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Accounting Policies of CHD Developers Ltd. Company

Mar 31, 2014

Corporate Information

CHD Developers Limited (''the Company'') was incorporated on August 17, 1990. CHD Developers Limited is a leading real estate developer engaged in the business of township and residential/commercial complexes. The operation of the company spans all aspects of real estate development, from identification and acquisition of land, to planning, execution, construction and marketing projects.

1. Basis of Preparation of Financial Statements

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (GAAP). The company has prepared these financial statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standard) Rules 2006, (as amended) and the relevant provisions of the Companies Act., 1956 and applicable provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis under the historical cost convention.

2. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements, disclosure regarding financial statements and reported amount of revenue and expenses during the reported period. These estimates are based upon management''s knowledge of current events and actions. Actual results could differ from those estimates and differences, if any are recognised in the period in which the results are known /materialised.

3. Fixed Assets and Depreciation

a) Valuation

Fixed assets are stated at cost (Gross Block) less accumulated depreciation and impairment. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment.

Capital Work in Progress represents expenditure incurred in respect of Capital projects / intangible assets under development and are carried at cost. Cost includes land, related acquisition expenses, development / construction costs, borrowing costs and other direct expenditure.

b) Depreciation

Depreciation on fixed assets has been provided on the basis of straight line method as per the rates prescribed in Schedule XIV of the Companies Act, 1956.

4. Inventories

Inventories comprise completed units for sale and property under construction (Work in progress):

a. Completed unsold inventory is valued at lower of cost and net realisable value. Cost is determined by including cost of land, materials, services and related overheads.

b. Work in progress is valued at cost. Cost comprises value of land (including development rights), materials, services and other overheads related to projects under construction.

5. Recognition of Income & Expenses: --

a) The revenue is recognised on the basis of ''Percentage of completionMethod'' of accounting. Revenue is recognised, in relation to sold areas only on the basis of percentage of actual cost incurred thereon including land as against the total estimated cost of the project under execution subject to such actual cost being 20% or more (25% or more for the Projects starting on or after 1st April, 2012 as per Guidance Note "Accounting for Real Estate Transaction (Revised 2012)" Issued by the Institute of Chartered Accountant of India) of the total estimated cost. The estimates of saleable area and costs are revised periodically by the management. The effect of such changes to estimates is recognised in the period such changes are determined. However, the revenue, in respect of project undertaken before March 31, 2010 is accounted for on the basis of actual receipts and instalment fallen due during the year towards booking of properties, subject to final adjustments on the completion of respective projects.

b) Further interest on delayed payments, if any is accounted for on realisation due to uncertainties in recovery.

c) Cost of construction/development (including cost of land) incurred is charged to the profit & loss account in proportion to project area sold. Adjustments if required are made on completion of the respective projects.

d) Interest and direct expenditure attributable to specific projects are capitalized in the cost of project, other interest and indirect costs are treated as ''Period Cost'' and charged to Profit & Loss account in the year in which it is incurred.

e) Brokerage paid/ fallen due on Fixed Deposits is accounted during the year.

f) Municipal Taxes are accounted for in the year of payment.

g) All other incomes and expenditures except mentioned above are accounted for on accrual basis.

6. Retirement Benefits to employees

Company''s contribution to Provident Fund and Employee State Insurance Compensation (ESIC) is charged to profit and loss account on the actual liability basis.

Provision for Gratuity & Leave Encashment is determined on the actuarial valuation carried out at the balance sheet date in accordance with transitional provision of Revised AS-15.

7. Taxation

Tax comprises current tax and deferred tax. Current tax is the amount payable as determined in accordance with the provisions of Income Tax Act, 1961. Provision for Income Tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from timing difference between the book and the taxable profits is accounted for using the tax rates and law that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in the future. However, if there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Deferred tax assets/liabilities are reviewed at each balance sheet date.

8. Investments

Investments intended to be held for more than a year are classified as long term investments. All other investments are classified as current investments. Long term investments are stated at cost. However provision for diminution is made to recognize any decline, other than temporary, in the value of investments. Current investments are stated at lower of cost or market value on an individual investment basis.

