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Accounting Policies of Manjeera Constructions Ltd. Company

Mar 31, 2014

1. Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of Companies Act, 1956. The financial statements have been prepared on accrual basis under historical convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2. Use of estimates

The Preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between the actual results and the estimates are recognized in the periods in which the results are known / materialise.

3. Fixed assets

Fixed assets are carried at cost of acquisition less accumulated depreciation and impairment losses, if any.

4. Depreciation and amortisation

Depreciation on fixed assets has been provided on written down value method as per the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

5. Borrowing costs

a. Borrowing costs specifically for the purpose of acquisition and construction of qualifying assets that are directly attributable to the qualifying asset, is capitalized as part of the cost of the asset.

b. Borrowing costs not attributable to the acquisition of any qualifying asset are recognised as expense in the period in which they are incurred.

6. Impairment of Assets

The carrying value of assets, other than inventory, is reviewed at each balance sheet date for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised whenever the carrying amount of an asset exceeds its recoverable amount.

7. Investments

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments.

8. Inventories

Properties under development represent costs incurred in respect of unsold area of properties under development and costs incurred on projects/ portion of projects when revenue is yet to be recognised. Such costs include cost of land, development rights, direct materials, labour, borrowing costs and an appropriate portion of construction overheads based on normal operating capacity. Borrowing costs directly attributable to properties under development which necessarily take a substantial period of time to get ready sale. Any expected loss on real estate projects is recognised as an expense when it is certain that the total cost will exceed the total revenue.

Building materials and consumables are valued at cost. Cost of building materials and consumables comprises of all costs of purchase and other costs incurred in bringing the inventories to their present location and condition.

9. Foreign currency transactions

Foreign currency transactions are recorded using the exchange rates prevailing on the date of the respective transactions. Exchange difference arising on foreign currency transactions settled during the year is recognized in the profit and loss account.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by forwarded exchange contracts are translated at year-end rates. The resultant exchange difference is recognized in the profit and loss account. Non-monetary assets are recorded at the rates prevailing on the date of the transaction.

10. Revenue recognition

i. On property and infrastructure development projects

a. Recognized on the ''Percentage of Completion Method'' of accounting. Revenue comprises the aggregate amounts of sale price in terms of the agreements entered into and is recognized on the basis of percentage of actual costs incurred thereon, including proportionate land cost and total estimated cost of the projects under execution, subject to such actual costs being 30 percent or more of the total estimated cost.

b. Where aggregate of the payment received provide insufficient evidence of buyers commitment to make the complete payment, revenue is recognized only to the extent of realization.

c. The estimates of the saleable areas and costs are reviewed periodically by the management and any effect of changes in estimates is recognized in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.

ii. On construction contracts (undertaken as contractors) The Company follows percentage completion method for accounting of construction contracts undertaken.

iii. Price escalation is carried out in the year of settlement of claims/bills

iv. Rent receipts are recognised on accrual basis.

v. Interest on deployment of funds is recognised using the time-proportion method, based on interest rates implicit in the transaction.

vi. Property management services are recognised on rendering services and billing thereof.

vii. Dividend income is accounted when the right to receive dividend is established.

11. Revenue receipts on joint venture contracts

In work sharing joint venture agreements revenues, expenses, assets and liabilities are accounted in the Company''s books to the extent work is executed by the Company.

12. Income tax

i. Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax act, 1961.

ii. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance sheet when it is probable that future economic benefit associated with it will flow to the Company.

iii. Deferred tax is recognized on timing differences being the differences between Taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward losses are recognized only if there is virtual certainty that there will be sufficient future taxable income available to realize such assets.

13. Employee benefits Defined contribution plans

The Company makes specified monthly contribution towards employee provident fund to Government administered provident fund scheme, which is a defined contribution scheme. The Company''s contribution is recognized as an expense in the statement of profit and loss during the period in which the employee renders the related service.

