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Accounting Policies of Unity Infraprojects Ltd. Company

Mar 31, 2013

1. Basis of Accounting

The financial statements are prepared under historical cost convention, on-going concern concept and in compliance with the Accounting Standards notified under section 211(3C) of the Companies Act, 1956 (the "Act"). The Company follows mercantile system of accounting and recognises income and expenditure on accrual basis to the extent measurable and where there is certainty of ultimate realisation in respect of incomes. Accounting policies not specifically referred to otherwise, are consistent and in consonance with the generally accepted accounting policies.

2. Fixed Assets

a) Tangible assets

Tangible assets are stated at cost, inclusive of incidental expenses related thereto and are net of recoverable taxes less accumulated depreciation and accumulated impairment loss. If any.

b) Intangible assets

Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment. Internally generated intangible assets, excluding development cost, are Expenses as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Company has an intention and ability to complete and use or sell the intangible and the costs can be measured reliably.

3. Depreciation and amortization

a) Depreciation on tangible fixed assets is provided on the written-down-value method at the rates and in the manner prescribed under Schedule XIV to the Act. Depreciation on additions/ deletions to fixed assets is calculated pro-rata from/up to the date of such additions/deletions.

b) Intangible fixed assets are amortised on a straight line basis over the estimated useful economic life. The Company uses a rebuttable presumption that the useful life of an intangible asset will not exceed five years from the date when the asset is available for use.

c) Assets individually costing Rs. 0.05 Lacs or less are fully depreciated in the year of purchase.

4. Borrowing Costs

a) Borrowing cost include interest, amortisation of ancillary costs incurred in connection with the arrangement of borrowing and exchange differences arising from foreign currency borrowing to the extent they are regarded as adjustment to the interest costs.

b) Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset. All other borrowing costs are expenses in the period they occur.

5. Investments

a) Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis.

b) Investment other than current investments, are classified as long-term investments and are stated at cost. Provision for diminution in value of Long term investments is made only if such a decline is other than temporary.

c) An investment in land or buildings, which is not intended to be occupied substantially for use by, or in the operations of the company, is classified as investment property. Investment properties are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

6. Inventories

a) Inventories of raw materials, stores and consumables and work-in-progress are valued at lower of cost or net realisable value on first-in-first- out basis. Work in progress on construction contracts reflects the value of material inputs and expenses including appropriate overheads incurred on such contracts, at cost. Cost for this purpose comprises of raw material cost & appropriate overheads incurred for bringing them to their present condition.

b) Traded goods are valued at the cost or net realizable value whichever is less and cost is determined on first-in-first-out basis.

7. Taxes on Income

a) Provision for current tax and fringe benefit tax is made considering various allowances and benefits available to the Company under the provisions of IncomeTax Act, 1961.

b) In accordance with Accounting Standard AS-22 "Accounting for Taxes on Income", deferred tax resulting from timing differences between book and tax profits are accounted for at tax rate substantially enacted by the Balance Sheet date to the extent the timing differences are expected to be crystalised.

c) Deferred Tax Assets arising on account of carried forward losses and unabsorbed depreciation as per Income Tax Act, 1961 are recognised to the extent there is a virtual certainty supported by convincing evidence that such assets will be realised.

8. Sales Tax / WCT / VAT

a) Where the Company has contractual right to claim equal amounts regarding the said liability from the clients, the same is not charged as expenditure.

b) Where the ultimate liability is on the Company, the same is accounted provisionally as per available information and the final adjustment for the same is done as and when the demand is raised by the concerned authorities on the Company. Sales tax expenses include amount paid on account of assessment order issued by concerned authorities.

