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Accounting Policies of Engineers India Ltd. Company

Mar 31, 2016

1.1 ACCOUNTING CONCEPTS

The accounts are prepared on historical cost concept based on accrual method of accounting as a going concern, consistent with generally accepted accounting principles in accordance with the mandatory accounting standards and disclosure requirements as per the provisions of the Companies Act, 2013.

1.2 REVENUE RECOGNITION

(A) Revenue from services rendered is accounted for:

(a) In the case of cost plus jobs, on the basis of amount billable under the contracts;

(b) In the case of lumpsum services and turnkey contracts, as proportion of actual direct costs of the work to latest estimated total direct cost of the work; and

(c) In the case of inspection contracts providing for a percentage fee on equipment/project cost, on the basis of physical progress duly certified.

(B) Other claims including interest on outstandings are accounted for when there is virtual certainty of ultimate collection.

1.3 TURNOVER/WORK-IN-PROGRESS

(A) No income has been taken into account on jobs for which:

a) The terms of remuneration receivable by the Company have not been settled and/or scope of work has not been clearly defined and, therefore, it is not possible in the absence of settled terms to determine whether there is a profit or loss on such jobs. However, in cases where minimum undisputed terms have been agreed to by the clients, income has been accounted for on the basis of such undisputed terms though the final terms are still to be settled.

b) The terms have been agreed to at lumpsum services / turnkey contracts and outcome of job cannot be estimated reliably

(B) The Cost of such jobs as stated in ''A'' above is carried forward as work-in- progress at actual direct cost.

1.4 CASH & CASH EQUIVALENT

i) Cash comprises cash on hand and demand deposits i.e. balances held with banks in current accounts for unrestrictive use;

ii) Cash equivalents are short term, highly liquid investments that are readily convertible into known amount of cash and which are subject to an insignificant risk of changes in value. The Company considers unrestrictive time deposits with banks having an original maturity of three months or less as cash equivalent.

1.5 FIXED ASSETS

a) Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses.

b) The cost of any software purchased initially along with the computer hardware is being capitalised along with the cost of the hardware. Any subsequent acquisition / upgradation of software is being capitalized as an intangible asset.

c) Whenever any new office space is acquired and partitions/fixtures and fittings are provided to make it suitable for use, the expenditure on the same is capitalised and depreciation charged as per Para 1.6 (a) below. All expenditure on subsequent modifications and repairs of partitions/fixtures and fittings are charged to revenue in the year it is incurred.

1.6 DEPRECIATION & AMORTIZATION

a) Depreciation on fixed assets is charged on straight line method either on the basis of rates arrived at with reference to the useful life of the assets evaluated by the Committee consisting of Technical experts and approved by the Management or rates arrived at based on useful life prescribed under Part C of Schedule II of the Companies Act, 2013, whichever is higher.

b) No depreciation has been provided in the case of land which is on perpetual lease or where no lease deeds have been executed. Premium paid on land where lease agreements have been executed are written off over the period of lease proportionately.

c) The cost of capitalized software is amortized over a period of three years from the date of its acquisition. However, software individually costing upto Rs.5 lakhs is fully amortized during the year of its acquisition.

d) 100% depreciation is provided on library books in the year of purchase since individual books are low value items.

e) Assets individually costing less than Rs.5,000 are fully depreciated in the year of acquisition.

1.7 IMPAIRMENT OF ASSETS

Impairment of cash generating assets are reviewed for impairment whenever an event or changes in circumstances indicate that carrying amount of such assets may not be recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of assets. If it is found that some of the impairment losses already recognized needs to be reversed the same are recognized in the statement of Profit & Loss Account in the year of reversal.

1.8 INVENTORIES

Inventories in respect of stores, spares and chemicals etc. are valued at cost or net realisable value whichever is less. Cost is determined on "First In, First Out" basis.

1.9 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are liabilities involving substantial degree of estimation are recognized when there is a present obligation as a result of past event having probability of outflow of resources and a reliable estimate can be made of such an obligation. Contingent liabilities are disclosed by way of note unless the possibility of outflow is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

1.10 PROVISION FOR CONTRACTUAL OBLIGATIONS

The provision for estimated liabilities on account of guarantees & warranties etc. in respect of lumpsum services and turnkey contracts awarded to the Company are being made on the basis of management''s assessment of risk and consequential probable liabilities on each such job.

1.11 FOREIGN CURRENCY TRANSACTIONS

a) Fixed assets are incorporated at the rates in force when transaction takes place.

b) Current Assets and Current Liabilities including Cash and Bank balances are carried at the year end exchange rates. Any gain or loss on account of exchange difference is charged to the Profit & Loss Account.

c) Foreign currency transactions (Income & Expenditure) are accounted for at average monthly rates based on market rates for preceding month in respect of Pound Sterling, US Dollars, Euro, Australian Dollar, Canadian Dollar, Swiss Franc & Japanese Yen and in respect of other currencies at Government rates prevailing in the month. Payments to sub-contractors/vendors from Foreign Currency (FCN) account are recorded at bank rate prevailing on the date of transaction.

d) Premium/discount arising at the inception of the forward contracts entered into to hedge the foreign currency risks are amortized as expense/income over the life of the contract. Outstanding forward contracts as at reporting date are restated at the exchange rate prevailing on that date.

1.12 RESEARCH AND DEVELOPMENT EXPENDITURE/GOVERNMENT GRANT

(a) Revenue expenditure on Research and Development is charged to Profit and Loss Account in the year the expenditure is incurred. Capital Expenditure on Research and Development is capitalized under respective fixed assets.

(b) Government grant of capital nature for promotion and setting up of R&D Centre is treated as Capital Reserve and shown separately under Reserves and Surplus.

(c) Government grant against specific fixed asset is deducted from the gross value of the concerned asset.

(d) Funds received from Government Agencies to carry out Research and Development activities are shown under the Head ''other income'' as adjustment against expenditure incurred. Unutilised funds are shown under other liabilities.

1.13 RETIREMENT / OTHER LONG TERM EMPLOYEE BENEFITS

a) Liability in respect of Gratuity, a defined benefit plan, is being paid to a fund maintained by LIC and administered through a separate irrevocable trust set up by the Company. Difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

b) Liability towards carried forward leave and post retirement medical benefits, being defined benefit plans, is paid to a fund maintained by LIC and difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

c) Contributions with respect to Provident Fund, a defined contribution plan, are made to the trust set-up by the Company for the purpose.

d) Contribution with respect to Superannuation Scheme, a defined contribution plan for employees is paid to a fund maintained by the Life Insurance Corporation of India and administered through separate irrecoverable Trust set up by the Company.

e) Liability in respect of other long term/terminal employee benefits, being defined benefit plans, is recognized on the basis of actuarial valuation.

f) Voluntary retirement expenses are charged to Profit & Loss Account in the year of its incurrence.

