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Accounting Policies of Artson Engineering Ltd. Company

Mar 31, 2015

The Significant Accounting Policies have been predominantly prescribed below in order of the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

i) Method of Accounting and preparation of the Financial Statements:

These financial statements have been prepared in accordance with the generally accepted accounting principles (GAAP) in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply with all material aspects of the accounting standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the company.

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 Schedule III to the Companies Act, 2013. Based on the nature of services offered, the Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.

ii) Revenue Recognition

a. Manufacturing activities:

Sales of Goods is recognised when significant risks and rewards of ownership are transferred to buyer. Sales exclude amount recovered towards Excise Duty and Sales Tax.

b. Erection / Construction activities: Revenues from execution of contract is recognized on the Percentage Completion method. The stage of completion is determined on the basis of actual work executed during the year. Running bills are accounted as sales on monthly basis. No profit is recognised till a minimum of 10% progress is achieved on the contract except in case of contracts executed on cost-plus basis. Costs incurred and invoices raised in respect of such contracts are carried in the Balance Sheet as contracts-in-progress and advance billing respectively. When it is probable at any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognised immediately. In case of arbitration awards which are granted in favour of the Company, any amount to be received is treated as income in the year of receipt of such award. Liquidated damages/Penalties are accounted for as cost when such delays and causes are attributable to the Company or when deducted by the client.

c. Work done but not billed: Value of work executed, billed subsequent to the Balance Sheet date, is valued at the contract price.

d. i Income and Expenses are accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation.

ii VAT set-off is based on returns filed with appropriate authorities.

e. Bank Guarantee commission is accounted in the year of execution/renewal of guarantee.

iii) Use of Estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the year. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from those estimates and the difference between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

iv) Fixed Assets:

Tangible

All tangible fixed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost of fixed assets comprises its purchase price and other attributable expenditure incurred in making the asset ready for its intended use and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use.

Intangible

Intangible Assets are initially recognised at cost and are stated at cost less depreciation and impairment (if any). The cost of an internally generated intangible asset comprises all expenditure that can be directly attributed, or allocated on a reasonable and consistent basis, to creating, producing and making the asset ready for its intended use. These Intangible Assets comprise of Computer Softwares.

v) Depreciation /Amortization on Fixed Assets:

a. Depreciation has been provided for on the written down value method as per the useful life prescribed in Schedule II to the Companies Act, 2013.

b. Leasehold Land, for 99 years and Leasehold Improvements are amortised over the period of the lease.

vi) Impairment of Assets:

As at each Balance Sheet date, the Company assesses the realisable value of all the assets. If there is any indication of fall in the realisable value over the carrying cost of the assets, impairment in value of the assets is recognised.

vii) Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts-in-progress, being technical matters, are estimated and certified by the Company's technical personnel.

b. Stock of all the raw materials, construction materials, stores and spares lying at store, sites/ factory have been valued at the lower of cost (FIFO) and the net realisable value.

c. Work-in Progress are valued at the lower of cost and the net realisable value.

viii) Investments:

a. Investments intended to be held for more than one year are classified as long term investments and are carried at cost of acquisition inclusive of other attributable expenses. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature in the value of such investments.

b. Current Investments is carried at the lower of cost and the fair value.

ix) Foreign Currency Transactions:

a. Transactions in foreign currency are recorded at the exchange rates prevailing on the date of transaction.

b. Monetary assets and liabilities denominated in foreign currencies at the year-end are translated at the year-end exchange rates.

c. The exchange difference on conversion are credited or charged to the Statement of Profit and Loss.

d. Financial statement of foreign operations, which are integral operations are translated using the same principles as stated above except following items which are translated as below:

Sr. Nature of the account Policy No.

1. Opening and Closing Exchange Rate at the commencement Work-in-progress and close of the year respectively.

2. Fixed Assets and Exchange Rate used for the Depreciation translation of the respective date of purchase of fixed assets.

x) Employee benefits:

a. The Company's contribution to Provident Fund is charged to the Statement of Profit and Loss.

b. Other long-term employee benefits comprise compensated absences which is provided based on an actuarial valuation carried out in accordance with AS 15 as at the Balance Sheet date.

c. The gratuity liability, which is a defined benefit plan, is provided on the basis of actuarial valuation as at the Balance Sheet date on the projected unit credit method and the same is funded with Life Insurance Corporation of India.

xi) Segment Reporting:

The Company is in the business of Engineering, Procurement & Construction contract in Oil, Gas & Hydrocarbon (OG&H) Sector and ancillary services, including manufacturing activity. More than 90% of the income is only from Engineering & Construction contracts in OG&H Sector and ancillary services. The projects are executed both in India and abroad. Considering the core activity of the Company as above, the primary segment is geographical segment. Accordingly, the reportable segments of the Company are:

