Accounting Policies of Shree Ram Urban Infrastructure Ltd. Company

Mar 31, 2017

a) Basis of Preparation of Financial Statements:

These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules, 2014. These financial statements have been prepared on accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

The Company is engaged in the business of developing real estate and is currently developing the project Pala is Royale for which operating cycle is around 11 years.

b) Use of Estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and reported amounts of income and expenses during the period. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from the estimates.

c) Revenue Recognition:

(i) Policy in respect of Real Estate Sales:

The Company follows Accounting Standard AS-9 ''Revenue Recognition'' read along with the Guidance Note on ‘Recognition of Revenue by the Real Estate Developers'' issued by the Institute of Chartered Accountants of India. Revenue in respect of real estate sales is recognized when the Company has transferred to the buyer all significant risks and rewards of ownership, i.e.. when the buyer has entered into an agreement for sale which is duly registered and according to which the buyer has a legal right to sell or transfer his interest in the property, without any material condition and in respect of unregistered agreement / letter of allotment when the substantial consideration has been received. Where the Company is obliged to perform substantial acts after the transfer of all significant risk and rewards of ownership, the revenue is recognized on proportionate basis as the acts are performed, by applying percentage of completion method in the manner explained in Accounting Standard AS-7 ''Construction Contracts’. Further, Revenue is recognized, in relation to the sold areas only, on the basis of percentage of actual cost incurred thereon including cost of land as against the total estimated cost of the project under execution subject to such actual costs being 30% or more of the total estimated cost. Estimated project cost includes cost of land / development rights, borrowing costs, overheads, estimated construction and development cost of such properties. 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.

(ii) Others:

Interest income is recognized on time proportion basis except interest due from customers which is recognized on realization basis.

Dividend income is recognized when the Company''s right to receive dividend is established.

d) Unbilled Receivables:

Unbilled receivables represents revenue recognized based on Percentage of completion method, as per Revenue Recognition Policy in respect of Real Estate Sales, over and above the amount due as per the payment plans agreed with the customers.

e) Fixed Assets:

All fixed assets are stated at cost of acquisition, less accumulated depreciation except leasehold land, and intangible assets which are stated at cost less amounts amortized. Cost includes purchase price and all other attributable costs of bringing the assets to its working condition for intended use. Financing costs relating to borrowed funds attributable to acquisition, which takes substantial period of time to get ready for its intended use are also included, for the period till such asset is put to use.

f) Depreciation/Amortization:

a) Tangible Assets

i) Depreciation on tangible fixed assets has been provided on straight line basis as per the useful life prescribed in Schedule II of the Companies Act. 2013, except in respect of ‘Shuttering and Scaffolding'' , whose useful life is determined by the Management for 6 years.

ii) Leasehold land is amortized over the period of lease.

b) Intangible Assets

Computer Software is amortized over a period of three years.

g) Impairment of Assets:

The Company reviews the carrying amounts of tangible and intangible assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. Impairment loss, if any_: is recognized in the period in which impairment takes place.

h) Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are considered as part of the cost of that asset up to the date the assets are ready / put to use. Other Borrowing costs are recognized as an expense in the period in which they are incused.

i) Investments:

Long term Investments are stated at cost. However, provision is made for diminution in value, other than temporary, on individual basis.

j) Inventories:

Materials. Stores and Spares, tools and consumables are valued at cost or net realizable value, whichever is lower on the basis of‘ First In First Out’ (FIFO) method and is net of cenvat.

Construction work-in-progress is valued at lower of cost and net realizable value. Construction work in progress includes cost of land, materials, services, depreciation, interest on borrowing and other incidental cost incurred in relation to project.

k) Cost of Constructions (Real Estate Development):

Cost of construction includes cost of land, materials, services, depreciation, interest on borrowing and other incidental cost incurred in relation to project.

I) Employee Benefits:

i) Defined Contribution Plan

Company''s contribution to Provident Fund is deposited with the Employees Provident Fund Organization (EPFO). The Company''s monthly contribution towards Provident Fund is accounted for on accrual basis.

ii) Defined Benefit Plan

Liability on account of ‘Gratuity'' is accounted for on the basis of Actuarial Valuation at the end of reporting year.

iii) Other Long Term

Liability on account of ''leave encashment'' is made on the basis of Actuarial Valuation at the end of the reporting year.

iv) Other Short Term

Other Short term Employee Benefits are charged to revenue in the reporting year in which the related services are rendered.

m) Share Issue Expenses:

Share Issue Expenses are adjusted against Share Premium to the extent balance available in the share premium account.

n) Taxation:

i) Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws.

ii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been announced up to the balance sheet date. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences between the taxable income and accounting income. The effect of tax rate change is considered in the statement of profit and loss of the respective reporting date.

iii) Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws are recognized only if there is a virtual certainty of its realization supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is reasonable certainty of its realization.

o) Foreign Currency Transactions:

i) The transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction.

ii) Current assets and current liabilities in foreign currency outstanding at the Balance Sheet date are translated at the exchange rates prevailing on the date of balance sheet.

The resulting exchange difference, if any, is charged to the statement of profit and loss.

p) Earnings Per Share (‘EPS’):

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.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

q) Provisions:

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.

r) Lease:

Lease arrangements where the risk and rewards incident to ownership of asset substantially vest with the lessor are recognized as operating lease. Lease rent under operating leases are charged to the statement of profit and loss on a straight line basis over the lease term.

Assets given under operating lease are included in fixed assets. Lease income is recognized in the statement of profit and loss on as straight line basis over the lease term. Costs including depreciation are recognized as expense in the statement of profit and loss.

s) Contingent Liabilities:

The Company makes a provision when there is present obligation as a result of past event where the outflow of economic resources is probable and a reliable estimate of the amount of the obligation can be made.

A disclosure is made for a contingent liability when there is a:

i) Possible obligation, the existence of which will be confirmed by the occurrence / non-occurrence of one or more uncertain events, not fully within the control of the company.

ii) Present obligation, where it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

iii) Present obligation where a reliable estimate cannot be made,

t) Other Accounting Policies:

These are consistent with the generally accepted accounting practices.

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Mar 31, 2015

A) Basis of Preparation of Financial Statements :

These financial statements are prepared under historical cost convention, on accrual basis, in accordance with the Generally Accepted Accounting Principles in India and comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 read with General Circular 8/2014 dated April 04, 2014 issued by the Ministry of Corporate Affairs.

