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Accounting Policies of Indiabulls Real Estate Ltd. Company

Mar 31, 2014

A Revenue recognition

(i) Revenue from real estate development projects and plots under development is recognized in the financial year in which the agreement to sell or application forms (containing salient terms of agreement to sell) is executed, on the percentage of completion method which is applied on a cumulative basis in each accounting year to the current estimate of contract revenue and related project costs, when the stage of completion of each project reaches a significant level which is estimated to be at least 25% of the total estimated construction cost of the respective projects.

(ii) Revenue and related expenditures in respect of short term works contracts that are entered into and completed during the year are accounted for on accrual basis as they are earned or incurred though revenue and related expenditures in respect of Long term works contracts are accounted for on the basis of "Percentage of Completion Method".

iii) Income from project advisory services is recognized on accrual basis.

iv) Marketing and lease management income are accounted for when the underline contracts are duly executed, on accrual basis.

v) Interest income from deposits,loans & advances and debentures is recognized on accrual basis.

vi) Dividend income is recognized when the right to receive the dividend is unconditionally established.

vii) Profit/(loss) on sale of investments is recognized on the date of the transaction of sale and is computed with reference to the carrying amount of investments.

viii) Incomes from sale of goods are recongised on dispatch of goods. Gross sale value are stated at contractual realizable values and net of sale tax and trade discounts.

b Inventories

Land other than that transferred to real estate projects under development is valued at lower of cost or net realisable value.

Cost includes cost of acquisition and internal and external development costs, construction costs, and development/ construction materials. Inventory work-in-progress represents land under development, cost incurred directly in respect of construction activity and indirect construction cost to the extent to which the expenditure is related to the construction or incidental thereto on unsold real estate projects and land held for development is valued at cost.

Construction materials, stores and spares, tools and consumable are valued at lower of cost or net realisable value, on the basis of first-in first-out method.

c Fixed assets

Recognition and measurement

Tangible fixed assets are stated at cost, net of tax or duty credits availed, less accumulated depreciation and accumulated impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation.

Intangible assets are stated at cost, net of tax or duty credits availed, less accumulated amortization and accumulated impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition.

Depreciation and Amortization

Depreciation on fixed assets is provided on the straight-line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, on a pro-rata basis from the date the asset is ready to put to use till the end of its useful life or till the asset is discarded, whichever is earlier. Individual assets costing up to Rs. 5,000 per item are fully depreciated in the year of purchase. Temporary structures are depreciated over a period of twelve months, on a pro-rata basis, from the date it is ready to put to use.

Intangible assets are amortized over the expected useful life from the date the assets are available for use, as mentioned below:

Description of asset Estimated useful life

computer software 4 years

Capital work-in-progress

Costs of fixed assets under construction are disclosed under capital work-in-progress. Advances paid towards acquisition or construction of fixed assets or intangible assets is included as capital advances under long term loans and advances.

d Borrowing costs

Borrowing costs attributable to the acquisition, construction or production of qualifying assets are capitalised as part of cost of the asset. 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 statement of profit and loss.

e Investments

Investments are classified as long term or current investments. Long term investments are stated at cost. Provision for diminution in value of long term investments is made only if such a decline is other than temporary in the opinion of the management. Current investments are stated at lower of cost or fair value.

f Impairment of assets

At each reporting date, the Company assesses whether there is any indication that an asset may be impaired, based on internal or external factors. If any such indication exists, the Company estimates the recoverable amount of the asset or the cash generating unit. If such recoverable amount of the asset or cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of profit and loss. If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed.

g Employee benefits

The Company''s contribution to provident fund and employee state insurance schemes is charged to the statement of profit and loss or inventorized as a part of real estate project under development, as the case may be. The Company has unfunded defined benefit plans namely compensated absences and gratuity for its employees, the liability for which is determined on the basis of actuarial valuation, conducted annually, by an independent actuary, in accordance with Accounting Standard 15 (Revised 2005) - ''Employee Benefits'', notified under the Companies (Accounting Standards) Rules, 2006, as amended.

