APR Constructions Limited - Saffron Capital

ANNEXURE - IV
Significant Accounting Policies and Notes on Accounts:
1. Accounting Policies:-
a. Basis of Accounting:
These financial statements have been prepared on historical cost conventions on accrual basis to comply
in all material respects with applicable accounting standards and relevant presentational requirements of
the Companies Act, 1956.
b. Revenue Recognition:
Revenue is recognized to the extent that it is probable that the economic benefit will flow to the
company and the revenue can be reasonably measured.
i) Revenue from Fixed Price construction contracts is recognized on the percentage of completion
method. Percentage of completion is determined on the basis of surveys performed. However, profit
is not recognized unless there is reasonable progress on the contract. Where the total cost of a
contract, based on technical and other estimates, is expected to exceed the corresponding contract
value, such expected loss is provided for. The effect of any adjustment arising from revisions to
estimates is included in the income of the period in which revisions are made.
Revenue from cost plus contracts is recognized by reference to the recoverable costs incurred
during the period plus the fee earned, measured by the proportion that costs incurred up to the
reporting date bear to the estimated total costs of the contract.
Contracts executed in Joint Ventures under work sharing arrangement are accounted in accordance
with the accounting policy followed by the company as that of an independent contract as stated
above.
ii) The revenue on account of claims is accounted for based on management‟s estimate of probability
that such claims would be admitted either wholly or in part.
iii) Interest is recognized on a time proportion basis taking into account the amount outstanding and the
rate applicable.
c. Fixed Assets and Depreciation:
i) Fixed Assets are stated at cost less accumulated depreciation, impairment losses and specific grant /
subsidies, if any. Cost comprise of purchase price, freight, duties, taxes and any attributable cost of
bringing the asset to its working condition for its intended use.
ii) Assets retired from active use and held for disposal are stated at their estimated net realizable values
or net book values whichever is lower.
iii) The carrying amount of fixed assets are reviewed at each balance sheet date when required to assess
whether they are recorded in excess of their recoverable amounts, and where carrying values exceed
the estimated recoverable amount, assets are written down to their recoverable amount.
iv) Depreciation is provided on straight line basis as per the rates prescribed in Schedule XIV of the
Companies Act, 1956.
d. Investments:
Investments consisting of long term investments are carried at cost.
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