Accounting Policies of Mukand Engineers Ltd. Company

Mar 31, 2017

1.1 Basis of Accounting :

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis, in accordance with the applicable mandatory Accounting Standards as prescribed under section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rule, 2014, and provisions of the Act, to the extent notified.

The Company is predominantly in to construction / erection business, where, the operating cycle depends upon the completion of the project, which is generally beyond twelve months. However, the Company has considered its operating cycle as twelve months for the purpose of current, non-current classification of assets and liabilities. Where as per the specific terms of the contract, the amounts are due beyond twelve months, the classification of assets and liabilities in to current and non- current is made accordingly.

1.2 Fixed Assets and Depreciation :

(i) Fixed Assets :

Fixed Assets are stated at cost of acquisition / book value less accumulated depreciation / amortization. Costs include all expenses incurred to bring the assets to its present location and condition.

(ii) Depreciation / Amortization :

(a) Depreciation is provided on Straight Line Method, in accordance with Schedule II to the Act. The useful lives of the assets for computing depreciation are as per Schedule II of the Act.

(b) Cost of Intangibles capitalized is amortized over their useful life.

(c) Cost of ERP Software capitalized is amortized over a period of five years.

(d) Depreciation / Amortization on additions or on sale/ discard of assets is provided on pro-rata basis from the date of such addition or up to the date of such sale / discard as the case may be. Depreciation on the assets purchased during the year is provided on the basis of individual useful life of the asset, which can vary with the useful lives prescribed in Schedule II of the Act.

1.3 Investments :

Investments are classified into current and non-current investments. All non-current investments are stated at cost. Diminution, if any, in the value of investments, other than temporary, is provided for each investment individually. Current investments are stated at lower of cost & market value / net realizable value.

1.4 Inventories :

(i) Stores and Spares :

Stores and Spares are valued at cost or net realizable value whichever is lower, computed on weighted average basis. Cost comprises of all costs of purchase and other costs incurred in bringing the inventories to its present location and condition.

(ii) Incomplete Contract Works under Contract Work-in-Progress :

“Incomplete Contract Works” are valued by the direct cost method. The direct cost is determined for each contract separately by considering all direct costs specifically attributable to each contract. However, where the outcome of the contract, based on percentage completion method is ascertained reliably after taking into account all future costs, and revenues, proportionate profit attributable to each contract is considered. The concept of valuation of “Incomplete Contract Works” under “Contract Work-in-Progress” arises only after the stage when direct costs under each contract are not carried forward any further as “Accumulated Direct Costs” as contemplated in policy 1.6(iii) below.

1.5 Amortization of Facilities at Customers’ site :

All facilities in the nature of assets created at the customers’ site and which are to be abandoned at the end of the each contract are written off / amortized in equal monthly installments over the period commencing from the month of completion of the individual facility up to the contracted month for completion of the contract plus twelve months. Billable reimbursements against such facilities, if separately identified in a contract, are similarly credited in equal annual installments against the write-offs over the said period.

1.6 Revenue Recognition :

Engineering construction business :

(i) Income by way of revenue arising out of execution of contract work (including supply of materials), is credited as “Income” only after at least 5% / 10% / 15% (depending upon each contract value) of the total estimated contract costs (i.e. direct and indirect costs) in respect of each contract are incurred (on accrual basis). Such revenue is recognized, as the contract progresses, by reference to the stage of completion of each contract and the invoices acknowledged by the customer’s authorized representative. Procurement of goods and materials, prior to commencement of the contract activity, is not considered as a progress in the contract activity and hence, no revenue is recognized, although, value of such goods and materials procured, exceeds 5% / 10% / 15% of the estimated contract costs.

(ii) The Company follows the “Percentage of Completion Method” of accounting for execution of contract work. The revenue from the execution of contracts is recognized proportionately with the degree of completion achieved under each contract, matching revenue with expenses incurred and therefore, the invoices raised for claiming periodic payments from customers are not accounted as income and the “Trade Receivables / Advances received against Contracts” are reflected accordingly.

Claims made on account of variation in contract work and extension of time, both, are recognized as revenue only when and to the extent of the acceptance of the claim and or variation by the customers.

(iii) Direct costs i.e. all costs related to contracts, which are accounted on accrual basis, are charged to revenue in respect of each contract undertaken, only after at least 5% /10% / 15% of the total estimated all direct and indirect contract costs in respect of each contract are incurred. Till such time, all such direct costs accounted in respect of each contract are carried forward to the next accounting year as “Accumulated Direct Costs” under “Contract Work-in-Progress”. Indirect costs are treated as expenses for the year in which they are incurred on accrual method of accounting and charged to revenue.

Infotech Business :

(iv) Income from Infotech services provided is accounted on accrual basis.

Other Income and Expenditure :

(v) Other Revenues / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

(vi) Dividend income is accounted in the period in which the right to receive the same is established.

1.7 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 disclosures related to contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period.

Differences between actual results and estimates are recognized in the period in which results are known.

Changes in the estimates, if material, are reflected in the financial statements in the period in which changes are made and their effects are disclosed in the notes to the financial statements.

1.8 Retirement and other Employee Benefits :

(i) Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related services are rendered.

(ii) Post employment benefits

(a) Defined contribution plans :

Company’s contributions to the superannuation scheme, state governed provident fund scheme are recognized during the year in which the related service is rendered.

(b) Defined benefit plans :

The present value of the gratuity obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognized immediately in the Statement of Profit and Loss. The gratuity liability as per the Payment of Gratuity Act,1972 for Permanent Employees is funded with the Life Insurance Corporation of India and the fair value of the plan assets, is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on a net basis.

(iii) Long term compensated absences which are unfunded are provided on the basis of an actuarial valuation using the Projected Unit Credit Method.

1.9 Foreign Currency Fluctuations :

(i) All transactions in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

(ii) Monetary items in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. Resultant gain or loss is accounted during the year.

1.10 Borrowing Costs :

Interest and other borrowing costs attributable to qualifying assets are Capitalized. Other interest and borrowing costs are charged to revenue.

1.11 Taxation :

Income-tax expense comprises Current tax and Deferred tax charge or credit.

(i) Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternate Tax (MAT) eligible for set off in subsequent years, (as per tax laws) is recognized as an asset by way of credit to the Statement of Profit and Loss only if there is convincing evidence of its realization. At each balance sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realization.

(ii) The Deferred tax Asset and Deferred tax Liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax Assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is a virtual certainty of its realization, supported by convincing evidence. Deferred tax Assets on account of other timing differences are recognized, only to the extent there is a reasonable certainty of its realization. At each Balance Sheet date, the carrying amount of Deferred tax Assets are reviewed to reassure realization.

1.12 Impairment of Assets :

The Company, at each balance sheet date, assesses whether there is any indication that an individual asset or group of assets constituting a Cash Generating Unit (CGU) may be impaired. Provision for impairment loss is recognized where the recoverable amount of an asset or a CGU, is less than its carrying amount. Provisions for impairment losses recognized in earlier years are further reviewed at each balance sheet date and adjusted for changes in the estimated recoverable amount of asset / CGU.

