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Akash Infraprojects

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Accounting Policy Year : Mar '18

SCHEDULE - 2 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS FOR THE YEAR ENDED ON 31ST MARCH, 2018

SIGNIFICANT ACCOUNTING POLICIES

1. Financial statement are prepared under material cost convention, based on mercantile system of accounting in accordance with generally accepted accounting principles and the provisions of the Companies Act, 2013 consistently followed by the company, except the provision of Staff Leave Encashment for which the company is following up cash based accounting system for its leave encashment payment

2. Fixed assets are stated at cost. Depreciation on assets in provided on written Down Value (WDV) Method in accordance with section 205(2) of the Companies Act, 2013 and at the rates and manner, specified in Schedule II to the Companies Act, 2013 till the residual value of the asset is reduced equal to 5% of the original cost. In respect of assets acquired during the year the depreciation is provided on pro-rata basis.

3. The company is consistently following Percentage of Completion Method to recognize revenue from its works contracts.

4. All other revenues are recognized only when there is reasonable certainty of their ultimate realization/ collection. Since Company realizes the retention money by providing Bank Guarantee it is recognized as revenue as contract income.

5. Long Term Investments are stated at cost.

6. Closing Stock on hand is values as under:

(a) Raw Material & Consumables

-At Cost or Net Realizable Value whichever is lower.

(b) Work-in-Progress

-At Material Cost plus Labour.

NOTES FORMING PART OF THE ACCOUNTS

1. The Company has availed following of Secured Loans :

Sr.

Name of Lender

Type of Facility

Sanctioned Limit (Rs. In Lac)

Bal. O/S on 31/03/18 (Rs. In Lac)

Against Security Of

01

Oriental Bank of Commerce

Cash Credit

2000

2022.82

Entire Current Assets

02

ó do ó

Non Fund Limit (2700 500)

3700

2458.33

Entire Current Assets

03

HDFC Bank

Term Loan

290.30

154.14

Hypothecation of Machinery.

04

Citi Bank

Term Loan

286.10

251.21

Hypothecation of Vehicles

05

Yes Bank

Term Loan

78.32

70.69

Hypothecation of used Vehicles

2. All known liabilities have been provided for except,

(a) Contingent Liabilities not provided for are Rs. 3700 Lacs (Previous year-Rs. 3200 Lacs), being bank guarantees issued by Oriental Bank of Commerce, Gandhinagar on behalf of the company.

(b) The company has been claiming Income Tax benefit under section 80IA(4) of the Income Tax Act, 1961 from year to year. The Income Tax Assessing officer has disallowed the company''s such claim from assessment year 2003-04 to 2011-12 till date. The company preferred appeals against the said disallowance and the appeals for AY 2003.04 to AY 2007.08 are pending with ITAT Ahmedabad.

For assessment year 2008-09 to 2013-14 the company''s claim u/s 80IA(4) is allowed by the Income Tax department.

Further, the Company has paid the entire tax liabilities for A.Y. 2003.04 to 2007.08 due to such disallowance.

(c) Ahmedabad Muncipal Corporation (AMC) hitherto was the main customer of the Company. The Company had set up a plant at Gyaspur with land provided by AMC to execute various road works in Ahmedabad Muncipal area as instructed by the AMC. No mention about the rent was there either in tender documents/agreement/standing committee resolution awarding the tender to the Company.

However, during the year under consideration, due to heavy rains in July, 2017, various roads laid by the Company and others were broken and AMC without being heard had black listed the company on 15.09.2017 along with two other parties and apart from black listing the company the AMC also had demanded the rent with interest and service tax for 5 years -Rs. 2,30,77,329/-for land provided to the company at Gyaspur Plant. This was done without giving the company any opportunity of being heard -than AMC has recovered the same through invoking Bank Guarantee of Rs. 4,00,42,322/- on 19.04.2018.

The Company has denied the said liability of Rs 23077329/- contesting the claim of AMC. The Company has obtained legal opinion on this matter Based on this opinion the Company has not provided for any such liability raised by AMC. Since the company has already written to the AMC and is seeking reversal of invoked amount, further options of any legal action would depend upon the stand taken by AMC

3. Based on actuarial valuation of its liabilities conducted under the Payment of Gratuity Act,1972, the company has provided its gratuity liability to the tune of Rs. 20,5367-till 31/03/18.(P.Y. Rs.129/-)

4. The liability for unexecuted contracts on capital account is Rs. 911.22 Lacs (P. Y. NIL) as on 31.03.2018.

5. Company has provided Current Income Tax liability for the financial year 2017-18 of Rs. 52,50,177/-(previous year Rs.1,13,08,423/-) The current tax liability is restricted to MAT. The company has not recognized MAT credit receivable in its books.

6. Directors remuneration paid/payable durina the year is as under:

Name

Directors remuneration (Amt in Rs.)

