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Accounting Policies of Artefact Projects Ltd. Company

Mar 31, 2017

NOTE 1

SIGNIFICANTACCOUNTING POLICIES

1.01 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under relevant provisions of the Companies Act, 2013 as adopted consistently by the company. The Financial Statements have been prepared on a Going Concern basis under the historical cost convention.

1.02 USEOFESTIMATES

The preparation of financial statements in conformity with Indian GAAP required judgments, estimates & assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.03 INVENTORIES

Inventories represents the WIP in respect of Project Management Consultancy Services in progress and remained inbuilt. Inventories have been valued at cost.

1.04 REVENUERECOGNITION

Income from Consultancy and Infrastructure project services are recognized in accordance with the Contract/Agreement entered into. Revenues are recognized when it is earned and no significant uncertainty exists as to its ultimate collection and includes, service tax, wherever applicable. Interest income is recognized on a time proportion basis. Dividend is considered when the right to receive is established.

1.05 FIXEDASSETS-TANGIBLEASSETS

Tangible Assets are stated at cost net of Central Value Added Tax & Value Added Tax credits less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use.

1.06 FIXEDASSETS-INTANGIBLEASSETS

Intangible Assets are stated at cost less accumulated amortization. Software’s which is not an integral part of the related hardware is classified as an Intangible asset and is amortized over the useful life of three years on Straight Line Basis.

1.07 DEPRECIATION

a) Depreciation on fixed assets is provided to the extent of depreciable amount on Straight Line Method over the useful life of the assets and in the manner prescribed in Schedule II to the Companies Act, 2013.

b) Additions, which form integral part of the fixed assets, are depreciated during the residual useful life of the asset.

c) In respect of fixed assets whose actual cost does not exceed Rs, 5000, depreciation is provided at 100% in the year of addition.

1.08 IMPAIRMENTOFASSETS

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

1.09 INVESTMENTS

Long-term investments are carried at cost. Current Investments are carried at the lower of cost and quoted/ fair value computed script wise. Provision for diminution in the value of long-term investments is made only if such decline is other than temporary.

1.10 BORROWINGCOSTS

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets (Net of income earned on temporary deployment of funds) are capitalized as part of the cost of such assets. Qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Statement of Profit and Loss.

1.11 EMPLOYEE’SBENEFITS

(i) Short-term employee benefits are recognized as an expense at the un-discounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

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

1.12 FOREIGNCURRENCYTRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currencies at the year-end are restated at year-end rates. Non-Monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

1.13 ACCOUNTING FORJOINTVENTURE OPERATIONS

The financial statements reflect the share of the Company’s assets and liabilities as well as income and expenditure of Joint Venture Operations which are accounted for according to the participating interest of the Company as per the various Joint Venture Agreements on a line by line basis along with similar items in the Company’s financial statements.

1.14 DERIVATIVE INSTRUMENTS

In respect of derivative contracts, premium paid gains / losses on settlement and provision for losses, if any, are recognized in the Statement of Profit and Loss.

1.15 PROVISION FOR CURRENTAND DEFFERED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961. Deferred tax resulting from “timing differences” between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is reasonable/ virtual certainty that asset will be realized against future taxable profits.

1.16 PROVISION, CONTINGENT LIABILITIESAND CONTINGENTASSETS

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

1.17 SHAREISSUEEXPENSES

Share issue expenses are adjusted against the Securities Premium Account.

2.03 Rights to Equity Shareholders

The Company has only one class of equity shares having face value of K 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation of the company, the equity shareholders will be entitled to receive any of remaining assets of the company after distribution of all preferential amounts . The distribution will be in proportion to the number of equity shares held by the shareholders.

4.01 Term Loan from a Bank referred to above and K 9,999,996 included in current maturity of long term debts in Note No. 9 are Secured against Mortgage of Building and Hypothecation of other Fixed Assets, Equipments, Hardwires and Software’s. The Term loan is repayable in 120 equal monthly installments of K 8,33,333 (only principal) starting from 31st July, 2015 and ending on 30th September, 2025 and carries interest @ 14.50% p.a.