1.13 Provisions, Contingent Liabilities and Contingent Assets :

Provisions involving a 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. Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.14 Assets taken on lease :

Assets taken on finance lease are accounted in accordance with Accounting Standard 19 on Leases. Lease payments are apportioned between finance charges and reduction of outstanding liabilities.

1.15 Cash flow statement :

Cash flows are reported using the Indirect Method, whereby profit / (loss) before 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.

1.16 Cash and bank balances :

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

1.17 Earnings Per Share :

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

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

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Mar 31, 2016

1.1 Basis of Accounting :

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis, in accordance with the applicable mandatory Accounting Standards as prescribed under section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rule, 2014, the provisions of the Act, to the extent notified.

The Company is in to construction / erection business, where, the operating cycle depends upon the completion of the project, which is generally beyond twelve months. However, the Company has considered its operating cycle as 12 months for the purpose of current, non-current classification of assets and liabilities. Where as per the specific terms of the contract, the amounts are due beyond twelve months, the classification of assets and liabilities in to current and non- current is made accordingly.

1.2 Fixed Assets and Depreciation :

(i) Fixed Assets :

Fixed Assets are stated at cost of acquisition / book value less accumulated depreciation / amortization. Costs include all expenses incurred to bring the assets to its present location and condition.

(ii) Depreciation / Amortization :

(a) Depreciation is provided on Straight Line Method, in accordance with Schedule II to the Act. The useful lives of the assets for computing depreciation are as per Schedule II of the Act.

(b) Cost of Intangibles capitalized is amortized over their useful life.

(c) Cost of ERP Software capitalized is amortized over a period of five years.

(d) Depreciation / Amortization on additions or on sale/ discard of assets is provided on pro-rata basis from the date of such addition or up to the date of such sale / discard as the case may be. Depreciation on the assets purchased during the year is provided on the basis of individual useful life of the asset, which can Vary with the useful lives Prescribed in Schedule II of the Act.

1.3 Investments :

Investments are classified into current and non-current investments. All non-current investments are stated at cost. Diminution, if any, in the value of investments, other than temporary, is provided for each investment individually. Current investments are stated at lower of cost & market value / net realizable value.

1.4 Inventories :

(i) Stores and Spares :

Stores and Spares are valued at cost or net realizable value whichever is lower, computed on weighted average basis. Cost comprises of all costs of purchase and other costs incurred in bringing the inventories to its present location and condition.

(ii) Incomplete Contract Works under Contract Work-in-Progress :

“Incomplete Contract Works” are valued by the direct cost method. The direct cost is determined for each contract separately by considering all direct costs specifically attributable to each contract. However, where the outcome of the contract, based on percentile completion method is ascertained reliably after taking into account all future costs, and revenues, proportionate profit attributable to each contract is considered. The concept of valuation of “Incomplete Contract Works” under “Contract Work-in-Progress” arises only after the stage when direct costs under each contract are not carried forward any further as “Accumulated Direct Costs” as contemplated in policy 1.6(iii) below.

1.5 Amortization of Facilities at Customers’ site :

All facilities in the nature of assets created at the customers’ site and which are to be abandoned at the end of the each contract are written off / amortized in equal monthly installments over the period commencing from the month of completion of the individual facility up to the contracted month for completion of the contract plus twelve months. Billable reimbursements against such facilities, if separately identified in a contract, are similarly credited in equal annual installments against the write-offs over the said period.

1.6 Revenue Recognition :

Engineering construction business :

(i) Income by way of revenue arising out of execution of contract work (including supply of materials), is credited as “Income” only after at least 5% / 10% / 15% (depending upon each contract value) of the total estimated contract costs (i.e. direct and indirect costs) in respect of each contract are incurred (on accrual basis). Such revenue is recognized, as the contract progresses, by reference to the stage of completion of each contract and the invoices acknowledged by the customer’s authorized representative. Procurement of goods and materials, prior to commencement of the contract activity, is not considered as a progress in the contract activity and hence, no revenue is recognized, although, value of such goods and materials procured, exceeds 5% / 10% / 15% of the estimated contract costs.

(ii) The Company follows the “Percentage of Completion Method” of accounting for execution of contract work. The revenue from the execution of contracts is recognized proportionately with the degree of completion achieved under each contract, matching revenue with expenses incurred and therefore, the invoices raised for claiming periodic payments from customers are not accounted as income and the “Trade Receivables / Advances received against Contracts” are reflected accordingly. Claims made on account of escalation in costs and on account of variation in contract work approved by the customers, are both, recognized as revenue only when and to the extent of the acceptance / realization of the amount of the claim or variation.

(iii) Direct costs i.e. all costs related to contracts, which are accounted on accrual basis, are charged to revenue in respect of each contract undertaken, only after at least 5% /10% / 15% of the total estimated all direct and indirect contract costs in respect of each contract are incurred. Till such time, all such direct costs accounted in respect of each contract are carried forward to the next accounting year as “Accumulated Direct Costs” under “Contract Work-in-Progress”. Indirect costs are treated as expenses for the year in which they are incurred on accrual method of accounting and charged to revenue.

Infotech Business :

(iv) Income from Infotech services provided is accounted on accrual basis.

Other Income and Expenditure :

(v) Other Revenues / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

(vi) Dividend income is accounted in the period in which the right to receive the same is established.

1.7 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 disclosures related to contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period.

Differences between actual results and estimates are recognized in the period in which results are known.

Changes in the estimates, if material, are reflected in the financial statements in the period in which changes are made and their effects are disclosed in the notes to the financial statements.

1.8 Retirement and other Employee Benefits :

(i) Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related services are rendered.

(ii) Post employment benefits

(a) Defined contribution plans :

Company’s contributions to the superannuation scheme, state governed provident fund scheme are recognized during the year in which the related service is rendered.

(b) Defined benefit plans :

The present value of the gratuity obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognized immediately in the Statement of Profit and Loss. The gratuity liability as per the Payment of Gratuity Act,1972 for Permanent Employees is funded with the Life Insurance Corporation of India and the fair value of the plan assets, is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on a net basis.

(iii) Long term compensated absences which are unfunded are provided on the basis of an actuarial valuation using the Projected Unit Credit Method.

1.9 Foreign Currency Fluctuations :

(i) All transactions in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

(ii) Monetary items in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. Resultant gain or loss is accounted during the year.

1.10 Borrowing Costs :

Interest and other borrowing costs attributable to qualifying assets are Capitalized. Other interest and borrowing costs are charged to revenue.

1.11 Taxation :

Income-tax expense comprises Current tax and Deferred tax charge or credit.

(i) Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternate Tax (MAT) eligible for set off in subsequent years, (as per tax laws) is recognized as an asset by way of credit to the Statement of Profit and Loss only if there is convincing evidence of its realization. At each balance sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realization.

(ii) The Deferred tax Asset and Deferred tax Liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax Assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is a virtual certainty of its realization, supported by convincing evidence. Deferred tax Assets on account of other timing differences are recognized, only to the extent there is a reasonable certainty of its realization. At each Balance Sheet date, the carrying amount of Deferred tax Assets are reviewed to reassure realization.

