1. Basis of Accounting :
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
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 disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period.Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates.
2. Accounting for Construction Division :
Revenue from sale of properties under construction is recognized on the
basis of actual bookings done (provided the significant risk and
rewards have been transferred to the buyer and there is reasonable
certainty of realization of proceeds) proportionate to the percentage
of physical completion of construction / development work certified by
3. Revenue Recognition :
a) Revenue is recognized when the substantial risks and rewards of
ownership is transferred to the buyer on dispatch of goods.
b) Interest income is recognized on time proportionate basis.
c) Dividend income from investments is recognized when the right to
receive the dividend is established.
d) Claims and damages are accounted as and when they are finalized.
4. Fixed Assets :
All Fixed assets are stated at cost of acquisition less accumulated
depreciation and impairment losses if any. The cost of fixed assets
includes taxes and duties (other than those subsequently recoverable
from respective authorities), freight and other incidental expenses
related to acquisition and installation of respective assets.
a. Depreciation on Fixed Assets is provided on Straight Line Method
based on the useful life of the assets estimated by the management
which is as per the rate prescribed in Schedule XIV of the Companies
b. Depreciation on addition / deletion is provided pro-rata basis with
reference to the date of addition / deletion as the case may be.
c Individual assets acquired for less than Rs. 5000/- are depreciated
fully in the year of acquisition.
6. Impairment of Assets :
a. The carrying amounts of assets are reviewed by the management at
each balance sheet date if there is any indication of impairment based
on internal / external factors. An impairment loss is recognized
wherever the carrying amount of assets exceeds its recoverable amount.
The recoverable amount is greater of asset''s net selling price and
value in use. In assessing value in use, the estimated future cash
flows are discounted to there present value at the weighted average
cost of capital.
b. After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life. A previously
recognized impairment loss is increased or reversed depending upon
changes in circumstances. However the carrying value after reversal is
not increased beyond the carrying value that would have prevailed by
charging usual depreciation if there was no impairment.
7. Excise Duty :
Excise duty, if applicable, has been accounted on the basis of payment
made in respect of finished goods cleared. No provision is made for the
finished good lying in bonded warehouse.
8. Foreign Currency Transactions :
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
The gain or loss arising out of settlement / translation of the assets
and the liabilities at the closing rates due to exchange fluctuations
is recognized as income / expenditure in the profit and loss account.
9. Investments :
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments.
Current investments are carried at lower of cost and fair value
determined on an individual investment basis. Long-term investments
are carried at cost. However, provision for diminution in value is made
to recognize a decline other than temporary in the value of the
10. Valuation of Inventories :
a. Raw Material and Stores & Spares are valued at cost ( on first
in first out basis ) or market value whichever is lower.
b. Stocks in transit are valued at cost or market value whichever is
c. Finished goods are valued at cost or net realizable value,
whichever is lower.
11. Employee''s Benefits :
Long Term Employee Benefits :
a. Defined Contribution Plan :
The company has Defined Contribution plans for post employment benefits
namely Provident Fund. Under the provident Fund Plan, the company
contributes to a Government administered provident fund on behalf of
The Company''s contributions to the above funds are charged to revenue
b. Defined Benefit Plans :
The Company''s liabilities towards gratuity and leave encashment are
determined using the projected unit credit method as at the balance
sheet date. Actuarial gains / losses are recognized immediately in the
profit and loss account. Long term compensated absences are provided
for based on actuarial valuations.
12. Borrowing Cost :
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
13. Segment Reporting :
The accounting policies adopted for segment reporting are in line with
the accounting policies of the company. Segment assets include all
operating assets used by the business segments and consist principally
of fixed assets, debtors and inventories. Segment liabilities include
the operating liabilities that result from the operating activities of
the business. Segment assets and liabilities that cannot be allocated
between the segments are shown as part of unallocated assets and
liabilities respectively. Income / Expenses relating to the enterprise
as a whole and not allocable on a reasonable basis to business segments
are reflected as unallocated income / expenses.
14. Earning per Share (EPS) :
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders (after deducting
attributable taxes) by the weighted average number of equity shares
outstanding during the year.
15. Provision for Current and Deferred Tax :
a. Provision for the current tax is made after taking into considering
benefits admissible under the provisions of the Income Tax Act, 1961.
b. Deferred Tax charge or credit reflects the tax effects of timing
differences between accounting income and taxable income for the
period. The deferred tax charge or credit and the corresponding
deferred tax liabilities or assets are recognized using the tax rates
that have been enacted or substantively enacted by the balance sheet
date. Deferred tax assets are recognized only to the extent there is
reasonable certainty that the assets can be realized in future.
Deferred tax assets are reviewed at each balance sheet date and is
written down or written up to reflect the amount that is reasonably or
virtually certain, as the case may be, to be realized.
16. Provisions :
A provision is recognized when the company has a present obligation as
a result of past events and it is probable that there will be an
outflow of resources to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best 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
17. Contingent Liabilities :
Contingent liabilities, if any are disclosed in the notes on accounts.
Provision is made in the accounts in respect of those contingencies
which are likely to materialize into liabilities after the year end
till the approval of the accounts by the board of directors and which
have material effect on the position stated in the balance sheet.