Accounting Policies of Garnet Construction Ltd. Company

Mar 31, 2015

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS :

The financial statements are prepared in accordance with Generally Accepted Accounting Principles ("GAAP") in India under the historical cost convention, on accrual basis. GAAP comprises mandatory Accounting Standards issued by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 2013. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

1.2 USE OF ESTIMATES :

The Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Any revision to the accounting estimates is recognized prospectively.

1.3 TANGIBLE ASSETS AND CAPITAL WORK IN PROGRESS :

Tangible assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable/allocable cost of bringing the asset to its working condition for its intended use. The cost also includes direct cost and other related incidental expenses. Revenues earned, if any during trial run of assets is adjusted against cost of the assets.

1.4 DEPRECIATION AND AMORTIZATION :

Depreciation on all assets of the Company has been provided on Straight Line Method at the rates and in the manner specified in schedule II of the Companies Act, 2013. The details of estimated life for each category of asset are as under:

Type of Asset Life

Office Premises 60 Years

Plant & Machinery 15 Years

Office Equipments 5 Years

Computers 3 Years

Furniture & Fixtures 10 Years

Motor Car 8 Years

Motor Bike 10 ears

1.5 IMPAIRMENT OF ASSETS :

Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceed its recoverable amount, an impairment loss is recognized in the income statement for the items of fixed assets carried at cost. However in the opinion of the management, no provision is required for impairment of asset in the current year.

1.6 INVESTMENTS:

Investments that are readily realizable and intended to be held for not more than one year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost or fair value determined on individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary decline in the value of the investments.

1.7 INVENTORIES:

a) Construction work in progress

The construction work in progress is valued at lower of cost and net realizable value. Cost includes cost of land, development rights, rates and taxes, construction costs, borrowing costs, other direct expenditure, allocated overheads and other incidental expenses.

b) Finished stock of completed projects (ready units)

Finished stock of completed projects and stock in trade of units is valued at lower of cost and net realizable value.

c) Inventory includes certain land purchased in the name of directors who holds the same in trust for the Company

1.8 REVENUE RECOGNITION:

i) Revenue for real estate development/sale

The Company being a Development and Construction Company engaged in the construction of the Industrial Plots Sheds and the Residential Bungalows. During the year under review, the Company has followed the method of accounting for the recognizing of sales on the basis completion of sales method prescribed in AS-9 Revenue Recognition. Hence sales are recognized when possession is handed over to the parties. All expenses and incomes not directly related to particular projects are charged to Profit and loss account of the financial year during which the same are incurred.

Further based on the Guidance Note on Accounting for Real Estate Transaction (Revised 2012) issued by the ICAI, company has followed percentage completion method for projects where construction activity has been commenced from 1st April,2012.

The estimates relating to percentage of completion, costs of completion, area available for sale etc. being of a technical nature are reviewed and revised periodically by the Management and are considered as change in estimates and accordingly, the effect of such changes in estimates is recognized prospectively in the period in which such changes are determined.

Revenue of open plots / land is recognized on the execution of agreement.

ii) Rent

Rental Income is recognized on a time proportion basis as per the contractual obligations agreed with the respective tenant.

iii) Interest

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.9 FOREIGN CURRENCY TRANSACTION:

All the Foreign Currency Transactions are accounted for at the exchange rate prevailing on the date of such transaction.

1.10 SHARE ISSUE EXPENSES :

Share issue expenses are amortized over a period not exceeding 5 years.

1.11 TAXES ON INCOME :

(a) Provision for Income Tax is made on the basis of income for the current accounting period in accordance with the Income tax Act, 1961.

(b) Deferred tax resulting from timing difference between book and tax profit is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize.

