Mar 31, 2023
Eldeco Housing and Industries Limited (âthe Companyâ) is domiciled and incorporated in India and its equity shares are listed at BSE Limited (BSE) & National Stock Exchange of India Limited (NSE). The registered office of the Company is situated at Eldeco Corporate Chamber-1, 2nd Floor, Vibhuti Khand (Opp. Mandi Parishad), Gomti Nagar, Lucknow, Uttar Pradesh-226010.
The Company is engaged into the business of developing real estate properties for residential, commercial and retail purposes.
The financial statements of the Company for the year ended 31st March, 2023 were approved and authorized for issue by board of directors in their meeting held on 15th day of May, 2023.
Basis of Preparation
The financial statements of the Company have been prepared to comply in all material respects with the Indian Accounting Standards (IND AS) as prescribed under Section 133 of the Companies Act, 2013 (ââthe Actââ) read with Companies (Indian Accounting Standards) Rules as amended from time to time notified under the Companies (Accounting Standards) Rules, 2015. The financial statements have been prepared under the historical cost convention with the exception of certain financial assets and liabilities and share based payments which have been prepared to comply with the Indian Accounting standards (IND AS), including the Rules notified under the relevant provisions of the Companies Act, 2013, (as amended from time to time) and Presentation and disclosure requirements of Division II of Schedule III to the Companies Act, 2013, (IND AS Compliant Schedule III) as amended from time to time.
The preparation of the financial statements requires management to make estimates and assumptions. Actual results could vary from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision effects only that period or in the period of the revision and future periods if the revision affects both current and future years.
The Company''s functional currency and presentation currency is Indian Rupees (INR). All amounts disclosed in the financial statements and notes are in Lacs except otherwise indicated.
The Company presents its assets and liabilities in the Balance Sheet based on current/non-current classification.
An asset is treated as current when it is:
a) expected to be realised or intended to be sold or consumed in normal operating cycle;
b) held primarily for the purpose of trading;
c) expected to be realised within twelve months after the reporting period; or
d) 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 treated as current when:
a) it is expected to be settled in normal operating cycle;
b) it is held primarily for the purpose of trading;
c) it is due to be settled within twelve months after the reporting period; or
d) there is no unconditional right to defer the settlement of the liabilty for at least twelve months after the reporting period
All other liabilities are classified as non-current.
Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle being a period within twelve months for the purpose of current and non-current classification of assets and liabilities.
(i) Basis of Measurement
The Financial Statements of the Company are consistently prepared and presented under historical cost convention on an accrued basis in accordance with IND AS except for certain Financial Assets and Financial Liabilities that are measured at fair value.
The Financial Statements are presented in Indian Rupees (INR) which is the Company''s functional and presentation currency and all amounts are rounded to the nearest Rupees (except otherwise indicated).
(ii) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of returns and discounts to customers.
(a) Real estate projects
The Company derives revenue from execution of real estate projects. Revenue from Real Estate project is recognised in accordance with IND AS 115 which establishes a comprehensive framework in determining whether how much and when revenue is to be recognised. IND AS 115 replaces IND AS 18 revenue and an IND AS 11 construction contract which prescribes control approach for revenue recognition as against risk and rewards as per IND AS 18. In accordance with IND AS 115 revenue from real estate projects are recognised upon transfer of control of promised real estate property to customer at an amount that reflects the consideration which the Company expects to receive in exchange for such booking and is based on following 6 steps:
1. Identification of contract with customers:
The Company accounts for contract with a customer only when all the following criteria are met:
- Parties (i.e. the Company and the customer) to the contract have approved the contract (in writing, orally or in accordance with business practices) and are committed to perform their respective obligations.
- The Company can identify each customer''s right regarding the goods or services to be transferred.
- The Company can identify the payment terms for the goods or services to be transferred.
- The contract has commercial substance (i.e. risk, timing or amount of the Company''s future cash flow is expected to change as a result of the contract) and
- It is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Consideration may not be the same due to discount rate etc.
2. Identify the separate performance obligation in the contract:
Performance obligation is a promise to transfer to a customer.
Goods or services or a bundle of goods or services i.e. distinct or a series of goods or services that are substantially the same and are transferred in the same way.
If a promise to transfer goods or services is not distinct from goods or services in a contract, then the goods or services are combined in a single performance obligation.
The goods or services that is promised to a customer is distinct if both the following criteria are met:
- The customer can benefit from the goods or services either on its own or together with resources that are readily available to the customer (i.e. the goods or services are capable of being distinct) and
- The Company''s promise to transfer the goods or services to the customer is separately identifiable from the other promises in the contract i.e the goods or services are distinct within the context of the contract.
3. Satisfaction of the performance obligation:
The Company recognizes revenue when (or as) the Company satisfies a performance obligation by transferring a promised goods or services to the customer.
The real estate properties are transferred when (or as) the customer obtains control of the property.
4. Determination of transaction price:
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to customer excluding GST.
The consideration promised in a contract with a customer may include fixed amount, variable amount or both. In determining transaction price, the Company assumes that goods or services will be transferred to the customer as promised in accordance with the existing contract and the contract can''t be cancelled renewed or modified.
5. Allocating the transaction price to the performance obligation:
The allocation of the total contract price to various performance obligation are done based on their standalone selling prices. The standalone selling price is the price at which the Company would sell promised goods or services separately to the customers.
6. Recognition of revenue when (or as) the Company satisfies a performance obligation:
Performance obligation is satisfied over time or at a point in time.
Performance obligation is satisfied over time if one of the criteria out of the following three is met:
- The customer simultaneously receives and consumes a benefit provided by the Company''s performance as the Company performs.
- The Company''s performance creates or enhances an asset that a customer controls as asset is created or enhanced or
- The Company''s performance doesn''t create an asset within an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date.
Therefore, the revenue recognition for a performance obligation is done over time if one of the criteria is met out of the above three else revenue recognition for a performance obligation is done at point in time.
The Company disaggregate revenue from real estate projects on the basis of nature of revenue.
(b) Project Management Fee
Project Management fee is accounted as revenue upon satisfaction of performance obligation as per agreed terms.
(c) Interest Income
Interest due on delayed payments by customers is accounted on accrual basis.
(d) Dividend income
Dividend income is recognized when the right to receive the payment is established.
(iii) Borrowing Costs
Borrowing cost that are directly attributable to the acquisition or construction of a qualifying asset (including real estate projects) are considered as part of the cost of the asset/project. All other borrowing costs are treated as period cost and charged to the statement of profit and loss in the year in which incurred.
(iv) 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)
Depreciation on Property, Plant and Equipment is provided on Straight line method based on the useful life of the asset as specified in Schedule II to the Companies Act, 2013. The management estimates the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in the case of steel shuttering and scaffolding, whose life is estimated as five years.
De-recognition
An item of property, plant and equipment and any significant part initially recognised is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.
(v) Intangible Assets Recognition and initial measurement
Intangible assets are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
Subsequent measurement (amortization and useful lives)
Intangible assets comprising of ERP & other computer software are stated at cost of acquisition less accumulated amortization and are amortised over a period of five years on straight line method.
(vi) Impairment of Non Financial 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. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss.
(vii) Financial Instruments
(a) Financial assets
Initial recognition and measurement
Financial assets are recognised when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transactional costs.
Subsequent measurement
(1) Financial instrument at amortised cost - The financial instrument is measured at the amortised cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. All other debt
instruments are measured at Fair Value through other comprehensive income or Fair value through profit and loss based on Company''s business model.
(2) Equity Investment - All equity investments in scope of IND AS 109 are measured at fair value. Equity instruments which are held for trading and generally classified as at fair value through profit and loss (FVTPL). For all other equity instruments, the Company decides to classify the same either as at fair value through other comprehensive income (FVOCI) or fair value through profit and loss (FVTPL). The Company makes such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.
De-recognition of financial assets
A financial asset is primarily de-recognised 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.
(b) Financial liabilities
Initial recognition and measurement
All financial liabilities are recognised initially at fair value and transaction cost that are attributable to the acquisition of the financial liabilities are also adjusted. These liabilities are classified as amortised cost.
Subsequent measurement
Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method. These liabilities include borrowings and deposits.
De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or on the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
(c) Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCIdebt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivable only, the Company applies the simplified approach permitted by IND AS 9 Financial instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
(d) 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 recognised amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
(viii) Inventories and Projects in progress
(a) Inventories
(i) Building material and consumable stores are valued at lower of cost and net realisable value, which is determined on the basis of the âFirst in First out'' method.
(ii) Land is valued at lower of cost and net realisable value, which is determined on average method. Cost includes cost of acquisition and all related costs.
(iii) Construction work in progress is valued at lower of cost and net realisable value. Cost includes cost of materials, services and other related overheads related to project under construction.
