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Accounting Policies of Jyoti Structures Ltd. Company

Mar 31, 2014

1. Basis of Preparation of Financial Statements:

The financial statements have been prepared and presented under the historical cost convention, on accrual basis of accounting, except for certain fixed assets, which are revalued in accordance with generally accepted accounting principles in India and the provisions of the Companies Act, 1956. They are prepared in accordance with the accounting standards notified under sub section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and other relevant provisions to the extent applicable.

2. Use of Estimates:

The presentation of financial statements requires estimates and assumptions. These estimates and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and the estimates are recognised in the period in which the results are known / materialised.

3. Revenue Recognition:

(a) Sale of goods is recognised on completion of supplies as per the terms of the contract and on transfer of risk and reward.

(b) Sales include excise duty and adjustment for price variation and are net of claims accepted.

(c) In case of construction / erection contracts, revenue is recognised based on the stage of completion determined as per the terms of the contract. Sales/income are booked on the basis of running account bills based on completed work and are net of claims accepted. Escalations and other claims which are not acknowledged by customers are not taken into account.

(d) Interest income is recognised on time proportion basis. The insurance claims are accounted for on accrual basis based on fair estimation of sanctions by the insurance companies.

4. Fixed Assets:

Fixed assets are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less accumulated depreciation and impairment loss, if any.

5. Depreciation / Amortisation:

(a) Depreciation on fixed assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956, except on computer software and on fixed assets of Uganda, Bhutan, Bangladesh, Kenya and South Africa branches.

(b) Computer software is depreciated over a period of 3 to 6 years depending upon the expected useful life of the software.

(c) On the fixed assets of Uganda, Bangladesh, Bhutan, Kenya and South Africa branches, depreciation is provided on Straight Line Method. The applicable rates are based on the local laws and practices of the respective countries.

(d) Assets individually costing Rs. 0.05 Lacs or less are depreciated fully in the year of purchase.

(e) In case of revalued assets, the difference between the depreciation based on revaluation and the depreciation charged on historical cost is recouped out of the revaluation reserve.

(f) Leasehold Land is amortised over the period of lease.

(g) Goodwill arising on amalgamation is amortised over a period of 5 years.

6. Investments:

Long term investments are stated at cost. Provision for diminution in value of such investments is made only if such a decline is other than temporary.

7. Inventories:

(a) Raw materials, Construction materials, Components and Stores and Spares are valued at lower of cost or net realisable value.

(b) Cost of inventories is determined by using the weighted average method.

(c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract, whichever is lower.

(d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when expected realisation is lesser than the carrying cost.

(e) Finished goods are valued at cost or net realisable value, whichever is lower and inclusive of excise duty.

(f) Tools and tackles are amortised over their estimated useful life

(g) Scrap is valued at net realisable value.

8. Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expenses in the period in which they are incurred.

9. Impairment of Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company''s fixed assets. If any such indication exists, then recoverable amount of the asset is estimated. An impairment loss, if any, is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

The impairment loss recognised in a prior accounting period is reversed, if there has been a change in the estimate of recoverable amount.

10. Debenture / Preference Share Issue Expenses:

Expenses incurred for issue of secured debentures and preference shares made by the Company are written off as revenue expenditure during the year of issue.

11. Foreign Currency Transactions:

(a) Transactions denominated in foreign currencies are accounted for at the exchange rates prevailing on the dates of the transactions or that approximates the actual rate at the dates of transactions.

(b) Monetary items denominated in foreign currencies remaining unsettled at the year end are restated at the year end rates.

(c) Non-monetary items denominated in a foreign currency are stated at costs.

(d) Any income or expense on account of exchange difference, either on settlement or on translation, is recognized in the Statement of Profit and Loss.

(e) Financial Statements of Overseas Integral Operations are translated as under:

i. Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are translated on the yearly average exchange rate prevailing during the year.

ii. Fixed assets are translated at the average rate prevailing on purchase / acquisition of assets. Depreciation is accounted at the same exchange rate at which the assets are translated.

iii. The resultant exchange gains and losses are recognised in the Statement of Profit and Loss.

(f) Forward Exchange Contracts:

I. In case of transactions covered by forward exchange contracts which are not intended for trading or speculation purposes, premium or discount is amortised as expense or income over the life of the contract.

II. Exchange difference on such contracts is recognised in the Statement of Profit and Loss in the year in which the exchange rates change.