4.02 The above term loan from a bank is guaranteed by a Director and two of his relatives in their personal capacity.

4.03 Vehicle Loan referred to above and K 3,70,837 included in current maturity of long term debts in Note No. 9 are secured against hypothecation of the specific vehicle financed and is repayable in 22 monthly installments of K 35,430 (including interest) starting from 31st March 2017 as per repayment schedule.

7.01 Working Capital Loan from a Bank to the extent of:

(i) K 82,074,292 referred to above are secured by way of hypothecation of whole of the movable properties Including Book Debts and Assets both present and future and are further secured collaterally by mortgage of immovable properties of the Company and also guaranteed by one of the director and two of his relatives in their personal capacity and by a Corporate Guarantee of a Company i.e. Vidarbha Holdings Ltd.

NOTE 8

TRADE PAYABLES - TOTAL OUTSTANDING DUES OF MICRO AND SMALL ENTERPRISES

The Company has sent letters for getting confirmation from all the creditors regarding their status as Micro Small and Medium Enterprises (MSME), however the Company has received response only from few creditors stating that they do not fall under MSME category. Accordingly Micro, Small and Medium Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company.

* Does not include any amount due and outstanding to be credited to Investor Education & Protection Fund.

** Mainly includes payable to employees, joint ventures and provision for expenses, etc.

9.01 Statutory Liabilities includes pending reconciliation of service tax collected and paid, the company has not filed the service tax returns since April, 2015. The company has recognized the interest on default in payment of service tax in the financial statements. Any other impact on the financial statements on account of above which cannot be quantified at this stage and therefore will be recognized upon the completion of reconciliation and filing of returns of service tax.

12.02 Refer Note No 1.08 for the basis of Valuation.

12.03 During the year, the company has sold 40 Lacs Equity Shares of Artefact Infrastructure Limited, a wholly owned subsidiary company consequently company''s investment in Artefact Infrastructure Limited reduced to 18.37% and Artefact Infrastructure Limited ceased to be a Subsidiary of the company w.e.f. January 02nd 2017.

13.01 MAT Credit Entitlement under section 115JB of the Income Tax Act, 1961 (The Act) is allowed to be carried forward for being set off against the future tax liabilities computed in accordance with the provisions of the Act other than section 115JB, in next fifteen years from the payment of MAT. During the year ended 31st March, 2017 the Company is liable to pay the income tax computed as per the provisions, other than under section 115 JB of the Act and accordingly as advised in Guidance Note on "Accounting for credit available in respect of Minimum Alternate Tax under the Income Tax Act, 1961” issued by the Institute of Chartered Accountants of India, the Company has utilized the MAT credit to the extent of K 29,401. The aggregate MAT Credit Entitlement available to company as at 31st March, 2017is K 6,870,035 (Previous Year - K 6,899,436).

15.01 Outstanding for a period exceeding six months amounting to K 99,246,872 mainly includes amount receivable from Government Departments, predominantly from NHAI, MMRDA, etc and are in relation to the execution of contract services, deployment of additional personnel, price escalations etc. The services have been provided on express written orders. The procedural delays in respect of reconciliation of accounts and disbursement of funds at government departments are normal. The Management is of the view that all these amounts are good for recovery and no further provision for doubtful debts is required.

Above loans are given for business purpose.

17.02 All the projects undertaken by the Meinhardt Singapore Pte. Ltd-Artefact Projects JV were completed in the year 2011-12, during the previous financial year JV partners decided to dissolve the JV after completion of due statutory compliance if any required. the board of Directors of the Company has approved the said decision in their meeting dated 09*'' February, 2016 and accordingly the Company has withdrawn the capital from the JV. The dissolution of JV is pending as on 31st March, 2017

17.03 The Company has not filled the Service Tax Returns since 1st April, 2015. Balance with the Cenvat Excise includes K 13,645,434/- outstanding for more than six months, in respect of which the Company has been advised by the consultants that the same is eligible for Cenvat Credit and is good for recovery.