Defined benefits plan

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. Gratuity is a non-funded liability. The liability recognised in the Balance Sheet in respect of defined benefit plans is the present value of the defined benefit obligation at the Balance Sheet date. The calculation of the Company''s obligation under the plan is performed annually by qualified independent actuary using the projected unit credit method. Actuarial gains and losses arising during the year are immediately recognised in the statement of profit and loss.

Compensated absences

Compensated absences, is a long-term employee benefit, and accrued based on an actuarial valuation done as per projected unit credit method as at the Balance Sheet date, carried out by an independent actuary. Actuarial gains and losses arising during the year are immediately recognised in the statement of profit and loss

14. Earning Per Share (EPS)

In arriving at the EPS, the Company''s net profit after tax, computed in terms of the GAAP, is divided by the weighted average number of equity shares outstanding on the last day of the reporting period. The EPS thus arrived at is known as ''Basic EPS''. To arrive at the diluted EPS the net profit after tax, referred above, is divided by the weighted average number of equity shares, as computed above and the weighted average number of equity shares that could have been issued on conversion of shares having potential dilutive effect subject to the terms of issue of those potential shares. The date/s of issue of such potential shares determine the amount of the weighted average number potential equity shares.

15. Prior period items

Prior period items are included in the respective heads of account and material items are disclosed by way of notes to accounts.

16. Provisions and contingent liabilities

The Company creates a provision when there is a present obligation as a result of past event that probably requires an out flow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingency liability as made when there is a possible obligation or a present obligation that may, but probability will not, require an out flow of resources. Where there is possible obligation or a present obligation in respect of which the likely hood of outflow of resources is remote, no provision or disclosure is made.

Provision for onerous contracts, i.e., contracts where the expected unavoidable costs of meeting the obligation under the contact exceeds the economic benefits expected to be received under it, are recognized when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event, based on reliable estimate of such obligation.

17. Leases

Operating lease payments are recognized as an expense in the profit and loss account on the basis of lease agreement.

18. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on available information.

19. Service tax input credit

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing / utilizing the credits.


Mar 31, 2013

1. Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of Companies Act, 1956. The financial statements have been prepared on accrual basis under historical convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2. Use of estimates

The Preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between the actual results and the estimates are recognized in the periods in which the results are known / materialise.

3. Fixed assets

Fixed assets are carried at cost of acquisition less accumulated depreciation and impairment losses, if any.

4. Depreciation and amortisation

Depreciation on fixed assets has been provided on written down value method as per the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

5. Borrowing costs

a. Borrowing costs specifically for the purpose of acquisition and construction of qualifying assets that are directly attributable to the qualifying asset, is capitalized as part of the cost of the asset.

a. Borrowing costs not attributable to the acquisition of any qualifying asset are recognised as expense in the period in which they are incurred.

6. impairment of Assets

The carrying value of assets, other than inventory, is reviewed at each balance sheet date for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised whenever the carrying amount of an asset exceeds its recoverable amount.

7. investments

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments.

8. inventories

Inventories are valued at the lower of cost and the net realisable value after providing other losses, wherever considered necessary. Property and infrastructure development projects under development are valued at cost. Cost includes direct development expenditure, borrowing cost, appropriate overheads and all charges in bringing the inventory to the point of sale.

9. Foreign currency transactions

Foreign currency transactions are recorded using the exchange rates prevailing on the date of the respective transactions. Exchange difference arising on foreign currency transactions settled during the year is recognized in the profit and loss account.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by forwarded exchange contracts are translated at year-end rates. The resultant exchange difference is recognized in the profit and loss account. Non-monetary assets are recorded at the rates prevailing on the date of the transaction.

