Accounting Policies of Sikozy Realtors Ltd. Company

Mar 31, 2024

Note 2.2 Significant accounting policies

(a) Revenue from Contracts with Customers

I. Revenue from contracts with customers

Revenue from contracts with customers is recognised when control of the goods or
services are transferred to the customer at an amount that reflects the consideration
to which the Company expects to be entitled in exchange for those goods or
services. Revenue is measured based on the transaction price, which is the
consideration, adjusted for discounts and other credits, if any, as specified in the
contract with the customer. The Company presents revenue from contracts with
customers net of indirect taxes in its statement of profit and loss.

The Company considers whether there are other promises in the contract that are
separate performance obligations to which a portion of the transaction price needs
to be allocated. In determining the transaction price, the Company considers the
effects of variable consideration, the existence of significant financing components,
non-cash consideration, and consideration payable to the customer (if any).

The Company has applied five step model as per Ind AS 115 ‘Revenue from
contracts with customers’ to recognise revenue in the standalone financial
statements. The Company satisfies a performance obligation and recognises
revenue over time, if one of the following criteria is met:

a) The Customer simultaneously receives and consumes the benefits provided by
the Company’s performance as the Company performs; or

b) The Company’s performance creates or enhances an asset that the customer
controls as the asset is created or enhanced; or

c) The Company’s performance does not create an asset with an alternative use
to the Company and the entity has an enforceable right to payment for
performance completed to date.

For performance obligations where any of the above conditions are not met,
revenue is recognised at the point in time at which the performance obligation is
satisfied.

Revenue is recognised either at point of time or over a period of time based on
various conditions as included in the contracts with customers.

The billing schedules agreed with customers include periodic performance-based
billing and/or milestone-based progress billings. Revenues in excess of billing are
classified as unbilled revenue, while billing in excess of revenues is classified as
contract liabilities (which we refer to as deferred revenues).

i) Recognition of revenue from sale of real estate property

Revenue from real estate development of residential unit is recognised at the point
in time, when the control of the asset is transferred to the customer, which generally
coincides with transfer of physical possession of the residential unit to the customer
ie., handover/deemed handover of the residential units. Deemed handover of the
residential units is considered upon intimation to the customers about receipt of
occupancy certificate and receipt of substantial sale consideration.

Revenue consists of sale of undivided share of land and constructed area to the
customer, which have been identified by the Company as a single performance
obligation, as they are highly interrelated/interdependent.

ii) Recognition of revenue from contractual projects

Revenue from contractual project is recognised over time, using an input method
with reference to the stage of completion of the contract activity at the end of the
reporting period, measured based on the proportion of contract costs incurred for
work performed to date relative to the estimated total contract costs.

The Company recognises revenue only when it can reasonably measure its
progress in satisfying the performance obligation. Until such time, the Company
recognises revenue to the extent of cost incurred, provided the Company expects
to recover the costs incurred towards satisfying the performance obligation.

When it is probable that total contract costs will exceed total contract revenue, the
expected loss is recognised as an expense immediately when such probability is
determined.

For contracts involving sale of real estate unit, the Company receives the
consideration in accordance with the terms of the contract in proportion of the
percentage of completion of such real estate project and represents payments
made by customers to secure performance obligation of the Company under the
contract enforceable by customers.

Such consideration is received and utilised for specific real estate projects in
accordance with the requirements of the Real Estate (Regulation and Development)
Act, 2016. Consequently, the Company has concluded that such contracts with
customers do not involve any financing element since the same arises for reasons
explained above, which is other than for provision of finance to/from the customer.

II. Rental income from operating leases

Rental income receivable under operating leases (excluding variable rental income) is
recognized in the statement of profit and loss on a straight-line basis over the term of the
lease including lease income on fair value of refundable security deposits. Rental income
under operating leases having variable rental income is recognized as per the terms of the
contract.

III. Dividend income

Revenue is recognised when the shareholders’ or unit holders’ right to receive payment is
established, which is generally when shareholder approve the dividend.

IV. Interest income

Interest income, including income arising from other financial instruments, is recognised
using the effective interest rate method.

V. Insurance

Claims are accounted for based on claims admitted/expected to be admitted and to the
extent that there is no uncertainty in receiving the Claims

(b) Borrowing costs

Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.

Borrowing costs directly attributable to the acquisition, construction or production
of an asset that necessarily takes a substantial period of time to get ready for its
intended use or sale are capitalized/inventorised as part of the cost of the
respective asset. All other borrowing costs are charged to statement of profit and
loss

The Company treats as part of general borrowings any borrowing originally made
to develop a qualifying asset when substantially all of the activities necessary
to prepare that asset for its intended use or sale are complete.