17.04 Other Loans and Advances includes K 7,272,300 recoverable from an individual with whom Company has entered into Financial Sponsorship Agreement for higher education and as per the terms, after completing education he was suppose to join company for rendering Project Management Consultancy Services or repay the full amount if does not render the services to the company. However from last 2 years he has neither joined the services nor confirmed the company to repay the amount. Management is of the view that amount is good for recovery and hence no provision is required.

Defined Benefit Plan

The employees Gratuity Fund Scheme, which is a defined benefit plan, is managed by a Trust maintained with Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.


Mar 31, 2015

1.01 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013 as adopted consistently by the Company. The financial statements have been prepared on a going concern basis under the historical cost convention.

1.02 USE OF ESTIMATES

The preparation of financial statements in conformity with Indian GAAP requires judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.03 REVENUE RECOGNITION

Income from Mining Contracts, Consultancy & Infrastruture project services and Engineering Procurement Construction Contracts are recognised in accordance with the Contract/Agreement entered into. Revenues are recognised when it is earned and no significant uncertainty exists as to its ultimate collection and includes, service tax, wherever applicable. Interest income is recognised on a time proportion basis. Dividend is considered when the right to receive is established.

1.04 FIXED ASSETS - TANGIBLE ASSETS

Tangible Assets are stated at cost net of Central Value Added Tax and Value Added Tax Credits, less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use.

1.05 INTANGIBLE ASSETS

Intangible Assets are stated at cost less accumulated amortisation. Softwares which is not an integral part of the related hardware is classified as an Intangible asset and is amortised over the useful life of three years on Straight Line Basis.

1.06 DEPRECIATION

a) Depreciation on fixed assets is provided to the extent of depreciable amount on Straight Line Method over the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

b) Additions, which form integral part of the fixed assets, are depreciated during the residual useful life of the asset.

c) In respect of fixed assets whose actual cost does not exceed Rs. 5000, depreciation is provided at 100% in the year of addition.

1.07 IMPAIRMENT OF ASSETS

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

1.08 INVESTMENTS

Long-term investments are carried at cost. Current Investments are carried at the lower of costs and quoted/ fair value computed script wise. Provision for diminution in the value of long-term investments is made only if such decline is other than temporary.

1.09 BORROWING COSTS

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets (Net of income earned and deployment of funds) are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Statement of Profit and Loss.

1.10 EMPLOYEE'S BENEFITS

(i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

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

1.11 FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currencies at the year-end are restated at year-end rates. Non-Monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

1.12 ACCOUNTING FOR JOINT VENTURE OPERATIONS

The financial statements reflect the share of the Company's assets and liabilities as well as income and expenditure of Joint Venture Operations which are accounted for according to the participating interest of the Company as per the various Joint Venture Agreements on a line by line basis along with similar items in the Company's financial statements.

1.13 DERIVATIVE INSTRUMENTS

In respect of derivative contracts, premium paid gains / losses on settlement and provision for losses, if any; are recognised in the Statement of Profit and Loss.

1.14 PROVISION FOR CURRENT AND DEFFERED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable / virtual certainty that the assets will be realised against future taxable profits.

1.15 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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

1.16 SHARE ISSUE EXPENSES

Share issue expenses are adjusted against the Securities Premium Account.


Mar 31, 2014

1.01 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles, accounting standards issued by the Institute of Chartered Accountants Of India and the provisions of the Companies Act, 1956

1.02 USE OF ESTIMATES

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.03 REVENUE RECOGNITION

Income from Consultancy and Infrastructure project services are recognised in accordance with the Contract/Agreement entered into. Revenues are recognised when it is earned and no significant uncertainty exists as to its ultimate collection and includes, service tax, wherever applicable. Interest income is recognised on a time proportion basis. Dividend is considered when the right to receive is established.

1.04 FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation, net of Central Value Added Tax. All costs including financing cost till the assets ready to use are capitalised.

1.05 INTANGIBLE ASSETS

Intangible Assets are stated at cost less accumulated amortisation. Softwares are amortised over a period of three years.

