1.                  Significant accounting policies 1.1.            Basis of brparation of financial statements

These financial statements have been brpared and brsented under the historical cost convention, on the accrual basis of accounting and comply with the Accounting Standards brscribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, the relevant provisions of the Companies Act, 1956 (‘the Act’) and other accounting principles generally accepted in India, to the extent applicable. The financial statements are brsented in Indian rupees.

During the year ended 31 March 2012 (effective 1 April 2011), the revised Schedule VI notified under the Act has become applicable to the Company for brparation and brsentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for brparation of financial statements. All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the revised Schedule  VI.1.2.            Use of estimates

The brparation 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 disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the brparation of the financial statements are prudent and reasonable. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.
2.         Significant accounting policies (Continued) 1.3.            Current / Non-current classification

The Revised Schedule VI to the Act requires assets and liabilities to be classified as either Current or Non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

(a)          it is expected to be realised in, or is intended for sale or consumption in, the entity’s normal operating cycle;

(b)         it is held primarily for the purpose of being traded;

(c)          it is expected to be realised within twelve months after the balance sheet date; or

(d)         it is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for atleast twelve months after the balance sheet date.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

(a)          it is expected to be settled in, the entity’s normal operating cycle;

(b)         it is held primarily for the purpose of being traded;

(c)          it is due to be settled within twelve months after the balance sheet date; or

(d)         the Company does not have an unconditional right to defer settlement of the liability for atleast twelve months after the balance sheet date.

All other liabilities are classified as non-current

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents.

Based on the nature of operations and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current – non-current classification of assets and liabilities.1.4.            Fixed assets and debrciation / amortisation

Tangible assets

Fixed assets are stated at cost less accumulated debrciation/amortisation and impairment loss, if any. Cost comprises of purchase price and any attributable cost such as duties, freight, borrowing costs, erection and commissioning expenses incurred in bringing the asset to its working condition for its intended use.  2.         Significant accounting policies (Continued) 2.4.      Fixed assets and debrciation / amortisation (Continued)

Advance paid /expenditure incurred on acquisition /construction of fixed assets which are not ready for their intended use at each balance sheet date are disclosed under loans and advances as advances on capital account and capital work-in-progress respectively.

Debrciation on assets except leasehold land, is provided using the Straight Line Method as per the useful lives of the assets estimated by the management, or at the rates brscribed under Schedule XIV of the Act, whichever is higher as listed below. Debrciation on addition / deletion of fixed asset made during the year is provided on pro-rata basis from / to the date of such addition / deletion. Leasehold land is amortised over the balance period of lease.

Useful lives and rates of debrciation are:

Asset group	Estimated useful life (in years)	Rates (%)
Building, Temporary structure (porta cabin)	56, 1	1.70, 100
Infrastructure and development cost	56	1.70
Plant and machinery	10	9.50
Office equipment	4	23.57
Computers	4	25.00
Furniture and fixture	7	13.57
Vehicles	5	19.00

Assets individually costing less than Rs 5,000 are fully written off in the year of acquisition.1.5.            Impairment of assets

In accordance with AS 28 on ‘Impairment of assets’ as brscribed in the Companies (Accounting Standards) Rules, 2006, the Company assesses at each balance sheet date, whether there is any indication that an asset may be impaired.  If any such indication exists, the Company estimates the recoverable amount of the asset. The recoverable amount of the assets (or where applicable that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. Value in use is the brsent value of estimated future cash flows expected to arise from the continuing use of the assets and from its disposal at the end of its useful life. An impairment loss is recognised whenever the carrying amount of an asset or the cash-generating unit to which it belongs, exceeds it recoverable amount.  Impairment loss is recognised in the statement of profit and loss or against revaluation surplus, where applicable.  If at the balance sheet date, there is an indication that a brviously assessed impairment loss no longer exists, the recoverable amount is re-assessed and the asset is reflected at the recoverable amount subject to a maximum of the debrciated historical cost. 
2.         Significant accounting policies (Continued) 1.6.            Investment property

Properties including land, building and other assets, which are held either for long-term rental yield or for capital apbrciation or for both, and which are not occupied substantially by the Company are classified as investment properties.

Investment property is stated at cost less debrciation less impairment losses if any. Investment properties are initially recognised at cost, including related transaction costs less impairment losses, if any.  Cost comprises of direct expenses like land cost, site labour cost, material used for project construction, project management consultancy, costs for moving the plant and machinery to the site and general expenses incurred specifically for the respective project like insurance, design and technical assistance, and construction overheads are allocated on a reasonable basis to the cost of the project.

Acquisitions and disposals are accounted for at the date of completion. 

Debrciation on investment property is provided using the Straight Line Method, as per useful lives of the assets estimated by the management.

Debrciation on addition / deletion of investment property made during the year is provided on pro-rata basis from / to the date of such addition / deletion.