1. Domestic

2. Overseas

xii) Earnings Per Share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 'Earnings per share'. Basic earnings per share, is computed by dividing the net profit or loss for the year, by the weighted average number of equity shares outstanding during the year.

xiii) Taxation (including Deferred Tax):

Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of the taxable income in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods are recognised using the tax rates, and tax laws that have been enacted or substantively enacted, subject to prudence. Deferred tax assets on unabsorbed depreciation and carry forward of losses are not recognised unless there is a virtual certainty that there will be sufficient future taxable income available to realise such assets.

xiv) Borrowing Costs:

Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets, are capitalised.

xv) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised for liabilities that can be measured only by using substantial degree of estimation, if:

a. The Company has a present obligation as a result of past events.

b. A probable outflow of resources is expected to settle the obligation.

c. The amount of the obligation is best estimate required to settle the obligation at the Balance Sheet date.

d. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

Reimbursement expected in respect of the expenditure required to settle a provision is recognized only when it is virtually certain that reimbursement will be received.

Contingent Liability is disclosed in the case of :

a. A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation,

b. A present obligation when no reliable estimate is possible, and

c. A possible obligation arising from past events where the probability of outflow of resources is not remote.

Contingent Assets are neither recognised, nor disclosed. Provision, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

xvi) Extraordinary Items:

The Extraordinary items are Income or Expenses that arise from events of transactions that are clearly distinct from the ordinary activities and therefore, are not expected to recur frequently or regularly.

The nature and amount of each extra ordinary item is identified and disclosed in the Statement of Profit and Loss in a manner that its impact on current profit or loss can be perceived.

xvii) Operating Leases:

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rents under operating leases are recognised in the profit and loss account on a straight line.


Mar 31, 2014

The Significant Accounting Policies have been predominantly prescribed below in order of the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended)

i) Method of Accounting and preparation of the Financial Statements:

The financial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the accounting principles, generally accepted in India and in accordance with Accounting Standards referred to in section 211(3C) of the Companies Act, 1956.

ii) Revenue Recognition

a Manufacturing activities:

Sales of Goods is recognized as per the terms of sales. Sales exclude amount recovered towards Excise Duty and Sales Tax

b Erection / Construction activities:

Revenues from execution of contract is recognized on the Percentage Completion method. The stage of completion is determined on the basis of actual work executed during the year. Running bills are accounted as sales on monthly basis. No profit is recognized till a minimum of 10% progress is achieved on the contract except in case of contracts executed on cost-plus basis. Costs incurred and invoices raised in respect of such contracts are carried in the Balance Sheet as contract in progress and advance billing respectively. When it is probable at any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognized immediately In case of arbitration awards which are granted in favour of the Company, any amount to be received is treated as ncome in the year of receipt of such award. Liquidated damages/Penalties are accounted for as cost when such delays and causes are attributable to the Company or when deducted by the client

c. Work done but not billed: Value of work executed, billed subsequent to the Balance Sheet date, is valued at the contract price

d. i. Income and Expenses are accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation

ii. VAT set-off is based on returns filed with appropriate authorities

e. Bank Guarantee commission is accounted in the year of execution/renewal of guarantee

iii) Use of Estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ from those estimates and the difference between the actual results and the estimates are recognized in the periods in which the results are known/materialise

iv) Fixed Assets:

All tangible fixed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost of fixed assets comprises its purchase price and other attributable expenditure incurred in making the asset ready for its intended use and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use

v) Depreciation /Amortization on Fixed Assets:

a. Depreciation has been provided for on the written down value method at the rates specified in Schedule XIV of the Companies Act, 1956

b. All the Fixed Assets costing less than Rs. 5,000/- each are fully depreciated in the year of acquisition

c. Leasehold Land and Leasehold Improvements are amortized over the period of the lease

vi) Impairment of Assets:

