a) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
 
 The financial statements are prepared in accordance with the Indian
 Generally Accepted Accounting Principles (GAAP) under the historical
 cost convention, accrual basis of accounting, on going concern basis .
 GAAP comprises mandatory accounting standards issued by the Institute
 of Chartered Accountants of India, the provisions of Companies Act,
 1956 and guidelines issued by the Securities Exchange Board of India.
 Accounting policies have been consistently applied except where a newly
 issued accounting standard is initially adopted or a revision to an
 existing accounting standard requires a change in the accounting policy
 hitherto in use or a change is necessitated, in the opinion of the
 management, for a more appropriate presentation of the financial
 statement of the enterprise.
 
 The management evaluates all recently issued or revised accounting
 standards on an ongoing basis.
 
 b) USE OF ESTIMATES
 
 The preparation of financial statements in conformity with the
 generally accepted accounting principles requires the management of the
 Company to make estimates and assumptions that affect the reported
 balances of assets and liabilities and disclosures relating to the
 contingent liabilities as at the date of the financial statements and
 reported amounts of income and expenses during the period. Although
 these estimates are based on the managements'' best knowledge of current
 events and actions the company may undertake in future, the actual
 results could differ from these estimates. Any revision to accounting
 estimates is recognized prospectively in current and future periods.
 
 c) FIXED ASSETS, INTANGIBLE ASSETS AND CAPITAL WORK IN PROGRESS
 
 Fixed assets, are stated at cost less accumulated depreciation and
 impairment losses. Cost comprises the purchase price and any
 attributable cost related to the acquisition and installation of the
 respective asset to bring the asset to its working condition for its
 intended use.
 
 Interest on borrowed money allocated to and utilized for fixed assets,
 pertaining to the period up to the date of capitalization is
 capitalized. Assets acquired on hire purchase are capitalized at the
 gross value and interest thereon is charged to Profit and Loss Account.
 
 Capital work-in-progress comprises the cost of fixed assets that are
 not yet ready for their intended use at the Balance Sheet date and the
 outstanding advances paid for the acquisition/construction of such
 fixed assets.
 
 An item of fixed assets is de-recognized upon disposal or when no
 future economic benefits are expected from its use or disposal. Any
 gain or loss arising on de-recognition of the asset (calculated as the
 difference between the net disposal proceeds and the carrying amount of
 the asset) is included in the income statement in the year the asset is
 de-recognized.
 
 d) IMPAIRMENT OF ASSETS
 
 As at each Balance Sheet date, the carrying amount of assets is tested
 for impairment so as to determine:
 
 (a) the provision for impairment loss ,if any required or
 
 (b) The reversal, if any, required of impairment loss recognized in
 previous periods.
 
 Impairment loss is recognized when the carrying amount of an asset
 exceeds its recoverable amount.
 
 Recoverable amount is determined:
 
 (a) in the case of an individual asset ,at the higher of the net
 selling price and the value in use.
 
 (b) in the case of a cash generating unit (a group of assets that
 generates identified independent cash flows) at the higher of the cash
 generating unit''s net selling price and the value in use.
 
 Value in use is determined as the present value of estimated future
 cash flows from the continuing use of an asset and from its disposal at
 the end of its useful life.
 
 e) INVESTMENTS
 
 Investment in subsidiaries and others are stated at cost. Investments
 that are intended to be held for more than a year, from the date of
 acquisition, are classified as long term investments and are stated at
 cost less provision for diminution in the value of such investments, if
 such diminution is of permanent nature. Investments other long term
 investments being current investments are valued at lower of cost and
 fair value, computed separately in respect of each category of
 investment.
 
 Investments in units/mutual funds are valued at lower of cost or marked
 to market values. Gain or loss on sale of investments is computed as
 difference between the net proceeds realized and the book value and is
 accordingly recognized in the Profit and Loss Account.
 
 f) INVENTORIES
 
 Ceramic Tile Division
 
 Raw materials, stores, spares and consumables: At lower of cost or
 market price; Cost is determined on First in First Out (FIFO) basis.
 
 Finished Goods: Lower of direct cost of production or net market value;
 Cost includes direct material and labour and a proportion of
 manufacturing overheads based on normal operating capacities. Excise
 duty payable on the finished goods has been included in the value of
 finished goods inventory. Net market value is the estimated selling
 price in the ordinary course of business.
 