9. Foreign Currency Transaction

Transaction in foreign currency is recorded at exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are translated at the exchange rate prevailing on the Balance sheet date and exchange difference on translation of monetary assets and liabilities and resultant gain or loss is recognized in the Profit & loss account.

Non Monetary assets and liabilities are translated at the rate prevailing on the date of transaction.

10. Borrowing Cost

The borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit & Loss account as an expense in the year in which they are incurred.

11. Impairment of Assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may suffer impairment loss. If any such indication exists, the Company estimates the recoverable amount of the asset or the recoverable amount of cash generating unit to which the asset belongs. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flow expected from the continuing use of the asset and from its disposal is discounted to their present value using a pre-discount rate that reflect the current market assessment of the time value of money and risk specific to the asset. In case recoverable amount is less than its carrying amount then its carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

12. Provisions, Contingent Liabilities and Contingent Assets

A) Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation if: -

a) The Company has present obligation as a result of past event.

b) A probable outflow of resources is expected to settle the obligation and the amount of obligation can be reliably estimated. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

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

C) Contingent Liability is disclosed in the case of: -

a) A present obligation arising from the past event, in case it is not probable that an outflow of resources will be required to settle the obligation.

b) A possible obligation, unless the probability of outflow of resources is remote.

D) Contingent Assets are neither recognized nor disclosed.

13. Employee Stock Compensation Cost

In respect of stock options granted by the Company the intrinsic value of the options (excess of market price of the share on the date of grant over the exercise price of the option) is treated as deferred employee compensation cost and is amortized over the vesting period on straight line basis in accordance with SEBI guidelines in this regard.

14. Leases

Lease arrangements, where risks and rewards incident to ownership of an asset substantially vest with the lessor are recognized as operating lease. Lease rentals in respect of operating lease arrangement are recognized as business income/expense in the profit and loss account as and when due in accordance with the terms of the related agreement.

15. Earning per share

The earnings considered in ascertaining the Company''s Earnings Per Share (EPS) comprises the net profit after tax (and include the post tax effect of any extra ordinary items). The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period / year. The number of shares used in computing Diluted EPS comprises of weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

16. Segment Reporting

Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under unallocated corporate expenditure.


Mar 31, 2013

1. Basis of Preparation of Financial Statements

The fnancial statements of the company have been prepared in accordance with generally accepted accounting principles in India (GAAP). The company has prepared these fnancial statements to comply in all material respects with the Accounting Standards notifed under the Companies (Accounting Standard) Rules 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The fnancial statements have been prepared on an accrual basis under the historical cost convention.

2. Use of Estimates

The preparation of fnancial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of fnancial statements, disclosure regarding fnancial statements and reported amount of revenue and expenses during the reported period. These estimates are based upon management''s knowledge of current events and actions. Actual results could differ from those estimates and differences, if any, are recognised in the period in which the results are known /materialised.

3. Fixed Assets and Depreciation

a) Valuation

Fixed assets are stated at cost (Gross Block) less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Capital Work in Progress (including intangible assets under development) represents expenditure incurred in respect of Capital projects / intangible assets under development and are carried at cost. Cost includes land, related acquisition expenses, development / construction costs, borrowing costs and other direct expenditure.

b) Depreciation

Depreciation on fxed assets has been provided on the basis of straight line method as per the rates prescribed in Schedule XIV of the Companies Act, 1956.

4. Inventories

Inventories comprise completed units for sale and property under construction (Work in progress):

a. Completed unsold inventory is valued at lower of cost and net realisable value. Cost is determined by including cost of land, materials, services and related overheads.

b. Work in progress is valued at cost. Cost comprises value of land (including development rights), materials, services and other overheads related to projects under construction.