(c) Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is
determined based on a weighted average basis. Net realizable 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.

I. Related to real estate

Direct expenditure relating to real estate activity is inventorised. Other expenditure
(including borrowing costs) during construction period is inventorised to the extent
the expenditure is directly attributable cost of bringing the asset to its working
condition for its intended use. Other expenditure (including borrowing costs)
incurred during the construction period which is not directly attributable for bringing
the asset to its working condition for its intended use is charged to the statement of
profit and loss. Direct and other expenditure is determined based on specific
identification to the real estate activity. Cost incurred/items purchased specifically
for projects are taken as consumed as and when incurred/received.

i. Work-in-progress (Real Estate): Represents cost incurred in respect of projects
where the revenue is yet to be recognised and includes cost of land (including
development rights, internal development costs, external development charges,
construction costs, overheads, borrowing cost etc

ii. Stock of Units/plots in completed real estate project: Valued at lower of cost
and net realizable value: Represents cost incurred in respect of completed real
estate projects net of revenue

iii. Building materials: Cost comprises of purchase price and other costs incurred
in bringing the inventories to their present location and conditions.

iv. Land stock: Represents land other than area transferred to work-in-progress at
the time of commencement of construction. It is Valued at lower of cost and net
realizable value. Net realizable value is the estimated selling price in the

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costs necessary to make the sale.

Foreign currency transactions and balances

i) Initial recognition

Foreign currency transactions are recorded in the functional currency, by applying
the exchange rate between the functional currency and the foreign currency at the
date of the transaction.

ii) Conversion

Foreign currency monetary items are retranslated using the exchange rate
prevailing at the reporting date. Non-monetary items, which are measured in terms
of historical cost denominated in a foreign currency, are reported using the
exchange rate at the date of the transaction. Non-monetary items, which are
measured at fair value or other similar valuation denominated in a foreign currency,
are translated using the exchange rate at the date when such value was
determined.

iii) Exchange differences

The Company accounts for exchange differences arising on translation/settlement
of foreign currency monetary items as income or as expense in the period in which
they arise.

(e) Property, plant and equipment

i) Recognition and initial measurement

Property, plant and equipment at their initial recognition are stated at their cost of
acquisition. Cost of an item of property, plant and equipment comprises its purchase
price, borrowing costs (if capitalization criteria are met), import duties, non¬
refundable taxes and 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. The Company identifies and determines cost of each
component/part of the asset separately, if the component/part have a cost which is
significant to the total cost of the asset and has useful life that is materially different
from that of the remaining asset.

The cost of a self-constructed item of property, plant and equipment comprises the
cost of materials, direct labour, borrowing costs (if capitalization criteria are met)
and any other costs directly attributable to bringing the asset to working condition
for its intended use. Advances paid towards the acquisition of property, plant and
equipment outstanding at each balance sheet date is classified as capital advances
under other non-current assets.

ii) Subsequent measurement

Items of property, plant and equipment are measured at cost, less accumulated
depreciation and any accumulated impairment losses, if any. When significant parts
of plant and equipment are required to be replaced at intervals, the Company
depreciates them separately based on their specific useful lives. Likewise, when a

major inspection is performed, its cost is recognised in the carrying amount of the
plant and equipment as a replacement if the recognition criteria are satisfied.

iii) Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic
benefits associated with the expenditure will flow to the Company and the cost of
the item can be measured reliably. All other expenses on existing property, plant
and equipment, including day-to-day repair and maintenance expenditure and cost
of replacing parts, are charged to the statement of profit and loss for the period
during which such expenses are incurred.

iv) Derecognition

An item of Property, plant and equipment and any significant part initially recognized
is derecognized upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on de-recognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement when the Property, plant
and equipment is de-recognized.

(f) Investment property

i) Recognition and initial measurement

Investment property is property held either to earn rental income or for capital
appreciation or for both. Upon initial recognition, an investment property is
measured at cost, including related transaction costs. The cost comprises purchase
price, cost of replacing parts, borrowing cost, if capitalization criteria are met and
directly attributable cost of bringing the asset to its working condition for the
intended use. Any trade discount and rebates are deducted in arriving at the
purchase price.

