ARSS Accounting Policy


a. Use of Estimates

In preparing the financial statements in conformity with accounting
principles generally accepted in India, Management is required to make
estimates and assumption that affect the reported amounts of assets and
liabilities as at the date of the financial statements and the amounts
of revenue and expenses during the reported period. Actual results
could differ from those estimates. Difference between the actual
results and estimates is recognised in the period in which the actual
results are known / materialized.

b. Tangible Fixed Assets

Fixed assets are stated at cost of acquisition inclusive of taxes,
duties, freight and other incidental expenses related to acquisition
and installation less accumulated depreciation.

Self constructed assets are capitalized at cost including an
appropriate share of overhead.

c. Depreciation on Tangible Fixed Assets

Depreciation on tangible assets is provided on the straight-line method
over the useful lives of assets as estimated by the Management. The
Management estimates the useful lives for the fixed assets as follows:


Particular Rate of * Useful Life *
Depreciation

Building (Factory) 3.17% 30 Years

Building (Non Factory) 1.58% 60 Years

Plant and Equipment (Earth Moving) 10.56% 9 Years

Plant and Equipment (Non Earth Moving) 6.33% 15 Years

Furniture and fixtures 9.50% 10 Years

Vehicles 11.88% 8 Years

Computer 31.67% 3 Years


* Rate of Depreciation is arrived by considering further useful life
for existing assets as on 01.04.2014 as per Technician Certificates or
from the date of acquisition for other assets and Residual Value at 5%
of cost.

Depreciation on addition / deletion of fixed assets during the year is
provided on pro-rata basis with reference to the date of addition /
deletion.

d. Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction
or production of a qualifying asset are capitalized as part of cost of
such asset till such time the asset is ready for its intended use or
sale. All other borrowing costs are recognized as an expense in the
period in which they are incurred.

e. Investments

The Investments that are readily realizable and intended to be held for
not more than a year from the Balance Sheet date are classified as
current investments. All other investments are classified as
non-current investments. On initial recognition, all investments are
recognised at cost. The cost comprises purchase price and directly
attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried at the lower of cost and quoted/fair
value, computed category wise. Long term investments are stated at
cost. Provision for diminution in the value of long-term investments is
made only if such a decline is other than temporary in the opinion of
the management.

Investments in integrated Joint ventures are carried at cost net of
adjustments for the company''s share in profits or losses as recognized.

f. Sundry Debtors / Loans and Advances:

Sundry Debtors / Loans and Advances are stated net of provision for
identified doubtful debts / advances wherever necessary. Sundry Debtors
and Loans and Advances has been taken at reconciled amount for the
parties from which the balance confirmation was received and for the
rest Debtors and balances are taken as per book balance and are subject
to adjustment and reconciliation, if any which will be done on receipts
of confirmation from such parties. In the opinion of the management on
which we have placed reliance, substantial part of Debtors and advances
are outstanding for a period exceeding six months and they are subject
to arbitration and other reconciliatory proceedings, the outcome and
quantum of which is not ascertainable and determined, and subject to
reconciliations referred to above, the debtors and Loans and advances
to the extent as stated are considered good in the Balance Sheet.

g. Impairment of Assets:

As at each balance sheet date, the carrying amount of assets is tested
for impairment so as to determine:

* The provision for impairment loss required, if any, or

* The reversal required of impairment loss recognised in previous
periods, if any,

Impairment loss is recognised when the carrying amount of asset exceeds
its recoverable amount.

Recoverable amount is determined in the case of an individual asset, at
higher of net selling price and the value in use.

h. Accounting for Joint Ventures Contracts

i. Contracts executed in Joint Venture under work sharing arrangement
(consortium) are accounted for in accordance with the accounting policy
followed by the Company as that of an independent contract to the
extent work is executed.

ii. In respect of contracts executed in Integrated Joint Ventures
under profit sharing arrangement (assessed as AOP under Income Tax
Laws), the services rendered to the Joint Ventures are accounted for as
income on accrual basis. The profit / Loss is accounted for, as and
when it is determined by the Joint Venture and the net investment in
the Joint Venture is reflected as investments, loans and advances or
current liabilities.

i Inventories

i. Raw Materials, Stores & Spares and Finished Goods

Raw Materials, construction materials and Finished Goods are valued at
the lower of cost and net realizable value.

ii. Work in Progress

The work in progress has been determined by the Management at the
estimated realizable value The value of work in progress comprises of
value of materials and expenses incurred at site including estimated
profits thereon in terms of guidelines provided under Accounting
Standards AS 7 on Construction Contracts.

j. Revenue Recognition

Contract Receipt / Construction Contract :

In respect of Construction contracts and in manner specified under
Accounting Standard AS-7 on Construction Contracts, Revenue is
recognized on Stage of Completion Method based on the Bills submitted,
certified and sanctioned by the appropriate authorities and Work
completed and Uncertified Bills for work executed on the Project and
does not include material supplied by the clients free of cost. The
relevant cost is recognized in accounts in the year of recognition of
the revenue. The total costs of contract are estimated by Company and
are based on technical and other estimates and assumptions.

The Company''s financial position is subject to strict conditions
imposed by Banks implementing CDR programme, resultantly the
performance and execution of the projects at times is affected. In case
of premature termination of contract there is uncertainty in the
outcome of the Projects.

