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Accounting Policies of RPP Infra Projects Ltd. Company

Mar 31, 2015

1.1 Basis of Preparation

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles ["GAAP"]. Further, the guidance notes / announcements issued by the Institute of Chartered Accountants of India (ICAI) are also considered, wherever applicable except to the extent where compliance with other statutory promulgations viz. SEBI guidelines override the same requiring a different treatment.

The financial statements are prepared in accordance with the requirements of the Companies Act, 2013, and comply with the Accounting Standards referred to in Section 133 of the said Act. The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful lives of tangible and intangible fixed assets, allowance for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known.

1.2 Presentation of financial Statement

The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 ("the Act"). The Cash Flow Statement has been prepared and presented as per the requirements of Accounting Standard (AS) 3 "Cash Flow Statements". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of accounts along with the other notes required to be disclosed under the notified Accounting Standards and the Listing Agreement.

Amounts in the financial statements are presented in Indian Rupees in Crore rounded off to two decimal places in line with the requirements of Schedule III except where stated otherwise. Per share data are presented in Indian Rupees to two decimals places.

1.3 Revenue Recognition

A. Accounting of construction contracts

The Company follows the (Accounting Standard 7) percentage completion method, based on the stage of completion as at the balance sheet date, taking into account the contractual price and revision there to by estimating total revenue and total cost till completion of the contract and the profit so determined has been accounted for proportionate to the percentage of the actual work done as on the date of the Balance Sheet.

B. Other Operational Income

Other Operational Income Includes Revenue for Technical services provided and accounted on accrual basis.

C. Other Income

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

b. Income of Power Generation from Windmill was accounted in the period in which the right to receive of the same is established.

c. Interest income is recognised on the time proportion basis.

d. Other items of income are accounted as and when the right to receive arises.

1.4 Extraordinary and exceptional Items

Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Company are classified as extraordinary items. Specific disclosure of such events/transactions is made in the financial statements. Similarly, any external event beyond the control of the Company, significantly impacting income or expense, is also treated as extraordinary item and disclosed as such.

On certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company, is such that its disclosure improves an understanding of the performance of the Company. Such income or expense is classified as an exceptional item and accordingly disclosed in the notes to accounts.

1.5 Classification of Assets and Liabilities

The Schedule III to the Companies Act, 2013 requires assets and liabilities to be classified as either Current or Non-current.

a) An asset shall be classified as current when it satisfies any of the following criteria:

I. it is expected to be realised in, or is intended for sale or consumption in, the Company's normal operating cycle;

II. It is held primarily for the purpose of being traded;

III. It is expected to be realized within twelve months after the reporting date; or

IV. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

b) All assets other than current assets shall be classified as non-current.

c) A liability shall be classified as current when it satisfies any of the following criteria:

I. It is expected to be settled in the company's normal operating cycle;

II. It is held primarily for the purpose of being traded;

III. It is due to be settled within twelve months after the reporting date; or

IV. The company does not have an unconditional right to defer settlement of the liability for at least twelvemonths after the reporting date.

d) All liabilities other than current liabilities shall be classified as non-current.

1.6 Fixed Assets

a) Fixed assets are stated at their original cost of acquisition and installation, less accumulated depreciation, amortisation and impairment losses, if any. Cost comprises of the purchase price and any other directly attributable cost of bringing the asset to its working condition for its intended use.

b) Administrative and other general overhead expenses that are specifically to construction or acquisition of Fixed Assets or bringing the Fixed Assets to working conditions are allocated and capitalised as a part of the cost of the Fixed Assets.

c) Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalised for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

d) Depreciation on fixed assets has been provided using straight line method, where hitherto Written Down Value method was adopted, in the manner and at the rates prescribed in Schedule II to the Companies Act, 2013. Effective 1 April 2014, the Company has changed the method of providing depreciation from written down value to straight line method. In management's view this change results in more appropriate presentation and gives a systematic basis of depreciation charge, representative of pattern of usage and economic benefits of the assets and provide greater consistency with the depreciation method used by other companies in the infra industry. Accordingly, excess depreciation charged for earlier years upto 31st March, 2014 aggregating Rs.14,92,29,232/- has been written back and recognized as an exceptional item in the Statement of Profit and Loss for the year ended 31st March, 2015.

