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Accounting Policies of Lanco Infratech Ltd. Company

Mar 31, 2015

I. Use of Estimates

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

ii. Revenue Recognition

Revenue is recognized based on the nature of activity to the extent it is probable that the economic benefits will flow to the Company and revenue can be reliably measured.

The company collects service tax, sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue.

The following specific recognition criteria must also be met before revenue is recognised.

EPC and Construction Services

For EPC and construction contracts, contract prices are either fixed or subject to price escalation clauses.

Revenues are recognised on a percentage of completion method measured on the basis of stage of completion which is as per joint surveys and work certified by the customers.

Profit is recognised in proportion to the value of work done (measured by the stage of completion) when the outcome of the contract can be estimated reliably.

The estimates of contract cost and the revenue thereon are reviewed periodically by management and the cumulative effect of any changes in estimates in proportion to the cumulative revenue is recognised in the period in which such changes are determined. When the total contract cost is estimated to exceed total revenues from the contract, the loss is recognised immediately.

Amounts due in respect of price escalation claims and/or variation in contract work are recognized as revenue only if the contract allows for such claims or variations and/or there is evidence that the customer has accepted it and are capable of being reliably measured.

Liquidated Damages / Penalty as per the contracts / Additional Contract Claims under the contract entered into with Vendors and Contractors are recognised at the end of the contract or as agreed upon.

Sale of Power

Revenue from sale of energy is recognized on the accrual basis in accordance with the provisions of Power Purchase Agreement. Claims for delayed payment charges and any other claims, which the company is entitled to under the Power Purchase Agreement, are accounted for in the year of acceptance.

Sale of Coal

Revenue from the sale of coal is recognized when the substantial risks and rewards of ownership are transferred to the buyer as per the respective agreements and revenue can be reliably measured.

Carbon Credits

Revenue from sale of Verified Emission Reductions (VERs) and Certified Emission Reductions (CERs) is recognized on sale of eligible credits.

Insurance Claims

Insurance claims are recognized on actual receipt / acceptance of the claim.

Management Consultancy

Income from project management / technical consultancy is recognized as per the terms of the agreement on the basis of services rendered.

Interest

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

Dividends

Revenue is recognised when the shareholders' right to receive payment is established by the Balance sheet date.

iii. Tangible Fixed Assets

Tangible assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of tangible assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. Assets under installation or under construction as at the Balance Sheet date are shown as Capital Work in Progress.

The activities necessary to prepare an asset for its intended use or sale extend to more than just physical construction of the asset. It may also include technical (DPR, environmental, planning, Land acquisition and geological study) and administrative work such as obtaining approvals before the commencement of physical construction.

The company adjusts exchange differences arising on translation/settlement of long term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

iv. Intangible Fixed Assets

Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.

v. Impairment of Assets

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

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

vi. Depreciation / Amortisation:

Tangible Assets:-

Depreciation is provided on Straight Line Method as per the provisions of schedule II of the Companies Act, 2013 or based on the useful life estimated on the technical assessment whichever has a lower life.

Leasehold land is amortised over the period of the lease.

Leasehold improvements included in "furniture and fixtures" Rs. are amortized over the period of lease or estimated useful life whichever is shorter.

Certain project related assets including temporary structures are depreciated over the respective estimated project periods. Depreciation on 'Wooden Scaffoldings' and 'Metal Scaffoldings' is provided considering the useful life of 1 Years and 3 Years respectively, which are grouped under plant and machinery.

In respect of additions / deletions to the fixed assets / leasehold improvements, depreciation is charged from the date the asset is ready to use / up to the date of deletion.

Depreciation on adjustments to the historical cost of the assets on account of reinstatement of long term borrowings in foreign currency, if any, is provided prospectively over the residual useful life of the asset.

Intangible Assets:-

Computer Software is amortised over an estimated useful life of 4 years.

vii. Investments

Investments, those are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long- term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments.

viii. Inventories

Construction materials, raw materials, Consumables, Stores and Spares are valued at lower of cost and net realizable value. Cost is determined on weighted average cost method.

Construction Work-in-progress related to project works is valued at lower of cost or net realizable value, where the outcome of the related project is estimated reliably. Cost includes cost of materials, cost of borrowings and other related overheads.

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

ix. Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest, exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other costs that an entity incurs in connection with the borrowing of funds.

x. Claims

Claims for duty drawback are accounted for on accrual basis:

i. Where there is reasonable assurance that the enterprise will comply with the conditions attached to them; and

ii. Where such benefits have been earned by the enterprise and it is reasonably certain that the ultimate collection will be made.

xi. Employee Benefits

i. Retirement benefits in the form of Provident Fund are a defend contribution scheme and the contributions are charged to the statement of profit and loss for the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective funds.

ii. Gratuity liability is defend benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

iii. Retention bonus liability is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

iv. Compensated absences are provided for on the basis of an actuarial valuation on unit credit method at the end of each financial year.

v. Actuarial gains/losses are immediately taken to statement of profit and loss and are not deferred.

vi. The amount of Non-current and Current portions of gratuity and compensated absences is classified as per the actuarial valuation at the end of each financial year.

xii. Foreign Currency Transactions

Initial Recognition

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

Conversion

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

Exchange Differences

Exchange differences arising on the settlement of monetary items, or on reporting such monetary items of the company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

Exchange difference arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to acquisition/ construction of a depreciable capital asset, are capitalized and depreciated over the balance life of the asset and in other cases are accumulated in a "Foreign Currency Monetary Item Translation Difference Account" in the company's financial statements and amortised over the balance period of such long term asset or liability, by recognition as income or expense in each of such period. For this purpose, the company treats a foreign monetary item as "long term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination.

