Mar 31, 2018
1. CORPORATE INFORMATION
CHD Developers Limited (âthe Company'') was incorporated on August 17, 1990. CHD Developers Limited is a leading real estate developer engaged in the business of township and residential/commercial complexes. The operation of the company spans all aspects of real estate development, from identification and acquisition of land, to planning, execution, construction and marketing projects. The Company is domiciled in India and its registered office is situated at SF-16-17, 1st Floor, Madame Bhikaji Cama Bhawan 11, Bhikaji Cama Place, New Delhi - 110066
2. GENERAL INFORMATION AND STATEMENT OF COMPLIANCE WITH IND AS
The standalone financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by Ministry of Corporate Affairs (âMCA'') under Section 133 of the Companies Act, 2013 (âthe Actâ) read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act. The Company has uniformly applied the accounting policies during the periods presented.
These financial statements for the year ended 31 March 2018 are the first financial statements which the Company has prepared in accordance with Ind AS. For all periods up to and including the year ended 31 March 2017, the Company had prepared its financial statements in accordance with accounting standards notified under Section 133 of the Act, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP), which have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS. For the purpose of comparatives, financial statements for the year ended 31 March 2017 and opening balance sheet as at 1 April 2016 are also prepared as per Ind AS.
The standalone financial statements are presented in Indian Rupees.
The financial statements for the year ended 31 March 2018 were authorized and approved for issue by the Board of Directors on 30 May 2018.
2.1 BASIS OF PREPARATION
The financial statements have been prepared on going concern basis in accordance with accounting principles generally accepted in India. Further, the financial statements have been prepared on historical cost basis except for certain financial assets and financial liabilities and share based payments which are measured at fair values as explained in relevant accounting policies.
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is treated as current when it is:
- Expected to be realized or intended to be sold or consumed in normal operating cycle.
- Held primarily for the purpose of trading.
- Expected to be realized within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle.
- It is held primarily for the purpose of trading.
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
(b) Foreign currencies
The Company''s financial statements are presented in INR, which is also the Company''s functional currency.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Company at functional currency spot rates at the date the transaction first qualifies for recognition. However, for practical reasons, the Company uses an average rate if the average approximates the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
(c) Revenue & Cost recognition
(i) Revenue Recognition
Revenue is recognized, in relation to sold areas only, on the basis of percentage of actual cost incurred thereon Based on the Educational Material on Ind AS 18 issued by the ICAI.
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 revenue transaction as set-out below:
Revenue from real estate projects
Revenue from constructed properties for all projects is recognized in accordance with the âGuidance Note on Accounting for Real Estate Transactions" (âGuidance Note''). As per this Guidance Note, the revenue has been recognized on percentage of completion method and on the percentage of actual project costs incurred thereon to total estimated project cost, provided the conditions specified in Guidance Note are satisfied.
Revenue is recognized in accordance with the terms of duly executed agreements to sell/application forms (containing salient terms of agreement to sell). Estimated project cost includes cost of land/ development rights, borrowing costs, overheads, estimated construction and development cost of such properties.
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.
Sale of land and plots
Sale of land and plots is recognized in the financial year in which the agreement to sell/ application forms (containing salient terms of agreement to sell) is executed and there exists no uncertainty in the ultimate collection of consideration from buyers. Where the Group has any remaining substantial obligations as per agreements, revenue is recognized on âpercentage of completion method'' as explained above under revenue from real estate projects.
Rental income
Rental income is recognized on a straight-line basis over the term of the lease, except for contingent rental income which is recognized when it arises and where scheduled increase in rent compensates the lessor for expected inflationary costs.
Development rights
Sale of development rights is recognized in the financial year in which the agreements of sale are executed and there exists no uncertainty in the ultimate collection of consideration from buyers.
Interest Income
Interest Income on delayed payments by customers, if any, is accounted for on realization due to uncertainties in recovery. All other interest Income is recorded on accrual basis using the effective interest rate (EIR) method.
Dividend income
Dividend income is recognized at the time when the right to receive is established by the reporting date.
(ii) Cost of revenue Cost of real estate projects
Cost of constructed properties includes cost of land (including cost of development rights/land under agreements to purchase), estimated internal development costs, external development charges, borrowing costs, overheads, construction costs and development/ construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of land and plots
Cost of land and plots includes land acquisition cost, estimated internal development costs and external development charges, which is charged to the statement of profit and loss based on the percentage of land/ plotted area in respect of which revenue is recognized as explained in accounting policy for revenue from âSale of land and plots'', in consonance with the concept of matching cost and revenue. Final adjustment is made on completion of the specific project.
Cost of development rights
Cost of development rights includes proportionate development rights cost, borrowing costs and other related cost Borrowing Cost
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset.
(d) Unbilled receivables
Unbilled receivables include:
Revenue recognized based on percentage of completion method, as per policy on revenue, over and above the amount due as per the payment plans/ invoices agreed with the customers.
(e) Borrowing Cost
Borrowing costs directly attributable (other than as per Point No. c above) to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset/ transferred to statement of profit & loss. 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.
All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
(f) Taxes on Income
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 alternate tax (âMAT'') 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 the carrying amount of MAT credit entitlement is written down 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 Company''s 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).
(g) Property, plant and equipment Recognition and initial measurement
Property, 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 asset''s 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 or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Property, plant and equipment are subsequently measured at cost less accumulated depreciation and impairment losses. Depreciation on property, plant and equipment is provided on a straight-line basis, computed on the basis of useful lives (as set-out below) prescribed in Schedule II to the Act:
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 and any significant part initially recognized is de-recognized 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 the statement of profit and loss, when the asset is de-recognized.
Capital work-in-progress and intangible assets under development
Capital work-in-progress and intangible assets under development represents expenditure incurred in respect of capital projects/ intangible assets under development and are carried at cost. Cost includes land, related acquisition expenses, development/ construction costs, borrowing costs and other direct expenditure.
(h) Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
For arrangements entered into prior to 1 April 2016, the Company has determined whether the arrangement contain lease on the basis of facts and circumstances existing on the date of transition.
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease.
Finance leases are capitalized at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit and loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Company''s general policy on the borrowing costs. Contingent rentals are recognized as expenses in the periods in which they are incurred.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company''s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
Company as a lessee
Lease rental are charged to statement of profit and loss on straight-line basis except where scheduled increase in rent compensates the lessor for expected inflationary costs.
Company as a lessor
Company as a lessor Rental income is recognized on straight-line basis over the lease term except where scheduled increase in rent compensates the Company with expected inflationary costs.
(i) Inventories
- Land and plots other than area transferred to constructed properties at the commencement of construction are valued at lower of cost/approximate average cost/ as re-valued on conversion to stock and net realizable value. Cost includes land (including development rights and land under agreement to purchase) acquisition cost, borrowing cost, estimated internal development costs and external development charges, and other Govt. dues.
- Construction work-in-progress of constructed properties includes the cost of land (including development rights and land under agreements to purchase), internal development costs, external development charges, construction costs, overheads, borrowing cost, development/ construction materials and is valued at lower of cost/ estimated cost and net realizable value.
- Development rights represent amount paid under agreement to purchase land/development rights and borrowing cost incurred by the Company to acquire irrevocable and exclusive licenses/development rights in identified land and constructed properties, the acquisition of which is either completed or is at an advanced stage.
