Accounting Policies of C & C Constructions Ltd. Company

Jun 30, 2015

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

These financial statements have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards prescribed under Section 133 of the Companies Act, 2013 ['Act'] read with Rule 7 of the Companies [Accounts] Rules, 2014, the provisions of the Act [to the extent notified] and other accounting principles generally accepted in India, to the extent applicable.

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 products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities.

B. USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Actual results could differ from these estimates, difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

C. FIXED ASSETS AND CAPITAL WORK-IN-PROGRESS

Fixed assets are stated at cost, less accumulated depreciation up to the date of the balance sheet. Cost includes duties & taxes,inwards freight & incidental expenses related to acquisition and installation of the assets.

Intangible assets comprise of licence fees, software and other implementation cost for software Oracle finance (ERP) acquired for in-house use.

Capital work-in-progress includes cost of fixed assets that are not yet ready for their intended use.

D. DEPRECIATION

a) Depreciation on the assets of the Company is charged on straight line method at the rates specified in Schedule II of Companies Act, 2013, on single shift basis, including those purchased under hire purchase agreements,

b) Depreciation for additions to / deductions from assets is calculated on prorate basis from / to the date of additions / deductions,

c) Software and implementation cost including users licence fees of the Enterprise Resource Planning System(ERP) and other application software costs are amortised over a period of Five years.

E. INVESTMENTS

Investments are valued at cost of acquisition. No provision has been made for diminution in value, if any, considering the same to be temporary in nature.

F. INVENTORIES

a) Raw Materials and Stores are valued at the lower of cost or net realisable value. The cost is arrived at by first-in-first out method except cost of spares which is valued at weighted average method.

b) Work-in-progress is valued at Net realisable value.

G. RETIREMENT BENEFITS TO EMPLOYEES

Defined contribution obligation: Company's contribution to provident fund and Employees State Insurance are defined contribution obligations which are charged to the Profit & Loss Account on accrual basis.

Defined benefit obligations: Gratuity and Earned Leaves are defined benefit obligations which are recognized on actuarial valuation basis as per Projected Unit Method.

Gratuity and accumulated leaves expected to be settled / paid / utilized within next 12 months is treated asshort term, liabilities and balance is treated as long term.

H. REVENUE RECOGNITION

Revenue is recognised as follows:

i) Contract revenue is recognised by adding the aggregate cost incurred and proportionate margin, using the percentage completion method. Percentage of completion is determined as a proportion of cost incurred to date to the total estimated contract cost. Foreseeable losses are accounted for as and when they are determined except to the extent they are expected to be recovered through claims presented or to be presented to the customer or in arbitration.

Claims are accounted as income in the year of receipt of arbitration award or acceptance by client.

ii) Revenue from contracts executed in Joint Ventures (Jointly Controlled Operations, in terms of Accounting Standard (AS) 27 "Financial Reporting of Interests in Joint Ventures"), is recognised on the same basis as similar contracts independently executed by the Company.

iii) Small Insurance claims are accounted for on cash basis and major claims are accounted for as and when the same are lodged.

iv) All other expenses and income are accounted for on accrual basis.

I. BORROWING COSTS

Borrowing Cost that are attributable to the acquisition, construction of qualifying assets are capitalised as part of cost of such asset up to the date the asset is ready for its intended use. All other borrowing costs are recognised as an expense in the year in which they are incurred.

J. TAXATION

a) Tax on income for the current period is determined on the basis of taxable income and tax credit computed in accordance with the provisions of the Income Tax Act 1961.

b) Deferred Tax is recognised on the basis of timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax Asset is recognised subject to the consideration of prudence and carried forward only to the extent that there is virtual certainty that the asset will be adjusted against future liability.

c) Provision for taxation has been made on the taxable income for the tax year ended 31st March, 2015. Further, provision for tax in respect of income accrued during the quarter from 1st April,2015 to 30th June,2015has been made on the basis of provisions of Income Tax law and tax rates applicable to the relevant financial year.

