SIGNIFICANT ACCOUNTING POLICIES A. Basis of brparation of financial statements These financial statements are brpared under the historical cost convention, on accrual basis, except where otherwise stated and with all material aspects of Generally Accepted Accounting Principles (GAAP). GAAP comprises mandatory accounting standards as brscribed under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Companies Act, 2013 ( to the extent notified) The accounting policies have been consistently applied by the Company except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. B.Use of Estimates The brparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of the financial statements and the result of operations during the reporting period. Accounting estimates are based upon past experience, brsent realization and future brsumptions and could change from period to period. Actual results could differ from these estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and if material, their effects are disclosed in the notes to the financial statements c. Revenue Recognition Revenue is recognized as follows: I. Revenue on construction/development of projects is recognized according to percentage of completion method after making appropriate allowance for foreseeable loss, if any. However, Revenue is recognized only on those units where formal allotment/ agreement to sell is executed and cost of construction reaches 30% of total estimated project cost. a. Estimated project cost includes cost of land/ development rights, borrowing costs, overheads, estimated construction and development cost for projects where revenue is recognized prior to 01.04.2012. b .For projects in which no revenue was recognized prior to 1st April, 2012, indirect costs including administrative costs, selling costs and other costs of similar nature incurred on or after 1st April, 2012 have not been considered as part of construction costs and development costs and have been fully charged to Statement of Profit & Loss. Similar costs incurred before 1st April, 2012 for such projects which are carried in Work in Progress, in terms of the accounting policy being consistently followed by the company, is charged to Statement of Profit & Loss in the year when the revenue is recognized for the first time. II. Revenue relating to sale of residential and commercial plots is recognized on proportionate basis when 50% of the progress has been achieved as measured in terms of actual cost incurred to total estimated cost subject to the execution of the agreement to sell. III. Claims, interest and transfer fees from customers are recognized on acceptance of the same. IV. Income from interest is accounted for on time proportion basis taking into account the amount outstanding and the applicable rate of interest. V. Revenue from operation includes various charges recovered from the customers which is recognized on accrual basis having regard to timing and nature of service provided. D. Borrowing Costs Borrowing costs attributable to the acquisition or construction of a qualifying asset are carried as part of the cost of such asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are expensed in the year they are incurred. E. Tangible Assets Tangible assets are stated at cost of acquisition including any attributable cost for bringing the asset to its working condition for its intended use less accumulated debrciation and impairment losses. F. Debrciation and amortisation Debrciation on tangible assets is provided on written down value method over the useful lives of assets estimated by the management as given in schedule II of The Companies Act, 2013 except, life of furniture and fixtures has been estimated as 15 years against 10 years. Debrciation for assets purchased / sold during a period is proportionately G.Intangible Assets Software which are not integral part of the hardware are classified as intangible assets and are stated at cost of acquisition less accumulated amortization. H.Investments Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long term investments. Long term investments are carried 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 and fair value. Profit / loss on sale of on investments is recognized with reference to the cost of the investment. I.Inventories i. Constructed properties, shown as work in progress, includes the cost of land (including development rights and land under agreements to purchase), internal development costs, external development costs, construction costs, overheads, borrowing costs, construction materials and is valued at lower of cost/ estimated cost and net realizable value. ii. On completion of projects, unsold stocks are transferred to project finished stock under the head "Inventory" and the same is carried at cost or net realizable value, whichever is less. J. Retirement Benefits a. Short Term employee benefit The Company's liability in respect of accumulated leave salary is provided for in the Profit & Loss Statement based on actual unencashed leave liability determined at the end of the year. b. Long Term and Post-employment benefits i. The employees' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The brsent value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method. ii. Retirement benefits in the form of Provident Fund and Superannuation/ Pension schemes are charged to the Profit & Loss Statement in the year when the contributions to the respective funds are due. K. Provisions, Contingent Liabilities and Contingent Assets Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation if the company has a brsent obligation as a result of past event and the amount of obligation can be reliably estimated. Possible future or brsent obligations that may but will probably not require outflow of resources or where the same can not be reliably estimated is disclosed as contingent liability in the financial statement. Contingent assets are neither recognized nor disclosed L. Taxes on Income i. Tax expense comprises both current and deferred tax. Current tax is determined in respect of taxable income for the year based on applicable tax rates and laws. ii. Deferred tax Asset/liability is recognized, subject to consideration of prudence, on timing differences being the differences between taxable incomes and accounting income that originates in one year and is capable of reversal in one or more subsequent year and measured using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are not recognized unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets are reviewed at each Balance Sheet date to reassess their reliability. M. Foreign Currency Transactions Foreign currency denominated monetary assets and liabilities are translated at exchange rates in effect at Balance Sheet date. The gains or losses resulting from such translation are included in the Statement of Profit and Loss. Non-monetary assets and non-monetary liabilities denominated in a foreign currency are translated at the exchange rate brvalent at the date of transactions. Revenue, expense and cash low items denominated in foreign currencies are translated using the exchange rate in effect on the date of transaction. N. Segment Reporting The company has identified that its operating activity is a single primary business segment viz. Real Estate Development & Services carried out in India. Accordingly, whole of India has been considered as one geographical segment. O. Earnings Per Share Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. P. Impairment of Assets The company reviews the carrying amounts of tangible and intangible assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. Impairment loss, if any, is recognized in the period in which impairment takes place. An impairment loss for an asset is reversed if, the reversal can be related to an event occurring after the impairment loss recognized. Q. Cash & Cash Equivalents Cash and cash equivalents comprise cash & cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents. 2.As per information available with the company, there are no dues outstanding in respect Micro and Small enterprises as provided in the 'Micro, Small and Medium Enterprises Development Act, 2006' as at the year end. Further, no interest during the year has been paid or payable in respect thereof. The parties have been identified based on the information available with the company and the same has been relied upon by the auditor. 3.The company has reviewed the carrying amount of its tangible and intangible assets (being a cash generating unit) with its future brsent value of cash lows and there has been no indication of impairment of the carrying amount of the Company's such Assets taking consideration into external and internal sources of information. 4. In consequence of coming into effect of Companies Act, 2013, the company has applied the estimated useful lives as given in Schedule II as disclosed in Accounting policy on Debrciation & amortization. Accordingly the unamortised carrying value is being debrciated/ amortised over the revised/remaining useful lives. The written down value of Fixed Assets whose lives have expired as at 1st April, 2014 have been adjusted net of tax, in the opening balance of Statement of Profit & Loss amounting to Rs 1,011,933/- (net of deferred tax of Rs 486,006/-). Notes: 1.Figures in brackets indicate cash outflow. 2.Previous figures have been regrouped/recanted, wherever necessary, to confirm to the current year's classification 4s per our report of even date attached For L.B. Jha & Co. For & on behalf of the Board of Directors of Chartered Accountants Sd/-(Bhaskar Auddy) Partner Membership No-53770 Sd/-Punit Beriwala Managing Director DIN:00231682 Sd/-Anil Kumar Agarwal Director DIN: 00479628 Sd/-Vivek Chaudhary Company Secretary Sd/-Ajay Agrawal Chief Financial Officer Place : Gurgaon Date : May 30, 2015 |