1.14 OPERATING LEASES

i) Assets acquired on leases where a significant portion of risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rental are charged to statement of profit and loss on accrual basis.

ii) Assets leased out under operating leases are capitalized. Rental income is recognized on accrual basis over the lease term.

1.15 Expenses/Income booked to Profit and Loss Account are after adjustment of excess/short provisions. However, in cases of specific provisions where no expenses/income has been incurred/received against such provisions, the same are adjusted as excess provisions of previous years written back/Miscellaneous income.

1.16 Dividend on Units/Shares is accounted for on declaration made upto the close of the accounting year. Income distributed/undistributed surplus on investment in an AOP is recognised as income as per intimation received.

1.17 TAXES ON INCOME

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized on timing difference, 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 recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred assets can be realised.

1.18 INVESTMENT

Long-term investments are carried at cost. However, when there is a decline, other than temporary, in the value of a long-term investment, the carrying amount is reduced to recognise the decline.

Current Investments i.e. investments which are intended to be held for not more than twelve months from the date of investment are carried at the lower of cost or market value.

1.19 OIL & GAS EXPLORATION ACTIVITIES

A) The Company follows ''Successful Efforts Method'' in accounting for Oil & Gas exploration and production activities as detailed below:

a) Survey costs are charged as expense in the year of its incurrence.

b) Acquisition costs, cost of incomplete/ undecided exploratory wells and development costs are carried as capital work in progress till these are either transferred to producing properties on completion or expensed in the year when determined to be dry as the case may be.

B) The Company''s share of proved oil and gas reserves are disclosed when notified by the operator of the relevant block.

C) The Company''s proportionate share in the assets, liabilities, income and expenditure of jointly controlled assets are accounted for as per the participating interest.


Mar 31, 2015

1 ACCOUNTING CONCEPTS

The accounts are prepared on historical cost concept based on accrual method of accounting as a going concern, consistent with generally accepted accounting principles in accordance with the mandatory accounting standards and disclosure requirements as per the provisions of the Companies Act, 2013.

2 REVENUE RECOGNITION

(A) Revenue from services rendered Is accounted for:

(a) In the case of cost plus jobs, on the basis of amount billable under the contracts;

(b) In the case of lumpsum services and turnkey contracts, as proportion of actual direct costs of the work to latest estimated total direct cost of the work; and

(c) In the case of inspection contracts providing for a percentage fee on equipment/project cost, on the basis of physical progress duly certified.

(B) Other claims including interest on outstandings are accounted for when there is virtual certainty of ultimate collection.

3 TURNOVER/WORK-IN-PROGRESS

(A) No income has been taken into account on jobs for which:

a) The terms of remuneration receivable by the Company have not been settled and/or scope of work has not been clearly defined and, therefore, it is not possible in the absence of settled terms to determine whether there is a profit or loss on such jobs. However, in cases where minimum undisputed terms have been agreed to by the clients, income has been accounted for on the basis of such undisputed terms though the final terms are still to be settled.

b) The terms have been agreed to at lumpsum services / turnkey contracts and outcome of job cannot be estimated reliably.

(B) The Cost of such jobs as stated in 'A' above is carried forward as work-in- progress at actual direct cost.

4 CASH & CASH EQUIVALENT

i) Cash comprises cash on hand and demand deposits i.e. balances held with banks in current accounts for unrestrictive use;

ii) Cash equivalents are short term, highly liquid investments that are readily convertible into known amount of cash and which are subject to an insignificant risk of changes in value. The company considers unrestrictive time deposits with banks having an original maturity of three months or less as cash equivalent.

5 FIXED ASSETS

a) Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses.

b) The cost of any software purchased initially along with the computer hardware is being capitalised along with the cost of the hardware. Any subsequent acquisition / upgradation of software is being capitalized as an intangible asset.

c) Whenever any new office space is acquired and partitions/fixtures and fittings are provided to make it suitable for use, the expenditure on the same is capitalised and depreciation charged as per Para 1.6 (a) below. All expenditure on subsequent modifications and repairs of partitions/fixtures and fittings are charged to revenue in the year it is incurred.

6 DEPRECIATION & AMORTIZATION

a) Depreciation on fixed assets is charged on straight line method either on the basis of rates arrived at with reference to the useful life of the assets evaluated by the Committee consisting of Technical experts and approved by the Management or rates arrived at based on useful life prescribed under Part C of Schedule II of the Companies Act, 2013, whichever is higher.

b) No depreciation has been provided in the case of land which is on perpetual lease or where no lease deeds have been executed. Premium paid on land where lease agreements have been executed are written off over the period of lease proportionately.

c) The cost of capitalized software is amortized over a period of three years from the date of its acquisition. However, software individually costing upto Rs.5 lakhs is fully amortized during the year of its acquisition.

d) 100% depreciation is provided on library books in the year of purchase since individual books are low value items.

e) Assets individually costing less than Rs.5,000 are fully depreciated in the year of acquisition.

7 IMPAIRMENT OF ASSETS

Impairment of cash generating assets are reviewed for impairment whenever an event or changes in circumstances indicate that carrying amount of such assets may not be recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of assets. If it is found that some of the impairment losses already recognized needs to be reversed the same are recognized in the statement of Profit & Loss Account in the year of reversal.

8 INVENTORIES

Inventories in respect of stores, spares and chemicals etc. are valued at cost or net realisable value whichever is less. Cost is determined on "First In, First Out" basis.

9 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are liabilities involving substantial degree of estimation are recognized when there is a present obligation as a result of past event having probability of outflow of resources and a reliable estimate can be made of such an obligation. Contingent liabilities are disclosed by way of note unless the possibility of outflow is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

10 PROVISION FOR CONTRACTUAL OBLIGATIONS

The provision for estimated liabilities on account of guarantees & warranties etc. in respect of lumpsum services and turnkey contracts awarded to the Company are being made on the basis of management's assessment of risk and consequential probable liabilities on each such job.

