i. Basis of preparation of Financial Statements:
These financial statements are prepared and presented under the
historical cost convention, on the accrual basis of accounting, in
accordance with the provisions of the Companies Act, 1956 (the Act),
the accounting principles generally accepted in India and comply with
the accounting standards prescribed in the Companies (Accounting
Standards) Rules, 2006 issued by the Central Government, in
consultation with the National Advisory Committee on Accounting
Standards, to the extent applicable. 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 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 fnancial 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 / materialised in accordance with the
requirements of the respective accounting standard, as may be
applicable.
iii. Revenue Recognition:
a. Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
b. Revenues from maintenance contracts are recognised as and when
services are rendered.
c. Construction Contracts
Contract revenue and expenses associated with the construction
contracts are recognised 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.
In the event of loss is estimated, provision is made upfront for the
entire loss irrespective of stage of work done. Variations, claims and
incentives are recognised at advanced stages when it is probable that
they will fructify.
d. Dividend income is recognised when the Companys right to receive
dividend is established. Dividend from subsidiaries is recognised even
if same are declared after the balance sheet date but pertains to
period on or before the date of balance sheet as per the requirement of
schedule VI of the Companies Act, 1956.
e. Interest is recognised using the time - proportion method, based on
rates implicit in the transaction.
iv. Fixed Assets:
a. The fixed assets are stated at cost (net of indirect taxes,
wherever recoverable) less accumulated depreciation and impairment, if
any. Cost comprises of all expenses incurred in bringing the assets to
its present location and working condition for intended use.
b. Intangible fixed assets are recognised 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.
v. Depreciation:
a. 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 Steel Shuttering Materials (included in Shuttering
Materials) which are depreciated @ 20 % based on the useful life
determined by the Management of the Company. Depreciation for assets
purchased / sold during a period is proportionately charged.
b. Individual assets costing less than Rs. 5,000 are depreciated in full
in the year of purchase.
c. MIVAN Design Charges are amortised on a
straight line basis over expected project duration and other intangible
assets are amortised on a straight-line basis over their expected
useful lives.
vi. 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.
vii. Inventories:
a. Inventory of construction materials is valued at cost (net of
indirect taxes, wherever recoverable) on FIFO method, net of provision
for diminution in the value. However, inventory is not written down
below cost if the estimated revenue of the concerned contract is in
excess of estimated cost.
b. Work-in-progress / other stock is valued at lower of cost and net
realizable value.
viii. Investments:
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 recognised if it is other than temporary.
ix. Provision and Contingent Liabilities:
A provision is recognised 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
estimates.
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 probable that a cash
outflow will be required to settle the obligation.
x. Share Issue Expenditure:
Expense incurred in relation to raising of Share Capital were amortised
equally over 5 years and on completion of initial public offering
during the last year, were adjusted (net of taxes) against Securities
Premium Account.
xi. Employee Benefits:
a. 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 recognised during the period when the
employee renders the service.
b. 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 recognised during the period when the
employee rendered the service.
c. Contributions to provident fund, a defined contribution plan, are
made in accordance with the rules of the statute and are recognised as
expenses when employees have rendered service entitling them to the
contributions.
d. Actuarial gains / losses are immediately taken to the Profit and
Loss account and are not deferred.
xii. Accounting For Leases:
Income earned by way of leasing or renting out of commercial premises
is recognised as income in accordance with Accounting Standards 19 on
Leases. Initial direct cost such as brokerage, etc. are recognised as
expenses on accrual basis in the Profit and Loss Account in the year of
lease.
xiii. Earnings Per Share:
Basic Earnings 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. The
weighted average number of equity shares
outstanding during the period are adjusted for events of bonus issue;
bonus element in a rights issue to existing shareholders. 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.
xiv. Foreign Currency Transactions:
a. 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 recognised as income or
expense in the year in which they arise.
b. 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 unrealised
gains or losses on foreign currency transactions are recognised in the
profit and loss account.
xv. Taxes on income:
a. 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;
b. Deferred Tax is calculated at the tax rates and laws that have been
enacted or substantially enacted as of the Balance Sheet date and is
recognised on timing difference that originate in one period and are
capable of reversal in one or more subsequent periods. Where there are
unabsorbed carry forward business losses or
depreciation, deferred tax assets are recognised only if there is
virtual certainty of realization of such assets. Other deferred tax
assets are recognised only to the extent that there is a reasonable
certainty of realization in future.
xvi. Impairments:
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
recognised in the profit and loss account. 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.
xvii.Cash and Cash Equivalents:
Cash and Cash Equivalents comprise cash in hand, balance in current and
deposit accounts with banks and highly liquid investments that can be
readily convertible to known amounts of cash.
xviii.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
mentioned.
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