Notes forming part of the Financial Statements. Significant Accounting Policies 1. Basis of brparation The financial statements have been brpared in compliance with the Accounting Standards Notified by Companies (Accounting Standards) Rules,2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been brpared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are Consistent with those used in the brvious year. 2. Use of Estimates The brparation of financial statements in conformity with generally accepted accounting principles (GAAP) require the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period. The management believes that the estimates used in the brparation of financial statements are prudent and reasonable. However, future results may defer from these estimates and the differences between the actual results and the estimates are recognized in the period in which results are known/materialize . 3. Revenue Recognition Revenue is primarily derived from the fixed price contracts and recognized on the basis of completion of the project work and billing of the same to customers. 4. Fixed Assets Fixed assets are stated at cost of acquisition or construction. less accumulated debrciation. Cost comprises of the purchase price and other attributable expenses including cost of borrowings till the date of capitalization of the asset acquired / commissioned. All the expenditure incurred on establishing / setting up of new projects / substantial expansion of existing facilities / creation of new assets is capitalized. Such expenditure to be capitalized includes borrowing / finance costs, direct and indirect expenditure incurred on such assets up to the time they are completed. 5. Debrciation Debrciation on fixed assets has been provided on the written down value method and at the rates and in manner specified in Schedule xiv to the Companies Act, 1956. 6. Investments Long term investments are stated at cost. The diminution in the market value of such investments is not recognized unless it is considered permanent in nature. Current investments are valued at the cost or market value whichever is lower. 7. Accounting for Leases Rentals in respect of leased brmises are charged to profit and loss account. 8. Taxes on Income a. Current Tax Provision for current tax is made for the amount of tax payable in respect of taxable income for the year computed under the provision of the income Tax Act.1961. b. Deferred Tax Deferred tax is recognized on timing difference being the difference between taxable income and accounting income that originate in one period and are capable of being reversed in the subsequent period / s, subject to the consideration of prudence. 9. Provisions, Contingent Liabilities and Contingent Assets Provision involving substantial degree of estimation in measurement is recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are disclosed when the Company has possible obligation or a brsent obligation and it is probable that a cash outflow will not be required to settle the obligation. Contingent Assets are neither recognized nor disclosed in the financial statements. 10. Impairment The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/ external factors. An impairment loss will be recognized if the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of asset's net selling price and value in use. In assessing the value in use the estimated future economic benefits are discounted to the brsent value at the weighted average cost of capital. 12. Segment Reporting: The company is engaged in the business of construction and infrastructure works which all together is only one business segment and the segment reporting not applicable for the company. 15. There are no amounts due to small-scale industrial undertakings, to whom the company owes a sum which is outstanding for more than 30 days and hence the details in respect of outstanding dues to small-scale industrial undertakings are not furnished, as required as per the notification No.GSR 129(E) dated 22nd February 1999. 16. Previous year's figures have been reclassified/ regrouped wherever necessary to conform to the current years' classification. As per report of even date attached For HANUMAIAH & CO, CHARTERED ACCOUNTANTS ( Firm Reg No: 009021S) Sd/- K,HANUMAIAH Partner. Membership No:201719 For PVV INFRA LIMITED Sd/- Director Sd/- Director Place: Hyderabad Date: 13th May, 2015 |