Basis of accounting
The financial statements are prepared under historical cost convention,
on accrual basis, on the principles of going concern, in accordance
with the generally accepted accounting principles, the relevant
accounting standards and the relevant guidance notes issued by the
Institute of Chartered Accountants of India (ICAI) and the applicable
provisions of the Companies Act, 1956.
Under the terms of the Concession Agreement with Yamuna Expressway
Industrial Development Authority (YEA), the Company has undertaken the
work of development, operation and maintenance of the six – lane access
controlled expressway along with service road and associated structures
etc. between Noida and Agra and the revenues are derived there from at
present mainly by way of transfer of constructed properties & transfer
of developed and undeveloped land allotted under the said Concession
Agreement along the proposed expressway. These revenues are recognised
Revenue from real estate development of constructed properties is
recognised on the percentage of completion method. Total sale
consideration as per the legally enforceable agreements to sell entered
into is recognised as revenue based on the percentage of actual project
costs incurred to total estimated project cost, subject to such actual
cost incurred being 30 percent or more of the total estimated project
cost. Project cost includes cost of land, estimated cost of
construction and development of such properties. The estimates of the
saleable area and costs are reviewed periodically and effect of any
change in such estimates is recognised in the period such change is
determined. Where aggregate of the payment received from customers
provide insufficient evidence of their commitment to make the complete
payment, revenue is recognised only to the extent of payment received.
Revenue from sale/sub-lease of undeveloped land is recognised when full
consideration is received against agreement to sell/sub- lease; all
significant risks and rewards are transferred to the customer and
possession is handed over.
Revenue from sale/sub-lease of developed land/plot is recognised based
on the percentage of completion method when a firm agreement has been
entered into and 30 percent or more of the consideration is received
and where no significant uncertainty exists regarding the amount of the
consideration that will be derived from such sales and it is not
unreasonable to expect ultimate collection, and all significant risks
and rewards are transferred to the customer.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and reported amount of revenues and
expenses during the reporting period. Differences between actual
results and estimates are recognised in the period in which the results
are known/ materialise.
Fixed Assets are stated at cost of acquisition or construction
inclusive of freight, erection & commissioning charges, duties and
taxes and other incidental expenses related thereto.
Capital Work in Progress
Capital work-in-progress represents capital expenditure incurred in
respect of Yamuna Expressway Project and is carried at cost. Cost
includes land, related acquisition expenses, construction costs,
borrowing costs capitalized and other direct expenditure and advances
to contractors and others.
Depreciation on Fixed Assets is provided on Straight Line Method as per
the classification and in the manner specified in Schedule XIV to the
Companies Act, 1956.
Employee Benefits are provided in the books as per AS-15 (revised) in
the following manner:
(i) Provident Fund and Pension contribution – as a percentage of
salary/wages is a Defined Contribution Scheme.
(ii) Gratuity and Leave Encashment is a defined benefit obligation.
The liability is provided for on the basis of actuarial valuation made
at the end of each financial year. The actuarial valuation is made on
Projected Unit Credit method.
Inventories are valued as under:
i) Stores & Spares : At Weighted Average Cost.
ii) Project under Development : As under
The stock of land and plot is valued at cost (average cost) or as
revalued on conversion to stock-in-trade, as applicable. Cost shall
include acquisition cost of land, internal development cost and
external development charges, construction cost, material costs, cost
of services etc.
Foreign Currency Transactions:
i) Monetary assets and liabilities related to foreign currency
transactions and outstanding at the close of the year are expressed in
Indian Rupees at the rate of exchange prevailing on the date of Balance
ii) Transactions in foreign currency are recorded in the books of
accounts in Indian Rupees at the rate of exchange prevailing on the
date of transaction.
i) Operating Leases: Rentals are expensed with reference to lease
ii) Finance Leases: The lower of the fair value of the assets or
present value of the minimum lease rentals is capitalised as fixed
assets with corresponding amount shown as lease liability. The
principal component in the lease rental is adjusted against the lease
liability and the interest component is charged to Profit & Loss
Preliminary Expenses are written off in the year in which it is
incurred, in terms of Accounting Standard (AS – 26).
Expenditure during Construction Period
Expenditure incurred on the project during construction is capitalized
to project asset(s) on commissioning.
Earnings Per Share
Basic Earnings Per Equity Share is computed by dividing the net profit
or loss after tax by the weighted average number of Equity Shares
outstanding during the year. Diluted earnings per equity share is
computed by dividing adjusted net profit after tax by the aggregate of
weighted average number of equity shares and dilutive potential equity
shares outstanding during the year.
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 takes substantial
period of time to get ready for intended use or sale. All other
borrowing costs are charged to revenue.
Taxes on Income
Provision for current tax is being made after taking into consideration
benefits admissible to the company under the provisions of the Income
Tax Act, 1961.
Deferred Tax Assets and Deferred Tax Liability are computed by applying
tax rates and tax laws that have been enacted or substantively enacted
by the Balance Sheet Date.
Impairment of Assets
Management periodically assesses using external and internal sources
whether there is an indication that assets may be impaired. Impairment
occurs where the carrying value exceeds the present value of future
cash flows expected to arise from the continuing use of the assets and
its eventual disposal. The impairment loss to be expensed is determined
as the excess of the carrying amount over the higher of the asset''s net
sale prices or present value as determined above.
Provisions, Contingent Liabilities and contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised nor disclosed in the