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Accounting Policies of Real Realty Management Company Ltd. Company

Mar 31, 2015

I Depreciation on fixed assets

Till the year ended 31 March 2014, Schedule XIV to the Companies Act, 1956, prescribed requirements concerning depreciation of fixed assets. From the current year, Schedule XIV has been replaced by Schedule II to the Companies Act, 2013. The applicability of Schedule II has resulted in the following changes related to depreciation of fixed assets. Unless stated otherwise, the impact mentioned for the current year is likely to hold good for future years also.

ii Useful lives/ depreciation rates

Till the year ended 31 March 2014, depreciation rates prescribed under Schedule XIV were treated as minimum rates and the company was not allowed to charge depreciation at lower rates even if such lower rates were justified by the estimated useful life of the asset. Schedule II to the Companies Act 2013 prescribes useful lives for fixed assets which, in many cases, are different from lives prescribed under the erstwhile Schedule XIV. However, Schedule II allows companies to use higher/ lower useful lives and residual values if such useful lives and residual values can be technically supported and justification for difference is disclosed in the financial statements.

Considering the applicability of Schedule II, the management has re-estimated useful lives and residual values of all its fixed assets. The management believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of fixed assets, though these rates in certain cases are different from lives prescribed under Schedule II. Hence, this change in accounting policy did not have any material impact on financial statements of the company.

(b) Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. actual results could differ form those estimates. Any revision to accounting estimates is recognised in accordance with the requirements of the respective accounting standard.

(c) Inventories

Inventories are valued as follows:

i Raw materials

Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components and stores and spares is determined on a FIFO basis. Cost includes relevant cost of bringing those material at their present location and condition..

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of construction overheads.

Net Realisable Value is the estimated selling Price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(d) Events occurring after balance date

Material events occurring after the date of balance sheet are recognized and are dealt with appropriately in accordance with generally accepted accounting principles and as provided in AS-5

(e) Depreciation

i Depreciation is provided using the Written Down Value Method according to useful of assets as provided in schedule II of the Companies Act, 2013.

ii Effective from 1st April, 2014, the company has charged depreciation on the remaining useful life of the assets as per the requirement of Schedule -II of the Act. In respect of the assets completing its useful life, has been adjusted against opening balance of the retained earnings in accordance with the transitional provision provided in Note 7(b) of the Schedule II of the act.

iii Useful lives of assets estimated by management (years)

a Factory Buildings 30

b Plant and equipments 15

c Furniture and fixtures 10

d Office Equipment 5

e Computer end user devise 3

(f) Revenue Recognition

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.

i Sales of Flats

Revenue is recognised when the significant risks and rewards of ownership of the flats have passed to the buyer.

(g) Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use, net of CENVAT recoverable. Financing costs relating to construction of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. Financing costs not relating to construction of fixed assets are charged to the income statements.

(h) Borrowing Cost

Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

In case funds borrowed are generally used for the purpose of obtaining a qualifying assets, the amount of borrowing costs determined by applying a capitalizing rate to the expenditure on that asset are capitalized as a part of the cost of the qualifying asset.

(i) Segment Reporting

Pursuant of scheme of arrangement The Company has demerged its agro division and taken over the business of transferor company which has only business segment of Real Estate Development.

(j) Earning Per Share

Basic earning per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

(k) Income Taxes

Tax expense comprises 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 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

(l) Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there are impairment indicators. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

A previously recognised impairment loss is increased or decreased based on reassessment of recoverable amount, which is carried out if the change is significant. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(m) Goodwill

Goodwill arising on amalgamation is recognised as intangible assets are included under Fixed Assets. Goodwill will be amortised over Sixty month/5 years from 01/04/2013.

(n) Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provision are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(o) Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.


Mar 31, 2014

(a) Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in accordance with the requirements of the respective accounting standard.

(b) Inventories

Inventories are valued as follows:

Raw materials, components, stores and spares

Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a FIFO basis. Cost includes relevant cost of bringing those material at their present location and condition.

Work-in-progress and finished goods

Lower of cost and net realizable value. Cost includes Direct Materials and Labour and a proportion of Construction Overheads based on normal operating capacity or actual production whichever is less.

Net Realizable Value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(c) Events occurring after balance date

Material events occurring after the date of balance sheet are recognized and are dealt with appropriately in accordance with generally accepted accounting principles and as provided in AS-5

(d) Depreciation

Depreciation is provided using the written Down Value Method as per the rates prescribed under schedule XIV of the Companies Act, 1956 except in case of :

Intangible Asset – Intangible Assets are stated at cost of acquisition less accumulated amortization.

(e) Revenue Recognition

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.

Sales of Flats

Revenue is recognized when the significant risks and rewards of ownership of the flats have passed to the buyer.

(f) Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use, net of CENVAT recoverable. Financing costs relating to construction of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. Financing costs not relating to construction of fixed assets are charged to the income statements.

(j) Borrowing Cost

Borrowing cost that are directly attributable to the acquisition, construction or production of a qualifying project are considered as cost of the project. Other borrowing costs are recognized as an expense in the period in which they are incurred.

(k) Segment Reporting

Pursuant of scheme of arrangement The company has demerged its agro division and taken over the business of transferor company which has only business segment of Real Estate Development.

(l) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

(m) Income Taxes

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.

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

(o) Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there are impairment indicators. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

A previously recognized impairment loss is increased or decreased based on reassessment of recoverable amount, which is carried out if the change is significant. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(p) Goodwill

Goodwill arising on amalgamation is recognized as intangible assets are included under Fixed Assets. Goodwill will be amortised over sixty month/5 years from the 01/04/2013.

(p) Provisions

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.


Mar 31, 2013

(a) Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in accordance with the requirements of the respective accounting standard.