The Board of Directors vide their resolution dated November 12, 2014 has approved the change of financial year of the Company from January-December to April-March effective April 01, 2015. In view of this, the current financial year is for a period of 15 months i.e. January 01, 2014 to March 31, 2015 (current period) and, accordingly, the figures for the current period are not comparable with figures for the year ended December 31, 2013 ("Previous year") presented in the Statement of Profit and Loss, Cash Flow Statement and related notes.

The Company is engaged in the business of developing real estate and is currently developing the project Palais Royale for which operating cycle is around 9 years.

b) Use of Estimates :

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported accounts of revenues and expenses during the reporting period. Although these estimates are based upon management's knowledge of current event and actions, actual results could differ from those estimates and revisions, if any, are recognized in the current and future periods.

c) Revenue Recognition :

(i) Policy in respect of Real Estate Sales :

The Company follows Accounting Standard AS-9 'Revenue Recognition' as notified under the Companies (Accounting Standards) Rules, 2006 read along with the Guidance Note on 'Recognition of Revenue by the Real Estate Developers' issued by the Institute of Chartered Accountants of India. Revenue in respect of real estate sales is recognized when the Company has transferred to the buyer all significant risks and rewards of ownership, i.e., when the buyer has entered into an agreement for sale which is duly registered and according to which the buyer has a legal right to sell or transfer his interest in the property, without any material condition and in respect of unregistered agreement/ letter of allotment when the substantial consideration has been received. Where the Company is obliged to perform substantial acts after the transfer of all significant risk and rewards of ownership, the revenue is recognized on proportionate basis as the acts are performed, by applying percentage of completion method in the manner explained in Accounting Standard AS-7 'Construction Contracts' as notified under the Companies (Accounting Standards) Rules, 2006. Further, Revenue is recognized, in relation to the sold areas only, on the basis of percentage of actual cost incurred thereon including cost of land as against the total estimated cost of the project under execution subject to such actual costs being 30% or more of the total estimated cost. Estimated project cost includes cost of land/ development rights, borrowing costs, overheads, estimated construction and development cost of such properties. 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.

(ii) Others :

Interest income is recognized on time proportion basis except interest due from customers which is recognised on realisation basis.

Dividend income is recognized when the Company's right to receive dividend is established.

d) Unbilled Receivables :

Unbilled receivables disclosed under Note 18 - "Other Current Assets" represents revenue recognized based on Percentage of completion method, as per Revenue Recognition Policy in respect of Real Estate Sales, over and above the amount due as per the payment plans agreed with the customers.

e) Fixed Assets :

All fixed assets are stated at cost of acquisition, less accumulated depreciation except leasehold land, and intangible assets which are stated at cost less amounts amortised. Cost includes purchase price and all other attributable costs of bringing the assets to its working condition for intended use. Financing costs relating to borrowed funds attributable to acquisition, which takes substantial period of time to get ready for its intended use are also included, for the period till such asset is put to use.

f) Depreciation / Amortisation :

i) Depreciation on fixed assets (other than Fire Fighting Equipment at Avadh Division) is provided on Straight Line Method (SLM) at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 except for depreciation on Shuttering & Scaffolding which are being depreciated on SLM at 16.67% p.a. based on useful life determined by the Management.

ii) Depreciation on Fire Fighting Equipment at Avadh Division is provided on written down value method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

iii) The depreciation has not been charged on Fixed Assets whose written down value had reached below 5% of its cost.

iv) Asset costing Rs.5,000 or less individually is fully depreciated in the year of purchase.

v) Leasehold land is amortised over the period of the lease.

vi) Software are being amortised over the estimated useful life of 3 years.

vii) In case of impairment loss, if any, depreciation on it is provided on the revised carrying amount for their remaining useful life.

g) Impairment of Assets :

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If recoverable amount of such asset is less than the carrying amount, then the carrying amount is reduced to its recoverable amount and the difference arising therefrom is treated as impairment loss and is charged to statement of profit and loss.

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

h) Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are considered as part of the cost of that asset upto the date the assets are ready / put to use. Other Borrowing costs are recognized as an expense in the period in which they are incurred.

i) Investments:

Long term Investments are stated at cost. However, provision is made for diminution in value, other than temporary, on individual basis.

j) Inventories:

Materials, Stores and Spares, tools and consumables are valued at cost or net realizable value, whichever is lower on the basis of 'First In First Out' (FIFO) method.

Construction work-in-progress is valued at lower of cost and net realizable value. Construction work in progress includes cost of land, materials, services, depreciation, interest on borrowing and other incidental cost Incurred In relation to project.

k) Cost of Constructions (Real Estate Development):

Cost of construction includes cost of land, materials, services, depreciation, interest on borrowing and other incidental cost incurred in relation to project.

l) Employee Benefits :

i) Defined Contribution Plan

Company's contribution to Provident Fund is deposited with the Employees Provident Fund Organization (EPFO). The Company's monthly contribution towards Provident Fund is accounted for on accrual basis.

ii) Defined Benefit Plan

Liability on account of 'Gratuity' is accounted for on the basis of Actuarial Valuation at the end of reporting period.

iii) Other Long Term

Liability on account of 'leave encashment' is made on the basis of Actuarial Valuation at the end of the reporting period.

iv) Other Short Term

Other Short term Employee Benefits are charged to revenue in the reporting period in which the related services are rendered.

m) Share Issue Expenses:

Share Issue Expenses are adjusted against Share Premium to the extent balance available in the share premium account.

n) Taxation:

i) Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws.

ii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been announced up to the balance sheet date. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences between the taxable income and accounting income. The effect of tax rate change is considered in the statement of profit and loss of the respective reporting date.

iii) Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws are recognized only if there is a virtual certainty of its realization supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is reasonable certainty of its realization.

o) Foreign Currency Transactions :

i) The transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction.

ii) Current assets and current liabilities in foreign currency outstanding at the Balance Sheet date are translated at the exchange rates prevailing on the date of balance sheet.

The resulting exchange difference, if any, is charged to the statement of profit and loss.

p) Earnings Per Share ('EPS') :

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.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

q) Provisions :

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.

r) Lease:

Lease arrangements where the risk and rewards incident to ownership of asset substantially vest with the lessor are recognized as operating lease. Lease rent under operating leases are charged to the statement of profit and loss on a straight line basis over the lease term.