1.06 DEPRECIATION

Depreciation on fixed assets has been provided on Straight Line Method at the rates and in the manner specified in Schedule XIV of the Companies Act 1956. Additions, which form integral part of the fixed assets, are depreciated during the residual useful life of the asset. In respect of fixed assets whose actual cost does not exceed Rs. 5000, depreciation is provided at 100% in the year of addition.The leasehold improvements has been depreciated over the lease period.

1.07 IMPAIRMENT OF ASSETS

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

1.08 INVESTMENTS

Long-term investments are carried at cost. Current Investments are carried at the lower of costs and quoted/ fair value computed script wise. Provision for diminution in the value of long-term investments is made only if such decline is other than temporary.

1.09 BORROWING COSTS

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets (Net of income earned and deployment of funds) are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Statement of Profit and Loss.

1.10 EMPLOYEE''S BENEFITS

(i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

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

1.11 FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currencies at the year-end are restated at year-end rates. Non-Monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

1.12 ACCOUNTING FOR JOINT VENTURE OPERATIONS

The financial statements reflect the share of the Company''s assets and liabilities as well as income and expenditure of Joint Venture Operations which are accounted for according to the participating interest of the Company as per the various Joint Venture Agreements on a line by line basis along with similar items in the Company''s financial statements.

1.13 DERIVATIVE INSTRUMENTS

In respect of derivative contracts, premium paid gains / losses on settlement and provision for losses, if any; are recognised in the Statement of Profit and Loss.

1.14 PROVISION FOR CURRENT AND DEFFERED TAX

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

1.15 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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

1.16 SHARE ISSUE EXPENSES

Share issue expenses are adjusted against the Securities Premium Account.


Mar 31, 2013

1.01 BASISOF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles, accounting standards issued by the institute of Chartered Accountants Of India and the provisions of the Companies Act, 1956

1.02 USE OF ESTIMATES

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the dale of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.03 REVENUE RECOGNITION

Income from Consultancy and Infrastructure project services are recognised in accordance with the Contract/Agreement entered into. Revenues are recognised when it is earned and no significant uncertainty exists as to its ultimate collection and includes, service tax, wherever applicable. Interest income is recognised on a time proportion basis. Dividend is considered when the right to receive is established.

1.04 FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation, net of Central Value Added Tax. All costs including financing cost till the assets ready to use are capitalised.

The leasehold improvements has been depreciated over the lease period.

1.05 INTANGIBLE ASSETS

Intangible Assets are stated at cost less accumulated amortisation. Softwares are amortised over a period of three years.

1.06 DEPRECIATION

Depreciation on fixed assets has been provided on Straight Line Method at the rates and in the manner specified in Schedule XIV of the Companies Act 1956. Additions, which form integral part of the fixed assets, are depreciated during the residual useful life of the asset. In respect of fixed assets whose actual cost does not exceed Rs. 5000, depreciation is provided at 100% in the year of addition.

1.07 IMPAIRMENT OF ASSETS

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

1.08 INVESTMENTS

Long-term investments are carried at cost. Current Investments are carried at the lower of costs and quoted/ fair value computed script wise. Provision for diminution in the value of long-term investments is made only if such decline is other than temporary.

1.09 BORROWING COSTS

Borrowing Costs that are attributable to the acquisition or constmction of qualifying assets (Net of income earned and deployment of funds) are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Statement of Profit and Loss.

1.10 EMPLOYEE''S BENEFITS

(i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered. (ii) Post employment and other long term employee benefits are recognized as an expense on the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable detennined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit and Loss.

1.11 FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currencies at the year-end are restated at year-end rates. Non-Monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

1.12 ACCOUNTING FOR JOINT VENTURE OPERATIONS

The financial statements reflect the share of the Company''s assets and liabilities as well as income and expenditure of Joint Venture Operations which are accounted for according to the participating interest of the Company as per the various Joint Venture Agreements on a line by line basis along with similar items in the Company''s financial statements,

1.13 DERIVATIVE INSTRUMENTS

In respect of derivative contracts, premium paid gains / losses on settlement and provision for losses, if any; are recognised in the Statement of Profit and Loss.

1.14 PROVISION FORCURRENT AND DEFFERED TAX

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

1.15 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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

1.16 SHARE ISSUE EXPENSES

Share issue expenses are adjusted against the Securities Premium Account.