(c) The Company has made current tax provision for Minimum Alternate Tax (MAT) under section 115JB of the Income tax Act, 1961. As per the provisions of section 115JAA. MAT Credit receivable has to be recognized as an asset in accordance with the recommendations contained in Guidance note issued by the ICAI. However same is not accounted as receivable in the books of accounts since the management is doubtful of availing the credit against Income tax payable due to uncertainty of taxable profits in the upcoming years

1.12 EARNING PER SHARE:

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.13 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

A provision is recognized when an enterprise has a present obligation as a result of past event it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Possible future obligations or present obligations that may but will probably not require outflow of resources or where the same cannot be reliably estimated, is disclosed as contingent liabilities in the notes to accounts of financial statements. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.14 BORROWING COSTS

Borrowing costs relating to acquisition and/or construction of qualifying assets are capitalized to the extent that the funds are borrowed and used for purpose of constructing a qualifying asset until the time all substantial activities necessary to prepare the - qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs which are not related to acquisition and/or construction activities nor are incidental thereto are charged to the Statement of profit and loss.

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Mar 31, 2014

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS :

The financial statements are prepared in accordance with Generally Accepted Accounting Principles ("GAAP") in India under the historical cost convention, on accrual basis. GAAP comprises mandatory Accounting Standards issued by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

1.2 USE OF ESTIMATES :

The Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Any revision to the accounting estimates is recognized prospectively.

1.3 TANGIBLE ASSETS AND CAPITAL WORK IN PROGRESS :

Tangible assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable/allocable cost of bringing the asset to its working condition for its intended use. The cost also includes direct cost and other related incidental expenses. Revenues earned, if any during trial run of assets is adjusted against cost of the assets.

1.4 DEPRECIATION AND AMORTIZATION :

Depreciation on all assets of the Company has been provided on Straight Line Method at the rates and in the manner specified in schedule XIV of the Companies Act,1956.

1.5 IMPAIRMENT OF ASSETS :

Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceed its recoverable amount, an impairment loss is recognized in the income statement for the items

Of fixed assets carried at cost. However in the opinion of the management, no provision is required for impairment of asset in the current year.

1.6 INVESTMENTS :

Investments that are readily realizable and intended to be held for not more than one year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost or fair value determined on individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary decline in the value of the investments.

1.7 INVENTORIES :

a) Construction work in progress

The construction work in progress is valued at lower of cost and net realizable value. Cost includes cost of land, development rights, rates and taxes, construction costs, borrowing costs, other direct expenditure, allocated overheads and other incidental expenses.

b) Finished stock of completed projects (ready units)

Finished stock of completed projects and stock in trade of units is valued at lower of cost and net realizable value.

c) Inventory includes certain land purchased in the name of directors who holds the same in trust for the Company

1.8 REVENUE RECOGNITION :

i) Revenue for real estate development/sale

The Company being a Development and Construction Company engaged in the construction of the Industrial Plots Sheds and the Residential Bungalows. During the year under review, the Company has followed the method of accounting for the recognizing of sales on the basis completion of sales method prescribed in AS-9 Revenue Recognition. Hence sales are recognized when possession is handed over to the parties. All expenses and incomes not directly related to particular projects are charged to Profit and loss account of the financial year during which the same are incurred.

Further based on the Guidance Note on Accounting for Real Estate Transaction (Revised 2012) issued by the ICAI, company has followed percentage completion method for projects where construction activity has been commenced from 1st April,2012.

The estimates relating to percentage of completion, costs of completion, area available for sale etc. being of a technical nature are reviewed and revised periodically by the Management and are considered as change in estimates and accordingly, the effect of such changes in estimates is recognized prospectively in the period in which such changes are determined.

Revenue of open plots / land is recognized on the execution of agreement.

ii) Rent

Rental Income is recognized on a time proportion basis as per the contractual obligations agreed with the respective tenant.

iii) Interest

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.9 FOREIGN CURRENCY TRANSACTION :

All the Foreign Currency Transactions are accounted for at the exchange rate prevailing on the date of such transaction.

1.10 SHARE ISSUE EXPENSES :

Share issue expenses are amortized over a period not exceeding 5 years.

1.11 TAXES ON INCOME :

(a) Provision for Income Tax is made on the basis of income for the current accounting period in accordance with the Income tax Act, 1961.

(b) Deferred tax resulting from timing difference between book and tax profit is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize.