Actuarial gains and losses are recognized in the statement of profit and loss or inventorized as a part of real estate project under development, as the case may be.

h Stock based compensation expense

Stock based compensation expense are recognized in accordance with the guidance note on ''Accounting for employee share based payments'' issued by the Institute of Chartered Accountants of India, which establishes financial accounting and reporting principles for employee share based payment plans. Employee stock compensation costs are measured based on the estimated intrinsic value of the stock options on the grant date. The compensation expense is amortized over the vesting period of the options.

i Leases

In case of assets taken on operating lease, the lease rentals are charged to the statement of profit and loss in accordance with Accounting Standard 19 (AS 19) - ''Leases'', as notified under the Companies (Accounting Standards) Rules, 2006, as amended.

j Foreign currency transactions

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying the exchange rate between the reporting currency and the foreign currency at the date of the transaction to the foreign currency amount. Conversion

Foreign currency monetary items are converted to reporting currency using the closing rate of reporting date. Non monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or any other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange Differences

Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise except those arising from investments in non-integral operations.

Exchange differences arising on monetary items that in substance forms part of the Company''s net investment in a non-integral foreign operation are accumulated in a foreign currency translation reserve in the financial statements until the disposal of the net investment, at which time they are recognized in the statement of profit and loss.

k Taxes on income

Current tax

Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations.

Deferred tax

Deferred tax resulting from timing differences between taxable income and accounting income is accounted for at the current rate of tax or substantively enacted tax rates as at reporting date, to the extent that the timing differences are expected to crystallize.

Deferred tax assets are recognized where realization is reasonably certain whereas in case of carried forward losses or unabsorbed depreciation, deferred tax assets are recognized only if there is a virtual certainty supported by convincing evidence that such deferred tax assets will be realized. Deferred tax assets are reviewed for the appropriateness of their respective carrying values at each reporting date.

l Provisions, contingent liabilities and contingent assets

Provisions are recognized only when there is a present obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for:

(i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or,

(ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

m Earnings per equity share

Basic earnings per share is computed by dividing profit available to equity shareholders by weighted average number equity shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of equity and dilutive potential equity shares outstanding during the year.

n Share issue/Buyback expenses

Share issue/Buyback expenses are adjusted against securities premium account to the extent of balance available and thereafter, the balance portion is charged off to statement of profit and loss, as incurred.

o Preliminary expenses

Preliminary expenses are adjusted against securities premium account (net of tax) to the extent of balance available and thereafter, the balance portion is charged off to the statement of profit and loss, as incurred.


Mar 31, 2012

A) Revenue recognition

i) Revenue from real estate development projects and plots under development is recognized in the financial year in which the agreement to sell or application forms (containing salient terms of agreement to sell) is executed, on the percentage of completion method which is applied on a cumulative basis in each accounting year to the current estimate of contract revenue and related project costs, when the stage of completion of each project reaches a significant level which is estimated to be at least 25% of the total estimated construction cost of the respective projects.

ii) Revenue and related expenditures in respect of short term works contracts that are entered into and completed during the year are accounted for on accrual basis as they are earned or incurred though revenue and related expenditures in respect of Long term works contracts are accounted for on the basis of "Percentage of Completion Method".

iii) Income from project advisory services is recognized on accrual basis.

iv) Marketing and lease management income are accounted for when the underline contracts are duly executed, on accrual basis.

v) Interest income from deposits is recognized on accrual basis.

vi) Dividend income is recognized when the right to receive the dividend is unconditionally established.

vii) Profit/(loss) on sale of investments is recognized on the date of the transaction of sale and is computed with reference to the carrying amount of investments.

viii) Incomes from sale of goods are recognized on dispatch of goods. Gross sale are stated at contractual realizable values and net of sale tax and trade discounts.

b) Inventories

Land other than that transferred to real estate projects under development is valued at lower of cost or net realizable value.

Cost includes cost of acquisition and internal and external development costs, construction costs, and development/ construction materials. Inventory work-in-progress represents land under development, cost incurred directly in respect of construction activity and indirect construction cost to the extent to which the expenditure is related to the construction or incidental thereto on unsold real estate projects is valued at cost.

Construction materials, stores and spares, tools and consumable are valued at lower of cost or net realizable value, on the basis of first-in first-out method.

c) Fixed assets

Recognition and measurement

Tangible fixed assets are stated at cost, net of tax or duty credits availed, less accumulated depreciation and accumulated impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation.

Intangible assets are stated at cost, net of tax or duty credits availed, less accumulated amortization and accumulated impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition.