As at each Balance Sheet date, the Company assesses the realizable value of all the assets. If there is any indication of fall in the realizable value over the carrying cost of the assets, impairment in value of the assets is recognized

vii) Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts in progress, being technical matters, are estimated and certified by the Company''s technical personnel

b. Stock of all the raw materials, construction materials , stores and spares lying at store, sites/ factory have been valued at cost on First in First Out basis

c. Work-in Progress are valued at the lower of cost and the net realizable value viii) Investments:

a. Investments intended to be held for more than one year are classified as long term investments and are carried at cost of acquisition inclusive of other attributable expenses or fair value whichever is lower. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature, in the value of such investments

b. Current Investments are carried at the lower of cost and the fair value ix) Foreign Currency Transactions:

a. Transactions in foreign currency are recorded at the exchange rates prevailing on the date of transaction

b. Monetary assets and liabilities denominated in foreign currencies at the year-end are translated at the year-end exchange rates

c. The exchange difference on conversion are credited or charged to the Statement of Profit and Loss

d. Financial statement of Foreign operations, which are integral operations are translated using the same principles as stated above except following items which are translated as below:

x) Employee benefits:

a. The Company''s contribution to Provident Fund is charged to the Statement of Profit and Loss

b. Other long term employee benefits comprise compensated absences which is provided based on an actuarial valuation carried out in accordance with AS 15 as at the Balance Sheet date

c. The gratuity liability, which is a defined benefit plan, is provided on the basis of actuarial valuation as on Balance Sheet date on the projected unit credit method and the same is funded with Life Insurance Corporation of India

xi) Segment Reporting:

The Company is in the business of Engineering, Procurement & Construction contract in Oil, Gas & Hydrocarbon (OG&H) Sector and ancillary services, including manufacturing activity. More than 90% of the income is only from Engineering & Construction contracts in OG&H Sector and ancillary services. The projects are executed both in India and abroad Considering the core activity of the Company as above, the primary segment is geographical segment. Accordingly the reportable segments of the Company are:

1. Domestic

2. Overseas

xii) Earnings Per Share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 ''Earnings per share'' Basic earnings per share, is computed by dividing the net profit or loss for the year, by the weighted average number of equity shares outstanding during the year

xiii) Taxation (including Deferred Tax):

Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of the taxable ncome in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods are recognized using the tax rates, and tax laws that have been enacted or substantively enacted, subject to prudence. Deferred tax assets on unabsorbed depreciation and carryforward of losses are not recognized unless there is a virtual certainty that there will be sufficient future taxable income available to realize such assets

xiv) Borrowing Costs:

Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets, are capitalized

xv) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized for liabilities that can be measured only by using substantial degree of estimation, if:

a. The Company has a present obligation as a result of past events

b. A probable outflow of resources is expected to settle the obligation

c. The amount of the obligation is best estimate required to settle the obligation at the Balance Sheet date

d. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate

Reimbursement expected in respect of the expenditure required to settle a provision is recognized only when it is virtually certain that reimbursement will be received

Contingent Liability is disclosed in the case of

a. A present obligation arises from past events, when it is not probable that an outflow of resources will be required to settle the obligation

b. A present obligation when no reliable estimate is possible, and

c. A possible obligation arising from past events where the probability of outflow of resources is not remote

Contingent Assets are neither recognized, nor disclosed. Provision, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date

xvi) Extraordinary Items:

The Extraordinary items are Income or Expenses that arise from events of transactions that are clearly distinct from the ordinary activities and therefore, are not expected to recur frequently or regularly

The nature and amount of each extra ordinary items is identified and disclosed in the Statement of Profit and Loss in a manner that its impact on current profit or loss can be perceived

b. Terms/rights attached to equity shares

The Company''s issued, subscribed and paid-up capital comprises of equity shares only and no preference share have been ssued. The Company''s paid-up capital comprises only one class, i.e. equity shares having par value of Rs. 1 per share. Each holder of equity share is entitled to one vote per share

The liability of the members is limited.

The Company''s shares are listed on the Bombay Stock Exchange Limited (BSE)

Restriction on distribution of Dividend

Pursuant to the Provisions of the Sanctioned Scheme, the Company is not permitted to declare any dividend to the equity shareholders without the prior approval of the BIFR/Monitoring Agency (MA) during the period of rehabilitation

c. No bonus shares have been issued, no shares have been issued for consideration other than cash and no shares have been bought back during the last five years

e. Reduction in paid-up value of equity shares

Pursuant to the provisions of the Sanctioned Scheme, effective 26th December 2007 the paid-up value of the equity shares has been reduced from Rs. 10/- per share to Rs. 1/- per share fully paid-up. On reduction, the paid-up capital of the Company was reduced to Rs. 92,30,000 comprising of 92,30,000 equity shares of Rs. 1/- each. On 4th January 2008, the Company has allotted 2,76,90,000 equity shares of Rs. 1/- each to Tata Projects Limited. Consequent to the allotment of these shares, the Company has become a subsidiary of Tata Projects Limited (shareholding of 75% in the Company''s paid-up capital). The Company''s paid-up capital has thus been increased to Rs. 3,69,20,000 comprising of 3,69,20,000 equity shares of Rs. 1/- each


Mar 31, 2013

The Signifcant Accounting Policies have been predominantly prescribed below in order of the Accounting Standards notifed under the Companies (Accounting Standards) Rules, 2006 (as amended).