(c) The Company has made current tax provision for Minimum Alternate Tax (MAT) under section 115JB of the Income tax Act, 1961. As per the provisions of section 115JAA. MAT Credit receivable has to be recognized as an asset in accordance with the recommendations contained in Guidance note issued by the ICAI. However same is not accounted as receivable in the books of accounts since the management is doubtful of availing the credit against Income tax payable due to uncertainty of taxable profits in the upcoming years

1.12 EARNING PER SHARE:

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.13 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

A provision is recognized when an enterprise has a present obligation as a result of past event it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Possible future obligations or present obligations that may but will probably not require outflow of resources or where the same cannot be reliably estimated, is disclosed as contingent liabilities in the notes to accounts of financial statements. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.14 BORROWING COSTS

Borrowing costs relating to acquisition and/or construction of qualifying assets are

capitalized to the extent that the funds are borrowed and used for purpose of constructing a qualifying asset until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs which are not related to acquisition and/or construction activities nor are incidental thereto are charged to the Statement of profit and loss.

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Mar 31, 2013

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements are prepared in accordance with Generally Accepted Accounting Principles ("GAAP") in India under the historical cost convention, on accrual basis. GAAP comprises mandatory Accounting Standards issued by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

1.2 USE OF ESTIMATES :

The Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Any revision to the accounting estimates is recognized prospectively. :

1.3 TANGIBLE ASSETS AND CAPITAL WORK IN PROGRESS:

Tangible assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable/allocable cost of bringing the asset to its working condition for its intended use. The cost also includes direct cost and other related incidental expenses. Revenues earned, if any during trial run of assets is adjusted against cost of the assets.

Capital work in progress is stated at cost less impairment losses, if any. Cost comprises of expenditure incurred in respect of capital projects under development and includes any attributable/allocable cost and other incidental expenses. Revenues earned, if any before capitalization from such capital project are adjusted against the capital work in progress.

1.4 DEPRECIATION AND AMORTIZATION

Depreciation on all assets of the Company has been provided on Straight Line Method at the rates and in the manner specified in schedule XIV of the CompaniesAct,1956.

1.5 IMPAIRMENT OF ASSETS:

Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceed its recoverable amount, an impairment loss is recognized in the income statement for the items of fixed assets carried at cost. However in the opinion of the management, no provision is required for impairment of asset in the current year.

1.6 INVESTMENTS: !

Investments that are readily realizable and intended to be held for not more than one year are classified as . current investments. All other investments are classified as long-term investments. Current investments I are carried at lower of cost or fair value determined on individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary decline in the value of the investments.

1.7 INVENTORIES:

a) Construction work in progress

The construction work in progress is valued at lower of cost and net realizable value. Cost includes cost of land, development rights, rates and taxes, construction costs, borrowing costs, other direct expenditure, allocated overheads and other incidental expenses.

b) Finished stock of completed projects (ready units)

Finished stock of completed projects and stock in trade of units is valued at lower of cost and net realizable value.

c) Inventory includes certain land purchased in the name of directors who holds the same in trust for the Company

1.8 REVENUE RECOGNITION:

i) Revenue for real estate development/sale

The Company being a Development and Construction Company engaged in the construction of the Industrial Plots Sheds and the Residential Bunglows. During the year under review, the Company has followed the method of accounting for the recognizing of sales on the basis completion of sales method prescribed in AS-9 Revenue Recognition. Hence sales are recognized when possession is handed over to the parties. All expenses and incomes not directly related to particular projects are charged to Profit and loss account of the financial year during which the same are incurred

Further based on the Guidance Note on Accounting for Real Estate Transaction (Revised 2012) issued by the ICAI, company has followed percentage completion method for projects where construction activity has been commenced from 1" April, 2012.

The estimates relating to percentage of completion, costs of completion, area available for sale etc. being of a technical nature are reviewed and revised periodically by the Management and are considered as change in estimates and accordingly, the effect of such changes in estimates is recognized prospectively in the period in which such changes are determined.

