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Accounting Policies of Tantia Constructions Ltd. Company

Mar 31, 2015

A. Corporate Information

Tantia Constructions Limited ('The Company') is one of the most experienced civil infrastructure solutions providers in India. Incorporated as a private limited Company in 1964 which became public limited Company in 1982, the Company is engaged in executing critical infrastructure projects. It began operations in the railways segment and over the years extended to seven core infrastructure segments of railways, roads, urban development, infrastructure and industrial fabrication, power, marine and aviation.

1. Basis of Preparation of Financial Statements

The Financial Statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and in accordance with Generally Accepted Accounting Principles (Indian GAAP) and comply in all material aspect with the applicable Accounting Standards notified under section 211 (3C) (which continues to be applicable in term of general circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act 2013) and other relevant provisions of the Companies Act,1956.

For recognition of Income and Expenses mercantile system of accounting is followed except in case of insurance claims where on the ground of prudence and as well as uncertainty in realization, the same is accounted for as and when accepted/received.

The accounting policies adopted in the preparation of Financial Statements are consistent with those of previous year.

2. Use of Estimates:

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

3. Change in Accounting Policies:

There is no change in accounting policies during the current financial year.

4. Inventories

a) Stock of Construction materials, stores and spares and fuel (except for those relating to Construction activities) are valued at cost (weighted average basis) or net realizable value whichever is lower.

b) Cost of Construction materials, stores, spares and fuel used in construction activities are valued at cost (weighted average basis).

c) Work-in-progress is valued at cost and reflects the work done but not certified.

d) The cost of inventories comprises all cost of purchase, cost of conversion and other incidental cost incurred in bringing the inventories to their present location and condition.

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

5. Fixed Assets

Tangible Fixed Assets are stated at cost of acquisition inclusive of duties (net of VAT where input credit is availed) together with any incidental costs for bringing the asset to its working condition for its intended use less accumulated depreciation/amortization and impairment losses, if any.

Capital work in progress is stated at amounts spent up to the date of the Financial Statement. Intangible assets comprise of License fees and other implementation cost of software (SAP) acquired for in- house use and is net of amortization. Intangible assets under development are stated at cost.

6. Depreciation / Amortization Tangible Assets

Depreciation on fixed assets is provided on Straight Line Method (SLM) method and is provided based on useful life of the assets as prescribed in Schedule - II to the Companies Act, 2013.

Intangible Assets

These are amortized over the best estimates of its useful life.

7. Impairment of Assets

On annual basis the Company makes an assessment of any indicator that may lead to impairment of assets. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. If any indication of such impairment exists, the reasonable amounts of those assets are estimated and impairment loss is recognized. The impairment loss recognized in prior accounting period is adjusted if there has been a change in the estimate of recoverable amount.

8. Revenue Recognition On Construction Contracts:

- The contract revenue is recognized by reference to the stage of completion of the contract activity at the reporting date of the Financial Statements on the basis of percentage completion method.

- The stage of completion of contracts is measured by reference to the proportion that the contract costs incurred for work completed up to the reporting date bear to the estimated total contract costs for each contract.

- Losses on contracts are fully accounted for as an expense immediately when it is certain that the total contract costs will exceed the total contract price. Total contract cost are ascertained on the basis of actual cost and cost to be incurred for the completion of contracts in progress which is determined by the management based on technical data, forecast and estimates of expenditure to be incurred in future.

- Price escalation claims and other additional claims are recognized as revenue when:

i. They are realized or receipts thereof are mutually settled or reasonably ascertained.

ii. Negotiations with the client have reached such an advanced stage that there is reasonable certainty that the client will accept the claim.

iii. Amount that is probable, if accepted by the client, to be measured reliably by the Company.

On Sale of Goods:

- In case of sale of goods, the transfer of property in goods results in the transfer of significant risks and rewards of ownership to the buyer and revenue is recognized at the time of transfer of property.

9. Foreign Currency Transactions

Transactions in foreign currency are recorded using the exchange rate prevailing at the date of transactions. Monetary assets and liabilities related to foreign currency transactions unsettled at the end of the year are translated at year end rate. All other foreign currency assets and liabilities are stated at the rates prevailing at the date of transaction other than those covered by forward contracts, which are stated at the contracted rate. Exchange differences arising on foreign currency transactions are recognized in the Statement of Profit & Loss.

10. Investment

Long-term investments are stated at cost, provision is made to recognize a decline, if any, other than temporary, in the value of long term investments. Investments in Joint Ventures are stated at cost.