The difference in the depreciation amounting to Rs.28,86,054/- due to changes to comply with schedule II of The Companies Act 2013 based on the useful lives of the assets has been debited to the Profit and Loss account.

Had the Company continued to use the earlier method of depreciation-

e) Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation / depletion. The costs comprises of all cost, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible asset.

f) Purchase cost and user license fees for major software are amortised over a period of three years.

g) Own fabricated assets are capitalized at cost including an appropriate share of overheads.

h) Depreciation for additions to/deductions is calculated @ pro-rata from/to the date of additions/deductions during the year.

i) Tangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as Capital Work-in-Progress.

1.7 Operating Cycle

An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

1.8 Investments

Long Term investments are valued at cost, less provision for diminution other than temporary, in value, if any. Current investments are stated at lower of cost and fair value, computed category-wise

1.9 Cash and equivalents

Cash and cash equivalents comprise of cash at bank and cash in hand. The Company considers all highly liquid investments with an original maturity of three months or less from date of purchase, to be cash equivalents.

1.10 Provisions and Contingent Liabilities

A provision is recognised 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 settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on management estimate required to settle the obligation at the Balance Sheet date. These are reviewed as on the Balance Sheet date and adjusted to reflect the current best estimates.

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

When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

1.11 Foreign Exchange Translation of Projects and Accounting of Foreign Exchange Translations Transactions in Foreign currencies are recorded at the rate prevailing on date of transaction. Foreign Branch and Subsidiaries are classified as non-integral foreign operations. Assets and Liabilities (both monetary and non-monetary) are translated at the closing rate at the end of year. Income and Expenses are translated at the monthly average rate. All the resulting exchange differences are accumulated in a separate head "Foreign Currency Translation Reserve" and the same is shown in Balance Sheet under Reserves and Surplus.

a) Assets and Liabilities are translated at the exchange rate prevailing on the last day of the year

b) Income and Expenditure are translated at the monthly average exchange rate.

Gains or losses arising out of remittance at the year-end are credited / debited to the statement of profit and loss for the year.

Gains or losses arising out of translations at the year-end are credited / debited to the Foreign Currency Translation Reserve under Reserves and Surplus.

1.12 Accounting for Taxes on Income

a) Current Income Tax:

Provision for Current Tax is made based on taxable Income computed for the year under the Income Tax Act, 1961, after deducting the profit for which the company is likely to claim exemption u/s 80IA.

b) Deferred Taxes :

Deferred Tax is accounted for by computing the tax effect of timing differences which arise during the year and reverse in subsequent periods. Timing differences arising due to difference in depreciation as per accounting records and Income Tax Act has alone been considered. Deferred tax assets are recognized and carried forward only to the extent that there is a certainty that sufficient future taxable income will be available against which such Deferred Tax Assets can be realised.

1.13 Employees Benefits

a) Employer's contribution to the recognized provident fund which is a defined contribution scheme and ESI Contribution as per law are charged to the Profit and Loss account.

b) Provision for Gratuity has been made for the year as per prudent management estimate as the company could not obtain an estimate from actuarial valuer for the provision.

1.14 Earnings per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS20). Earnings per Share notified by the Companies (Accounting Standards) Rules, 2006. Basic earnings per equity shares are computed by dividing the net profit for the year attributable to the Equity Shareholders including the extraordinary profits arising out of the change in the method of depreciation from WDV method to straight line method by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit for the year adjusting for the effects of dilutive potential equity shares attributable to the Equity Shareholders by the weighted average number of the equity shares and dilutive potential equity shares outstanding during the year except where the results are anti dilutive.