(iv) Completed real estate project for sale and trading stock are valued at lower of cost and net realizable value. Cost includes cost of land, materials, construction, services and other related overheads.
(b) Projects in progress
Projects in progress are valued at lower of cost and net realisable value. Cost includes cost of land, materials, construction, services, borrowing costs and other overheads relating to projects.
(ix) Retirement benefits
i. Contributions payable by the Company to the concerned government authorities in respect of provident fund, family pension fund and employee state insurance are charged to the statement of profit and loss.
ii. The Company is having Group Gratuity Scheme with Life Insurance Corporation of India. Provision for gratuity is made based on actuarial valuation in accordance with IND AS 19.
iii. Provision for leave encashment in respect of unavailed leave standing to the credit of employees is made on actuarial basis in accordance with IND AS 19.
iv. Actuarial gains/losses resulting from re-measurements of the liability/ asset are included in other comprehensive income.
(x) Provisions, contingent assets and contingent liabilities
A provision is recognized when:
⢠the Company has a present obligation 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.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
(xi) Earnings per share
Basic earnings per share are calculated by dividing the total Profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the total Profit for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year area adjusted for the effects of all dilutive potential equity share.
(xii) Leases
In accordance with IND AS 116, the Company recognizes right of use assets representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of right of use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payment made at or before commencement date less any lease incentive received plus any initial direct cost incurred and an estimate of cost to be incurred by lessee in dismantling and removing underlying asset or restoring the underlying asset or site on which it is located. The right of use asset is subsequently measured at cost less accumulated depreciation, accumulated impairment losses, if any, and adjusted for any remeasurement of lease liability. The right of use assets is depreciated using the straight line method from the commencement date over the shorter of lease term or useful life of right of use asset. The estimated useful lives of right of use assets are determined on the same basis as those of property, plant and equipment. Right of use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognized in statement of profit and loss. The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined; the Company uses incremental borrowing rate. Lease arrangements where the risk and rewards incident to ownership of an asset substantially vest with the lessor are recognised as operating lease. Lease rent under operating lease are charged to statement of profit and loss on a straight line basis over the lease term except where scheduled increase in rent compensate the lessor for expected inflationary costs.
The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modification or to reflect revised-in-substance fixed lease payments. The Company recognizes amount of remeasurement of lease liability due to modification as an adjustment to right of use assets and statement of profit and loss depending upon the nature of modification. Where the carrying amount of right of use assets is reduced to zero and there is further reduction in measurement of lease liability, the Company recognizes any remaining amount of the remeasurement in statement of profit and loss.
(xiii) Income Taxes
(i) Provision for current tax is made based on the tax payable under the Income Tax Act, 1961. Current income tax relating to items recognised outside profit and loss is recognised outside profit and loss (either in other comprehensive income or in equity).
(ii) Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and
tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.
(xiv) Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs:
⢠Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
⢠Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
⢠Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfer have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosure, the Company has determined classes of assets and liabilities on the basis of nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
(xv) Cash and Cash Equivalent
Cash and Cash equivalent in the balance sheet comprises cash at bank and cash on hand, demand deposits and short term deposits which are subject to an insignificant change in value.
The amendment to IND AS 7 requires entities to provide disclosure of change in the liabilities arising from financing activities, including both changes arising from cash flows and non cash changes (such as foreign exchange gain or loss). The Company has
provided information for both current and comparative period in cash flow statement.
(xvi) Business Combinations
The acquisition method of accounting is used to account for all business combinations, except common control transactions, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of the transferor Companies comprises the â
⢠fair values of the assets transferred;
⢠liabilities incurred to the former owners of the acquired business;
⢠equity interests issued by the Company; and
⢠fair value of any asset or liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are with limited exceptions, measured initially at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised in other comprehensive income and accumulated in equity as capital reserve provided there is clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. In other cases, the bargain purchase gain is recognised directly in equity as capital reserve.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity''s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently re-measured to fair value with changes in fair value recognised in profit or loss. There is no contingent consideration in respect of all the years presented.
Business combinations involving entities that are controlled by the Company are accounted for using the pooling of interests method as follows:
⢠The assets and liabilities of the combining entities are reflected at their carrying amounts.
⢠No adjustments are made to reflect fair values or recognise any new assets or liabilities. Adjustments are only made to harmonise accounting policies.
⢠The financial information in the financial statements in respect of prior periods is restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective
of the actual date of the combination. In case of Court approved Scheme the business combination is recognised from the appointed date following the accounting treatment approved by the Court.
⢠The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee.
⢠The identity of the reserves are preserved and the reserves of the transferor become the reserves of the transferee.
⢠The difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is presented separately from other capital reserves.
(xvii) Significant management judgement in applying accounting policies and estimation of uncertainty
Significant management judgement
When preparing the financial statements management undertakes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.
The following are significant management judgement in applying the accounting policies of the Company that have the most significant effect on the financial statements:-
(a) Recognition of deferred tax assets
The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilised.
(b) Estimation of uncertainty
(a) Recoverability of advances/receivables
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding receivables and advances.
(b) Defined benefit obligation (DBO)
Management''s estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
(c) Provisions
At each balance sheet date on the basis of management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding warranties and
guarantees. However the actual future outcome may be different from this judgment.
(d) Inventories
Inventory is stated at the lower of cost and net realisable value (NRV).
NRV for completed inventory is assessed including but not limited to market conditions and prices existing at the reporting date and is determined by the Company based on net amount that it expects to realise from the sale of inventory in the ordinary course of business.
NRV in respect of inventories under construction is assessed with reference to market prices (by referring to expected or recent selling price) at the reporting date less estimated costs to complete the construction and estimated cost necessary to make the sale. The costs to complete the construction are estimated by management.
(e) Fair value measurements
Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument/assets. Management bases its assumptions on observable date as far as possible but this may not always be available. In that case Management uses the best relevant information available. Estimated fair values may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.
(f) Lease
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of IND AS 116. Identification of a lease requires significant judgement. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.
The Company determines the lease term as the non-cancellable period of lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In exercising whether the Company is reasonably certain to exercise an option to extend a lease or to exercise an option to terminate the lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease or to exercise the option to terminate the lease. The Company revises lease term, if there is change in non-cancellable period of lease. The discount rate used is generally based on incremental borrowing rate.
(g) Classification of assets and liabilities into current and non-current
The Management classifies assets and liabilities into current and non-current categories based on its operating cycle.
Mar 31, 2018
1. Significant Accounting Policies :
(i) Basis of Preparation
The financial statements of the Company have been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (âInd ASâ) issued by Ministry of Corporate Affairs (âMCAâ). The Company has uniformly applied the accounting policies during the period presented.
For all periods up to and including the year ended 31st March, 2017, the Company prepared its financial statements in accordance with accounting standards notified under the Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended 31st March, 2018 are the first financial statements, the Company has prepared in accordance with Ind AS. For the purpose of comparatives, financial statements for the year ended 31st March, 2017 and also prepared under Ind AS.
The financial statements for the year ended 31st March, 2018 were authorized and approved for issue by the Board of Directors on 25th May, 2018.
(ii) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of returns and discounts to customers.
(a) Real estate projects
Revenue from real estate projects is recognized on the âPercentage of Completion methodâ (POC) of accounting.
Revenue under the POC method is recognized on the basis of percentage of actual costs incurred, including land, construction and development cost of projects under execution subject, to such actual cost being 30 percent or more of the total estimated cost of projects.
The stage of completion under the POC method is measured on the basis of percentage that actual costs incurred on real estate projects including land, construction and development cost bears to the total estimated cost of the project.
Effective from 1st April 2012, in accordance with the âGuidance Note on Accounting for Real Estate Transactions (Revised) 2012â (referred to as âGuidance Noteâ), all projects commencing on or after the said date or projects where revenue is recognised for the first time on or after the said date, Revenue from real estate projects has been recognized on Percentage of Completion (POC) method provided the following conditions are met:
(1) All critical approvals necessary for commencement of the project have been obtained.
(2) The expenditure incurred on construction and development is not less than 25% of the total estimated construction and development cost.
(3) At least 25% of the saleable project area is secured by way of contracts or agreements with buyers.
(4) At least 10% of the total revenue as per the agreement of sale or any other legally enforceable documents are realised at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties to such contracts will comply with the payment terms as defined in the respective contracts.
The estimates of the projected revenues, projected profits, projected costs, cost to completion and the foreseeable losses are reviewed periodically by the management and any effect of changes in estimates is recognized in the period in which such changes are determined.
Unbilled revenue disclosed under other current financial assets represents revenue recognized based on percentage of completion method over and above amount due as per payment plan agreed with the customers. Amount received from customers which exceeds the cost and recognized profits to date on projects in progress, is disclosed as advance received from customers under other current liabilities. Any billed amount against which revenue is recognized but amount not collected is disclosed under trade receivables.