11 FOREIGN CURRENCY TRANSACTIONS

a) Fixed assets are incorporated at the rates in force when transaction takes place.

b) Current Assets and Current Liabilities including Cash and Bank balances are carried at the year end exchange rates. Any gain or loss on account of exchange difference is charged to the Profit & Loss Account.

c) Foreign currency transactions (Income & Expenditure) are accounted for at average monthly rates based on market rates for preceding month in respect of Pound Sterling, US Dollars, Euro, Australian Dollar, Canadian Dollar, Swiss Franc & Japanese Yen and in respect of other currencies at Government rates prevailing in the month. Payments to sub-contractors/vendors from Foreign Currency (FCN) account are recorded at bank rate prevailing on the date of transaction.

d) Premium/discount arising at the inception of the forward contracts entered into to hedge the foreign currency risks are amortized as expense/income over the life of the contract. Outstanding forward contracts as at reporting date are restated at the exchange rate prevailing on that date.

12 RESEARCH AND DEVELOPMENT EXPENDITURE/GOVERNMENT GRANT

(a) Revenue expenditure on Research and Development is charged to Profit and Loss Account in the year the expenditure is incurred. Capital Expenditure on Research and Development is capitalized under respective fixed assets.

(b) Government grant of capital nature for promotion and setting up of R&D Centre is treated as Capital Reserve and shown separately under Reserves and Surplus.

(c) Government grant against specific fixed asset is deducted from the gross value of the concerned asset.

(d) Funds received from Government Agencies to carry out Research and Development activities are shown under the Head 'other income' as adjustment against expenditure incurred. Unutilised funds are shown under other liabilities.

13 RETIREMENT/OTHER LONG TERM EMPLOYEE BENEFITS

a) Liability in respect of Gratuity, a defined benefit plan, is being paid to a fund maintained by LIC and administered through a separate irrevocable trust set up by the company. Difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

b) Liability towards carried forward leave and post retirement medical benefits, being defined benefit plans, is paid to a fund maintained by LIC and difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

c) Contributions with respect to Provident Fund, a defined contribution plan, are made to the trust set-up by the Company for the purpose.

d) Contribution with respect to Superannuation Scheme, a defined contribution plan for employees is paid to a fund maintained by the Life Insurance Corporation of India and administered through separate irrecoverable Trust set up by the Company.

e) Liability in respect of other long term/terminal employee benefits, being defined benefit plans, is recognized on the basis of actuarial valuation.

f) Voluntary retirement expenses are charged to Profit & Loss Account in the year of its incurrence.

14 OPERATING LEASES

i) Assets acquired on leases where a significant portion of risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rental are charged to statement of profit and loss on accrual basis.

ii) Assets leased out under operating leases are capitalized. Rental income is recognized on accrual basis over the lease term.

15 Expenses/Income booked to Profit and Loss Account are after adjustment of excess/short provisions. However, in cases of specific provisions where no expenses/income has been incurred/received against such provisions, the same are adjusted as excess provisions of previous years written back/Miscellaneous income.

16 Dividend on Units/Shares is accounted for on declaration made upto the close of the accounting year. Income distributed/undistributed surplus on investment in an AOP is recognised as income as per intimation received.

17 TAXES ON INCOME

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized on timing difference, 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 recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred assets can be realised.

18 INVESTMENT

Long-term investments are carried at cost. However, when there is a decline, other than temporary, in the value of a long-term investment, the carrying amount Is reduced to recognise the decline.

Current Investments i.e. investments which are intended to be held for not more than twelve months from the date of investment are carried at the lower of cost or market value.

19 OIL & GAS EXPLORATION ACTIVITIES

A) The Company follows 'Successful Efforts Method' in accounting for Oil & Gas exploration and production activities as detailed below:

a) Survey costs are charged as expense in the year of its incurrence.

b) Acquisition costs, cost of incomplete/ undecided exploratory wells and development costs are carried as capital work in progress till these are either transferred to producing properties on completion or expensed in the year when determined to be dry as the case may be.

B) The Company's share of proved oil and gas reserves are disclosed when notified by the operator of the relevant block.

C) The Company's proportionate share in the assets, liabilities, income and expenditure of jointly controlled assets are accounted for as per the participating interest.


Mar 31, 2014

1.1 ACCOUNTING CONCEPTS

The accounts are prepared on historical cost concept based on accrual method of accounting as a going concern in accordance with generally accepted accounting principles in India, accounting standards notified under Companies (Accounting Standards) Rules, 2006 read with General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs, provisions of the Companies Act, 1956 and the Companies Act, 2013 (to the extent notified and applicable).

1.2 REVENUE RECOGNITION

(A) Revenue from services rendered is accounted for:

(a) In the case of cost plus jobs, on the basis of amount billable under the contracts;

(b) In the case of lumpsum services and turnkey contracts, as proportion of actual direct costs of the work to latest estimated total direct cost of the work; and

(c) In the case of inspection contracts providing for a percentage fee on equipment/project cost, on the basis of physical progress duly certified.

(B) Other claims including interest on outstandings are accounted for when there is virtual certainty of ultimate collection.

1.3 TURNOVER/WORK-IN-PROGRESS

(A) No income has been taken into account on jobs for which:

a) The terms of remuneration receivable by the Company have not been settled and/or scope of work has not been clearly defined and, therefore, it is not possible in the absence of settled terms to determine whether there is a profit or loss on such jobs. However, in cases where minimum undisputed terms have been agreed to by the clients, income has been accounted for on the basis of such undisputed terms though the final terms are still to be settled.

b) The terms have been agreed to at lumpsum services / turnkey contracts and outcome of job cannot be estimated reliably

(B) The Cost of such jobs as stated in ''A'' above is carried forward as work-in- progress at actual direct cost.

1.4 CASH & CASH EQUIVALENT

i) Cash comprises cash on hand and demand deposits i.e. balances held with banks in current accounts for unrestrictive use;

ii) Cash equivalents are short term, highly liquid investments that are readily convertible into known amount of cash and which are subject to an insignificant risk of changes in value. The company considers unrestrictive time deposits with banks having an original maturity of three months or less as cash equivalent.

1.5 FIXED ASSETS

a) Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses.

b) The cost of any software purchased initially along with the computer hardware is being capitalised along with the cost of the hardware. Any subsequent acquisition / upgradation of software is being capitalized as an intangible asset.

c) Whenever any new office space is acquired and partitions/fixtures and fittings are provided to make it suitable for use, the expenditure on the same is capitalised and depreciation charged as per Para 1.6 (a) below. All expenditure on subsequent modifications and repairs of partitions/fixtures and fittings are charged to revenue in the year it is incurred.