Forward Exchange Contracts not intended for trading or speculation purposes

In case of forward exchange contracts or any other financial instruments that is in substance a forward exchange contract to hedge the foreign currency risks the premium or discount arising at the inception of the contract is amortised as expenses or income over the life of the contract. Exchange differences arising on such contracts are recognized in the period in which they arise.

Derivative Instruments

Losses(net of gains) on account of outstanding Forward exchange contracts which are on account of firm commitments and / or in respect of highly probable forecast transaction on balance sheet date are accounted on Mark to Market basis keeping in view of the principle of prudence. The same is as per ICAI announcement on derivatives.

As per the ICAI Announcement, accounting for derivative contracts, other than those covered under (AS) - 11, Accounting for the Effects of Changes in Foreign Exchange Rates are marked to market on a portfolio basis, and the net loss is charged to the income statement. Net gains are ignored.

xiii. Leases

Operating Lease

As Lessee

Assets acquired on leases where a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. Lease rentals are charged to the Statement of profit and loss on straight line basis over the lease term.

As Lessor

Assets given on leases where a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. Lease rentals are recognised in the statement of profit and loss on accrual basis.

Finance Lease

Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are recognised as finance cost in the statement of profit and loss. Lease management fees, legal charges and other initial direct costs are capitalised.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

xiv. Earnings per Share

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

The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue; share split; and reverse share split (consolidation of shares).

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

xv. Employee Stock Option Scheme

The Company has formulated an Employees Stock Option Scheme to be administered through a Trust. The scheme provides that subject to continued employment with the company, employees of the company and its subsidiaries are granted an option to acquire equity shares of the company that may be exercised within a specified period. The company follows the intrinsic value method for computing the compensation cost for all options granted which will be amortized over the vesting period. ESOP has been accounted as per the SEBI guidelines and guidance note issued by ICAI.

xvi. Taxes on Income

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

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set of current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each balance sheet date the company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

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

xvii. Minimum Alternative Tax (MAT)

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT Credit Entitlement. The company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.

xviii. Provisions, Contingent Liabilities and Contingent Assets

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

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

b) A probable outflow of resources is expected to settle the obligation; and

c) The amount of the obligation can be reliably estimated

Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in case of

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

b) A present obligation arising from past events, when no reliable estimate is possible;

c) A possible obligation arising from past events whose existence will be confirmed by the occurrence or non- occurrence of one or more uncertain future events beyond the control of the company where the probability of outflow of resources is not remote.

Contingent assets are neither recognized, nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

Liquidated Damages / Penalty as per the contracts / Additional Contract Claims under the contract entered into with Vendors and Contractors are recognised at the end of the contract or as agreed upon.

xix. Cash and Cash equivalents:

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

xx. Measurement of EBITDA

As permitted by the Schedule III to the Companies Act, 2013, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance costs and tax expense.


Mar 31, 2014

I. Use of Estimates

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

ii. Revenue Recognition

Revenue is recognized based on the nature of activity to the extent it is probable that the economic benefits will fow to the Company and revenue can be reliably measured.

The company collects service tax, sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits fowing to the company. Hence, they are excluded from revenue.

The following Specific recognition criteria must also be met before revenue is recognised.

EPC and Construction Services

For EPC and construction contracts, contract prices are either fixed or subject to price escalation clauses.

Revenues are recognised on a percentage of completion method measured on the basis of stage of completion

which is as per joint surveys and work certified by the customers.

Profit is recognised in proportion to the value of work done (measured by the stage of completion) when the outcome of the contract can be estimated reliably.

The estimates of contract cost and the revenue thereon are reviewed periodically by management and the cumulative efect of any changes in estimates in proportion to the cumulative revenue is recognised in the period in which such changes are determined. When the total contract cost is estimated to exceed total revenues from the contract, the loss is recognised immediately.

Amounts due in respect of price escalation claims and/or variation in contract work are recognized as revenue only if the contract allows for such claims or variations and/or there is evidence that the customer has accepted it and are capable of being reliably measured.

Liquidated Damages / Penalty as per the contracts / Additional Contract Claims under the contract entered into with Vendors and Contractors are recognised at the end of the contract or as agreed upon.

Sale of Power

Revenue from sale of energy is recognized on the accrual basis in accordance with the provisions of Power Purchase Agreement. Claims for delayed payment charges and any other claims, which the company is entitled to under the Power Purchase Agreement, are accounted for in the year of acceptance.

Sale of Coal

Revenue from the sale of coal is recognized when the substantial risks and rewards of ownership are transferred to the buyer as per the respective agreements and revenue can be reliably measured.

Carbon Credits

Revenue from sale of Verifed Emission Reductions (VERs) and certified Emission Reductions (CERs) is recognized on sale of eligible credits.

