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Accounting Policies of Arihant Foundations & Housing Ltd. Company

Dec 31, 2014

A. BASIS OF PREPARATION

a) The financial statements have been prepared on accrual basis of accounting under the historical cost convention in accordance with the generally accepted accounting principles in India.

b) Accounting policies not specially referred to otherwise are consistently followed throughout the period under audit and in consonance with the generally accepted accounting principles.

B. USE OF ESTIMATES

The preparation of financial statement in conformity with generally accepted accounting policies requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at date of the financial statements and the reported accounts of revenues and expenses for the years presented. Although these estimates are based upon Management''s best knowledge of current events and actions, actual results could differ from these estimates.

C. FIXED ASSETS AND DEPRECIATION

a) The fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes all related expenses incurred up to the date the assets are put to use.

b) Depreciation on fixed assets is provided on straight line method as per rate and manner prescribes in schedule- XIV of the companies Act 1956. The depreciation has been provided at 100% on the Assets purchased during the year the cost of which is less than Rs 5000/-.

D. INTANGIBLES AND AMORTIZATION

Intangible assets are recognized when it is probable that future economic benefits that are attributable to these assets will flow to the company and the cost of the asset can be measured reliably.

E. IMPAIRMENT OF ASSETS

Management at each balance sheet date assesses using internal sources whether there is an indication that an asset or group of assets or a cash generating unit as the case may be, is impaired. Impairment occurs where the carrying value exceeds the higher of value in use represented by present value of future cash flows expected to arise from the continuing use of the asset and its realizable value. The impairment asset is charged off to statement of profit and loss.

F. INVESTMENTS

Trade investments are those made to enhance the Group''s business interests. Investments are classified as either current or long-term, based on the Management''s intention at the time of purchase.

Long-term investments

Long-term investments are stated at cost. However, provision is made for diminution in the value of the asset, which is other than temporary.

Quoted

The company holds investment in quoted securities. They are classified as long-term as the Management intends to hold the same for a period of more than twelve months. These investments are classified as non-trade.

Unquoted

The company holds investment in unquoted securities of its subsidiaries, joint ventures and associates. These investments are classified as trade.

G. INVENTORIES

a) Raw materials and consumables

The cost of inventories comprise of purchase cost and conversion cost, if any.

b) Work -in-progress

Costs generally include cost of land, construction costs, job work allocated borrowing costs and other costs that are attributable to project and such other costs as are specifically chargeable to the project. Work-in-progress are valued at cost less cost of sales.

c) Finished stock

Finished stock consists of completed real estate projects which are unsold at the end of the financial year.

H. BORROWING COST

Borrowing cost that are directly attributable to the acquisition or construction or development of qualifying assets of the company are capitalized until the time all substantial activities necessary to prepare the qualifying assets for the intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use or sale.

Borrowing cost that are attributable to any work-in- progress, qualifying land advances as well as capital work-in-progress are charged to the respective qualifying project. All other borrowing costs, not eligible for inventorisation or capitalization are charged to revenue in the year in which they are incurred.

I. REVENUE RECOGNITION

i) Construction Contracts

In construction contracts, revenue is recognized on percentage of completion method. The revenue is recognized on the basis of the Accounting Standard and as prescribed by Institute of Chartered Accountants of India.

Revenue on sale of land is recognized upon enter in to contract with the customer in the purchase of the said undivided share of land. The revenue also recognized at the time of registration of sale deed or completion of the project whichever is earlier.

ii) Revenue from lease rentals and related income

Lease income is recognized on accrual basis as per the Contract.

iii) Interest Income

Interest is recognised on accrual basis of accouting.

iv) Dividend Income

Dividend income is recognized when the right to receive the same is established or the receipt of the same whichever is earlier.

J. FOREIGN EXCHANGE TRANSACTIONS

The foreign exchange transaction recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount, the prevailing exchange rate, as at the date of transaction.

K. TAXES ON INCOME

Tax expense comprises of current tax and deferred tax.

Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws that are enacted or substantially enacted.

Deferred Tax is recognized on timing differences, being the differences between taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward, only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year end, based on the tax rates and laws enacted or substantially enacted on the balance sheet date. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized. They can be realized against future taxable profits.

L. EMPLOYEE BENEFITS

Liability for employee benefits, both short and long term, for present and past services which are due as per the terms of employment and as required by law are recorded in accordance with Accounting Standard (AS) 15 (Revised) "Employee Benefits" issued by the Institute of Chartered Accountants of India.

i) Gratuity

Gratuity is a defined benefit plan. Liability for gratuity in respect of past services are provided for based on the actuarial valuation carried out annually as at the balanced sheet date by an independent actuary using the Projected Unit Credit (PUC) method.

ii) Provident Fund

The company''s contribution to Provident fund is considered as a defined contribution plan. Company''s contribution to provident fund is charged to the statement of profit and loss when the contribution is due.

M. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized in respect of liabilities which can be measured only by using a substantial degree of estimation when:

a) the company has a present obligation as a result of past event;

b) a probable outflow of resources embodying economic benefits will be required to settle the obligation; and

c) the amount of obligation can be reliably estimated

Re- imbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of:

a) a present obligation arising from a past event, when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

b) a possible obligation, that arises out of past events and the existence of which will be confirmed only by one or more uncertain future events unless the probability of outflow of resources is remote.

Contingents assets are neither recognized nor disclosed. However, when realization of income is virtually certain, related asset is recognized.

N. CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash in hand and at bank and short-term investments with an original maturity of three months or less.

O. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue, share split and share warrants conversion.

Diluted earnings per share is calculated by adjusting net profit or loss for the period attributable to equity shareholders and the weighted number of shares outstanding during the period for the effect of all dilutive potential equity shares.


Sep 30, 2013

A. BAsis oF PrePArAtion

a) The fnancial statements have been prepared on accrual basis of accounting under the historical cost convention in accordance with the generally accepted accounting principles in India.

b) Accounting policies not specially referred to otherwise are consistently followed throughout the period under audit and in consonance with the generally accepted accounting principles.

B. use oF estimAtes

The preparation of fnancial statement in conformity with generally accepted accounting policies requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at date of the fnancial statements and the reported accounts of revenues and expenses for the years presented. Although these estimates are based upon Management''s best knowledge of current events and actions, actual results could differ from these estimates.

C. FiXed Assets And dePreCiAtion

a) The fxed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes all related expenses incurred up to the date the assets are put to use.

b) Depreciation on fxed assets is provided on straight line method as per rate and manner prescribes in schedule-XIV of the companies Act 1956. The depreciation has been provided at 100% on the Assets purchased during the year the cost of which is less than Rs 5000/-.

d. intAngiBLes And AmortiZAtion

Intangible assets are recognized when it is probable that future economic benefts that are attributable to these assets will fow to the company and the cost of the asset can be measured reliably.

e. imPAirment oF Assets

Management at each balance sheet date assesses using internal sources whether there is an indication that an asset or group of assets or a cash generating unit as the case may be, is impaired. Impairment occurs where the carrying value exceeds the higher of value in use represented by present value of future cash fows expected to arise from the continuing use of the asset and its realizable value. The impairment asset is charged off to statement of proft and loss.

F. inVestments

Trade investments are those made to enhance the Group''s business interests. Investments are classifed as either current or long-term, based on the Management''s intention at the time of purchase.

Long-term investments

Long-term investments are stated at cost. However, provision is made for diminution in the value of the asset, which is other than temporary.

