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Union Budget 2017-18
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Accounting Policies of OM Metals Infraprojects Ltd. Company

Mar 31, 2014

1.1 ACCOUNTING CONVENTION :

The financial statements of the company have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Ac3counting Standards) rules , 2006 (as amended) and the relevant provisions of the Companies Act. , 1956 and provisions of companies act 2013 to the extent applicable. The financial statements have been prepared under the historical cost convention method on an accrual basis except in case of assets for which provision for impairment Is made and revaluation is carried out. The accounting policies have been consistently applied by the company and are consistent with those used in the previous year, claims of liquidated damages on supplies. Warranties, fuel escalation charges payable to the electricity board which are accounted for on acceptance and other claims accounted for receipt/ payment basis. In view of uncertainty involved.

1.2 FIXED ASSETS AND DEPRECIATION :

(a) Fixed Assets ( Other than land & building, plant & machinery of the company which have been re-valued and stated at the revalued figures ) are stated at cost net of cenvat less accumulated depreciation and impairment losses, if any. Cost of acquisition or construction is inclusive of freight, duties, taxes and incidental/preoperative expenses and interest on loans attributable to the acquisition of assets upto the date of commissioning of assets . Capital subsidy received against specific assets is reduced from the value of relevant fixed assets .

(b) The depredation has been provided on straight line method of depreciation at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on assets used in Engineering and real estate divisions, which is on written down value method.

(c) Depreciation is calculated on a prorate basis from the date of additions and on assets sold, discarded etc during the year. Depreciation is provided up to the date of sale / discard.

(d) Lease hold land are not amortized.

1.3 EXPENDITURE ON NEW PROJECT AND SUBSTANTIAL EXPANSION

Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extant to which the expenditure is indirectly related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs)incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the statement of profit and loss . Income earned during construction period is deducted from the total of the indirect expenditure,

1.4 INVENTORIES

Inventories are valued as follows

* Net realizable value is estimated selling price in the ordinary course of business.

B) Hotel Division:

Stock of operating supplies i.e. crockery, cutlery, glassware, utensils, linen etc. in circulation are written off as and when issued from the stores.

1.5 FOREIGN CURRENCY TRANSACTION :

a) Transactions in foreign currencies are recorded on initial recognition at the exchange rates prevailing on the date of the transaction .

b) Monetary items (i.e. receivables , payables ,loans etc) denominated in foreign currencies at the year end are restated at year end rates. In case of monetary items which are covered by forward exchange contracts , the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract,

c) Non monetary foreign currency items are carried at cost.

d) Any income or expenses on account of exchange difference either on settlement or on translation is recognized as revenue except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

1.6 REVENUE RECOGNITION:

a) Engineering Division :

Sales of products (Fabricated goods) escalation and erection receipts (sales is net of trade discount and sales tax) are accounted for on the basis of bills/invoices acknowledged or paid by the project authorities.

b) Other Divisions:

Sales comprises of sales of goods, room sales etc. are excluding sales tax/VAT . It is being accounted for net of returns/discount/claims etc.

c) Income of interest on refund of income tax is accounted for in the year, the order is passed by the concerned authority.

d) Revenue from real estate division are recognized on the percentage of completions method of accounting. Revenue is recognized as per AS-7, in relation to the sold areas only, on the basis of percentage of actual Direct cost incurred thereon including land as against the total estimated cost of the project under execution subject to such actual costs being 25% or more of the total estimated cost. The estimates of saleable area and cost are revised periodically by the management. The effect of such changes to estimates is recognized in the period such changes are determined.

e) Revenue is recognized when the shareholder''s right to receive payment is established by the balance sheet date . Dividend from subsidiaries is recognized even if the same is declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the requirement of Schedule VI of the Companies Act., 1956.

f) The share of profits from partnerships firm has been taken as share of income in the head other income as against the previous policy of line by line consolidation .The effect of income due to this is Rs.19.19 cr in this current fiscal and previous years Rs,18.24 cr which has been considered in reserves and surplus..

1.7 INVESTMENTS:

Investments that are readily realizable and intended to be held for not more than a year are from the date on which such investments are made, are classified as current investments. All other investments are classified as long Term Investments on initial recognition , all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, Provision for diminution in the value is made to recognize a decline other than temporary in the value of the investments.

