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Accounting Policies of Supreme Holdings & Hospitality (India) Ltd. Company
Mar 31, 2025
2 Significant accounting policies
(a) Basis of preparation
The Standalone Financial Statements have been prepared to comply in all material respects with the Indian Accounting Standards
notified under Section 133 of Companies Act, 2013 (the Act) read with Companies Indian Accounting Standards (Ind AS) Rules,
2015 and other relevant provisions of the Act and rules framed thereunder.
The standalone financial statements have been prepared under the historical cost convention and on accrual basis, except for
certain financial assets and liabilities measured at fair value as explained in accounting policies below.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation
technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or
liability as if market participants would take those characteristics into account when pricing the asset or liability at the
measurement date.
The financial statements are presented in Indian National Rupee (INR) lakhs, except when otherwise indicated.
(b) Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle (twelve
months) and other criteria set out in Schedule III to the Act.
(c) Property, plant and equipment
i) All property, plant and equipment are stated at original cost of acquisition/installation (net of input tax credits availed) less
accumulated depreciation and impairment loss, if any, except freehold land which is carried at fair market value. Cost includes
cost of acquisition, construction and installation, taxes (other than input tax credit availed), duties, freight and other
incidental expenses that are directly attributable to bringing the asset to its working condition for the intended use and
estimated cost for decommissioning of an asset
ii) Subsequent expenditure is capitalised only if it is probable that future economic benefit associated with the
expenditure will flow to the Company.
iii) Property, plant and equipment is derecognised from financial statements, either on disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the property (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and
loss in the period in which the property, plant and equipment is derecognised.
iv) Depreciation on property, plant and equipment is provided on âStraight Line Method" based on the useful life specified in
Schedule II of the Companies Act, 2013.
(d) Investment Property
i) 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 initially at its cost, including related transaction costs and where applicable
borrowing costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation
and accumulated impairment losses, if any. All other repairs and maintenance costs are expensed when incurred. When part
of an investment property is replaced, the carrying amount of the replaced part is derecognised.
ii) The useful lives have been determined based on technical evaluation done by the management''s expert which are as per those
specified by Schedule II to the Companies Act; 2013, in order to reflect the actual usage of the assets.
iii) The fair values of investment property is disclosed in the notes. Fair values is determined by an independent valuer who holds
a recognised and relevant professional qualification and has recent experience in the location and category of the investment
property being valued.
(e) Inventories
Direct expenditure relating to real estate activity is inventorised. Other expenditure (including borrowing costs) during
construction period is inventorised to the extent the expenditure is directly attributable cost of bringing the asset to its working
condition for its intended use. Other expenditure (including borrowing costs) incurred during the construction period which is
not directly attributable for bringing the asset to its working condition for its intended use is charged to the statement of profit and
loss. Direct and other expenditure is determined based on specific identification to the real estate activity.
i) Construction materials and consumables
The construction materials and consumables are valued at lower of cost or net realisable value. The construction materials
and consumables purchased for construction work issued to construction are treated as consumed.Cost is determined based
on FIFO basis.
ii) Construction work in progress
Represents cost incurred in respect of unsold area (including land) of the real estate development projects or cost incurred on
projects where the revenue is yet to be recognized. The construction work in progress is valued at lower of cost or net
realisable value.
iii) Finished stock of completed projects
Finished stock of completed projects and stock in trade of units is valued at lower of cost or net realisable value.
(f) Fair value measurement
The Company''s accounting policies and disclosures require the measurement of fair values for financial instruments.
The Company has an established control framework with respect to the measurement of fair values. The management regularly
reviews significant unobservable inputs and valuation adjustments.
All financial assets and financial liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
⢠Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
⢠Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable, or
⢠Level 3-Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the
change has occurred.
(g) Equity investments in subsidiary
Investments in subsidiary are accounted at cost in accordance with Ind AS 27 âSeparate financial statements".
(h) Financial instruments
I Financial assets
I) Classification
The Company classifies its financial assets either at fair value through profit or loss (FVTPL), fair value through other
comprehensive income (FVTOCI) or at amortised cost, based on the Group''s business model for managing the financial
assets and their contractual cash flows.
ii) Initial recognition and measurement
The Comapany at initial recognition measures a financial asset at its fair value plus transaction costs that are directly
attributable to it''s acquisition. However, transaction costs relating to financial assets designated at fair value through profit
or loss (FVTPL) are expensed in the statement of profit and loss for the year.
iii) Subsequent measurement
For the purpose of subsequent measurement, the financial asset are classified in four categories:
(a) Debt instrument at amortised cost
(b) Debt instrument at fair value through other comprehensive income
(c) Debt instrument at fair value through profit or loss
(d) Equity investments
Debt instruments
⢠Amortised cost:
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal
and interest are measured at amortised cost. A gain or loss on such instruments is recognised in profit or loss when the
asset is derecognised or impaired. Interest income from these financial assets is calculated using the effective interest
rate method and is included under the head "Finance income".
⢠Fair value through other comprehensive income (FVTOCI):
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash
flows represent solely payments of principal and interest, are measured at fair value through other comprehensive
income (FVTOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment
gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the statement of profit
and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified
from equity to statement of profit and loss. Interest income from these financial assets is calculated using the effective
interest rate method and is included under the head ''''Finance incomeâ.
⢠Fair value through profit or loss:
Assets that do not meet the criteria for amortised cost or fair value through other comprehensive income (FVTOCI) are
measured at fair value through profit or loss. Gain and losses on fair value of such instruments are recognised in
statement of profit and loss. Interest income from these financial assets is included in other income.
⢠Equity investments other than investments in subsidiaries, joint ventures and associates
The Comapny subsequently measures all equity investments other than investments in subsidiaries, joint ventures and
associates at fair value. Where the Group''s management has elected to present fair value gains and losses on equity
investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to the
statement of profit and loss in the event of de-recognition. Dividends from such investments are recognised in the
statement of profit and loss as other income when the Group''s right to receive payments is established. Changes in the fair
value of financial assets at fair value through profit or loss are recognised in the statement of profit and loss. Impairment
losses (and reversal of impairment losses) on equity investments measured at FVTOCI are not reported separately from
other changes in fair value.
iv) Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at
amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a
significant increase in credit risk
v) De-recognition of financial assets
A financial asset is derecognised only when:
⢠The rights to receive cash flows from the financial asset have expired
⢠The Company has transferred substantially all the risks and rewards of the financial asset or
⢠The Company has neither transferred nor retained substantially all the risks and rewards of the financial asset, but has
transferred control of the financial asset
II Financial liabilities
(I) Classification
The Company classifies all financial liabilities at amortised cost or fair value through profit or loss.
(ii) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, deposits or as payables, as appropriate. All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable transaction costs.
(iii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
a. Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for
trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading
are recognised in the profit or loss.
b. Loans, borrowings and deposits
After initial recognition, loans, borrowings and deposits are subsequently measured at amortised cost using the effective
interest rate (EIR) method. Gains and losses are recognised in the statement of profit and loss when the liabilities are
derecognised as well as through the EIR amortization process. The EIR amortisation is included in project costs in the
statement of profit and loss
c. Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year
which are unpaid. For trade and other payables maturing within one year from the balance sheet date, the carrying
amounts approximate fair value due to the short-term maturity of these instruments.
d. De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the de- recognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in
the statement of profit or loss.
(i) Cash and cash equivalents
(i) Cash and cash equivalents in the balance sheet comprise cash at bank and on hand and short-term deposit with original
maturity upto three months, which are subject to insignificant risk of changes in value.
(ii) For the purpose of presentation in the statement of cash flows, cash and cash equivalents consists of cash and short- term
deposit, as defined above, net of outstanding bank overdraft as they are considered as an integral part of Group''s cash
management.
(j) Revenue recognition
(i) Revenue from real estate development/sale, maintenance services, construction and project management services
Revenue from contracts with customers
Revenue is recognised on satisfaction of performance obligation upon transfer of control of promised products (residential or
commercial completed units) or services to customers in an amount that reflects the consideration the Company expects to
receive in exchange for those products or services. Revenue and trade receivables are recorded at transaction price, which is
the consideration, adjusted for discounts and other credits, if any, as specified in the contract with customers.
The Company satisfies the performance obligation and recognises revenue over time if one of the following criteria is met: i)
the Customer simultaneously receives and consumes the benefit provided by the Company''s performance as the Company
performs; or ii) the Company''s performance creates or enhances an asset that the customer controls as the asset is created or
enhanced; or iii) the Company''s performance does not create an asset with an alternative use to the Company and the entity
has an enforceable right to payment for performance completed to date.For performance obligations where any one of the
above conditions are not met, revenue is recognised at a point in time at which the performance obligation is satisfied.
In case, revenue is recognised over the time, it is being recognised from the financial year in which the agreement to sell or any
other binding documents containing salient terms of agreement to sell is executed. In respect of ''over the period of time'', the
revenue is recognised based on the percentage-of-completion method (''POC method'') of accounting with cost of construction
incurred (input method) for the respective projects determining the degree of completion of the performance obligation.
The period over which revenue is recognised is based on entityâs right to payment for performance completed. In determining
whether an entity has right to payment, the entity shall consider whether it would have an enforceable right to demand or
retain payment for performance completed to date, if the contract were to be terminated before completion for reasons other
than entity''s failure to perform as per the terms of the contract.
The Company bills to customers for construction contracts as per agreed terms. The Company adjusts the transaction price for
the effects of the significant financing component included in the contract price in the case of contracts involving the sale of
property under development, where the Company offers deferred payment schemes to its customers.