1.6 DEPRECIATION & AMORTIZATION

a) Depreciation on fixed assets is charged on straight line method either on the basis of rates arrived at with reference to the useful life of the assets evaluated by the Committee consisting of Technical experts and approved by the Management, or the minimum rates prescribed under Schedule XIV of the Companies Act, 1956, whichever is higher.

b) No depreciation has been provided in the case of land which is on perpetual lease or where no lease deeds have been executed. Premium paid on land where lease agreements have been executed are written off over the period of lease proportionately.

c) The cost of capitalized software is amortized over a period of three years from the date of its acquisition. However, software individually costing upto Rs. 5 lakhs is fully amortized during the year of its acquisition.

d) 100% depreciation is provided on library books in the year of purchase since individual books are low value items.

e) Assets individually costing less than Rs. 5,000 are fully depreciated in the year of acquisition.

1.7 IMPAIRMENT OF ASSETS

Impairment of cash generating assets are reviewed for impairment whenever an event or changes in circumstances indicate that carrying amount of such assets may not be recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of assets. If it is found that some of the impairment losses already recognized needs to be reversed the same are recognized in the statement of Profit & Loss Account in the year of reversal.

1.8 INVENTORIES

Inventories in respect of stores, spares and chemicals etc. are valued at cost or net realisable value whichever is less. Cost is determined on "First In, First Out” basis.

1.9 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are liabilities involving substantial degree of estimation are recognized when there is a present obligation as a result of past event having probability of outflow of resources and a reliable estimate can be made of such an obligation. Contingent liabilities are disclosed by way of note unless the possibility of outflow is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

1.10 PROVISION FOR CONTRACTUAL OBLIGATIONS

The provision for estimated liabilities on account of guarantees & warranties etc. in respect of lumpsum services and turnkey contracts awarded to the Company are being made on the basis of management''s assessment of risk and consequential probable liabilities on each such job.

1.11 FOREIGN CURRENCY TRANSACTIONS

a) Fixed assets are incorporated at the rates in force when transaction takes place.

b) Current Assets and Current Liabilities including Cash and Bank balances are carried at the year end exchange rates. Any gain or loss on account of exchange difference is charged to the Profit & Loss Account.

c) Foreign currency transactions (Income & Expenditure) are accounted for at average monthly rates based on market rates for preceding month in respect of Pound Sterling, US Dollars, Euro, Australian Dollar, Canadian Dollar, Swiss Franc & Japanese Yen and in respect of other currencies at Government rates prevailing in the month. Payments to sub-contractors/vendors from Foreign Currency (FCN) account are recorded at bank rate prevailing on the date of transaction.

1.12 RESEARCH AND DEVELOPMENT EXPENDITURE/GOVERNMENT GRANT

(a) Revenue expenditure on Research and Development is charged to Profit and Loss Account in the year the expenditure is incurred. Capital Expenditure on Research and Development is capitalized under respective fixed assets.

(b) Government grant of capital nature for promotion and setting up of R&D Centre is treated as Capital Reserve and shown separately under Reserves and Surplus.

(c) Government grant against specific fixed asset is deducted from the gross value of the concerned asset.

(d) Funds received from Government Agencies to carry out Research and Development activities are shown under the Head ''other income'' as adjustment against expenditure incurred. Unutilised funds are shown under other liabilities.

1.13 RETIREMENT / OTHER LONG TERM EMPLOYEE BENEFITS

a) Liability in respect of Gratuity, a defined benefit plan, is being paid to a fund maintained by LIC and administered through a separate irrevocable trust set up by the company. Difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

b) Liability towards carried forward leave and post retirement medical benefits, being defined benefit plans, is paid to a fund maintained by LIC and difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

c) Contributions with respect to Provident Fund, a defined contribution plan, are made to the trust set-up by the Company for the purpose.

d) Contribution with respect to Superannuation Scheme, a defined contribution plan for employees is paid to a fund maintained by the Life Insurance Corporation of India and administered through separate irrecoverable Trust set up by the Company.

e) Liability in respect of other long term/terminal employee benefits, being defined benefit plans, is recognized on the basis of actuarial valuation.

f) Voluntary retirement expenses are charged to Profit & Loss Account in the year of its incurrence.

1.14 OPERATING LEASES

i) Assets acquired on leases where a significant portion of risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rental are charged to statement of profit and loss on accrual basis.

ii) Assets leased out under operating leases are capitalized. Rental income is recognized on accrual basis over the lease term.

1.15 Expenses/Income booked to Profit and Loss Account are after adjustment of excess/short provisions. However, in cases of specific provisions where no expenses/income has been incurred/received against such provisions, the same are adjusted as excess provisions of previous years written back/Miscellaneous income.

1.16 Dividend on Units/Shares is accounted for on declaration made upto the close of the accounting year. Income distributed/undistributed surplus on investment in an AOP is recognised as income as per intimation received.

1.17 TAXES ON INCOME

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized on timing difference, 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 recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred assets can be realised.

1.18 INVESTMENT

Long-term investments are carried at cost. However, when there is a decline, other than temporary, in the value of a long-term investment, the carrying amount is reduced to recognise the decline.

Current Investments i.e. investments which are intended to be held for not more than twelve months from the date of investment are carried at the lower of cost or market value.

1.19 OIL & GAS EXPLORATION ACTIVITIES

A) The Company follows ''Successful Efforts Method'' in accounting for Oil & Gas exploration and production activities as detailed below:

a) Survey costs are charged as expense in the year of its incurrence.

b) Acquisition costs, cost of incomplete/ undecided exploratory wells and development costs are carried as capital work in progress till these are either transferred to producing properties on completion or expensed in the year when determined to be dry as the case may be.

B) The Company''s share of proved oil and gas reserves are disclosed when notified by the operator of the relevant block.

C) The Company''s proportionate share in the assets, liabilities, income and expenditure of jointly controlled assets are accounted for as per the participating interest.


Mar 31, 2013

1.1 ACCOUNTING CONCEPTS

The accounts are prepared on historical cost concept based on accrual method of accounting as a going concern, and consistent with generally accepted accounting principles in accordance with the mandatory accounting standards and disclosure requirements as per the provisions of the Companies Act, 1956.

1.2 REVENUE RECOGNITION

(A) Revenue from services rendered is accounted for:

(a) In the case of cost plus jobs, on the basis of amount billable under the contracts;

(b) In the case of lumpsum services and turnkey contracts, as proportion of actual direct costs of the work to latest estimated total direct cost of the work; and

(c) In the case of inspection contracts providing for a percentage fee on equipment/project cost, on the basis of physical progress duly certified.

(B) Other claims including interest on outstandings are accounted for when there is virtual certainty of ultimate collection.

1.3 TURNOVER/WORK-IN-PROGRESS

(A) No income has been taken into account on jobs for which:

a) The terms of remuneration receivable by the Company have not been settled and/or scope of work has not been clearly defined and, therefore, it is not possible in the absence of settled terms to determine whether there is a profit or loss on such jobs. However, in cases where minimum undisputed terms have been agreed to by the clients, income has been accounted for on the basis of such undisputed terms though the final terms are still to be settled.

b) The terms have been agreed to at lumpsum services / turnkey contracts and physical progress is less than 25%.