1.8 RESEARCH AND DEVELOPMENT:

The revenue expenditure on research and development is charged as an expense in the year in which it is incurred. Capital expenditure is included in fixed assets

1.9 BORROWING COSTS:

Borrowing costs directly attributable to the acquisition, construction or production of an assets that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consists of interest and other costs that an entity incurs in connection with the borrowing of funds.

1.10 TAXATION:

(a) Current Tax;

The income tax liability provided in accordance with the provisions of the Income Tax Act, 1961, as advised by income tax consultant,

(b) Deferred Tax Liabilities/(Assets)

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax assets or a deferred tax liabilities . They are measured using the substantively enacted tax rate and tax laws.

(c) Dividend Tax

Tax on distributed profits payable In accordance with the provisions of section 115 O of the Income Tax Act., 1961 which is accounted for in accordance with the Guidance Not on Accounting for Corporate Dividend tax is regarded as a tax on distribution of profits and is not considered in determination of profits for the year.

1.11 RETIREMENT AND OTHER EMPLOYEE BENEFITS :

a) Retirement benefit in the form of provident fund is a defined benefit obligation of the company and the contributions are charged to the statement of profit and loss of the year when the contributions to the funds are due. The company is liable to meet the Shortfall, if any, in payment of intent at the rates declared by the central Government , and such liability is recognized in the year of shortfall.

b) Gratuity:

Gratuity liability is a defined benefit obligation of the company. The Company provides for gratuity to all eligible employees. The benefit is in the form of Lump sum payments to vested employees on resignation, resignation, retirement, on death while in employment or on termination of employment of and amount equivalent to 15 days basic salary payable to each completed year of services. Vesting occurs upon completion of 5 years of services. The company has not made annual contributions to funds administered by trustees or managed by insurance companies. Actuarial valuation for the liabilities has been provided as per report submitted by the certified valuer.

c) Leave Salaries:

Liabilities for privilege leave benefits, in accordance with the rules of the company is provided for, as prevailing salary rate for the entire un-availed leave balance as at the balance sheet date. Actuarial valuation for the liabilities has been provided as per report submitted by the certified valuer.

1.12 IMPAIRMENT OF ASSETS:

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

1.13 PROVISIONS. CONTINGENT LIABILITIES & ASSETS:

A Provision is recognized when an enterprise has a present obligation as a result of past event, it is probable that an outflow of resources will be required to settled the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not disclosed to its present value and are determined based on best management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates , Other contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statement.

1.14 EARNING PER SHARE:

Basic earnings per share is calculated by dividing the Net Profit or Loss for the year attributable to equity share holders (After deducting taxes etc.) by the weighted average number of the equity shares outstanding during the year are adjusted for the effect.

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

1.15 USE OF ESTIMATE:

The preparation of financial statements in conformity with the generally accepted accounting principles (GAAP) requires the management to make judgment, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and Liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions , uncertainty about these assumptions and estimates could result in the out comes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

1.16 OPERATING LEASE

Operating Lease receipts and payments are recognized as income or expense in the statement of profit and loss as per the terms of the lease agreement.

1.17 CASH FLOW STATEMENT

The Cash flow statement is prepaid using "in direct method " set out in Accounting Standard - 3 cash flow statement "and presents the cash flow by operating, investing and financing activities of the company. Cash and Cash equivalents presented in the cash flow statement consist of cash'' on hand and highly liquid bank balances.


Mar 31, 2013

1.1 ACCOUNTING CONVENTION :

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) rules , 2006 (as amended) and the relevant provisions of the Companies Act. , 1956. The financial statements have been prepared under the historical cost convention method on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied by the company and are consistent with those used in the previous year, claims of liquidated damages on supplies, Warranties, fuel escalation charges payable to the electricity board which are accounted for on acceptance and other claims accounted for receipt/ payment basis, In view of uncertainty involved.

1.2 FIXED ASSETS AND DEPRECIATION :

(a) Fixed Assets ( Other than land & building, plant & machinery of the company which have been re-valued and stated at the revalued figures) are stated at cost net of cenvat less accumulated depreciation and impairment , if any. Cost of acquisition or construction is inclusive of freight, duties, taxes and incidential/preoperative expenses and interest on loans attributable to the acquisition of assets upto the date of commissioning of assets . Capital subsidy received against specific assets is reduced from the value of relevant fixed assets.