Revenue from construction services being cost plus contracts is recognised over time and is determined with reference to the
extent performance obligations have been satisfied. The amount of transaction price allocated to the performance obligations
satisfied represents the recoverable costs incurred during the period plus the margin as agreed with the customer.
The revenue recognition requires forecasts to be made of the total budgeted costs with the outcomes of underlying
construction contracts, which further require assessments and judgements to be made on changes in work scopes and other
payments to the extent they are probable and they are capable of being reliably measured. In case, where the contract cost is
estimated to exceed total revenues from the contract, the loss is recognised immediately in the statement of profit an Revenue
recognised in excess of invoicing is classified as contract asset while invoicing in excess of revenue recognised (billing in
excess of contract revenue), deferred revenue i.e. where revenue is being recognised post completion of the project and
advance from customers are classified as contract liabilities.
(ii) Revenue from sale of goods
Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the
buyer, recovery of the consideration is probable, the associated cost can be estimated reliably, there is no continuing effective
control or managerial involvement with the goods, and the amount of revenue can be measured reliably. Revenue from sale of
goods is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms
of payment and excluding taxes or duties collected on behalf of the government.
(iii) Dividend income
Dividend income is recognized when the Company''s right to receive the dividend is established.
(iv) Interest income
Interest income for all debt instruments, measured at amortised cost or fair value through other comprehensive income, is
recognised using the effective interest rate method.
(iv) Rentincome
Rental income is recognised on a time proportion basis as per the contractual obligations agreed with the respective tenant.
k) Foreign currency transactions
(i) Foreign currency transactions are recorded in the reporting currency (INR) by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign currency on the date of the transaction.
(ii) All monetary items denominated in foreign currency are converted into (INR) at the year-end exchange rate. The exchange
differences arising on such conversion and on settlement of the transactions are recognised in the statement of profit and loss.
Non-monetary items in terms of historical cost denominated in a foreign currency are reported using the exchange rate
prevailing on the date of the transaction.
(l) Income taxes
The income tax expenses comprises current and deferred tax. It is recognised in the statement of profit and loss except to the
extent that it relates to items recognised directly in equity or in other comprehensive income.
Current tax:
The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period.
Deferred tax:
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for financial
reporting purposes and the amount used for taxation purposes.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent
that is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised, such
reductions are reversed when the probability of future taxable profit improves.
Unrecognised deferred tax assets are measured at each reporting date and recognised to the extent it has become probable that
future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, using tax
rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects
at the reporting date to recover or settle the carrying amount of its assets and liabilities.
Minimum Alternate Tax (MAT) credit is recognised as deferred tax asset only when and to the extent there is convincing evidence
that the Company will pay normal income tax during the specified period. Such asset is reviewed at each balance sheet date and the
carrying amount of MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the
Company will pay normal income tax during the specified period.
(m) Employee benefits
(i) Short-term benefits
Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss for
the year in which the related services are rendered.
(ii) Defined contribution plans
Payments to defined contribution retirement benefit schemes are charged to the statement of profit and loss of the year when
the contribution to the respective funds are due. There are no other obligations other than the contribution payable to the
fund.
(iii) Defined benefit plans
Defined benefits plans are recognized as an expense in the consolidated statement of profit and loss for the year in which the
employee has rendered services. The expense is recognized at the present value of the amount payable determined using
actuarial valuation techniques. The cost of providing benefits under the defined benefit plan is determined using the
projected unit credit method.
Re-measurement of the net defined benefit liability, which comprises of actuarial gains and losses, are recognised in other
comprehensive income in the period in which they occur.
(n) Impairment of non-financial assets
The carrying amounts of non financial assets are reviewed at each balance sheet date if there is any indication of impairment based
on internal/external factors. An asset is treated as impaired when the carrying amount exceeds its recoverable value. The
recoverable amount is the greater of an asset''s or cash generating unit''s, net selling price and value in use. In assessing value in use,
the estimated future cash flows are discounted to the present value using a pre-tax discount rate that reflects current market
assessment of the time value of money and risks specific to the assets. An impairment loss is charged to the statement of profit and
loss in the year in which an asset is identified as impaired. After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life. The impairment loss recognized in prior accounting periods is reversed by
crediting the statement of profit and loss if there has been a change in the estimate of recoverable amount.
(o) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the
period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive
potential equity shares except when the results would be anti-dilutive.
Mar 31, 2024
1 Company information
Supreme Holdings & Hospitality (India) Limited (the company) is a public limited company domiciled in India and incorporated under
the provisions of Companies Act, 1956. The company is engaged in development of commercial and residential projects.
The separate financial statements (hereinafter referred to as "Financial Statementsâ) of the Company for the year ended 31 March
2024 were approved and authorised for issue by the Board of Directors at their meeting held on 27 May 2024.
2 Significant accounting policies
(a) Basis of preparation
The financial statements have been prepared to comply in all material respects with the Indian Accounting Standards notified under Section 133 of Companies Act, 2013 (the Act) read with Companies Indian Accounting Standards (Ind AS) Rules, 2015 and other relevant provisions of the Act and rules framed thereunder.
The financial statements have been prepared under the historical cost convention and on accrual basis, except for certain financial assets and liabilities measured at fair value as explained in accounting policies below.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless ofwhether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability as if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
The financial statements are presented in Indian National Rupee (INR) lakhs, except when otherwise indicated.
(b) Current and non-current classification
Allassetsandliabilitieshavebeenclassifiedascurrentornon-currentaspertheCompany''snormaloperatingcycle(twelvemonths)and other criteria set out in Schedule III to the Act.
(c) Property, plant and equipment
i) All property, plant and equipment are stated at original cost of acquisition/installation (net of input tax credits availed) less accumulated depreciation and impairment loss, if any, except freehold land which is carried at fair market value. Cost includes cost of acquisition, construction and installation, taxes (other than input tax credit availed), duties, freight and other incidental expenses that are directly attributable to bringing the asset to its working condition for the intended use and estimated cost for decommissioning of an asset
ii) Subsequent expenditure is capitalised only if it is probable that future economic benefit associated with the expenditure will flow to the Group
iii) Property, plant and equipment is derecognised from financial statements, either on disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss in the period in which the property, plant and equipment is derecognised.
iv) Depreciation on property, plant and equipment is provided on âStraight Line Method" based on the useful life specified in Schedule II of the Companies Act, 2013.
(d) Investment Property
i) 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 initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised.
ii) The useful lives have been determined based on technical evaluation done by the management''s expert which are as per those specified by Schedule II to the Companies Act; 2013, in order to reflect the actual usage of the assets.
iii) The fair values of investment property is disclosed in the notes. Fair values is determined by an independent valuer who holds a recognised and relevant professional qualification and has recent experience in the location and category of the investment property being valued.
(e) Inventories
Direct expenditure relating to real estate activity is inventorised. Other expenditure (including borrowing costs) during
construction period is inventorised to the extent the expenditure is directly attributable cost of bringing the asset to its working condition for its intended use. Other expenditure (including borrowing costs) incurred during the construction period which is not directly attributable for bringing the asset to its working condition for its intended use is charged to the statement of profit and loss. Direct and other expenditure is determined based on specific identification to the real estate activity.
i) Construction materials and consumables
The construction materials and consumables are valued at lower of cost or net realisable value. The construction materials and consumables purchased for construction work issued to construction are treated as consumed.Cost is determined based on FIFO basis.
ii) Construction work in progress
Represents cost incurred in respect of unsold area (including land) of the real estate development projects or cost incurred on projects where the revenue is yet to be recognized. The construction work in progress is valued at lower of cost or net realisable value.
iii) Finished stock of completed projects
Finished stock of completed projects and stock in trade of units is valued at lower of cost or net realisable value.
(f) Fair value measurement
The Company accounting policies and disclosures require the measurement of fair values for financial instruments.
The Company has an established control framework with respect to the measurement of fair values. The management regularly reviews significant unobservable inputs and valuation adjustments.
All financial assets and financial liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
⢠Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
⢠Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable, or
⢠Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
(g) Equity investments in subsidiary
Investments in subsidiary are accounted at cost in accordance with Ind AS 27 âSeparate financial statements".
(h) Financial instruments I Financial assets
I) Classification
The Company classifies its financial assets either at fair value through profit or loss (FVTPL), fair value through other comprehensive income (FVTOCI) or at amortised cost, based on the Group''s business model for managing the financial assets and their contractual cash flows.
ii) Initial recognition and measurement
The Company at initial recognition measures a financial asset at its fair value plus transaction costs that are directly attributable to it''s acquisition. However, transaction costs relating to financial assets designated at fair value through profit or loss (FVTPL) are expensed in the statement of profit and loss for the year.
iii) Subsequent measurement
For the purpose of subsequent measurement, the financial asset are classified in four categories:
(a) Debt instrument at amortised cost
(b) Debt instrument at fair value through other comprehensive income
(c) Debt instrument at fair value through profit or loss
(d) Equity investments
Debt instruments
⢠Amortised cost:
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on such instruments is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is calculated using the effective interest rate method and is included under the head "Finance income".
⢠Fair value through other comprehensive income (FVTOCI):
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash
flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVTOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the statement of profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to statement of profit and loss. Interest income from these financial assets is calculated using the effective interest rate method and is included under the head ''''Finance incomeâ.
⢠Fairvaluethroughprofitorloss:
Assets that do not meet the criteria for amortised cost or fair value through other comprehensive income (FVTOCI) are measured at fair value through profit or loss. Gain and losses on fair value of such instruments are recognised in statement of profit and loss. Interest income from these financial assets is included in other income.