(B) The Cost of such jobs as stated in ''A'' above is carried forward as work-in- progress at actual direct cost.

1.4 CASH & CASH EQUIVALENT

i) Cash comprises cash on hand and demand deposits i.e. balances held with banks in current accounts for unrestrictive use;

ii) Cash equivalents are short term, highly liquid investments that are readily convertible into known amount of cash and which are subject to an insignificant risk of changes in value. The company considers unrestrictive time deposits with banks having an original maturity of three months or less as cash equivalent.

1.5 FIXED ASSETS

a) Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses.

b) The cost of any software purchased initially along with the computer hardware is being capitalised along with the cost of the hardware. Any subsequent acquisition / upgradation of software is being capitalized as an intangible asset.

c) Whenever any new office space is acquired and partitions/fixtures and fittings are provided to make it suitable for use, the expenditure on the same is capitalised and depreciation charged as per Para 1.6 (a) below. All expenditure on subsequent modifications and repairs of partitions/fixtures and fittings are charged to revenue in the year it is incurred.

1.6 DEPRECIATION & AMORTIZATION

a) Depreciation on fixed assets is charged on straight line method either on the basis of rates arrived at with reference to the useful life of the assets evaluated by the Committee consisting ofTechnical experts and approved by the Management, or the minimum rates prescribed under Schedule XIV of the Companies Act, 1956, whichever is higher.

b) No depreciation has been provided in the case of land which is on perpetual lease or where no lease deeds have been executed. Premium paid on land where lease agreements have been executed are written off over the period of lease proportionately.

c) The cost of capitalized software is amortized over a period of three years from the date of its acquisition. However, software individually costing upto Rs.5 lakhs is fully amortized during the year of its acquisition.

d) 100% depreciation is provided on library books in the year of purchase since individual books are low value items.

e) Assets individually costing less than Rs.5,000 are fully depreciated in the year of acquisition.

1.7 IMPAIRMENT OF ASSETS

Impairment of cash generating assets are reviewed for impairment whenever an event or changes in circumstances indicate that carrying amount of such assets may not be recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of assets. If it is found that some of the impairment losses already recognized needs to be reversed the same are recognized in the statement of Profit & Loss Account in the year of reversal.

1.8 INVENTORIES

Inventories in respect of stores, spares and chemicals etc. are valued at cost or net realisable value whichever is less. Cost is determined on"First In, First Out" basis.

1.9 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are liabilities involving substantial degree of estimation are recognized when there is a present obligation as a result of past event having probability of outflow of resources and a reliable estimate can be made of such an obligation. Contingent liabilities are disclosed by way of note unless the possibility of outflow is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

1.10 PROVISION FOR CONTRACTUAL OBLIGATIONS

The provision for estimated liabilities on account of guarantees & warranties etc. in respect of lumpsum services and turnkey contracts awarded to the Company are being made on the basis of management''s assessment of risk and consequential probable liabilities on each such job.

1.11 FOREIGN CURRENCY TRANSACTIONS

a) Fixed assets are incorporated at the rates in force when transaction takes place.

b) Current Assets and Current Liabilities including Cash and Bank balances are carried at the year end exchange rates. Any gain or loss on account of exchange difference is charged to the Profit & Loss Account.

c) Foreign currency transactions (Income & Expenditure) are accounted for at average monthly rates based on market rates for preceding month in respect of Pound Sterling, US Dollars, Euro, Australian Dollar, Canadian Dollar, Swiss Franc & Japanese Yen and in respect of other currencies at Government rates prevailing in the month. Payments to sub-contractors/vendors from Foreign Currency (FCN) account are recorded at bank rate prevailing on the date of transaction.

1.12 RESEARCH AND DEVELOPMENT EXPENDITURE/GOVERNMENT GRANT

(a) Revenue expenditure on Research and Development is charged to Profit and Loss Account in the year the expenditure is incurred. Capital Expenditure on Research and Development is capitalized under respective fixed assets.

(b) Government grant of capital nature for promotion and setting up of R&D Centre is treated as Capital Reserve and shown separately under Reserves and Surplus.

(c) Funds received from Government Agencies to carry out Research and Development activities are shown under the Head ''other income'' as adjustment against expenditure incurred. Unutilised funds are shown under other liabilities.

1.13 RETIREMENT / OTHER LONG TERM EMPLOYEE BENEFITS

a) Liability in respect of Gratuity, a defined benefit plan, is being paid to a fund maintained by LIC and administered through a separate irrevocable trust set up by the company. Difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

b) Liability towards carried forward leave and post retirement medical benefits, being defined benefit plans, is paid to a fund maintained by LIC and difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

c) Contributions with respect to Provident Fund, a defined contribution plan, are made to the trust set-up by the Company for the purpose.

d) Contribution with respect to Superannuation Scheme, a defined contribution plan for employees is paid to a fund maintained by the Life Insurance Corporation of India and administered through separate irrecoverable Trust set up by the Company.

e) Liability in respect of other long term/terminal employee benefits, being defined benefit plans, is recognized on the basis of actuarial valuation.

f) Voluntary retirement expenses are charged to Profit & Loss Account in the year of its incurrence.

1.14 Expenses/Income booked to Profit and Loss Account are after adjustment of excess/short provisions. However, in cases of specific provisions where no expenses/income has been incurred/received against such provisions, the same are adjusted as excess provisions of previous years written back/Miscellaneous income.

1.15 Dividend on Units/Shares is accounted for on declaration made upto the close of the accounting year. Income distributed/undistributed surplus on investment in an AOP is recognised as income as per intimation received.

1.16 TAXES ON INCOME

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized on timing difference, 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 recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred assets can be realised.

1.17 INVESTMENT

Long-term investments are carried at cost. However, when there is a decline, other than temporary, in the value of a long-term investment, the carrying amount is reduced to recognise the decline.

Current Investments i.e. investments which are intended to be held for not more than twelve months from the date of investment are carried at the lower of cost or market value.

1.18 OIL & GAS EXPLORATION ACTIVITIES

A) The Company follows ''Successful Efforts Method'' in accounting for Oil & Gas exploration and production activities as detailed below:

a) Survey costs are charged as expense in the year of its incurrence.

b) Acquisition costs, cost of incomplete/ undecided exploratory wells and development costs are carried as capital work in progress till these are either transferred to producing properties on completion or expensed in the year when determined to be dry as the case may be.