9. Employee Benefits

a) Defined Contribution Plans

The Company contributes on a defined contribution basis to Employee''s Provident Fund and Employee''s State Insurance Fund towards post-employment benefits, all of which are administered by the respective Government authorities, and has no further obligation beyond making its contribution, which is an expense in the year to which it pertains.

b) Defined Benefit Plans

The Company has a Defined Benefit Plan namely Gratuity for all its employees. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation by an independent actuary at the year end, which is calculated using projected unit credit method. Actuarial gains and losses which comprise experience adjustment and the effect of changes in actuarial assumptions are recognised in the Profit and Loss Account.

c) Employee Leave Entitlement

The employees of the Company are entitled to leave as per the leave policy of the Company. The liability in respect of unutilised leave balances is provided based on an actuarial valuation carried out by an independent actuary as at the year end and charged to the Profit and Loss Account.

10. Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Monetary assets and liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing at the date of the Balance Sheet. Gains and losses arising on account of differences in foreign exchange rates on settlement/ translation of monetary assets and liabilities are recognised in the Profit and Loss Account. Non-monetary foreign currency items have been carried at cost.

11. Revenue Recognition

a) Income from construction is recognised as determined by the project manager by taking into consideration actual cost incurred and profit evaluated and duly certified by the client. All other income are recognised and accounted for on accrual basis. Losses on contracts are fully accounted for as and when incurred. Foreseeable losses are accounted for when they are determined. Insurance claims are accounted for on cash basis.

b) Turnover represents work certified as determined by the project managers by taking into consideration the actual cost incurred and profit evaluated and duly certified by the client and is inclusive of service tax.

c) Dividends are accounted for when the right to receive dividend is established.

d) Income from interest on deposits, loans and interest bearing securities is recognised on time proportionate method.

e) Share of profit / loss from firms, in which the company is a partner, is accounted for in the financial year ending on (or immediately before) the date of the balance sheet.

12. Impairment of Assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

13. Provisions, Contingent Liabilities and Contingent Assets

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

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.

Where there is a possible obligation or a present obligation but the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent Assets are neither recognised nor disclosed.

14. Accounting Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period.

Difference between the actual results and the estimates are recognized in the period in which the results are known/ materialised.

15. Leases

a) Where the company is lessee

Finance leases, which effectively transfers to the company substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges have been recognised as finance cost in the statement of profit and loss.

Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the lessor, have been recognised as operating lease. Lease rental under operating lease are charged off to the Profit and Loss Account as incurred.

b) Where the company is lessor

Leases in which the company transfers substantially all the risks and rewards of the ownership are classified as finance leases. Assets given under the finance lease have recognised at an amount equal to the net investment in the lease. After initial recognition, the company apportions lease rentals between the principal repayment and interest income so as to achieve a constant rate of return on the net investment outstanding in respect of finance lease.

Leases in which the company does not transfer substantially all the risks and rewards of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in assets. Lease income on an operating lease is recognised in the statement of profit and loss on a straight-line basis over the lease term.

16. Accounting for Joint venture contracts

a) Contracts executed in joint venture under work sharing arrangements (consortium) are accounted in accordance with the accounting policy followed by the company as that of an independent contract to the extent work is performed.

b) In respect of contracts executed in Integrated Joint Ventures under profit sharing arrangements, the services rendered to the joint ventures are accounted as income on accrual basis. The profit/loss is accounted for, as and when it is determined by the Joint Ventures and the net investment in the Joint Ventures is reflected as investments.


Mar 31, 2012

The financial statements are prepared under historical cost convention, ongoing concern concept and in compliance with the Accounting Standards notified under section 211(3C) of the Companies let, 1956 (the "let"). The Company follows mercantile system of accounting and recognized income and expenditure on accrual basis to the extent measurable and where there is certainty of ultimate realization in respect of incomes. Accounting policies not specifically referred to otherwise, are consist ent and in consonance with the generally accepted accounting policies.

a) Tangible assets

Tangible assets are stated at cost, inclusive of incidental expenses related thereto and are net of recoverable taxes less accumulated depreciation and accumulated impairment loss. If any.

b) Intangible assets

Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment. Internally generated intangible assets, excluding development cost, are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Company has an intention and ability to complete and use or sell the intangible and the costs can be measured reliably.

