(a) Basis of Accounting:
The financial statement are Prepared in accordance with Indian
Generally Accepted Accounting .
Principles (GAAP) under the historical cost convention, on the
(b) Use of Estimates
The presentation of financial statements in confirmity with the
generally accepted accounting principles - requires estimates and
assumptions to be made that may affect the reported amount of assets
and liabilities and disclosures relating to contingent liabilities as
at the date of the financial statements and the reported amount of
revenues and expenses during the reported period. Actual results could
differ from those estimated.
(c) Revenue Recognition:
(i) Sale of goods:
Reveune from the sale of goods is recognized when significant risks and
rewards in respect of ownership of the goods are transferred to the
customer, as per the terms of the respective Sales Order.
Property Development business: The Company has decided to follow
completed contract method of accounting for property development
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the rate acceptable. .
Dividend Income from investments are recognized when the right to
receive payment established.
(d) Fixed Assets
Fixed Assets are stated at cost, iess cu.cumuiai all expenditure
necessary to bring the assets to its working conditions for its
(e) Depreciation and Amortization
Depreciation is provided on the straight line method based as per the
rate specified in Schedules XIV of the Companies Act, 1956 except for
WTG, on useful lives of assets as estimated by the management.
Long-term investments are carried at cost. However, Provision is made
to recognize, other than temporary, in the value of long-term
Current Investments ar carried at lower of cost and fair values,
determined on individual basis.
Inventories are at lower of cost and net realizable value.
Stock of land is valued at lower of cost and net realizable value. Cost
is determined on the weighted average basis, net realizable value is
determined by management using technical estimates.
(h) Borrowing Costs
Borrowing lists that are directly attributable to the acquisition,
construction or production of qualifying assets are capitalized as part
of the cost of such assets. A qulity asset is one that necessarily
takes substantial period of time to get readly for intended use. All
other borrowing costs are changed to revenue.
(i) Retirment and other employee benefits .
The Company has adopted the policy to provide for the Liability for
gratuity and leave encashment benefits on actuarial valuation. Though
the report of Actuarial valuation for the current year has not been
obtained and provision has not been made accordingly.
(j) Provisions. Contingent liabilities and contingent Assets.
A Provision is recognized when the Company has a Present obligation as
a result of past events and it is probable that an out flow of
resources will be required to settle the obligation, in respect of
which are reliable estimate can be made. Provisions are not
discounted to their present value and are determined .based on 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 disclosed by way of Notes to
the account Contingent assets are not recognized.
(k) Provision for current and deferred tax
Provision for current income tax is made in accordance with the Income
Tax Act.1961. Deferred tax liabilities and assets are recognized at
substantively enacted tax rates, subject to the consideration of
prudence, on timing difference, beina the difference between taxable
income and accouonting income that original in
of reversal in one or more subsequently period.
Impairment loss is recognized wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognized as an
expense in the statement of Profit and Loss and carrying amount of the
asset is reduced to its recoverable amount.
(m) Earning Per Share
Basic earnings per Share are calculated by dividing the net profit for
the period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period. The weighted
average number of equity shares outstanding during the period are
adjusted for any bonus shares issued during the year and also after the
balance sheet date but before the ate the financial statements are
approved bythe Board of Directors.
For the purpose of calculating diluted earnings per share, the net
profit for period attributed to equity shareholders and the weight
average number of share outstanding during the period adjusted for the
effects of all dilaative potenial equity shares.
The number of equity shares are potential dilative equity shares are
adjusted for bonus as appropriate.
(n) Share Issue Expenses
Share issue expenses are redemption premium are adjusted against the
Securities Premium Account as permissble under Section 78(2) of the
Companies Act, 1956, to the extent balance is available for utilization
in the Securities Premium Account. The balance of share issue expenses
is carried as an asset and is amortised over a period of 5 years