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Accounting Policies of Vascon Engineers Ltd. Company

Mar 31, 2015

1 Corporate Information

Vascon Engineers Limited (the 'Company') was incorporated on January 1, 1986 and is engaged in the business of Engineering, Procurement and Construction services (EPC) and Real Estate Development. The shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange.

2.1 Basis of Preparation of Financial Statements

The financial statements of the Company 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 the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been prepared on accrual basis 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.

2.2 Use of Estimates

The preparation of the financial statements, in conformity with the Indian GAAP, requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities (including contingent liability) at the date of the financial statements and the reported amounts of revenues and expenses during the year. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and differences between actual results and estimates are recognized in the periods in which the results are known/materialize.

2.3 Tangible Asset, Intangible asset and capital work in progress Fixed assets are carried at cost less accumulated depreciation/amortization. The cost of fixed assets comprises its purchase

a) price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use.

b) Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realizable value and disclosed separately.

c) Capital Work in Progress - Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest. Revenues earned if any, before capitalization from such capital project are adjusted against capital work in progress.

d) Borrowing cost relating to acquisition / construction /development of tangible asset and capital work in progress which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such asset are ready to be put to use.

2.4 Impairment of fixed assets

At the end of each year, the management reviews the carrying values of assets to determine whether there is any indication that those assets have suffered impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent, if any, of the impairment loss. Where it is not possible to estimate the recoverable amount of individual asset, the management estimates the recoverable amount of the cash generating unit to which the asset belongs. Intangible assets are tested for impairment every financial year even if there is no indication that the asset is impaired.

If the recoverable amount of an asset of cash generating unit is estimated to be less than the carrying amount, the carrying amount of the asset or the cash generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in the Statement of Profit and Loss.

When an impairment loss subsequently reverses, the carrying amount of the asset of cash generating unit is increased to the revised estimate of a recoverable amount, not exceeding the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash generating unit in prior years. A reversal of impairment loss is Estimated useful life of assets consistent with the useful life specified in Schedule II of the Companies Act, 2013. The economic useful life of assets has been assessed based on technical evaluation, taking into account the nature of assets, the estimated usage of assets, the operating conditions of the assets, past history of replacement, anticipated technological changes, maintenance history etc.

b) Intangible assets are amortized on the written down value method over their estimated useful life.

c) Fixed assets individually costing Rs. 5,000 or less are depreciated fully in the year of acquisition.

d) Depreciation on assets acquired/purchased, sold/discarded during the year is provided on a pro-rata basis from the date of each addition till the date of sale/discard.

e) Cost of acquisition of share in partnership firm is amortized on systematic manner. Adjustments are made for any permanent impairment in value, if any.

2.6 Investments

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

2.7 Recognition of Revenue / Cost

a) Construction contracts

Revenue from fixed price construction contracts is recognized on the Percentage Of Completion Method (POCM). The stage of completion is determined by survey of work performed / completion of physical proportion of the contract work determined by technical estimate of work done / actual cost incurred in relation to total estimated contract cost, as the case may be. The estimate of total contract cost has been made at the time of commencement of contract work and reviewed and revised, by the technical experts, from time to time during period in which the contract work is executed. Future expected loss, if any, is recognised immediately as expenditure. In respect of unapproved revenue recognized, an adequate provision is made for possible reductions, if any. Contract revenue earned in excess of billing has been reflected as unbilled revenue under the head "Other Current Assets" " and billing in excess of contract revenue has been reflected as Unearned Revenue under the head "Other Current Liabilities" in the Balance Sheet.

The Company provides for cost to be incurred during warranty period for servicing warranties on the completed projects. Such amount, net of the obligations on account of sub-contractors, is determined on the basis of technical evaluation and past experience of meeting such costs.

Escalation claims raised by the Company are recognized when negotiations have reached an advanced stage such that customers will accept the claim and amount that is probable will be accepted by the customer can be measured reliably.

b) Real estate development

(i) Completed Units

Revenue from sales of units is recognized as and when the underlying significant risk and rewards of ownership are transferred to the purchaser.

(ii) Units Under Development

Revenue from sales of such units is recognized as and when all the following conditions are satisfied:

(a) The underlying significant risk and rewards of ownership are transferred to the purchaser.

(b) All critical approvals necessary for commencement of the project are obtained .

(c) Reasonable level of development is reached when project cost incurred excluding land cost and borrowing cost exceeds 25% of the project cost.

(d) At least 25% of the estimated project area are secured by contracts or agreement with the buyers.

(e) At least 10% of the total revenue as per agreements of sale are realized at the reporting date in respect of each of the contracts and there are no outstanding defaults of the payment terms in such contracts.

(f) Certainty of recoverability of the balance consideration.

Project revenue and project costs associated with the real estate project are recognized as revenue and expenses by reference to the stage of completion of the project activity at the reporting date in accordance with "Guidance Note on Accounting for real estate transactions".

The percentage completion for the purpose of recognition of revenue is determined based on actual costs incurred thereon by the Company to total estimated cost with reference to the saleable area. Cost for this purpose includes cost of land/development rights, construction and development costs of such properties borrowing costs and overheads, as may be applicable.

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 occur.

However, when the total project cost is estimated to exceed total revenues from the project, loss is recognized immediately.

c) Share of Profit/Loss from Partnership firm/ Association of Person is recognized as income during the relevant period on the basis of accounts made-up audited or unaudited as the case may be and allocation made by the firm/AOP n accordance with Complied by: Dion Global Solutions Limited the Deed of Partnership/AOP Agreement.

d) Interest Income – Interest income is recognized on time proportion basis taking into account the amounts invested and the rate of interest.

e) Dividend Income – Dividend income is recognized as and when the right to receive the same is established.

f) Rental Income - Income from letting-out of property is accounted on accrual basis- as per the terms of agreement and when the right to receive the rent is established.

g) Income from services rendered is recognized as revenue when the right to receive the same is established. h) Profit on sale of investment is recorded upon transfer of title by the Company. It is determined as the difference between the sale price and the then carrying amount of the investment.

2.8 Inventories

a) Stock of Materials, etc. Stock of materials, etc. has been valued at lower of cost or net realizable value. The cost is determined on Weighted Average method.

b) Development Work

(i) Development - Completed Units

Finished goods comprising of constructed units ready for sale are valued at lower of cost and net realizable value.

(ii) Development - Units under construction

The unit under construction to the extent not recognized as sales under the revenue recognition policy adopted by the Company is carried at lower of cost or net realizable value on the basis of technical estimate certified by the Managing Director / Technical Experts.

c) Stock of Trading Goods Stock of trading goods has been stated at cost or net realizable whichever is lower. The cost is determined on Weighted Average Method.

2.9 Retirement benefits

a) Short-term Employee Benefits - The undiscounted amount of short-term employee benefits expected to be paid in exchange of services rendered by the employees is recognized during the year when the employees render the service.

b) Post Employment Benefits i) Defined Contribution Plan -

Payments to defined contribution retirement benefit schemes viz. Company's Provident Fund Scheme and Superannuation Fund are recognized as an expense when the employees have rendered the service entitling them to the contribution.

ii) Defined Benefit Plan -

The Company's liability towards gratuity is determined using the Projected Unit Credit method, with actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses are recognized in the Statement of Profit and Loss in the period in which they occur. Past service costs is recognized on a straight line basis over the average period until the benefits become vested. To the extent the benefits are vested, the past service cost is recognized immediately in the Statement of Profit and Loss.

The liability recognized in the Balance Sheet represents the present value of the defined benefit obligation adjusted for unrecognized past service cost and as reduced by the fair value of the scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

c) Other Long-term Employee Benefits -

The Company's liability towards compensated absence which are not expected to accrue within twelve months after the end of the period in which employee renders the related service is determined by using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date.

2.10 Borrowing Cost

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset are added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted. Advances/deposits given to the vendors under the contractual arrangement for acquisition/construction of qualifying assets is considered as cost for the purpose of capitalization of borrowing cost.

2.11 Leases

a) Assets acquired on leases where a significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to statement of profit and loss on accrual basis.

b) Assets leased out under operating leases are capitalized. Rental income recognized on accrual basis over the lease term.

2.12 Provisions and Contingent Liabilities

A provision is recognized when the Company has a present obligation as a result of past event, it is probable that outflow of resources will be required to settle the obligation and in respect of which reliable estimates can be made. Provisions (excluding employee benefits) are not discounted to their present value and are determined based on the best estimates required to settle the obligation as at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent Liabilities are disclosed in the financial statements unless the probability of outflow of resources is remote. A contingent asset is neither recognized nor disclosed in the financial statements.