a) Depreciation on tangible fixed assets is provided on the written-down-value method at the rates and in the manner prescribed under Schedule XIV to the Act. Depreciation on additions/ deletions to fixed assets is calculated pro-rata from/up to the date of such additions/deletions.

b) Intangible fixed assets are amortized on a straight line basis over the estimated useful economic life. The Company uses a rebuttable presumption that the useful life of an intangible asset will not exceed five years from the date when the asset is available for use.

c) Assets individually costing Rs. 0.05 lacs or less are fully depreciated in the year of purchase.

a) Borrowing cost include interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as adjustment to the interest costs.

b) Borrowing costs directly attributable to the acquisition, constitution or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

a) Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis.

b) Investment other than current investments, are classified as long-term investments and are stated at cost. Provision for diminution in value of Long-term investments is made only if such a decline is other than temporary.

c) An investment in land or buildings, which is not intended to be occupied substantially for use by, or in the operations of the company, is classified as investment property. Investment properties are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

a) Inventories of raw materials, stores and consumables and work-in-progress are valued at lower of cost or net realizable value on first-in-first-out basis. Work in progress on construction contracts reflects the value of material inputs and expenses including appropriate overheads incurred on such contracts, at cost. Cost for this purpose comprises of raw material cost& appropriate overheads incurred for bringing them to their present condition.

b) Traded goods are valued at the cost or net realizable value which eve r is less and cost is determined on first-in-first-

a) Provision for current tax and fringe benefit tax is made considering various allowances and benefits available to the Company under the provisions of Income Tax Act, 1961.

b) In accordance with Accounting Standard AS-22 "Accounting for Taxes on Income", deferred tax resulting from timing differences between book and tax profits are accounted for at tax rate substantially enacted by the Balance Sheet date to the extent the timing differences are expected to be crystallized.

Deferred Tax Assets arising on account of carried forward losses and unabsorbed depreciation as per Income Tax Act, 1961 are recognized to the extent there is a virtual certainty supported by convincing evidence that such assets will be realized.

a) Where the Company has contractual right to claim equal amounts regarding the said liability from the clients, the same is not charged as expenditure.

b) Where the ultimate liability is on the Company, the same is accounted provisionally as per available information and the final adjustment for the same is done as and when the demand is raised by the concerned authorities on the Company. Sales tax expenses include amount paid on account of assessment order issued by concerned authorities.

a) Defined Contribution Plans

The Company contributes on a defined contribution basis to Employee's Provident Fund and Employee's State Insurance Fund towards post-employment benefits, all of which are administered by the respective Government authorities, and has no further obligation beyond making its contribution, which is expensed in the year to which it pertains.

b) Defined Benefit Plans

The Company has a Defined Benefit Plan namely Gratuity for all its employees. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation by an independent actuary at the year end, which is calculated using projected unit credit method.

Actuarial gains and losses which comprise experience adjustment and the effect of changes in actuarial assumptions are recognized in the Profit and Loss Account.

c) Employee Leave Entitlement

The employees of the Company are entitled to leave as per the leave policy of the Company. T he liability in respect of un-utilized leave balances is provided based on an actuarial valuation carried out by an independent actuary as at the year end and charged to the Profit and Loss Account.

Foreign currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Monetary assets and liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing at the date of the Balance Sheet. Gains and losses arising on account of differences in foreign exchange rates on settlement/translation of monetary assets and liabilities are recognized in the Profit and Loss Account. Non-monetary foreign currency items are carried at cost.

a) Income from construction is recognized as determined by the project manager by taking into consideration actual cost incurred and profit evaluated and duly certified by the client. All other income are recognized and accounted for on accrual basis. Losses on contracts are fully accounted for as and when incurred. Foreseeable losses are accounted for when they are determined. Insurance claims are accounted for on cash basis.

b) Turnover represents work certified as determined by the project managers by taking into consideration the actual cost incurred and profit evaluated and duly certified by the client and is inclusive of service tax.

c) Dividends are accounted for when the right to receive dividend is established.

d) Income from interest on deposits, loans and interest bearing securities is recognised on time proportionate method.

e) Share of profit / loss from firms, in which the company is a partner, is accounted for in the financial year ending on (or immediately before) the date of the balance sheet.

