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Accounting Policies of Nila Infrastructures Ltd. Company
Mar 31, 2025
1. Corporate Information
NiLa Infrastructures Limited is a Company based in Ahmedabad, Gujarat with its Registered Office situated at 1st Floor, Sambhav House, Opp. Chief Justice Bungalow, Bodakdev, Ahmedabad - 380015. Nila Infrastructures Limited is a public company incorporated on 26th February, 1990 and listed on BSE (Bombay Stock Exchange of India Limited) and NSE (National Stock Exchange of India Limited). The Company is involved in the construction as well as development of infrastructures projects.
2. Basis of preparation and measurement2.1. Statement of compliance
These standalone financial statements have been prepared in accordance with Indian Accounting Standards (âInd ASâ) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (the âActâ) and other relevant provisions of the Act.
The standalone financial statements for the year ended 31 March 2025 have been reviewed by audit committee and subsequently approved by Board of Directors at its meetings held on 03 May 2025.
Details of the Companyâs material accounting policies are included in note 3.
2.2. Functional and presentation currency
These standalone financial statements are presented in Indian Rupees (?), which is also the Companyâs functional currency. ALL the amounts have been rounded-off to the nearest Lakhs, unless otherwise stated.
The standalone financial statements have been prepared on the historical cost basis except for the following items:
|
Items |
Measurement basis |
|
Net defined benefit pLans |
Fair vaLue of pLan assets Less present vaLue of defined benefit obLigation using key actuariaL assumptions |
|
Land and transferable development |
Fair value of land and transferable development rights using |
|
rights ReceivabLes (UnbiLLed) |
appLicabLe market inputs |
|
Debt mutual fund investments |
Fair vaLue based on net asset vaLue (NAV) as pubLished by the asset management company, cLassified as fair vaLue through profit or Loss (FVTPL) |
2.4. Use of estimates and judgements
In preparing this standalone financial statement, management has made judgements, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, Liabilities, income and expenses. ActuaL results may differ from these estimates.
Estimates and assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognized prospectively.
Basis of preparation and measurement (Continued)
Information about critical judgements in applying accounting policies, as well as estimates and the assumptions that have most significant effect to the carrying amounts of assets and LiabiLities within the next financiaL year, are incLuded in the foLLowing notes:
Note 3(g) - Evaluation of percentage completion for the purpose of revenue recognition
Note 3(d) - Identification of the building & furniture & fixtures as an investment property
Note 3(b) - Useful life used for the purpose of depreciation on property, plant and equipment and investment properties and amortisation of intangible assets Note 3 (e),(i) - Impairment of financial and non-financial assets Note 3 (q) - Lease classification
Note 3 (f) - Recognition and measurement of defined benefit obligations, key actuarial assumptions Note 3 (i) - Fair value measurement of financial instruments
Note 3 (j) - Current / deferred tax expense and recognition and evaluation of recoverability of deferred
tax assets
Note 3(l) - Provisions and contingencies
2.5. Measurement of fair values
The Companyâs accounting policies and disclosures requires the measurement of fair values for financial instruments.
The Company has established control framework with respect to the measurement of fair values. The management regularly reviews significant unobservable inputs and valuation adjustments.
Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entity in the same level of fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognizes transfers between the levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in the following notes: Note 5 - Investment property Note 39 - Financial instruments
3. Material accounting policiesa) Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in Schedule III of the Companies Act, 2013. Operating cycle for project related assets and liabilities is the time start of the project to their realization in cash or cash equivalents. Operating cycle for all other assets and liabilities has been considered as twelve months.
b) Property, plant and equipment Recognition and measurement
Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, including non-refundabLe purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognized in Statement of Profit and Loss.
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Depreciation is being provided as per the âStraight Line Methodâ over the estimated useful lives of the assets as prescribed under Part C of Schedule II to the Companies Act, 2013. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use of disposal. The consequential gain or loss is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss.
c) Intangible assets and amortisation
Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises of its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use.
Subsequent expenditure is capitalized only when it increases the future economic benefits associated with the expenditure will flow to the Company. All other expenditure is recognized in the Statement of Profit and Loss as incurred
Intangible assets are amortized on a straight - line basis (pro-rata from the date of additions) over estimated useful life up to five years.
The carrying amount of an intangible asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from derecognition of intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of intangible assets and is recognized in the Statement of Profit and Loss.
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes.
Upon initial recognition, an investment property is measured at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.
Depreciation is being provided on a pro-rata basis on the âStraight Line Methodâ over the estimated useful lives of the assets as prescribed under Part C of Schedule II to the Companies Act, 2013. The residual values, useful lives and methods of depreciation of investment properties equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
The fair values of investment property is disclosed in the notes. Fair value is determined by an independent valuer who holds a recognized and relevant professional qualification and has recent experience in the location and category of the investment property being valued.
Any gain or loss on disposal of an investment property is recognized in Statement of Profit and Loss.
e) Impairment of non-financial assets
Non-financial assets of the Company, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognized in the Statement of Profit and Loss. Impairment loss recognized in respect of a CGU is allocated to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.
f) Employee benefitsShort term employee benefits
Short term employee benefit obligations are measured on an undiscounted expenses and are expensed as the related services are provided. A liability is recognized for the amount expected to be paid, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no Legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards government administered schemes. Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in the Statement of Profit and Loss in the periods during which the services are rendered by the employees.
A defined benefit plan is a post-employment benefit plan other than defined contribution plan. The Companyâs net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligations is performed periodically by an independent qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income (OCI). Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in Statement of Profit and Loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in Statement of Profit and Loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Other long-term employee benefits
The Companyâs net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefits that employees have earned in return for their service in the current and prior periods; that benefits is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual independent actuarial valuation using the projected unit credit method
Remeasurement gains or losses are recognized in the Statement of Profit and Loss in the period in which they arise.
g) Revenue recognition(i) Construction and infrastructure contracts
Performance obligations with reference to construction and infrastructure contracts are satisfied over the period of time, and accordingly, revenue from such contracts is recognized based on progress of performance determined using input method with reference to the cost incurred on contract and their estimated total contact costs. Revenue is adjusted towards liquidated damages, time value of money and price variations/escalation, wherever, applicable. Variation in contract work and other claims are included when it is highly probable that significant reversal will not occur and it can be measured reliably and it is agreed with customers.
Estimates of revenue and costs are reviewed periodically and revised, wherever circumstances change, resulting increases or decreases in revenue determination, is recognized in the period in which estimates are revised.
The Company evaluates whether each contract includes a single performance obligation or multiple performance obligations. Where the Company enters into multiple contracts with the same customer (or its related parties), such contracts are assessed for combination as a single contract in accordance with Ind AS 115, based on the following criteria:
⢠The contracts are negotiated as a package with a single commercial objective;
⢠The amount of consideration to be paid in one contract depends on the price or performance of the other contract; or
⢠The goods or services promised in the contracts (or some goods or services promised in each of the contracts) represent a single performance obligation.
Where any of the above conditions are met, the Company combines such contracts and accounts for them as a single contract to ensure accurate recognition of revenue and performance obligations.
(ii) Land and transferrable development rights
Billed revenue from contracts for sale of land and transferrable development rights is recognised at a point in time when control is transferred to the customer and it is probable that consideration will be collected. This is usually deemed to be legal completion as this is the point at which the Company has an enforceable right to payment. Revenue from sale of land and transferrable development rights is measured at the transaction price specified in the contract with the customer.
Contract balancesContract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer e.g. unbilled revenue. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset i.e. unbilled revenue is recognised for the earned consideration that is conditional.
A receivable represents the Companyâs right to an amount of consideration that is unconditional i.e. only the passage of time is required before payment of consideration is due.
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. Contract liabilities are recognised as revenue when the Company performs under the contract.
Lease income from operating leases shall be recognised in income on a straight line basis over the lease term, unless another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished. Income from leasing of commercial complex is recognised on an accrual basis in accordance with lease agreements. Refer note 3(q) for accounting policy on leases.
Interest income from financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected Life of the financial asset to the assetâs net carrying amount on initial recognition.
Dividend income is recognized when the right to receive the same is established it is probable that the economic benefits associated with the dividend will flow to the Company and amount can be measured reliably.
Share in profit / loss of Limited liability partnership (LLP). The Company''s share in profits / losses from LLP, where the Company is a partner, is recognised as income / loss in the statement of profit and loss as and when the right to receive its profit / loss share is established by the Company in accordance with the terms of contract between the Company and the partnership entity. Share in profit / loss is recorded under Partners Current Account.
i) Financial instrument Financial assets Classification
The Company classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit and loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
Initial recognition and measurement
On initial recognition, a financial asset is recognized at fair value, in case of financial assets which are recognized at fair value through the Statement of Profit and Loss (FVTPL), its transaction cost are recognized in the Statement of Profit and Loss. In other case, the transaction costs are attributed to the acquisition value of the financial asset.
Subsequent measurement and gains and losses
Financial assets are subsequently classified as measured at
⢠Financial assets at amortized cost: These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment is recognized in the Statement of Profit and Loss. Any gain or loss on derecognition is recognized in the Statement of Profit and Loss.
⢠Fair value through profit and loss (FVTPL): These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in the Statement of Profit and Loss.
⢠Fair value through other comprehensive income (FVOCI): These assets are subsequently measured at fair value. Dividends are recognized as income in the Statement of Profit and Loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains or losses are recognized in OCI and are not reclassified to the Statement of Profit and Loss.
Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company changes its business model for managing financial assets.
Trade receivables and Loans are initially recognized at fair value when they are originated. Subsequently, these assets are held at amortized cost, using the effective interest rate (EIR) method net of any expected credit Losses. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.
All investments in equity instruments classified under financial assets are initially measured at fair vaLue, the Company may, on initiaL recognition, irrevocabLy eLect to measure the same either at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument is recognized as other income in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured at FVOCI are recognized in OCI.
Amounts recognized in OCI are not subsequently reclassified to the Statement of Profit and Loss. Dividend income on the investments in equity instruments are recognized as âother incomeâ in the Statement of Profit and Loss.
A financial asset (or, where applicable, a part of the financial asset) is primarily derecognized when:
a) The right to receive cash flows from the asset have expired; or
b) The Company has transferred substantially all the risks and rewards of the asset; or
c) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred controL of the asset.
Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financials assets in FVTPL category. For financial assets other than trade receivables, as per Ind AS 109, the Company recognizes 12 month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. The Company''s trade receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall. The impairment losses and reversals are recognized in Statement of Profit and Loss.
Financial liabilitiesInitial recognition and measurement
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortized cost unless at initial recognition, they are classified as fair value through profit and loss. In case of trade payables, they are initially recognized at fair value and subsequently, these liabilities are held at amortized cost, using the effective interest method.
Financial liabilities are subsequently measured at amortized cost using the EIR method. Financial liabilities carried at fair value through Statement of Profit and Loss are measured at fair value with all changes in fair value recognized in the Statement of Profit and Loss.
A financial Liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet date if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle them on net basis or to realize the assets and settle the Liabilities simultaneously.
Income tax comprises of current and deferred tax. It is recognized in the Statement of Profit and Loss except to the extent that it is relates to an item recognized directly in equity or in OCI.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes.
It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date. Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognized amounts, and it is intended to realize the asset and settle the liability on a net basis or simultaneously.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognized in respect of carried forward tax losses and tax credits. Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which they can be used.
Inventory comprises of land, project inventories and work in progress in case of construction and development of infrastructure projects. Inventories comprising of land is valued at lower of cost or net realizable value. Cost includes cost of land, borrowing cost and other related overhead as the case may be.
Inventories of project materials are valued at cost or net realizable value whichever is less. Cost is arrived at on weighted average method (WAM) basis.
Work-in-progressConstruction and development of Infrastructure project:
Cost incurred for the contract that relate to future activity of the contract, such contract cost are recognized as an asset provided it is probable that they will be recovered. Such costs represent an amount due from the customer and are often classified as Contract work in progress which is valued at cost or net realizable value whichever is less.
l) Provisions and contingencies
A provision is recognized if, as a result of past events, the Company has a present Legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax that reflects current market assessments of the time value of money and the risks specific to the liability.
The unwinding of the discount is recognized as finance cost. Expected future operating losses are not provided for Contingent liabilities are disclosed in the Notes to the Standalone Financial Statements. Contingent liabilities are disclosed for:
i. Possible obligations which will be confirmed only by future events not wholly within the control of the Company, or
ii. Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings to the extent they are regarded as an adjustment to the interest cost. Investment income earned on temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized, if any. All other borrowing costs are expensed in the period in which they occur.
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company. For the disclosure on reportable segments see Note 35.
Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the original maturity is three months or less and other short term highly liquid.
p) Investments in subsidiaries, joint venture and associates
The Company has elected to recognise its investments in subsidiary and associate and joint venture companies at cost in accordance with the option available in Ind AS 27, Separate Financial Statements.
Ind AS 116 Leases introduces single accounting model and requires a lessee to recognise assets and liabilities for all leases subject to recognition exemptions. The Company adopted Ind AS 116 Leases using modified retrospective approach and practical expedients.
At the inception of a contract, the Company assesses whether a contract is or contains, a Lease. A contract is, or contains a Lease if the contract conveys the right to controL the use of an identified asset for a period of time in exchange of consideration. To assess whether a contract conveys the right to control the use of an asset the Company assesses whether:
- The contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should be physically distinct or represent substantially aLL of the capability of a physical distinct asset. If the supplier has a substantive substitution right, then the asset is not identified.
- The Company has the right to obtain substantially aLL of the economic benefits from use of the asset throughout the period of use; and
- The Company has the right to direct the use of the asset. The Company has this right when it has the decision making rights that are most relevant to changing how and for what purpose the asset is used.
The Company recognises a right-of-use asset and a Lease Liability at the Lease commencement date. At the commencement date, a Lessee shaLL measure the right-of-use asset at cost which comprises initiaL measurement of the Lease LiabiLity, any Lease payments made at or before the commencement date, Less any Lease incentives received, any initiaL direct costs incurred by the Lessee; and an estimate of costs to be incurred by the Lessee in dismantLing and removing the underLying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.
At the commencement date, a Lessee shaLL measure the Lease LiabiLity at the present vaLue of the Lease payments that are not paid at that date. The Lease payments shaLL be discounted using the interest rate impLicit in the Lease, if that rate can be readiLy determined. If that rate cannot be readiLy determined, the Lessee shaLL use the Lesseeâs incrementaL borrowing rate.
