SIGNIFICANT ACCOUNTING POLICIES AND OTHER DISCLOUSERS FORMING PART OF BALANCE SHEET AS ON 31st MARCH 2015 AND STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED ON THAT DATE. A. COMPANY INFORMATION 1. Brahmaputra Infrastructure Limited is into EPC & Real Estate Development Business and handling various projects like Construction of Bridges, Flyovers, Highways, Airport, Building Construction, Tunnel projects, Mining projects. The Registered Office of the Company is situated at Brahmaputra House, A-7, Mahipalpur (NH-8, Mahipalpur Crossing) New Delhi - 110 037 B. SIGNIFICANT ACCOUNTING POLICIES 1. Basis of accounting The financial statements have been brpared to comply with the requirements of companies act 2013 and the Companies Act, 1956, wherever applicable, under the historical cost convention on the accrual basis of accounting except interest on Mobilization/Equipment Advances is being accounted for on actual recovery basis and Interest on Late / Non Payment of Term Loan Installments of Financers accounted for as and when settled. Also the financial statements have been brpared in accordance with the Accounting standards specified under section 133 of the act, read with RULE 7 of the companies (Accounts) Rules, 2014. 2. Use of estimates The brparation of financial statements in conformity with generally accepted accounting policies requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported accounts of revenues and expenses for the years brsented. 3. Revenue recognition a. Income from construction contracts is recognized by reference to the stage of completion of the contract activity as certified by the client. b. Revenue from real estate projects is recognized on the basis of percentage of completion method of accounting c. Income from industrial park project is recognized on the time of execution of registered sale deed / agreement to sale, in relation to sold areas only. d. "Bill raised but unsettled" have been accounted for in the books at the value reasonably ascertained by the management on the date of raising the bill. e. Claims in respect of civil contracts lodged/awarded with/by the respective Department which may pertains to earlier years have been accounted for in the books in the year of its certainty and at value /enhanced value reasonably ascertained by the management. 4. Joint Ventures Revenues / Expenses from contracts executed by the Company in joint ventures on back-to-back arrangement basis are recognized on the same basis as similar contracts independently executed by the Company. Company's share in the Profit / Loss from joint ventures is accounted as and when the same is determined by the joint venture. 5. Employee benefit During the year under review the company has provided Bonus on accrual basis, Provident fund and ESI contribution for eligible employees has been provided on actual liability basis and Gratuity and Leave Encashment has been provided based on actuarial valuation. 6. Investment Long term and short term investments both are stated at cost. No provision for diminution in coated investment is made because of its Long Term Nature. 7. Inventory (A). All inventories consisting of Work in Progress (Contract), Materials & Stores in hand and Real-estate division has been valued at cost as determined by the Management. (B). No Provision is being made for slow moving Work in Progress as the management is hope full to recover at stated value. 8. Foreign currency transactions a. Transactions in foreign currencies are accounted for at exchange rate brvailing as on date of transaction. b. All assets and liabilities in foreign currencies existing at balance sheet date are translated at the rate of balance sheet date. 9. Misc. expenditure. a) Preliminary expenses are amortized over a period of 10 years. b) Increase in share capital expenses are amortized over a period of 5 years. c) Amalgamation expenses are amortized over a period of 5 years. 