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Accounting Policies of Jaihind Projects Ltd. Company

Mar 31, 2015

1.1 Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention on accrual basis in accordance with Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

1.2 Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles in India (Indian GAAP) requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. The estimates and assumptions used in the accompanying financial statements are based upon Management's evaluation of the relevant facts and circumstances as on the date of the financial statements. Actual results may differ from the estimates used in preparing the accompanying financial statements. Differences between the actual results and estimates are recognized in the period in which the results are known or materialized.

1.3 Fixed Assets:

1.3.1 Tangible Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes non-refundable taxes and levies, freight and other incidental expenses related to acquisition and installation of the respective assets. Assets acquired on hire purchase basis are stated at their cash values less accumulated depreciation.

1.3.2 Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

1.3.3 Certain computer software costs are capitalized and recognized as intangible assets in terms of Accounting Standard – 26 Intangible Assets based on materiality, accounting prudence and significant economic benefits expected to flow there from for a period longer than one year. Capitalized cost includes direct cost of implementation and expenses directly attributable to the implementation.

1.4 Leases

Operating lease rentals are expenses with reference to lease terms and other considerations. Lease rentals in respect of assets acquired under operating lease are charged to Statement of profit and Loss. There are no finance leases.

1.5 Impairment of Assets

An asset is treated as impaired when the carrying cost of the same exceeds its recoverable amount. Impairment is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

1.6 Depreciation and Amortization:

1.6.1 Depreciation on fixed assets is provided on Straight Line Method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013

1.6.2 Computer software costs capitalized are amortized using the Straight Line Method over estimated useful life of three to five years, as estimated at the time of capitalization.

1.7 Investments:

1.7.1 Long Term investments are stated at cost and provision is made to recognize any diminution in value, other than that of temporary nature.

1.7.2 Current investments are carried at lower of cost and market value. Diminution in value is charged to the profit and loss account.

1.8 Inventories:

1.8.1 The stock of construction material, operating supplies, consumable stores and spares at sites are valued at lower of moving weighted average cost and net realizable value.

1.8.2 Project Work-in Progress is valued at realizable sale value on percentage completion method in respect of contracts where the outcome of the contract can be estimated reliably. Where the outcome cannot be estimated reliably, no profit is being recognized. Expected loss on contracts are assesses periodically and recognized immediately.

1.9 Cash and Cash Equivalents:

Cash and cash equivalents comprise of cash at bank and cash in hand. The Company considers all highly liquid investments into cash equivalents.

1.10 Security Deposits/Retention Monies:

Amounts retained by the clients, as per terms of contract, until satisfactory completion of the contract(s) are recognized in the financial statements as security deposits and retention monies with clients. As per terms of Contract, client deducts security deposit at the rate of 10% against each bill raised to them. The security deposit shall be released along with the pre-final bill, which is to be put-up only on mechanical completion, pre-commissioning of pipeline system and material reconciliation.

1.11 Revenue Recognition:

1.11.1 Contract Revenue and Expenses

(i) The Company follows percentage completion method for accounting of construction contracts. The revenue under a contract is recognised when the outcome of a construction contracts can be estimated reliably and with reference to the stage of completion of the contract activity at the end of each accounting period. The stage of completion is determined as a proportion of cost incurred-to-date to the total estimated contract cost. Provision is made for foreseeable losses, if any, in respect of incomplete contracts, as estimated by the management.

(ii) Variations in contracts and amount in respect thereof are recognized only when it is probable, that the customer(s) will approve them and amounts can be measured reliably.

(iii) Revenue includes the work that has been executed, claims for cost-overrun due to client caused delay, deviation in design and change in scope of the work; for which Company is at various stages of negotiations/discussions or has filed/proposed to file arbitration on a continuing basis.

1.11.2 Hiring service revenue:

Revenue from hiring services is recognised as the related services are performed.

1.11.3 Revenue from Contracts executed under Joint Venture:

In respect of contracts executed by jointly controlled entity, the profit / Loss from the Joint Venture is accounted for when determined.

