i. Basis of Accounting
The financial statements are prepared to comply in all material aspects
with Indian Accounting Standards as notified by the Companies
(Accounting Standards) Rules, 2006 issued by the Central Government in
exercise of power conferred under section 642(1)(a) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on accrual basis.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
ii. Presentation and disclosure of financial statements
During the year ended 31 March 2012, the revised Schedule VI notified
under the Companies Act 1956, has become applicable to the company, for
preparation and presentation of its financial statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of these financial statements.
However, it has significant impact on presentation and disclosures made
in the financial statements. The company has also reclassified the
previous year figures in accordance with the requirements applicable in
the current year.
iii. Use of Estimates
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements. Actual results could differ from
those estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods.
iv. Fixed Assets
Fixed assets are stated at historical cost less accumulated
depreciation. Cost includes purchase price and all other attributable
cost to bring the assets to its working condition for the intended use.
Depreciation has been provided on straight line method at the rates
prescribed under Schedule XIV to the Companies Act, 1956 on pro-rata
Assets costing below Rs. 5000 are written off in the year of purchase.
vi. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash- generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the statement of profit and loss.
vii. Inventories Inventories are valued as under:
Building Materials, Stores and Consumables are valued at lower of cost,
where cost is determined on first in first out basis.
Land Unsold Shops, Flats etc., are valued at lower of cost or net
Construction Project in Progress is valued at cost and consists of all
direct expenditure incurred on projects under execution on which no
income has been recognised in accordance with the percentage of
completion method of accounting.
Completed real estate proj ect for sale and trading stock are valued at
lower of cost or net realizable value.
Tools, Implements and Wooden Shuttering Materials are written off in
the year of purchase.
Long term investments are stated at cost less permanent diminution, if
any, in value of such investments.
ix. Revenue Recognition
A. Real Estate Projects
a. The Company follows the Percentage of Completion Method (POC) of
Accounting. As per this method, the revenue in the Statement of Profit
and Loss at the end of the accounting year is recognized in proportion
to the actual cost incurred as against the total estimated cost of
projects under execution with the Company subject to actual cost being
30% or more of the total estimated cost.
b. The stage of completion under the POC method is measured on the
basis of percentage that actual costs incurred on real estate projects
including land, construction and development cost bears to the total
estimated cost of the project. The estimates of the projected revenues,
projected profits, projected costs, cost to completion and the
foreseeable loss are reviewed periodically by the management and any
effect of changes in estimates is recognized in the period in which
such changes are determined.
c. Surrender of flats by buyers are valued at cost and accounted for
as ''Cost of Construction''. When sold, proceeds are treated as
d. Repair, maintenance and other costs incurred after the completion
of the project are charged to the cost of construction in the year in
which cost is incurred.
e. Interest due on delayed payments by customers is accounted on
receipt basis due to uncertainty of recovery of the same.
B. Income from Construction Contracts
a. Revenue from construction contracts is recognized on the
Percentage of Completion Method of accounting.
b. Income from Construction contracts is recognized by reference to
the stage of completion of the contract activity as certified by the
c. Revenue on account of contract variations, claims and incentives
are recognized upon determination or settlement of the contract.
The Management is consistent with the past practice in treating the
value of work done as sales turnover. The value of work done has been
arrived at after adding the estimated profits to the expenditure
incurred on projects each year, subject to final accounting on the
actual completion of the project, and is net of adjustments for losses
and/or variations in turnover on final accounting of completed projects
or revision of estimates.
xi. Retirement and Other Benefits
i) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the Statement of Profit & Loss of the year in
which the employee has rendered services.
ii) Post employment benefits are recognized as an expense in the
Statement of Profit & Loss for the year in which the employee has
rendered services. The expense is recognized at the present value of
amount payable towards contributions. The present value is determined
using market yields of government bonds, at the balance sheet date, as
the discounting rate.
iii) Other long term employee benefits are recognized as an expense in
the Statement of Profit & Loss for the year in which the employee has
rendered services. Estimated liability on account of long term benefits
is discounted to the present value using the market yield on government
bonds as on the date of balance sheet.
iv) Actuarial gains and losses in respect of post employment and other
long term benefits are charged to the Statement of Profit & Loss.
xii. Accounting for taxes on income
The accounting treatment followed for taxes on income is to provide for
current and deferred tax. Provision for current tax is made after
taking into consideration benefits admissible under the provisions of
the Income Tax Act, 1961. Deferred Tax resulting from the difference
between book and taxable profits is accounted for using the tax rates
and laws that have been enacted or substantially enacted as on Balance
Sheet date. The Deferred Tax is recognised and carried forward only to
the extent that there is a reasonable certainty that the assets will be
realised in future.
xiii.Earnings Per Share
Earning per shares(EPS) are computed on the basis of net profit after
tax. The number of shares used in computing basic EPS is weighted
average number of shares outstanding during the year.
The diluted EPS is calculated on the same basis as basic EPS, after
adjusting for the effect of potential diluted equity shares.
xiv. Contingent Liabilities
Contingent liability, if any, is disclosed by way of notes on accounts.
Provision is made in account in respect of those contingencies which
are likely to materialize in to liabilities after the year end till the
adoption of accounts by Board of Directors and which have material
effect on the position stated in the balance sheet.
xv. Cash & Cash Equivalents
For the purpose of Cash Flow Statement cash and cash equivalents
include cash in hand, demand deposits with bank, other short term
highly liquid investments within original maturities of 3 months or