Accounting Policies of Skyline Millars Ltd. Company

Mar 31, 2015

1.1 Basis for preparation of financial statements

(a) Basis of Preparation:

The financial statements have been prepared and presented under the historical cost convention, on accrual basis of accounting in accordance with the accounting principles generally accepted in India ('Indian GAAP') and comply with the applicable Accounting Standards prescribed under Sec. 133 of the Companies Act, 2013 ['Act'] read with Rule 7 of the Companies [Accounts] Rules, 2014, the provisions of the Act [to the extent notified] and other relevant provisions of the Companies Act, 1956, to the extent applicable.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.

(b) Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles in India ('Indian GAAP') requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

1.2 Summary of Significant Accounting polices

(a) Revenue Recognition Manufacturing Division:

i) Revenue from sale of goods is recognized when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, the company retains no effective control of the goods transferred to a degree associated with ownership and no significant uncertainty exists regarding the amount of consideration that will be derived from the sale of goods. Sales are recognized net of trade discounts, rebates, sales taxes and excise duties on goods manufactured and outsourced.

ii) Income from Services rendered is recognized based on agreements/arrangements with the customers on completion of Service when no significant uncertainty exists regarding the amount of consideration that will be derived from rendering of service and is recognized net of service tax, as applicable.

Realty Division

i) Sales of Flats & Commercial Offices are accounted only after receiving full consideration against the Sale Agreements.

ii) Other Projects

The Company is following the "Percentage of Completion Method" of accounting. As per this method, revenue from sale of properties is recognized in the Statement of Profit and Loss in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company on transfer of significant risk and rewards to the buyer. If the actual project cost incurred is less than 25% of the total estimated project cost, no income is recognized in respect of that project in the relevant period. Determination of revenues under the percentage of completion method necessarily involves making estimates, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project or activity and the foreseeable losses to completion. Estimates of project income, as well as project costs, are reviewed periodically. The effect of changes, if any, to estimates is recognized in the financial statements for the period in which such changes are determined. Losses, if any, are fully provided for immediately.

Other Income

I) Interest income is recognized on a time proportion basis.

ii) Dividend Income on investment is recognized for when the right to receive dividend is established.

( b) Fixed Assets & Depreciation

i) Tangible Fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. Cost includes all expenses related to the acquisition and installation of fixed assets. Tangible assets not ready for the intended use on the date of the Balance sheet are disclosed as "Capital work-in-progress".

ii) Depreciation has been provided on a pro-rata basis on the straight line method based on the 'Useful lives' prescribed under Schedule II to the Companies Act, 2013.

(c) Impairment of Asset

The Company reviews the carrying values of tangible assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. In assessing the recoverable amount, the estimated future cash flows are discounted to their present value based on appropriate discount rates.

(d) Investments

Long term Investments are carried at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management. Long term Investments being Mutual Funds of DSP Merill Lynch were redeemed during the current year & the resulting surplus on the same has been credited to Revenue. Current investments are carried at lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments.

(e) Trade Receivables

Trade receivables are stated after making adequate provisions for doubtful balances.

(f) Inventories Manufacturing Division:

I) Raw Materials, Components, Packing Materials, Stock in trade, Stores and Spare Parts are valued at lower of cost and net realizable value. Work-in-Process of the Construction Machinery is valued at estimated cost.

ii) Finished Goods are valued at lower of cost or net realizable value.

Realty Division:

I) Work-in-Progress

Construction Work-in-Progress includes cost of land, Transfer of Development Rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company.

(g) Employees' Benefits

i) The Company's contribution to Provident Fund and ESIC are charged to the Statement of Profit And Loss.

ii) Liability for Payment of gratuity to employees is covered through the Group Gratuity Schemes of Life Insurance Corporation of India. Gratuity is accounted on the basis of the premium paid to Life Insurance Corporation of India under the Group Gratuity Scheme.

iii) Provision for Leave Encashment is determined on basis of actuarial valuation. (Note 35)

(h) Foreign Exchange Transactions

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit And Loss of the year.

Monetary assets and liabilities denominated in foreign currencies, which are outstanding as at the year end are translated at the closing exchange rate and the resultant exchange differences are recognized in the Statement of Profit And Loss.

(i) Taxation

Tax expenses comprises current tax and deferred tax. Provisions for income tax are made in accordance with the Income Tax Act, 1961.

Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences, subject to the consideration of prudence. Deferred tax assets are recognized and carried forward only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. The carrying amount of deferred tax assets is reviewed at each balance sheet date for any write down, as considered appropriate.

Deferred tax assets and liabilities are measured using the tax rates enacted or substantively enacted at the Balance Sheet date.

(j) Earnings Per Share

Basic earning per share [EPS] are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted EPS, the net profit or loss for the period attributable to equity shareholders and the weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(k) Borrowing Cost

Borrowing costs that are directly attributable to long term projects / development activities are treated as part of the respective project cost and added to the stock in trade upto the date when such projects / development activities are completed. Other borrowing costs are charged as an expense in the year in which they are incurred.

(l) Contingencies / Provisions

The Company creates a provision when there exists a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may arise, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which likelihood of outflow or resources is remote, no provision or disclosure is made.

(m) Measurement of EBITDA

The Company has elected to present earning before interest (finance cost), tax, depreciation and amortization (EBITDA) as a separate line item on the face of Statement of Profit and Loss for the year. The Company measures EBITDA on the basis of profit / (loss) from continuing operations.

(n) Segment Reporting

Segments are identified having regard to the dominant source and nature of risks and returns and internal organization and management structure. The Company has considered business segments as the primary segments for disclosure. The business segments are 'Construction Equipment', 'Pre Cast Pipes' and 'Real Estate Development'. The Company does not have any geographical segment.

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Mar 31, 2014

1.1 Basis for preparation of financial statements

(a) Basis of Preparation:

The financial statements have been prepared in accordance with Generally Accepted Accounting Principles (GAAP) in India and presented under the historical cost convention on accrual basis of accounting to comply with the accounting standards prescribed in the Companies (Accounting standards) Rules, 2006 and with the relevant provisions of the Companies Act, 1956.

(b) Use of Estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) in India 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 financial statements and reported amounts of income and expenses during the period.

1.2 Summary of Significant Accounting polices

(a) Revenue Recognition

Manufacturing Division:

i) Sales are exclusive of duties and taxes and after adjustment for liquidated damages.

ii) Sales and Services are accounted on dispatch of goods and services rendered to customers only when it can be reliable measured and it is reasonable to expect ultimate collection.

Realty Division

i) Sales of flats representing Book Value of Ghatkopar & Karjat Projects in Note 14 are accounted only after receiving full consideration.

ii) Other Projects

The Company is following the "Percentage of Completion Method" of accounting. As per this method, revenue from sale of properties is recognized in the Statement of Profit and Loss in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company on transfer of significant risk and rewards to the buyer. If the actual project cost incurred is less than 20% of the total estimated project cost, no income is recognized in respect of that project in the relevant period. Determination of revenues under the percentage of completion method necessarily involves making estimates, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project or activity and the foreseeable losses to completion. Estimates of project income, as well as project costs, are reviewed periodically. The effect of changes, if any, to estimates is recognized in the financial statements for the period in which such changes are determined. Losses, if any, are fully provided for immediately.

Other Income

i) Interest income is accounted on accrual basis.

ii) Dividend Income is accounted for when the right to receive income is established.

(b) Lease Accounting

Assets taken on operating Lease

Lease rentals on assets taken on operating lease are recognized as expenses in the statement of profit & loss on an accrual basis over the lease term.

(c) Fixed Assets & Depreciation

i) Fixed assets are stated at cost less accumulated depreciation. Cost includes all expenses related to the acquisition and installation of fixed assets.

ii) Depreciation has been provided on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956.

iii) Assets of individual value upto Rs. 5,000/- at 100%

(d) Impairment of Asset

The Company reviews the carrying values of tangible assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. In assessing the recoverable amount, the estimated future cash flows are discounted to their present value based on appropriate discount rates.

(e) Investments

Long term Investments are carried at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management. Long term Investments being Mutual Funds of DSP Merill Lynch were redeemed during the current year & the resulting surplus on the same has been credited to Revenue. Current investments are carried at lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments.

(f) Inventories

Manufacturing Division:

i) Raw Materials, Components, Stores and Spare Parts are valued at lower of cost and net realizable value. Work-in-Process of the Construction Machinery is valued at estimated cost.

ii) Finished Goods are valued at lower of estimated cost or market value.

Realty Division:

i) Work In Progress

Construction Work In Progress includes cost of land, Transfer of Development Rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company.