1.11.4 Interest revenues are recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.12 Foreign Currency Transactions:

1.12.1 Transactions in foreign currency are recorded at exchange rates prevailing on the respective dates of the relevant transactions. Monetary assets and liabilities denominated in foreign currency are restated at exchange rates prevailing at the Balance Sheet date. The gains or losses resulting from such transactions are adjusted to the Profit and Loss Account.

1.12.2 The exchange difference arising on settlement/restatement of long term foreign currency monetary items are capitalized as part of the depreciable fixed assets to which the monetary items relates and depreciated over the remaining balance life of such assets and in other cases amortized over the balance period of such long term foreign currency monetary items. The unamortized balance is carried in the balance sheet in Foreign Currency Translation Reserve as a separate line item under "Reserve and surplus account".

1.12.3 Foreign branches/subsidiaries considered as Non Integral foreign operations, Monetary/Non-monetary assets and liabilities are restated at exchange rates prevailing at the Balance Sheet date. Incomes and Expenditure items are translated at average exchange rates prevailing during the period. Exchange difference arising are recognized in "Foreign Currency Translation Reserve Account" under Reserves and Surplus.

1.12.4 The Company uses foreign exchange forward contracts to cover its exposure to movements in foreign exchange rates. The use of foreign exchange forward contracts reduces the risk of fluctuations in exchange movements for the Company. The Company does not use the foreign exchange forward contract for trading or speculative purposes. Premium or Discount arising at the inception of forward contracts against the underlying assets is amortized as expense or income over the life of contract.

1.13 Mobilization Advance Received:

Mobilization advances received from clients towards construction contracts, which in terms of the contract are to be adjusted over the period of contract as and when bills are to be raised are classified as "Current liabilities".

1.14 Employee Benefits:

1.14.1 Defined Contribution Plan:

The Company's contributions paid / payable for the year to Provident Fund are recognised in the profit and loss accounts.

1.14.2 Defined benefit Plan:

The Company's liabilities towards gratuity are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognized on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the profit and loss account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the balance sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

1.15 Borrowing Costs:

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and all other borrowing costs are recognized in the period in which they are incurred.

1.16 Taxation:

1.16.1 Income taxes are accounted for in accordance with Accounting Standard (AS) – 22 "Accounting for taxes on income". Income tax comprises both current and deferred tax.

1.16.2 Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

1.16.3 The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

1.16.4 The Deferred tax asset is recognised and carried forward only to the extent that there is reasonable certainty that the assets will be realized in future.

1.17 Earnings per Share:

The Company reports basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per Share.

1.18 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2014

1.1 Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention on accrual basis in accordance with Generally Accepted Accounting Principles and Accounting Standards issued under the Companies (Accounting Standards) Rules, 2006 as amended to the extent applicable and provisions of the Companies Act, 1956.

1.2 Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. The estimates and assumptions used in the accompanying financial statements are based upon Management''s evaluation of the relevant facts and circumstances as on the date of the financial statements. Actual results may differ from the estimates used in preparing the accompanying financial statements. Differences between the actual results and estimates are recognized in the period in which the results are known or materialized.

1.3 Fixed Assets:

1.3.1 Tangible Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes non-refundable taxes and levies, freight and other incidental expenses related to acquisition and installation of the respective assets. Assets acquired on hire purchase basis are stated at their cash values less accumulated depreciation.

1.3.2 Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

1.3.3 Certain computer software costs are capitalized and recognized as intangible assets in terms of Accounting Standard - 26 Intangible Assets based on materiality, accounting prudence and significant economic benefits expected to flow there from for a period longer than one year. Capitalized cost includes direct cost of implementation and expenses directly attributable to the implementation.

1.3.4 Capital work-in-progress includes the cost of fixed assets that are not ready for intended use at the Balance Sheet date and advances paid to acquire capital assets before the Balance Sheet date.