Quoted

The company holds investment in quoted securities. They are classifed as long-term as the Management intends to hold the same for a period of more than twelve months. These investments are classifed as non-trade.

unquoted

The company holds investment in unquoted securities of its subsidiaries, joint ventures and associates. These investments are classifed as trade.

g. inVentories

a) raw materials and consumables

The cost of inventories comprise of purchase cost and conversion cost, if any.

b) Work -in-progress

Costs generally include cost of land, construction costs, job work allocated borrowing costs and other costs that are attributable to project and such other costs as are specifcally chargeable to the project. Work-in-progress are valued at cost less cost of sales.

c) Finished stock

Finished stock consists of completed real estate projects which are unsold at the end of the fnancial year.

h. BorroWing Cost

Borrowing cost that are directly attributable to the acquisition or construction or development of qualifying assets of the company are capitalized until the time all substantial activities necessary to prepare the qualifying assets for the intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use or sale.

Borrowing cost that are attributable to any work-in-progress, qualifying land advances as well as capital work-in-progress are charged to the respective qualifying project. All other borrowing costs, not eligible for inventorisation or capitalization are charged to revenue in the year in which they are incurred.

I. reVenue reCognition

i) Construction Contracts

In construction contracts, revenue is recognized on percentage of completion method. The revenue is recognized on the basis of the Accounting Standard and as prescribed by Institute of Chartered Accountants of India.

Revenue on sale of land is recognized upon enter in to contract with the customer in the purchase of the said undivided share of land. The revenue also recognized at the time of registration of sale deed or completion of the project whichever is earlier.

ii) revenue from lease rentals and related income

Lease income is recognized on accrual basis as per the Contract.

iii) interest income

Interest is recognised on accrual basis of accouting.

iv) dividend income

Dividend income is recognized when the right to receive the same is established or the receipt of the same whichever is earlier.

J. Foreign eXChAnge trAnsACtions

The foreign exchange transaction recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount, the prevailing exchange rate, as at the date of transaction.

K tAXes on inCome

Tax expense comprises of current tax and deferred tax.

Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws that are enacted or substantially enacted.

Deferred Tax is recognized on timing differences, being the differences between taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward, only to the extent that there is a reasonable certainty that suffcient future taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year end, based on the tax rates and laws enacted or substantially enacted on the balance sheet date. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that suffcient future taxable income will be available against which such deferred tax asset can be realized. They can be realized against future taxable profts.

L. emPLoYee BeneFits

Liability for employee benefts, both short and long term, for present and past services which are due as per the terms of employment and as required by law are recorded in accordance with Accounting Standard (AS) 15 (Revised) "Employee Benefts" issued by the Institute of Chartered Accountants of India.

i) gratuity

Gratuity is a defned beneft plan. Liability for gratuity in respect of past services are provided for based on the actuarial valuation carried out annually as at the balanced sheet date by an independent actuary using the Projected Unit Credit (PUC) method.

ii) Provident Fund

The company''s contribution to Provident fund is considered as a defned contribution plan. Company''s contribution to provident fund is charged to the statement of proft and loss when the contribution is due.

m. ProVisions, Contingent LiABiLities And Contingent Assets

Provisions are recognized in respect of liabilities which can be measured only by using a substantial degree of estimation when:

a) the company has a present obligation as a result of past event;

b) a probable outfow of resources embodying economic benefts will be required to settle the obligation; and

c) the amount of obligation can be reliably estimated

Re-imbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of:

a) a present obligation arising from a past event, when it is not probable that an outfow of resources embodying economic benefts will be required to settle the obligation.

b) a possible obligation, that arises out of past events and the existence of which will be confrmed only by one or more uncertain future events unless the probability of outfow of resources is remote.

Contingents assets are neither recognized nor disclosed. However, when realization of income is virtually certain, related asset is recognized.

n. CAsh And CAsh eQuiVALents

Cash and cash equivalents comprise cash in hand and at bank and short-term investments with an original maturity of three months or less.

o. eArnings Per shAre

Basic earnings per share is calculated by dividing the net proft or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue, share split and share warrants conversion.

Diluted earnings per share is calculated by adjusting net proft or loss for the period attributable to equity shareholders and the weighted number of shares outstanding during the period for the effect of all dilutive potential equity shares.