Short-term lease and leases of low-value assets
The Company has eLected not to recognise right-of-use assets and Lease LiabiLities for short- term Leases that have a Lease term of Less than 12 months or Less and Leases of Low-vaLue assets, incLuding IT Equipment. The Company recognises the lease payments associated with these leases as an expense on a straight-Line basis over the Lease term.
The eLection for short-term Leases shaLL be made by cLass of underLying asset to which the right of use reLates. A cLass of underLying asset is a grouping of underLying assets of a simiLar nature and use in Companyâs operations. The eLection for Leases for which the underLying asset is of Low vaLue can be made on a Lease-by-Lease basis.
Basic earnings per share is computed by dividing the net profit for the year attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for events such as bonus shares, other than conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
s) Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates as at the date of transaction or at an average rate if the average rate approximates the actual rate at the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of transaction. Exchange differences are recognized in the Statement of Profit and Loss.
t) Recent accounting pronouncement
The Ministry of Corporate Affairs (MCA) notifies new standards | amendments to the existing standards under the Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended on March 31, 2025, the MCA has notified Ind AS 117 Insurance Contracts and amendments to Ind AS 116 Leases, related to sale and leaseback transactions, applicable to the Company effective from April 01, 2024. The Company has evaluated the new pronouncements | amendments and there is no material impact on its Financial Statements.
New and revised Ind ASs in issue but not yet effective:
The Ministry of Corporate Affairs (MCA) notifies new standards or amendments to the existing standards. There is no such notification which will be applicable from April 01, 2025.
Mar 31, 2024
1. Corporate Information
NiLa Infrastructures Limited is a Company based in Ahmedabad, Gujarat with its Registered Office situated at 1st FLoor, Sambhav House, Opp. Chief Justice BungaLow, Bodakdev, Ahmedabad - 380015. NiLa Infrastructures Limited is a pubLic company incorporated on 26th February, 1990 and Listed on BSE (Bombay Stock Exchange of India Limited) and NSE (NationaL Stock Exchange of India Limited). The Company is invoLved in the construction as well as development of infrastructures projects. .
2. Basis of preparation and measurement2.1. Statement of compliance
These standaLone financiaL statements have been prepared in accordance with Indian Accounting Standards (âInd ASâ) as per the Companies (Indian Accounting Standards) RuLes, 2015 notified under Section 133 of the Companies Act, 2013 (the âActâ) and other relevant provisions of the Act.
The standaLone financiaL statements for the year ended 31 March 2024 have been reviewed by audit committee and subsequentLy approved by Board of Directors at its meetings heLd on 04 May 2024.
Details of the Companyâs material accounting policies are included in note 3.
2.2. Functional and presentation currency
These standaLone financiaL statements are presented in Indian Rupees (?), which is aLso the Companyâs functionaL currency. ALL the amounts have been rounded-off to the nearest Lakhs, unLess otherwise stated.
The standaLone financiaL statements have been prepared on the historicaL cost basis except for the foLLowing items:
|
Items |
Measurement basis |
|
Net defined benefit plans |
Fair value of plan assets Less present value of defined benefit obligation using key actuarial assumptions |
|
Land and transferable development rights Receivables |
Fair value of Land and transferable development rights using applicable market inputs |
2.4. Use of estimates and judgements
In preparing this standaLone financiaL statement, management has made judgements, estimates, and assumptions that affect the appLication of accounting poLicies and the reported amounts of assets, LiabiLities, income and expenses. ActuaL results may differ from these estimates.
Estimates and assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognized prospectively.
Information about critical judgements in applying accounting policies, as well as estimates and the assumptions that have most significant effect to the carrying amounts of assets and Liabilities within the next financial year, are included in the following notes:
Basis of preparation and measurement (Continued)
Note 3(g) - Evaluation of percentage completion for the purpose of revenue recognition
Note 3(d) - Identification of the building & furniture & fixtures as an investment property
Note 3(b) - Useful life used for the purpose of depreciation on property, plant and equipment and
investment properties and amortisation of intangible assets Note 3(e),(i) - Impairment of financial and non-financial assets
Note 3 (q) - Lease classification
Note 3 (f) - Recognition and measurement of defined benefit obLigations, key actuarial assumptions Note 3 (i) - Fair vaLue measurement of financial instruments
Note 3 (j) - Current / deferred tax expense and recognition and evaluation of recoverability of deferred tax assets
Note 3(l) - Provisions and contingencies
2.5. Measurement of fair values
The Companyâs accounting policies and disclosures requires the measurement of fair values for financial instruments.
The Company has estabLished control framework with respect to the measurement of fair values. The management reguLarLy reviews significant unobservable inputs and valuation adjustments.
Fair values are categorized into different LeveLs in a fair vaLue hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets and Liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or Liability that are not based on observable market data (unobservable inputs).
When measuring the fair vaLue of an asset or Liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair vaLue of an asset or a Liability faLL into different LeveLs of the fair value hierarchy, then the fair value measurement is categorized in its entity in the same level of fair value hierarchy as the Lowest LeveL input that is significant to the entire measurement.
The Company recognizes transfers between the levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair vaLues is included in the foLLowing notes:
Note 5 - Investment property Note 38 - FinanciaL instruments
3. Material accounting policiesa) Operating Cycle
ALL assets and LiabiLities have been classified as current or non-current as per the Companyâs normaL operating cycLe and other criteria set out in Schedule Ill of the Companies Act, 2013. Operating cycLe for project related assets and liabilities is the time start of the project to their realization in cash or cash equivaLents. Operating cycLe for aLL other assets and LiabiLities has been considered as tweLve months.
b) Property, plant and equipment Recognition and measurement
Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, including non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use.
If significant parts of an item of property, pLant and equipment have different usefuL Lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or Loss on disposal of an item of property, plant and equipment is recognized in Statement of Profit and Loss.
Subsequent expenditure is capitaLized onLy if it is probabLe that the future economic benefits associated with the expenditure wiLL flow to the Company.
Depreciation is being provided on a pro-rata basis on the âStraight Line Methodâ over the estimated useful lives of the assets as prescribed under Part C of Schedule II to the Companies Act, 2013. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financiaL year end and adjusted prospectiveLy, if appropriate. Advances given towards acquisition of property, pLant and equipment outstanding at each BaLance Sheet date are discLosed as other noncurrent assets.
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use of disposaL. The consequentiaL gain or Loss is measured as the difference between the net disposaL proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss.
c) Intangible assets and amortisation
Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises of its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use.
Subsequent Expenditure
Subsequent expenditure is capitaLized onLy when it increases the future economic benefits associated with the expenditure wiLL flow to the Company. ALL other expenditure is recognized in the Statement of Profit and Loss as incurred
Amortisation
Intangible assets are amortized on a straight - line basis (pro-rata from the date of additions) over estimated usefuL Life up to five years.
The carrying amount of an intangible asset is derecognized on disposal or when no future economic benefits are expected from its use or disposaL. The gain or Loss arising from derecognition of intangibLe assets are measured as the difference between the net disposaL proceeds and the carrying amount of intangibLe assets and is recognized in the Statement of Profit and Loss.
d) Investment Property
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes.
Upon initial recognition, an investment property is measured at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.
Depreciation is being provided on a pro-rata basis on the âStraight Line Methodâ over the estimated useful lives of the assets as prescribed under Part C of Schedule II to the Companies Act, 2013. The residual values, useful lives and methods of depreciation of investment properties equipment are reviewed at each financiaL year end and adjusted prospectiveLy, if appropriate.
The fair vaLues of investment property is discLosed in the notes. Fair vaLue is determined by an independent vaLuer who hoLds a recognized and reLevant professionaL quaLification and has recent experience in the location and category of the investment property being valued.
Any gain or Loss on disposaL of an investment property is recognized in Statement of Profit and Loss.
e) Impairment of non-financial assets
Non-financiaL assets of the Company, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smaLLest group of assets that generates cash inflows that are LargeLy independent of the cash inflows of other assets or CGUs.
Non-financiaL assets of the Company, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smaLLest group of assets that generates cash inflows that are LargeLy independent of the cash inflows of other assets or CGUs.
f) Employee benefitsShort term employee benefits
Short term empLoyee benefit obLigations are measured on an undiscounted expenses and are expensed as the related services are provided. A liability is recognized for the amount expected to be paid, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
A defined contribution pLan is a post-empLoyment benefit pLan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthLy contributions towards government administered schemes. ObLigations for contributions to defined contribution pLans are recognized as an empLoyee benefit expense in the Statement of Profit and Loss in the periods during which the services are rendered by the employees.
A defined benefit pLan Is a post-empLoyment benefit pLan other than defined contribution pLan. The Companyâs net obLigation in respect of defined benefit pLans Is caLcuLated separateLy for each pLan by estimating the amount of future benefit that empLoyees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The caLcuLation of defined benefit obLigations Is performed periodicaLLy by an independent quaLified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset Is Limited to the present vaLue of economic benefits avaiLabLe in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present vaLue of economic benefits, consideration Is given to any appLicabLe minimum funding requirements.
Remeasurement of the net defined benefit LiabiLity, which comprise actuariaL gains and Losses and the return on pLan assets (excLudlng interest) and the effect of the asset ceiLing (if any, excLuding interest), are recognized immedlateLy in other comprehensive income (OCI). Net interest expense (income) on the net defined LiabiLity (assets) Is computed by appLying the discount rate, used to measure the net defined Liability (asset). Net interest expense and other expenses reLated to defined benefit pLans are recognized in Statement of Profit and Loss.
Whenthebenefits ofa planarechanged orwhenaplanis curtalled,the resulting change i n benefitthat relatesto past service or the gain or Loss on curtailment Is recognized immediately in Statement of Profit and Loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Other long-term employee benefits
The Companyâs net obligation in respect of long-term employee benefits other than post-employment benefits Is the amount of future benefits that employees have earned in return for their service in the current and prior periods; that benefits Is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual independent actuarial valuation using the projected unit credit method
Remeasurement gains or losses are recognized in the Statement of Profit and Loss in the period in which they arise.
g) Revenue recognition(i) Construction and infrastructure contracts
Performance obligations with reference to construction and infrastructure contracts are satisfied over the period of time, and accordingly, revenue from such contracts is recognized based on progress of performance determined using input method with reference to the cost incurred on contract and their estimated total contact costs. Revenue is adjusted towards liquidated damages, time value of money and price variations/escalation, wherever, applicable. Variation in contract work and other claims are included when it Is highly probable that significant reversal will not occur and it can be measured reliably and it is agreed with customers.
Estimates of revenue and costs are reviewed periodically and revised, wherever circumstances change, resulting increases or decreases in revenue determination, is recognized in the period in which estimates are revised.
The Company evaluates whether each contract consists of a single performance obligation or multiple performance obligations. Where the Company enters into multiple contracts with the same customer, the Company evaluates whether the contract is to be combined or not by evaluating various factors as prescribed in the standard.
(ii) Land and transferable development rights
Revenue from contracts for sale of Land and transferable development rights is recognised at a point in time when control is transferred to the customer and it is probable that consideration will be collected. This is usually deemed to be legal completion as this is the point at which the Company has an enforceable right to payment. Revenue from sale of land and transferrable development rights is measured at the transaction price specified in the contract with the customer.
Contract balancesContract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer e.g. unbilled revenue. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset i.e. unbilled revenue is recognised for the earned consideration that is conditional.
Trade receivables
A receivable represents the Companyâs right to an amount of consideration that is unconditional i.e. only the passage of time is required before payment of consideration is due.
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. Contract liabilities are recognised as revenue when the Company performs under the contract.
Lease income from operating leases shall be recognised in income on a straight line basis over the lease term, unless another systematic basis is more representative of the time pattern in which use benefit derived from the Leased asset is diminished. Income from Leasing of commerciaL compLex is recognised on an accrual basis in accordance with lease agreements. Refer note 3(q) for accounting policy on leases.
h) Other income
Interest income from financiaL asset is recognised when it is probabLe that the economic benefits wiLL flow to the Company and the amount of income can be measured reLiabLy. Interest income is accrued on a time basis, by reference to the principaL outstanding and at the effective interest rate appLicabLe, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financiaL asset to the assetâs net carrying amount on initiaL recognition.
Dividend income and share of profit in LLP is recognized when the right to receive the same is estabLished, it is probabLe that the economic benefits associated with the dividend wiLL flow to the Company and amount can be measured reliably.
i) Financial instrument Financial assets Classification
The Company cLassifies financiaL assets as subsequentLy measured at amortized cost, fair vaLue through other comprehensive income or fair vaLue through profit and Loss on the basis of its business modeL for managing the financiaL assets and the contractuaL cash flow characteristics of the financiaL assets.
On initial recognition, a financiaL asset is recognized at fair vaLue, in case of financial assets which are recognized at fair vaLue through the Statement of Profit and Loss (FVTPL), its transaction cost are recognized in the Statement of Profit and Loss. In other case, the transaction costs are attributed to the acquisition vaLue of the financial asset.
Subsequent measurement and gains and losses
FinanciaL assets are subsequentLy classified as measured at
⢠Financial assets at amortized cost: These assets are subsequently measured at amortized cost
using the effective interest method. The amortized cost is reduced by impairment Losses. Interest
income, foreign exchange gains and Losses and impairment is recognized in the Statement of Profit and Loss. Any gain or Loss on derecognition is recognized in the Statement of Profit and Loss.
⢠Fair value through profit and loss (FVTPL): These assets are subsequently measured at fair value.
Net gains and losses, including any interest or dividend income, are recognized in the Statement of Profit and Loss.
⢠Fair value through other comprehensive income (FVOCI): These assets are subsequently measured at fair vaLue. Dividends are recognized as income in the Statement of Profit and Loss unLess the dividend cLearLy represents a recovery of part of the cost of the investment. Other net gains or Losses are recognized in OCI and are not recLassified to the Statement of Profit and Loss.
FinanciaL assets are not recLassified subsequent to their recognition, except if and in the period the Company changes its business modeL for managing financiaL assets.
Trade receivables and loans
Trade receivables and loans are initially recognized at fair value when they are originated. Subsequently, these assets are heLd at amortized cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected Life of financiaL instrument.
Equity instrument
ALL investments in equity instruments cLassified under financiaL assets are initially measured at fair ALL investments in equity instruments classified under financial assets are initially measured at fair value, the Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument is recognized as other income in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured at FVOCI are recognized in OCI.
