses previously recognized are accordingly reversed.
g) Employee benefits
The Company''s contribution to provident fund and employee state
insurance schemes is charged to the statement of profit and loss or
inventorized as a part of real estate project under development, as the
case may be. The Company has unfunded defined benefit plans namely
compensated absences and gratuity for its employees, the liability for
which is determined on the basis of actuarial valuation, conducted by
an independent actuary, in accordance with Accounting Standard 15
(Revised 2005) - ''Employee Benefits'', notified under the Companies
(Accounting Standards) Rules, 2006, as amended.
Actuarial gains and losses are recognized in the statement of profit
and loss or inventorized, as the case may be.
h) Stock based compensation expense
Stock based compensation expense are recognized in accordance with the
guidance note on ''Accounting for employee share based payments'' issued
by the Institute of Chartered Accountants of India, which establishes
financial accounting and reporting principles for employee share based
payment plans. Employee stock compensation costs are measured based on
the intrinsic value of the stock options on the grant date. The
compensation expense is amortized over the vesting period of the
options.
i) Leases
In case of assets taken on operating lease, the lease rentals are
charged to the statement of profit and loss in accordance with
Accounting Standard 19 (AS 19) - ''Leases'', as notified under the
Companies (Accounting Standards) Rules, 2006, as amended.
j) Foreign currency transactions
Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the exchange rate between the reporting currency and the
foreign currency at the date of the transaction to the foreign currency
amount.
Conversion
Foreign currency monetary items are converted to reporting currency
using the closing rate. Non monetary items denominated in a foreign
currency which are carried at historical cost are reported using the
exchange rate at the date of the transaction; and non-monetary items
which are carried at fair value or any other similar valuation
denominated in a foreign currency are reported using the exchange rates
that existed when the values were determined.
Exchange Differences
Exchange differences arising on monetary items on settlement, or
restatement as at reporting date, at rates different from those at
which they were initially recorded, are recognized in the statement of
profit and loss in the year in which they arise except those arising
from investments in non-integral operations.
Exchange differences arising on monetary items that in substance forms
part of the Company''s net investment in a non-integral foreign
operation are accumulated in a foreign currency translation reserve in
the financial statements until the disposal of the net investment, at
which time they are recognized in the statement of profit and loss.
k) Taxes on income Current tax
Current tax is determined as the tax payable in respect of taxable
income for the year and is computed in accordance with relevant tax
regulations.
Deferred tax
Deferred tax resulting from timing differences between taxable income
and accounting income is accounted for at the current rate of tax or
substantively enacted tax rates as at reporting date, to the extent
that the timing differences are expected to crystallize.
Deferred tax assets are recognized where realization is reasonably
certain whereas in case of carried forward losses or unabsorbed
depreciation, deferred tax assets are recognized only if there is a
virtual certainty supported by convincing evidence that such deferred
tax assets will be realized .Deferred tax assets are reviewed for the
appropriateness of their respective carrying values at each reporting
date.
l) Provisions, contingent liabilities and contingent assets
Provisions are recognized only when there is a present obligation, as a
result of past events, and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for:
* Possible obligations which will be confirmed only by future events
not wholly within the control of the Company or,
* Present obligations arising from past events where it is not probable
that an outflow of resources will be required to settle the obligation
or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are not recognized in the financial statements since
this may result in the recognition of income that may never be
realized.
m) Earnings per equity share
Basic earnings per share is computed by dividing profit available to
equity shareholders by weighted average number fo equity shares
outstanding during the year. Diluted earnings per share is computed
using the weighted average number of equity and dilutive potential
equity shares outstanding during the year.
n) Share issue expenses
Share issue expenses are adjusted against securities premium account to
the extent of balance available and thereafter, the balance portion is
charged off to the statement of profit and loss, as incurred.
o) Preliminary expenses
Preliminary expenses are adjusted against securities premium account
(net of tax) to the extent of balance available and thereafter, the
balance portion is charged off to the statement of profit and loss, as
incurred.
p) Segment Reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive management
in performance assessment and decision making with regards to resource
allocation.