- Construction/ development material is valued at lower of cost and net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale
(j) Impairment of non -financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating units (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When 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 fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
Impairment losses, if any, are recognized in the statement of profit and loss.
(k) Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
(l) Impairment of financial assets
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding financial assets.
(m) Retirement and other employee benefits Provident Fund
The Company makes contribution to statutory provident fund in accordance with the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952.
Gratuity
Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of gratuity is the present value of the defined benefit/obligation at the balance sheet date, together with adjustments for unrecognized actuarial gains or losses and past service costs. The defined benefit/obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. This is based on standard rates of inflation, salary growth rate and mortality. Discount factors are determined close to each year-end by reference to market yields on government bonds that have terms to maturity approximating the terms of the related liability. Service cost on the Companyâs defined benefit plan is included in employee benefits expense. Net interest expense on the net defined benefit liability is included in finance costs. Actuarial gains/losses resulting from measurements of the liability are included in other comprehensive income.
Other long-term employee benefits
Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognized on the basis of discounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or 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.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged to statement of profit and loss in the year in which such gains or losses are determined.
Short-term employee benefits
Expense in respect of 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. Contribution made towards superannuation fund is charged to statement of profit and loss on accrual basis.
(n) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
(A) Financial assets Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
- Financial instruments at amortized cost
- Financial instruments at fair value through other comprehensive income (FVTOCI)
- Financial instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
- Equity instruments measured at fair value through other comprehensive income (FVTOCI)
Financial instruments at amortized cost
A âFinancial instrument'' is measured at the amortized 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 amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.
Financial instrument at FVTOCI
A âFinancial instrument'' is classified as at the FVTOCI if both of the following criteria are met:
- The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
- The asset''s contractual cash flows represent SPPI.
- Financial instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the P&L. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to P&L. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
Financial instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatch''). The Company has not designated any debt instrument as at FVTPL.
Financial instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.
Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L. De-recognition
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognized (i.e. removed from the Company''s balance sheet) 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 or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-through'' arrangement and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred an asset, the Company evaluates whether it has transferred substantially all the risk and rewards of the ownership of the financial asset, in such cases, the financial asset is derecognized. When the Company has not transferred substantially all the risk and rewards of the ownership of the financial asset, the financial asset is not derecognized.
When the Company has neither transferred nor retained substantially all of the risks and rewards of the financial asset, the financial asset is derecognized if the Company has not retained control of the financial assets. Where the Company retains control of the financial assets, the assets continue to be recognized to the extent of continuing involvement in the financial assets.
Impairment of financial assets
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding financial assets.
(B) Financial liabilities Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Companyâs financial liabilities include trade and other payables, loans and borrowings.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
Gains or losses on liabilities held for trading are recognized in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognized in the statement of profit or loss. The Company has not designated any financial liability as at fair value through profit and loss.
Loans and borrowings
This is the category most relevant to the Company. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
This category generally applies to borrowings. For more information refer Note 15.
Derecognition
A financial liability is derecognized 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 derecognition 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 or 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 realise the assets and settle the liabilities simultaneously.
Reclassification of financial assets
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company''s senior management determines change in the business model as a result of external or internal changes which are significant to the Companyâs operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.
(o) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.
(p) Cash Flow Statement
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7. The amendments are applicable to the Company from 1 April 2017.
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The Company is evaluating the requirements of the amendment and its impact on the financial statements.
(q) Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or nonoccurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements unless the probability of outflow of resources is remote.
Contingents liabilities are reviewed at each balance sheet date.
(r) Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss attributable to equity holder of the company by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders of the company and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Mar 31, 2016
Note 1:
A) Corporate Information
CHD Developers Limited (''the Company'') was incorporated on August 17, 1990. CHD Developers Limited is a leading real estate developer engaged in the business of developing township and residential/commercial complexes. The operation of the company spans all aspects of real estate development, from identification and acquisition of land, to planning, execution, construction and marketing projects.
B) Summary of Significant Accounting Policies
1. Basis of Preparation of Financial Statements
The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 2013 and applicable provision of Companies Act, 1956 ,if any. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous period, except for the change in accounting policy explained below.
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 financial statements, disclosure regarding financial statements and reported amount of revenue and expenses during the reported period. These estimates are based upon management''s knowledge of current events and actions. Actual results could differ from those estimates and differences, if any, are recognized in the period in which the results are known /materialized.
3. Fixed Assets and Depreciation
a) Valuation
Fixed assets are stated at cost less accumulated depreciation and impairment (if any). Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.
Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment.
Capital Work in Progress represents expenditure incurred in respect of Capital projects / intangible assets under development and are carried at cost. Cost includes land, related acquisition expenses, development / construction costs, borrowing costs and other direct expenditure.
b) Depreciation
Depreciation on fixed assets is charged on the basis of straight line method as per useful life prescribed in schedule II of the Companies Act, 2013.
4. Inventories
Inventories comprise completed units for sale and property under construction (Work in progress):
a. Completed unsold inventory is valued at lower of cost and net realizable value. Cost is determined by including cost of land, materials, services and related overheads.
b. Work in progress is valued at cost. Cost comprises value of land (including development rights), materials, services and other overheads related to projects under construction.
5. Recognition of Income & Expenses
a) The revenue is recognized on the basis of ''Percentage of completion Method'' of accounting. Revenue is recognized, in relation to sold areas only, on the basis of percentage of actual cost incurred thereon including land as against the total estimated cost of the project under execution subject to such actual cost being 20% or more (25% or more for the Projects starting on or after 1st April, 2012 as per Guidance Note "Accounting for Real Estate Transaction (Revised 2012)" Issued by the Institute of Chartered Accountant of India) of the total estimated cost. The estimates of saleable area and costs are revised periodically by the management. The effect of such changes to estimates is recognized in the period such changes are determined. However, the revenue, in respect of project undertaken before March 31, 2010 is accounted for on the basis of actual receipts and installment fallen due during the year towards booking of properties, subject to final adjustments on the completion of respective projects.
b) Further interest on delayed payments, if any, is accounted for on realization due to uncertainties in recovery.
c) Cost of construction/development (including cost of land) incurred is charged to the profit & loss account in proportion to project area sold. Adjustments if required are made on completion of the respective projects.
d) Interest and direct expenditure attributable to specific projects are capitalized in the cost of project, other interest and indirect costs are treated as ''Period Cost'' and charged to Profit & Loss account in the year in which it is incurred.
e) Brokerage paid/ fallen due on Fixed Deposits is accounted during the year.
f) Municipal Taxes are accounted for in the year of payment.
g) All other incomes and expenditures except mentioned above are accounted for on accrual basis.
6. Retirement Benefits to employees
Company''s contribution to Provident Fund and Employee State Insurance Compensation (ESIC) is charged to profit and loss account on the actual liability basis.
Provision for Gratuity & Leave Encashment is determined on the actuarial valuation carried out at the balance sheet date in accordance with transitional provision of Revised AS-15.
7. Taxation
Tax comprises current tax and deferred tax. Current tax is the amount payable as determined in accordance with the provisions of Income Tax Act, 1961. Provision for Income Tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from timing difference between the book and the taxable profits is accounted for using the tax rates and law that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the asset can be realized in the future. However, if there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Deferred tax assets/liabilities are reviewed at each balance sheet date.
8. Investments
Investments intended to be held for more than a year are classified as long term investments. All other investments are classified as current investments. Long term investments are stated at cost. However provision (if any) for diminution is made to recognize any decline, other than temporary, in the value of investments. Current investments are stated at lower of cost or market value on an individual investment basis.