(i) Method of Accounting and preparation of Financial Statement:

The fnancial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the generally accepted accounting principles, in India and in accordance with accounting standards notifed under the Companies (Accounting Standards) Rules, 2006

(ii) Revenue Recognition

a. Manufacturing activities:

Sales of Goods is recognized when signifcant risks pass to the buyer as per the terms of sales. Sales exclude amount recovered towards Excise Duty and Sales Tax.

b. Erection/Construction activities:

Revenue is recognized when there is certainty as to measurability and collectability exists. Revenues from execution of contract are recognized on the Percentage of Completion method. The stage of completion is determined on the basis of actual work executed during the year. Running bills are accounted as sales on monthly basis. No proft is recognized till a minimum of 10% progress is achieved on the contract except in case of contracts executed on Cost-plus basis. Costs incurred and invoices raised in respect of such contracts are carried in the Balance Sheet as contracts in progress and advance billing respectively. When it is probable at any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognized immediately. Liquidated damages/Penalties are accounted for as cost when such delays and causes are attributable to the Company or when deducted by the Client.

c. work done but not billed:

Value of work executed, billed subsequent to the Balance Sheet date, is valued at contract price.

d. i. Income and Expenses are accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation.

ii. VAT set-off is based on returns fled with appropriate authorities.

e. Bank Guarantee commission is accounted in the year of execution/renewal of guarantee.

(iii) Fixed Assets:

All tangible and intangible fxed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost comprises of purchase price and other attributable expenses incurred up to acquisition and installation.

(iv) Depreciation/Amortisation on Fixed Assets:

a. Depreciation has been provided for on the written down value method at the rates specifed in Schedule XIV of the Companies Act, 1956 except as stated below.

b. All Fixed Assets costing less than Rs. 5,000/- each are fully depreciated in the year of acquisition.

c. Leasehold Improvements are amortised over the period of the lease.

d. Computer software being an intangible asset is amortized at 40% on written down value basis.

(v) Impairment of Assets:

As at each Balance Sheet date, the Company assesses the realizable value of all the assets. If there is any indication of fall in the realizable value over the carrying cost of the assets, impairment in value of the assets is recognized.

(vi) Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts-in-progress, being technical matters, are estimated and certifed by the Company''s technical personnel.

b. Stock of raw materials, construction materials, stores and spares lying at store, sites/factory have been valued at the lower of cost on First in First Out basis and the net realizable value.

c. Work-in-Progress is valued at the lower of cost and net realizable value.

d. Sale in transit are valued at respective contract price.

(vii) Investments:

a. Investments intended to be held for more than one year are classifed as long term investments and are carried at cost of acquisition inclusive of other attributable expenses or fair value whichever is lower. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature.

b. Current Investments are carried at the lower of cost and fair value.

(viii) Foreign Currency Transactions:

a. Sales and expenditure relating to overseas jobs/projects have been converted at the exchange rates prevailing on the date of transaction.

b. Assets and liabilities denominated in foreign currencies at the year-end are normally translated at the year- end exchange rates.

c. The exchange difference on conversion are credited or charged to the Statement of Proft and Loss.

d. Financial statements of foreign operations, which are integral operations are translated using the same principles as stated above except following items which are translated as below:

Sl. No. Nature of the account Policy

1. Opening and Closing Work-in-progress Exchange Rate at the commencement and close of

the year respectively.

2. Fixed Assets and Depreciation Exchange Rate used for the translation of the

respective date of purchase of fxed assets.

(ix) Retirement benefts:

a. The Company''s contribution to Provident Fund is charged to the Statement of Proft and Loss.

b. Leave encashment beneft at the time of retirement/cessation of service as calculated on the basis of actuarial valuation, is charged to the Statement of Proft and Loss.

c. Gratuity liability, which is a defned beneft plan, is provided on the basis of actuarial valuation as on the Balance Sheet date and the same is funded with Life Insurance Corporation of India as per its advice.

(x) Segment Reporting:

The Company is in the business of Engineering, Procurement & Construction contract in Oil, Gas & Hydrocarbon (OG&H) Sector and ancillary services, including Manufacturing activity. More than 90% of the income is derived from Engineering & Construction contracts in OG&H Sector and ancillary services. The projects are executed both in India and abroad. Considering the core activity of the Company as above, the primary segment is Geographical segment. Accordingly the reportable segment of the Company is geographic as follows:

1. Domestic

2. Overseas

(xi) Earnings Per Share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 ''Earnings per share''. Basic earnings per share, is computed by dividing the net proft or loss for the year by the weighted average number of equity shares outstanding during the year.