K. FOREIGN CURRENCY TRANSACTIONS, FOREIGN OPERATIONS, AND FORWARD CONTRACTS

a) Foreign operations of a Joint Venture have been classified as integral foreign operations and financial statement are translated as under at each balance sheet date:

i) Foreign currency monetary items are reported using the closing rate.

ii) Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction

iii) Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rate that existed when the values were determined.

iv) Revenue and Expenses are recognised at yearly average of exchange rates prevailing during the year.

v) Exchange difference arising on translation is recognized as income or expenses of the period in which they arise.

b) Monetary Assets and liabilities related to foreign currency transaction remaining unsettled at the end of the year are translated at year end rates. The difference in translation of monetary assets and liabilities and unrealized gains or losses on exchange translation are recognized in the statement profit and loss.

L. ACCOUNTING OF JOINT VENTURES

Jointly Controlled Operations;

In respect of joint venture contracts in the nature of Jointly Controlled Operations, the assets controlled, liabilities incurred, the share of income and expenses incurred are recognised in the agreed proportions under respective heads in the financial Statements.

M. IMPAIRMENT OF ASSETS

At each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) The provision for impairment loss, if any, required or

b) The reversal, if any, required of impairment loss recognised in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount or value in use,

Recoverable amount is determined

a) in the case of an individual asset, at the higher of the net selling price and the value in use.

b) in the case of a cash generating unit (a group of assets that generates identified independent cash flows), at the higher of the cash generating unit's net selling price and the value in use.

(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life).

N. LEASES

a. Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value or the present value of minimum lease payment and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost.

b. Assets acquired on leases where a significant portion of the risk and reward of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the statement of profit& Loss on accrual basis.

O. PROVISIONS, CONTINGENT LIABILITIES AND

CONTINGENT ASSETS

Provisions are recognised for liabilities that can be measured only by using a 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.

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

Contingent Liability is disclosed in the case of

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

b) a possible obligation, if 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.

P. DERIVATIVE AND HEDGING INSTRUMENTS ACCOUNTING

In respect of derivative contracts, premium paid, gains/ losses on settlement and provision for losses for cash flow hedges are recognised in the statement Profit and Loss.

Q. CALCULATION OF EARNING PER SHARE (EPS)

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity share- holders by the weighted average number of equity shares outstanding during the period.

Diluted earnings per share are calculated by dividing the net profit or loss for the period attributable to equity share- holders by the weighted average number of shares outstanding during the period added with the effect of all dilutive potential equity shares outstanding.

R. CASH & CASH EQUIVALENTS:

Cash and cash equivalents for the purpose of Cash flow Statement comprise cash in hand and cash at bank and include cheques in hand.

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Jun 30, 2014

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements are prepared under historical cost convention on accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 and comply with the Accounting Standards and Generally Accepted Accounting Principles (GAAP) in India. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 2013 (to the extent notified), the Companies Act, 1956 (to the extent applicable), and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

B. USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Actual results could differ from these estimates, difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

C. FIXED ASSETS AND CAPITAL-WORK-IN-PROGRESS

Fixed assets are stated at cost, less accumulated depreciation up to the date of the balance sheet. Cost includes duties & taxes,inwards freight & incidental expenses related to acquisition and installation of the assets.

Intangible assets comprise of licence fees, software and other implementation cost for software Oracle finance ERP) acquired for in-house use.

Capital work-in-progress includes cost of fixed assets that are not yet ready for their intended use.

D. DEPRECIATION

a) Depreciation on the assets of the Company is charged on straight line method at the rates specified in Schedule XIV of Companies Act, 1956, on single shift basis, including those purchased under hire purchase agreements,

(b) Depreciation for additions to / deductions from assets is calculated on prorate basis from / to the date of additions / deductions.

(c) Software and implementation cost including users licence fees of the Enterprise Resource Planning System(ERP) and other application software costs are amortised over a period of five years.

(d) Assets costing less than Rs. 5,000/- are depreciated at 100% in the year of purchase.

E. INVESTMENTS

Investments are valued at cost of acquisition. No provision has been made for diminution in value, if any, considering the same to be temporary in nature.

F. INVENTORIES

a) Raw Materials and Stores are valued at the lower of cost or net realisable value. The cost is arrived at by first-in-first out method except cost of spares which is valued at weighted average method.

b) Work-in-progress is valued at Net realisable value.