9. Foreign Currency Transaction
Transaction in foreign currency is recorded at exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are translated at the exchange rate prevailing on the Balance sheet date and exchange difference on translation of monetary assets and liabilities and resultant gain or loss is recognized in the Profit & loss account.
Non Monetary assets and liabilities are translated at the rate prevailing on the date of transaction.
10. Borrowing Cost
The borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. 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 Profit & Loss account as an expense in the year in which they are incurred.
11. Impairment of Assets
The Company assesses at each balance sheet date whether there is any indication that an asset may suffer impairment loss. If any such indication exists, the Company estimates the recoverable amount of the asset or the recoverable amount of cash generating unit to which the asset belongs. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flow expected from the continuing use of the asset and from its disposal is discounted to their present value using a pre-discount rate that reflect the current market assessment of the time value of money and risk specific to the asset. In case recoverable amount is less than its carrying amount then its carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists the recoverable amount is reassessed and the asset is reflected at the recoverable amount.
12. Provisions, Contingent Liabilities and Contingent Assets
A) Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation if: -
a) The Company has present obligation as a result of past event.
b) A probable outflow of resources is expected to settle the obligation and the amount of obligation can be reliably estimated.
Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
B) Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.
C) Contingent Liability is disclosed in the case of: -
a) a Present obligation arising from the past event, in case it is not probable that an outflow of resources will be required to settle the obligation.
b) a Possible obligation, unless the probability of outflow of resources is remote.
D) Contingent Assets are neither recognized nor disclosed.
13. Leases
Lease arrangements, where risks and rewards incident to ownership of an asset substantially vest with the less or are recognized as operating lease. Lease rentals in respect of operating lease arrangement are recognized as business income/expense in the profit and loss account as and when due in accordance with the terms of the related agreement.
14. Earning per share
The earnings considered in ascertaining the Company''s Earnings Per Share (EPS) comprises the net profit after tax (and include the post tax effect of any extra ordinary items). The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period / year. The number of shares used in computing Diluted EPS comprises of weighted average number of equity shares and dilutive potential equity shares outstanding during the period.
15. Segment Reporting
Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under unallocated corporate expenditure.
16. Cash and cash equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.
17. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
Mar 31, 2014
Corporate Information
CHD Developers Limited (''the Company'') was incorporated on August 17,
1990. CHD Developers Limited is a leading real estate developer engaged
in the business of township and residential/commercial complexes. The
operation of the company spans all aspects of real estate development,
from identification and acquisition of land, to planning, execution,
construction and marketing projects.
1. Basis of Preparation of Financial Statements
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(GAAP). The company has prepared these financial statements to comply
in all material respects with the Accounting Standards notified under
the Companies (Accounting Standard) Rules 2006, (as amended) and the
relevant provisions of the Companies Act., 1956 and applicable
provisions of the Companies Act, 2013. The financial statements have
been prepared on an accrual basis under the historical cost convention.
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 financial statements, disclosure regarding
financial statements and reported amount of revenue and expenses during
the reported period. These estimates are based upon management''s
knowledge of current events and actions. Actual results could differ
from those estimates and differences, if any are recognised in the
period in which the results are known /materialised.
3. Fixed Assets and Depreciation
a) Valuation
Fixed assets are stated at cost (Gross Block) less accumulated
depreciation and impairment. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
Intangible assets are recorded at the consideration paid for
acquisition of such assets and are carried at cost less accumulated
amortization and impairment.
Capital Work in Progress represents expenditure incurred in respect of
Capital projects / intangible assets under development and are carried
at cost. Cost includes land, related acquisition expenses, development
/ construction costs, borrowing costs and other direct expenditure.
b) Depreciation
Depreciation on fixed assets has been provided on the basis of straight
line method as per the rates prescribed in Schedule XIV of the
Companies Act, 1956.
4. Inventories
Inventories comprise completed units for sale and property under
construction (Work in progress):
a. Completed unsold inventory is valued at lower of cost and net
realisable value. Cost is determined by including cost of land,
materials, services and related overheads.
b. Work in progress is valued at cost. Cost comprises value of land
(including development rights), materials, services and other overheads
related to projects under construction.
5. Recognition of Income & Expenses: --
a) The revenue is recognised on the basis of ''Percentage of
completionMethod'' of accounting. Revenue is recognised, in relation to
sold areas only on the basis of percentage of actual cost incurred
thereon including land as against the total estimated cost of the
project under execution subject to such actual cost being 20% or more
(25% or more for the Projects starting on or after 1st April, 2012 as
per Guidance Note "Accounting for Real Estate Transaction (Revised
2012)" Issued by the Institute of Chartered Accountant of India) of the
total estimated cost. The estimates of saleable area and costs are
revised periodically by the management. The effect of such changes to
estimates is recognised in the period such changes are determined.
However, the revenue, in respect of project undertaken before March 31,
2010 is accounted for on the basis of actual receipts and instalment
fallen due during the year towards booking of properties, subject to
final adjustments on the completion of respective projects.
b) Further interest on delayed payments, if any is accounted for on
realisation due to uncertainties in recovery.
c) Cost of construction/development (including cost of land) incurred
is charged to the profit & loss account in proportion to project area
sold. Adjustments if required are made on completion of the respective
projects.
d) Interest and direct expenditure attributable to specific projects
are capitalized in the cost of project, other interest and indirect
costs are treated as ''Period Cost'' and charged to Profit & Loss account
in the year in which it is incurred.
e) Brokerage paid/ fallen due on Fixed Deposits is accounted during the
year.
f) Municipal Taxes are accounted for in the year of payment.
g) All other incomes and expenditures except mentioned above are
accounted for on accrual basis.
6. Retirement Benefits to employees
Company''s contribution to Provident Fund and Employee State Insurance
Compensation (ESIC) is charged to profit and loss account on the actual
liability basis.
Provision for Gratuity & Leave Encashment is determined on the
actuarial valuation carried out at the balance sheet date in accordance
with transitional provision of Revised AS-15.
7. Taxation
Tax comprises current tax and deferred tax. Current tax is the amount
payable as determined in accordance with the provisions of Income Tax
Act, 1961. Provision for Income Tax is made after taking into
consideration benefits admissible under the provisions of the Income
Tax Act, 1961. Deferred tax resulting from timing difference between
the book and the taxable profits is accounted for using the tax rates
and law that are enacted or substantively enacted as on the balance
sheet date. Deferred tax assets are recognised only to the extent there
is reasonable certainty that the asset can be realised in the future.
However, if there is unabsorbed depreciation or carried forward loss
under taxation laws, deferred tax assets are recognised only if there
is virtual certainty of realisation of such assets. Deferred tax
assets/liabilities are reviewed at each balance sheet date.
8. Investments
Investments intended to be held for more than a year are classified as
long term investments. All other investments are classified as current
investments. Long term investments are stated at cost. However
provision for diminution is made to recognize any decline, other than
temporary, in the value of investments. Current investments are stated
at lower of cost or market value on an individual investment basis.
9. Foreign Currency Transaction
Transaction in foreign currency is recorded at exchange rate prevailing
on the date of transaction. Monetary assets and liabilities denominated
in foreign currency are translated at the exchange rate prevailing on
the Balance sheet date and exchange difference on translation of
monetary assets and liabilities and resultant gain or loss is
recognized in the Profit & loss account.