1.4 Leases

Operating lease rentals are expenses with reference to lease terms and other considerations. Lease rentals in respect of assets acquired under operating lease are charged to Statement of profit and Loss. There are no finance leases.

1.5 Impairment of Assets

An asset is treated as impaired when the carrying cost of the same exceeds its recoverable amount. Impairment is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

1.6 Depreciation and Amortization:

1.6.1 Depreciation on fixed assets is provided on Straight Line Method in accordance with Section 205 (2) (b) of the Companies Act, 1956 at the rates and in the manner prescribed in schedule XIV of the said Act. Assets costing individually '' 5,000 or less are charged to profit and loss account.

1.6.2 Computer software costs capitalized are amortized using the Straight Line Method over estimated useful life of three to five years, as estimated at the time of capitalization.

1.7 Investments:

1.7.1 Long Term investments are stated at cost and provision is made to recognize any diminution in value, other than that of temporary nature.

1.7.2 Current investments are carried at lower of cost and market value. Diminution in value is charged to the profit and loss account.

1.8 Inventories:

Stock of construction material, operating supplies, consumable stores and spares at sites are valued at lower of moving weighted average cost and net realizable value.

1.9 Cash and Cash Equivalents:

Cash and cash equivalents comprise of cash at bank and cash in hand. The company considers all highly liquid investments into cash equivalents.

1.10 Security Deposits/Retention Monies:

Amounts retained by the clients, as per terms of contract, until satisfactory completion of the contract(s) are recognized in the financial statements as security deposits and retention monies with clients. As per terms of Contract, client deducts security deposit at the rate of 10% against each bill raised to them. The security deposit shall be released along with the pre-final bill, which is to be put-up only on mechanical completion, pre-commissioning of pipeline system and material reconciliation.

1.11 Revenue Recognition:

1.11.1 Contract Revenue and Expenses

(i) The Company follows percentage completion method for accounting of construction contracts. The revenue under a contract is recognised when the outcome of a construction contracts can be estimated reliably and with reference to the stage of completion of the contract activity at the end of each accounting period. The stage of completion is determined as a proportion of cost incurred-to-date to the total estimated contract cost. Provision is made for foreseeable losses, if any, in respect of incomplete contracts, as estimated by the management.

(ii) Variations in contracts and amount in respect thereof are recognized only when it is probable, that the customer(s) will approve them and amounts can be measured reliably.

(iii) Revenue includes the work that has been executed, claims for cost-overrun due to client caused delay, deviation in design and change in scope of the work; for which company is at various stages of negotiations/discussions or has filed/proposed to file arbitration on a continuing basis.

1.11.2 Hiring service revenue: Revenue from hiring services is recognised as the related services are performed.

1.11.3 Revenue from Contracts executed under Joint Venture:

In respect of contracts executed by jointly controlled entity, the profit / Loss from the Joint Venture is accounted for when determined.

1.11.4 Interest revenues are recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.12 Foreign Currency Transactions:

1.12.1 Transactions in foreign currency are recorded at exchange rates prevailing on the respective dates of the relevant transactions. Monetary assets and liabilities denominated in foreign currency are restated at exchange rates prevailing at the Balance Sheet date. The gains or losses resulting from such transactions are adjusted to the Profit and Loss Account.

1.12.2 The exchange difference arising on settlement/restatement of long term foreign currency monetary items are capitalized as part of the depreciable fixed assets to which the monetary items relates and depreciated over the remaining balance life of such assets and in other cases amortized over the balance period of such long term foreign currency monetary items. The unamortized balance is carried in the balance sheet in Foreign Currency Translation Reserve as a separate line item under "Reserve and surplus account".

1.12.3 Foreign branches/subsidiaries considered as Non Integral foreign operations, Monetary/Non-monetary assets and liabilities are restated at exchange rates prevailing at the Balance Sheet date. Incomes and Expenditure items are translated at average exchange rates prevailing during the period. Exchange difference arising are recognized in "Foreign Currency Translation Reserve Account" under Reserves and Surplus.