Mar 31, 2014

1.1 Basis of Preparation

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles ["GAAP"]. Further, the guidance notes / announcements issued by the Institute of Chartered Accountants of India (ICAI) are also considered, wherever applicable except to the extent where compliance with other statutory promulgations viz. SEBI guidelines override the same requiring a different treatment.

The financial statements are prepared in accordance with the requirements of the Companies Act, 1956, and comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the said Act. The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful lives of tangible and intangible fixed assets, allowance for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known.

1.2 Presentation of financial Statement

The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule VI to the Companies Act, 1956 ("the Act"). The Cash Flow Statement has been prepared and presented as per the requirements of Accounting Standard (AS) 3 "Cash Flow Statements". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule VI to the Act, are presented by way of notes forming part of accounts along with the other notes required to be disclosed under the notified Accounting Standards and the Listing Agreement.

Amounts in the financial statements are presented in Indian Rupees in Crore rounded off to two decimal places in line with the requirements of Schedule VI except where stated otherwise. Per share data are presented in Indian Rupees to two decimals places.

1.3 Revenue Recognition

A. Accounting of construction contracts

The Company follows the (Accounting Standard 7) percentage completion method, based on the stage of completion as at the balance sheet date, taking into account the contractual price and revision there to by estimating total revenue and total cost till completion of the contract and the profit so determined has been accounted for proportionate to the percentage of the actual work done as on the date of the Balance Sheet.

B. Other Operational Income

Other Operational Income Includes Revenue for Technical services provided.

C. Other Income

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

b. Dividend income was accounted when the right to receive of the same is established.

c. Income of Power Generation from Windmill was accounted in the period in which the right to receive of the same is established.

d. Interest income was recognised on the time proportion basis.

e. Other items of income are accounted as and when the right to receive arises.

1.4 Extra ordinary and exceptional Items

Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Company are classified as extraordinary items. Specific disclosure of such events/transactions is made in the financial statements. Similarly, any external event beyond the control of the Company, significantly impacting income or expense, is also treated a^ extraordinary item and disclosed as such.

On certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company, is such that its disclosure improves an understanding of the performance of the Company. Such income or expense is classified as an exceptional item and accordingly disclosed in the notes to accounts.

1.5 Classification of Assets and Liabilities

The Revised Schedule VI to the Companies Act, 1956 requires assets and liabilities to be classified as either Current or Non-current.

a) An asset shall be classified as current when it satisfies any of the following criteria:

I. it is expected to be realised in, or is intended for sale or consumption in, the Company''s normal operating cycle;

II. It is held primarily for the purpose of being traded;

III. It is expected to be realized within twelve months after the reporting date; or

IV. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

b) All assets other than current assets shall be classified as non-current.

c) A liability shall be classified as current when it satisfies any of the following criteria:

I. It is expected to be settled in the company''s normal operating cycle;

II. It is held primarily for the purpose of being traded;

III. It is due to be settled within twelve months after the reporting date; or

IV. The company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

d) All liabilities other than current liabilities shall be classified as non-current.

1.6 Fixed Assets

a) Fixed assets are stated at their original cost of acquisition and installation, less accumulated depreciation, amortisation and impairment losses, if any. Cost comprises of the purchase price and any other directly attributable cost of bringing the asset to its working condition for its intended use.

b) Administrative and other general overhead expenses that are specifically to construction or acquisition of Fixed Assets or bringing the Fixed Assets to working conditions are allocated and capitalised as a part of the cost of the Fixed Assets.

c) Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalised for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

d) Depreciation is provided on the written down value method at the rates prescribed in Schedule XIV to the Companies Act, 1956. Assets costing less than Rs. 5,000/- each are fully depreciated in the year of capitalisation.

e) Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation / depletion. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible asset.

f) Purchase cost and user licence fees for major software are amortised over a period of three years.

g) Own fabricated assets are capitalized at cost including an appropriate share of overheads.

h) Depreciation for additions to/deductions is calculated @ pro-rata from/to the date of additions/deductions during the year.

i) Tangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as Capital Work-in-Progress.

j) Asset addition includes revaluation of Land by Chartered Engineer.