Mar 31, 2013
A) Revenue recognition
i) Revenue from real estate development projects and plots under
development is recognized in the financial year in which the agreement
to sell or application forms (containing salient terms of agreement to
sell) is executed, on the percentage of completion method which is
applied on a cumulative basis in each accounting year to the current
estimate of contract revenue and related project costs, when the stage
of completion of each project reaches a significant level which is
estimated to be at least 25% of the total estimated construction cost
of the respective projects.
ii) Revenue from sale of goods is recognized when all the significant
risks and rewards of ownership of the goods have been passed to the
buyer, usually on delivery of goods. The company collects all relevant
applicable taxes like sales taxes, value added taxes (VAT) etc. on
behalf of the government and, therefore, these are not economic
benefits flowing to the company. Hence, they are excluded from revenue.
iii) Revenue from sale of developed land and plots is recognized in the
year in which the underlying sale deed is executed.
iv) Interest income from deposits is recognized on accrual basis.
v) Dividend income is recognized when the right to receive the dividend
is unconditionally established.
vi) Profit on sale of investment is recognized on the date of its sale
and is computed as excess of sale proceeds over its carrying amount as
at the date of sale.
vii) Interest on delayed receipts, cancellation/forfeiture and transfer
fees from customers is recognized, as per revenue recognition
principles laid down in Accounting Standard - 9 on "Revenue
Recognition", when certainty of its collection is established.
b) Inventories
Land other than that transferred to real estate projects under
development is valued at lower of cost or net realizable value.
Cost includes cost of acquisition and internal and external development
costs, construction costs, and development/construction materials. Real
estate projects under development represents land under development,
cost incurred directly in respect of construction activity and indirect
construction cost to the extent to which the expenditure is related to
the construction or incidental thereto on unsold real estate projects
is valued at cost.
Construction materials, stores and spares, tools and consumable are
valued at lower of cost or net realizable value, on the basis of
first-in first-out method.
Inventories of trading goods are valued at cost or estimated net
realizable value, whichever is lower. Cost of inventories is determined
using the weighted average cost method and includes purchase price, and
all direct costs incurred in bringing the inventories to their present
location and condition.
c) Fixed assets
Recognition and measurement
Tangible fixed assets are stated at cost; net of tax or duty credits
availed, less accumulated depreciation and accumulated impairment
losses, if any. Cost includes original cost of acquisition, including
incidental expenses related to such acquisition and installation.
Intangible assets are stated at cost, net of tax or duty credits
availed, less accumulated amortization and accumulated impairment
losses, if any. Cost includes original cost of acquisition, including
incidental expenses related to such acquisition.
Depreciation and Amortization
Depreciation on fixed assets is provided on the straight-line method at
the rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956, on a pro-rata basis from the date the asset is ready to put
to use till the end of its useful life or till the asset is discarded,
whichever is earlier. Individual assets costing up to Rs. 5,000 per
item are fully depreciated in the year of purchase. Temporary
structures are depreciated over a period of twelve months, on a
pro-rata basis, from the date it is ready to put to use.
(All Amounts in Indian ''except share data and where otherwise stated)
Intangible assets are amortized over the expected useful life from the
date the assets are available for use, as mentioned below:
Capital work-in-progress
Costs of fixed assets under construction are disclosed under capital
work-in-progress. Advances paid towards acquisition or construction of
fixed assets or intangible assets is included as capital advances under
long term loans and advances.
d) Borrowing costs
Borrowing costs attributable to the acquisition, construction or
production of qualifying assets are capitalised as part of cost of the
asset. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use. All other borrowing
costs are charged to statement of profit and loss.
e) Investments
Investments are classified as long term or current investments. Long
term investments are stated at cost. Provision for diminution in value
of long term investments is made only if such a decline is other than
temporary in the opinion of the management. Current investments are
stated at the lower of cost or fair value.
f) Impairment of assets
At each reporting date, the Company assesses whether there is any
indication that an asset may be impaired, based on internal or external
factors. If any such indication exists, the Company estimates the
recoverable amount of the asset or the cash generating unit. If such
recoverable amount of the asset or 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 recognised in the statement of profit and loss.
If, at the reporting date there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.
Impairment losses previously recognized are accordingly reversed.
g) Employee benefits
The Company''s contribution to provident fund and employee state
insurance schemes is charged to the statement of profit and loss or
inventorized, as the case may be. The Company has unfunded defined
benefit plans namely compensated absences and gratuity for its
employees, the liability for which is determined on the basis of
actuarial valuation, conducted semi-annually, by an independent
actuary, in accordance with Accounting Standard 15 (Revised 2005) -
''Employee Benefits'', notified under the Companies (Accounting
Standards) Rules, 2006, as amended.