1.12.4 The Company uses foreign exchange forward contracts to cover its exposure to movements in foreign exchange rates. The use of foreign exchange forward contracts reduces the risk of fluctuations in exchange movements for the Company. The Company does not use the foreign exchange forward contract for trading or speculative purposes. Premium or Discount arising at the inception of forward contracts against the underlying assets is amortized as expense or income over the life of contract.

1.13 Mobilization Advance Received: Mobilization advances received from clients towards construction contracts, which in terms of the contract are to be adjusted over the period of contract as and when bills are to be raised are classified as "Current liabilities".

1.14 Employee Benefits:

1.14.1 Defined Contribution Plan: The Company''s contributions paid / payable for the year to Provident Fund are recognised in the profit and loss accounts.

1.14.2 Defined benefit Plan: The Company''s liabilities towards gratuity are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognized on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the profit and loss account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the balance sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

1.15 Borrowing Costs: Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and all other borrowing costs are recognized in the period in which they are incurred.

1.16 Taxation:

1.16.1 Income taxes are accounted for in accordance with Accounting Standard (AS) - 22 "Accounting for taxes on income". Income tax comprises both current and deferred tax.

1.16.2 Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

1.16.3 The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date. 1.16.4 The Deferred tax asset is recognised and carried forward only to the extent that there is reasonable certainty that the assets will be realized in future.

1.17 Earnings per Share:

The Company reports basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per Share.

1.18 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2013

1.1 Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention on accrual basis in accordance with Generally Accepted Accounting Principles and Accounting Standards issued under the Companies (Accounting Standards) Rules, 2006 as amended to the extent applicable and provisions of the Companies Act, 1956.

1.2 Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. The estimates and assumptions used in the accompanying financial statements are based upon Managements evaluation of the relevant facts and circumstances as on the date of the financial statements. Actual results may differ from the estimates used in preparing the accompanying financial statements. Differences between the actual results and estimates are recognized in the period in which the results are known or materialized.

1.3 Fixed Assets:

1.3.1 Tangible Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes non-refundable taxes and levies, freight and other incidental expenses related to acquisition and installation of the respective assets. Assets acquired on hire purchase basis are stated at their cash values less accumulated depredation.

1.3.2 Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

1.3.3 Certain computer software costs are capitalized and recognized as intangible assets in terms of Accounting Standard - 26 Intangible Assets based on materiality, accounting prudence and significant economic benefits expected to flow there from for a period longer than one year. Capitalized cost includes direct cost of implementation and expenses directly attributable to the implementation.

1.3.4 Capital work-in-progress includes the cost of fixed assets that are not ready for intended use at the Balance Sheet date and advances paid to acquire capital assets before the Balance Sheet date.

1.4 Leases

Operating lease rentals are expenses with reference to lease terms and other considerations. There are no finance leases.

1.5 Impairment of Assets

An asset is treated as impaired when the carrying cost of the same exceeds its recoverable amount. Impairment is chaiged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

1.6 Depreciation and Amortization:

1.6.1 Depreciation on fixed assets is provided on Straight Line Method in accordance with Section 205 (2) (b) of the Companies Act, 1956 at the rates and in the manner prescribed in schedule XIV of the said Act. Assets costing individually 75,000 oi less are charged to profit and loss account.

1.6.2 Computer software costs capitalized are amortized using the Straight Line Method over estimated useful life of three to five years, as estimated at the time of capitalization.

1.7 Investments:

1.7.1 Long Term investments are stated at cost and provision is made to recognize any diminution in value, other than that of temporary nature.

1.7.2 Current investments are carried at lower of cost and market value. Diminution in value is charged to the profit and toss account.

1.8 Inventories:

Stock of construction material, operating supplies, consumable stores and spares at sites are valued at lower of moving weighted average cost and net realizable value.