2.13 Taxes on Income

a) Tax expense comprises of current tax and deferred tax.

b) Current tax is measured at the amount expected to be paid to/recovered from the tax authorities, using the applicable tax rates and tax laws.

c) Deferred tax is recognized on timing differences between taxable income and accounting income which originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and tax laws enacted or substantively enacted as at the reporting date. Deferred tax assets are recognized for timing differences other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future income will be available against which these can be realized. Deferred tax assets in respect of unabsorbed depreciation and carried forward losses are recognized only if there is virtual certainty that sufficient future taxable income will be available to realize the assets. Deferred tax assets are reviewed at each balance sheet date for their reliability.

d) Minimum Alternate Tax (MAT) credit entitlement available under the provisions of Section 115JAA of the Income Tax Act, 1961 is recognized if there is convincing evidence that the Company will pay normal tax during the specified future period. The Company reviews the carrying amount of MAT credit entitlement at each balance sheet date and writes-down the carrying amount to the extent there is no longer convincing evidence that the Company will pay normal tax during the specified future period.

2.14 Joint Venture Projects

a) Jointly Controlled Operations -

In respect of joint venture contracts in the nature of jointly controlled operations, the assets controlled, liabilities incurred, the share of income and expenses incurred are recognized in the agreed proportions, as may be belonging to the Company, under respective heads in the financial statements.

b) Jointly Controlled Entities - i) Integrated Joint Ventures -

Company's share in profits or losses of Integrated Joint Ventures is accounted on determination of the profits or losses by the joint venture.

Investments in Integrated Joint Ventures are carried at cost net of company's share in recognized profits or losses. ii) Incorporated Jointly Controlled Entities -

- Income on investments in incorporated Jointly Controlled Entities is recognized when the right to receive the same is established.

- Investment in such Joint Ventures are carried at cost after providing for diminution in value considered other than temporary in nature in the opinion of the management, if any.

2.15 Segment reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.

Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".

2.16 Employee Stock Option Scheme

Complied by: Dion Global Solutio

The Company has formulated Employee Stock Option Schemes (ESOS) in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The Schemes provide for grant of options to employees of the Company to acquire equity shares of the Company that vest in a graded manner and that are to be exercised within a specified period. The Company accounts the employee stock based compensation under intrinsic value method. In accordance with the SEBI Guidelines; the excess, if any, of the closing market price on the day prior to the grant of the options under ESOS over the exercise price is amortized on a straight-line basis over the vesting period.

2.17 Foreign currency transaction

a) Initial Recognition Transactions in foreign currency are initially recorded at the exchange rate prevailing on the date of the transaction.

b) Conversion

Monetary assets and liabilities denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. Non-monetary foreign currency items are carried at their historical costs and not retranslated. Gains and losses arising on translation and settlement of foreign currency monetary assets and liabilities are recognized in the Statement of Profit and Loss.

c) Exchange Difference Exchange differences on forward exchange contracts are recognized in the Statement of Profit and Loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of a forward exchange contract is recognized in the Statement of Profit and Loss.

2.18 Earnings Per Share

The Company reports basic and diluted earnings per share (EPS) in accordance with Accounting Standard 20 "Earnings per Share". Basic EPS is computed by dividing the net profit or loss for the year attributable to equity shareholder by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss attributable to equity shareholders by weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

2.19 Cash Flow Statement

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

Cash and cash equivalents presented in cash flow statement consists of cash in hand and unencumbered, highly liquid bank and other balances that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.


Mar 31, 2014

1. The Company overview

Vascon Engineers Limited (Company) was incorporated on January 1, 1986. The Company is engaged in the business of Engineering, Procurement and Construction services (EPC) and Real Estate Development directly or indirectly through its Subsidiaries, Joint Ventures and Associates. The shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange.

2.1 Basis of Preparation of Financial Statements

The The Financial statement have been prepared to comply in all material respects with the notified accounting standard by companies Accounting rules 2006 as amended from time to time and revelent provisions of companies Act 1956 (The Act). The financial statements have been prepared in accordance with revised schedule VI requirement including previous year comparatives. The financial statement has been prepared under historical cost convention on an accrual basis in accordance with accounting principles generally accepted in India. The accounting policies have been consistently applied by the company and are consistent with those used in previous year.

The company has also reclassified the previous year figures in accordance with the requirement applicable in the current year.

2.2 Use of Estimates

The Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of the financial statement and the result of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current event and actions actual result could differ from these estimates. significant estimates used by the management in the preparation of these financial statement include Project revenue , Project cost , Saleable area , economic useful lives of Fixed asset , accrual of allowance for bad and doubtful Receivables and loans and Advances. Any revision to accounting estimates is recognized prospectively in accordance with applicable accounting standard.

2.3 Tangible Asset, Intangible asset and capital work in progress

a) Tangible asset are stated at cost less accumulated depreciation and Impairment losses, if any. Cost compromises the purchase price and any attributable / allocable incidental cost of bringing the asset to its working condition for its intended use.

b) Intangible assets are recognized as an asset only if it fulfills the criteria, for recognizing Intangible Assets, specified in AS 26

"Intangible Assets" issued by the ICAI. Intangible asset are stated at cost less accumulated amortization and impairment losses. cost comprises the acquisition price , development cost and attributable /allocable cost of bringing the asset to its working condition for its intended use.

c) Assets under installation or under construction as at the Balance sheet date are shown as Capital work in progress and are stated at cost less impairment losses. Cost comprises of expenditure incurred in respect of capital projects under development and includes any attributable / allocable cost and other incidental expenses. Revenues earned if any, before capitalization from such capital project are adjusted against capital work in progress.

d) Borrowing cost relating to acquisition / construction /development of tangible asset and capital work in progress which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such asset are ready to be put to use.

2. 4 Impairment

As at each Balance sheet date, the carrying amount of assets is tested for impairment so as to determine

a) the provision for impairment loss, if any and

b) the reversal of impairment loss recognized in previous period, if any Impairment loss is recognized when carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined:

a) in the case of individual asset, at higher of the net selling price or value in use

b) in the case of cash generating unit ( a group of assets that generates identified, independent cash flows), at the higher of the cash generating unit''s net selling price and the value in use (value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life)

2. 5 Depreciation / Amortisation

a) Depreciation on tangible fixed assets has been provided under written down value method at the rates and manner prescribed in schedule XIV to the Companies Act, 1956.

b) Cost of lease hold rights of land has been amortized evenly over a period of lease term.

c) Software in nature of intangible asset has been amortised over its estimated useful life evenly.

d) Cost of acquisition of share in partnership firm is amortised on systematic manner. Adjustments are made for any permanent impairment in value, if any.

2. 6 Investments

Investments are classified into current investments and long term investments. Investment intended to be held for not more than a year are classified as current investment. All other investment are classified as long term investments.

Long term investment are stated at cost less permanent diminution in value, if any. current investment are stated at lower of cost or fair value

2. 7 Recognition of Revenue / Cost

a) Construction contracts

Revenue from fixed price construction contracts is recognised on the Percentage Of Completion Method (POCM). The stage of completion is determined by survey of work performed / completion of physical proportion of the contract work determined by technical estimate of work done / actual cost incurred in relation to total estimated contract cost, as the case may be. The estimate of total contract cost has been made at the time of commencement of contract work and reviewed and revised, by the technical experts, from time to time during period in which the contract work is executed. Future expected loss, if any, is recognised immediately as expenditure. In respect of unapproved revenue recognised, an adequate provision is made for possible reductions, if any. Contract revenue earned in excess of billing has been reflected as unbilled revenue under the head "Other Current Assets" " and billing in excess of contract revenue has been reflected as Unearned Revenue under the head "Other Current Liabilities" in the Balance Sheet.

The Company provides for cost to be incurred during warranty period for servicing warranties on the completed projects. Such amount, net of the obligations on account of sub- contractors, is determined on the basis of technical evaluation and past experience of meeting such costs.

Escalation claims raised by the Company are recognised when negotiations have reached an advanced stage such that customers will accept the claim and amount that is probable will be accepted by the customer can be measured reliably.

b) Real estate development

(i) Completed Units

Revenue from sales of units is recognized as and when the underlying significant risk and rewards of ownership are transferred to the purchaser.

(ii) Units Under Development

(A) Projects which have commenced on or before March 31,2012

Revenue from sales of such units is recognized as and when the underlying significant risk and rewards of ownership are transferred to the purchaser, taking into account materiality of the work performed and certainty of recoverability of the consideration. Revenue is recognized on proportionate basis as the acts are progressively performed, by applying the percentage of completion method as explained in AS-7 (Revised) Construction Contracts in compliance with the authoritative professional view.

The percentage completion is determined based on actual costs incurred thereon by the Company to total estimated cost with reference to the saleable area. Cost for this purpose includes cost of land / development rights, construction and development costs of such properties borrowing costs and overheads, as may be applicable.

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 occur.

However, when the total project cost is estimated to exceed total revenues from the project, loss is recognized immediately.

(B) Projects which have commenced after March 31,2012.

Revenue from sales of such units is recognized as and when all the following conditions are satisfied:

(a) The underlying significant risk and rewards of ownership are transferred to the purchaser.

(b) All critical approvals necessary for commencement of the project are obtained .

(c) Reasonable level of development is reached when project cost incurred excluding land cost and borrowing cost exceeds 25% of the project cost excluding land cost and borrowing cost.