10. Revenue recognition

i. on property and infrastructure development projects

a. Recognized on the ''Percentage of Completion Method'' of accounting. Revenue Comprises the aggregate amounts of sale price in terms of the agreements entered Into and is recognized on the basis of percentage of actual costs incurred thereon, Including proportionate land cost and total estimated cost of the projects under Execution, subject to such actual costs being 30 percent or more of the total estimated cost.

b. Where aggregate of the payment received provide insufficient evidence of buyers commitment to make the complete payment, revenue is recognized only to the extent of realization.

b. The estimates of the saleable areas and costs are reviewed periodically by the management and any effect of changes in estimates is recognized in the period such changes are determined. however, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.

ii. On construction contracts (undertaken as contractors) The Company follows percentage completion method for accounting of Construction contracts undertaken.

iii. Price escalation is carried out in the year of settlement of claims/bills

iv. Rent Receipts are recognised on accrual basis.

v. Interest on deployment of funds is recognised using the time-proportion method, based on interest rates implicit in the transaction.

vi. Property management services are recognised on rendering services and billing thereof.

vii. Dividend income is accounted when the right to receive dividend is established.

11. Revenue receipts on joint venture contracts

In work sharing joint venture agreements revenues, expenses, assets and liabilities are accounted in the Company''s books to the extent work is executed by the Company.

12. income tax

i. Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax act, 1961.

ii. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance sheet when it is probable that future economic benefit associated with it will flow to the Company.

iii. Deferred tax is recognized on timing differences being the differences between Taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward losses are recognized only if there is virtual certainty that there will be sufficient future taxable income available to realize such assets.

13. Employee benefits

a. Short Term Employee Benefits:

All employees'' benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service.

b. Long Term and Post-employment benefits:

1. Defined contribution plans: Defined contribution plans are post employment benefit plans under which the Company pays fixed contributions into separate entities (funds) or to financial institutions or state managed benefit schemes. The Company contributions to defined contribution plans are recognized in the Statement of Profit and Loss in the financial year to which they relate. The Company makes specified monthly contributions towards Employee Provident Fund Scheme and Employee State Insurance Scheme.

2. Defined Benefit obligation: Gratuity liability is defined obligation and is provided for on the basis of an actuarial valuation on Projected Unit Credit method made at the end of each financial year.

14. Earning Per Share (EPS)

In arriving at the EPS, the Company''s net profit after tax, computed in terms of the GAAP, is divided by the weighted average number of equity shares outstanding on the last day of the reporting period. The EPS thus arrived at is known as ''Basic EPS''. To arrive at the diluted EPS the net profit after tax, referred above, is divided by the weighted average number of equity shares, as computed above and the weighted average number of equity shares that could have been issued on conversion of shares having potential dilutive effect subject to the terms of issue of those potential shares. The date/s of issue of such potential shares determine the amount of the weighted average number potential equity shares.

15. Prior period items

Prior period items are included in the respective heads of account and material items are disclosed by way of notes to accounts.

16. Provisions and contingent liabilities

The Company creates a provision when there is a present obligation as a result of past event that probably requires an out flow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingency liability as made when there is a possible obligation or a present obligation that may, but probability will not, require an out flow of resources. Where there is possible obligation or a present obligation in respect of which the likely hood of outflow of resources is remote, no provision or disclosure is made.

Provision for onerous contracts, i.e., contracts where the expected unavoidable costs of meeting the obligation under the contact exceeds the economic benefits expected to be received under it, are recognized when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event, based on reliable estimate of such obligation.

17. Leases

Operating lease payments are recognized as an expense in the profit and loss account on the basis of lease agreement.

18. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on available information.

19. Service tax input credit

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing / utilizing the credits.


Mar 31, 2012

1.1 Basis of Accounting and Preparation of Financial Statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of Companies Act, 1956. The financial statements have been prepared on accrual basis under historical convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of Estimates

The Preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between the actual results and the estimates are recognized in the periods in which the results are known / materialise.

1.3 Fixed Assets

Fixed assets are carried at cost of acquisition less accumulated depreciation and impairment losses, if any.

1.4 Depreciation and Amortisation

Depreciation on fixed assets has been provided on written down value method as per the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

1.5 Borrowing Costs

a) Borrowing costs specifically for the purpose of acquisition and construction of qualifying assets that are directly attributable to the qualifying asset, is capitalized as part of the cost of the asset.

B) Borrowing costs not attributable to the acquisition of any qualifying asset are recognised as expense in the period in which they are incurred.