5. Recognition of Income & Expenses: -

a) The revenue is recognised on the basis of ''Percentage of completion Method'' of accounting. Revenue is recognised, in relation to sold areas only, on the basis of percentage of actual cost incurred thereon including land as against the total estimated cost of the project under execution subject to such actual cost being 20% or more (25% or more for the Projects starting on or after 1st April, 2012 as per Guidance Note "Accounting for Real Estate Transaction (Revised 2012)" Issued by the Institute of Chartered Accountant of India) of the total estimated cost. The estimates of saleable area and costs are revised periodically by the management. The effect of such changes to estimates is recognised in the period such changes are determined. However, the revenue, in respect of project undertaken before March 31, 2010 is accounted for on the basis of actual receipts and installment fallen due during the year towards booking of properties, subject to fnal adjustments on the completion of respective projects.

b) Further interest on delayed payments, if any, is accounted for on realisation due to uncertainties in recovery.

c) Cost of construction/development (including cost of land) incurred is charged to the proft & loss account in proportion to project area sold. Adjustments if required are made on completion of the respective projects.

d) Interest and direct expenditure attributable to specifc projects are capitalized in the cost of project, other interest and indirect costs are treated as ''Period Cost'' and charged to Proft & Loss account in the year in which it is incurred.

e) Brokerage paid/ fallen due on Fixed Deposits is accounted during the year.

f) Municipal Taxes are accounted for in the year of payment.

g) All other incomes and expenditures except mentioned above are accounted for on accrual basis.

6. Retirement Benefts to employees

Company''s contribution to Provident Fund and Employee State Insurance Compensation (ESIC) is charged to proft and loss account on the actual liability basis.

Provision for Gratuity & Leave Encashment is determined on the actuarial valuation carried out at the balance sheet date in accordance with transitional provision of Revised AS-15.

7. Taxation

Tax comprises current tax and deferred tax. Current tax is the amount payable as determined in accordance with the provisions of Income Tax Act, 1961. Provision for Income Tax is made after taking into consideration benefts admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from timing difference between the book and the taxable profts is accounted for using the tax rates and law that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in the future. However, if there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Deferred tax assets/liabilities are reviewed at each balance sheet date.

8. Investments

Investments intended to be held for more than a year are classifed as long term investments. All other investments are classifed as current investments. Long term investments are stated at cost. However provision for diminution is made to recognize any decline, other than temporary, in the value of investments. Current investments are stated at lower of cost or market value on an individual investment basis.

9. Foreign Currency Transaction

Transaction in foreign currency is recorded at exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are translated at the exchange rate prevailing on the Balance sheet date and exchange difference on translation of monetary assets and liabilities and resultant gain or loss is recognized in the Proft & loss account.

Non Monetary assets and liabilities are translated at the rate prevailing on the date of transaction.

10. Borrowing Cost

The borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Proft & Loss account as an expense in the year in which they are incurred.

11. Impairment of Assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may suffer impairment loss.

If any such indication exists, the Company estimates the recoverable amount of the asset or the recoverable amount of cash generating unit to which the asset belongs. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash fow expected from the continuing use of the asset and from its disposal is discounted to their present value using a pre-discount rate that refect the current market assessment of the time value of money and risk specifc to the asset. In case recoverable amount is less than its carrying amount then its carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Proft and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists the recoverable amount is reassessed and the asset is refected at the recoverable amount.

12. Provisions, Contingent Liabilities and Contingent Assets

A) Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation if: -

a) the Company has present obligation as a result of past event.

b) a probable outfow of resources is expected to settle the obligation and the amount of obligation can be reliably estimated.

Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to refect the current management estimates.

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

C) Contingent Liability is disclosed in the case of: -

a) a Present obligation arising from the past event, in case it is not probable that an outfow of resources will be required to settle the obligation.

b) a Possible obligation, unless the probability of outfow of resources is remote.

D) Contingent Assets are neither recognized nor disclosed.

13. Employee Stock Compensation Cost

In respect of stock options granted by the Company, the intrinsic value of the options (excess of market price of the share on the date of grant over the exercise price of the option) is treated as deferred employee compensation cost and is amortized over the vesting period on straight line basis in accordance with SEBI guidelines in this regard.

14. Leases

Lease arrangements, where risks and rewards incident to ownership of an asset substantially vest with the lessor are recognized as operating lease. Lease rentals in respect of operating lease arrangement are recognized as business income/expense in the proft and loss account as and when due in accordance with the terms of the related agreement.

15. Earning per share

The earnings considered in ascertaining the Company''s Earnings Per Share (EPS) comprises the net proft after tax (and include the post tax effect of any extra ordinary items). The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period / year. The number of shares used in computing Diluted EPS comprises of weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

16. Segment Reporting

Revenue and expenses have been identifed to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under unallocated corporate expenditure.