Amounts recognized in OCI are not subsequently reclassified to the Statement of Profit and Loss. Dividend income on the investments in equity instruments are recognized as âother incomeâ in the Statement of Profit and Loss.
Derecognition
A financial asset (or, where applicable, a part of the financial asset) is primarily derecognized when:
a) The right to receive cash flows from the asset have expired; or
b) The Company has transferred substantially all the risks and rewards of the asset; or
c) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Expected credit Losses are recognized for aLL financiaL assets subsequent to initiaL recognition other than financiaLs assets in FVTPL category. For financiaL assets other than trade receivabLes, as per Ind AS 109, the Company recognizes 12 month expected credit Losses for aLL originated or acquired financiaL assets if at the reporting date the credit risk of the financiaL asset has not increased significantLy since its initiaL recognition. The expected credit Losses are measured as Lifetime expected credit Losses if the credit risk on financiaL asset increases significantLy since its initiaL recognition. The Company''s trade receivabLes do not contain significant financing component and Loss aLLowance on trade receivabLes is measured at an amount equal to Life time expected Losses i.e. expected cash shortfall. The impairment Losses and reversaLs are recognized in Statement of Profit and Loss.
Financial liabilitiesInitial recognition and measurement
FinanciaL LiabiLities are recognized when the Company becomes a party to the contractuaL provisions of the instrument. FinanciaL LiabiLities are initially measured at the amortized cost unLess at initiaL recognition, they are classified as fair value through profit and Loss. In case of trade payables, they are initially recognized at fair value and subsequently, these liabilities are held at amortized cost, using the effective interest method.
Financial LiabiLities are subsequently measured at amortized cost using the EIR method. Financial LiabiLities carried at fair value through Statement of Profit and Loss are measured at fair value with all changes in fair value recognized in the Statement of Profit and Loss.
A financial Liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires.
Offsetting of financial instruments
Financial assets and financial LiabiLities are offset and the net amount is reported in the balance sheet date if there is a currently enforceable Legal right to offset the recognized amounts and there is an intention to settle them on net basis or to realize the assets and settle the liabilities simultaneously.
Income tax comprises of current and deferred tax. It is recognized in the Statement of Profit and Loss except to the extent that it is relates to an item recognized directly in equity or in OCI.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes.
It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date. Current tax assets and current tax LiabiLities are offset only if there is a Legally enforceable right to set off the recognized amounts, and it is intended to realize the asset and settle the Liability on a net basis or simultaneously.
Deferred tax Is recognized in respect of temporary differences between the carrying amounts of assets and LiabiLities for financiaL reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognized in respect of carried forward tax Losses and tax credits. Deferred tax assets are recognized to the extent that it Is probabLe that future taxabLe profits wiLL be avaiLabLe against which they can be used.
Inventory comprises of Land, project inventories and work in progress in case of construction and deveLopment of infrastructure projects. Inventories comprising of Land is vaLued at Lower of cost or net reaLizabLe vaLue. Cost incLudes cost of Land, borrowing cost and other reLated overhead as the case may be.
Inventories of project materials are valued at cost or net realizable value whichever is less. Cost is arrived at on weighted average method (WAM) basis.
Work-in-progressConstruction and development of Infrastructure project:
Cost incurred for the contract that relate to future activity of the contract, such contract cost are recognized as an asset provided it is probable that they will be recovered. Such costs represent an amount due from the customer and are often cLassified as Contract work in progress which Is vaLued at cost or net realizable value whichever is less.
l) Provisions and contingencies
A provision is recognized if, as a result of past events, the Company has a present legal or constructive obLigation that can be estimated reLiabLy, and it Is probabLe that an outflow of economic benefits wiLL be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settLe the present obLigation at the baLance sheet date) at a pre-tax that reflects current market assessments of the time vaLue of money and the risks specific to the LiabiLity.
The unwinding of the discount Is recognized as finance cost. Expected future operating Losses are not provided for.
Contingent Liabilities are dlscLosed in the Notes to the StandaLone FinanciaL Statements. Contingent liabilities are disclosed for:
I. possible obligations which will be confirmed only by future events not wholly within the control of the Company, or
II. present obligations arising from past events where it Is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
m) Borrowing Cost
Borrowing cost Includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings to the extent they are regarded as an adjustment to the interest cost. Investment income earned on temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Borrowing costs, if any, directLy attributabLe to the acquisition, construction or production of an asset that necessariLy takes a substantiaL period of time to get ready for its intended use or saLe are capitalized, if any. ALL other borrowing costs are expensed in the period in which they occur.
Operating segments are reported in a manner consistent with the internaL reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is responsibLe for aLLocating resources and assessing performance of the operating segments of the Company. For the discLosure on reportabLe segments see Note 34.
Cash and Cash equivaLents for the purpose of Cash FLow Statement comprise cash and cheques in hand, bank baLances, demand deposits with banks where the originaL maturity is three months or Less and other short term highLy Liquid.
p) Investments in subsidiaries, joint venture and associates
The Company has elected to recognise its investments in subsidiary and associate and joint venture companies at cost in accordance with the option avaiLabLe in Ind AS 27, Separate FinanciaL Statements.
q) Leases
Ind AS 116 Leases introduces single accounting model and requires a lessee to recognise assets and liabilities for all leases subject to recognition exemptions. The Company adopted Ind AS 116 Leases using modified retrospective approach and practicaL expedients.
At the inception of a contract, the Company assesses whether a contract is or contains, a lease. A contract is, or contains a Lease if the contract conveys the right to controL the use of an identified asset for a period of time in exchange of consideration. To assess whether a contract conveys the right to control the use of an asset the Company assesses whether:
- The contract invoLves the use of an identified asset - this may be specified expLicitLy or impLicitLy, and should be physically distinct or represent substantially all of the capability of a physical distinct asset. If the suppLier has a substantive substitution right, then the asset is not identified.
- The Company has the right to obtain substantiaLLy aLL of the economic benefits from use of the asset throughout the period of use; and
- The Company has the right to direct the use of the asset. The Company has this right when it has the decision making rights that are most reLevant to changing how and for what purpose the asset is used.
As a Lessee
Right of use Asset
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. At the commencement date, a lessee shall measure the right-of-use asset at cost which comprises initial measurement of the lease liability, any lease payments made at or before the commencement date, less any Lease incentives received, any initiaL direct costs incurred by the Lessee; and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.
At the commencement date, a Lessee shall measure the Lease Liability at the present value of the Lease payments that are not paid at that date. The lease payments shall be discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee shall use the lesseeâs incremental borrowing rate.
Short-term lease and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for short- term leases that have a lease term of less than 12 months or less and leases of low-value assets, including IT Equipment. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
The election for short-term leases shall be made by class of underlying asset to which the right of use relates. A class of underlying asset is a grouping of underlying assets of a similar nature and use in Companyâs operations. The election for leases for which the underlying asset is of low value can be made on a lease-by-lease basis.
r) Earnings per share
Basic earnings per share is computed by dividing the net profit for the year attributabLe to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for events such as bonus shares, other than conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of caLcuLating diLuted earnings per share, the net profit for the period attributabLe to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of aLL diLutive potentiaL equity shares.
s) Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates as at the date of transaction or at an average rate if the average rate approximates the actual rate at the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of transaction. Exchange differences are recognized in the Statement of Profit and Loss.
t) Recent accounting pronouncement
Recent accounting pronouncements effective from ApriL 01, 2024:
Ministry of Corporate Affairs (MCA) notifies new standards or amendments to the existing standards. There is no such notification which wouLd have been appLicabLe from ApriL 01, 2024.
Mar 31, 2023
1. Corporate Information
NiLa Infrastructures Limited is a Company based in Ahmedabad, Gujarat with its Registered Office situated at 1st Floor, Sambhaav House, Opp. Chief Justice Bungalow, Bodakdev, Ahmedabad - 380015. Nila Infrastructures Limited is a public company incorporated on 26 February 1990 and Listed on BSE (Bombay Stock Exchange of India Limited) and NSE (National Stock Exchange of India Limited). The Company is involved in the construction as weLL as deveLopment of infrastructures projects.
2. Basis of preparation and measurement2.1. Statement of compliance
These standalone financial statements have been prepared in accordance with Indian Accounting Standards (âInd ASâ) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (the âActâ) and other relevant provisions of the Act.
The standalone financial statements for the year ended 31 March 2023 have been reviewed by audit committee and subsequently approved by Board of Directors at its meetings held on 25 May 2023.
Details of the Companyâs significant accounting policies are included in note3.
2.2. Functional and presentation currency
These standalone financial statements are presented in Indian Rupees (?), which is also the Companyâs functional currency. ALL the amounts have been rounded-off to the nearest Lakhs, unless otherwise stated.
The standalone financial statements have been prepared on the historical cost basis except for the following items:
|
Items |
Measurement basis |
|
Net defined benefit pLans |
Fair vaLue of pLan assets Less present vaLue of defined benefit obligation using key actuarial assumptions |
|
Land and transferable development rights Receivables |
Fair value of land and transferable development rights using applicable market inputs |
2.4. Use of estimates and judgements
In preparing this standalone financial statement, management has made judgements, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, Liabilities, income and expenses. ActuaL results may differ from these estimates.
Estimates and assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognized prospectively.
Information about critical judgements in applying accounting policies, as well as estimates and the assumptions that have most significant effect to the carrying amounts of assets and LiabiLities within the next financiaL year, are incLuded in the foLLowing notes:
|
Note 3(g) - |
EvaLuation of percentage compLetion for the purpose of revenue recognition |
|
Note 3(d) - |
Identification of the buiLding & furniture & fixtures as an investment property |
|
Note 3(b) - |
UsefuL Life used for the purpose of depreciation on property, pLant and equipment and investment properties and amortisation of intangible assets |
|
Note 3(e), (i) - |
Impairment of financiaL and non-financiaL assets |
|
Note 3(q) - |
Lease cLassification |
|
Note |
3(f) |
- Recognition and measurement of defined benefit obligations, key actuarial assumptions |
|
Note |
3(i) |
- Fair value measurement of financial instruments |
|
Note |
3(j) |
- Current / deferred tax expense and recognition and evaluation of recoverability of deferred |
|
tax assets |
||
|
Note |
3(l) |
- Provisions and contingencies |
2.5. Measurement of fair values
The Companyâs accounting policies and disclosures requires the measurement of fair values for financial instruments.
The Company has established control framework with respect to the measurement of fair values. The management regularly reviews significant unobservable inputs and valuation adjustments.
Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices(unadjusted) in active markets for identical assets and liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entity in the same level of fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognizes transfers between the levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in the following notes:
Note 5 - Investment property Note 37 - Financial instruments
3. Significant accounting policiesa) Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in Schedule III of the Companies Act, 2013. Operating cycle for project related assets and liabilities is the time start of the project to their realization in cash or cash equivalents. Operating cycle for all other assets and liabilities has been considered as twelve months.
b) Property, plant and equipment Recognition and measurement
Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, including non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use.
If significant parts of an item of property, plant and equipment have different useful Lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognized in Statement of Profit and Loss.
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Depreciation is being provided on a pro-rata basis on the âStraight Line Methodâ over the estimated useful lives of the assets as prescribed under Part C of Schedule II to the Companies Act, 2013. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate. Advances given towards acquisition of property, plant and equipment outstanding at each Balance Sheet date are disclosed as other noncurrent assets.
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use of disposal. The consequential gain or loss is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss.
c) Intangible assets and amortisation
Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises of its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use.
Subsequent expenditure is capitalized only when it increases the future economic benefits associated with the expenditure will flow to the Company. All other expenditure is recognized in the Statement of Profit and Loss as incurred.
Intangible assets are amortized on a straight - line basis (pro-rata from the date of additions) over estimated useful life upto five years.
The carrying amount of an intangible asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from derecognition of intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of intangible assets and is recognized in the Statement of Profit and Loss.
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes.
Upon initial recognition, an investment property is measured at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.
Depreciation is being provided on a pro-rata basis on the âStraight Line Methodâ over the estimated useful lives of the assets as prescribed under Part C of Schedule II to the Companies Act, 2013. The residual values, useful lives and methods of depreciation of investment properties equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
The fair values of investment property is disclosed in the notes. Fair value is determined by an independent valuer who holds a recognized and relevant professional qualification and has recent experience in the location and category of the investment property being valued.
Any gain or loss on disposal of an investment property is recognized in Statement of Profit and Loss.
e) Impairment of non-financial assets
Non-financial assets of the Company, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognized in the Statement of Profit and Loss. Impairment loss recognized in respect of a CGU is allocated to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.
f) Employee benefitsShort term employee benefits
Short term employee benefit obligations are measured on an undiscounted expenses and are expensed as the related services are provided. A liability is recognized for the amount expected to be paid, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards government administered schemes. Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in the Statement of Profit and Loss in the periods during which the services are rendered by the employees.
A defined benefit plan is a post-employment benefit plan other than defined contribution plan. The Companyâs net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligations is performed periodically by an independent qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income (OCI). Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in Statement of Profit and Loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in Statement of Profit and Loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Other long-term employee benefits
The Companyâs net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefits that employees have earned in return for their service in the current and prior periods; that benefits is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual independent actuarial valuation using the projected unit credit method.
Remeasurement gains or losses are recognized in the Statement of Profit and Loss in the period in which they arise.
g) Revenue recognition(i) Construction and infrastructure contracts
Performance obligations with reference to construction and infrastructure contracts are satisfied over the period of time, and accordingly, revenue from such contracts is recognized based on progress of performance determined using input method with reference to the cost incurred on contract and their estimated total contact costs. Revenue is adjusted towards liquidated damages, time value of money and price variations/escalation, wherever applicable. Variation in contract work and other claims are included when it is highly probable that significant reversal will not occur and it can be measured reliably and it is agreed with customers.
Estimates of revenue and costs are reviewed periodically and revised, wherever circumstances change, resulting increases or decreases in revenue determination, is recognized in the period in which estimates are revised.
The Company evaluates whether each contract consists of a single performance obligation or multiple performance obligations. Where the Company enters into multiple contracts with the same customer, the Company evaluates whether the contract is to be combined or not by evaluating various factors as prescribed in the standard.
(ii) Land and transferrable development rights
Revenue from contracts for sale of Land and transferrable development rights is recognised at a point in time when control is transferred to the customer and it is probable that consideration will be collected. This is usually deemed to be legal completion as this is the point at which the Company has an enforceable right to payment. Revenue from sale of land and transferrable development rights is measured at the transaction price specified in the contract with the customer.
