NOTES FORMING PART of the financial statement 1. A. FINANCIAL STATEMENTS The financial statements have been brpared to comply in all the material aspects with Accounting Standards notified by Central Government under Section 129 of the Companies Act, 2013 rules made there under and the relevant provisions of the Companies Act, 2013. The financial statement has been brpared under historical cost convention on an accrual basis in accordance with Generally Accepted Accounting Principles (GAAP). The accounting policies have been consistently applied by the company except otherwise stated and are consistent with those used in brvious year. All the assets and liabilities have been classified as current and non current as per the Company's normal operating cycle and other criteria set out in Schedule III of the Companies Act, 2013.The normal operating cycle of the company has been considered as 12 months. B. USE OF ESTIMATES The brparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the balances of assets and liabilities and disclosures relating to contingent liabilities as at the Balance Sheet date and amounts of income and expenses during the year. Examples of such estimates include contract costs expected to be incurred to complete construction contracts, provision for doubtful debts, income taxes and future obligations under employee retirement benefit plans. Actual results could differ from those estimates. The effects of adjustment arising from revisions made to the estimates are included in the Statement of Profit and Loss in the year in which such revisions are made. C. REVENUE RECOGNITION a) Revenue from own construction projects are recognised on Percentage of completion method. Units for which agreement for sale is executed till reporting date are considered for it. Revenue recognition starts when 20% of estimated project cost excluding land and marketing cost is incurred and 30% of consideration is received from party. Further, units for which Deed of Conveyance is executed or possession is given, revenue is recognised to full extent. b) Revenue from Joint Venture Development Agreement under work sharing arrangements are recognised on the same basis as similar to own construction projects independently executed by the company to the extent of the company's share in joint venture. c) Revenue from Construction Contracts are recognised on "Percentage of Completion Method" measured by reference to the survey of works done up to the reporting date and certified by the client before finalisation of projects accounts. d) Real Estate: Sales is exclusive of service tax, if any, net of sales return. e) Revenue from services are recognised on rendering of services to customers except otherwise stated. f) Rental income from assets is recognised for an accrual basis except in case where ultimate collection is considered doubtful. g) Rental Income: Rental income is exclusive of service tax. h) Interest income is recognised on time proportion basis. Interest on delayed payment from customers is recognised when realised. D. FIXED ASSETS Fixed Assets, including those given on lease, are stated at cost less accumulated debrciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Software is capitalised, where it is expected to provide future enduring economic benefits. Leasehold land under perpetual lease is not amortised. Lease hold land other than on perpetual lease is being amortised on time proportion basis over their respective lease periods. E. DEbrCIATION AND AMORTISATION Debrciation is provided on debrciable value (cost minus residual value) using straight line method in the manner that the assets is debrciated over the useful life stated in "Schedule - 11" of companies Act, 2013. F. IMPAIRMENT OF ASSETS An asset is treated as impaired when the carrying cost of the same exceeds its recoverable amount. Impairment is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of the recoverable amount. G. INVESTMENTS All investments are bifurcated into Non Current Investments and Current Investments. Investments that are readily realisable and intended to be held for not more than a year from the date of Balance Sheet are classified as Current Investments. All other investments are classified as Non Current Investments. Current Investments are carried at lower of cost or fair market value, determined on an individual investment basis. Non Current Investments are carried at cost. Provision for Diminution in the value of Non Current Investments is made, only if such a diminution is other than temporary. H. INVENTORIES a) Finished Goods: At lower of cost or net realisable value. b) Work-in-Progress: At lower of cost or net realisable value. Cost comprises of cost of land and development, material cost including material lying at respective sites, construction expenses, finance and administrative expenses which contribute to bring the inventory to their brsent location and condition. Provision for obsolescence in inventories is made, wherever required. Work-in-progress- Real Estate projects (including land inventory): rebrsents cost incurred in respect of unsold area of the real estate development projects or costs incurred on projects where revenue is to be recognised. Work-in-progress-Contractual: rebrsents cost of work done yet to be certified / billed. I. CASH AND CASH EQUIVALENTS 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. J. FOREIGN CURRENCY TRANSACTION Transactions denominated in foreign currencies are recorded at the exchange rate brvailing at the date of transactions or that approximates the actual rate at the date of transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognised in the statement of profit and loss for the period. Transactions which remain unsettled at the reporting date and reported at rates brvailing as at reporting date and any exchange gain / loss is recognised in Statement of Profit and Loss. K. EMPLOYEE BENEFITS i) Short term employee benefits: Short term employee benefits such as salaries, wages, bonus, expected cost