Home  »  Company  »  GPT Infraprojects  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of GPT Infraprojects Ltd. Company

Mar 31, 2015

A) Basis of preparation of accounts

The financial statements of the company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared under the historical cost convention on an accrual basis. Except otherwise mentioned, the accounting policies applied by the Company are consistent with those used in the previous year.

b) Change in accounting policy

Till the year ended 31st March 2014, Schedule XIV to the Companies Act, 1956, prescribed requirements concerning depreciation of fixed assets. From the current year, Schedule XIV has been replaced by Schedule II to the Companies Act, 2013. The applicability of Schedule II has resulted in changes related to depreciation of fixed assets. Unless stated otherwise, the impact mentioned for the current year is likely to hold good for future years also.

Till the year ended 31st March 2014, depreciation rates prescribed under Schedule XIV were treated as minimum rates and the Company was not allowed to charge depreciation at lower rates even if such lower rates were justified by the estimated useful life of the asset. Schedule II to the Companies Act 2013 prescribes useful lives for fixed assets which, in many cases, are different from lives prescribed under the erstwhile Schedule XIV However, Schedule II allows companies to use higher/ lower useful lives and residual values if such useful lives and residual values can be technically supported and justification for difference is disclosed in the financial statements.

Considering the applicability of Schedule II, the management has re-estimated useful lives and residual values of all its fixed assets, accordingly, depreciation charge for the current year is higher by Rs. 160.23 lacs as compared to previous year, further, based on transitional provision provided in Note 7(b) of Schedule II, an amount of Rs. 13.91 lacs (net of deferred tax of Rs. 6.22 lacs) has been adjusted with retained earnings. The management believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of fixed assets.

c) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities, at the end of reporting period. Although these estimates are based upon the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets and liabilities in future periods.

d) Tangible Fixed Assets

Tangible Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment loss, if any. The Cost of acquisition comprises purchase price inclusive of duties (net of CENVAT / VAT), taxes, directly attributable incidental expenses, erection / commissioning expenses, borrowing cost if capitalization criteria are met, etc. incurred upto the date the asset is ready for its intended use.

Machinery Spares which can be used only in connection with a particular item of Fixed Assets and whose use, as per the technical assessment, is expected to be irregular are capitalized and depreciated proportionately over the residual life of the respective assets. Gain or losses arising from derecognition of tangible fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss when the assets are derecognized.

From accounting periods commencing on or after 1st April, 2011, the Company adjusts exchange differences arising on translation / settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

e) Intangible Fixed Assets

Intangible assets are carried at cost of acquisition less accumulated amortization and impairment losses, if any. The Cost of acquisition comprises purchase price inclusive of duties (net of CENVAT / VAT), taxes, etc.

Computer softwares not being part of the hardware operating system are assessed to have a useful life of 3 years and are capitalized as intangible fixed assets.

Gain or losses arising from derecognition of intangible fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss when the assets are derecognized.

f) Depreciation & Amortization

Tangible Fixed Assets

i. The classification of Plant and Machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.

ii. Depreciation on fixed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management which is in line with the useful lives as specified in Schedule II to the Companies Act, 2013, except for the following class of assets where management has estimated useful life based on management's technical evaluation:

- Steel Shutterings are depreciated over a period of five years from the year of addition. No specific useful life for such class of assets has been indicated in Schedule II.

iii. Depreciation on Insurance Spares / standby equipments is provided over the useful lives of the respective mother assets.

iv. Depreciation on fixed assets added / disposed off during the year, is provided on pro-rata basis with reference to the date of addition / disposal.

Intangible Fixed Assets

Computer softwares capitalized as intangible fixed assets are amortized on a straight line basis over their useful life of 3 years.

g) Impairment of tangible and intangible fixed assets

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount which is the greater of the asset's net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre- tax discount rate that reflects current market assessments of the time value of money and risks specific to the assets.

h) Leases

Finance Leases, which effectively transfer to the Company, substantially, all the risks and benefits incidental to the ownership of the leased items, are capitalized at the lower of the fair value and present value of the minimum lease payment at the inception of lease term and disclosed as leased assets.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

i) Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

j) Investments

Investments that are readily realizable and intended to be held for not more than a year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments. Long term investments are considered at cost, unless there is an "other than temporary" decline in value thereof, in which case, adequate provision for diminution is made in the financial statements. Current Investments are carried at lower of cost and fair value on an individual investment basis.

k) Inventories

(i) Closing stock of stores and spares and raw materials (except for those relating to construction activities) are valued at lower of cost computed on 'Weighted Average' basis and net realizable value. However, materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost includes expenses incidental to procurement thereof.

(ii) Finished goods and work in progress (except for those relating to construction activities) are valued at the lower of cost (computed on weighted average basis) and net realizable value. Costs in respect of finished goods include direct material, labour and an appropriate portion of overhead costs and excise duty.

(iii) Construction work in progress is valued at cost. However, in case of contracts where losses are likely to occur, the stock is considered at net realizable value. Costs include materials, labour and an appropriate portion of construction overheads.

(iv) Stores, components, etc. and construction materials at sites to be used in contracts are valued at cost which is ascertained on 'Weighted Average' basis.

(v) Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

l) Revenue recognition

(i) Construction contracts

Revenue on construction contracts is recognized on percentage completion method based on the stage of completion of the contract. The stage of completion is determined as a proportion that contract costs incurred for work performed upto the reporting date bears to the estimated total costs. When it is probable that the total contract cost will exceed the total contract revenue, the expected loss is recognized immediately. For this purpose, total contract costs are ascertained on the basis of actual costs incurred and costs to be incurred for completion of contracts in progress, which is arrived at by the management based on current technical data, forecasts and estimate of expenditure to be incurred in future including contingencies, which being technical matters have been relied upon by the auditors. Revisions in projected profit or loss arising from change in estimates are reflected in each accounting period which, however, cannot be disclosed separately in the financial statements as the effect thereof cannot be accurately determined.

Overhead expenses representing indirect costs that cannot be directly aligned with the jobs, are distributed over the various contracts on a pro-rata basis.

(ii) Sale of Goods

Revenue from sale of goods is recognized on passage of title thereof to the customers, which generally coincides with delivery. Sales are net of taxes, returns, claims, trade discounts etc. Revenue is recognized when the significant risks and rewards of ownership of the goods get passed to the buyer.

(iii) Income from Services

Revenues from operation and maintenance contracts are recognized on rendering of services as per the terms of contract.

(iv) Interest

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

m) Foreign currency translations

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. 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 and non- monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences

Exchange differences, in respect of accounting periods commencing from 1st April 2011, arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset, and in other cases, such exchange differences are accumulated in a "foreign Currency Monetary Items Translation Difference Account" and amortised over the balance period of such long-term asset / liability.

Exchange differences arising on the settlement or reporting of monetary items, not covered above, at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, are recognized as income or expenses in the period in which they arise.

(iv) Forward Exchange Contracts not intended for trading or speculation purposes.

The premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of the respective contracts. Exchange differences on such contracts, except the contracts which are long term foreign currency monetary items, are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or expense for the year. Any gain/loss arising on forward contracts which are long term foreign currency monetary items is recognized in accordance with paragraph 2 (m) (iii) above.

(v) Derivatives Instruments:

As per ICAI announcement, accounting for derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss after considering the offsetting effect on the underlying hedge item is charged to the statement of profit and loss. Net gains are ignored.

(vi) Translation of Integral foreign operations

The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Company itself.

(vii) Translation of Non-integral foreign operations

Exchange differences arising on a monetary item that, in substance, forms part of the Company's net investment in a non- integral foreign operations are accumulated in the foreign currency translation reserve until the disposal of the net investment. On the disposal of such net investment, the cumulative amount of the exchange differences which have been deferred and which relate to that investment is recognized as income or as expenses in the same period in which the gain or loss on disposal is recognized.

n) Retirement and other employee benefits

Retirement benefits in the form of Provident Fund is a defined contribution scheme. The Company recognizes contribution payable to provident fund scheme as an expenditure on rendering of related service by employees. There are no obligations other than the contribution payable to the fund. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset.

Gratuity (funded) being defined benefit obligation and long term compensated absences (unfunded) are provided for based on actuarial valuation made at the end of each financial year using the projected unit credit method.

Actuarial gain and losses are recognized immediately in the Statement of Profit and Loss as income or expenses.

o) Income Taxes

Tax expense comprises current and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits.

The carrying amounts of deferred tax assets are reviewed at each Balance Sheet date. The Company writes down the carrying amount of the deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax assets can be realized. Any such write down is reversed to the extent it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

p) Employee Stock Compensation Cost

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost relating to employee stock options using the intrinsic value method. Compensation expense is amortized over the vesting period of the option on a straight line basis.

q) Segment Reporting

(i) Identification of Segments

The Company has identified that its business segments are the primary segments. The Company's businesses are organized and managed separately according to the nature of activity, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

(ii) Inter segment Transfers

The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

(iii) Allocation of common costs

Common allocable costs are allocated to each segment on case to case basis applying the ratio, appropriate to each relevant case. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segment on a reasonable basis, have been included under the head "Unallocated - Common".

(iv) Segment Policies

The accounting policies adopted for segment reporting are in line with those of the Company.

r) Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

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

s) Provisions

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions made in terms of Accounting Standard 29 are not discounted to their present value and are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and appropriately adjusted to reflect the current management estimates.

Provision for warranties cost is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period.

t) Cash and Cash Equivalents

Cash and cash equivalents as indicated in the Cash FIow Statement comprises cash at bank and on hand and short-term investments with an original maturity of three months or less.

u) Accounting for interests in joint ventures

In respect of joint ventures entered into with other parties in the form of 'integrated joint ventures', the accounting treatment is done as below in terms of Accounting Standard 27 notified by the Companies Accounting Standards Rules, 2006 (as amended) :

(i) Company's share in profits and losses is accounted for on determination of profits or losses by the Joint Ventures;

(ii) Investments are carried at cost, net of the Company's share of profits or losses, recognized in the accounts.

v) Measurement of EBIDTA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present earnings before interest, tax expenses, depreciation and amortization expenses (EBITDA) as a separate line item on the face of the statement of profit and loss. The Company measures EBITDA on the basis of profit from continuing operations. In its measurement, the Company does not include depreciation and amortization expenses, interest and tax expenses.

w) Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the consolidated financial statements.




Mar 31, 2014

A) Basis of preparation of Accounts

The financial statements have been prepared to comply in all material respects with the accounting standards notified by the Companies Accounting Standards Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular 8/2014 dated 4th April 2014 issued by the Ministry of Corporate Affairs. The financial statements have been prepared under the historical cost convention on an accrual basis, except for insurance and other claims which are accounted for on acceptance / actual receipt basis. The accounting policies adopted in the preparation of financial statements are consistent with those used in the previous year.

b) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities, at the end of reporting period. Although these estimates are based upon the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets and liabilities in future periods.

c) Tangible Fixed Assets

Tangible Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment loss, if any. The Cost of

acquisition comprises of purchase price inclusive of duties (net of CENVAT / VAT), taxes, directly attributable incidental expenses,

erection / commissioning expenses, borrowing cost if capitalization criteria are met, etc. incurred upto the date the asset is ready

for its intended use.

Machinery Spares which can be used only in connection with a particular item of Fixed Assets and whose use, as per the technical

assessment, is expected to be irregular are capitalized and depreciated proportionately over the residual life of the respective

assets.

Gain or losses arising from derecognition of tangible fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss when the assets are derecognized. From accounting periods commencing on or after 1st April, 2011, the company adjusts exchange differences arising on translation/ settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

d) Intangible Fixed Assets

Intangible assets are carried at cost of acquisition less accumulated amortization and impairment losses, if any. The Cost of acquisition comprises of purchase price inclusive of duties (net of CENVAT / VAT), taxes, etc.

Computer softwares not being part of the hardware operating system are assessed to have a useful life of 3 years and are capitalized as intangible fixed assets.

Gain or losses arising from derecognition of intangible fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss when the assets are derecognized.

e) Depreciation & Amortization

Tangible Fixed Assets

i. The classification of Plant and Machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.

ii. Depreciation on tangible fixed assets except as mentioned below, is provided using the Straight Line Method at the rates and in the manner prescribed under Schedule XIV of the Companies Act, 1956 or at rates determined based on the useful life of

Assets estimated by the management, whichever is higher.

– Tangible fixed assets acquired up to March 31, 1991 are depreciated at the rates specified in Schedule XIV of the Companies Act, 1956 using written down value method.

– Steel Shutterings are depreciated over a period of five years on straight line method from the year of addition.

iii. Depreciation on Insurance Spares / standby equipments is provided over the useful lives of the respective mother assets.

iv. Depreciation on fixed assets added / disposed off during the year, is provided on pro-rata basis with reference to the date of addition / disposal.

Intangible Fixed Assets

i. Computer softwares capitalized as intangible fixed assets are amortized on a straight line basis over their useful life of 3 years.

f) Impairment of tangible and intangible fixed assets

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount which is the greater of the asset''s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre- tax discount rate that reflects current market assessments of the time value of money and risks specific to the assets.

g) Leases

Finance Leases, which effectively transfer to the Company, substantially, all the risks and benefits incidental to the ownership of the leased items, are capitalized at the lower of the fair value and present value of the minimum lease payment at the inception of lease term and disclosed as leased assets.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

h) Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

i) Investments

Investments that are readily realizable and intended to be held for not more than a year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments. Long term investments are considered at cost, unless there is an "other than temporary" decline in value thereof, in which case, adequate provision for diminution is made in the financial statements. Current Investments are carried at lower of cost and fair value on an individual investment basis.

j) Inventories

(i) Closing stock of stores and spares and raw materials (except for those relating to construction activities) are valued at lower of cost computed on ''Weighted Average'' basis and net realizable value. However, materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost includes expenses incidental to procurement thereof.