III. Profit or loss arising on cancellation or renewal of such forward exchange contracts is recognised as income or expense for the year.

12. Excise Duty:

The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The amount of Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials consumed.

13. Leased Assets:

Operating Lease:

i) Lease payments are recognised as expense in the Statement of Profit and Loss on straight line basis over the term of the lease.

ii) Assets given on operating lease are included in fixed assets. Lease income is recognised in the Statement of Profit and Loss on straight line basis over the term of the lease.

14. Employees Retirement and Other Benefits:

a) Short Term Employee Benefits:

Short term employee benefits are recognised as expenses at the undiscounted amount in the period during which the services have been rendered.

b) Long Term Employee Benefits:

1) Defined Contribution Plan:

The Company''s contribution to Provident Fund and Superannuation Fund are charged to Statement of Profit and Loss on accrual basis.

2) Defined Benefit Plan:

i) Gratuity: The Company provides for the applicable gratuity based on actuarial valuation as per the Projected Unit Credit Method.

ii) Leave Encashment: The Company provides for the liability at the year end on account of unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.

iii) The cost of employee stock option attributable to current financial year is accounted for and charged to Statement of Profit and Loss.

15. Taxes on Income:

a) Current Tax:

Provision for current Income Tax is made on the estimated taxable income using the applicable tax rates and tax laws.

b) Deferred Tax

Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax asset is not recognised unless there is a virtual certainty as regards to the reversal of the same in future years.

16. Earnings Per Share:

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.

17. Provisions and Contingencies:

a) A provision is recognised when there is a present obligation as a result of a 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 are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

b) A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

c) Contingent assets are neither recognised nor disclosed in the financial statement.

18. Employees Stock Option Scheme:

Stock options granted to the employees of the company, under the Employees Stock Option Scheme are evaluated as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess of market value of the stock option, as on date of grant over the exercise price of the option is recognised as deferred employee compensation and is charged to Statement of Profit and Loss asemployee costs, on straight line method over the vesting period of the options.


Mar 31, 2013

1. Basis of Preparation of Financial Statements:

The financial statements have been prepared and presented under the historical cost convention, on accrual basis of accounting, except for certain fixed assets which are revalued in accordance with generally accepted accounting principles in India and the provisions of the Companies Act, 1956. They are prepared in accordance with the accounting standards notified under sub section (3C) of Section 211 of the Companies Act, 1956 and other relevant provisions to the extent applicable.

2. Use of Estimates:

The presentation of financial statements requires estimates and assumptions. These estimates and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and the estimates are recognised in the period in which the results are known/materialised.

3. Revenue Recognition:

a) Sale of goods is recognised on completion of supplies as per the terms of the contract and on transfer of risk and reward. Sales include excise duty and adjustment for price variation and are net of claims accepted.

b) In case of construction/erection contracts, revenue is recognised based on the stage of completion determined as per the terms of the contract. Sales/income are booked on the basis of running account bills based on completed work and are net of claims accepted. Escalations and other claims which are not acknowledged by customers are not taken into account.

c) Interest income is recognised on time proportion basis.

d) The insurance claims are accounted for on accrual basis based on fair estimation of sanction by the insurance companies.

4. Fixed Assets:

Fixed assets are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less accumulated depreciation and impairment loss, if any.

5. Depreciation/Amortisation:

a) Depreciation on fixed assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except on computer software and on fixed assets of Uganda, Bhutan, Bangladesh and Kenya branches.

b) Computer software is depreciated over a period of 3 to 6 years depending upon the expected useful life of the software.

c) On the fixed assets of Uganda, Bangladesh Bhutan and Kenya branches, depreciation is provided on Straight Line Method. The applicable rates are based on the local laws and practices of the respective countries.

d) Assets individually costing Rs. 0.05 Lacs or less are depreciated fully in the year of purchase.

e) In case of revalued assets, the difference between the depreciation based on revaluation and the depreciation charged on historical cost is recouped out of the revaluation reserve.

f) Leasehold Land is amortised over the period of lease.

g) Goodwill arising on amalgamation is amortised over a period of 5 years.

6. Investments:

Long term investments are stated at cost. Provision for diminution in value of such investments is made only if such a decline is other than temporary.

7. Inventories:

a) Raw materials, Construction materials, Components and Stores and Spares are valued at lower of cost or net realisable value.

b) Cost of inventories is determined by using the weighted average method.

c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract, whichever is lower.

d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when expected realisation is lesser than the carrying cost.

e) Finished goods are valued at cost or net realisable value, whichever is lower and inclusive of excise duty.

f) Scrap is valued at net realisable value.