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Los s Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

- The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

- A disclosure for a contingent liability is made when there is a possible obligation represent obligation that may but probably will not, require an outflow of resources.

- Where there is a possible obligation or a present obligation but the likelihood of outflow of resources is remote, no provision or disclosure is made.

- Contingent Assets are neither recognized nor disclosed.

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Difference between the actual results and the estimates are recognized in the period in which the results are known / materialized.

a) Where the company is lessee

- Finance leases, which effectively transfers to the company substantially all the risks and rewards incidental to ownership of the leased item, are capitalized at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability Finance charges are recognized as finance cost in the statement of profit and Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the less or, are recognized as operating lease. Lease rental under operating lease are charged off to the Profit and Loss Account as incurred.

b) Where the company is less or

- Leases in which the company transfers substantially all the risks and rewards of the ownership are classified as finance leases. Assets given under the finance lease are recognized at an amount equal to the net investment in the lease. After initial recognition, the company apportions lease rentals between the principal repayment and interest income so as to achieve a constant rate of return on the net investment outstanding in respect of finance lease.

- Leases in which the company does not transfer substantially all the risks and rewards of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in assets. Lease income on an operating lease is recognized in the statement of profit and loss on a straight -line basis over the lease term.

a) Contracts executed in joint venture under work sharing arrangements (consortium ) are accounted in accordance with the accounting policy followed by the company as that of an independent contract to the extent work is performed.

b) In respect of contracts executed in Integrated Joint Ventures under profit sharing arrangements, the services rendered to the joint ventures are accounted as income on accrual basis. The profit/loss is accounted for, as and when it is determined by the Joint Ventures and the net investment in the Joint Ventures is reflected as investments.

- The Company has only one class of equity shares having a par value of Rs. 2 Per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

- During the year ended March 31, 2012 the amount of per share dividend recognized as distributions to equity shareholders was Re. 1 (Previous Year: Re. 1).

- 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. The distribution will be in proportion to the number of equity shares held by the shareholders.

Details of security and terms of repayment

- Vehicle and equipment loans

Secured against specific charge on vehicles and equipment. These are repayable in EMIs over a period of time spread from one year to five years.

- Other Loans

a) To the extent of Rs.4,054.28 lacs are

Secured by: First pari -passu charge in favor of the project Lenders by way of 1) Hypothecation of all Movable tangible and intangible assets receivables cash and investment Created as part of project 2) Monies lying in Escrow Account into which all the Project and revenues are to be deposited 3) Assignment of all rights title benefits claims and demands under Project document.

Term of repayment: 10 equal quarterly installments commencing after moratorium period of 15 months from the date of first disbursement Interest to be serviced monthly as and when due.

b) To the extent of Rs. 2,485.64 lacs are

Secured by: Specific Exclusive Charge on the Equipment proposes to be purchased (Excavators Tippers dumpers) under the facility security cover to remain at 1.15 times of the Facility amount outstanding.

Term of repayment: 3 equal semi-annual installments commencing 30 months from date of First drawdown in compliance with RBI minimum maturity guidelines.

c) To the extent of Rs. 3,125.00 lacs are

Secured by; First charge by way of hypothecation on the entire Current Assets of the company (excluding project specific current assets) on pari pasu basis with all other banks / Financial institution which have extended term loans and fund based and non-fund based working capital facilities to the company against the security of its Current Assets.

Term of repayment: In 3 years (including moratorium period of one year) commencing from June 11 quarterly payments.

d) To the extent of Rs. 2 91.39 lacs are

Secured by: Pari passu first charge by way of hypothecation of current assets stores and spares with other banks under Multiple Banking Arrangement.