Depreciation and Amortization

Depreciation on fixed assets is provided on the straight-line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, on a pro-rata basis from the date the asset is ready to put to use till the end of its useful life or till the asset is discarded, whichever is earlier. Individual assets costing up to Rs. 5,000 per item are fully depreciated in the year of purchase. Temporary structures are depreciated over a period of twelve months, on a pro-rata basis, from the date it is ready to put to use.

Intangible assets are amortized over the expected useful life from the date the assets are available for use, as mentioned below:

Description of asset Estimated useful life

computer software 4 years

Capital work-in-progress

Costs of fixed assets under construction are disclosed under capital work-in-progress. Advances paid towards acquisition or construction of fixed assets or intangible assets is included as capital advances under long term loans and advances.

d) Borrowing costs

Borrowing costs attributable to the acquisition, construction or production of qualifying assets are capitalized as part of cost of the asset. 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 Statement of Profit and Loss.

e) Investments

Investments are classified as long term or current investments. Long term investments are stated at cost. Provision for diminution in value of long term investments is made only if such a decline is other than temporary in the opinion of the management. Current investments are stated at lower of cost or fair value.

f) Impairment of assets

At each reporting date, the Company assesses whether there is any indication that an asset may be impaired, based on internal or external factors. If any such indication exists, the Company estimates the recoverable amount of the asset or the cash generating unit. If such recoverable amount of the asset or cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed.

g) Employee benefits

The Company's contribution to provident fund and employee state insurance schemes is charged to the Statement of Profit and Loss or inventorized as a part of real estate project under development, as the case may be. The Company has unfunded defined benefit plans namely compensated absences and gratuity for its employees, the liability for which is determined on the basis of actuarial valuation, conducted semi-annually, by an independent actuary, in accordance with Accounting Standard 15 (Revised 2005) - 'Employee Benefits', notified under the Companies (Accounting Standards) Rules, 2006, as amended.

Actuarial gains and losses are recognized in the Statement of Profit and Loss or inventoried as a part of real estate project under development, as the case may be.

h) Stock based compensation expense

Stock based compensation expense are recognized in accordance with the guidance note on 'Accounting for employee share based payments' issued by the Institute of Chartered Accountants of India, which establishes financial accounting and reporting principles for employee share based payment plans. Employee stock compensation costs are measured based on the estimated intrinsic value of the stock options on the grant date. The compensation expense is amortized over the vesting period of the options.

i) Leases

In case of assets taken on operating lease, the lease rentals are charged to the Statement of Profit and Loss in accordance with Accounting Standard 19 (AS 19) -'Leases', as notified under the Companies (Accounting Standards) Rules, 2006, as amended.

j) Foreign currency transactions Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying the exchange rate between the reporting currency and the foreign currency at the date of the transaction to the foreign currency amount.

Conversion

Foreign currency monetary items are converted to reporting currency using the closing rate. Non monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or any other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange Differences

Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the Statement of Profit and Loss in the year in which they arise except those arising from investments in non-integral operations.

Exchange differences arising on monetary items that in substance forms part of the Company's net investment in a non-integral foreign operation are accumulated in a foreign currency translation reserve in the financial statements until the disposal of the net investment, at which time they are recognized in the Statement of Profit and Loss.

k) Taxes on income

Current tax

Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations.

Deferred tax

Deferred tax resulting from timing differences between taxable income and accounting income is accounted for at the current rate of tax or substantively enacted tax rates as at reporting date, to the extent that the timing differences are expected to crystallize.

Deferred tax assets are recognized where realization is reasonably certain whereas in case of carried forward losses or unabsorbed depreciation, deferred tax assets are recognized only if there is a virtual certainty supported by convincing evidence that such deferred tax assets will be realized. Deferred tax assets are reviewed for the appropriateness of their respective carrying values at each reporting date.

I) Provisions, contingent liabilities and contingent assets

Provisions are recognized only when there is a present obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for:

(i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or,

(ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

m) Earnings per equity share

Basic earnings per share is computed using the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of equity and dilutive potential equity shares outstanding during the year.

n) Share issue expenses

Share issue expenses are adjusted against securities premium account to the extent of balance available and thereafter, the balance portion is charged off to Statement of Profit and Loss, as incurred.

o) Preliminary expenses

Preliminary expenses are adjusted against securities premium account (net of tax) to the extent of balance available and thereafter, the balance portion is charged off to the Statement of Profit and Loss, as incurred.