(ii) Finished goods and work in progress (except for those relating to construction activities) are valued at the lower of cost (computed on weighted average basis) and net realizable value. Costs in respect of finished goods include direct material, labour and an appropriate portion of overhead costs and excise duty.

(iii) Construction work in progress is valued at cost. However, in case of contracts where losses are likely to occur, the stock is considered at net realizable value. Costs include materials, labour and an appropriate portion of construction overheads.

(iv) Stores, components, etc. and construction materials at sites to be used in contracts are valued at cost which is ascertained on

''Weighted Average'' basis.

(v) Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

k) Revenue recognition

(i) Construction contracts

Revenue on construction contracts is recognized on percentage completion method based on the stage of completion of the contract. The stage of completion is determined as a proportion that contract costs incurred for work performed upto the reporting date bears to the estimated total costs. When it is probable that the total contract cost will exceed the total contract revenue, the expected loss is recognized immediately. For this purpose, total contract costs are ascertained on the basis of actual costs incurred and costs to be incurred for completion of contracts in progress, which is arrived at by the management based on current technical data, forecasts and estimate of expenditure to be incurred in future including contingencies, which being technical matters have been relied upon by the auditors. Revisions in projected profit or loss arising from change in estimates are reflected in each accounting period which, however, cannot be disclosed separately in the financial statements as the effect thereof cannot be accurately determined.

Overhead expenses representing indirect costs that cannot be directly aligned with the jobs, are distributed over the various contracts on a pro-rata basis.

(ii) Sale of Goods

Revenue from sale of goods is recognized on passage of title thereof to the customers, which generally coincides with delivery. Sales are net of taxes, returns, claims, trade discounts etc. Revenue is recognized when the significant risks and rewards of ownership of the goods get passed to the buyer.

(iii)Income from Services

Revenues from operation and maintenance contracts are recognized on rendering of services as per the terms of contract.

(iv)Interest

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

l) Foreign currency translations (i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. 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 and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences

Exchange differences, in respect of accounting periods commencing from 1st April 2011, arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset, and in other cases, such exchange differences are accumulated in a "Foreign Currency Monetary Items Translation Difference Account" and amortised over the balance period of such long-term asset / liability.

Exchange differences arising on the settlement or reporting of monetary items, not covered above, at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, are recognized as income or expenses in the period in which they arise.

(iv)Forward Exchange Contracts not intended for trading or speculation purposes.

The premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of the respective contracts. Exchange differences on such contracts, except the contracts which are long term foreign

currency monetary items, are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or expense for the year. Any gain/loss arising on forward contracts which are long term foreign currency monetary items is recognized in accordance with paragraph 2 (l) (iii) above.

(v) Derivatives Instruments:

As per ICAI announcement, accounting for derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss after considering the offsetting effect on the underlying hedge item is charged to the statement of profit and loss. Net gains are ignored.

(vi)Translation of Integral foreign operations

The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Company itself.

(vii)Translation of Non-integral foreign operations

Exchange differences arising on a monetary item that, in substance, forms part of the Company''s net investment in a non- integral foreign operation is accumulated in the foreign currency translation reserve until the disposal of the net investment. On the disposal of such net investment, the cumulative amount of the exchange differences which have been deferred and which relate to that investment is recognized as income or as expenses in the same period in which the gain or loss on disposal is recognized.

m) Retirement and other employee benefits

Retirement benefit in the form of Provident Fund is a defined contribution scheme. The Company recognizes contribution payable to provident fund scheme as an expenditure on rendering of related service by employees. There are no obligations other than the contribution payable to the fund. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset.

Gratuity (funded) being defined benefit obligations and long term compensated absences (unfunded) are provided for based on actuarial valuation made at the end of each financial year using the projected unit credit method.

Actuarial gain and losses are recognized immediately in the Statement of Profit and Loss as income or expenses.

n) Income Taxes

Tax expense comprises current and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Ta x Act, 1961. Deferred taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits.

The carrying amounts of deferred tax assets are reviewed at each Balance Sheet date. The Company writes down the carrying amount of the deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax assets can be realized. Any such write down is reversed to the extent it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

o) Employee Stock Compensation Cost

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost relating to employee stock options using the intrinsic value method. Compensation expense is amortized over the vesting period of the option on a straight line basis.

p) Segment Reporting

i. Identification of Segments

The Company has identified that its business segments are the primary segments. The Company''s businesses are organized and managed separately according to the nature of activity, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

ii. Inter segment Transfers

The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

iii. Allocation of common costs

Common allocable costs are allocated to each segment on case to case basis applying the ratio, appropriate to each relevant case. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segment on a reasonable basis, have been included under the head "Unallocated – Common".

iv. Segment Policies

The accounting policies adopted for segment reporting are in line with those of the Company.

q) Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

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

r) Provisions

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions made in terms of Accounting Standard 29 are not discounted to their present value and are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and appropriately adjusted to reflect the current management estimates.

Provision for warranties cost is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period.

s) Cash and Cash Equivalents

Cash and cash equivalents as indicated in the Cash Flow Statement comprise of cash at bank and on hand and short-term investments with an original maturity of three months or less.

t) Accounting for interests in joint ventures

In respect of joint ventures entered into with other parties in the form of ''integrated joint ventures'', the accounting treatment is done as below in terms of Accounting Standard 27 notified by the Companies Accounting Standards Rules, 2006 (as amended):

(i) Company''s share in profits and losses is accounted for on determination of profits or losses by the Joint Ventures;

(ii) Investments are carried at cost, net of the Company''s share of profits or losses, recognized in the accounts.

u) Measurement of EBIDTA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present earnings before interest, tax expenses, depreciation and amortization expenses (EBITDA) as a separate line item on the face of the statement of profit and loss. The Company measures EBITDA on the basis of profit from continuing operations. In its measurement, the Company does not include depreciation and amortization expenses, interest and tax expenses.

(d) Terms/ rights attached to equity shares

i. The Company has only one class of equity shares having par value of Rs. 10/- each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the general meeting.

ii. The amount of per share dividend recognised as distribution to equity shareholders is Rs. 1.00 (31st March 2013 : Rs. 1.00) for the year.

iii. In the event of winding-up of the Company, the equity shareholders shall be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

Note:

5.1 Term Loans in foreign currency (external commercial borrowing) is secured by first charge of equipments purchased from proceeds of such loans and personal guarantees of four directors of the Company. The loan is repayable in 8 quarterly equal installments of Rs. 67.98 lacs (USD 1.25 lacs) each after 27 months from the date of disbursement (first tranche of repayment commenced from February 26, 2013) and carries interest @ Libor (3 months) plus 3%.

