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Accounting Policies of Madhucon Projects Ltd. Company

Mar 31, 2015

Company Overview:

Madhucon Projects Ltd (MPL) or "the Company" is an integrated construction, Infrastructure development and management Company head quartered in Hyderabad, India.

The Company is surging ahead with presence in multiple sectors of construction and infrastructure projects such as Transportation, Irrigation, Water resources infrastructures, railways,Engineering ,Procurement & Construction (EPC),Turnkey projects,developments of smart cities,and properties, in India.Completing the projects with high quality workmanshipand commitment to excellencemade the Company a leader in the industry..The Company is best in innovation, creativity and technological mastery, delivering top-quality work,head of schedules, in all sectors.

A majority of the development projects of the Company are based on Public-Private Partnerships (PPP) and operated by separate Special Purpose Vehicles (SPV)

1.1. Basis of accounting and preparation of financial statements:

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified under section 133 of the Companies Act 2013 ("Act"), read with Rule 7 of the Companies (Accounts) Rules 2014 and the relevant provisions of the Act (to the extent notified). The financial statements have been prepared under the historical cost convention on accrual basis. The accounting policies adopted in the preparation of financial statements are consistent with those followed in the previous years unless otherwise stated separately herein below.

1.2. Use of Estimates:

Management makes estimates, technical and other assumptions regarding the amounts of income and expense in accordance with Indian GAAP in the preparation of its financialstatements. Difference between the actual results and estimates are recognized in the period in which the results are known/materialize.

1.3. Inventories:

a) Raw Materials ,construction materials and stores & spares are valued at weighted average cost or underCost excludes refundable duties and taxes.

b) Work-in-progress is valued on the basis of the actual expenditure incurred in the case of all incomplete contracts.

1.4. Fixed Assets:

Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment losses if any. The cost of fixed assets includes interest on borrowings attributableto acquisition of qualifying fixed assetsupto the date the asset is ready for its intended use and other incidental expenses incurred upto that date.

1.5. Depreciation and Amortization:

Depreciation is provided for in the accounts on Straight-Line method in accordance with the Schedule II of the Companies Act, 2013, based on the useful life estimated on the technical assessment as in force and proportionate depreciation are charged for additions/deletions during the year. 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.

1.6. Impairment of Assets:

The carrying amount of assets other than inventories is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the assets is estimated. The recoverable amount is greater thanthe asset's net selling price and value in use which is determined based on the estimated future cash flowdiscounted to their present values.An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

1.7. Investments:

Investments are classified as long term and current investments.Long Term Investments are carried at cost less provision for other than temporary diminution, if any in value of such investments. Current investments are carried at lower of cost and fair value.

1.8. Employee Benefits:

Provident Fund:

Provident fund is defined Contribution scheme and contributions are charged to profit and loss account of the year when the contributions to the respective funds are due.Other retirement benefits such as Gratuity, leave encashment etc., are recognized on basis of an Actuarial Valuation.

1.9. Revenue Recognition:

(i) Accounting of Construction Contracts:

The Company follows the percentage completion method, based on the stage of completion at the balance sheet date, taking into account the contractual price and revision thereto by estimating total revenue and total cost till completion of the contract and the profit so determined has been accounted in proportion to the percentage of the actual work done. Future expected loss, if any, is recognized as expenditure.

Revenue is recognized as follows:

a) In case of Item rate contracts on the basis of physical measurement of work actually completed at the balance sheet date.

b) In case of Lump sum contracts, revenue is recognized on the completion of milestones as specified in the contract or as identified by the management Foreseeable losses are accounted for as and when they are determined except to the extent they are expected to be recovered through Claims presented or to be presented to the customer or in arbitration.

ii) Accounting of Supply Contracts-Sale of goods:

Revenue from supply contract is recognized when the substantial risk and rewards of ownership is transferred to the buyer

a) Accounting Policy for Claims:

Claims are accounted as income in the year of receipt of arbitration award or acceptance by client or evidence of acceptance received.

b) Interest:

Revenue is recognized on a time proportionate basis taking into account theamountoutstandingand the rate applicable.