Actuarial gains and losses are recognized in the statement of profit
and loss or inventorized, as the case may be.
h) Stock based compensation expense
Stock based compensation expense are recognized in accordance with the
guidance note on ''Accounting for employee share based payments'' issued
by the Institute of Chartered Accountants of India, which establishes
financial accounting and reporting principles for employee share based
payment plans. Employee stock compensation costs are measured based on
the intrinsic value of the stock options on the grant date. The
compensation expense is amortized over the vesting period of the
options.
i) Leases
In case of assets taken on operating lease, the lease rentals are
charged to the statement of profit and loss in accordance with
Accounting Standard 19 (AS 19) - ''Leases'', as notified under the
Companies (Accounting Standards) Rules, 2006, as amended
j) Foreign currency transactions Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the exchange rate between the reporting currency and the
foreign currency at the date of the transaction to the foreign currency
amount Conversion
Foreign currency monetary items are converted to reporting currency
using the closing rate. Non monetary items denominated in a foreign
currency which are carried at historical cost are reported using the
exchange rate at the date of the transaction; and non-monetary items
which are carried at fair value or any other similar valuation
denominated in a foreign currency are reported using the exchange rates
that existed when the values were determined.
Exchange Differences
Exchange differences arising on monetary items on settlement, or
restatement as at reporting date, at rates different from those at
which they were initially recorded, are recognized in the statement of
profit and loss in the year in which they arise except those arising
from investments in non-integral operations.
Exchange differences arising on monetary items that in substance forms
part of the Company''s net investment in a non-integral foreign
operation are accumulated in a foreign currency translation reserve in
the financial statements until the disposal of the net investment, at
which time they are recognized in the statement of profit and loss.
k) Taxes on income Current tax
Current tax is determined as the tax payable in respect of taxable
income for the year and is computed in accordance with relevant tax
regulations.
Deferred tax
Deferred tax resulting from timing differences between taxable income
and accounting income is accounted for at the current rate of tax or
substantively enacted tax rates as at reporting date, to the extent
that the timing differences are expected to crystallize.
Deferred tax assets are recognized where realization is reasonably
certain whereas in case of carried forward losses or unabsorbed
depreciation, deferred tax assets are recognized only if there is a
virtual certainty supported by convincing evidence that such deferred
tax assets will be realized. Deferred tax assets are reviewed for the
appropriateness of their respective carrying values at each reporting
date.
l) Provisions, contingent liabilities and contingent assets
Provisions are recognized only when there is a present obligation, as a
result of past events, and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for:
- Possible obligations which will be confirmed only by future events
not wholly within the control of the Company or,
- Present obligations arising from past events where it is not probable
that an outflow of resources will be required to settle the obligation
or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are not recognized in the financial statements since
this may result in the recognition of income that may never be
realized.
m) Earnings per equity share
Basic earnings per equity share is computed using the weighted average
number of equity shares outstanding during the year. Diluted earnings
per equity share is computed using the weighted average number of
equity and dilutive potential equity shares outstanding during the
year.
n) Share issue expenses
Share issue expenses are adjusted against securities premium account to
the extent of balance available and thereafter, the balance portion is
charged off to the statement of profit and loss, as incurred. o)
Preliminary expenses
Preliminary expenses are adjusted against securities premium account
(net of tax) to the extent of balance available and thereafter, the
balance portion is charged off to the statement of profit and loss, as
incurred.
p) Segment Reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive management
in performance assessment and decision making with regards to resource
allocation.
Mar 31, 2012
A) Statement of compliance
The financial statements are prepared under the historical cost
convention on an accrual basis, in accordance with the generally
accepted accounting principles in India and in compliance with the
applicable accounting standards as notified under the Companies
(Accounting Standards) Rules, 2006, as amended and as per Revised
Schedule VI to the Companies Act, 1956. 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 the Revised Schedule VI
to the Companies Act, 1956.
b) Use of estimates
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities and disclosure of contingent liabilities as on the date of
the financial statements and the reported amount of revenues and
expenses during the reporting year. Differences between the actual
results and estimates are recognized in the year in which { the results
are known or materialized.
a) Revenue recognition
i) Revenue from real estate development projects and plots under
development is recognized in the financial j year in which the
agreement to sell or application forms (containing salient terms of
agreement to sell) is executed, on the percentage of completion method
which is applied on a cumulative basis in each accounting year to the
current estimate of contract revenue and related project costs, when
the stage of completion of j each project reaches a significant level
which is estimated to be at least 25% of the total estimated
construction j cost of the respective projects.
ii) Revenue from sale of goods is recognized when all the significant
risks and rewards of ownership of the goods have been passed to the
buyer, usually on delivery of goods. The Company collects all relevant
applicable taxes like sales taxes, value added taxes (VAT) etc. on
behalf of the government and, therefore, these are not economic
benefits flowing to the Company. Hence, they are excluded from revenue.
The ownership in goods/merchandise of third parties under
concessionaire arrangements does not pass to the Company.