G. RETIREMENT BENEFITS TO EMPLOYEES

Defined contribution obligation: Company''s contribution to provident fund and Employees State Insurance are defined contribution obligations which are charged to the Profit & Loss Account on accrual basis.

Defined benefi t obligations: Gratuity and Earned Leaves are defined benefit obligations which are recognized on actuarial valuation basis as per Projected Unit Method.

Gratuity and accumulated leaves expected to be settled / paid / utilized within next 12 months is treated as short term, liabilities and balance is treated as long term.

H. REVENUE RECOGNITION

Revenue is recognised as follows:

i) Contract revenue is recognised by adding the aggregate cost incurred and proportionate margin, using the percentage completion method. Percentage of completion is determined as a proportion of cost incurred to date to the total estimated contract cost. Foreseeable losses are accounted for as and when they are determined except to the extent they are expected to be recovered through claims presented or to be presented to the customer or in arbitration.

Claims are accounted as income in the year of receipt of arbitration award or acceptance by client.

ii) Revenue from contracts executed in Joint Ventures (Jointly Controlled Operations, in terms of Accounting Standard (AS) 27 “Financial Reporting of Interests in Joint Ventures”), is recognised on the same basis as similar contracts independently executed by the Company.

iii) Small Insurance claims are accounted for on cash basis and major claims are accounted for as and when the same are lodged.

iv) All other expenses and income are accounted for on accrual basis.

I. BORROWING COSTS

Borrowing Cost that are attributable to the acquisition, construction of qualifying assets are capitalised as part of cost of such asset up to the date the asset is ready for its intended use. All other borrowing costs are recognised as an expense in the year in which they are incurred.

J. TAXATION

a) Tax on income for the current period is determined on the basis of taxable income and tax credit computed in accordance with the provisions of the Income Tax Act 1961.

b) Deferred Tax is recognised on the basis of timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred Tax Asset is recognised subject to the consideration of prudence and carried forward only to the extent that there is virtual certainty that the asset will be adjusted against future liability.

c) Provision for taxation has been made on the taxable income for the tax year ended 31st March, 2014. Further, provision for tax in respect of income accrued during the quarter from 1st April, 2014 to 30th June, 2014 has been made on the basis of provisions of Income Tax law and tax rates applicable to the relevant financial year

K. FOREIGN CURRENCY TRANSACTIONS, FOREIGN OPERATIONS, AND FORWARD CONTRACTS

a) Foreign operations of a Joint Venture have been classified as integral foreign operations and financial statement are translated as under at each balance sheet date:

I) Foreign currency monetary items are reported using the closing rate.

ii) Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

iii) Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rate that existed when the values were determined.

iv) Revenue and Expenses are recognised at yearly average of exchange rates prevailing during the year.

v) Exchange difference arising on translation is recognized as income or expenses of the period in which they arise.

b) Monetary Assets and liabilities related to foreign currency transaction remaining unsettled at the end of the year are translated at year end rates. The difference in translation of monetary assets and liabilities and unrealized gains or losses on exchange translation are recognized in the statement profit and loss.

L. ACCOUNTING OF JOINT VENTURES

Jointly Controlled Operations:

In respect of joint venture contracts in the nature of Jointly Controlled Operations, the assets controlled, liabilities incurred, the share of income and expenses incurred are recognised in the agreed proportions under respective heads in the financial Statements.

M. IMPAIRMENT OF ASSETS

At each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) The provision for impairment loss, if any required or

b) The reversal, if any, required of impairment loss recognised in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount or value in use,

Recoverable amount is determined

a) in the case of an individual asset, at the higher of the net selling price and the value in use.

b) in the case of a cash generating unit (a group of assets that generates identified independent cash flows), at the higher of the cash generating unit''s net selling price and the value in use.

(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life).

N. LEASES

a) Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value or the present value of minimum lease payment and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost.

b) Assets acquired on leases where a significant portion of the risk and reward of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the statement of profit & Loss on accrual basis.

O. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognised for liabilities that can be measured only by using a 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.

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

Contingent Liability is disclosed in the case of

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

b) a possible obligation, if 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.