1.10. Income Tax:

a) Current Tax:

Provision for Current Tax is made based on taxable income computed for the year under the Income Tax Act 1961

b) Deferred Taxes: Deferred tax is accounted for by computing the tax effect of timing differences which arise during the year and reverse in subsequent periods.Deferred tax assets are recognized and carried forward only to the extent that there is a certainty that sufficient future taxable income will be available against which such Deferred Tax Assets can be realized.

1.11. Borrowing Costs:

Borrowing costs that are attributable to the acquisition and construction of qualifying asset are capitalized as a part of cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that requires substantial period of the time to get ready for its intended use. Other borrowing costs are charged to statement of Profit & Loss as incurred.

1.12. Accounting for Joint Venture Contracts

a) Contracts executed in Joint Venture under work sharing arrangement(consortium)are accounted in accordance with the Accounting policy followed by theCompany as thatof an independentcontract to the extent work is executed.

b) In respect of contracts executed in Integrated Joint Ventures under profit sharingarrangement (assessed as AOP under Income tax laws), the services rendered to the Joint Ventures are accounted as income on accrual basis. The profit/loss is accounted for, as and when it is determined by the Joint Venture and the net investment in the Joint Venture is reflected as investments, loans & advances or current liabilities.

1.13. Foreign Currency Translation:

a) Transactions denominated in foreign currency are normally recorded at theexchange rate prevailing on thedate of the transaction.

b) Any income or expense on account of exchange difference either on settlement or on transaction is recognized in the profit and loss account. In case of fixed assets they are adjusted to the carrying cost of such assets. Foreign Currency Monetary Items are re- translated at the exchange rate prevailingon the reporting date.

c) Exchange differences arising on the settlement of monetary items or on reporting company's monetary items 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 except those relating to liability for acquiring fixed assets from outside India which are capitalized and those arising from investments in non-integral operations.

1.14. Provisions, Contingent Liabilities & Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will bean outflow of resources. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources.Contingent assets are neither recognized nor disclosed in thefinancial statements.

1.15. Leases:

The companies leasing arrangements are mainly in respect of operating leases for premises and construction equipment. The leasing arrangements range from 11 months to 10 years, generally and are usually cancellable / revocable by mutual consent an agreed terms. The aggregate lease rent same payable are charged as rent / hire in the statement of profit and loss account.

1.16. Earnings Per Share:

The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS 20), Earnings Per Share notified by the Companies (Accounting Standards) Rules, 2006. Basic earnings per equity share is computed by dividing the net profit for the year attributable to the Equity Shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit for the year adjusted for the effects of dilutive potential equity shares, attributable to the Equity Shareholders by the weighted average number of the equity shares and dilutive potential equity shares outstanding during the year except where the results are anti-dilutive.

1.17. Cash Flow Statement:

Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short- term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.


Mar 31, 2014

A. Basis of Accounting and preparation of financial statements:

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in india (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on accrual basis. The accounting policies have been consistently applied by the company and are same as used in the previous year.

B. Use of Estimates:

Management makes estimates, technical and other assumptions regarding the amounts of income and expense in accordance with Indian GAAP in the preparation of its financial statements. Difference between the actual results and estimates are recognized in the period in which (hey are determined.

C. Inventories:

a) The stock of stores, embedded goods and fuel are valued at cost or net realizable value whichever is lower.

b) Work-in-progress is valued on the basis of the actual expenditure incurred in the case of all incomplete contracts.

D. Fixed Assets:

Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment losses if any. The cost of acquisition consists of purchase price and incidental costs if any to bring the asset to its working condition or for their intended use. Borrowing costs relating to acquisition of tangible assets which takes substantial period of time to get the asset 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.

E. Depreciation and Amortization:

Depreciation is provided for in the accounts on Straight-Line method in accordance with the Schedule XIV of the Companies Act, 1956 as in force and proportionate depreciation are charged for additions/deletions during the year. 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.

F. Impairment of Assets:

The carrying amount of assets other than inventories is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the assets is estimated. The recoverable amount is greater than the asset''s net selling price and value in use which is determined based on the estimated future cash flow discounted to their present values. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount,

G. Investments:

Investments, which are readily realizable 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 in the financial statements at lower of cost or fair value determined on an individual investment basis. Long-term Investments are carried at cost; provision for diminution in value is made to recognize a decline other than temporary in the value of investments.