(b) The depreciation has been provided on straight line method of depreciation at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on assets used in Engineering and real estate divisions , which is on written down value method.

(c) Depreciation is not provided during the year in respect of assets sold, discarded etc during the year upto the date of sales/discard in the Engineering and real estate divisions.

(d) Depreciation is calculated on pro-rata basis from the date of additions except on assets of Engineering real estate divisions which are depreciated for a full year.

(e) Lease hold land are not amortized .

1.3 Expenditure on New project and substantial expansion

Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extant to which the expenditure is indirectly related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs)incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the statement of profit and loss . Income earned during construction period is deducted from the total of the indirect expenditure.

1.4 INVENTORIES

Inventories are valued as follows :-

(A) (a) Raw Material, Stores & Spares, Components, construction material. food & beverages, liquor, crockery, cutlery, glassware, utensils and linen

At cost (FIFO method) or net realizable value, whichever is lower.

(b) Process Stocks At cost or net realizable value, which ever is lower. Cost for this purpose includes direct material cost plus appropriate share of manufacturing overheads on work done basis.

© Finished Goods A Cost or net realizable value*, which ever is lower. Cost for this purpose includes direct material cost plus appropriate share of overhead.

(d) Goods in transit Are stated at actual cost plus freight, if any.

* Net realizable value is estimated selling price in the ordinary Course of business.

B) Hotel Division :

Stock of operating supplies i.e. crockery, cutlery, glassware, utensils, linen etc. in circulation are written off as and when issued from the stores .

1.5 Foreign currency Transaction :

a) Transactions in foreign currencies are recorded on initial recognition at the exchange rates prevailing on the date of the transaction .

b) Monetary items (i.e. receivables , payables , loans etc) denominated in foreign currencies at the year end are restated at year end rates. In case of monetary items which are covered by forward exchange contracts , the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

c) Non monetary foreign currency items are carried at cost.

d) Any income or expenses on account of exchange difference either on settlement or on translation is recognized as revenue except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

1.6 Revenue Recognition :

a) Engineering Division :

Sales of products (Fabricated goods) escalation and erection receipts (sales is net of trade discount and sales tax) are accounted for on the basis of bills/invoices acknowledged or paid by the project authorities.

b) Other Divisions :

Sales comprises of sales of goods, room sales etc. are excluding sales tax/VAT . It is being accounted for net of returns/discount/claims etc

c) Income of interest on refund of income tax is accounted for in the year, the order is passed by the concerned authority .

d) Revenue from real estate division are recognized on the percentage of completions method of accounting. Revenue is recognized , in relation to the sold areas only, on the basis of percentage of actual Direct cost incurred thereon including land as against the total estimated cost of the project under execution subject to such actual costs being 25% or more of the total estimated cost. The estimates of saleable area and cost are revised periodically by the management . The effect of such changes to estimates is recognized in the period such changes are determined.

e) Revenue is recognized when the shareholder''s right to receive payment is established by the balance sheet date . Dividend from subsidiaries is recognized even if the same is declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the requirement of Schedule VI of the Companies Act., 1956.

1.7 INVESTMENTS:

Investments that are readily realizable and intended to be held for not more than a year are from the date on which such investments are made, are classified as current investments. All other investments are classified as long Term Investments on initial recognition , all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, Provision for diminution in the value is made to recognize a decline other than temporary in the value of the investments.

1.8 RESEARCH AND DEVELOPMENT :

The revenue expenditure on research and development is charged as an expense in the year in which it is incurred. Capital expenditure is included in fixed assets

1.9 Borrowing costs :

Borrowing costs directly attributable to the acquisition, construction or production of an assets that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur . Borrowing costs consists of interest and other costs that an entity incurs in connection with the borrowing of funds.

1.10 TAXATION :

(a) Current Tax :

The income tax liability provided taking into considerations of claiming of deduction under section 80 IB of the Income Tax Act. and in accordance with the provisions of the Income Tax Act, 1961, as advised by income tax consultant.

