A. NATURE OF OPERATIONS
Ansal Properties and Infrastructure Ltd. (APIL or the
Company), was incorporated in 1967. The Company''s main business is
real estate promotion and development in residential and commercial
B. BASIS OF PREPARATION OF ACCOUNTS
The Financial Statements have been prepared to comply in all material
respects with the mandatory Accounting Standards notified by the
Central Government as per the Companies (Accounting Standards) Rules,
2006 and the relevant provisions of the Companies Act, 1956. The
Financial Statements have been prepared under the historical cost
convention, on the basis of going concern and on an accrual basis
except as stated otherwise.
C. USE OF ESTIMATES
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates. Difference between the actual results and
estimates are recognized in the period in which the results are known /
D. FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price and any cost attributable to bringing the
asset to its working condition for its intended use. Some of the flats
owned by the Company which have been revalued are stated at revalued
amounts less accumulated depreciation.
Intangible Assets are recognised on the basis of recognition criteria
as set out in Accounting Standard (AS-26) Intangible Assets.
Bought out softwares are recognised at cost of purchase.
Inventories are valued as under:-
i. Building Materials, Stores, Spare Parts at weighted average cost
ii. Shuttering & Scaffolding Materials at depreciated cost
ii. Apartments / Houses / Shops/ Flats at lower of cost or net
iv. Projects in Progress It represents land acquired for future
development and construction, and is stated at cost including the cost
of land, the related costs of acquisition, borrowing costs incurred to
get the properties ready for their intended use.
Cost is calculated on weighted average basis.
Net relisable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and costs
required to make the sale.
i. Depreciation on Plant and Machinery relating to Windmill is
provided on Straight Line Method and in respect of remaining fixed
assets, on Written Down Value Method at the rates and in the manner
prescribed in Schedule- XIV to the Companies Act, 1956.
ii. Cost of Leasehold land is amortised over the period of lease.
iii. Assets costing upto Rs.5,000/-are fully depreciated in the year of
iv. Intangible Assets are amortised over the expected duration of
benefits not exceeding ten years.
Investment intended to be held for more than a year are classified as
long term investments. All other investments are classified as current
investments. Current investments are stated at lower of cost and market
value. Long term investments are stated at cost. Decline in value of
long term investments is recognized, if considered other than
H. REVENUE RECOGNITION
i. The Company follows Percentage of Completion Method of
accounting for contracts and constructed residential, institutional and
commercial properties. As per this method, the revenue is recognized in
proportion to the actual costs incurred as against the total estimated
cost of the projects under execution subject to actual cost being 30%
or more of the total estimated cost.
In case of FSI sale, revenue is recognized to the extent of-
a. 50% if the sale consideration received is at Ieast20 %,
b. 100% if the sale consideration received is more than 50 %.
ii. Income from know how fee is recognized as per the terms of the
agreement with the recipient of know how.
iii. 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 accounts in the year in which the
estimates are revised.
iv. Indirect costs (Note No. 22,23,24 & 25) are treated as Period
Costs and are charged to the Statement of Profit & Loss in the year
in which they are incurred.
v. Surrender of flats by buyers are valued at cost and accounted for
as surrender of rights under ''Cost of Construction1 in the case of
projects in progress and once sold, proceeds are treated as ''Sales''.
vi. For recognizing income and working out related cost of
construction, in case of developed land, flats / shops/ houses/farms
etc., major self contained residential township projects are divided
into various schemes such as plotted area, constructed houses and
commercial area, malls etc.
vii. Whereas all income and expenses are accounted for on accrual
basis, interest on delayed payments by customers against dues and
holding charges, interest claims for delay in projects and assured
returns to customers are taken into account on realization or payment
owing to practical difficulties and uncertainties involved.
viii. Income from Windmill is accounted for on the basis of power
supplied to the Customer as per the terms of the Power
Purchase Agreement with the respective party.
ix. The maintenance and other expenses incurred subsequent to
completion of projects are charged off to the Statement of Profit &
Loss under the head Expenditure on Completed Projects.
x. Interest income on fixed deposit with banks is recognized on time
proportion basis taking into account the amount outstanding and the
xi. Dividend income from investments is recognized when the Company''s
right to receive payment is established.
