a. Basis of preparation of financial statements
The financial statements are prepared under historical cost convention,
in accordance with the Accounting Principles Generally Accepted in
India (''Indian GAAP'') and the provisions of Companies Act, 1956.
b. Presentation and disclosure of financial statements.
During the year ended 31 March 2012, the revised Schedule VI notified
under the Companies Act 1956, has become applicable to the company, for
preparation and presentation of its financial statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of these financial statements.
However, it has significant impact on presentation and disclosures made
in the financial statements. The company has also reclassified the
previous year figures in accordance with the requirements applicable in
the current year.
c. Use of estimates
The preparation of financial statements in conformity with the Generally
Accepted Accounting Principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent liabilities on the date of
the financial statements. Actual results could differ from those
estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
d. Fixed assets
Fixed assets are stated at historical cost less accumulated
depreciation. Cost includes purchase price and all other attributable
cost to bring the assets to its working condition for the intended use.
Depreciation on fixed assets is provided on written down value method in
the manner and rates prescribed in Schedule XIV to the Companies Act,
1956 except in the case of steel shuttering and scaffolding material,
which is treated as part of plant and machinery where the estimated
useful life based on technical evaluation has been determined as five
Cost of building constructed on land owned by third party under ''Build
Own Transfer'' agreement is amortized over the period of the agreement.
f. Intangible assets
Intangible assets comprising of ERP & other computer software''s are
stated at cost of acquisition less accumulated amortization and are
amortised over a period of four years on straight line method.
g. Borrowing costs
Borrowing cost that are directly attributable to the acquisition or
construction of a qualifying asset (including real estate projects) are
considered as part of the cost of the asset/ project. All other
borrowing costs are treated as period cost and charged to the statement
of Profit and loss in the year in which incurred.
h. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of Profit and loss.
Long-term investments are stated at cost. Provision for diminution, if
any, in the value of each long-term investment is made to recognize a
decline, other than of a temporary nature.
Current investments are stated at lower of cost or market value.
i. Building material and consumable stores are valued at cost, which is
determined on the basis of the ''First in First out'' method.
ii. Land is valued at cost, which is determined on average method. Cost
includes cost of acquisition and all related costs.
iii. Construction work in progress is valued at cost. Cost includes
cost of material, services and other related overheads related to
project under construction.
iv. Completed real estate project for sale and trading stock are valued
at lower of cost or net realizable value. Cost includes cost of
materials, services and other related overheads.
k. Projects in progress
Projects in progress are valued at cost. Cost includes cost of land,
materials, construction, services, borrowing costs and other overheads
relating to projects.
l. Revenue recognition
i. Real estate projects
Revenue from real estate projects is recognized on the ''Percentage of
Completion method'' (POC) of accounting.
Revenues under the POC method is recognized on the basis of percentage
of actual costs incurred, including land, construction and development
cost of projects under execution subject, to such actual cost being 30
percent or more of the total estimated cost of projects.
The stage of completion under the POC method is measured on the basis
of percentage that actual costs incurred on real estate projects
including land, construction and development cost bears to the total
estimated cost of the project. The estimates of the projected
revenues, projected Profits, projected costs, cost to completion and the
foreseeable loss are reviewed periodically by the management and any
effect of changes in estimates is recognized in the period in which
such changes are determined.
Unbilled revenue disclosed under other assets represents revenue
recognized over and above amount due as per payment plan. Progress
billings which exceeds the cost and recognized Profits to date on
projects in progress ,the same is disclosed as advance received from
customers under other current liabilities. Any billed amount not
collected is disclosed under trade receivable.
ii. Interest due on delayed payments by customers is accounted on
receipts basis due to uncertainty of recovery of the same and is
treated as part of operating income.
iii. Income from construction contracts
Revenue from construction contracts is recognized on the ''Percentage of
Completion method'' of accounting.
Income from construction contracts is recognized by reference to the
stage of completion of the contract activity as certified by the client.
Revenue on account of contract variations, claims and incentives are
recognized upon determination or settlement of the contract.
iv. Income from trading sales
Revenue from trading activities is accounted for on accrual basis.
v. Dividend income is recognized when the right to receive the payment
m. Foreign currency transactions
i. Foreign currency transactions are recorded at exchange rates
prevailing on the date of respective transactions.
ii. Current assets and current liabilities in foreign currencies
existing at balance sheet date are translated at year-end rates.
iii. Foreign currency translation differences related to acquisition of
imported fixed assets are adjusted in the carrying amount of the related
fixed assets. All other foreign currency gains and losses are recognized
in the statement of Profit and loss.
iv. Foreign Exchange difference arising as a monetary item that, in
substance, form part of company''s net investment is a non-integral
foreign operation and is accumulated in a Foreign Currency Translation
Reserve in the financial statement until the disposal of net investment
at which time it is recognized as income or expenses.
n. Accounting for taxes on income
i. Provision for current tax is made based on the tax payable under the
Income Tax Act, 1961.
ii. Deferred tax on timing differences between taxable and accounting
income is accounted for, using the tax rates and the tax laws enacted
or substantially enacted as on the balance sheet date. Deferred tax
assets are recognized only when there is a reasonable certainty of
their realization. Wherever there are unabsorbed depreciation or carry
forward losses under Tax laws, Deferred tax assets are recognized only
to the extent that there is a virtual certainty of their realization.
o. Retirement benefits
i. Contributions payable by the Company to the concerned government
authorities in respect of provident fund, family pension fund and
employee state insurance are charged to the statement of Profit and
ii. The Company is having Group Gratuity Scheme with Life Insurance
Corporation of India. Provision for gratuity is made based on actuarial
valuation in accordance with Revised AS-15.
iii. Provision for leave encashment in respect of unavailed leave
standing to the credit of employees is made on actuarial basis in
accordance with Revised AS-15.
p. Provisions, contingent liabilities and contingent assets
A provision is recognized when: the Company has a present obligation as
a result of a past event; it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation;
and a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
q. Operating lease
Lease arrangements where the risk and rewards incident to ownership of
an assets substantially vest with the lessor are recognized as
operating lease. Lease rent under operating lease are charged to
statement of Profit and loss on a straight line basis over the lease
r. Employee stock compensation cost
In respect of stock options granted by the Company, the intrinsic value
of the options (excess of market price of the shares over the exercise
price of the option) is treated as employee compensation cost and is
amortised over the vesting period.
s. Share issue expenses
Share issue expenses are adjusted against the securities premium
1.2 Terms / rights attached to shares
The company has only one class of equity shares having a par value of
-10/- per share. Each holder of equity shares is entitled to one vote
per share. The company declares and pays dividend in Indian rupees. The
dividend proposed by board of directors is subject to the approval of
the shareholders in the ensuing Annual general meeting. In the event of
liquidation of the company, the holders of equity shares will be
entitled to receive remaining assets of the company, after distribution
of all preferential amounts. The distribution will be in proportion to
the number of equity shares held by the share holders.
The company has one class of preference shares having a par value of
-10/-per share. Each holder of preference shares shall not be entitled
to vote at any general meeting of the members of the Company in
relation to any of the matters solely by virtue of holding preference
shares. The preference Shares shall be eligible for dividend at the
rates prescribed by the Board of the Company at the time of issuance.
The Preference Shares shall be redeemed as per the terms of the issue.
No preference share capital has yet been issued by the company.
1.5 Shares reserved for issue under options
The Company has adopted Omaxe ESOP Plan Beta in the Annual General
Meeting held on September 27, 2007. The total number of shares
available in the plan is 3% of the total issued and subscribed share
capital of the Company. However, no options have been granted till