Insurance Claims

Insurance claims are recognized on actual receipt / acceptance of the claim.

Management Consultancy

Income from project management / technical consultancy is recognized as per the terms of the agreement on the basis of services rendered.

Interest

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

Dividends

Revenue is recognised when the shareholders'' right to receive payment is established by the Balance sheet date.

iii. Tangible Fixed Assets

Tangible assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of tangible assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. Assets under installation or under construction as at the Balance Sheet date are shown as Capital Work in Progress.

The activities necessary to prepare an asset for its intended use or sale extend to more than just physical construction of the asset. It may also include technical (DPR, environmental, planning, Land acquisition and geological study) and administrative work such as obtaining approvals before the commencement of physical construction.

The company adjusts exchange diferences arising on translation/settlement of long term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

iv. Intangible Fixed Assets

Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will fow to the enterprise and the cost of the asset can be measured reliably.

v. Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre- tax discount rate that refects current market assessments of the time value of money and risks Specific to the asset. Net selling price is the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less the costs of disposal.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

vi. Depreciation / Amortisation:

Tangible Assets:-

Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the management, or at the rates prescribed under schedule XIV of the Companies Act, 1956 whichever is higher. Assets costing Rs. 5000 or less are fully depreciated in the year of acquisition.

Leasehold land is amortised over the period of the lease.

Leasehold improvements included in "furniture and fixtures" are amortized over the period of lease or estimated useful life whichever is shorter.

Certain project related assets including temporary structures are depreciated over the respective estimated project periods. Depreciation on ''Wooden Scafoldings'' is provided at 100%, and ''Metal Scafoldings'' is written of over a period of 3 years, which are grouped under plant and machinery.

In respect of additions / deletions to the fixed assets / leasehold improvements, depreciation is charged from the date the asset is ready to use / up to the date of deletion.

Depreciation on adjustments to the historical cost of the assets on account of reinstatement of long term borrowings in foreign currency, if any, is provided prospectively over the residual useful life of the asset.

Intangible Assets:-

Computer Software is amortized over an estimated useful life of 4 years.

vii. Investments

Investments, that are readily realisable and intended to be held for not more than one year from the date on

which such investments are made, are classifed as current investments. All other investments are classifed as long- term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments.

viii. Inventories

Construction materials, raw materials, Consumables, Stores and Spares are valued at lower of cost and net realizable value. Cost is determined on weighted average cost method.

Construction Work-in-progress related to project works is valued at lower of cost or net realizable value, where the outcome of the related project is estimated reliably. Cost includes cost of materials, cost of borrowings and other related overheads.

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

ix. Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest, exchange diferences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other costs that an entity incurs in connection with the borrowing of funds.

x. Claims

Claims for duty drawback are accounted for on accrual basis:

i. Where there is reasonable assurance that the enterprise will comply with the conditions attached to them; and

ii. Where such benefits have been earned by the enterprise and it is reasonably certain that the ultimate collection will be made.

xi. Employee benefits

i. Retirement benefits in the form of Provident Fund are a Defined contribution scheme and the contributions are charged to the statement of Profit and loss for the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective funds.

ii. Gratuity liability is Defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

iii. Retention bonus liability is provided for on the basis of an actuarial valuation on projected unit credit method at the end of each financial year.

iv. Compensated absences are provided for on the basis of an actuarial valuation on unit credit method at the end of each financial year.

v. Actuarial gains/losses are immediately taken to statement of Profit and loss and are not deferred.

vi. The amount of Non-current and Current portions of gratuity, retention bonus and compensated absences is classifed as per the actuarial valuation at the end of each financial year.

xii. Foreign Currency Transactions

Initial Recognition

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

Conversion

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

Exchange Diferences

Exchange diferences arising on the settlement of monetary items, or on reporting such monetary items of the company at rates diferent from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

Exchange diference arising on reporting of long term foreign currency monetary items at rates diferent from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to acquisition / construction of a depreciable capital asset, are capitalized and depreciated over the balance life of the asset and in other cases are accumulated in a "Foreign Currency Monetary Item Translation Diference Account" in the company''s financial statements and amortised over the balance period of such long term asset or liability, by recognition as income or expense in each of such period. For this purpose, the

company treats a foreign monetary item as "long term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination.

Forward Exchange Contracts not intended for trading or speculation purposes

In case of forward exchange contracts or any other financial instruments that is in substance a forward exchange contract to hedge the foreign currency risks the premium or discount arising at the inception of the contract is amortised as expenses or income over the life of the contract. Exchange diferences arising on such contracts are recognized in the period in which they arise.

Derivative Instruments

Losses(net of gains) on account of outstanding Forward exchange contracts which are on account of firm commitments and / or in respect of highly probable forecast transaction on balance sheet date are accounted on Mark to Market basis keeping in view of the principle of prudence. The same is as per ICAI announcement on derivatives.

As per the ICAI Announcement, accounting for derivative contracts, other than those covered under (AS) - 11, Accounting for the Efects of Changes in Foreign Exchange Rates are marked to market on a portfolio basis, and the net loss is charged to the income statement. Net gains are ignored.

xiii. Leases

Operating Lease

As Lessee

Assets acquired on leases where a significant portion of the risks and rewards of ownership is retained by the lessor are classifed as operating leases. Lease rentals are charged to the Statement of Profit and loss on straight line basis over the lease term.