P. DERIVATIVE AND HEDGIN INSTRUMENTS ACCOUNTING

In respect of derivative contracts, premium paid, gains/losses on settlement and provision for losses for cash flow hedges are recognised in the statement Profit and Loss.

Q CALCULATION OF EARNING PER SHARE (EPS)

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity share-holders by the weighted average number of equity shares outstanding during the period. Diluted earning per share is calculated by dividing the net profit or loss for the period attributable to equity share-holders by the weighted average number of shares outstanding during the period added with the affect of all dilutive potential equity shares outstanding.

R. CASH & CASH EQUIVALENTS:

Cash and cash equivalents for the purpose of Cash flow Statement comprise cash in hand and cash at bank and include cheques in hand.

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Jun 30, 2013

1. BASIS OF PREPARATION OF fiNaNciaL stateMeNts

The fnancial statements are prepared underhistorical cost convention on accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 and comply with the Accounting Standards and Generally Accepted Accounting Principles (GAAP) in India.

For the fnancial statements as on 30thJune''2013, the revised Schedule VI notifed under the Companies Act, 1956 has become applicable to the Company. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of fnancial statements. However, it has signifcant impact on presentation and disclosures made in the fnancial statements. The Company has also reclassifed the previous year fgure in accordance with the requirements applicable in the current year.

2. USE OF ESTIMATES

The preparation of fnancial statements in conformity withGAAP requires that the management of the Company makes estimates and assumptions that affect thereported amounts of income and expenses of theperiod, the reported balances of assets and liabilities andthe disclosures relating to contingent liabilities as of thedate of the fnancial statements. Actual results coulddiffer from these estimates, difference between theactual results and estimates are recognised in the period in which the results are known/materialised.

3. FIXED ASSETS AND caPitaL-WorK-iN-ProGress

Fixed assets are stated at cost, less accumulated depreciation up to the date of the balance sheet. Cost includes duties & taxes,inwards freight & incidental expenses related to acquisition and installation of the assets.

Intangible assets comprise of licence fees, software and other implementation cost for software Oracle fnance ERP) acquired for in-house use.

Capital work-in-progress includes cost of fxed assets that are not yet ready for their intended use.

4 DEPRECIATION

a) Depreciation on the assets of the Company is charged on straight line method at the rates specifed in Schedule XIV of Companies Act, 1956, on single shift basis, including those purchased under hire purchase agreements,

(b) Depreciation for additions to / deductions from assets is calculated on prorate basis from / to the date of additions / deductions.

(c) Software and implementation cost including users licence fees of the Enterprise Resource Planning System(ERP) and other application software costs are amortised over a period of fve years.

(d) Assets costing less than Rs. 5,000/- are depreciated at 100% in the year of purchase.

5. INVESTMENTS

Investments are valued at cost of acquisition. No provision has been made for diminution in value, if any, considering the same to be temporary in nature.

6. INVENTORIES

a) Raw Materials and Stores are valued at the lower of cost or net realisable value. The cost is arrived at by frst-in-frst out method except cost of spares which is valued at weighted averag method.

b) Work-in-progress is valued at Net realisable value.

7. RETIREMENT BENEFITS TO EMPLOYEES

Defned contribution obligation: Company''s contribution to provident fund and Employees State Insurance are defned contribution obligations which are charged to the Proft & Loss Account on accrual basis.

Defned beneft obligations: Gratuity and Earned Leaves are defned beneft obligations which are recognized on actuarial valuation basisas per Projected Unit Method.

Gratuity and accumulated leaves expected to be settled / paid / utilized within next 12 months is treated as short term, liabilities and balance is treated as long term.

8 REVENUE RECOGNITION

Revenue is recognised as follows:

i) Contract revenue is recognised by adding the aggregate cost incurred and proportionate margin, using the percentage completion method.Percentage of completion is determined as a proportion of cost incurred to date to the total estimated contract cost. Foreseeable losses are accounted for as and when they are determined except to the extent they are expected to be recovered through claims presented or to be presented to the customer or in arbitration.