(b) Interest Income
Interest due on delayed payments by customers is accounted on accrual basis.
(c) Sale of completed real estate projects
Revenue from sale of completed real estate projects, land, development rights and sale/transfer of rights in agreements are recognized in the financial year in which agreements of such sales are executed and there is no uncertainty about ultimate collections.
(d) Dividend Income
Dividend income is recognized when the right to receive the payment is established.
(iii) Borrowing Costs
Borrowing cost that are directly attributable to the acquisition or construction of a qualifying asset (including real estate projects) are considered as part of the cost of the asset/project. All other borrowing costs are treated as period cost and charged to the statement of profit and loss in the year in which incurred.
(iv) Property, Plant and Equipment Recognition and initial measurement
Properties, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company. All other repair and maintenance costs are recognized in statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Depreciation on Property, Plant and Equipment is provided on Straight line method based on the useful life of the asset as specified in Schedule II to the Companies Act, 2013. The management estimates the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in the case of steel shuttering and scaffolding, whose life is estimated as five years.
De-recognition
An item of property, plant and equipment and any significant part initially recognised is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.
(v) Intangible Assets Recognition and initial measurement
Intangible assets are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
Subsequent measurement (amortization and useful lives)
Intangible assets comprising of ERP & other computer software are stated at cost of acquisition less accumulated amortization and are amortised over a period of five years on straight line method.
(vi) Impairment of Non Financial 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. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss.
(vii) Financial Instruments
(a) Financial assets
Initial recognition and measurement
Financial assets are recognised when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transactional costs.
Subsequent measurement
(1) Financial instrument at amortised cost - the financial instrument is measured at the amortised cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. All other debt instruments are measured at Fair Value through other comprehensive income or Fair value through profit and loss based on Companyâs business model.
(2) Equity Investment - All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and generally classified as at fair value through profit and loss (FVTPL). For all other equity instruments, the Company decides to classify the same either as at fair value through other comprehensive income (FVOCI) or fair value through profit and loss (FVTPL). The Company makes such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.
De-recognition of financial assets
A financial asset is primarily de-recognised 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.
(b) Financial liabilities
Initial recognition and measurement
All financial liabilities are recognised initially at fair value and transaction cost that are attributable to the acquisition of the financial liabilities are also adjusted. These liabilities are classified as amortised cost.
Subsequent measurement
Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method. These liabilities include borrowings and deposits.
De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or on the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
(c) Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivable only, the Company applies the simplified approach permitted by Ind AS-09 Financial instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
(d) 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 recognised amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
(viii) Inventories and Projects in progress
(a) Inventories
(i) Building material and consumable stores are valued at lower of cost or net realisable value, which is determined on the basis of the âFirst in First outâ method.
(ii) Land is valued at lower of cost or net realisable value, which is determined on average method. Cost includes cost of acquisition and all related costs.
(iii) Construction work in progress is valued at lower of cost or net realisable value. Cost includes cost of materials, services and other related overheads related to project under construction.
(iv) Completed real estate project for sale and trading stock are valued at lower of cost or net realizable value. Cost includes cost of land, materials, construction, services and other related overheads.
(b) Projects in progress
Projects in progress are valued at lower of cost or net realisable value. Cost includes cost of land, materials, construction, services, borrowing costs and other overheads relating to projects.
(ix) Retirement benefits
i. Contributions payable by the Company to the concerned government authorities in respect of provident fund, family pension fund and employee state insurance are charged to the statement of profit and loss.
ii. The Company is having Group Gratuity Scheme with Life Insurance Corporation of India. Provision for gratuity is made based on actuarial valuation in accordance with Ind AS-19.
iii. Provision for leave encashment in respect of unavailed leave standing to the credit of employees is made on actuarial basis in accordance with Ind AS-19.
iv. Actuarial gains/losses resulting from re-measurements of the liability/ asset are included in other comprehensive income.
(x) Provisions, contingent assets and contingent liabilities A provision is recognized when :
- the company has a present obligation 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.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
(xi) Earnings per share
Basic earnings per share are calculated by dividing the total profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the total profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year area adjusted for the effects of all dilutive potential equity share.
(xii) Operating lease
Lease arrangements where the risk and rewards incident to ownership of an asset substantially vest with the lessor are recognised as operating lease. Lease rent under operating lease are charged to statement of profit and loss on a straight line basis over the lease term except where scheduled increase in rent compensate the lessor for expected inflationary costs.
(xiii) Income Taxes
(i) Provision for current tax is made based on the tax payable under the Income Tax Act 1961. Current income tax relating to items recognised outside profit and loss is recognised outside profit and loss (either in other comprehensive income or in equity).
(ii) Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.
(xiv) Fair value measurement
Fair value is the price that would be received to sell as asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs:
- Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities,
- Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable,
- Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfer have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosure, the Company has determined classes of assets and liabilities on the basis of nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
(xv) Cash and Cash Equivalent
Cash and Cash equivalent in the balance sheet comprises cash at bank and cash in hand, demand deposits and short term deposits which are subject to an insignificant change in value.
The amendment to Ind AS-7 requires entities to provide disclosure of change in the liabilities arising from financing activities, including both changes arising from cash flows and non cash changes (such as foreign exchange gain or loss). The Company has provided information for both current and comparative period in cash flow statement.
(xvi) Business Combinations:
The acquisition method of accounting is used to account for all business combinations, except common control transactions, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of the transferor companies comprises the â
- fair values of the assets transferred;
- liabilities incurred to the former owners of the acquired business;
- equity interests issued by the Company; and
- fair value of any asset or liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are with limited exceptions, measured initially at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised in other comprehensive income and accumulated in equity as capital reserve provided there is clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. In other cases, the bargain purchase gain is recognised directly in equity as capital reserve.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entityâs incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently re-measured to fair value with changes in fair value recognised in profit or loss. There is no contingent consideration in respect of all the years presented.
Business combinations involving entities that are controlled by the Company are accounted for using the pooling of interests method as follows:
- The assets and liabilities ofthe combining entities are reflected at their carrying amounts.
- No adjustments are made to reflect fair values, or recognise any new assets or liabilities. Adjustments are only made to harmonise accounting policies.
- The financial information in the financial statements in respect of prior periods is restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. In case of Court approved Scheme the business combination is recognised from the appointed date following the accounting treatment approved by the Court.
- The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee.
- The identity of the reserves are preserved and the reserves of the transferor become the reserves of the transferee.
- The difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is presented separately from other capital reserves.
(xvii) Significant management judgement in applying accounting policies and estimation of uncertainty Significant management judgement
When preparing the financial statements, management undertakes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.
The following are significant management judgement in applying the accounting policies of the Company that have the most significant effect on the financial statements.
(a) Revenue
The Company recognises revenue using the percentage of completion method. This requires estimation of the projected revenues, projected profits, projected costs, cost to completion and the foreseeable losses. These are reviewed periodically by the management and any effect of changes in estimates is recognised in the period in which such changes are determined.
(b) Recognition of deferred tax assets
The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Companyâs future taxable income against which the deferred tax assets can be utilised.
Estimation of uncertainty
(a) Recoverability of advances/receivables
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding receivables and advances.
(b) Defined benefit obligation (DBO)
Managementâs estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
(c) Provisions
At each balance sheet date on the basis of management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding warranties and guarantees. However the actual future outcome may be different from this judgment.
(d) Inventories
Inventory is stated at the lower of cost or net realisable value (NRV).
NRV for completed inventory is assessed including but not limited to market conditions and prices existing at the reporting date and is determined by the Company based on net amount that it expects to realise from the sale of inventory in the ordinary course ofbusiness.
NRV in respect of inventories under construction is assessed with reference to market prices (by referring to expected or recent selling price) at the reporting date less estimated costs to complete the construction, and estimated cost necessary to make the sale. The costs to complete the construction are estimated by management.
(e) Fair value measurements
Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument / assets. Management bases its assumptions on observable date as far as possible but this may not always be available. In that case Management uses the best relevant information available. Estimated fair values may vary from the actual prices that would be achieved in an armâs length transaction at the reporting date.
(f) Classification of assets and liabilities into current and non-current
The Management classifies assets and liabilities into current and non-current categories based on its operating cycle.
(xviii) First Time Adoption- Mandatory Exceptions and Optional Exemptions
The company has prepared the opening balance sheet as per IND AS as on transition date as on 01.04.2016 by
a) recognising all assets and liabilities whose recognition is required by Ind AS
b) not recognising items of assets and liabilities not permitted by Ind AS
c) reclassifying item from previous GAAP to Ind AS as required under Ind AS
d) applying Ind AS in measurement of recognised assets and liabilities
However, this principle is subject to certain exceptions and certain optional exemptions availed by the company as under:-
1. De - recognition of financial assets and liabilities
The company has applied dereognition requirements of financial assets and liabilities prospectively for transactions occuring on or after 01.04.2016.