As Lessor

Assets given on leases where a significant portion of the risks and rewards of ownership is retained by the lessor are classifed as operating leases. Lease rentals are recognised in the statement of Profit and loss on accrual basis.

Finance Lease

Finance leases, which efectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are recognised as finance cost in the statement of

Profit and loss. Lease management fees, legal charges and other initial direct costs are capitalised.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

xiv. Earnings per Share

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

The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue; share split; and reverse share split (consolidation of shares).

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

xv. Employee Stock Option Scheme

The Company has formulated an Employees Stock Option Scheme to be administered through a Trust. The scheme provides that subject to continued employment with the company, employees of the company and its subsidiaries are granted an option to acquire equity shares of the company that may be exercised within a specified period. The company follows the intrinsic value method for computing the compensation cost for all options granted which will be amortized over the vesting period. ESOP has been accounted as per the SEBI guidelines and guidance note issued by ICAI.

xvi. Taxes on Income

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the applicable tax laws. Deferred income taxes refects the impact of current year timing diferences between taxable income and accounting income for the year and reversal of timing diferences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are ofset, if a legally enforceable right exists to set of current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufcient future taxable income will be available against which such deferred tax

assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable Profits.

At each balance sheet date the company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufcient future taxable income will be available against which such deferred tax assets can be realised.

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

xvii. Minimum Alternative Tax (MAT)

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of Profit and loss and shown as MAT Credit Entitlement. The company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the efect that company will pay normal Income Tax during the specified period.

xviii. Provisions, Contingent Liabilities and Contingent Assets

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

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

b) A probable outflow of resources is expected to settle the obligation; and

c) The amount of the obligation can be reliably estimated

Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. Reimbursement

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

Contingent liability is disclosed in case of

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

b) A present obligation arising from past events, when no reliable estimate is possible;

c) A possible obligation arising from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company where the probability of outflow of resources is not remote.

Contingent assets are neither recognized, nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

Liquidated Damages / Penalty as per the contracts / Additional Contract Claims under the contract entered into with Vendors and Contractors are recognised at the end of the contract or as agreed upon.

xix. Cash and Cash equivalents:

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

xx. Measurement of EBITDA

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


Mar 31, 2013

I. Use of Estimates

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

ii. Revenue Recognition

Revenue is recognized based on the nature of activity to the extent it is probable that the economic benefits will flow to the Company and revenue can be reliably measured.

The company collects service tax, sales taxes and value added taxes (VAT ) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue.

The following specific recognition criteria must also be met before revenue is recognised.

EPC and Construction Services

For EPC and construction contracts, contract prices are either fixed or subject to price escalation clauses.

Revenues are recognised on a percentage of completion method measured on the basis of stage of completion which is as per joint surveys and work certified by the customers.

Profit is recognised in proportion to the value of work done (measured by the stage of completion) when the outcome of the contract can be estimated reliably.

The estimates of contract cost and the revenue thereon are reviewed periodically by management and the cumulative effect of any changes in estimates in proportion to the cumulative revenue is recognised in the period in which such changes are determined. When the total contract cost is estimated to exceed total revenues from the contract, the loss is recognised immediately.

Amounts due in respect of price escalation claims and/or variation in contract work are recognized as revenue only if the contract allows for such claims or variations and/or there is evidence that the customer has accepted it and are capable of being reliably measured.

Liquidated Damages /Penalty as per the Contracts entered into with Vendors and contractors are recognised at the end of the Contract or as agreed upon.

Sale of Power

Revenue from sale of energy is recognized on the accrual basis in accordance with the provisions of Power Purchase Agreement. Claims for delayed payment charges and any other claims, which the company is entitled to under the Power Purchase Agreement, are accounted for in the year of acceptance.

Sale of Coal

Revenue from the sale of coal is recognized when the substantial risks and rewards of ownership are transferred to the buyer as per the respective agreements and revenue can be reliably measured.

Carbon Credits

Revenue from sale of Verified Emission Reductions (VERs) and Certified Emission Reductions (CERs) is recognized on sale of eligible credits.

Insurance Claims

Insurance claims are recognized on actual receipt / acceptance of the claim.

Management Consultancy

Income from project management / technical consultancy is recognized as per the terms of the agreement on the basis of services rendered.

Interest

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

Dividends

Revenue is recognised when the shareholders'' right to receive payment is established by the Balance sheet date.

iii. Tangible Fixed Assets

Tangible assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of tangible assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. Assets under installation or under construction as at the Balance Sheet date are shown as Capital Work in Progress.

The activities necessary to prepare an asset for its intended use or sale extend to more than just physical construction of the asset. It may also include technical (DPR, environmental, planning, Land acquisition and geological study) and administrative work such as obtaining approvals before the commencement of physical construction.

The company adjusts exchange differences arising on translation/settlement of long term foreign currency monetary

items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

iv. Intangible Fixed Assets

Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.

v. Impairment of Assets

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

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

vi. Depreciation / Amortisation:

Tangible Assets:-

Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the management, or at the rates prescribed under schedule XIV of the Companies Act, 1956 whichever is higher. Assets costing Rs. 5,000 or less are fully depreciated in the year of acquisition.