1.6 Impairment of Assets

The carrying value of assets, other than inventory, is reviewed at each balance sheet date for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised whenever the carrying amount of an asset exceeds its recoverable amount.

1.7 Investments

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments.

1.8 Inventories

Inventories are valued at the lower of cost and the net realisable value after providing other losses, wherever considered necessary. Property and infrastructure development projects under development are valued at cost. Cost includes direct development expenditure, borrowing cost, appropriate overheads and all charges in bringing the inventory to the point of sale.

1.9 Foreign Currency Transactions

Foreign currency transactions are recorded using the exchange rates prevailing on the date of the respective transactions. Exchange difference arising on foreign currency transactions settled during the year is recognized in the profit and loss account.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by forwarded exchange contracts are translated at year-end rates. The resultant exchange difference is recognized in the profit and loss account. Non-monetary assets are recorded at the rates prevailing on the date of the transaction.

1.10 Revenue Recognition

i. On property and infrastructure development projects

a) Recognized on the 'Percentage of Completion Method' of accounting. Revenue comprises the aggregate amounts of sale price in terms of the agreements entered into and is recognized on the basis of percentage of actual costs incurred thereon, including proportionate land cost and total estimated cost of the projects under execution, subject to such actual costs being 30 percent or more of the total estimated cost.

b) Where aggregate of the payment received provide insufficient evidence of buyers commitment to make the complete payment, revenue is recognized only to the extent of realization.

c) The estimates of the saleable areas and costs are reviewed periodically by the management and any effect of changes in estimates is recognized in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.

ii. On construction contracts (undertaken as contractors) the Company follows percentage completion method for accounting of construction contracts undertaken.

iii. Price escalation is carried out in the year of settlement of claims/bills

iv. Rent Receipts are recognized on accrual basis.

v. Interest on deployment of funds is recognised using the time-proportion method, based on interest rates implicit in the transaction.

vi. Property management services are recognised on rendering services and billing thereof.

vii. Dividend income is accounted when the right to receive dividend is established.

1.11 Revenue Receipts on Joint Venture Contracts

In work sharing joint venture agreements revenues, expenses, assets and liabilities are accounted in the Company's books to the extent work is executed by the Company.

1.12 Income Tax

a) Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

b) Minium Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly,

MAT is recognized as an asset in the Balance sheet when it is probable that future economic benefit associated with it will flow to the Company.

c) Deferred tax is recognized on timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward losses are recognized only if there is virtual certainity that there will be sufficient future taxable income available to realize such assets.

1.13 Employee Benefits

i. Short Term Employee Benefits:

All employees' benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service.

ii. Long Term and Post-employment benefits:

a) Defined Contribution Plans

Defined contribution plans are post employment benefit plans under which the Company pays fixed contributions into separate entities (funds) or to financial institutions or state managed benefit schemes. The Company contributions to defined contribution plans are recognized in the Statement of Profit and Loss in the financial year to which they relate. The Company makes specified monthly contributions towards Employee Provident Fund Scheme and Employee State Insurance Scheme.

b) Defined Benefit Obligation

Gratuity liability is defined obligation and is provided for on the basis of an actuarial valuation on Projected Unit Credit method made at the end of each financial year.

1.14 Earning Per Share (EPS)

In arriving at the EPS, the Company's net profit after tax, computed in terms of the GAAP, is divided by the weighted average number of equity shares outstanding on the last day of the reporting period. The EPS thus arrived at is known as 'Basic EPS'. To arrive at the diluted EPS the net profit after tax, referred above, is divided by the weighted average number of equity shares, as computed above and the weighted average number of equity shares that could have been issued on conversion of shares having potential dilutive effect subject to the terms of issue of those potential shares. The date/s of issue of such potential shares determine the amount of the weighted average number potential equity shares.

1.15 Prior Period Items

Prior period items are included in the respective heads of account and material items are disclosed by way of notes to accounts.