2. Impairment of financial assets-
The Company has applied impairment requirements of Ind AS 109 retrospectively, however as permitted by Ind AS 101, it has used reasonable and supportable information to determine credit risk at the date at which financial instruments were initially recognised in order to compare it with credit risk at transition date. However, the Company has not undertaken an exhaustive search for information when determining at the date of transition to Ind AS whether there has been significant increase in credit risk since initial recognition as permitted by Ind AS 101.
3. Deemed cost of Property, Plant and Equipment-
The Company has elected to continue with carrying value of all its Property, Plant and Equipment recognised as of01.04.2016 measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
4. Business Combination
Exemptions from retrospective application (i) Business combination exemption- The Company has applied the exemption as provided in Ind AS 101 on non-application of Ind AS 103, âBusiness Combinationsâ to business combinations consummated prior to April 1, 2016 (the âTransition Dateâ), pursuant to which goodwill/capital reserve arising from a business combination has been stated at the carrying amount prior to the date of transition under Indian GAAP. The Company has also applied the exemption for past business combinations to acquisitions of investments in subsidiaries / associates / joint ventures consummated prior to the Transition Date.
Mar 31, 2016
i. Basis of Accounting
Financial Statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and to comply with Accounting Standards referred to in Section 133 of the Companies Act 2013 read with Rule 7 of Company (Accounts) Rules 2014, to the extent applicable.
The Company follows the mercantile system of accounting and recognizes the income & expenditure on accrual basis.
All assets and liabilities have been classified as Current or Non-current as per Company''s normal operating cycle. Based on the nature of products and time between acquisition of assets/materials for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle being a period of one year for the purpose of classification of assets and liabilities as current and non-current.
ii. Use of Estimates
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
iii. Accounting Policies
a. Fixed Assets
Fixed Assets are stated at acquisition cost less accumulated depreciation. Cost includes inward freight, duties, taxes and incidental expenses related to acquisition and installation incurred up to the date of commissioning of assets.
b. Depreciation
Depreciation on fixed assets is provided on straight line method based on the useful life of the asset as specified in Schedule II to the Companies Act, 2013. The management estimates the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Intangible assets are amortized over their estimated useful life. In respect of Computer Software as 5 years.
c. 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. If such recoverable amount of the asset or the recoverable amount of the cash- generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss.
d. Investments
Long-term investments are carried at cost less provision, if any, for diminution in value other than temporary. Current investments are carried individually, at lower of cost or fair value.
e. Inventories
Inventories are valued as under:
Building Materials, Stores and Consumables are valued at cost, where cost is determined on first in first out basis.
Land is valued at cost. Cost includes cost of acquisition and all related costs.
Project in Progress is valued at cost and consists of all direct expenditure incurred on projects under execution. Cost includes cost of land, materials, construction, services, borrowing costs and other directly attributable to the construction/development of the projects.
Completed real estate project for sale and trading stock are valued at lower of cost or net realizable value.
f. Revenue Recognition
A. Real Estate Projects
The Company follows the Percentage of Completion Method (POC) of Accounting. As per this method, the revenue in the Statement of Profit and Loss at the end of the accounting year is recognized in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company subject to actual cost being 30% or more of the total estimated cost.
The stage of completion under the POC method is measured on the basis of percentage that actual costs incurred on real estate projects including land, construction and development cost bears to the total estimated cost of the project. The estimates of the projected revenues, projected profits, projected costs, cost to completion and the foreseeable loss are reviewed periodically by the management and any effect of changes in estimates is recognized in the period in which such changes are determined.
Effective from 1st April 2012, in accordance with the âGuidance Note on Accounting for Real Estate Transactions (Revised) 2012â (referred to as âGuidance Noteâ), all projects commencing on or after the said date or projects where revenue is recognized for the first time on or after the said date, Revenue from real estate projects has been recognized on Percentage of Completion method provided the following conditions are met:
(i) All critical approvals necessary for commencement of the project have been obtained.
(ii) The expenditure incurred on construction and development is not less than 25% of the total estimated construction and development cost.
(iii) At least 25% of the saleable project area is secured by way of contracts or agreements with buyers.
(iv) At least 10% of the total revenue as per the agreement of sale or any other legally enforceable document are realized at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties to such contracts will comply with the payment terms as defined in the respective contracts.
Unbilled revenue disclosed under other assets represents revenue recognized based on percentage of completion method over and above amount due as per payment plan agreed with the customers. Amount received from customers which exceeds the cost and recognized profits to date on projects in progress, is disclosed as advance received from customers under other current liabilities. Any billed amount against which revenue is recognized but amount not collected is disclosed under trade receivable.
Surrender of flats by buyers are valued at cost and accounted for as âCost of Constructionâ. When sold, proceeds are treated as â Sales â.
Repair, maintenance and other costs incurred after the completion of the project are charged to the cost of construction in the year in which cost is incurred. Interest due on delayed payments by customers are recognized when the recovery is reasonable certain. Revenue from sale of completed real estate projects, land, development rights and sale/transfer of rights in agreements are recognized in the financial year in which agreements of such sales are executed and there is no uncertainty about ultimate collections.
B. Income from Construction Contracts
a. Revenue from construction contracts is recognized on the âPercentage of Completion Methodâ of accounting.
b. Income from Construction contracts is recognized by reference to the stage of completion of the contract activity as certified by the client.
c. Revenue on account of contract variations, claims and incentives are recognized upon determination or settlement of the contract.
C. Revenue from Trading activities of completed projects is accounted for on accrual basis
g. Retirement Benefits
i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit & Loss of the year in which the employee has rendered services.
ii) Post employment benefits are recognized as an expense in the Statement of Profit & Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable towards contributions. The present value is determined using market yields of government bonds, at the balance sheet date, as the discounting rate.
iii) Other long term employee benefits are recognized as an expense in the Statement of Profit & Loss for the year in which the employee has rendered services. Estimated liability on account of long term benefits is discounted to the present value using the market yield on government bonds as on the date of balance sheet,
iv) Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit & Loss.
h. Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets (including real estate projects) are capitalized as part of the cost of such asset/project. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.
i. Accounting for taxes on income
The accounting treatment followed for taxes on income is to provide for current and deferred tax. Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred Tax resulting from the difference between book and taxable profits is accounted for using the tax rates and laws that have been enacted or substantially enacted as on Balance Sheet date. The Deferred Tax is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized in future.
j. Operating lease
Lease arrangements where the risk and rewards incident to ownership of an assets substantially vest with the less or are recognized as operating lease. Lease rent under operating lease are charged to statement of profit and loss on a straight line basis over the lease term.
k. Earnings per share
The earnings considered in ascertaining the companyâs EPS comprise the Net Profit or Loss for the period after tax and extra ordinary items. The basic EPS is computed on the basis of weighted average number of equity shares outstanding during the year. The number of shares for computation of diluted EPS comprises of weighted average number of equity shares considered for deriving basic EPS and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares.
1. Provisions, Contingent Liabilities and Contingent Assets
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not; require an out flow of resources. Where there is a possible obligation of a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Provision is made in account in respect of those contingencies which are likely to materialize in to liabilities after the year end till the adoption of accounts by Board of Directors and which have material effect on the position stated in the balance sheet, m. Cash & Cash Equivalents
For the purpose of Cash Flow Statement cash and cash equivalents include cash in hand, demand deposit with the bank, other short term highly liquid investments within original maturities of 3 months or less.
2.2 Terms/ Rights Attached to Equity Shares
The Company has only one class of Equity Shares having a par value of Rs.10 per share. Each holder of Equity Shares is entitled to one vote per share and ranks pari passu. The Dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
#The aforesaid disclosure is based upon percentages computed separately for class of shares outstanding as at the balance sheet date. As per records of the company, including its register of shareholders/members and other declaration received from shareholders regarding beneficial interest, the above shareholding represents both legal & beneficial ownership of shares.
Nature of Security of Working Capital & Short Term Loans:
(i) Residential and Commercial Land with construction of site office and surrounded by boundary wall and gate at Faizullahganj,Mohibullapur Sitapur Road, near Janakipuram flyover, Lucknow bearing khasra no. 58,59,60,& 85 measuring 15141.54 sq. mts. Land having khasra no. 703,704 & 851 ka Haiwat Mau Mawajya, Pargana Bijnor, Ward Ibrahimpur, Raibareilly Road, Lucknow.
(ii) Further Secured by personal guarantee of Shri S.K. Garg (Chairman) & Shri Pankaj Bajaj (Managing Director).
(iii) Further Secured by First Charge on Block Assets of the Company.
(iv) In overdraft account secured against lien on bank Fixed Deposits and personal guarantee of Directors.