(b) Inventories

Inventories are valued as follows:

Raw materials, components, stores and spares

Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a FIFO basis. Cost includes relevant cost of bringing those material at their present location and condition.

Work-in-progress and finished goods

Lower of cost and net realizable value. Cost includes Direct Materials and Labour and a proportion of Manufacturing Overheads based on normal operating capacity or actual production whichever is less. Net Realizable Value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(c) Events occurring after balance date

Material events occurring after the date of balance sheet are recognized and are dealt with appropriately in accordnce with generally accepted accounting principles and as provided in AS-5

(d) Depreciation

Depreciation is provided using the written Down Value Method as per the rates prescribed under schedule

XIV of the Companies Act, 1956 except in case of :

Intangible Asset – Intangible Assets are stated at cost of acquisition less accumulated amortization.

(e) Revenue Recognition

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.

Sales of Flats

Revenue is recognized when the significant risks and rewards of ownership of the flats have passed to the buyer.

(f) Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use, net of CENVAT recoverable. Financing costs relating to construction of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. Financing costs not relating to construction of fixed assets are charged to the income statements.

(j) Borrowing Cost

Borrowing cost that are directly attributable to the acquisition, construction or production of a qualifying project are considered as cost of the project. Other borrowing costs are recognized as an expense in the period in which they are incurred.

(k) Segment Reporting

Pursuant of scheme of arrangement The company has demerged its agro division and taken over the business of transferor company which has only business segment of Real Estate Development.

(l) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

(m) Income Taxes

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.

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

(n) Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there are impairment indicators. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

A previously recognized impairment loss is increased or decreased based on reassessment of recoverable amount, which is carried out if the change is significant. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(o) Goodwill

Goodwill arising on amalgamation is recognized as intangible assets are included under Fixed Assets. Goodwill will be amortised over sixty month/5 years from the 01/04/2013.

(p) Provisions

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.


Mar 31, 2012

(a) Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. actual results could differ form those estimates. Any revision to accounting estimates is recognised in accordance with the requirements of the respective accounting standard.

(b) Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use, net of CENVAT recoverable. Financing costs relating to construction of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. Financing costs not relating to construction of fixed assets are charged to the income statements.

(c) Depreciation

Depreciation is provided using the Straight Line Method as per the rates prescribed under schedule XIV of the Companies Act, 1956.

(d) Inventoreis

As explained to us, the company has not done any commercial production dueirng the year under audit so physical verification of inventory does not arise.

(e) Revenue Recognition

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.

Sales of Goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Excise Duty included in the amount of turnover (gross) are deducted form turnover (gross) for disclosure of net turnover in the P&L account.

(f) Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there are impairment indicators. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

A previously recognised impairment loss is increased or decreased based on reassessment of recoverable amount, which is carried out if the change is significant. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(g) Employee Benefits

The company does not have any employee as at the end of the year and hence provision for retirement benefits are not done.

(h) Segment Reporting

The company is engaged mainly in the business of agricultural products. These, in the context of Accounting Standard 17 on Segment Reporting, as specified in the Companies (Accounting Standard) Rules, 2006, are considered to constitute one single primary segment. Further, there is no reportable secondary segment i.e. Geographical segment.

(i) Income Taxes

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.

As the company has unabsorbed depreciation and carry forward loss during the year in the absence of virtual certainty of future taxable profit the company has not recognised deferred tax asset.

(j) Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provision are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.


Mar 31, 2010

1. Basis of Accounting

The accompanying financial statements have been prepared under the historical cost convention, with Indian Generally Accepted Accounting Principles(GAAP) and the provisions of the Companies Act,1956(The Act).

2. Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles required estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosed contingent liabilities on the date of financial statements and the reported amounts of revenues and ex during the reporting period. Actual results could differ from these estimates and differences between results and estimates are recognized in the periods in which the results are known/materialize.

3. Fixed Assets and Depreciation

Fixed Assets are stated at cost of acquisition.

4. Inventories

There is no stock of Raw materials and Finished Goods. Byproducts are valued at Net realizable Packing Materials are valued at cost.

5. Investment:

Investments are valued at cost except that there is permanent diminution in the value of the same.

6. Sales & Job Work Charges:

During the year under the review, the company has stopped its own manufacturing & has carried out work on behalf of parties. The same is accounted on the monthly basis quantity of processing date. during the month.

7. Contingent Liabilities:

All liabilities have been provided for in the accounts except liabilities of a contingent nature, which are been disclosed at their estimated value in the notes on accounts.

8. Preliminary & Deferred Revenue Expenses (Public Issue Exp.)

Preliminary & Public Issue Expenses (if any) are amortized in the same year.

9. Government Subsidy: The subsidy received against fixed assets is reduced from the cost of concerned Assets.

10. Impairment of Fixed Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment the carrying amount of the Company's fixed assets. If any indication exists;, an asset's recoverable annexed estimated. An impairment loss is, recognized whenever the carrying amount of an asset exceeds is reserved amount. The recoverable amount is the greater of the net selling price and value in use. In assessing the estimated future cash flows are discounted to their present value based on appropriate discount The company has carefully considered the impact of Accounting Standard-28 pertaining to Impairment As the recoverable amount of assets is higher than the WDV of its Fixed Assets, no provision is Impairment of assets.

11. Prior Period Items:

There are no prior period items during the year,

12. Gratuity:

(Gratuity & other retirement benefits are not provided

13. Segmental Reporting:

The Company has only one business segment and its operation are also confined to one geographical i.e. India, as such, no further disclosure under Accounting Standard 17 'Segment Reporting" issued by institute of Chartered Accountants of India is required.

14. Deferred Tax Liability:

Deferred taxation has not been calculated, as the Company has unabsorbed losses of previous years and uncertainty of the sufficiency of future taxable profit.

 
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