1.16 Provisions and contingent liabilities

The Company creates a provision when there is a present obligation as a result of past event that probably requires an out flow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingency liability as made when there is a possible obligation or a present obligation that may, but probability will not, require an outflow of resources. Where there is possible obligation or a present obligation in respect of which the likely hood of outflow of resources is remote, no provision or disclosure is made.

Provision for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligation under the contact exceeds the economic benefits expected to be received under it, are recognized when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event, based on reliable estimate of such obligation.

1.17 Leases

Operating lease payments are recognized as an expense in the profit and loss account on the basis of lease agreement.

1.18 Cash Flow Statement

Cash flows are reported ausing the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on available information.

1.19 Service Tax Input Credit

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing / utilizing the credits.


Mar 31, 2011

1. Basis for preparation of financial statements

The financial statements have been prepared under historical cost convention in accordance with Generally Accepted Accounting Principles (GAAP) in conformity with Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of Companies Act, 1956 as adopted consistently by the Company. All income and expenditure having a material bearing on the financial statements are recognized on accrual basis and provision is made for all known losses and liabilities.

2. Use of Accounting estimates

Preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the balances of assets and liabilities and disclosures relating to contingent liabilities as at the reporting date of the financial statements and amounts of income and expenses during the year of account. Management periodically assesses whether there is an indication that an asset may be impaired and makes provision in the accounts for any impairment losses estimated. Contingencies are recorded when it is probable that a liability will be incurred and the amount can be reasonably estimated. Actual results could differ from those estimates.

3. Fixed assets

Fixed assets are stated at cost of acquisition less accumulated depreciation thereon.

4. Depreciation

Depreciation on fixed assets is provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

5. Borrowing costs

a. Borrowing costs specifcally for the purpose of acquisition and construction of a qualifying asset, that are directly attributable to the qualifying asset, is capitalized as part of the cost of the asset.

b. Borrowing costs not attributable to the acquisition of any qualifying asset are recognised as expense in the period in which they are incurred.

6. Impairment of Assets

The carrying amount of assets, other than inventory is reviewed at each balance sheet date for any indication of impairment and if any, the recoverable amount of assets is estimated. Impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount.

7. Investments

Long-term investments are stated and carried at cost less provision for permanent diminution, if any, in value of such investments.

8. Inventories

Inventories are valued at lower of cost or net realisable value. Properties under development are valued at cost. Cost includes all direct development expenditure, borrowing cost and appropriate overheads.

9. Miscellaneous expenditure

Preliminary and Rights issue expenses are amortised over a period of five years.

10. Foreign currency transactions

Foreign currency transactions are recorded using the exchange rates prevailing on the date of the respective transactions. Exchange difference arising on foreign currency transactions settled during the year are recognized in the profit and loss account

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by forwarded exchange contracts are translated at year-end rates. The resultant exchange difference is recognized in the profit and loss account. Non-monetary assets are recorded at the rates prevailing on the date of the transaction.

11. Revenue recognition

i) (a) On property development projects

i. Recognised on the "Percentage of Completion Method" of accounting. Revenue comprises the aggregate amounts of sale price in terms of the agreements entered into and is recognized on the basis of percentage of actual costs incurred thereon, including proportionate land cost and total estimated cost of the projects under execution, subject to such actual costs being 20 percent or more of the total estimated cost.

ii. Where aggregate of the payment received provide insuffcient evidence of buyers commitment to make the complete payment, revenue is recognized only to the extent of realization.

iii. The estimates of the saleable areas and costs are reviewed periodically by the management and any effect of changes in estimates is recognized in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.

(b) On construction contracts (undertaken as contractors)

The Company follows percentage completion method for accounting of construction contracts undertaken.

ii) Rent Receipts are recognised on accrual basis.

iii) Interest on deployment of funds is recognised using the time-proportion method, based on interest rates implicit in the transaction.

iv) Property management services are recognised on rendering services and billing thereof.

v) Dividend income is accounted when the right to receive dividend is established.

12. Revenue receipts on joint venture contracts

In work sharing joint venture agreements revenues, expenses, assets and liabilities are accounted in the Company's books to the extent work is executed by the Company.