Term of repayment: Principal shall be payable in 12 quarterly installments from the date of release.

e) To the extent of Rs. 3,284.15 lacs are

Secured by: Exclusive charge on the Construction equipment bought from the ECB facility with asset cover of. 1.25X

Term of repayment: Moratorium of 18 months and Repayments thereafter in 14 equal quarterly installments in years 2, 3, 4 & 5 of USS 0.857143 million (Weighted Average Maturity of >=3 years).

f) To the extent of Rs. 2,333.33 lacs are

Secured by: 1. First Charge on entire inventory and receivable of this project in an account held with the Bank (on Best Effort Basis)

2. Fixed Deposit of INR 240 Million "under lien "held by the Bank for a period till such time that the Customer is able to secure first charge over the project receivables in favor of the Bank.

Term of repayment: The repayment would start from August 2012 in 12 equal monthly repayments. Incase NOC is not received the FD of Rs. 2,400.00 lacs will be used to set off the outstanding in a rear ended manner.

g) To the extent of Rs. 180.83 lacs are

Secured By: First and Exclusive charge (Hypothecation) on currently unencumbered construction equipment.


Mar 31, 2011

1. Basis of Accounting

The financial statements are prepared under historical cost convention, on going concern concept and in compliance with the Accounting Standards notified under section 211(3C) of the Companies Act, 1956 (the "Act"). The Company follows mercantile system of accounting and recognises income and expenditure on accrual basis to the extent measurable and where there is certainty of ultimate realisation in respect of incomes. Accounting policies not specifically referred to otherwise, are consistent and in consonance with the generally accepted accounting policies.

2. Fixed Assets

Fixed Assets are stated at cost, inclusive of incidental expenses related thereto and are net of Cenvat Credit less accumulated depreciation. Cost of software includes license fees and implementation/ integration expenses.

3. Borrowing Costs

Borrowing costs directly attributable to the acquisition/ construction of fixed assets are apportioned to the cost of the fixed assets up to the date on which the asset is put to use/ commissioned.

4. Depreciation

a) Depreciation on Fixed Assets is provided on the written-down-value method at the rates and in the manner prescribed under Schedule XIV to the Companies Act. Depreciation on additions/ deletions to fixed assets is calculated pro-rata from/up to the date of such additions/ deletions.

b) Computer Software is amortized on the straight line method of five years.

c) Assets individually costing Rs. 0.05 Lakhs or less are fully depreciated in the year of purchase.

5. Investments

Investments are classified as current and long term investments. Current Investments are valued at lower of cost or market value. Long term Investments are stated at cost. The decline in the value of Long term investments, other than temporary is provided for.

6. Inventories

Inventories of stores and construction raw materials are valued at lower of cost or net realizable value on first-in-first-out basis. Works in progress on construction contracts reflects the value of material inputs and expenses including appropriate overheads incurred on such contracts, at cost.

7. Taxes on Income

a) Provision for current tax is made considering various allowances and benefits available to the Company under the provisions of Income Tax Act, 1961.

b) In accordance with Accounting Standard AS-22 "Accounting for Taxes on Income", deferred tax resulting from timing differences between book and tax profits are accounted for at tax rate substantially enacted by the Balance Sheet date to the extent the timing differences are expected to be crystallized.

Deferred Tax Assets arising on account of carried forward losses and unabsorbed depreciation as per Income Tax Act, 1961 are recognised to the extent there is a virtual certainty supported by convincing evidence that such assets will be realized.

8. Sales Tax / WCT / VAT:

Where the company has contractual right to claim equal amounts regarding the said liability from the clients, the same is not charged as expenditure.

Where the ultimate liability is on the Company, the same is accounted provisionally as per the information and the final adjustment for the same is done as and when the demand is raised by the concerned authorities on the Company. During the year under review, sales tax expenses include amount paid on account of assessment order during the year.