Sep 30, 2012

A. BASIS OF PREPARATION

a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India.

b) Accounting policies not specially referred to otherwise are consistently followed throughout the period under audit and in consonance with the generally accepted accounting principles and provisions.

c) During the year ended 30th September, 2012 the Revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for the preparation and presentation of its financial statements. The adoption of Revised Schedule VI does not impact the recognition and measurement principles followed by the company for the preparation of financial statements. However it has significant impact on the 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.

B. USE OF ESTIMATES

The preparation of financial statement in conformity with generally accepted accounting policies requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at date of the financial statements and the reported accounts of revenues and expenses for the years presented. Although these estimates are based upon Management''s best knowledge of current events and actions, actual results could differ from these estimates.

a) The fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes all related expenses incurred up to the date the assets are put to use.

b) Depreciation on fixed assets is provided on straight line method as per rate and manner prescribes in schedule-XIV of the companies Act 1956. The depreciation has been provided at 100% on the Assets purchased during the year the cost of which is less than Rs 5000/-.

D. INTANGIBLES AND AMORTIZATION

Intangible assets are recognized when it is probable that future economic benefits that are attributable to these assets will flow to the company and the cost of the asset can be measured reliably.

Intangible assets (acquired or developed in-house) are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated depreciation and accumulated impairment losses, if any.

E. IMPAIRMENT OF ASSETS

Management at each balance sheet date assesses using internal sources whether there is an indication that an asset or group of assets or a cash generating unit as the case may be, is impaired. Impairment occurs where the carrying value exceeds the higher of value in use represented by present value of future cash flows expected to arise from the continuing use of the asset and its realizable value. The impairment asset is charged off to statement of profit and loss.

F. INVESTMENTS

Trade investments are those made to enhance the Group''s business interests. Investments are classified as either current or long-term, based on the Management''s intention at the time of purchase.

Long-term investments

Long-term investments are stated at cost. However, provision is made for diminution in the value of the asset, which is other than temporary.

Quoted

The company holds investment in quoted securities. They are classified as long-term as the Management intends to hold the same for a period of more than twelve months. These investments are classified as non-trade.

Unquoted

The company holds investment in unquoted securities of its subsidiaries, joint ventures and associates. These investments are classified as trade.

Current invetsments

Current investments are carried at the lower of cost and fair value.

G. INVENTORIES

a) Raw materials and consumables

The cost of inventories comprise of purchase cost and conversion cost, if any.

b) Work -in-progress

Costs generally include cost of land, construction costs, job work allocated borrowing costs and other costs that are attributable to project and such other costs as are specifically chargeable to the project. Work-in-progress are valued at cost less cost of sales.

c) Finished stock

Finished stock consists of completed real estate projects which are unsold at the end of the financial year. It also includes cost of finished stock purchased from customers for the purpose of sale.

H. BORROWING COST

Borrowing cost that are directly attributable to the acquisition or construction or development of qualifying assets of the company are capitalized until the time all substantial activities necessary to prepare the qualifying assets for the intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use or sale.

Borrowing cost that are attributable to any work-in- progress, qualifying land advances as well as capital work-in-progress are charged to the respective qualifying project. All other borrowing costs, not eligible for inventorisation or capitalization are charged to revenue in the year in which they are incurred.

I. REVENUE RECOGNITION

i) Construction Contracts

In construction contracts, revenue is recognized on percentage of completion method. The revenue is recognized on the basis of the Accounting Standard and as prescribed by Institute of Chartered Accountants of India.

Revenue on sale of land is recognized upon enter in to contract with the customer in the purchase of the said undivided share of land. The revenue also recognized at the time of registration of sale deed or completion of the project whichever is earlier.

ii) Revenue from lease rentals and related income

Lease income is recognized on actual basis as per the Contract.

iii) Interest Income

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable on daily basis. Interest is recognized on actual basis of accounting.

iv) Dividend Income

Dividend income is recognized when the right to receive the same is established or the receipt of the same whichever is earlier.