Revenue of open plots / land is recognized on the execution of agreement.

ii) Rent

Rental Income is recognized on a time proportion basis as per the contractual obligations agreed with the respective tenant.

iii) Interest

Interest Income is recognized on a time proportion basis taking into account die amount outstanding and the rate applicable.

1.10 SHARE ISSUE EXPENSES:

Share issue expenses are amortized over a period not exceeding 5 years.

1.11 TAXES ON INCOME:

(a) Provision for Income Tax is made on the basis of income for the current accounting period in accordance with the Income tax Act, 1961.

(b) Deferred tax resulting from timing difference between book and tax profit is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize.

(c) The Company has made current tax provision for Minimum Alternate Tax (MAT) under section 115JB of the Income tax Act, 1961. As per the provisions of section 115JAA., MAT Credit receivable has to be recognized as an asset in accordance with the recommendations contained in Guidance note issued by the ICAI. However same is not accounted as receivable in the books of accounts since the management is doubtful of availing the credit against Income tax payable due to uncertainty of taxable profits in the upcoming years

1.12 EARNING PER SHARE:

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.13 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

A provision is recognized when an enterprise has a present obligation as a result of past event it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Possible future obligations or present obligations that may but will probably not require outflow of resources or where the same cannot be reliably estimated, is disclosed as contingent liabilities in the notes to accounts of financial statements. Contingent Assets are neither recognized nor disclosed in the financial statements

1.14 BORROWING COSTS

Borrowing costs relating to acquisition and/or construction of qualifying assets are capitalized to the extent that the funds are borrowed and used for purpose of constructing a qualifying asset until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs which are not related to acquisition and/or construction activities nor are incidental thereto are charged to the Statement of profit and loss.

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Mar 31, 2012

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS :

(a) The Financial Statements are prepared under the historical cost convention in accordance with the generally accepted accounting principals and the provisions of the Companies Act,1956, subject to what is stated herein below, as adopted consistently by the Company.

(b) The Company being a Development and Construction Company engaged in the construction of the Industrial Plots, Sheds & the Residential Bunglows. During the year under review, the Company has followed the method of accounting for the recognizing of sales on the basis completion of sales method prescribed in AS-9 Revenue Recognition. Hence sales are recognized when possession is handed over to the parties. All expenses and incomes not directly related to particular projects are charged to Prof it and loss account of the financial year during which the same are incurred.

(c) All revenue, costs, assets & liabilities are accounted for on accrual basis.

1.2 FIXED ASSETS:

Fixed Assets have been stated at Cost less Depreciation.

1.3 DEPRECIATION:

Depreciation on all assets of the Company has been provided on Straight Line Method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956.

1.4 INVESTMENTS:

I) All the long-term investments are stated at cost of acquisition and provision for diminution is made if the fall in value of investment is other than temporary nature.

ii) All the current investments are stated at cost of fair market value whichever is lower

1.5 FOREIGN CURRENCYTRANSACTION:

All the Foreign Currency Transactions are accounted for at the exchange rate prevailing on the date of such transaction.

1.6 PUBLIC ISSUE EXPENSES:

Such expenses are amortized l/5th in each year.

1.7 TAXES ON INCOME:

(a) Provision for Income Tax is made on the basis of income for the current accounting period in accordance with the Income tax Act, 1961.

(b) Deferred tax resulting from timing differences between book and tax profit is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize.

(c) The Company has made current tax provision for Minimum Alternate Tax (MAT) under Section 115JB of the Income Tax Act, 1961. As per the provisions of Section 115JAA, MAT Credit receivable has to be recognized as an asset in accordance with the recommendations contained in Guidance note issued by the ICAI. However the same is not accounted as receivable in the books of accounts since the management is doubtful of availing the credit against Income Tax Payable due to uncertainty of taxable profits in theupcomingyears.

1.8 REVENUE RECOGNITION:

(I) The company is engaged in construction activity and the sales are recognized when the construction is completed and possession is given. Sales are recognized net off returns and discounts given.