Leasehold land is amortised over the period of the lease.

Leasehold improvements included in "furniture and fixtures"Rs. are amortized over the period of lease or estimated useful life whichever is shorter.

Certain project related assets including temporary structures are depreciated over the respective estimated project periods. Depreciation on ‘Wooden Scaffoldings'' is provided at 100%, and ‘Metal Scaffoldings'' is written off over a period of 3 years, which are grouped under plant and machinery.

In respect of additions / deletions to the fixed assets / leasehold improvements, depreciation is charged from the date the asset is ready to use / up to the date of deletion.

Depreciation on adjustments to the historical cost of the assets on account of reinstatement of long term borrowings in foreign currency, if any, is provided prospectively over the residual useful life of the asset.

The company has used the following rates to provide depreciation on its fixed assets.

Intangible Assets:-

Computer Software is amortized over an estimated useful life of 4 years.

vii. Investments

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

viii. Inventories

Construction materials, raw materials, Consumables, Stores and Spares are valued at lower of cost and net realizable value. Cost is determined on weighted average cost method.

Construction Work-in-progress related to project works is valued at lower of cost and net realizable value whichever is lower, where the outcome of the related project is estimated reliably. Cost includes cost of materials, cost of borrowings and other related overheads.

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

ix. Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest, exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other costs that an entity incurs in connection with the borrowing of funds.

x. Claims

Claims for duty drawback are accounted for on accrual basis:

i. Where there is reasonable assurance that the enterprise will comply with the conditions attached to them; and

ii. Where such benefits have been earned by the enterprise and it is reasonably certain that the ultimate collection will be made.

xi. Employee Benefits

i. Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are charged to the statement of profit and loss for the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective funds.

ii. Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

iii. Retention bonus is other defined long term employee benefit obligation and its liability is provided for on the basis of an actuarial valuation on projected unit credit method at the end of each financial year.

iv. The Company provides short term compensated absences based on estimates. Long term compensated absences are provided for on the basis of an actuarial valuation on unit credit method at the end of each financial year.

v. Actuarial gains/losses are immediately taken to statement of profit and loss and are not deferred.

vi. The amount of Non-current and Current portions of gratuity, retention bonus and compensated absences is classified as per the actuarial valuation at the end of each financial year.

xii. Foreign Currency Transactions

Initial Recognition

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

Conversion

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

Exchange Differences

Exchange differences arising on the settlement of monetary items, or on reporting such monetary items of the company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

Exchange difference arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to acquisition / construction of a depreciable capital asset, are capitalized and depreciated over the balance life of the asset and in other cases are accumulated in a "Foreign Currency Monetary Item Translation Difference Account" in the company''s financial statements and amortised over the balance period of such long term asset or liability, by recognition as income or expense in each of such period. For this purpose, the company treats a foreign monetary item as "long term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination.

Forward Exchange Contracts not intended for trading or speculation purposes

In case of forward exchange contracts or any other financial instruments that is in substance a forward exchange contract to hedge the foreign currency risks the premium or discount arising at the inception of the contract is amortised as expenses or income over the life of the contract. Exchange differences arising on such contracts are recognized in the period in which they arise.

Derivative Instruments

Losses (net of gains) on account of outstanding Forward exchange contracts which are on account of firm commitments and / or in respect of highly probable forecast transaction on balance sheet date are accounted on Mark to Market basis keeping in view of the principle of prudence. The same is as per ICAI announcement on derivatives.

As per the ICAI Announcement, accounting for derivative contracts, other than those covered under (AS) - 11, Accounting for the Effects of Changes in Foreign Exchange Rates are marked to market on a portfolio basis, and the net loss is charged to the income statement. Net gains are ignored.

xiii. Leases

Operating Lease

As Lessee

Assets acquired on leases where a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. Lease rentals are charged to the Statement of profit and loss on straight line basis over the lease term.

As Lessor

Assets given on leases where a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. Lease rentals are recognised in the statement of profit and loss on accrual basis.

Finance Lease

Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are recognised as finance cost in the statement of profit and loss. Lease management fees, legal charges and other initial direct costs are capitalised.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

xiv. Earnings per Share

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

The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue, share split and reverse share split (consolidation of shares).

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

xv. Employee Stock Option Scheme

The Company has formulated an Employees Stock Option Scheme to be administered through a Trust. The scheme provides that subject to continued employment with the company, employees of the company and its subsidiaries are granted an option to acquire equity shares of the company that may be exercised within a specified period. The company follows the intrinsic value method for computing the compensation cost for all options granted which will be amortized over the vesting period. ESOP has been accounted as per the SEBI guidelines and guidance note issued by ICAI.

xvi. Taxes on Income

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

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each balance sheet date the company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

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

xvii. Minimum Alternative Tax (MAT)

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the

MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT Credit Entitlement. The company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.

xviii. Provisions, Contingent Liabilities and Contingent Assets

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

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

b) A probable outflow of resources is expected to settle the obligation; and

c) The amount of the obligation can be reliably estimated

Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in case of

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

b) A present obligation arising from past events, when no reliable estimate is possible;

c) A possible obligation arising from past events whose existence will be confirmed by the occurrence or non- occurrence of one or more uncertain future events beyond the control of the company where the probability of outflow of resources is not remote.

