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Accounting Policies of Nimbus Projects Ltd. Company

Mar 31, 2016

NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31ST MARCH, 2016 Note-

1 :Significant Accounting Policies

1.1 Basis of accounting

The financial statements are prepared under historical cost convention on accrual basis (except interest on delayed payment by customers, administrative charges recovered from customers and expenditure on compensation/ penalty for project delay, which are accounted for at the time of acceptance/ settlement with the customers due to uncertainties with regard to determination of amount receivable/ payable) and are in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 read with Rule 7 of the Companies (Accounts) Rules, 2014 in respect of Section 133 of the Companies Act, 2013. The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates.

1.2 Fixed assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises purchase price, duties, levies and any other cost relating to the acquisition and installation of the asset. Fixed assets under construction are treated as soon the assets become operational and ready for use. Borrowing cost, if any, directly attributable to the acquisition and / or construction of fixed asset, until the date assets are ready for its intended use, are capitalized as a part of the cost of that asset subject to the provisions of impairment of the assets.

Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. Expenditure on an intangible item is expensed when incurred unless it forms part of the cost of intangible asset that meets the recognition criteria. Intangible assets are stated at cost of acquisition and are carried at cost less accumulated amortization and impairment loss, if any.

1.3 Depreciation

a) Depreciation is provided on Written Down Value Method as prescribed in Schedule II to the Companies Act, 2013. For Mobile Phones, useful life is considered 2 years.

b) Depreciation on additions / deletion to fixed assets is provided on proportionate basis according to the date of addition / deletion.

1.4 Investments

Long term investments are stated at cost. A provision for diminution is made to recognise a decline, if any, other than temporary in nature, in the value of long term investments.

Short term investments are stated at lower of cost or market value.

1.5 Inventories

Inventories are valued at lower of cost and net realizable value. Construction work in progress comprises of cost of land (including premium for development rights), materials, services and other related overheads.

1.6 Employee Benefits

Retirement benefits to the employees comprise of payments under defined contribution plans like Provident Fund & Family Pension and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employees.

The employees'' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. Provision for leave encashment is made on accrual basis.

1.7 Borrowing Costs

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized for the period until the assets are ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognized and capitalized and are included in Capital WIP in the period in which they are incurred.

1.8 Taxation

Tax expense comprises of current Income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rate and the tax laws enacted or substantially enacted at the balance sheet date.

Deferred tax assets other than on carried forward losses and unabsorbed depreciation are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred tax asset on account of carried forward losses and unabsorbed depreciation are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

1.9 Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when an enterprise has a present obligation as a result of past event and 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 their present values and are determined based on management estimate required to settle the obligation at the balance sheet date. Contingent liabilities, if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the financial statement.

1.10 Revenue Recognition

a) Revenue from constructed properties is recognized on the ''percentage of completion method''. Sale consideration as per the duly executed agreements to sell/application forms (containing salient terms of agreement to sell), is recognized as revenue based on (i) the percentage of actual project costs incurred thereon to total estimated project cost, subject to such actual cost incurred (excluding land acquisition cost) being 25 per cent or more of the total estimated project cost (excluding land acquisition cost) and (ii) when at least 25 per cent of the saleable project area is secured by contracts or agreements with buyers and at least 10 per cent of the total revenue are realized. Income is recognized when it is not unreasonable to expect ultimate collection and no significant uncertainty exists regarding the amount of consideration. The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period in which such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, loss is recognized immediately.

b) Interest on fixed deposits and inter-corporate deposits is accounted on accrual basis.

c) Dividend income is accounted when the right to receive is established and known.

d) Administration charges recovered from customers are accounted as per the terms of contract with the customers.

e) Share of profit from the partnership firm, in which the Company is a partner, is as per the financial statement of the partnership firm.

1.11 Cost of Construction/ Development

Cost of Construction/ Development (including cost of land) incurred is charged to the Statement of Profit and Loss proportionate to project area sold. Adjustments, if required, are made on completion of the respective projects.