(xii) Taxation (including Deferred Tax):

Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of taxable income in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods, are recognized using the tax rates, and tax laws that have been enacted or substantively enacted. Deferred tax assets on timing differences, other than on unabsorbed depreciation and carry forward of loss, are recognized if their a reasonable certainty of their reversal. However deferred tax assets on unabsorbed depreciation and carry forward of losses is recognized only if there is virtual certainty.

(xiii) Borrowing Costs:

Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets are capitalized.

(xiv) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized for liabilities that can be measured only by using substantial degree of estimation, if

a. The Company has a present obligation as a result of past event.

b. A probable outfow of resources is expected to settle the obligation, and

c. The amount of the obligation can be reliably estimated.

Reimbursement expected in respect of the expenditure required to settle a provision is recognized only when it is virtually certain that reimbursement will be received.

Contingent Liability is disclosed in the case of:

a. A present obligation arises from past events, when it is not probable that an outfow of resources will be required to settle the obligation,

b. A present obligation when no reliable estimate is possible, and

c. A possible obligation arising from past events where the probability of outfow of resources is not remote.

Contingent Assets are neither recognized, nor disclosed. Provision, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

(xv) Extraordinary Items:

The Extraordinary items are Income or Expenses that arise from events of transactions that are clearly distinct from the ordinary activities of enterprises and therefore, are not expected to recur frequently or regularly.

The nature and amount of each extra ordinary items is identifed and disclosed in the Statement of Proft and Loss in a manner that its impact on current proft or loss can be perceived.


Mar 31, 2012

I. Method of Accounting and preparation of Financial Statement:

The financial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the accounting principles, generally accepted in India and in accordance with accounting standards referred to in section 211(3C) of the Companies Act, 1956.

II. Revenue Recognition:

a. Manufacturing activities

Sale of Goods is recognized as per the terms of sales. Sales exclude amount recovered towards Excise Duty and Sales Tax.

b. Erection / Construction activities: Revenues from execution of contract is recognized on Percentage Completion method. The stage of completion is determined on the basis of actual work executed during the period. Running bills are accounted as sales on monthly basis. No profit is recognized till a minimum of 10% progress is achieved on the contract except in case of contracts executed on Cost-plus basis. Cost incurred and invoices raised in respect of such contract are carried in the Balance Sheet as contract in progress and advance billing respectively. When it is probable at any stage of the contract, that the total cost will exceed the total contract revenue, the expected loss recognized immediately.

c. Work done but not billed: Value of work executed, billed subsequent to balance sheet date, is valued at contract price.

d. i Income and Expenses are accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation. ii VAT set-off is based on returns filed with appropriate authorities.

e. Bank Guarantee commission is accounted in the year of execution/renewal of guarantee.

III. Fixed Assets:

All tangible fixed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost comprises of purchase price and other attributable expenses incurred up to acquisition and installation.

IV. Depreciation /Amortisation on Fixed Assets:

a. Depreciation has been provided for on the written down value method at the rates specified in Schedule XIV of the Companies Act, 1956.

b. All the Fixed Assets costing less than Rs 5,000/- each are fully depreciated in the year of acquisition.

c. Lease hold Improvements is Amortised over the period of the Lease.

V. Impairment of Assets:

As at each Balance Sheet date, the Company assesses the realizable value of all the assets. If there is any indication of fall in the realizable value over carrying cost of the assets, impairment in value of the assets is recognized.

VI. Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts in progress, being technical matters, are estimated and certified by the Company's technical personnel.

b. Stock of all the raw materials, construction materials, stores and spares lying at store, sites/factory have been valued at cost on First In First Out basis.

c. Work-in-Progress are valued at lower of cost and net realizable value.

VII. Investments:

a. Investments intended to be held for more than one year are classified as long term investments and are carried at cost of acquisition inclusive of other attributable expenses or fair value whichever is lower. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature.

b. Current Investments are carried at lower of cost and fair value.

VIII. Foreign Currency Transactions:

a. Sales and expenditure relating to overseas jobs/projects have been converted at the exchange rates prevailing on the date of transaction.

b. Assets and liabilities denominated in foreign currencies at the year-end are normally translated at the year-end exchange rates.

c. The exchange difference on conversion are credited or charged to profit and loss account.