13. Income tax

a) Current tax is determined as the amount of tax payable to the tax authorities in respect of taxable income for the year.

b) Deferred tax is recognized, subject to the consideration of prudence, on timing difference being differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

14. Employee benefits

A. Short Term Employee benefits

All employees' benefits payable wholly within twelve months of rendering the service are classifed as short term employee benefits and they are recognized in the period in which the employee renders the related service.

B. Long Term and Post-employment benefits

a) Defned contribution plans

Defned contribution plans are post employment benefit plans under which the Company pays fixed contributions into separate entities (funds) or to financial institutions or state managed benefit schemes. The Company contributions to defned contribution plans are recognized in the profit and Loss Account in the financial year to which they relate.

The Company makes specifed monthly contributions towards Employee Provident Fund Scheme and Employee State Insurance Scheme.

b) Defned benefit obligation

Gratuity liability are defned obligation and is provided for on the basis of an actuarial valuation on Projected Unit Credit method made at the end of each financial year.

15. Earning Per Share (EPS)

In arriving at the EPS, the Company's net profit after tax, computed in terms of the GAAP, is divided by the weighted average number of equity shares outstanding on the last day of the reporting period. The EPS thus arrived at is known as 'Basic EPS'. To arrive at the diluted EPS the net profit after tax, referred above, is divided by the weighted average number of equity shares, as computed above and the weighted average number of equity shares that could have been issued on conversion of shares having potential dilutive effect subject to the terms of issue of those potential shares. The date/s of issue of such potential shares determine the amount of the weighted average number potential equity shares.

16. Prior period items

Prior period items are included in the respective heads of account and material items are disclosed by way of notes to accounts.

17. Provisions and contingent liabilities

The Company creates a provision when there is a present obligation as a result of past event that probably requires an out fow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingency liability as made when there is a possible obligation or a present obligation that may, but probability will not, require an out fow of resources. Where there is possible obligation or a present obligation in respect of which the likely hood of outfow of resources is remote, no provision or disclosure is made.

Provision for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligation under the contact exceeds the economic benefits expected to be received under it, are recognized when it is probable that an outfow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event, based on reliable estimate of such obligation.

18. Leases

Operating lease payments are recognized as an expense in the profit and loss account on the basis of lease agreement.


Mar 31, 2001

1. Basis for preparation of financial statements:

The financial statements are prepared under the historical cost convention, in accordance with generally accepted accounting principles and the provisions of Companies Act, 1956, as adopted consistently by the Company. All income and expenditure having a material bearing on the financial statements are recognised on the accrual basis.

2. Revenue recognition:

Sales of flats recognised progressively based on percentage of completion method. Contract Receipts recognised based on the bills raised on the works completed on percentage of completion method. Rent Receipts recognised on accrual basis. Interest on deployment of surplus funds recognised using the time-proportion method, based on interest rates implicit in the transaction.

Property management services recognised on rendering services and billing thereof.

3. Expenditure:

Expenses are accounted on the accrual basis and provisions are made for all known losses and liabilities.

4. Fixed Assets:

Fixed Assets are stated at cost of acquisition less accumulated depreciation.

5. Depreciation:

Depreciation is provided on written down value method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956.

6. Investments:

Long term investments are stated and carried at cost.

7. Inventories:

Inventories are valued at lower of cost or net realisable value. The cost of project-in-progress, work certified and flats held for sale include direct material cost, direct labour cost and appropriate overheads.

8. Miscellaneous Expenditure:

Preliminary and Public issue expenses are being amortised over a period of ten years.

9. Retirement Benefits:

The gratuity liability is determined on the basis of actuarial valuation but not provided in the accounts.

10. Borrowing costs:

Borrowing costs not attributable to the acquisition of any qualifying asset are recognised as expense in the period in which they are incurred.

11. Pre-operative Expenditure:

Pre-operative expenditure is allocated to fixed assets relating to the concerned project in the year of commencement of the project. The amount to be capitalized is determined in accordance with the accepted accounting principles.

 
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