Claims are accounted as income in the year of receipt of arbitration award or acceptance by client.

ii) Revenue from contracts executed in Joint Ventures (Jointly Controlled Operations, in terms of Accounting Standard (AS) 27 "Financial Reporting of Interests in Joint Ventures"), is recognised on the same basis as similar contracts independently executed by the Company.

iii) Small Insurance claims are accounted for on cash basis and major claims are accounted for as and when the same are lodged.

iv) Allother expenses and income are accounted for on accrual basis.

9. BORROWING COSTS

Borrowing Cost that are attributable to the acquisition, construction of qualifying assets are capitalised as part of cost of such asset up to the date the assetis ready for its intended use. All other borrowing costs are recognised as an expense in the year in which they are incurred.

10. TAXATION

a) Tax on income for the current period is determined on the basis of taxable income and tax credit computed in accordance with the provisions of the Income Tax Act 1961.

b) Deferred Tax is recognised on the basis of timing differences, being the difference between

taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax Asset is recognised subject to the consideration of prudence and carried forward only to the extent that there is virtual certainty that the asset will be adjusted against future liability.

c) Provision for taxation has been made on the taxable income for the tax year ended 31st March, 2013. Further, provision for tax in respect of income accrued during the quarter from 1st April, 2013 to 30th June, 2013 has been made on the basis of provisions of Income Tax law and tax rates applicable to the relevant fnancial year.

11. FOREIGN CURRENCY TRANSACTIONS, foreiGN oPeratioNs, aNd forWard coNtracts

a) Foreign operations of a Joint Venture have been classifed as integral foreign operations and fnancial statement are translated as under at each balance sheet date:

i) Foreign currency monetary items are reported using the closing rate.

ii) Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

iii) Non-monetary items which are carried at fair valueor other similar valuation denominated in a foreign currency are reported using the exchange rate that existed when the values were determined.

iv) Revenue and Expenses are recognised at yearly average of exchange rates prevailing during the year.

v) Exchange difference arising on translation is recognized as income or expenses of the period in which they arise.

b) Monetary Assets and liabilities related to foreign currency transaction remaining unsettled at the end of the year are translated at year end rates. The difference in translation of monetary assets and liabilities and unrealized gains or losses on exchange translation are recognized in the statement proft and loss.

12. ACCOUNTING OF JOINT VENTURES

Jointly controlled operations:

In respect of joint venture contracts in the nature of Jointly Controlled Operations, the assets controlled, liabilities incurred, the share of income and expenses incurred are recognised in the agreed proportions under respective heads in the fnancial Statements.

13 iMPairMeNtof assets

At each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) The provision for impairment loss, if any, required or

b) The reversal, if any, required of impairment loss recognised in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount or value in use,

Recoverable amount is determined

a) in the case of an individual asset, at the higher of the net selling price and the value in use.

b) in the case of a cash generating unit (a group of assets that generates identifed independent cash fows), at the higher of the cash generating unit''s net selling price and the value in use.

(Value in use is determined as the present value of estimated future cash fows from the continuing use of an asset and from its disposal at the end of its useful life).

14. LEASES

a. Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classifed as fnance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value or the present value of minimum lease payment and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost.

b. Assets acquired on leases where a signifcant portion of the risk and reward of ownership are retained by the lessor are classifed as operating leases. Lease rentals are charged to the statement of proft & Loss on accrual basis.

15. PROVISIONS, CONTINGENT LIABILITIES aNd coNtiNGeNt assets

Provisions are recognised for liabilities that can be measured only by using a 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.

d) Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will bereceived,

Contingent Liability is disclosed in the case of

a) a present obligation arising from a past event, when it is not probable that an outfow of resources will be required to settle the obligation.

b) apossible obligation, if the probability of outfow 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.

16. DERIVATIVE AND HEDGIN INSTRUMENTS accoUNtiNG

In respect of derivative contracts, premium paid, gains/losses on settlement and provision for losses for cash fow hedges are recognised in the statement Proft and Loss.

17. CALCULATION OF EARNING PER SHARE (EPS)

Basic earning per share is calculated by dividing the net proft or loss for the period attributable to equity share-holders by the weighted average number of equity shares outstanding during the period. Diluted earning per share is calculated by dividing the net proft or loss for the period attributable to equity share-holders by the weighted average number of shares outstanding during the period added with the affect of all dilutive potential equity shares outstanding.