8. Tools and Tackles:

Tools and tackles are amortised over their estimated useful life.

9. Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expenses in the period in which they are incurred.

10. Impairment of Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company''s fixed assets. If any such indication exists, then recoverable amount of the asset is estimated. An impairment loss, if any, is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

The impairment loss recognised in a prior accounting period is reversed, if there has been a change in the estimate of recoverable amount.

11. Debenture / Preference Share Issue Expenses:

Expenses incurred for issue of secured debentures and preference share made by the Company, were written off as revenue expenditure during the year of issue.

12. Foreign Currency Transactions:

a) Transactions denominated in foreign currencies are accounted for at the exchange rates prevailing on the dates of the transactions or that approximates the actual rate at the dates of transactions.

b) Monetary items denominated in foreign currencies, remaining unsettled at the year end are restated at the year end rates.

c) Non-monetary items denominated in a foreign currency are stated at costs.

d) Any income or expense on account of exchange difference either on settlement or on translation is recognised in Statement of Profit and Loss.

e) Financial Statements of Overseas Integral Operations are translated as under:

i) Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are translated on the yearly average exchange rate prevailing during the year.

ii) Fixed assets are translated at the average rate prevailing on purchase/acquisition of assets. Depreciation is accounted at the same rate at which the assets are translated.

iii) The resultant exchange gains and losses are recognised in the Statement of Profit and Loss.

f) Forward Exchange Contracts:

i) In case of transactions covered by forward exchange contracts which are not intended for trading or speculation purposes, premium or discount is amortised as expense or income over the life of the contract.

ii) Exchange difference on such contracts is recognised in the Statement of Profit and Loss in the year in which the exchange rates change.

iii) Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as income or expense for the year.

13. Excise Duty:

The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The amount of Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials consumed.

14. Leased Assets:

Operating Lease:

i) Lease payments are recognised as expense in the Statement of Profit and Loss on straight line basis over the term of the lease.

ii) Assets given on operating lease are included in fixed assets. Lease income is recognised in the Statement of Profit and Loss on straight line basis over the term of the lease.

15. Employees Retirement and Other Benefits:

a) Short Term Employee Benefits:

Short term employee benefits are recognised as expenses at the undiscounted amount in the period during which the services have been rendered.

b) Long Term Employee Benefits:

1) Defined Contribution Plan:

The Company''s contribution to Provident Fund and Superannuation Fund are charged to Statement of Profit and Loss on accrual basis.

2) Defined Benefit Plan:

i) Gratuity: The company provides for gratuity based on actuarial valuation as per the Projected Unit Credit Method.

ii) Leave Encashment: The company provides for liability at the year end on account of unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.

iii) The bonus and leave travel allowance applicable to employees is accounted for on accrual basis.

iv) The cost of employee stock option attributable to current financial year is accounted for and charged to Statement of Profit and Loss.

16. Taxes on Income:

a) Current Tax:

Provision for current Income Tax is made on the estimated taxable income using the applicable tax rates and tax laws.

b) Deferred Tax:

Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax asset is not recognised unless there is a virtual certainty as regards to the reversal of the same in future years.

17. Earnings Per Share:

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.

18. Provisions and Contingencies:

a) A provision is recognised when there is a present obligation as a result of a 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 are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

b) A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

c) Contingent assets are neither recognised nor disclosed in the financial statement.

19. Employees Stock Option Scheme:

Stock options granted to the employees of the company, under the Employees Stock Option Scheme are evaluated as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess of market value of the stock option, as on date of grant over the exercise price of the option is recognised as deferred employee compensation and is charged to Statement of Profit and Loss as employee costs, on straight line method over the vesting period of the options.


Mar 31, 2012

1. Basis of Preparation of Financial Statements:

The financial statements have been prepared and presented under the historical cost convention, on accrual basis of accounting, except for certain fixed assets which are revalued in accordance with generally accepted accounting principles in India and the provisions of the Companies Act, 1956. They are prepared in accordance with the accounting standards notified under sub section (3C) of section 211 of the Companies Act, 1956 and other relevant provisions to the extent applicable.

2. Use of Estimates:

The presentation of financial statements requires estimates and assumptions. These estimates and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and the estimates are recognised in the period in which the results are known/materialised.