1.7 Impairment of Assets

Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amount. The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. Recoverable amount is the higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of an asset less the cost of disposal. If at the Balance Sheet date there is an indication that the previously assessed impairment loss no longer exist, the recoverable amount is reassessed and the asset is reflected at recoverable amount subject to maximum of depreciable historical cost.

1.8 Operating Cycle

An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

1.9 Investments

Long Term investments are valued at cost, less provision for diminution other than temporary, in value, if any. Current investments are stated at lower of cost and fair value, computed category-wise

1.10 Cash and equivalents

Cash and cash equivalents comprise of cash at bank and cash in hand. The Company considers all highly liquid investments with an original maturity of three months or less from date of purchase, to be cash equivalents.

1.11 Provisions and Contingent Liabilities

A provision is recognised 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 settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on 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.

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

When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

1.12 Foreign Exchange Translation of Projects and Accounting of Foreign Exchange Translations

Transactions in Foreign currencies are recorded at the rate prevailing on date of transaction. Foreign Branch and Subsidiaries are classified as non-integral foreign operations. Assets and Liabilities (both monetary and non-monetary) are translated at the closing rate at the end of year. Income and Expenses are translated at the monthly average rate. All the resulting exchange differences are accumulated in a separate head "Foreign Currency Translation Reserve" and the same is shown in Balance Sheet under Reserves and Surplus.

a) Assets and Liabilities are translated at the exchange rate prevailing on the last day of the year

b) Income and Expenditure are translated at the monthly average exchange rate.

Gains or losses arising out of remittance at the year-end are credited / debited to the statement of profit and loss for the year.

Gains or losses arising out of translations at the year-end are credited / debited to the Foreign Currency Translation Reserve under Reserves and Surplus.

1.13 Accounting for Taxes on Income

a) Current Income Tax :

Provision for Current Tax is made based on taxable Income computed for the year under the Income Tax Act, 1961, after deducting the profit for which the company is likely to claim exemption u/s 80IA.

b) Deferred Taxes:

Deferred Tax is accounted for by computing the tax effect of timing differences which arise during the year and reverse in subsequent periods. Timing differences arising due to difference in depreciation as per accounting records and Income Tax Act has alone been considered. Deferred tax assets are recognized and carried forward only to the extent that there is a certainty that sufficient future taxable income will be available against which such Deferred Tax Assets can be realised.

1.14 Employees Benefits

a) Employer''s contribution to the recognized provident fund which is a defined contribution scheme and ESI Contribution as per law are charged to the Profit and Loss account.

b) Provision for Gratuity has been made for the year under Group Gratuity Scheme with Life Insurance Corporation of India.

1.15 Earnings per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS20). Earnings per Share notified by the Companies (Accounting Standards) Rules, 2006. Basic earnings per equity shares are computed by dividing the net profit for the year attributable to the Equity Shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit for the year adjusting for the effects of dilutive potential equity shares attributable to the Equity Shareholders by the weighted average number of the equity shares and dilutive potential equity shares outstanding during the year except where the results are anti dilutive.


Mar 31, 2013

1.1 Basis of Preparation

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles ["GAAP"]. Further, the guidance notes / announcements issued by the Institute of Chartered Accountants of India (ICAI) are also considered, wherever applicable except to the extent where compliance with other statutory promulgations viz. SEBI guidelines override the same requiring a different treatment.

The financial statements are prepared in accordance with the requirements of the Companies Act, 1956, and comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the said Act. The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful lives of tangible and intangible fixed assets, allowance for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known.