18. CASH & CASH EQUIVALENTS:

Cash and cash equivalents for the purpose of Cash fow Statement comprise cash in hand and cash at bank and include cheques in hand.

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Jun 30, 2010

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements are prepared under historical cost convention, on accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 and comply with the Accounting Standards and Generally Accepted Accounting Principles (GAAP) in India.

2. USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the fi nancial statements. Actual results could differ from these estimates, difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

3. FIXED ASSETS AND CAPITAL WORK-IN-PROGRESS

Fixed assets are stated at cost, less accumulated depreciation up to the date of the balance sheet. Cost includes duties & taxes but does not include inwards freight & incidental expenses related to acquisition and Installation of the assets.

Intangible assets comprise of licence fees and other implementation cost for software Oracle finance (ERP) acquired for in-house use.

Capital work-in-progress includes cost of fixed assets that are not yet ready for their intended use and advance paid to acquire fixed assets.

4. DEPRECIATION

a) Depreciation on the assets of the Company is charged on straight line method at the rates specified in Schedule XIV of Companies Act, 1956, on single shift basis, including those purchased under hire purchase agreements, except Depreciation on Plant & Machineries deployed at Afghanistan Projects are charged at a rate higher than the stipulated by the Companies Act 1956, based on the useful life of the Asset, as estimated by the Management. The useful life of such assets is follows:

(b) Software and implementation cost including users licence fees of the Enterprise Resource Planning System (ERP) and other application software costs are amortised over a period of Five years.

(c) Assets costing less than Rs. 5,000/- have been depreciated at hundred percent in the year of purchase

5. INVESTMENTS

Investments are valued at cost of acquisition. No provision for diminution in value, if any, is made, if considered to be temporary in nature.

6. INVENTORIES

a) Raw Material and Stores are valued at the lower of cost or net realisable value. The cost is arrived at by fi rst-in- fi rst out method except cost of spares which is valued at weighted average method.

b) Work-in-progress is valued at Net realisable value.

7. RETIREMENT BENEFITS TO EMPLOYEES

Defi ned contribution obligation: Companys contribution to provident fund and Employees State Insurance are defi ned contribution obligations which are charged to the Profit & Loss Account on accrual basis.

Defi ned benefit obligations: Gratuity and Earned Leaves are defi ned benefit obligations which are recognized on actuarial valuation basis.

8. REVENUE RECOGNITION

Revenue is recognised as follows:

i) Contract revenue is recognised by adding the aggregate cost and proportionate margin, using the percentage completion method, Percentage of completion is determined as a proportion of cost incurred to date to the total estimated contract cost. Foreseeable losses are accounted for as and when they are determined except to the extent they are expected to be recovered through claims presented or to be presented to the customer or in arbitration.

Claims are accounted as income in the year of receipt of arbitration award or acceptance by client.

ii) Revenue from contracts executed in Joint Ventures (Jointly Controlled Operations, in terms of Accounting

Standard (AS) 27 "Financial Reporting of Interests in Joint Ventures"), is recognised on the same basis as similar contracts independently executed by the Company.

iii) Small Insurance claims are accounted for on cash basis and major claims are accounted for as and when the same are lodged..

iv) All other expenses and income are accounted for on accrual basis.

9. BORROWING COSTS

Borrowing Cost that are attributable to the acquisition, construction of qualifying assets are capitalised as part of cost of such assets up to the date the assets are ready for its intended use. All other borrowing costs are recognised as an expense in the year in which they are incurred.

10. TAXATION

a) Tax on income for the current period is determined on the basis of taxable income and tax credit computed in accordance with the provisions of the Income Tax Act 1961.

b) Deferred Tax is recognised subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax Asset is recognised and carried forward only to the extent that there is virtual certainty that the asset will be adjusted in future.

c) Provision for taxation has been made on the taxable income for the tax year ended 31st March, 2010. Provision for tax, if any, in respect of income accrued during the period 1st April, 2010 to 30th June, 2010 would be determined and provided with reference to the profit, if any, for the year ending 31st March, 2011.