1.9 Security Deposits/Retention Monies:

Amounts retained by the clients, as per terms of contract, until satisfactory completion of the contract(s) are recognized in the financial statements as security deposits and retention monies with clients. As per terms of Contract, client deducts security deposit at the rate of 10% against each bill raised to them. The security deposit shall be released along with the pre-final bill, which is to be put-up only on mechanical completion, pre- commissioning of pipeline system and material reconciliation.

1.10 Revenue Recognition:

1.10.1 Contract Revenue and Expenses

(i) The Company follows percentage completion method for accounting of construction contracts. The revenue under a contract is recognised when the outcome of a construction contracts can be estimated reliably and with reference to the stage of completion of the contract activity at the end of each accounting period. The stage of completion is determined as a proportion of cost incurred- to-date to the total estimated contract cost. Provision is made for foreseeable losses, if any, in respect of incomplete contracts, as estimated by the management.

(ii) Variations in contracts and amount in respect thereof are recognized only when it is probable, that the customer(s) will approve them and amounts can be measured reliably.

(iii) Claims and amounts in respect thereof are recognized only when negotiations have advanced to a stage where it is probable that the customer(s) will accept them and amounts can be measured reliably.

(iv) Revenue is recognized only when no significant uncertainties exist regarding the amount of consideration and it is reasonably certain that the ultimate collection will be made.

1.10.2 Hiring service revenue:

Revenue from hiring services is recognised as the related services are performed.

1.10.3 Revenue from Contracts executed under Joint Venture:

In respect of contracts executed by jointly controlled entity, the profit / Loss from the Joint Venture is accounted for when determined.

1.10.4 Interest revenues arc recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.11 Foreign Currency Transactions:

1.11.1 Transactions in foreign currency are recorded at exchange rates prevailing on the respective dates of the relevant transactions. Monetary assets and liabilities denominated in foreign currency are restated at exchange rates prevailing at the Balance Sheet date. The gains or losses resulting from such transactions are adjusted to the Profit and Loss Account.

1.11.2 Foreign branches/subsidiaries considered as Non Integral foreign operations, Monetary/Non-monetary assets and liabilities are restated at exchange rates prevailing at the Balance Sheet date. Incomes and Expenditure items are translated at average exchange rates prevailing during the period. Exchange difference arising are recognized in "Foreign Currency Translation Reserve Account" under Reserves and Surplus.

1.11.3 The Company uses foreign exchange forward contracts to cover its exposure to movements in foreign exchange rates. The use of foreign exchange forward contracts reduces the risk of fluctuations in exchange movements for the Company. The Company does not use the foreign exchange forward contract for trading or speculative purposes. Premium or Discount arising at the inception of forward contracts against the underlying assets are amortized as expense or income over the life of contract.

1.12 Mobilization Advance Received:

Mobilization advances received From clients towards construction contracts, which in terms of the contract are to be adjusted over the period of contract as and when bills are to be raised are classified as "Current liabilities .

1.13 Employee Benefits:

1.13.1 Defined Contribution Plan:

The Company''s contributions paid / payable for the year to Provident Fund are recognised in the profit and loss accounts.

1.13.2 Defined benefit Plan:

The Company''s liabilities towards gratuity are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognized on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the profit and loss account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the balance sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

1.14 Borrowing Costs:

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction ofqualifying fixedassets are capitalized up to the date when such assets are ready for its intended use and all other borrowing costs are recognized in the period in which they are incurred.

1.15 Taxation:

1.15.1 Income taxes are accounted for in accordance with Accounting Standard (AS) - 22 Accounting for taxes on income". Income tax comprises both current and deferred tax.

1.15.2 Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act 1961.

1.15.3 The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

1.15.4 The Deferred tax asset is recognised and carried forward only to the extent that there is reasonable certainty that the assets will be realized in future.

1.16 Earnings per Share:

The Company reports basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per Share.

1.17 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

The Company has only one class of shares referred to as equity shares having par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.


Mar 31, 2012

1.1 Basis of Preparation of Financial Statements '

The financial statements are prepared on accrual basis under the historical cost convention with the generally accepted accounting principles, applicable Accounting Standards as prescribed under the Companies (Accounting Standards) Rules, 2006 and provisions of the Companies Act, 1956.