Contingent assets are neither recognized, nor disclosed.

These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Liquidated Damages /Penalty as per the Contracts entered into with contractees are provided for at the end of the Contract or as agreed upon.

xix. Cash and Cash equivalents

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

xx. Measurement of EBITDA

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


Mar 31, 2012

I. Change in Accounting Policy

Presentation and disclosure of financial statements

During the year ended March 31, 2012, the revised schedule VI notified Under the Companies Act 1956, has become applicable to the Company, for Preparation and presentation of its financial statements. The adoption Of revised schedule VI does not impact recognition and measurement Principles followed for preparation of financial statements. However, It has significant impact on presentation and disclosures made in the Financial statements. The Company has also reclassified the previous Year figures in accordance with the requirement applicable in the Current year.

ii. Use of Estimates

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

iii. Revenue Recognition

Revenue is recognised based on the nature of activity to the extent it Is probable that the economic benefits will flow to the Company and Revenue can be reliably measured.

The Company collects service tax, sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not Economic benefits flowing to the Company. Hence, they are excluded from Revenue.

The following specific recognition criteria must also be met before Revenue is recognised.

EPC and Construction Services

For EPC and construction contracts, contract prices are either fixed or Subject to price escalation clauses.

Revenues are recognised on a percentage of completion method measured On the basis of stage of completion which is as per joint surveys and Work certified by the customers.

Profit is recognised in proportion to the value of work done (measured By the stage of completion) when the outcome of the contract can be Estimated reliably.

The estimates of contract cost and the revenue thereon are reviewed Periodically by management and the cumulative effect of any changes in Estimates in proportion to the cumulative revenue is recognised in the Period in which such changes are determined. When the total contract Cost is estimated to exceed total revenues from the contract, the loss Is recognised immediately.

Amounts due in respect of price escalation claims and/ or variation in Contract work are recognised as revenue only if the contract allows for Such claims or variations and/or there is evidence that the customer Has accepted it and are capable of being reliably measured.

Sale of Power

Revenue from sale of energy is recognised on the accrual basis in Accordance with the provisions of Power Purchase Agreement. Claims for Delayed payment charges and any other claims, which the Company is Entitled to under the Power Purchase Agreement, are accounted for in The year of acceptance.

Sale of Coal

Revenue from the sale of coal is recognised when the substantial risks And rewards of ownership are transferred to the buyer as per the Respective agreements and revenue can be reliably measured.

Carbon Credits

Revenue from sale of Verified Emission Reductions (VERs) and Certified Emission Reductions (CERs) is recognised on sale of eligible credits.

Insurance Claims

Insurance claims are recognised on actual receipt / acceptance of the Claim.

Management Consultancy

Income from project management / technical consultancy is recognised as Per the terms of the agreement on the basis of services rendered.

Interest

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

Dividends

Revenue is recognised when the shareholders' right to receive payment Is established by the Balance sheet date.

iv. Tangible Fixed Assets

Tangible assets are stated at cost, less accumulated depreciation and Impairment losses if any. Cost comprises the purchase price and any Attributable cost of bringing the asset to its working condition for Its intended use. Borrowing costs relating to acquisition of tangible Assets which takes substantial period of time to get ready for its Intended use are also included to the extent they relate to the period Till such assets are ready to be put to use. Assets under installation Or under construction as at the Balance Sheet date are shown as Capital Work in Progress.

The Company adjusts exchange differences arising on Translation/settlement of long term foreign currency monetary items Pertaining to the acquisition of a depreciable asset to the cost of the Asset and depreciates the same over the remaining life of the asset.

V. Intangible Fixed Assets

Intangible assets are recognised when it is probable that the future Economic benefits that are attributable to the asset will flow to the Enterprise and the cost of the asset can be measured reliably.

Vi. Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date If there is any indication of impairment based on internal / external Factors. An impairment loss is recognised wherever the carrying amount Of an asset exceeds its recoverable amount. The recoverable amount is The greater of the asset's net selling price and value in use. In Assessing value in use, the estimated future cash flows are discounted To their present value using a pre-tax discount rate that reflects Current market assessments of the time value of money and risks Specific to the asset. Net selling price is the amount obtainable from The sale of an asset in an arm's length transaction between Knowledgeable, willing parties, less the costs of disposal.

After impairment, depreciation is provided on the revised carrying Amount of the asset over its remaining useful life.

Vii. Depreciation/Amortisation:

Tangible Assets:-

Depreciation is provided using the Straight Line Method as per the Useful lives of the assets estimated by the management, or at the rates Prescribed under schedule XIV of the Companies Act, 1956 whichever is Higher. Assets costing Rs. 5,000 or less are fully depreciated in the Year of acquisition.

Leasehold land is amortised over the period of the lease.

Leasehold improvements included in "furniture and fixtures" are Amortised over the period of lease or estimated useful life whichever Is shorter.

Certain project related assets including temporary structures are Depreciated over the respective estimated project periods. Depreciation On 'Wooden Scaffoldings' is provided at 100%, and Metal Scaffoldings' Is written off over a period of 3 years, which are grouped under plant And machinery.

In respect of additions / deletions to the fixed assets / leasehold Improvements, depreciation is charged from the date the asset is ready To use / up to the date of deletion.