Mar 31, 2010

A) Basis of Accounting:

The fnancial statements are prepared under the historical cost convention on an accrual basis, in accordance with the generally accepted accounting principles in India and in compliance with the ap- plicable accounting standards as notifed under the Companies (Accounting Standards) Rules, 2006, as amended.

b) Use of Estimates:

The presentation of fnancial statements in con- formity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the fnancial statements and the reported amount of revenues and expenses during the reporting year. Differences between the actual results and estimates are recognised in the year in which the results are known / materialised.

c) Revenue Recognition:

i) Income from Real Estate Project Advisory is recognised on accrual basis.

ii) Revenue and related expenditures in respect of short term works contracts that are entered into and completed during the year are accounted for on accrual basis as they are earned or incurred.

iii) Interest income from deposits is recognised on accrual basis.

iv) Dividend income is recognised when the right to receive the dividend is unconditionally established.

v) Proft on sale of investments is recognised on the date of the transaction of sale and is computed with reference to the cost of invest- ments.

vi) Incomes from sale of goods are recongised on dispatch of goods. Gross sale are stated at contractual realisable values and net of sale tax and trade discounts.

d) Fixed Assets:

Tangible Fixed Assets are stated at cost, net of tax / duty credits availed, less accumulated depreciation / impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation. Intangible assets are stated at cost, net of tax / duty credits availed, less accumulated amortisation / impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition.

e) Depreciation / Amortisation:

Depreciation on Fixed Assets is provided on the straight-line method at the rates and as per the manner prescribed in Schedule XIV of the Compa- nies Act, 1956.

Depreciation on additions / deletions to fxed assets is provided on pro-rata basis from/till the date the asset is put to use / discarded. Individual assets costing less than Rs. 5,000 are fully depreciated in the year of purchase.

Intangible assets are amortised over the expected useful life from the date the assets are available for use, as mentioned below:

Description of asset Estimated useful life

Software Four years

f) Impairment of Assets:

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired, based on internal or external factors. If any such indication exists, the Company esti- mates the recoverable amount of the asset or the cash generating unit. If such recoverable amount of the asset or cash generating unit to which the asset belongs is less than its carrying amount, the carry- ing amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Proft and Loss Account. If, at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and impairment losses previously recognised are ac- cordingly reversed.

g) Borrowing Costs:

Borrowing costs attributable to the acquisition, construction or production of qualifying assets are capitalised as part of cost of the asset. 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 revenue.

h) Investments:

Investments are classifed as long term or current investments. Long term investments are stated at cost and provision for diminution in their value, other than temporary, is recorded in the books of account. Current investments are stated at the lower of cost or fair value.

i) Taxes on Income:

Current Tax is determined as the tax payable in respect of taxable income for the year and is com- puted in accordance with relevant tax regulations. Deferred Tax resulting from timing differences between taxable income and accounting income is accounted for at the current rate of tax / substan- tively enacted tax rates as on the Balance Sheet date, to the extent that the timing differences are expected to crystallise.

Deferred Tax Assets are recognised where reali- sation is reasonably certain whereas in case of carried forward losses or unabsorbed depreciation, Deferred Tax Assets are recognised only if there is virtual certainty supported by convincing evidence that such deferred tax assets will be realised. Deferred Tax Assets are reviewed for the appropri- ateness of their respective carrying values at each Balance Sheet data.

j) Leases:

In case of assets taken on operating leases, lease rentals are charged to the proft and loss account in accordance with Accounting Standard 19 (AS 19) - Leases as notifed under the Companies (Account- ing Standards) Rules, 2006, as amended.

k) Foreign Currency Transactions:

As stipulated in Accounting Standard 11, The Effects of Changes in Foreign Exchange Rates, noti- fed under the Companies (Accounting Standards) Rules, 2006, as amended, foreign currency opera- tions of the Company are classifed as (a) Integral Operations and (b) Non Integral Operations. Overseas subsidiaries are treated as Non Integral Operations.

i). Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying the exchange rate between the reporting currency and the foreign cur- rency at the date of the transaction to the foreign currency amount.

ii). Conversion

Foreign currency monetary items are converted to reporting currency using the closing rate. Non monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transac- tion; and non-monetary items which are carried at fair value or any other similar valuation denomi- nated in a foreign currency are reported using the exchange rates that existed when the values were determined.

iii). Exchange Differences

Exchange differences arising on the settlement/ conversion of monetary items or on reporting, the companys monetary items at rates different from those at which they were initially recorded, are rec- ognised as income or expense in the year in which they arise except those arising from investments in non-integral operations.

