1.1 Corporate information:
Man Infraconstruction Limited is a Public Company domiciled in India
and incorporated under the provisions of the Companies Act, 1956. Its
shares are listed on BSE Limited and National Stock Exchange of India
Limited in India. The Company was incorporated on 16th August, 2002 and
is engaged in the business of Civil Construction.
1.2 Basis of preparation of Financial Statements:
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India, on the basis of
going concern under the historical cost convention and also on accrual
basis. These financial statements comply, in all material aspects, with
the provisions of the Companies Act, 1956 (The Act) and the Companies
Act, 2013 (to the extent applicable) and also accounting standards
prescribed by the Companies (Accounting Standards) Rules, 2006, which
continue to be applicable in respect of Section 133 of the Companies
Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013
of the Ministry of Corporate Affairs.
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 VI to the Companies Act, 1956. Based
on the nature of operations 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 as less
than 12 months.
1.3 Use of Estimates:
The preparation of the financial statements in conformity with 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
reported amounts of revenue and expenses during the reported period.
Although such estimates are on a reasonable and prudent basis taking
into account all available information, actual results could differ
from estimates. Differences on account of revision of estimates /
actual outcome and existing estimates are recognised prospectively once
such results are known / materialized in accordance with the
requirements of the respective accounting standard, as may be
1.4 Tangible fixed assets:
Fixed assets are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. The cost comprises purchase
price, non refundable taxes, borrowing costs, if capitalization
criteria are met and directly attributable cost of bringing the asset
to its present location and condition for the intended use. Any trade
discounts and rebates are deducted in arriving at the purchase price.
1.5 Intangible assets:
Intangible fixed assets are recognized only if they are separately
identifiable and the Company expects to receive the future economic
benefits arising out of them and cost of the assets can be measured
reliably. Intangible assets are carried at cost less accumulated
amortisation and accumulated impairment losses, if any.
1.6 Depreciation and amortization:
1.6.1 Depreciation on tangible fixed assets is computed on written down
value method, at the rates and manner prescribed in Schedule XIV to the
Act except with respect to Steel Shuttering Materials, Racks and
Pallets and Leasehold Premises. Depreciation for assets purchased /
sold during a period is proportionately charged.
Depreciation in respect of Steel Shuttering Materials (included in
Shuttering Materials) is provided on straight line method considering a
useful life of five years. Depreciation in respect of Racks and Pallets
(included in Plant and Equipment) is provided on straight line method
considering a useful life of four years. Leasehold Premises are
amortized on a straight line basis over the respective period of lease.
1.6.2 Individual assets costing less than Rs. 5,000 are depreciated in
full in the year of purchase.
1.6.3 Intangible assets are amortized on a straight line basis over the
estimated useful economic life as follows:
Design charges for Shuttering Materials - amortised over expected
project duration ranging from 1-2 years.
Computer software - 2 years.
The amortization period and the amortization method are reviewed at
least at each financial year end. If the expected useful life of the
asset is significantly different from previous estimates, the
amortization period is changed accordingly. If there has been a
significant change in the expected pattern of economic benefits from
the asset, the amortization method is changed to reflect the changed
pattern. Such changes are accounted for in accordance with AS 5 Net
Profit or Loss for the Period, Prior Period Items and Changes in
1.7 Borrowing Costs :
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are treated as direct cost and are
capitalised as part of cost of such assets. A qualifying asset is an
asset that necessarily requires a substantial period of time to get
ready for its intended use or sale. All other borrowing costs are
recognised as an expense in the year in which they are incurred.
The carrying amounts of assets are reviewed at each balance sheet date
when required to assess whether they are recorded in excess of their
recoverable amounts, and where carrying values exceed this estimated
recoverable amount, assets are written down to their recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the Statement of Profit and Loss. If at the balance sheet
date there is an indication that if a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the
assets are reflected at the recoverable amount.
Investments that are readily realizable and intended to be held as on
date of investment for not more than a year are classified as current
investments. All other investments are classified as long-term
investments. Current investments are carried at lower of cost and fair
value determined on an individual investment basis. Long-term
investments are carried at cost. However, provision for diminution in
value is recognized if it is other than temporary.
1.10.1 Inventory of construction materials is valued at lower of cost
(net of indirect taxes, wherever recoverable) and net realizable value
on FIFO method. However, inventory is not written down below cost if
the estimated revenue of the concerned contract is in excess of
1.10.2 Work-in-progress / other stock is valued at lower of cost and
net realizable value.