(b) Deferred Tax Liabilities/(Assets)

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax assets or a deferred tax liabilities . They are measured using the substantively enacted tax rate and tax laws.

© Dividend Tax

Tax on distributed profits payable in accordance with the provisions of section 115 O of the Income Tax Act., 1961 which is accounted for in accordance with the Guidance Not on Accounting for Corporate Dividend tax is regarded as a tax on distribution of profits and is not considered in determination of profits for the year.

1.11 Retirement and other employee benefits :

a) Retirement benefit in the form of provident fund is a defined benefit obligation of the company and the contributions are charged to the statement of profit and loss of the year when the contributions to the funds are due. The company is liable to meet the Shortfall, if any, in payment of intent at the rates declared by the central Government , and such liability is recognized in the year of shortfall.

b) Gratuity:

The company has provided for gratuity as per actuarial valuation done by certified actuarial valuer. However interest cost is not been provided which aggregates to Rs. 533060/-.

c) Leave Salaries:

Liabilities for privilege leave benefits, in accordance with the rules of the company is provided for, as prevailing salary rate for the entire un-availed leave balance as at the balance sheet date.

1.12 Impairment of assets:

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

1.13 Provisions, contingent liabilities & Assets:

A Provision is recognized when an enterprise has a present obligation as a result of past event, it is probable that an outflow of resources will be required to settled the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not disclosed to its present value and are determined based on best management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates . Other contingent liabilities are not

1.14 Earning per Share:

Basic earnings per share is calculated by dividing the Net Profit or Loss for the year attributable to equity share holders (After deducting taxes etc.) by the weighted average number of the equity shares outstanding during the year are adjusted for the effect.

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

1.15 Use of Estimate:

The preparation of financial statements in conformity with the generally accepted accounting principles (GAAP) requires the management to make judgment, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and Liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions , uncertainty about these assumptions and estimates could result in the out comes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

1.16 Operating Lease - Operating Lease receipts and payments are recognized as income or expense in the statement of profit and loss as per the terms of the lease agreement.

1.17 Cash flow statement

The Cash flow statement is prepaid the "in direct method " set out in Accounting Standard - 3 cash flow statement "and presents the cash flow by operating , investing and financing activities of the company. Cash and Cash equivalents presented in the cash flow statement consist of cash on hand and highly liquid bank balances.


Mar 31, 2012

1.1 ACCOUNTING CONVENTION:

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) rules , 2006 (as amended) and the relevant provisions of the Companies Act. , 1956. The financial statements have been prepared under the historical cost convention method on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied by the company and are consistent with those.used irLthe previous year, claims of liquidated damages on supplies, Warranties, fuel escalation charges payable to the electricity board which are accounted for on acceptance and other claims accounted for receipt/ payment basis, In view of uncertainty involved.

12 FIXED ASSETS AND DEPRECIATION :

(a) Fixed Assets ( Other than land & building, plant & machinery of the company which have been re-valued and stated at the revalued figures ) are stated at cost net of cenvat less accumulated depreciation and impairment , if any. Cost of acquisition or construction is inclusive of freight, duties, taxes and incidential/preoperative expenses and interest on loans attributable to the acquisition of assets upto the date of commissioning of assets.^jCapital subsidy received against specific assets is reduced from the value of relevant fixed assets .

(b) The depreciation has been provided on straight line method of depreciation at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on assets used in Engineering Division, which is on written down value method.

(c) Depreciation is not provided during the year in respect of assets sold, discarded etc during the year upto the date of sales/discard in the Engineering Division.

(d) Depreciation is calculated on pro-rata basis from the date of additions except on assets of Engineering Division which are depreciated for a full year.

(e) Lease hold land are not amortized .

1.3 Expenditure on New project and substantial expansion

Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extant to which the expenditure is indirectly related to construction or is incidental thereto. Other indirect expenditure {including borrowing costs)incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the statement of profit and loss . Income earned during construction period is deducted from the total of the indirect expenditure.

1.4 INVENTORIES

Inventories are valued as follows :-

(A) (a) Raw Material/ Stores & Spares, Components, construction material. food & beverages, liquor, crockery, cutlery, glassware, utensils and linen

At cost (FIFO method) or net realizable value, whichever is lower.