 Work in progress: At direct cost of production including estimated
 amount of allocable expenditure.
 
 Real Estate Division
 
 Real Estate: Lower of cost or net market value; Cost includes cost of
 acquisition and other related expenses incurred in bringing the
 inventories to their present location and condition. Net market value
 is the estimated selling price in the ordinary course of business.
 
 Constructed/Under Construction Properties:
 
 Lower of cost or net realisable value. Cost includes the cost of land,
 internal development cost, external development charges, construction
 cost, overheads, borrowing cost and development/ construction material.
 
 Development rights: At cost of acquisition, including cost of acquiring
 rights of any interested party. Development rights are considered to
 have been acquired on execution of a Development Agreement upon visting
 of irrevocable rights in the Company to construct, market, and sell the
 development over land and realize and retain the economic and other
 benefits.
 
 g) UNBILLED RECEIVABLES
 
 Unbilled receivables represent revenue recognized based on Percentage
 of Completion of Construction Method [para (j) below], to the extent
 the work completed exceeds billed receivables.
 
 h) RESEARCH AND DEVELOPMENT EXPENDITURE
 
 Revenue expenditure on research and development is charged to Profit
 and Loss Account in the year in which it is incurred.  Capital
 expenditure on research and development is treated as additions to
 fixed assets and is subject to depreciation in the manner set out in
 paragraph (h) below.
 
 i) DEPRECIATION
 
 Depreciation on fixed assets is charged on the written down value
 method except Buildings (Other than Factory Building) and Plant &
 Machinery (Tile Division) wherein depreciation is charged on the
 straight line method, at the rates as specified in Schedule XIV of the
 Companies Act, 1956. Depreciation on the acquisition/ purchase of
 assets during the year has been provided on pro-rata basis according to
 the period each asset was put to use during the year.
 
 Goodwill arising on amalgamation is amortised over a period of five
 years.
 
 In respect of an asset for which impairment loss is recognised,
 depreciation is provided on the revised carrying amount of the assets
 over its remaining useful life.
 
 Where depreciable assets are revalued, deprecation is provided on the
 revalued amount and the additional depreciation on accretion to assets
 on revaluation is transferred from revaluation reserve to the Profit
 and Loss Account.
 
 Assets costing less than Rs. 5,000 are depreciated at the rate of 100%.
 
 j) REVENUE RECOGNITION
 
 Real Estate
 
 - Revenue from construction projects for sale is recognized on the
 `Percentage of Completion of Contruction Method’. Revenue from
 properties under construction is recognized to the extent that the
 percentage of actual project cost incurred thereon to total estimated
 project cost bears to todate sale consideration, provided actual cost
 incurred is 30% or more of the total estimated project cost. Project
 cost includes cost of land, and estimated construction and development
 costs. The estimates of saleable area and costs are reviewed
 periodically and effect of
 
 any changes in such estimates is recognized in the period such changes
 are determined.  When the total project cost is estimated to exceed
 total revenues from the project, the loss is immediately recognized.
 
 - Income from construction contracts is recognized by reference to the
 stage of completion of the contract activity at the reporting date of
 the financial statements, and costs related thereto are charged to
 Profit and Loss Account for the year.
 
 - Revenue from sales of investments in properties and shares is
 recognized by reference to the total sale consideration as per
 agreement to sell as reduced by the cost of acquisition of such
 property/shares. Cost of properties includes acquisition cost and
 construction and development cost.
 
 - Forfeiture due to non fulfilment of obligations by counter parties is
 accounted as Revenue on unconditional appropriation.
 
 - Revenue from rentals is recognized on accrual in accordance with
 terms of the relevant agreement.
 
 Ceramic Tile Division
 
 - Revenue is recognized to the extent that that it can be reasonably
 measured and is probable that economic benefit will flow to the
 Company.
 
 - Revenue from sale of products is recognized when risk and reward of
 ownership of the products are transferred to the customers and the
 Company retains no effective control of the goods to a degree usually
 associated with ownership, which are generally on dispatch/delivery of
 the goods and no significant un-certainty exists regarding the amount
 of consideration that will be derived from the sale of goods. Sales are
 stated net of discounts, returns and recoverable taxes.
 