⢠Equity investments other than investments in subsidiaries, joint ventures and associates
The Company subsequently measures all equity investments other than investments in subsidiaries, joint ventures and associates at fair value. Where the Company''s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to the statement of profit and loss in the event of de-recognition. Dividends from such investments are recognised in the statement of profit and loss as other income when the Company''s right to receive payments is established. Changes in the fair value of financial assets at fair value through profit or loss are recognised in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVTOCI are not reported separately from other changes in fair value.
iv) Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk
v) De-recognition of financial assets
A financial asset is derecognised only when:
⢠The rights to receive cash flows from the financial asset have expired
⢠The Company has transferred substantially all the risks and rewards of the financial asset or
⢠The Company has neither transferred nor retained substantially all the risks and rewards of the financial asset, but has transferred control of the financial asset
II Financial liabilities (I) Classification
The Company classifies all financial liabilities at amortised cost or fair value through profit or loss.
(ii) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, deposits or as payables, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
(iii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
a. Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the profit or loss.
b. Loans, borrowings and deposits
After initial recognition, loans, borrowings and deposits are subsequently measured at amortised cost using the effective interest rate (EIR) method. Gains and losses are recognised in the statement of profit and loss when the liabilities are derecognised as well as through the EIR amortization process. The EIR amortisation is included in project costs in the statement of profit and loss
c. Trade and other payables
These amounts represent liabilities for goods and services provided to the Campany prior to the end of financial year which are unpaid. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short-term maturity of these instruments.
d. De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de- recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
(i) Cash and cash equivalents
(i) Cash and cash equivalents in the balance sheet comprise cash at bank and on hand and short-term deposit with original maturity upto three months, which are subject to insignificant risk of changes in value.
(ii) For the purpose of presentation in the statement of cash flows, cash and cash equivalents consists of cash and short- term deposit, as defined above, net of outstanding bank overdraft as they are considered as an integral part of Group''s cash management.
(j) Revenue recognition
(i) Revenue from real estate activity
Revenue from real estate activity is recognised in accordance with the Ind AS 115 "Revenue from Contracts with Customersâ. Revenue is recognised on satisfaction of performance obligation upon transfer of control of promised product (Residential units) or services to customers in an amount that reflects the consideration the Group expects to receive in exchange for those products or services.
The Group satisfies the performance obligation and recognises revenue over time if one of the following criteria is met: i) the Customer simultaneously receives and consumes the benefit provided by the Group''s performance as the Group performs; or ii) the Group''s performance creates or enhaces an asset that the customer controls as the asset is created or enhanced; or iii) the Group''s performance does not create an asset with an alternative use to the Group and the entity has an enforceable right to payment for performance completed to date.
For performance obligations where any one of the above conditions are not met, revenue is recognised at a point in time at which the performance obligation is satisfied.
In case, revenue is recognised over the time, it is being recognised from the financial year in which the agreement to sell or any other binding documents containing salient terms of agreement to sell is executed. In respect of ''over the period of time'', the revenue is recognised based on the percentage-of-completion method (''POC method'') of accounting with cost of construction incurred (input method) for the respective projects determining the degree of completion of the performance obligation.
The revenue recognition requires forecasts to be made of the total budgeted costs with the outcomes of underlying construction contracts, which further require assessments and judgements to be made on changes in work scopes and other payments to the extent they are probable and they are capable of being reliably measured. In case, where the contract cost is estimated to exceed total revenues from the contract, the loss is recognised immediately in the statement of profit and loss.
(ii) Dividend income
Dividend income is recognized when the Group''s right to receive the dividend is established.
(iii) Interest income
Interest income for all debt instruments, measured at amortised cost or fair value through other comprehensive income, is recognised using the effective interest rate method.
(iv) Rent income
Rental income is recognised on a time proportion basis as per the contractual obligations agreed with the respective tenant.
(k) Foreign currency transactions
(i) Foreign currency transactions are recorded in the reporting currency (INR) by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency on the date of the transaction.
(ii) All monetary items denominated in foreign currency are converted into (INR) at the year-end exchange rate. The exchange differences arising on such conversion and on settlement of the transactions are recognised in the statement of profit and loss. Non-monetary items in terms of historical cost denominated in a foreign currency are reported using the exchange rate prevailing on the date of the transaction.
(l) Income taxes
The income tax expenses comprises current and deferred tax. It is recognised in the statement of profit and loss except to the extent that it relates to items recognised directly in equity or in other comprehensive income.
Current tax:
The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Deferred tax:
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amount used for taxation purposes.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised, such reductions are reversed when the probability of future taxable profit improves.
Unrecognised deferred tax assets are measured at each reporting date and recognised to the extent it has become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects at the reporting date to recover or settle the carrying amount of its assets and liabilities.
Minimum Alternate Tax (MAT) credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Group will pay normal income tax during the specified period. Such asset is reviewed at each balance sheet date and the carrying amount of MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Group will pay normal income tax during the specified period.
(m) Employee benefits
(i) Short-term benefits
Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss for the year in which the related services are rendered.
(ii) Defined contribution plans
Payments to defined contribution retirement benefit schemes are charged to the statement of profit and loss of the year when the contribution to the respective funds are due. There are no other obligations other than the contribution payable to the fund.
(iii) Defined benefit plans
Defined benefits plans are recognized as an expense in the consolidated statement of profit and loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method.
Re-measurement of the net defined benefit liability, which comprises of actuarial gains and losses, are recognised in other comprehensive income in the period in which they occur.
(n) Impairment of non-financial assets
The carrying amounts of non financial assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying amount exceeds its recoverable value. The recoverable amount is the greater of an asset''s or cash generating unit''s, net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value using a pre-tax discount rate that reflects current market assessment of the time value of money and risks specific to the assets. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. The impairment loss recognized in prior accounting periods is reversed by crediting the statement of profit and loss if there has been a change in the estimate of recoverable amount.
(o) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the
period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares except when the results would be anti-dilutive.
(p) Provisions, contingent liabilities and contingent assets
(i) Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period.
Provisions (excluding retirement benefits) are discounted using pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense
(ii) A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognize a contingent liability but discloses its existence in the financial statements.
(iii) Contingent assets are not recognized, but disclosed in the financial statements where an inflow of economic benefit is probable.
(q) Leases
The Company has adopted Ind AS 116-Leases effective 01 April, 2019, using the modified retrospective method. The Company has applied the standard to its leases with the cumulative impact recognised on the date of initial application (1st April, 2019). Accordingly, previous period information has not been restated.
The Company''s lease asset classes primarily consist of leases for buildings. The Company assesses whether a contract is or contains a lease, at inception of a contract. 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 for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:(I) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognises a right-of-use asset (âROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short term leases) and leases of low value assets. For these short term and leases of low value assets, the Company recognises the lease payments as an operating expense on a straight line basis over the term of the lease.
3. Significant accounting judgements, estimates and assumptions
The preparation of the Group''s financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Estimates and judgements are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Revisions to accounting estimates are recognised in the period in which the estimate is revised.
a) Classification of property
The Group determines whether a property is classified as investment property or inventory:
Investment property comprises land and buildings that are not occupied substantially for use by, or in the operations of, the Group, nor for sale in the ordinary course of business, but are held primarily to earn rental income and capital appreciation. These buildings are substantially rented to tenants and not intended to be sold in the ordinary course of business.
Inventory comprises property that is held for sale in the ordinary course of business. Principally, the Group develops and intends to sell before or on completion of construction.
b) Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
c) Evaluation of performance obligation over time
Determination of revenues over time necessarily involves making estimates, some of which are of a technical nature, concerning, where relevant, costs to completion, the expected revenues from the project or activity and the foreseeable losses to completion. Estimates of project income, as well as project costs, are reviewed periodically. The effect of changes, if any, to the estimates is recognised in the financial statements for the period in which such are determined.
d) Taxes
The Company periodically assesses its liabilities and contingencies related to income taxes for all years open to scrutiny based on latest information available. For matters where it is probable that an adjustment will be made, the Company records its best estimates of the tax liability in the current tax provision. The Management believes that they have adequately provided for the probable outcome of these matters.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits.
e) Recognition and measurement of defined benefit obligations
The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate, trends in salary escalation and attrition rate. The discount rate is determined by reference to market yields at the end of the reporting period on government securities.
Mar 31, 2023
1 Companyinformation
Supreme Holdings & Hospitality (India) Limited (the company) is a public limited company domiciled in India and
incorporated under the provisions of Companies Act, 1956. The company is engaged in development of commercial and
residential projects.
The separate financial statements (hereinafter referred to as "Financial Statementsâ) of the Company for the year ended 31
March 2023 were approved and authorised for issue by the Board of Directors at their meeting held on 26 May 2023.
2 Significantaccountingpolicies
(a) Basis of preparation
The financial Statements have been prepared to comply in all material respects with the Indian Accounting Standards notified under Section 133 of Companies Act, 2013 (the Act) read with Companies Indian Accounting Standards (Ind AS) Rules, 2015 and other relevant provisions of the Act and rules framed thereunder.
The financial statements have been prepared under the historical cost convention and on accrual basis, except for certain financial assets and liabilities measured at fair value as explained in accounting policies below.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability as if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
The financial statements are presented in Indian National Rupee (INR) lakhs, except when otherwise indicated.
(b) Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle (twelve months) and other criteria set out in Schedule III to the Act.