(v) Short Term Loan is availed for purchase of 67.58% of the shareholding of Eldeco City Private Limited from Xander Investment Holding Private Limited and Nalonrod Holdings Limited, thereby becomes wholly owned subsidiary of the company (Refer Note No. 13) and secured by:
a. Pledge of 100% Equity Shares of Eldeco City Private Limited
b. First Equitable Mortgage of "Eldeco Shaurya" project land, admeasuring 43.069 acres approximately, located at village Bijnor, Tehsil Mohan Lai Ganj, near Bhonwal Engineering College, Luck now, with construction thereon, present and future.
c. Charge on the entire ale proceeds/receivables accruing from sold and unsold area of the entire "Eldeco Shaurya" project at the above-mentioned land.
d. Personal Guarantee of Mr. Pankaj Bajaj, Managing Director.
c. And/or any other security of higher or equivalent amount as may be acceptable to bank so as to maintain the said Loan-Asset-Cover at a minimum of 2.00 times the principal outstanding at all times.
Mar 31, 2015
I. Basis of Accounting
Financial Statements have been prepared under the historical cost
convention in accordance with the generally accepted accounting
principles and to comply with Accounting Standards referred to in
Section 133 of the Companies Act, 2013, read with Rule 7 of Company
(Accounts) Rules 2014, to the extent applicable.
The Company follows the mercantile system of accounting and recognizes
the income & expenditure on accrual basis.
All assets and liabilities have been classified as Current or
Non-current as per Company's normal operating cycle. Based on the
nature of products and time between acquisition of assets/materials for
processing and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle being a period of one year
for the purpose of classification of assets and liabilities as current
and non-current.
ii. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period.
Difference between the actual results and estimates are recognised in
the period in which the results are known / materialised.
iii. Accounting Policies
a. Fixed Assets
Fixed Assets are stated at acquisition cost less accumulated
depreciation. Cost includes inward freight, duties, taxes and
incidental expenses related to acquisition and installation incurred up
to the date of commissioning of assets.
b. Depreciation
I. Depreciation on fixed assets for the year ended 31st March, 2014, is
provided for on the Straight Line Method in the manner and at the rates
specified in Schedule XIV to the Companies Act, 1956, except on fixed
assets with 100% rate of depreciation which are fully depreciated in the
year of addition.
Effective from 1st April 2014, depreciation is charged on the basis of
useful life of the fixed assets. The Company has adopted useful life of
fixed assets as given in Part 'C' of Schedule II of the Companies Act,
2013 in respect of all fixed assets.
II. Intangible assets are amortised over their estimated useful life.
In respect of Computer Software as 5 years.
c. 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. If
such recoverable amount of the asset or the recoverable amount of the
cash- generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of profit and loss.
d. Investments
Long-term investments are carried at cost less provision, if any, for
diminution in value other than temporary. Current investments are
carried individually, at lower of cost or fair value.
e. Inventories
Inventories are valued as under:
Building Materials, Stores and Consumables are valued at lower of cost
or net realizable value, where cost is determined on first in first out
basis.
Land is valued at cost. Cost includes cost of acquisition and all
related costs.
Project in Progress is valued at cost and consists of all direct
expenditure incurred on projects under execution. Cost includes cost
of land, materials, construction, services, borrowing costs and other
directly attributable to the construction/development of the projects.
Completed real estate project for sale and trading stock are valued at
lower of cost or net realizable value.
f. Revenue Recognition
A. Real Estate Projects
The Company follows the Percentage of Completion Method (POC) of
Accounting. As per this method, the revenue in the Statement of Profit
and Loss at the end of the accounting year is recognized in proportion
to the actual cost incurred as against the total estimated cost of
projects under execution with the Company subject to actual cost being
30% or more of the total estimated cost.
The stage of completion under the POC method is measured on the basis
of percentage that actual costs incurred on real estate projects
including land, construction and development cost bears to the total
estimated cost of the project. The estimates of the projected revenues,
projected profits, projected costs, cost to completion and the
foreseeable loss are reviewed periodically by the management and any
effect of changes in estimates is recognized in the period in which
such changes are determined.
Effective from 1st April, 2012, in accordance with the "Guidance Note
on Accounting for Real Estate Transactions (Revised) 2012" (referred to
as "Guidance Note"), all projects commencing on or after the said date
or projects where revenue is recognized for the first time on or after
the said date, Revenue from real estate projects has been recognized on
Percentage of Completion Method provided the following conditions are
met:
(i) All critical approvals necessary for commencement of the project
have been obtained.
(ii) The expenditure incurred on construction and development is not
less than 25% of the total estimated construction and development cost.
(iii) At least 25% of the saleable project area is secured by way of
contracts or agreements with buyers.
(iv) At least 10% of the total revenue as per the agreement of sale or
any other legally enforceable document are realized at the reporting
date in respect of each of the contracts and it is reasonable to expect
that the parties to such contracts will comply with the payment terms as
defined in the respective contracts.
Unbilled revenue disclosed under other assets represents revenue
recognized based on Percentage of Completion Method over and above
amount due as per payment plan agreed with the customers. Amount
received from customers which exceeds the cost and recognized profits
to date on projects in progress, is disclosed as advance received from
customers under other current liabilities. Any billed amount against
which revenue is recognized but amount not collected is disclosed under
trade receivable. Surrender of flats by buyers are valued at cost and
accounted for as 'Cost of Construction'. When sold, proceeds are
treated as 'Sales' .
Repair, maintenance and other costs incurred after the completion of
the project are charged to the cost of construction in the year in
which cost is incurred.
Interest due on delayed payments by customers is accounted on receipts
basis due to uncertainty of recovery of the same.
Revenue from sale of completed real estate projects, land, development
rights and sale/transfer of rights in agreements are recognised in the
financial year in which agreements of such sales are executed and there
is no uncertainty about ultimate collections.
B. Income from Construction Contracts
a. Revenue from construction contracts is recognized on the
"Percentage of Completion Method" of accounting.
b. Income from Construction contracts is recognized by reference to
the stage of completion of the contract activity as certified by the
client.
c. Revenue on account of contract variations, claims and incentives
are recognized upon determination or settlement of the contract.
C. Revenue from Trading activities of completed projects is accounted
for on accrual basis.
g. Retirement Benefits
i) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the Statement of Profit & Loss of the year in
which the employee has rendered services.
ii) Post employment benefits are recognized as an expense in the
Statement of Profit & Loss for the year in which the employee has
rendered services. The expense is recognized at the present value of
the amount payable towards contributions. The present value is
determined using market yields of government bonds, at the balance
sheet date, as the discounting rate.
iii) Other long term employee benefits are recognized as an expense in
the Statement of Profit & Loss for the year in which the employee has
rendered services. Estimated liability on account of long term benefits
is discounted to the present value using the market yield on government
bonds as on the date of balance sheet.
iv) Actuarial gains and losses in respect of post employment and other
long term benefits are charged to the Statement of Profit & Loss.
h. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
i. Accounting for taxes on income
The accounting treatment followed for taxes on income is to provide for
current and deferred tax. Provision for current tax is made after taking
into consideration benefits admissible under the provisions of the
Income Tax Act, 1961. Deferred Tax resulting from the difference between
book and taxable profits is accounted for using the tax rates and laws
that have been enacted or substantially enacted as on Balance Sheet
date. The Deferred Tax is recognised and carried forward only to the
extent that there is a reasonable certainty that the assets will be
realised in future.
j. Earnings per share
The earnings considered in ascertaining the company's EPS comprise the
Net Profit or Loss for the period after tax and extra ordinary items.
The basic EPS is computed on the basis of weighted average number of
equity shares outstanding during the year. The number of shares for
computation of diluted EPS comprises of weighted average number of
equity shares considered for deriving basic EPS and also the weighted
average number of equity shares which could be issued on the conversion
of all dilutive potential equity shares.
k. Provisions, Contingent Liabilities and Contingent Assets
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not; require an out flow of resources. Where there is a possible
obligation of a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made. Provision is
made in account in respect of those contingencies which are likely to
materialize in to liabilities after the year end till the adoption of
accounts by Board of Directors and which have material effect on the
position stated in the balance sheet.
l. Cash & Cash Equivalents
For the purpose of Cash Flow Statement, cash and cash equivalents
includes cash in hand, demand deposit with the bank, other short term
highly liquid investments within original maturities of 3 months or
less.