(g) Employees'' Benefits

i) The Company''s contribution to Provident Fund and ESIC are charged to the Statement of Profit And Loss.

ii) Liability for Payment of gratuity to employees is covered through the Group Gratuity Schemes of Life Insurance Corporation of India. Gratuity is accounted on the basis of the premium paid to Life Insurance Corporation of India under the Group Gratuity Scheme.

iii) Provision for Leave Encashment is determined on basis of actuarial valuation.

(h) Foreign Exchange Transactions

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit And Loss of the year.

Monetary assets and liabilities denominated in foreign currencies, which are outstanding as at the year end are translated at the closing exchange rate and the resultant exchange differences are recognized in the Statement of Profit And Loss.

(i) Taxation

Income tax comprises current tax and deferred tax. Provisions for income tax are made in accordance with the Income Tax Act, 1961.

Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences, subject to the consideration of prudence. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred tax assets and liabilities are measured using the tax rates enacted or substantively enacted at the Balance Sheet date.

(j) Earnings Per Share

Basic earning per share [EPS] are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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

(k) Borrowing Cost

Borrowing costs that are directly attributable to long term projects / development activities are treated as part of the respective project cost and added to the stock in trade upto the date when such projects / development activities are completed. Other borrowing costs are charged as an expense in the year in which they are incurred.

(l) Contingencies / Provisions

The Company creates a provision when there exists a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may arise, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which likelihood of outflow or resources is remote, no provision or disclosure is made.

(m) Measurement of EBITDA

The Company has elected to present earning before interest (finance cost), tax, depreciation and amortization (EBITDA) as a separate line item on the face of Statement of Profit and Loss for the year. The Company measures EBITDA on the basis of profit / (loss) from continuing operations.

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Mar 31, 2012

(a) Revenue Recognition

Manufacturing Division:

i) Sales are exclusive of duties and taxes and after adjustment for liquidated damages.

ii) Sales and Services are accounted on dispatch of goods and services rendered to customers on accrual basis.

Realty Division

i) Sales of flats representing Book Value of Ghatkopar Project in Note 13 are accounted only after receiving full consideration.

ii) Other Projects

The Company is following the "Percentage of Completion Method" of accounting. As per this method, revenue from sale of properties is recognized in the Statement of Profit and Loss in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company on transfer of significant risk and rewards to the buyer. If the actual project cost incurred is less than 20% of the total estimated project cost, no income is recognized in respect of that project in the relevant period. Determination of revenues under the percentage of completion method necessarily involves making estimates, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project or activity and the foreseeable losses to completion. Estimates of project income, as well as project costs, are reviewed periodically. The effect of changes, if any, to estimates is recognized in the financial statements for the period in which such changes are determined. Losses, if any, are fully provided for immediately.

Other Income

i) Interest income is accounted on accrual basis.

ii) Dividend Income is accounted for when the right to receive income is established.

(b) Fixed Assets & Depreciation

i) Fixed assets are stated at cost less accumulated depreciation. Cost includes all expenses related to the acquisition and installation of fixed assets.

ii) Depreciation has been provided on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956.

iii)Assets of individual value up toRs. 5,000/-at100%

(c) Impairment Of Asset

The Company reviews the carrying values of tangible assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. In assessing the recoverable amount, the estimated future cash flows are discounted to their present value based on appropriate discount rates.

(d) Investments

Long term Investments are carried at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management. Current investments are carried at lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments.

(e) Inventories Manufacturing Division:

i) Raw Materials, Components, Stores and Spare Parts are valued at lower of cost and net realizable value. Work-In-Process of the Construction Machinery is valued at estimated cost.

ii) Finished Goods are valued at lower of cost and market value.

Realty Division:

i) Work In Progress

Construction Work In Progress includes cost of land, Transfer of Development Rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company.

(f) Cost of Realty Projects

Cost of Realty Projects has been arrived at by accumulating the costs incurred for projects and reducing there from the proportionate cost of flats for which agreements are entered till the reporting date.

(g) Employees' Benefits

i) The Company's contribution to Provident Fund and ESIC are charged to the Statement of Profit And Loss.

ii) Liability for Payment of gratuity to employees is covered through the Group Gratuity Scheme of Life Insurance Corporation of India. Gratuity is accounted on the basis of the premium paid to Life Insurance Corporation of India under the Group Gratuity Scheme.

iii) Provision for Leave Encashment is determined on basis of actuarial valuation.

(h) Foreign Exchange Transactions

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit And Loss of the year.

