A. Basis of accounting:
The financial statements have been prepared to comply in all material
aspects with the notified accounting standards by Companies Accounting
Standards Rules'' 2006 (as amended) and the relevant provisions of the
Companies Act'' 1956. The financial Statements are prepared under the
historical cost convention and income and expenses are accounted for on
an accrual basis'' in accordance with the accounting principles
generally accepted in India. The accounting policies have been
consistently applied by the Company and are consistent with those used
in the previous year.
B. Events Occurring After the Date of Balance Sheet:
Material events occurring after the date of Balance Sheet are taken
C. Revenue Recognition:
Income from Operations:
Income from Operations is determined as the aggregate during the period
of the project promotion fee earned'' value of the construction work
done'' increase in land development cost'' sale of land and the proceeds
from the demolition contracts.
(a) Project Promotion Fee:
Project promotion fee is the fee charged to the customers on allotment
of flats at the specific rate per square foot of built up area to be
constructed'' in consideration of the various services rendered by the
company for promoting the respective projects. Project * promotion
receipts include sale of land to the customers.
(b) Value of Construction Work:
The value of construction work done during the year is determined as
i. In the case of projects completed during the year'' it is the
difference between the value of construction to the customers on
completion of the project and the; value of construction to the
customers at the beginning of the accounting year''
ii. In the case of projects in progress at the close of the accounting
period'' it is the difference between the value of construction to the
customers determined at the close of the accounting period and the
value of construction to the customers at the beginning of the
iii. Value of construction to the customers in respect of completed
projects is the full value that is paid /payable by the customers for
the project on this accourt.
iv. Value of construction to the customers in respect of projects in
progress at the beginning of the accounting period and at the close of
the accounting period is the value of work-in-progress on those dates
(c) Demolition Proceeds:
Demolition proceeds for the period is the aggregate sum stated as
consideration in the ''-——— demolition agreements executed during the
period'' for demolition of existing structures on the properties taken
up for development by the company.
(d) Increase in Land Development Cost
Increase in Land Development cost is the difference between the amount
received from Prospective buyer and amount paid to the vendor at
(e) Service charges
Service Charges is the nature of income which is generated from making
out the deal between the land seller and prospective buyer''
(1) Revenue from Sale of Land
Revenue from Sale of land is the difference between the cost of land
purchased (inclusive of stamp duty and other charges) and Sale value of
D. Fixed Assets:
Expenditure which is of a capita! nature is capitalised at cost which
comprises purchase price (net of rebates and discounts)'' statutory
levies and other expenses/charges directly expended in acquiring such
E. Intangible Assets:
There are no Intangible Assets of the Company.
The company assesses at each balance shee* date whether there is any
indication that an asset may be impaired. If any such indication
exists'' then impairment loss is recognised wherever the carrying amount
of an asset is in excess of its recoverable amount and the same is
recognized as an expenses in the statement of profit and loss and
carrying amount of the asset is reduced to its recoverable amount.
Reveisal of impairment losses recognised in prior years is recorded
when there is an ind.cation ¦*
that the impairment losses recognized for the asset no longer exist or
Depreciation is provided from the date on which assets have been
installed and put to jse on Written down Value method at the rates
specified under Schedule XIV to the Compani3s Act'' 1956. Depreciation
is provided from the date of capitalization till the date of sale of
assets. According to the circular No. 14'' dated 20-12-1993''
depreciation on assets'' whose actual cost does not exceed five thousand
rupees have been provided at the rate of hundred percent. Depr
jciation is not provided on Land and building.
H.'''' Work - In - Progress:
Work - in - Progress in respect of each project in progress is first
valued at the close of the accojnting year at the aggregate of the cost
of materials consumed'' labour charges and the other expenditure
incurred on the project. Thereafter the adjustment for value addition
is made on the following basis:
i. Where the actual expenditure incurred up to the end of the
accounting year in a project is between 30% and 89% of its total
estimated expenditure'' and this total expenditure is less than its
total estimated revenue'' value addition is determined as 2/3rds of the
propolionate estimated surplus (such proportion being the percentage of
actual expenditure to total estimated expenditure). Where however the
actual expenditure of a project up to the close .- __ of the accounting
year is above 89% of the total estimated expenditure of the project''
value addition is determined as the 4/5th of the proportionate
estimated surplus (such proportion being the percentage of actual
expenditure to total estimated expenditure)
ii. Where total estimated expenditure of a project is inexcess of its
total estimated revenue'' the entire actual expenditure comprising of
the cost of the material consumed'' labour and other expenditure
incurred on the project is considered as the value of work-in-progress
till the project is completed.
I. Land Owner''s Account:
Amounts due from customers towards land cost are debited to their
accounts on the land cost falling due under the agreements of the
project promotion and construction are credited to the respective land
owner''s accounts. Advance to land owners are reflected as the aggregate
of amounts paid to them and amounts due from them'' reduced by the
amounts credited to them as aforesaid.
The inventories are valued at cost''
K. Recognition of Income and Expenditure:
Income and expenditure are recognised on accrual basis and provision is
made for all known expenses.
L. Borrowing Costs
There are no borrowing costs attributable to the acquisition or
construction of assets'' Other borrowing costs are recognised as
expenses in the period in which they are incurred.
Tax expense comprises current tax and deferred tax
The accounting treatment for income-tax in respect of company''s income
is based on the Accounting Standard 22 on ''Accounting for Taxes on
Income'' issued by the Institute of Chartered Accountants of India.
Provision for current income-tax is made in accordance with the Income-
tax Act'' 1961.
Deferred tax assets and liabilities are recognized at substantively
enacted tax rates'' subject to the consideration of prudence'' on timing
difference'' being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods.
N. Employee Benefits:
a. Short term Employee Benefits
All Short term employee benefits payable including salaries and other
allowances are recognized on accrual basis'' in the manner provided in
b. Other Long Term Employee Benefits
No provision has been made for leave encashment retirement benefit for
the pe''iod as the terms of employment does not provide for such
obligation on the company.