The cost of a self-constructed item of Investment property comprises the cost of
materials, direct labour, borrowing costs (if capitalization criteria are met) and any
other costs directly attributable to bringing the asset to working condition for its
intended use.

ii) Subsequent measurement

Subsequent to initial recognition, investment property is measured at cost less
accumulated depreciation and accumulated impairment losses, if any. When
significant parts of the investment property are required to be replaced at intervals,
the Company depreciates them separately based on their specific useful lives.

iii) Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic
benefits associated with the expenditure will flow to the Company and the cost of
the item can be measured reliably. All other repair and maintenance costs are
recognised in statement of profit or loss as incurred.

iv) Derecognition

Investment property is derecognised either when control of the same is transferred
to the buyer or when it is permanently withdrawn from use and no future economic
benefit is expected from its disposal. Any gain or loss on disposal of investment
property (calculated as the difference between the net proceeds from disposal and
the carrying amount of the item) is recognised in profit or loss.

v) Reclassification from / to investment property

Transfers to (or from) investment property are made only when there is a change in
use. Transfers between investment property, owner-occupied property and
inventories do not change the carrying amount of the property transferred and they
do not change the cost of that property for measurement or disclosure purposes.

vi) Fair value disclosure

Though the Company measures investment property using cost-based
measurement, the fair value of investment property is disclosed in the notes. Fair
values are determined based on an annual evaluation performed by an accredited
external independent Valuer.

(g) Depreciation and amortisation

Depreciation commences when the assets are ready for their intended use.
Depreciable amount for assets is the cost of an asset, or other amount substituted
for cost, less its estimated residual value. Depreciation is recognised so as to write
off the cost of assets less their residual values over their useful lives, using straight¬
line method as per the useful lives and residual value prescribed in Schedule II to
the Act as under.

The Company, based on technical assessment made by technical expert and
management estimate, depreciates certain items of building and plant and
equipment over estimated useful lives which are different from the useful life
prescribed in Schedule II to the Companies Act, 2013. Leasehold land is amortized
on a straight-line basis over the balance period of lease. Free hold land is not
depreciated and is stated at cost less impairment loss, if any. The management
believes that these estimated useful lives are realistic and reflect fair approximation
of the period over which the assets are likely to be used. The estimated useful lives,
residual value and depreciation/amortisation method are reviewed annually and, if

expectations differ from previous estimates, the change is accounted for as a
change in accounting estimate on a prospective basis.

(h) Capital work-in-progress and intangible assets under development

Capital work-in-progress and intangible assets under development represents
expenditure incurred in respect of capital projects/intangible assets under
development which are not yet ready for their intended use and are carried at cost
less accumulated impairment loss, if any. Depreciation/amortisation is not provided
on capital work-in-progress and intangible assets under development until
construction/installation are complete and the asset is ready for its intended use

(i) Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost.
Following initial recognition, intangible assets are carried at cost less accumulated
amortization and accumulated impairment losses, if any. Intangible assets,
comprising of software and intellectual property rights are amortized on a straight¬
line basis over a period of 3 years, which is estimated to be the useful life of the
asset and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at least at the
end of each reporting period. Gains or losses arising from derecognition of an
intangible asset are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognised in the Statement of Profit
or Loss when the asset is derecognised.

(j) Lease

The Company assesses at contract inception whether a contract is, or contains, a
lease. That is, if the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.

i) Right-of-use assets

The Company recognises right-of-use assets at the commencement date of the
lease (i.e. the date the underlying asset is available for use). Right-of-use assets
are measured at cost, less any accumulated depreciation and impairment losses
and adjusted for any remeasurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised, initial direct costs incurred
and lease payments made at or before the commencement date less any lease
incentives received. Right-of-use assets are depreciated on a straight-line basis
over the lease term. If ownership of the leased asset transfers to the Company at
the end of the lease term or the cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated useful life of the asset. The right-of-
use assets are also subject to impairment. Refer to the accounting policies in note
2.2(p)(ii) on impairment of non-financial assets.

ii) Lease liabilities

At the commencement date of the lease, the Company recognises lease liabilities
measured at the present value of lease payments to be made over the lease term.
The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that
depend on an index or a rate and amounts expected to be paid under residual value
guarantees. The lease payments also include the exercise price of a purchase

option reasonably certain to be exercised by the Company and payments of
penalties for terminating the lease, if the lease term reflects the Company exercising
the option to terminate. Variable lease payments that do not depend on an index or
a rate are recognised as expenses in the period in which the event or condition that
triggers the payment occurs. In calculating the present value of lease payments, the
Company uses its incremental borrowing rate at the lease commencement date
because the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments made. In addition, the
carrying amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the lease payments (e.g. changes to future payments
resulting from a change in an index or rate used to determine such lease payments)
or a change in the assessment of an option to purchase the underlying asset.

iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term
leases (i.e. those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also applies the
lease of low-value assets recognition exemption to leases of assets that are
considered to be low value. Lease payments on short term leases and leases of low
value assets are recognised as expense on a straight-line basis over the lease term.

iv) Company as a lessor

Leases in which the Company does not transfer substantially all the risks and
rewards incidental to ownership of the asset are classified as operating leases.
Assets subject to operating leases are included under Investment property.