Assets given under operating lease are included in fixed assets. Lease income is recognized in the statement of profit and loss on as straight line basis over the lease term. Costs including depreciation are recognized as expense in the statement of profit and loss.

s) Contingent Liabilities :

The Company makes a provision when there is present obligation as a result of past event where the outflow of economic resources is probable and a reliable estimate of the amount of the obligation can be made.

A disclosure is made for a contingent liability when there is a:

(i) Possible obligation, the existence of which will be confirmed by the occurrence / non-occurrence of one or more uncertain events, not fully within the control of the company.

(ii) Present obligation, where it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

(iii) Present obligation where a reliable estimate cannot be made.

t) Other Accounting Policies :

These are consistent with the generally accepted accounting practices.

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Dec 31, 2013

A) Basis of Preparation of Financial Statements :

The Financial statements are prepared under historical cost convention, on accrual basis, in accordance with the Generally Accepted Accounting Principles in India and comply with Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 issued by the Central Government (which continues to be applicable in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013) and the provisions of the Companies Act, 1956, (the ''Act'') to the extent applicable.

The Company is engaged in the business of developing real estate and is currently developing the project Palais Royale for which operating cycle is around 9 years.

b) Use of Estimates :

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported accounts of revenues and expenses for the years presented. Although these estimates are based upon management''s knowledge of current event and actions, actual results could differ from those estimates and revisions, if any, are recognized in the current and future periods.

c) Revenue Recognition

(i) Policy in respect of Real Estate Sales :

The Company follows Accounting Standard AS-9 ''Revenue Recognition'' as notified under the Companies (Accounting Standards) Rules, 2006 read along with the Guidance Note on ''Recognition of Revenue by the Real Estate Developers'' issued by the Institute of Chartered Accountants of India. Revenue in respect of real estate sales is recognized when the Company has transferred to the buyer all significant risks and rewards of ownership, i.e., when the buyer has entered into an agreement for sale which is duly registered and according to which the buyer has a legal right to sell or transfer his interest in the property, without any material condition and in respect of unregistered agreement / letter of allotment when the substantial consideration has been received. Where the Company is obliged to perform substantial acts after the transfer of all significant risk and rewards of ownership, the revenue is recognized on proportionate basis as the acts are performed, by applying percentage of completion method in the manner explained in Accounting Standard AS-7 ''Construction Contracts'' as notified under the Companies (Accounting Standards) Rules, 2006. Further, Revenue is recognized, in relation to the sold areas only, on the basis of percentage of actual cost incurred thereon including cost of land as against the total estimated cost of the project under execution subject to such actual costs being 30% or more of the total estimated cost. Estimated project cost includes cost of land / development rights, borrowing costs, overheads, estimated construction and development cost of such properties. 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.

(ii) Others :

Interest income is recognized on time proportion basis except interest due from customers which is recognised on realisation basis.

Dividend income is recognized when the Company''s right to receive dividend is established.

d) Unbilled Receivables :

Unbilled receivables disclosed under Note 18 - "Other Current Assets" represents revenue recognized based on Percentage of completion method, as per Revenue Recognition Policy in respect of Real Estate Sales, over and above the amount due as per the payment plans agreed with the customers.

e) Fixed Assets :

All fixed assets are stated at cost of acquisition, less accumulated depreciation except leasehold land, and intangible assets which are stated at cost less amounts amortised. Cost includes purchase price and all other attributable costs of bringing the assets to its working condition for intended use. Financing costs relating to borrowed funds attributable to acquisition, which takes substantial period of time to get ready for its intended use are also included, for the period till such asset is put to use.

f) Depreciation / Amortisation :

i) Depreciation on fixed assets (other than Fire Fighting Equipment at Avadh Division) is provided on Straight Line Method (SLM) at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 except for depreciation on Shuttering & Scaffolding which are being depreciated on SLM at 16.67% p.a. based on useful life determined by the Management.

ii) Depreciation on Fire Fighting Equipment at Avadh Division is provided on written down value method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

iii) The depreciation has not been charged on Fixed Assets whose written down value had reached below 5% of its cost.

iv) Asset costing Rs.5,000 or less individually is fully depreciated in the year of purchase.

v) Leasehold land is amortised over the period of the lease.

vi) Software are being amortised over the estimated useful life of 3 years.

vii) In case of impairment loss, if any, depreciation on it is provided on the revised carrying amount for their remaining useful life.

g) Impairment of Assets :

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If recoverable amount of such asset is less than the carrying amount, then the carrying amount is reduced to its recoverable amount and the difference arising therefrom is treated as impairment loss and is charged to statement of profit and loss.

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

h) Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are considered as part of the cost of that asset upto the date the assets are ready / put to use. Other Borrowing costs are recognized as an expense in the year in which they are incurred.

i) Investments:

Long term Investments are stated at cost. However, provision is made for diminution in value, other than temporary, on individual basis.

j) Inventories:

Materials, Stores and Spares, tools and consumables are valued at cost or net realizable value, whichever is lower on the basis of ''First In First Out'' (FIFO) method.

Construction work-in-progress is valued at lower of cost and net realizable value. Construction work in progress includes cost of land, materials, services, depreciation, interest on borrowing and other incidental cost incurred in relation to project.

k) Cost of Constructions (Real Estate Development):

Cost of construction includes cost of land, materials, services, depreciation, interest on borrowing and other incidental cost incurred in relation to project.

I) Employee Benefits :

i) Defined Contribution Plan

Company''s contribution to Provident Fund is deposited with the Employees Provident Fund Organization (EPFO). The Company''s monthly contribution towards Provident Fund is accounted for on accrual basis.

ii) Defined Benefit Plan

Liability on account of ''Gratuit/ is accounted for on the basis of Actuarial Valuation at the end of each year.

iii) Other Long Term

Liability on account of ''leave encashment'' is made on the basis of Actuarial Valuation at the end of the year.

iv) Other Short Term

Other Short term Employee Benefits are charged to revenue in the year in which the related services are rendered.

m) Share Issue Expenses:

Share Issue Expenses are adjusted against Share Premium to the extent balance available in the share premium account.

n) Taxation:

i) Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws.

ii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been announced up to the balance sheet date. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences between the taxable income and accounting income. The effect of tax rate change is considered in the statement of profit and loss of the respective year of change.

iii) Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws are recognized only if there is a virtual certainty of its realization supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is reasonable certainty of its realization.

o) Foreign Currency Transactions :

i) The transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction.

ii) Current assets and current liabilities in foreign currency outstanding at the Balance Sheet date are translated at the exchange rates prevailing on the date of balance sheet.