Monetary assets and liabilities denominated in foreign currencies, which are outstanding as at the yearend are translated at the closing exchange rate and the resultant exchange differences are recognized in the Statement of Profit And Loss.

(i) Taxation

Income tax comprises current tax and deferred tax. Provisions for income tax are made in accordance with the Income Tax Act, 1961.

Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences, subject to the consideration of prudence. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred tax assets and liabilities are measured using the tax rates enacted or substantively enacted at the Balance Sheet date.

(j) Earnings Per Share

Basic Earnings Per Share [EPS] are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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

(k) Borrowing Cost

Borrowing costs that are directly attributable to long-term projects/development activities are treated as part of the respective project cost and added to the stock in trade up to the date when such projects / development activities are completed. Other borrowing costs are charged as an expense in the year in which they are incurred.

(I) Contingencies/Provisions

The Company creates a provision when there exists a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made 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. When there is a possible obligation or a present obligation in respect of which likelihood of outflow or resources is remote, no provision or disclosure is made.

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Mar 31, 2010

1. GENERAL

The financial statements are prepared under the historical cost convention on an accrual basis and are in accordance with the requirements of the Companies Act, 1956.

2. REVENUE RECOGNITION

(A) Manufacturing Division:

i) Sales are exclusive of duties and taxes and after adjustment for liquidated damages. ii) Sales and Services are accounted on dispatch of goods and services rendered to customers on accrual basis.

(B) Realty Division:

i) Sales of flats representing Book Value of Chatkopar Project in Schedule 7 are accounted only after receiving full consideration.

ii) Project at Ghatkopar Property Building No. 4:-

Recognition of Income and Expenses for ongoing projects are based on expected sales value and estimated costs, as per the judgement of the Management based on certified by the Architects being technical matter.

(C)Other Income:

i) Interest income is accounted on accrual basis.

ii) Dividend Income is accounted for when the right to receive income is established.

3. FIXED ASSETS & DEPRECIATION

i) Fixed assets are stated at cost less accumulated depreciation. Cost includes all expenses related to the acquisition and installation of fixed assets.

ii) Depreciation has been provided on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956.

iii) Assets of individual value upto Rs. 5,000/- at 100%

4. IMPAIRMENT OF ASSET

The Company reviews the carrying values of tangible and intangible assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. In assessing the recoverable amount, the estimated future cash flows are discounted to their present value based on appropriate discount rates.

5. INVESTMENTS

Investments are stated at cost. Provision for diminution in value of investments other than temporary has been made as required byAccountingStandardofThe Institute of Chartered Accountantsof India.

6. INVENTORIES Manufacturing Division:

i) Raw Materials, Components, Stores and Spare Parts are valued at cost. Work-in-Process of the Construction Machinery is valued at estimated cost.

ii) Finished Goods are valued at lower of cost or market value.

7. EMPLOYEESBENEFITS

i) The Companys contribution to Provident Fund and ESIC are charged to the Profit and Loss Account.

ii) Liability for Payment of Gratuity and Superannuation to employees is covered through the Group Gratuity and Superannuation Schemes of Life Insurance Corporation of India. Gratuity is accounted on the basis of the premium paid to Life Insurance Corporation of India under the Group Gratuity Scheme.

iii) Provision for Leave Encashment is determined on basis of actuarial valuation.

8. FOREIGN EXCHANGE TRANSACTIONS

Realised gains and losses on foreign exchange transactions other than those relating to fixed assets are recognised in the Profit and Loss Account,

9. TAXATION

Income tax comprises current tax and deferred tax. Provisions for income tax are made in accordance with the Income Tax Act, 1961.

Deferred tax Assets and Liabilities are recognized for the future tax consequences of timing differences, subject to the consideration of prudence. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred tax Assets and Liabilities are measured using the tax rates enacted or substantively enacted at the Balance Sheet date.

10.EARNINGS PER SHARE

Basic earning per share [EPS] are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted EPS, the net Profit or loss for the period attributable to equity shareholders and the weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

11.BORROWING COST

Borrowing costs that are directly attributable to long term projects / development activities are treated as part of the respective project cost and added to the Stock in trade upto the date when such projects / development activities are completed. Other borrowing costs are charged as an expense in the year in which they are incurred.

12.CONTINGENC1ES/PROVISIONS

Disputed liabilities and claims against the Company including claims raised by fiscal authorities pending in appeal / court for which no reliable estimates can be made of the amount of obligations are not provided for in the accounts but disclosed by way of Notes to Accounts.