10. Fixed assets. Fixed Assets has been stated at cost less accumlated debrciation. Cost includes purchase price and all other attributable cost of bringing the assets to working condition for intended use. 11. Debrciation Debrciation on Fixed Assets has been provided as per useful lives method brscribed under schedule -ii of the companies act, 2013. i.e. Debrciable Amount ( cost Less 5% Residual Value ) is to be charged over useful life of Fixed Asset under straight Line Method of Debrciation. Carrying amount of the Fixed Assets as on 31.03.2014 is to be debrciated over remaining life of the Asset, However if the life of asset expires before 31.03.2014 it is debited to Reserve and Surplus for the Year. 12. Contingent liabilities Contingent Liabilities not admitted by the company are not provided for in the accounts but are disclosed by way of other disclosures. 13. Taxation Income Tax comprises current tax and deferred tax. Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences subject to consideration of prudence. Deferred tax assets and liabilities are measured using the tax rates enacted or substantively enacted by the balance sheet date. 14. Earning per share The earnings considered in ascertaining company's EPS comprises the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year 15. Borrowing cost Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are considered as part of the cost of that asset. Other borrowing costs are recognized as an expense in the year in which they are incurred. 16. Prior Period Income/Expenses. Income/Expenses related to Prior Period are shown separately in "Note" to financial Statement under their natural head and the impact of amounts is separately disclosed in other disclosures. 17. Impairment of assets Pursuant to Accounting Standard (AS-28) on - Impairment of assets issued by the Institute of Chartered Accountant of India, the company assessed its fixed assets for impairment as at the year end and concluded that there has been no significant impaired fixed assets that needs to be recognized in the books of accounts. 18. Lease rental payments being operating lease is accounted for as an expenses on accrual basis. 19. Insurance claims lodged / Receivable with the respective departments has been accounted for in the books at the value either mutually settled or reasonably ascertained by the management. 20. Provision for Doubtful Debts is made at value estimated by the management. C. OTHER DISCLOUSERS 1 Contingent Liabilities not provided for : (a) Guarantees given by banks towards performance, financial and contractual commitments (Net of FDR) on behalf of the Company Rs. 26295.28 Lacs (brvious year Rs 39912.30 Lacs). (b) Letter of Credit o/s as on 31-03-15 Rs. 599.38 Lacs (Previous Year Rs.580.68 Lacs ) (c) VAT Liability against Housing Project at Guwahati is estimated to be approx. Rs. 47.87 lacs (Previous Year - Rs. 47.87 Lacs). (d) Income Tax Demand (including interest) of Rs. 515.83 Lacs (Previous Year-515.83 Lacs ) under section 153A/143(3) of Income Tax Act,1961 as the same is under appeal with I.T Authorities. However the I.T Deptt. Has recovered Rs 513.62 Lacs against outstanding refunds shown under " Advance Income Tax & TDS (Net of Provision for income tax )" under Note No. 16 (e) Service Tax demand of Rs. 1488.42 Lacs (Previous Year-Rs.1488.42 Lacs) for F.Y.2005-06 to F.Y. 2010-11 and penalty of Rs.173.24 Lacs ( Previous Year-173.24 Lacs). However the Deptt. Has recovered Rs 300 Lacs which is shown under " Indirect Tax Balances / recoverable / Credits" under Note No. 16 (f) VAT/Entry Tax liability against Lucknow Airport Project is estimated to be Approx Rs.196.62 Lacs ( Previous Year -54.25 Lacs ) (g) Income Tax demand of Rs.0.70 Lacs (Previos Year - 0.70 Lacs ) for penalty of U/s.271(1b) (h) Income Tax demand for penalty U/s 272 (A)(2)(k) of Rs.3.50 Lacs ( Previous Year - 3.50 Lacs ) (i) Penalty for Non Submission of C Form under Lucknow Airport Project - Rs 72.69 Lacs (Previous Year - NIL) 2 (a) The Balance of Security Deposit/ Retention Money, Earnest Money, Withheld Money, Trade Receivables, Loans & Advances and Trade payables are subject to their confirmation. (b) Rs. 7,04,34,973/- (Previous Year - Rs. 6,71,59,938/-) recoverable from DDA against Service tax against which Petition have been filed in High Court of Delhi and the same is pending. In the opinion of the Management, the same is considered good and will be recovered in due course therefore no provision has been made in the books of accounts. (c) Trade payable and Trade Receivables are shown net off business advances. 