Contract balancesContract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer e.g. unbilled revenue. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset i.e. unbilled revenue is recognised for the earned consideration that is conditional.
A receivable represents the Companyâs right to an amount of consideration that is unconditional i.e. only the passage of time is required before payment of consideration is due.
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. Contract liabilities are recognised as revenue when the Company performs under the contract.
Lease income from operating leases shall be recognised in income on a straight line basis over the lease term, unless another systematic basis is more representative of the time pattern in which use benefit derived from the Leased asset is diminished. Income from Leasing of commercial complex is recognised on an accrual basis in accordance with lease agreements. Refer note 3(q) for accounting policy on leases.
Interest income from financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset to the assetâs net carrying amount on initial recognition.
Dividend income and share of profit in LLP is recognized when the right to receive the same is established, it is probable that the economic benefits associated with the dividend will flow to the Company and amount can be measured reliably.
i) Financial instrument Financial assets Classification
The Company classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit and loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
On initial recognition, a financial asset is recognized at fair value, in case of financial assets which are recognized at fair value through the Statement of Profit and Loss (FVTPL), its transaction cost are recognized in the Statement of Profit and Loss. In other case, the transaction costs are attributed to the acquisition value of the financial asset.
Subsequent measurement and gains and losses
Financial assets are subsequently classified as measured at
⢠Financial assets at amortized cost: These assets are subsequently measured at amortized cost
using the effective interest method. The amortized cost is reduced by impairment losses. Interest
income, foreign exchange gains and losses and impairment is recognized in the Statement of Profit and Loss. Any gain or loss on derecognition is recognized in the Statement of Profit and Loss.
⢠Fair value through profit and loss (FVTPL): These assets are subsequently measured at fair value.
Net gains and losses, including any interest or dividend income, are recognized in the Statement of Profit and Loss.
⢠Fair value through other comprehensive income (FVOCI): These assets are subsequently measured at fair value. Dividends are recognized as income in the Statement of Profit and Loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains or losses are recognized in OCI and are not reclassified to the Statement of Profit and Loss.
Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company changes its business model for managing financial assets.
Trade receivables and loans are initially recognized at fair value when they are originated. Subsequently, these assets are held at amortized cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.
All investments in equity instruments classified under financial assets are initially measured at fair value, the Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument is recognized as other income in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured at FVOCI are recognized in OCI.
Amounts recognized in OCI are not subsequently reclassified to the Statement of Profit and Loss. Dividend income on the investments in equity instruments are recognized as âother incomeâ in the Statement of Profit and Loss.
A financial asset (or, where applicable, a part of the financial asset) is primarily derecognized when:
a) The right to receive cash flows from the asset have expired; or
b) The Company has transferred substantially all the risks and rewards of the asset; or
c) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Expected credit Losses are recognized for all financial assets subsequent to initial recognition other than financials assets in FVTPL category. For financial assets other than trade receivables, as per Ind AS 109, the Company recognizes 12 month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit Losses are measured as Lifetime expected credit Losses if the credit risk on financial asset increases significantly since its initial recognition. The Company''s trade receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall. The impairment losses and reversals are recognized in Statement of Profit and Loss.
Financial liabilitiesInitial recognition and measurement
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortized cost unless at initial recognition, they are classified as fair value through profit and loss. In case of trade payables, they are initially recognized at fair value and subsequently, these liabilities are held at amortized cost, using the effective interest method.
Financial liabilities are subsequently measured at amortized cost using the EIR method. Financial liabilities carried at fair value through Statement of Profit and Loss are measured at fair value with all changes in fair value recognized in the Statement of Profit and Loss.
A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet date if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle them on net basis or to realize the assets and settle the liabilities simultaneously.
Income tax comprises of current and deferred tax. It is recognized in the Statement of Profit and Loss except to the extent that it is relates to an item recognized directly in equity or in OCI.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes.
It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date. Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognized amounts, and it is intended to realize the asset and settle the liability on a net basis or simultaneously.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and Liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognized in respect of carried forward tax Losses and tax credits. Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which they can be used.
Inventory comprises of land, project inventories and work in progress in case of construction and development of infrastructure projects. Inventories comprising of land is valued at lower of cost or net realizable value. Cost includes cost of land, borrowing cost and other related overhead as the case may be.
Inventories of project materials are valued at cost or net realizable value whichever is less. Cost is arrived at on weighted average method (WAM) basis.
Work-in-progressConstruction and development of Infrastructure project:
Cost incurred for the contract that relate to future activity of the contract, such contract cost are recognized as an asset provided it is probable that they will be recovered. Such costs represent an amount due from the customer and are often classified as Contract work in progress which is valued at cost or net realizable value whichever is less.
l) Provisions and contingencies
A provision is recognized if, as a result of past events, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax that reflects current market assessments of the time value of money and the risks specific to the liability.
The unwinding of the discount is recognized as finance cost. Expected future operating losses are not provided for.
Contingent liabilities are disclosed in the Notes to the Standalone Financial Statements. Contingent liabilities are disclosed for:
i. possible obligations which will be confirmed only by future events not wholly within the control of the Company, or
ii. present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings to the extent they are regarded as an adjustment to the interest cost. Investment income earned on temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized, if any. All other borrowing costs are expensed in the period in which they occur.
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company. For the disclosure on reportable segments see Note 33.
Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the original maturity is three months or less and other short term highly liquid.
p) Investments in subsidiaries, joint venture and associates
The Company has elected to recognise its investments in subsidiary and associate and joint venture companies at cost in accordance with the option available in Ind AS 27, Separate Financial Statements.
Ind AS 116 Leases introduces single accounting model and requires a lessee to recognise assets and liabilities for all leases subject to recognition exemptions. The Company adopted Ind AS 116 Leases using modified retrospective approach and practical expedients.
At the inception of a contract, the Company assesses whether a contract is or contains, a lease. A contract is, or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange of consideration. To assess whether a contract conveys the right to control the use of an asset the Company assesses whether:
- The contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capability of a physical distinct asset. If the supplier has a substantive substitution right, then the asset is not identified.
- The Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
- The Company has the right to direct the use of the asset. The Company has this right when it has the decision making rights that are most relevant to changing how and for what purpose the asset is used.
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. At the commencement date, a lessee shall measure the right-of-use asset at cost which comprises initial measurement of the lease liability, any lease payments made at or before the commencement date, less any lease incentives received, any initial direct costs incurred by the lessee; and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.
At the commencement date, a Lessee shall measure the Lease Liability at the present value of the Lease payments that are not paid at that date. The lease payments shall be discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee shall use the lesseeâs incremental borrowing rate.
Short-term lease and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for short- term leases that have a lease term of less than 12 months or less and leases of low-value assets, including IT Equipment. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
The election for short-term leases shall be made by class of underlying asset to which the right of use relates. A class of underlying asset is a grouping of underlying assets of a similar nature and use in Companyâs operations. The election for leases for which the underlying asset is of low value can be made on a lease-by-lease basis.
Basic earnings per share is computed by dividing the net profit for the year attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for events such as bonus shares, other than conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
s) Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates as at the date of transaction or at an average rate if the average rate approximates the actual rate at the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of transaction. Exchange differences are recognized in the Statement of Profit and Loss.
t) Recent accounting pronouncement
New Accounting standards, amendments and interpretations adopted by the Company effective from 01 April 2023:
Ministry of Corporate Affairs (âMCAâ) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 31 March 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from 01 April 2023, as below:
Ind AS 1 - Presentation of Financial Statements
This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after 01 April 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the Standalone Financial Statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors:
This amendment has introduced a definition of âaccounting estimatesâ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after 01 April 2023. The Company has evaluated the amendment and there is no material impact on its Standalone Financial Statements.
This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after 01 April 2023. The Company has evaluated the amendment and there is no material impact on its Standalone Financial Statements.
Mar 31, 2018
Note-1. Significant Accounting Policies
a) Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in Schedule III of the Companies Act, 2013. Operating cycle for project related assets and liabilities is the time start of the project to their realization in cash or cash equivalents.
b) Property, plant and equipment Recognition and measurement
Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, including non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognized in Statement of Profit and Loss.
Transition to Ind AS
On transition to Ind AS, the Company has opted to continue with the carrying value of all its property, plant and equipment recognized as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as deemed cost of such property, plant and equipment.
Subsequent measurement
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Depreciation
Depreciation is being provided on a pro-rata basis on the âStraight Line Methodâ over the estimated useful lives of the assets as prescribed under Part C of Schedule II to the Companies Act, 2013. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate. Advances given towards acquisition of property, plant and equipment outstanding at each Balance Sheet date are disclosed as Other non-current assets.
Derecognition
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use of disposal. The consequential gain or loss is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss.
c) Intangible assets and amortisation
Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises of its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use.
The Company has elected to continue with the carrying value of all its intangible assets as recognized in the standalone financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as the deemed cost as at the transition date pursuant to the exemption under Ind AS 101.
Land and Transferable Development Rights (TDR) received as a part of Public Private Partnership arrangement for development of slum areas are accounted as an intangible asset at the value at which corresponding revenue is recognized when right is established on fulfillment of conditions attached to it.
Subsequent Expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits associated with the expenditure will flow to the Company. All other expenditure is recognized in the Statement of Profit and Loss as incurred
Amortisation
Intangible assets are amortized on a straight - line basis (pro-rata from the date of additions) over estimated useful life of four years.
Land Rights and Transferable Development Rights (TDR) are considered as Intangible Assets under development until the underlying project is completed on which they are received.
Derecognition
The carrying amount of an intangible asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of intangible assets and is recognized in the Statement of Profit and Loss account. Land Rights and Transferable Development Rights (TDR) is derecognized when agreement to sale is entered.
d) Investment Property
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes.
Recognition and measurement
Upon initial recognition, an investment property is measured at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.
Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its investment properties recognized as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such investment properties.
Depreciation
Depreciation is being provided on a pro-rata basis on the âStraight Line Methodâ over the estimated useful lives of the assets as prescribed under Part C of Schedule II to the Companies Act, 2013. The residual values, useful lives and methods of depreciation of investment properties equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Fair value disclosure
The fair values of investment property is disclosed in the notes. Fair values is determined by an independent valuer who holds a recognized and relevant professional qualification and has recent experience in the location and category of the investment property being valued.
Any gain or loss on disposal of an investment property is recognized in Statement of Profit and Loss.
e) Impairment of non-financial assets
Non-financial assets of the Company, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognized in the Statement of Profit and Loss. Impairment loss recognized in respect of a CGU is allocated to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.
f) Business Combination
The acquisition method of accounting is used to account for all the business combinations, regardless of whether equity instruments or other assets are acquired. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at the fair values at the acquisition date. The Company recognizes any non - controlling interest in the acquired entity on an acquisition by acquisition basis either at fair value or at the non-controlling interestâs proportionate share of the acquired entityâs net identifiable assets.
Transition to Ind AS
In accordance with Ind AS 101 provisions related to first time adoption, the Company has elected to apply Ind AS accounting for business combinations prospectively from 1 April 2016. As such, Indian GAAP balances relating to business combination entered into before the date of transition have been carried forward.
Common control business combinations
Business combinations involving entities that are controlled by the Company are accounted for using the pooling of interest method as follows:
a. The assets and liabilities transferred are derecognized at their book value
b. No adjustments are made to reflect the fair value
c. The financial information in the financial statements in respect of prior periods is restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination.
g) Employee benefits
Short term employee benefits
Short term employee benefit obligations are measured on an undiscounted expenses and are expensed as the related services are provided. A liability is recognized for the amount expected to be paid, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards government administered schemes. Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in the Statement of Profit and Loss in the periods during which the services are rendered by the employees.
Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than defined contribution plan. The Companyâs net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligations is performed periodically by an independent qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company , the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income (OCI). Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in Statement of Profit and Loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in Statement of Profit and Loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Other long-term employee benefits
The Companyâs net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefits that employees have earned in return for their service in the current and prior periods; that benefits is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual independent actuarial valuation using the projected unit credit method. Remeasurements gains or losses are recognized in the Statement of Profit and Loss in the period in which they arise.
Share-based payments
Employees of the Company receive remuneration in the form of share based payments in consideration of the services rendered.
Under the equity settled share based payment, the fair value on the grant date of the awards given to employees is recognized as âemployee benefit expensesâ with a corresponding increase in equity over the vesting period. The fair value of the options at the grant date is calculated by an independent valuer on the basis Black Scholes model. At the end of each reporting period, apart from the non-market vesting condition, the expense is reviewed and adjusted to reflect changes to the level of options expected to vest. When the options are exercised, the Company issues fresh equity shares.
Cancellation of Share based payment is accounted as an acceleration of vesting, and therefore recognize immediately the amount that otherwise would have been recognized for services received over the remainder vesting period. The amount that would have been recognized is based on an estimate on the date of cancellation - i.e. estimating how many instruments are expected to vest at the original vesting date.
h) Revenue recognition Construction contracts
Contract revenue is recognized as revenue in the Statement of Profit and Loss in the accounting periods in which the work is performed as per Ind AS 11. If the outcome of the contractual contract can be reliably measured, revenue associated with the construction contract is recognized reference to the stage of completion of the contract activity at the year-end (the percentage of completion method).The stage of completion on a project is measured on the basis of proportion of the contract work/based upon the contracts/agreements entered into by the Company with the customers. In case of contracts under Public Private Partnership Model, Lease hold land right and Land Development rights provided by the government which forms part of consideration for the services provided is recognized as an intangible assets at fair value at the time of initial recognition.
Contract costs are recognized as an expense in the Statement of Profit and Loss in the accounting period in which the work to which they relate is performed. In the case of contracts with defined milestones and assigned price for each milestone, the Company recognizes revenue on transfer of significant risks and rewards which coincides with achievement of milestone and its acceptance by its customer.
Contract revenue includes the initial amount agreed in the contract plus any variation in contract work and claims payment, to the extent that it is probable that they will result in revenue and can be measured reliably. The Company recognizes bonus/incentive revenue on early completion of the project based on the confirmation received from the customer.
If the outcome of a construction contract can be estimated reliably, contract revenue is recognized in the Statement of Profit and Loss in proportion to the stage of completion of the contract. The stage of completion is assessed by reference to surveys of work performed. Otherwise, contract revenue is recognized only to the extent of contract costs incurred that are likely to be recoverable.
Contact costs are recognized as expenses as incurred unless they create an asset is related to future contract activity. An expected loss on a contract is recognized immediately in the Statement of Profit and Loss.