3. Revenue Recognition:

a) Sale of goods is recognised on completion of supplies as per the terms of the contract and on transfer of risk and reward. Sales includes excise duty and adjustment for price variation and are net of claims accepted.

b) In case of construction/erection contracts, revenue is recognised based on the stage of completion determined as per the terms of the contract. Sales/income are booked on the basis of running account bills based on completed work and are net of claims accepted. Escalations and other claims which are not acknowledged by customers are not taken into account.

c) Interest income is recognised on time proportion basis.

d) The insurance claims are accounted for on accrual basis based on fair estimation of sanction by the insurance companies.

4. Fixed Assets:

Fixed assets are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less accumulated depreciation and impairment loss, if any.

5. Depreciation/Amortisation:

a) Depreciation on fixed assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except on computer software and on fixed assets of Uganda, Bhutan and Bangladesh branches.

b) Computer software is depreciated over a period of 3 to 6 years depending upon the expected useful life of the software.

c) On the fixed assets of Uganda, Bangladesh and Bhutan branches, depreciation is provided on Straight Line Method. The applicable rates are based on the local laws and practices of the respective countries.

d) Assets individually costing 0.05 Lacs or less are depreciated fully in the year of purchase.

e) In case of revalued assets, the difference between the depreciation based on revaluation and the depreciation charged on historical cost is recouped out of the revaluation reserve.

f) Leasehold Land is amortised over the period of lease.

g) Goodwill arising on amalgamation is amortised over a period of 5 years.

6. Investments:

Long term investments are stated at cost. Provision for diminution in value of such investments is made only if such a decline is other than temporary.

7. Inventories:

a) Raw materials, Construction materials, Components and Stores and Spares are valued at lower of cost or net realisable value.

b) Cost of inventories is determined by using the weighted average method.

c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract, whichever is lower.

d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when expected realisation is lesser than the carrying cost.

e) Finished goods are valued at cost or net realisable value, whichever is lower and inclusive of excise duty.

f) Scrap is valued at net realisable value.

8. Tools and Tackles:

Tools and tackles are amortised over their estimated useful life.

9. Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expenses in the period in which they are incurred.

10. Impairment of Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any such indication exists, then recoverable amount of the asset is estimated. An impairment loss, if any, is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

The impairment loss recognised in a prior accounting period is reversed, if there has been a change in the estimate of recoverable amount.

11. Debenture Issue Expenses:

Expenses incurred for issue of secured debentures made by the Company, were written off as revenue expenditure during the year of issue.

12. Foreign Currency Transactions:

a) Transactions denominated in foreign currencies are accounted for at the exchange rates prevailing on the dates of the transactions or that approximates the actual rate at the dates of transactions.

b) Monetary items denominated in foreign currencies, remaining unsettled at the year end are restated at the year end rates.

c) Non-monetary items denominated in a foreign currency are stated at costs.

d) Any income or expense on account of exchange difference either on settlement or on translation is recognised in Statement of Profit and Loss.

e) Financial Statements of Overseas Integral Operations are translated as under:

i) Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are translated on the yearly average exchange rate prevailing during the year.

ii) Fixed assets are translated at the average rate prevailing on purchase/acquisition of assets. Depreciation is accounted at the same rate at which the assets are translated.

iii) The resultant exchange gains and losses are recognised in the Statement of Profit and Loss.

f) Forward Exchange Contracts:

i) In case of transactions covered by forward exchange contracts which are not intended for trading or speculation purposes, premium or discount is amortised as expense or income over the life of the contract.

ii) Exchange difference on such contracts is recognised in the Statement of Profit and Loss in the year in which the exchange rates change.

iii) Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as income or expense for the year.

13. Excise Duty:

The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The amount of Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials consumed.

14. Leased Assets:

Operating Lease:

i) Lease payments are recognised as expense in the Statement of Profit and Loss on straight line basis over the term of the lease.

ii) Assets given on operating lease are included in fixed assets. Lease income is recognised in the Statement of Profit and Loss on straight line basis over the term of the lease.

15. Employees Retirement and Other Benefits:

a) Short Term Employee Benefits:

Short term employee benefits are recognised as expenses at the undiscounted amount in the period during which the services have been rendered.

b) Long Term Employee Benefits:

1) Defined Contribution Plan:

The Company's contribution to Provident Fund and Superannuation Fund are charged to Statement of Profit and Loss on accrual basis.