3 Receipts from Civil Contracts / Projects and bill raised but unsettled are inclusive of VAT and / or Service Tax wherever applicable. 4 During the year, the Company was associated in the following Joint Ventures: C. OTHER DISCLOUSERS 1 Contingent Liabilities not provided for : (a) Guarantees given by banks towards performance, financial and contractual commitments (Net of FDR) on behalf of the Company Rs. 26295.28 Lacs (brvious year Rs 39912.30 Lacs). (b) Letter of Credit o/s as on 31-03-15 Rs. 599.38 Lacs (Previous Year Rs.580.68 Lacs ) (c) VAT Liability against Housing Project at Guwahati is estimated to be approx. Rs. 47.87 lacs (Previous Year - Rs. 47.87 Lacs). (d) Income Tax Demand (including interest) of Rs. 515.83 Lacs (Previous Year-515.83 Lacs ) under section 153A/143(3) of Income Tax Act,1961 as the same is under appeal with I.T Authorities. However the I.T Deptt. Has recovered Rs 513.62 Lacs against outstanding refunds shown under " Advance Income Tax & TDS (Net of Provision for income tax )" under Note No. 16 (e) Service Tax demand of Rs. 1488.42 Lacs (Previous Year-Rs.1488.42 Lacs) for F.Y.2005-06 to F.Y. 2010-11 and penalty of Rs.173.24 Lacs ( Previous Year-173.24 Lacs). However the Deptt. Has recovered Rs 300 Lacs which is shown under " Indirect Tax Balances / recoverable / Credits" under Note No. 16 (f) VAT/Entry Tax liability against Lucknow Airport Project is estimated to be Approx Rs.196.62 Lacs ( Previous Year -54.25 Lacs ) (g) Income Tax demand of Rs.0.70 Lacs (Previos Year - 0.70 Lacs ) for penalty of U/s.271(1b) (h) Income Tax demand for penalty U/s 272 (A)(2)(k) of Rs.3.50 Lacs ( Previous Year - 3.50 Lacs ) (i) Penalty for Non Submission of C Form under Lucknow Airport Project - Rs 72.69 Lacs (Previous Year - NIL) 2 (a) The Balance of Security Deposit/ Retention Money, Earnest Money, Withheld Money, Trade Receivables, Loans & Advances and Trade payables are subject to their confirmation. (b) Rs. 7,04,34,973/- (Previous Year - Rs. 6,71,59,938/-) recoverable from DDA against Service tax against which Petition have been filed in High Court of Delhi and the same is pending. In the opinion of the Management, the same is considered good and will be recovered in due course therefore no provision has been made in the books of accounts. (c) Trade payable and Trade Receivables are shown net off business advances. 3 Receipts from Civil Contracts / Projects and bill raised but unsettled are inclusive of VAT and / or Service Tax wherever applicable. 5 Previous year figures having been re-worked, regrouped rearranged and reclassified wherever necessary to make them comparable with current year figures 6 Accounting for Tax on Income: Current Tax is determined based on the provision of the Income Tax Act 1961 including treatment of Retention Money amount as contingent amount taxable in the year of its real accrual/ receivable based on real income theory. Deferred tax has been provided for all timing difference as required under the provisions of the Accounting Standard -22 issued by the Institute of Chartered Accountants of India. 9 In the opinion of the Directors, the Current Assets, Non Current Assets,Claim Receivables,Outstanding Arbitrational Claim,Loan & Advances (excluding retention money) have a value on realization in ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. 10 The company has not received information from vendors regarding their status under the Micro, Small and medium Enterprise Development Act,2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/ payable under this Act has not been given. 13 There is no impairment loss on fixed assets is recognized or reversed during the year pursuant to Accounting Standard (AS) 28. 15 Travelling & Conveyance includes Rs. 0.75 Lacs (Previous Year - Rs. NIL) incurred on Foreign Travelling of Directors & Others. In terms of our attached audit report of even date For A.B. BANSAL AND COMPANY CHARTERED ACCOUNTANTS Firm Regn. No. : 010538N A.B. BANSAL PARTNER M. No.84628 For and on behalf of Board of Directors Sanjeev Kumar Prithani (Joint Managing Director) Vivek Malhotra (Company Secretary) Pankaj Goyal (Rajesh Singh) (VP - Finance & Accounts) (Whole Time Director) Place : New Delhi Date : 30.05.2015 |