Exchange differences arising on monetary items that in substance forms part of the Companys net investment in a non-integral foreign operation are accumulated in a foreign currency translation re- serve in the balance sheet until the disposal of the net investment, at which time they are recognised as income or expenses.

l) Employee Benefts:

Short-term employee benefts are recognised as an expense at the undiscounted amount in the proft and loss account for the year in which the related service is rendered. The Companys contribution to Provident Fund and Employee State Insurance Schemes (defned contribution schemes) is charged to the Proft and Loss Account Post employment and other long term employee benefts for its eligible employees are recognised as an expense in the proft and loss account, for the year in which the employee has rendered services. The Company has unfunded defned beneft plans, namely compensated absences and gratuity the liability for which is determined on the basis of actuarial valuation, conducted semi-annually, by an independent actuary, in accordance with Account- ing Standard 15 (AS 15) - Employee Benefts, noti- fed under the Companies (Accounting Standards) Rules, 2006, as amended. The expense is recogn- ised at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses are recognised in the Proft and Loss account as income or expenses.

m) Deferred Employee Stock Compensation Costs:

Deferred Employee Stock Compensation Costs are recognised in accordance with the Guidance Note on Accounting for Employee Share Based Payments issued by the Institute of Chartered Accountants of India, which establishes fnancial accounting and reporting principles for employee share based pay- ment plans. Employee stock compensation costs are measured based on the estimated intrinsic or fair value (as elected by the Company in respect of its different Employees Share Based Payment Plans) of the stock options on the grant date. The compensation expense is amortised over the vest- ing period of the options.

n) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised only when there is a pres- ent obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for:

i) Possible obligations which will be confrmed only by future events not wholly within the control of the Company or,

ii) Present obligations arising from past events where it is not probable that an outfow of resources will be required to settle the obliga- tion or a reliable estimate of the amount of the obligation cannot be made.

Contingent Assets are not recognised in the fnan- cial statements since this may result in the recogni- tion of income that may never be realised.

o) Share Issue Expenses:

Share Issue Expenses are adjusted against Securi- ties Premium Account to the extent of balance available and thereafter, the balance portion is charged off to the proft and loss account, as incurred.

p) Earnings Per Share:

Basic Earnings per Share is computed using the weighted average number of equity shares outstanding during the year. Diluted Earnings per Share is computed using the weighted average number of equity and dilutive potential equity shares outstanding during the year.

q) Preliminary Expenses:

Preliminary Expenses are adjusted against Securi- ties Premium Account (net of tax) to the extent of balance available and thereafter, the balance por- tion is charged off to the proft and loss account, as incurred.






Mar 31, 2009

A. Basis of Accounting:

The financial statements are prepared underthe historical cost convention on an accrual basis, in accordance with the generally accepted accounting principles in India and in compliance with the applicable accounting standards as notified under the Companies (Accounting Standards)Rules2006,asamended.

b. Use of Estimates:

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting year. Differences between the actual results and estimates are recognized in the year in which the results are known/ materialized.

c. Revenue Recognition:

i. Incomefrom Real Estate Project Advisory is recognized on accrual basis.

ii. Interest income from deposits is recognized on accrual basis.

iii. Dividend income is recognized when the right to receive the dividend is unconditionally established.

iv. Profit on sale of investments is recognized on the date of the transaction of sale and is computed with reference to the cost of investments.

d. Fixed Assets:

Tangible Fixed Assets are stated at cost, netof tax/duty credits availed, less accumulated depreciation/impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation.

Intangible assets are stated at cost, net of tax / duty credits availed, less accumulated amortisation / impairment losses, if any. Cost includes origin alcost of acquisition including incidental expenses related to such acquisition.

e. Depreciation/Amortisation:

Depreciation on Fixed Assets is provided on the straight-line method at the rates and as per the manner prescribed in Schedule XIV of the CompaniesAct,1956.

Depreciation on additions / deletions to fixed assets is provided on pro-rata basis from/till the date the asset is put to use / discarded. Individual as sets costing lessthan Rs.5,000 are fully depreciated in the year of purchase.