H. Employee Benefits:

Provident Fund:

Provident fund is defined Contribution scheme and contributions are charged to profit and loss account of the year when the contributions to the respective funds are due.

Other retirement benefits such as Gratuity, leave encashment etc., are recognized on cash basis,

I. Revenue Recognition:

i) Accounting of Construction Contracts:

The Company follows the percentage completion method, based on the stage of completion at the balance sheet date, taking into account the contractual price and revision thereto by estimating total revenue and total cost till completion of the contract and the profit so determined has been accounted in proportion to the percentage of the actual work done. Future expected loss, if any, is recognized as expenditure.

Revenue is recognized as follows:

a) In case of Item rate contracts on the basis of physical measurement of work actually completed at the balance sheet date.

b) In case of Lump sum contracts, revenue is recognized on the completion of milestones as specified in the contract or as identified by the management Foreseeable losses are accounted for as and when they are determined except to the extent they are expected to be recovered through Claims presented or to be presented to the customer or in arbitration,

ii) Accounting of Supply Contracts-Sale of goods:

Revenue from supply contract is recognized when the substantial risk and rewards of ownership is transferred to the buyer

a) Accounting Policy for Claims:

Claims are accounted as income in the year of receipt of arbitration award or acceptance by client or evidence of acceptance received.

b) Interest:

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

J. Income Tax;

a) Current Tax:

Tax expense comprises both current and deferred taxes. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act 1961. 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.

b) Deferred Taxes:

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets are recognized on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax assets can be realized against future taxable profits. Unrecognized deferred tax of earlier years are re-assessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized.

K. Borrowing Costs:

Borrowing costs that are attributable to the acquisition and construction of qualifying asset are capitalized as a part of cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that requires substantial period of the time to get ready for its intended use. Other borrowing costs are charged to statement of Profit & Loss as incurred,

L. Accounting for Joint Venture Contracts

a) Contracts executed in Joint Venture under work sharing arrangement (consortium)are accounted in accordance with the Accounting policy followed by the Company as that of an independent contract to the extent work is executed.

b) In respect of contracts executed in Integrated Joint Ventures under profit sharing arrangement (assessed as AOP under income tax laws), the services rendered to the Joint Ventures are accounted as income on accrual basis. The profit/loss is accounted for, as and when it is determined by the Joint Venture and the net investment in the Joint Venture is reflected as investments, loans & advances or current liabilities.

M. Foreign Currency Translation:

a) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing on the date of the transaction,

b) Any income or expense on account of exchange difference either on settlement or on transaction is recognized in the profit and loss account. In case of fixed assets they are adjusted to the carrying cost of such assets. Foreign Currency Monetary Items are re- translated at the exchange rate prevailing on the reporting date.

c) Exchange differences arising on the settlement of monetary items or on reporting company''s monetary items 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 except those relating to liability for acquiring fixed assets from outside India which are capitalized and those arising from investments in non-integral operations.

N. Provisions, Contingent Liabilities & Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.

o. Leases:

The companies leasing arrangements are mainly in respect of operating leases for premises and construction equipment. The leasing arrangements range from 11 months to 10 years, generally and are usually cancellable / revocable by mutual consent an agreed terms. The aggregate lease rent same payable are charged as rent / hire in the statement of profit and loss account.


Mar 31, 2013

A. Basis of Accounting:

The Company is maintaining its books of accounts on accrual basis. Management makes estimates and technical and other assumptions regarding the amounts of income and expenses in accordance with Indian GAAP in the preparation of its financial statements. Difference between the actual results and estimates are recognized in the period in which they are determined.

B. Inventories:

a) The stock of stores, embedded goods and fuel are valued at cost (weighted average basis) or net realizable value whichever is lower.

b) Work-in-progress is valued on the basis of the actual expenditure incurred in the case of all incomplete contracts.

C. Fixed Assefs:

Fixed assets are stated at cost of acquisition less accumulated depreciation. The cost of acquisition is inclusive of freight, insurance, duties, levies and all incidentals attributable to bringing the asset to its working condition for their intended use.

D. Depreciation and Amortization:

Depreciation is provided for in the accounts on Straight-Line method in accordance with the Schedule XIV of the Companies Act, 1956 as in force and proportionate depreciation are charged for additions/deletions during the year.