(d) Atleast 25% of the estimated project area are secured by contracts or agreement with the buyers.

(e) Atleast 10% of the total revenue as per agreements of sale are realised at the reporting date in respect of each of the contracts and there are no outstanding defaults of the payment terms in such contracts.

(f) Certainty of recoverability of the balance consideration.

Revenue is recognized on proportionate basis as the acts are progressively performed, by applying the percentage of completion method as explained in AS-7 (Revised) Construction Contracts in compliance with the authoritative professional view.

The percentage completion for the purpose of recognition of revenue is determined based on actual costs incurred thereon by the Company to total estimated cost with reference to the saleable area. Cost for this purpose includes cost of land/ development rights, construction and development costs of such properties borrowing costs and overheads, as may be applicable.

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 occur.

However, when the total project cost is estimated to exceed total revenues from the project, loss is recognized immediately.

c) Share of Profit/Loss from Partnership firm/ Association of Person is recognised as income during the relevant period on the basis of accounts made-up audited or unaudited as the case may be and allocation made by the firm/AOP in accordance with the Deed of Partnership/AOP Agreement.

d) Interest Income - Interest income is recognized on time proportion basis taking into account the amounts invested and the rate of interest.

e) Dividend Income - Dividend income is recognized as and when the right to receive the same is established.

f) Rental Income - Income from letting-out of property is accounted on accrual basis- as per the terms of agreement and when the right to receive the rent is established.

g) Income from services rendered is recognised as revenue when the right to receive the same is established.

h) Profit on sale of investment is recorded upon transfer of title by the Company. It is determined as the difference between the sale price and the then carrying amount of the investment.

2.8 Inventories

a) Stock of Materials, etc.

Stock of materials, etc. has been valued at lower of cost or net realisable value. The cost is determined on Weighted Average method.

b) Development Work

(i) Development - Completed Units Finished goods comprising of constructed units ready for sale are valued at lower of cost and net realisable value.

(ii) Development - Units under construction The unit under construction to the extent not recognised as sales under the revenue recognition policy adopted by the Company is carried at lower of cost or net realisable value on the basis of technical estimate certified by the Managing Direcor / Technical Experts.

c) Stock of Trading Goods

Stock of trading goods has been stated at cost or net realisable whichever is lower. The cost is determined on Weighted Average Method.

2.9 Employee Benefits

Provision for Gratuity and Compensated Absences on retirement payable are made on acturial basis. The Company has taken up a group policy with Life Insurance Corporation of India for future payment of gratuities to employees. Amount of premium and differential liability on account of excess of obligation over plan assets and acturial loss for the period for the said Policy and Company''s contribution for the period to Provident Fund. and superannuation fund etc. are charged to Revenue.

2.10 Borrowing Cost

Borrowing cost include interest , commitment charges , amortization of ancillary cost , amortization of discounts/ premium related to borrowing , finance charges in respect of asset acquired on finance leases and exchange difference arising from foreign currency borrowings , to the extent they are regarded as adjustment to interest costs Borrowing cost that are attributable to the acquisition , construction or production a qualifying asset are capitalized/inventoried as cost of such asset till such time the asset is ready for its intended use or sale. a qualifying asset is an asset that necessarily requires substantial period of time to get ready for its intended use or sale. All other borrowing cost are recognized as an expense in the period in which they are incurred.

Advances/deposits given to the vendors under the contractual arrangement for acquisition / construction of qualifying assets is considered as cost for the purpose of capitalization of borrowing cost. During the period of suspension of work on project, the capitalization of borrowing cost is also suspended.

2.11 Leases

a) Assets acquired on leases where a significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to statement of profit and loss on accrual basis.

b) Assets leased out under operating leases are capitalized. Rental income recognized on accrual basis over the lease term.

2.12 Contingent Liabilities and Assets

a) A provision is recognized when

i) the company has present obligation as result of a past event

ii) a probable outflow of resources is expected to settle obligation and

iii) the amount of the obligation can be reliably estimated

b) A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably may not, require an outflow of resources.

c) Where there is a possible obligation such that likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets as on the balance sheet, if any, are neither recognized nor disclosed in the financial statements.

2.13 Taxes on Income

a) Taxes on Income are accounted in accordance with AS - 22 " Taxes on Income". Taxes on Income comprise both current tax and deferred tax.

b) Provision for current tax for the year is determined considering the disallowance, exemptions and deductions and/or liabilities / credits and set off available as laid down by the tax law and interpreted by various authorities.

c) Deferred tax is the tax effect of timing difference representing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s).This is measured using substantively enacted tax rate and tax regulation.

d) Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay income tax under the normal provisions during the specified period, resulting in utilization of MAT credit. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement.

The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will utilize MAT credit during the specified period.

2.14 Amortization

Expenses relating to increase in capital other than those related to public issue of shares, if any, are being written off in the year the same are incurred. The expenses relating to public issue of shares is appropriated from Share Premium Account.

2.15 Joint Venture Projects

a) Jointly Controlled Operations:- In respect of joint venture contracts in the nature of jointly controlled operations, the assets controlled, liabilities incurred, the share of income and expenses incurred are recognised in the agreed proportions, as may be belonging to the Company, under respective heads in the financial statements.

b) Jointly Controlled Entities :-

i) Integrated Joint Ventures :-

Company''s share in profits or losses of

Integrated Joint Ventures is accounted on determination of the profits or losses by the joint venture.

Investments in Integrated Joint Ventures are carried at cost net of company''s share in recognised profits or losses.

ii) Incorporated Jointly Controlled Entities :- Income on investments in incorporated Jointly Controlled Entities is recognised when the right to receive the same is established. Investment in such Joint Ventures are carried at cost after providing for diminution in value considered other than temporary in nature in the opinion of the management, if any.

2.16 Segment reporting

a) Indentification of Segments

The Company''s operating business are organised and managed seprately accordingly to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major oerating divisions of the company operate.

b) Inter segment Transfers

The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

c) Allocation of Common Costs

Common allocable costs are allocated to each segment on reasonable basis.

d) Unallocated Items

Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under Unallocated Items.

e) Segment policies

The Company prepares its segment information in confirmity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

2.17 Employee Stock Option Scheme

In accordance with the Securities and Exchange Board of India guidelines, the excess of the market price of shares, at the date of grant of options under the Employee Stock Option scheme, over the exercise price is treated as employee compensation and amortised over the vesting period.

2.18 Provisions

Provision are recognized for liabilities that can be measured only by using a substantial degree of estimation , if

i) the company has a present obligation as a result of past event

ii) a probable outflow of resources is expected to settle the obligation

iii) the amount of obligation can be reliably estimated

Reimbursement expected in respect of expenditure required to settle a provision recognized only when it is virtually certain that the reimbursement will be received.

Provisions except the provision required under AS - 15 "Employee Benefits", 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.

2.19 Foreign currency transaction

a) Initial Recognition

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

b) Conversion

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

c) Exchange Difference

All exchange differences arising on settlement and conversion on foreign currency transactions are included in the profit and loss account, except in cases where they relate to the acquisition of fixed assets from outside India, in which case they are adjusted in the cost of the corresponding assets.

2.20 Earning Per Share

The company reports Basic and Diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 "Earning Per Share" issued by the ICAI. Basic earnings per share are computed by dividing the net profit or loss after tax for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per shares outstanding during the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares except where the result are anti - dilutive.

2.21 Cash and cash equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

2.22 Exceptional items

Exceptional Iitems include significant restructuring costs, reversals of provisions no longer required, profits or losses on disposal or termination of operations, litigation settlements, profit or loss on disposal of investments, significant impairment of assets and unforeseen gains/ losses arising on derivative instruments. The Company in assessing the particular items, which by virtue of their scale and nature are disclosed in the income statement and related notes as exceptional items.

2.23 Events occuring after Balance Sheet date

Events which occure between the Balance Sheet date and the date on which financial statements are approved, need adjustments to assets and liabilties as at the Balance Sheet date. Adjustments to assets and liabilities are made for the events occuring after the Balance Sheet date that provide additional information materially affecting the determination of the amounts relating to conditions existing as at the Balance Sheet date.


Mar 31, 2013

1. 1 Basis of Preparation of Financial Statements

"The The Financial statement have been prepared to comply in all material respects with the notifed accounting standard by companies Accounting rules 2006 as amended from time to time and revelent provisions of companies Act 1956 (The Act). The fnancial statements have been prepared in accordance with revised schedule VI requirement including previous year comparatives. The fnancial statement has been prepared under historical cost convention on an accrual basis in accordance with accounting principles generally accepted in India. The accounting policies have been consistently applied by the company and are consistent with those used in previous year. The company has also reclassifed the previous year fgures in accordance with the requirement applicable in the current year.

1. 2 Use of Estimates

The Preparation of fnancial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of the fnancial statement and the result of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current event and actions actual result could differ from these estimates. signifcant estimates used by the management in the preparation of these fnancial statement include Project revenue , Project cost , Saleable area , economic useful lives of Fixed asset , accrual of allowance for bad and doubtful Receivables and loans and Advances. Any revision to accounting estimates is recognized prospectively in accordance with applicable accounting standard.