J. FOREIGN EXCHANGE TRANSACTIONS

The foreign exchange transaction recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount, the prevailing exchange rate, as at the date of transaction.

K. TAXES ON INCOME

Tax expense comprises of current tax and deferred tax.

Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws that are enacted or substantially enacted.

Deferred Tax is recognized on timing differences, being the differences between taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward, only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The tax effect is calculated on the accumulated timing difference at the year end, based on the tax rates and laws enacted or substantially enacted on the balance sheet date. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized. They can be realized against future taxable profits.

L. EMPLOYEE BENEFITS

Liability for employee benefits, both short and long term, for present and past services which are due as per the terms of employment and as required by law are recorded in accordance with Accounting Standard (AS) 15 (Revised) "Employee Benefits" issued by the Institute of Chartered Accountants of India.

i) Gratuity

Gratuity is a defined benefit plan. Liability for gratuity in respect of past services are provided for based on the actuarial valuation carried out annually as at the balanced sheet date by an independent actuary using the Projected Unit Credit (PUC) method.

ii) Provident Fund

The company''s contribution to Provident fund is considered as a defined contribution plan. Company''s contribution to provident fund is charged to the statement of profit and loss when the contribution is due.

M. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized in respect of liabilities which can be measured only by using a substantial degree of estimation when:

a) the company has a present obligation as a result of past event;

b) a probable outflow of resources embodying economic benefits will be required to settle the obligation; and

c) the amount of obligation can be reliably estimated

Re-imbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of:

a) a present obligation arising from a past event, when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

b) a possible obligation, that arises out of past events and the existence of which will be confirmed only by one or more uncertain future events unless the probability of outflow of resources is remote.

Contingents assets are neither recognized nor disclosed. However, when realization of income is virtually certain, related asset is recognized.

N. CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash in hand and at bank and short-term investments with an original maturity of three months or less. Cash flow statement is prepared using indirect method.

O. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue, share split and share warrants conversion.

Diluted earnings per share is calculated by adjusting net profit or loss for the period attributable to equity shareholders and the weighted number of shares outstanding during the period for the effect of all dilutive potential equity shares.


Sep 30, 2011

1. BASIS OF ACCOUNTING

a) The financial statements have been prepared under the historical cost conversion in accordance with the generally accepted accounting principles and provisions.

b) Accounting policies not specially referred to otherwise are consistently followed throughout the period under audit and in consonance with the generally accepted accounting principles followed by the Institute of Chartered Accountants of India.

2. USE OF ESTIMATES

The preparation of financial statement in conformity with generally accepted accounting policies requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at date of the financial statements and the reported accounts of revenues and expenses for the years presented. Actual results could differ from these estimates.

3. FIXED ASSETS AND DEPRECIATION

a) The fixed assets are stated at cost less accumulated depreciation, cost includes all related expenses incurred up to the date the Assets is put to use.

b) Depreciation on fixed asset is provided on straight line method as per rate and manner prescribes in schedule-XIV of the companies Act 1956. The depreciation has been provided at 100% on the Assets purchased during the year the cost of which is less than Rs 5000/- c) Fixed assets acquired under hire purchase agreement are recorded at their cash values and finance charges thereon related to period are charged to revenue account. The vendors have lien on these Assets.

4. RECOGNITION OF INCOME

The revenue is recognized on the "Percentage of Completion Method" of accounting of projects subject to percentage of confirmation of sales relating to each project.

5. SUNDRY DEBTORS

Represents value of sales less amount received.

6. VALUATION OF INVENTORIES

a) Work in progress : Work-in-progress comprises direct cost of project and valued at cost less cost of sales.

b) Finished stock : Finished stocks consist of unsold stock in trade at the end of financial year.

7. INVESTMENTS

The long term investments are carried at cost. The decline other than temporary, will reduced from carrying amount to recognize decline.