1.12 Foreign Currency Transaction

Foreign currency transaction is recorded at the rates of exchange prevailing on the date of the transactions. Exchange differences arising on foreign currency transactions are recognized as income or as expenses and accordingly debited or credited to profit and loss account.

1.13 Segment Reporting

The Company is mainly engaged in Real Estate and Infrastructure Development activities which constitute Single Primary Business Segment as defined under Accounting Standard 17.

1.14 Leases

a) Operating lease

Leases where the less or effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as Operating leases. Lease payments are charged to the statement of profit and loss account of the year in which they due.

b) Finance lease

Leases where the less or effectively transfers substantially all the risks and rewards incident to ownership of an asset are classified as Finance leases. The Company has taken a Plot of Land on finance lease from Greater Noida Industrial Development Authority (GNIDA).

1.15 Accounting for Joint Ventures

The Company''s investments in jointly controlled entities is reflected as investment and accounted for in accordance with the company''s accounting policy of investments.

c) Rights, preferences and restrictions attached to Equity shares

The Company has equity shares having a par value of Rs. 10/- per share. On a show of hands, every holder of equity shares is entitled for one vote and upon a poll shall have voting rights in proportion to the shares of the paid up capital of the Company held by them. The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the company after distribution of all preferential amount in the proportion to their shareholding.

d) Rights, preferences and restrictions attached to Preference shares

The Company has only one class of preference shares 8% Non-Cumulative, Non-Convertible, Non-Participating, Compulsory Redeemable Preference Shares of Rs. 10/- each (at a premium of Rs. 40/- on each Preference Share) to be redeemed after 15 years at a premium of Rs. 100/- on each Preference Share but which may be redeemed at the option of the Company at any time after 2 years at a fixed premium of Rs. 40/- on each Preference Share and an additional premium @ Rs. 4/- per year till these Preference Shares are redeemed. These shares carry no voting rights and the said shares are Non-convertible into equity shares. As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

iii) Claims against the Company not acknowledged as debt Rs. Nil (31.03.2015: Nil).

(b) Commitments

There are no outstanding Capital Commitments.

2.27 Retirement Benefits: Payments under defined contribution plans like Provident Fund and Family Pension have been charged to the Statement of Profit and Loss as and when made or due.

Disclosure for defined benefit plan - Gratuity (funded with LIC under Group Gratuity Scheme)

2.28 Related Party Transactions:

a) Names of other related parties and nature of relationship where there are transactions with related parties:

Associate Companies Capital Infra projects Pvt. Ltd

Golden Palms Facility Management Pvt. Ltd.

Jointly Controlled Entities IITL-Nimbus The Hyde Park - a Partnership Firm

IITL-Nimbus The Express Park View - a Partnership Firm IITL- Nimbus The Palm Village - a Partnership Firm Indogreen International - a Partnership Firm

Entities over which Key Management Personnel Nimbus India Limited

Exercise Significant Influance Nimbus Propmart Pvt. Ltd

Nimbus Multicommodities Brokers Ltd.

IITL Projects Ltd

Key Management Personnels Mr. Bipin Agarwal - Managing Director

Mr. Lalit Agarwal - Whole Time Director (WTD) & Company Secretary (W.e.f. 09.11.2015) Mr. Swatantra Kumar Sethi - Company Secretary (W.e.f. 30.03.2015 to 19.08.2015) Mr. Jitendra Kumar - Chief Financial Officer (W.e.f. 14.05.2015)

2.35 In the opinion of the management, the trade receivables, current assets, loans and advances and trade payables are approximately of the value stated if realized in the ordinary course of business. The provisions for all known liabilities are adequate.