17. Amalgamation expenses

Amalgamation expenses arising due to merger of Capital Homes Limited with the company are being amortised over the period of fve years.


Mar 31, 2012

1. Presentation and Disclosure of financial statements Change in Accounting Policy

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 financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous years figure in accordance with the requirement applicable in the current year.

2. Basis of Preparation of Financial Statements

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (GAAP). The company has prepared these financial statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standard) Rules 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis under the historical cost convention.

3. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements, disclosure regarding financial statements and reported amount of revenue and expenses during the reported period. These estimates are based upon management's knowledge of current events and actions. Actual results could differ from those estimates and differences, if any, are recognised in the period in which the results are known /materialised.

4. Fixed Assets

a) Valuation

Fixed assets are stated at cost (Gross Block) less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. (Depreciation on fixed assets is provided at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956)

Capital Work in Progress represents expenditure incurred in respect of Capital Projects under development and are carried at cost includes land, related acquisition expenses, development / construction costs, borrowing costs and other direct expenses, including advance to contractors and others.

b) Depreciation

Depreciation on fixed assets has been provided on the basis of straight line method as per the rates prescribed in Schedule XIV of the Companies Act, 1956.

5. Inventories

Inventories comprise completed units for sale and property under construction (Work in progress):

a. Completed unsold inventory is valued at lower of cost or net realisable value. Cost is determined by including cost of land, materials, services and related overheads.

b. Work in progress is valued at cost. Cost comprises value of land (including development rights), materials, services and other overheads related to projects under construction.

6. Recognition of Income & Expenses:

a) The revenue is recognised on the basis of 'Percentage of completion Method' of accounting. Revenue is recognised, in relation to sold areas only, on the basis of percentage of actual cost incurred thereon including land as against the total estimated cost of the project under execution subject to such actual cost being 20% or more of the total estimated cost.

The estimates of saleable area and costs are revised periodically by the management. The effect of such changes to estimates is recognised in the period such changes are determined. However, the revenue, in respect of project undertaken before March 31, 2010 is accounted for on the basis of actual receipts and instalment fallen due during the year towards booking of properties, subject to final adjustments on the completion of respective projects. However, change in this accounting policy doesn't have any significant impact on the profitability of the company.

Further interest on delayed payments, if any, is accounted for on realisation due to uncertainties in recovery.

c) Cost of construction/development (including cost of land) incurred is charged to the profit & loss account in proportion to project area sold. Adjustments if required are made on completion of the respective projects.

d) Interest and direct expenditure attributable to specific projects are capitalized in the cost of project, other interest and indirect costs are treated as 'Period Cost' and charged to Profit & Loss account in the year in which it is incurred.

e) Brokerage paid/ fallen due on Fixed Deposits is accounted during the year.

f) Municipal Taxes are accounted for in the year of payment.

g) All other incomes and expenditures except mentioned above are accounted for on accrual basis.

7. Retirement Benefits to employees

Company's contribution to Provident Fund and ESIC charged to profit and loss account on the actual liability basis.

Provision for gratuity & Leave Encashment is determined on the actuarial valuation carried out at the balance sheet date in accordance with transitional provision of revised AS-15.

8. Taxation

Income tax comprises current tax and deferred tax. Current tax is the amount payable as determined in accordance with the provisions of Income Tax Act, 1961. Provision for Income Tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961.Deferred tax resulting from timing difference between the book and the taxable profits is accounted for using the tax rates and law that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in the future. However if there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Deferred tax assets/liabilities are reviewed at each balance sheet date.

9. Investments

Investments intended to be held for more than a year are classified as long term investments. All other investments are classified as current investments. Long term investments are stated at cost. However provision for diminution is made to recognize any decline, other than temporary, in the value of investments. Current investments are stated at lower of cost or market value on an individual investment basis.

10. Foreign Currency Transaction

Transaction in foreign currency is recorded at exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are translated at the exchange rate prevailing on the Balance sheet date and exchange difference on translation of monetary assets and liabilities and resultant gain or loss is recognized in the Profit & loss account.

Non Monetary assets and liabilities are translated at the rate prevailing on the date of transaction.

11. Borrowing Cost

The borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit & Loss account as an expense in the year in which they are incurred.