1. 3 Tangible Asset , Intangible Asset and Capital Work in Progress

a) Tangible asset are stated at cost less accumulated depreciation and Impairment losses, if any. Cost compromises the purchase price and any attributable / allocable incidental cost of bringing the asset to its working condition for its intended use.

b) Intangible assets are recognized as an asset only if it fulflls the criteria, for recognizing Intangible Assets, specifed in AS 26 "Intangible Assets" issued by the ICAI. Intangible asset are stated at cost less accumulated amortization and impairment losses. cost comprises the acquisition price , development cost and attributable /allocable cost of bringing the asset to its working condition for its intended use.

c) Assets under installation or under construction as at the Balance sheet date are shown as Capital work in progress and are stated at cost less impairment losses. Cost comprises of expenditure incurred in respect of capital projects under development and includes any attributable / allocable cost and other incidental expenses. Revenues earned if any, before capitalization from such capital project are adjusted against capital work in progress.

d) Borrowing cost relating to acquisition / construction /development of tangible asset and capital work in progress which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such asset are ready to be put to use.

1. 4 Impairment

As at each Balance sheet date, the carrying amount of assets is tested for impairment so as to determine

a) the provision for impairment loss, if any and

b) the reversal of impairment loss recognized in previous period, if any Impairment loss is recognized when carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined:

a) in the case of individual asset, at higher of the net selling price or value in use

b) in the case of cash generating unit (a group of assets that generates identifed, independent cash fows), at the higher of the cash generating unit''s net selling price and the value in use (value in use is determined as the present value of estimated future cash fows from the continuing use of an asset and from its disposal at the end of its useful life)

1. 5 Depreciation / Amortisation

a) Depreciation on tangible fxed assets has been provided under written down value method at the rates and manner prescribed in schedule XIV to the Companies Act, 1956.

b) Cost of lease hold rights of land has been amortized evenly over a period of lease term.

c) Software in nature of intangible asset has been amortised over its estimated useful life evenly.

d) Cost of acquisition of share in partnership frm is amortised on systematic manner. Adjustments are made for any permanent impairment in value, if any.

1. 6 Investments

Investments are classifed into current investments and long term investments. Investment intended to be held for not more than a year are classifed as current investment. All other investment are classifed as long term investments. Long term investment are stated at cost less permanent diminution in value, if any. current investment are stated at lower of cost or fair value

1. 7 Recognition of Revenue / Cost

a) Construction Contracts

Revenue from fxed price construction contracts is recognised on the Percentage of Completion Method (POCM). The stage of completion is determined by survey of work performed / completion of physical proportion of the contract work determined by technical estimate of work done / actual cost incurred in relation to total estimated contract cost, as the case may be. The estimate of total contract cost has been made at the time of commencement of contract work and reviewed and revised, by the technical experts, from time to time during period in which the contract work is executed. Future expected loss, if any, is recognised immediately as expenditure. In respect of unapproved revenue recognised, an adequate provision is made for possible reductions, if any. Contract revenue earned in excess of billing has been refected as unbilled revenue under the head "Other Current Assets" " and billing in excess of contract revenue has been refected as Unearned Revenue under the head "Other Current Liabilities" in the Balance Sheet. The Company provides for cost to be incurred during warranty period for servicing warranties on the completed projects. Such amount, net of the obligations on account of sub-contractors, is determined on the basis of technical evaluation and past experience of meeting such costs.

Escalation claims raised by the Company are recognised when negotiations have reached an advanced stage such that customers will accept the claim and amount that is probable will be accepted by the customer can be measured reliably.

b) Real Estate Development

(i) Completed Units

Revenue from sales of units is recognized as and when the underlying signifcant risk and rewards of ownership are transferred to the purchaser.

(ii) Units Under Development

(A) Projects which have commenced on or before March 31, 2012 Revenue from sales of such units is recognized as and when the underlying signifcant risk and rewards of ownership are transferred to the purchaser, taking into account materiality of the work performed and certainty of recoverability of the consideration.

Revenue is recognized on proportionate basis as the acts are progressively performed, by applying the percentage of completion method as explained in AS-7 (Revised) Construction Contracts in compliance with the authoritative professional view.

The percentage completion is determined based on actual costs incurred thereon by the Company to total estimated cost with reference to the saleable area. Cost for this purpose includes cost of land/development rights, construction and development costs of such properties borrowing costs and overheads, as may be applicable.

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 occur. However, when the total project cost is estimated to exceed total revenues from the project, loss is recognized immediately.

(B) Projects which have commenced after March 31, 2012. Revenue from sales of such units is recognized as and when all the following conditions are satisfed:

(a) The underlying signifcant risk and rewards of ownership are transferred to the purchaser.

(b) All critical approvals necessary for commencement of the project are obtained .

(c) Reasonable level of development is reached when project cost incurred excluding land cost and borrowing cost exceeds 25% of the project cost excluding land cost and borrowing cost.

(d) Atleast 25% of the estimated project area are secured by contracts or agreement with the buyers.

(e) Atleast 10% of the total revenue as per agreements of sale are realised at the reporting date in respect of each of the contracts and there are no outstanding defaults of the payment terms in such contracts.

(f) Certainty of recoverability of the balance consideration. Revenue is recognized on proportionate basis as the acts are progressively performed, by applying the percentage of completion method as explained in AS-7 (Revised) Construction Contracts in compliance with the authoritative professional view.

The percentage completion for the purpose of recognition of revenue is determined based on actual costs incurred thereon by the Company to total estimated cost with reference to the saleable area. Cost for this purpose includes cost of land/development rights, construction and development costs of such properties borrowing costs and overheads, as may be applicable. 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 occur. However, when the total project cost is estimated to exceed total revenues from the project, loss is recognized immediately. c) Share of Proft/Loss from Partnership frm/ Association of Person is recognised as income during the relevant period on the basis of accounts made-up audited or unaudited as the case may be and allocation made by the frm/AOP in accordance with the Deed of Partnership/AOP Agreement.

d) Interest Income – Interest income is recognized on time proportion basis taking into account the amounts invested and the rate of interest.

e) Dividend Income – Dividend income is recognized as and when the right to receive the same is established.

f) Rental Income - Income from letting-out of property is accounted on accrual basis- as per the terms of agreement and when the right to receive the rent is established.

g) Income from services - rendered is recognised as revenue when the right to receive the same is established.

h) Proft on sale of investment - is recorded upon transfer of title by the Company. It is determined as the difference between the sale price and the then carrying amount of the investment.

1. 8 Inventories

a) Stock of Materials, etc.

Stock of materials, etc. has been valued at lower of cost or net realisable value. The cost is determined on Weighted Average method.

b) Development Work

(i) Development - Completed Units

Finished goods comprising of constructed units ready for sale are

valued at lower of cost and net realisable value.

(ii) Development - Units under construction

The unit under construction to the extent not recognised as sales under the revenue recognition policy adopted by the Company is carried at lower of cost or net realisable value on the basis of technical estimate certifed by the Managing Direcor / Technical Experts.

c) Stock of Trading Goods

Stock of trading goods has been stated at cost or net realisable whichever is lower. The cost is determined on Weighted Average Method.

1. 9 Employee Benefts

Provision for Gratuity and Compensated Absences on retirement payable are made on acturial basis. The Company has taken up a group policy with Life Insurance Corporation of India for future payment of gratuities to employees. Amount of premium and differential liability on account of excess of obligation over plan assets and acturial loss for the period for the said Policy and Company''s contribution for the period to Provident Fund. and superannuation fund etc. are charged to Revenue.

1. 10 Borrowing Cost

Borrowing cost include interest , commitment charges , amortization of ancillary cost, amortization of discounts/ premium related to borrowing, fnance charges in respect of asset acquired on fnance leases and exchange difference arising from foreign currency borrowings, to the extent they are regarded as adjustment to interest costs Borrowing cost that are attributable to the acquisition, construction or production a qualifying asset are capitalized/ inventorised as cost of such asset till such time the asset is ready for its intended use or sale. a qualifying asset is an asset that necessarily requires substantial period of time to get ready for its intended use or sale. All other borrowing cost are recognized as an expense in the period in which they are incurred.

Advances/deposits given to the vendors under the contractual arrangement for acquisition/construction of qualifying assets is considered as cost for the purpose of capitalization of borrowing cost. During the period of suspension of work on project, the capitalization of borrowing cost is also suspended.

1. 11 Leases

a) Assets acquired on leases where a signifcant portion of the risk and rewards of ownership are retained by the lessor are classifed as operating leases. Lease rentals are charged to statement of proft and loss on accrual basis.

b) Assets leased out under operating leases are capitalized. Rental income recognized on accrual basis over the lease term.