B) The Company''s share of proved oil and gas reserves are disclosed when notified by the operator of the relevant block.

C) The Company''s proportionate share in the assets, liabilities, income and expenditure of jointly controlled assets are accounted for as per the participating interest.


Mar 31, 2012

1.1 ACCOUNTING CONCEPTS

The accounts are prepared on historical cost concept based on accrual method of accounting as a going concern, and consistent with generally accepted accounting principles in accordance with the mandatory accounting standards and disclosure requirements as per the provisions of the Companies Act, 1956.

1.2 REVENUE RECOGNITION

(A) Revenue from services rendered is accounted for:

(a) In the case of cost plus jobs, on the basis of amount billable under the contracts;

(b) In the case of lumpsum services and turnkey contracts, as proportion of actual direct costs of the work to latest estimated total direct cost of the work; and

(c) In the case of contracts providing for a percentage fee on equipment/project cost, on the basis of physical progress duly certified.

(B) Other claims including interest on outstandings are accounted for when there is virtual certainty of ultimate collection.

1.3 TURNOVER/WORK-IN-PROGRESS

(A) No income has been taken into account on jobs for which:

a) The terms of remuneration receivable by the Company have not been settled and/or scope of work has not been clearly defined and, therefore, it is not possible in the absence of settled terms to determine whether there is a profit or loss on such jobs. However, in cases where minimum undisputed terms have been agreed to by the clients, income has been accounted for on the basis of such undisputed terms though the final terms are still to be settled.

b) The terms have been agreed to at lumpsum services / turnkey contracts and physical progress is less than 25%.

(B) The Cost of such jobs as stated in 'A' above is carried forward as work-in- progress at actual direct cost.

1.4 CASH & CASH EQUIVALENT

i) Cash comprises cash on hand and demand deposits i.e. balances held with banks in current accounts for unrestrictive use;

ii) Cash equivalents are short term, highly liquid investments that are readily convertible into known amount of cash and which are subject to an insignificant risk of changes in value. The company considers unrestrictive time deposits with banks having an original maturity of three months or less as cash equivalent.

1.5 FIXED ASSETS

a) Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses.

b) The cost of any software purchased initially along with the computer hardware is being capitalised along with the cost of the hardware. Any subsequent acquisition / upgradation of software is being capitalized as an intangible asset.

c) Whenever any new office space is acquired and partitions/fixtures and fittings are provided to make it suitable for use, the expenditure on the same is capitalised and depreciation charged as per Para 1.6 (a) below. All expenditure on subsequent modifications and repairs of partitions/fixtures and fittings are charged to revenue in the year it is incurred.

1.6 DEPRECIATION & AMORTIZATION

a) Depreciation on fixed assets is charged on straight line method either on the basis of rates arrived at with reference to the useful life of the assets evaluated by the Committee consisting of Technical experts and approved by the Management, or the minimum rates prescribed under Schedule XIV of the Companies Act, 1956, whichever is higher.

b) No depreciation has been provided in the case of land which is on perpetual lease or where no lease deeds have been executed. Premium paid on land where lease agreements have been executed are written off over the period of lease proportionately.

c) The cost of capitalized software is amortized over a period of three years from the date of its acquisition. However, software individually costing upto Rs5 lakhs is fully amortized during the year of its acquisition.

d) 100% depreciation is provided on library books in the year of purchase since individual books are low value items.

e) Assets individually costing less than Rs 5,000 are fully depreciated in the year of acquisition.

1.7 IMPAIRMENT OF ASSETS

Impairment of cash generating assets are reviewed for impairment whenever an event or changes in circumstances indicate that carrying amount of such assets may not be recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of assets. If it is found that some of the impairment losses already recognized needs to be reversed the same are recognized in the statement of Profit & Loss Account in the year of reversal.

1.8 INVENTORIES

Inventories in respect of stores, spares and chemicals etc. are valued at cost or net realisable value whichever is less. Cost is determined on "First In, First Out" basis.

1.9 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are liabilities involving substantial degree of estimation are recognized when there is a present obligation as a result of past event having probability of outflow of resources and a reliable estimate can be made of such an obligation. Contingent liabilities are disclosed by way of note unless the possibility of outflow is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

1.10 PROVISION FOR CONTRACTUAL OBLIGATIONS

The provision for estimated liabilities on account of guarantees & warranties etc. in respect of lumpsum services and turnkey contracts awarded to the Company are being made on the basis of management's assessment of risk and consequential probable liabilities on each such job.

1.11 FOREIGN CURRENCY TRANSACTIONS

a) Fixed assets are incorporated at the rates in force when transaction takes place.

b) Current Assets and Current Liabilities including Cash and Bank balances are carried at the year end exchange rates. Any gain or loss on account of exchange difference is charged to the Profit & Loss Account.

c) Foreign currency transactions (Income & Expenditure) are accounted for at average monthly rates based on market rates for preceding month in respect of Pound Sterling, US Dollars, Euro, Australian Dollar, Canadian Dollar, Swiss Franc & Japanese Yen and in respect of other currencies at Government rates prevailing in the month. Payments to sub- contractors/vendors from Foreign Currency (FCN) account are recorded at bank rate prevailing on the date of transaction.

1.12 RESEARCH AND DEVELOPMENT EXPENDITURE/GOVERNMENT GRANT

(a) Revenue expenditure on Research and Development is charged to Profit and Loss Account in the year the expenditure is incurred. Capital Expenditure on Research and Development is capitalized under respective fixed assets.

(b) Government grant of capital nature for promotion and setting up of R&D Centre is treated as Capital Reserve and shown separately under Reserves and Surplus.

(c) Funds received from Government Agencies to carry out Research and Development activities are shown under the Head 'other income' as adjustment against expenditure incurred. Unutilised funds are shown under other liabilities.

1.13 RETIREMENT / OTHER LONG TERM EMPLOYEE BENEFITS

a) Liability in respect of Gratuity, a defined benefit plan, is being paid to a fund maintained by LIC and administered through a separate irrevocable trust set up by the company. Difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

b) Liability towards carried forward leave and post retirement medical benefits, being defined benefit plans, is paid to a fund maintained by LIC and difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

c) Contributions with respect to Provident Fund, a defined contribution plan, are made to the trust set-up by the Company for the purpose.

d) Contribution with respect to Superannuation Scheme, a defined contribution plan for employees is paid to a fund maintained by the Life Insurance Corporation of India and administered through separate irrecoverable Trust set up by the Company.

e) Liability in respect of other long term/terminal employee benefits, being defined benefit plans, is recognized on the basis of actuarial valuation.

f) Voluntary retirement expenses are charged to Profit & Loss Account in the year of its incurrence.