Non Monetary assets and liabilities are translated at the rate
prevailing on the date of transaction.
10. Borrowing Cost
The borrowing costs that are directly attributable to the acquisition
or construction of qualifying assets are capitalized as part of the
cost of such assets. 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 Profit & Loss account as an expense in
the year in which they are incurred.
11. Impairment of Assets:
The Company assesses at each balance sheet date whether there is any
indication that an asset may suffer impairment loss. If any such
indication exists, the Company estimates the recoverable amount of the
asset or the recoverable amount of cash generating unit to which the
asset belongs. Recoverable amount is the higher of an asset''s net
selling price and value in use. In assessing value in use, the
estimated future cash flow expected from the continuing use of the
asset and from its disposal is discounted to their present value using
a pre-discount rate that reflect the current market assessment of the
time value of money and risk specific to the asset. In case recoverable
amount is less than its carrying amount then its carrying amount is
reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognized in the Profit and Loss Account. If at
the Balance Sheet date there is an indication that if a previously
assessed impairment loss no longer exists the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.
12. Provisions, Contingent Liabilities and Contingent Assets
A) Provisions are recognized for liabilities that can be measured only
by using a substantial degree of estimation if: -
a) The Company has present obligation as a result of past event.
b) A probable outflow of resources is expected to settle the obligation
and the amount of obligation can be reliably estimated. Provisions are
determined based on management estimates required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current management
estimates.
B) Reimbursement expected in respect of expenditure required to settle
a provision is recognized only when it is virtually certain that the
reimbursement will be received.
C) Contingent Liability is disclosed in the case of: -
a) A present obligation arising from the past event, in case it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A possible obligation, unless the probability of outflow of
resources is remote.
D) Contingent Assets are neither recognized nor disclosed.
13. Employee Stock Compensation Cost
In respect of stock options granted by the Company the intrinsic value
of the options (excess of market price of the share on the date of
grant over the exercise price of the option) is treated as deferred
employee compensation cost and is amortized over the vesting period on
straight line basis in accordance with SEBI guidelines in this regard.
14. Leases
Lease arrangements, where risks and rewards incident to ownership of an
asset substantially vest with the lessor are recognized as operating
lease. Lease rentals in respect of operating lease arrangement are
recognized as business income/expense in the profit and loss account as
and when due in accordance with the terms of the related agreement.
15. Earning per share
The earnings considered in ascertaining the Company''s Earnings Per
Share (EPS) comprises the net profit after tax (and include the post
tax effect of any extra ordinary items). The number of shares used in
computing Basic EPS is the weighted average number of shares
outstanding during the period / year. The number of shares used in
computing Diluted EPS comprises of weighted average number of equity
shares and dilutive potential equity shares outstanding during the
period.
16. Segment Reporting
Revenue and expenses have been identified to segments on the basis of
their relationship to the operating activities of the segment. Revenue
and expenses, which relate to the enterprise as a whole and are not
allocable to segments on a reasonable basis, have been included under
unallocated corporate expenditure.
Mar 31, 2013
1. Basis of Preparation of Financial Statements
The fnancial statements of the company have been prepared in accordance
with generally accepted accounting principles in India (GAAP). The
company has prepared these fnancial statements to comply in all
material respects with the Accounting Standards notifed under the
Companies (Accounting Standard) Rules 2006, (as amended) and the
relevant provisions of the Companies Act, 1956. The fnancial statements
have been prepared on an accrual basis under the historical cost
convention.
2. Use of Estimates
The preparation of fnancial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of fnancial statements, disclosure regarding
fnancial statements and reported amount of revenue and expenses during
the reported period. These estimates are based upon management''s
knowledge of current events and actions. Actual results could differ
from those estimates and differences, if any, are recognised in the
period in which the results are known /materialised.
3. Fixed Assets and Depreciation
a) Valuation
Fixed assets are stated at cost (Gross Block) less accumulated
depreciation. Cost comprises the purchase price and any attributable
cost of bringing the asset to its working condition for its intended
use.
Capital Work in Progress (including intangible assets under
development) represents expenditure incurred in respect of Capital
projects / intangible assets under development and are carried at cost.
Cost includes land, related acquisition expenses, development /
construction costs, borrowing costs and other direct expenditure.
b) Depreciation
Depreciation on fxed assets has been provided on the basis of straight
line method as per the rates prescribed in Schedule XIV of the
Companies Act, 1956.
4. Inventories
Inventories comprise completed units for sale and property under
construction (Work in progress):
a. Completed unsold inventory is valued at lower of cost and net
realisable value. Cost is determined by including cost of land,
materials, services and related overheads.
b. Work in progress is valued at cost. Cost comprises value of land
(including development rights), materials, services and other overheads
related to projects under construction.
5. Recognition of Income & Expenses: -
a) The revenue is recognised on the basis of ''Percentage of completion
Method'' of accounting. Revenue is recognised, in relation to sold areas
only, on the basis of percentage of actual cost incurred thereon
including land as against the total estimated cost of the project under
execution subject to such actual cost being 20% or more (25% or more
for the Projects starting on or after 1st April, 2012 as per Guidance
Note "Accounting for Real Estate Transaction (Revised 2012)" Issued by
the Institute of Chartered Accountant of India) of the total estimated
cost. The estimates of saleable area and costs are revised periodically
by the management. The effect of such changes to estimates is
recognised in the period such changes are determined. However, the
revenue, in respect of project undertaken before March 31, 2010 is
accounted for on the basis of actual receipts and installment fallen
due during the year towards booking of properties, subject to fnal
adjustments on the completion of respective projects.
b) Further interest on delayed payments, if any, is accounted for on
realisation due to uncertainties in recovery.
c) Cost of construction/development (including cost of land) incurred
is charged to the proft & loss account in proportion to project area
sold. Adjustments if required are made on completion of the respective
projects.
d) Interest and direct expenditure attributable to specifc projects are
capitalized in the cost of project, other interest and indirect costs
are treated as ''Period Cost'' and charged to Proft & Loss account in the
year in which it is incurred.
e) Brokerage paid/ fallen due on Fixed Deposits is accounted during the
year.
f) Municipal Taxes are accounted for in the year of payment.
g) All other incomes and expenditures except mentioned above are
accounted for on accrual basis.
6. Retirement Benefts to employees
Company''s contribution to Provident Fund and Employee State Insurance
Compensation (ESIC) is charged to proft and loss account on the actual
liability basis.
Provision for Gratuity & Leave Encashment is determined on the
actuarial valuation carried out at the balance sheet date in accordance
with transitional provision of Revised AS-15.
7. Taxation
Tax comprises current tax and deferred tax. Current tax is the amount
payable as determined in accordance with the provisions of Income Tax
Act, 1961. Provision for Income Tax is made after taking into
consideration benefts admissible under the provisions of the Income Tax
Act, 1961. Deferred tax resulting from timing difference between the
book and the taxable profts is accounted for using the tax rates and
law that are enacted or substantively enacted as on the balance sheet
date. Deferred tax assets are recognised only to the extent there is
reasonable certainty that the asset can be realised in the future.
However, if there is unabsorbed depreciation or carried forward loss
under taxation laws, deferred tax assets are recognised only if there
is virtual certainty of realisation of such assets. Deferred tax
assets/liabilities are reviewed at each balance sheet date.