Depreciation on adjustments to the historical cost of the assets on Account of reinstatement of long term borrowings in foreign currency, If any, is provided prospectively over the residual useful life of the Asset.

The Company has used the following rates to provide depreciation on its Fixed assets.

Intangible Assets:-

Computer Software is amortised over an estimated useful life of 4 Years.

Viii. Investments

Investments,that are readily realisable and intended to be held for not More than one year from the date on which such investments are made, Are classified as current investments. All other investments are Classified as long-term investments. Current investments are carried at Lower of cost and fair value determined on an individual investment Basis. Long-term investments are carried at cost. However, provision For diminution in value is made to recognise a decline other than Temporary in the value of the investments.

ix. Inventories

Construction materials, raw materials, Consumables, Stores and Spares And project / construction work-in- progress are valued at lower of Cost and net realisable value.

Cost is determined on weighted average cost method.

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

Construction Work-in-progress related to project works is valued at Cost or estimated net realisable value whichever is lower, till such Time the outcome of the related project is ascertained reliably and at Contractual rates thereafter. Cost includes cost of materials, cost of Borrowings to the extent it relates to specific project and other Related project overheads.

X. Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction Or production of an asset that necessarily takes a substantial period Of time to get ready for its intended use or sale are capitalised as Part of the cost of the respective asset. All other borrowing costs are Expensed in the period they occur. Borrowing costs consist of interest, Exchange differences arising from foreign currency borrowings to the Extent they are regarded as an adjustment to the interest cost and Other costs that an entity incurs in connection with the borrowing of Funds.

Xi. Claims

Claims for duty drawback are accounted for on accrual basis:

i. Where there is reasonable assurance that the enterprise will comply With the conditions attached to them; and

ii. Where such benefits have been earned by the enterprise and it is Reasonably certain that the ultimate collection will be made.

Xii. Employee Benefits

i. Retirement benefits in the form of Provident Fund are a defined Contribution scheme and the contributions are charged to the statement Of profit and loss for the year when the contributions to the Respective funds are due. There are no other obligations other than the Contribution payable to the respective funds.

ii. Gratuity liability is defined benefit obligation and is provided For on the basis of an actuarial valuation on projected unit credit Method made at the end of each financial year.

iii. Retention bonus is other defined long term employee benefit Obligation and its liability is provided for on the basis of an Actuarial valuation on projected unit credit method at the end of each Financial year.

iv. The Company provides short term compensated absences based on Estimates. Long term compensated absences are provided for on the basis Of an actuarial valuation on unit credit method at the end of each Financial year.

V. Actuarial gains/losses are immediately taken to statement of profit And loss and are not deferred.

Vi. The amount of Non-current and Current portions of gratuity, Retention bonus and compensated absences is classified as per the Actuarial valuation at the end of each financial year.

Xiii. Foreign Currency Transactions

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, By applying to the foreign currency amount the exchange rate between The reporting currency and the foreign currency at the date of the Transaction.

Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost Denominated in a foreign currency are reported using the exchange rate At the date of the transaction; and non-monetary items which are Carried at fair value or other similar valuation denominated in a Foreign currency are reported using the exchange rates that existed When the values were determined.

Exchange Differences

Exchange differences arising on the settlement of monetary items, or on Reporting such monetary items of the Company at rates different from Those at which they were initially recorded during the year, or Reported in previous financial statements, are recognised as income or As expenses in the year in which they arise.

Exchange difference arising on reporting of long term foreign currency Monetary items at rates different from those at which they were Initially recorded during the period, or reported in previous financial Statements, in so far as they relate to acquisition/ construction of a Depreciable capital asset, are capitalised and depreciated over the Balance life of the asset and in other cases are accumulated in a "Foreign Currency Monetary Item Translation Difference Account" in the Company's financial statements and amortised over the balance period of Such long term asset or liability, by recognition as income or expense In each of such period. For this purpose, the Company treats a foreign Monetary item as "long term foreign currency monetary item", if it has A term of 12 months or more at the date of its origination.

Forward Exchange Contracts not intended for trading or speculation Purposes

In case of forward exchange contracts or any other financial Instruments that is in substance a forward exchange contract to hedge The foreign currency risks the premium or discount arising at the Inception of the contract is amortised as expenses or income over the Life of the contract. Exchange differences arising on such contracts Are recognised in the period in which they arise.

Derivative Instruments

Losses net of gains) on account of outstanding Forward exchange Contracts which are on account of firm commitments and / or in respect Of highly probable forecast transaction on balance sheet date are Accounted on Mark to Market basis keeping in view of the principle of Prudence. The same is as per ICAI announcement on derivatives.

As per the ICAI Announcement, accounting for derivative contracts, Other than those covered under (AS) - 11, Accounting for the Effects of Changes in Foreign Exchange Rates are marked to market on a portfolio Basis, and the net loss is charged to the income statement. Net gains Are ignored.

Xiv. Leases

Operating Lease

As Lessee

Assets acquired on leases where a significant portion of the risks and Rewards of ownership is retained by the lessor are classified as Operating leases. Lease rentals are charged to the Statement of profit And loss on straight line basis over the lease term.