9. Employee Benefits

a) Defined Contribution Plans

The Company contributes on a defined contribution basis to Employee's Provident Fund, Employee's State Insurance Fund towards post employment benefits, all of which are administered by the respective Government authorities, and has no further obligation beyond making its contribution, which is expensed in the year to which it pertains.

b) Defined Benefit Plans

The Company has a Defined Benefit Plan namely Gratuity for all its employees. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation carried out by the insurer, HDFC Standard Life, from whom the Company has taken out Group Gratuity Policy.

Actuarial gains and losses which comprise experience adjustment and the effect of changes in actuarial assumptions are recognised in the Profit and Loss Account.

c) Employee Leave Entitlement

The employees of the Company are entitled to leave as per the leave policy of the Company. The liability in respect of unutilised leave balances is provided on the basis of an actuarial valuation carried out by the insurer, HDFC Standard Life, as at the year end and charged to the Profit and Loss Account.

10. Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Monetary assets and liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing at the date of the Balance Sheet. Gains and losses arising on account of differences in foreign exchange rates on settlement/ translation of monetary assets and liabilities are recognised in the Profit and Loss Account. Non-monetary foreign currency items are carried at cost.

11. Revenue Recognition

a) Income from Construction is recognized as determined by the Project Manager by taking into consideration actual cost incurred and profit evaluated and duly certified by the client. All other income expenditure are recognized and accounted for on an accrual basis. Losses on contracts are fully accounted for as and when incurred. Foreseeable losses are accounted for when they are determined. Insurance claims are accounted for on cash basis.

b) Turnover represents Work Certified as determined by the Project Managers by taking into consideration the actual cost incurred and profit evaluated and duly certified by the client and is inclusive of service tax.

c) Dividends are accounted for when the right to receive dividend is established.

d) Income from interest on deposits, loans and interest bearing securities is recognized on time proportionate method.

e) Share of profit/loss from firms, in which the company is a partner, is accounted for in the financial year ending on (or immediately before) the date of the balance sheet.

12. Impairment of Assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

13. Provisions, Contingent Liabilities and Contingent Assets

The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

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.

Where there is a possible obligation or a present obligation but the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent Assets are neither recognized nor disclosed.

14. Accounting Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Difference between the actual results and the estimates are recognized in the period in which the results are known/ materialised.

15. Leases

Lease arrangements where the risks and rewards incident to ownership of an asset substantially vests with the lessor, are recognised as operating lease. Lease rental under operating lease are charged off to the Profit and Loss Account, as incurred.

16. Accounting for Joint Venture Contracts:

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

b) In respect of contracts executed in Integrated Joint Ventures under profit sharing arrangements, the services rendered to the joint ventures are accounted as income on accrual basis. The profit/loss is accounted for, as and when it is determined by the Joint Ventures and the net investment in the Joint Ventures is reflected as investments.


Mar 31, 2010

1. Basis of Accounting

The financial statements are prepared under historical cost convention, on going concern concept and in compliance with the Accounting Standards notified under section 211(3C) of the Companies Act, 1956 (the "Act"). The Company follows mercantile system of accounting and recognises income and expenditure on accrual basis to the extent measurable and where there is certainty of ultimate realisation in respect of incomes. Accounting policies not specifically referred to otherwise, are consistent and in consonance with the generally accepted accounting policies.

2. Fixed Assets

Fixed Assets are stated at cost, inclusive of incidental expenses related thereto and are net of Cenvat Credit less accumulated depreciation.

3. Borrowing Costs

Borrowing costs directly attributable to the acquisition/ construction of fixed assets are apportioned to the cost of the fixed assets up to the date on which the asset is put to use/ commissioned.

4. Depreciation

Depreciation on Fixed Assets is provided on the written-down-value method at the rates and in the manner prescribed under Schedule XIV to the Companies Act. Depreciation on additions/ deletions to fixed assets is calculated pro-rata from/up to the date of such additions/ deletions.

5. Investments

Investments are classified as current and long term investments. Current Investments are valued at lower of cost or market value. Long term Investments are stated at cost. The decline in the value of Long term investments, other than temporary is provided for.

