1. Corporate Information Gujarat. It is currently engaged in construction as well as development of real estate and infrastructure projects. Nila Infrastructures Ltd is a public company incorporated on February 26, 1990 and listed on BSE and NSE (Bombay Stock Exchange and National Stock Exchange). 2. Significant Accounting Policies a) Basis of brparation of financial statements: These financial statements have been brpared in accordance with generally accepted accounting principles in India under historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rule, 2014, till the standards of accounting or any addendum thereto are brscribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been brpared to comply in all material aspects, with Accounting Standards notified under Section 211 (3C) [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013. b) Use of Estimates The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the reported income and expenses during the year. The management believes that the estimates used in the brparation of financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise c) Fixed Assets (i) Tangible Assets Fixed assets are stated at cost of acquisition or construction (net of tax / duty credits availed if any) including any cost attributable to bringing the assets to their working condition for their intended use. Fixed assets are valued at cost less accumulated debrciation there on. (ii) Intangible Assets All Intangible Assets are initially measured at cost (net of tax / duty credits availed if any) and amortized so as to reflect the pattern in which the assets' economic benefits are consumed. Intangible assets are amortized on a straight-line basis (pro-rata from the date of additions)over estimated useful life of four years. d) Debrciation (i) Useful lives Debrciation is being provided on a pro-rata basis on the 'Straight Line Method' over the estimated useful lives of the assets as brscribed under Schedule II to the Companies Act, 2013, till the year ended March 31, 2014, debrciation was provided in the manner and rates brscribed under Schedule XIV to the Companies Act, 1956. The management has decided to apply the revised accounting policy prospectively from accounting periods commencing on or after April 1, 2014. The change in accounting policy did not have any material impact on financial statements of the company for the current year. (ii) Debrciation on assets costing less than Rs. 5,000 Till year ended March 31, 2014, to comply with the requirements of Schedule XIV to the Companies Act, 1956, the company was charging 100% debrciation on assets costing less than Rs. 5,000 in the year of purchase. However, Schedule II to the Companies Act, 2013 applicable from the current year, does not recognize such practice. Hence, to comply with the requirement of Schedule II to the Companies Act, 2013, the company has changed its accounting policy for debrciations of assets costing less than Rs. 5,000. As per the revised policy, the company is debrciating such assets over their useful life as brscribed under Schedule II to the Companies Act, 2013. The management has decided to apply the revised accounting policy prospectively from accounting periods commencing on or after April 1, 2014. The change in accounting for debrciation of assets costing less than Rs. 5,000 did not have any material impact on financial statements of the company for the current year. e) Impairment of Assets At each Balance sheet date, the company considers whether there is any indication that an asset may be impaired. If any indication exists the recoverable amount of the asset is estimated. An impairment loss is recognized immediately whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use, estimated future Cash Flows are discounted to their brsent value based on an appropriate discount factor. f) Investments Investments are classified into current investments and non-current investment. Investments are further classified as quoted and unquoted investments also. Non-current Investments are stated at cost of acquisition. If there is a decline in the value of non- current investment as on the reporting date other than of temporary in nature, such decline is debited to the statement of profit and loss as "Provision for diminution in value of Investments". Subsequent increase in the realizable value of investment will be credited to the statement of profit and loss to the extent provision made for. Current Investments, if any, are stated at cost or fair value whichever is lower and resultant decline is charged to statement of profit and loss. g) Taxation Provision for Income tax for the current year is based on the estimated taxable income for the period in accordance with the provisions of the Income Tax Act, 1961. Minimum Alternative Tax (MAT) paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that company will pay normal income tax. Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the company and the asset can be measured reliably. The deferred tax impact resulting from timing difference between accounting and taxable profit is accounted by using tax rates and tax laws enacted or subsequently enacted as at the Balance sheet date. The Deferred Tax Asset is recognized and carried forward only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. h) Revenue Recognition (i) Construction and Development of Infrastructures Project Income from Infrastructure project has been recognized on accrual basis. Revenue has been recognized on the basis of work done and as per the terms of the tender / contract. The company records revenue of its infrastructure projects based on running bill raised. Revenue expenditure is accounted on accrual basis. (ii) Construction and Development of Real Estate Project The Company records its revenue of its residential projects confirming to Accounting Standard 9 and also based on Guidance note issued by the ICAI. The full revenue is recognized on the sale of property when the company has transferred all significant risks and rewards of ownership to the buyer and when the company is not required to perform any substantial acts to complete the contract. When the Company is obliged to perform any substantial acts after transfer of all significant risks and rewards of ownership on sale of property to the buyer, the revenue and cost is recognized on proportionate basis by applying the percentage completion method. (iii) Trading (Land and Land Rights) Income from Trading is recognized when the Company enters into agreement for sale with the buyer