Concessionaire income earned from sales made by third parties under
such arrangements is recognised in the statement of profit and loss as
other operating income under the head Concessionaire Income.
iii) Revenue from sale of developed land and plots is recognized in the
year in which the underlying sale deed is executed.
iv) Interest income from deposits is recognized on accrual basis.
v) Dividend income is recognized when the right to receive the dividend
is unconditionally established.
vi) Profit on sale of investment is recognized on the date of its sale
and is computed as excess of sale proceeds over its carrying amount as
at the date of sale.
vii) Interest on delayed receipts, cancellation/forfeiture and transfer
fees from customers is recognized, as per revenue recognition
principles laid down in Accounting Standard - 9 on "Revenue
Recognition", when certainty of its collection is established.
b) Inventories
Land other than that transferred to real estate projects under
development is valued at lower of cost or net realizable value.
Cost includes cost of acquisition and internal and external development
costs, construction costs, and development/ construction materials.
Real estate projects under development represents land under
development, cost incurred directly in respect of construction activity
and indirect construction cost to the extent to which the expenditure
is related to the construction or incidental thereto on unsold real
estate projects is valued at cost.
Construction materials, stores and spares, tools and consumable are
valued at lower of cost or net realizable value, on the basis of
first-in first-out method. j
Inventories of trading goods are valued at cost or estimated net
realizable value, whichever is lower. Cost of j inventories is
determined using the weighted average cost method and includes purchase
price, and all direct costs j incurred in bringing the inventories to
their present location and condition.
c) Fixed assets
Recognition and measurement
Tangible fixed assets are stated at cost; net of tax or duty credits
availed, less accumulated depreciation and accumulated impairment
losses, if any. Cost includes original cost of acquisition, including
incidental expenses related to such acquisition and installation.
Intangible assets are stated at cost, net of tax or duty credits
availed, less accumulated amortization and accumulated impairment
losses, if any. Cost includes original cost of acquisition, including
incidental expenses related to such acquisition.
Depreciation and Amortization
Depreciation on fixed assets is provided on the straight-line method at
the rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956, on a pro-rata basis from the date the asset is ready to put
to use till the end of its useful life or till the asset is discarded,
whichever is earlier. Individual assets costing up to Rs. 5,000 per
item are fully depreciated in the year of purchase. Temporary
structures are depreciated over a period of twelve months, on a
pro-rata basis, from the date it is ready to put to use.
Costs of fixed assets under construction are disclosed under capital
work-in-progress. Advances paid towards acquisition or construction of
fixed assets or intangible assets is included as capital advances under
long term loans and advances.
d) Borrowing costs
Borrowing costs attributable to the acquisition, construction or
production of qualifying assets are capitalised as part of cost of the
asset. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use. All other borrowing
costs are charged to statement of profit and loss.
e) Investments
Investments are classified as long term or current investments. Long
term investments are stated at cost. Provision for diminution in value
of long term investments is made only if such a decline is other than
temporary in the opinion of the management. Current investments are
stated at the lower of cost or fair value.
f} Impairment of assets
At each reporting date, the Company assesses whether there is any
indication that an asset may be impaired, based on internal or external
factors. If any such indication exists, the Company estimates the
recoverable amount of the asset or the cash generating unit. If such
recoverable amount of the asset or 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 recognised in the Statement of Profit and Loss.
If, at the reporting date there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.
Impairment losses previously recognized are accordingly reversed.
g) Employee benefits
The Company's contribution to provident fund and employee state
insurance schemes is charged to the statement of profit and loss or
inventorized, as the case may be. The Company has unfunded defined
benefit plans namely compensated absences and gratuity for its
employees, the liability for which is determined on the basis of
actuarial valuation, conducted semi-annually, by an independent
actuary, in accordance with Accounting Standard 15 (Revised 2005) -
'Employee Benefits', notified under the Companies (Accounting
Standards) Rules, 2006, as amended.
Actuarial gains and losses are recognized in the statement of profit
and loss or inventorized, as the case may be.
h) Stock based compensation expense
Stock based compensation expense are recognized in accordance with the
guidance note on 'Accounting for employee share based payments' issued
by the Institute of Chartered Accountants of India, which establishes
financial accounting and reporting principles for employee share based
payment plans. Employee stock compensation costs are measured based on
the intrinsic value of the stock options on the grant date. The
compensation expense is amortized over the vesting period of the
options.
i) Leases
In case of assets taken on operating lease, the lease rentals are
charged to the statement of profit and loss in accordance with
Accounting Standard 19 (AS 19) -'Leases', as notified under the
Companies (Accounting Standards) Rules, 2006, as amended.
j) Foreign currency transactions
Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the exchange rate between the reporting currency and the
foreign currency at the date of the transaction to the foreign currency
amount.