1. 12 Contingent Liabilities and Assets

a) A provision is recognized when

i) the company has present obligation as result of a past event

ii) a probable outfow of resources is expected to settle obligation and iii) the amount of the obligation can be reliably estimated

b) A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably may not, require an outfow of resources.

c) Where there is a possible obligation such that likelihood of outfow of resources is remote, no provision or disclosure is made. Contingent assets as on the balance sheet, if any, are neither recognized nor disclosed in the fnancial statements.

1. 13 Taxes on Income

a) Taxes on Income are accounted in accordance with AS – 22 "Taxes on Income". Taxes on Income comprise both current tax and deferred tax.

b) Provision for current tax for the year is determined considering the disallowance, exemptions and deductions and/or liabilities / credits and set off available as laid down by the tax law and interpreted by various authorities.

c) Deferred tax is the tax effect of timing difference representing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s).This is measured using substantively enacted tax rate and tax regulation.

d) Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay income tax under the normal provisions during the specifed period, resulting in utilization of MAT credit. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the proft and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will utilize MAT credit during the specifed period.

1. 14 Amortization

Expenses relating to increase in capital other than those related to public issue of shares, if any, are being written off in the year the same are incurred. The expenses relating to public issue of shares is appropriated from Share Premium Account.

1. 15 Joint Venture Projects

a) Jointly Controlled Operations:- In respect of joint venture contracts in the nature of jointly controlled operations, the assets controlled, liabilities incurred, the share of income and expenses incurred are recognised in the agreed proportions, as may be belonging to the Company, under respective heads in the fnancial statements.

b) Jointly Controlled Entities :- i) Integrated Joint Ventures :- Company''s share in profts or losses of Integrated Joint Ventures is accounted on determination of the profts or losses by the joint venture.

Investments in Integrated Joint Ventures are carried at cost net of company''s share in recognised profts or losses. ii) Incorporated Jointly Controlled Entities :- - Income on investments in incorporated Jointly Controlled Entities is recognised when the right to receive the same is established. - Investment in such Joint Ventures are carried at cost after providing for diminution in value considered other than temporary in nature in the opinion of the management, if any.

1. 16 Segment reporting

a) Indentifcation of Segments

The Company''s operating business are organised and managed seprately accordingly to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major oerating divisions of the company operate.

b) Inter segment Transfers

The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

c) Allocation of Common Costs

Common allocable costs are allocated to each segment on reasonable basis.

d) Unallocated Items

Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under Unallocated Items.

e) Segment policies

The Company prepares its segment information in confrmity with the accounting policies adopted for preparing and presenting the fnancial statements of the Company as a whole.

1. 17 Employee Stock Option Scheme

Stock options granted to the employees under the stock options scheme are accounted as per the accounting treatment prescribed by ICAI. Accordingly, the excess of fair value over the exercise price of the options is recognised as deferred employee compensation and is charged to the proft and loss account on straight line basis over the vesting period of the options. The amortised portion of the cost is shown under reserves and surplus.

1. 18 Provisions

Provision are recognized for liabilities that can be measured only by using a substantial degree of estimation, if i) the company has a present obligation as a result of past event ii) a probable outfow of resources is expected to settle the obligation iii) the amount of obligation can be reliably estimated Reimbursement expected in respect of expenditure required to settle a provision recognized only when it is virtually certain that the reimbursement will be received. Provisions except the provision required under AS - 15 "Employee Benefts", 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 refect the current best estimates.

1. 19 Foreign Currency Transaction

a) Initial Recognition

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

b) Conversion

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

c) Exchange Difference

All exchange differences arising on settlement and conversion on foreign currency transactions are included in the proft and loss account, except in cases where they relate to the acquisition of fxed assets from outside India, in which case they are adjusted in the cost of the corresponding assets.

1. 20 Earning Per Share

The company reports Basic and Diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 "Earning Per Share" issued by the ICAI. Basic earnings per share are computed by dividing the net proft or loss after tax for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per shares outstanding during the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares except where the result are anti - dilutive.

1. 21 Cash and Cash Equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

1. 22 Exceptional items

Exceptional Iitems include signifcant restructuring costs, reversals of provisions no longer required, profts or losses on disposal or termination of operations, litigation settlements, proft or loss on disposal of investments, signifcant impairment of assets and unforeseen gains/ losses arising on derivative instruments. The Company in assessing the particular items, which by virtue of their scale and nature are disclosed in the income statement and related notes as exceptional items.

1. 23 Events occuring after Balance Sheet date

Events which occure between the Balance Sheet date and the date on which fnancial statements are approved, need adjustments to assets and liabilties as at the Balance Sheet date. Adjustments to assets and liabilities are made for the events occuring after the Balance Sheet date that provide additional information materially affecting the determination of the amounts relating to conditions existing as at the Balance Sheet date.


Mar 31, 2012

1. 1 Basis of Preparation of Financial Statements

The financial statements are prepared under historical cost convention, in accordance with the Indian Generally Accepted Accounting Principles ("GAAP") comprising the mandatory Accounting Standards, Statements and Guidance Notes issued by the Institute of Chartered Accountants of India (ICAI) and the provisions of the Companies Act, 1956 and rules framed there under, on accrual basis, as adopted consistently by the Company.

1.2 Use of Estimates

The preparation of financial statements in conformity with Indian Generally GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

1.3 Fixed Assets and Capital Work in Progress

a) Fixed assets are stated at cost of acquisition or construction, after reducing accumulated depreciation till the date of the Balance Sheet. The cost of an item of fixed asset comprises of its purchase price, including import duties and other non-refundable taxes or levies, borrowing cost relating to any specific borrowing attributable to the acquisition of the fixed assets as per the provisions of AS 16 "Borrowing Cost" issued by ICAI and any other directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price and includes.

b) Assets under installation or under construction as at the Balance Sheet date are shown as Capital work in progress. Advances paid towards acquisition of assets are disclosed as Capital advances under the head Long Term Loans and Advances.

c) Intangible assets are recognised as an asset only if it fulfills the criteria, for recognising Intangible Assets, specified in AS 26 "Intangible Assets" issued by the ICAI.

1.4 Impairment

The assets are tested for impairment and the provision is made wherever considered necessary based on economic utility of the asset as determined in accordance with the principles as laid down in AS 28 "Impairment of Assets" issued by ICAI.

1.5 Depreciation / Amortisation

a) Depreciation on tangible fixed assets has been provided under written down value method at the rates and manner prescribed in schedule XIV to the Companies Act, 1956.

b) Cost of lease hold rights of land has been amortised evenly over a period of lease term.

c) Software in nature of intangible asset has been amortised fully in the year in which the same is ready for use.

d) Cost of acquisition of share in partnership firm is amortised on systematic manner in proportion to the percentage of completed area of the project recognised as sale. Adjustments are made for any permanent impairment in value, if any.

1.6 Investments

Investment are classified into current investments and long term investments. Current investments are carried at the lower of cost or fair value. Long term investments are carried at cost less provision made to recognise any decline in the value of such investments if such decline is considered other than temporary in nature in the opinion of the management. Any reduction in carrying amount and any reversals of such reductions are charged or credited to the Statement of Profit and Loss.

1.7 Recognition of Revenue / Cost

a) Construction contracts:

Revenue from fixed price construction contracts is recognised on the Percentage Of Completion Method (POCM). The stage of completion is determined by survey of work performed/completion of physical proportion of the contract work determined by technical estimate of work done/actual cost incurred in relation to total estimated contract cost, as the case may be. The estimate of total contract cost has been made at the time of commencement of contract work and reviewed and revised, by the technical experts, from time to time during period in which the contract work is executed. Future expected loss, if any, is recognised immediately as expenditure. In respect of unapproved revenue recognised, an adequate provision is made for possible reductions, if any. Contract revenue earned in excess of billing has been reflected as unbilled revenue under the head "Other Current Assets" and billing in excess of contract revenue has been reflected as Unearned Revenue under the head "Other Current Liabilities" in the Balance Sheet.

The Company provides for cost to be incurred during warranty period for servicing warranties on the completed projects. Such amount, net of the obligations on account of sub-contractors, is determined on the basis of technical evaluation and past experience of meeting such costs.

b) Real estate development

(i) Completed Units

Revenue from sales of units is recognised as and when the underlying significant risk and rewards of ownership are transferred to the purchaser.

(ii) Units Under Development

Revenue from sales of such units is recognised as and when the underlying significant risk and rewards of ownership are transferred to the purchaser, taking into account materiality of the work performed and certainty of recoverability of the consideration. Revenue is recognised on proportionate basis as the acts are progressively performed, by applying the percentage of completion method as explained in AS-7 (Revised) Construction Contracts in compliance with the authoritative professional view.

The percentage completion is determined based on actual costs incurred thereon by the Company to total estimated cost with reference to the saleable area. Cost for this purpose includes cost of land/ development rights, construction and development costs of such properties borrowing costs and overheads, as may be applicable.

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 occur.