Current investments being readily realizable and intended to be held for less than a year are carried at cost or market rate whichever is lower, on individual investment basis.

11. Employee Benefit (Retirement and Post Employment Benefit)

Liability for employee benefits, both short and long term, for present and past services which are due as per the terms of employment are recorded in accordance with Accounting Standard (AS) - 15 "Employee Benefits" notified by Companies (Accounting Standards) Rules, 2006.

I. Gratuity

Liability on account of Gratuity is:

- Covered through recognized gratuity fund managed by Life Insurance Corporation of India and contributions are charged to revenue; and

- Balance if any, is provided on the basis of valuation of the liability by an independent Actuary as at the year end.

II. Provident Fund, ESI and Medical

Contribution to provident fund (defined contribution plan) and ESI made to government administered Provident Fund and ESI are recognized as expenses. The company has no further obligation beyond its monthly contribution. Those employees who are not covered under ESI scheme (as stated in the Act) are eligible for medical re-imbursement as per the HR policy of the Company.

III. Leave Encashment

Liability for leave encashment is treated as a long term liability and is provided on the basis of valuation by an independent Actuary as at the year end.

12. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the Statement of Profit and Loss.

13. Segment Reporting Identification of Segments

The Company has identified that its business segments are the primary segments. The Company's businesses are organized and managed separately according to the nature of activity, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Allocation of common costs

Common allocable costs are allocated to each segment on case to case basis applying the ratio, appropriate to each relevant case. Revenue and expenses, which relates to the enterprise as a whole and are not allocable to segment on a reasonable basis, have been included under the head "Unallocated - Common".

Segment Policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

14. Earnings Per Share

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

15. Taxation

Tax expenses comprise of current tax and deferred tax.

Current tax is determined in respect of taxable income for the year based on Income Tax Act 1961. Deferred tax is recognized, subject to consideration of prudence, on timing difference (being the difference between taxable income and accounting income that originates in one period and are capable of being reversed in one or more subsequent years) and is measured using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date and are recognized only if there is reasonable certainty that they will be realized.

16. Accounting of Joint Venture contracts

a) In respect of its interest in Jointly Controlled Operations, the Company recognize the asset that it controls and the liability that it incurs along with the expenses that it incurs and the income it earns from the Joint Venture in accordance with Accounting Standards (AS) 27.

b) In respect of its interest in Jointly Controlled Entity, the same is recognized as an Investment in accordance with Accounting Standard (AS) 13, "Accounting for Investment". a

17. Provision, Contingent Liabilities & Contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes to Financial Statement. Disputed demands in respect of Income Tax and Sales Tax etc are disclosed as contingent liability. Payments in respect of such demands, if any, are shown as advance, till the final outcome.


Mar 31, 2014

1. Basis of Preparation of Financial Statements

The Financial Statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and in accordance with Generally Accepted Accounting Principles (Indian GAAP) and comply in all material aspect with the applicable Accounting Standards notified under section 211 (3C) (which continues to be applicable in term of general circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act 2013) and other relevant provisions of the Companies Act,1956.

For recognition of Income and Expenses mercantile system of accounting is followed except in case of insurance claims where on the ground of prudence and as well as uncertainty in realization, the same is accounted for as and when accepted/received.

The accounting policies adopted in the preparation of Financial Statements are consistent with those of previous year.

2. Use of Estimates :

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

3. Change in Accounting Policies :

There is no change in accounting policies during the current financial year.

4. Inventories

a) Stock of Construction materials, stores and spares and fuel (except for those relating to Construction activities) are valued at cost (weighted average basis) or net realizable value whichever is lower.

b) Cost of Construction materials, stores, spares and fuel used in construction activities are valued at cost (weighted average basis).

c) Work-in-progress is valued at cost and reflects the work done but not certified.

d) The cost of inventories comprises all cost of purchase, cost of conversion and other incidental cost incurred in bringing the inventories to their present location and condition.

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

5. Fixed Assets

Tangible Fixed Assets are stated at cost of acquisition inclusive of duties (net of VAT where input credit is availed) together with any incidental costs for bringing the asset to its working condition for its intended use less accumulated depreciation/amortizati''on and impairment losses, if any.

Capital work in progress is stated at amounts spent up to the date of the Financial Statement.

Intangible assets comprise of License fees

and other implementation cost of software (SAP) acquired for in-house use and is net of amortization. Intangible assets under

development are stated at cost.