1.2 Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. The estimates and assumptions used in the accompanying financial statements are based upon Management's evaluation of the relevant facts and circumstances as on the date of the financial statements. Actual results may differ from the estimates used in preparing the accompanying financial statements. Differences between the actual results and estimates are recognized in the period in which the results are known/materialize.

1.3 Fixed Assets:

(i) Tangible Fixed Assets are stated at cost of acquisition or construction less accumulated depredation. The cost of fixed assets includes non-refundable taxes and levies, freight and other incidental expenses related to acquisition and installation of the respective assets. Assets acquired on hire purchase basis are stated at their cash values less accumulated depredation.

(ii) Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

(iii) Certain computer software costs are capitalized and recognised as intangible assets interms of Accounting Standard - 26 on intangible assets based on materiality, accounting prudence and significant economic benefits expected to flow there from for a period longer than one year. Capitalized cost includes direct cost of implementation and expenses directly attributable to the implementation.

(iv) Capital work-in-progress includes the cost of fixed assets that are not ready for intended use at the Balance Sheet date and advances paid to acquire capital assets before the Balance Sheet date.

1.4 Lease:

Operating lease rentals are expenses with reference to lease terms and other considerations. There are no finance leases.

1.5 Impairment of Assets

An asset is treated as impaired when the carrying cost of the same exceeds its recoverable amount. Impairment is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

1.6 Depredation and Amortization:

(i) Depredation on fixed assets is provided on Straight Line Method in accordance with Section 205 (2) (b) of the Companies Act, 1956 at the rates and in the manner prescribed in schedule XIV of the said Act. Assets costing individually Rs. 5000 or less are charged to profit and loss account.

(ii) Computer software costs capitalized are amortized using the Straight Line Method over estimated useful life of three to five years, as estimated at the time of capitalization.

1.7 Investments:

(i) Long Term investments are stated at cost and provision is made to recognize any diminution in value, other than that of temporary nature.

(ii) Current investments are carried at lower of cost and market value. Diminution in value is charged to the profit and loss account.

1.8 Inventories:

Stock of construction material, operating supplies, consumable stores and spares at sites are valued at lower of moving weighted average cost and net realizable value.

1.9 Security Deposits/Retention Monies:

Amounts retained by the clients, as per terms of contract, until satisfactory completion of the contract(s) are recognised in the financial statements as security deposits and retention monies with clients. As per terms of Contract, client deducts security deposit at the rate of 10% against each bill raised to them. The security deposit shall be released along with the pre-final bill, which is to be put-up only on mechanical completion, pre- commissioning of pipeline system and material reconciliation.

1.10 Revenue Recognition:

(a) Contract Revenue and Expenses

(i) The Company follows percentage completion method for accounting of construction contracts. The revenue under a contract is recognised when the outcome of a construction contracts can be estimated reliably and with reference to the stage of completion of the contract activity at the end of each accounting period. The stage of completion is determined as a proportion of cost incurred-to-date to the total estimated contract cost. Provision is made for foreseeable losses, if any, in respect of incomplete contracts, as estimated by the management.

(ii) Variations in contracts and amount in respect thereof are recognized only when it is probable, that the customer(s) will approve them and amounts can be measured reliably.

(iii) Claims and amounts in respect thereof are recognized only when negotiations have advanced to a stage where it is probable that the customer(s) will accept them and amounts can be measured reliably.

(iv) Revenue is recognized only when no significant uncertainties exist regarding the amount of consideration and it is reasonably certain that the ultimate collection will be made.

(b) Hiring service revenue:

Revenue from hiring services is recognised as the related services are performed.

(c) Revenue from Contracts executed under Joint Venture:

In respect of contracts executed by jointly controlled entity, the profit / Loss from the Joint Venture is accounted for when determined.