6. Inventories

Inventories of stores and construction raw materials are valued at lower of cost or net realizable value on first-in-first- out basis. Works in progress on construction contracts reflects the value of material inputs and expenses including appropriate overheads incurred on such contracts, at cost.

7. Taxes on Income

a) Provision for current tax is made considering various allowances and benefits available to the Company under the provisions of Income Tax Act, 1961.

b) In accordance with Accounting Standard AS-22 "Accounting for Taxes on Income", deferred tax resulting from timing differences between book and tax profits are accounted for at tax rate substantially enacted by the Balance Sheet date to the extent the timing differences are expected to be crystallized.

Deferred Tax Assets arising on account of carried forward losses and unabsorbed depreciation as per Income Tax Act, 1961 are recognised to the extent there is a virtual certainty supported by convincing evidence that such assets will be realized.

8. Sales Tax / WCT / VAT:

Where the company has contractual right to claim equal amounts regarding the said liability from the clients, the same is not charged as expenditure.

Where the ultimate liability would be on the Company, the same is accounted provisionally as per the information and the final adjustment for the same would be done as and when the demand from concerned authorities on the Company. During the year under review, sales tax expenses also include amount paid on account of assessment order during the year.

9. Employee Benefits

a) Defined Contribution Plans

The Company contributes on a defined contribution basis to Employees Provident Fund, Employees State Insurance Fund towards post employment benefits, all of which are administered by the respective Government authorities, and has no further obligation beyond making its contribution, which is expensed in the year to which it pertains.

b) Defined Benefit Plans

The Company has a Defined Benefit Plan namely Gratuity for all its employees. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation carried out by the insurer, HDFC Standard Life, from whom the Company has taken out Group Gratuity Policy.

Actuarial gains and losses which comprise experience adjustment and the effect of changes in actuarial assumptions are recognised in the Profit and Loss Account.

c) Employee Leave Entitlement

The employees of the Company are entitled to leave as per the leave policy of the Company. The liability in respect of unutilised leave balances is provided on the basis of an actuarial valuation carried out by the insurer, HDFC Standard Life, as at the year end and charged to the Profit and Loss Account

10. Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Monetary assets and liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing at the date of the Balance Sheet. Gains and losses arising on account of differences in foreign exchange rates on settlement/ translation of monetary assets and liabilities are recognised in the Profit and Loss Account. Non-monetary foreign currency items are carried at cost.

11. Revenue Recognition

a) Income from Construction is recognized as determined by the Project Manager by taking into consideration actual cost incurred and profit evaluated and duly certified by the client. All other income expenditure are recognized and accounted for on an accrual basis. Losses on contracts are fully accounted for as and when incurred. Foreseeable losses are accounted for when they are determined. Insurance claims are accounted for on cash basis.

b) Turnover represents Work Certified as determined by the Project Managers by taking into consideration the actual cost incurred and profit evaluated and duly certified by the client and is inclusive of service tax

c) Dividends are accounted for when the right to receive dividend is established.

d) Income from interest on deposits, loans and interest bearing securities is recognized on time proportionate method.

e) Share of profit/loss from firms in which the company is a partner is accounted for in the financial year ending on (or immediately before) the date of the balance sheet.

12. Impairment of Assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

13. Provisions, Contingent Liabilities and Contingent Assets

The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

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

Where there is a possible obligation or a present obligation but the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent Assets are neither recognized nor disclosed

14. Accounting Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Difference between the actual results and the estimates are recognized in the period in which the results are known/ materialised.

15.Leases

Lease arrangements where the risks and rewards incident to ownership of an asset substantially vests with the lessor, are recognised as operating lease. Lease rental under operating lease are charged off to the Profit and Loss Account, as incurred.

16. Accounting for Joint Venture Contracts:

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

b) In respect of contracts executed in Integrated Joint Ventures under profit sharing arrangements, the services rendered to the joint ventures are accounted as income on accrual basis. The profit/loss is accounted for, as and when it is determined by the Joint Ventures and the net investment in the Joint Ventures is reflected as investments.

 
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