Mar 31, 2014
I. Basis of Accounting
The financial statements are prepared to comply in all material aspects
with Indian Accounting Standards as notified by the Companies
(Accounting Standards) Rules, 2006 issued by the Central Government in
exercise of power conferred under section 642(1 )(a) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention, on the accrual
basis of accounting. The accounting policies have been consistently
applied by the Company and are consistent with those used in the
previous year.
ii. Use of Estimates
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements. Actual results could differ from
those estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
iii. Fixed Assets
Fixed assets are stated at historical cost less accumulated
depreciation. Cost includes purchase price and all other attributable
cost to bring the assets to its working condition for the intended use.
iv. Depreciation
Depreciation has been provided on straight line method at the rates
prescribed under Schedule XIV to the Companies Act, 1956 on pro-rata
basis. Assets costing below Rs. 5000 are written off in the year of
purchase.
v. Intangible assets
Intangible assets comprises of computer software are stated at cost of
acquisition less accumulated depreciation on straight line method.
vi. 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. If
such recoverable amount of the asset or the recoverable amount of the
cash- generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of profit and loss.
vii. Inventories
Inventories are valued as under:
Building Materials, Stores and Consumables are valued at lower of cost,
where cost is determined on first in first out basis.
Land is valued at cost. Cost includes cost of acquisition and all
related costs.
Project in Progress is valued at cost and consists of all direct
expenditure incurred on projects under execution. Cost includes cost of
land, materials, construction, services, borrowing costs and other
directly attributable to the construction/development of the projects.
Completed real estate project for sale and trading stock are valued at
lower of cost or net realizable value.
viii. Investments
Long term investments are stated at cost less permanent diminution, if
any, in value of such investments.
ix. Revenue Recognition
A. Real Estate Projects
The Company follows the Percentage of Completion Method (POC) of
Accounting. As per this method, the revenue in the Statement of Profit
and Loss at the end of the accounting year is recognized in proportion
to the actual cost incurred as against the total estimated cost of
projects under execution with the Company subject to actual cost being
30% or more of the total estimated cost.
The stage of completion under the POC method is measured on the basis
of percentage that actual costs incurred on real estate projects
including land, construction and development cost bears to the total
estimated cost of the project. The estimates of the projected revenues,
projected profits, projected costs, cost to completion and the
foreseeable loss are reviewed periodically by the management and any
effect of changes in estimates is recognized in the period in which
such changes are determined.
Effective from 1st April 2012, in accordance with the "Guidance Note
on Accounting for Real Estate Transactions (Revised) 2012" (referred
to as "Guidance Note"), all projects commencing on or after the
said date or projects where revenue is recognized for the first time on
or after the said date, Revenue from real estate projects has been
recognized on Percentage of Completion method provided the following
conditions are met:
(i) All critical approvals necessary for commen- cement of the project
have been obtained.
(ii) The expenditure incurred on construction and development is not
less than 25% of the total estimated construction and development cost.
(iii) At least 25% of the saleable project area is secured by way of
contracts or agreements with buyers.
(iv) At least 10% of the total revenue as per the agreement of sale or
any other legally enforceable document are realized at the reporting
date in respect of each of the contracts and it is reasonable to expect
that the parties to such contracts will comply with the payment terms
as defined in the respective contracts.
Unbilled revenue disclosed under other assets represents revenue
recognized based on percentage of completion method over and above
amount due as per payment plan agreed with the customers. Amount
received from customers which exceeds the cost and recognized profits
to date on projects in progress, is disclosed as advance received from
customers under other current liabilities. Any billed amount against
which revenue is recognized but amount not collected is disclosed under
trade receivable.
Surrender of flats by buyers are valued at cost and accounted for as
''Cost of Construction''. When sold, proceeds are treated as ''
Sales ''.
Repair, maintenance and other costs incurred after the completion of
the project are charged to the cost of construction in the year in
which cost is incurred. Interest due on delayed payments by customers
is accounted on receipts basis due to uncertainty of recovery of the
same.
Revenue from sale of completed real estate projects, land, development
rights and sale/transfer of rights in agreements are recognised in the
financial year in which agreements of such sales are executed and there
is no uncertainty about ultimate collections.
B. Income from Construction Contracts
a. Revenue from construction contracts is recognized on the
"Percentage of Completion Method" of accounting.
b. Income from Construction contracts is recognized by reference to the
stage of completion of the contract activity as certified by the
client.
c. Revenue on account of contract variations, claims and incentives are
recognized upon determination or settlement of the contract.
C. Revenue from Trading activities of completed projects is accounted
for on accrual basis.
x. Retirement and Other Benefits
i) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the Statement of Profit & Loss of the year in
which the employee has rendered services.
ii) Post employment benefits are recognized as an expense in the
Statement of Profit & Loss for the year in which the employee has
rendered services. The expense is recognized at the present value of
the amount payable towards contributions. The present value is
determined using market yields of government bonds, at the balance
sheet date, as the discounting rate.
iii) Other long term employee benefits are recognized as an expense in
the Statement of Profit & Loss for the year in which the employee has
rendered services. Estimated liability on account of long term benefits
is discounted to the present value using the market yield on government
bonds as on the date of balance sheet.
iv) Actuarial gains and losses in respect of post employment and other
long term benefits are charged to the Statement of Profit & Loss.
xi. Accounting for taxes on income
The accounting treatment followed for taxes on income is to provide for
current and deferred tax. Provision for current tax is made after
taking into consideration benefits admissible under the provisions of
the Income Tax Act, 1961. Deferred Tax resulting from the difference
between book and taxable profits is accounted for using the tax rates
and laws that have been enacted or substantially enacted as on Balance
Sheet date. The Deferred Tax is recognised and carried forward only to
the extent that there is a reasonable certainty that the assets will be
realized in future.
xii. Earnings Per Share
Earning per shares (EPS) are computed on the basis of net profit after
tax. The number of shares used in computing basic EPS is weighted
average number of shares outstanding during the year.
The diluted EPS is calculated on the same basis as basic EPS, after
adjusting for the effect of potential diluted equity shares.
xiii. Provisions, Contingent Liabilities and Contingent
Assets
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not; require an out flow of resources. Where there is a possible
obligation of a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made. Provision is
made in account in respect of those contingencies which are likely to
materialize in to liabilities after the year end till the adoption of
accounts by Board of Directors and which have material effect on the
position stated in the balance sheet.
xiv. Cash & Cash Equivalents
For the purpose of Cash Flow Statement cash and cash equivalents
include cash in hand, demand deposits with bank, other short term
highly liquid investments within original maturities of 3 months or
less.
1.1 Terms/ Rights Attached to Equity Shares
The Company has only one class of Equity Shares having a par value of
Rs. 10 per share. Each holder of Equity Shares is entitled to one vote
per share and ranks pari passu. The Dividend proposed by the Board of
Directors is subject to approval of the shareholders at the ensuing
Annual General Meeting. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the
Company after distribution of all preferential amounts, in proportion
to their shareholding.
#The aforesaid disclosure is based upon percentages computed separately
for class of shares outstanding as at the balance sheet date. As per
records of the company, including its register of shareholders/members
and other declaration received from shareholders regarding beneficial
interest, the above shareholding represents both legal & beneficial
ownership of shares.
Term Loan from bank are secured by Equitable Mortgage of Commercial
Property of PlotNo TC/G-10/10 Group Housing Scheme, Vibhuti Khand,
Gomti Nagar, Lucknow and further secured by personal guarantee of
Director.
(i) Residential and Commercial Land with construction of site office
and surrounded by boundary wall and gate at Faizullahganj,Mohibullapur
Sitapur Road, near Janakipuram flyover, Lucknow bearing khasra no.
58,59,60,61 ,& 85 measuring 15141.54 sq. mts. Land having khasra no.
703,704 & 851 ka Haiwat Mau Mawajya, Pargana Bijnor, Ward Ibrahimpur,
Raibareilly Road, Lucknow.
(ii) Further Secured by personal guarantee of Shri S.K.Garg (Chairman)
& Shri Pankaj Bajaj (Managing Director).
(iii) Further Secured by First Charge on Block Assets of the Company
(excluding land & building and vehicles)
(iv) In overdraft account secured against lien on bank Fixed Deposits
and personal guarantee of Directors. .
*Includes overdraft facility of Rs 46.07 Lacs from City Cooperative
Bank Limited, against fixed deposit of Rs 106.29 Lacs. The said Bank
has discontinued its operations, however the company has applied for
repayment of fixed deposit after adjustment of the balance outstanding
in the overdraft account.
* The Company has not received informations from vendors regarding
their status under the Micro, Small and Medium Enterprises Development
Act, 2006 and hence disclosure relating to amounts unpaid as at the
year end together with interest paid/ payable under the Act has not
been given.
Includes deposits of Rs 106.29 Lacs from City Cooperative Bank Limited,
against overdraft facility of Rs 46.07 Lacs. The said Bank has
discontinued its operations, however the company has applied for
repayment of fixed deposit after adjustment of the balance outstanding
in the overdraft account.
2.1 Loans and Advances includes payment to parties (including
associates) for acquiring land for development of real estate projects,
either on collaboration basis or self- development basis, for bulk
booking, and for purchase of commercial space.