6. Depreciation / Amortization

Depreciation on fixed assets acquired upto the year ended on Diwali 2040 S.Y. (Corresponding to 3rd November 1983) is provided by applying the rates specified in Schedule-XIV of the Companies Act 1956 and calculated on written down value method.

In respect of the assets acquired thereafter, other than Construction Accessories and Intangible Assets depreciation is charged on the straight line method at the rates prescribed in Schedule- XIV of the Companies'' Act 1956. Construction Accessories are depreciated over a period of five years on straight line method from the year of addition.

Intangible Assets are amortized over the best estimates of its useful life.

Depreciation on fixed assets acquired/disposed off during the year, is provided on pro-rata basis with reference to the date of acquisition/disposal.

7. Impairment of Assets

On annual basis the Company makes an assessment of any indicator that may lead to impairment of assets. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. If any indication of such impairment exists, the reasonable amounts of those assets are estimated and impairment loss is recognized. The impairment loss recognized in prior accounting period is adjusted if there has been a change in the estimate of recoverable amount.

8. Revenue Recognition

On Construction Contracts :

- The contract revenue is recognized by reference to the stage of completion of the contract activity at the reporting date of the Financial Statements on the basis of percentage completion method.

- The stage of completion of contracts is measured by reference to the proportion that the contract costs incurred for work completed upto the reporting date bear to the estimated total contract costs for each contract.

- Losses on contracts are fully accounted for as an expense immediately when it is certain that the total contract costs will exceed the total contract price. Total contract cost are ascertained on the basis of actual cost and cost to be incurred for the completion of contracts in progress which is determined by the management based on technical data, forecast and estimates of expenditure to be incurred in future.

- Price escalation claims and other additional claims are recognized as revenue when:

i. They are realized or receipts thereof are mutually settled or reasonably ascertained.

ii. Negotiations with the client have reached such an advanced stage that there is reasonable certainty that the client will accept the claim.

iii. Amount that is probable, if accepted by the client, to be measured reliably by the Company.

On Sale of Goods :

- In case of sale of goods, the transfer of property in goods results in the transfer of significant risks and rewards of ownership to the buyer and revenue is recognized at the time of transfer of property.

9. Foreign Currency Transactions

Transactions in foreign currency are recorded using the exchange rate prevailing at the date of transactions. Monetary assets and liabilities related to foreign currency transactions unsettled at the end of the year are translated at year end rate. All other foreign currency assets and liabilities are stated at the rates prevailing at the date of transaction other than those covered by forward contracts, which are stated at the contracted rate. Exchange differences arising on foreign currency transactions are recognized in the Statement of Profit & Loss.

10. Investment

Long-term investments are stated at cost, provision is made to recognize a decline, if any, other than temporary, in the value of long term investments. Investments in Joint Ventures are stated at cost.

Current investments being readily realizable and intended to be held for less than a year are carried at cost or market rate whichever is lower, on individual investment basis.

11. Employee Benefit (Retirement and Post Employment Benefit)

Liability for employee benefits, both short and long term, for present and past services which are due as per the terms of employment are recorded in accordance with Accounting Standard (AS) - 15 "Employee Benefits" notified by Companies (Accounting Standards) Rules, 2006.

I. Gratuity

Liability on account of Gratuity is :

- Covered through recognized gratuity fund managed by Life Insurance Corporation of India and contributions are charged to revenue; and

- Balance if any, is provided on the basis of valuation of the liability by an independent Actuary as at the year end.

II. Provident Fund, ESI and Medical

Contribution to provident fund (defined contribution plan) and ESI made to government administered Provident Fund and ESI are recognized as expenses. The company has no further obligation beyond its monthly contribution. Those employees who are not covered under ESI scheme (as stated in the Act) are eligible for medical re-imbursement as per the HR policy of the Company.

III. Leave Encashment

Liability for leave encashment is treated as a long term liability and is provided on the basis of valuation by an independent Actuary as at the year end.

12. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the Statement of Profit and Loss.

13. Segment Reporting

Identification of Segments

The Company has identified that its business segments are the primary segments. The Company''s businesses are organized and managed separately according to the nature of activity, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Allocation of common costs

Common allocable costs are allocated to each segment on case to case basis applying the ratio, appropriate to each relevant case. Revenue and expenses, which relates to the enterprise as a whole and are not allocable to segment on a reasonable basis, have been included under the head "Unallocated - Common".

Segment Policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

14. Earnings Per Share

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

15. Taxation

Tax expenses comprise of current tax and deferred tax.