12. Impairment of Assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may suffer impairment loss. If any such indication exists, the Company estimates the recoverable amount of the asset or the recoverable amount of cash generating unit to which the assets belongs. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing value in use, the estimated future cash flow expected from the continuing use of the asset and from its disposal is discounted to their present value using a pre-discount rate that reflect the current market assessment of the time value of money and risk specific to the asset. In case recoverable amount is less than its carrying amount then its carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

13. Provisions, Contingent Liabilities and Contingent Assets

A) Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation if: -

a) The Company has present obligation as a result of past event.

b) A probable outflow of resources is expected to settle the obligation and the amount of obligation can be reliably estimated. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

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

C) Contingent Liability is disclosed in the case of:

a) A Present obligation arising from the past event, in case it is not probable that an outflow of resources will be required to settle the obligation.

b) A Possible obligation, unless the probability of outflow of resources is remote.

D) Contingent Assets are neither recognized nor disclosed.

14. Employee Stock Compensation Cost

In respect of stock options granted by the Company, the intrinsic value of the options (excess of market price of the share on the date of grant over the exercise price of the option) is treated as deferred employee compensation cost and is amortized over the vesting period on straight line basis in accordance with SEBI guidelines in this regard.

15. Leases

Lease arrangements, where risks and rewards incident to ownership of an asset substantially vest with the lessor are recognized as operating lease. Lease rentals in respect of operating lease arrangement are recognized as business income/expense in the profit and loss account as and when due in accordance with the terms of the related agreement.

16. Earning per share

The earnings considered in ascertaining the Company's Earnings Per Share (EPS) comprises the net profit after tax (and include the post tax effect of any extra ordinary items). The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period / year. The number of shares used in computing Diluted EPS comprises of weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

17. Segment Reporting

Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under unallocated corporate expenditure.

18. Amalgamation Expenses

Amalgamation expenses arising due to merger of Capital Homes Limited with the Company are being amortized over the period of five years.

19. Cash and Cash Equivalents

The company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalent.


Mar 31, 2011

1. Basis of Preparation of Financial Statements

The Financial Statements have been prepared under the historical cost convention and on the basis of going concern concept and in accordance with the Generally Accepted Accounting Principles ("GAAP") and other Accounting Standards prescribed under the Companies (Accounting Standard) Rules, 2006 and other applicable provisions of the Companies Act, 1956. A Summary of Significant Accounting polices that have been applied consistently is set out below.

2. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements, disclosure regarding financial statements and reported amount of revenue and expenses during the reported period. These estimates are based upon management''s knowledge of current events and actions, actual results could differ from those estimates and differences, if any, are recognised in the period in which the results are known /materialised.

3. Fixed Assets

a) Valuation

Fixed assets are stated at cost (Gross Block) less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

b) Capital Work in Progress represents expenditure incurred in respect of Capital projects under development and are carried at cost, includes land, related acquisition expenses, development / construction costs, borrowing costs and other direct expenses.

c) Depreciation

Depreciation on fixed assets has been provided on the basis of straight line method as per provision of section 205 (2) (b) and the rates prescribed in schedule XIV of the Companies Act, 1956.

4. Inventories

Inventories are valued as under:

a) Building material & stores at lower of Cost or Net Realisable Value

b) Flats (unsold) at lower of cost or Net Realisable Value

c) Projects/contracts work in progress at lower of Cost or Net Realisable Value

5. Recognition of Income & Expenses

a) The revenue is recognised on the basis of ''Percentage of Completion Method'' of accounting. Revenue is recognised, in relation to sold areas only, on the basis of percentage of actual cost incurred thereon including land as against the total estimated cost of the project under execution subject to such actual cost being 20% or more of the total estimated cost. The estimates of saleable area and costs are revised periodically by the management. The effect of such changes to estimates is recognised in the period such changes are determined. However, the revenue, in respect of project undertaken before March 31, 2010, is accounted for on the basis of actual receipts and instalment fallen due during the year towards booking of properties, subject to final adjustments on the completion of respective projects. However, change in this Accounting Policy doesn''t have any significant impact on the profitability of Company.

b) Further interest on delayed payments, if any, is accounted for on realisation due to uncertainties in recovery.

c) Interest and direct expenditure attributable to specific projects are capitalized in the cost of project, other interest and indirect costs are treated as ''Period Cost and charged to Profit & Loss account in the year in which it is incurred.

d) Brokerage or Commission on Sales is accounted in the year of payment due to uncertainty on realisation of sale Installments.

e) Municipal Taxes are accounted in the year of payment.

f) All other incomes and expenditures except mentioned above are accounted for on accrual basis.