Conversion
Foreign currency monetary items are converted to reporting currency
using the closing rate. Non monetary items denominated in a foreign
currency which are carried at historical cost are reported using the
exchange rate at the date of the transaction; and non-monetary items
which are carried at fair value or any other similar valuation
denominated in a foreign currency are reported using the exchange rates
that existed when the values were determined.
Exchange Differences
Exchange differences arising on monetary items on settlement, or
restatement as at reporting date, at rates different from those at
which they were initially recorded, are recognized in the statement of
profit and loss in the year in which they arise except those arising
from investments in non-integral operations.
Exchange differences arising on monetary items that in substance forms
part of the Company's net investment in a non-integral foreign
operation are accumulated in a foreign currency translation reserve in
the financial statements until the disposal of the net investment, at
which time they are recognized in the statement of profit and loss.
k) Taxes on income
Current tax
Current tax is determined as the tax payable in respect of taxable
income for the year and is computed in accordance with relevant tax
regulations.
Deferred tax
Deferred tax resulting from timing differences between taxable incofne
and accounting income is accounted for at the current rate of tax or
substantively enacted tax rates as at reporting date, to the extent
that the timing differences are expected to crystallize.
Deferred tax assets are recognized where realization is reasonably
certain whereas in case of carried forward losses or unabsorbed
depreciation, deferred tax assets are recognized only if there is a
virtual certainty supported by convincing evidence that such deferred
tax assets will be realized. Deferred tax assets are reviewed for the
appropriateness of their respective carrying values at each reporting
date.
I) Provisions, contingent liabilities and contingent assets
Provisions are recognized only when there is a present obligation, as a
result of past events, and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for:
Possible obligations which will be confirmed only by future events not
wholly within the control of the Company or,
Present obligations arising from past events where it is not probable
that an outflow of resources will be required to settle the obligation
or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are not recognized in the financial statements since
this may result in the recognition of income that may never be
realized.
m) Earnings per equity share
Basic earnings per equity share is computed using the weighted average
number of equity shares outstanding during the year. Diluted earnings
per equity share is computed using the weighted average number of
equity and dilutive potential equity shares outstanding during the
year.
n) Share issue expenses
Share issue expenses are adjusted against securities premium account to
the extent of balance available and thereafter, the balance portion is
charged off to the statement of profit and loss, as incurred.
o) Preliminary expenses
Preliminary expenses are adjusted against securities premium account
(net of tax) to the extent of balance available and thereafter, the
balance portion is charged off to the statement of profit and loss, as
incurred.
p) Segment Reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive management
in performance assessment and decision making with regards to resource
allocation.
Mar 31, 2011
I. Basis of Accounting:
The financial statements are prepared under the historical cost
convention on an accrual basis, in accordance with the generally
accepted accounting principles in India and in compliance with the
applicable accounting standards as notified under the Companies
(Accounting Standards) Rules, 2006, as amended.
ii. Use of Estimates:
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities and disclosure of contingent liabilities on the date of the
financial statements and the reported amount of revenues and expenses
during the reporting year. Differences between the actual results and
estimates are recognized in the year in which the results are known
/materialized.
iii. Revenue Recognition:
a) Revenue from real estate development projects and plots under
development is recognised in the financial year in which the agreement
to sell / application forms (containing salient terms of agreement to
sell) is executed, on the Percentage of Completion Method which is
applied on a cumulative basis in each accounting year to the current
estimate of contract revenue and related project costs, when the stage
of completion of each project reaches a significant level which is
estimated to be at least 25% of the total estimated construction cost
of the respective projects.
b) Revenue from sale of developed land and plots is recognised in the
year in which the underlying sale deed is executed.
c) Income from sale of goods is recongised on dispatch of goods. Gross
sale are stated at contractual realizable values and net of sale tax
and trade discounts.
d) Interest income from deposits and others is recognised on accrual
basis.
e) Dividend income is recognised when the
right to receive the dividend is unconditionally established.
iv. Borrowing Costs:
Borrowing costs attributable to the acquisition, construction or
production of qualifying assets are capitalised as part of cost of the
asset. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use. All other borrowing
costs are charged to revenue.
v. Investments:
Investments are classified as long term or current investments. Long
term investments are stated at cost and provision for diminution in
their value, other than temporary, is recorded in the books of account.
Current investments are stated at the lower of cost or fair value.
vi. Inventories:
Land other than that transferred to real estate projects under
development is valued at lower of cost or net realisable value.
Cost includes cost of acquisition and internal and external development
costs, construction costs, and development/construction materials. Real
estate projects under development represents land under development,
cost incurred directly in respect of construction activity and indirect
construction cost to the extent to which the expenditure is indirectly
related to the construction or incidental thereto on unsold real estate
projects is valued at cost.