1.2 Presentation of financial Statement

The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule VI to the Companies Act, 1956 ("the Act"). The Cash Flow Statement has been prepared and presented as per the requirements of Accounting Standard (AS) 3 "Cash Flow Statements". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule VI to the Act, are presented by way of notes forming part of accounts along with the other notes required to be disclosed under the notified Accounting Standards and the Listing Agreement.

Amounts in the financial statements are presented in Indian Rupees in Crore rounded off to two decimal places in line with the requirements of Schedule VI except where stated otherwise. Per share data are presented in Indian Rupees to two decimals places.

1.3 Revenue Recognition

A. Accounting of construction contracts

The Company follows the (Accounting Standard 7) percentage completion method, based on the stage of completion as at the balance sheet date, taking into account the contractual price and revision there to by estimating total revenue and total cost till completion of the contract and the profit so determined has been accounted for proportionate to the percentage of the actual work done as on the date of the Balance Sheet.

B. Other Operational Income

Other Operational Income Includes Revenue for Technical service provided.

C. Other Income

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

b. Dividend income was accounted when the right to receive of the same is established.

c. Income of Power Generation from Windmill was accounted in the period in which the right to receive of the same is established.

d. Interest income was recognised on the time proportion basis.

e. Other items of income are accounted as and when the right to receive arises.

1.4 Extra ordinary and exceptional Items

Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Company are classified as extraordinary items. Specific disclosure of such events/transactions is made in the financial statements. Similarly, any external event beyond the control of the Company, significantly impacting income or expense, is also treated as extraordinary item and disclosed as such.

On certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company, is such that its disclosure improves an understanding of the performance of the Company. Such income or expense is classified as an exceptional item and accordingly disclosed in the notes to accounts.

1.5 Classification of Assets and Liabilities

The Revised Schedule VI to the Companies Act, 1956 requires assets and liabilities to be classified as either Current or Non-current.

a) An asset shall be classified as current when it satisfies any of the following criteria:

I It is expected to be realized in, or is intended for sale or consumption in, the Company''s normal operating cycle;

II It is held primarily for the purpose of being traded;

III It is expected to be realized within twelve months after the reporting date; or

IV It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

b) All assets other than current assets shall be classified as non-current.

c) A liability shall be classified as current when it satisfies any of the following criteria:

I It is expected to be settled in the company''s normal operating cycle;

II It is held primarily for the purpose of being traded;

III It is due to be settled within twelve months after the reporting date; or

IV The company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

V. All liabilities other than current liabilities shall be classified as non-current.

1.6 Fixed Assets

a) Fixed assets are stated at their original cost of acquisition and installation, less accumulated depreciation, amortisation and impairment losses, if any. Cost comprises of the purchase price and any other directly attributable cost of bringing the asset to its working condition for its intended use.

b) Administrative and other general overhead expenses that are specifically to construction or acquisition of Fixed Assets or brining the Fixed Assets to working conditions are allocated and capitalised as a part of the cost of the Fixed Assets.

c) Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalised for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

d) Depreciation is provided on the written down value method at the rates prescribed in Schedule XIV to the Companies Act, 1956. Assets costing less than Rs. 5,000/- each are fully depreciated in the year of capitalisation.

e) Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation / depletion. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible

f) Purchase cost and user license fees for major software are amortised over a period of three years.

g) Own fabricated assets are capitalized at cost including an appropriate share of overheads.

h) Depreciation for additions to/deductions is calculated @ pro-rata from/to the date of additions/deductions during the year.

i) Tangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as Capital Work- in-Progress.

1.7 Impairment of Assets

Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amount. The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. Recoverable amount is the higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. /Net selling price is the amount obtainable from the sale of an asset less the cost of disposal. If at the Balance Sheet date there is an indication that the previously assessed impairment loss no longer exist, the recoverable amount is reassessed and the asset is reflected at recoverable amount subject to maximum of depreciable historical cost.