The resulting exchange difference, if any, is charged to the statement of profit and loss.

p) Earnings Per Share (EPS) :

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.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

q) Provisions :

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.

r) Lease:

Lease arrangements where the risk and rewards incident to ownership of asset substantially vest with the lessor are recognized as operating lease. Lease rent under operating leases are charged to the statement of profit and loss on a straight line basis over the lease term.

Assets given under operating lease are included in fixed assets. Lease income is recognized in the statement of profit and loss on as straight line basis over the lease term. Costs including depreciation are recognized as expense in the statement of profit and loss.

s) Contingent Liabilities :

The Company makes a provision when there is present obligation as a result of past event where the outflow of economic resources is probable and a reliable estimate of the amount of the obligation can be made.

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Dec 31, 2012

A) Basis of preparation of financial statements:

The financial statements are prepared under historical cost convention, on accrual basis, in accordance with the Generally Accepted Accounting Principles in India and comply with Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 issued by the Central Government and the provisions of the Companies Act, 1956, (the ''Act'') to the extent applicable.

The Company is engaged in the business of developing real estate and is currently developing the project Palais Royale for which operating cycle is around 9 years.

b) Use of estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported accounts of revenues and expenses for the years presented. Although these estimates are based upon management''s knowledge of current event and actions, actual results could differ from those estimates and revisions, if any, are recognized in the current and future periods.

c) Revenue Recognition:

(i) Policy in respect of Real Estate Sales:

The Company follows Accounting Standard AS-9 ''Revenue Recognition'' as notified under the Companies (Accounting Standards) Rules, 2006 read along with the Guidance Note on ''Recognition of Revenue by the Real Estate Developers'' issued by the Institute of Chartered Accountants of India. Revenue in respect of real estate sales is recognized when the Company has transferred to the buyer all significant risks and rewards of ownership, i.e., when the buyer has entered into an agreement for sale which is duly registered and according to which the buyer has a legal right to sell or transfer his interest in the property, without any material condition and in respect of unregistered agreement / letter of allotment when the substantial consideration has been received. Where the Company is obliged to perform substantial acts after the transfer of all significant risk and rewards of ownership, the revenue is recognized on proportionate basis as the acts are performed, by applying percentage of completion method in the manner explained in Accounting Standard AS-7 ''Construction Contracts'' as notified under the Companies (Accounting Standards) Rules, 2006. Further, Revenue is recognized, in relation to the sold areas only, on the basis of percentage of actual cost incurred thereon including cost of land as against the total estimated cost of the project under execution subject to such actual costs being 30% or more of the total estimated cost. Estimated project cost includes cost of land / development rights, borrowing costs, overheads, estimated construction and development cost of such properties. 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.

(ii) Others:

Interest income is recognized on accrual basis on a time proportion basis.

Dividend income is recognized when the Company''s right to receive dividend is established.

d) Unbilled Receivables:

Unbilled receivables disclosed under Note 17 - "Other Current Assets" represents revenue recognized based on Percentage of completion method, as per Revenue Recognition Policy in respect of Real Estate Sales, over and above the amount due as per the payment plans agreed with the customers.

e) Fixed Assets:

All fixed assets are stated at cost of acquisition, less accumulated depreciation except leasehold land, and intangible assets which are stated at cost less amounts amortised. Cost includes purchase price and all other attributable costs of bringing the assets to its working condition for intended use. Financing costs relating to borrowed funds attributable to acquisition, which takes substantial period of time to get ready for its intended use are also included, for the period till such asset is put to use.

f) Depreciation / Amortisation:

i) Depreciation on fixed assets (other than Fire Fighting Equipment at Avadh Division) is provided on Straight Line Method (SLM) at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 except for depreciation on Shuttering & Scaffolding which are being depreciated on SLM at 16.67% p.a. based on useful life determined by the Management.

ii) Depreciation on Fire Fighting Equipment at Avadh Division is provided on written down value method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

iii) The depreciation has not been charged on Fixed Assets whose written down value had reached below 5% of its cost.

iv) Asset costing Rs. 5,000 or less individually is fully depreciated in the year of purchase.

v) Leasehold land is amortised over the period of the lease.

vi) Software are being amortised over the estimated useful life of 3 years.

vii) In case of impairment loss, if any, depreciation on it is provided on the revised carrying amount for their remaining useful life.

g) Impairment of Assets:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If recoverable amount of such asset is less than the carrying amount, then the carrying amount is reduced to its recoverable amount and the difference arising therefrom is treated as impairment loss and is charged to statement of profit and loss.

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

h) Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are considered as part of the cost of that asset upto the date the assets are ready / put to use. Other Borrowing costs are recognized as an expense in the year in which they are incurred.

i) Investments:

Long term Investments are stated at cost. However, provision is made for diminution in value, other than temporary, on individual basis.

j) Inventories:

Materials, Stores and Spares, tools and consumables are valued at cost or net realizable value, whichever is lower on the basis of ''First In First Out'' (FIFO) method.

Work-in-progress is valued at lower of cost and net realizable value. Cost of construction includes cost of land, materials, services, depreciation, interest on borrowing and other incidental cost incurred in relation to project.

k) Cost of Constructions (Real Estate Development):

Cost of constructions includes cost of land, materials, services, depreciation, interest on borrowing and other incidental cost incurred in relation to project.

l) Employee Benefits:

i) Defined Contribution Plan

Company''s contribution to Provident Fund is deposited with the employees Provident Fund Organization (EPFO). The Company''s monthly contribution towards Provident Fund is accounted, for on accrual basis.

ii) Defined Benefit Plan

Liability on account of ''Gratuity'' is accounted for on the basis of Actuarial Valuation at the end of each year.

iii) Other Long Term

Liability on account of ''leave encashment'' is made on the basis of Actuarial Valuation at the end of the year.

iv) Other Short Term

Other Short term Employee Benefits are charged to revenue in the ye.ar in which the related services are rendered.

m) Share Issue Expenses:

Share Issue Expenses are adjusted against Share Premium to the extent balance available in the share premium account.

n) Taxation:

i) Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws.

ii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been announced up to the balance sheet date. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences between the taxable income and accounting income. The effect of tax rate change is considered in the statement of profit and loss of the respective year of change.

iii) Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws are recognized only if there is a virtual certainty of its realization supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is reasonable certainty of its realization.

o) Foreign Currency Transactions:

i) The transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction.

ii) Current assets and current liabilities in foreign currency outstanding at the balance sheet date are translated at the exchange rates prevailing on the date of balance sheet.