However, when the total project cost is estimated to exceed total revenues from the project, loss is recognised immediately.

c) Share of Profit/Loss from Partnership firm/ Association of Person is recognised as income during the relevant period on the basis of accounts made-up audited or unaudited as the case may be and allocation made by the firm/AOP in accordance with the Deed of Partnership/AOP Agreement.

d) Interest Income - Interest income is recognised on time proportion basis taking into account the amounts invested and the rate of interest.

e) Dividend Income - Dividend income is recognized as and when the right to receive the same is established.

f) Rental Income - Income from letting-out of property is accounted on accrual basis- as per the terms of agreement and when the right to receive the rent is established.

g) Income from services rendered is recognised as revenue when the right to receive the same is established.

h) Profit on sale of investment is recorded upon transfer of title by the Company. It is determined as the difference between the sale price and the then carrying amount of the investment.

1.8 Inventories

a) Stock of Materials, etc.

Stock of Materials, etc. has been valued at lower of cost or net realisable value. The cost is determined on Weighted Average Method.

b) Development Work

(i) Development - Completed Units

Finished goods comprising of constructed units ready for sale are valued at lower of cost and net realisable value.

(ii) Development - Units under construction

The unit under construction to the extent not recognised as sales under the revenue recognition policy adopted by the Company is carried at lower of cost or net realisable value on the basis of technical estimate certified by the Managing Direcor / Technical Experts.

c) Stock of Trading Goods

Stock of Trading Goods has been stated at cost or net realisable whichever is lower. The cost is determined on Weighted Average Method.

1.9 Employee Benefits

Provision for Gratuity and Compensated Absences on retirement payable are made on acturial basis. The Company has taken up a group policy with Life Insurance Corporation of India for future payment of gratuities to employees. Amount of premium and differential liability on account of excess of obligation over plan assets and acturial loss for the period for the said Policy and Company's contribution for the period to Provident Fund and superannuation fund etc. are charged to Revenue.

1.10 Borrowing Cost

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying assets, if any, are capitalised up to the date when such assets are ready for sale or its intended use and other borrowing costs are charged to the Statement of Profit & Loss. Advances/deposits given to the vendors under the contractual arrangement for acquisition/construction of qualifying assets is considered as cost for the purpose of capitalisation of borrowing cost. During the period of suspension of work on project, the capitalisation of borrowing cost is also suspended.

1.11 Leases

Lease rentals in respect of assets acquired under operating lease are charged to the Statement of Profit and Loss as accrued. Lease rentals in respect of assets given under operating lease are credited to the Statement of Profit and Loss as accrued.

1.12 Contingent Liabilities and Assets

a) Contingent liabilities, if any, have been disclosed by way of note to balance sheet. Provision has been made in respect of those, which have materialised after the year- end but before finalisation of accounts and have material effect on balance sheet date.

b) Contingent assets as on the balance sheet, if any, are neither recognised nor disclosed in the financial statements.

1.13 Taxes on Income

a) Taxes on Income are accounted in accordance with AS - 22 " Taxes on Income". Taxes on Income comprise both current tax and deferred tax.

b) Provision for current tax for the year is determined considering the disallowance, exemptions and deductions and/or liabilities/credits and set off available as laid down by the tax law and interpreted by various authorities.

c) Deferred tax is the tax effect of timing difference representing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s).This is measured using substantively enacted tax rate and tax regulation.

d) "Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay income tax under the normal provisions during the specified period, resulting in utilisation of MAT credit. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement.

1.14 Amortisation

Expenses relating to increase in capital other than those related to public issue of shares, if any, are being written off in the year the same are incurred. The expenses relating to public issue of shares is appropriated from Share Premium Account.

1.15 Joint Venture Projects

a) Jointly Controlled Operations:- In respect of joint venture contracts in the nature of jointly controlled operations, the assets controlled, liabilities incurred, the share of income and expenses incurred are recognised in the agreed proportions, as may be belonging to the Company, under respective heads in the financial statements.

b) Jointly Controlled Entities :-

i) Integrated Joint Ventures :-

Company's share in profits or losses of Integrated Joint Ventures is accounted on determination of the profits or losses by the joint venture.

Investments in Integrated Joint Ventures are carried at cost net of company's share in recognised profits or losses.

ii) Incorporated Jointly Controlled Entities :-

- Income on investments in incorporated Jointly Controlled Entities is recognised when the right to receive the same is established.

- Investments in such Joint Ventures are carried at cost after providing for diminution in value considered other than temporary in nature in the opinion of the management, if any.

1.16 Segment reporting

a)Identification of Segments

The Company's operating business are organised and managed separately accordingly to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the company operate.

b) Inter segment Transfers

The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

c) Allocation of Common Costs

Common allocable costs are allocated to each segment on reasonable basis.

d) Unallocated Item

Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under Unallocated Items.

e) Segment policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

1.17 Employee Stock Option Scheme

Stock options granted to the employees under the stock options scheme are accounted as per the accounting treatment prescribed by ICAI. Accordingly, the excess of fair value over the exercise price of the options is recognised as deferred employee compensation and is charged to the profit and loss account on straight line basis over the vesting period of the options. The amortised portion of the cost is shown under reserves and surplus.

1.18 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. Provisions except the provision required under AS - 15 "Employee Benefits", are not discounted to their 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.

1.19 Foreign currency transaction

a) Initial Recognition

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

b) Conversion

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

c) Exchange Difference

All exchange differences arising on settlement and conversion on foreign currency transactions are included in the profit and loss account, except in cases where they relate to the acquisition of fixed assets from outside India, in which case they are adjusted in the cost of the corresponding assets.

1.20 Earning Per Share

The Company reports Basic and Diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 "Earning Per Share" issued by the ICAI. Basic earnings per share are computed by dividing the net profit or loss after tax for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per shares outstanding during the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares except where the result are anti - dilutive.

1.21 Cash and cash equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

1.22 Exceptional items

Exceptional items include significant restructuring costs, reversals of provisions no longer required, profits or losses on disposal or termination of operations, litigation settlements, profit or loss on disposal of investments, significant impairment of assets and unforeseen gains/losses arising on derivative instruments. The Company in assessing the particular items, which by virtue of their scale and nature are disclosed in the income statement and related notes as exceptional items, use judgement.

1.23 Events occuring after Balance Sheet date

Events which occur between the Balance Sheet date and the date on which financial statements are approved, need adjustments to assets and liabilities as at the Balance Sheet date. Adjustments to assets and liabilities are made for the events occuring after the Balance Sheet date that provide additional information materially affecting the determination of the amounts relating to conditions existing as at the Balance Sheet date.


Mar 31, 2010

1.1 Basis of Preparation of Financial Statements

The financial statements are prepared under historical cost convention, in accordance with the Indian Generally Accepted Accounting Principles ("GAAP") comprising the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and the provisions of the Companies Act, 1956, on accrual basis, as adopted consistently by the Company.

1.2 Use of Estimates

The preparation of financial statements in conformity with Indian Generally GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

1.3 Fixed Assets and Capital Work in Progress

1.3.1 Fixed assets are stated at cost of acquisition or construction, after reducing accumulated depreciation till the date of the Balance Sheet. The cost of an item of fixed asset comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price and includes borrowing cost relating to any specific borrowing attributable to the acquisition of the fixed assets as per the provisions of AS 16 "Borrowing Cost" issued by ICAI.

Assets under installation or under construction as at the Balance sheet date are shown as Capital work in progress. Advances paid towards acquisition of assets are also included under Capital work in progress.

1.3.2 Intangible assets are recognised as an asset only if it fulfils the criteria specified in AS 26 "Intangible Assets" issued by the ICAI.

1.4 Impairment

The assets are tested for impairment and the provision, is made wherever considered necessary based on economic utility of the asset as determined in accordance with the principles as laid down in AS 28 "Impairment of Assets" issued by ICAI.

1.5 Depreciation/Amortisation

Depreciation on fixed assets has been provided underwritten down value method at the rates and manner prescribed in schedule XIV to the Companies Act, 1956. Cost of lease rights of land has been amortized over a period of lease term. Software in nature of intangible asset has been amortised fully in the year in which the same is ready for use.

1.6 Investments

Investments are classified into current investments and long term investments. Current investments are carried at the lower of cost or fair value. Long term investments are carried at cost less provision made to recognise any decline in the value of such investments, other than temporary, in the opinion of the management. Any reduction in carrying amount and any reversals of such reductions are charged or credited to the profit and loss account.

1.7 Recognition of Revenue /Cost

1.7.1 Revenue from fixed price construction contracts is recognised on the percentage of completion method. The stage of completion is determined by survey of work performed / completion of physical proportion of the contract work determined by technical estimate of work done / actual cost incurred in relation to estimated contract amount, as the case may be, and acknowledged by the contractee. Future expected loss, if any, is recognised immediately as expenditure. In respect of unapproved revenue recognised, an adequate provision is made for possible reductions, if any. Contract revenue earned in excess of billing has been reflected under "Debtors" and billing in excess of contract revenue has been reflected under "Liabilities" in the balance sheet.

The Company provides for warranties and expected cost for completed projects, based on technical evaluation and past experience of meeting such costs net of the obligations on account of subcontractors.

