b) Significant Accounting Policies
A. Method of Accounting:
The standalone financial statements are prepared as a going concern under historical cost
convention basis, except those with significant uncertainty, and in accordance with the mandatory
accounting standards as specified under Section 133 of the Companies Act, 2013 read with Rule
7 of the Companies (Accounts) Rules, 2014 (as amended). Accounting policies not stated
explicitly otherwise are consistent with generally accepted accounting principles.
B. Use of Accounting Estimates:
The preparation of the standalone financial statements in conformity with Indian GAAP requires
management to make estimates and assumption that affect the balances of assets and liabilities
and disclosure relating to contingent liabilities as at the reporting date of the standalone financial
statements and amounts of income and expenses during the period of account. Example of such
estimates includes contract costs expected to be incurred to complete construction contracts,
provision for doubtful debts and income tax. Management periodically assesses whether there is
an indication that an asset may be impaired and make provision in the account for any impairment
losses estimated. Contingencies are recorded when it is probable that a liability will be incurred,
and the amount can be reasonably estimated.
C. Revenue Recognition:
Revenue from Construction Property - The Company follows completed project method of
accounting. Direct/Allocable expenses incurred during the period are debited to work- in-progress
account. The revenue is accounted for as and when the significant risks and rewards of ownership
of the units in real estate have passed or deemed to have passed to the buyer and the Projects get
completed or substantially completed, to the extent that the economic benefits will flow to the
Company and the revenue can be reliably measured.
Incomes from services - Income from services are recognized on the basis of services rendered.
Income is accounted net of goods & service tax.
Share of Profit in Firm - Share of Profit / loss in which Company is a partner is accounted for in
the financial year ending (or immediately before) the date of the balance sheet.
Dividend - Dividend income is recognized when right to received is established by the reporting
date.
Works Contract Services - Revenue from Works Contract Services is recognized in the profit on
loss account on mercantile basis.
D. Property Plant and Equipment:
Property Plant and Equipment are stated at cost, less accumulated depreciation and amortization.
Cost comprises the purchase price and any attributable cost of bringing the asset to its working
condition for its intended use. Borrowing costs relating to acquisition of Property Plant and
Equipment which takes substantial period of time to get ready for its intended use are also included
to the extent they relate to the period till such assets are ready to be put to use.
E. Impairment of Assets:
The Company assesses at each Balance Sheet date whether there is any indication that any asset
may be impaired and if such indication exists, the carrying value of such asset is reduced to its
recoverable amount and a provision is made for such impairment loss in the profit and loss
account.
F. Depreciation:
Depreciation on Fixed assets has been provided on the basis of useful lives of assets as mentioned
in Part ‘A’, ‘B’ and ‘C’ of Schedule II to the Companies Act, 2013. Depreciation on the additions
during the period is provided on pro-rata basis.
G. Inventory:
Inventories are valued at lower of cost or net realizable value.
H. Investments:
Investments that are readily realizable and intended to be held for not more than one period are
classified as current investments. All other investments are classified as long-term investments.
Current investments are carried at lower of cost or fair value determined on individual investment
basis. Long-term investments are carried at cost. However, provision for diminution in value is
made to recognize a decline other than temporary decline in the value of the investments.
I. Employee Benefits:
The provisions of Provident Fund Act and Gratuity Act are not applicable to the company since
its staff strength is below the threshold limit specified under the statute.
J. Taxes on Income:
Tax expenses for a period comprises of current tax and deferred tax.
Current Tax is measured at the amount expected to be paid to the tax authorities, after taking into
consideration, the applicable deduction and exemption admissible under the provision of the
Income Tax Act, 1961.
Deferred tax reflects the impact of current period timing difference between taxable income and
accounting income for the period and reversal of timing difference of earlier periods. Deferred tax
is measured based on the tax rates and the tax law enacted or substantively enacted at the balance
sheet date.
K. Borrowing Costs:
Borrowing costs that are directly attributable to the acquisition is capitalized as part of the cost of
such assets. All other borrowing costs are charged to profit and loss account.
L. Earnings Per Share (EPS):
In arriving at the EPS, the Company’s net profit after tax, computed in terms of the Indian GAAP,
is divided by the weighted average number of equity share outstanding on the last day of the
reporting period. The EPS thus arrived at is known as ‘Basic EPS’. To arrive at the diluted EPS
the net profit after tax, referred above, is divided by the weighted average number of equity shares,
as computed above and the weighted average number of equity shares that could have been issued
on conversion of shares having potential dilutive effect subject to the terms of issue of those
potential shares. The date/s of issue of such potential shares, determine the amount of the weighted
average number of potential equity shares.
|