Current tax is determined in respect of taxable income for the year based on Income Tax Act 1961. Deferred tax is recognized, subject to consideration of prudence, on timing difference (being the difference between taxable income and accounting income that originates in one period and are capable of being reversed in one or more subsequent years) and is measured using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date and are recognized only if there is reasonable certainty that they will be realized.

16. Accounting of Joint Venture contracts

a) In respect of its interest in Jointly Controlled Operations, the Company recognize the asset that it controls and the liability that it incurs along with the expenses that it incurs and the income it earns from the Joint Venture in accordance with Accounting Standards (AS) 27.

b) In respect of its interest in Jointly Controlled

Entity, the same is recognized as an Investment in accordance with Accounting Standard (AS) 13, "Accounting for Investment".

17. Provision, Contingent Liabilities & Contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent liabilities are not recognized but are disclosed in the Notes to Financial Statement. Disputed demands in respect of Income Tax and Sales Tax etc are disclosed as contingent liability. Payments in respect of such demands, if any, are shown as advance, till the final outcome.

Contingent Assets are neither recognized nor disclosed in the Financial Statements.

i) The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupee. The dividend proposed by the Board of Directors is subject to the approval of the share holders in the ensuing Annual General Meeting.

ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts, in the proportion to their shareholding.

The Company had issued cumulative redeemable preference shares having a par value of Rs. 10 per share on 8th January 2005. The preference share holders do not carry any voting right at shareholders meeting except in case of special meeting of preference share holders only. The preference share holders are entitled to dividend @ 10.5% on prorata basis before equity share holders are paid dividend. The preference shares are redeemable at the option of shareholder with a notice of 90 days or at the option of the Company with 30 days notice within a maximum period of 10 years from the date of issue. In the event of liquidation of the Company, the holders of preference shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts and before distribution of anything to the equity share holder. The distribution will be in the proportion to the no. of shares held by the shareholder.


Mar 31, 2010

1. Nature of Operations

Tantia Constructions Limited (The Company) is one of the oldest general civil infrastructure solutions providers in India. Incorporated as a private limited Company in 1964 which became public limited Company in 1982, the Company is engaged in executing critical infrastructure proects. It began operations in the railways segment and over the years extended to seven core infrastructure segm ents of railways, roads urban development, industial, power, marine and aviation.

2. Basis of Preparation of Financial Statements

The Financial Statements have been prepared and presented under he historical cost convention on the accrual basis of accounting and in accordance with Generally Accepted Accounting Principles (Indian GAAP) and comply with the applicable accounting standards notified under Section 2113C) of he Companes Act, 1956 and the relevant provisions of the Companies Act, 1956 except where otherwise stated.

For recognition of Income and Expenses mercantile system of accounting is followed except in case of insurance claims.

The accounting polices have been consistently applied by the Company unless otherwise stated.

3. Use of Estim ates

The preparation of financial statem ents requies estm ates and assumptions to be m ade that affect reported am ount of assets and labilities on he date of financial statements and he reported am ount of revenues and expenses during he reporting period. Difference between the actual results and estmates are recognised in the period in whih the results are known.

4. Inventories

a) Stock of raw materials, stores and spares, other construction materials and fuel are valued at cost (weighted average basis) or net realisable value whihever is lower.

b) Work-in-progress is valued at cost and refects the work done but not certifed.

5. Depreciation / Am ortisation

Depreciation on fixed assets acquired upto the year ended on Diwali 2040 S.Y. Corresponding to 3rd November, 1983) is provided by applying the rates specifed in Schedue-XIV of the Com panes Act, 1956 and calculated on written down value method.

In respect of the other assets acquied thereafter depreciation is charged on he straight line method at the rates prescrbed in Schedue- XIV of the Companes Act, 1956

Intangible Assets are recorded at the consideration paid for acquisition of such assets and are carried at cost ess accumulated Amortisation.

6. Revenue Recognition

On Constuction Contracts

* The contract revenue is recognised by reference to the stage of completion of the contract activity at the reporting date of he financial statements on the basis of percentage competion method.

* The stage of competion of contracts is measured by reference to the proportion that the contract costs incurred for work performed upto the reporing date bear to the estm ated total contract costs for each contract.

* Losses on contracts are fully accounted for as an expense, immediately when it is certain that the total contract costs will exceed the total contract price.

* Price escalation claims and other addiional claims including those under arbitration are recognised as revenue when: i They are realised or receipts thereof are mutually settled or reasonably ascertained.

i. Negotiations with he client have reached such an advanced stage such that there is reasonable certainty that the client will accept the claim.

ii. Amount that is probable, if accepted by the clent, to be measured reliably by the Company.