8. Investments
Investments intended to be held for more than a year are classifed as
long term investments. All other investments are classifed as current
investments. Long term investments are stated at cost. However
provision for diminution is made to recognize any decline, other than
temporary, in the value of investments. Current investments are stated
at lower of cost or market value on an individual investment basis.
9. Foreign Currency Transaction
Transaction in foreign currency is recorded at exchange rate prevailing
on the date of transaction. Monetary assets and liabilities denominated
in foreign currency are translated at the exchange rate prevailing on
the Balance sheet date and exchange difference on translation of
monetary assets and liabilities and resultant gain or loss is
recognized in the Proft & loss account.
Non Monetary assets and liabilities are translated at the rate
prevailing on the date of transaction.
10. Borrowing Cost
The borrowing costs that are directly attributable to the acquisition
or construction of qualifying assets are capitalized as part of the
cost of such assets. 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 Proft & Loss account as an expense in
the year in which they are incurred.
11. Impairment of Assets:
The Company assesses at each balance sheet date whether there is any
indication that an asset may suffer impairment loss.
If any such indication exists, the Company estimates the recoverable
amount of the asset or the recoverable amount of cash generating unit
to which the asset belongs. Recoverable amount is the higher of an
asset''s net selling price and value in use. In assessing value in use,
the estimated future cash fow expected from the continuing use of the
asset and from its disposal is discounted to their present value using
a pre-discount rate that refect the current market assessment of the
time value of money and risk specifc to the asset. In case recoverable
amount is less than its carrying amount then its carrying amount is
reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognized in the Proft and Loss Account. If at
the Balance Sheet date there is an indication that if a previously
assessed impairment loss no longer exists the recoverable amount is
reassessed and the asset is refected at the recoverable amount.
12. Provisions, Contingent Liabilities and Contingent Assets
A) Provisions are recognized for liabilities that can be measured only
by using a substantial degree of estimation if: -
a) the Company has present obligation as a result of past event.
b) a probable outfow of resources is expected to settle the obligation
and the amount of obligation can be reliably estimated.
Provisions are determined based on management estimates required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to refect the current management
estimates.
B) Reimbursement expected in respect of expenditure required to settle
a provision is recognized only when it is virtually certain that the
reimbursement will be received.
C) Contingent Liability is disclosed in the case of: -
a) a Present obligation arising from the past event, in case it is not
probable that an outfow of resources will be required to settle the
obligation.
b) a Possible obligation, unless the probability of outfow of resources
is remote.
D) Contingent Assets are neither recognized nor disclosed.
13. Employee Stock Compensation Cost
In respect of stock options granted by the Company, the intrinsic value
of the options (excess of market price of the share on the date of
grant over the exercise price of the option) is treated as deferred
employee compensation cost and is amortized over the vesting period on
straight line basis in accordance with SEBI guidelines in this regard.
14. Leases
Lease arrangements, where risks and rewards incident to ownership of an
asset substantially vest with the lessor are recognized as operating
lease. Lease rentals in respect of operating lease arrangement are
recognized as business income/expense in the proft and loss account as
and when due in accordance with the terms of the related agreement.
15. Earning per share
The earnings considered in ascertaining the Company''s Earnings Per
Share (EPS) comprises the net proft after tax (and include the post tax
effect of any extra ordinary items). The number of shares used in
computing Basic EPS is the weighted average number of shares
outstanding during the period / year. The number of shares used in
computing Diluted EPS comprises of weighted average number of equity
shares and dilutive potential equity shares outstanding during the
period.
16. Segment Reporting
Revenue and expenses have been identifed to segments on the basis of
their relationship to the operating activities of the segment. Revenue
and expenses, which relate to the enterprise as a whole and are not
allocable to segments on a reasonable basis, have been included under
unallocated corporate expenditure.
17. Amalgamation expenses
Amalgamation expenses arising due to merger of Capital Homes Limited
with the company are being amortised over the period of fve years.
Mar 31, 2012
1. Presentation and Disclosure of financial statements Change in
Accounting Policy
During the year ended 31 March, 2012, 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 for preparation of financial
statements. However, it has significant impact on presentation and
disclosures made in the financial statements. The company has also
reclassified the previous years figure in accordance with the
requirement applicable in the current year.
2. Basis of Preparation of Financial Statements
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(GAAP). The company has prepared these financial statements to comply
in all material respects with the Accounting Standards notified under
the Companies (Accounting Standard) Rules 2006, (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis under the historical
cost convention.
3. 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 financial statements, disclosure regarding
financial statements and reported amount of revenue and expenses during
the reported period. These estimates are based upon management's
knowledge of current events and actions. Actual results could differ
from those estimates and differences, if any, are recognised in the
period in which the results are known /materialised.
4. Fixed Assets
a) Valuation
Fixed assets are stated at cost (Gross Block) less accumulated
depreciation. Cost comprises the purchase price and any attributable
cost of bringing the asset to its working condition for its intended
use. (Depreciation on fixed assets is provided at the rates and in the
manner prescribed in schedule XIV of the Companies Act, 1956)
Capital Work in Progress represents expenditure incurred in respect of
Capital Projects under development and are carried at cost includes
land, related acquisition expenses, development / construction costs,
borrowing costs and other direct expenses, including advance to
contractors and others.
b) Depreciation
Depreciation on fixed assets has been provided on the basis of straight
line method as per the rates prescribed in Schedule XIV of the
Companies Act, 1956.
5. Inventories
Inventories comprise completed units for sale and property under
construction (Work in progress):
a. Completed unsold inventory is valued at lower of cost or net
realisable value. Cost is determined by including cost of land,
materials, services and related overheads.
b. Work in progress is valued at cost. Cost comprises value of land
(including development rights), materials, services and other overheads
related to projects under construction.
6. Recognition of Income & Expenses:
a) The revenue is recognised on the basis of 'Percentage of completion
Method' of accounting. Revenue is recognised, in relation to sold areas
only, on the basis of percentage of actual cost incurred thereon
including land as against the total estimated cost of the project under
execution subject to such actual cost being 20% or more of the total
estimated cost.
The estimates of saleable area and costs are revised periodically by
the management. The effect of such changes to estimates is recognised
in the period such changes are determined. However, the revenue, in
respect of project undertaken before March 31, 2010 is accounted for on
the basis of actual receipts and instalment fallen due during the year
towards booking of properties, subject to final adjustments on the
completion of respective projects. However, change in this accounting
policy doesn't have any significant impact on the profitability of the
company.
Further interest on delayed payments, if any, is accounted for on
realisation due to uncertainties in recovery.
c) Cost of construction/development (including cost of land) incurred
is charged to the profit & loss account in proportion to project area
sold. Adjustments if required are made on completion of the respective
projects.
d) Interest and direct expenditure attributable to specific projects
are capitalized in the cost of project, other interest and indirect
costs are treated as 'Period Cost' and charged to Profit & Loss account
in the year in which it is incurred.
e) Brokerage paid/ fallen due on Fixed Deposits is accounted during the
year.
f) Municipal Taxes are accounted for in the year of payment.
g) All other incomes and expenditures except mentioned above are
accounted for on accrual basis.
7. Retirement Benefits to employees
Company's contribution to Provident Fund and ESIC charged to profit and
loss account on the actual liability basis.
Provision for gratuity & Leave Encashment is determined on the
actuarial valuation carried out at the balance sheet date in accordance
with transitional provision of revised AS-15.