2) Defined Benefit Plan:

i) Gratuity: The company provides for gratuity based on actuarial valuation as per the Projected Unit Credit Method.

ii) Leave Encashment: The company provides for liability at the year end on account of unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.

iii) The bonus and leave travel allowance applicable to employees is accounted for on accrual basis.

iv) The cost of employee stock option attributable to current financial year is accounted for and charged to Statement of Profit and Loss.

16. Taxes on Income:

a) Current Tax:

Provision for current Income Tax is made on the estimated taxable income using the applicable tax rates and tax laws.

b) Deferred Tax

Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax asset is not recognised unless there is a virtual certainty as regards to the reversal of the same in future years.

17. Earnings Per Share:

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.

18. Provisions and Contingencies:

a) A provision is recognised when there is a present obligation as a result of a 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 are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

b) A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

c) Contingent assets are neither recognised nor disclosed in the financial statement.

19. Employees Stock Option Scheme:

Stock option granted to the employees of the company, under the Employees Stock Option Scheme are evaluated as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess of market value of the stock option, as on date of grant over the exercise price of the option is recognised as deferred employee compensation and is charged to Statement of Profit and Loss as employee costs, on straight line method over the vesting period of the options.


Mar 31, 2011

1. Basis of Preparation of Financial Statements:

The financial statements have been prepared and presented under the historical cost convention, on accrual basis of accounting, except for certain fixed assets which are revalued in accordance with generally accepted accounting principles in India and the provisions of the Companies Act, 1956. They are prepared in accordance with the accounting standards notified under sub section (3C) of section 211 of the Companies Act, 1956 and other relevant provisions to the extent applicable.

2. Use of Estimates:

The presentation of financial statements requires estimates and assumptions. These estimates and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and the estimates are recognised in the period in which the results are known/materialised.

3. Revenue Recognition:

a) Sale of goods is recognised on completion of supplies as per the terms of the contract and on transfer of risk and reward. Sales include excise duty and adjustment for price variation and are net of claims accepted.

b) In case of construction/erection contracts, revenue is recognised based on the stage of completion determined as per the terms of the contract. Sales/income are booked on the basis of running account bills based on completed work and are net of claims accepted. Escalations and other claims which are not acknowledged by customers are not taken into account.

c) Interest income is recognised on time proportion basis.

d) The insurance claims are accounted for on accrual basis based on fair estimation of sanction by the insurance companies.

4. Fixed Assets:

Fixed assets are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less accumulated depreciation and impairment loss, if any.

5. Depreciation/Amortisation:

a) Depreciation on fixed assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except on computer software and on fixed assets of Uganda, Tunisia and Bhutan branches.

b) Computer software is depreciated over a period of 3 to 6 years depending upon the expected useful life of the software.

c) On the fixed assets of Tunisia, Uganda and Bhutan branches, depreciation is provided on Straight Line Method. The applicable rates are based on the local laws and practices of the respective countries.

d) Assets individually costing 0.005 Million or less are depreciated fully in the year of purchase.

e) In case of revalued assets, the difference between the depreciation based on revaluation and the depreciation charged on historical cost is recouped out of the revaluation reserve.

f) Leasehold Land is amortised over the period of lease.

g) Goodwill arising on amalgamation is amortised over a period of 5 years.

6. Investments:

Long term investments are stated at cost. Provision for diminution in value of such investments is made only if such a decline is other than temporary.

7. Inventories:

a) Raw materials, Construction materials, Components and Stores and Spares are valued at lower of cost or net realisable value.

b) Cost of inventories has been determined by using the weighted average method.

c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract, whichever is lower.

d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when expected realisation is lesser than the carrying cost.

e) Finished goods are valued at cost or net realisable value, whichever is lower and inclusive of excise duty.

f) Scrap is valued at net realisable value.

8. Tools and Tackles:

Tools and tackles are amortised over their estimated useful life.

9. Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expenses in the period in which they are incurred.

10. Impairment of Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Companys fixed assets. If any such indication exists, then recoverable amount of the asset is estimated. An impairment loss, if any, is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

The impairment loss recognised in a prior accounting period is reversed, if there has been a change in the estimate of recoverable amount.

11. Debenture issue expenses:

Expenses incurred for issue of secured debentures made by the Company, are written off as revenue expenditure during the year of issue.