The key assets and related debrciation are as under:

Asset group	Estimated useful life (in years)	Rates (%)
Building	60	5
Infrastructure development	60	5
Plant and machinery	10	9.50

Investment properties under construction

Investment property under construction rebrsents the cost incurred in respect of areas under construction of the real estate development projects less impairment losses, if any. Property under construction is accounted for as investment property under construction until construction or development is complete.

Direct expenses like cost of land, site labour cost, material used for project construction, project management consultancy, costs for moving the plant and machinery to the site and general expenses incurred specifically for the respective project like insurance, design and technical assistance, and construction overheads are taken as the cost of the project.

Advance paid for acquisition of investment property which are not ready for their intended use at each balance sheet date are disclosed under loans and advances as advances on capital account.
2.         Significant accounting policies (Continued) 1.7.            Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are treated as direct cost and are considered as part of cost of such assets. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

Capitalisation of borrowing costs is suspended during the extended period in which active development is interrupted. Capitalisation of borrowing costs is ceased when substantially all the activities necessary to brpare the qualifying asset for its intended use or sale are complete.

Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs are capitalised to the cost of the qualifying assets. Foreign exchange gain arising from the restatement of foreign currency loan is adjusted in the cost of the qualifying asset only to the extent that exchange loss was capitalised as part of the cost of the asset in an earlier accounting period pursuant to paragraph 4(e) of Accounting standard (AS) 16 on Borrowing costs. Any exchange gain in excess of exchange loss brviously capitalised is treated as income in the statement of profit and loss.

Any exchange gain on the foreign currency loan that arises after the capitalisation of borrowing cost has ceased is credited to the statement of profit and loss.1.8.            Inventories

Inventories comprise of building material, components and stores and spares. Inventories are valued as lower of cost and net realisable value. Cost is determined on Moving Weighted Average basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
2.         Significant accounting policies (Continued) 1.9.            Revenue recognition

Revenue from property leased out under an operating lease is recognised over the tenure of the lease / service agreement on a straight line basis, except where there is uncertainty of ultimate collection.

Maintenance income is recognised as and when related expenses are incurred.

When assets are let out under finance lease, the Company recognizes a receivable at an amount equal to the net investment in the lease. Rentals received are accounted for as repayment of principal and finance income. Minimum lease payments receivable on finance leases are apportioned between the finance income and the reduction of the outstanding receivable. The finance income is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining net investment in the finance lease. Contingent rents are recorded as income in the periods in which they are earned.

Revenue from works contracts, where the outcome can be estimated reliably, is recognized on the basis of percentage completion method by reference to stage of completion of the contract activity. The stage of completion is measured by calculating the proportion that cost incurred to date bears to the estimated total cost of contract.

Interest income is recognised on time proportion basis.1.10.        Income- tax

Income-tax expense comprises current tax, and deferred tax charge or credit. 

Current tax

Provision for current tax is based on the results for the year ended 31 March 2013, in accordance with the provisions of the Income-tax Act, 1961.

Deferred tax

Deferred tax liability or asset is recognized for timing differences between the profits/losses offered for income taxes and profits/losses as per the financial statements.  Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date.  

Deferred tax asset is recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed debrciation or carried forward loss under taxation laws, deferred tax asset is recognized only if there is a virtual certainty of realization of such asset.  Deferred tax asset is reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably/virtually certain to be realized.
2.         Significant accounting policies (Continued) 1.11.        Earnings per share (EPS):

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period.

Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti-dilutive.1.12.        Provisions and contingent liabilities

The Company creates a provision where there is brsent obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible or a brsent obligation that may, but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.1.13.        Foreign currency transactions

Transactions denominated in foreign currency are recorded at the exchange rate brvailing on the date of transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the statement of profit and loss of the year.

Monetary assets and liabilities in foreign currency, which are outstanding as at the year-end and not covered by forward contracts, are translated at the year-end at the closing exchange rate and the resultant exchange differences are recognized in the statement of profit and loss. Non-monetary foreign currency items are carried at cost. 1.14.        Short term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits such as salaries, wages, etc. and are recognised in the period in which the employee rendered the related services. The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized as an expense during the period1.15.        Leases

a)         Operating lease

Leases, where the lessor effectively retains substantially all the risk and benefits of ownership, of the leased assets during the lease term are classified, as operating leases. Operating lease income / expenditure are recognized in statement of profit and loss on straight line basis over the leased term.

 2.         Significant accounting policies (Continued)

b)         Finance lease

Leases, where the lessor transfers substantially all the risks and benefits or ownership, of the leased assets during the lease term are classified, as finance leases. Assets given under finance lease are recognized as a receivable at an amount equal to the net investment in the lease. Net investment in the lease is the gross investment in lease less unearned finance income. Gross investment in the lease is aggregate of minimum lease payments under the finance lease and any unguaranteed residual value accruing to the lessor.

1.1.            Short term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits such as salaries, wages, etc. and are recognised in the period in which the employee rendered the related services. The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized as an expense during the period