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Accounting Policies of Vas Infrastructure Ltd. Company

Mar 31, 2015

A) Change in accounting policy

Presentation and disclosure of financial statements during the period of 18 months ended March 31, 2015 the Schedule III notified under the Companies Act, 2013, has become applicable to the Company for preparation and presentation of its financial statements. The adoption of Schedule III does not impact recognition and measurement principles followed by the Company for preparation of financial statements. However, it significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

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 disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Significant estimates used by the management in the preparation of these financial statements include computation of percentage completion for projects in progress, project cost, revenue and saleable area estimates, classification of assets and liabilities into current and non current, estimates of the economic useful lives of fixed assets, provisions for bad and doubtful debts. Any revision to accounting estimates is recognized prospectively.

3) Tangible and intangible fixed assets

a) Tangible fixed assets

Tangible fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any, Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Borrowing costs directly attributable to acquisition of fixed assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

b) Depreciation on tangible fixed assets

During the 18 months ended 31st March, 2015, the company has revised the estimated useful life of all the assets with effect from 01-04-2014 taking the useful life as defined in Schedule-ll Parte of the Act. Consequently the company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the assets was determined as nil as on 1st April, 2014, and the same is disclosed in profit and loss account under depreciation.

Assets individually costing less than or equal to Rs.5,000/- are fully depreciated in the year of purchase.

c) Impairment of tangible and intangible assets

The Company assesses at each reporting date whether there is any indication that an asset may be impaired. If any indication exists, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an assets or cash generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individual assets, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. Impairment losses, including impairment on inventories, are recognized in the statement of profit and loss.

After impairment deprecation is provided on the revised carrying amount of the asset over its remaining useful life.

4) Investments

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued.

5) Inventories

Related to contractual and real estate activity

Direct expenditure relating to construction activity is inventorised. Other expenditure (including borrowing costs) during construction period is inventorised to the extent the expenditure is directly attributable cost of bringing the asset to its working condition for its intended use. Other expenditure (including borrowing costs) incurred during the construction period which is not directly attributable for bringing the assets to its working condition for its intended use is charged to the statement of profit and loss. Direct and other expenditure is determined based on specific identification to the construction and real estate activity. Cost incurred/items purchased specifically for projects are taken as consumed as and when incurred/received.

6) Revenue recognition

Recognition of revenue from real estate projects

Revenue from real estate projects is recognized when it is reasonably certain that the ultimate collection will be made and that there is buyers commitment to make the complete payment. The Risk & reward is passed on to the Buyer.

In such cases, the revenue is recognized on percentage of completion method, when the following Criteria listed below are met Together & not Individually.

a) When the stage of completion of the project reaches a reasonable level of development. A reasonable level of development is not achieved if the expenditure incurred on construction and development costs is less than 25% of the construction and development costs.

b) At least 25% of the saleable project area is secured by contracts or agreements with buyers.

c) At least 10% of the total revenue as per the agreements of sale or any other legally enforceable documents are realized at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties to such contracts will comply with the payments terms as defined in the contracts.

Revenue is recognized in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Land costs are not included for the purpose of computing the percentage of completion. Interest Cost taken for specific project from Banks are taken into direct cost while estimating the project cost to be undertaken for the Project.

Income from real estate sales is recognised on the transfer of all significant risks and rewards of ownership to the buyers and it is not unreasonable to expect ultimate collection and no significant uncertainty exists regarding the amount of consideration. However if, at the time of transfer substantial acts are yet to be performed under the contract, revenue is recognised on proportionate basis as the acts are performed, i.e. on the percentage of completion basis. Income from long term contracting assignments is also recognised on the percentage of completion basis. As the long term contracts necessary extend beyond one year, revision in costs and revenues estimated during the course of the contract are reflected in the accounting period in which the facts requiring the revision become known.Unbilled costs are carried as construction work-in-progress.

Determination of revenue under the percentage of completion method necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project/activity and the foreseeable losses to completion. Such estimates have been relied upon by the auditors.

Note : The Guidance note on accounting of Real estate Transaction (Revised 2012.) issued by ICAI has Been followed for Projects Commenced after April 2012 or Projects Commenced before April 2012 but no Revenue from the project is recognized for the 18 month ended 31.03.2015.

All the Project except Pushp Vinod 1 are accounted based on the Revised Guidance note on Accounting of real estate transaction 2012 issued by the ICAI.

7) Interest Income

Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

8) Taxes

Tax expense comprises of current and deferred tax.

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier year.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized.

Minimum Alternative tax (MAT) credit 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 the 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 there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

9) Retirement and other employee benefits

Retirement benefits in the form of provident fund is a defined contribution scheme and the contributions are charged to the statement of profit and loss of the year when the contributions to the provident fund are due. There are no other obligations other than the contribution payable to the government administered provident fund.

Gratuity & other long terms benefits are accounted as per A S 15 Retirement benefits issued by the ICAI.

10) Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

11) Provisions

A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable. Provisions are not discounted to its present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

12) Cash and Cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short term investments with an original maturity of three months or less.


Sep 30, 2013

1) Corporate information

VAS INFRASTRUCTURE Limited (‘Company'' or ‘VIL'') was incorporated on February 11, 1994. VIL is a leading real estate developer engaged in the business of construction, development, sale, management and operation of all or any part of townships, housing projects, commercial premises and other related activities.

2) Basis of preparation

The financial statements have been prepared to comply in all material respects with the accounting standards notified by Companies (Accounting Standards) Rules 2006, (as amended) and the relevant provisions of the Companies Act, 1956 ("the Act"). The financial statements have been prepared under the historical cost convention on an accrual basis in accordance with accounting policies have been consistently applied by the Company and are consistent with those used in previous year, except for the change in accounting policy explained in note 2.1 (a) below.

2.1 Summary of significant accounting policies

a) Change in accounting policy

Presentation and disclosure of financial statements during the period of 18 months ended September 30, 2013 the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed by the Company for preparation of financial statements. However, it significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

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 disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period. Although these estimates are based upon management`s best knowledge of current events and actions, actual results could differ from these estimates. Significant estimates used by the management in the preparation of these financial statements include computation of percentage completion for projects in progress, project cost, revenue and saleable area estimates. classification of assets and liabilities into current and non current, estimates of the economic useful lives of fixed assets, provisions for bad and doubtful debts. Any revision to accounting estimates is recognized prospectively.

3) Tangible and intangible fixed assets

a) Tangible fixed assets

Tangible fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any, Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price

Borrowing costs directly attributable to acquisition of fixed assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

b) Depreciation on tangible fixed assets

Depreciation on assets, other than those described below, is provided using written down value method at the rates prescribed under Schedule XIV of the Companies Act, 1956, which is also estimated by the management to be the estimated useful lives of the assets.

Assets individually costing less than or equal to Rs.5,000/- are fully depreciated in the year of purchase

c) Impairment of tangible and intangible assets

The Company assesses at each reporting date whether there is any indication that an asset may be impaired. If any indication exists, the Company estimates the asset`s recoverable amount. An asset`s recoverable amount is the higher of an assets or cash generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individual assets, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. Impairment losses, including impairment on inventories, are recognized in the statement of profit and loss.

After impairment deprecation is provided on the revised carrying amount of the asset over its remaining useful life.

NOTES TO THE FINANCIAL STATEMENTS FOR THE 18 MONTHS ENDED SEPTEMBER 30, 2013

4) Investments

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued.

5) Inventories

Related to contractual and real estate activity

Direct expenditure relating to construction activity is inventorised. Other expenditure (including borrowing costs) during construction period is inventorised to the extent the expenditure is directly attributable cost of bringing the asset to its working condition for its intended use. Other expenditure (including borrowing costs) incurred during the construction period which is not directly attributable for bringing the assets to its working condition for its intended use is charged to the statement of profit and loss. Direct and other expenditure is determined based on specific identification to the construction and real estate activity. Cost incurred/items purchased specifically for projects are taken as consumed as and when incurred/received.

6) Revenue recognition

Recognition of revenue from real estate projects

Revenue from real estate projects is recognized when it is reasonably certain that the ultimate collection will be made and that there is buyers commitment to make the complete payment. The Risk & reward is passed on to the Buyer.

In such cases, the revenue is recognized on percentage of completion method, when the following Criteria listed below are met Together & not Individually .

a) When the stage of completion of the project reaches a reasonable level of development. A reasonable level of development is not achieved if the expenditure incurred on construction and development costs is less than 25% of the construction and development costs.

b) At least 25% of the saleable project area is secured by contracts or agreements with buyers.

c) At least 10% of the total revenue as per the agreements of sale or any other legally enforceable documents are realized at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties to such contracts will comply with the payments terms as defined in the contracts.

Revenue is recognized in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Land costs are not included for the purpose of computing the percentage of completion. Interest Cost taken for specific project from Banks are taken into direct cost while estimating the project cost to be undertaken for the Project.

Income from real estate sales is recognised on the transfer of all significant risks and rewards of ownership to the buyers and it is not unreasonable to expect ultimate collection and no significant uncertainty exists regarding the amount of consideration. However if, at the time of transfer substantial acts are yet to be performed under the contract, revenue is recognised on proportionate basis as the acts are performed, i.e. on the percentage of completion basis. Income from long term contracting assignments is also recognised on the percentage of completion basis. As the long term contracts necessary extend beyond one year, revision in costs and revenues estimated during the course of the contract are reflected in the accounting period in which the facts requiring the revision become known. Unbilled costs are carried as construction work-in-progress.

Determination of revenue under the percentage of completion method necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project/activity and the foreseeable losses to completion. Such estimates have been relied upon by the auditors.