Mar 31, 2013
I. Basis of Accounting
The financial statements are prepared to comply in all material aspects
with Indian Accounting Standards as notified by the Companies
(Accounting Standards) Rules, 2006 issued by the Central Government in
exercise of power conferred under section 642(1)(a) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on accrual basis.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
ii. Use of Estimates
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements. Actual results could differ from
those estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
iii. Fixed Assets
Fixed assets are stated at historical cost less accumulated
depreciation. Cost includes purchase price and all other attributable
cost to bring the assets to its working condition for the intended use.
iv. Depreciation
Depreciation has been provided on straight line method at the rates
prescribed under Schedule XIV to the Companies Act, 1956 on pro-rata
basis. Assets costing below Rs. 5000 are written off in the year of
purchase.
v. Intangible assets
Intangible assets comprises of computer software are stated at cost of
acquisition less accumulated depreciation on straight line method.
vi. 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. If
such recoverable amount of the asset or the recoverable amount of the
cash- generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of profit and loss.
vii. Inventories
Inventories are valued as under:
Building Materials, Stores and Consumables are valued at lower of cost,
where cost is determined on first in first out basis.
Land Unsold Shops, Flats etc., are valued at lower of cost or net
realizable value.
Project in Progress is valued at cost and consists of all direct
expenditure incurred on projects under execution. Cost includes cost of
land, materials, construction, services, borrowing costs and other
overheads relating to projects.
Completed real estate project for sale and trading stock are valued at
lower of cost or net realizable value.
viii.Investments
Long term investments are stated at cost less permanent diminution, if
any, in value of such investments.
ix. Revenue Recognition
A. Real Estate Projects
The Company follows the Percentage of Completion Method (PCM) of
Accounting. As per this method, the revenue in the Statement of Profit
and Loss at the end of the accounting year is recognized in proportion
to the actual cost incurred as against the total estimated cost of
projects under execution with the Company subject to actual cost being
30% or more of the total estimated cost.
The stage of completion under the PCM method is measured on the basis
of percentage that actual costs incurred on real estate projects
including land, construction and development cost bears to the total
estimated cost of the project. The estimates of the projected revenues,
projected profits, projected costs, cost to completion and the
foreseeable loss are reviewed periodically by the management and any
effect of changes in estimates is recognized in the period in which
such changes are determined.
Effective from 1st April 2012, in accordance with the "Guidance Note on
Accounting for Real Estate Transactions (Revised) 2012" (referred to as
"Guidance Note"), all projects commencing on or after the said date or
projects where revenue is recognized for the first time on or after the
said date, Revenue from real estate projects has been recognized on
Percentage of Completion method provided the following conditions are
met:
(i) All critical approvals necessary for commencement of the project
have been obtained.
(ii) The expenditure incurred on construction and development is not
less than 25% of the total estimated construction and development cost.
(iii) At least 25% of the saleable project area is secured by way of
contracts or agreements with buyers.
(iv) At least 10% of the total revenue as per the agreement of sale or
any other legally enforceable document are realized at the reporting
date in respect of each of the contracts and it is reasonable to expect
that the parties to such contracts will comply with the payment terms
as defined in the respective contracts.
Unbilled revenue disclosed under other assets represents revenue
recognized based on percentage of completion method over and above
amount due as per payment plan agreed with the customers. Amount
received from customers which exceeds the cost and recognized profits
to date on projects in progress, is disclosed as advance received from
customers under other current liabilities. Any billed amount against
which revenue is recognized but amount not collected is disclosed under
trade receivable.
Surrender of flats by buyers are valued at cost and accounted for as
''Cost of Construction''. When sold, proceeds are treated as ''Sales''.
Repair, maintenance and other costs incurred after the completion of
the project are charged to the cost of construction in the year in
which cost is incurred.
Interest due on delayed payments by customers is accounted on receipt
basis due to uncertainty of recovery of the same.
B. Income from Construction Contracts
a. Revenue from construction contracts is recognized on the
"Percentage of Completion Method" of accounting.
b. Income from Construction contracts is recognized by reference to
the stage of completion of the contract activity as certified by the
client.
c. Revenue on account of contract variations, claims and incentives
are recognized upon determination or settlement of the contract.
C. Revenue from Trading activities of completed projects is accounted
for on accrual basis.
x. Retirement and Other Benefits
i) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the Statement of Profit & Loss of the year in
which the employee has rendered services.
ii) Post employment benefits are recognized as an expense in the
Statement of Profit & Loss for the year
in which the employee has rendered services. The expense is recognized
at the present value of the amount payable towards contributions. The
present value is determined using market yields of government bonds, at
the balance sheet date, as the discounting rate.
iii) Other long term employee benefits are recognized as an expense in
the Statement of Profit & Loss for the year in which the employee has
rendered services. Estimated liability on account of long term
benefits is discounted to the present value using the market yield on
government bonds as on the date of balance sheet.
iv) Actuarial gains and losses in respect of post employment and other
long term benefits are charged to the Statement of Profit & Loss.
xi. Accounting for taxes on income
The accounting treatment followed for taxes on income is to provide for
current and deferred tax. Provision for current tax is made after
taking into consideration benefits admissible under the provisions of
the Income Tax Act, 1961. Deferred Tax resulting from the difference
between book and taxable profits is accounted for using the tax rates
and laws that have been enacted or substantially enacted as on Balance
Sheet date. The Deferred Tax is recognised and carried forward only to
the extent that there is a reasonable certainty that the assets will be
realized in future.
xii. Earnings Per Share
Earning per shares (EPS) are computed on the basis of net profit after
tax. The number of shares used in computing basic EPS is weighted
average number of shares outstanding during the year.
The diluted EPS is calculated on the same basis as basic EPS, after
adjusting for the effect of potential diluted equity shares.
xiii.Provisions, Contingent Liabilities and Contingent Assets
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not; require an out flow of resources. Where there is a possible
obligation of a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made. Provision is
made in account in respect of those contingencies which are likely to
materialize into liabilities after the year end till the adoption of
accounts by Board of Directors and which have material effect on the
position stated in the balance sheet.
xiv. Cash & Cash Equivalents
For the purpose of Cash Flow Statement cash and cash equivalents
include cash in hand, demand deposits with bank, other short term
highly liquid investments within original maturities of 3 months or
less.
Mar 31, 2012
I. Basis of Accounting
The financial statements are prepared to comply in all material aspects
with Indian Accounting Standards as notified by the Companies
(Accounting Standards) Rules, 2006 issued by the Central Government in
exercise of power conferred under section 642(1)(a) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on accrual basis.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
ii. Presentation and disclosure of financial statements
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 these financial statements.
However, it has significant impact on presentation and disclosures made
in the financial statements. The company has also reclassified the
previous year figures in accordance with the requirements applicable in
the current year.
iii. Use of Estimates
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements. Actual results could differ from
those estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
iv. Fixed Assets
Fixed assets are stated at historical cost less accumulated
depreciation. Cost includes purchase price and all other attributable
cost to bring the assets to its working condition for the intended use.
v. Depreciation
Depreciation has been provided on straight line method at the rates
prescribed under Schedule XIV to the Companies Act, 1956 on pro-rata
basis.
Assets costing below Rs. 5000 are written off in the year of purchase.
vi. 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. If
such recoverable amount of the asset or the recoverable amount of the
cash- generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of profit and loss.
vii. Inventories Inventories are valued as under:
Building Materials, Stores and Consumables are valued at lower of cost,
where cost is determined on first in first out basis.
Land Unsold Shops, Flats etc., are valued at lower of cost or net
realizable value.
Construction Project in Progress is valued at cost and consists of all
direct expenditure incurred on projects under execution on which no
income has been recognised in accordance with the percentage of
completion method of accounting.
Completed real estate proj ect for sale and trading stock are valued at
lower of cost or net realizable value.
Tools, Implements and Wooden Shuttering Materials are written off in
the year of purchase.
viii. Investments
Long term investments are stated at cost less permanent diminution, if
any, in value of such investments.
ix. Revenue Recognition
A. Real Estate Projects
a. The Company follows the Percentage of Completion Method (POC) of
Accounting. As per this method, the revenue in the Statement of Profit
and Loss at the end of the accounting year is recognized in proportion
to the actual cost incurred as against the total estimated cost of
projects under execution with the Company subject to actual cost being
30% or more of the total estimated cost.
b. The stage of completion under the POC method is measured on the
basis of percentage that actual costs incurred on real estate projects
including land, construction and development cost bears to the total
estimated cost of the project. The estimates of the projected revenues,
projected profits, projected costs, cost to completion and the
foreseeable loss are reviewed periodically by the management and any
effect of changes in estimates is recognized in the period in which
such changes are determined.
c. Surrender of flats by buyers are valued at cost and accounted for
as 'Cost of Construction'. When sold, proceeds are treated as
'Sales'.
d. Repair, maintenance and other costs incurred after the completion
of the project are charged to the cost of construction in the year in
which cost is incurred.
e. Interest due on delayed payments by customers is accounted on
receipt basis due to uncertainty of recovery of the same.