E. Impairment of Assets:

The carrying amount of assets other than inventories is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the assets is estimated. The recoverable amount is greater than of the asset''s net selling price and value In use which is determined based on the estimated future cash flow discounted to their present values. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

F. Investments:

Investments, which are readily realizable 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 in the financial statements at lower of cost or fair value determined on an individual investments basis. Long-term Investments are carried at cost; provision for diminution in value is made to recognize a decline other than temporary in the value of investments.

G. Employee Benefits:

Provident Fund:

Provident fund is defined-Contribution scherne and contributions are charged to profit and loss account of the year when the contributions to the respective funds are due. Other retirement benefits such as Gratuity, leave encashment etc., are recognized on cash basis.

H. Revenue Recognition:

I) Accounting of Construction Contracts:

The Company follows the percentage completion method, based on the stage of completion at the balance sheet date, taking into account the contractual price and '' - revision thereto by estimating tofal revenue and total cost till completion of the contract and the profit so determined has been accounted for proportionate to the percentage of the actual work done. Future expected loss, if any, is recognized as expenditure.

Revenue is.recognized as follows:

a) In case of Item rate contracts on the basis of physical measurement of work actually completed at the balance sheet date.

b) In case of Lump sum contracts, revenue is recognized on the completion of milestones as specified in the contract-or as identified by the management Foreseeable losses are

* '' accounted for as and when'' they are determined except to the extent they are expected to be recovered through Claims presented or to be presented to the customer or in arbitration.

ii) Accounting of Supply Contracts-Sale of goods:

Revenue from supply contract is recognized when the substantial risk and rewards of ownership is transferred to the buyer

a) Accounting Policy for Claims:

Claims are accounted as income in the year of receipt''of arbitration award or acceptance by client or evidence of acceptance received.

b) Interest:

Revenueis recognized on a time proportionate basis taking into account the amount outstanding.and the rate applicable.

I. Income Tax: ¦

a) Current Tax:-

Tax expense comprises both current and deferred taxes. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act 196V. 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.

b) Deferred Taxes:

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets are recognized on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax assets can be realized against future taxable profits. Unrecognized deferred tax of earlier years are re-assessed ard recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized.

J. Borrowing Costs:

Borrowing costs that are attributable to the acquisition and construction of qualifying asset are capitalized as a part of cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that requires substantial period of the time to get ready for its intended use. Other borrowing costs are charged to statement of Profit & Loss as incurred.

K, Accounting for Joint Venture Contracts

(a) Contracts executed in Joint Venture under work sharing arrangement (consortium)are accounted in accordance with the Accounting policy followed by the Company as that of an independent contract to the extent work is executed.

b) In respect of contracts executed in Integrated Joint Ventures under profit sharing arrangement [assessed as AOP under Income tax laws), the services rendered to the Joint Ventures are accounted as income on accrual basis. The profit/loss is accounted for, as and when it is determined by the Joint Venture and the net investment in the Joint Venture is reflected as investments, loans & advances or current liabilities.

L Foreign Currency Translation:

a) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of the transaction.

b) Any income or expense on account of exchange difference either on settlement or on transaction is recognized in the profit and loss account except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying

'' cost of such assets.

c) Exchange differences arising on the settlement of monetary items or on reporting company''s monetary items 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 except those relating to liability for acquiring fixed assets from outside India which are capitalized and those arising from investments in non-integral operations.

M. Provisions, Contingent Liabilities & Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.

N. Leases:

The companies leasing arrangements are mainly in respect of operating leases for premises and construction equipment. The leasing arrangements range from 11 months to 10 years, generally and are usually cancellable / revocable by mutual consent an agreed terms. The aggregate lease rent same payable are charged as rent / hire in the statement of profit and loss account.


Mar 31, 2012

1. Basis of Accounting:

The Company is maintaining its books of accounts on accrual basis, Management makes estimates and technical and other assumptions regarding the amounts of income and expenses in accordance with Indian GAAP in the preparation of its financial statements. Difference between the actual results and estimates are recognized in the period in which they are determined.

During the year ended March 31, 2012, the revised schedule VI notified under the Companies Act, 1956, has become applicable to the company, for the preparation and presentation of its financial statements. The adoption of revised schedule VI does not impact on recognition and measurement of 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 requirements applicable in the current year.