(b) Process Stocks

At cost or net realizable value, which-ever- is lower. Cost for this purpose includes direct material cost and appropriate of manufacturing overheads on work done basis.

(c) Finished Goods

A Cost or net realizable value*, which ever is lower. Cost for this purpose includes direct material cost and a proportion of manufacturing overhead.

(d) Goods in transit

Are stated at actual cost plus freight, if any.

* Net realizable value is estimated selling price in the ordinary course of business.

B) Hotel Division :

Stock of operating supplies i.e. crockery, cutlery, glassware, utensils, linen etc. in circulation are written off as and when issued from the stores .

1.5 Foreign currency Transaction :

a) Transactions in foreign currencies are recorded on initial recognition at the exchange rates prevailing at the

b) Monetary items (i.e. receivables, payables , loans etc) denominated in foreign currencies at the year end are restated at year end rates. In case of monetary items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

c} Non monetary foreign currency items are carried at cost.

d> Any income or expenses on account of exchange differenc either on settlement or on translation is recognized as revenue except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

1.6 Revenue Recognition :

a) Engineering Division :

Sales of products {Fabricated goods) escalation and erection receipts {sales is net of trade discount and sales tax) are accounted for on the basis of bills/invoices acknowledged or paid by the project authorities.

b) Other Divisions:

Sales comprises of sales of goods, room sales etc. are excluding sales tax/VAT . It is being accounted for net of returns/discount/claims etc

c) Income of interest on refund of income tax is accounted for in the year, the order is passed by the concerned authority .

d) Revenue from real estate division are recognized on the percentage of completions method of accounting. Revenue is recognized , in relation to the sold areas only, on the basis of percentage of actual Direct cost incurred thereon including land as against the total estimated cost of the project under execution subject to such actual costs being 30% or more of the total estimated cost. The estimates of saleable area and cost are revised periodically by the management. The effect of such changes to estimates is recognized in the period such changes are determined.

e) Revenue is recognized when the shareholder's right to receive payment is established by the balance sheet date . Dividend from subsidiaries is recognized even if the same is declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the requirement of Schedule VI of the Companies Act., 1956.

1.7 INVESTMENTS:

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long Term Investments Current inyestments are carried at lower of cost and fair value determined on and individual investment basis. Long term investments are carried at cost. However, Provision for diminution in the value is made to recognize a decline other than temporary in the value of the investments.

1.8 RESEARCH AND DEVELOPMENT:

The revenue expenditure on research and development is charged as an expense in the year in which it is incurred. Capital expenditure is included in fixed assets

1.9 Borrowing costs :

Borrowing costs directly attributable to the acquisition and construction of and assets that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur . Borrowing costs consists of interest and other costs that an entity incurs in connection with the borrowing of funds.

1.11 TAXATION :

(a) Current Tax:

The income tax liability provided taking into considerations of claiming of deduction under section 80 IB of the Income Tax Act and in accordance with the provisions of the Income Tax Act, 1961, as advised by income tax consultant.

(b) Deferred Tax Liabilities/(Assets)

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

1.12 Retirement and other employee benefits :

Retirement benefit in the form of provident fund is a defined benefit obligation of the company and the contributions ares charged to the statement of profit and loss of the year when the contributions to the funds are due. Shortfall in the funds, if any, is adequately provided for by the company.

b) Gratuity:

Gratuity liability is a defined benefit obligation of the company . The company provides for gratuity to all eligible employees. The benefit is in the form of lump sump payments to vested employees on resignation, retirement, on death while in employment or on termination of employment of and amount equivalent to 15 days basic salary payable to each completed year of service. Vesting occurs upon completion of 5 years of services. The company has not made annual contributions to funds administered by trustees or managed by insurance companies. Actuarial valuation for the liabilities has , however has not been done.

c) Leave Salaries:

Liabilities for privilege leave benefits, in accordance with the rules of the company is provided for, as prevailing salary rate for the entire un-availed leave balance as at the balance sheet date.

1.13 Impairment of assets:

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

1.14 Provisions, contingent liabilities & Assets:

A Provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settled the obligation , in respect of which a reliable estimate can be made. Provisions are not disclosed to its present value and are determined based on best management estimate required to settle; the" obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates . Other contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statement.