8. Taxation
Income tax comprises current tax and deferred tax. Current tax is the
amount payable as determined in accordance with the provisions of
Income Tax Act, 1961. Provision for Income Tax is made after taking
into consideration benefits admissible under the provisions of the
Income Tax Act, 1961.Deferred tax resulting from timing difference
between the book and the taxable profits is accounted for using the tax
rates and law that are enacted or substantively enacted as on the
balance sheet date. Deferred tax assets are recognised only to the
extent there is reasonable certainty that the asset can be realised in
the future. However if there is unabsorbed depreciation or carried
forward loss under taxation laws, deferred tax assets are recognised
only if there is virtual certainty of realisation of such assets.
Deferred tax assets/liabilities are reviewed at each balance sheet
date.
9. Investments
Investments intended to be held for more than a year are classified as
long term investments. All other investments are classified as current
investments. Long term investments are stated at cost. However
provision for diminution is made to recognize any decline, other than
temporary, in the value of investments. Current investments are stated
at lower of cost or market value on an individual investment basis.
10. Foreign Currency Transaction
Transaction in foreign currency is recorded at exchange rate prevailing
on the date of transaction. Monetary assets and liabilities denominated
in foreign currency are translated at the exchange rate prevailing on
the Balance sheet date and exchange difference on translation of
monetary assets and liabilities and resultant gain or loss is
recognized in the Profit & loss account.
Non Monetary assets and liabilities are translated at the rate
prevailing on the date of transaction.
11. Borrowing Cost
The borrowing costs that are directly attributable to the acquisition
or construction of qualifying assets are capitalized as part of the
cost of such assets. 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 Profit & Loss account as an expense in
the year in which they are incurred.
12. Impairment of Assets:
The Company assesses at each balance sheet date whether there is any
indication that an asset may suffer impairment loss. If any such
indication exists, the Company estimates the recoverable amount of the
asset or the recoverable amount of cash generating unit to which the
assets belongs. Recoverable amount is the higher of an asset's net
selling price and value in use. In assessing value in use, the
estimated future cash flow expected from the continuing use of the
asset and from its disposal is discounted to their present value using
a pre-discount rate that reflect the current market assessment of the
time value of money and risk specific to the asset. In case recoverable
amount is less than its carrying amount then its carrying amount is
reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognized in the Profit and Loss Account. If at
the Balance Sheet date there is an indication that if a previously
assessed impairment loss no longer exists the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.
13. Provisions, Contingent Liabilities and Contingent Assets
A) Provisions are recognized for liabilities that can be measured only
by using a substantial degree of estimation if: -
a) The Company has present obligation as a result of past event.
b) A probable outflow of resources is expected to settle the obligation
and the amount of obligation can be reliably estimated. Provisions are
determined based on management estimates required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current management
estimates.
B) Reimbursement expected in respect of expenditure required to settle
a provision is recognized only when it is virtually certain that the
reimbursement will be received.
C) Contingent Liability is disclosed in the case of:
a) A Present obligation arising from the past event, in case it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A Possible obligation, unless the probability of outflow of
resources is remote.
D) Contingent Assets are neither recognized nor disclosed.
14. Employee Stock Compensation Cost
In respect of stock options granted by the Company, the intrinsic value
of the options (excess of market price of the share on the date of
grant over the exercise price of the option) is treated as deferred
employee compensation cost and is amortized over the vesting period on
straight line basis in accordance with SEBI guidelines in this regard.
15. Leases
Lease arrangements, where risks and rewards incident to ownership of an
asset substantially vest with the lessor are recognized as operating
lease. Lease rentals in respect of operating lease arrangement are
recognized as business income/expense in the profit and loss account as
and when due in accordance with the terms of the related agreement.
16. Earning per share
The earnings considered in ascertaining the Company's Earnings Per
Share (EPS) comprises the net profit after tax (and include the post
tax effect of any extra ordinary items). The number of shares used in
computing Basic EPS is the weighted average number of shares
outstanding during the period / year. The number of shares used in
computing Diluted EPS comprises of weighted average number of equity
shares and dilutive potential equity shares outstanding during the
period.
17. Segment Reporting
Revenue and expenses have been identified to segments on the basis of
their relationship to the operating activities of the segment. Revenue
and expenses, which relate to the enterprise as a whole and are not
allocable to segments on a reasonable basis, have been included under
unallocated corporate expenditure.
18. Amalgamation Expenses
Amalgamation expenses arising due to merger of Capital Homes Limited
with the Company are being amortized over the period of five years.
19. Cash and Cash Equivalents
The company considers all highly liquid financial instruments, which
are readily convertible into cash and have original maturities of three
months or less from the date of purchase, to be cash equivalent.
Mar 31, 2011
1. Basis of Preparation of Financial Statements
The Financial Statements have been prepared under the historical cost
convention and on the basis of going concern concept and in accordance
with the Generally Accepted Accounting Principles ("GAAP") and other
Accounting Standards prescribed under the Companies (Accounting
Standard) Rules, 2006 and other applicable provisions of the Companies
Act, 1956. A Summary of Significant Accounting polices that have been
applied consistently is set out below.
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 financial statements, disclosure regarding
financial statements and reported amount of revenue and expenses during
the reported period. These estimates are based upon management''s
knowledge of current events and actions, actual results could differ
from those estimates and differences, if any, are recognised in the
period in which the results are known /materialised.
3. Fixed Assets
a) Valuation
Fixed assets are stated at cost (Gross Block) less accumulated
depreciation. Cost comprises the purchase price and any attributable
cost of bringing the asset to its working condition for its intended
use.
b) Capital Work in Progress represents expenditure incurred in respect
of Capital projects under development and are carried at cost, includes
land, related acquisition expenses, development / construction costs,
borrowing costs and other direct expenses.
c) Depreciation
Depreciation on fixed assets has been provided on the basis of straight
line method as per provision of section 205 (2) (b) and the rates
prescribed in schedule XIV of the Companies Act, 1956.
4. Inventories
Inventories are valued as under:
a) Building material & stores at lower of Cost or Net Realisable Value
b) Flats (unsold) at lower of cost or Net Realisable Value
c) Projects/contracts work in progress at lower of Cost or Net
Realisable Value
5. Recognition of Income & Expenses
a) The revenue is recognised on the basis of ''Percentage of Completion
Method'' of accounting. Revenue is recognised, in relation to sold areas
only, on the basis of percentage of actual cost incurred thereon
including land as against the total estimated cost of the project under
execution subject to such actual cost being 20% or more of the total
estimated cost. The estimates of saleable area and costs are revised
periodically by the management. The effect of such changes to estimates
is recognised in the period such changes are determined. However, the
revenue, in respect of project undertaken before March 31, 2010, is
accounted for on the basis of actual receipts and instalment fallen due
during the year towards booking of properties, subject to final
adjustments on the completion of respective projects. However, change
in this Accounting Policy doesn''t have any significant impact on the
profitability of Company.
b) Further interest on delayed payments, if any, is accounted for on
realisation due to uncertainties in recovery.
c) Interest and direct expenditure attributable to specific projects
are capitalized in the cost of project, other interest and indirect
costs are treated as ''Period Cost and charged to Profit & Loss account
in the year in which it is incurred.
d) Brokerage or Commission on Sales is accounted in the year of payment
due to uncertainty on realisation of sale Installments.
e) Municipal Taxes are accounted in the year of payment.
f) All other incomes and expenditures except mentioned above are
accounted for on accrual basis.
