Akash Infra-Projects Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

Mar 31, 2018

SCHEDULE - 2 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS FOR THE YEAR ENDED ON 31ST MARCH, 2018

SIGNIFICANT ACCOUNTING POLICIES

1. Financial statement are prepared under material cost convention, based on mercantile system of accounting in accordance with generally accepted accounting principles and the provisions of the Companies Act, 2013 consistently followed by the company, except the provision of Staff Leave Encashment for which the company is following up cash based accounting system for its leave encashment payment

2. Fixed assets are stated at cost. Depreciation on assets in provided on written Down Value (WDV) Method in accordance with section 205(2) of the Companies Act, 2013 and at the rates and manner, specified in Schedule II to the Companies Act, 2013 till the residual value of the asset is reduced equal to 5% of the original cost. In respect of assets acquired during the year the depreciation is provided on pro-rata basis.

3. The company is consistently following "Percentage of Completion Method" to recognize revenue from its works contracts.

4. All other revenues are recognized only when there is reasonable certainty of their ultimate realization/ collection. Since Company realizes the retention money by providing Bank Guarantee it is recognized as revenue as contract income.

5. Long Term Investments are stated at cost.

6. Closing Stock on hand is values as under:

(a) Raw Material & Consumables	-At Cost or Net Realizable Value whichever is lower.
(b) Work-in-Progress	-At Material Cost plus Labour.

NOTES FORMING PART OF THE ACCOUNTS

1. The Company has availed following of Secured Loans :

Sr.	Name of Lender	Type of Facility	Sanctioned Limit (Rs. In Lac)	Bal. O/S on 31/03/18 (Rs. In Lac)	Against Security Of
01	Oriental Bank of Commerce	Cash Credit	2000	2022.82	Entire Current Assets
02	ó do ó	Non Fund Limit (2700 500)	3700	2458.33	Entire Current Assets
03	HDFC Bank	Term Loan	290.30	154.14	Hypothecation of Machinery.
04	Citi Bank	Term Loan	286.10	251.21	Hypothecation of Vehicles
05	Yes Bank	Term Loan	78.32	70.69	Hypothecation of used Vehicles

2. All known liabilities have been provided for except,

(a) Contingent Liabilities not provided for are Rs. 3700 Lacs (Previous year-Rs. 3200 Lacs), being bank guarantees issued by Oriental Bank of Commerce, Gandhinagar on behalf of the company.

(b) The company has been claiming Income Tax benefit under section 80IA(4) of the Income Tax Act, 1961 from year to year. The Income Tax Assessing officer has disallowed the company''s such claim from assessment year 2003-04 to 2011-12 till date. The company preferred appeals against the said disallowance and the appeals for AY 2003.04 to AY 2007.08 are pending with ITAT Ahmedabad.

For assessment year 2008-09 to 2013-14 the company''s claim u/s 80IA(4) is allowed by the Income Tax department.

Further, the Company has paid the entire tax liabilities for A.Y. 2003.04 to 2007.08 due to such disallowance.

(c) Ahmedabad Muncipal Corporation (AMC) hitherto was the main customer of the Company. The Company had set up a plant at Gyaspur with land provided by AMC to execute various road works in Ahmedabad Muncipal area as instructed by the AMC. No mention about the rent was there either in tender documents/agreement/standing committee resolution awarding the tender to the Company.

However, during the year under consideration, due to heavy rains in July, 2017, various roads laid by the Company and others were broken and AMC without being heard had black listed the company on 15.09.2017 along with two other parties and apart from black listing the company the AMC also had demanded the rent with interest and service tax for 5 years -Rs. 2,30,77,329/-for land provided to the company at Gyaspur Plant. This was done without giving the company any opportunity of being heard -than AMC has recovered the same through invoking Bank Guarantee of Rs. 4,00,42,322/- on 19.04.2018.

The Company has denied the said liability of Rs 23077329/- contesting the claim of AMC. The Company has obtained legal opinion on this matter Based on this opinion the Company has not provided for any such liability raised by AMC. Since the company has already written to the AMC and is seeking reversal of invoked amount, further options of any legal action would depend upon the stand taken by AMC

3. Based on actuarial valuation of its liabilities conducted under the "Payment of Gratuity Act,1972", the company has provided its gratuity liability to the tune of Rs. 20,5367-till 31/03/18.(P.Y. Rs.129/-)

4. The liability for unexecuted contracts on capital account is Rs. 911.22 Lacs (P. Y. NIL) as on 31.03.2018.

5. Company has provided Current Income Tax liability for the financial year 2017-18 of Rs. 52,50,177/-(previous year Rs.1,13,08,423/-) The current tax liability is restricted to MAT. The company has not recognized MAT credit receivable in its books.