and all significant risks and rewards have been transferred to the buyer and there is no uncertainty regarding realisability of the sale consideration. (iv) Lease Rental (Income) Income from leasing of commercial complex is recognized on an accrual basis. The leasing agreements range from 11 months to 10 years generally and are usually cancellable / renewable by mutual consent on the agreed terms. (v) Interest income is accounted on an accrual basis at contracted rates. (vi) Dividend income is recognized when the right to receive the same is established. (vii) Income on investments is recognized based on the terms of the investment. Income from mutual fund scheme having fixed maturity plans is accounted on declaration of dividend or on maturity of such investments. i) Employee Benefits Liability for employee benefits, both short and long term, for brsent and past services which are due as per the terms of employment are recorded in accordance with the Accounting Standard-15 "Employee Benefits" notified under section 211 (3c) of the Companies Act, 2013 (i) Gratuity and Leave Encashment liabilities are provided for on the basis of an actuarial valuation on Projected Unit Credit Method as at the reporting date. (ii) The company's Contribution to the Provident Fund and Employee State Insurance is charged to the statement of profit and loss for the year. The company has no other obligation other than contribution payable. j) Borrowing costs Borrowing costs attributable to the acquisition and/or construction of qualifying assets is capitalised to as part of the cost of such assets in accordance with notified Accounting Standard-16 "Borrowing Cost". A qualifying asset is one that necessarily takes a substantial periodof time to get ready for use or sale. Capitalisation of borrowing cost is suspended in the period during which the active development is delayed due to, other than temporary interruption. All other borrowing costs are charged to the statement of profit and loss as incurred. k) Inventories (i) Inventory comprises of Completed property for sale, Land, Transferable development rights Completed property for sale, land and transferable property rights are valued at lower of cost or net realizable value. Cost includes cost of land, land development rights, acquisition of tenancy rights, materials, services, borrowing cost and other related overhead as the case may be. In case of acquisition of land for development and construction, the rights are acquired from the owners of the land and the conveyance and registration thereof will be executed between the original owners and the ultimate purchasers as per trade practice. As a result, in the immediate period, generally, the land is not registered in the name of the company. (ii) Raw materials and stores Stock of raw materials and stores are valued at the cost or net realizable value whichever is less. Cost is arrived at on Weighted Average Method (WAM) basis. (iii) Work-in-progress Construction and Development of Infrastructure Project Cost of work yet to be certified / billed, as it pertains to contract cost that relates to future activity on the contract, are recognized as work-in-progress provided it is probable that they will be recovered. Work-in-progress is valued at cost or net realizable value whichever is less. Cost includes direct material, labour and proportion of project overhead. Construction and Development of Real Estate Project Work-in-progress is valued at cost or net realizable value whichever is less. Cost includes cost of land, land development rights, materials, services, borrowing cost, acquisition of tenancy rights and other related overheads. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale. l) Cash Flow Statement Cash flow is reported using indirect method, whereby profit / (loss) before extra ordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on available information. Cash equivalents for the purpose of cash flow statements comprise cash at bank and in hand Cash equivalents are short-term balances that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. m) Earnings Per Share The company reports basic and diluted earnings per share in accordance with Accounting Standard-20. Basic earning per equity share is calculated by dividing the net profit for the year attributable to the Equity Shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is calculated by dividing the net profit for the year, adjusted for the effects of dilutive potential equity shares, attributable to the equity shareholders by weighted average number of the equity shares and dilutive potential equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. n) Provisions, Contingent Liabilities and Contingent Assets Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if ; (i) the company has a brsent obligation as a result of past event (ii) a probable outflow of resources is expected to settle the obligation and (iii) the amount of the obligation can be reliably estimated. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of: (i) a brsent obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation (ii) a brsent obligation arising from past events, when no reliable estimate is possible (iii) a possible obligation arising from past events where the probability of outflow of resources is not remote. Contingent assets are neither recognised, nor disclosed. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date. o) General Accounting policies not specifically referred to are consistent with generally accepted accounting principles. 2. Details of loans given, investments made covered u/s 186(4) of the Companies Act, 2013, and disclosures pursuant to clause 32 of the listing agreement The details of loan given and investment made are given under the respective heads. The loans given are for the general business purpose of the borrower. Details of the disclosures pursuant to clause no. 32 of the listing agreement are given in Note 28. 3. There is no foreign transaction during the year under consideration. 4. The brvious year's figures have been reworked, regrouped and reclassified wherever necessary. For, O. P Bhandari & Co. Chartered Accountants Firm Registration Number : 112633W O. P Bhandari Partner Membership No. : 34409 For and on behalf of the Board of Directors of Nila Infrastructures Ltd. Manoj B. Vadodaria Managing Director DIN : 00092053 Prashant H. Sarkhedi Chief Finance Officer Kiran B. Vadodaria Joint Managing Director DIN : 00092067 Dipen Y. Parikh Company Secretary Place : Ahmedabad Date : May 25, 2015 |