(d) Interest revenues are recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.11 Foreign Currency Transactions:

(i) Transactions in foreign currency are recorded at exchange rates prevailing on the respective dates of the relevant transactions. Monetary assets and liabilities denominated in foreign currency are restated at exchange rates prevailing at the Balance Sheet date. The gains or losses resulting from such transactions are adjusted to the Profit and Loss Account

(ii) Foreign branches/subsidiaries considered as Non Integral foreign operations, Monetary/Non-monetaiy assets and Liabilities are restated at exchange rates prevailing at the Balance Sheet date. Incomes and Expenditure items are translated at average exchange rates prevailing during the period. Exchange difference arising are recognized in "Foreign Currency Translation Reserve Account" under Reserves and Surplus.

(iii) The Company uses foreign exchange forward contracts to cover its exposure to movements in foreign exchange rates. The use of foreign exchange forward contracts reduces the risk of fluctuations in exchange movements for the Company. The Company does not use the foreign exchange forward contract for trading or speculative purposes. Premium or Discount arising at the inception of forward contracts against the underlying assets are amortised as expense or income over the life of contract.

1.12 Mobilization Advance Received:

Mobilization advances received from clients towards construction contracts, which in terms oF the contract are to be adjusted over the period of contract as and when bills are to be raised are classified as "Current liabilities".

1.13 Employee Benefits:

(i) Defined Contribution Plan:

The Company's contributions paid / payable for the year to Provident Fund are recognised in the profit and loss accounts.

(ii) Defined benefit Plan:

The Company's liabilities towards gratuity are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognized on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the profit and loss account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the balance sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

1.14 Borrowing Costs:

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and all other borrowing costs are recognized in the period in which they are incurred.

1.15 Taxation:

(i) Income taxes are accounted for in accordance with Accounting Standard (AS) - 22 "Accounting for taxes on income". Income tax comprises both current and deferred tax.

(ii) Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

(iii) The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

(iv) The Deferred tax asset is recognised and carried forward only to the extent that there is reasonable certainty that the assets will be realized in future.

1.16 Earnings per Share:

The Company reports basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per Share.

1.17 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2011

1. General:

The financial statements are prepared on accrual basis under the historical cost convention and to comply in all material aspects with applicable accounting principles in India, the accounting standards and the relevant provisions of the Companies Act, 1956.

2. Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. The estimates and assumptions used in the accompanying financial statements are based upon Management's evaluation of the relevant facts and circumstances as on the date of the financial statements. Actual results may differ from the estimates used in preparing the accompanying financial statements. Differences between the actual results and estimates are recognized in the period in which the results are known/materialize.

3. Fixed Assets:

(i) Tangible Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes non-refundable taxes and levies, freight and other incidental expenses related to acquisition and installation of the respective assets. Assets acquired on hire purchase basis are stated at their cash values less accumulated depreciation.

(ii) Certain computer software costs are capitalized and recognised as intangible assets in terms of Accounting Standard - 26 on intangible assets based on materiality, accounting prudence and significant economic benefits expected to flow there from for a period longer than one year. Capitalized cost includes direct cost of implementation and expenses directly attributable to the implementation.

(iii)Capital work-in-progress includes the cost of fixed assets that are not ready for intended use at the Balance Sheet date and advances paid to acquire capital assets before the Balance Sheet date.

4. Lease:

Operating lease rentals are expenses with reference to lease terms and other considerations. There are no finance leases.

5. Impairment of Assets

An asset is treated as impaired when the carrying cost of the same exceeds its recoverable amount. Impairment is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

6. Depreciation and Amortization:

(I) Depreciation on fixed assets is provided on Straight Line Method in accordance with Section 205 (2) (b) of the Companies Act, 1956 at the rates and in the manner prescribed in schedule XIV of the said Act. Assets costing individually Rs. 5000 or less are charged to profit and loss account.

(ii) Computer software costs capitalized are amortized using the Straight Line Method over estimated useful life of three to five years, as estimated at the time of capitalization.

7. Investments:

(i) Long Term investments are stated at cost and provision is made to recognize any diminution in value, other than that of temporary nature.