2. Inventories:

a) The stock of stores, embedded goods and fuel are valued at cost (weighted average basis) or net realizable value whichever is lower.

b) Work-in-progress is valued on the basis of the actual expenditure incurred in the case of all incomplete contracts.

3. Fixed Assets:

Fixed assets are stated at cost of acquisition less accumulation of depreciation. The cost of acquisition is inclusive of freight, insurance, duties, levies and all incidentals attributable to bringing the asset to its working condition for their intended use.

4. Depreciation and Amortization

Depreciation is provided for in the accounts on Straight-Line method in accordance with the Schedule XIV of the Companies Act, 1956 as in force and proportionate depreciation are charged for additions/deletions during the year.

5. Impairment of Assets:

The carrying amount of assets other than inventories is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the assets is estimated. The recoverable amount is greater of the asset's net selling price and value in use which is determined based on the estimated future cash flow discounted to their present values. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

6. Investments:

Investments, which are readily realizable 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 in the financial statements at lower of cost or fair value determined on an individual investments basis. Long-term investments are carried at cost; provision for diminution in value is made to recognize a decline other than temporary in the value of investments.

7. Loan Funds

Working Capital, Short term Loan facilities:

Funded and Non fund based facilities from Consortium of banks are secured by

(a) Paripassu first charge on Current assets of the Company.

(b) Paripassu second charge on unencumbered movable fixed Assets of the Company.

ECB Loan:

Facility is secured by exclusive charge on equipment purchase.

8. Employee Benefits

a) Provident Fund:

Provident fund is defined Contribution scheme and contributions are charged to the statement of profit and loss of the year when the contributions to the respective funds are due.

Other retirement benefits such as Gratuity, leave encashment etc., are recognized on cash basis.

9. Revenue recognition:

i) Accounting of construction contracts

The Company follows the percentage completion method, based on the stage of completion at the balance sheet date, taking into account the contractual price and revision thereto by estimating total revenue and total cost till completion of the contract and the profit so determined has been accounted for proportionate to the percentage of the actual work done. Future expected loss, if any, is recognized as expenditure.

Revenue is recognized as follows:

a) In case of Item rate contracts on the basis of physical measurement of work actually completed at the balance sheet date.

b) In case of Lump sum contracts, revenue is recognized on the completion of milestones as specified in the contract or as identified by the management foreseeable losses are accounted for as and when they are determined except to the extent they are expected to be recovered through Claims presented or to be presented to the customer or in arbitration.

a) Accounting Policy for Claims

Claims are accounted as income in the year of receipt of arbitration award or acceptance by client or evidence of acceptance received.

b) Interest:

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

c) Contract Income:

Revenue from construction contracts are recognized by reference to the percentage of completion of the contract activity. The stage of completion is determined by survey of work performed and /or on completion of a physical proportion of the contract work, as the case may be, and acknowledged by the contractee. Future expected loss, if any, is recognized as expenditure.

The work completed, which was not billed, is treated as Work-in-Progress and is valued on the basis of actual expenditure incurred as per the books of Account. In respect of escalation and other claims revenue is recognized on receipt basis.

10. Income Tax:

Tax expense comprises both current and deferred taxes. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred 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 are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets are recognized on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax assets can be realized against future taxable profits. Unrecognized deferred tax of earlier years are re-assessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized.

11. Borrowing Costs:

Borrowing costs that are attributable to the acquisition and construction of qualifying asset are capitalized as a part of cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that requires substantial period of the time to get ready for its intended use. Other borrowing costs are charged to statement of Profit & Loss as incurred.

12. Accounting for Joint Venture Contracts

(a) Contracts executed in Joint Venture under work sharing arrangement (consortium) are accounted in accordance with the Accounting policy followed by the Company as that of an independent contract to the extent work is executed.

(b) In respect of contracts executed in Integrated Joint Ventures under profit sharing arrangement (assessed as AOP under Income tax laws), the services rendered to the Joint Ventures are accounted as income on accrual basis. The profit / loss is accounted for, as and when it is determined by the Joint Venture and the net investment in the Joint Venture is reflected as investments, loans & advances or current liabilities.