2.36 Status of Various Projects

a) The Company has developed a Group Housing Project "Express Park View" at Plot No GH-10B, Sector CHI-V, Greater Noida, U.P., located in main Noida-Greater Noida Expressway. This Group Housing Project has all important facilities and amenities such as well laid out roads and paths, landscaped areas and beautiful parks, street lights and well designed services to give world class comfort feeling to the residents. Project has 332 flats & 4 shops, consisting of 2 Bed Rooms and 3 Bed Rooms in sizes varying from 831sq.ft. to 1458 sq.ft. Presently, the Project is fully complete in all respects. The Company has booked total 311 Flats of varying sizes, out of which the Company has given possession of 274 Units and has collected the Rs. 82.36 crore for the sale of flats & shops till 31.03.2016. During the quarter ended 31.03.2016 the project undertaken by the company is completed, the cost of unsold units has been considered as stock of units in completed project.

b) The Company had entered into a Partnership ''IITL-NIMBUS THE HYDE PARK NOIDA'' in April 2010 with M/s IITL Projects Ltd. & M/s Supertech Ltd. to develop the Group Housing Project "The Hyde Park" at Plot No. GH-03, Sector 78, Noida. The agreed Capital Ratio between the partners was 45:45:10 with profit to be shared in the said Capital Ratio. During the year ended 31.03.2016, M/s Supertech Ltd. exit from the partnership firm and now the revised Ratio between remaining partners is 50:50. The Hyde Park Project for Residential Development encompasses all important facilities and amenities such as well laid out roads and paths, landscaped areas and beautiful parks, street lights and well designed services to give world class comfort feeling to the residents. Project consists of 2044 flats & 63 commercial units in totality. Apartments are of IBHK/ 2BHK/ 3BHK & 4BHK with sizes varying from 525sq.ft. to 2428 sq.ft. The Partnership Firm has booked total 1377 Flats of varying sizes & 57 commercial units in the said project and has collected the booking amount of Rs. 553.33 crore for the above said booking of flats & commercial units till 31.03.2016.

c) The Company had entered into a Partnership ''IITL-NIMBUS THE EXPRESS PARK VIEW'' with M/s IITL Projects Ltd. & M/ s Assotech Ltd. in April 2011, to develop the Group Housing Project ''Express Park View - II'' at Plot No. GH-03, Sector CHI-V, Greater Noida. The agreed Capital Ratio between the partners is 47.5:47.5:5 and profit will be shared in the said Capital Ratio. The Express Park View - II, Project for Residential Development shall encompass all important facilities and amenities such as well laid out roads and paths, landscaped areas and beautiful parks, street lights and well designed services to give world class comfort feeling to the residents. Project consists of 1668 flats in totality. Apartments shall be of 2BHK/ 3BHK & 4BHK in sizes varying from 984 sq.ft. to 2191 sq.ft. The Partnership Firm has booked total 698 Flats of varying sizes in the said project and has collected the booking amount of Rs. 185.92 Crore for the above said booking of flats till 31.03.2016.

d) The Company had entered into a Partnership ''IITL-NIMBUS THE PALM VILLAGE'' with M/s IITL Projects Ltd. & M/s Assotech Ltd. in June 2011, to develop the Group Housing Project ''The Golden Palm Village'' at Plot No. GH-03, Sector 22A, Greater Noida of Yamuna Expressway Industrial Development Authority. The agreed Capital Ratio between the partners is 47.5:47.5:5 and profit will be shared in the said ratio. ''The Golden Palm Village'', Project for Residential Development shall encompass all important facilities and amenities such as well laid out roads and paths, landscaped areas and beautiful parks, street lights and well designed services to give world class comfort feeling to the residents. The Partnership Firm has booked total 54 Flats of varying sizes in the said project and has collected the booking amount of Rs. 3.49 Crore for the above said booking of flats as on 31.03.2016. Due to Real Estate Market conditions, low demand and consequent delay, the Firm has started refunding booking amount along with interest to the customers as per their request. The Firm is in the process of evaluating alternative options for executing this project within the overall framework of the lease agreement. The management at this stage does not expect any erosion in the capital contribution in the Firm.