11. FOREIGN CURRENCY TRANSACTIONS, FOREIGN OPERATIONS, AND FORWARD CONTRACTS

a) The reporting currency of the Company is Indian Rupee.

b) Foreign operations have been classifi ed as integral foreign operations and financial statement are translated as under:

i) Assets and liabilities (both Monetary and Non-Monetary) at the rate prevailing at the end of the year.

ii) Revenue and Expenses at yearly average Exchange

Rates prevailing during the year. Exchange difference arising on translation is recognised as income or expense of the period in which they arise.

c) Monetary Assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year end rates. The differences in translation of monetary assets and liabilities and unrealised gains or losses on foreign currency transactions are recognised in the profit and loss account.

12. ACCOUNTING OF JOINT VENTURES Jointly Controlled Operations:

In respect of joint venture contracts in the nature of Jointly Controlled Operations, the assets controlled, liabilities incurred, the share of income and expenses incurred are recognised in the agreed proportions under respective heads in the financial Statement.

13. IMPAIRMENT OF ASSETS

As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) The provision for impairment loss, if any, required or

b) The reversal, if any, required of impairment loss recognised in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount,

Recoverable amount is determined:

a) in the case of an individual asset, at the higher of the net selling price and the value in use.

b) in the case of a cash generating unit (a group of assets that generates identifi ed independent cash fl ows), at the higher of the cash generating units net selling price and the value in use.

(Value in use is determined as the present value of estimated future cash fl ows from the continuing use of an asset and from its disposal at the end of its useful life).

14. CHANGE IN ACCOUNTING POLICY IN RESPECT TO FOREIGN OPERATIONS IN JOINT VENTURE

The Joint Venture operations in Afghanistan have been reclassifi ed in accordance with AS-27 as integral operations in lieu of non- integral from the financial year 2009-10. Due to the change in accounting policy, the profit for the year has increased by a sum of Rs. 686 lacs.

15. LEASES

i) Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classifi ed as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value or the present value of minimum lease payment and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost.

ii) Assets acquired on leases where a signifi cant portion of the risk and reward of ownership are retained by the lessor are classifi ed as operating leases. Lease rentals are charged to the profit & Loss account on accrual basis.

16. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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

a) the company has a present obligation as a result of past event,

b) a probable outfl ow of resources is expected to settle the obligation and

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

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

Contingent Liability is disclosed in the case of:

a) a present obligation arising from a past event, when it is not probable that an outfl ow of resources will be required to settle the obligation.

b) a possible obligation, if 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

17. DERIVATIVE AND HEDGING INSTRUMENTS ACCOUNTING

In respect of derivative contracts, premium paid, gains/ losses on settlement and provision for losses for cash fl ow hedges are recognised in the Profit and Loss account except in case where they relate to the acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such assets.

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Jun 30, 2009

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements are prepared under historical cost convention, on accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 and comply with the Accounting Standards and Generally Accepted Accounting Principles (GAAP) in India.

2. USE OF ESTIMATES

The preparation of fnancial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that afect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Actual results could difer from these estimates, diference between the actual results and estimates are recognised in the period in which the results are known / materialised.

3. FIXED ASSETS AND CAPITAL-WORK-IN-PROGRESS

Fixed assets are stated at cost, less accumulated depreciation up to the date of the balance sheet. Cost includes duties & taxes but does not include inwards freight & incidental expenses related to acquisition and Installation of the assets.

Intangible assets comprise of licence fees and other implementation cost for software Oracle fnance (ERP) acquired for in-house use.

Capital work-in-progress includes cost of fxed assets that are not yet ready for their intended use and advance paid to acquire fxed assets.

DEPRECIATION

b) Software and implementation cost including users licence fees of the Enterprise Resource Planning System (ERP) and other application software costs are amortised over a period of Five years.

c) Assets costing less than Rs. 5,000/- have been depreciated at hundred percent in the year of purchase

4. INVESTMENTS

Investments are valued at cost of acquisition. No provision for diminution in value, if any, has been made considering the same as temporary in nature.

5. INVENTORIES

a) Raw Material and Stores are valued at the lower of cost or net realisable value. Te cost is arrived at by frst-in-frst out method except cost of spares which is valued at weighted average method.

b) Work-in-progress are valued on the basis of percentage completion method at the rates provided in the contract reduced by an estimated percentage towards expected proft.