Lease rental income
Lease income from operating leases shall be recognized in income on a straight-line basis over the lease term, unless another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished.
Income from leasing of commercial complex is recognized on an accrual basis.
Other income
Interest income is accounted on accrual basis at effective interest rate.
Dividend income and share of profit in LLP is recognized when the right to receive the same is established.
i) Financial instrument
Financial assets
Classification
The Company classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit and loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
Initial recognition and measurement
On initial recognition, a financial asset is recognized at fair value, in case of financial assets which are recognized at fair value through the Statement of Profit and Loss (FVTPL), its transaction cost are recognized in the Statement of Profit and Loss. In other case, the transaction costs are attributed to the acquisition value of the financial asset.
Subsequent measurement and gains and losses
Financial assets are subsequently classified as measured at
- Financial assets at amortized cost: These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment is recognized in the Statement of Profit and Loss. Any gain or loss on derecognition is recognized in the Statement of Profit and Loss.
- Fair value through profit and loss (FVTPL): These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in the Statement of Profit and Loss.
- Fair value through other comprehensive income (FVOCI): These assets are subsequently measured at fair value. Dividends are recognized as income in the Statement of Profit and Loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains or losses are recognized in OCI and are not reclassified to the Statement of Profit andLoss.
Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company changes its business model for managing financial assets.
Trade receivables and loans
Trade receivables are initially recognized at fair value. Subsequently, these assets are held at amortized cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.
Equity instrument
All investments in equity instruments classified under financial assets are initially measured at fair value, the Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument is recognized as other income in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured at FVOCI are recognized in OCI. Amounts recognized in OCI are not subsequently reclassified to the Statement of Profit and Loss. Dividend income on the investments in equity instruments are recognized as âother incomeâ in the Statement of Profit and Loss.
Derecognition
A financial asset (or, where applicable, a part of the financial asset) is primarily derecognized when:
a) The right to receive cash flows from the asset have expired; or
b) The Company has transferred substantially all the risks and rewards of the asset; or
c) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financials assets in FVTPL category. For financial assets other than trade receivables, as per Ind AS 109, the Company recognizes 12 month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. The Companyâs trade receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall. The impairment losses and reversals are recognized in Statement of Profit and Loss.
Financial liabilities
Initial recognition and measurement
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortized cost unless at initial recognition, they are classified as fair value through profit and loss. In case of trade payables, they are initially recognized at fair value and subsequently, these liabilities are held at amortized cost, using the effective interest method.
Subsequent measurement
Financial liabilities are subsequently measured at amortized cost using the EIR method. Financial liabilities carried at fair value through Statement of Profit and Loss are measured at fair value with all changes in fair value recognized in the Statement of Profit and Loss.
Derecognition
A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet date if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle them on net basis or to realize the assets and settle the liabilities simultaneously.
j) Income taxes
Income tax comprises of current and deferred tax. It is recognized in the Statement of Profit and Loss except to the extent that it is relates to an item recognized directly in equity or in OCI.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes.
It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date. Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognized amounts, and it is intended to realize the asset and settle the liability on a net basis or simultaneously.
Deferred tax
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognized in respect of carried forward tax losses and tax credits. Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available.
Minimum Alternate Tax (MAT) eligible for set off in subsequent years (as per tax laws), is recognized as an asset by way of credit to the restated standalone summary Statement of Profit and Loss only if there is convincing evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilized by the Company. At each balance sheet date, the carrying amount of deferred tax in relation to MAT credit entitlement receivable is reviewed to reassure realization.
k) Inventories
Inventory comprises of land and transferable development rights. Land and transferable development rights are valued at lower of cost or net realizable value. Cost includes cost of land, land development rights, acquisition of tenancy rights, materials, services, borrowing cost and other related overhead as the case may be. In the case of acquisition of land for development and construction, the rights are acquired from the owners of the land and the conveyance and registration thereof will be executed between the original owners and the ultimate purchasers as per trade practice. As a result, in the immediate period, generally, the land is not registered in the name of the company.
Project inventories
Inventories of project materials are valued at cost or net realizable value whichever is less. Cost is arrived at on weighted average method (WAM) basis.
Work-in-progress
Construction and development of Infrastructure project:
Cost incurred for the contract that relate to future activity of the contract, such contract cost are recognized as an asset provided it is probable that they will be recovered. Such costs represent an amount due from the customer and are often classified as Contract work in progress which is valued at cost or net realizable value whichever is less.
l) Provisions and contingencies
A provision is recognized if, as a result of past events, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax that reflects current market assessments of the time value of money and the risks specific to the liability.
The unwinding of the discount is recognized as finance cost. Expected future operating losses are not provided for.
Contingent liabilities are disclosed in the Notes to the Standalone Financial Statements. Contingent liabilities are disclosed for:
i. possible obligations which will be confirmed only by future events not wholly within the control of the Company, or
ii. present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
m) Borrowing Cost
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings to the extent they are regarded as an adjustment to the interest cost.
Investment income earned on temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized, if any. All other borrowing costs are expensed in the period in which they occur.
n) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company. For the disclosure on reportable segments see Note 35.
o) Cash and cash equivalents
Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the original maturity is three months or less and other short term highly liquid.
p) Investments in subsidiaries, joint venture and associates
The Company has elected to recognise its investments in subsidiary and associate and joint venture companies at cost in accordance with the option available in Ind AS 27, Separate Financial Statements.
q) Leases
Asset given under lease
In respect of assets provided on finance leases, amount due from lesseesare recorded as receivables at the amount of the Companyâs net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Companyâs net investment outstanding in respect of the leases. In respect of assets given on operating lease, lease rentals are accounted on accrual basis in accordance with the respective lease agreements.
Asset held under lease
Leases of property, plant and equipment that transfer substantially all the risks and rewards of ownership ae classified as finance leases. All the other leases are classified as operating leases. For finance lease, the leased assets are measured initially at an amount equal to the lower of their fair value and the present value of minimum lease payments. Subsequent to the initial recognition, the assets are accounted for in accordance with the accounting policy applicable to similar owned assets.
Assets held under operating leases are neither recognized in (in case the Company is lessee) nor derecognized (in case the Company is lessor) from the Companyâs balance sheet.
Lease payments
Payments made under operating leases are generally recognized in the Statement of Profit and Loss on a straight line basis over the term of lease unless such payments are structured to increase in line with the expected general inflation to compensate for the lessorâs expected inflationary cost increases. Lease incentives received are recognized as an integral part of the total lease expense over the term of lease.
r) Earnings per share
Basic earnings per share is computed by dividing the net profit for the year attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for events such as bonus shares, other than conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
In a capitalization or bonus issue or share split, ordinary shares are issued to equity shareholders for no additional consideration. The number of ordinary shares outstanding before the event is adjusted for the proportionate change in the number of ordinary shares outstanding as if the event had occurred at the beginning of the earliest period presented.
s) Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates as at the date of transaction or at an average rate if the average rate approximates the actual rate at the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of transaction. Exchange differences are recognized in the Statement of Profit and Loss.
t) Recent accounting pronouncement
Ind AS 115- Revenue from Contract with Customers: Ind AS 115 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including Ind AS 18 Revenue and Ins AS 11 Construction Contracts. The core principle of the new standard that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers. This Standard permits two possible methods of transition i.e. retrospective approach and modified retrospective method.
Based on the preliminary assessment, the Company does not expect any significant impacts on transition to Ind AS 115. This assessment is based on currently available information and may be subject to changes arising from further reasonable and supportable information when the standard will be adopted. The quantitative impacts would be finalized based on a detailed assessment which has been initiated to identify the key impacts along with evaluation of appropriate transition options to be considered.
Amendments to existing Ind AS
- Ind AS 40 - Investment Property - The amendment lays down the principle regarding the transfer of asset to, or from, investment property.
- Ind AS 21 - The Effects of Changes in Foreign Exchange Rates - The amendment lays down principles to determine the date of transaction when a Company recognizes a non-monetary prepayment asset or deferred income liability.
- Ind AS 12 - Income Taxes - The amendments explains that determining temporary differences and estimating probable future taxable profit against which deductible temporary differences are assessed for utilization are two separate steps.
* The Company has elected to continue with the carrying value of its Investment properties recognized as of 1 April 2016 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date as per Para D7AA of Ind AS 101.
Refer below table for the gross block value and the accumulated depreciation on 1 April 2016 under Indian GAAP (IGAAP):
Measurement of fair value of investment properties:
A. Fair value hierarchy:
The fair value of investment properties has been determined by external independent property valuers, having appropriate recognised professional qualification and recent experience in the location and category of properties being valued.
The fair value measurement of the investment properties has been categorised as Level 3 fair value based on the inputs to the valuation techniques used.
B. Fair valuation technique
Refer note 18 - For information on investment peroperties pledged as security by the Company Refer note 37 - For details of operating lease
Refer note 3 (k) for accounting policy on inventories.
During the year ended 31 March 2018, the company has inventorised borrowing cost of Rs. 200.49 lakhs (31 March 2017 Rs. 198.55 lakhs and 1 April 2016 Rs. 793.15 lakhs)
Refer note 42 - Financial instruments, fair values and risk measurement
Includes retention money receivable amounting to Rs. 1,323.36 lakhs (31 March 2017: Rs. 738.99 lakhs, 1 April 2016: Rs. 366.08 lakhs)
Mar 31, 2016
1. Corporate Information:
Nila Infrastructures Ltd is a Company based in Ahmadabad, Gujarat. It is currently engaged in construction as well as development of real estate and infrastructure projects. Nila Infrastructures Ltd is a public company incorporated on 26th February, 1990 and listed on BSE and NSE (Bombay Stock Exchange Of India Limited and National Stock Exchange Of India Limited).
2. Significant Accounting Policies:
a) Basis of preparation of financial statements:
These financial statements have been prepared in accordance with generally accepted accounting principles in India under historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rule, 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects, with Accounting Standards notified under Section 211 (3C) [C companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.
b) Use of Estimates:
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the reported income and expenses during the year. The management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize
c) Fixed Assets:
(i) Tangible Assets
Fixed assets are stated at cost of acquisition or construction (net of tax/duty credits availed if any) including any cost attributable to bringing the assets to their working condition for their intended use. Fixed assets are valued at cost less accumulated depreciation there on.
(ii) Intangible Assets and amortization
All Intangible Assets are initially measured at cost (net of tax/duty credits availed if any) and amortized so as to reflect the pattern in which the assets economic benefits are consumed. Intangible assets are amortized on a straight - line basis (pro-rata from the date of additions) over estimated useful life of four years.
d) Depreciation:
(i) Useful lives
Depreciation is being provided on a pro-rata basis on the ''Straight Line Method'' over the estimated useful lives of the assets as prescribed under Part C of Schedule II to the Companies Act, 2013.
(ii) Depreciation on assets costing less than '' 5,000
The company is depreciating such assets over their useful life as prescribed under Schedule II to the Companies Act, 2013.
. e) Impairment of Assets:
At each Balance sheet date, the company consider whether there is any indication that an asset may be impaired. If any indication exists the recoverable amount of the asset is estimated. An impairment loss is recognized immediately whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use, estimated future Cash Flows are discounted to their present value based on an appropriate discount factor.
f) Investments:
Investments are classified into current investments and Non-current investment. Investments are further classified as quoted and unquoted investments also.
Non-current Investments are stated at cost of acquisition. If there is decline in value of non-current investment as on reporting date other than of temporary in nature, such decline is debited to the statement of profit and loss as "Provision for diminution in value of Investments". Subsequent increase in the realizable value of investment will be credited to the statement of profit and loss to the extent provision made for.
Current Investments, if any, are stated at cost or fair value whichever is lower and resultant decline is charged to statement of profit and loss.
g) Taxation:
Provision for Income tax for the current year is based on the estimated taxable income for the period in accordance with the provisions of the Income Tax Act, 1961.
Minimum Alternative Tax (MAT) paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that company will pay normal income tax. Accordingly, MAT is recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the company and the asset can be measured reliably.
The deferred tax impact resulting from timing difference between accounting and taxable profit is accounted by using tax rates and tax laws enacted or substantially enacted as at the Balance sheet date. The Deferred Tax Asset is recognized and carried forwarded only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
h) Revenue Recognition:
(i) Construction and Development of Infrastructures Project
Income from Infrastructure project has been recognized as per Accounting Standard 7. If the outcome of contractual contract can be reliably measured, revenue associated with the construction contract is recognized by reference to the stage of completion of the contract activity at year end (the percentage of completion method). The stage of completion on a project is measured on the basis of proportion of the contract work/ based upon the contracts/ agreements entered into by the Company with its customers. Where the outcome of the construction cannot be estimated reliably, revenue is recognized to the extent of the construction costs incurred if it is probable that they will be recoverable. If total cost is estimated to exceed total contract revenue, the Company provides for foreseeable loss. Contract revenue earned in excess of billing has been reflected as unbilled revenue and billing in excess of contract revenue has been reflected as unearned revenue. Revenue expenditure is accounted on accrual basis.
(ii) Construction and Development of Real Estate Project
The Company records its revenue of its residential projects confirming to Accounting Standard 9 and also based on Guidance note issued by the ICAI.
The full revenue is recognized on sale of property when the company has transferred all significant risk and rewards of ownership to the buyer and when the company is not required to perform any substantial acts to complete contract.
When the Company is obliged to perform any substantial acts after transfer of all significant risks and rewards of ownership on sale of property to the buyer, the revenue and cost is recognized on proportionate basis by applying the percentage completion method.
(iii) Trading (Land and Land Rights)
Income from Land Trading Activity is recognized when the Company enters into agreement for sale with the buyer and all significant risks and rewards have been transferred to the buyer and there is no uncertainty regarding reliability of the sale consideration.
(iv) Lease Rental (Income)
Income from leasing of commercial complex is recognized on an accrual basis. The leasing agreements range from 11 months to 10 years generally and are usually cancellable / renewable by mutual consent on agreed terms.
(v) Interest income is accounted on an accrual basis at contracted rates.
(vi) Dividend income is recognized when the right to receive the same is established.
(vii) Income on investments is recognized based on the terms of the investment. Income from mutual fund scheme having fixed maturity plans is accounted on declaration of dividend or on maturity of such investments.
(viii) Income from Commercial vehicle rental charges is recognized on accrual basis.
i) Employee Benefits:
Liability for employee benefits, both short and long term, for present and past services which are due as per the terms of employment are recorded in accordance with Accounting Standard-15 ''Employee Benefits'' notified under section 211 (3c) of the Companies Act, 2013
(i) Gratuity and Leave Encashment liabilities are provided for on the basis of an actuarial valuation on Projected Unit Credit Method as at the reporting date.