e) The Company holds 50% shareholding, i.e., 500,000 Equity Shares (and 11,250,000 Preference Shares) of "M/s Capital Infra projects Pvt. Ltd.". The company M/s ''Capital Infra projects Pvt. Ltd.'' is developing a Group Housing Project at Plot No. GH-01/E, Sector - 168, Noida. The Project ''The Golden Palms'' encompasses all important facilities and amenities such as well laid out roads and paths, landscaped areas and beautiful parks, street lights and well designed services to give world class comfort feeling to the residents. Project consists of 1408 Flats and 49 Commercial Units in totality. Apartments are Studio Appt. / 2BHK/ 3BHK & 4BHK in sizes varying from 506sq.ft. to 2629 sq.ft. The company M/s ''Capital Infra projects Pvt. Ltd.'' has booked total 862 Flats of varying sizes and 21 Commercial Units in the said project and has collected the booking amount of Rs. 293.94 crore for the above said bookings till 31.03.2016.


Mar 31, 2015

Corporate Information

Nimbus Projects Limited is engaged in Real Estate Development of Commercial / Residential Projects, Trading of Properties & Real Estate Agent business etc. It is developing Residential Projects in National Capital Region (NCR). It has developed one Residential Project "Express Park View" in Greater Noida. Apart from developing its own Project, the company is undertaking development through Special Purpose Vehicle / Joint Venture (SPV / JV). The company is developing four Residential Projects in Joint Venture in Noida & Greater Noida.

1.1 Basis of Accounting

The financial statements are prepared under historical cost convention on accrual basis (except interest on delayed payment by customers, administrative charges recovered from customers and expenditure on compensation/ penalty for project delay, which are accounted for at the time of acceptance/ settlement with the customers due to uncertainties with regard to determination of amount receivable/ payable) and are in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 read with Rule 7 of the Companies (Accounts) Rules, 2014 in respect of Section 133 of the Companies Act, 2013. The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates.

1.2 Fixed assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises purchase price, duties, levies and any other cost relating to the acquisition and installation of the asset. Fixed assets under construction are treated as soon the assets become operational and ready for use. Borrowing cost, if any, directly attributable to the acquisition and / or construction of fixed asset, until the date assets are ready for its intended use, are capitalized as a part of the cost of that asset subject to the provisions of impairment of the assets. Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. Expenditure on an intangible item is expensed when incurred unless it forms part of the cost of intangible asset that meets the recognition criteria. Intangible assets are stated at cost of acquisition and are carried at cost less accumulated amortization and impairment loss, if any.

1.3 Depreciation

a) Depreciation on fixed assets for the year ended 31st March, 2014 is provided on the Written down Value Method at the rates prescribed in Schedule XIV to The Companies Act, 1956.

b) Effective from 1st April, 2015, depreciation is provided on Written Down Value Method as prescribed in Schedule II to the Companies Act, 2013.

c) Depreciation on additions / deletion to fixed assets is provided on proportionate basis according to the date of addition / deletion.

1.4 Investments

Long term investments are stated at cost. A provision for diminution is made to recognize a decline, if any, other than temporary in nature, in the value of long term investments.

Short term investments are stated at lower of cost or market value.

1.5 Inventories

Inventories are valued at lower of cost and net realizable value. Construction work in progress comprises of cost of land (including premium for development rights), materials, services and other related overheads.

1.6 Employee Benefits

Retirement benefits to the employees comprise of payments under defined contribution plans like Provident Fund & Family Pension and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employees.

The employees' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. Provision for leave encashment is made on accrual basis.

1.7 Borrowing Costs

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized for the period until the assets are ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognized and capitalized and are included in Capital WIP in the period in which they are incurred.

1.8 Taxation

Tax expense comprises of current Income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rate and the tax laws enacted or substantially enacted at the balance sheet date.