The resulting exchange difference, if any, .is charged to the statement of profit and loss.

p) Earnings Per Share (''EPS''):

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.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

q) Provisions:

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.

r) Lease:

Lease arrangements where the risk and rewards incident to ownership of asset substantially vest with the lessor are recognized as operating lease. Lease rent under operating leases are charged to the statement of profit and loss on a straight line basis over the lease term.

Assets given under operating lease are included in fixed assets. Lease income is recognized in the statement of profit and loss on as straight line basis over the lease term. Costs including depreciation are recognized as expense in the statement of profit and loss.

s) Segmental Policies:

Company''s reporting segments are identified based on activities / products, risks and rewards, organization structure and internal reporting systems.

Segment revenue and expense includes amounts, which can be directly attributed to the segment and are allocable on a reasonable basis. Unallocable items and interest income / expenses are disclosed separately.

Segment assets and liabilities are operating assets / liabilities by the segments which are directly attributable to the segment. The components of capital employed that cannot be directly identified are shown as unallocable capital employed.

t) Contingent Liabilities:

The Company makes a provision when there is present obligation as a result of past event where the outflow of economic resources is probable and a reliable estimate of the amount of the obligation can be made.

A disclosure is made for a contingent liability when there is a:

i) Possible obligation, the existence of which will be confirmed by the occurrence / non-occurrence of one or more uncertain events, hot fully within the control of the company.

ii) Present obligation, where it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

iii) Present obligation where a reliable estimate cannot be made.

u) Other accounting Policies:

These are consistent with the generally accepted accounting practices.

---

Dec 31, 2011

BASIS OF ACCOUNTING:

The Financial statements are prepared under historical cost convention, on accrual basis, in accordance with the Generally Accepted Accounting Principles in India and comply with Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 issued by the Central Government and the provisions of the Companies Act, 1956, (the 'Act') to the extent applicable.

USE OF ESTIMATES:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported accounts of revenues and expenses for the years presented. Although these estimates are based upon management's knowledge of current event and actions, actual results could differ from those estimates and revisions, if any, are recognized in the current and future periods.

REVENUE RECOGNITION:

(i) Policy in respect of Real Estate Sales:

The Company follows Accounting Standard AS-9 'Revenue Recognition' read Along with the Guidance Note on 'Recognition of Revenue by the Real Estate Developers' issued by the Institute of Chartered Accountants of India. Revenue in respect of real estate sales is recognized when the Company has transferred to the buyer all significant risks and rewards of ownership, i.e., when the buyer has entered into an agreement for sale which is duly registered and according to which the buyer has a legal right to sell or transfer his interest in the property, without any material condition. Where the Company is obliged to perform substantial acts after the transfer of all significant risk and rewards of ownership, the revenue is recognized on proportionate basis as the acts are performed, by applying percentage of completion method in the manner explained in Accounting Standard AS-7 'Construction Contracts' as notified under the Companies (Accounting Standards) Rules, 2006. Further, Revenue is recognized, in relation to the sold areas only, on the basis of percentage of actual cost incurred thereon including cost of land as against the total estimated cost of the project under execution subject to such actual costs being 30% or more of the total estimated cost. Estimated project cost includes cost of land / development rights, borrowing costs, overheads, estimated construction and development cost of such properties. The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognised 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.

(ii) Others:

Interest income is recognized on accrual basis on a time proportion basis.

Dividend income is recognized when the Company's right to receive dividend is established.

UNBILLED RECEIVABLES:

Unbilled receivables disclosed under Schedule 8 - "Other Current Assets" represents revenue recognized based on Percentage of completion method, as per Revenue Recognition Policy in respect of Real Estate Sales, over and above the amount due as per the payment plans agreed with the customers.

FIXED ASSETS:

All fixed assets are stated at cost of acquisition, less accumulated depreciation except leasehold land, and intangible assets which are stated at cost less amounts amortized. Cost includes purchase price and all other attributable costs of bringing the assets to its working condition for intended use. Financing costs relating to borrowed funds attributable to acquisition, which takes substantial period of time to get ready for its intended use are also included, for the period till such asset is put to use.

DEPRECIATION / AMORTISATION :

a) Depreciation on fixed assets (other than Fire Fighting Equipment at Avadh Division) is provided on Straight Line Method (SLM) at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 except for depreciation on Shuttering & Scaffolding which are being depreciated on SLM at 16.67% p.a. based on useful life determined by the Management.

b) Depreciation on Fire Fighting Equipment at Avadh Division is provided on written down value method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

c) The depreciation has not been charged on Fixed Assets whose written down value had reached below 5% of its cost.

d) Asset costing Rs. 5,000 or less individually is fully depreciated in the year of purchase.

e) Leasehold land is amortized over the period of the lease.

f) Software are being amortized over the estimated useful life of 3 years.

g) In case of impairment loss, if any, depreciation on it is provided on the revised carrying amount for their remaining useful life.

IMPAIRMENT OF ASSETS:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If recoverable amount of such asset is less than the carrying amount, then the carrying amount is reduced to its recoverable amount and the difference arising there from is treated as impairment loss and is charged to profit & loss account.

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

BORROWING COST:

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are considered as part of the cost of that asset upto the date the assets are ready / put to use. Other Borrowing costs are recognized as an expense in the year in which they are incurred.

INVESTMENTS:

Long term Investments are stated at cost. However, provision is made for diminution in value, other than temporary, on individual basis.

INVENTORIES:

Materials, Stores and Spares, tools and consumables are valued at cost or net realizable value, whichever is lower on the basis of 'First In First Out' (FIFO) method.

Work-in-progress is valued at lower of cost and net realizable value. Cost of construction includes cost of land, materials, services, depreciation, interest on borrowing and other incidental cost incurred in relation to project.

COST OF CONSTRUCTION (Real Estate Development):

Cost of construction includes cost of land, materials, services, depreciation, interest on borrowing and other incidental cost incurred in relation to project.