5.2 Term loan in Indian Rupees is secured by exclusive charge by way of hypothecation of (a) current assets both present and future (b) entire fixed assets both present and future (c) Trust and Retention account (d) Project development documents rights, title, interest, benefits, claims and demand (e) Personal guarantee of one director, relating to Ahmedpur project of the Company. The outstanding loan is repayable by August 2014 and carries interest @ 14.25% p.a.

5.3 Deferred Payment Credits are secured by first charge of equipments purchased from proceeds of such loans and personal guarantees of two Directors. The outstanding loan amount is repayable in monthly installments and the amount repayable within one year being Rs. 622.87 lacs, between 1 - 2 years Rs. 266.44 lacs and between 2 - 3 year Rs. 72.54 lacs. The loan carries interest @ 8.00% - 14.00% p.a.

* The classification of provision for employee benefits in current / non current has been done by the actuary based upon the estimated amount of cash outflow during the next 12 months from the balance sheet date.

Note:

8.1 Cash credit, short term loans for working capital and foreign currency loan are secured by (a) First hypothecation charge on current assets of the Company on pari pasu basis under consortium banking arrangement. (b) First hypothecation charge on all movable fixed assets (excluding those assets financed out of term loan / lease finance from Banks / Financial Institutions) of the Company on pari pasu basis under consortium banking arrangement. (c) Personal guarantee of four promoter directors of the Company and (d) Corporate guarantee and equitable mortgage of land owned by GPT Developers Limited. All the charges created in favour of the Lenders for Cash Credit and Working Capital loan rank pari passu inter se.

8.2 Cash Credit borrowings carry interest @ 10.60% to 13.75% p.a. and are repayable on demand.

8.3 Short term loans for working capital carries interest @ 11.00% to 12.75% p.a. and are repayable till August 2014.

8.4 Buyers Credit in foreign currency carry interest @ 1.03% to 2.44% p.a. and are repayable till July 2014.

8.5 Default as on the Balance Sheet date:

* As per information available with the Company, there are no suppliers covered under Micro, Small & Medium Enterprise Development Act, 2006. As a result, no interest provision/payment have been made by the Company to such creditors, if any, and no disclosure thereof is made in these financial statements.

Notes:

(i) Includes Rs. 101.60 lacs (31st March 2013 : Rs. 101.60 lacs) registered in the name of GPT Metal Industries Limited, which has been merged with the Company in an earlier year.

(ii) Includes Plant and equipment of Rs. 30.12 lacs (31st March 2013 : Rs. 106.83 lacs) installed on premises of a related party.

(iii)Charge for the year 2012 - 13 includes Rs. 53.66 lacs relating to wind power division / business disposed off during the previous year. Also refer note no 30.

(a) 2,295,000 (31st March 2013 : 2,295,000) Shares Pledged with State Bank of India as security for loan sanctioned (but not disbursed as on the balance sheet date) by them to the Subsidiary Company.

(b) Valued at exchange rate prevailing on the date of allotment / transaction.

(c) The non cumulative redeemable preference shares are redeemable after the expiry of 13 years from the date of issue / allotment or earlier subject to the approval / consent of the board, preference shareholders and lenders of the Investee Subsidiary Company.

(d) The Redeemable Preference Shares are redeemable in remaining four equal quarterly installments by March 2015.

(e) The Joint Ventures are in the form of AOP and unincorporated entities. Hence, number of shares and face value are not applicable.


Mar 31, 2013

A) Basis of preparation of Accounts

The financial statements have been prepared to comply in all material respects with the accounting standards notified by the Companies Accounting Standards Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis, except for insurance and other claims which are accounted for on acceptance / actual receipt basis. The accounting policies adopted in the preparation of financial statements are consistent with those used in the previous year.

b) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities, at the end of reporting period. Although these estimates are based upon the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets and liabilities in future periods.

c) Tangible Fixed Assets

Tangible Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment loss, if any. The Cost of acquisition comprises of purchase price inclusive of duties (net of CENVAT / VAT), taxes, directly attributable incidental expenses, erection / commissioning expenses, borrowing cost if capitalization criteria are met, etc. incurred upto the date the asset is ready for its intended use.

Machinery Spares which can be used only in connection with a particular item of Fixed Assets and whose use, as per the technical assessment, is expected to be irregular are capitalized and depreciated proportionately over the residual life of the respective assets.

Gain or losses arising from derecognition of tangible fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss when the assets are derecognized. From accounting periods commencing on or after 1st April, 2011, the company adjusts exchange differences arising on translation/ settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

d) Intangible Fixed Assets

Intangible assets are carried at cost of acquisition less accumulated amortization and impairment losses, if any. The Cost of acquisition comprises of purchase price inclusive of duties (net of CENVAT / VAT), taxes, etc.

Computer softwares not being part of the hardware operating system are assessed to have a useful life of 3 years and are capitalized as intangible fixed assets.

Gain or losses arising from derecognition of intangible fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss when the assets are derecognized.

e) Depreciation & Amortization

Tangible Fixed Assets

i. The classification of Plant and Machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.

ii. Depreciation on tangible fixed assets except as mentioned below, is provided using the Straight Line Method at the rates and in the manner prescribed under Schedule XIV of the Companies Act, 1956 or at rates determined based on the useful life of

Assets estimated by the management, whichever is higher.

– Tangible fixed assets acquired up to March 31, 1991 and tangible fixed assets of the Wind Power Unit are depreciated at the rates specified in Schedule XIV of the Companies Act, 1956 using written down value method.

– Steel Shutterings are depreciated over a period of five years on straight line method from the year of addition.

iii. Depreciation on Insurance Spares / standby equipments is provided over the useful lives of the respective mother assets.

iv. Depreciation on fixed assets added / disposed off during the year, is provided on pro-rata basis with reference to the date of addition / disposal.

Intangible Fixed Assets

i. Computer softwares capitalized as intangible fixed assets are amortized on a straight line basis over their useful life of 3 years.

f) Impairment of tangible and intangible fixed assets

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount which is the greater of the asset''s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre- tax discount rate that reflects current market assessments of the time value of money and risks specific to the assets.

g) Leases

Finance Leases, which effectively transfer to the Company, substantially, all the risks and benefits incidental to the ownership of the leased items, are capitalized at the lower of the fair value and present value of the minimum lease payment at the inception of lease term and disclosed as leased assets.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

h) Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

i) Investments

Investments that are readily realizable and intended to be held for not more than a year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments. Long term investments are considered at cost, unless there is an "other than temporary” decline in value thereof, in which case, adequate provision for diminution is made in the financial statements. Current Investments are carried at lower of cost and fair value on an individual investment basis.

j) Inventories

(i) Closing stock of stores and spares and raw materials (except for those relating to construction activities) are valued at lower of cost computed on ‘Weighted Average'' basis and net realizable value. However, materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost includes expenses incidental to procurement thereof.

(ii) Finished goods and work in progress (except for those relating to construction activities) are valued at the lower of cost computed on weighted average basis and net realizable value. Costs in respect of finished goods include direct material, labour and an appropriate portion of overhead costs and excise duty.