(ii) During the financial year 2008-09 the company had entered into various agreements for sale of its plots, Real Estate etc. In accordance with the practice followed by the company in the past, sales revenue and profit thereon were recognized at the time of entering such agreement based on advance received against sales.

(iii) During the previous financial year due to unfavorable conditions, some of the parties to whom sales had been affected have failed to meet their commitment. Therefore during the previous financial year certain sales agreement effected in 2008-09 & earlier year's stands cancelled and sales return and reversal of profit thereon has been effected during the previous financial year.

The company upto 31st March 2008 considered sales as completed and credited its profit and loss account by the agreed sales consideration of unit sold. Such units sold were not ready for possession; necessary provisions for expenses to be incurred were made on such sales. In F.Y.2008-09 company has changed the method of accounting so as to recognize sale on giving possession of unit sold. In case of sales return affected out of such sales, work in progress is reflected at cost which includes provision for expenses provided in earlieryears.

1.9 BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as a part of the cost of such asset. Other borrowings costs are charged to statement of profit and loss as incurred.

1.10 IMPAIRMENT OF ASSETS

Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognized in the income statement for the items of fixed assets carried at cost. However, in the opinion of the management, no provisions is required for impairment of assets in the current year.

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Mar 31, 2010

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

(a) The Financial Statements are prepared under the historical cost convention in accordance with the generally accepted accounting principals and the provisions of the Companies Act, 1956, subject to what is stated herein below, as adopted consistently by the Company.

(b) The Company being a Development and Construction Company engaged in the construction of the Industrial Plots, Sheds & the Residential Bungalows. During the year under review, the Company has followed the method of accounting for the recognising of sales on the basis completion of sale method prescribed in AS-9 Revenue of Recognition. Hence sales is recognised when possession is handover to the parties. All expenses and incomes not directly related to particular projects are charged to Profit and Loss account of the financial year during which the same are incurred.

(c) All revenue, costs, assets & liabilities are accounted for on accrual basis.

2. FIXEDASSETS:

Fixed Assets have been stated at Cost less Depreciation.

3. DEPRECIATION:

Depreciation on all assets of the Company has been provided on Straight Line Method at the rates and in the manner specifiedin Schedule XIV ofthe Companies Act, 1956.

4. INVESTMENTS:

i) All the long-term investments are staled at cost of acquisition and provision for diminution is made if the fall in value of investment is other than temporary nature. ii) All the current investments are stated at cost or fair market value whichever is lower.

5. FOREIGN CURRENCY TRANSACTION:

All the Foreign Currency Transactions are accounted for at the exchange rate prevailing on the date of such transaction.

6. PUBLIC ISSUE EXPENSES:

Such expenses are amortised l/5thin each year.

7. TAXES ON INCOME

(a) Provision for Income Tax is made on the basis of income for the current accounting period in accordance with the Income TaxAct, 1961.

(b) Deferred Tax resulting from timing differences between book and tax profit is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallise

8. REVENUE RECOGNITION:

(i) The company is engaged in construction activity and the sales are recognise when the construction is completed and possession is given.

(ii) During the previous financial year the company had entered into various agreements for sale of its Plots, Real Estate etc. In accordance with the practise followed by the company in the past, sales revenue and profit thereon were recognised at the time of entering such agreement based on advance received against sales.

(iii) During the year due to unfavourable conditions, some of the parties to whom saleshadbeen effected have failed to meet their commitment. Therefore during the year certain sales agreements effected in earlier years stands cancelled and sales return and reversal of profit thereon has been effected during the year.

The company upto 31st March 2008 considered sale as completed and credited its profit and loss account by the agreed sales consideration of unit sold. Such unit sold were not ready for possession, necessary provisions for expenses to be incurred were made on such sales. InF.Y2008-09 company has^ changed the method of accounting so as to recognise sale on giving possession of unit sold. In case of sales return affected out of such sales, work in progress is reflected at cost which includes provision for expenses provided in earlier years.

9. IMPAIRMENT OF ASSETS

Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognized in the income statement for the items of fixed assets at carried at cost However, in the opinion of the management, no provision is required for impairment of asset in the current year.