B. Income from Construction Contracts
a. Revenue from construction contracts is recognized on the
"Percentage of Completion Method" of accounting.
b. Income from Construction contracts is recognized by reference to
the stage of completion of the contract activity as certified by the
client.
c. Revenue on account of contract variations, claims and incentives
are recognized upon determination or settlement of the contract.
x. Turnover
The Management is consistent with the past practice in treating the
value of work done as sales turnover. The value of work done has been
arrived at after adding the estimated profits to the expenditure
incurred on projects each year, subject to final accounting on the
actual completion of the project, and is net of adjustments for losses
and/or variations in turnover on final accounting of completed projects
or revision of estimates.
xi. Retirement and Other Benefits
i) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the Statement of Profit & Loss of the year in
which the employee has rendered services.
ii) Post employment benefits are recognized as an expense in the
Statement of Profit & Loss for the year in which the employee has
rendered services. The expense is recognized at the present value of
the
amount payable towards contributions. The present value is determined
using market yields of government bonds, at the balance sheet date, as
the discounting rate.
iii) Other long term employee benefits are recognized as an expense in
the Statement of Profit & Loss for the year in which the employee has
rendered services. Estimated liability on account of long term benefits
is discounted to the present value using the market yield on government
bonds as on the date of balance sheet.
iv) Actuarial gains and losses in respect of post employment and other
long term benefits are charged to the Statement of Profit & Loss.
xii. Accounting for taxes on income
The accounting treatment followed for taxes on income is to provide for
current and deferred tax. Provision for current tax is made after
taking into consideration benefits admissible under the provisions of
the Income Tax Act, 1961. Deferred Tax resulting from the difference
between book and taxable profits is accounted for using the tax rates
and laws that have been enacted or substantially enacted as on Balance
Sheet date. The Deferred Tax is recognised and carried forward only to
the extent that there is a reasonable certainty that the assets will be
realised in future.
xiii.Earnings Per Share
Earning per shares(EPS) are computed on the basis of net profit after
tax. The number of shares used in computing basic EPS is weighted
average number of shares outstanding during the year.
The diluted EPS is calculated on the same basis as basic EPS, after
adjusting for the effect of potential diluted equity shares.
xiv. Contingent Liabilities
Contingent liability, if any, is disclosed by way of notes on accounts.
Provision is made in account in respect of those contingencies which
are likely to materialize in to liabilities after the year end till the
adoption of accounts by Board of Directors and which have material
effect on the position stated in the balance sheet.
xv. Cash & Cash Equivalents
For the purpose of Cash Flow Statement cash and cash equivalents
include cash in hand, demand deposits with bank, other short term
highly liquid investments within original maturities of 3 months or
less.
Mar 31, 2010
I. Basis of Preparation of Financial Statements
The financial statements are prepared to comply in all material aspects
with Indian Accounting Standards as notified by the Companies
(Accounting Standards) Rules, 2006 issued by the Central Government in
exercise of power conferred under Section 642 (1) (a) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on accrual basis.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
ii. Use of Estimates
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements. Actual results could differ from
those estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
iii. Principles of Consolidation
The consolidated financial statements relate to Eldeco Housing &
Industries Limited (the Parent) its subsidiaries, jointly controlled
entities and associates (collectively referred to as the Group) as on
31st March 2010 and for the period ended on that date. The consolidated
financial statements have been prepared in accordance with the
principles and procedures required for the preparation and presentation
of financial statements as laid down under the Accounting Standards.
The consolidated financial statements have been prepared using uniform
accounting policies for like transactions and other events in similar
circumstances and are presented to the extent possible, in the same
manner as the Companys separate financial statements.
The financial statements of the Company and its subsidiaries have been
combined on line to line basis by adding together the book values of
like items of assets, liabilities, income and expenses after fully
eliminating intra-group balances and transactions and resulting
unrealized gain/losses. Where the cost of the investment is
higher/lower than the share of equity in the subsidiary at the time of
acquisition the resulting difference is treated as goodwill/capital
reserve.
The parent companys investments in associates are accounted under the
equity method of accounting where it is able to exercise significant
influence over the operating and financial policies of the investee.
The Companys share of profit/loss in associates is included in the
profit and loss account. Where the - cost of the investment is
higher/lower than the share of equity in the associates at the time of
acquisition the resulting difference is disclosed as goodwill/capital
reserve in the investment schedule.
The Companys interest in Jointly Controlled Entities are consolidated
on a line by line basis by adding together the book values of like
items of assets, liabilities, income and expenses after eliminating
intra- group balances and intra-group transactions resulting in
unrealized gain/losses, using the proportionate consolidation method.
iv. Fixed Assets
Fixed assets are stated at historical cost less accumulated
depreciation. Cost includes purchase price and all other attributable
cost to bring the assets to its working condition for the intended use.
v. Depreciation
Depreciation has been provided on straight line method at the rates
prescribed under Schedule XIV to the Companies Act, 1956 on pro-rata
basis. Assets costing below Rs. 5000 are written off in the year of
purchase
vi. Inventories
Inventories are valued as under:
Building Materials, Stores and Consumables are valued at lower of cost
or net realizable value, where cost is determined on first in first out
basis.
Land, Unsold Shops, Flats etc., are valued at lower of cost or net
realizable value.
Project in Progress is valued at cost and consists of all direct
expenditure incurred on projects under execution on which no income has
been recognised in accordance with the percentage of completion method
of accounting.
Tools, Implements and Wooden Shuttering Materials are written off in
the year of purchase. vii. Investments Long term investments are
stated at cost less permanent diminution, if any, in value of such
investments. viii. Revenue Recognition
A. Real Estate Projects
a. The Company follows the Percentage of Completion Method of
Accounting. As per this method, the revenue in the Profit and Loss
Account at the end of the accounting year is recognized in proportion
to the actual cost incurred as against the total estimated cost of
projects under execution with the Company subject to actual cost being
30% or more of the total estimated cost. Expenses incurred on repairs
and maintenance on completed projects is charged to profit and loss
account.
b. The estimates relating to saleable area, sale value, estimated
costs etc., are revised and updated periodically by the management and
necessary adjustments are made in the current years accounts.
c. Surrender of flats by buyers are valued at cost and accounted for
as Cost of Construction. When sold, proceeds are treated as Sales.
d. Repair, maintenance and other costs incurred after the completion
of the project are charged to the cost of construction in the year in
which cost is incurred.
B. Interest due on delayed payments by customers is accounted on
receipt basis due to uncertainty of recovery of the same.
C. Income from Construction Contracts
a Revenue from construction contracts is recognized on the "Percentage
of Completion Method" of accounting.
b Income from Construction contracts is recognized by reference to the
stage of completion of the contract activity as certified by the
client.
c Revenue on account of contract variations, claims and incentives are
recognized upon determination or settlement of the contract.
ix., Turnover
The Management is consistent with the past practice in treating the
value of work done as sales turnover. The value of work done has been
arrived at after adding the estimated profits to the expenditure
incurred on projects each year, subject to final accounting on the
actual completion of the project, and is net of adjustments for losses
and/or variations in turnover on final accounting of completed projects
or revision of estimates.
x. Retirement and Other Benefits
i. Ã Provident Fund:
Contribution to Provident Fund is deposited in accordance with the
provisions of Employees Provident Fund Act, 1952 and charged to Profit
and Loss account.
ii. The Company is having Group Gratuity Scheme with Life Insurance
Corporation of India. The net present value of the Companys obligation
towards Gratuity to Employees is funded as actuarially determined as at
the Balance Sheet date based on the Projected Unit Credit Method.
Actuarial gain and loss are recognized in the Profit & Loss Account.
iii. Provision for leave encashment in respect of unavailed leave
standing to the credit of employees is made on actuarial basis in
accordance with projected credit unit method.
xi. Accounting for taxes on income
The accounting treatment followed for taxes on income is to provide for
current and deferred tax. Provision for current tax is made after
taking into consideration benefits admissible under the provisions of
the Income Tax Act, 1961. Deferred Tax resulting from the difference
between book and taxable profits is accounted for using the tax rates
and laws that have been enacted or substantially enacted as on Balance
Sheet date. The Deferred Tax is recognised and carried forward only to
the extent that there is a reasonable certainty that the assets will be
realised in future.
xii. Impairment of Assets
If the carrying amount of the fixed assets exceeds the recoverable
amount on the reporting date the carrying amount is reduced to the
recoverable amount. The recoverable amount is measured at the highest
of the net selling price and the value in use determined by the present
value of estimated future cash flow.
xiii. Contingent Liabilities
Contingent liability, if any, is disclosed by way of notes on accounts.
Provision is made in account in respect of those contingencies which
are likely to materialize in to liabilities after the year end till the
adoption of accounts by Board of Directors and which have material
effect on the position stated in the balance sheet.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article