Lease income from operating lease is recognized on a straight-line basis over the
term of the relevant lease including lease income on fair value of refundable security
deposits, unless the lease agreement explicitly states that increase is on account of
inflation. Costs, including depreciation, are recognized as an expense in the
statement of profit and loss. Initial direct costs incurred in negotiating and arranging
an operating lease are added to the carrying amount of the leased asset and
recognised over the lease term on the same basis as rental income.

(k) Employees Benefit

Retirement benefits in the form of state-governed Employee Provident Fund,
Employee State Insurance, Employee Pension Fund Schemes and Gratuity are
defined contribution schemes (collectively the ‘Schemes’) are not applicable to the
company since there no employees eligible for retirement and other employees’
benefits.

Various workman law not applicable to the company

i. Retirement and other employee benefits

ii. Employee Provident Fund and Employee State Insurance

iii. Compensated absences

Other short-term benefits

Short-term employee benefits comprising employee costs including
performance bonus is recognized in the statement of profit and loss on the

basis of the amount paid or payable for the period during which services are
rendered by the employee.

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Mar 31, 2015

A) BASIS OF ACCOUNTING

The financial statements are prepared in accordance with the historical cost convention & applicable accounting standards & generally accepted accounting principles. These financial statements have been prepared in compliance with all material aspects of the accounting standards notified under section 133 and the other relevant provisions of the Companies Act, 2013. The company follows mercantile system of accounting generally & recognizes income & expenditure on accrual basis, unless otherwise specifically provided.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles

b) USE OF ESTIMATES

The preparation of financial statement in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount and assets and liabilities & disclosure of contingent liabilities at the date of financial statement and result of the operations during the reporting period end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates difference between the actual results and an estimate is recognized in the period in which the results are known..

c) REVENUE RECOGNITION

Revenue from construction, development and sale of residential, commercial and other units and projects is to be considered on percentage of completion method as per the Guidance Notes on Revenue Recognition issued by the ICAI. Accordingly amount received from the customers which does not qualify for revenue recognition is accounted as Current Liability titled as Advance from Customers under the sub-head of other current liability.

The cost incurred on property development activities are carried as inventories till such time as the outcome of the project can not be estimated reliably and certain conditions are fulfilled.

d) FIXED ASSETS & DEPRECIATION

Fixed asset are stated at cost less accumulated depreciation. Cost includes expenses to put to use of the assets. Depreciation on fixed assets is provided on SLM method on the basis of the remaining useful life of each assets as prescribed in Part C of Schedule II of the Companies Act, 2013. Depreciation on additions during the year have been provided on pro-rata basis. Further unit of asset having value up to Rs.5000 have been directly charged to the Profit & Loss Account, hence not considered for depreciation.

e) INVENTORIES

Inventories comprise finished property and properties under construction (WEP). Work In Progress comprise the cost of land, development rights, TDR, Construction & Development Cost, cost of materials, services and other overheads related to the projects under construction. Inventory is valued at cost including all incidental cost or net realizable value whichever is lower.

f) LEASE

In respect of operating leases, lease rentals are expensed with reference to the term of Lease and other considerations except lease rentals pertaining to the period upto the assets put to use, which are capitalized.

g) BORROWING COST

Borrowing costs attributes to fixed assets during construction period are capitalized. Other borrowing costs a recognized as an expense in the profit and loss account.

h) EMPLOYEES RETIREMENT BENEFITS

Employer contributions towards PF & ESIC are charged to the P&L Account. Liabilities on account of retirement benefits such as Gratuity are charged to the P&L on the basis of Valuation done by independent actuaries at the close of the year.

Leave encashment calculated at the end of every financial year for the leave not availed during the year is in cashed and paid off to the employee as per companies rule.

i) INVESTMENTS

Investments are accounted and valued at cost plus incidental expenses incurred for acquisition All investments are classified in two categories t.e. Long term investments and current investments. Further in case of long term investment diminution, if any, other than temporary, is provided.

j) IMPAIRMENT

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in the prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

k) ACCOUNTING FOR TAXES ON INCOME

The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provision of the I. Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing difference, being the difference taxable incomes & accounting incomes that originate in one period & are capable of reversal in one or more subsequent period.