1.8 Operating Cycle

An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

1.9 Investments

a) Trade Investments comprises of Investments in Subsidiaries.

b) Long Term investments are valued at cost, less provision for diminution other than temporary, in value, if any. Current investments are stated at lower of cost and fair value, computed category-wise

1.10 Cash and equivalents

Cash and cash equivalents comprise of cash at bank and cash in hand. The Company considers all highly liquid investments with an original maturity of three months or less from date of purchase, to be cash equivalents.

1.11 Provisions and Contingent Liabilities

A provision is recognised 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 settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on 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.

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

When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

1.12 Foreign Exchange Translation of Projects and Accounting of Foreign Exchange Translations

Transactions in Foreign currencies are recorded at the rate prevailing on date of transaction. Foreign Branch and Subsidiaries are classified as non-integral foreign operations. Assets and Liabilities (both monetary and non-monetary) are translated at the closing rate at the end of year. Income and Expenses are translated at the monthly average rate. All the resulting exchange differences are accumulated in a separate head "Foreign Currency Translation Reserve" and the same is shown in Balance Sheet under Reserves and Surplus.

a) Assets and Liabilities are translated at the exchange rate prevailing on the last day of the year

b) Income and Expenditure are translated at the monthly average exchange rate.

Gains or losses arising out of remittance at the year-end are credited / debited to the statement of profit and loss for the year.

Gains or losses arising out of translations at the year-end are credited / debited to the Foreign Currency Translation Reserve under Reserves and Surplus.

1.13 Accounting for Taxes on Income

a) Current Income Tax :

Provision for Current Tax is made based on taxable Income computed for the year under the Income Tax Act, 1961, after deducting the profit for which the company is likely to claim exemption u/s 80IA.

b) Deferred Taxes :

Deferred Tax is accounted for by computing the tax effect of timing differences which arise during the year and reverse in subsequent periods. Timing differences arising due to difference in depreciation as per accounting records and Income Tax Act has alone been considered. Deferred tax assets are recognized and carried forward only to the extent that there is a certainty that sufficient future taxable income will be available against which such Deferred Tax Assets can be realized.

1.14 Employees Benefits

a) Employer''s contribution to the recognized provident fund which is a defined contribution scheme and ESI Contribution as per law are charged to the Profit and Loss account.

b) Provision for Gratuity has been made for the year under Group Gratuity Scheme with Life Insurance Corporation of India.

1.15 Earnings per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS20). Earnings per Share notified by the Companies (Accounting Standards) Rules, 2006. Basic earnings per equity shares are computed by dividing the net profit for the year attributable to the Equity Shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit for the year adjusting for the effects of dilutive potential equity shares attributable to the Equity Shareholders by the weighted average number of the equity shares and dilutive potential equity shares outstanding during the year except where the results are anti dilutive.


Mar 31, 2012

1. Basis of Accounting:

The financial statements have been prepared as of a going concern on historical cost convention and on accrual method of accounting in accordance with the generally accepted accounting principles, Accounting Standards issued by the Institute of Chartered Accountants of India, as applicable and the provisions of the CompaniesAct, 1956,as adopted consistently by the Company.

During the year ended March 31, 2012, the revised Schedule VI notified under the CompaniesAct, 1956, has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However,it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicablein the current year.

2. Use of Estimate:

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates.

3. Cash Flow Statement:

Cash Flow Statement is prepared in accordance with "Indirect method" as explained in the Accounting standard 3issuedbythe InstituteofCharteredAccountantsofIndia.

4. Classification of Assets and Liabilities:

The Revised Schedule VI to the Companies Act, 1956 requires assets and liabilities to be classified as either Currentor Non-current.

a. Anasset shall be classified as current when it satisfies any of the following criteria:

i. it is expected to be realized in, or is intended for sale or consumption in, the Company's normal operating cycle;

ii. It is held primarily for the purpose of being traded;

iii. It is expectedto be realized within twelve months after the reporting date; or iv. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability foratleast twelve months after the reporting date.

b. All assets other than current assets shall be classified as non-current.

c. Aliability shall be classified as current when it satisfies any of the following criteria:

i.It is expected to be settled in the company's normal operating cycle; ii. It is held primarily for the purpose of being traded;

iii. It is due to be settled within twelve months after the reporting date; or

iv. The company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

d. All liabilities other than current liabilities shall be classified as non-current.