 Other Income
 
 - Interest Income is recognized on time
 
 proportion basis taking into account the amount outstanding and the
 applicable rate of interest.
 
 - Dividend income is recognized when the right to receive the dividend
 is established.
 
 - Interest on arrears of allotment money is accounted in the year of
 receipt.
 
 k) CLAIMS
 
 Claims lodged by and lodged against the Company are accounted in the
 year of payment or settlement thereof.
 
 l) BORROWING COST
 
 Borrowing costs directly attributable to the acquisition, construction
 or production of qualifying assets which are assets that necessarily
 take a substantial period of time to get ready for their intended use,
 are added to the cost of those assets, until such time as the assets
 are substantially ready for their intended use. All other borrowing
 costs are recognized as part of Financial Expenses in the income
 statement in the period in which they are incurred.
 
 m) EMPLOYEE BENEFITS
 
 i.  Short Term Employee Benefits:
 
 All employee benefits payable wholly within twelve months of rendering
 the services are classified as Short Term Employee Benefits.  Benefits
 such as salaries, wages and short term compensated absence etc and the
 expected cost of ex-gratia is recognized in the period in which the
 employee renders the related service.
 
 ii.  Post Employment Benefits:
 
 (a) Defined Benefit Plans: The Company’s Gratuity and Leave encashment
 schemes are defined benefit plans. In accordance with the requirements
 of revised Accounting Standard-15 Employee Benefits, the Company
 provides for gratuity covering eligible employees on the
 
 basis of actuarial valuation as carried out by an independent actuary
 using the Projected Unit Credit method, which recognizes each period of
 service as giving rise to additional unit of employee benefit
 entitlement and measures each unit separately to build up the final
 obligation. The obligation is measured at the present value of the
 estimated future cash flows. The discount rates used for determining
 the present value of obligation under defined benefit plans is based on
 the market yields on Government securities as at the Balance Sheet
 date.
 
 The liability is un-funded. Actuarial gains and losses arising from
 changes in the actuarial assumptions are charged or credited to the
 Profit and Loss Account in the year in which such gains or losses
 arise.
 
 Leave encashment benefits payable to employees of the Company with
 respect to accumulated leave outstanding at the year end are accounted
 for on the basis of an actuarial valuation as at the Balance Sheet
 date.
 
 (b) Defined Contribution Plans
 
 Contributions payable by the Company to the concerned government
 authorities in respect of provident fund, family pension fund and
 employees state insurance are defined contribution plans. The
 contributions are recognized as an expense in the Profit and Loss
 Account during the period in which the employee renders the related
 service.  The Company does not have any further obligation in this
 respect, beyond such contribution.
 
 Other employee benefits are accounted for on accrual basis.
 
 n) FOREIGN CURRENCY TRANSACTIONS Transactions in foreign currencies are
 recorded at the rates prevailing on the date of the transaction.
 Monetary items denominated in foreign currency are restated at the rate
 prevailing on the Balance Sheet date except in cases where actual
 amount has been ascertained by the time of finalization of accounts.
 
 Exchange differences arising on the translation or settlement of
 monetary items at rates different from those at which they were
 initially recorded during the year, or reported in the previous
 financial statements, are recorded in exchange fluctuation account and
 recognized as income or expense in the year in which they arise.
 
 In translating the financial statements of representative offices, the
 monetary assets and liabilities are translated at the rate prevailing
 on the Balance Sheet date; non monetary assets and liabilities are
 translated at exchange rates prevailing at the date of the transaction
 and income and expense items are converted at the respective monthly
 average rates. Net gain/loss on foreign currency translation is
 recognized in the Profit and Loss Account.
 
 o) TAXES ON INCOME
 
 The accounting treatment followed for taxes on income is to provide for
 Current Tax and Deferred Tax. Provision for current income tax is made
 for the tax liability payable on taxable income ascertained in
 accordance with the applicable tax rates and laws.
 
 Deferred tax assets and liabilities are recognized for the future tax
 consequences attributable to timing differences between the financial
 statements, carrying amounts of existing assets and liabilities and
 their respective tax bases and carry forwards of operating loss.
 Deferred tax
 
 assets and liabilities are measured on the timing differences applying
 the tax rates and tax laws that have been enacted or substantively
 enacted by the Balance Sheet date. Changes in deferred tax assets and
 liabilities between one Balance Sheet date and the next, are recognized
 in the Profit and Loss Account in the year of change. The effect on
 deferred tax assets and liabilities of a change in tax rates is
 recognized in the Profit and Loss Account in the year of change.
 