12. Foreign Currency Transactions:

a) Transactions denominated in foreign currencies are accounted for at the exchange rates prevailing on the dates of the transactions or that approximates the actual rate at the dates of transactions.

b) Monetary items denominated in foreign currencies, remaining unsettled at the year end are restated at the year end rates.

c) Non-monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical costs.

d) Any income or expense on account of exchange difference either on settlement or on translation is recognised in Profit and Loss Account.

e) Financial Statements of Overseas Integral Operations are translated as under:

i. Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are translated on the yearly average exchange rate prevailing during the year.

ii. Fixed assets are translated at the average rate prevailing on purchase/acquisition of assets. Depreciation is accounted at the same rate at which the assets are translated.

iii. The resultant exchange gains and losses are recognised in the Profit and Loss Account.

f) Forward Exchange Contracts:

i. In case of transactions covered by forward exchange contracts which are not intended for trading or speculation purposes, premium or discount is amortised as expense or income over the life of the contract.

ii. Exchange difference on such contracts is recognised in the Profit and Loss Account in the year in which the exchange rates change.

iii. Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as income or expense for the year.

13. Excise Duty:

The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The amount of Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials consumed.

14. Leased Assets:

Operating Lease:

i. Lease payments are recognised as expense in the Profit and Loss Account on straight line basis over the term of the lease.

ii. Assets given on operating lease are included in fixed assets. Lease income is recognised in the Profit and Loss Account on straight line basis over the term of the lease.

15. Employee Benefits:

a. Short Term Employee Benefits:

Short term employee benefits are recognised as expenses at the undiscounted amount in the period during which the services have been rendered.

b. Long Term Employee Benefits:

1. Defined Contribution Plan:

The Companys contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account on accrual basis.

2. Defined Benefit Plan:

i. Gratuity: The Company provides for gratuity based on actuarial valuation as per the Projected Unit Credit Method.

ii. Leave encashment: The Company provides for liability at the year end on account of unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.

iii. The bonus and leave travel allowance applicable to employees is accounted for on accrual basis.

iv. The cost of employee stock option attributable to current financial year is accounted for and charged to Profit and Loss Account.

16. Taxes on Income:

a. Current Tax:

Provision for current Income Tax is made on the estimated taxable income using the applicable tax rates and tax laws.

b. Deferred Tax:

Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax asset is not recognised unless there is a virtual certainty as regards to the reversal of the same in future years.

17. Earnings Per Share:

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.

18. Provisions and Contingencies:

a. A provision is recognised when there is a present obligation as a result of a 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 are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

b. A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

c. Contingent assets are neither recognised nor disclosed in the financial statement.

19. Employees Stock Option Scheme:

Stock option granted to the employees of the Company, under the Employees Stock Option Scheme are evaluated as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess of market value of the stock option, as on date of grant over the exercise price of the option is recognised as deferred employee compensation and is charged to Profit and Loss Account as employee costs, on straight line method over the vesting period of the options.


Mar 31, 2010

1. Basis of preparation of Financial Statements:

The financial statements have been prepared and presented under the historical cost convention, on accrual basis of accounting, except for certain fixed assets which are revalued in accordance with generally accepted accounting principles in India and the provisions of the Companies Act 1956. They are prepared in accordance with accounting standards notified under sub section (3C) of section 211 of the Companies Act, 1956 and other relevant provisions to the extent applicable.

2. Revenue Recognition:

a) Sale of goods is recognised on completion of supplies as per the terms of the contract and upon raising commercial invoices. Sales include excise duty and adjustment for price variation and are net of claims accepted.

b) In case of construction / erection contracts, revenue is recognised based on stage of completion determined as per the terms of the contract. Sales / income are booked on the basis of running account bills based on completed work and are net of claims accepted. Escalations and other claims which are not acknowledged by customers are not taken into account.

c) Leasing income is accounted as per principles of AS 19 Accounting for Leases.

d) Interest income is accounted for on time proportion basis.

e) The insurance claims are accounted for on accrual basis based on fair estimation of sanction by the insurance companies.

3. Fixed Assets:

Fixed Assets are stated at cost of acquisition or construction, net of CENVAT / VAT credit as availed; including any cost attributable for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less of accumulated depreciation and impairment loss, if any.

