NOTES FORMING PART OF FINANCIAL INFORMATION

CORPORATE INFORMATION:

Company Background: The Company was incorporated on March 21, 1995 as KMF BUILDERSAND DEVELOPERS LIMITED to carry on business in development and construction of flats.

1.00 SIGNIFICANT ACCOUNTING POLICIES

1.01 BASIS FOR brPARATION:

These financial statements are brpared in accordance with Indian generally accepted accounting principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as brscribed by the Rule 7 of companies (Accounting standards) Rules, 2014, as per Section 133 of the provisions of the Companies Act, 2013.

1.02 USE OF ESTIMATES:

The brparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances ofassets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period.

1.03 INVENTORIES:

PurabManor Project:

Inventories are valued at cost. The total estimated costs to complete the Residential Project is estimated and accordingly, the cost of sales is worked out and transferred to the Statement of Profit and Loss outof the work in progress. Balance cost incurred is carried as inventory cost.

Mathura Project:

Total Cost spent on project shown as Inventory-WIP

1.04 EVENTS OCCURRING AFTER THE DATE OF BALANCE SHEET:

Material events occurring after the date of Balance Sheet are taken into cognizance and dealt accordingly.

1.05 REVENUE RECOGNITION: RESIDENTIAL COMPLEX:

Revenue in respect of residential project is recognized based on percentage completion method as per Accounting Standard 7 issued by the ICAI. Under this method, revenue is recognized based on the estimated total cost of the project and estimated sale value based on the transfer of ownership/ possession/ GPA/Katha Transfer/Agreements.

Effective 1st April, 2012 in accordance with the 'Guidance Note on Accounting for Real Estate Transactions (Revised 2012 Guidance Note) all projects commencing on or after the said date or projects where revenue is recognized for the first time on or after the above date, construction revenue on such projects have been recognized on percentage completion method provided the following threshold have been met:

a. all critical approvals necessary for the commencement have been obtained.

b. the expenditure incurred on construction and development costs is not less than 25% of the total estimated construction and development cost.

c. at least 25% of the saleable project area is secured by agreements with Buyers and

d. at least 10% of the agreements are realized at the reporting date in respect of such contracts.

Interest income recognized on time proportionate basis and other income is recognized on accrual basis

In respect of interest on IT refund/Insurance claim. Income will be recognized on cash basis

1.06 INFLATION:

Assets and liabilities are recorded at historical cost. These costs are not adjusted to reflect the changing value in the purchasing power of money.

1.07 FIXEDASSETS& DEbrCIATION: Tangible Fixed Assets:

Fixed assets are carried at cost less accumulated debrciation and impairment losses, ifany. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of debrciable fixed assets are adjusted to the cost of the respective assets

Intangible Assets:

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.

Debrciation provided on a pro-rata basis on the WDV over the estimated useful life of the assets which are equal or higher than the rates brscribed under sch-II to the Companies Act, 2013, inorderto reflect the actual usage of the assets.

1.08 TREATMENT OF EXPENDITURE ON CONSTRUCTION WORK:

The expenditure incurred/borrowing cost on construction work was directly allocated to projects, wherever the expenses were not identifiable those expenses were apportioned to the administration and other projects which are in progress.

1.09 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.

The information required under the provisions of Rules 5(2) & 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are not applicable to the Company as there was no Personnel who was in receipt of remuneration aggregating to Rs. 60,00,000/- per annum if employed throughout the financial year and Rs. 5,00,000/- per month if employed for a part of financial year.

All Board Directors and the designated employees have confirmed compliance with the Code.

1.11 DEFERRED TAXES:

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

1.12 TAXATION:

Income tax:

Income tax expense comprises current tax for the year determined in accordance with the income-tax Act, 1961.

Deferred tax:

Deferred taxation is provided using the liability method in respect of the taxation effect originating from all material timing differences between the accounting and tax treatment of income and expenditure, which are expected with reasonable probability to reverse in subsequent periods. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted bythe balance sheetdate.

1.13 SEGMENTAL REPORTING:

The Company Operates in only one segment of business, namely, development of an Residential Housing. Hence segment reporting is not applicable.

1.14 IMPAIRMENTOFASSETS:

Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An asset is impaired when the carrying amount of the asset exceeds its recoverable amount. An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired.

The information required under the provisions of Rules 5(2) & 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are not applicable to the Company as there was no Personnel who was in receipt of remuneration aggregating to Rs. 60,00,000/- per annum if employed throughout the financial year and Rs. 5,00,000/- per month if employed for a part of financial year.

All Board Directors and the designated employees have confirmed compliance with the Code.

1.15 INSURANCECLAIMS

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

1.16 SERVICE TAX INPUT CREDIT

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

1.17 EARNINGS PERSHARE:

In determining earning per share, the company considers the net profit after tax and includes the post tax effect of extraordinary items. The number of shares used in computing basic earnings pershare is the weighted average number of shares outstanding during the period.

1.18 BORROWINGS 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 utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction /development of the qualifying asset up to the date of capitalisation of such asset is added to the cost of the assets.

1.19 PROVISIONSAND CONTINGENTLIABILITIES:

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

Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.