 Deferred tax assets are recognized only to the extent there is
 reasonable certainty that sufficient future taxable income will be
 available against which these assets can be realized in future, whereas
 in case of existence of unabsorbed depreciation or carry forward of
 losses, deferred tax assets are recognized only if there is virtual
 certainty of realization backed by convincing evidence. Deferred tax
 assets are reviewed at each Balance Sheet date.
 
 p) SEGMENT ACCOUNTING AND
 
 REPORTING
 
 The accounting principles consistently used in the preparation of the
 financial statements are also consistently applied to record income and
 expenditure in individual segments. The basis of reporting is as
 follows:
 
 a) Segment revenue and expenses
 
 Segment revenue and expenses those are directly attributable to the
 segment are considered for respective segments. For rest allocation has
 been done between segments and where it is not possible to segregate,
 the same has been considered as un-allocable revenue and expenses.
 
 Segment expenses does not include leave encashment, gratuity and
 provision for taxation.
 
 b) Segment assets and liabilities
 
 All segment assets and liabilities which arise as a result of operating
 activities of the
 
 segment are recognised in that segment.  Fixed assets which are
 exclusively used by the segment or allocated on a reasonable basis are
 also included.
 
 Un-allocable assets and liabilities are those which are not
 attributable to any of the segments and include Advance Taxes and
 Provisions for taxation, gratuity and leave encashment.
 
 q) EARNINGS PER SHARE
 
 In determining earnings per share, the Company considers the net profit
 after tax for the year attributable to equity shareholders. The number
 of shares used in computing basic earnings per share is the weighted
 average number of shares outstanding during the period. The number of
 shares used in computing diluted earnings per share comprises the
 weighted average shares considered for deriving basic earnings per
 share, and also the weighted average number of equity shares that could
 have been issued on the conversion of all dilutive potential equity
 shares.  The diluted potential equity shares are adjusted for the
 proceeds available, had the shares been actually issued at fair value
 (i.e. the average market value of the outstanding shares). Dilutive
 potential equity shares are deemed converted as of the beginning of the
 period, unless issued at a later date. The number of shares and
 potentially dilutive equity shares are adjusted for any stock splits
 and bonus shares issues.
 
 r) CASH FLOW STATEMENT
 
 Cash flows are reported using the indirect method, whereby net profit
 before tax is adjusted for the effects of transactions of a non-cash
 nature and any deferrals or accruals of past or future cash receipts or
 payments. The cash flows from regular revenue generating, investing and
 financing activities of the Company are segregated.
 
 s) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS A provision
 is recognized for a present obligation as result of past events if it
 is probable that an outflow of resources will be required to settle the
 obligation and in respect of which a reliable estimate can be made.
 Provisions are determined based on best estimate of the amount required
 to settle the obligation at the Balance Sheet date. Re-imbursement
 expected in respect of expenditure required to settle a provision is
 recognized only when it is virtually certain that the re-imbursement
 will be received.  Contingent liabilities are disclosed in the notes in
 case of a present obligation arising from a past event when it is not
 probable that an outflow of resources will be required to settle the
 obligation. Contingent assets are neither recognized nor disclosed in
 the financial statements. Provisions, Contingent Liabilities and
 Contingent Assets are reviewed at each Balance Sheet date.
 
 t) LEASES OBTAINED
 
 Leases where the lessor retains substantially all the risks and
 benefits of ownership of the asset are classified as operating lease.
 Operating lease payments are recognized as an expense in the Profit and
 Loss Account on straight line basis over the lease term. Finance lease
 which effectively transfer to the Company substantial risk and benefits
 incidental to ownership of the leased items, are capitalized and
 disclosed as leased assets. Lease payments are apportioned between the
 finance charges and reduction of lease liability so as to achieve a
 constant rate of interest on the remaining balance of the liability.
 Financial expenses are charged directly against income.
 
 u) MISCELLANEOUS EXPENDITURE
 
 Miscellaneous expenditure is amortised equally over a period of 5
 years.