4. Depreciation / Amortisation:

a) Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on computer software and on Fixed Assets of Ethiopia, Abu Dhabi, Uganda and Tunisia Branches.

b) Computer software is depreciated over a period of 3 to 6 years depending upon the expected useful life of the software.

c) On the Fixed Assets of Ethiopia Branch, the depreciation is provided on Written Down Value Method and in Tunisia, Abu Dhabi and Uganda Branches depreciation is provided on Straight Line Method. The applicable rates are based on the local laws and practices of the respective countries.

d) In case of revalued assets, the difference between the depreciation based on revaluation and the depreciation charged on historical cost is recouped out of the Revaluation Reserve.

e) Leasehold land is amortised over the period of lease.

f) Goodwill arising on amalgamation is amortised over a period of 5 years.

5. Investments:

Long term investments are stated at cost. Provision for diminution in value of such investments is made only if such a decline is other than temporary.

6. Inventories:

a) Raw Materials, Construction materials, Components and Stores & Spares are valued at lower of cost or net realisable value.

b) Cost of inventories has been determined by using the weighted average cost formula.

c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract, whichever is lower.

d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when expected realisation is lesser than the carrying cost.

e) Finished goods are valued at cost or net realisable value, whichever is lower and inclusive of excise duty.

f) Scrap is valued at net realisable value.

7. Tools and Tackles:

Tools and tackles are amortised over their estimated life.

8. Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expenses in the period in which they are incurred.

9. Impairment of Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Companys fixed assets. If any such indication exists, then recoverable amount of the asset is estimated. An impairment loss, if any, is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

10. Share issue expenses:

Expenses incurred for issue of Equity Shares made by the Company were written off over a period of 5 years in equal installments. However, from the current year, no such expenses are carried forward and the full balance is written off during the year.

11. Foreign Currency Transactions:

a) Transactions in foreign currencies are accounted for at the exchange rates prevailing on the dates of the transactions or that approximates the actual rate at the dates of transactions.

b) Monetary items denominated in foreign currencies, remaining unsettled at the year end are restated at the closing rates.

c) Non-monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical costs.

d) Any income or expense on account of exchange difference either on settlement or on translation is recognized in Profit and Loss account.

e) Financial Statements of Overseas Integral operations are translated as under :

a. Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are translated on the yearly average exchange rate prevailing during the year.

b. Fixed assets are translated at the average rate prevailing on purchase / acquisition of assets. Depreciation is accounted at the same rate at which the assets are translated.

c. The resultant exchange gains and losses are recognised in the Profit and Loss account.

f) Forward Exchange Contracts:

a. In case of transactions covered by forward exchange contracts which are not intended for trading or speculation purposes, premium or discount is amortised as expense or income over the life of the contract.

b. Exchange difference on such contracts is recognised in the Profit and Loss account in the year in which the exchange rates change.

c. Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as income or expense for the year.

12. Excise Duty:

The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The amount of Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials consumed.

13. Leased Assets:

Operating Lease:

i. Lease payments are recognized as expense in the Profit and Loss account on straight line basis over the term of the lease.

ii. Asset given on operating lease are included in Fixed Assets. Lease income is recognized in the Profit and Loss account on straight line basis over the term of the lease.

14. Employees retirement and other benefits:

a) Short term employee benefits:

Short term employee benefits are recognised in the period during which the services have been rendered.

b) Long term Employee Benefits:

a. Defined contribution plan:

The Companys contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account on accrual basis.

b. Defined benefit plan:

i. Gratuity: The Company provides for gratuity based on actuarial valuation as per the Projected Unit Credit Method.

ii. Leave encashment: The Company provides for liability at the year end on account of unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.

iii. The bonus and leave travel allowance applicable to employees is accounted for on accrual basis.

iv. The cost of employee stock option attributable to current financial year is accounted for and charged to Profit and Loss account.

15. Taxes on Income:

a) Current Tax:

Provision for current Income Tax is made on the estimated taxable income using the applicable tax rates and tax laws.

b) Deferred Tax:

Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets are not recognised unless there is a virtual certainty as regards to the reversal of the same in future years.

16. Earnings Per Share:

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of Equity Shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.

17. Use of Estimates:

The presentation of financial statements requires estimates and assumptions. These estimates and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual result and the estimates are recognized in the period in which the results are known /materialized.

18. Provisions and Contingencies:

a) A provision is recognised when there is a present obligation as a result of a 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 are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

b) A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

19. Employees Stock Option Scheme:

Stock option granted to the employees of the Company, under the Employees Stock Option Scheme are evaluated as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess of market value of the Stock Option, as on date of grant over the exercise price of the options is recognised as deferred employee compensation and is charged to Profit and Loss account as employee costs, on straight line method over the vesting period of the options.

 
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