Mar 31, 2012

1.01 BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles, accounting standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956

1.02 USE OF ESTIMATES The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.03 REVENUE RECOGNITION Income from Consultancy and Infrastructure project services are recognised in accordance with the Contract/Agreement entered into. Revenues are recognised when it is earned and no significant uncertainty exists as to its ultimate collection and includes, service tax, wherever applicable. Interest income is recognised on a time proportion basis. Dividend is considered when the right to receive is established.

1.04 FIXED ASSETS Fixed Assets are stated at cost less accumulated depreciation, net of Central Value Added Tax. All costs including financing cost till the assets ready to use are capitalised.

1.05 INTANGIBLE ASSETS "Intangible Assets are stated at cost less accumulated amortisation. Softwares are amortised over a period of three years."

1.06 DEPRECIATION Depreciation on fixed assets has been provided on Straight Line Method at the rates and in the manner specified in Schedule XIV of the Companies Act 1956. Additions, which form integral part of the fixed assets, are depreciated during the residual useful life of the asset. In respect of

fixed assets whose actual cost does not exceed Rs. 5000, depreciation is provided at 100% in the year of addition.

1.07 IMPAIRMENT OF ASSETS An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

1.08 INVESTMENTS

Long-term investments are carried at cost. Current Investments are carried at the lower of costs and quoted/ fair value computed script wise. Provision for diminution in the value of long-term investments is made only if such decline is other than temporary.

1.09 BORROWING COSTS

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets (Net of income earned and deployment of funds) are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Statement of Profit and Loss.

1.10 EMPLOYEE’S BENEFITS

(i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

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

1.11 FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currencies at the year-end are restated at year-end rates. Non-Monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

1.12 ACCOUNTING FOR JOINT VENTURE OPERATIONS

The financial statements reflect the share of the Company’s assets and liabilities as well as income and expenditure of Joint Venture Operations which are accounted for according to the participating interest of the Company as per the various Joint Venture Agreements on a line by line basis along with similar items in the Company’s financial statements.

1.13 DERIVATIVE INSTRUMENTS

In respect of derivative contracts, premium paid gains / losses on settlement and provision for losses, if any; are recognised in the Statement of Profit and Loss.

1.14 PROVISION FOR CURRENT AND DEFFERED TAX

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

1.15 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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

1.16 SHARE ISSUE EXPENSES

Share issue expenses are adjusted against the Securities Premium Account.

2.03 Rights to Equity Shareholders

The Company has only one class of equity share having face value of Rs. 10 per share. Each shareholder is eligible for one vote per share held

In the event of liquidation of the company , the equity shareholders will be entitled to receive any of remaining assets of the company after distributiion of all preferential amounts . The distribution will be in proportion to the number of equity shares held by the shareholder.

2.04 Reserved Shares :

The Convertible Share Warrants holders have the option to convert their Share Warrants into Nil Equity Share (Previous Year 10,22,400) of Rs. 10 each at the Terms and Condition referred in Note No. 4.

NOTE 4

MONEY RECEIVED AGAINST SHARE WARRANTS

As approved by the Shareholders in the Extra- Ordinary General Meeting held on February 23, 2010, the Company had alloted 1,022,400 Convertible Warrants on preferential basis @ Rs. 101 each to be converted into one fully paid-up equity share of the Company of Rs. 10 each at a premium of Rs. 91 per equity share at any time prior to 18 months from the date of allotment of warrants i.e April 27, 2010. During the year the warrants holders have exercise option in respect of 547,400 warrants and 547,400 Equity Shares are allotted. In respect of 475,000 warrants, warrant holders did not exercise their option, accordingly Rs.11,993,750 being the amount received against these Convertible Share Warrants has been forfeited by the Company and credited to Capital Reserve.

5.01 Term Loan from a Bank referred to above and Rs.14,834,402 included in current maturity of long term debts in Note No.9 is Secured against Mortgage of Building and Hypothecation of other Fixed Assets, Equipments, Hardwares and Softwares. The loan is repayable in 42 equal monthly installments (including interest) of Rs. 2,373,415 as per repayment schedule, ending on September 6, 2015 and carry a prevailing interest rate @ 16% p.a.