EMPLOYEE BENEFITS:

a) Defined Contribution Plan

Company's contribution to Provident Fund is deposited with the Employees Provident Fund Organization (EPFO). The Company's monthly contribution towards Provident Fund is accounted for on accrual basis.

b) Defined Benefit Plan

Liability on account of 'Gratuity' is accounted for on the basis of Actuarial Valuation at the end of each year.

c) Other Long Term

Liability on account of 'leave encashment' is made on the basis of Actuarial Valuation at the end of the year.

d) Other Short Term

Other Short term Employee Benefits are charged to revenue in the year in which the related services are rendered.

MISCELLANEOUS EXPENDITURE:

Expenditure in the nature of miscellaneous expenditure represented by Voluntary Termination Benefits are amortized in accordance with Accounting Standard 15 (Revised) 'Employee Benefits' notified under the Companies (Accounting Standards) Rules, 2006.

SHARE ISSUE EXPENSES:

Share Issue Expenses are adjusted against Share Premium to the extent balance available in the share premium account.

TAXATION:

a) Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws.

b) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been announced up to the balance sheet date. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences between the taxable income and accounting income. The effect of tax rate change is considered in the profit and loss account of the respective year of change.

c) Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws are recognized only if there is a virtual certainty of its realization supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is reasonable certainty of its realization.

FOREIGN CURRENCY TRANSACTIONS:

a) The transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction.

b) Current Assets and Current Liabilities in foreign currency outstanding at the Balance Sheet date are translated at the exchange rates prevailing on the date of Balance Sheet.

The resulting Exchange Difference, if any, is charged to the Profit and Loss Account.

EARNINGS PER SHARE ('EPS'):

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.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

PROVISIONS:

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.

LEASES:

Lease arrangements where the risk and rewards incident to ownership of asset substantially vest with the lessor are recognized as operating lease. Lease rent under operating leases are charged to the Profit and Loss Account on a straight line basis over the lease term.

Assets given under operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on as straight line basis over the lease term. Costs including depreciation are recognized as expense in the Profit and Loss Account.

SEGMENT POLICIES:

Company's reporting segments are identified based on activities / products, risks and rewards, organization structure and internal reporting systems.

Segment revenue and expense includes amounts, which can be directly attributed to the segment and are allocable on a reasonable basis. Unallocable items and interest income / expenses are disclosed separately.

Segment assets and liabilities are operating assets / liabilities by the segments which are directly attributable to the segment. The components of capital employed that cannot be directly identified are shown as unallocable capital employed.

CONTINGENT LIABILITIES:

The Company makes a provision when there is present obligation as a result of past event where the outflow of economic resources is probable and a reliable estimate of the amount of the obligation can be made.

A disclosure is made for a contingent liability when there is a:

(i) Possible obligation, the existence of which will be confirmed by the occurrence / non-occurrence of one or more uncertain events, not fully within the control of the company;

(ii) Present obligation, where it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation;

(iii) Present obligation where a reliable estimate cannot be made;

---

Dec 31, 2010

BASIS OF ACCOUNTING:

The Financial statements are prepared under historical cost convention, on accrual basis, in accordance with the Generally Accepted Accounting Principles in India and comply with Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 issued by the Central Government and the provisions of the Companies Act, 1956, (the Act) to the extent applicable.

USE OF ESTIMATES:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported accounts of revenues and expenses for the years presented. Although these estimates are based upon managements knowledge of current event and actions, actual results could differ from those estimates and revisions, if any, are recognised in the current and future periods.

REVENUE RECOGNITION:

(i) Policy in respect of Real Estate Sales:

The Company follows Accounting Standard AS-9 Revenue Recognition read alongwith the Guidance Note on Recognition of Revenue by the Real Estate Developers issued by The Institute of Chartered Accountants of India. Revenue in respect of real estate sales is recognised when the Company has transferred to the buyer all significant risk and rewards of ownership, i.e., when the buyer has entered into a legally enforceable agreement for sale and according to the which the buyer has a legal right to sell or transfer his interest in the property, without any material condition. However, in case where the Company is obliged to perform the substantial acts after the transfer of all significant risk and rewards of ownership, the revenue is recognised on proportionate basis as the acts are performed, by applying percentage of completion method in the manner explained in Accounting Standard AS-7 Construction Contracts issued by Institute of Chartered Accountants of India. Further, Revenue is recognised, in relation to the sold areas only, on the basis of percentage of actual cost incurred thereon including cost of land as against the total estimated cost of the project under execution subject to such actual costs being 30% or more of the total estimated cost. Estimated project cost includes cost of land / development rights, borrowing costs, overheads, estimated construction and development cost of such properties. The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognised 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 recognised immediately.

(ii) Others:

Interest income is recognised on accrual basis on a time proportion basis.

Dividend income is recognised when the Companys right to receive dividend is established.

FIXED ASSETS:

All fixed assets are stated at cost of acquisition, less accumulated depreciation except leasehold land and intangible assets which are stated at cost less amounts amortised. Cost includes purchase price and all other attributable costs of bringing the assets to its working condition for intended use. Financing costs relating to borrowed funds attributable to acquisition, which takes substantial period of time to get ready for its intended use are also included, for the period till such asset is put to use.

DEPRECIATION / AMORTISATION:

a) Depreciation on fixed assets (other than Fire Fighting Equipment at Avadh Division) is provided on Straight Line Method (SLM) at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 except for depreciation on Shuttering and Scaffolding which are being depreciated on SLM at 16.67% p.a. based on useful life determined by the Management.

b) Depreciation on Fire Fighting Equipment at Avadh Division is provided on written down value method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

c) The depreciation has not been charged on Fixed Assets whose written down value had reached below 5% of its cost.

d) Asset costing Rs. 5000 or less individually is fully depreciated in the year of purchase.

e) Leasehold land is amortised over the period of the lease.

f) Software are being amortised over the estimated useful life of 3 years.

g) In case of impairment loss, if any, depreciation on it is provided on the revised carrying amount for their remaining useful life.

IMPAIRMENT OF ASSETS:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If recoverable amount of such asset is less than the carrying amount, then the carrying amount is reduced to its recoverable amount and the difference arising therefrom is treated as impairment loss and is charged to profit and loss account.

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

BORROWING COST:

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are considered as part of the cost of that asset upto the date the assets are ready / put to use. Other borrowing costs are recognised as an expense in the year in which they are incurred.

INVESTMENTS:

Long term Investments are stated at cost. However, provision is made for diminution in value, other than temporary, on individual basis.

INVENTORIES:

Materials, Stores and Spares, tools and consumables are valued at cost or net realisable value, whichever is lower on the basis of First In First Out (FIFO) method.