1.15 Earning per Share:

Basic earnings per share is calculated by dividing the Net Profit or Loss for the period attributable to equity share holders (After deducting taxes etc.) by the weighted average number of the equity shares outstanding during the period.

For the purpose of calculating diluted earning per share, the net profit or Loss for the period attribuable to equity share holders and the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares.

1.16 Use of Estimate:

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and Liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operation during the reporting period end. Although these estimates are based upon management's best no knowledge of current events and actions , actual results could differ from these estimates . Difference between actual results and estimates is recognized in the period in which the results are known / materialized.

1.17 Operating Lease - Lease rentals in respect of assets taken are charged to statement of profit and loss as per the terms of the lease agreement.


Mar 31, 2010

(i) ACCOUNTING CONVENTION :

The financial statements of the Company are prepared under the historical cost convention method and in accordance with the applicable accounting standards except where other wise stated. The company follows mercantile system of accounting and recognizes income and expenditure on accrual basis except claims of liquidated damages on supplies, Warranties, fuel escalation charges payable to the electricity board which are accounted for on acceptance and other claims accounted for receipt/ payment basis, In view of uncertainty involved.

(ii) FIXED ASSETS AND DEPRECIATION :

(a) Fixed Assets ( Other than land & building, plant & machinery of the company - which have been re-valued and stated at the revalued figures) are stated at cost net of cenvat less accumulated depreciation and impairment, if any. The Cost of acquisition or construction is inclusive of freight, duties, taxes and incidential/preoperative expenses and interest on loans attributable to the acquisition of assets upto the date of commissioning of assets . Capital subsidy received against specific assets is reduced from the value of relevant fixed assets .

(b) The depreciation has been provided on straight line method of depreciation at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on assets used in Engg. Div. Which is on written down value method.

(c) Depreciation is not provided during the year in respect of assets sold, discarded etc during the year upto the date of sales/discard.

(d) Depreciation is calculated on pro-rata basis from the date of additions except on assets of Engg. Division which are depreciated for a full year.

(e) Lease hold land are not depreciated.

(f) Expenditure on New project and substantial expansion

Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extant to which the expenditure is indirectly related to construction or is incidental thereto. Other indirect expenditure including borrowing costs)incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the profit & loss account. Income earned during construction period is deducted from the total of the indirect expenditure.

iv) Hotel Division :

Stock of operating supplies i.e. crockery, cutlery, glassware, utensils, linen etc. in circulation are treated as consumption as and when issued from the stores .

v) Foreign currency Transaction:

a) Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing on the date of the transaction .

b) Monetary items denominated in foreign currencies at the year end are restated at , year end rates. In case of monetary items which are covered by forward exchange contracts , the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

Non monetary foreign currency items are carried at cost.

d) Any income or expenses on account of exchange difference either on settlement or on translation is recognized as revenue except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

vi) Revenue Recognition :

a) Engineering Division :

Sales of products (Fabricated goods) escalation and erection receipts are accounted for on the basis of bills/invoices acknowledged or paid by the project authorities.

b) Other Divisions :

Sales comprises of sales of goods, room sales etc. are excluding sales tax/VAT . It is being accounted for net of returns/discount/claims etc

c) Income of interest on refund of income tax is accounted for in the year, the order is passed by the concerned authority .

d) Revenue from construction contracts/projects and real estate are recognized on the percentage of completions method of accounting. Revenue is recognized , in relation to the sold areas only, on the basis of percentage of actual cost incurred thereon including land as against the total estimated cost of the project under execution subject to such actual costs being 30% or more of the total estimated cost . The estimates of saleable area and cost are revised periodically by the management. The effect of such changes to estimates is recognized in the period such changes are determined.

e) Dividend from investments in shares/units is recognized when the company/mutual fund in which they are held declares the dividend and the right to receive the same is established.

vii) INVESTMENTS:

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long Term Investments .Current investments are carried at lower of cost and fair value determined on and individual investment basis. Long term investments are carried at cost. However, Provision for diminution in the value is made to recognize a decline other than temporary in the value of the investments.

viii) MISCELLANEOUS EXPENDITURE ( To the extent not written off or ; adjusted)

Miscellaneous expenditure such as public issue expenditure are amortized over a period of 5 years.

ix) RESEARCH & DEVELOPMENT :

Research & development costs ( Other than cost of fixed assets acquired are charged as an expense in the year in which they are incurred.

x) Borrowing costs :

Borrowing costs are recognized as expenses in the period in which they are incurred except for borrowings for acquisition of qualifying assets which are capitalized upto the date, the assets is ready for its intended use.

xi) TAXATION :

(a) Current Tax :

The income tax liability provided in accordance with the provisions of the Income Tax Act, 1961 or as advised by income tax consultant after claiming deduction

under section 80 I.