1.7.2 Revenue from sale of units is recognised as and when the underlying significant risk and rewards of ownership are transferred to the purchaser and when there is no uncertainty of the amount of consideration that will be derived and it is not unreasonable to expect ultimate collection. However, in case where the Company is obligated to perform any substantial acts after the transfer of all significant risks and rewards of ownership, revenue is recognised on proportionate basis as the acts are progressively performed, by applying the percentage of completion method as explained in AS - 7 (Revised), Construction Contracts.

1.7.3 Share of Profit/Loss from Partnership firm/ Association of Person is recognised as income during the relevant period on the basis of accounts made-up and allocation made by the firm/AOP in accordance with the Deed of Partnership/AOP Agreement.

1.7.4 Interest Income - Interest income is recognized on time proportion basis taking into account the amounts invested and the rate of interest.

1.7.5 Dividend Income - Dividend income is recognized as and when the right to receive the same is established.

1.7.6 Rental Income - Income from letting-out of property is accounted on accrual basis- as per the terms of agreement and when the right to receive the rent is established.

1.7.7 Income from services rendered is recognised as revenue when the right to receive the same is established.

1.8 Inventories

1.8.1 Stock of Materials, etc.

Stock of materials, etc. has been valued at lower of cost or net realisable value. The Cost is determined on Weighted Average method.

1.8.2 Development Work

The development work in progress represents progressive cost of work remaining incomplete / unsold as at close of the year, valued at lower of cost or net realisable value on the basis of technical estimate certified by the Managing Director. Finished goods comprising of constructed units ready for sale are valued at lower of cost and net realisable value.

1.8.3 Stock of Trading Goods

Stock of trading goods has been stated at cost or net realisable whichever is less. The cost is determined on Weighted Average Method.

1.9 Retirement Benefits

Provision for Gratuity and Compensated Absences on retirement payable are made on acturial basis. The Company has taken up a group policy with Life Insurance Corporation of India for future payment of gratuities to employees. Amount of premium and differential liability on account of excess of obligation over plan assets and actuarial loss for the period for the said Policy and Companys contribution for the year to RF,and superannuation fund etc are charged to Revenue.

1.10 Borrowing Cost:

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying assets, if any, are capitalized up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit & Loss Account. Advances/deposits given to the vendors under the contractual arrangement for acquisition of qualifying assets are considered for the purpose of capitalization of borrowing cost.

1.11 Leases

Lease rentals in respect of assets acquired under operating lease are charged to the Profit and Loss Account as accrued. Lease rentals in respect of assets given under operating lease are credited to the Profit and Loss Account as accrued.

1.12 Contingent Liabilities and Assets

Contingent liabilities, if any, have been disclosed by way of note to balance sheet. Provision has been made in respect of those, which have materialised after the year-end but before finalisation of accounts and have material effect on balance sheet date.

Contingent assets as on the balance sheet, if any, are neither recognised nor disclosed in the financial statements.

1.13 Taxes on Income:

Taxes on Income are accounted in accordance with AS - 22 "Taxes on Income". Taxes on Income comprise both current tax and deferred tax.

a) Provision for current tax for the year is determined considering the disallowance, exemptions and deductions and/or liabilities / credits and set off available as laid down by the tax law and interpreted by various authorities.

b) Deferred tax is the tax effect of timing difference representing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period (s).This is measured using substantively enacted tax rate and tax regulation.

c) Fringe Benefit Tax is recognised in accordance with the relevant provisions of the Income Tax Act, 1961 and the Guidance note on Fringe Benefits Tax issued by the ICAI.

1.14 Amortization

Expenses relating to increase in capital other than those related to public issue of shares, if any, are being written off in the year the same are incurred. The expenses relating to proposed public issue of shares is appropriated from Share Premium Account.

Expenses relating to issue of debentures are being written off in the year the same are incurred.

1.15 Joint Venture Projects

1.15.1 Jointly Controlled Operations: - In respect of joint venture contracts in the nature of jointly controlled operations, the assets controlled, liabilities incurred, the share of income and expenses incurred are recognised in the agreed proportions under respective heads in the financial statements.

1.15.2 Jointly Controlled Entities :-

a) Integrated Joint Ventures :-

1) Companys share in profits or losses of Integrated Joint Ventures is accounted on determination of the profits or losses by the joint venture.

2) Investments in Integrated Joint Ventures are carried at cost net of companys share in recognised profits or losses.

B) Incorporated Jointly Controlled Entities :-

1) Income on investments in incorporated Jointly Controlled Entities is recognised when the right to receive the same is established.

2) Investment in such Joint Ventures are carried at cost after providing for any other than temporary diminution in value in opinion of the management.

1.16 Segment Reporting

The Companys operations predominantly consist of construction / project activities. Hence there are no reportable segments under Accounting Standard - 17. During the year under the report, the Company has engaged in its business only within India and not in any other country. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.






Mar 31, 2009

1.1 Basis of Preparation of Financial Statements

The financial statements are prepared under historical cost convention, in accordance with the Indian Generally Accepted Accounting Principles ("GAAP") comprising the mandatory accounting standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956, on accrual basis, as adopted consistently by the Company.

1.2 Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

1.3 Fixed Assets and Capital Work in Progress

1.3.1 Fixed assets are stated at cost of acquisition or construction, after reducing accumulated depreciation till the date of the Balance Sheet. The cost of an item of fixed asset comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price further adjusted by CENVAT credit and includes borrowing cost relating to any specific borrowing attributable to the acquisition of the fixed assets as per the provisions of Accounting Standard AS 16 "Borrowing Cost" issued by ICAI.

Assets under installation or under construction as at the Balance sheet date are shown as Capital work in progress. Advances paid towards acquisition of assets are also included under Capital work in progress.

1.3.2 Intangible assets are recognised as per the criteria specified in Accounting Standard (AS) 26 "Intangible Assets" issued by the Institute of Chartered Accountants of India and amortised as follows:

a) Specialised Software :- 100% in the year of acquisition.

1.3.3 Payment for leasehold land is amortized over the period of lease.

1.4 Impairment

The assets are tested for impairment and the provision, if applicable, is made wherever considered necessary based on economic utility of the asset as determined in accordance with the principles as laid down in Accounting Standard AS 28" Impairment Assets".

1.5 Depreciation

Depreciation on fixed assets have been provided under written down value method and manner at the rates prescribed in schedule XIV to the Companies Act, 1956. Cost of lease rights are amortized over a period of lease term.

1.6 Investments

Investment are classified into current investments and long term investments. Current investments are carried at the lower of cost or fair value. Any reduction in carrying amount and any reversals of such reductions are charged or credited to the profit and loss account. Long term investments are carried at cost less provision made to recognise any decline, other than temporary, in the value of such investments in the opinion of the management.

1.7 Recognition of Revenue

1.7.1 Revenue from fixed price construction contracts is recognised on the percentage completion method. The stage of completion is determined by survey of work performed / completion of physical proportion of the contract work determined by technical estimate of work done / actual cost incurred in relation to estimate contract amount, as the case may be, and acknowledged by the contractee. Future expected loss, if any, is recognised as expenditure. In respect of unapproved revenue recognised, an adequate provision is made for possible reductions, if any. Contract revenue earned in excess of billing has been reflected under "Other Current Assets" and billing in excess of contract revenue has been reflected under "Liabilities" in the balance sheet.

1.7.2 Revenue from sale of units is recognised as and when the underlying significant risk and rewards of ownership are transferred to the purchaser and when there is no uncertainty of the amount of consideration that will be derived and it is not unreasonable to expect ultimate collection. However, in case where the seller is obligated to perform any substantial acts after the transfer of all significant risks and rewards of ownership, revenue is recognised on proportionate basis as the acts are progressively performed, by applying the percentage of completion method as explained in Accounting Standard - 7 (revised 2002), Construction Contracts.

1.7.3 Share of Profit/Loss from Partnership firm/Association of Person is recognised as income on period-to-period basis on the basis of accounts made-up and allocation made by the firm/AOP in accordance with the Deed of Partnership/AOPAgreement.

1.7.4 Interest Income - Interest income is recognized on time proportion basis taking into account the amounts invested and the rate of interest.

1.7.5 Dividend Income - Dividend income is recognized as and when the right to receive the same is established.

1.7.6 Rental Income - Income from letting-out of property is accounted on accrual basis- as per the terms of agreement and the right to receive the rent is established.

1.7.7 Income from services rendered is booked based on agreements/arrangements with the concerned parties.

1.8 Inventories

(a) Stock of Materials, etc.

Stock of materials, etc. has been valued at lower of cost or net realisable value. The Cost is determined on Weighted Average method.

(b) Development Work

The development work in progress represents progressive cost of work remaining incomplete/unsold as at close of the year, valued at lower of cost or net realisable value on the basis of technical estimate certified and verified by the Managing Director.

(c) Stock of Trading Goods

Stock of trading goods has been stated at cost or net realisable whichever is less. The cost is determined on Weighted Average Method.