Construction materials, stores and spares, tools and consumable are
valued at lower of cost or net realisable value, whichever is lower on
the basis of first-in first-out method.
vii. Fixed Assets:
Tangible fixed assets are stated at cost, net of tax / duty credits
availed, less accumulated depreciation / impairment losses, if any.
Cost includes original cost of acquisition, including incidental
expenses related to such acquisition and installation.
Intangible assets are stated at cost, net of tax / duty credits
availed, less accumulated amortization /impairment losses, if any. Cost
includes original cost of acquisition, including incidental expenses
related to such acquisition.
Expenditure directly relating to construction/ development activity is
capitalised. Indirect expenditure incurred during construction/
development period is capitalised as part of the indirect
construction/development cost to the extent to which the expenditure is
indirectly related to construction / development or is incidental
thereto.
viii. Depreciation/Amortization:
Depreciation on fixed assets is provided on the straight-line method at
the rates and as per the manner prescribed in Schedule XIV of the
Companies Act, 1956.
Depreciation on additions/deletions to fixed assets is provided on
pro-rata basis from/till the date the asset is put to use/discarded.
Assets costing less than Rs. 5,000 per item are fully depreciated in
the year of purchase.
Intangible assets consisting of Software are amortized on a straight
line basis over a period of four years from the date when the assets
are available for use.
ix. Impairment of Assets:
At each Balance Sheet date, the Company assesses whether there is any
indication that an asset may be impaired, based on internal or external
factors. If any such indication exists, the Company estimates the
recoverable amount of the asset or the cash generating unit. If such
recoverable amount of the asset or 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 recognised in the Profit and Loss Account. If,
at the Balance Sheet date there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.
Impairment losses previously recognized are accordingly reversed.
x. Taxes on Income:
Current tax is determined as the tax payable in respect of taxable
income for the year and is computed in accordance with relevant tax
regulations. Minimum Alternate Tax (MAT) paid in excess of normal
income tax is recognised as asset (MAT Credit entitlement) only to the
extent,
there is reasonable certainty that company shall be liable to pay tax
as per the normal provisions of the Act in future. MAT Credit is
utilised in the year when normal income tax is higher than the Minimum
Alternate Tax (MAT).
Deferred Tax resulting from timing differences between taxable income
and accounting income is accounted for at the current rate of tax /
substantively enacted tax rates as on the Balance Sheet date, to the
extent that the timing differences are expected to crystallize.
Deferred Tax Assets are recognized where realization is reasonably
certain whereas in case of carried forward losses or unabsorbed
depreciation, Deferred Tax Assets are recognized only if there is a
virtual certainty supported by convincing evidence that such deferred
tax assets will be realized. Deferred Tax Assets are reviewed for the
appropriateness of their respective carrying values at each Balance
Sheet date.
xi. Leases:
In case of assets taken on operating lease, the lease rentals are
charged to the profit and loss account in accordance with Accounting
Standard (AS)  19 "Leases as notified under the Companies (Accounting
Standards) Rules, 2006, as amended.
xii. Foreign Currency Transactions:
a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying the exchange rate between the reporting currency and the
foreign currency at the date of the transaction to the foreign currency
amount.
b) Conversion
Foreign currency monetary items are converted to reporting currency
using the closing rate. Non monetary items denominated in a foreign
currency which are carried at historical cost are reported using the
exchange rate at the date of the transaction; and non-monetary items
which are carried at fair value or any other similar valuation
denominated in a foreign currency are reported using the exchange rates
that existed when the values were determined.
c) Exchange Differences
Exchange differences arising on the settlement of monetary items or on
reporting company''s monetary items at rates different from those at
which they were initially recorded, are recognized as income or expense
in the year in which they arise except those arising from investments
in non-integral operations.
Exchange differences arising on monetary items that in substance forms
part of the Company''s net investment in a non-integral foreign
operation are accumulated in a foreign currency translation reserve in
the balance sheet.
xiii. Employee benefts:
Short-term employee benefits are recognised as an expense at the
undiscounted amount in the profit and loss account /real estate
projects under development for the year in which the related service is
rendered. The Company''s contribution to Provident Fund and Employee
State Insurance Schemes is charged to the profit and loss account/ real
estate projects under development.
