1.1 Basis of Accounting
(a) The financial statements of the Company have been prepared under
the historical cost convention in accordance with the Accounting
standards specified by Companies (Accounting Standards) Rules, 2006
issued by the Central Government and the relevant provisions of the
Companies Act, 1956 as amended upto the date and the Rules and
Regulations made thereunder.
(b) All financial transactions have been recognized on accrual basis.
The preparation of financial statements in conformity with the GAAP
requires that the management makes estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of
contingent liabilities as at the date of the financial statements and
the reported amounts of revenue and expenses during the reported
period. The Management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable.
Future results could differ from those estimates.
1.2 Use of Estimates
In preparation of financial statements conforming to GAAP requirements
certain estimates and assumptions are essentially required to be made
with respect to items such as provision for doubtful debts, future
obligations under employee retirement benefit plans, income taxes and
the useful life period of Fixed Assets. Due care and diligence have
been exercised by the Management in arriving at such estimates and
assumptions since they may directly affect the reported amounts of
income and expenses during the year as well as the balances of Assets
and Liabilities including those which are contingent in nature as at
the date of reporting of the financial statements.
To comply with GAAP requirements relating to impairment of assets, if
any, the Management periodically determines such impairment using
external and internal resources for such assessment. Loss, if any,
arising out of such impairment is expensed as stipulated under the GAAP
requirements. Contingencies are recorded when a liability is likely to
be incurred and the amount can be reasonably estimated. To this extent
the results may differ from such estimates.
1.3 Revenue Recognition
As a consistent practice, the Company recognizes revenues on accrual
basis. Revenue from rental income is recognised on accrual basis as per
the agreements entered. Revenue from dividend is recognised upon right
to receive the dividend is established. Interest income is recognized
on time proportion basis taking into account the amount outstanding and
1.4 Fixed Assets
Fixed Assets are stated at the cost of acquisition less accumulated
depreciation. The cost of acquisition includes taxes, duties, freight
and other incidental expenses related to the acquisition and
installation of the respective assets.
Depreciation is provided on straight-line method at the rates
prescribed under Schedule XIV of the Companies Act, 1956 or based on
the remaining estimated economic useful lives determined by the
management whichever is higher.
All the fixed assets are assessed for any indication of impairment at
the end of each financial year. On such indication, the impairment loss
being the excess of carrying value over the recoverable value of the
assets, are charged to the Statement of Profit and Loss in the
respective financial years. The impairment loss recognized in the prior
years is reversed in cases where the recoverable value exceeds the
carrying value, upon reassessment in the subsequent years.
Long-term investments are stated at cost, less diminution other than
temporary in the value of such investments, if any. Current investments
are valued at cost or market value which ever is lower.
Inventories primarily constitute land and related development
activities, which is valued at lower of cost or Net Realizable Value.
Cost comprises of all expenses incurred for the purpose of acquisition
of land, development of the land and other related direct expenses.
1.9 Employee Benefits Gratuity
The liability as at the Balance Sheet date is provided for based on the
actuarial valuation carried out in accordance with revised Accounting
Standard 15 (Revised 2005) on Employee Benefits as at the end of the
period. Actuarial Gains/Losses are recognized immediately in statement
of Profit & Loss.
Leave encashment is paid for in accordance with the rules of the
Company and provided based on an actuarial valuation as at the balance
sheet date. Actuarial Gains/Losses are recognized immediately in
statement of Profit & Loss.
Other Benefit Plans
Contributions paid/ payable under defined contribution plans are
recognized in the statement of Profit and Loss in each year.
Contribution plans primarily consist of Provident Fund administered and
managed by the Government of India. The company makes monthly
contributions and has no further obligations under the plan beyond its
1.10 Taxes on Income
(i) Provision for current tax is made for the amount of tax payable in
respect of taxable income for the year under Income Tax Act, 1961.
(ii) Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the company has unabsorbed depreciation or carry forward tax
losses, deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that such deferred tax
assets can be realised against future taxable profits.
1.11 Earnings Per Share
The earnings considered for ascertaining the Company''s Earnings Per
Share comprises the net profit after tax. The number of shares used in
computing Basic EPS is the weighted average number of shares
outstanding during the period. The number of shares used in computing
diluted EPS comprises the weighted average shares considered for
deriving basic EPS, and also the weighted average number of equity
shares that would be issued on the conversion of all dilutive potential
1.12 Borrowing Cost
Expenditure on borrowing cost on the loans obtained specifically for
acquisition, construction or production of qualifying assets are
capitalized as part of the cost of that asset. All other borrowing
costs are charged to statement of profit and loss.
1.13 Foreign Currency Transactions
Foreign currency transactions are translated at the exchange rates
prevailing on the respective date of transactions.
Assets and Liabilities outstanding in foreign currency as on the date
of the Balance Sheet are translated at exchange rates prevailing as on
the last day of the relevant financial year. Differences rising out of
such translations are charged to the statement of profit and loss.
The assets purchased under hire purchase agreements are included in the
Fixed Assets block. The value of the asset purchased is capitalized in
the books. A liability for the same amount is created at the time of
entering into the agreement. The payments are made to the HP vendors as
per the EMI''s given in the hire purchase agreements. The finance
charges are debited to the statement of profit and loss and the
principal amount is adjusted against the liability created for the
1.15 Cash Flow Statement
The Cash flow statement is prepared under the indirect method as per
Accounting Standard 3 Cash Flow Statements.
1.16 Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized when the Company has an obligation as a
result of past events and it is probable that an outflow of resources
will be required to settle the obligation and the amount can be
reliably estimated. Obligations are assessed on an ongoing basis and
only those having a largely probable outflow of resources are provided
Contingent Liabilities are recognized only when there is a possible
obligation arising from past events due to occurrence or non-occurrence
of one or more uncertain future events not wholly within the control of
the Company or where any present obligation cannot be measured in terms
of future outflow of resources or where a reliable estimate of the
obligation cannot be made.