8. EMPLOYEE BENEFIT

a) Provident Fund Plan

The company is yet to remit the employees contribution to provident fund to the tune of Rs.12,30,745/-

b) Defend Gratuity obligation Liability for Gratuity and balance of leave not availed due to employees are provided on the basis of actuarial valuation carried out at the Balance Sheet date by an independent actuary using the Projected Unit Credit (PUC) method.

9. TAXES ON INCOME

Income tax comprises current tax and deferred tax. Current tax is the amount of tax payable as determined in accordance with the provisions of the Income Tax Act 1961. Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences, subject to the consideration of prudence. Deferred tax asset and liabilities are measured using the tax rates applicable to the company at the balance sheet date.

10. DEFERRED TAX

Deferred tax liability is adjusted with the deferred tax asset and the closing balance standing at the end of the year is net off deferred tax asset created during the year. The details are as follows:-

11. CONTINGENT LIABILITIES AND CONTINGENT ASSETS

i) Sales tax liability, if any on works contracts carried out by the company is considered by management as not material but if any liability arises it will be recovered from customers.

ii) During the financial year the company has received a show cause notice from the service tax department in which they have asked for clarification from the company regarding the differences arises in the computation of service tax for the periods as given below. The total amount for which the explanation has been asked for is Rs.13,79,844/-. The details of the two show cause notice are as follows:- Date of Notice Pertaining to period Amount 19/10/2010 April,2009 to Sept.2009 1379844/- The company has fle a writ petition against the above service tax levied by the department and the penalty levied by the service tax department to the tune of Rs 70 lakhs vide court case number-6562 / 2011 before the honorable Madras High Court and the High Court has granted a stay until further orders.

The Company has received notice from Income Tax Department for reopening the assessment for the assessment year 2004-05. The Company has decided to challenge the same in the appropriate forum.

Chennai Metropolitan Development Authority:- The Company has built all properties in accordance to plan except minor deviations which are within permissible limits.

iii) Contingent assets are neither recognized nor disclosed.

12. BORROWING COST

Borrowing costs that are directly attributable to the acquisition or construction of qualifying asset are considered as part of the cost of that asset. Other borrowing costs are recognized as an expense in the year in which they are incurred. The Borrowing cost of the projects are charged to project accounts in the year in which they are incurred.


Sep 30, 2010

1. BASIS OF ACCOUNTING

a) The financial statements have been prepared under the historical cost conversion in accordance with the generally accepted accounting principles and provisions.

b) Accounting policies not specially referred to otherwise are consistently followed throughout the period under audit and in consonance with the generally accepted accounting principles followed by the Institute of Chartered Accountants of India.

2. FIXED ASSETS AND DEPRECIATION

a) The fixed assets are stated at cost less accumulated depreciation, cost includes all related expenses incurred up to the date the Assets is put to use.

b) Depreciation on fixed asset is provided on straight line method as per rate and manner prescribes in schedule-XIV of the companies Act 1956. The depreciation has been provided at 100% on the Assets purchased during the year the cost of which is less than Rs 5000/- c) Fixed assets acquired under hire purchase agreement are recorded at their cash values and fnance charges thereon related to period are charged to revenue account. The vendors have lien on these Assets.

3. RECOGNITION OF INCOME

The revenue is recognized on the "Percentage of Completion Method" of accounting of projects subject to percentage of confrmation of sales relating to each project.

4. SUNDRY DEBTORS

Represents value of sales less amount received.

5. VALUATION OF INVENTORIES

a) Work in progress

Work-in-progress comprises direct cost of project and valued at cost less cost of sales. Sizeable interest free deposits paid to land owners have been treated as part of project cost.

b) Finished stock

Finished stock consist of unsold stock in trade at the end of fnancial year.

6. INVESTMENTS

The long term investments are carried at cost. The decline other than temporary, will reduced from carrying amount to recognize decline.