1.14 Expenses/Income booked to Profit and Loss Account are after adjustment of excess/short provisions. However, in cases of specific provisions where no expenses/income has been incurred/received against such provisions, the same are adjusted as excess provisions of previous years written back/Miscellaneous income.

1.15 Dividend on Units/Shares is accounted for on declaration made upto the close of the accounting year. Income distributed/undistributed surplus on investment in an AOP is recognised as income as per intimation received.

1.16 TAXES ON INCOME

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized on timing difference, 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 recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred assets can be realised.

1.17 INVESTMENT

Long-term investments are carried at cost. However, when there is a decline, other than temporary, in the value of a long- term investment, the carrying amount is reduced to recognise the decline.

Current Investments i.e. investments which are intended to be held for not more than twelve months from the date of investment are carried at the lower of cost or market value.


Mar 31, 2011

1. Accounting Concepts The accounts are prepared on historical cost concept based on accrual method of accounting as a going concern, and consistent with generally accepted accounting principles in accordance with the mandatory accounting standards and disclosure requirements as per the provisions of the Companies Act, 1956.

2. Income Recognition

(A) Income from services rendered is accounted for:

(a) In the case of cost plus jobs, on the basis of amount billable under the contracts;

(b) In the case of lumpsum services and lumpsum Turnkey contracts, as proportion of actual direct costs of the work to latest estimated total direct cost of the work; and

(c) In the case of contracts providing for a percentage fee on equipment/project cost, on the basis of physical progress duly certified.

(B) Other claims including interest on outstandings are accounted for when there is virtual certainty of ultimate collection.

3. Turnover/work-in-progress

(A) No income has been taken into account on jobs for which:

a) The terms of remuneration receivable by the Company have not been settled and/or scope of work has not been clearly defined and, therefore, it is not possible in the absence of settled terms to determine whether there is a profit or loss on such jobs. However, in cases where minimum undisputed terms have been agreed to by the clients, income has been accounted for on the basis of such undisputed terms though the final terms are still to be settled.

b) The terms have been agreed to at lumpsum services / lumpsum turnkey contracts and physical progress is less than 25%.

(B) The Cost of such jobs as stated in 'A' above is carried forward as work-in-progress at actual direct cost.

4. Fixed Assets

a) Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses.

b) The cost of any software purchased initially along with the computer hardware is being capitalised along with the cost of the hardware. Any subsequent acquisition / upgradation of software is being capitalized as an asset.

c) Whenever any new office space is acquired and partitions/fixtures and fittings are provided to make it suitable for use, the expenditure on the same is capitalised and depreciation charged as per Para 5 (a) below. All expenditure on subsequent modifications and repairs of partitions/fixtures and fittings are charged to revenue in the year it is incurred.

5. Depreciation

a) Depreciation on fixed assets is charged on straight line method either on the basis of rates arrived at with reference to the useful life of the assets evaluated by the Committee consisting of Technical experts and approved by the Management, or the minimum rates prescribed under Schedule XIV of the Companies Act, 1956, whichever is higher.

b) No depreciation has been provided in the case of land which is on perpetual lease or where no lease deeds have been executed. Premium paid on land where lease agreements have been executed are written off over the period of lease proportionately.

c) The cost of capitalized software is amortized over a period of three years from the date of its acquisition. However, software individually costing upto Rs. 5 lakhs is fully amortized during the year of its acquisition.

d) 100% depreciation is provided on library books in the year of purchase since individual books are low value items.

e) Assets individually costing less than Rs. 5,000 are fully depreciated in the year of acquisition.

6. Impairment of Assets Impairment of cash generating assets are reviewed for impairment whenever an event or changes in circumstances indicate that carrying amount of such assets may not be recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of assets. If it is found that some of the impairment losses already recognized needs to be reversed the same are recognized in the statement of Profit & Loss Account in the year of reversal.

7. Inventories Inventories in respect of stores, spares and chemicals etc. are valued at cost or net realisable value which ever is less. Cost is determined on "First In First Out" Basis.

8. Provision for Contractual Obligations The provision for estimated liabilities on account of guarantees & warranties etc. in respect of lumpsum services and lumpsum turnkey contracts awarded to the Company are being made on the basis of assessment of risk and consequential probable

liabilities on each such job made by the management.

9. Foreign Currency Transactions

a) Fixed assets are incorporated at the rates in force when transaction takes place.

b) Current Assets and Current Liabilities including Cash and Bank balances are carried at the year end exchange rates. Any gain or loss on account of exchange difference is charged to the Profit & Loss Account.

c) Foreign currency transactions (Income & Expenditure) are accounted for at average monthly rates based on market rates for preceding month in respect of Pound Sterling, US Dollars, Euro, Australian Dollar, Canadian Dollar, Swiss Franc & Japanese Yen and in respect of other currencies at Government rates prevailing in the month. Payments to sub- contractors/vendors from Foreign Currency (FCN) account are recorded at bank rate prevailing on the date of transaction.

10. Research and Development Expenditure/Government Grant

(a) Revenue expenditure on Research and Development is charged to Profit and Loss Account in the year the expenditure is incurred. Capital Expenditure on Research and Development is capitalized under respective fixed assets.

(b) Government grant of capital nature for promotion and setting up of R&D Centre is treated as Capital Reserve and shown separately under Reserves and Surplus.

(c ) Funds received from Government Agencies to carry out Research and Development activities are shown under the Head 'other income' as adjustment against expenditure incurred. Unutilised funds are shown under other liabilities.

11. Retirement / Other Long Term Employee Benefits

a) Liability in respect of Gratuity, a defined benefit plan, is being paid to a fund maintained by LIC and administered through a separate irrevocable trust set up by the company. Difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

b) Liability towards carried forward leave and post retirement medical benefits, being defined benefit plans, is paid to a fund maintained by LIC and difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

c) Contributions with respect to Provident Fund, a defined contribution plan, are made to the trust set-up by the Company for the purpose.

d) Contribution with respect to Superannuation Scheme, a defined contribution plan for employees is paid to a fund maintained by the Life Insurance Corporation of India and administered through separate irrecoverable Trust set up by the Company.

e) Liability in respect of other long term/terminal employee benefits, being defined benefit plans, is recognized on the basis of actuarial valuation.

f) Voluntary retirement expenses are charged to Profit & Loss Account in the year of its incurrence.

12. Expenses/Income booked to Profit and Loss Account are after adjustment of excess/short provisions. However, in cases of specific provisions where no expenses/income has been incurred/received against such provisions, the same are adjusted as excess provisions of previous years written back/Miscellaneous income.