(iii) Construction work in progress is valued at cost. However, in case of contracts where losses are likely to occur, the stock is considered at net realizable value. Costs include materials, labour and an appropriate portion of construction overheads.

(iv) Stores, components, etc. and construction materials at sites to be used in contracts are valued at cost which is ascertained on ‘Weighted Average'' basis.

(v) Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

k) Revenue recognition

(i) Construction contracts

Revenue on construction contracts is recognized on percentage completion method based on the stage of completion of the contract. The stage of completion is determined as a proportion that contract costs incurred for work performed upto the reporting date bears to the estimated total costs. When it is probable that the total contract cost will exceed the total contract revenue, the expected loss is recognized immediately. For this purpose, total contract costs are ascertained on the basis of actual costs incurred and costs to be incurred for completion of contracts in progress, which is arrived at by the management based on current technical data, forecasts and estimate of expenditure to be incurred in future including contingencies, which being technical matters have been relied upon by the auditors. Revisions in projected profit or loss arising from change in estimates are reflected in each accounting period which, however, cannot be disclosed separately in the financial statements as the effect thereof cannot be accurately determined.

Overhead expenses representing indirect costs that cannot be directly aligned with the jobs, are distributed over the various contracts on a pro-rata basis.

(ii) Sale of Goods

Revenue from sale of goods is recognized on passage of title thereof to the customers, which generally coincides with delivery. Sales are net of taxes, returns, claims, trade discounts etc. Revenue is recognized when the significant risks and rewards of ownership of the goods get passed to the buyer.

(iii)Income from Services

Revenues from operation and maintenance contracts are recognized on rendering of services as per the terms of contract.

(iv)Interest

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

l) Foreign currency translations (i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. 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 and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences

Exchange differences, in respect of accounting periods commencing from 1st April 2011, arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset, and in other cases, such exchange differences are accumulated in a "Foreign Currency Monetary Items Translation Difference Account” and amortised over the balance period of such long-term asset / liability.

Exchange differences arising on the settlement or reporting of monetary items, not covered above, at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, are recognized as income or expenses in the period in which they arise.

(iv)Forward Exchange Contracts not intended for trading or speculation purposes.

The premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of the respective contracts. Exchange differences on such contracts, except the contracts which are long term foreign

currency monetary items, are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or expense for the year. Any gain/loss arising on forward contracts which are long term foreign currency monetary items is recognized in accordance with paragraph 2 (l) (iii) above.

(v) Derivatives Instruments:

As per ICAI announcement, accounting for derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss after considering the offsetting effect on the underlying hedge item is charged to the statement of profit and loss. Net gains are ignored.

(vi)Translation of Integral foreign operations

The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the company itself.

(vii)Translation of Non-integral foreign operations

Exchange differences arising on a monetary item that, in substance, forms part of the company''s net investment in a non- integral foreign operation is accumulated in the foreign currency translation reserve until the disposal of the net investment. On the disposal of such net investment, the cumulative amount of the exchange differences which have been deferred and which relate to that investment is recognized as income or as expenses in the same period in which the gain or loss on disposal is recognized.

m) Retirement and other employee benefits

Retirement benefit in the form of Provident Fund is a defined contribution scheme. The Company recognizes contribution payable to provident fund scheme as an expenditure on rendering of related service by employees. There are no obligations other than the contribution payable to the fund. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset.

Gratuity (funded) being defined benefit obligations and long term compensated absences (unfunded) are provided for based on actuarial valuation made at the end of each financial year using the projected unit credit method.

Actuarial gain and losses are recognized immediately in the Statement of Profit and Loss as income or expenses.

n) Income Taxes

Tax expense comprises of current and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits.

The carrying amounts of deferred tax assets are reviewed at each Balance Sheet date. The company writes down the carrying amount of the deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax assets can be realized. Any such write down is reversed to the extent it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

o) Employee Stock Compensation Cost

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost relating to employee stock options using the intrinsic value method. Compensation expense is amortized over the vesting period of the option on a straight line basis.

p) Segment Reporting

i. Identification of Segments

The Company has identified that its business segments are the primary segments. The Company''s businesses are organized and managed separately according to the nature of activity, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

ii. Inter segment Transfers

The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

iii. Allocation of common costs

Common allocable costs are allocated to each segment on case to case basis applying the ratio, appropriate to each relevant case. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segment on a reasonable basis, have been included under the head "Unallocated – Common”

iv. Segment Policies

The accounting policies adopted for segment reporting are in line with those of the Company.

q) Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

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

r) Provisions

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions made in terms of Accounting Standard 29 are not discounted to their present value and are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and appropriately adjusted to reflect the current management estimates.

Provision for warranties cost is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period.

s) Cash and Cash Equivalents

Cash and cash equivalents as indicated in the Cash Flow Statement comprise of cash at bank and on hand and short-term investments with an original maturity of three months or less.

t) Accounting for interests in joint ventures

In respect of joint ventures entered into with other parties in the form of ‘integrated joint ventures'', the accounting treatment is done as below in terms of Accounting Standard 27 notified by the Companies Accounting Standards Rules, 2006 (as amended) :

(i) Company''s share in profits and losses is accounted for on determination of profits or losses by the Joint Ventures;

(ii) Investments are carried at cost, net of the Company''s share of profits or losses, recognized in the accounts.

u) Measurement of EBIDTA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before finance costs, tax expenses, depreciation and amortization expenses (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit from continuing operations. In its measurement, the company does not include depreciation and amortization expenses, finance costs and tax expenses.


Mar 31, 2012

A) Basis of preparation of Accounts

The financial statements have been prepared to comply in all material respects with the accounting standards notified by the Companies Accounting Standards Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis, except for insurance and other claims which are accounted for on acceptance/actual receipt basis. The accounting policies adopted in the preparation of financial statements are consistent with those used in the previous year, except for 'b' below.

b) Change in accounting policy

Presentation and disclosure of financial statements

During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the Revised Schedule VI requirements applicable in the current year.

Change in Method of Valuation of Raw Material, Construction Material and Stores & Spares Parts During the year, the Company has implemented a new ERP system and thus changed its method of valuation of raw materials, construction materials and stores & spares parts inventories from "First in First out" to "Weighted Average" basis. Further, the management believes that such change in the method of valuation of inventories will result in a more appropriate presentation of these inventories and will give a systematic basis of charge for raw materials, construction materials and stores & spares parts consumption and would be more representative of the time pattern in which the economic benefits will be derived from the use of such inventories. Had the Company continued to use the earlier basis of valuation, the charge to statement of profit and loss for the year would have been lower by Rs 30.26 lacs and raw materials, construction materials and stores & spares parts inventories would have been higher by Rs 30.26 lacs.

Foreign Currency Transactions

Pursuant to the Companies (Accounting Standards) (Second Amendment) Rules, 2011 vide GSR 914(E) dated 29th December, 2011, the Company has exercised the option of capitalizing exchange differences, in respect of accounting periods commencing from 1st April, 2011, on long-term foreign currency monetary items which were hitherto recognized as income or expense in the period in which they arose. As a result, such exchange differences so far as they relate to the acquisition of a fixed asset are capitalized and depreciated over the remaining useful life of the asset. For this purpose, the company treats a foreign monetary item as "long-term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination.