(b) Deferred Tax Liabilities/(Assets)

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

xii) Retirement benefits and other employee benefits :

a) Companys contribution to recognized provident fund maintained and managed by the office of regional provident fund commissioner paid/payable during the year is recognized the profit and loss account.

b) Gratuity:

The company provides for gratuity to all eligible employees. The benefit is in the form of lump sump payments to vested employees on resignation, retirement, on death while in employment or on termination of employment of and amount equivalent to 15 days basic salary payable to each completed year of service. Vesting occurs upon completion of 5 years of service. The company has not made annual contributions to funds administered by trustees or managed by insurance companies. Actuarial valuation for the liabilities has , however has not been done.

c) Leave Salaries:

Liabilities for privilege leave benefits, in accordance with the rules of the company is provided for, as prevailing salary rate for the entire un-availed leave balance as at the balance sheet date.

xiii) Impairment of assets:

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

xiv) Provision, contingent liabilities and contingent assets:

Provisions involving substantial degree of estimation in measurement - are recognized when there is a present obligation as a result of past events and it is probable that there will be an out flow of resources. Other contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statement.

xv) Earning per Share:

Basic earnings per share is calculated by dividing the Net Profit or Loss for the period attributable to equity share holders (After deducting taxes etc.) by the weighted average number of the 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 share holders and the weighted average number of shares outstanding during the period are adjusted for the effect of all diluted potential equity shares.

xvi) Use of Estimate:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made 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 reporting period. Difference between actual result and estimates are recognized in the period in which results are known / materialized.

xvii) Operating Lease - Lease rentals in respect of assets taken are charged to profit & loss account as per the terms of the lease agreement.


Mar 31, 2009

I. ACCOUNTING CONVENTION:

The financial statements of the Company are prepared under the historical cost convention method and in accordance with the applicable accounting standards except where other wise stated. The company follows mercantile system of accounting and recognizes income and expenditure on accrual basis except claims of liquidated damages on supplies, Warranties, fuel escalation charges payable to the electricity board which are accounted for on acceptance and other claims accounted for receipt/ payment basis, In view of uncertainty involved.

ii. FIXED ASSETS AND DEPRECIATION:

a) Fixed Assets ( Other than land & building, plant & machinery of the company which have been re-valued and stated at the revalued figures ) are stated at cost net of cenvat less accumulated depreciation and impairment , if any. The Cost of acquisition or construction is inclusive of freight, duties, taxes and incidential/preoperative expenses and interest on loans attributable to the acquisition of assets upto the date of commissioning of assets . Capital subsidy received against specific assets is reduced from the value of relevant fixed assets .

b) The depreciation has been provided on straight line method of depreciation at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on assets used in Engg. Div. Which is on written down value method.

c) Depreciation is not provided during the year in respect of assets sold, discarded etc during the year upto the date of sales/ discard.

d) Depreciation is calculated on pro-rata basis from the date of additions except on assets of Engg. Division which are depreciated for a full year.

e) Lease hold land are not depreciated.

f) Expenditure on New project and substantial expansion

Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs)incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the profit & loss account. Income earned during construction period is deducted from the total of the indirect expenditure.

iii. INVENTORIES:

Inventories are valued as follows:-

A. a) Raw Material, Stores & Spares, Components, construction material. food & beverages, liquor, crockery, cutlery, glassware, utensils and linen

At cost (FIFO method) or net realizable value, whichever is lower.

b) Process Stocks

At cost or net realizable value, which ever is lower. Cost for this purpose includes direct cost and factory overheads allocated on absorption cost method.

c) Finished Goods

Cost as stated in (b) above or net realizable value*, which ever is lower. The cost here includes taxes and duties wherever applicable.

d) Goods in transit

Are stated at actual cost plus freight, if any.

