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the details of our method of revenue recognition, see “Management‘s Discussion and Analysis of Financial
Conditions and Results of Operations—Critical Accounting Policies” on page 258.
Further, there is currently no prescribed method of accounting of revenue and cost for companies engaged in
real estate development under Indian GAAP. The Accounting Standard 7 (“AS-7”) issued by the Institute of
Chartered Accountants of India is applicable to entities in the business of construction contracts and entities
engaged in real estate development business are not required to comply with AS-7. In the event of any change in
law or Indian GAAP which requires a change in the method of revenue recognition, the financial results of our
operations may be adversely affected. For the details of the method of revenue recognition, see “Management‘s
Discussion and Analysis of Financial Conditions and Results of Operations - Critical Accounting Policies”
on page 258.
22. The adoption of IFRS effective April 2011 could have a material adverse effect on our results of
operations and financial condition.
The Institute of Chartered Accountants of India, the accounting body that regulates the accounting firms in
India, has announced a road map for the adoption of, and convergence with, IFRS, pursuant to which all public
companies in India, such as our Company after the Issue, will be required to prepare their annual and
interim financial statements under IFRS beginning with the fiscal period commencing April 1, 2011. Because
there is significant lack of clarity on the adoption of and convergence with IFRS and there is not yet a
significant body of established practice on which to draw in respect of forming judgments regarding the
implementation and application of IFRS, we have not determined with any degree of certainty the impact that
such adoption will have on our financial reporting. As we transition to IFRS reporting, we may encounter
difficulties in the ongoing process of implementing and enhancing our management information
systems. Moreover, there is increasing competition for the small number of IFRS-experienced accounting
personnel available as more Indian companies begin to prepare IFRS financial statements. There can be no
assurance that our adoption of IFRS will not adversely affect our reported results of operations or financial
condition and any failure to successfully adopt IFRS by April 2011 could have a material adverse effect on our
stock price.
23. We may not obtain independent appraisals before acquiring land or development rights and
undertaking projects.
We do not obtain any third party appraisals when acquiring land or development rights and undertaking projects.
Therefore, the price we pay for land or development rights and undertaking projects may exceed fair market
value or the value that would have been determined by third party appraisals, which may have an adverse impact
on our financial condition and results of operations.
24. The development and construction costs of our projects in relation to the Net Proceeds of the Issue
have not been appraised.
Our expenditure plans and estimates of the costs of projects for which we propose to use the net proceeds of the
Issue have not been appraised by any third party and are based on our internal estimates and certificates received
from Architects. Further, such estimates are based on market conditions and management expectations as of the
date they were made. Accordingly, prospective investors in the Issue will need to rely upon the judgment of our
management and the Architects with respect to the use of proceeds in this respect. In view of the highly
competitive nature of the real estate development industry, we may have to revise our management estimates
from time to time and consequently our funding requirements may also change. For example, the significant
rise in cement costs over the last year could result in an escalation of our project costs. Significant revisions to
our funding requirements or the deployment of the net proceeds of the Issue may result in the rescheduling of
our project expenditure programmes and an increase or decrease in our proposed expenditure for a particular
project.
25. We have not entered into any definitive agreements/ made applications in relation to utilization of
approximately Rs. 6,271.7 million of Issue proceeds and any difficulties in entering into definitive and
binding agreements in relation to the deployment of the net proceeds of the Issue may have a material
adverse impact on our operations.
We intend to use the net proceeds of the Issue to, among other things, fund the development and construction of
certain of our projects, fund the payments of statutory development charges relating to our „Ambience City‟
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