Close Ad
SENSEX NIFTY India | Accounting Policy > Construction & Contracting - Civil > Accounting Policy followed by Madhucon Projects - BSE: 531497, NSE: MADHUCON

Madhucon Projects

BSE: 531497|NSE: MADHUCON|ISIN: INE378D01032|SECTOR: Construction & Contracting - Civil
Jul 20, 16:00
-0.21 (-2.22%)
VOLUME 15,359
Jul 20, 15:55
-0.05 (-0.54%)
VOLUME 122,577
Mar 15
Accounting Policy Year : Mar '16

Company Overview:

Madhucon Projects Ltd (MPL) or “the Company” is an integrated construction, Infrastructure development and management Company Corporate Office at Hyderabad, India.

The Company is surging ahead with presence in multiple sectors of construction and infrastructure projects such as Transportation, Irrigation, Water resources infrastructures, railways, Engineering ,Procurement & Construction (EPC),Turnkey projects, developments of smart cities, and properties, in India. Completing the projects with high quality workman ship and commitment to excellence made the Company a leader in the industry..The Company is best in innovation, creativity and technological mastery, delivering top-quality work, head of schedules, in all sectors.

A majority of the development projects of the Company are based on Public-Private Partnerships (PPP) and operated by separate Special Purpose Vehicles (SPV)


1.1. Basis of accounting and preparation of financial statements:

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified under section 333 of the Companies Act 2033 (“Act”), read with Rule 7 of the Companies (Accounts) Rules 2034 and the relevant provisions of the Act. The financial statements have been prepared under the historical cost convention on accrual basis. The accounting policies adopted in the preparation of financial statements are consistent with those followed in the previous years unless otherwise stated separately herein below.

1.2. Use of Estimates:

Management makes estimates, technical and other assumptions regarding the amounts of income and expense in accordance with Indian GAAP in the preparation of its financial statements. Difference between the actual results and estimates are recognized in the period in which the results are known/materialize.

1.3. Inventories:

a) Raw Materials, construction materials and stores & spares are valued at Lower of Cost/Net Realizable Value or under Cost exclude refundable duties and taxes.

b) Work-in-progress is valued on the basis of the actual expenditure incurred in the case of all incomplete contracts, is stated at the Lower of Cost/ Net Realizable Value.

1.4. Fixed Assets:

Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment losses if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.

1.5. Depreciation and Amortization:

Depreciation is provided for in the accounts on Straight-Line method in accordance with the Schedule II of the Companies Act, 2033, based on the useful life estimated on the technical assessment as in force and proportionate depreciation are charged for additions/deletions during the year. In respect of additions / deletions to the fixed assets / leasehold improvements, depreciation is charged from the date the asset is ready to use / up to the date of deletion.

1.6. Impairment of Assets:

The carrying amount of assets other than inventories is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the assets is estimated. The recoverable amount is greater than the asset''s net selling price and value in use which is determined based on the estimated future cash flow discounted to their present values. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

1.7. Investments:

Investments are classified as long term investments. Long Term Investments are carried at cost less provision for other than temporary diminution, if any in value of such investments.

1.8. Employee Benefits:

Provident Fund:

Provident fund is defined Contribution scheme and contributions are charged to profit and loss account of the year when the contributions to the respective funds are due. Other retirement benefits such as Gratuity, leave encashment etc., are recognized on basis of an Actuarial Valuation.

1.9. Revenue Recognition:

(i) Accounting of Construction Contracts:

The Company follows the percentage completion method, based on the stage of completion at the balance sheet date, taking into account the contractual price and revision thereto by estimating total revenue and total cost till completion of the contract and the profit so determined has been accounted in proportion to the percentage of the actual work done. Future expected loss, if any, is recognized as expenditure

Revenue is recognized as follows:

a) In case of Item rate contracts on the basis of physical measurement of work actually completed at the balance sheet date.

b) In case of Lump sum contracts, revenue is recognized on the completion of milestones as specified in the contract or as identified by the management Foreseeable losses are accounted for as and when they are determined except to the extent they are expected to be recovered through Claims presented or to be presented to the customer or in arbitration.

c) Accounting Policy for Claims:

Claims are accounted as income in the year of receipt of arbitration award or acceptance by client or evidence of acceptance received.

d) Interest:

Revenue is recognized on a time proportionate basis taking into account the amount outstanding and the rate applicable.

1.10. Income Tax:

a) Current Tax:

Provision for Current Tax is made based on taxable income computed for the year under the Income Tax Act 1961

b) Deferred Taxes:

Deferred tax is accounted for by computing the tax effect of timing differences which arise during the year and reverse in subsequent periods. Deferred tax assets are recognized and carried forward only to the extent that there is a certainty that sufficient future taxable income will be available against which such Deferred Tax Assets can be realized.

1.11. Borrowing Costs:

Borrowing costs that are attributable to the acquisition and construction of qualifying asset are capitalized as a part of cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that requires substantial period of the time to get ready for its intended use. Other borrowing costs are charged to statement of Profit & Loss as incurred.

61.12. Accounting for Joint Venture Contracts

a) Contracts executed in Joint Venture under work sharing arrangement(consortium)are accounted in accordance with the Accounting policy followed by the Company as that of an independent contract to the extent work is executed.

b) In respect of contracts executed in Integrated Joint Ventures under profit sharing arrangement (assessed as AOP under Income tax laws), the services rendered to the Joint Ventures are accounted as income on accrual basis. The profit/loss is accounted for, as and when it is determined by the Joint Venture and the net investment in the Joint Venture is reflected as investments, loans & advances or current liabilities.

1.13. Foreign Currency Translation:

a) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing on the date of the transaction.

b) Any income or expense on account of exchange difference either on settlement or on transaction is recognized in the profit and loss account. In case of fixed assets they are adjusted to the carrying cost of such assets. Foreign Currency Monetary Items are re-translated at the exchange rate prevailing on the reporting date.

c) Exchange differences arising on the settlement of monetary items or on reporting company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise except those relating to liability for acquiring fixed assets from outside India which are capitalized and those arising from investments in non-integral operations.

1.14. Provisions, Contingent Liabilities & Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will bean outflow of resources. 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. Contingent assets are neither recognized nor disclosed in the financial statements.

1.15. Leases:

The companies leasing arrangements are mainly in respect of operating leases for premises and construction equipment. The leasing arrangements range from 11 months to 10 years, generally and are usually cancellable / revocable by mutual consent an agreed terms. The aggregate lease rent same payable are charged as rent / hire in the statement of profit and loss account.

1.16. Earnings Per Share:

The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS 20), Earnings Per Share notified by the Companies (Accounting Standards) Rules, 2006. Basic earnings per equity share is computed by dividing the net profit for the year attributable to the Equity Shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit for the year adjusted for the effects of dilutive potential equity shares, attributable to the Equity Shareholders by the weighted average number of the equity shares and dilutive potential equity shares outstanding during the year except where the results are anti-dilutive.

1.17. Cash Flow Statement:

Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

Source : Dion Global Solutions Limited
Quick Links for madhuconprojects
Explore Moneycontrol
Stocks     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Others
Mutual Funds     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Copyright © Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of is prohibited.