of ex-gratia etc. are recognised in the period in which the employee renders the related service. ii) Post-employment benefits a) Defined Contribution Plan: Employee benefits in the form of Employees State Insurance Corporation and Provident Fund are considered as defined contribution plan and the contributions are charged to the Statement of Profit and Loss for the period when the contributions to the respective funds are due. b) Defined Benefit Plan: Employee benefits in the form of Gratuity is considered as defined benefit plan and are provided for on the basis of an independent actuarial valuation, using the projected unit credit method, as at the Balance Sheet date as per requirements of Accounting Standard-15 (Revised 2005) on "Employee Benefits". iii) Actuarial gains/losses, if any, are immediately recognised in the Statement of Profit and Loss. L. BORROWING COSTS Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use or sale. Other borrowing costs are recognised as an expense in the year in which they are incurred. M. TAXATION a) Current Tax: Current tax is determined as the amount of tax payable in respect of taxable income for the year in accordance with the provisions of the Income Tax Act, 1961. Minimum Alternative Tax credit available under section 115JB of the Income Tax Act, 1961 will be accounted in the year in which the benefits are claimed. b) Deferred Tax: Deferred tax is recognised subject to consideration of prudence on the basis of timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. Deferred tax asset is recognised and carried forward only to the extent that there is reasonable certainty that the asset will be realised in future. N. PROVISIONS/CONIINGENCIES A provision is recognised for a brsent obligation as a result of past events if it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are determined based on best estimate of the amount required to settle the obligation as at the Balance Sheet date. Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent liability and are disclosed by way of note. 2. Segment Reporting:- The Business of the company fall under a single segment i.e. "Development of Real Estate & Infrastructure". In view of the general classification notified by Central Government in exercise of power conferred u/s 129 of Companies Act, 2013 for company operating in a single segment, the disclosure requirement as per AS - 17 on 'Segment Reporting' is not applicable to the company. The Company's business is mainly concentrated in similar geographical, political and economical conditions; hence disclosure for Geographical segment is also not required. 3. Interest on Short Term Borrowings included under the relevant loan, as it is deemed to have been converted into loan as and when credited as per terms. 4. Disclosure relating to Amalgamation as per AS-14 a) The scheme of amalgamation has taken place between Pincha Home Builders Private Limited (the Transferor Company) and RDB Realty & Infrastructure Ltd (the Transferee Company) both are dealing in construction activities. b) The Effective date of Amalgamation is 1st April, 2012. c) Pooling of interest method of accounting has been used to reflect the amalgamation. d) The scheme of amalgamation of Pincha Home Builders Private Limited (the Transferor Company) and RDB Realty & Infrastructure Ltd (the Transferee Company) has been approved by the Honourable High Court at Calcutta. Hence, the effect of amalgamation has been incorporated in the books of accounts. e) 64,83,400 Nos. of Equity Shares issued against 29,47,000 Nos. of Equity Shares of Pincha Home Builders Private Limited in the ration 1:2.2. f) Net Assets Aquired amounted Rs. 15,28,18,275/ 5. Contingent Liabilities:- a) On account of Guarantee Rs. 1475.59 lacs (Previous Year Rs. 2306.25 lacs) issued by the company's bankers to the Contractee for projects under EPC Division. b) During the year under review, demand has been raised by Income Tax Department for Rs.277.94 Lacs against company for the Asst Year 11 - 12 and 12 - 13 for which appeal have been filed with Commissioner (Appeal) of Income Tax. 6. During the year under review, HSCC Limited (contractor) a government of India undertaking has revoked contract for construction of hostel and O.P.D under the control of Regional Institute of Medical Science at Imphal consequent to such revocation the contractor has revoked the Bank Guarantee issued in favour of contractor amounting to Rs. 557.75 lacs. The contract was executed by a sub-contractor, as per the terms of contract with RDBRIL, the sub-contractor is liable to bear any damages/loss/expenses suffered by RDBRIL. Hence, no provision has been made for the same. 7. During the year under review, the company has changed the method of providing debrciation on fixed assets from W.D.V. to S.L.M., persuant to the change, debrciation the current year is short by Rs. 22.09 Lacs. Further debrciation up to 31.03.14 has been charged in excess by Rs. 153 Lacs. The Company has adopted useful lives of the fixed assets as those specified in Part "C" of Schedule II to the Companies Act, 2013 ("the Act"). Accordingly carrying amount of assets, for which the useful lives as per the revised estimate are exhausted as of 1st April, 2014 have been adjusted with the opening balance retained earning as on that date after retaining the residual value of those assets. For the other assets, the carrying amount as of 1st April, 2014 will be amortised over the remaining useful lives of the assets. Rs. 4.22 Lacs has been adjusted with the opening retained earning as of 1st April' 2014. The figures of Previous Year have been recast, regrouped wherever considered necessary. For S. M. DAGA & CO. Chartered Accountants Firm Regd. No. 303119E DEEPAK KUMAR DAGA Partner Membership No. 059205 For and on behalf of the Board Sri Sunder Lal Dugar Chairman and Managing Director Pradeep Kumar Pugalia Whole Time Director Anil Kumar Apat Company Secretary & Compliance Officer Deepika Sethia Chief Financial Officer Kolkata 28th Day of May 2015 |