Post employment and other long term employee benefits for its eligible
employees are recognised as an expense in the profit and loss
account/real estate projects under development, for the year in which
the employee has rendered services. The Company has unfunded defined
benefit plans namely compensated absences and gratuity for its
employees, the liability for which is determined on the basis of
actuarial valuation, conducted semi-annually, by an independent
actuary, in accordance with Accounting Standard (AS) - 15 (Revised
2005) "Employee BenefitsÂ, notified under the Companies (Accounting
Standards) Rules, 2006, as amended. Actuarial gains and losses are
recognized in profit and loss account/real estate projects under
development.
xiv. Deferred Employee Stock Compensation Costs:
Deferred Employee Stock Compensation Costs are recognised in accordance
with the Guidance Note on Accounting for Employee Share Based Payments
issued by the Institute of Chartered Accountants of India, which
establishes financial accounting and reporting principles for employee
share based payment plans. Employee stock compensation costs are
measured based on the estimated intrinsic or fair value (as elected by
the Company in respect of its different Employees Share Based Payment
Plans) of the stock options on the grant date. The compensation expense
is amortized over the vesting period of the options.
xv. Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognized only when there is a present obligation as a
result of past events and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for:
(a) Possible obligations which will be confirmed only by future events
not wholly within the control of the Company or
(b) Present obligations arising from past events where it is not
probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount of the obligation
cannot be made.
Contingent Assets are not recognized in the financial statements since
this may result in the recognition of income that may never be
realized.
xvi. Share Issue Expenses:
Share Issue Expenses are adjusted against Securities Premium Account to
the extent of balance available and thereafter, the balance portion is
charged off to the profit and loss account, as incurred.
xvii. Earnings Per Share:
Basic Earnings per Share is computed using the weighted average number
of equity shares outstanding during the year. Diluted Earnings per
Share is computed using the weighted average number of equity and
dilutive potential equity shares outstanding during the year.
xviii. Preliminary Expenses:
Preliminary Expenses are adjusted against Securities Premium Account
(net of tax) to the extent of balance available and thereafter, the
balance portion is charged off to the profit and loss account, as
incurred.
Mar 31, 2010
I. Basis of Accounting:
The financial statements are prepared under the historical cost
convention on an accrual basis, in accordance with the generally
accepted accounting principles in India and in compliance with the
applicable accounting standards as notified under the Companies
(Accounting Standards) Rules, 2006, as amended.
ii. Use of Estimates:
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities and disclosure of contingent liabilities on the date of the
financial statements and the reported amount of revenues and expenses
during the reporting year. Differences between the actual results and
estimates are recognized in the year in which the results are known /
materialized.
iii. Revenue Recognition:
a) Revenue from real estate development projects is recognised on the
Percentage of Completion Method which is applied on a cumulative basis
in each accounting year to the current estimate of contract revenue and
related project costs, when the stage of completion of each project
reaches a significant level which is estimated to be at least 25% of
the total estimated construction cost of the respective projects.
b) Income from sale of goods are recongised on dispatch of goods. Gross
sale are stated at contractual realizable values and net of sale tax
and trade discounts.
c) Revenue from sale of land and plots is recognised in the year in
which the underlying sale deed is executed,
d) Interest income from deposits and others is recognised on accrual
basis.
e) Dividend income is recognised when the right to receive the dividend
is unconditionally established.
iv. Borrowing Costs:
Borrowing costs attributable to the acquisition, construction or
production of qualifying assets are capitalised as part of cost of the
asset. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use. All other borrowing
costs are charged to revenue.
v. Investments:
Investments are classified as long term or current investments. Long
term investments are stated at cost and provision for diminution in
their value, other than temporary, is recorded in the books of account.
Current investments are stated at the lower of cost or fair value.
vi. Inventories:
Land other than that transferred to real estate projects under
development is valued at lower of cost or net realisable value
Cost includes cost of acquisition and internal and external development
costs, construction costs, and development/construction materials Real
estate projects under development represents land under development,
cost incurred directly in respect of construction activity and indirect
construction cost to the extent to which the expenditure is indirectly
related to the construction or incidental thereto on unsold real estate
projects is valued at cost.
Construction materials, stores and spares, tools and consumable are
valued at lower of cost or net lealisable value, whichever is lower on
the basis of first-in first-out method.
vii. Fixed Assets:
Tangible fixed assets are stated at cost, net of tax / duty credits
availed, less accumulated depreciation / impairment losses, if any.
Cost includes original cost of acquisition, including incidental
expenses related to such acquisition and installation.
Intangible assets are stated at cost, net of tax / duty credits
availed, less accumulated amortization / impairment losses, if any.
Cost includes original cost of acquisition, including incidental
expenses related to such acquisition.
Expenditure directly relating to construction/development activity is
capitalised. Indirect expenditure incurred during
construction/development period is capitalised as part of the indirect
construction/development cost to the extent to which the expenditure is
indirectly related to construction/development or is incidental
thereto.
viii. Depreciation/Amortization:
Depreciation on fixed assets is provided on the straight-line method at
the rates and as per the manner prescribed in Schedule XIV of the
Companies Act, 1956.