13. Dividend on Units/Shares is accounted for on declaration made upto the close of the accounting year. Income distributed/undistributed surplus on investment in an AOP is recognised as income as per intimation received.

14. Taxes On Income

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized on timing difference, 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 recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred assets can be realised.

15. Investment

Long-term investments are carried at cost. However, when there is a decline, other than temporary, in the value of a long-term investment, the carrying amount is reduced to recognise the decline. Current Investments are carried at the lower of cost or market value.


Mar 31, 2010

1. Accounting Concepts

The accounts are prepared on historical cost concept based on accrual method of accounting as a going concern, and consistent with generally accepted accounting principles in accordance with the mandatory accounting standards and disclosure requirements as per the provisions of the Companies Act, 1956.

2. Income Recognition

(A) Income from services rendered is accounted for:

(a) In the case of cost plus jobs, on the basis of amount billable under the contracts;

(b) In the case of lumpsum services and lumpsum Turnkey contracts, as proportion of actual direct costs of the work to latest estimated total direct cost of the work; and

(c) In the case of contracts providing for a percentage fee on equipment/project cost, on the basis of physical progress duly certified.

(B) Other claims including interest on outstandings are accounted for when there is virtual certainty of ultimate collection.

3. Turnover/Work-in-progress

(A) No income has been taken into account on jobs for which:

a) The terms of remuneration receivable by the Company have not been settled and/or scope of work has not been clearly defined and, therefore, it is not possible in the absence of settled terms to determine whether there is a profit or loss on such jobs. However, in cases where minimum undisputed terms have been agreed to by the clients, income has been accounted for on the basis of such undisputed terms though the final terms are still to be settled.

b) The terms have been agreed to at lumpsum services / lumpsum turnkey contracts and physical progress is less than 25%.

(B) The Cost of such jobs as stated in A above is carried forward as work-in- progress at actual direct cost.

4. Fixed Assets

a) Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses.

b) The cost of any software purchased initially along with the computer hardware is being capitalised along with the cost of the hardware. Any subsequent acquisition / upgradation of software is being capitalized as an asset.

c) Whenever any new office space is acquired and partitions/fixtures and fittings are provided to make it suitable for use, the expenditure on the same is capitalised and depreciation charged as per Para 5 (a) below. All expenditure on subsequent modifications and repairs of partitions/fixtures and fittings are charged to revenue in the year it is incurred.

5. Depreciation

a) Depreciation on fixed assets is charged on straight line method either on the basis of rates arrived at with reference to the useful life of the assets evaluated by the Committee consisting of Technical experts and approved by the Management, or the minimum rates prescribed under Schedule XIV of the Companies Act, 1956, whichever is higher.

b) No depreciation has been provided in the case of land which is on perpetual lease or where no lease deeds have been executed. Premium paid on land where lease agreements have been executed are written off over the period of lease proportionately.

c) The cost of capitalized software is amortized over a period of three years from the date of its acquisition. However, software individually costing upto Rs.5 lakhs is fully amortized during the year of its acquisition.

d) 100% depreciation is provided on library books in the year of purchase since individual books are low value items.

e) Assets individually costing less than Rs.5,000 are fully depreciated in the year of acquisition.

6. Impairment of Assets

Impairment of cash generating assets are reviewed for impairment whenever an event or changes in circumstances indicate that carrying amount of such assets may not be recoverable. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of assets. If it is found that some of the impairment losses already recognized needs to be reversed the same are recognized in the statement of Profit & Loss Account in the year of reversal.

7. Inventories

Inventories in respect of stores, spares and chemicals etc. are valued at cost or net realisable value which ever is less. Cost is determined on "First In First Out" Basis.

8. Provision for Contractual Obligations

9. Foreign Currency Transactions

a) Fixed assets are incorporated at the rates in force when transaction takes place.

b) Current Assets and Current Liabilities including Cash and Bank balances are carried at the year end exchange rates. Any gain or loss on account of exchange difference is charged to the Profit & Loss Account.

c) Foreign currency transactions (Income & Expenditure) are accounted for at average monthly rates based on market rates for preceding month in respect of Pound Sterling, US Dollars, Euro, Australian Dollar, Canadian Dollar, Swiss Franc & Japanese Yen and in respect of other currencies at Government rates prevailing in the month. Payments to sub-contractors/vendors from Foreign Currency (FCN) account are recorded at bank rate prevailing on the date of transaction.

10. Research and Development Expenditure/ Government Grant

(a) Revenue expenditure on Research and Development is charged to Profit and Loss Account in the year the expenditure is incurred. Capital Expenditure on Research and Development is capitalized under respective fixed assets.

(b) Government grant of capital nature for promotion and setting up of R&D Centre is treated as Capital Reserve and shown separately under Reserves and Surplus.

(c ) Funds received from Government Agencies to carry out Research and Development activities are shown under the Head other income as adjustment against expenditure incurred. Unutilised funds are shown under other liabilities.

11. Retirement/Other Long Term Employee Benefits

a) Liability in respect of Gratuity, a defined benefit plan, is being paid to a fund maintained by LIC and administered through a separate irrevocable trust set up by the company. Difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

b) Liability towards carried forward leave and post retirement medical benefits, being defined benefit plans, is paid to a fund maintained by LIC and difference between the fund balance and accrued liability at the end of the year based on actuarial valuation is charged to Profit & Loss Account.

c) Contributions with respect to Provident Fund, a defined contribution plan, are made to the trust set-up by the Company for the purpose.

d) Contribution with respect to Superannuation Scheme, a defined contribution plan for employees is paid to a fund maintained by the Life Insurance Corporation of India and administered through separate irrevocable Trust set up by the Company.

e) Liability in respect of other long term/terminal employee benefits, being defined benefit plans, is recognized on the basis of actuarial valuation.

f) Voluntary retirement expenses are amortised over a period of five years or over a period till 31st March, 2010, whichever is shorter.

12. Expenses/Income booked to Profit and Loss Account are after adjustment of excess/short provisions. However, in cases of specific provisions where no expenses/income has been incurred/received against such provisions, the same are adjusted as excess provisions of previous years written back/Miscellaneous income.

13. Dividend on Units/Shares is accounted for on declaration made upto the close of the accounting year. Income distributed/undistributed surplus on investment in an AOP is recognised as income as per intimation received.

14. Taxes On Income

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized on timing difference, 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 recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred assets can be realised.

15. Investment

Long-term investments are carried at cost. However, when there is a decline, other than temporary, in the value of a long- term investment, the carrying amount is reduced to recognise the decline. Current Investments are carried at the lower of cost or market value.

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