IX. Retirement benefits:

a. The Company's contribution to Provident fund is charged to the Profit and Loss Account.

b. Leave encashment benefit at the time of retirement/cessation of service as calculated on the basis of actuarial valuation, is charged to the Profit and Loss Account.

c. The Gratuity liability, which is a defined benefit plan, is provided on the basis of actuarial valuation as on balance sheet date and same is funded with Life Insurance Corporation of India as per its advice.

X. Segment Reporting:

The Company is in the business of Engineering, Procurement & Construction contract in Oil, Gas & Hydrocarbon (OG&H) Sector and ancillary services including Manufacturing activity. More than 90% of the income is only from Engineering & Construction contracts in OG&H Sector and ancillary services. The projects are executed both in India and abroad. Considering the core activity of the Company as above, the primary segment is Geographical segment. Accordingly the reportable Segment of the Company are:

1. Domestic

2. Overseas

XI. Earnings Per Share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 'Earnings per share' issued by the Institute of Chartered Accountants of India. Basic earnings per share, is computed by dividing the net profit or loss for the year, by the weighted average number of equity shares outstanding, during the year.

XII. Taxation (including Deferred Tax):

Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of taxable income in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods, are recognised using the tax rates, and tax laws that have been enacted or substantively enacted, subject to prudence.

XIII. Borrowing Costs:

Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets, are capitalised.

XIV. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised for liabilities that can be measured only by using substantial degree of estimation, if

a. The Company has a present obligation as a result of past event.

b. A probable outflow of resources is expected to settle the obligation, and

c. The amount of the obligation can be reliably estimated.

Reimbursement expected in respect of the expenditure required to settle a provision is recognized only when it is virtually certain that reimbursement will be received.

Contingent Liability is disclosed in the case of:

a. A present obligation arises from past events, when it is not probable that an outflow of resources will be required to settle the obligation,

b. A present obligation when no reliable estimate is possible, and

c. A possible obligation arising from past events where the probability of outflow of resources is not remote. Contingent Assets are neither recognized, nor disclosed. Provision, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

XV. Extraordinary Items:

The Extraordinary items are Income or Expenses that arise from events of transactions that are clearly distinct from the ordinary activities of enterprises and therefore, are not expected to recur frequently or regularly.

The nature and amount of each extraordinary items is identified and disclosed in the Statement of Profit and Loss in a manner that its impact on current profit or loss can be perceived.

(b) Terms/rights attached to equity shares

The Company's paid up capital comprises only one class i.e equity shares having par value of Rs 1/- per share. Each holder of equity share is entitled to one vote per share.

The Liability of the Member is limited.

The Company's shares are listed on the Bombay Stock Exchange Limited (BSE).

Restriction on distribution of Dividend: Pursuant to the Provisions of the Sanctioned Scheme, the Company is not permitted to declare any dividend to the equity shareholders without the prior approval of the BIFR/Monitoring Agency (MA) during the period of rehabilitation.

(e) Reduction in paid-up value of equity shares

Pursuant to the provisions of the Sanctioned Scheme, effective 26th December 2007 the paid-up value of the equity shares has been reduced from Rs 10/- per share to Rs 1/- per share fully paid up. On reduction, the paid up capital of the Company was reduced to Rs 9,230,000/- comprising of 9,230,000 equity share of Rs 1/- each. On 4th January 2008, the Company has allotted 27,690,000 equity share of Rs 1/- each to Tata Projects Limited. Consequent to the allotment of these shares, the Company has become a subsidiary of Tata Projects Limited (shareholding of 75% in the Company's paid up capital). The Company's paid up capital has thus been increased to Rs 36,920,000/- comprising of 36,920,000 equity share of Rs 1/- each.

(a) Loans & Advances from Related Parties (Holding Company)

In terms of the Sanctioned Scheme of BIFR dated 18th December 2007, the Company has obtained term loan from the Strategic Investor viz. Tata Projects Limited (Holding Company) against the security of immovable property and all title deeds of the property are deposited with the Holding Company. The loan from the Holding Company (Non-current portion) is repayable in 2 (two) equal annual installments falling due on 31st March of 2014 and 2015, respectively.

(b) HDFC Bank Ltd. - Vehicle Loan : Hypothecation on Motor Vehicle.