Exchange differences arising on other long-term foreign currency monetary items are accumulated in the "Foreign Currency Monetary Item Translation Difference Account" and amortized over the remaining life of the concerned monetary item

Had the Company continued to use the earlier basis of recognizing exchange differences as income or as expenses in the period in which they arise, the charge to statement of profit and loss for the year on account of Foreign Exchange (Gain)/Loss would have been higher by Rs 43.62 lacs and Gross Block and Net Block of Tangible Fixed Assets would have been lower by Rs 43.62 lacs and Rs 39.06 lacs respectively.

c) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities, at the end of reporting period. Although these estimates are based upon the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets and liabilities in future periods.

d) Tangible Fixed Assets

Tangible Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment loss, if any. Cost is inclusive of duties (net of CENVAT/VAT), taxes, incidental expenses, erection/commissioning expenses etc. incurred upto the date the asset is ready for its intended use.

Machinery Spares which can be used only in connection with a particular item of Fixed Assets and whose use, as per the technical assessment, is expected to be irregular are capitalized and depreciated proportionately over the residual life of the respective assets

From accounting periods commencing on or after 1st April, 2011, the company adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

e) Intangible Fixed Assets

Intangible assets are carried at cost less accumulated amortization and impairment losses, if any.

Computer softwares not being part of the hardware operating system are assessed to have a useful life of 3 years and are capitalized as intangible fixed assets.

f) Depreciation & Amortization Tangible Fixed Assets

i. The classification of Plant and Machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.

ii. Depreciation on tangible fixed assets except as mentioned below, is provided using the Straight Line Method at the rates and in the manner prescribed under Schedule XIV of the Companies Act, 1956 or at rates determined based on the useful life of Assets estimated by the management, whichever is higher.

- Tangible fixed assets acquired up to March 31, 1991 and tangible fixed assets of the Wind Power Unit are depreciated at the rates specified in Schedule XIV of the Companies Act, 1956 using written down value method.

- Steel Shutterings are depreciated over a period of five years on straight line method from the year of addition.

iii. Depreciation on Insurance Spares/standby equipments is provided over the useful lives of the respective mother assets.

iv. Depreciation on fixed assets added/disposed off during the year, is provided on pro-rata basis with reference to the month of addition/disposal.

Intangible Fixed Assets

i. Computer softwares capitalized as intangible fixed assets are amortized on a straight line basis over their useful life of 3 years.

g) Impairment of tangible and intangible fixed assets

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount which is the greater of the asset's net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre- tax discount rate that reflects current market assessments of the time value of money and risks specific to the assets.

h) Leases

Finance Leases, which effectively transfer to the Company, substantially, all the risks and benefits incidental to the ownership of the leased items, are capitalized at the lower of the fair value and present value of the minimum lease payment at the inception of lease term and disclosed as leased assets.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

i) Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

j) Investments

Investments that are readily realisable and intended to be held for not more than a year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments. Long term investments are considered at cost, unless there is an "other than temporary" decline in value thereof, in which case, adequate provision for diminution is made in the financial statements. Current Investments are carried at lower of cost and fair value on an individual investment basis.

k) Inventories

(i) Closing stock of stores and spares and raw materials (except for those relating to construction activities) are valued at lower of cost computed on 'Weighted Average' basis and net realizable value. However, materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost includes expenses incidental to procurement thereof.

(ii) Finished goods and work in progress (except for those relating to construction activities) are valued at the lower of cost (computed on weighted average basis) and net realizable value. Costs in respect of finished goods include direct material, labour and an appropriate portion of overhead costs and excise duty.

(iii) Construction work in progress is valued at cost. However, in case of contracts where losses are likely to occur, the stock is considered at net ealized d value. Costs include materials, labour and an appropriate portion of construction overheads.

(iv) Stores, components, etc. and construction materials at sites to be used in contracts are valued at cost which is ascertained on 'Weighted Average' basis.

(v) Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

l) Revenue recognition

(i) Construction contracts

Revenue on contracts is recognised on percentage completion method based on the stage of completion of the contract. The stage of completion is determined as a proportion that contract costs incurred for work performed upto the reporting date bears to the estimated total costs. When it is probable that the total contract cost will exceed the total contract revenue, the expected loss is recognized immediately. For this purpose, total contract costs are ascertained on the basis of actual costs incurred and costs to be incurred for completion of contracts in progress, which is arrived at by the management based on current technical data, forecasts and estimate of expenditure to be incurred in future including contingencies, which being technical matters have been relied upon by the auditors. Revisions in projected profit or loss arising from change in estimates are reflected in each accounting period which, however, cannot be disclosed separately in the financial statements as the effect thereof cannot be accurately determined.

Overhead expenses representing indirect costs that cannot be directly aligned with the jobs, are distributed over the various contracts on a pro-rata basis.

(ii) Sale of Goods

Revenue from sale of goods is recognized on passage of title thereof to the customers, which generally coincides with delivery. Sales are net of taxes, returns, claims, trade discounts etc.

Revenue is recognized when the significant risks and rewards of ownership of the goods get passed to the buyer.

(iii) Income from Services

Revenues from operation and maintenance contracts are recognised on rendering of services as per the terms of contract.

(iv) Interest

Interest is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

m) Foreign currency translations

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. 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 and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences

Exchange differences, in respect of accounting periods commencing from 1st April 2011, arising on reporting of long- term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset (except for that part of exchange difference which is regarded as an adjustment to interest costs) and are depreciated over the balance life of the asset, and in other cases, such exchange differences are accumulated in a "Foreign Currency Monetary Items Translation Difference Account" and amortised over the balance period of such long-term asset/liability.

Exchange differences arising on the settlement or reporting of monetary items, not covered above, at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, are recognized as income or expenses in the period in which they arise.

(iv) Forward Exchange Contracts not intended for trading or speculation purposes.

The premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of the respective contracts. Exchange differences on such contracts, except the contracts which are long term foreign currency monetary items, are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or expense for the year. Any gain/loss arising on forward contracts which are long term foreign currency monetary items is recognized in accordance with paragraph 2 (m) (iii) above.

(v) Derivatives Instruments:

As per ICAI announcement, accounting for derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss after considering the offsetting effect on the underlying hedge item is charged to the statement of profit and loss. Net gains are ignored.

(vi) Translation of Integral foreign operations

The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the company itself.

(vii) Translation of Non-integral foreign operations

Exchange differences arising on a monetary item that, in substance, forms part of the company's net investment in a non-integral foreign operation is accumulated in the foreign currency translation reserve until the disposal of the net investment. On the disposal of such net investment, the cumulative amount of the exchange differences which have been deferred and which relate to that investment is recognized as income or as expenses in the same period in which the gain or loss on disposal is recognized.

n) Retirement and other employee benefits

Retirement benefits in the form of Provident Fund being a defined contribution scheme, are charged to the Statement of Profit and Loss of the year when the contributions to the funds are due. There are no obligations other than the contribution payable to the fund.