(c) Property plant and equipment
i) All property, plant and equipment are stated at original cost of acquisition/installation (net of input tax credits availed) less accumulated depreciation and impairment loss, if any, except freehold land which is carried at market price. Cost includes cost of acquisition, construction and installation, taxes (other than input tax credit availed), duties, freight and other incidental expenses that are directly attributable to bringing the asset to its working condition for the intended use and estimated cost for decommissioning of an asset.
ii) Subsequent expenditure is capitalised only if it is probable that future economic benefit associated with the expenditure will flow to the Company.
iii) Property, plant and equipment is derecognised from financial statements, either on disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss in the period in which the property, plant and equipment is derecognised.
iv) Depreciation on property, plant and equipment is provided on âStraight Line Method" based on the useful life specified in Schedule II of the Companies Act, 2013.
i) 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 initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised.
ii) The useful lives have been determined based on technical evaluation done by the management''s expert which are as per those specified by Schedule II to the Companies Act; 2013, in order to reflect the actual usage of the assets.
iii) The fair values of investment property is disclosed in the notes. Fair values is determined by an independent valuer who
holds a recognised and relevant professional qualification and has recent experience in the location and category of theinvestment property being valued.
i) Construction materials and consumables
The construction materials and consumables are valued at lower of cost or net realisable value. The construction materials and consumables purchased for construction work issued to construction are treated as consumed.
(ii) Construction work in progress
The construction work in progress is valued at lower of cost or net realisable value. Cost includes cost of land, development rights, rates and taxes, construction costs, borrowing costs, other direct expenditure, allocated overheads and other incidental expenses.
(iii) Finished stock of completed projects
Finished stock of completed projects and stock in trade of units is valued at lower of cost or net realisable value.
The Company''s accounting policies and disclosures require the measurement of fair values for financial instruments.The Company has an established control framework with respect to the measurement of fair values. The management regularly reviews significant unobservable inputs and valuation adjustments.All financial assets and financial liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
⢠Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
⢠Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable, or
⢠Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
(g) Equity investments in subsidiary
Investments in subsidiary are accounted at cost in accordance with Ind AS 27 âSeparate financial statements".
(h) Financial instruments I Financial assets
i) Classification The Company classifies its financial assets either at fair value through profit or loss (FVTPL), fair value through other comprehensive income (FVTOCI) or at amortised cost, based on the Company''s business model for managing the financial assets and their contractual cash flows.
ii) Initial recognition and measurement The Company at initial recognition measures a financial asset at its fair value plus transaction costs that are directly attributable to it''s acquisition. However, transaction costs relating to financial assets designated at fair value through profit or loss (FVTPL) are expensed in the statement of profit and loss for the year.
iii) Subsequent measurement
For the purpose of subsequent measurement, the financial assets are classified in four categories:
a) Debt instrument at amortised cost
b) Debt instrument at fair value through other comprehensive income
c) Debt instrument at fair value through profit or loss
d) Equity investments
Debt instruments
⢠Amortised cost:
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on such instruments is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is calculated using the effective interest rate method and is included under the head ''''Finance incomeâ.
⢠Fair value through other comprehensive income (FVTOCI):
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVTOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the statement of profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to statement of profit and loss. Interest income from these financial assets is calculated using the effective interest rate method and is included under the head "Finance income".
⢠Fair value through profit or loss:
Assets that do not meet the criteria for amortised cost or fair value through other comprehensive income (FVTOCI) are measured at fair value through profit or loss. Gain and losses on fair value of such instruments are recognised in statement of profit and loss. Interest income from these financial assets is included in other income.
⢠Equity investments other than investments in subsidiaries, joint ventures and associates
The Company subsequently measures all equity investments other than investments in subsidiaries, joint ventures and associates at fair value. Where the Company''s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to the statement of profit and loss in the event of de-recognition. Dividends from such investments are recognised in the statement of profit and loss as other income when the Company''s right to receive payments is established. Changes in the fair value of financial assets at fair value through profit or loss are recognised in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVTOCI are not reported separately from other changes in fair value.
iv) Impairment offinancial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
v) De-recognition of financial assets
A financial asset is derecognised only when:
⢠The rights to receive cash flows from the financial asset have expire
⢠The Company has transferred substantially all the risks and rewards of the financial asset or
⢠The Company has neither transferred nor retained substantially all the risks and rewards of the financial asset, but has transferred control of the financial asset
i) Classification
The Company classifies all financial liabilities at amortised cost or fair value through profit or loss.
ii) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, deposits or as payables, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
iii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below: a Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the profit or loss. b Loans, borrowings and deposits
After initial recognition, loans, borrowings and deposits are subsequently measured at amortised cost using the effective interest rate (EIR) method. Gains and losses are recognised in the statement of profit and loss when the liabilities are derecognised as well as through the EIR amortization process. The EIR amortisation is included in project cost in the statement of profit and loss. c Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short-term maturity of these instruments.
iv) De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
(i) Cash and cash equivalents in the balance sheet comprise cash at bank and on hand and short-term deposit with original maturity upto three months, which are subject to insignificant risk of changes in value.
(ii) For the purpose of presentation in the statement of cash flows, cash and cash equivalents consists of cash and shortterm deposit, as defined above, net of outstanding bank overdraft as they are considered as an integral part of Company''s cash management.
I) Revenue from real estate activity
Revenue from real estate activity is recognised in accordance with the Ind AS 115 "Revenue from Contracts with Customersâ. Revenue is recognised on satisfaction of performance obligation upon transfer of control of promised product (residential units) or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.
The Company satisfies the performance obligation and recognises revenue over time if one of the following criteria is met:
i) the Customer simultaneously receives and consumes the benefit provided by the Company''s performance as the Company performs; or ii) the Company''s performance creates or enhaces an asset that the customer controls as the asset is created or enhanced; or iii) the Company''s performance does not create an asset with an alternative use to the Company and the entity has an enforceable right to payment for performance completed to date.
For performance obligations where any one of the above conditions are not met, revenue is recognised at a point in time at which the performance obligation is satisfied. In case, revenue is recognised over the time, it is being recognised from the financial year in which the agreement to sell or any other binding documents containing salient terms of agreement to sell is executed. In respect of ''over the period of time'', the revenue is recognised based on the percentage-of-completion method (''POC method'') of accounting with cost of construction incurred (input method) for the respective projects determining the degree of completion of the performance obligation. The revenue recognition requires forecasts to be made of the total budgeted costs with the outcomes of underlying construction contracts, which further require assessments and judgements to be made on changes in work scopes and other payments to the extent they are probable and they are capable of being reliably measured. In case, where the contract cost is estimated to exceed total revenues from the contract, the loss is recognised immediately in the statement of profit and loss.
Dividend income is recognized when the Company''s right to receive the dividend is established.
Interest income for all debt instruments, measured at amortised cost or fair value through other comprehensive income, is recognised using the effective interest rate method.
income is recognised on a time proportion basis as per the contractual obligations agreed with the respective tenant.
(k) Foreign currency transactions
I) Foreign currency transactions are recorded in the reporting currency (INR) by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency on the date of the transaction.
ii) All monetary items denominated in foreign currency are converted into (INR) at the year-end exchange rate. The exchange differences arising on such conversion and on settlement of the transactions are recognised in the statement of profit and loss. Non-monetary items in terms of historical cost denominated in a foreign currency are reported using the exchange rate prevailing on the date of the transaction.
The income tax expenses comprises current and deferred tax. It is recognised in the statement of profit and loss except to the extent that it relates to items recognised directly in equity or in other comprehensive income.
Current tax:
The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period.
Deferred tax:
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amount used for taxation purposes.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised, such reductions are reversed when the probability of future taxable profit improves. Unrecognised deferred tax assets are measured at each reporting date and recognised to the extent it has become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects at the reporting date to recover or settle the carrying amount of its assets and liabilities.
Minimum Alternate Tax (MAT) credit is recognised as deferred tax asset only when and to the extent there is convincing
evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each balance sheet date and the carrying amount of MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.
(i) Short-term benefits
Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss for the year in which the related services are rendered.
(ii) Defined contribution plans
Payments to defined contribution retirement benefit schemes are charged to the statement of profit and loss of the year when the contribution to the respective funds are due. There are no other obligations other than the contribution payable to the fund.
(iii) Defined benefit plans
Defined benefits plans are recognized as an expense in the statement of profit and loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method.
Re-measurement of the net defined benefit liability, which comprises of actuarial gains and losses, are recognised in other comprehensive income in the period in which they occur.
(n) Impairment of non-financial assets
The carrying amounts of non financial assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying amount exceeds its recoverable value. The recoverable amount is the greater of an asset''s or cash generating unit''s, net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value using a pre-tax discount rate that reflects current market assessment of the time value of money and risks specific to the assets. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. The impairment loss recognized in prior accounting periods is reversed by crediting the statement of profit and loss if there has been a change in the estimate of recoverable amount.
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares except when the results would be anti-dilutive.
(p) Provisions, contingent liabilities and contingent assets
i) Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period.
Provisions (excluding retirement benefits) are discounted using pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
ii) A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
iii) Contingent assets are not recognized, but disclosed in the financial statements where an inflow of economic benefit is probable.
The Company has adopted Ind AS 116-Leases effective 1st April, 2019, using the modified retrospective method. The Company has applied the standard to its leases with the cumulative impact recognised on the date of initial application (1st April, 2019). Accordingly, previous period information has not been restated.