Mar 31, 2011

I. Method of Accounting & Revenue Recognition:

a. The financial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the accounting principles, generally accepted in India and in accordance with accounting standards referred to in section 211(3C) of the Companies Act, 1956.

b. Manufacturing activities: Sales of Goods is recognized as per the terms of sales. Sales exclude amount recovered towards Excise Duty and Sales Tax.

c. Erection/Construction activities: Revenues from execution of contract is recognized on Percentage Completion method. The stage of completion is determined on the basis of actual work executed during the period. Running bills are accounted as sales on monthly basis. No profit is recognized till a minimum of 10% progress is achieved on the contract. Cost incurred and invoices raised in respect of such contract are carried in the Balance Sheet as contract in progress and advance billing respectively. When it is probable at any stage of the contract, that the total cost will exceed the total contract revenue, the expected loss is recognized immediately.

d. Work done but not billed: Value of work executed, billed subsequent to balance sheet date, is valued at contract price.

e. i. Income and Expenses are accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation.

ii. VAT set-off is based on returns filed with appropriate authorities.

f. Bank guarantee commission is accounted in the year of execution /renewal of guarantee.

II. Fixed Assets:

All tangible fixed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost comprises of purchase price and other attributable expenses incurred up to acquisition and installation.

III. Depreciation/Amortisation on Fixed Assets:

a. Depreciation has been provided for on the written down value method at the rates specified in Schedule XIV of the Companies Act, 1956.

b. All the Fixed Assets costing less than Rs 5,000/- each are fully depreciated in the year of acquisition.

c. Lease hold Improvements is amortised over the period of the Lease.

IV. Impairment of Assets:

As at each Balance sheet date, the Company assesses the realizable value of all the assets. If there is any indication of fall in the realizable value over carrying cost of the assets, impairment in value of the assets is recognized.

V. Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts in progress, being technical matters, are estimated and certified by the Company's technical personnel.

b. Stock of all the raw materials, construction materials, stores and spares lying at store, sites/ factory have been valued at cost on First in First Out basis.

c. Work-in Progress are valued at lower of cost and net realizable value.

VI. Investments:

Investments intended to be held for more than one year are classified as long term investments and are carried at cost of acquisition inclusive of other attributable expenses or fair value whichever is lower. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature. Current Investments are carried at lower of cost and fair value.

VII. Foreign Currency Transactions:

a. Sales and expenditure relating to overseas jobs/projects have been converted at the exchange rates prevailing on the date of transaction.

b. Assets and liabilities denominated in foreign currencies at the year end are normally translated at the year end exchange rates.

c. The exchange difference on conversion are credited or charged to profit and loss account.

d. Financial statement of Foreign operations, which are integral operations are translated using the same principles as stated above except following items which are translated as below:

Sr. Nature of the account Policy No. 1. Opening and Closing Work-in- Exchange rate at the commencement progress and close of the year respecti- vely.

2. Fixed Assets and Depreciation Exchange rate used for the translation of the respective date of purchase of fixed assets.

VIII. Retirement benefts:

a. The Company's contribution to Provident fund is charged to the Profit and Loss Account.

b. Leave encashment benefit at the time of retirement/cessation of employment as calculated on the basis of actuarial valuation, is charged to the Profit and Loss Account.

c. The Gratuity liability, which is a defined benefit plan, is provided on the basis of actuarial valuation as on balance sheet date and same is funded with Life Insurance Corporation of India as per their advice.

Ix. Segment Reporting:

The Company is in the business of Engineering Procurement contracts & Construction in Oil and Gas and Hydrocarbon sector and ancillary services including Manufacturing activity. More than 90% of the income is only from Engineering & Construction contract in Oil and Gas Sector and ancillary services. The projects are executed both in India and abroad. Considering the core activity of the company as above, the primary segment is Geographical segment. Accordingly the reportable Segment of the Company are:

a. Domestic

b. Overseas

X. Earnings per share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 'Earnings per share' issued by the Institute of Chartered Accountants of India. Basic earnings per share, is computed by dividing the net profit or loss for the year, by the weighted average number of equity shares outstanding, during the year.

XI. Taxation (including Deferred Tax): Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of taxable income in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods, are recognised using the tax rates, and tax laws that have been enacted or substantively enacted, subject to prudence.

XII. Borrowing Costs: Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets, are capitalised.

XIII. Provisions, Contingent Liabilities and Contingent Assets: Provision are recognised for liabilities that can be measured only by using substantial degree of estimation, if:

a. The Company has a present obligation as a result of past event.

b. A probable outflow of resources is expected to settle the obligation, and

c. The amount of the obligation can be reliably estimated.

Reimbursement expected in respect of the expenditure required to settle a provision is recognized only when it is virtually certain that reimbursement will be received.

Contingent Liability is disclosed in the case of:

a. A present obligation arises from past events, when it is not probable that an outflow of resources will be required to settle the obligation,

b. A present obligation when no reliable estimate is possible, and

c. A possible obligation arising from past events where the probability of outflow of resources is not remote.

Contingent Assets are neither recognized, nor disclosed. Provision, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.