Mar 31, 2011

1. LEGAL STATUS

The assessee is a Public Limited Company, formed vide Certificate of Incorporation dated 7th February 1994, P.A.No. AAACV3537A

2. BUSINESS ACTIVITY

The Assessee is into the Business of Acquisition of land and Development Construction & infrastructural activities. During the Previous Year Under Consideration the Assessee has Aquired various Projects in Connection with the Purchase of Land, Structure along with Land & Development thereon.

3. SIGNIFICANT ACCOUNTING POLICIES General:

The financial statements are prepared under the historical cost convention, on an accrual basis and on the accounting principles of a going concern. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

Revenue Recognition:

The company is maintaining its books of accounts on mercantile system of accounting.

Pushpvinod Project.

a) The Revenue from the Real Estate Projects is Recognised in conformity with the prescribed Accounting Standard-9 revenue recognition of the Institute of Chartered Accountants of India.

Projects other than Pushpvinod.

The Company shall follow Revenue Recognition method (AS 9) issued by the ICAI, However in cases where Sales Consideration upto 90% is received & Sale agreement is executed & actual cost being 30% or more of the estimated cost of the individual ¦ project, the assessee shall follow AS 7 percentage of Completion method issued by the ICAI.]

During the previous year the company had two heads in the Balance sheet namely WIP & Project on hand, grouped under the head Current Assets. The Project on hand grouped under Current assets were transfered to WIP based on Commencement of the Work towards that project.

During the year under Consideration the Company has changed its policy of Bifurcation of projects into Two heads namely WIP & Projects on hand. During the current year the Opening balance in Project on hand a/c have been Transfered to WIP from the Profit & loss a/c & the same is reflected as WIP in the closing stock. The effect on Profit on account of this change is NIL.

b) Service Tax:

The Assessee is a Member of Maharashtra Chamber of Housing Society (Refered to as MCHI). Service tax is Collected @ 2.575% on Receipt or Sale which ever is earlier from Customers.

c) VAT:

During the year under Consideration, the Assessee has opted for the 1 % Composition scheme under VAT for its Pushpvinod Project. The tax effect of the same has been given in the books of accounts.

During the year under Consideration the assessee has Transfered to expenses Rs. 3931714.00, the same was reflected in VAT Receivable account under the Current Assets. In absence of Utilization of VAT Credit under the Composition scheme the same is transfered to Expenses under the Profit & Loss a/c.

During the year the Assessee has Commenced the Construction work at Pushpvinod 2 & Pushpvinod 3.

Fixed Assets:

Fixed Assets are stated at their historical cost, which includes expenditure incurred for their acquisition and installation.

Depreciation:

Depreciation on all the assets is calculated on Straight Line method at the rates specified in Schedule XIV to the Companies Act 1956.

Inventories :

Inventories are valued at lower of cost or net realizable value.

Taxation :

Deferred tax assets arising from timing difference are recognized to the extent there is reasonable certainty that these would be realized against future taxable profit.

Deferred tax is recognised subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods which is in conformity with the prescribed Accounting Standard-22 of the Institute of Chartered Accountants of India.


Mar 31, 2010

The financial statements are prepared under the historical cost convention, on an accrual basis and on the accounting principles of a going concern. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

Revenue Recognition:

The company is maintaining its books of accounts on mercantile system of accounting.

a) The Revenue from the Real Estate Projects is Recognised in conformity with the prescribed Accounting Standard-9 revenue recognition of the Institute of Chartered Accountants of India, However, on conservative approach, revenue/Sales has been booked only for those registered sale agreements where amounts in excess of 90% of receivable, have been received till/ during the year under consideration. The accounts to this extent are not in confirmity with AS-9 as prescribed by the ICAI. The profits are lower to that extent.

b) Service Tax :

Effects of applicability of Service Tax on account of Recent Amendment In the Budget are not accounted for as necessary information and documentation was not made available for verification, However, the assessee has obtained undertaking from the proposed buyers for reimbursement of such taxes levied by the govt, from time to time. Hence impact on profit is NIL.

c) VAT:

During the year under Consideration, the Assessee has not Segregated VAT Credit on Inputs of Rawmaterial & has grouped the Same under the Purchases / Expenses, Hence the profits to the extent of unbifurcated Vat is lower.

In Absence of Clarity regards to VAT Applicability on the Construction Activity the Same is not provided in the books of accounts.

Fixed Assets :

Fixed Assets are stated at their historical cost, which includes expenditure incurred for their acquisition and installation.

Depreciation :

Depreciation on all the assets is calculated on Straight Line method at the rates specified in Schedule XIV to the Companies Act 1956.

Inventories :

Inventories are valued at lower of cost or net realizable value.

Taxation :

Deferred tax assets arising from timing difference are recognized to the extent there is reasonable certainty that these would be realized against future taxable profit.

Deferred tax is recognised subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods which is in conformity with the prescribed Accounting Standard-22 of the Institute of Chartered Accountants of India.

 
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