Work-in-progress is valued at lower of cost and net realisable value. Cost of construction includes cost of land, materials, services, depreciation, interest on borrowing and other incidental cost incurred in relation to project.

COST OF CONSTRUCTION (Real Estate Development):

Cost of construction includes cost of land, materials, services, depreciation, interest on borrowing and other incidental cost incurred in relation to project.

EMPLOYEE BENEFITS:

a) Defined Contribution Plan

Companys contribution to Provident Fund is deposited with the employees Provident Fund Organisation (EPFO). The Companys monthly contribution towards Provident Fund is accounted for on accrual basis.

b) Defined Benefit Plan

Liability on account of Gratuity is accounted for on the basis of Actuarial Valuation at the end of each year.

c) Other Long Term

Liability on account of leave encashment is made on the basis of Actuarial Valuation at the end of the year.

d) Other Short Term

Other Short term Employee Benefits are charged to revenue in the year in which the related services are rendered.

MISCELLANEOUS EXPENDITURE:

Expenditure in the nature of miscellaneous expenditure represented by Voluntary Termination Benefits are amortised in accordance with Accounting Standard 15 (Revised) Employee Benefits issued by the Institute of Chartered Accountants of India.

TAXATION:

a) Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws.

b) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been announced up to the balance sheet date. Deferred tax assets and liabilities are recognised for the future tax consequences attributable to timing differences between the taxable income and accounting income. The effect of tax rate change is considered in the profit and loss account of the respective year of change.

c) Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws are recognised only if there is a virtual certainty of its realisation supported by convincing evidence. Deferred tax assets on account of other timing differences are recognised only to the extent there is reasonable certainty of its realisation.

FOREIGN CURRENCY TRANSACTIONS:

a) The transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction.

b) Current Assets and Current Liabilities in foreign currency outstanding at the Balance Sheet date are translated at the exchange rates prevailing on the date of Balance Sheet.

The resulting Exchange Difference, if any, is charged to the Profit and Loss Account.

EARNINGS PER SHARE (EPS):

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.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

PROVISIONS:

Provision is recognised 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.

LEASES:

Lease arrangements where the risk and rewards incident to ownership of asset substantially vest with the lessor are recognised as operating lease. Lease rent under operating leases are charged to the Profit and Loss account on a straight line basis over the lease term.

Assets given under operating leases are included in fixed assets. Lease income is recognised in the Profit and Loss Account on as straight line basis over the lease term. Costs including depreciation are recognised as expense in the Profit and Loss Account.

SEGMENT POLICIES:

Companys reporting segments are identified based on activities / products, risk and rewards, organisation structure and internal reporting systems.

Segment revenue and expense includes amounts, which can be directly attributed to the segment and are allocable on a reasonable basis. Unallocable items and interest income / expenses are disclosed separately.

Segment assets and liabilities are operating assets / liabilities by the segments which are directly attributable to the segment. The components of capital employed that cannot be directly identified are shown as unallocable capital employed.

CONTINGENT LIABILITIES:

The Company makes a provision when there is present obligation as a result of past event where the outflow of economic resources is probable and a reliable estimate of the amount of the obligation can be made.

A disclosure is made for a contingent liability when there is a:

(i) Possible obligation, the existence of which will, be confirmed by the occurrence / non-occurrence of one or more uncertain events, not fully within the control of the company;

(ii) Present obligation, where it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

(iii) Present obligation where a reliable estimate cannot be made. OTHER ACCOUNTING POLICIES:

These are consistent with the generally accepted accounting practices.

---

Dec 31, 2009

BASIS OF ACCOUNTING:

The Financial statements are prepared under historical cost convention, on accrual basis, in accordance with the Generally Accepted Accounting Principles in India and comply with Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 to the extent applicable and in accordance with provisions of the Companies Act, 1956.

USE OF ESTIMATES:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported accounts of revenues and expenses for the years presented. Although these estimates are based upon managements knowledge of current event and actions, actual results could differ from those estimates and revisions, if any, are recognized in the current and future periods.

REVENUE RECOGNITION:

(i) Policy in respect of Real Estate Sales

The Company follows Accounting Standard AS-9 Revenue Recognition read alongwith the Guidance Note on Recognition of Revenue by the Real Estate Developers issued by the Institute of Chartered Accountants of India. Revenue in respect of real estate sales is recognized when the Company has transferred to the buyer all significant risks and rewards of ownership, i.e., when the buyer has entered into a legally enforceable agreement for sale and according to the which the buyer has a legal right to sell or transfer his interest in the property, without any material condition. However in case where the Company is obliged to perform the substantial acts after the transfer of all significant risk and rewards of ownership, the revenue is recognized on proportionate basis as the acts are performed, by applying percentage of completion method in the manner explained in Accounting Standard AS-7 Construction Contracts issued by Institute of Chartered Accountants of India. Further, Revenue is recognized, in relation to the sold areas only, on the basis of percentage of actual cost incurred thereon including cost of land as against the total estimated cost of the project under execution subject to such actual costs being 30% or more of the total estimated cost. Estimated project cost includes cost of land / development rights, borrowing costs, overheads, estimated construction and development cost of such properties. The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognised 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.

(ii) Others

Interest income is recognized on accrual basis on a time proportion basis.

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

FIXED ASSETS:

All fixed assets are stated at cost of acquisition, less accumulated depreciation except leasehold land, and intangible assets which are stated at cost less amounts amortized. Cost includes purchase price and all other attributable costs of bringing the assets to its working condition for intended use. Financing costs relating to borrowed funds attributable to acquisition, which takes substantial period of time to get ready for its intended use are also included, for the period till such asset is put to use.

DEPRECIATION / AMORTISATION:

a) Depreciation on fixed assets (other than Fire Fighting Equipment at Avadh Division) is provided on Straight Line Method (SLM) at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 except for depreciation on Shuttering & Scaffolding which are being depreciated on SLM at 16.67% p.a. based on useful life determined by the Management.

b) Depreciation on Fire Fighting Equipment at Avadh Division is provided on written down value method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

c) The depreciation has not been charged on Fixed Assets whose written down value had reached below 5% of its cost.

d) Asset costing Rs.5000 or less individually is fully depreciated in the year of purchase.

e) Leasehold land is amortized over the period of the lease.

f) Software are being amortized over the estimated useful life of 3 years.

g) In case of impairment loss, if any, depreciation on it is provided on the revised carrying amount for their remaining useful life.