(ii) The Company''s Contribution to Provident Fund and Employee State Insurance is charged to the statement of profit and loss for the year. The company has no other obligation other than contribution payable.
j) Borrowing costs:
Borrowing costs attributable to the acquisition and/or construction of qualifying assets is capitalized to as part of the cost of such assets in accordance with notified Accounting Standard 16 "Borrowing Costs". A qualifying asset is one that necessarily takes a substantial period of time to get ready for use or sale. Capitalization of borrowing costs is suspended in the period during which the active development is delayed due to, other than temporary interruption. All other borrowing costs are charged to the statement of profit and loss as incurred
k) Inventories:
(i) Inventory comprises of Completed property for sale, Land, Transferable development rights
Completed property for sale, Land and transferable property rights are valued at lower of cost or net realizable value. Cost includes cost of land, land development rights, acquisition of tenancy rights, materials, services, borrowing cost and other related overhead as the case may be.
In the case of acquisition of land for development and construction, the rights are acquired from the owners of the land and the conveyance and registration thereof will be executed between the original owners and the ultimate purchasers as per trade practice. As a result, in the immediate period, generally, the land is not registered in the name of the company.
(ii) Raw materials and stores
Stock of raw materials and stores are valued at cost or net realizable value whichever is less. Cost is arrived at on Weighted Average Method (WAM) basis.
(iii) Work-in-progress
Construction and Development of Infrastructure Project:
Cost incurred for the contract that relate to future activity of the contract, such contract cost are recognized as an asset provided it is probable that they will be recovered. Such costs represent an amount due from the customer and are often classified as Contract work in progress which is valued at cost or net realizable value whichever is less.
Construction and Development of Real Estate Project:
Work-in-progress is valued at cost or net realizable value whichever is less. Cost includes cost of land, land development rights, materials, services, borrowing cost, acquisition of tenancy rights and other related overheads. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale.
l) Cash Flow Statement :
Cash flow are reported using indirect method, whereby profit / (loss) before extra ordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on available information.
Cash comprises of cash on hand and demand deposits with banks. Cash equivalents are short-term balances that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
m) Earnings Per Share:
The company reports basic and diluted earnings per share in accordance with Accounting Standard 20. Basic earnings per equity share is calculated by dividing the net profit for the year attributable to the Equity Shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is calculated by dividing the net profit for the year, adjusted for the effects of dilutive potential equity shares, attributable to the equity shareholders by weighted average number of the equity shares and dilutive potential equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
n) Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if
(i) the company has a present obligation as a result of past event
(ii) a probable outflow of resources is expected to settle the obligation and
(iii) the amount of the obligation can be reliably estimated.
Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.
Contingent liability is disclosed in case of
(i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation
(ii) a present obligation arising from past events, when no reliable estimate is possible
(iii) a possible obligation arising from past events where the probability of outflow of resources is not remote.
Contingent assets are neither recognized, nor disclosed.
Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.
o) General:
Accounting policies not specifically referred to are consistent with generally accepted accounting principles.
* Out of paid up capital, 172000000 equity share of Rs, 1/- each fully paid up allotted pursuant to the Scheme of Amalgamation, for consideration other than cash on July 24, 2010
**The Company has received 25% of the total consideration towards allotment of 22500000 warrants convertible into equivalent number of equity shares of Rs, 1/- each at a premium Rs, 4/- per share to the promoters on January 03,2015.The remaining 75% amount of total consideration of the said warrants shall be received on conversion within 18 months from its allotment
Mar 31, 2015
A) Basis of preparation of financial statements:
These financial statements have been prepared in accordance with
generally accepted accounting principles in India under historical cost
convention on accrual basis. Pursuant to section 133 of the Companies
Act, 2013 read with Rule 7 of the Companies (Accounts) Rule, 2014, till
the standards of accounting or any addendum thereto are prescribed by
Central Government in consultation and recommendation of the National
Financial Reporting Authority, the existing Accounting Standards
notified under the Companies Act, 1956 shall continue to apply.
Consequently, these financial statements have been prepared to comply
in all material aspects, with Accounting Standards notified under
Section 211 (3C) [Companies (Accounting Standards) Rules, 2006, as
amended] and other relevant provisions of the Companies Act, 2013.
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and the reported income and expenses during the year. The
management believes that the estimates used in the preparation of
financial statements are prudent and reasonable. Future results could
differ due to these estimates and the differences between the actual
results and the estimates are recognised in the periods in which the
results are known / materialise
c) Fixed Assets
(i) Tangible Assets
Fixed assets are stated at cost of acquisition or construction (net of
tax / duty credits availed if any) including any cost attributable to
bringing the assets to their working condition for their intended use.
Fixed assets are valued at cost less accumulated depreciation there on.
(ii) Intangible Assets
All Intangible Assets are initially measured at cost (net of tax / duty
credits availed if any) and amortized so as to reflect the pattern in
which the assets' economic benefits are consumed. Intangible assets are
amortized on a straight-line basis (pro-rata from the date of
additions)over estimated useful life of four years.
d) Depreciation
(i) Useful lives
Depreciation is being provided on a pro-rata basis on the 'Straight
Line Method' over the estimated useful lives of the assets as
prescribed under Schedule II to the Companies Act, 2013, till the year
ended March 31, 2014, depreciation was provided in the manner and rates
prescribed under Schedule XIV to the Companies Act, 1956.
The management has decided to apply the revised accounting policy
prospectively from accounting periods commencing on or after April 1,
2014. The change in accounting policy did not have any material impact
on financial statements of the company for the current year.
(ii) Depreciation on assets costing less than Rs. 5,000
Till year ended March 31, 2014, to comply with the requirements of
Schedule XIV to the Companies Act, 1956, the company was charging 100%
depreciation on assets costing less than Rs. 5,000 in the year of
purchase. However, Schedule II to the Companies Act, 2013 applicable
from the current year, does not recognize such practice. Hence, to
comply with the requirement of Schedule II to the Companies Act, 2013,
the company has changed its accounting policy for depreciations of
assets costing less than Rs. 5,000. As per the revised policy, the
company is depreciating such assets over their useful life as
prescribed under Schedule II to the Companies Act, 2013. The management
has decided to apply the revised accounting policy prospectively from
accounting periods commencing on or after April 1, 2014. The change in
accounting for depreciation of assets costing less than Rs. 5,000 did
not have any material impact on financial statements of the company for
the current year.
e) Impairment of Assets
At each Balance sheet date, the company considers whether there is any
indication that an asset may be impaired. If any indication exists the
recoverable amount of the asset is estimated. An impairment loss is
recognized immediately whenever the carrying amount of an asset exceeds
its recoverable amount. The recoverable amount is the greater of the
net selling price and value in use, estimated future Cash Flows are
discounted to their present value based on an appropriate discount
factor.
f) Investments
Investments are classified into current investments and non-current
investment. Investments are further classified as quoted and unquoted
investments also. Non-current Investments are stated at cost of
acquisition. If there is a decline in the value of non- current
investment as on the reporting date other than of temporary in nature,
such decline is debited to the statement of profit and loss as
"Provision for diminution in value of Investments". Subsequent increase
in the realizable value of investment will be credited to the statement
of profit and loss to the extent provision made for. Current
Investments, if any, are stated at cost or fair value whichever is
lower and resultant decline is charged to statement of profit and loss.
g) Taxation
Provision for Income tax for the current year is based on the estimated
taxable income for the period in accordance with the provisions of the
Income Tax Act, 1961. Minimum Alternative Tax (MAT) paid in accordance
to the tax laws, which gives rise to future economic benefits in the
form of adjustment of future income tax liability, is considered as an
asset if there is convincing evidence that company will pay normal
income tax. Accordingly, MAT is recognised as an asset in the balance
sheet when it is probable that the future economic benefit associated
with it will flow to the company and the asset can be measured
reliably. The deferred tax impact resulting from timing difference
between accounting and taxable profit is accounted by using tax rates
and tax laws enacted or subsequently enacted as at the Balance sheet
date. The Deferred Tax Asset is recognized and carried forward only to
the extent there is reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be
realized.
h) Revenue Recognition
(i) Construction and Development of Infrastructures Project
Income from Infrastructure project has been recognized on accrual
basis. Revenue has been recognized on the basis of work done and as per
the terms of the tender / contract. The company records revenue of its
infrastructure projects based on running bill raised. Revenue
expenditure is accounted on accrual basis.
(ii) Construction and Development of Real Estate Project
The Company records its revenue of its residential projects confirming
to Accounting Standard 9 and also based on Guidance note issued by the
ICAI.
The full revenue is recognized on the sale of property
when the company has transferred all significant risks and rewards of
ownership to the buyer and when the company is not required to perform
any substantial acts to complete the contract.
When the Company is obliged to perform any substantial acts after
transfer of all significant risks and rewards of ownership on sale of
property to the buyer, the revenue and cost is recognized on
proportionate basis by applying the percentage completion method.
(iii) Trading (Land and Land Rights)
Income from Trading is recognized when the Company enters into
agreement for sale with the buyer and all significant risks and rewards
have been transferred to the buyer and there is no uncertainty
regarding realisability of the sale consideration.
(iv) Lease Rental (Income)
Income from leasing of commercial complex is recognized on an accrual
basis. The leasing agreements range from 11 months to 10 years
generally and are usually cancellable / renewable by mutual consent on
the agreed terms.
(v) Interest income is accounted on an accrual basis at contracted
rates.
(vi) Dividend income is recognized when the right to receive the same
is established.
(vii) Income on investments is recognized based on the terms of the
investment. Income from mutual fund scheme having fixed maturity plans
is accounted on declaration of dividend or on maturity of such
investments.
i) Employee Benefits
Liability for employee benefits, both short and long term, for present
and past services which are due as per the terms of employment are
recorded in accordance with the Accounting Standard-15 "Employee
Benefits" notified under section 211 (3c) of the Companies Act, 2013
(i) Gratuity and Leave Encashment liabilities are provided for on the
basis of an actuarial valuation on Projected Unit Credit Method as at
the reporting date.
(ii) The company's Contribution to the Provident Fund and Employee
State Insurance is charged to the statement of profit and loss for the
year. The company has no other obligation other than contribution
payable.
j) Borrowing costs
Borrowing costs attributable to the acquisition and/or construction of
qualifying assets is capitalised to as part of the cost of such assets
in accordance with notified Accounting Standard-16 "Borrowing Cost". A
qualifying asset is one that necessarily takes a substantial period
of time to get ready for use or sale. Capitalisation of borrowing cost
is suspended in the period during which the active development is
delayed due to, other than temporary interruption. All other borrowing
costs are charged to the statement of profit and loss as incurred.
k) Inventories
(i) Inventory comprises of Completed property for sale, Land,
Transferable development rights
Completed property for sale, land and transferable property rights are
valued at lower of cost or net realizable value. Cost includes cost of
land, land development rights, acquisition of tenancy rights,
materials, services, borrowing cost and other related overhead as the
case may be.
In case of acquisition of land for development and construction, the
rights are acquired from the owners of the land and the conveyance and
registration thereof will be executed between the original owners and
the ultimate purchasers as per trade practice. As a result, in the
immediate period, generally, the land is not registered in the name of
the company.
(ii) Raw materials and stores
Stock of raw materials and stores are valued at the cost or net
realizable value whichever is less. Cost is arrived at on Weighted
Average Method (WAM) basis.
(iii) Work-in-progress
Construction and Development of Infrastructure Project
Cost of work yet to be certified / billed, as it pertains to contract
cost that relates to future activity on the contract, are recognized as
work-in-progress provided it is probable that they will be recovered.
Work-in-progress is valued at cost or net realizable value whichever is
less. Cost includes direct material, labour and proportion of project
overhead.
Construction and Development of Real Estate Project
Work-in-progress is valued at cost or net realizable value whichever is
less. Cost includes cost of land, land development rights, materials,
services, borrowing cost, acquisition of tenancy rights and other
related overheads.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated cost of completion and estimated
cost necessary to make the sale.
l) Cash Flow Statement
Cash flow is reported using indirect method, whereby profit / (loss)
before extra ordinary items and tax is adjusted for the effects of
transactions of non-cash nature and any deferrals or accruals of past
or future cash receipts or payments. The cash flows from operating,
investing and financing activities of the Company are segregated based
on available information.
Cash equivalents for the purpose of cash flow statements comprise cash
at bank and in hand Cash equivalents are short-term balances that are
readily convertible into known amounts of cash and which are subject to
insignificant risk of changes in value.
m) Earnings Per Share
The company reports basic and diluted earnings per share in accordance
with Accounting Standard-20. Basic earning per equity share is
calculated by dividing the net profit for the year attributable to the
Equity Shareholders by the weighted average number of equity shares
outstanding during the year. Diluted earnings per share is calculated
by dividing the net profit for the year, adjusted for the effects of
dilutive potential equity shares, attributable to the equity
shareholders by weighted average number of the equity shares and
dilutive potential equity shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
n) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised for liabilities that can be measured only by
using a substantial degree of estimation, if ;
(i) the company has a present obligation as a result of past event
(ii) a probable outflow of resources is expected to settle the
obligation and
(iii) the amount of the obligation can be reliably estimated.
Reimbursement expected in respect of expenditure required to settle a
provision is recognised only when it is virtually certain that the
reimbursement will be received. Contingent liability is disclosed in
case of:
(i) a present obligation arising from past events, when it is not
probable that an outflow of resources will be required to settle the
obligation
(ii) a present obligation arising from past events, when no reliable
estimate is possible
(iii) a possible obligation arising from past events where the
probability of outflow of resources is not remote.
Contingent assets are neither recognised, nor disclosed. Provisions,
contingent liabilities and contingent assets are reviewed at each
balance sheet date.
o) General
Accounting policies not specifically referred to are consistent with
generally accepted accounting principles.
Mar 31, 2014
A) Basis of preparation of financial statements:
The financial statements are prepared and presented under the
historical cost convention on an accrual basis of accounting in
accordance with generally accepted accounting principles in India
("Indian GAAP") and are to comply with the Accounting Standards
prescribed in the Companies (Accounting Standards) Rules, 2006 as
amended issued by the Central Government in exercise of the power
conferred under sub-section 1(a) of section 642 and the relevant
provisions of the Companies Act, 1956.
b) Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period.