Depreciation on additions/deletions to fixed assets is provided on
pro-rata basis from the date the asset is put to use/discarded. Assets
costing less than Rs5,000 per item are fully depreciated in the year of
purchase.
Intangible assets consisting of Software are amortized on a straight
line basis over a period of four years from the date when the assets
are available for use.
ix. Impairment of Assets:
At each Balance Sheet date, the Company assesses whether there is any
indication that an asset may be impaired, based on internal or external
factors. If any such indication exists, the Company estimates the
recoverable amount of the asset or the cash generating unit. If such
recoverable amount of the asset or 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 recognised in the Profit and Loss Account. If,
at the Balance Sheet date there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.
Impairment losses previously recognized are accordingly reversed,
x. Taxes on Income:
Current tax is determined as the tax payable in respect of taxable
income for the year and is computed in accordance with relevant tax
regulations.
Deferred Tax resulting from timing differences between taxable income
and accounting income is accounted for at the current rate of tax /
substantively enacted tax rates as on the Balance Sheet date, to the
extent that the timing differences are expected to crystallize.
Deferred Tax Assets are recognized where realization is reasonably
certain whereas in case of carried forward losses or unabsorbed
depreciation, Deferred Tax Assets are recognized only if there is a
virtual certainty supported by convincing evidence that such deferred
tax assets will be realized .Deferred Tax Assets are reviewed for the
appropriateness of their respective carrying values at each Balance
Sheet date.
xi. Leases:
In case of assets taken on operating lease, the lease rentals are
charged to the profit and loss account in accordance with Accounting
Standard 19 (AS 19) on Leases as notified under the Companies
(Accounting Standards) Rules, 2006, as amended.
xii. Foreign Currency Transactions:
a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying the exchange date between the reporting currency and the
foreign currency at the date of the transaction to the foreign currency
amount.
b) Conversion
Foreign currency monetary items are converted to reporting currency
using the closing rate. Non monetary items denominated in a foreign
currency which are carried at historical cost are reported using the
exchange rate at the date of the transaction; and non-monetary items
which are carried at fair value or any other similar valuation
denominated in a foreign currency are reported using the exchange rates
that existed when the values were determined.
c) Exchange Differences
Exchange differences arising on the settlement of monetary items or on
reporting company's monetary items at rates different from those at
which they were initially recorded, are recognized as income or expense
in the year in which they arise except those arising from investments
in non- integral operations.
Exchange differences arising on monetary items that in substance forms
part of the Company's net investment in a non-integral foreign
operation are accumulated in a foreign currency translation reserve in
the balance sheet.
xiii. Employee benefits:
The Company's contribution to Provident Fund and Employee State
Insurance Schemes is charged to the profit and loss account. The
Company has unfunded defined benefit plans namely compensated absences
and gratuity for its employees, the liability for which is determined
on the basis of actuarial valuation, conducted semi-annually, by an
independent actuary, in accordance with Accounting Standard 15 (Revised
2005) - Employee Benefits, notified under the Companies (Accounting
Standards) Rules, 2006, as amended.
Actuarial gains and losses are recognized in profit and loss
account/real estate projects under development.
xiv. Deferred Employee Stock Compensation Costs:
Deferred Employee Stock Compensation Costs are recognised in accordance
with the Guidance Note on Accounting for Employee Share Based Payments
issued by the Institute of Chartered Accountants of India, which
establishes financial accounting and reporting principles for employee
share based payment plans. Employee stock compensation costs are
measured based on the estimated intrinsic or fair value (as elected by
the Company in respect of its different Employees Share Based Payment
Plans) of the stock options on the grant date. The compensation expense
is amortized over the vesting period of the options.
xv. Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognized only when there is a present obligation as a
result of past events and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for:
(a) Possible obligations which will be confirmed only by future events
not wholly within the control of the Company or
(b) Present obligations arising from past events where it is not
probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount of the obligation
cannot be made.
Contingent Assets are not recognized in the financial statements since
this may result in the recognition of income that may never be
realized,
xvi. Share Issue Expanses:
Share Issue Expenses are adjusted against Securities Premium Account to
the extent of balance available and thereafter, the balance portion is
charged oft to the profit and loss account, as incurred.
xvii. Earnings Per Share:
Basic Earnings per Share is computed using the weighted average number
of equity shares outstanding during the year. Diluted Earnings per
Share is computed using the weighted average number of equity and
dilutive potential equity shares outstanding during the year
xviii. Preliminary Expenses:
Preliminary Expenses are adjusted against Securities Premium Account
(net of tax) to the extent of balance available and thereafter, the
balance portion is charged off to the profit and loss account, as
incurred.
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