1.12 Impairment of Assets :

The Company, at each balance sheet date, assesses whether there is any indication that an individual asset or group of assets constituting a Cash Generating Unit (CGU) may be impaired. Provision for impairment loss is recognized where the recoverable amount of an asset or a CGU, is less than its carrying amount. Provisions for impairment losses recognized in earlier years are further reviewed at each balance sheet date and adjusted for changes in the estimated recoverable amount of asset / CGU.

1.13 Provisions, Contingent Liabilities and Contingent Assets :

Provisions involving a 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. Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.14 Assets taken on lease :

Assets taken on finance lease are accounted in accordance with Accounting Standard 19 on Leases. Lease payments are apportioned between finance charges and reduction of outstanding liabilities.

1.15 Cash flow statement :

Cash flows are reported using the Indirect Method, whereby profit / (loss) before 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.

1.16 Cash and bank balances :

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

1.17 Earnings Per Share :

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

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

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Mar 31, 2015

1.1 Basis of Accounting :

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis, in accordance with the applicable mandatory Accounting Standards as prescribed under Section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rule, 2014. As the standards of accounting or any addendum thereto are not yet prescribed by the Central Government in consultation with and recommendation of the National Financial Reporting Authority, the existing accounting standards notified under the Companies Act, 1956 shall continue to apply. As such, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) of the Companies Act, 1956, Companies (Accounting Standards) Rules, 2006, (as amended) and other relevant provisions of the Act.

The Company is in to construction / erection business, where, the operating cycle depends upon the completion of the project, which is generally beyond twelve months. However, the Company has considered its operating cycle as 12 months for the purpose of current, non- current classification of assets and liabilities. Where as per the specific terms of the contract, the amounts are due beyond twelve months, the classification of assets and liabilities in to current and non- current is made accordingly.

1.2 Fixed Assets and Depreciation :

(i) Fixed Assets :

Fixed Assets are stated at cost of acquisition / book value less accumulated depreciation / amortisation. Costs include all expenses incurred to bring the assets to its present location and condition.

(ii) Depreciation / Amortisation :

(a) Depreciation is provided on Straight Line Method, in accordance with Schedule II to the Act. The useful lives of the assets for computing depreciation are as per Schedule II of the Act.

(b) Cost of Intangibles capitalised is amortised over their useful life.

(c) Cost of ERP Software / Intangible Assets capitalised is amortised over a period of five years.

(d) Depreciation / Amortisation on additions or on sale/ discard of assets is provided on pro-rata basis from the date of such addition or up to the date of such sale / discard as the case may be.

(e) Fixed Assets individually costing Rs. 5000/- or less are depreciated / amortised fully in the year of acquisition.

1.3 Investments :

Investments are classified into current and non-current investments. All non-current investments are stated at cost. Diminution, if any, in the value of investments, other than temporary, is provided for each investment individually. Current investments are stated at lower of cost or market value / net realisable value.

1.4 Inventories :

(i) Stores and Spares :

Stores and Spares are valued at cost or net realisable value whichever is lower, computed on weighted average basis. Cost comprises of all costs of purchase and other costs incurred in bringing the inventories to its present location and condition.

(ii) Incomplete Contract Works under Contract Work-in-Progress :

"Incomplete Contract Works" are valued by the direct cost method. The direct cost is determined for each contract separately by considering all direct costs specifically attributable to each contract. However, where the outcome of the contract, based on percentile completion method is ascertained reliably after taking into account all future costs, and revenues, proportionate profit attributable to each contract is considered. The concept of valuation of "Incomplete Contract Works" under "Contract Work-in-Progress" arises only after the stage when direct costs under each contract are not carried forward any further as "Accumulated Direct Costs" as contemplated in policy 1.6(iii) below.

1.5 Amortisation of Facilities at Customers' site :

All facilities in the nature of assets created at the customers' site and which are to be abandoned at the end of the each contract are written off / amortised in equal monthly instalments over the period commencing from the month of completion of the individual facility upto the contracted month for completion of the contract plus twelve months. Billable reimbursements against such facilities, if separately identified in a contract, are similarly credited in equal annual instalments against the write-offs over the said period.

1.6 Revenue Recognition :

Engineering construction business :

(i) Income by way of revenue arising out of execution of contract work (including supply of materials), is credited as "Income" only after at least 5% / 10% / 15% (depending upon each contract value) of the total estimated contract costs (i.e. direct and indirect costs) in respect of each contract are incurred (on accrual basis). Such revenue is recognised, as the contract progresses, by reference to the stage of completion of each contract and the invoices acknowledged by the customer's representative. Procurement of goods and materials, prior to commencement of the contract activity, is not considered as a progress in the contract activity and hence, no revenue is recognised, although, value of such goods and materials procured, exceeds 5% / 10% / 15% of the estimated contract costs.

(ii) The Company follows the "Percentage of Completion Method" of accounting for execution of contract work. The revenue from the execution of contracts is recognised proportionately with the degree of completion achieved under each contract, matching revenue with expenses incurred and therefore, the invoices raised for claiming periodic payments from customers are not accounted as income and the "Trade Receivables / Advances received against Contracts" are reflected accordingly.

Claims made on account of escalation in costs and on account of variation in contract work approved by the customers, are both, recognised as revenue only when and to the extent of the acceptance / realisation of the amount of the claim or variation.

(iii) Direct costs i.e. all costs related to contracts, which are accounted on accrual basis, are charged to revenue in respect of each contract undertaken, only after at least 5% /10% / 15% of the total estimated all direct and indirect contract costs in respect of each contract are incurred. Till such time, all such direct costs accounted in respect of each contract are carried forward to the next accounting year as "Accumulated Direct Costs" under "Contract Work-in-Progress". Indirect costs are treated as expenses for the year in which they are incurred on accrual method of accounting and charged to revenue.

Infotech Business :

(iv) Income from Infotech services provided is accounted on accrual basis.

Other Income and Expenditure :

(v) Other Revenues / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

(vi) Dividend income is accounted in the period in which the right to receive the same is established.

1.7 Use of Estimates :

The preparation of Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures relating to contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Differences between actual results and estimates are recognised in the period in which the results are known.

Changes in the estimates, if material, are reflected in the financial statements in the period in which changes are made and their effects are disclosed in the notes to the financial statements.

1.8 Retirement and other Employee Benefits :

(i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related services are rendered.

(ii) Post employment benefits

(a) Defined contribution plans :

Company's contribution to the superannuation scheme, state governed provident fund scheme, etc. are recognised during the year in which the related service is rendered.

(b) Defined benefit plans :

The present value of the gratuity obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognised immediately in the Statement of Profit and Loss. The gratuity liability is funded with the Life Insurance Corporation of India and the fair value of the plan assets, is reduced from the gross obligation under the defined benefit plan, to recognise the obligation on a net basis.

(iii) Long term compensated absences are provided on the basis of an actuarial valuation using the Projected Unit Credit Method.

(iv) Termination Benefits are recognised as an expense in the Statement of Profit and Loss for the year in which they are incurred.