6. RETIREMENT BENEFITS TO EMPLOYEES

Defned contribution obligation: Company’s contribution to provident fund and Employees State Insurance are defned contribution obligations which are charged to the Proft & Loss Account on accrual basis.

Defined beneft obligations: Gratuity and Earned Leaves are defned beneft obligations which are recognized on actuarial valuation basis.

7. REVENUE RECOGNITION

Revenue is recognised as follows:

i) Contract revenue is recognised by adding the aggregate cost and proportionate margin, using the percentage completion method, on the basis of physical measurement of work actually completed on the balance sheet date. Foreseeable losses are accounted for as and when they are determined except to the extent they are expected to be recovered through claims presented or to be presented to the customer or in arbitration.

Claims are accounted as income in the year of receipt of arbitration award or acceptance by client.

ii) Revenue from contracts executed in Joint Ventures (Jointly Controlled Operations, in terms of Accounting Standard (AS) 27 "Financial Reporting of Interests in Joint Ventures"), is recognised on the same basis as similar contracts independently executed by the Company.

iii) Insurance claims are accounted for on cash basis.

iv) All other expenses and income are accounted for on accrual basis.

8. BORROWING COST

Borrowing Cost that are attributable to the acquisition, construction of qualifying assets are capitalised as part of cost of such assets up to the date the assets are ready for its intended use. All other borrowing costs are recognised as an expense in the year in which they are incurred.

9. TAXATION

a) Tax on income for the current period is determined on the basis of taxable income and tax credit computed in accordance with the provisions of the Income Tax Act, 1961.

b) Deferred Tax is recognised subject to the consideration of prudence, on timing diferences, being the diference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred Tax Assets is recognised and carried forward only to the extent that there is reasonable certainty that the asset will be adjusted in future.

c) Provision for taxation has been made on the taxable income for the tax year ended31st March, 2009. Provision for tax, if any, in respect of income accrued during the period 1st April, 2009 to 30th June, 2009 would be determined and provided with reference to the proft, if any, for the year ending 31st March, 2010.

10. FOREIGN CURRENCY TRANSACTION, FOREIGN OPERATIONS, AND FORWARD CONTRACTS

(a) The reporting currency of the Company is Indian Rupee.

b) Foreign operations have been classifed as non-integral foreign operations and fnancial statement are translated as under:

i Assets and liabilities (both Monetary and Non-Monetary) at the rate prevailing at the end of the year.

ii Revenue and Expenses at yearly average Exchange Rates prevailing during the year. Exchange diference arising on translation of non integral foreignoperations is accumulated in the Foreign Currency Translation Reserve until the disposal of such foreign operation.

c) Monetary Assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year end rates. Te diferences in translation of monetary assets and liabilities and realised gains or losses on foreign currency transactions are recognised in the proft and loss account.

11. ACCOUNTING OF JOINT VENTURES

Jointly Controlled Operations:

In respect of joint venture contracts in the nature of Jointly Controlled Operations, the assets controlled, liabilities incurred, the share of income and expenses incurred are recognised in the agreed proportions under respective heads in the fnancial Statement.

12. IMPAIRMENT OF ASSETS

As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) Te provision for impairment loss, if any, required or

b) Te reversal, if any, required of impairment loss recognised in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount, Recoverable amount is determined

a) in the case of an individual asset, at the higher of the net selling price and the value in use.

b) in the case of a cash generating unit (a group of assets that generates identifed independent cash fows), at the higher of the cash generating unit’s net selling price and the value in use.

(Value in use is determined as the present value of estimated future cash fows from the continuing use of an asset and from its disposal at the end of its useful life).

13. LEASES

i) Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classifed as fnance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value or the present value of minimum lease payment and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost.

ii) Assets acquired on leases where a signifcant portion of the risk and reward of ownership are retained by the lessor are classifed as operating leases. Lease rentals are charged to the proft & Loss account on accrual basis.

14. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognised for liabilities that can be measured only by using a 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 expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received,

Contingent Liability is disclosed in the case of

a) a present obligation arising from a past event, when it is not probable that an outfow of resources will be required to settle the obligation.

b) a possible obligation, if the probability of outfow 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