Deferred tax assets other than on carried forward losses and unabsorbed depreciation are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred tax asset on account of carried forward losses and unabsorbed depreciation are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

1.9 Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when an enterprise has a present obligation as a result of past event and 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 their present values and are determined based on management estimate required to settle the obligation at the balance sheet date. Contingent liabilities, if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the financial statement.

1.10 Revenue Recognition

a) Revenue from constructed properties is recognized on the 'percentage of completion method'. Sale consideration as per the duly executed agreements to sell/application forms (containing salient terms of agreement to sell), is recognized as revenue based on (i) the percentage of actual project costs incurred thereon to total estimated project cost, subject to such actual cost incurred (excluding land acquisition cost) being 25 per cent or more of the total estimated project cost (excluding land acquisition cost) and (ii) when at least 25 per cent of the saleable project area is secured by contracts or agreements with buyers and at least 10 per cent of the total revenue are realized. Income is recognized when it is not unreasonable to expect ultimate collection and no significant uncertainty exists regarding the amount of consideration. The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period in which such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, loss is recognized immediately.

b) Interest on fixed deposits and inter-corporate deposits is accounted on accrual basis.

c) Dividend income is accounted when the right to receive is established and known.

d) Administration charges recovered from customers' are accounted as per the terms of contract with the customers.

e) Share of profit from the partnership firm, in which the Company is a partner, is as per the financial statement of the partnership firm.

1.11 Cost of Construction/ Development

Cost of Construction/ Development (including cost of land) incurred is charged to the Statement of Profit and Loss proportionate to project area sold. Adjustments, if required, are made on completion of the respective projects.

1.12 Foreign Currency Transaction

Foreign currency transaction is recorded at the rates of exchange prevailing on the date of the transactions. Exchange

differences arising on foreign currency transactions are recognized as income or as expenses and accordingly debited or credited to profit and loss account.

1.13 Borrowing Cost

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are expensed in the period they occur.

1.14 Segment Reporting

The Company is mainly engaged in Real Estate and Infrastructure Development activities which constitute Single Primary Business Segment as defined under Accounting Standard 17.

1.15 Leases

a) Operating lease

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as Operating leases. Lease payments are charged to the statement of profit and loss account of the year in which they due.

b) Finance lease

Leases where the lessor effectively transfers substantially all the risks and rewards incident to ownership of an asset are classified as Finance leases. The Company has taken a Plot of Land on finance lease from Greater Noida Industrial Development Authority (GNIDA).

1.16 Accounting for Joint Ventures

The Company's investments in jointly controlled entities is reflected as investment and accounted for in accordance with the company's accounting policy of investments.

c) Rights, preferences and restrictions attached to Equity shares

The Company has equity shares having a par value of Rs. 10/- per share. On a show of hands, every holder of equity shares is entitled for one vote and upon a poll shall have voting rights in proportion to the shares of the paid up capital of the Company held by them. The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the vent of liquidation, the equity shareholders are entitled to receive the remaining assets of the company after distribution of all preferential amount in the proportion to their shareholding.

d) Rights, preferences and restrictions attached to Preference shares

The Company has only one class of preference shares 8% Non–Cumulative, Non–Convertible, Non–Participating, Compulsory Redeemable Preference Shares of Rs. 10/- each (at a premium of Rs. 40/- on each Preference Share) to be redeemed after 15 years at a premium of Rs. 100/- on each Preference Share but which may be redeemed at the option of the Company at any time after 2 years at a fixed premium of Rs. 40/- on each Preference Share and an additional premium @ Rs. 4/- per year till these Preference Shares are redeemed. These shares carry no voting rights and the said shares are Non-convertible into equity shares. As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.


Mar 31, 2014

1) Basis of Accounting

The financial statements are prepared under historical cost convention on an accrual basis (except interest income on late payments on flat booked and maintenance/administration charges, which are accounted when realised) and are in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies(Accounting Standards) Rules, 2006 (as amended and which continue to be applicable in respect of section133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the Companies Act, 1956. The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates.