1.9 Foreign Currency Fluctuations :

(i) All transactions in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

(ii) Monetary items in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. Resultant gain or loss is accounted during the year.

1.10 Borrowing Costs :

Interest and other borrowing costs attributable to qualifying assets are Capitalised. Other interest and borrowing costs are charged to revenue.

1.11 Taxation :

Income-tax expense comprises Current tax and Deferred tax charge or credit.

(i) Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternate Tax (MAT) eligible for set off in subsequent years, (as per tax laws) is recognized as an asset by way of credit to the Statement of Profit and Loss only if there is convincing evidence of its realisation. At each balance sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realisation.

(ii) The Deferred tax Assets and Deferred tax Liabilities is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax Assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax Assets on account of other timing differences are recognised, only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of Deferred tax Assets are reviewed to reassure realisation.

1.12 Impairment of Assets :

The Company, at each balance sheet date, assesses whether there is any indication that an individual asset or group of assets constituting a Cash Generating Unit (CGU) may be impaired. Provision for impairment loss is recognised where the recoverable amount of an asset or a CGU, is less than its carrying amount. Provisions for impairment losses recognised in earlier years are further reviewed at each balance sheet date and adjusted for changes in the estimated recoverable amount of asset / CGU.

1.13 Provisions, Contingent Liabilities and Contingent Assets :

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

1.14 Assets taken on lease :

Assets taken on finance lease are accounted in accordance with Accounting Standard 19 on Leases. Lease payments are apportioned between finance charges and reduction of outstanding liabilities.

1.15 Cash flow statement:

Cash flows are reported using the Indirect Method, whereby profit / (loss) before 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.

1.16 Cash and cash equivalents :

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

1.17 Earnings Per Share :

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

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

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Mar 31, 2014

1.1 Basis of Accounting:

The financial statements are prepared under the historical cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, the applicable mandatory Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended), the relevant provisions of the Companies Act, 1956 and the provisions of Companies Act, 2013, to the extent notified.

The Company is in to construction / erection business, where, the operating cycle depends upon the completion of the project, which is generally beyond twelve months. However, the Company has considered its operating cycle as 12 months for the purpose of current, non-current classification of assets and liabilities. Where as per the specific terms of the contract, the amounts are due beyond twelve months, the classification ofassets and liabilities in to currentand non-current is made accordingly.

1.2 Fixed Assets and Depreciation :

(i) Fixed Assets :

Fixed Assets are stated at cost of acquisition / book value less accumulated depreciation / amortisation. Costs include all expenses incurred to bring the assets to its present location and condition.

Fixed assets individually costing Rs.5,000/- or less are depreciated fully in the year of Acquisition.

(ii) Depreciation/Amortisation:

(a) Depreciation on assets is provided on Straight Line Method at the rates prescribed in Schedule XIV to the Companies Act, 1956 except on assets acquired on second hand basis, where depreciation is provided over their remaining estimated useful life.

(b) Cost of Intangibles capitalised is amortised over their useful life.

(c) Cost of ERP Software capitalised is amortised over a period of five years.

(d) Depreciation / Amortisation on additions or on sale / discard of assets is provided on pro-rata basis from the month of such addition or up to the month of such sale / discard as the case may be.

1.3 Investments:

Investments are classified into current and non-current investments. All non-current investments are stated at cost. Diminution, if any, in the value of investments, other than temporary, is provided for each investment individually. Current investments are stated at lower of cost & market value/net realisable value.

1.4 Inventories:

(i) Stores and Spares :

Stores and Spares are valued at cost or net realisable value whichever is lower, computed on weighted average basis. Cost comprises of all costs of purchase and other costs incurred in bringing the inventories to its present location and condition.

(ii) Incomplete Contract Works under Contract Work-in-Progress :

"Incomplete Contract Works" are valued by the direct cost method. The direct cost is determined for each contract separately by considering all direct costs specifically attributable to each contract. However, where the outcome of the contract, based on percentile completion method is ascertained reliably after taking into account all future costs, and revenues, proportionate profit attributable to each contract is considered. The concept of valuation of "Incomplete Contract Works" under "Contract Work-in-Progress" arises only after the stage when direct costs under each contract are not carried forward any further as "Accumulated Direct Costs" as contemplated in policy 1.6(iii) below.

1.5 Amortisation of Facilities at Customers'' site :

All facilities in the nature of assets created at the customers'' site and which are to be abandoned at the end of the each contract are written off / amortised in equal monthly instalments over the period commencing from the month of completion of the individual facility upto the contracted month for completion of the contract plus twelve months. Billable reimbursements against such facilities, if separately identified in a contract, are similarly credited in equal annual instalments against the write-offs over the said period.

1.6 RevenueRecognition :

Engineering construction business :

(i) Income by way of revenue arising out of execution of contract work (including supply of materials), is credited as "Income" only after at least 5% / 10% / 15% (depending upon each contract value) of the total estimated contract costs (i.e. direct and indirect costs) in respect of each contract are incurred (on accrual basis). Such revenue is recognised, as the contract progresses, by reference to the stage of completion of each contract and the invoices acknowledged by the customer''s representative. Procurement of goods and materials, prior to commencement of the contract activity, is not considered as a progress in the contract activity and hence, no revenue is recognised, although, value of such goods and materials procured, exceeds 5% / 10% / 15% of the estimated contract costs.

(ii) The Company follows the "Percentage of Completion Method" of accounting for execution of contract work. The revenue from the execution of contracts is recognised proportionately with the degree of completion achieved under each contract, matching revenue with expenses incurred and therefore, the invoices raised for claiming periodic payments from customers are not accounted as income and the "Trade Receivables / Advances received against Contracts" are reflected accordingly.

Claims made on account of escalation in costs and on account of variation in contract work approved by the customers, are both, recognised as revenue only when and to the extent of the acceptance / realisation of the amount of the claim or variation.

(iii) Direct costs i.e. all costs related to contracts, which are accounted on accrual basis, are charged to revenue in respect of each contract undertaken, only after at least 5% / 10% / 15% of the total estimated all direct and indirect contract costs in respect of each contract are incurred. Till such time, all such direct costs accounted in respect of each contract are carried forward to the next accounting year as "Accumulated Direct Costs" under "Contract Work-in-Progress". Indirect costs are treated as expenses for the year in which they are incurred on accrual method of accounting and charged to revenue.

Infotech Business :

(iv) Income from Infotech services provided is accounted on accrual basis.

Other Income and Expenditure :

(v) Other Revenues / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

(vi) Dividend income is accounted in the period in which the right to receive the same is established.

1.7 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 disclosures related to contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Differences between actual results and estimates are recognised in the period in which results are known.

1.8 Retirement and other Employee Benefits :

(i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related services are rendered.

(ii) Post employment benefits

(a) Defined contribution plans :

Company''s contribution to the superannuation scheme, state governed provident fund scheme, etc. are recognised during the year in which the related service is rendered.

(b) Defined benefit plans :

The present value of the gratuity obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognised immediately in the Statement of Profit and Loss. The gratuity liability is funded with the Life Insurance Corporation of India and the fair value of the plan assets, is reduced from the gross obligation under the defined benefit plan, to recognise the obligation on a net basis.