13. Foreign Currency Translation:

a) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of the transaction.

b) Any income or expense on account of exchange difference either on settlement or on transaction is recognized in the profit and loss account except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

c) Exchange differences arising on the settlement of monetary items or on reporting Company's monetary items 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 except those relating to liability for acquiring fixed assets from outside India which are capitalized and those arising from investments in non-integral operations.

14. Provisions, Contingent Liabilities & Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligations a result of past events and it is probable that there will be an outflow of resources. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not; require an out flow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.

15. Leases

Lease rentals in respect of assets acquired under operating lease are charged to Statement of profit and loss.


Mar 31, 2011

1. Basis of preparation:

The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies applied by the company are consistent with those used in the previous years.

2. Significant accounting judgments and estimates:

Judgments and estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, equal to the related actual results.

3. Inventories:

a) The stock of stores and embedded goods and fuel is valued at cost (weighted average basis) or net realizable value whichever is lower.

b) Work-in-progress is valued on the basis of the actual expenditure incurred in the case of all incomplete contracts.

4. Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation. Cost comprises the cost of acquisition and any attributable cost of bringing the asset to its working condition for its intended use.

5. Depreciation:

Depreciation is provided for in the Accounts on Straight-Line method in accordance with the Schedule XIV of the Companies Act, 1956 as in force and proportionate depreciation are charged for additions/deletions during the year.

6. Impairment of Assets:

The carrying amount of assets other than inventories is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the assets is estimated. The recoverable amount is greater of the asset's net selling price and value in use which is determined based on the estimated future cash flow discounted to their present values. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

7. Investments:

Long term investments are carried at cost. However, wherever necessary provision for diminution in value of investment is made to recognize the decline other than temporary in the value of the investments.

8. Loan Funds

(i) Working Capital, Short Term Loan Facilities:

Funded and Non fund based facilities from Consortium of banks are secured by

(a) Pari passu first charge on Current Assets of the Company.

(b) Pari passu second charge on unencumbered movable Fixed Assets of the company.

(ii) ECB Loan:

Facility is secured by exclusive charge on equipment purchase.

9. Retirement Benefits:

i. Provident Fund is a defined contribution scheme and the contributions are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due.

ii. Other retirement benefits such as Gratuity, Leave encashment etc. are recognized on cash basis.

10. Revenue recognition:

a) Interest:

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

b) Contract Income:

Revenue from construction contracts are recognized by reference to the percentage of completion of the contract activity. The stage of completion is determined by survey of work performed and /or on completion of a physical proportion of the contract work, as the case may be, and acknowledged by the contractee. Future expected loss ,if any, is recognized as expenditure.

The work completed, which was not billed, is treated as Work-in-Progress and is valued on the basis of actual expenditure incurred as per the books of Account. In respect of Escalation and other claims revenue is recognized on receipt basis.

11. Income Tax:

Tax expense comprises both current and deferred taxes. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred 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 are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets are recognized on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax assets can be realized against future taxable profits. Unrecognized deferred tax of earlier years are re- assessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized.

12. Borrowing Costs:

Borrowing costs that are attributable to the acquisition and construction of qualifying asset are capitalized as a part of cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that requires substantial period of the time to get ready for its intended use.

13. Joint Venture Projects:

In respect of Joint Venture Projects executed jointly control operations, the assets controlled, liabilities incurred, the share of income and the expenses incurred are accounted in accordance with the agreed proportion under respective rights in the financial statements.

Assets, liabilities and expenditure arising out of contracts executed wholly by the Company pursuant to a Joint Venture Contract are accounted in respective heads in these financial statements.

14. Foreign Currency Translation:

a) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of the transaction.

b) Any income or expense on account of exchange difference either on settlement or on transaction is recognized in the profit and loss account except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

c) Exchange differences arising on the settlement of monetary items or on reporting company's monetary items 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 except those relating to liability for acquiring fixed assets from outside India which are capitalized and those arising from investments in non-integral operations.

15. Provisions, Contingent Liabilities & 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 obligation can be reliably estimated. Contingent liability is disclosed in the case of:

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

b. A possible obligation unless the probability of outflow of resources is remote. Contingent Assets are neither recognized nor disclosed.

Provisions, Contingent liabilities and Contingent assets are reviewed at each balance sheet date.