Company Contribution to EPF (Amt. inRs.)

Shri Y. H. Patel

96,00,000

3,02,400

Shri A. P. Gol

96,00,000

3,02,400

ShriP. P. Gol

36,00,000

1,20,240

Shri D. H. Patel

36,00,000

1,20,240

Total Rs.

2,64,00,000

8,45,280

7. Closing stock of materials and Work In Process on hand as at the end of the year is taken as valued, verified and certified by the company.

8. Remuneration paid/payable to the auditors is as under:

Particulars

F.Y. 2017-18

F.Y. 2016-17

Audit Fee (incl. of taxes)

4,72,000

4,60,000

Taxation Matters

Nil

Nil

Certification Work

Nil

1,48,900

Others

Nil

1,29,375

Total Rs.

4,72,000

7,38,275

9. Custody certificates have not been obtained by the company in case of FDRs or other ownership documents pledged as security.

10. Related party disclosure as required by AS-18 issued by The ICAI-New Delhi are as under:-(i) Associates & Joint Ventures :

1) Akash Infra Inc. USA - Subsidiary Company

2) Akash Petroleum Pvt. Ltd.-Associate Company

3) Akash Residency and Hospitality Pvt. Ltd

4) Aadhyashakti Mining P. Ltd.,

5) Divyalaxmi Finlease Pvt. Ltd. (i) Key Management Personnel:

Mr. Yoginkumar H. Patel -Director

Mr. Ambusinh P. Gol - Director

Mr. Dinesh H. Patel -Director

Mr. Premalsinh P. Gol - Director

(ii) Companies over which Key Management Personnel exercise significant influence and with whom transactions have taken place during the year:-

a) Akash Petroleum Pvt. Ltd.

b) Aadhyashakti Minings Pvt. Ltd.,

c) Akash Residency and Hospitality Pvt. Ltd

(ill) Transactions with related parties: - (Rs. In Lac)

Description

Key Management Personnel

Enterprises By Managemen

Key controllec Personnel

2017-18

2016-17

2017-18

2016-17

Purchase of Goods

0.00

0.00

653.37

591.14

Remuneration

264.00

156.00

-

-

Rent

26.40

18.90

6.00

6.37

Works contract

0.00

0.00

588.78

0.00

Loans & Adv. Received & O/S at the end of the year

0.00

0.00

0.00

0.00

Loans & Advances aiven & O/S at the end of the year

0.00

0.00

0.00

0.00

Total

290.40

174.90

1248.15

597.51

(v) The Basic EPS is worked on the basis of AS 20 issued by the Institute of Chartered Accountants of India as follows:

Particulars

2017-18

2016-17

Profit / (Loss) after taxation Rs.

1,95,65,686

4,44,15,167

Profit attributable to Ordinary shareholders. (Excluding Deff. Tax Assets/Liabi. Provi.)

1,95,65,686

4,44,15,167

No. of Equity Shares

75,88,267

75,88,267

Basic Earning Per Share Rs.

2.58

5.85

11. Since, forthe year under audit, the company has no Time Benefits in terms of AS 22 but has observed Time Deficit, on account of higher the Depreciation as per books than the depreciation as per Income Tax Act, 1961. Further there is a timing difference with regards to the payment of Bonus forthe year 2017-18. Accordingly, to mitigate the Time Deficit observed for the year under audit, the company

has created and accounted for Deferred Tax Assets/ Liability account to the tune of Rs. 8,76,385/-(DTL-Net) (P. Y. 15,41,110/- (DTA-Net)) in terms of AS 22.

12. There are certain disputes with AMC with regards to the quality of road construction and this has resulted in over due payment of Rs 26.53 Crores from AMC. The Company however treats these as good, though overdue.

13. Balances of sundry Debtors/Creditors/Loans/Advances and Deposits are subject to confirmation, reconciliation and necessary adjustments.

14. Previous year''s figures have been re-grouped or re-arranged wherever necessary to make them comparable with the current year figures.

15. The final dividend on shares are not recognized as liability in the annual accounts pursuantto revised accounting standard-4. The Board of Directors has proposed dividend at the rate of Rs. 0.50 per equity share of Rs. 10 each. (Last year at the rate of Rs. 1 per equity share of Rs. 10 each).

As per our report of even date For Akash Infra Projects Ltd.

For Rakesh Bhatt & Co.

Y.H.Patel

A. P. Gol

Chartered Accountants

Chairman & Managing Director

Managing Director

Rakesh Bhatt

DIN 00463335

DIN 00463376

Proprietor

S.K.Padhi

U.A.Patel

M. No. 046382

Chief Financial Officer

Company Secretary

Place : Gandhinagar

Place : Gandhinagar

Date : 30/05/2018

Date : 30/05/2018

Source : Dion Global Solutions Limited
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