The Company''s lease asset classes primarily consist of leases for buildings. The Company assesses whether a contract is or contains a lease, at inception of a contract. 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 for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i)the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognises a right-of-use asset (âROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short term leases) and leases of low value assets. For these short term and leases of low value assets, the Company recognises the lease payments as an operating expense on a straight line basis over the term of the lease.
3 Significant accounting judgements, estimates and assumptions
The preparation of the Company''s financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Estimates and judgements are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Revisions to accounting estimates are recognised in the period in which the estimate is revised.
The Company determines whether a property is classified as investment property or inventory:
Investment property comprises land and buildings that are not occupied substantially for use by, or in the operations of, the Company, nor for sale in the ordinary course of business, but are held primarily to earn rental income and capital appreciation. These buildings are substantially rented to tenants and not intended to be sold in the ordinary course of business.
Inventory comprises property that is held for sale in the ordinary course of business. Principally, the Company develops and intends to sell before or on completion of construction.
b) Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
c) Evaluation of performance obligation over time
Determination of revenues over time necessarily involves making estimates, some of which are of a technical nature, concerning, where relevant, costs to completion, the expected revenues from the project or activity and the foreseeable losses to completion. Estimates of project income, as well as project costs, are reviewed periodically. The effect of changes, if any, to the estimates is recognised in the financial statements for the period in which such are determined.
The Company periodically assesses its liabilities and contingencies related to income taxes for all years open to scrutiny based on latest information available. For matters where it is probable that an adjustment will be made, the Company records its best estimates of the tax liability in the current tax provision. The Management believes that they have adequately provided for the probable outcome of these matters.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits.
e) Recognition and measurement of defined benefit obligations
The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate, trends in salary escalation and attrition rate. The discount rate is determined by reference to market yields at the end of the reporting period on government securities
Mar 31, 2018
Notes forming part of the standalone financial statements
1 Company information
The Supreme Holdings & Hospitality (India) Limited (the company) is a public limited company domiciled in India and incorporated under the provisions of Companies Act 1956. The company is engaged in hospitality and constructions of commercial and residential complex activities.
The separate financial statements (hereinafter referred to as "Financial Statementsâ) of the Company for the year ended 31 March 2018 were approved and authorized for issue by the Board of Directors at their meeting held on 30 May 2018.
2 Significant accounting policies
(a) Basis of preparation
The financial Statements have been prepared to comply in all material respects with the Indian Accounting Standards notified under Section 133 of Companies Act, 2013 (the Act) read with Companies (Indian Accounting Standards (Ind AS) Rules, 2015 and other relevant provisions of the Act and rules framed there under.
For all periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with previous GAAP, including accounting standards notified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounting Standards) Rules, 2014. These financial statements for the year ended 31 March 2018 are the first financial statements of the Company prepared in accordance with Ind-AS. In accordance with Ind AS 101, the transition date to Ind AS being 1 April 2016, the comparatives for the previous year ended 31 March 2017 and balances as on 1 April 2016 reported under previous GAAP have been restated as per Ind AS. Refer note 34 for understanding how the transition from previous GAAP to Ind AS affected the Company''s earlier reported Balance sheet, financial performance and cash flows.
The financial statements have been prepared under the historical cost convention and on accrual basis, except for certain financial assets and liabilities measured at fair value as explained in accounting policies below.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
The financial statements are presented in Rupees (Rs.) lakhs, except when otherwise indicated.
(b) Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle (twelve months) and other criteria set out in the Schedule III to the Act.
(c) Property, plant and equipment
i) All property, plant and equipment are stated at original cost of acquisition/installation (net of input credits availed) less accumulated depreciation and impairment loss, if any, except freehold land which is carried at cost. Cost includes cost of acquisition, construction and installation, taxes, duties, freight and other incidental expenses that are directly attributable to bringing the asset to its working condition for the intended use and estimated cost for decommissioning of an asset.
ii) Subsequent expenditure is capitalized only if it is probable that the future economic benefit associated with the expenditure will flow to the Company.
iii) Property, plant and equipment is derecognized from financial statements, either on disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss in the period in which the property, plant and equipment is derecognized.
iv) On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
v) Depreciation on property, plant and equipment is provided on "Straight Line Methodâ based on the useful life specified in Schedule II of the Companies Act, 2013.
(d) Inventories
Inventories are valued at lower of cost and net realizable value. The cost of raw materials (construction materials) is determined on the basis of weighted average method. Cost of work-in-progress and finished stock includes cost of land / development rights, construction costs, allocated borrowing costs and expenses incidental to the projects undertaken by the Company.
(e) Fair value measurement
The Company''s accounting policies and disclosures require the measurement of fair values for financial instruments.
The Company has an established control framework with respect to the measurement of fair values. The management regularly reviews significant unobservable inputs and valuation adjustments.
All financial assets and financial liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
- Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
- Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable, or
- Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
(f) Equity investments in subsidiary
Investments in subsidiary are accounted at cost in accordance with Ind AS 27 "Separate financial statementsâ
(g) Financial instruments
I Financial assets
i) Classification
The Company classifies its financial assets either at Fair Value through Profit or Loss (FVTPL), Fair Value through Other Comprehensive Income (FVTOCI) or at amortized Cost, based on the Company''s business model for managing the financial assets and their contractual cash flows.
ii) Initial recognition and measurement
The Company at initial recognition measures a financial asset at its fair value plus transaction costs that are directly attributable to it''s acquisition. However, transaction costs relating to financial assets designated at fair value through profit or loss (FVTPL) are expensed in the statement of profit and loss for the year.
iii) Subsequent measurement
For the purpose of subsequent measurement, the financial asset are classified in four categories:
a) Debt instrument at amortized cost
b) Debt instrument at fair value through other comprehensive Income
c) Debt instrument at fair value through profit or loss
d) Equity investments
Debt instruments - Amortized cost:
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on such instruments is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is calculated using the effective interest rate method and is included under the head "Finance incomeâ.
- Fair value through other comprehensive income (FVTOCI):
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVTOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in the statement of profit and loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to statement of profit and loss. Interest income from these financial assets is calculated using the effective interest rate method and is included under the head "Finance incomeâ.
- Fair value through profit or loss:
Assets that do not meet the criteria for amortized cost or fair value through other comprehensive income (FVTOCI) are measured at fair value through profit or loss. Gain and losses on fair value of such instruments are recognized in statement of profit and loss. Interest income from these financial assets is included in other income.
Equity investments other than investments in subsidiaries, joint ventures and associates
The Company subsequently measures all equity investments other than investments in subsidiaries, joint ventures and associates at fair value. Where the Company''s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to the statement of profit and loss in the event of de-recognition. Dividends from such investments are recognized in the statement of profit and loss as other income when the Company''s right to receive payments is established. Changes in the fair value of financial assets at fair value through profit or loss are recognized in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVTOCI are not reported separately from other changes in fair value.
iv) Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortized cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
v) De-recognition of financial assets
A financial asset is derecognized only when:
- The rights to receive cash flows from the financial asset have expired
- The Company has transferred substantially all the risks and rewards of the financial asset or
- The Company has neither transferred nor retained substantially all the risks and rewards of the financial asset, but has transferred control of the financial asset.
II Financial liabilities
i) Classification
The Company classifies all financial liabilities at amortized cost or fair value through profit or loss.
ii) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, deposits or as payables, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
iii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
a Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognized in the profit or loss.
b Loans, borrowings and deposits
After initial recognition, loans, borrowings and deposits are subsequently measured at amortized cost using the effective interest rate (EIR) method. Gains and losses are recognized in the statement of profit and loss when the liabilities are derecognized as well as through the EIR amortization process. The EIR amortisation is included in project cost in the statement of profit and loss.
c Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short-term maturity of these instruments.
iv) De-recognition of financial liabilities
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
(h) Cash and cash equivalents
(i) Cash and cash equivalents in the balance sheet comprise cash at bank and on hand and short-term deposit with original maturity unto three months, which are subject to insignificant risk of changes in value.
(ii) For the purpose of presentation in the statement of cash flows, cash and cash equivalents consists of cash and short-term deposit, as defined above, net of outstanding bank overdraft as they are considered as an integral part of Company''s cash management.
(i) Revenue recognition
i) Revenue from real estate activity
a) Revenue from real estate activity is recognized in accordance with the "Guidance Note on Accounting for Real Estate Transactions (for entities to whom Ind AS is applicable)â issued by the Institute of Chartered Accountants of India (ICAI). Construction revenue on such projects is recognized on percentage of completion method provided the threshold levels as prescribed in the said Guidance Note have been met. The method of determination of stage of completion of construction work is certified by the registered Architect, subject to such percentage being 25 percent or more, and revenue computed under this method in any case does not exceed the revenue computed with reference to the ''project cost method''.
b) Revenue in respect of completed units, is recognized when the significant risks and rewards of ownership of the units in real estate have been passed on to the buyer.
Revenue is recognized net of indirect taxes and comprises the aggregate amounts of sale price as per the documents entered into. The total saleable area and estimate of costs are reviewed periodically by the management and any effect of changes therein is recognized in the period in which such changes are determined. However, if and when the total project cost is estimated to exceed the total revenue from the project, the loss is recognized in the same financial year.
ii) Dividend income
Dividend income is recognized when the Company''s right to receive the dividend is established.
iii) Interest income
Interest income for all debt instruments, measured at amortized cost or fair value through other comprehensive income, is recognized using the effective interest rate method.
