Note 1. SIGNIFICANT ACCOUNTING POLICIES a)Method of Accounting The financial statements are brpared under the historical cost convention in conformity with the Generally Accepted Accounting Principles in India, applicable 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. b)Use of Estimates The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements and the result of operations during the reporting periods. Although these estimates are based upon management's knowledge of current events and actions, actual results could differ from those estimates. c)Fixed Assets Fixed Assets are stated at cost less accumulated debrciation and amortisation. Direct costs inclusive of inward freight, duties and taxes, incidental expenses including interest relating to acquisition and cost of improvements thereon are capitalized until fixed assets are ready for use. Capital Work in Progress comprises cost of fixed assets not ready for their intended use at the reporting date of the financial statements. Debrciation and Amortisation Effective 1st April,2014, Debrciation on fixed assets is provided on straight-line method and based on useful life of assets as brscribed in Schedule II to the Companies Act, 2013 as against the earlier practice of debrciating at the rates brscribed in Schedule XIV of the Companies Act, 1956. Investments Long term investments are carried at cost, less provision for diminution other than temporary if any, in the value of such investments. Current Investments are carried at lower of cost and fair value. f)Inventories Inventories are valued as under: (i)Land earmarked for property development is valued at cost. Cost includes land acquisition cost, registration charges and stamp duty. (ii)Constructed properties includes cost of land, brmium for development rights, construction costs and allocated interest and expenses incidental to the projects undertaken by the company. (iii)Stock of food and beverages are carried at cost and net realizable value, whichever is lower. Cost is determined on the "weighted average" method. g)Revenue Recognition (i)Sale of Land and Plots is recognized in the financial year in which the agreement to sell is executed. (ii)Revenue from constructed properties (excluding service tax) is recognized on the "percentage of completion method". Total sale consideration as per the agreements to sell constructed properties entered into is recognized as revenue only when the stage of completion is 20 percent or more when the outcome of the project can be estimated reliably. When it is probable that total costs will exceed the total project revenue the expected loss is recognized immediately. Service tax does not form part of gross revenue. (iii)Contract revenue from the construction contracts are recognized on "percentage of completion method measured by survey of work performed" depending on the nature of the contract. The revenue on construction contract is recognized only when the stage of completion is 20 percent or more when the outcome of the contract can be estimated reliably. When it is probable that the total cost exceeds the total contract revenue, the expected loss is recognized immediately. (iv)Income from sale of Rooms, Food and Beverages and allied services relating to hotel operations is recognized upon rendering of the service. Income stated is exclusive of amount received towards sales tax/ service tax etc. (v)In respect of membership (club) sales, revenue is recognized as under: -Life membership, Permanent membership and Time-share membership over a period of 15 years. -Long-term membership over a period of 3 years. -Health club membership fully in the year of receipt. h)Cost of Construction Cost of constructed properties includes cost of land (including land under agreements to purchase), estimated internal development costs, external development charges, constructions costs and development/ construction materials, which is charged to the statement of profit and loss based on the percentage of revenue recognized as per accounting policy (g) above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the applicable project. Cost of Construction Contracts includes estimated construction costs and construction material, which is charged to the statement of profit and loss based on percentage of revenue recognized measured by survey of work performed as per accounting policy (g) above, depending on the nature of the contract, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the applicable project. Overhead expenses comprising costs other than those directly charged to the jobs are distributed over the various projects on a pro-rata basis having regard to the activity and nature of such projects. i)Foreign Exchange Transactions Transactions in foreign currency and non monetary assets are accounted for at the exchange rate brvailing on the date of the transaction. All monetary items denominated in foreign currency are converted at the year-end exchange rate. The exchange differences arising on such conversion and on settlement of the transaction are dealt with in the statement of profit and loss. j) Income Tax Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, subject to consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. k) Borrowing Cost Borrowing costs that are directly attributable to acquisition, construction or production of a qualifying asset are capitalised as part of the cost of such asset. A qualifying asset is one that necessarily takes substantial period of time i.e., more than twelve months to get ready for its intended use. All other borrowing costs are charged to the statement of profit and loss as incurred. l) Earnings per share (EPS) In arriving at the EPS, the Company's net profit after tax, computed in terms of the accounting principles, generally accepted in India, is divided by the weighted average number of equity shares outstanding on the last day of the reporting period. The EPS thus arrived is known as 'Basic EPS'. To arrive at the diluted EPS the net profit after tax, referred above, is divided by the weighted average number of equity shares that could have been issued on conversion of the shares having potential dilutive effect subject to the terms of issue of those potential shares. The date/s of issue of such potential shares determine the amount of the weighted average number of potential equity shares. m) Employee Benefits Liability for employee benefits, both short and long term, for brsent and past services which are due as per the terms of employment are recorded in accordance with Accounting Standard (AS) 15 "Employee Benefits". i)Defined Contribution Plan: Company's contributions paid / payable during the year towards Provident Fund are charged to the statement of Profit and Loss. ii)Defined Benefit Plan: The gratuity liability is provided on the basis of actuarial valuation on the Balance Sheet date and the same is funded with Life Insurance Corporation as per their advice. 1.the secured loan of rs. 3,200.00 lacs from prajay properties private limited is continuing as interest free by virtue of the agreement date 6th October 2009. Since some of the statutory approvals for prajay megapolis project are yet to be ontained crystallization of loan repayment time schedule has not taken place as on 31.03.15 2. brvious years figures have been recast restated to conform to current year classification As per my report attached For and on behalf of the board S.V.Rangan Chartered Accountant D.Vijay Sen Reddy Managing Director Sumit Sen Whole Time Director P.Bhaskara Rao Chief Financial Officer D. Madhavi Latha Company Secretary Date : 30.05.2015 Place : Hyderabad |