2) Use of Estimates

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

3) Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises purchase price, duties, levies and any other cost relating to the acquisition and installation of the asset. Fixed assets under construction are treated as soon the assets become operational and ready for use. Borrowing cost, if any, directly attributable to the acquisition and / or construction of fixed asset, until the date assets are ready for its intended use, are capitalized as a part of the cost of that asset subject to the provisions of impairment of the assets.

Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. Expenditure on an intangible item is expensed when incurred unless it forms part of the cost of intangible asset that meets the recognition criteria. Intangible assets are stated at cost of acquisition and are carried at cost less accumulated amortization and impairment loss, if any.

4) Depreciation

a) Depreciation on fixed assets is provided on the Written down Value Method at the rates prescribed in Schedule XIV to The Companies Act, 1956.

b) Depreciation on additions to fixed assets is provided on the basis of date of addition. No depreciation is provided on deletion to fixed assets in the year to sale.

5) Construction Contract Revenue / Cost

Contract revenues and contract cost are recognized as revenue and expenses respectively by reference to the stage of the completion of the contract activity at the reporting date when and only when the outcome of a construction contract is estimated reliably. When the outcome of a construction contract is not estimated reliably then revenue is recognized only to the extent of contract costs incurred of which recovery is probable and contract costs is recognized as an expense in the period in which they are incurred. An expected loss is recognized as an expense immediately.

6) Revenue Recognition

a) Revenue from Real estate projects is recognized on the Percentage of Completion method. Revenue is recognized in relation to area sold, on the basis of percentage of actual costs incurred as against the total estimated cost of the project under execution, subject to such actual costs being 25 percent or more of the total estimated cost.

The estimates of saleable area and costs are revised periodically by the Management. The effect of such changes in estimates is recognized in the period in which such changes are determined.

b) Fees are accounted as per the terms of contract with the customers.

c) Interest on fixed deposits and inter-corporate deposits is accounted on accrual basis.

d) Dividend income is accounted when the right to receive is established and known.

e) Share of profit from the partnership firm, in which the Company is a partner, is as per the financial statement of the partnership firm.

7) Inventories

a) Construction Material cost is determined on a First in First out basis.

b) Land is valued at cost. Cost comprises cost of acquisition and all other related costs.

c) Construction work in progress is valued at cost. Cost comprises premium for development rights, cost of material, services and other related overheads related to project under construction.

8) Investments

Long term investments are stated at cost. A provision for diminution is made to recognise a decline, if any, other than temporary in nature, in the value of long term investments.

Current investments are stated at lower of cost and fair market value.

9) Taxation

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rate and the tax laws enacted or substantially enacted at the balance sheet date.

Deferred tax assets other than on carried forward losses and unabsorbed depreciation are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

Deferred tax asset on account of carried forward losses and unabsorbed depreciation are recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised.

10) Foreign Currency Transaction

Foreign currency transaction is recorded at the rates of exchange prevailing on the date of the transactions. Exchange differences arising on foreign currency transactions are recognized as income or as expenses and accordingly debited or credited to profit and loss account.

11) Retirement and other Employees'' Benefits

a) Defined Contribution Plan:

Provident fund is considered as defined contribution plan and the contributions are charged to the profit and loss account of the year in which the contributions to the fund are due. However contributions which are directly attributable to project are allocated to cost of construction.

b) Defined benefit plan:

The company has a defined benefit employees scheme in the form of Gratuity and for this purpose it has entered into a Group gratuity cum Life Assurance Scheme to be approved under part ''C'' of the Fourth Schedule of Income Tax Act, 1961, with the Life Insurance Corporation of India to provide the Gratuity Benefits to the employees of the company under an Irrevocable Trust. The Trustees of the Scheme have entrusted the administration of related fund to L.I.C. The company shall pay to the trustee such contribution as are required to secure the benefits which will include the liberalized death cover to the employees. Expenses for the year is determined on the basis of actuarial valuation of the company''s year-end obligation in this regard and the value of year end assets of the scheme. Contribution is deposited with L.I.C. based on intimation received by the Company.