I. ADVANCES TO SUBSIDIARIES, ASSOCIATES AND OTHERS FOR PURCHASE OF
Advances given to subsidiary and land holding companies for acquiring
land are initially classified as ''Advances'' for purchase of land under
Loans & Advances. On obtaining the license for a land, the full cost of
the land is transferred to cost of land, an item of cost of
construction, from ''Advance against land''.
J. RETIREMENT AND OTHER BENEFITS
i. Contribution to the Provident Fund is charged to the revenue each
ii. Provisions for Gratuity and leave encashment are made on the basis
of actuarial valuation at the year-end in accordance with Accounting
Standard AS 15 on ''Employee Benefits''. The actuarial valuation is done
as per Projected Unit Credit Method (PUCM). Actuarial gains/(losses)
are immediately taken to Statement of profit & Loss in the year in
which such gains or losses arise.
K. FOREIGN CURRENCY TRANSLATION / CONVERSION
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of transactions. Gains / Losses arising due to
fluctuations in the exchange rates are recognized in the Statement of
Profit & Loss in the period in which they arise.
Gains / Losses on foreign exchange rate fluctuations relating to
translation of monetary items at the year-end are accounted for in the
Statement of Profit & Loss.
L. BORROWING COSTS
Borrowing costs that are directly attributable to the acquisition or
construction of a qualifying asset are considered as part of cost of
that asset. In accordance with Accounting Standard (AS-16)
Borrowing Costs, a qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use. Other
borrowing costs are expensed as period costs.
Borrowing costs that are directly attributable to the projects are
charged to the respective Project on the basis of expenditure incurred
net of customer collections.
M. TAXES ON INCOME
Income tax expense is accounted for in accordance with AS-22,
Accounting for Taxes on Income, as stated below:
i. Provision for current tax is made based on taxable income for the
year computed in accordance with provisions of the Income Tax Act, 1961.
ii. Deferred tax is recognized, subject to the consideration of
prudence, on timing differences, being the difference between taxable
income and accounting income that originate in one period and are
capable of reversal in one or more subsequent periods.
iii. Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred tax assets and deferred tax
liabilities relate to the taxes on income levied by same governing
iv. Deferred tax asset is recognized and carried forward to the extent
that there is a reasonable certainty of realization. In the case of
unabsorbed depreciation and carry forward tax losses deferred tax asset
is recognized, to the extent there is virtual certainty that sufficient
future taxable income will be available against which such deferred tax
assets can be realized.
N. SEGMENT POLICIES
The Company''s reportable segments are identified based on
activities/products, risk and reward structure, organization structure
and internal reporting systems.
O. ACCOUNTING FORJOINT VENTURES
i. Jointly controlled operations - The Company''s share of revenue,
expenses, assets and liabilities are included in the financial
statements as revenue, expenses, assets and liabilities respectively.
ii. Jointly controlled entities - The Company''s investment in jointly
controlled entities is reflected as investment and accounted for in
accordance with the Company''s accounting policy of Investments. (See
Note No. 1(G) above)
At each Balance Sheet date, the management reviews the carrying amounts
of Fixed Assets to determine whether there is any indication that these
assets suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the
extent of impairment loss and necessary provisions are made against
such impairment. The recoverable amount is the greater of the asset''s
net selling price and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value at
the weighted average cost of capital. Reversal of impairment loss is
recognized as income in the Statement of Profit & Loss to the extent of
impairment loss previously recognized.
When the Company is the lessee
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Statement of Profit & Loss on a straight-line basis over the
When the Company is the lessor
Assets subject to operating leases are included in fixed assets. Lease
income is recognised in the Statement of Profit & Loss on a
straight-line basis over the lease term. Costs, including depreciation
are recognised as an expense in the Statement of Profit & Loss. Initial
direct costs such as legal costs, brokerage costs, etc. are recognised
immediately in the Statement of Profit & Loss.
R. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
A provision is recognised when an enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted
to its present value and are determined based on best estimate required
to settle the obligation at the balance sheet date. These are reviewed
at each balance sheet date and adjusted to reflect the current best
Contingent liabilities are shown byway of note in the Notes to Accounts
in respect of obligations where based on the evidence available, their
existence at the balance sheet date is considered not probable.
Contingent assets are neither recognized in the accounts nor disclosed.
S. EARNING PERSHARE
Basic earning per share 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 earning per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all potential dilutive equity shares.
T. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash at bank, cash/ cheques in hand
and fixed deposits with banks with maturity period of three months or