5.02 Guaranteed by Directors or others :

The above term loan from a bank is guaranteed by some of the Directors in their personal capacity and also covered by a Corporate Guarantee of a Company i.e. Vidharbha Holding Limited.

5.03 Vehicle Loan referred to above and Rs.315,975 included in current maturity of long term debts in Note No.9 is secured by the hypothecation of the specific vehicle financed. The loan is repayable in 43 monthly equal instalments (including interest) of Rs. 34,570 as per repayment schedule.

7.01 Working Capital Loans form Banks

(i) aggregating to Rs.87,888,880 (Previous Year Rs. 81,245,319) referred to above are secured by the hypothecation of whole of the movable properties Including Book Debts and Assets both present and future, and are further secured collaterally by mortgage of immovable properties of the Company, guaranteed by some of the directors in their personal capacity and also covered by a Corporate Guarantee of a Company i.e. Vidharbha Holding Ltd.

(ii) aggregating to Rs.20,252,589 (Previous Year Rs. Nil) referred to above are secured by the Pledge of Fixed Deposit with Bank (Refer Note No. 15.01).

EMPLOYEES BENEFIT EXPENSES

20.01 Salaries, Wages and Allowance includes Remuneration to Executive Directors of Rs. Nil (Previous Year Rs. 2,263,505) paid in excess of the amount eligible under schedule XIII of the Companies Act, 1956. The Company has already applied for the approval to the Central Government.


Mar 31, 2010

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles, accounting standards issued by the Institute of Chartered Accountants Of India and the provisions of the Companies Act, 1956

2. USE OF ESTIMATES

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

3. REVENUE RECOGNITION

Income from Consultancy and Infrastructure project services are recognised in accordance with the Contract/Agreement entered into. Revenues are recognised when it is earned and no significant uncertainty exists as to its ultimate collection and includes, service tax, wherever applicable.

4. FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation, net of Central Value Added Tax. All costs including financing cost till commencement of commercial production are capitalised.

5. INTANGIBLE ASSETS

Intangible Assets are stated at cost less accumulated amortisation. Softwares are amortised over a period of three years.

6. DEPRECIATION

Depreciation on fixed assets has been provided on Straight Line Method at the rates and in the manner specified in Schedule XIV of the Companies Act 1956. Additions, which form integral part of the fixed assets, are depreciated during the residual useful life of the asset. In respect of fixed assets whose actual cost does not exceed ?. 5000, depreciation is provided at 100% in the year of addition.

7. INVESTMENTS

Long-term investments are carried at cost. Current Investments are carried at the lower of costs and quoted/fair value computed script wise. Provision for diminution in the value of long-term investments is made only if such decline is other than temporary.

8. BORROWING COSTS

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

9. EMPLOYEES BENEFITS

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

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

10. FOREIGN CURRENCYTRANSACTION

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currencies at the year-end are restated at year-end rates. Non-Monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss account.

11. TAXATION

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

12. ACCOUNTING FOR JOINT VENTURE OPERATIONS

The financial statements reflect the share of the Companys assets and liabilities as well as income and expenditure of Joint Venture Operations which are accounted for according to the participating interest of the Company as per the various Joint Venture Agreements on a line by line basis along with similar items in the Companys financial statements.

13. DERIVATIVE INSTRUMENTS

In respect of derivative contracts, premium paid gains / losses on settlement and provision for losses, if any; are recognised in the Profit and Loss Account.

14. IMPAIRMENT OF ASSETS

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

15. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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

Notes:

1 Bracket indicates cash outflow.

2 The above cash flow statement has been prepared under the "Indirect Method" as set out in the Accounting Standard 3 - "Cash Flow Statement" as notified by Companies (Accounting Standard) Rules, 2006.

3 Cash And Cash Equivalents At The End Of The Year includes deposits with banks aggreagating to Rs. 98,32,000/- which are pledged against bank guaranteesw and overdraft.

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