(j) Foreign currency transactions
i) Foreign currency transactions are recorded in the reporting currency (Indian rupee) by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency on the date of the transaction.
ii) All monetary items denominated in foreign currency are converted into Indian rupees at the year-end exchange rate. The exchange differences arising on such conversion and on settlement of the transactions are recognized in the statement of profit and loss. Non-monetary items in terms of historical cost denominated in a foreign currency are reported using the exchange rate prevailing on the date of the transaction.
(k) Income taxes
The income tax expenses comprises current and deferred tax. It is recognized in the statement of profit and loss except to the extent that it relates to items recognized directly in equity or in other comprehensive income.
Current tax:
The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period.
Deferred tax:
Deferred tax is recognized in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amount used for taxation purposes.
Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized, such reductions are reversed when the probability of future taxable profits improves.
Unrecognized deferred tax assets are measured at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be used. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects at the reporting date to recover or settle the carrying amount of its assets and liabilities.
Minimum Alternate Tax (MAT) credit is recognized as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each balance sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.
(l) Employee benefits
(i) Short-term benefits
Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss for the year in which the related services are rendered.
(ii) Defined contribution plans
Payments to defined contribution retirement benefit schemes are charged to the statement of profit and loss of the year when the contribution to the respective funds are due. There are no other obligations other than the contribution payable to the fund.
(iii) Defined benefit plans
Defined benefits plans is recognized as an expense in the statement of profit and loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques.
Re-measurement of the net defined benefit liability, which comprises of actuarial gains and losses, are recognized in other comprehensive income in the period in which they occur
(iv) Other long-term employee benefits
Other long-term benefits are recognized as an expense in the statement of profit and loss as per the provisions of gratuity act.
(m) Impairment of non-financial assets
The carrying amounts of non financial assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying amount exceeds its recoverable value. The recoverable amount is the greater of an asset''s or cash generating unit''s, net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value using a pre-tax discount rate that reflects current market assessment of the time value of money and risks specific to the assets. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. The impairment loss recognized in prior accounting periods is reversed by crediting the statement of profit and loss if there has been a change in the estimate of recoverable amount.
(n) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares except when the results would be anti-dilutive.
(o) Provisions, contingent liabilities and contingent assets
i) Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized for future operating losses. Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period.
Provisions (excluding retirement benefits) are discounted using pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.
ii) A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company The Company does not recognize a contingent liability but discloses its existence in the financial statements.
iii) Contingent assets are not recognized, but disclosed in the financial statements where an inflow of economic benefit is probable.
3 A Significant accounting judgments, estimates and assumptions
The preparation of the Company''s financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Estimates and judgments are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Revisions to accounting estimates are recognized in the period in which the estimate is revised.
a) Classification of property
The Company determines whether a property is classified as investment property or inventory:
"Investment property comprises land and buildings (principally commercial premises and retail property) that are not occupied substantially for use by, or in the operations of, the Company, nor for sale in the ordinary course of business, but are held primarily to earn rental income and capital appreciation. These buildings are substantially rented to tenants and not intended to be sold in the ordinary course of business. Inventory comprises property that is held for sale in the ordinary course of business. Principally, the Company develops and intends to sell before or on completion of construction.â
b) Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
c) Evaluation of percentage completion
Determination of revenues under the percentage of completion method necessarily involves making estimates, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project or activity and the foreseeable losses to completion. Estimates of project income, as well as projects costs, are reviewed periodically. The effect of changes, if any, to estimates is recognized in the financial statements for the period in which such are determined.
d) Taxes
The Company periodically assesses its liabilities and contingencies related to income taxes for all years open to scrutiny based on latest information available. For matters where it is probable that an adjustment will be made, the Company records its best estimates of the tax liability in the current tax provision. The Management believes that they have adequately provided for the probable outcome of these matters.
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits.
e) Recognition and measurement of defined benefit obligations
The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate, trends in salary escalation and attrition rate. The discount rate is determined by reference to market yields at the end of the reporting period on government securities.
B Recent accounting pronouncements
i) Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On 28 March 2018, Ministry of Corporate Affairs ("MCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.
The amendment will come into force from 1 April 2018. The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of Ind AS 21 is expected to be insignificant.
ii) Ind AS 115, Revenue from Contract with Customers:
In March 2018, the Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Amended Rules, 2018 ("amended rulesâ). As per the amended rules, Ind AS 115 "Revenue from contracts with customersâ supersedes Ind AS 11, "Construction contractsâ and Ind AS 18, "Revenueâ and is applicable for all accounting periods commencing on or after 1 April 2018.
Ind AS 115 introduces a new framework of five step model for the analysis of revenue transactions. The model specifies that revenue should be recognized when (or as) an entity transfer control of goods or services to a customer at the amount to which the entity expects to be entitled. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers. The new revenue standard is applicable to the Company from 1 April 2018.
The standard permits two possible methods of transition:
a) Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
b) Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (cumulative catch - up approach)
The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of Ind AS 115 is expected to be insignificant.
by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Mar 31, 2016
Note 1A Corporate Information
The Supreme Holdings & Hospitality (India) Limited (the company) is a public limited company domiciled in India and incorporated under the provisions of Companies Act 1956. The company is engaged in hospitality and constructions of commercial and residential complex activities.
Note 1B Significant Accounting Policies
a) Basis of preparation of Financial Statement:
The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis. The accounts are prepared on historical cost basis as a going concern and are consistent with generally accepted accounting principles.
b) Use of Estimates:
The Preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known or materialized.
c) Revenue Recognition:
Revenue from sale of properties by legally binding contracts is recognized on the transfer of significant risks and rewards of ownership to the customer when it is not unreasonable to expect ultimate collection and no significant uncertainty exists regarding the amount of consideration.
Revenue from such contracts are recognized under the percentage of completion method to the extent it is possible that the economic benefits will flow to the Company and the revenue can be reliably measured. Contracts revenues represent the aggregate amount of sale price for agreements entered into and are accrued based on the percentage that the actual construction costs incurred until the reporting date bears to the total estimated construction costs to completion as in with terms specified in guidance note of Accounting Standard 7 issued by ICAI.
The Company follows the accrual basis of accounting except in dividend, payment of bonus and insurance claims where the same are recorded on the basis of ascertainment of rights or obligation.
d) Fixed Assets:
Tangible Assets : Fixed Assets are stated at cost of acquisition less accumulated depreciation. The cost includes taxes, duties, freight, installation, start-up and commissioning expenses and other preoperative expenses and other direct and allocated expenses of bringing the assets to working condition for its intended use.
e) Depreciation:
i. Depreciation on Fixed Assets is provided on "Straight Line Method" in the manner prescribed in Schedule-II to the Companies Act, 2013.
ii. Depreciation on additions / deductions of assets during the year is provided on a pro-rata basis.
f) Investments:
Long term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long term investment.
g) Inventories:
Cost of work in progress includes all costs directly related to the project and other expenditure as identified by the Management which are incurred for the purpose of executing and securing the completion of the project (net of incidental recoveries/receipts).
h) Retirement Benefits:
The liability of gratuity is ascertained and provided on the basis and method as prescribed under the Payment of Gratuity Act.
i) Foreign Currency Transactions:
All transactions in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place. Monetary assets and liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet.
j) Taxes on Income:
(i) Provision for current income-tax is recognized in accordance with the provision of Indian Income-tax Act,1961 and is made annually based on the tax liability after taking credit for tax allowances and exemptions.
(ii) Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantially enacted at the balance sheet date. Deferred tax Assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future. Deferred Tax Assets are reviewed as at each Balance Sheet date.
k) Provisions , contingent liabilities and contingent assets:
Estimation of the probability of any loss that might be incurred on outcome of contingencies on basis of information available up to the date on which the financial statements are prepared. A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date, supplemented by experience of similar transactions. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. In cases where the available information indicates that the loss on the contingency is reasonable possible but the amount of loss cannot be reasonably estimated, a disclosure to this effect is made in the financial statements. In case of remote possibility neither provision nor disclosure is made in the financial statement. The company does not account for or disclose contingent asset, if any.
l) Earnings Per Share:
The company records basic and diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 Earnings per share. Basic EPS is computed by dividing the net profit or loss for the year available for the year for equity share holders by the weighted average no of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effect of all dilutive potential equity shares, except where the results are anti-dilutive.â
Mar 31, 2015
A) Basis of preparation of Financial Statement:
The Company follows the mercantile system of accounting and recognizes
income and expenditure on accrual basis. The accounts are prepared on
historical cost basis as a going concern and are consistent with
generally accepted accounting principles.
b) Use of Estimates:
The Preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Differences between actual
results and estimates are recognised in the period in which the results
are known or materialized.
c) Revenue Recognition:
The Company follows the accrual basis of accounting except in dividend,
payment of bonus and insurance claims where the same are recorded on
the basis of ascertainment of rights or obligation.
d) Fixed Assets:
Tangible Assets : Fixed Assets are stated at cost of acquisition less
accumulated depreciation. The cost includes taxes, duties, freight,
installation, start-up and commissioning expenses and other
preoperative expenses and other direct and allocated expenses of
bringing the assets to working condition for its intended use.
e) Depreciation:
i. Depreciation on Fixed Assets is provided on "Straight Line Method"
in the manner prescribed in Schedule-II to the Companies Act, 2013.
ii. Depreciation on additions / deductions of assets during the year is
provided on a pro-rata basis.
f) Investments:
Long term investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary, in the value of long
term investment.
g) Inventories:
Cost of work in progress includes all costs directly related to the
project and other expenditure as identified by the Management which are
incurred for the purpose of executing and securing the completion of
the project (net of incidental recoveries/receipts).
h) Retirement Benefits:
The liability of gratuity is ascertained and provided on the basis and
method as prescribed under the Payment of Gratuity Act.
i) Foreign Currency Transactions:
All transactions in foreign currency are recorded at the rates of
exchange prevailing on the dates when the relevant transactions take
place. Monetary assets and liabilities in foreign currency, outstanding
at the close of the year, are converted in Indian Currency at the
appropriate rates of exchange prevailing on the date of the Balance
Sheet.
j) Taxes on Income:
(i) Provision for current income-tax is recognized in accordance with
the provision of Indian Income- tax Act,1961 and is made annually based
on the tax liability after taking credit for tax allowances and
exemptions.