Management believes that the estimates used in the preparation of
financial statements are prudent and reasonable.
c) Fixed Assets:
a. Tangible Assets
Fixed assets is stated at cost of acquisition or construction including
any cost attributable to bringing the assets to their working condition
for their intended use.
Fixed assets are valued at cost less accumulated depreciation there on.
b. Intangible Assets
All Intangible Assets are initially measured at cost and amortized so
as to reflect the pattern in which the assets economic benefits are
consumed.
d) Depreciation:
Company has provided depreciation at the rates and in the manner laid
down in Schedule XIV to the Companies
Act, 1956 as per "Straight Line Method" in respect of all the fixed
assets.
e) Investments:
Investments are classified into current investments and Non-current
investment. Investments are further classified as quoted and unquoted
investments also.
Non-current Investments are stated at cost of acquisition. If there is
decline in value of non-current investment as on reporting date other
than of temporary in nature, such decline is debited to the statement
of profit and loss as "Provision for diminution in value of
Investments". Subsequent increase in the realizable value of investment
will be credited to the statement of profit and loss to the extent
provision made for.
Current Investments, if any, are stated at cost or fair value whichever
is lower and resultant decline is charged to statement of profit and
loss.
f) Taxation:
Provision for Income tax for the current year is based on the estimated
taxable income for the period in accordance with the provisions of the
Income Tax Act, 1961.
Minimum Alternative Tax (MAT) paid in accordance to the tax laws, which
gives rise to future economic benefits in the form of adjustment of
future income tax liability, is considered as an asset if there is
convincing evidence that company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the balance sheet when it
is probable that the future economic benefit associated with it will
flow to the company and the asset can be measured reliably.
The deferred tax impact resulting from timing difference between
accounting and taxable profit is accounted by using tax rates and tax
laws enacted or substantially enacted as at the Balance sheet date. The
Deferred Tax Asset is recognized and carried forwarded only to the
extent there is reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be
realized.
g) Revenue Recognition:
(i) Infrastructures Development Income
Income from Infrastructure project has been recognized on accrual
basis.
(ii) Real Estate Development
The Company records its revenue of its residential projects confirming
to Accounting Standard 9 and also based on Guidance note issued by the
ICAI.
The full revenue is recognized on sale of property when the company has
transferred all significant risk and rewards of ownership to the buyer
and when the company is not required to perform any substantial acts to
complete contract.
When the Company is obliged to perform any substantial acts after
transfer of all significant risks and rewards of ownership on sale of
property to the buyer, the revenue and cost is recognized on
proportionate basis by applying the percentage completion method.
(iii) Lease
Income from leasing of commercial complex is recognized on an accrual
basis.
(iv) Interest income is accounted on an accrual basis at contracted
rates.
(v) Dividend income is recognized when the right to receive the same is
established.
(vi) Income on investments is recognized based on the terms of the
investment. Income from mutual fund scheme having fixed maturity plans
is accounted on declaration of dividend or on maturity of such
investments.
(vii) Income from Trading Activity is recognized when the seller has
transferred to the buyer the property in goods for a consideration or
significant risks and rewards of ownership have been transferred to the
buyer and no significant uncertainty exists regarding the amount of
consideration that will be derived from the sale of goods.
h) Employee Benefits:
(i) Gratuity and Leave Encashment liabilities are provided for on the
basis of an actuarial valuation on Projected Unit Credit Method as at
the reporting date.
(ii) Company''s Contribution to Provident Fund and Employee State
Insurance is charged to the statement of profit and loss for the year.
The company has no other obligation other than contribution payable.
i) Borrowing costs:
Borrowing costs attributable to the acquisition and/or construction of
qualifying assets is capitalized to as part of the cost of such assets
in accordance with notified
Accounting Standard 16 "Borrowing Costs". A qualifying asset is one
that necessarily takes a substantial period of time to get ready for
use or sale. Capitalization of borrowing costs is suspended in the
period during which the active development is delayed due to, other
than temporary interruption. All other borrowing costs are charged to
the statement of profit and loss as incurred.
j) Inventories:
(i) Land
Land is valued at cost or net realizable value whichever is less.
(ii) Raw materials and stores
Stock of raw materials and stores are valued at cost or net realizable
value whichever is less.
(iii) Work-in-progress
Work-in-progress is valued at cost or net realizable value whichever is
less.
k) Segment Reporting Policies:
The Company has identified that its operating activity is a single
business segment viz., Real Estate and Infrastructure Development from
the risk and return point of view. Geographical also company operates
under one sagment.
l) Impairment of Assets:
At each Balance sheet date, the company consider whether there is any
indication that an asset may be impaired. If any indication exists the
recoverable amount of the asset is estimated. An impairment loss is
recognized immediately whenever the carrying amount of an asset exceeds
its recoverable amount. The recoverable amount is the greater of the
net selling price and value in use, estimated future Cash Flows are
discounted to their present value based on an appropriate discount
factor.
m) Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognized in the accounts in respect of present
probable obligations, the amount of which can be reliably estimated.
Contingent Liabilities are disclosed by way of notes to the accounts
explaining the nature and quantum of such liabilities. Contingent
Assets are neither recognized nor disclosed in the financial
statements.
b. Terms/rights attached to Equity shares
The company has one class of equity shares having a par value of Re.1/-
per share. Each shareholder is eligible for one vote per share held.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting. In
the event of liquidation, the equity shareholders are eligible to
receive the remaining assets of the Company after distribution of all
preferential amounts, in proportion to their shareholding.
d. Out of above, 17,20,00,000 equity share of Re. 1/- each fully paid
up allotted pursuant to the Scheme of Amalgamation, for consideration
other than cash on 24/07/2010.
Nature of security for short term borrowings
*Overdraft facility of Rs. 9,37,72,791/- (P.Y. 6,49,11,613/-) is
secured by way of equitable mortgage of properties situated at 7th to
9th floor Sambhaav House, Ahmedabad and personal guarantee of Mr. Manoj
Vadodaria & Mr. Kiran Vadodaria.
Mar 31, 2013
A) Basis of preparation of financial statements :
The financial statements are prepared and presented under the
historical cost convention on an accrual basis of accounting in
accordance with generally accepted accounting principles in India
("Indian GAAP") and are to comply with the Accounting Standards
prescribed in the Companies (Accounting Standards) Rules, 2006 (as
amended) issued by the Central Government in exercise of the power
conferred under sub-section 1(a) of section 642 and the relevant
provisions of the Companies Act, 1956.
b) Use of Estimates :
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period.
Management believes that the estimates used in the preparation of
financial statements are prudent and reasonable.
c) Fixed Assets :
(i) Tangible Assets
Fixed assets are stated at cost of acquisition or construction
including any cost attributable to bringing the assets to their working
condition for their intended use.
Fixed assets are stated at cost less accumulated depreciation there on.
(ii) Intangible Assets
All Intangible Assets are initially measured at cost and amortized so
as to reflect the pattern in which the assets economic benefits are
consumed.
d) Depreciation and Amortisation :
(i) Company has provided depreciation at the rates and in the manner
laid down in Schedule XIV to the Companies Act,1856 as per "Straight
Line Method" in respect of all fixed assets.
(ii) Computer software is amortised as per "Straight Line Method" over
its useful life, which is estimated as three years.
e) Investments :
Investments are classified into current investments and Non-current
investment. Investments are further classified as quoted and unquoted
investments also.
Non-current Investments are stated at cost of acquisition. If there is
decline in value of non-current investment as on reporting date other
than of temporary in nature, such decline is debited to the statement
of profit and loss as "Provision for diminution in value of
Investments". Subsequent increase in the realizable value of the
investment will be credited to the statement of profit and loss to the
extent provision made for.
Current Investments, if any, are stated at cost or fair value whichever
is lower and resultant decline is charged to statement of profit and
loss.
f) Taxation :
Provision for Income tax for the current year is based on the estimated
taxable income for the period in accordance with the provisions of the
Income Tax Act, 1961.
Minimum Alternative Tax (MAT) paid in accordance to the tax laws, which
gives rise to future economic benefit in the form of adjustment of
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the balance sheet when it
is probable that the future economic benefit associated with it will
flow to the Company and the asset can be measured reliably.
The deferred tax impact resulting from timing difference between
accounting and taxable profit is accounted by using tax rates and tax
laws enacted or substantially enacted as at the Balance sheet date. The
Deferred Tax Asset is recognized and carried forwarded only to the
extent there is reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be
realized.
g) Revenue Recognition :
(i) Infrastructures Development Income
Income from Infrastructure project has been recognized on accrual
basis.
(ii) Real Estate Development
The Company records revenue of its residential projects confirming to
Accounting Standard 9 and also based on Guidance note issued by the
ICAI.
The full revenue is recognized on sale of property when the company has
transferred all significant risk and rewards of ownership to the buyer
and when the company is not required to perform any substantial acts to
complete contract.
When the Company is obliged to perform any substantial acts after
transfer of all significant risks and rewards of ownership on sale of
property to the buyer, the revenue and cost is recognized on
proportionate basis by applying the percentage completion method.
(iii) Lease
Income from leasing of commercial complex is recognized on an accrual
basis.
(iv) Interest income is accounted on an accrual basis at applicable
rates.
(v) Dividend income is recognized when the right to receive the same is
established.
(vi) Income on investments is recognized based on the terms of the
investment. Income from mutual fund scheme having fixed maturity plans
is accounted on declaration of dividend or on maturity of such
investments.
(vii) Income from Trading Activity is recognized when the property in
the goods has transferred to the buyer for a consideration or
significant risks and rewards of ownership have been transferred to the
buyer and no significant uncertainty exists regarding the amount of
consideration that will be derived from the sale of goods.
h) Employee Benefits :
(i) Gratuity and Leave Encashment liabilities are provided for on the
basis of an actuarial valuation on Projected Unit Credit Method as at
the reporting date.
(ii) Company''s Contribution to Provident Fund and Employee State
Insurance is charged to the statement of profit and loss for the year.
The company has no other obligation other than contribution payable.
i) Borrowing Costs :
Borrowing costs attributable to the acquisition and/ or construction of
qualifying assets is capitalized to as part of the cost of such assets
in accordance with notified Accounting Standard 16 "Borrowing Costs". A
qualifying asset is one that necessarily takes a substantial period of
time to get ready for use or sale. Capitalization of borrowing costs is
suspended in the period during which the active development is delayed
due to, other than temporary interruption. All other borrowing costs
are charged to the statement of profit and loss as incurred.
j) Inventories :
(i) Land
Land is valued at cost or net realizable value whichever is less.
(ii) Raw materials and stores
Stock of raw materials and stores are valued at cost or net realizable
value whichever is less.
(iii) Work-in-Progress
Work-in-Progress is valued at cost or net realizable value whichever is
less.
k) Segment Reporting Policies :
The Company has identified that its operating activity is a single
business segment viz., Real Estate and Infrastructure Development from
the risk and return point of view. Geographically also company operates
under one segment.
l) Impairment of Assets :
At each Balance sheet date, the company consider whether there is any
indication that an asset may be impaired. If any indication exists the
recoverable amount of the asset is estimated. An impairment loss is
recognized immediately whenever the carrying amount of an asset exceeds
its recoverable amount. The recoverable amount is the greater of the
net selling price and value in use, estimated future Cash Flows are
discounted to their present value based on an appropriate discount
factor.
m) Provisions, Contingent Liabilities and Contingent Assets :
Provisions are recognized in the accounts in respect of present
probable obligations, the amount of which can be reliably estimated.
Contingent Liabilities are disclosed by way of notes to the accounts
explaining the nature and quantum of such liabilities. Contingent
Assets are neither recognized nor disclosed in the financial
statements.
Mar 31, 2012
A) Basis of preparation of financial statements:
The financial statements are prepared and presented under the
historical cost convention on an accrual basis of accounting in
accordance with generally accepted accounting principles in India
("Indian GAAP") and are to comply with the Accounting Standards
prescribed in the Companies (Accounting Standards) Rules, 2006 (as
amended) issued by the Central Government in exercise of the power
conferred under sub-section 1(a) of section 642 and the relevant
provisions of the Companies Act, 1956.
b) Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period.
Management believes that the estimates used in the preparation of
financial statements are prudent and reasonable.
c) Fixed Assets:
(i). Tangible Assets
Fixed assets are stated at cost of acquisition or construction
including any cost attributable to bringing the assets to their working
condition for their intended use.
Fixed assets are stated at cost less accumulated depreciation there on.
(ii). Intangible Assets
All Intangible Assets are initially measured at cost and amortized so
as to reflect the pattern in which the assets economic benefits are
consumed.
d) Depreciation:
Company has provided depreciation at the rates and in the manner laid
down in Schedule XIV to the
Companies Act, 1956 as per "Straight Line Method" in respect of all the
fixed assets.
e) Investments:
Investments are classified into current investments and Non-current
investment. Investments are further classified as quoted and unquoted
investments also.
Non-current Investments are stated at cost of acquisition. If there is
decline in value of non-current investment as on reporting date other
than of temporary in nature, such decline is debited to the statement
of profit and loss as "Provision for diminution in value of
Investments". Subsequent increase in the realizable value of the
investment will be credited to the statement of profit and loss to the
extent provision made for.
Current Investments, if any, are stated at cost or fair value whichever
is lower and resultant decline is charged to statement of profit and
loss.
f) Taxation:
Provision for Income tax for the current year is based on the estimated
taxable income for the period in accordance with the provisions of the
Income Tax Act, 1961.
Minimum Alternative Tax (MAT) paid in accordance to the tax laws, which
gives rise to future economic benefit in the form of adjustment of
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the balance sheet when it
is probable that the future economic benefit associated with it will
flow to the Company and the asset can be measured reliably.
The deferred tax impact resulting from timing difference between
accounting and taxable profit is accounted by using tax rates and tax
laws enacted or substantially enacted as at the Balance sheet date. The
Deferred Tax Asset is recognized and carried forward only to the extent
there is reasonable certainty that sufficient future taxable income
will be available against which such deferred tax assets can be
realized.
g) Revenue Recognition:
(i) Infrastructures Development Income
Income from Infrastructure project has been recognized on accrual
basis.
(ii) Real Estate Development
The Company records its revenue of its residential projects confirming
to Accounting Standard 9 and also based on Guidance note issued by the
ICAI.
The full revenue is recognized on sale of property when the company has
transferred all significant risk and rewards of ownership to the buyer
and when the company is not required to perform any substantial acts to
complete contract.