As Lessor

Assets given on leases where a significant portion of the risks and Rewards of ownership is retained by the lessor are classified as Operating leases. Lease rentals are recognised in the statement of Profit and loss on accrual basis.

Finance Lease

Finance leases, which effectively transfer to the Company substantially All the risks and benefits incidental to ownership of the leased item, Are capitalised at the lower of the fair value and present value of the Minimum lease payments at the inception of the lease term and disclosed As leased assets. Lease payments are apportioned between the finance Charges and reduction of the lease liability based on the implicit rate Of return. Finance charges are recognised as finance costs in the Statement of profit and loss. Lease management fees, legal charges and Other initial direct costs are capitalised.

If there is no reasonable certainty that the Company will obtain the Ownership by the end of the lease term, capitalised leased assets are Depreciated over the shorter of the estimated useful life of the asset Or the lease term.

Xv. Earnings per Share

Basic earnings per share are calculated by dividing the net profit or Loss for the period attributable to equity shareholders by the weighted Average number of equity shares outstanding during the period.

The weighted average number of equity shares outstanding during the Period is adjusted for events of bonus issue; share split; and reverse Share split (consolidation of shares).

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

Xvi. Employee Stock Option Scheme

The Company has formulated an Employees Stock Option Scheme to be Administered through a Trust. The scheme provides that subject to Continued employment with the Company, employees of the Company and its Subsidiaries are granted an option to acquire equity shares of the Company that may be exercised within a specified period. The Company Follows the intrinsic value method for computing the compensation cost For all options granted which will be amortised over the vesting Period. ESOP has been accounted as per the SEBI guidelines and guidance Note issued by ICAI.

Xvii. Taxes on Income

Tax expense comprises of current and deferred tax. Current income tax Is measured at the amount expected to be paid to the tax authorities in Accordance with the applicable tax laws. Deferred income taxes reflects The impact of current year timing differences between taxable income And accounting income for the year and reversal of timing differences Of earlier years.

Deferred tax is measured based on the tax rates and the tax laws Enacted or substantively enacted at the balance sheet date. Deferred Tax assets and deferred tax liabilities are offset, if a legally Enforceable right exists to set off current tax assets against current Tax liabilities and the deferred tax assets and deferred tax Liabilities relate to the taxes on income levied by same governing Taxation laws. Deferred tax assets are recognised only to the extent That there is reasonable certainty that sufficient future taxable Income will be available against which such deferred tax assets can be Realised. In situations where the Company has unabsorbed depreciation Or carry forward tax losses, all deferred tax assets are recognised Only if there is virtual certainty supported by convincing evidence That they can be realised against future taxable profits.

At each balance sheet date the Company re-assesses unrecognised Deferred tax assets. It recognises unrecognised deferred tax assets to The extent that it has become reasonably certain or virtually certain, As the case may be, that sufficient future taxable income will be Available against which such deferred tax assets can be realised.

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

Xviii. Minimum Alternate Tax

MAT credit is recognised as an asset only when and to the extent there Is convincing evidence that the Company will pay normal income tax During the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognised as an Asset in accordance with the recommendations contained in Guidance Note Issued by the Institute of Chartered Accountants of India, the said Asset is created byway of a credit to the statement of profit and loss And shown as MAT Credit Entitlement. The Company reviews the same at Each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence To the effect that Company will pay normal Income Tax during the Specified period.

Xix. Provisions, Contingent Liabilities and Contingent Assets

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

A) The Company has a present obligation as a result of past event,

B) A probable outflow of resources is expected to settle the Obligation; and

C) The amount of the obligation can be reliably estimated

Provisions are not discounted to their present value and are determined Based on the best estimate required to settle the obligation at the Reporting date. Reimbursement expected in respect of expenditure Required to settle a provision is recognised only when it is virtually Certain that the reimbursement will be received.

Contingent liability is disclosed in case of

A) A present obligation arising from past events, when it is not Probable that an outflow of resources will be required to settle the Obligation;

B) A present obligation arising from past events, when no reliable Estimate is possible;

C) A possible obligation arising from past events whose existence will Be confirmed by the occurrence or non-occurrence of one or more Uncertain future events beyond the control of the Company where the Probability of outflow of resources is not remote.

Contingent assets are neither recognised, nor disclosed.

These estimates are reviewed at each reporting date and adjusted to Reflect the current best estimates.

Xx. Cash and Cash equivalents:

Cash and cash equivalents comprise cash at bank and in hand and Short-term investments with an original maturity of three months or Less.

Xxi. Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present earnings before Interest, tax, depreciation and amortisation (EBITDA) as a separate Line item on the face of the statement of profit and loss. The Company Measures EBITDA on the basis of profit/ (loss) from continuing Operations. In its measurement, the Company does not include Depreciation and amortisation expense, finance costs and tax expense.

In respect of the State Plans (Employee State Insurance), an amount of 1.70 lakhs (Previous year : 3.35 lakhs) has been recognised as Expenditure in the Statement of Profit and Loss

Other Employee Benefits

During the year the Company has provided retention bonus of Rs. 2,509.36 Lakhs (Previous Year: Rs. 1,055.59 lakhs). The provision for compensated Absences as per actuarial valuation as at March 31, 2012 isRs. 3,478.57 Lakhs (March 31, 2011 isRs. 3,474.53 lakhs)

 
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