* Net realizable value is estimated selling price in the ordinary course of business.

IV. HOTEL DIVISION:

Stock of operating supplies i.e. crockery, cutlery, glassware, utensils, linen etc. in circulation are treated as consumption as and when issued from the stores.

V. FOREIGN CURRENCY TRANSACTION:

a) Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing on the date of the transaction.

b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of monetary items which are covered by forward exchange contracts , the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

c) Non monetary foreign currency items are carried at cost.

d) Any income or expenses on account of exchange difference either on settlement or on translation is recognized as revenue except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.

VI. REVENUE RECOGNITION:

a) Engineering Division:

Sales of products (Fabricated goods) escalation and erection receipts are accounted for on the basis of bills/invoices acknowledged or paid by the project authorities.

b) Other Divisions :

Sales comprises of sales of goods, room sales etc. are excluding sales tax/VAT . It is being accounted for net of returns/ discount/claims etc

c) Income of interest on refund of income tax is accounted for in the year, the order is passed by the concerned authority .

d) Revenue from construction contracts/projects and real estate are recognized on the percentage of completions method of accounting. Revenue is recognized , in relation to the sold areas only, on the basis of percentage of actual cost incurred thereon including land as against the total estimated cost of the project under execution subject to such actual costs being 30% or more of the total estimated cost . The estimates of saleable area and cost are revised periodically by the management. The effect of such changes to estimates is recognized in the period such changes are determined.

f) Dividend from investments in shares/units is recognized when the company/mutual fund in which they are held declares the dividend and the right to receive the same is established.

VII. INVESTMENTS:

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long Term Investments .Current investments are carried at lower of cost and fair value determined on individual investment basis. Long term investments are carried at cost. However, Provision for diminution in the value is made to recognize a decline other than temporary in the value of the investments.

VIII. MISCELLANEOUS EXPENDITURE:

(To the extent not written off or; adjusted) Miscellaneous expenditure such as public issue expenditure are amortized over a period of 5 years.

IX. RESEARCH & DEVELOPMENT:

Research & development costs ( Other than cost of fixed assets acquired are charged as an expense in the year in which they are incurred.

X. BORROWING COSTS:

Borrowing costs are recognized as expenses in the period in which they are incurred except for borrowings for acquisition of qualifying assets which are capitalized upto the date, the assets is ready for its intended use.

XI. TAXATION:

a) Current Tax:

The income tax liability provided in accordance with the provisions of the Income Ta x Act, 1961 or as advised by income tax consultant after claiming deduction under section 80 I .

b) Deferred Ta x Liabilities/(Assets)

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

c) Fringe benefit tax :

Fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the provision of Income Tax Act, 1961.

XII. RETIREMENT BENEFITS AND OTHER EMPLOYEE BENEFITS:

a) Companys contribution to recognized provident fund maintained and managed by the office of regional provident fund commissioner paid/payable during the year is recognized the profit and loss account.

b) Gratuity :

The company provides for gratuity to all eligible employees. The benefit is in the form of lump sump payments to vested employees on resignation, retirement, on death while in employment or on termination of employment of and amount equivalent to 15 days basic salary payable to each completed year of service. Vesting occurs upon completion of 5 years of service. The company has not made annual contributions to funds administered by trustees or managed by insurance companies. Actuarial valuation for the liabilities has , however has not been done.

c) Leave Salaries:

Liabilities for privilege leave benefits, in accordance with the rules of the company is provided for, as prevailing salary rate for the entire un-availed leave balance as at the balance sheet date.

XIII. IMPAIRMENT OF ASSETS:

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

XIV. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

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

XV. EARNING PER SHARE:

Basic earnings per share is calculated by dividing the Net Profit or Loss for the period attributable to equity share holders (After deducting taxes etc.) by the weighted average number of the 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 share holders and the weighted average number of shares outstanding during the period are adjusted for the effect of all diluted potential equity shares.

XVI. USE OF ESTIMATE:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made 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 reporting period. Difference between actual result and estimates are recognized in the period in which results are known / materialized.



 
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