(iii) Long term compensated absences are provided on the basis of an actuarial valuation using the Projected Unit Credit Method.

(iv) Termination Benefits are recognised as an expense in the Statement of Profit and Loss for the year in which they are incurred.

1.9 Foreign CurrencyFluctuations:

(i) All transactions in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

(ii) Monetary items in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. Resultant gain or loss is accounted during the year.

1.10 Borrowing Costs :

Interest and other borrowing costs attributable to qualifying assets are Capitalised. Other interest and borrowing costs are charged to revenue.

1.11 Taxation :

Income-tax expense comprises Current tax and Deferred tax charge or credit.

(i) Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternate Tax (MAT) eligible for set off in subsequent years, (as per tax laws) is recognized as an asset by way of credit to the Statement of Profit and Loss only if there is convincing evidence of its realisation. At each balance sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realisation.

(ii) The Deferred tax Asset and Deferred tax Liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax Assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax Assets on account of other timing differences are recognised, only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of Deferred tax Assets are reviewed to reassure realisation.

1.12 ImpairmentofAssets:

The Company, at each balance sheet date, assesses whether there is any indication that an individual asset or group of assets constituting a Cash Generating Unit (CGU) may be impaired. Provision for impairment loss is recognised where the recoverable amount of an asset ora CGU, is less than its carrying amount. Provisions for impairment losses recognised in earlier years are further reviewed at each balance sheet date and adjusted for changes in the estimated recoverable amount of asset / CGU.

1.13 Provisions, Contingent Liabilities and Contingent Assets :

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

1.14 Assets taken on lease :

Assets taken on finance lease are accounted in accordance with Accounting Standard 19 on Leases. Lease payments are apportioned between finance charges and reduction ofoutstanding liabilities.

1.15 Cashflowstatement:

Cash flows are reported using the Indirect Method, whereby profit / (loss) before 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 ofthe Company are segregated based on the available information.

1.16 Cash and bank balances :

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

1.17 Earnings Per Share :

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

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

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Mar 31, 2013

1.1 Basis of Accounting:

The financial statements are prepared under the historical cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, the applicable mandatory Accounting Standards and the relevant provisions of the Companies Act, 1956.

The Company is in to construction / erection business, where, the operating cycle depends upon the completion of the project, which is generally beyond twelve months. However, the Company has considered its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

1.2 Fixed Assets and Depreciation :

(i) Fixed Assets :

Fixed Assets are stated at cost of acquisition/book value less accumulated depreciation/amortisation. Costs include all expenses incurred to bring the assets to its present location and condition.

Fixed assets individually costing Rs. 5,000/- or less are depreciated fully in the year of Acquisition.

(ii) Depreciation I Amortisation:

(a) Depreciation on assets is provided on Straight Line Method at the rates prescribed in Schedule XIV to the Companies Act, 1956 except on assets acquired on second hand basis, where depreciation is provided over their remaining estimated useful life.

(b) Cost of Intangibles capitalised is amortised over their useful life.

(c) Cost of ERP Software capitalised is amortised over a period of five years.

(d) Depreciation / Amortisation on additions or on sale/ discard of assets is provided on pro-rata basis from the month of such addition or up to the month of such sale / discard as the case may be.

1.3 Investments :

All Long term investments are stated at cost. Diminution, if any, in the value of investments, other than temporary, is provided for each investment individually.

1.4 Inventories :

(i) Stores and Spares :

Stores and Spares are valued at cost or net realisable value whichever is lower, computed on weighted average basis. Cost comprises of all costs of purchase and other costs incurred in bringing the inventories to its present location and condition.

(ii) Incomplete Contract Works under Contract Work-in-Progress:

"Incomplete Contract Works" are valued by the direct cost method. The direct cost rate is determined for each contract separately by considering all direct costs specifically attributable to each contract. The concept of valuation of "Incomplete Contract Works" under "Contract Work-in-Progress" arises only after the stage when direct costs under each contract are not carried forward any further as "Accumulated Direct Costs" as contemplated in policy 1,6(iii) below.

1.5 Amortisation of Facilities at Customers'' site :

All facilities in the nature of assets created at the customers'' site and which are to be abandoned at the end of the each contract are written off / amortised in equal monthly instalments over the period commencing from the month of completion of the individual facility upto the contracted month for completion of the contract plus twelve months. Billable reimbursements against such facilities, if separately identified in a contract, are similarly credited in equal annual instalments against the write-offs over the said period.

1.6 Revenue Recognition:

Engineering construction business:

(i) Income by way of revenue arising out of execution of contract work (including supply of materials), is credited as "Income" only after at least 5% /10% /15% (depending upon each contract value) of the total estimated contract costs (i.e. direct and indirect costs) in respect of each contract are incurred (on accrual basis). Such revenue is recognised, as the contract progresses, by reference to the stage of completion of each contract and the invoices acknowledged by the customer''s representative. Procurement of goods and materials, prior to commencement of the contract activity, is not considered as a progress in the contract activity and hence, no revenue is recognised, although, value of such goods and materials procured, exceeds 5% /10% /15% of the estimated contract costs.

(ii) The Company follows the "Percentage of Completion Method" of accounting for execution of contract work. The revenue from the execution of contracts is recognised proportionately with the degree of completion achieved under each contract, matching revenue with expenses incurred. Therefore, the invoices raised for claiming periodic payments from customers are not accounted as income and the "Trade Receivables / Advances received against Contracts" are reflected accordingly.

Claims made on account of escalation in costs and on account of variation in contract work approved by the customers, are both, recognised as revenue only when and to the extent of the acceptance/realisation of the amount of the claim or variation.

(iii) Direct costs i.e. all costs related to contracts, which are accounted on accrual basis, are charged to revenue in respect of each contract undertaken, only after at least 5% /10% /15% of the total estimated contract costs (i.e. all direct and indirect costs) in respect of each contract are incurred. Till such time, all such direct costs accounted in respect of each contract are carried forward to the next accounting year as "Accumulated Direct Costs" under "Contract Work-in-Progress". Indirect costs are treated as expenses for the year in which they are incurred on accrual method of accounting and charged to revenue.

Infotech Business:

(iv) Income from Infotech services provided is accounted on accrual basis.

Other Income and Expenditure:

(v) Other Revenue / Income and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

1.7 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 amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Differences between actual results and estimates are recognised in the period in which results are known.

1.8 Retirement and other Employee Benefits:

(i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

(ii) Post employment benefits

(a) Defined contribution plans:

Company''s contribution to the superannuation scheme, state governed provident fund scheme, etc. are recognised during the year in which the related service is rendered.

(b) Defined benefit plans:

The present value of the gratuity obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognised immediately in the Statement of Profit and Loss. The gratuity liability is funded with the Life Insurance Corporation of India and the fair value of the plan assets, is reduced from the gross obligation under the defined benefit plan, to recognise the obligation on a net basis.

(iii) Long term compensated absences are provided on the basis of an actuarial valuation using the Projected Unit Credit Method.