Minimum Alternate Tax (MAT) paid in a year is charged to the statement of Profit & Loss as current Tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that Company will pay normal income tax during the specified period, i.e. the period for which MAT credit is allowed to be carried forward.

l) Provisions, contingent liabilities & assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of any past events and it is probable that there will be outflow of resources.

Contingent liabilities are not recognized, but are disclosed in the notes. Contingent assets are neither recognized, nor disclosed in the financial statement.

m) Cash Flow Statement:.

Cash flow are reported using the indirect method, whereby profit (loss) before extra ordinary items is adjusted for the effects of the transactions on non cash nature. The cash flow from operating, investing and financing activities of the company are segregated based on available information.

n) Earnings Per Share

The Earning considered in ascertaining the Company's earning per Shares (EPS) comprise of the net profit after tax to equity shares holders. Basic earnings per share are calculated by dividing the Net Profit or Loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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

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Mar 31, 2014

A) BASIS OF ACCOUNTING

The financial statements are prepared in accordance with the historical cost convention & applicable accounting standards & generally accepted accounting principles. The company follows mercantile system of accounting generally & recognizes income & expenditure on accrual basis. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles

b) USE OF ESTIMATES

The preparation of financial statement in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amount and assets and liabilities & disclosure of contingent liabilities at the date of financial statement and result of the operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and an estimate is recognized in the period in which the results are known.

c) REVENUE RECOGNITION

Revenue from construction, development and sale of residential, commercial and other units and projects is to be considered on percentage of completion method as per the Guidance Notes on Revenue Recognition issued by the ICAI. Accordingly amount received from the customers which does not qualify for revenue recognition is accounted as Current Liability titled as Advance from Customers under the sub-head of other current liability.

The cost incurred on property development activities are carried as inventories till such time as the outcome of the project can not be estimated reliably and certain conditions are fulfilled.

d) FIXED ASSETS & DEPRECIATION

Fixed asset are stated at cost less depreciation. The cost is inclusive of interest and incidental expenses incurred during the construction period

Depreciation on fixed assets is provided on S.L.M method at the rate prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on additions during the year have been provided on pro-rata basis.

e) INVENTORIES

Inventories comprises finished property and properties under construction (WIP). Work In Progress comprise the cost of land, development rights, TDR, Construction & Development Cost, cost of materials, services and other overheads related to the projects under construction.

Inventory is valued at cost including all incidental cost or net realizable value whichever is lower.

f) LEASE

In respect of operating leases, lease rentals are expensed with reference to the term of Lease and other considerations except lease rentals pertaining to the period up to the assets put to use, are capitalized.

g) BORROWING COST

Borrowing costs attributes to fixed assets during construction period are capitalized. Other borrowing costs a recognized as an expense in the profit and loss account

h) EMPLOYEES RETIREMENT BENEFITS

Employer contributions towards PF & ESIC are charged to the P&L Account.

Liabilities on account of retirement benefits such as Gratuity is charged to the P&L on the basis of Valuation done by independent actuaries at the close of the year.

Leave encashment calculated at the end of every financial year for the leave not availed during the year is in cashed and paid off to the employee as per companies rule.

i) INVESTMENTS

Investments are accounted and valued at cost plus incidental expenses incurred for acquisition All investments are classified in two categories i.e. Long term investments and current investments. Further in case of long term investment diminution, if any, other than temporary, is provided.

j) IMPAIRMENT

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in the prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

k) ACCOUNTING FOR TAXES ON INCOME

The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provision of the I. Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing difference, being the difference taxable incomes & accounting incomes that originate in one period & are capable of reversal in one or more subsequent period.

Minimum Alternate Tax (MAT) paid in a year is charged to the statement of Profit & Loss as current Tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that Company will pay normal income tax during the specified period, i.e. the period for which MAT credit is allowed to be carried forward.

l) Provisions, contingent liabilities & assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of any past events and it is probable that there will be outflow of resources. Contingent liabilities are not recognized, but are disclosed in the notes. Contingent assets are neither recognized, nor disclosed in the financial statement.

m) Cash Flow Statement:

Cash flow are reported using the indirect method, whereby profit (loss) before extra ordinary items is adjusted for the effects of the transactions on non cash nature. The cash flow from operating, investing and financing activities of the company are segregated based on available information.

n) Earnings Per Share

The Earning considered in ascertaining the Company''s earning per Shares (EPS) comprise of the net profit after tax to equity shares holders. Basic earnings per share are calculated by dividing the Net Profit or Loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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