6. Retirement Benefits to employees
Company''s contribution to Provident Fund, Family Pension and ESIC are
deposited in accordance with the provisions of Employees Provident
fund, 1952 charged to profit and loss account.
Provision for gratuity and leave encashment is determined on the basis
of actuarial valuation carried out at the balance sheet date in
accordance with revised AS-15.
7. Taxation
Income tax comprises current tax, deferred tax. Current tax is the
amount payable as determined in accordance with the provisions of
Income Tax Act, 1961. Provision for Income Tax is made after taking
into consideration benefits admissible under the provisions of the
Income Tax Act, 1961. Deferred tax resulting from timing difference
between the book and the taxable profits is accounted for using the tax
rates and law that are enacted or substantively enacted as on the
balance sheet date. Deferred tax assets are recognised only to the
extant there is reasonable certainty that the asset can be realised in
the future. However if there is unabsorbed depreciation or carried
forward loss under taxation laws, deferred tax assets are recognised
only if there is virtual certainty of realisation of such assets.
Deferred tax assets/liabilities are reviewed at each balance sheet
date.
8. Investments
Investments intended to be held for more than a year are classified as
long term investments. All other investments are classified as current
investments. Long term investments are stated at cost. However
provision for diminution is made to recognize any decline, other than
temporary, in the value of investments. Current investments are stated
at lower of cost or market value on an individual investment basis.
9. Foreign Currency Transaction
Transaction in foreign currency is recorded at exchange rate prevailing
on the date of transaction. Monetary assets and liabilities denominated
in foreign currency are translated at the exchange rate prevailing on
the Balance sheet date and exchange difference on translation of
monetary assets and liabilities and resultant gain or loss is
recognized in the Profit & loss account.
Non Monetary assets and liabilities are translated at the rate
prevailing on the date of transaction.
10. Borrowing Cost
The borrowing costs that are directly attributable to the acquisition
or construction of qualifying assets are capitalized as part of the
cost of such assets. A qualifying asset is one that necessarily take
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to Profit & Loss account as an expense in
the year in which they are incurred.
11. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may suffer impairment loss. If any such
indication exists, the Company estimates the recoverable amount of the
asset or the recoverable amount of cash generating unit to which the
assets belongs. Recoverable amount is the higher of an asset''s net
selling price and value in use. In assessing value in use, the
estimated future cash flow expected from the continuing use of the
asset and from its disposal are discounted to their present value using
a pre-discount rate that reflect the current market assessment of the
time value of money and risk specific to the asset. In case recoverable
amount is less than its carrying amount then its carrying amount is
reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognized in the Profit and Loss Account. If at
the Balance Sheet date there is an indication that if a previously
assessed impairment loss no longer exists the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.
12. Provisions, Contingent Liabilities and Contingent Assets
A) Provisions are recognized for liabilities that can be measured only
by using a substantial degree of estimation if: -
a) The Company has present obligation as a result of past event.
b) A probable outflow of resources is expected to settle the obligation
and the amount of obligation can be reliably estimated.
Provisions are determined based on management estimates required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current management
estimates.
B) Reimbursement expected in respect of expenditure required to settle
a provision is recognized only when it is virtually certain that the
reimbursement will be received.
C) Contingent Liability is disclosed in the case of: -
a) A Present obligation arising from the past event, in case it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A Possible obligation, unless the probability of outflow of
resources is remote.
D) Contingent Assets are neither recognized nor disclosed.
13. Employee Stock Compensation Cost
In respect of stock options granted by the Company, the intrinsic value
of the options (excess of market price of the share on the date of
grant over the exercise price of the option) is treated as deferred
employee compensation cost and is amortized over the vesting period on
straight line basis in accordance with SEBI guidelines in this regard.
14. Leases
Lease arrangements, where risks and rewards incident to ownership of an
asset substantially vest with the lessor are recognized as operating
lease. Lease rentals in respect of operating lease arrangement are
recognized as business income/expense in the profit and loss account as
and when due in accordance with the terms of the related agreement.
15. Earning per share
The earnings considered in ascertaining the Company''s Earnings Per
Share (EPS) comprises the net profit after tax (and includes the post
tax effect of any extra ordinary items). The number of shares used in
computing Basic EPS is the weighted average number of shares
outstanding during the period /year. The number of shares used in
computing Diluted EPS comprises of weighted average number of equity
shares and dilutive potential equity shares outstanding during the
period..
16. Amalgamation Expenses: Amalgamation expenses arising due to merger
of Capital Homes Limited with the Company are being amortized over the
period of five years.
Mar 31, 2010
1. Basis of Preparation of Financial Statements
The Financial Statements have been prepared under the historical cost
convention and on the basis of going concern concept and in accordance
with the Generally Accepted Accounting Principles ("GAAP") and other
Accounting Standards notified under Section 211(3) (c) of the Companies
Act, 1956 in India. A Summary of Significant Accounting polices that
have been applied consistently is set out below. The Financial
Statements have also been prepared in accordance with the relevant
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 financial statements and reported amount of
revenue and expenses during the reported period. Difference between the
actual results and estimates are recognised in the period in which the
results are known /materialised.
3. Fixed Assets
a) Valuation
Fixed assets are stated at cost (Gross Block) less accumulated
depreciation. (Depreciation on fixed assts is provided at the rates and
in the manner prescribed in schedule XIV of the Companies Act, 1956.)
b) Depreciation
Depreciation on fixed assets has been provided on the basis of straight
line method as per provision of section 205 (2) (b) and the rates
prescribed in schedule XIV of the Companies Act, 1956.
4. Inventories
Inventories are valued as under:
a) Building material & stores at cost
b) Flats (unsold) at lower of the cost
or market price
c) Projects/contracts work in progress at cost
5. Recognition of Income & Expenses: -
(a) The revenue is recognised on the basis of actual receipts and
instalments fallen due during the year towards booking of properties,
subject to final adjustment on the completion of respective projects.
Further interest on delayed payments, if any, is accounted for on
realisation due to uncertainties in recovery. Cost of construction is
determined in proportionate to the actual cost incurred as against the
total estimated cost of the project or revised estimated cost, if any.
(b) Interest and direct expenditure attributable to specific projects
are capitalized in the cost of project, other interest and indirect
costs are treated as Period Cost and charged to Profit & Loss Account
in the year in which it is incurred.
(c) Brokerage paid/fallen due on Fixed Deposits is accounted during the
year.
(d) Municipal Taxes & Leave Encashment are accounted for in the year of
payment.
(e) All other incomes and expenditures except mentioned above are
accounted for on accrual basis.
6. Retirement Benefits to employees
Companys contribution to Provident Fund, Family Pension and ESIC
charged to Profit and Loss Account on the actual liability basis.
Provision for gratuity is determined on the actuarial valuation carried
out at the Balance Sheet date in accordance with transitional provision
of revised AS-15.
7. Provision for Current and Deferred Tax
Provision for Income Tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from timing difference between the book and the
taxable profits is accounted for using the tax rates and law that are
enacted or substantively enacted as on the Balance Sheet date. Deferred
tax assets are recognised only to the extant there is reasonable
certainty that the asset can be realised in the future. However, if
there is unabsorbed depreciation or carried forward loss under taxation
laws, deferred tax assets are recognised only if there is virtual
certainty of realisation of such assets. Deferred tax assets /
liabilities are reviewed at each balance sheet date.