Hence in terms of para 34 of the AS-7 Company has recognized contract
revenue and contract cost which is direct cost specifically
identifiable and directly attributable to the specific contract in
accordance with para 31 instead of para 21, i.e. contract revenue to
the extent of cost incurred of which recovery is probable and contract
cost in the period in which they are incurred. Also based on the above,
an expected loss, if any to the extent as identified and quantified, is
recognized as an expenses immediately in accordance with para 35.

Further apportionment and allocation of combined Operating overhead,
Head office overhead, General overhead and Finance cost do not
commensurate with size, nature and duration of projects being executed
and hence the company is unable to specifically determine project wise
profitability. Also adequate disclosure in terms of para 38, 39 and 41
of AS-7 have been made in accounts under relevant head/notes.

Other Income

Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the rate applicable. Dividend income
recognized as and when right to receive established. All other income
is recognized on accrual basis

k. Taxes on Income

The Tax expenses comprise of current tax and deferred tax charged or
credited to the profit and loss account for the year. Current tax is
calculated in accordance with the tax laws applicable to the current
financial year. The deferred tax charge or credit is recognized using
the tax rates and tax laws that have been enacted by the Balance Sheet
date. Where there are unabsorbed depreciation or carry forward losses,
deferred tax assets are recognized only if there is virtual certainty
of realization of such assets. Other deferred tax assets are recognized
only to the extent there is reasonable certainty of realization in
future. At each Balance Sheet date, recognized and unrecognized
deferred tax assets are reviewed.

l. Employee Benefits

i. Defined contribution plans

Contributions paid/payable to defined contribution plans comprising of
provident fund are recognized as expenses during the period in which
the employees perform the services that the payments cover.

The Company makes monthly contributions and has no further obligations
under the plan beyond its contributions.

ii Defined benefit plan

Gratuity for employees is covered under a scheme of SBI Life Insurance
and contributions in respect of such scheme are recognized in the
Profit and Loss Account. The liability as at the Balance Sheet date is
provided for based on the actuarial valuation, at the Balance Sheet
date, carried out by an independent actuary. Actuarial gains and losses
comprise experience adjustments and the effect of changes in the
actuarial assumptions and are recognized immediately in the Profit and
Loss account as income or expense. Actuarial valuation is independently
done by SBI Life Insurance Company Ltd and company has based its
provisions the same. Financial effects of changes in those plans during
the period in terms of para 119 of AS-15 are as disclosed and
recognised in Profit and Loss Accounts. Insurance Company has provided
detail working of actuarial valuation as required for disclosure in
terms of para 119 & para 120 of AS-15 Employee''s Benefits is as
follows:

a. Assumptions and data considered for valuation:

Discount Rate 8.00%

Salary Escalation Rate for first 5 year 10.00%

Salary Escalation Rate thereafter 5.00%

Attrition Rate 15.00%

Mortality Rate Indian Assured Lives
Mortality (2006-08)
Ultimate

Actuarial Valuation Method Projected Unit Credit
Method

Retirement Age 60 years

Benefits As per Payment of
Gratuity Act

b. Expense recognized in the statement of Profit and Loss account:

Particulars Amount (Rs.)

Current Service Cost 18,68,146/-

Insurance for Life Cover 1,16,747/-

Increase in Fair value of Fund Balance (Assets) 10,66,570/-

Expense/(income) to be recognized in the statement 9,18,323/-
of Profit and Loss account

Current Service Cost (As % of Annual Wages Bill) 3.85%

c. Movements in the Liability recognized in Balance Sheet ::

Particulars Amount (Rs.)

Past Service Liability 1,02,27,633

Current Service Cost 18,68,146/-

Insurance for Life Cover 1,16,747/-

Contribution paid to Fund 9,18,323/-

Liability as on 31.03.2015 1,12,94,203/-

Policy Account Value / Fund Balance 1,12,94,203/-
(Assets) as on 31.03.2015

Net Asset/(Liability) to be recognized Nil
in the balance sheet


iii. Short term employee benefits

Short term employee benefits including compensated absences as at the
Balance Sheet date are recognized as an expense as and when it paid.

m. Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement
are recognized when an enterprise has a present obligation as a result
of past event; 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 not discounted to its present
value and are determined based on best estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
Balance Sheet date and adjusted to reflect the current best estimates.

Contingent Liabilities are not recognized but are disclosed in the
notes to accounts. Disputed demands in respect of Central Excise, VAT,
Income Tax and Sales Tax are disclosed as Contingent Liabilities.
Payment in respect of such demands, if any, is shown as advance, till
the final outcome of the matter. Contingent Assets are neither
recognized nor disclosed in the financial statements..

n. Earning per share :

Basic earning per share is calculated by dividing the net profit or
loss for the period attributable to equity share holders by the
weighted average no. of equity shares outstanding during the period.
The weighted average no. of equity shares outstanding during the period
is adjusted for events of shares split.

For the purpose of calculating diluted earning per share, the net
profit or loss for the period attributable to the equity share holders
and weighted average no. of equity shares outstanding during the period
is adjusted for the effects of all dilutive potential equity shares.

o. Overdue Charges in Respect of Loans

Overdue charges if any levied by Financial Institutions / Banks/NBFC
are not considered during the currency of the loan. The same is
considered as a financial expense in the year of final settlement of
loan amount.

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
“2019 © COPYRIGHT DYNAMIC EQUITIES PVT. LTD.”

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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