The Company provides for the encashment of leave or leave without pay subject to certain rules. The Employees are entitled to accumulate leave subject to certain limits for future encashment/availment. The Company makes provision for compensated absences based on management valuation as at the date of balance sheet.

12) Borrowing Cost

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are expensed in the period they occur.

13) Segment Reporting

The Company is mainly engaged in Real Estate and Infrastructure Development activities which constitute Single Primary Business Segment as defined under Accounting Standard 17.

14) Leases Operating lease

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as operating leases. Lease payments are charged to the profit and loss account of the year in which they due.

Finance lease

Leases where the lessor effectively transfers substantially all the risks and rewards incident to ownership of an asset. Land has been taken on finance lease of 90 years and is included in Inventory.

15) Accounting for Joint Ventures

The Company''s investments in jointly controlled entities is reflected as investment and accounted for in accordance with the company''s accounting policy of investments (see Note C (23) below).

16) Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors. Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amount. Recoverable amount is the higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less the cost of disposal.

17) Provision, contingent liabilities and contingent assets

Provision is recognized when an enterprise has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate.

The contingent liabilities are disclosed, unless the possibility of outflow of resources is remote. Contingent Assets are generally neither recognized nor disclosed in the financial statements.


Mar 31, 2010

1.) Nature Of Operation

The company has been engaged in the various activities relating to real estate sector including entering into collaboration agreement, development of commercial complex, construction of flats and offices, advisory / consultancy services.

2.) Basis of preparation of financial statements

The financial statements have been prepared to comply, in all material respects, with:

- the Accounting Standards as notified by the Companies (Accounting Standards) Rules, 2006;

- ther elevant provisions of the Companies Act, 1956;and

- the generally accepted accounting principles in India.

The financial statements have been prepared under historical cost convention on accrual basis and on the assumption of going concern basis. The accounting policies have been consistently applied by the Company and are consistently followed by the Company and are consistent with those applied in the previous year.

3.) Use of Estimates

The preparation of Financial Statements require to management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of the contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from estimates. Any revision to accounting estimates is recognized in accordance with the requirements of the respective accounting standard in the period in which the results are known / materialized.

4.) Inventories

The value of various categories of inventories is arrived following FIFO, formula wherever applicable, at as follows:

- Raw material, consumables and stores and spares are valued at the lower of cost or net realizable value.

- Work in progress is valued by taking cost of material used and labour charges incurred upto the stage of constructions and other related cost wherever applicable subject to their estimated net realizable value.

- Finished goods is valued at the lower of cost or net realizable value.

5.) Contingencies and Provisions

A provision is recognized when there is a present obligation as a result of past event and 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 date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

6.) Prior Period Items

Prior period items arisen in the current year as a result of errors or omission in the preparation of the financial statements of prior period(s) are separately disclosed in the profit & loss account.

7.) Construction Contract Revenue/ Cost

- Contract Revenues and Contract Cost are recognized as revenue and expenses respectively by reference to the stage of the completion of the contract activity at the reporting date when and only when the outcome of a construction contract is estimated reliably. When the outcome of a construction contract is not estimated reliably then revenue is recognized only to the extent of contract costs incurred of which recovery is probable and contract costs is recognized as an expense in the period in which they are incurred. An expected loss is recognized as an expense immediately.

8.) Revenue Recognition

- Revenues / Sales / Incomes and Cost / Expenditures are generally accounted on accrual basis, as they are earned or incurred.

- Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

- Revenues from sales are recognized on transfer of significant risk and rewards.