(ii) Current investments are carried at lower of cost and market value. Diminution in value is charged to the profit and loss account.

8. Inventories:

Stock of construction material, operating supplies, consumable stores and spares at sites are valued at lower of moving weighted average cost and net realizable value.

9. Security Deposit/Retention Monies:

Amounts retained by the clients, as per terms of contract, until satisfactory completion of the contract(s) are recognised in the financial statements as security deposits and retention monies with clients. As per terms of Contract, client deducts security deposit at the rate of 10% against each bill raised to them. The security deposit shall be released along with the pre-final bill, which is to be put-up only on mechanical completion, pre-commissioning of pipeline system and material reconciliation.

10. Revenue Recognition:

(a) Contract Revenue and Expenses

(i) The Company follows percentage completion method for accounting of construction contracts. The revenue under a contract is recognised when the outcome of a construction contracts can be estimated reliably and with reference to the stage of completion of the contract activity at the end of each accounting period. The stage of completion is determined as a proportion of cost incurred-to-date to the total estimated contract cost. Provision is made for foreseeable losses, if any, in respect of incomplete contracts, as estimated by the management.

(ii) Variations in contracts and amount in respect thereof are recognized only when it is probable, that the customer(s) will approve them and amounts can be measured reliably.

(iii) Claims and amounts in respect thereof are recognized only when negotiations have advanced to a stage where it is probable that the customer(s) will accept them and amounts can be measured reliably.

(iv) Revenue is recognized only when no significant uncertainties exist regarding the amount of consideration and it is reasonably certain that the ultimate collection will be made.

(b) Hiring service revenue:

Revenue from hiring services is recognised as the related services are performed.

(c) Revenue from Contracts executed under Joint Venture:

In respect of contracts executed by jointly controlled entity, the profit / Loss from the Joint Venture is accounted for when determined.

(d) Interest revenues are recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

11. Foreign Currency Transactions:

(i) Transactions in foreign currency are recorded at exchange rates prevailing on the respective dates of the relevant transactions. Monetary assets and liabilities denominated in foreign currency are restated at exchange rates prevailing at the Balance Sheet date. The gains or losses resulting from such transactions are adjusted to the Profit and Loss Account.

(ii) Foreign branches considered as Non Integral foreign operations, Monetary/Non-monetary assets and liabilities are restated at exchange rates prevailing at the Balance Sheet date. Incomes and Expenditure items are translated at average exchange rates prevailing during the period. Exchange difference arising are recognised in Foreign Currency Translation Reserve account under Reserves and Surplus.

(iii) The Company uses foreign exchange forward contracts to cover its exposure to movements in foreign exchange rates. The use of foreign exchange forward contracts reduces the risk of fluctuations in exchange movements for the Company. The Company does not use the foreign exchange forward contract for trading or speculative purposes. Premium or Discount arising at the inception of forward contracts against the underlying assets are amortised as expense or income over the life of contract.

12. Mobilization Advance Received:

Mobilization advances received from clients towards construction contracts, which in terms of the contract are to be adjusted over the period of contract as and when bills are to be raised are classified as "Current liabilities".

13. Employee Benefits:

(i) Defined Contribution Plan:

The Company's contributions paid / payable for the year to Provident Fund are recognised in the profit and loss accounts.

(ii) Defined benefit Plan:

The Company's liabilities towards gratuity are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognised on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the profit and loss account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the balance sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

14. Borrowing Costs:

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and all other borrowing costs are recognized in the period in which they are incurred.

15. Taxation:

(i) Income taxes are accounted for in accordance with Accounting Standard (AS) 22 "Accounting for taxes on income". Income tax comprises both current and deferred tax.

(ii) Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

(iii) The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

(iv) The Deferred tax asset is recognised and carried forward only to the extent that there is reasonable certainty that the assets will be realized in future.

16. Earnings per Share:

The Company reports basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard 20 on Earnings per Share.

17. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.



 
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