(iv) Termination Benefits are recognised as an expense in the Statement of Profit and Loss for the year in which they are incurred.

1.9 Foreign Currency Fluctuations:

(i) All transactions in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

(ii) Monetary items in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. Resultant gain or loss is accounted during the year.

1.10 Borrowing Costs :

Interest and other borrowing costs attributable to qualifying assets are Capitalised. Other interest and borrowing costs are charged to revenue.

1.11 Taxation :

Income-tax expense comprises Current tax and Deferred tax charge or credit.

(i) Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternate Tax (MAT) eligible for set off in subsequent years, (as per tax laws) is recognized as an asset by way of credit to the Statement of Profit and Loss only if there is convincing evidence of its realisation. At each balance sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realisation.

(ii) The Deferred tax Asset and Deferred tax Liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax Assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax Assets on account of other timing differences are recognised, only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of Deferred tax Assets are reviewed to reassure realisation.

1.12 Impairment of Assets:

The Company, at each balance sheet date, assesses whether there is any indication that an individual asset or group of assets constituting a Cash Generating Unit (CGU) may be impaired. Provision for impairment loss is recognised where the recoverable amount of an asset or a CGU, is less than its carrying amount. Provisions for impairment losses recognised in earlier years are further reviewed at each balance sheet date and adjusted for changes in the estimated recoverable amount of asset / CGU.

1.13 Provisions, Contingent Liabilities and Contingent Assets:

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

1.14 Assets taken on lease :

Assets taken on finance lease are accounted in accordance with Accounting Standard 19 on Leases. Lease payments are apportioned between finance charges and reduction of outstanding liabilities.

1.15 Cash flow statement

Cash flow statement is prepared in accordance with the indirect method prescribed in Accounting Standard (AS) 3 on ''Cash Flow Statements''.

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Mar 31, 2012

1.1 Basis of Accounting:

The financial statements are prepared under the historical cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, the applicable mandatory Accounting Standards and the relevant provisions of the Companies Act, 1956.

The Company is in to construction / erection business, where, the operating cycle depends upon the completion of the project, which is generally beyond twelve months. However, the Company has considered its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

1.2 Fixed Assets and Depreciation :

(i) Fixed Assets :

Fixed Assets are stated at cost of acquisition / book value less accumulated depreciation/amortisation. Costs include all expenses incurred to bring the assets to its present location and condition.

Fixed assets individually costing Rs 5,000/- or less are depreciated fully in the year of Acquisition.

(ii) Depreciation / Amortisation:

(a) Depreciation on assets is provided on Straight Line Method at the rates prescribed in Schedule XIV to the Companies Act, 1956 except on assets acquired on second hand basis, where depreciation is provided over their remaining estimated useful life.

(b) Cost of Intangibles capitalised is amortised over their useful life.

(c) Cost of ERP Software capitalised is amortised over a period of five years.

(d) Depreciation / Amortisation on additions or on sale/ discard of assets is provided on pro-rata basis from the month of such addition or up to the month of such sale / discard as the case may be.

1.3 Investments :

All Long term investments are stated at cost. Diminution, if any, in the value of investments, other than temporary, is provided for each investment individually.

1.4 Inventories :

(i) Stores and Spares :

Stores and Spares are valued at cost or net realisable value whichever is lower, computed on weighted average basis. Cost comprises of all costs of purchase and other costs incurred in bringing the inventories to its present location and condition.

(ii) Incomplete Contract Works under Contract Work-in-Progress:

"Incomplete Contract Works" are valued by the direct cost method. The direct cost rate is determined for each contract separately by considering all direct costs specifically attributable to each contract. The concept of valuation of "Incomplete Contract Works" under "Contract Work-in-Progress" arises only after the stage when direct costs under each contract are not carried forward any further as "Accumulated Direct Costs" as contemplated in policy 1,6(iii) below.

1.5 Amortisation of Facilities at Customers' site :

All facilities in the nature of assets created at the customers' site and which are to be abandoned at the end of the each contract are written off / amortised in equal monthly instalments over the period commencing from the month of completion of the individual facility upto the contracted month for completion of the contract plus twelve months. Billable reimbursements against such facilities, if separately identified in a contract, are similarly credited in equal annual instalments against the write-offs over the said period.

1.6 Revenue Recognition:

Engineering construction business:

(i) Income by way of revenue arising out of execution of contract work (including supply of materials), is credited as "Income" only after at least 15% of the total estimated contract costs (i.e. direct and indirect costs) in respect of each contract are incurred (on accrual basis). Such revenue is recognised, as the contract progresses, by reference to the stage of completion of each contract and the invoices acknowledged by the customer's representative. Procurement of goods and materials, prior to commencement of the contract activity, is not considered as a progress in the contract activity and hence, no revenue is recognised, although, value of such goods and materials procured, exceeds 15% of the estimated contract costs. _

(ii) The Company follows the "Percentage of Completion Method" of accounting for execution of contract work. The revenue from the execution of contracts is recognised proportionately with the degree of completion achieved under each contract, matching revenue with expenses incurred. Therefore, the invoices raised for claiming periodic payments from customers are not accounted as income and the 'Trade Receivables / Advances received against Contracts" are reflected accordingly.

Claims made on account of escalation in costs and on account of variation in contract work approved by the customers, are both, recognised as revenue only when and to the extent of the acceptance / realisation of the amount of the claim or variation.

(iii) Direct costs i.e. all costs related to contracts, which are accounted on accrual basis, are charged to revenue in respect of each contract undertaken, only after at least 15% of the total estimated contract costs (i.e. all direct and indirect costs) in respect of each contract are incurred. Till such time, all such direct costs accounted in respect of each contract are carried forward to the next accounting year as "Accumulated Direct Costs" under "Contract Work-in-Progress". Indirect costs are treated as expenses for the year in which they are incurred on accrual method of accounting and charged to revenue.

Infotech Business:

(iv) Income from Infotech services provided is accounted on accrual basis.

Other Income and Expenditure:

(v) Other Revenue / Income and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

1.7 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 amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Differences between actual results and estimates are recognised in the period in which results are known.

1.8 Retirement and other Employee Benefits:

(i) Short term employee benefits are recognised as an expense at the undiscounted amount in the statement of Profit and Loss for the year in which the related service is rendered.

(ii) Post employment benefits

(a) Defined contribution plans:

Company's contribution to the superannuation scheme, state governed provident fund scheme, etc. are recognised during the year in which the related service is rendered.

(b) Defined benefit plans:

The present value of the gratuity obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognised immediately in the statement of Profit and Loss. The gratuity liability is funded with the Life Insurance Corporation of India and the fair value of the plan assets, is reduced from the gross obligation under the defined benefit plan, to recognise the obligation on a net basis.

(iii) Long term compensated absences are provided on the basis of an actuarial valuation using the Projected Unit Credit Method.

(iv) Termination Benefits are recognised as an expense in the statement of Profit and Loss for the year in which they are incurred.

1.9 Foreign Currency Fluctuations:

(i) All transactions in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

(ii) Monetary items in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. Resultant gain or loss is accounted during the year.