IMPAIRMENT OF ASSETS:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If recoverable amount of such asset is less than the carrying amount, then the carrying amount is reduced to its recoverable amount and the difference arising therefrom is treated as impairment loss and is charged to profit & loss account.

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

BORROWING COST:

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are considered as part of the cost of that asset upto the date the assets are ready / put to use. Other Borrowing costs are recognized as an expense in the year in which they are incurred.

INVESTMENTS:

Long term Investments are stated at cost. However, provision is made for diminution in value, other than temporary, on individual basis.

INVENTORIES:

Materials, Stores and Spares, tools and consumables are valued at cost or net realizable value, whichever is lower on the basis of First In First Out (FIFO) method.

Work-in-progress is valued at lower of cost or net realizable value. Cost of construction includes cost of land, materials, services, depreciation, interes on borrowing and other incidental cost incurred in relation to project.

COST OF CONSTRUCTION (Real Estate Development):

Cost of construction includes cost of land, materials, services, depreciation, interest on borrowing, and other incidental cost incurred in relation to project.

EMPLOYEE BENEFITS:

a) Defined Contribution Plan

Companys contribution to Provident Fund is deposited with the employees Provident Fund Organization (EPFO). The Companys monthly contribution towards Provident Fund is accounted for on accrual basis.

b) Defined Benefit Plan

Liability on account of Gratuity is accounted for on the basis of Actuarial Valuation at the end of each year.

c) Other Long Term

Liability on account of leave encashment is made on the basis of Actuarial Valuation at the end of the year.

d) Other Short Term

Other Short term Employee Benefits are charged to revenue in the year in which the related services are rendered.

MISCELLANEOUS EXPENDITURE:

Expenditure in the nature of miscellaneous expenditure represented by Voluntary Termination Benefits are amortized in accordance with Accounting Standard 15 (Revised) Employee Benefits issued by the Institute of Chartered Accountants of India.

TAXATION:

a) Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws.

b) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been announced up to the balance sheet date. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences between the taxable income and accounting income. The effect of tax rate change is considered in the profit and loss account of the respective year of change.

c) Deferred tax assets arising mainly on account of brought forward losses and uhabsorbed depreciation under tax laws are recognized onlv if there is a virtual certainty of its realization supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is reasonable certainty of its realization.

FOREIGN CURRENCY TRANSACTIONS:

a) The transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction.

b) Current Assets and Current Liabilities in Foreign currency outstanding at the Balance Sheet date are translated at the exchange rates prevailing on the date of Balance Sheet.

The resulting Exchange Difference, if any, is charged to the Profit & Loss Account.

EARNINGS PER SHARE (EPS):

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.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

PROVISIONS:

Provision is recognized when an enterp ise 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.

LEASES:

Lease arrangements where the risk and rewards incident to ownership of asset substantially vest with the lessor are recognized as operating lease. Lease re it under operating leases are charged to the Profit and Loss account on a straight line basis over the lease term.

Assets given under operating leases are included in fixed assets. Lease income is recognized in the profit and loss account on as straight line basis over the lease term. Costs, including depreciation are recognized as expense in the profit and loss account.

SEGMENT POLICIES:

Companys reporting segments are identified based on activities / products, risks and reward, organization structure and internal reporting systems.

Segment revenue and expense includes amounts, which can be directly attributed to the segment and are allocable on a reasonable basis. Unallocable items and interest income / expenses are disclosed separately.

Segment assets and liabilities are operating assets / liabilities by the segments which are directly attributable to the segment. The components of capital employed that cannot be directly identified are shown as unallocable capital employed.

CONTINGENT LIABILITIES:

The company makes a provision when there is present obligation as a result of past event where the outflow of economic resources is probable and a reliable estimate of the amount of the obligation can be made.

A disclosure is made for a contingent liability when there is a:

(i) Possible obligation, the existence of which will be confirmed by the occurrence / non-occurrence of one or more uncertain events, not fully within the control of the company;

(ii) Present obligation, where it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligatior.

(iii) Present obligation, where a reliable estimate can not be made.

OTHER ACCOUNTING POLICIES:

These are consistent with the generally accepted accounting practices.

1. Preference shares includes 1,17,011 - 0 % Redeemable Preference Shares of face value of Rs. 100/- each and 1,36,877 - 11% Redeemable Cumulative Preference Shares which are due for redemption on 30th October, 2017 and 31st October, 2018 respectively.

2. Issue of convertible warrants:

During the year, the Company had issued on preferential / private placement basis, 1,60,00,000 equity warrants carrying an option to subscribe to equivalent number of equity shares of Rs 10/- each on a future date, to the Promoters / Promoters Group and Others. Out of above, the Company has allotted 45,00,000 equity warrants to the Promoters / Promoters Group at its Board meeting held on 16th December, 2009. The other terms and conditions of the convertible warrants issued are as follows:

(a) An amount of 25% of the price of equity warrants, as prescribed as per applicable SEBI regulations relating to preferential allotment as amended from time to time, is payable on or before allotment of equity warrants.

(b) The Warrants holders shall have the option of applying for and being allotted equity shares of the Company of face value of Rs.10/- each by paying the balance subscription price after adjusting the upfront payment made on the date of allotment of warrants, at any time prior to expiry of 18 months from the date of allotment of the Warrants by the allottees.

(c) The relevant dates for the preferential issue of equity warrants, as prescribed as per applicable SEBI regulations relating to preferential allotment as amended upto date, for determination of applicable price for the issue of above mentioned equ.ty warrants was 7th October, 2009 i.e. 30 (thirty) days prior to the date of declaration of the postal ballot result.

(d) In the event the equity warrants holder(s) doesnt exercise the option given under the equity warrants within 18 months from the date of allotment of the equity warrants, the equity warrants shall lapse and the amount paid as deposit shall stand forfeited by the Company.

(e) The equity shares to be issued and allotted by the Company as a consequence of the conversion / exchange of the equity warrants in the manner aforesaid shall be subject to the Memorandum and Articles of Association of the Company and shall rank pari passu in all respect with the existing equity shares of the Company.

(f) The equity warrants and the equity shares allotted pursuant to exercise of such equity warrants shall be subject to the lock-in period and restrictions in transferability as specified as per applicable SEBI Regulations relating to preferential allotment.

(g) The aforesaid warrants by itself shall not give the holder thereof any rights of the shareholder of the Company.