(ii) Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to timing differences that result between
the profits offered for income taxes and the profits as per the
financial statements. Deferred tax assets and liabilities are measured
using the tax rates and the tax laws that have been enacted or
substantially enacted at the balance sheet date. Deferred tax Assets
are recognized only to the extent there is reasonable certainty that
the assets can be realized in the future. Deferred Tax Assets are
reviewed as at each Balance Sheet date.
k) Provisions , contingent liabilities and contingent assets:
Estimation of the probability of any loss that might be incurred on
outcome of contingencies on basis of information available up to the
date on which the financial statements are prepared. A provision is
recognised when an enterprise has a present obligation as a result of a
past event and it is probable that an outflow of resources will be
required to settle the obligation, in respect of which a reliable
estimate can be made. Provisions are determined based on management
estimates required to settle the obligation at the balance sheet date,
supplemented by experience of similar transactions. These are reviewed
at each balance sheet date and adjusted to reflect the current
management estimates. In cases where the available information
indicates that the loss on the contingency is reasonable possible but
the amount of loss cannot be reasonably estimated, a disclosure to this
effect is made in the financial statements. In case of remote
possibility neither provision nor disclosure is made in the financial
statement. The company does not account for or disclose contingent
asset, if any.
l) Earnings Per Share:
The company records basic and diluted Earnings Per Share (EPS) in
accordance with Accounting Standard 20 Earnings per share. Basic EPS is
computed by dividing the net profit or loss for the year available for
the year for equity share holders by the weighted average no of equity
shares outstanding during the year. Diluted EPS is computed by dividing
the net profit or loss for the year by the weighted average number of
equity shares outstanding during the year as adjusted for the effect of
all dilutive potential equity shares, except where the results are
anti-dilutive.
(ii) Aggregate number of equity shares issued for consideration other
then cash during the period of five year immediately preceding the year
in which balance sheet was prepared :
Pursuant to amalgamation of Jatia Hotels & Resorts Private Limited and
Royalways Trading & Investment Service Private Limited with the
company, the company has allotted 2,66,82,553 Equity Share of Rs.10
Each during the year 2011-12 to the share holders of Jatia Hotels &
Resorts Private Limited and Royalways Trading & Investment Services
Private Limited.
Mar 31, 2014
A) Basis of preparation of Financial Statement:
The Company follows the mercantile system of accounting and recognizes
income and expenditure on accrual basis. The accounts are prepared on
historical cost basis as a going concern and are consistent with
generally accepted accounting principles.
b) Use of Estimates:
The Preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Differences between actual
results and estimates are recognised in the period in which the results
are known or materialized.
c) Revenue Recognition:
The Company follows the accrual basis of accounting except in dividend,
payment of bonus and insurance claims where the same are recorded on
the basis of ascertainment of rights or obligation.
d) Fixed Assets:
Tangible Assets : Fixed Assets are stated at cost of acquisition less
accumulated depreciation. The cost includes taxes, duties, freight,
installation, start-up and commissioning expenses and other
preoperative expenses and other direct and allocated expenses of
bringing the assets to working condition for its intended use.
e) Depreciation:
i. Depreciation on Fixed Assets is provided on "Straight Line Method"
in the manner prescribed in Schedule-XIV to the Companies Act, 1956.
ii. Depreciation on additions / deductions of assets during the year is
provided on a pro-rata basis.
f) Investments:
Long term investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary, in the value of long
term investment.
g) Inventories:
Cost of work in progress includes all costs directly related to the
project and other expenditure as identified by the Management which are
incurred for the purpose of executing and securing the completion of
the project (net of incidental recoveries/receipts).
h) Retirement Benefits:
The liability of gratuity is ascertained and provided on the basis and
method as prescribed under the Payment of Gratuity Act.
i) Foreign Currency Transactions:
All transactions in foreign currency are recorded at the rates of
exchange prevailing on the dates when the relevant transactions take
place. Monetary assets and liabilities in foreign currency, outstanding
at the close of the year, are converted in Indian Currency at the
appropriate rates of exchange prevailing on the date of the Balance
Sheet.
j) Taxes on Income:
(i) Provision for current income-tax is recognized in accordance with
the provision of Indian Income-tax Act,1961 and is made annually based
on the tax liability after taking credit for tax allowances and
exemptions.
(ii) Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to timing differences that result between
the profits offered for income taxes and the profits as per the
financial statements. Deferred tax assets and liabilities are measured
using the tax rates and the tax laws that have been enacted or
Notes to the Financial Statements as at 31.03.2014
substantially enacted at the balance sheet date. Deferred tax Assets
are recognized only to the extent there is reasonable certainty that
the assets can be realized in the future. Deferred Tax Assets are
reviewed as at each Balance Sheet date.
k) Provisions , contingent liabilities and contingent assets:
Estimation of the probability of any loss that might be incurred on
outcome of contingencies on basis of information available upto the
date on which the financial statements are prepared. A provision is
recognised when an enterprise has a present obligation as a result of a
past event and it is probable that an outflow of resources will be
required to settle the obligation, in respect of which a reliable
estimate can be made. Provisions are determined based on management
estimates required to settle the obligation at the balance sheet date,
supplemented by experience of similar transactions. These are reviewed
at each balance sheet date and adjusted to reflect the current
management estimates. In cases where the available information
indicates that the loss on the contingency is reasonable possible but
the amount of loss cannot be reasonably estimated, a disclosure to this
effect is made in the financial statements. In case of remote
possibility neither provision nor disclosure is made in the financial
statement. The company does not account for or disclose contingent
asset, if any.
l) Earnings Per Share:
The company records basic and diluted Earnings Per Share (EPS) in
accordance with Accounting Standard 20 Earnings per share. Basic EPS is
computed by dividing the net profit or loss for the year available for
the year for equity share holders by the weighted average no of equity
shares outstanding during the year. Diluted EPS is computed by dividing
the net profit or loss for the year by the weighted average number of
equity shares outstanding during the year as adjusted for the effect of
all dilutive potential equity shares, except where the results are
anti-dilutive.
(ii) Aggregate number of equity shares issued for consideration other
then cash during the period of five year immediately preceding the year
in which balance sheet was prepared :
Pursuant to amalgamation of Jatia Hotels & Resorts Private Limited and
Royalways Trading & Investment Service Private Limited with the
company, the company has allotted 2,66,82,553 Equity Share of Rs.10
Each during the year 2011-12 to the share holders of Jatia Hotels &
Resorts Private Limited and Royalways Trading & Investment Services
Private Limited.
(iii) Term/ right attached to equity:
The company has only one class of share capital namely Ordinary Shares
having par value of Rs. 10/- per share. Each holder of Ordinary Shares
is entitled to one vote per share. In the event of liquidation of the
company, the holders of Ordinary Shares will be entitled to receive
remaining assets of the company, after distribution of all preferential
amounts. The distribution will be in proportion to the number of
Ordinary Shares held by the shareholder.
During the year company has provided Rs.57,692/- (P.Y. Rs.79,114/-) as
gratuity as per provisions of "Payment of Gratuity Act". Further
Rs.2,784/- (P.Y. Rs. 9,640/- ) has been provided for leave encashment
during the year
Notes
i) Expenses Payable to Related Parties includes dues to a firm in which
directors are partners Rs.9,000/- (P.Y.Rs.Nil)
(i) Loan & Advances to related parties includes advance to its
subsidiary Helmet Traders Ltd of Rs.79,13,300/- (RY.Rs.81,73,300/-)
Mar 31, 2013
A) Basis of preparation of Financial Statement:
The Company follows the mercantile system of accounting and recognizes
income and expenditure on accrual basis. The accounts are prepared on
historical cost basis as a going concern and are consistent with
generally accepted accounting principles.
b) Use of Estimates:
The Preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that afect the reported amounts of assets and liabilities on the
date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Diferences between actual
results and estimates are recognised in the period in which the results
are known or materialized.
c) Revenue Recognition:
The Company follows the accrual basis of accounting except in dividend,
payment of bonus and insurance claims where the same are recorded on
the basis of ascertainment of rights or obligation.
d) Fixed Assets:
Tangible Assets : Fixed Assets are stated at cost of acquisition less
accumulated depreciation. The cost includes taxes, duties, freight,
installation, start-up and commissioning expenses and other
preoperative expenses and other direct and allocated expenses of
bringing the assets to working condition for its intended use.
e) Depreciation:
i. Depreciation on Fixed Assets is provided on "Straight Line Method"
in the manner prescribed in Schedule-XIV to the Companies Act, 1956.
ii. Depreciation on additions / deductions of assets during the year is
provided on a pro-rata basis.
f) Investments:
Long term investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary, in the value of long
term investment.
g) Inventories:
Cost of work in progress includes all costs directly related to the
project and other expenditure as identified by the Management which are
incurred for the purpose of executing and securing the completion of
the project (net of incidental recoveries/receipts).
h) Retirement Benefits:
The liability of gratuity is ascertained and provided on the basis and
method as prescribed under the Payment of Gratuity Act.
i) Foreign Currency Transactions:
All transactions in foreign currency are recorded at the rates of
exchange prevailing on the dates when the relevant transactions take
place. Monetary assets and liabilities in foreign currency, outstanding
at the close of the year, are converted in Indian Currency at the
appropriate rates of exchange prevailing on the date of the Balance
Sheet.
j) Taxes on Income:
(i) Provision for current income-tax is recognized in accordance with
the provision of Indian Income-tax Act,1961 and is made annually based
on the tax liability after taking credit for tax allowances and
exemptions.