7. Fixed Assets

Fixed Assets are stated at cost of acquisition together with any incidental costs for bringing the asset to is working condition for its intended use ess accumulated depreciation and impaiment losses, if any. Capital work in progress is stated at amount spent up to the date of the Balance Sheet.Intangible assets comprise of License fees and other implementation cost of software SAP) acquired for in-house use is net off am ortization, if any.

8. Foreign Currency Transactions

Transactions in foreign currency are recorded using the exchange rate prevailing at the date of transactions. At the Balance Sheet date monetary assets and liabilites denominated in foreign currency are recorded using the closing exchange rates. All other foreign currency assets and liabilities are stated at the rates ruling at the year end other than those covered by forward contracts , which are stated at the contracted rate. Exchange differences arising on foreign currency transactions are recognised in the Profit& Loss Account.

9. Investment

Long-term investments a restated at cost, provision is made to recognise a decline, other than temporary , in the value of long term investm ents. Current investments a re carried at cost or m arket rate whichever is less, on individual investment basis . Investments in Joint Ventures are stated at cost.

10 . Employee Benefit (Retirement and Post Employment Benefit)

Contribution to defined benefits chemes such as Provident Fund, ESI, Medicalre-imbursem entetc . are charged to profit and loss account as in curred . The contributions a re made to Governmentadm inistered Provident Fund and ESI tow ards which the Company has no further obligations beyond its monthly contributions. Those employees who are not covered under ESI scheme (as stated in the Act) get medical re - im bursement as per the HR policy of the Company.

The Company also provides forretirment benefits in the form of gratuity an d leave en cash m ent. Such benefits a re provided for, based on the valuation as at the balance sheet date made by independent actuaries.

The company has taken policy of Group Gratuity Scheme from LICI. In respect of Gratuity , the company provides in its books of account the shortfall in the fund balanceas per and in depend ent actuary valuation subject to minimum of the premium claimed by LICI (as on 31st M arch).

11. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets . A qualifying as set is one that necessarily takes subsequent period of time to get ready for intended use. All other borrowing costs are charged to Profit and Loss account.

12. Earnings Per Share

Basic earning per share is calculated by dividing the net Profit or Loss for the period attributable to equity share holders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earning per share , the net Profit or Loss for the year attributable to the equity share holders and weighted average number of share outstanding if any are adjusted for the effects of all dilutive potentialequity shares .

13. Taxation

Tax expenses comprise of current tax, deferred tax and fringe benefit tax.

i) Current tax is determined in respect of taxable income for the year based on applicable tax rates and laws. On the basis of the opinion taken from an Expert the Company is continuing to avail of the benefit of deductions u/s 80IA of the Income Tax Act, 1961 for the eligible projects.

i) Deferred tax is recognised, subject to consideration of prudence, on timing difference being the difference between taxable income and accounting income that originates in one period an dare capable of being set off in one on m ore subsequent ye ars and is measured using taxrates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are reviewed at each balance sheet date to and a rerecognised only if there is reasonable certainty that they will be realised .

14. Accounting of Joint Venture contracts

a) The contracts executed in Joint Venture under work sharing arrangem ent (consortium ) are accounted in accordance with the accounting policy followed by the Company as that of an independent contract to the extent work is executed.

b) In joint venture contracts under profit sharing arrangem ents , services rendered to joint ventures are accounted as income on accrual basis , profit or loss is accounted as when determined by the jointventure and Net Investment in the jointventure is reflected as investm ents or loans and advances or current liabilities. The proportionate contract receipts of joint ventures are reflected as contract receipts of joint ventures and the same has been shown as expenses of joint venture as a conservative approach.

15. Impairment of Assets

On annual basis the Company makes an assessm ent of any indicator that may lead to impairment of assets. An asset is treated as impaired when the carrying cost of the as set is exceeds the recoverable value. If any indication of such impairment exists, the reasonable amounts of those assets are estim ated and impairment loss is recognised, if the carrying amount of those assets exceeds their recoverable amount. The impairment loss recognised in prior accounting period is adjusted if there has been a change in the estimate of re coverable mount.

16. Provision, Contingent Liabilities & Contingent assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there willbe an outflow of resoures. Contingent liabilities are not recognised but a re disclosed in the notes to accounts . Disputed dem ands in respect of Income Tax, Sales Tax a re disclosed as contingent liability . Payments in respect of suchde mands, if any, are shown as advance, till the final outcome . Contingent Assets are neither recognised nor disclosed in the financial statements .



 
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