When the Company is obliged to perform any substantial acts after
transfer of all significant risks and rewards of ownership on sale of
property to the buyer, the revenue and cost is recognized on
proportionate basis by applying the percentage completion method.
(iii) Lease
Income from leasing of commercial complex is recognized on an accrual
basis.
(iv) Interest income is accounted on an accrual basis at applicable
rates.
(v) Dividend income is recognized when the right to receive the same is
established.
(vi) Income on investments is recognized based on the terms of the
investment. Income from mutual fund scheme having fixed maturity plans
is accounted on declaration of dividend or on maturity of such
investments.
(vii) Income from Trading Activity is recognized when the property in
the goods has transferred to the buyer for a consideration or
significant risks and rewards of ownership have been transferred to the
buyer and no significant uncertainty exists regarding the amount of
consideration that will be derived from the sale of goods.
h) Employee Benefits:
(i) Gratuity and Leave Encashment liabilities are provided for on the
basis of an actuarial valuation on Projected Unit Credit Method as at
the reporting date.
(ii) Company's Contribution to Provident Fund and Employee State
Insurance is charged to the statement of profit and loss for the year.
The company has no other obligation other than contribution payable.
i) Borrowing Costs:
Borrowing costs attributable to the acquisition and/or construction of
qualifying assets is capitalized to as part of the cost of such assets
in accordance with notified Accounting Standard 16 "Borrowing Costs". A
qualifying asset is one that necessarily takes a substantial period of
time to get ready for use or sale. Capitalization of borrowing costs is
suspended in the period during which the active development is delayed
due to, other than temporary interruption. All other borrowing costs
are charged to the statement of profit and loss as incurred.
j) Inventories:
(i) Land
Land is valued at cost or net realizable value whichever is less.
(ii) Raw materials and stores
Stock of raw materials and stores are valued at cost or net realizable
value whichever is less.
(iii) Work-in-Progress
Work-in-Progress is valued at cost or net realizable value whichever is
less.
k) Segment Reporting Policies:
The Company has identified that its operating activity is a single
business segment viz., Real Estate and Infrastructure Development from
the risk and return point of view. Geographically also company operates
under one segment.
l) Impairment of Assets:
At each Balance sheet date, the company consider whether there is any
indication that an asset may be impaired. If any indication exists the
recoverable amount of the asset is estimated. An impairment loss is
recognized immediately whenever the carrying amount of an asset exceeds
its recoverable amount. The recoverable amount is the greater of the
net selling price and value in use, estimated future Cash Flows are
discounted to their present value based on an appropriate discount
factor.
m) Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognized in the accounts in respect of present
probable obligations, the amount of which can be reliably estimated.
Contingent Liabilities are disclosed by way of notes to the accounts
explaining the nature and quantum of such liabilities. Contingent
Assets are neither recognized nor disclosed in the financial
statements.
Mar 31, 2011
(a) Basis of preparation of financial statements:
The financial statements are prepared and presented under the
historical cost convention on an accrual basis of accounting in
accordance with generally accepted accounting principles in India
("Indian GMP') and are to comply with the Accounting standards
prescribed In the Companies (Accounting Standards Rules, 2006 as
amended issued by the Central Government in exercise of the power
Conferred under sub- section l(a) of section 642 and the relevant
provisions of the Companies Act, 1956.
(b) Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Management
believes that the estimates used in the preparation of financial
statements are prudent and reasonable.
(c) Fixed Assets:
i. Tangible Assets
The Gross block of fixed assets is stated at Cost of acquisition Or
construction including any cost attribute the bringing the assets to
their working condition for their intended use.
Fixed assets are valued at cost less accumulated depreciation there on.
ii. Intangible Assets
All intangible Assets are initially measured at cost and amortized so
as to reflect the pattern in which the assets economic benefits are
consumed.
d) Depreciation;
Company has provided depreciation at the rates and in the manner laid
down in Schedule XIV to the Companies Act. 1956 as per "Straight Line
Method' in respect of all the fixed assets.
(e) Investments:
Investments are classified into long term and current investment.
Investment are further classified as quoted and unquoted investment
also.
Long term investments are stated at cost of acquisition. If there is
decline in value of quoted long term investment as on resorting date
other than of temporary in nature, such decline is debited to profit
and loss account as "Provision for diminution in value of Investments".
However, realizable value is increased subsequently; the Increase in
value of Investment will be credited to profit and loss account to the
extent provision made for.
Current Investments / Short term investments, If any are stated at cost
or fair value and resultant decline is charged to revenue.
(F) Provision for Income Tax and Deferred Tax:
Provision for Income tax for the current year is based on the estimated
taxable income for the period in accordance with the provisions of the
income tax Act 1961.
The deferred tax impact resulting from timing difference between
accounting and taxable profit is accounted by using tax rates and tax
laws enacted or substantially enacted as at the Balance sheet date, The
Deferred tax asset Is recognized and earned forwarded only to the
extent where is reasonable certainty that sufficient future taxable
Income will be available against which such deferred tax assets can to
realized.
(g) Revenue Recognition:
i. Infrastructure Development Income
Income from Infrastructures Project has been recognized on accrual
basis,
ii. Real Estate Development
The Company records its revenue of its residential projects confirming
to Accounting Standard 9 and also based on guidance note Issued by
ICAI.
The full revenue is recognized on sale of property when the Company has
transferred all significant risk and rewards of ownership to the buyer
when the company is not required do perform any substantial acts to
complete contract.
When the Company is obliged to perform any substantial acts after
transfer of all significant risks and rewards of ownership on sale of
property to the buyer, the revenue and cost is recognized on
proportionate basis by applying the percentage completion method,
iii. Lease
Income from leasing of commercial complex is recognized over the tenure
of lease or service agreement.
iv. interest income is accounted on an accrual basis at contracted
rates.
v. Dividend Income is recognized when the right to receive the same is
established.
vi. Income on investments is recognized based on the terms of the
investment, Income from mutual fund scheme having fixed maturity plans
is accounted on declaration of dividend or on maturity of such
investments.
(h) Employee Benefits
1. Gratuity and leave encashment liabilities are provided for on the
basis of an actuarial valuation on projected unit credit method as at
the reporting date.
ii. Company's Contribution to provident fund and employee state insure
nee a recharged to profit and loss account of the year. The company
has no other obligation other than contribution payable.
(i) Borrowing costs:
Borrowing costs are attributable to the acquisition and/ or
construction of qualifying assets is capitalized to as part of the cost
of such assets. In accordance with notified Accounting Standard
16"Borrowing Costs". A qualifying asset is one that necessarily takes a
substantial period Of time to gel ready for use Or sale. Capitalization
of borrowing casts is suspended in the period during which the active
development is delayed due to, other than temporary interruption. All
other borrowing costs are charged to profit and loss account as
incurred,
(j) Inventories:
i, Land
Land is valued at cost or net realizable value whichever is less.
ii. Raw materials and stores
Stock of raw materials and stores are valued at cost or net realizable
value whichever is less.
iii. Work-in-progress
Work-in-progress is valued at cost or net realizable value whichever is
less.
(k) Segment Reporting Policies
The Company has identified that operating activity is a single business
segment viz., Real Estate & Infrastructure Development from the risks
and return point of view and Geographic point of view.
(l) Impairment of Assets:
At each Balance sheet date, the company consider whether there is any
indication that an asset may be impaired. If any indication exits the
recoverable amount of the asset is estimated. An Impairment loss is
recognized immediately whenever the carrying amount of an asset exceeds
its recoverable amount. The recoverable amount is the greater of the
net selling price and value in use, estimated future cash flows are
discounted to their present value based on an appropriate discount
factor.
(m) Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognized in the accounts in aspect of present crooablo
obligations, the amount of which can be reliably estimated.
Contingent Liabilities are disclosed by way of notes to the accounts
explaining the nature and quantum of such liabilities.
Contingent Assets are neither recognized nor discloses in the financial
statements.
Mar 31, 2010
A) Basis of preparation of Financial Statements:
The Financial Statements are prepared and presented under the
historical cost convention on an accrual basis of accounting in
accordance with generally accepted accounting principles in India
("Indian GAAP") and are in compliance with Accounting Standards issued
by the Institute of Chartered Accountants of India ("ICAI") and the
relevant provisions of the Companies Act, 1956.
b) Accounting Convention and Revenue Recognition:
The Company follows mercantile system of accounting and recognizes
significant items of income and expenditure on accrual basis.
Insurance and other claims are accounted for as and when admitted by
the appropriate authorities.
c) Fixed Assets:
a. Fixed Assets are valued at cost less accumulated depreciation.
b. Cost includes all costs incurred to bring the asset to their
working condition and location.
d) Depreciation:
Company has provided depreciation at the rates and in the manner laid
down in Schedule XIV to the Companies Act, 1956 as per "Straight Line
Method" in respect of all the fixed assets.
e) Investments:
Investments are classified into long term and current investments. Long
term investment are stated at cost of acquisition.
If there is decline in value of quoted long term investments as on
reporting date, such decline is debited to profit & loss account as
Provision for Diminution in value of Investments. However realizable
value is increased subsequently, the
increase in value of such investment will be credited to profit & loss
account to the extent provision made for.
Current investments / short term investments, if any, are stated at
lower of cost or fair value and resultant decline is charged to
revenue.
f) Provision for Income Ta x and Deferred Tax:
Provision for Income tax for the current year is based on the estimated
taxable income for the period in accordance with the provisions of the
Income Tax Act, 1961.
The Deferred Tax impact resulting from timing difference between
accounting & taxable profit is accounted by using tax rates & tax laws
that have been enacted or substantially enacted as at the Balance Sheet
date. The Deferred Tax Asset is recognized and carried forward only to
the extent there is a reasonable certainty that the asset will be
realized in the future.
g) Revenue Recognition 1) Project Income:
Infrastructure Development Income :
Income from Infrastructure development have been recognized on accrual
basis.
Income from Real Estate Development Projects:
i) The Company records revenue of its residential project - Asmaakam
confirming to Accounting Standard à 9 and also based on guidance note
issued by ICAI.
ii) The full revenue is recognized on sale of property when the Company
has transferred all significant risks & rewards of ownership to the
buyer and when the company is not required to perform any substantial
acts to complete the contract.
iii) When the Company is obliged to perform any
substantial acts after transfer of all significant risks and rewards of
ownership on sale of property to the buyer, the revenue and cost is
recognized on proportionate basis by applying the percentage completion
method.
2) Leases
Income from leasing of commercial complex is recognized over the tenure
of lease or service agreements.
h) Employee Benefits:
a. Gratuity and leave encashment liability is provided for on the
basis of an actuarial valuation.
b. Companys contribution to provident fund is charged to profit and
Loss Account of the year. The company has no other obligation other
than the contribution payable.
i) Inventories:
a. Land:
Land is valued at cost.
b. Raw Materials:
Stock of Raw Materials is valued at cost.
c. Work-in-progress: Work-in-progress is valued at cost.
j) Borrowing Costs
Borrowing costs are recognized as an expense in the period in which
these are incurred.
k) Segment Reporting Policies
The Company has identified that its operating activity is a single
business segment viz., Real Estate & Infrastructure Development from
the risks and return point of view and Geographical point of view.
l) Impairment of Assets
At each balance sheet date, the Company consider whether there is any
indication that an asset may be impaired. If any indication exists, the
recoverable amount of the asset is estimated. An impairment
loss is recognized immediately whenever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is the greater
of the net selling price and value in use. In assessing value in use,
estimated future cash flow are discounted to their present value based
on an appropriate discount factor.
m) Contingent Liabilities:
Contingent Liabilities are disclosed by way of notes to the accounts
explaining the nature and quantum of such liabilities.
Contingent liabilities are disclosed in respect of possible obligations
that arise from past events but the existence is confirmed by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the company.
Mar 31, 2009
(a) Basis of preparation of Financial Statements:
The Financial Statements are prepared and presented under the
historical cost convention on the accrual basis of accounting in
accordance with Generally Accepted Accounting Principles in India
("Indian GAAP") and are in compliance with Accounting Standards issued
by the Institute of Chartered Accountants of India ("ICAI") and the
provisions of Companies Act, 1956.
(b) Accounting Convention and Revenue Recognition:
The Company follows mercantile system of accounting and recognizes
significant items of income and expenditure on accrual basis.
Insurance and other claims are accounted for as and when admitted by
the appropriate authorities.
(c) Fixed Assets:
a. Fixed Assets are valued at cost less accumulated depreciation.
b. Cost includes all costs incurred to bring the asset to their
working condition and location.
(d) Depreciation:
Company has provided Depreciation at the rates and in the manner laid
down in Schedule XIV to the Companies Act, 1956 as per "Straight Line
Method" in respect of all assets.
(e) Investments:
Investments are stated at cost of acquisition.
(f) Provision for Income Tax:
Provision of Income tax for the current year is based on the estimated
taxable income for the period in accordance with the provisions of the
income Tax Act, 1961.
(g) Provision for Deferred Tax
The Deferred Tax resulting from timing difference between accounting &
taxable profit is accounted by using tax rates & tax laws that have
been enacted or substantively enacted as at the Balance Sheet date. The
Deferred Tax Asset is recognized & carried forward only to the extent
there is a reasonable certainty that the asset will be realized in the
future.
(h) Business Income:
Infrastructure Development Income:
Income from Infrastructure development have been recognized on accrual
basis.
Income from Real Estate Development Projects:
(I) The Company records revenue of its residential project - Asmaakam
confirming to Accounting Standard - 9 and also based on guidance note
issued by The Institute of Chartered Accountants of India.
(ll)The full revenue is recognized on sale of property when the Company
has transferred all significant risks & rewards of ownership to the
buyer and when the company is not required to perform any substantial
acts to complete the contract.
(Ill) When the Company is obliged to perform any substantial acts after
transfer of all significant risks and rewards of ownership on sale of
property to the buyer, the revenue and cost is recognized on
proportionate basis by applying the percentage completion method.
(i) Staff Benefit:
(I) Gratuity liability is provided for on the basis of an actuarial
valuation.
(II) Companys contribution to provident fund is charged to profit and
Loss Account of the year. The company has no other obligation other
than the contribution payable.
(j) Inventories:
(i) Land:
Land is valued at cost.
(ii) Raw Materials:
Stock of Raw Materials is valued at cost.
(iii) Work-in-progress:
Closing stock of work-in-progress is valued at cost.
(k) Contingent Liabilities:
Contingent Liabilities are disclosed by way of notes to the accounts
explaining the nature and quantum of such liabilities.
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