(ii) Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to timing diferences that result between
the profits ofered for income taxes and the profits as per the
financial statements. Deferred tax assets and liabilities are measured
using the tax rates and the tax laws that have been enacted or
substantially enacted at the balance sheet date. Deferred tax Assets
are recognized only to the extent there is reasonable certainty that
the assets can be realized in the future. Deferred Tax Assets are
reviewed as at each Balance Sheet date.
k) Provisions , contingent liabilities and contingent assets:
Estimation of the probability of any loss that might be incurred on
outcome of contingencies on basis of information available upto the
date on which the financial statements are prepared. A provision is
recognised when an enterprise has a present obligation as a result of a
past event and it is probable that an outflow of resources will be
required to settle the obligation, in respect of which a reliable
estimate can be made. Provisions are determined based on management
estimates required to settle the obligation at the balance sheet date,
supplemented by experience of similar transactions. These are reviewed
at each balance sheet date and adjusted to reflect the current
management estimates. In cases where the available information
indicates that the loss on the contingency is reasonable possible but
the amount of loss cannot be reasonably estimated, a disclosure to this
efect is made in the financial statements. In case of remote
possibility neither provision nor disclosure is made in the financial
statement. The company does not account for or disclose contingent
asset, if any.
l) Earnings Per Share:
The company records basic and diluted Earnings Per Share (EPS) in
accordance with Accounting Standard 20 Earnings per share. Basic EPS is
computed by dividing the net profit or loss for the year available for
the year for equity share holders by the weighted average no of equity
shares outstanding during the year. Diluted EPS is computed by dividing
the net profit or loss for the year by the weighted average number of
equity shares outstanding during the year as adjusted for the efect of
all dilutive potential equity shares, except where the results are
anti-dilutive.
Mar 31, 2012
A) Basis of preparation of Financial Statement:
The Company follows the mercantile system of accounting and recognizes
income and expenditure on accrual basis. The accounts are prepared on
historical cost basis as a going concern and are consistent with
generally accepted accounting principles.
b) Revenue Recongnition:
The Company follows the accrual basis of accounting except in dividend,
payment of bonus and insurance claims where the same are recorded on
the basis of ascertainment of rights or obligation.
c) Fixed Assets:
Tangible Asstes : Fixed Assets are stated at cost of acquisition less
accumulated depreciation.The cost includes taxes, duties, freight,
installation, startup and commissioning expenses and other preoperative
expenses and other direct and allocated expenses of bringing the assets
to working condition for its intended use. Capital Work in Progress:
Incidental Expenditure during construction, pending allocation,
included in Capital Work-in- Progress represents expenditure incurred
in connection with the project which is intended to capitalized to the
project.
d) Depreciation:
i. Depreciation on Fixed Assets is provided on "Straight Line
Method" in the manner prescribed in Schedule-XIV to the Companies
Act, 1956.
ii. Depreciation on additions / deductions of assets during the year
is provided on a pro-rata basis.
e) Investments:
Long term investments are stated at cost.A provision for diminution is
made to recognize a decline, other than temporary, in the value of long
term investment.
f) Inventories:
Inventories are valued at lower of cost or Net Realisiable Value.
g) Retirement Benefits:
The Liability of gratuity and leave encashment are determined and
provided for based on acturial valuation made by an independent actuary
as at the Balance Sheet date.
h) Foreign Currency Transactions:
All transactions in foreign currency are recorded at the rates of
exchange prevailing on the dates when the relevant transactions take
place.Monetary assets and liabilities in foreign currency, outstanding
at the close of the year, are converted in Indian Currency at the
appropriate rates of exchange prevailing on the date of the Balance
Sheet.
i) Taxes on Income:
(i) Provision for current income-tax is recognized in accordance with
the provision of Indian Income-tax Act,1961 and is made annually based
on the tax liability after taking credit for tax allowances and
exemptions.
(ii) Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to timing differences that result between
the profits offered for income taxes and the profits as per the
financial statements. Deferred tax assets and liabilities are measured
using the tax rates and the tax laws that have been enacted or
substantially enacted at the balance sheet date. Deferred tax Assets
are recognized only to the extent there is reasonable certainty that
the assets can be realized in the future. Deferred Tax Assets are
reviewed as at each Balance Sheet date.
Mar 31, 2011
1 Basis of Preparation of Financial Statements
The company follows the mercantile system of accounting and recognizes
income and expenditure on accrual basis. The accounts are prepared on
historical cost basis as a going concern and are consistent with
generally accepted accounting principles.
2 Revenue Recognition
The Company follows the accrual basis of accounting except in dividend,
payment of bonus and insurance claims where the same are recorded on
the basis of ascertainment of rights or obligation.
3 Fixed Assets
(i) Fixed Assets are accounted at cost less accumulated depreciation.
Cost comprises the purchase price and any attributable cost of bringing
the asset to working condition for its intended use.
(ii) Capital Work in Progress :
Incidental expenditure during construction, pending allocation,
included in Capital Work-in-Progress represents expenditure incurred in
connection with the project which is intended to be capitalized to the
project.
4 Depreciation
(i) Depreciation on Fixed Assets is charged on the "Straight Line
Value" Method at rates specified under Schedule XIV of the Companies
Act, 1956.
(ii) Depreciation on additions/deductions of assets during the year is
provided on a pro-rata basis.
5 Foreign Currency Transactions
All transactions in foreign currency are recorded at the rates of
exchange prevailing on the dates when the relevant transactions take
place.
Monetary assets and liabilities in foreign currency, outstanding at the
close of the year, are converted in Indian Currency at the appropriate
rates of exchange prevailing on the date of the Balance Sheet.
6 Investments
Long term investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary, in the value of long
term investment.
7 Inventory
Inventories are valued at lower of cost or market value.
8 Retirement Benefits
The liability of gratuity and leave encasement are determined and
provided for based on actuarial valuation made by an independent
actuary as at the Balance Sheet date.
9 Taxes on Income
Current Taxes
Provision for current income-tax is recognized in accordance with the
provisions of Indian Income- tax Act, 1961 and is made annually based
on the tax liability after taking credit for tax allowances and
exemptions.
Deferred Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to timing differences that result between the
profits offered for income taxes and the profits as per the financial
statements. Deferred tax assets and liabilities are measured using the
tax rates and the tax laws that have been enacted or substantially
enacted at the balance sheet date. The effect of a change in tax rates
on deferred tax and assets or liabilities are recognized in the period
that includes the enactment date. Deferred tax Assets are racognized
only to the extent there is reasonable certainty that the assets can be
realized in the future. Deferred Tax Assets are reviewed as at each
Balance Sheet date.
Mar 31, 2010
1 Basis of Preparation of Financial Statements
The Financial Statements are prepared under the historical cost
convention and on an accrual basis and are in consonance with the
generally accepted accounting principles as per requirements of the
Companies Act, 1956.
2 Revenue Recognition
The Company follows the accrual basis of accounting except in dividend,
where the same is recorded on the basis of ascertainment of rights or
obligation.
3 Fixed Assets
Fixed Assets are accounted at cost less accumulated depreciation. Cost
comprises the purchase price and any attributable cost of bringing the
asset to working condition for its intended use.
4 Depreciation
Depreciation on Fixed Assets is charged on the ÃWritten down ValueÃ
Method at rates specified under Schedule XIV of the Companies Act,
1956.
5 Investments
i. The shares & securities acquired with the intention of short term
holding & trading positions, if any are considered as Stock in Trade.
Other shares & securities acquired with the intention of Long term
holding are considered as Long Term Investments.
ii. Long Term Investments are stated at cost inclusive of incidental
expenses. Provision in the value of Long Term Investments is made only
if such a decline is other than temporary in the opinion of the
Management.
6 Inventory
Stock of Shares and Securities are valued at lower of cost or market
value.
7 Contingent Liabilities
Contingent Liabilities if any are disclosed by way of Notes forming
parts of Accounts.
8 Retirement Benefits
The liability of gratuity is ascertained and provided on the basis and
method as prescribed under the Payment of Gratuity Act.
9 Taxes on Income
Current Taxes
Provision for current income-tax is recognized in accordance with the
provisions of Indian Income- tax Act, 1961 and is made annually based
on the tax liability after taking credit for tax allowances and
exemptions.
Deferred Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to timing differences that result between the
profits offered for income taxes and the profits as per the financial
statements. Deferred tax assets and liabilities are measured using the
tax rates and the tax laws that have been enacted or substantially
enacted at the balance sheet date. The effect of a change in tax rates
on deferred tax and assets or liabilities are recognized in the period
that includes the enactment date. Deferred tax Assets are recognized
only to the extent there is reasonable certainty that the assets can be
realized in the future. Deferred Tax Assets are reviewed as at each
Balance Sheet date.
10. Miscellaneous Expenditure
Preliminary expenses have been written off in the year in which they
are incurred.
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