1. Basis for preparation of Accounts
The Financial Statements are prepared on accrual basis under the
historical cost convention in accordance with the Companies (Accounting
Standard) Rules, 2006 notified by the Central Government, generally
accepted accounting principles applicable in India (GAAP) and the
provisions of the Companies Act, 1956, as applicable to the Company and
applied > consistently, as supplemented by revaluation of certain
assets in accordance with the generally accepted accounting principles
applicable in India.
2. Use of Estimates
The preparation of financial statements in conformity with 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
financial statements. Actual results if they differ from those
estimates are recognized in the current and future period.
3. Fixed Assets and Depreciation
Fixed assets are carried at cost of acquisition (except in case of
Cable Division where they are increased for appreciation based on the
revaluation of assets under replacement cost method as at 1 November
1987) less accumulated depreciation. Depreciation is provided on
straight line method at the rates and in the manner specified in
Schedule XIV to the Companies Act, 1956.
Depreciation on incremental value of assets revalued is provided on the
basis of life determined by the valuer and an equivalent amount is
being transferred from revaluation reserve to the profit and loss
Long term investments are stated at cost. However, there is a decline,
other than temporary, if any, in the value of long term investments,
the carrying amount is reduced to recognise the decline.
Inventories are valued as follows:
At lower of cost or net realisable value
Stores, Spares and Packing materials
Work in process
Construction work in progress
At lower of cost and market value
At net realisable value:
Costs are determined using weighted average method. However material
and other items held for use in the production of inventories are not
written down below cost if the finished products in whjch they will be
incoporated are expected to be sold at or above cost.
Cost in case of finished products and work in process include cost of
raw material and related conversion costs.
6. Retirement Benefits
Defined contibution plans - provident fund: The Company expenses its
contribution to Regional Provident Fund Commissioner.
Defined benefit plans - gratuity and compensated absences : The Company
makes contribution to insurer managed fund for gratuity. The difference
between the balance with the fund and the gratuity liability of the
Company, as determined by the insurer, is charged/credited to the
Profit and Loss Account. Provision for compensated absences is made on
the basis of estimate payout prepared by the management.
Sales are disclosed net of excise duty and exclusive of sales tax.
Claims and rebates on sales are accounted for on actual determination.
8. Recognition of revenue
Revenue from sale of goods is recognized when the significant risks and
rewards in respect of ownership of the goods are transferred to the
Revenue from sale of apartments and other areas is determined on
percentage of completion method with reference to the age of
completion/proportionate realisation on completion of constructed
properties. Revenue from sale of plots is recognized upon transfer of
all significants risks and rewards of ownership by such real
estate/property, as per the terms of contracts entered into with such
buyers, which generally coincides with the firming of the sales
Revenue from real estate projects include charges collected from
clients towards registration, electricity and water charges, property
taxes, khata charges and other charges, which are accounted based upon
the contracts/agreements entered into by the Company with its
Tax expense comprises both current, deferred income tax and fringe
benefit taxes, Current tax is determined as the amount of tax payable
in respect of taxable income for the year.
Deferred income taxs reflects the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing difference of earlier years. Deferred tax is
measured based on the tax rates enacted or subsequently enacted at the
balance sheet date. Deferred tax assets are recognized only to the
extent that there is a reasonable/virtual certainty that sufficient
future taxable income will be available against which such deferred tax
asset can be realised.
Fringe benefit tax is determined in accordance with applicable Income
Leases (where, the lessor effectively retains substantially ail the
risks and benefits of ownership of the leased item), are classified as
operating leases. Lease rentals in respect of assets taken on
operating lease are charged to the Profit and Loss account on a
straight line basis over the lease term.
11. Earnings per share
Earnings per share are calculated by. dividing the net profit or loss
for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year.
12. Impairment of assets
The Company on an annual basis makes an assessment of any indicator
that may lead to impairment of assets. If any such indication exists,
the Company estimates the recoverable amount of the assets. If such
recoverable amount is less than the carrying amount, then the carrying
amount is reduced to its. recoverable amount by treating the difference
between them as impairment loss and is charged to the profit and loss,
13. Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
14. Foreign currency transactions
i) Initial Recognition : Transactions in foreign currency are recorded
in the reporting currency by applying to the foreign currency amount
the exchange rate prevailing on the date of the transaction.
ii) Conversion : Monetary items denominated in foreign currency as at
the balance sheet date are converted at the exchange rate prevailing on
iii) Exchange differences : Exchange differences arising on the
settlement of monetary items or on the reporting companys monetary
items at rates different from those at which they were initially
recorded during the year, are recognized as income or as expenses in
the year in which they arise.