6. Retirement Benefits to employees

Company''s contribution to Provident Fund, Family Pension and ESIC are deposited in accordance with the provisions of Employees Provident fund, 1952 charged to profit and loss account.

Provision for gratuity and leave encashment is determined on the basis of actuarial valuation carried out at the balance sheet date in accordance with revised AS-15.

7. Taxation

Income tax comprises current tax, deferred tax. Current tax is the amount payable as determined in accordance with the provisions of Income Tax Act, 1961. Provision for Income Tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from timing difference between the book and the taxable profits is accounted for using the tax rates and law that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets are recognised only to the extant there is reasonable certainty that the asset can be realised in the future. However if there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Deferred tax assets/liabilities are reviewed at each balance sheet date.

8. Investments

Investments intended to be held for more than a year are classified as long term investments. All other investments are classified as current investments. Long term investments are stated at cost. However provision for diminution is made to recognize any decline, other than temporary, in the value of investments. Current investments are stated at lower of cost or market value on an individual investment basis.

9. Foreign Currency Transaction

Transaction in foreign currency is recorded at exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are translated at the exchange rate prevailing on the Balance sheet date and exchange difference on translation of monetary assets and liabilities and resultant gain or loss is recognized in the Profit & loss account.

Non Monetary assets and liabilities are translated at the rate prevailing on the date of transaction.

10. Borrowing Cost

The borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily take substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit & Loss account as an expense in the year in which they are incurred.

11. Impairment of Assets

The Company assesses at each balance sheet date whether there is any indication that an asset may suffer impairment loss. If any such indication exists, the Company estimates the recoverable amount of the asset or the recoverable amount of cash generating unit to which the assets belongs. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flow expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-discount rate that reflect the current market assessment of the time value of money and risk specific to the asset. In case recoverable amount is less than its carrying amount then its carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

12. Provisions, Contingent Liabilities and Contingent Assets

A) Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation if: -

a) The Company has present obligation as a result of past event.

b) A probable outflow of resources is expected to settle the obligation and the amount of obligation can be reliably estimated.

Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

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

C) Contingent Liability is disclosed in the case of: -

a) A Present obligation arising from the past event, in case it is not probable that an outflow of resources will be required to settle the obligation.

b) A Possible obligation, unless the probability of outflow of resources is remote.

D) Contingent Assets are neither recognized nor disclosed.

13. Employee Stock Compensation Cost

In respect of stock options granted by the Company, the intrinsic value of the options (excess of market price of the share on the date of grant over the exercise price of the option) is treated as deferred employee compensation cost and is amortized over the vesting period on straight line basis in accordance with SEBI guidelines in this regard.

14. Leases

Lease arrangements, where risks and rewards incident to ownership of an asset substantially vest with the lessor are recognized as operating lease. Lease rentals in respect of operating lease arrangement are recognized as business income/expense in the profit and loss account as and when due in accordance with the terms of the related agreement.

15. Earning per share

The earnings considered in ascertaining the Company''s Earnings Per Share (EPS) comprises the net profit after tax (and includes the post tax effect of any extra ordinary items). The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period /year. The number of shares used in computing Diluted EPS comprises of weighted average number of equity shares and dilutive potential equity shares outstanding during the period..

16. Amalgamation Expenses: Amalgamation expenses arising due to merger of Capital Homes Limited with the Company are being amortized over the period of five years.














Mar 31, 2010

1. Basis of Preparation of Financial Statements

The Financial Statements have been prepared under the historical cost convention and on the basis of going concern concept and in accordance with the Generally Accepted Accounting Principles ("GAAP") and other Accounting Standards notified under Section 211(3) (c) of the Companies Act, 1956 in India. A Summary of Significant Accounting polices that have been applied consistently is set out below. The Financial Statements have also been prepared in accordance with the relevant provisions of the companies Act, 1956.

2. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenue and expenses during the reported period. Difference between the actual results and estimates are recognised in the period in which the results are known /materialised.

3. Fixed Assets

a) Valuation

Fixed assets are stated at cost (Gross Block) less accumulated depreciation. (Depreciation on fixed assts is provided at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956.)

b) Depreciation

Depreciation on fixed assets has been provided on the basis of straight line method as per provision of section 205 (2) (b) and the rates prescribed in schedule XIV of the Companies Act, 1956.

4. Inventories

Inventories are valued as under:

a) Building material & stores at cost

b) Flats (unsold) at lower of the cost or market price

c) Projects/contracts work in progress at cost

5. Recognition of Income & Expenses: -

(a) The revenue is recognised on the basis of actual receipts and instalments fallen due during the year towards booking of properties, subject to final adjustment on the completion of respective projects. Further interest on delayed payments, if any, is accounted for on realisation due to uncertainties in recovery. Cost of construction is determined in proportionate to the actual cost incurred as against the total estimated cost of the project or revised estimated cost, if any.

(b) Interest and direct expenditure attributable to specific projects are capitalized in the cost of project, other interest and indirect costs are treated as Period Cost and charged to Profit & Loss Account in the year in which it is incurred.

(c) Brokerage paid/fallen due on Fixed Deposits is accounted during the year.

(d) Municipal Taxes & Leave Encashment are accounted for in the year of payment.

(e) All other incomes and expenditures except mentioned above are accounted for on accrual basis.

6. Retirement Benefits to employees

Companys contribution to Provident Fund, Family Pension and ESIC charged to Profit and Loss Account on the actual liability basis.

Provision for gratuity is determined on the actuarial valuation carried out at the Balance Sheet date in accordance with transitional provision of revised AS-15.

7. Provision for Current and Deferred Tax

Provision for Income Tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from timing difference between the book and the taxable profits is accounted for using the tax rates and law that are enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are recognised only to the extant there is reasonable certainty that the asset can be realised in the future. However, if there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Deferred tax assets / liabilities are reviewed at each balance sheet date.

8. Investments

Long term investments are stated at cost. However provision for diminution is made to recognize any decline, other than temporary, in the value of investments. Current investments are stated at lower of cost or market value.

9. Foreign Currency Transaction

Transaction in foreign currency is recorded at exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are translated at the Balance sheet date and resultant gain or loss is recognized in the Profit & loss account.

Non Monetary assets and liabilities are translated at the rate prevailing on the date of transaction.

10. Borrowing Cost

The borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily take substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit & Loss account.

11. Intangible Assets

Intangible assets are amortized over the period of four years.

12. 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 or the recoverable amount of cash generating unit to which the assets belongs is less than its carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

13. Provisions, Contingent Liabilities and Contingent Assets

A) Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation if: -

a) The Company has present obligation as a result of past event.

b) A probable outflow of resources is expected to settle the obligation and the amount of obligation can be reliably estimated

B) Reimbursement 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 the past event, in case it is not probable that an outflow of resources will be required to settle the obligation.

b) A Possible obligation, unless the probability of outflow of resources is remote.

Contingent Assets are neither recognized nor disclosed.

14. Employee stock compensation cost

In respect of stock options granted by the Company, the intrinsic value of the options (excess of market price of the shares over the exercise price of the option) is treated as deferred employee compensation cost and is amortized over the vesting period.

15. Leases

Lease rentals in respect of operating lease arrangement are recognized as business income / expense in the profit and loss account as and when due in accordance with the terms of the related agreement.

16. Earning per share

The earnings considered in ascertaining the Companys Earnings Per Share (EPS) comprises the net profit after tax (and includes the post tax effect of any extra ordinary items). The number of shares used

in computing Basic EPS is the weighted average number of shares outstanding during the period / year. The number of shares used in computing Diluted EPS comprises of weighted average shares considered for deriving Basic EPS, and also the weighted average number of equity shares.

17. Segment Reporting

Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under unallocated corporate expenditure.

18. Amalgamation Expenses:

Amalgamation expenses arising due to merger of Capital Homes Limited with the Company are being amortized over the period of five years.

 
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