Mar 31, 2010

1. Basis of preparation:

The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies applied by the company are consistent with those used in the previous years.

2. Significant accounting judgments and estimates:

Judgments and estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, equal to the related actual results.

3. Inventories:

a) The stock of stores and embedded goods and fuel is valued at cost (weighted average basis) or net realizable value whichever is lower.

b) Work-in-progress is valued on the basis of the actual expenditure incurred in the case of all incomplete contracts.

4. Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation. Cost comprises the cost of acquisition and any attributable cost of bringing the asset to its working condition for its intended use.

5. Depreciation:

Depreciation is provided for in the Accounts on Straight-Line method in accordance with the Schedule XIV of the Companies Act, 1956 as in force and proportionate depreciation are charged for additions/deletions during the year.

6. Impairment of Assets:

The carrying amount of assets other than inventories is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the assets is estimated. The recoverable amount is greater of the assets net selling price and value in use which is determined based on the estimated future cash flow discounted to their present values. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

7. Investments:

Long term investments are carried at cost. However, wherever necessary provision for diminution in value of investment is made to recognize in decline other than temporary in the value of the investments.

8. Loan Funds

(i) Working Capital, Short Term Loan Facilities:

Fund and Non Fund based facilities from Consortium of Banks are secured by.

(a) Pari passu first charge on Current Assets of the Company.

(b) Pari passu second charge on unencumbered movable Fixed Assets of the company.

(ii) ECB Loan:

Facility is secured by exclusive charge on equipment purchase.

9. Retirement Benefits:

i. Provident Fund is a defined contribution scheme and the contributions are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due.

ii. Other retirement benefits such as gratuity, leave encashment etc., are recognized on cash basis.

10. Revenue recognition:

a) Interest:

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

b) Contract Income:

Revenue from construction contracts are recognized by reference to the percentage of completion of the contract activity. The stage of completion is determined by survey of work performed and /or on completion of a physical proportion of the contract work, as the case may be, and acknowledged by the contractee. Future expected loss, if any, is recognized as expenditure.

Contract revenue for the work done is taken on actual billing basis. The work completed, which was not billed, is treated as Work-in-Progress and is valued on the basis of actual expenditure incurred as per the books of Account. In respect of escalation and other claims, revenue is recognized on receipt basis.

11. Deferred Revenue Expenditure:

All expenditure, the benefit of which is spread over more than a year are grouped under miscellaneous expenditure and is amortized over the expected serviceable life of such expenditure.

12. Income Tax:

Tax expense comprises both current and deferred taxes. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred 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 are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets are recognized on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax assets can be realized against future taxable profits. Unrecognized deferred tax of earlier years are re- assessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized.

13. Borrowing Costs:

Borrowing costs that are attributable to the acquisition and construction of qualifying asset are capitalized as a part of cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that requires substantial period of the time to get ready for its intended use.

14. Joint Venture Projects:

In respect of Joint Venture Projects executed jointly control operations, the assets controlled, liabilities incurred, the share of income and the expenses incurred are accounted in accordance with the agreed proportion under respective rights in the financial statements.

Assets, liabilities and expenditure arising out of contracts executed wholly by the Company pursuant to a Joint Venture Contract are accounted in respective heads in these financial statements.

15. Foreign Currency Translation:

a) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of the transaction.

b) Any income or expense on account of exchange difference either on settlement or on transaction is recognized in the profit and loss account except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

c) Exchange differences arising on the settlement of monetary items or on reporting companys monetary items 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 except those relating to liability for acquiring fixed assets from outside India which are capitalized and those arising from investments in non-integral operations.

16. Provisions, Contingent Liabilities & 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 obligation can be reliably estimated. Contingent liability is disclosed in the case of:

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

b. A possible obligation unless the probability of outflow of resources is remote. Contingent Assets are neither recognized nor disclosed.

Provisions, Contingent liabilities and Contingent assets are reviewed at each balance sheet date.

17. Equity Shares:

Consequent to the approval of the shareholders in their Extra Ordinary General Meeting held on 30.09.2009, the Board of Directors fixed the record date of 07.11.2009 for sub division of equity shares of the company from Rs. 2/- into two equity shares of Re.1/- each. Weighted average number of shares used in computing earnings per share is based on the face value of Re.1/- per share.



 
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