Gratuity (funded) being defined benefit obligations and long term compensated absences (unfunded) are provided for based on actuarial valuation made at the end of each financial year using the projected unit credit method.

Actuarial gain and losses are recognized immediately in the Statement of Profit and Loss as income or expenses.

o) Income Taxes:

Tax expense comprises of current and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profits.

The carrying amounts of deferred tax assets are reviewed at each Balance Sheet date. The company writes down the carrying amount of the deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax assets can be realised. Any such write down is reversed to the extent it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

p) Employee Stock Compensation Cost

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost relating to employee stock options using the intrinsic value method. Compensation expense is amortized over the vesting period of the option on a straight line basis.

q) Segment Reporting

Identification of Segments

The Company has identified that its business segments are the primary segments. The Company's businesses are organized and managed separately according to the nature of activity, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Inter segment Transfers

The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

Allocation of common costs

Common allocable costs are allocated to each segment on case to case basis applying the ratio, appropriate to each relevant case. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segment on a reasonable basis, have been included under the head "Unallocated - Common"

Segment Policies

The accounting policies adopted for segment reporting are in line with those of the Company.

r) Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

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

s) Provisions

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard 29 are not discounted to their present value and are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and appropriately adjusted to reflect the current management estimates.

Provision for warranties cost is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period.

t) Cash and Cash Equivalents

Cash and cash equivalents as indicated in the Cash Flow Statement comprise of cash at bank and in hand and short-term investments with an original maturity of three months or less.

u) Accounting for interests in joint ventures

In respect of joint ventures entered into with other parties in the form of 'integrated joint ventures', the accounting treatment is done as below in terms of Accounting Standard 27 notified by the Companies Accounting Standards Rules, 2006 (as amended) :

(i) Company's share in profits and losses is accounted for on determination of profits or losses by the Joint Ventures;

(ii) Investments are carried at cost, net of the Company's share of profits or losses, recognized in the accounts.

v) Measurement of EBIDTA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before finance costs, tax expenses, depreciation and amortization expenses (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit from continuing operations. In its measurement, the company does not include depreciation and amortization expenses, finance costs and tax expenses.

* 200,000 (1,593,000) Compulsorily Convertible Preference shares of Rs 140/- each have been converted in to 200,000 (1.593.000) Equity Shares of Rs 10/- each at a premium of Rs 130/- per equity share.

** Nil (200,000) Compulsorily Convertible Preference shares of Series A of Rs 160/- each have been converted in to Nil (200.000) Equity Shares of Rs 10/- each at a premium of Rs 150/- per equity share.

*** 575,000 (1,775,000) convertible share warrants of Rs 140/- (600,000 convertible share warrants of Rs 140/- and 1.175.000 convertible share warrants of Rs 160/-) each have been converted into 575,000 (1,775,000) equity shares of Rs 10/- each fully paid up at a premium of Rs 130/- per share (of Rs 130 on 600,000 equity shares and of Rs 150/- on 1.175.000 equity shares) upon exercise of the option by the warrant holders.


Mar 31, 2010

1. Basis of Preparation

The financial statements have been prepared to comply in all material respects with the accounting standards notified by the Companies Accounting Standards Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis, except for insurance and other claims which are accounted for on acceptance / actual receipt basis. The accounting policies applied by the Company are consistent with those used in the previous year, except for the changes as described in Note No.3 below.

2. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon the management's best knowledge of current events and actions, actual results could differ from these estimates.

3. Changes in Accounting Policies

a. During the year, the Company has accounted for unbilled revenue of Rs. 535,810 thousands in terms of Accounting Standard 7 on Construction Contracts which hitherto were being considered as a part of work in progress. Accordingly, the revenue from sales & services during the year has increased by Rs. 535,810 thousands with corresponding decrease in work in progress as at 31st March 2010. However, the impact of the above change on the Company's profit is not ascertainable.

b. During the year, the Company has capitalised the cost of steel shuttering to be depreciated on straight line method over a period of five years (being useful life as estimated by the management) from the year of addition. Such materials were hitherto being charged to consumption on the basis of management estimates of the physical stock available. However, the impact of the above change on the Company's profit is not ascertainable.

4. Fixed Assets

Fixed assets are stated at cost of acquisition inclusive of duties (net of CENVAT / VAT), taxes, incidental expenses, erection/commissioning expenses upto the date the asset is ready to be put to use.

5. Depreciation

Depreciation on fixed assets except as mentioned below, is provided using the Straight Line Method at the rates prescribed under Schedule XIV of the Companies Act, 1956

- Fixed assets acquired up to 31st March 1991 and fixed assets of the Wind Power Unit are depreciated at the rates specified in Schedule VI of the Companies Act, 1956 using written down value method

- Steel Shuttering are depreciated over a period of five years on straight line method from the year of addition

In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over their remaining useful life.

6. Impairment

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

7. Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss account on a straight-line basis over the lease term.

8. Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Long term investments are considered at cost, unless there is an "other than temporary" decline in value thereof, in which case, adequate provision for diminution is made in the accounts. Current Investments are carried at lower of cost and fair value on an individual investment basis.

9. Inventories

Closing stock of stores and spares, raw materials, finished goods and work in progress (except for those relating to construction activities) are valued at lower of cost and net realisable value. Cost of inventories is ascertained on 'First In First Out' basis. Materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

Cost in respect of raw materials and stores and spares include expenses incidental to procurement thereof. Cost in respect of finished goods represents prime cost and an appropriate portion of overhead costs and excise duty.

Construction work in progress is valued at cost. However, in case of jobs where losses are likely to occur, the stock is considered at net realisable value. Costs include materials, labour and an appropriate portion of construction overheads.

Stores, components, etc. and construction materials at sites to be used in contracts are valued at cost which is ascertained on First in First Out (FIFO) basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

10. Revenue recognition

a) Construction contracts

Revenue on contracts is recognised on percentage completion method based on the stage of completion of the contract. The stage of completion is determined as a proportion that contract costs incurred for work performed upto the reporting date bear to the estimated total costs. When it is probable that the total contract cost will exceed the total contract revenue, the expected loss is recognised immediately. For this purpose, total contract costs are ascertained on the basis of actual costs incurred and costs to be incurred for completion of contracts in progress, which is arrived at by the management based on current technical data, forecasts and estimate of expenditure to be incurred in future including contingencies, which being technical matters have been relied on by the auditors. Revisions in projected profit or loss arising from change in estimates are reflected in each accounting period which however cannot be disclosed separately in the financial statements as the effect thereof cannot be accurately determined.

Overhead expenses representing indirect costs that cannot be directly aligned with the jobs, are distributed over the various contracts on a pro-rata basis.

b) Sale of Goods

Revenue from sale of goods is recognised on passage of title thereof to the customers, which generally coincides with delivery. Sales are net of taxes, returns, claims, trade discounts etc.