1.10 Borrowing Costs :

Interest and other borrowing costs attributable to qualifying assets are Capitalised. Other interest and borrowing costs are charged to revenue.

1.11 Taxation :

Income-tax expense comprises Current tax and Deferred tax charge or credit.

(i) Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternate Tax (MAT) eligible for set off in subsequent years, (as per tax laws) is recognized as an asset by way of credit to the statement of Profit and Loss only if there is convincing evidence of its realisation. At each balance sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realisation.

(ii) The Deferred tax Asset and Deferred tax Liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax Assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax Assets on account of other timing differences are recognised, only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of Deferred tax Assets are reviewed to reassure realisation.

1.12 Impairment of Assets:

The Company, at each balance sheet date, assesses whether there is any indication that an individual asset or group of assets constituting a Cash Generating Unit (CGU) may be impaired. Provision for impairment loss is recognised where the recoverable amount of an asset or a CGU, is less than its carrying amount. Provisions for impairment losses recognised in earlier years are further reviewed at each balance sheet date and adjusted for changes in the estimated recoverable amount of asset / CGU.

1.13 Provisions, Contingent Liabilities and Contingent Assets:

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

1.14 Assets taken on lease :

Assets taken on finance lease are accounted in accordance with Accounting Standard 19 on Leases. Lease payments are apportioned between finance charges and reduction of outstanding liabilities.

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Mar 31, 2011

(1) Basis of Accounting:

The financial statements are prepared under the historical cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, the applicable mandatory Accounting Standards and the relevant provisions of the Companies Act, 1956.

(2) Fixed Assets and Depreciation :

(i) Fixed Assets :

Fixed Assets are stated at cost of acquisition/book value less accumulated depreciation/amortisation. Costs include all expenses incurred to bring the assets to its present location and condition. Fixed assets individually costing Rs. 5000/- or less are depreciated fully in the year of Acquisition.

(ii) Depreciation / Amortisation:

(a) Depreciation on assets is provided on Straight Line Method at the rates prescribed in Schedule XIV to the Companies Act, 1956 except on assets acquired on second hand basis, where depreciation is provided over their remaining estimated useful life.

(b) Cost of Intangibles capitalised is amortised over their useful life.

(c) Cost of ERP Software capitalised is amortised over a period of five years.

(d) Depreciation / Amortisation on additions or on sale/ discardment of assets is provided on pro-rata basis from the month of such addition or up to the month of such sale / discardment as the case may be.

(iii) Amortisation of Facilities at Customers site :

All facilities in the nature of assets created at the customers site and which are to be abandoned at the end of the contract are written off / amortised in equal annual instalments over the period commencing from the year of completion of the facility upto the contracted year for completion of the contract. Billable reimbursements against such facilities, if separately identified in a contract, are similarly credited in equal annual instalments against the write-offs over the said period.

(3) Investments :

All Long term investments are stated at cost. Diminution, if any, in the value of investments, other than temporary, is provided for each investment individually.

(4) Inventories :

(i) Stores and Spares :

Stores and Spares are valued at cost or net realisable value whichever is lower, computed on First in First out basis. Cost comprises of all costs of purchase and other costs incurred in bringing the inventories to its present location and condition.

(ii) Incomplete Contract Works under Contract Work-in-Progress:

"Incomplete Contract Works" are valued by the direct cost method. The direct cost rate is determined for each contract separately by considering all direct costs specifically

attributable to each contract. The concept of valuation of "Incomplete Contract Works" under "Contract Work-in-Progress" arises only after the stage when direct costs under each contract are not carried forward any further as "Accumulated Direct Costs" as contemplated in policy 5 (iii) below.

(5) Income and Expenditure :

Engineering construction business:

(i) Income by way of revenue arising out of execution of contract work (including supply of materials), is credited as "Income" only after at least 15% of the total estimated contract costs (i.e. direct and indirect costs) in respect of each contract are incurred (on accrual basis). Such revenue is recognised, as the contract progresses, by reference to the stage of completion of each contract and the invoices acknowledged by the customers representative. Procurement of goods and materials, prior to commencement of the contract activity, is not considered as a progress in the contract activity and hence, no revenue is recognised, although, value of such goods and materials procured, exceeds 15% of the estimated contract costs.

(ii) The Company follows the "Percentage of Completion Method" of accounting for execution of contract work. The revenue from the execution of contracts is recognised proportionately with the degree of completion achieved under each contract, matching revenue with expenses incurred. Therefore, the invoices raised for claiming periodic payments from customers are not accounted as income and the "Sundry Debtors / Advances received against Contracts" are reflected accordingly.Claims made on account of escalation in costs and on account of variation in contract work approved by the customers, are both, recognised as revenue only when and to the extent of the acceptance/ realisation of the amount of the claim or variation.

(iii) Direct costs i.e. all costs related to contracts, which are accounted on accrual basis, are charged to revenue in respect of each contract undertaken, only after at least 15% of the total estimated contract costs (i.e. all direct and indirect costs) in respect of each contract are incurred.Till such time, all such direct costs accounted in respect of each contract are carried forward to the next accounting year as "Accumulated Direct Costs" under "Contract Work-in-Progress". Indirect costs are treated as expenses for the year in which they are incurred on accrual method of accounting and charged to revenue.

Infotech Business:

(iv) Income from EDP services provided is accounted on accrual basis.

Other Income and Expenditure:

(v) Other Revenue / Income and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

(6) 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 amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Differences between actual results and estimates are recognised in the period in which results are known.

(7) Retirement and other Employee Benefits:

(i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit and Loss Account for the year in which the related service is rendered.

(ii) Post employment benefits

(a) Defined contribution plans: Companys contribution to the superannuation scheme, state governed provident fund scheme, etc. are recognised during the year in which the related service is rendered.

(b) Defined benefit plans: The present value of the gratuity obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognised immediately in the Profit and Loss Account. The gratuity liability is funded with the Life Insurance Corporation of India and the fair value of the plan assets, is reduced from the gross obligation under the defined benefit plan, to recognise the obligation on a net basis.

(iii) Long term compensated absences are provided on the basis of an actuarial valuation.

(iv) Termination Benefits are recognised as an expense in the Profit and Loss Account for the year in which they are incurred.

(8) Foreign Currency Fluctuations:

(i) All transactions in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place;

(ii) Monetary items in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. Resultant gain or loss is accounted during the year;

(9) Borrowing Costs :

Interest and other borrowing costs attributable to qualifying assets are Capitalised. Other interest and borrowing costs are charged to revenue.

(10) Taxation :

Income-tax expense comprises Current tax and Deferred tax charge or credit.

(i) Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternate Tax (MAT) eligible for set off in subsequent years, (as per tax laws) is recognized as an asset by way of credit to the Profit and Loss Account only if there is convincing evidence of its realisation. At each balance sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realisation.

(ii) The Deferred tax Asset and Deferred tax Liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax Assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax Assets on account of other timing differences are recognised, only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of Deferred tax Assets are reviewed to reassure realisation.