Intangible assets are amortized over the expected usefull if from the date the assets are available for use as mentioned below:

Description of asset Estimated useful life

Softie Four years

f. Impairment of Assets:

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired, based on internal or external factors. If any such indication exists, the Company estimates the recoverable amount of the asset or the cash generating unit. If such recoverable amount of the asset or cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If, at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the reassessed recoverable amount Impairment losses previously recognized are accordingly reversed.

g. Borrowing Cost:

Borrowing costs attribut able to the acquisition,construction or production of qualifying as sets are capitalised as part of cost of the asset.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 revenue.

h. Investments:

Investments are classified as long term or current investments. Long term investments are stated at cost and provision for diminution in their value. other than temporary is recorded in the books of account Current investments are stated at the lower of cost or fair value.

i.Taxes on Income:

Current Tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations.

Deferred Tax resulting from timing differences between taxable income and accounting income is accounted for at the current rate of tax / substant -ively enacted tax rates as on the Balance Sheet date to the extent that the timing differences are expected to crystallize.

Deferred Tax Assets are recognized where realization is reasonably certain whereas in case of carried forward losses or unabsorbed depreciation, Deferred Tax Assets are recognized only ifthere is virtual certainty supported by convincing evidence that such deferred tax assets will be realised.

Deferred Tax Assets are reviewed for the appropriateness of their Lpective carrying values at each Balance Sheet date.

j.Fringe Benefits Tax:

Fringe Benefits Tax is calculated in accordance with the provisions of the Income TaxAct, 1961.

k. Leases:

In case of assets taken on operating leases, lease rentals are charged to the profit and loss account in accordance with Accounting Standard 19 (AS 19) - Leases as notified underthe Companies (Accounting Standards) Rules, 2006, as amended.

l. Foreign Currency Transactions:

As stipulated in Accounting Standard 11, The Effects of Changes in Foreign Exchange Rates, notified underthe Companies (Accounting Standards) Rules, 2006, as amended, foreign currency operations of the Company are classified as (a) Integral Operations and (b) Non Integral Operations Overse as subsidiaries are treated as Non Integral Operations.

i. Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying the exchange rate between the reporting currency and the foreign currency at the date of the transaction to the foreign currency amount.

ii. Conversion

Foreign currency monetary items are converted to reporting currency using the closing rate. Non monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or any other similar valuation denominated inaforeign currency are reported using the exchange rates that existed when the values were determined.

iii. Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting companys monetary items at rates different from those at which they were initially recorded, are recognized as income or expense in the year in which they arise except those arising from investments in non- integral operations.

Exchange differences arising on monetary items that in substance forms part of the Companys net investment in a non-integral foreign operation are accumulated in a foreign currency translation reserve in the balance sheet.

m.Employee Benefits:

The Companys contribution to Provident Fund and Employee State Insurance Schemes is charged to the profit and loss account. The Company has unfunded defined benefit plans namely compensated absences and gratuity for its employees, the liability for which is determined on the basis of actuarial valuation, conducted semi-annually, by an independent actuary in accordance with Accounting Standard 15 (Revised 2005) - Employee Benefits, notified underthe Companies (Accounting Standards) Rules, 2006, as amended.

Actuarial gains and losses are recognized in profit and loss account as income or expenses.

n.Deferred Employee Stock Compensation Costs:

Deferred EmployeeStock Compensation Costsare recognized inaccordance with the Guidance Note on Accounting for Employee Share Based Payments issued by the Institute of Chartered Accountants of India, which establishes financial accounting and reporting principles for employee share based payment plans. Employee stock compensation costs are measured based on the estimated intrinsic or fair value(as elected by the Co The compens ation expense is a mortized over the vesting period of the options.

o. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized only when there is a present obligation as a result of past events.and when are liable estimate of the amount of obligation can be made. Contingent liability is disclosed for:

i.Possible obligations which will be confirmed only by future events not wholly within the control of the Company or,

ii. Present obligations arising from past events when or are liable estimate of the amount of the obligation cannot be made.

Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

p. Share Issue Expenses:

Share Issue Expenses are adjusted against Securities Premium Account to the extent of balance available and thereafter, the balance portion is charged off to the profit and loss account,as incurred.

q. Earnings Per Share:

Basic Earnings per Share is computed using the weighted a verage number of equity shares outstanding during the year.Diluted Earnings per Share is computed using the weighted a ver age number of equity and dilutive potential equity shares outstanding during

r. Preliminary Expenses:

Preliminary Expenses are adjusted against Securities Premium Account (net of tax) to the extent of balance available and thereafter, the balance portion is charged off to the profitand loss account, as incurred.

 
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