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Excise Duty, Sales Tax and VAT deducted from turnover (gross) are the amount that is included in the amount of turnover (gross) and not the entire amount of liability arisen during the year.

c) Income from Services

Revenues from operation and maintenance contracts are recognised on rendering of services as per the terms of contract.

d) Interest

Interest is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

11. Foreign currency translations Initial Recognition

Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are reported using the closing rate. 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 and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange Differences

Exchange differences arising on the settlement/conversion of monetary items are recognised as income or expenses in the year in which they arise.

Forward Exchange Contracts

The premium or discount arising at the inception of forward exchange contracts is amortised as expenses or income over the life of the respective contracts. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or expense for the year.

Translation of Integral and Non-integral foreign operations

The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Company itself.

In translating the financial statements of a non-integral foreign operation for incorporation in financial statements, the assets and liabilities, both monetary and non-monetary, are translated at the closing rate; while income and expense items are translated at exchange rates at the dates of the transactions; All the resulting exchange differences are accumulated in a foreign currency translation reserve until the disposal of the net investment.

On the disposal of a non-integral foreign operation, the cumulative amount of the exchange differences which have been deferred and which relate to that operation are recognised as income or as expenses in the same period in which the gain or loss on disposal is recognised.

When there is a change in the classification of a foreign operation, the translation procedures applicable to the revised classification are applied from the date of the change in the classification.

11. Retirement and other employee benefits

Retirement benefits in the form of Provident Fund being a defined contribution scheme, are charged to Profit and Loss Account of the year when the contributions to the funds are due. There are no obligations other than the contribution payable to the fund.

Gratuity (funded) being a defined benefit obligation and long term compensated absences (unfunded) are provided for based on actuarial valuation made at the end of each financial year using the projected unit credit method.

Actuarial gain and losses are recognised immediately in the statement of Profit & Loss Account as income or expenses.

12. Income taxes

Tax expense comprises of current and deferred income tax and fringe benefit tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that these can be realised against future taxable profits.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes down the carrying amount of the deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax assets can be realised. Any such write down is reversed to the extent it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

13. Employee Stock Compensation Cost:

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost relating to employee stock options using the intrinsic value method. Compensation expense is amortised over the vesting period of the option on a straight line basis.

14. Segment Reporting Identification of Segments

The Company has identified that its business segments are the primary segments. The Company's businesses are organised and managed separately according to the nature of activity, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Inter segment Transfers

The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

Allocation of common costs

Common allocable costs are allocated to each segment on case to case basis applying the ratio, appropriate to each relevant case. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segment on a reasonable basis, have been included under the head "Unallocated - Common"

Segment Policies

The accounting policies adopted for segment reporting are in line with those of the Company.

15. Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

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

16. Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and appropriately adjusted to reflect the current management estimates. Contingent Assets are neither recognised nor disclosed in the financial statements. Contingent liabilities are not provided for and are disclosed by way of notes.

Provision for product related warranties cost is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period.

17. Cash and Cash Equivalents

Cash and cash equivalents as indicated in the Cash Flow Statements comprise of cash at bank and in hand and short-term investments with an original maturity of three months or less.

18. Accounting for interests in joint ventures

In respect of joint ventures entered into with other parties in the form of 'integrated joint ventures', the accounting treatment is done as below in terms of Accounting Standard 27 notified by the Companies Accounting Standards Rules, 2006 (as amended) :

a) Company's share in profits and losses is accounted for on determination of profits or losses by the Joint Ventures;

b) Investments are carried at cost, net of the Company's share of profits or losses, recognised in the accounts.


Mar 31, 2007

1. Basis of Accounting

The accounts of the Company are prepared on accrual basis in accordance with generally accepted accounting principles.

2. Revenue Recognition

Income & expenditures are recognized on accrual basis. In respect of Construction Contracts, the percentage of completion method for accounting is followed. The Profit and Loss Account of the Joint Ventures, if any, are accounted for by incorporation with respective heads of accounts to the extent of Company''s share in the Joint Venture.

3. Fixed Assets

Fixed Assets are stated at cost. Cost of Fixed Assets includes duties, taxes and incidental expenses attributable to bringing them to their present working condition.

4. Depreciation

Depreciation on Fixed Assets have been provided at the rates specified in Schedule XIV to the Companies Act, 1956, on Written Down Value Method in respect of Assets acquired up to 31 March 1991, and on the basis of Straight Line Method in respect of additions made thereafter, however, in respect of Fixed Assets of Company''s Wind Power Division, depreciation is provided on Written Down Value

Method at the rates specified in Schedule XIV to the Companies Act, 1956.

5. Impairment

The carrying amount of assets are reviewed once in a year if there is indication of impairment based on internal/external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use.

6. Investments

Investments that are readily realisable and intended to be held for not more then a year are recognized as Current investments. All other investments are recognized as long term investments other than investment in Joint Venture which is for Short Term and are stated at cost.

7. Inventories

Inventories are valued as under:

a) Raw Materials - At Cost on FIFO Basis.

b) Work-in-Progress (Work done but not certified) - At Cost.

c) Trading Goods - At Lower of Cost or Net Realizable Value.

d) Finished Goods - At Lower of Cost or Net Realizable Value.

e) Spares, Spares & Consumables - At Cost on FIFO Basis.

8. Foreign Currency Transactions

Transactions in foreign currency are recorded on the basis of the exchange rates prevailing between the Indian Rupee and the foreign currency at the date of the transaction. Translation of monetary items as on Balance Sheet date has been made at the exchange rate as at Balance Sheet date.

9. Retirement Benefits

a) The Company has created an approved gratuity fund, which has taken a group gratuity cum insurance policy with Life Insurance Corporation of India (LIC) for future payment of gratuity to the eligible employees.

b) Contributions are made to Provident & other funds on actual liability basis.

c) Liability in respect of earned leaves as per employment rules of the Company for the employees is provided for the end of the year as per actuarial estimation.

10. Income Tax

Tax expense comprises both Current, Deferred and Fringe Benefit Taxes. Current Income Tax and Fringe Benefit Tax are measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and tax laws enacted or substantively enacted at the Balance Sheet date. Deferred Tax assets are recognized on carry forward of unabsorbed depreciation and tax losses only if there is ‘virtual certainty'' that such deferred tax assets can be realized against future taxable profits. Unrecognized deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized.

11. Contingent Liability

Contingent liabilities are not provided for in the accounts and are disclosed separately by way of notes to accounts.

12. Segment Reporting Policies

The Company''s operating business are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segment is based on the areas in which major operating divisions of the Company operate.

13. Earnings Per Share

Basic earnings per share are computed by dividing net profit or loss after tax for the year by the weighted average number of Equity Shares outstanding during the year.

For the purpose of diluted earnings per share, the net profit or loss after tax for the year and weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

 
Subscribe now to get personal finance updates in your inbox!