5. Operating Cycle:

An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

6. Fixed assets:

Fixed assets are stated at cost of acquisition or construction, less accumulated depreciation, amortisation and impairment losses, if any. All costs relating to the acquisition and installation of fixed assets are capitalized which includes borrowing costs directly attributable to construction or acquisition of fixed assets uptothe date the asset isputtouse.

7. Depreciation Accounting:

Depreciation is being charged on Written down Value method in accordance with rates specified under schedule XIV of the Companies Act, 1956. Depreciation on addition/deletion to assets during the period has been provided on pro-rata basis with reference to the date of addition / deletion. Depreciation on assets, whose actual cost does not exceed five thousand rupees, has been providedat the rateof 100%.

8. Inventories :

Raw Materials and other construction materials are valued at the lower of cost and net realizable value onthe basisofFIFO method.

9. Revenue Recognition:

Accounting of construction contracts: The Company follows the percentage completion method, as prescribed by The Institute of Chartered Accountants of India vide the Accounting Standard 7, based on the stage of completion at the balance sheet date, taking into account the contractual price and revision thereto by estimating total revenue and total cost till completion of the contract and the profit so determined has been accounted for proportionate to the percentage of the actual work done. Total costs estimated to complete the contract are adoptedasassessed byaqualified engineer and certifiedbythe Management.

10. Accounting for Effects of changes in Foreign Exchange Rates:

Transactions in foreign currencies are recorded at the rate prevailing on date of transaction. Foreign Branch and Subsidiaries are classified as non-integral foreign operations. Assets and Liabilities (both monetary and non-monetary) are translated at the closing rate at the year end. Income and expenses are translated at the monthly average rate. All resulting exchange differences are accumulated in a separate account 'Foreign CurrencyTranslation Reserve' and are shown inthe Balance sheet.

11. Accounting for Investments:

Long Term investments are valued at cost, less provision for diminution other than temporary, in value, if any. Current investments are statedat lower ofcost and fair value, computed category-wise.

12. EmployeeBenefits:

I) Employer's contribution to the recognized provident fund, which is a defined contribution scheme and ESI Contribution as per law are charged to the profit and loss account.

ii) Provision for Gratuity has been provided for the year under group gratuity scheme with Life Insurance Corporation of India.

13. Earnings per Share :

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

14. Accounting for Taxes on Income :

I) Current Income Tax: Provision for Current Tax is made based on taxable income computed for the year under the Income Tax Act, 1961, after deducting the profit for which the company is likely to claim exemption U/s 80IA.

ii) Deferred Taxes: Deferred Tax is accounted for by computing the tax effect of timing differences which arise during the year and reverse in subsequent periods. Timing differences arising due to difference in depreciation as per accounting records and Income Tax Act has alone been considered. Deferred tax assets are recognized and carried forward only to the extent that there is a certainty that sufficient future taxable income willbeavailable against which such Deferred TaxAssets canberealized.

15. Impairment ofAssets :

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

16. Provisions, Contingent Liabilities and ContingentAssets:

A provision is recognized when there is a present obligation as a result of past events and it is probable that there willbeanoutflowofresourceto settle the obligation,in respect ofwhicha reliable estimate canbemade. Provisions are not discountedto its present value and are determined basedonthe best estimates 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.

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

Against the total projected utilization of Rs. 46.75 crores from the Intial Public Offering funds, the entire amount has been utilized towards funding margin requirement for working capital, investments in capital equipments, capitalization of subsidiaries which are SPV's carrying out projects overseas, general corporate purposes and issue expenses.

 
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