1.11 Revenue Recognition:
1.11.1 Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
1.11.2 Construction Contracts:
Contract revenue and expenses associated with the construction
contracts are recognized by reference to the stage of completion of the
project at the balance sheet date. The stage of completion of project
is determined by considering all relevant factors relating to contracts
including survey of work performed, on completion of a physical
proportion of the work done and proportion of contract costs incurred.
When it is probable that total contract costs will exceed total
contract revenue, the expected loss is recognised as an expense
immediately irrespective of stage of work done. Variations, claims and
incentives are recognized at advanced stages when it is probable that
they will fructify.
1.11.3 Revenues from other contracts are recognised as and when
services are rendered.
1.11.4 Interest and dividend income:
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established.
1.11.5 Accounting for Lease Income:
Income earned by way of leasing or renting out of commercial premises
is recognized as income in accordance with Accounting Standards 19 on
Leases. Initial direct cost such as brokerage, etc. are recognized as
expenses on accrual basis in the Statement of Profit and Loss in the
year of lease.
1.12 Foreign Currency Transactions:
Foreign currency transactions are recorded at the exchange rate
prevailing at the date of transactions. Exchange gains and losses
arising on settlement of such transactions are recognized as income or
expense in the year in which they arise.
Monetary assets and liabilities related to foreign currency
transactions remaining unsettled at the end of the year are translated
at the year end rate and difference in translations and unrealized
gains or losses on foreign currency transactions are recognized in the
Statement of Profit and Loss.
Non-monetary items, which are measured in terms of historical cost
denominated in a foreign currency, are reported using the exchange rate
at the date of the transaction.
1.13 Employee Benefits:
1.13.1 Short term employee benefits (benefits which are payable within
twelve months after the end of the period in which the employees render
service) are measured at cost and recognized during the period when the
employees render the service. Accumulated leave, which is expected to
be utilized within the next 12 months, is treated as short-term
employee benefit. The Company measures the expected cost of such
absences as the additional amount that it expects to pay as a result of
the unused entitlement that has accumulated at the reporting date.
1.13.2 Long term employees benefits (benefits which are payable after
the end of twelve months from the end of the period in which the
employees render service) and Post employment benefits (benefits which
are payable after completion of employment) are measured on a
discounted basis by the Projected Unit Credit Method on the basis of
annual third party actuarial valuation and are recognized during the
period when the employees render the service.
1.13.3 Contributions to provident fund, a defined contribution plan,
are made in accordance with the rules of the statute and are recognized
as expenses when employees render service entitling them to the
contributions. The Company has no obligation, other than the
contribution payable to the provident fund.
1.13.4 Actuarial gains / losses are immediately taken to the Statement
of Profit and Loss and are not deferred.
1.14 Taxes on income:
Provision for Taxation is made on the basis of taxable profits computed
for the current accounting period (reporting period) in accordance with
the Income Tax Act, 1961;
Deferred tax is calculated at the rates and laws that have been enacted
or substantively enacted as of the Balance Sheet date and is recognized
on timing differences that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax assets are
recognized on carry forward of unabsorbed depreciation and tax losses
only if there is virtual certainty that sufficient future taxable
income will be available against which such deferred tax asset can be
realized. Other deferred tax assets are recognised only to the extent
there is a reasonable certainty of realization in future. The effect on
deferred tax assets and liabilities of change in tax rates is
recognized in the Statement of Profit and Loss in the period of
enactment of the change. The carrying amount of deferred tax assets are
reviewed at each reporting date. The Company writes-down the carrying
amount of deferred tax asset to the extent that it is no longer
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available against which
deferred tax asset can be realized. Any such write-down is reversed to
the extent that it becomes reasonably certain or virtually certain, as
the case may be, that sufficient future taxable income will be
1.15 Earnings Per Share:
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they are entitled to participate in dividends relative to a
fully paid equity share during the reporting period. The weighted
average number of equity shares outstanding during the period is
adjusted for events such as bonus issue, bonus element in a rights
issue, share split, and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted earnings 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 dilutive potential equity shares.
1.16 Provision and Contingent Liabilities / Assets :
A provision is recognized when an enterprise has a present obligation
as a result of past event; 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 stated separately by way of a note.
Contingent Liabilities are disclosed when the Company has a possible
obligation or a present obligation and it is not probable that a cash
outflow will be required to settle the obligation. Contingent Assets
are neither recognised nor disclosed.
1.17 Cash and Cash Equivalents:
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank, cash in hand, deposits with banks and other
short-term investments with an original maturity of three months or
1.18 Cash Flow Statement:
Cash Flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature, such as deferrals or accruals of past or future operating cash
receipts or payments and items of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are separately