- Duties and Taxes, wherever applicable, included in the amount of turnover (gross) are deducted from turnover (gross) for disclosure of net turnover in the P&LA/c.

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

9.) Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises purchase price, duties, levies and any other cost relating to the acquisition and installation of the asset. Fixed assets under construction are

Seated as soon the assets become operational and ready for use. Borrowing cost, if any, directly attributable to the acquisition and / or construction of fixed asset, until the date assets are ready for its intended use, are capitalized as a part of the cost of that asset subject to the provisions of impairment of the assets.

10.) Depreciation

Depreciation on fixed assets is charged, on pro-rata, on the Written Down Value Method in accordance with those specified in Schedule XIV of The Companies Act, 1956.

11.) Foreign Currency Transaction

Foreign currency transaction is recorded at the rates of exchange prevailing on the date of the transactions. Exchange differences arising on foreign currency transactions are recognized as income or as expenses and accordingly debited or credited to profit and loss account.

12.) Investments

Investments which are readily realizable and intended to be held for not more than a year are classified as Current Investment and valued at lower of cost or fair market value determined on an individual investment basis. All other investments are classified as Long Term Investments and are stated at cost less diminution if any which is not in temporary nature.

13.) Retirement and other Employees Benefits

Liability for employees benefits, both short term and long term, for present and past services which are due as per the terms of employment are accounted for as per the provisions of AS 15 (Revised). Gratuity is accounted as per the rules of the company. Contribution to the P.F. / E.S.I., if applicable, are made at a pre determined rate and charged to profit and loss account on accrual basis.

14.) Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as a part of the cost of that asset subject to the provisions of impairment of the assets and other borrowing cost are recognized as expenses in the period in which they are incurred.

15.) Segment Reporting

The Company has been mainly engaged in Real Estate and Infrastructure Development activities which constitute Single Primary Business Segment as defined under Accounting Standard 17.

16.) Related Party Transaction

In related party transactions all the material information as required by the Accounting Standard 18 are given to disclose the effect on the financial position and operating results of the Company.

17.) Lease

The company has adopted the provisions of Accounting Standard 19 for accounting of lease, whether finance lease or operating lease, where it is an original lessor or lessee. Assets acquired under lease where substantial risks and rewards are transferred are treated as finance lease and lease other than finance lease is treated as operating lease.

18.) Earning Per Share

Basic Earning Per Share is calculated by dividing the net profit or loss after tax for the period attributable to equity shareholders by the weighted average number of equity shares during the period.

19.) Taxation

Tax expense comprises of Current Tax and Deferred Tax. Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year.

Deferred Taxes are recognized for the future tax consequences attributable to timing differences and their recognition for tax purpose The effect of a change in tax rates on Deferred Tax Assets / Liabilities is recognized in income using the tax rates and tax laws that have been enacted or substantively enacted by balance sheet date.

Deferred Tax Assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such Deferred Tax can be realized. However, Deferred Tax Assets arising from brought forward and depreciation are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized in foreseeable future.

20.) Research and Development

All expenses pertaining to research are charged to the profit and loss account in the year in which they are incurred. All expenses pertaining to development are recognized if, and only if, future economic benefits from the asset are probable otherwise these expenses are charged to the profit and loss account in the year in which they are incurred. 21.) Joint Ventures

I) Interest In Jointly Controlled Operations

Assets that it controls and the liabilities that it incurs, expenses that it incurs and its share of income that it earns from the joint ventures is recognized in its Separate Financial Statements; and

II) Interest In Jointly Controlled Entitles

Interest in such entity is accounted for as an investment in accordance with Accounting Standard (AS) 13, Accounting for Investment.

22.) Impairment of Assets

The carrying amount of assets is reviewed at each balance sheet date if there is any indication of impairment of the carrying amount of the companys assets. If any indication exists, then recoverable amount / fair market value of such asset is estimated. An impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount / fair market value. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However the carrying amount after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation as if there was no impairment.

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