8. Investments
Long term investments are stated at cost. However provision for
diminution is made to recognize any decline, other than temporary, in
the value of investments. Current investments are stated at lower of
cost or market value.
9. Foreign Currency Transaction
Transaction in foreign currency is recorded at exchange rate prevailing
on the date of transaction. Monetary assets and liabilities denominated
in foreign currency are translated at the Balance sheet date and
resultant gain or loss is recognized in the Profit & loss account.
Non Monetary assets and liabilities are translated at the rate
prevailing on the date of transaction.
10. Borrowing Cost
The borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily take
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to Profit & Loss account.
11. Intangible Assets
Intangible assets are amortized over the period of four years.
12. Impairment of Assets:
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset or
the recoverable amount of cash generating unit to which the assets
belongs is less than its carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the Profit and Loss Account. If at the Balance Sheet date
there is an indication that if a previously assessed impairment loss no
longer exists the recoverable amount is reassessed and the asset is
reflected at the recoverable amount.
13. Provisions, Contingent Liabilities and Contingent Assets
A) Provisions are recognized for liabilities that can be measured only
by using a substantial degree of estimation if: -
a) The Company has present obligation as a result of past event.
b) A probable outflow of resources is expected to settle the obligation
and the amount of obligation can be reliably estimated
B) Reimbursement expected in respect of expenditure required to settle
a provision is recognized only when it is virtually certain that the
reimbursement will be received.
Contingent Liability is disclosed in the case of:-
a) A Present obligation arising from the past event, in case it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A Possible obligation, unless the probability of outflow of
resources is remote.
Contingent Assets are neither recognized nor disclosed.
14. Employee stock compensation cost
In respect of stock options granted by the Company, the intrinsic value
of the options (excess of market price of the shares over the exercise
price of the option) is treated as deferred employee compensation cost
and is amortized over the vesting period.
15. Leases
Lease rentals in respect of operating lease arrangement are recognized
as business income / expense in the profit and loss account as and when
due in accordance with the terms of the related agreement.
16. Earning per share
The earnings considered in ascertaining the Companys Earnings Per
Share (EPS) comprises the net profit after tax (and includes the post
tax effect of any extra ordinary items). The number of shares used
in computing Basic EPS is the weighted average number of shares
outstanding during the period / year. The number of shares used in
computing Diluted EPS comprises of weighted average shares considered
for deriving Basic EPS, and also the weighted average number of equity
shares.
17. Segment Reporting
Revenue and expenses have been identified to segments on the basis of
their relationship to the operating activities of the segment. Revenue
and expenses, which relate to the enterprise as a whole and are not
allocable to segments on a reasonable basis, have been included under
unallocated corporate expenditure.
18. Amalgamation Expenses:
Amalgamation expenses arising due to merger of Capital Homes Limited
with the Company are being amortized over the period of five years.
Mar 31, 2009
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The Financial Statements have been prepared under the historical cost
convention on the basis of going concern and in accordance with the
Generally Accepted Accounting Principles ("GAAP") and accepted
Accounting Standard notified under Section 211(3c) of the Companies
Act, 1956 in India. A Summary of Significant Accounting polices that
have been applied consistently is set out below. The Financial
Statements have also been prepared in accordance with the relevant
provisions of the companies Act, 1956.
2. Fixed Assets
a) Valuation
Fixed assets are stated at cost (Gross Block) less accumulated
depreciation. Depreciation on fixed assts is provided at the rates and
in the manner prescribed in schedule XIV of the Companies Act, 1956.
b) Depreciation
Depreciation on fixed assets has been provided on the basis of straight
line method as per provision of section 205(2)(b) and applying the
rates as prescribed in schedule XIV of the Companies Act, 1956.
3. Inventory
Inventories are valued as under :
a) Building material & stores at cost
b) Flats (unsold) at lower of the cost or market price
c) Projects/contracts work in progress at cost
4. Recognition of Income & Expenses
a) The revenue is recognised on the basis of actual receipts and
instalments fallen due during the year towards booking of properties,
subject to final adjustment on the completion of respective projects.
Further interest on delayed payments, if any, is accounted for on
realisation due to uncertainties in recovery.
Cost of construction is determined in proportionate to the actual cost
incurred as against the total estimated cost of the project or revised
estimated cost, if any.
b) Interest and direct expenditure attributable to specific projects
are capitalized in the cost of project, other interest and indirect
costs are treated as ÃPeriod Cost and charged to Profit & Loss account
in the year in which it is incurred.
c) Brokerage paid/ fallen due on Fixed Deposits is accounted during the
year.
d) Municipal Taxes & Leave Encashment are accounted for in the year of
payment.
e) All other incomes and expenditures except mentioned above are
accounted for on accrual basis.
5. Retirement Benefits to employees
Companys contribution to Provident Fund, Family Pension and ESIC
charged to profit and loss account on the actual liability basis.
Provision for gratuity is determined on the actuarial valuation
carried out at the balance sheet date
6. Provision for Current and Deferred Tax
Provision for Income Tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from timing difference between the book and the
taxable profits is accounted for, using the tax rates and law that are
enacted or substantively enacted as on the Balance Sheet date. Deferred
tax assets are recognised only to the extant there is reasonable
certainty that the asset can be realised in the future. However there
is unabsorbed depreciation or carried forward loss under taxation laws,
deferred tax assets are recognised only if there is virtual certainty
of realisation of such assets. Deferred tax assets/liabilities are
reviewed at each balance sheet date.
7. Investments
Long term investments are stated at cost. However provision for
diminution is made to recognize any decline, other than temporary, in
the value of investments. Current investments are stated at lower of
cost or market value.
8. Intangible Assets
Intangible assets are amortized over the period of four years.
9. Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset or
the recoverable amount of cash generating unit to which the assets
belongs is less than its carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the Profit and Loss Account. If at the Balance Sheet date
there is an indication that if a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount.
10. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized for liabilities that can be measured only by
using a substantial degree of estimation if:
The Company has present obligation as a result of past event.
A probable outflow of resources is expected to settle the obligation
and the amount of obligation can bereliably estimated.
Reimbursement expected in respect of expenditure required to settle a
provision is recognized only when it is virtually certain that the
reimbursement will be received.
Contingent Liability is disclosed in the case of: -
a) A Present obligation arising from the past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
b) A Possible obligation, unless the probability of outflow of
resources is remote. Contingent Assets are neither recognized nor
disclosed.
11. Employee stock compensation cost
In respect of stock options granted by the Company, the intrinsic value
of the options (excess of market price of the shares over the exercise
price of the option) is treated as deferred employee compensation cost
and is amortized over the vesting period.
12. Leases
Lease rentals in respect of operating lease arrangement are recognized
as Business income/expense in the profit and loss account, when due as
per terms of the related agreement.
13. Earning per share
Basic Earning per share are calculated by dividing the next profit or
loss for the year attributable to equity shareholders after tax by the
weighted average no. of equity share.
14. Segment Reporting
Revenue and expenses have been identified to segments on the basis of
their relationship to the operating activities of the segment. Revenue
and expenses, which relate to the enterprise as a whole and are not
allocable to segments on a reasonable basis, have been included under
unallocated corporate expenditure.
15. Amalgamation expenses
Amalgamation expenses arising due to merger of Capital Homes Limited
with the Company are being amortized over the period of Five years.
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