1.9 Retirement Benefits

Provision for Gratuity and Leave encashment on retirement payable are made on actuarial basis. The Company has taken up a group policy with Life Insurance Corporation of India for future payment of gratuities to employees. Amount of premium and differential liability on account of excess of obligation over plan assets and acturial loss for the period for the said Policy and Companys contribution for the year to P.F. etc are charged to Revenue.

1.10 Borrowing Cost

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying assets, if any, are capitalized up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit & Loss Account. Advances/deposits given to the vendors under the contractual arrangement for acquisition of qualifying assets is considered for the purpose of captation of borrowing cost.

1.11 Leases

Lease rentals in respect of assets acquired under operating lease are charged to the Profit and Loss Account as incurred. Lease rentals in respect of assets given under operating lease are credited to the Profit and LossAccountas accrued.

1.12 Contingent Liabilities

Contingent liabilities, if any, have been disclosed by way of note to balance sheet. Provision has been made in respect of those, which have materialised after the year-end but before finalisation of accounts and have material effect on balance sheetdate.

1.13 Taxes on Income:

Taxes on Income are accounted in accordance with AS - 22 " Taxes on Income". Taxes on Income comprise both current tax and deferred tax.

(a) Provision for current tax for the year is determined considering the disallowance, exemptions and deductions and/or liabilities / credits and set off available as laid down by the tax law and interpreted by various authorities.

(b) Deferred tax being the tax effect of timing difference representing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period (s).This is measured using substantively enacted tax rate and tax regulation.

(c) Fringe Benefit Tax is recognised in accordance with the relevant provisions of the Income Tax Act, 1961 and the Guidance note on Fringe Benefits Tax issued by the ICAI

1.14 Amortization

Expenses relating to increase in capital other than those related to public issue of shares, if any, are being written off in the year the same are incurred. The expenses relating to proposed public issue of shares is appropriated from Share Premium Account.

Expenses relating to issue of debentures are being written off in the yearthe same are incurred.

1.15 Joint Venture Projects

1.15.1 Jointly Controlled Operations :- In respect of joint venture contracts in the nature of jointly controlled operations, the assets controlled, liabilities incurred, the share of income and expenses incurred are recognised in the agreed proportions under respective heads in the financial statements.

1.15.2 Jointly Controlled Entities

a) Integrated Joint Ventures :-

1) Companys share in profits or losses of Integrated Joint Ventures is accounted on determination of the profits or losses by the jointventure.

2) Investments in Integrated Joint Ventures are carried at cost net of companys share in recognised profits or losses.

b) Incorporated Jointly Controlled Entities :-

1) Income on investments in incorporated Jointly Controlled Entities is recognised when the right to receive the same is established.

2) Investment in such Joint Ventures are carried at cost after providing for any other than temporary diminution in value in opinion of the management.

1.16 Segment Reporting

The Companys operation predominantly consist of construction /project activities. Hence there are no reportable segments under Accounting Standard -17. During the year under the report, the Company has engaged in its business only within India and not in any other country. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

1.17 Employee Stock Option Scheme

Stock options granted to the employees under the stock options scheme are accounted as per the accounting treatment prescribed by Institute of Chartered Accountants of India. Accordingly, the excess of fair value over the exercise price of the options is recognised as deferred employee compensation and is charged to the profit and loss account on straight line basis over the vesting period of the options. The amortised portion of the cost is shown under reserves and surplus.

OTHER NOTES

(c) Employees compensation expenses relating to issue of shares under Employee Stock option scheme is not required to be included in managerial remuneration forthe purpose of Section 349 of the CompaniesAct, 1956.


Mar 31, 2007

1.1 Basis of Preparation of Financial Statements

The financial statements are prepared under historical cost convention, in accordance with the Indian Generally Accepted Accounting Principles ("GAAP") comprising the mandatory accounting standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956, on accrual basis, as adopted consistently by the Company.

1.2 Use of Estimates

The preparation of financial statements in conformity with generally accepted principles (GAAP) requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

1.3 Fixed Assets

1.3.1 Fixed assets are stated at cost of acquisition or construction, after reducing accumulated depreciation till the date of the Balance Sheet. The cost of an item of fixed asset comprises of its purchase price, including import duties and other non- refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price and includes borrowing cost relating to any specific borrowing attributable to the acquisition of the fixed assets as per the provisions of AS 16 "Borrowing Cost" issued by ICAI..

1.3.2 Intangible assets are recognised as per the criteria specified in AS 26 "Intangible Assets" issued by the Institute of Chartered Accountants of India and amortised as follows

a) Specialised Software :- 100% during the year

1.4 Impairment

The assets are tested for impairment and the provision, if applicable, is made wherever considered necessary based on economic utility of the asset as determined in accordance with the principles as laid down in AS 28 "Impairment of Assets".

1.5 Depreciation

Depreciation on fixed assets have been provided under written down value method and manner at the rates prescribed in schedule XIV to the Companies Act, 1956. In respect of lease assets, the cost is depreciated over the lease period.

1.6 Investments

Investments are classified as long term and current investments. Long term investments are valued at cost of acquisition less provision for permanent diminuation, if any, in the value of investment. Current investments are carried at lower of cost and fair value.

1.7 Recognition of Revenue

1.7.1 Revenue from fixed price construction contracts is recognised on percentage completion method. The stage of completion is determined by survey of work performed and or on completion of physical proportion of the contract work , as the case may be, and acknowledged by the contractee. Future expected loss, if any, is recognised as expenditure. In respect of uncertified revenue recognised, an adequate provision is made for possible reductions, if any.

17.2 Revenue from sale of units is recognised as and when the underlying significant risk and rewards of ownership are transferred to the purchaser and when there is no uncertainty of the amount of consideration that will be derived and it is not unreasonable to expect ultimate collection.

1.7.3 Share of Profit/Loss from Partnership firm/ Association of Person is recognised as income on year-to-year basis on the basis of accounts made-up and allocation made by the firm/AOP in accordance with the Deed of Partnership/AOP Agreement.

1.7.4 Interest Income - Interest income is recognized on time proportion basis taking into account the amounts invested and the rate of interest.

1.7.5 Dividend Income - Dividend income is recognized as and when the right to receive the same is established.

1.7.6 Rental Income - Income from letting-out of property is accounted on accrual basis- as per the terms of agreement and the right to receive the rent is established.

1.8 Inventories

(a) Stock of Materials, etc.

Stock of materials, etc. has been valued at lower of cost or net realisable value. The cost is determined on FIFO method.

(b) Development Work

The development work in progress represents progressive cost of work remaining incomplete/unsold as at close of the year, valued at lower of cost or net realisable value on the basis of technical estimate certified and verified by the Managing Director.

(c) Stock of Resale Units

Stock of Resale units has been stated at cost or net realisable whichever is less.

1.9 Retirement Benefits

The Company has taken up a group policy with Life Insurance Corporation of India for future payment of gratuities to employees. Amount of premium for the period for the said policy and Companys contribution for the year to Provident Fund, etc. are charged to Revenue. Provision for Leave encashment on retirement payable are made on acturial basis.

1.10 Borrowing Cost

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets, if any, are capitalized up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit & Loss Account.

1.11 Leases

Lease rentals in respect of assets acquired under operating lease are charged to the Profit and Loss Account as incurred. Lease rentals in respect of assets given under operating lease are credited to the Profit and Loss Account as accrued.

1.12 Contingent Liabilities

Contingent liabilities, if any, have been disclosed by way of note to balance sheet. Provision has been made in respect of those, which have materialised after the year-end but before finalisation of accounts and have material effect on balance sheet date.

1.13 Income Tax

Provision for the tax for the year comprises current income-tax determined to be payable in respect of taxable income and deferred tax being the tax effect of timing difference representing the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period/s.

1.14 Amortization

Expenses relating to increase in capital are being written off in the year they are incurred.

1.15 Joint Venture Projects

1.15.1 Jointly Controlled Operations :- In respect of joint venture contracts in the nature of jointly controlled operations, the assets controlled, liabilities incurred, the share of income and expenses incurred are recognised in the agreed proportions under respective heads in the financial statements.

1.15.2 Jointly Controlled Entities

a) Integrated Joint ventures

1) Companys share in profits or losses of Integrated Joint Ventures is accounted on determination of the profits or losses by the joint venture.

2) Investments in Integrated Joint Ventures are carried at cost net of companys share in recognised profits or losses.

b) Incorporated Jointly Controlled Entities

1) Income on investments in incorporated Jointly Controlled Entities is recognised when the right to received the same is established.

2) Investment in such Joint Ventures are carried at cost after providing for any permenant dimunation in value.

1.16 Segment Reporting

The Companys operations predominately consist of construction contracts/development activities. Hence there are no reportable segments under Accounting Standard - 17. During the year under the review, the Company has engaged in its business only within India and not in any other country. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

1.17 Fringe Benefit Tax

Fringe benefit tax is recognised in accordance with the relevant provisions of the Income Tax Act, 1961 and the Guidance note on Fringe Benefits Tax issued by the ICAI.

 
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