6. Directors remuneration paid/payable durina the year is as under:

Name	Directors remuneration (Amt in Rs.)	Company Contribution to EPF (Amt. inRs.)
Shri Y. H. Patel	96,00,000	3,02,400
Shri A. P. Gol	96,00,000	3,02,400
ShriP. P. Gol	36,00,000	1,20,240
Shri D. H. Patel	36,00,000	1,20,240
Total Rs.	2,64,00,000	8,45,280

7. Closing stock of materials and Work In Process on hand as at the end of the year is taken as valued, verified and certified by the company.

8. Remuneration paid/payable to the auditors is as under:

Particulars	F.Y. 2017-18	F.Y. 2016-17
Audit Fee (incl. of taxes)	4,72,000	4,60,000
Taxation Matters	Nil	Nil
Certification Work	Nil	1,48,900
Others	Nil	1,29,375
Total Rs.	4,72,000	7,38,275

9. Custody certificates have not been obtained by the company in case of FDRs or other ownership documents pledged as security.

10. Related party disclosure as required by AS-18 issued by The ICAI-New Delhi are as under:-(i) Associates & Joint Ventures :

1) Akash Infra Inc. USA - Subsidiary Company

2) Akash Petroleum Pvt. Ltd.-Associate Company

3) Akash Residency and Hospitality Pvt. Ltd

4) Aadhyashakti Mining P. Ltd.,

5) Divyalaxmi Finlease Pvt. Ltd. (i) Key Management Personnel:

Mr. Yoginkumar H. Patel -Director	Mr. Ambusinh P. Gol - Director
Mr. Dinesh H. Patel -Director	Mr. Premalsinh P. Gol - Director

(ii) Companies over which Key Management Personnel exercise significant influence and with whom transactions have taken place during the year:-

a) Akash Petroleum Pvt. Ltd.

b) Aadhyashakti Minings Pvt. Ltd.,

c) Akash Residency and Hospitality Pvt. Ltd

(ill) Transactions with related parties: - (Rs. In Lac)

Description	Key Management Personnel		Enterprises By Managemen	Key controllec Personnel
	2017-18	2016-17	2017-18	2016-17
Purchase of Goods	0.00	0.00	653.37	591.14
Remuneration	264.00	156.00	-	-
Rent	26.40	18.90	6.00	6.37
Works contract	0.00	0.00	588.78	0.00
Loans & Adv. Received & O/S at the end of the year	0.00	0.00	0.00	0.00
Loans & Advances aiven & O/S at the end of the year	0.00	0.00	0.00	0.00
Total	290.40	174.90	1248.15	597.51

(v) The Basic EPS is worked on the basis of AS 20 issued by the Institute of Chartered Accountants of India as follows:

Particulars	2017-18	2016-17
Profit / (Loss) after taxation Rs.	1,95,65,686	4,44,15,167
Profit attributable to Ordinary shareholders. (Excluding Deff. Tax Assets/Liabi. Provi.)	1,95,65,686	4,44,15,167
No. of Equity Shares	75,88,267	75,88,267
Basic Earning Per Share Rs.	2.58	5.85

11. Since, forthe year under audit, the company has no "Time Benefits" in terms of AS 22 but has observed "Time Deficit", on account of higher the Depreciation as per books than the depreciation as per Income Tax Act, 1961. Further there is a timing difference with regards to the payment of Bonus forthe year 2017-18. Accordingly, to mitigate the "Time Deficit" observed for the year under audit, the company

has created and accounted for "Deferred Tax Assets/ Liability account" to the tune of Rs. 8,76,385/-(DTL-Net) (P. Y. 15,41,110/- (DTA-Net)) in terms of AS 22.

12. There are certain disputes with AMC with regards to the quality of road construction and this has resulted in over due payment of Rs 26.53 Crores from AMC. The Company however treats these as good, though overdue.

13. Balances of sundry Debtors/Creditors/Loans/Advances and Deposits are subject to confirmation, reconciliation and necessary adjustments.

14. Previous year''s figures have been re-grouped or re-arranged wherever necessary to make them comparable with the current year figures.

15. The final dividend on shares are not recognized as liability in the annual accounts pursuantto revised accounting standard-4. The Board of Directors has proposed dividend at the rate of Rs. 0.50 per equity share of Rs. 10 each. (Last year at the rate of Rs. 1 per equity share of Rs. 10 each).

As per our report of even date For Akash Infra Projects Ltd.

For Rakesh Bhatt & Co.	Y.H.Patel	A. P. Gol
Chartered Accountants	Chairman & Managing Director	Managing Director
Rakesh Bhatt	DIN 00463335	DIN 00463376

Proprietor	S.K.Padhi	U.A.Patel
M. No. 046382	Chief Financial Officer	Company Secretary
Place : Gandhinagar	Place : Gandhinagar
Date : 30/05/2018	Date : 30/05/2018