(11) Impairment of Assets:

The Company, at each balance sheet date, assesses whether there is any indication that an individual asset or group of assets constituting a Cash Generating Unit (CGU) may be impaired. Provision for impairment loss is recognised where the recoverable amount of an asset or a CGU, is less than its carrying amount. Provisions for impairment losses recognised in earlier years are further reviewed at each balance sheet date and adjusted for changes in the estimated recoverable amount of asset / CGU.

(12) Provisions, Contingent Liabilities and Contingent Assets:

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

(13) Assets taken on lease :

Assets taken on finance lease are accounted in accordance with Accounting Standard 19 on Leases. Lease payments are apportioned between finance charges and reduction of outstanding liabilities.

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Mar 31, 2010

(1) Basis of Accounting:

The financial statements are prepared under the historical cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, the applicable mandatory Accounting Standards and the relevant provisions of the Companies Act, 1956.

(2) Fixed Assets and Depreciation :

(i) Fixed Assets :

(a) Fixed Assets are stated at cost of acquisition/ book value less accumulated depreciation/ amortisation.

(b) The Company, at each balance sheet date, assesses whether there is any indication that an individual asset or group of assets constituting a Cash Generating Unit (CGU) may be impaired. Provision for impairment loss is recognised where the recoverable amount of an asset or a CGU, is less than its carrying amount. Provisions for impairment losses recognised in earlier years are further reviewed at each balance sheet date and adjusted for changes in the estimated recoverable amount of asset / CGU.

(ii) Depreciation / Amortisation:

(a) Depreciation on assets is provided on Straight Line Method at the rates prescribed in Schedule XIV to the Companies Act, 1956.

(b) Cost of Intangibles capitalised is amortised over their useful life.

(c) Cost of ERP Software capitalised is amortised over a period of five years.

(d) Depreciation / Amortisation on additions or on sale/discardment of assets is provided on pro- rata basis from the month of such addition or up to the month of such sale/discardment as the case may be.

(3) Investments :

All Long term investments are stated at cost. Diminution, if any, in the value of investments, other than temporary, is provided for each investment individually.

(4) Inventories :

(i) Stores and Spares :

Stores and Spares are valued at cost or net realisable value whichever is lower. The cost formula used is First In First Out.

(ii) Incomplete Contract Works under Contract Work-in-Progress:

"Incomplete Contract Works" are valued by the direct cost method. The direct cost rate is determined for

each contract separately by considering all direct costs specifically attributable to each contract in relation to the aggregate quantity of work to be carried out under each activity of the contract. The concept of valuation of "Incomplete Contract Works" under "Contract Work-in-Progress" arises only after the stage when direct costs under each contract are not any further carried forward as "Accumulated Direct Costs" as contemplated in policy 5 (iii) below.

(5) Income and Expenditure :

Engineering construction business:

(i) Income by way of revenue arising out of execution of contract work (including supply of materials), is credited as "Income" in respect of each contract undertaken on the basis of pre-determined rates of income derived in relation to value of each activity under the contract, only after at least 15% of the total estimated contract costs (i.e. direct and indirect costs) in respect of each contract are incurred (on accrual basis). Such revenue is recognised as the contract activity progresses, by reference to the stage of completion of each contract and the invoices acknowledged by the customers representative. Procurement of goods and materials, prior to commencement of the contract activity, is not considered as a progress in the contract activity and hence, no revenue is recognised, although, value of such goods and materials procured, exceeds 15% of the estimated contract costs.

(ii) The Company follows the "Percentage of Completion Method" of accounting for execution of contract work. The revenue from the execution of contracts is recognised proportionately with the degree of completion achieved under each contract, matching revenue with expenses incurred. Therefore, the invoices raised for claiming periodic payments from customers are not accounted as income and the "Sundry Debtors / Advances received against Contracts" are reflected accordingly.

Claims made on account of escalation in costs and on account of variation in contract work approved by the customer, are both, recognised as revenue only when and to the extent of the acceptance/ realisation of the amount of the claim or variation.

(iii) Direct costs which are accounted on accrual basis, are charged to revenue in respect of each contract undertaken, only after at least 15% of the total estimated contract costs (i.e. all direct and indirect costs) in respect of each contract are incurred (on accrua basis).

Till such time, all the direct costs accounted in respect of each contract are carried forward to the next accounting year as "Accumulated Direct Costs" under "Contract Work-in-Progress". Indirect costs are treated as expenses for the year in which they are incurred on accrual method of accounting and charged to revenue.

(iv) All facilities in the nature of assets created at the customers site and which are to be abandoned at the end of the contract, are, when under construction, carried forward at cost to-date as "Facilities at Customers site-under construction". Upon subsequent completion, they are carried forward as "Facilities at Customers site-completed"(both being grouped as "Other Current Assets"). The completed facilities are written off in equal annual installments over the period commencing from the year of completion of the facility upto the contracted year for completion of the contract. Billable reimbursements against such facilities, if separately identified in a contract, are similarly credited in equal annual installments against the write-offs over the said period.

Infotech Business:

(v) Income from EDP services provided is accounted on accrual basis.

Other Income and Expenditure:

(vi) Other Revenue / Income and Costs/Expenditure are generally accounted on accrual, as they are earned or incurred.

(vii) Share issue expenses are charged, first against available balance in Securities Premium Account.

(6) 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 amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Differences between actual results and estimates are recognised in the period in which results are known.

(7) Retirement and other Employee Benefits:

(i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit and Loss Account for the year in which the related service is rendered.

(ii) Post employment benefits

(a) Defined contribution plans:

Companys contribution to the superannuation scheme, state governed provident fund scheme, etc. are recognised during the year in which the related service is rendered.

(b) Defined benefit plans:

The present value of the gratuity obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognised immediately in the Profit and Loss

Account. The gratuity liability is funded with the Life Insurance Corporation of India and the fair value of the plan assets, is reduced from the gross obligation under the defined benefit plan, to recognise the obligation on a net basis.

(iii) Long term compensated absences are provided on the basis of an actuarial valuation.

(iv) Termination Benefits are recognised as an expense in the Profit and Loss Account for the year in which they are incurred.

(8) Foreign Currency Fluctuations:

(i) All transactions in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place;

(ii) Monetary items in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. Resultant gain or loss is accounted during the year;

(9) Borrowing Costs :

Interest and other borrowing costs attributable to qualifying assets are Capitalised. Other interest and borrowing costs are charged to revenue.

(10) Taxation :

Income-tax expense comprises Current tax and Deferred tax charge or credit.

(i) Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternate Tax (MAT) eligible for set off in subsequent years, (as per tax laws) is recognized as an asset by way of credit to the Profit and Loss Account only if there is convincing evidence of its realisation. At each balance sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realisation.

(ii) The Deferred tax Asset and Deferred tax Liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax Assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax Assets on account of other timing differences are recognised, only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of Deferred tax Assets are reviewed to reassure realisation.

(11) Provisions, Contingent Liabilities and Contingent Assets:

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

(12) Assets taken on lease :

Assets taken on finance lease are accounted in accordance with Accounting Standard 19 on Leases. Lease payments are apportioned between finance charges and reduction of outstanding liabilities.