7. EMPLOYEE BENEFIT

a) Provident Fund Plan

The company does not fall within the purview of Provident fund Act.

b) Employees State Insurance / Pension Fund scheme. The company does not fall within the purview of Employees State insurance / Pension fund scheme

c) Defned Gratuity obligation Provision for Gratuity liability has been made for the year as per the provisions of Gratuity Act. The Gratuity will be accounted as and when paid.

8. TAXES ON INCOME

The provision is made for taxation on proportionate period basis for the year ended 30.09.2010.

9. CONTINGENT LIABILITIES AND CONTINGENT ASSETS

i) Sales tax liability, if any on works contracts carried out by the company is considered by management as not material but if any liability arises it will be recovered from customers.

ii) Chennai Metropolitan Development Authority:- The Company has built all properties in accordance to plan except minor deviations which are within permissible limits.

iii) Contingent assets are neither recognized nor disclosed.

10) BORROWING COST

As the Company has borrowed funds for the projects, interest has been accordingly charged to respective projects for which borrowing was made.


Sep 30, 2009

1. BASIS OF ACCOUNTING

a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and provisions except AS-15 and AS-22.

b) Accounting policies not specially referred to otherwise are consistently followed throughout the period under audit and in consonance with the generally accepted accounting principles prescribed by the Institute of Charted Accountants of India.

2. FIXED ASSETS AND DEPRECIATION

a) The fixed Assets are stated at cost of acquisition less depreciation, cost includes all the related expenses incurred upto the date the Asset is put to use.

b) Depreciation on Fixed Assets is provided on straight line method as per rate and in the manner prescribed in schedule XIV of the Companies Act, 1956.The depreciation has been provided at 100% on the Assets purchased during the year the cost of which is less than Rs.5000/-.

c) Fixed Assets acquired under hire purchase agreement are recorded at their cash values and finance charges thereon related to period are charged to revenue account. The Vendors have lien over these Assets.

3. RECOGNITION OF INCOME

The revenue is recognized on the "Percentage of Completion Method" of accounting of projects subject to percentage of confirmation of sales relating to each project.

4. SUNDRY DEBTORS

Represents value of sales less amount received

5. VALUATION OF INVENTORIES

(a) Work in Progress

Work in progress comprises direct cost of project and valued at cost less cost of sales. Sizeable interest free deposits paid to land owners have been treated as part of project cost.

(b) Finished stock

Finished stock consists of unsold stock in trade at the end of the financial year.

6. INVESTMENTS

The Long Term Investments are carried at cost. The decline other than temporary, will be reduced from carrying amount to recognize decline.

7. EMPLOYEE BENEFITS

a) Provident Fund Plan

The company does not fall with in the purview of Provident Fund Act.

b) Employees State Insurance/ Pension fund scheme:

The company does not fall with in the purview of Employees State Insurance/Pension fund scheme.

c) Defined Gratuity obligation:

Provision for Gratuity liability has not been made for the year as per the provisions of gratuity Act. The gratuity will be accounted as and when paid.

8. TAXES ON INCOME

The provision is made for taxation on proportionate period basis for the year ended 30.09.2009.

9. FRINGE BENEFIT TAX

Fringe benefit tax on all the expenses, as specified in the Income Tax Act, 1961, is recognized in the Profit and Loss Account when the underlying expenses are incurred upto 31.03.2009.

10. CONTINGENT LIABILITIES AND CONTINGENT ASSETS

i) Sales Tax liability, if any on works contract carried out by the company is considered by management as not material but if any liability arises it will be recovered from customers.

ii) Service Tax Liability : Th|e company has stopped collection of service tax on residential flats after issue of circular no. 108/02/2009 dated 29.01.2009 by CBEC. Any liability in respect of service tax if arises, the same will be recovered (from the customers.

iii) Chennai Metropolitan Development Authority : The Company has built all properties in accordance to plan except minor deviations which are within permissible limits.

iv) Contingent assets are neither recognized, nor disclosed.

11. BORROWING COST

As the company has borrowed funds for the projects, interest has been according y charged to respective projects for which borrowing was made

 
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