Mar 31, 2010

I. Method of Accounting & Revenue Recognition:

a. The financial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the accounting principles, generally accepted in India and in accordance with accounting standards referred to in Section 211(3C) of the Companies Act, 1956.

b. Manufacturing activities: During the year no Manufacturing Activity has been carried out.

c. Erection/Construction activities: Sales have been stated exclusive of excise duty. Revenue from execution of contracts is recognized on Percentage Completion method. The stage of completion is determined on the basis of actual work executed during the period. Running bills are accounted as sales on monthly basis. No profit is recognized till a minimum of 10% progress is achieved on the contract. Cost incurred and invoices raised in respect of such contracts are carried in the balance sheet as contract in progress and advance billing respectively.

d. Work done but not billed: Value of work executed, billed subsequent to balance sheet date, is valued at contract price.

e. i. Income and Expenses are mainly accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation,

ii. Sales Tax set-off is based on returns filed with appropriate authorities.

f. Bank guarantee commission is accounted in the year of execution/renewal of guarantee.

g. As prudence, all debtors (including advances), creditors, unless disputed, beyond 36 months are written off/ written back.

II. Fixed Assets:

All tangible fixed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost comprises of purchase price and other attributable expenses incurred up to acquisition and installation.

III. Depreciation:

a. Depreciation has been provided for on the written down value method at the rates specified in Schedule XIV to the Companies Act, 1956 except for the factory building at Nashik which is depreciated @ 5% per annum.

b. All the Fixed Assets costing less than Rs. 5,000/- each are fully depreciated in the year of acquisition.

IV. Impairment of Assets:

As at each Balance sheet date, the Company assesses the realizable value of all the assets. If there is any indication of fall in the realizable value over carrying cost of the assets, impairment in value of the assets is recognized.

V. Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts in progress, being technical matters, are estimated and certified by the Companys technical personnel.

b. Stock of all the raw materials, construction materials, stores and spares lying at store/sites have been valued at cost on First-in-First-Out basis.

VI. Investments:

Investments intended to be held for more than one year are classified as long term investments and are carried at cost of acquisition inclusive of other attributable expenses or fair value whichever is lower. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature. Current Investments are carried at lower of cost and fair value.

VII. Foreign Currency Transactions:

a. Sales and expenditure relating to overseas jobs/projects have been converted at the exchange rates prevailing at the end of the month in which the transaction is entered or at the last rate available.

b. Assets and liabilities denominated in foreign currencies at the year-end are normally translated at the year-end exchange rates.

c. The exchange difference on conversion are credited or charged to profit and loss account.

d. Financial statement of overseas operations, which are integral operations are translated using the same principles as stated above except following items which are translated as below:

Sr. No. Nature of the account Policy

1. Opening and Closing Work-in-progress Rate at the commencement and end of the year

respectively.

2. Fixed Assets and Depreciation Rate used for the translation of the respective

date of purchase of fixed assets.

VIM. Retirement benefits:

a. The Companys contribution to Provident fund is charged to the Profit and Loss Account.

b. Leave encashment benefit at the time of retirement/cessation of service as calculated on the basis of actuarial valuation, is charged to the Profit and Loss Account.

c. The Gratuity liability, which is a defined benefit plan, is provided on the basis of actuarial valuation as on the Balance Sheet date and same is funded with Life Insurance Corporation of India as per their advice.

IX. Segment Reporting:

The Company has only one business segment i.e. Engineering & Construction activity. There is no distinguishable component of the Company providing a product or service or group of products or services that is subject to risks and returns that are different from other segments. As the Company also exports, the segment for the Company is based on location of customers/export destinations.

X. Earnings per share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 Earnings per share issued by the Institute of Chartered Accountants of India. Basic earnings per share, is computed by dividing the net profit or loss for the year, by the weighted average number of equity shares outstanding, during the year.

XI. Taxation (including Deferred Tax):

Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of taxable income in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods, are recognised using the tax rates, and tax laws that have been enacted or substantively enacted, subject to prudence.

XII. Borrowing Costs:

Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets are capitalised.

XIII. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised for liabilities that can be measured only by using substantial degree of estimation, if:

a. the Company has a present obligation as a result of past event;

b. a probable outflow of resources is expected to settle the obligation; and

c. the amount of the obligation can be reliably estimated.

Reimbursement expected in respect of the expenditure required to settle a provision is recognised only when it is virtually certain that reimbursement will be received.

A Contingent Liability is disclosed in the case of:

a. a present obligation arises from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

b. a present obligation when no reliable estimate is possible; and

c. a possible obligation arising from past events where the probability of outflow of resources is not remote.

Contingent Assets are neither recognised, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

 
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