SENSEX NIFTY India | Accounting Policy > Construction & Contracting - Civil > Accounting Policy followed by Man Infraconstruction - BSE: 533169, NSE: MANINFRA
Man Infraconstruction
BSE: 533169|NSE: MANINFRA|ISIN: INE949H01023|SECTOR: Construction & Contracting - Civil
Nov 24, 16:01
2.1 (5.13%)
VOLUME 851,814
Nov 24, 16:01
1.9 (4.63%)
VOLUME 2,434,014
« Mar 14
Accounting Policy Year : Mar '15
 1.1 Corporate information:
 Man Infraconstruction Limited is a Public Company domiciled in India
 and incorporated under the provisions ofthe Companies Act, 1956. Its
 shares are listed on BSE Limited (Bombay Stock Exchange) and National
 Stock Exchange 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 on accrual basis.
 These financial statements have been prepared to comply, in all
 material aspects with the accounting standards notified under Section
 133 of the Companies Act, 2013 (the Act) , read together with rule 7 of
 the Companies (Accounts) Rules, 2014 and the relevant provisions ofthe
 Act. In accordance with first proviso to section 129(1) ofthe Act and
 clause 6 of the General Instructions given in Schedule III to the Act,
 the terms used in these financial statements are in accordance with the
 Accounting Standards as referred to herein. The accounting policies
 have been consistently applied by the Company and are consistent with
 those used in previous year.
 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 Act.  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 for
 the purpose of current-non current classification of assets and
 Transactions and balances with values below the rounding off norm
 adopted by the Company have been reflected as 0.00 in the relevant
 notes in these financial statements.
 1.3 Use of Estimates:
 The preparation ofthe 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 applicable.
 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 ofthe 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 except with respect to Steel shuttering materials, Racks
 and pallets and Leasehold premises where depreciation is provided on
 straight line method (SLM).  Depreciation for assets purchased / sold
 during a period is proportionately charged. Useful life and residual
 value prescribed in Schedule II of the Act are considered for computing
 depreciation except in the following cases :
 Particulars                                  Useful Life
                                              (in years)
 Steel Shuttering Materials                      5
 (included in Shuttering Materials)
 Leasehold premises are amortized on a
 straight line basis over the respective
 period of lease.
 Misc Equipments and Instruments               5 to 10
 For MIVAN shuttering and MASCON shuttering (included in Shuttering
 Materials), the residual value is considered at 31% to 52% of original
 cost, which is higher than the limit specified in Schedule II ofthe
 For these classes of assets, based on internal assessments and
 technical evaluation, the Company believes that the useful lives and
 residual values as given above best represent the period over which the
 Company expects to use these assets. Hence the useful lives and
 residual values for these assets are different from the useful lives
 and residual values as prescribed in Schedule II ofthe Act.
 1.6.2 Intangible assets are amortized on a straight line basis over the
 estimated useful economic life asfollows:
 Design charges for Shuttering Materials - amortised over expected
 project duration ranging from 1-2years.
 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
 Accounting Policies.
 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.
 1.8 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
 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.
 1.9 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 recognized if it is other than temporary. Cost of investments
 include acquisition charges such as brokerage, fees and duties.
 1.10 Inventories:
 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
 estimated cost.
 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
 reliably measured.
 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 nextl2 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 employee 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 providentfund.
 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 carryforward 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 inthe 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 ofthree 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
Source : Dion Global Solutions Limited
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