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Accounting Policies of Artson Engineering Ltd. Company

Mar 31, 2019

1) SIGNIFICANT ACCOUNTING POLICIES:

1.1 Basis of preparation

(a) Compliance with Ind AS

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under the Section 133 of the Companies Act, 2013 (the Act), the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.

(b) Historical cost convention

The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities and defined benefit plans (plan assets), which are measured at fair values at the end of each reporting period, as explained in the accounting policies below:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability.

2.2 Estimates

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates, judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the year. Application of accounting policies that require critical accounting estimates involving complex and subjective judgements and the use of assumptions in these financial statements have been disclosed. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

2.3 Revenue Recognition

The Company recognizes revenue on satisfaction of performance obligation to its customer. Revenue is measured based on the consideration specified in a contract with a customer and excludes taxes collected on behalf of the government authorities.

Determination of transaction price and its subsequent assessment:

The Company assesses the transaction price considering the contract price as agreed with the customer in the contract document, that includes Letter of Acceptance/Intent or any document evidencing the contractual arrangement. Where consideration is not specified within the contract and is variable, the Company estimates the amount of consideration to be received from its customer. The consideration recognized is the amount which the Company assesses to be highly probable not to result in a significant reversal in future periods.

Modification(s) to an existing contract, if any, are assessed to be either a separate performance obligation or an extension of existing scope and transaction price is determined accordingly Company considers the retention moneys held by customer to be protection money in the hands of the Company and hence are not subjected to discounting pursuant to para 61 and 62(c) of Ind AS 115. The mobilisation advances received, free of interest, from customers, also are not subjected to discounting, as the Company considers the objective behind the transaction to be that of ensuring and protecting timely execution of the project and not deriving financial benefit in the nature of interest.

Company deploys revenue recognition both as (a) over a period of time, and (b) at a point of time, as considered appropriate to the nature of product/service delivered to the customer.

Revenue from operations:

(i) Revenue from construction activities is recognized over a period of time and the Company uses the input method to measure progress of delivery.

(ii) Revenue from sale of goods is recognized at a point in time when title has passed to the customer. Revenue is recognized on dispatch of goods and on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Amount disclosed as revenue is inclusive of excise duty and net of returns, trade allowances, rebates, value added taxes, goods and service tax (GST) and amounts collected on behalf of third parties.

(iii) Revenue from services rendered is recognised at a point in time based on the arrangements/ agreements with the concerned parties and when the services are rendered.

Revenue from other sources:

(i) Interest income is accrued on a time basis using the effective interest method by reference to the principal outstanding and the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assetâs net carrying amount.

(ii) Any amount received/receivable in respect of Arbitration Awards in favour of the Company is treated as income of the year of receipt of the award.

Performance obligations in a contract with customer

Company determines the performance obligations, considering the nature and scope of each contract.

Measuring Progress of a construction contract

When the outcome of individual contracts can be estimated reliably, contract revenue and contract costs are recognized as revenue and expenses respectively by reference to the stage of completion as at the reporting date. The stage of completion is determined on the basis of proportion of cost of work performed to-date, to the total estimated contract costs. Costs are recognized as incurred and revenue is recognized on the basis of the proportion of total actual costs as at the reporting date, to the estimated total costs of the contract.

For the purpose of recognizing revenue, contract revenue comprises the initial amount of revenue agreed in the contract, the variations in contract work, claims and incentive payments to the extent that it is probable they will result in revenue and they are capable of being reliably measured.

The percentage of completion method is applied on a cumulative basis in each accounting year to the current estimates of contact revenue and contract costs. The effect of a change in the estimate of the outcome of a contract is accounted for as a change in accounting estimates and the effect of which is recognized in the Statement of Profit and Loss in the year in which the change is made and in subsequent years.

When the outcome of a construction contract cannot be estimated reliably, revenue is recognized only to the extent of contract costs incurred of which recovery is probable and the related contract costs are recognized as an expense in the year in which they are incurred.

When it is probable that the total contract cost will exceed total contract revenue, the expected loss is recognized as an expense in the Statement of Profit and Loss in the year in which such probability occurs.

Provision is made for all known or expected losses on individual contracts once such losses are foreseen. Revenue in respect of variations to contracts and incentive payments is recognized when it is probable it will be agreed by the customer.

The Company adjusts the impact of uninstalled materials from the contract value, budgeted costs and costs incurred to measure the percentage of completion. The revenue on such items is recognized equal to the cost incurred on such items.

No profit is recognized till a minimum of 10% progress is achieved on the contract.

Contract Assets and Contract Liabilities

If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, such amount is recognized as a contract asset, excluding any amounts presented as a receivable. The contract asset represents the Companyâs right to consideration in exchange for goods or services that the Company has transferred to the customer. The Company shall assess a contract asset for impairment in accordance with Ind AS 109. An impairment of a contract asset shall be measured, presented and disclosed on the same basis as a financial asset that is within the scope of Ind AS 109.

If the customer pays consideration, or an Company has a right to an amount of consideration that is unconditional, before the Company transfers a good or service to the customer, such amount is recognized as a contract liability. The contract liability represents the Companyâs obligation to transfer goods or services to the customer for which the Company has received consideration from the customer.

2.4 Foreign Currency Translation

(i) Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates (âthe functional currencyâ). The financial statements are presented in Indian Rupee (INR), which is the Companyâs functional and presentation currency.

(ii) Transactions and balances

Transactions in foreign currency are recorded at the exchange rates prevailing on the date of transaction. Foreign currency monetary items outstanding at the Balance Sheet date are restated at the prevailing year-end rates. The resultant gain / loss upon such restatement along with gain / loss on account of foreign currency transactions is accounted in the Statement of Profit and Loss.

2.5 Employee Benefits

(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employeesâ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

(ii) Other long-term employee benefit obligations

Other long-term employee benefits comprise of earned leave and sick leave compensated absences that are not expected to be settled wholly within 12 months after the end of the period in which the employees renders related services. These obligations are therefore measured as the present value of expected future payments and expected utilisations (in case of sick leaves) to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the appropriate market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.

(iii) Post-employment obligations

The Company operates the following post-employment schemes:

(a) Defined benefit plans such as gratuity and

(b) Defined contribution plans such as provident fund.

(a) Defined benefit plans - Gratuity

The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The gratuity plan is a funded plan and the Company makes contributions to Life Insurance Corporation of India (LIC). The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. The estimated future payments which are denominated in a currency other than INR, are discounted using market yields determined by reference to high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss as past service cost.

(b) Defined contribution plan

The Company pays provident fund contributions to publicly administered provident funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due.

2.6 Earnings Per Share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

- the profit attributable to owners of the Company

- by the weighted average number of equity shares outstanding during the financial year.

(ii) Diluted Earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

2.7 Leasing

As a lessee

Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the leaseâs inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.

2.8 Taxation

The income tax expense or credit for the period is the tax payable on the current periodâs taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in India in accordance with the provisions of the Income Tax Act, 1961. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

2.9 Property, Plant and Equipment & Intangible Assets

Property, Plant and Equipment

Property, Plant and Equipment are carried at historical cost less accumulated depreciation and impairment losses, if any. The cost of Property, Plant and Equipment comprises its purchase price and other attributable expenditure incurred in making the asset ready for its intended use and interest on borrowings attributable to acquisition of qualifying Property, Plant and Equipment up to the date the asset is ready for its intended use.

Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

Property, Plant and Equipment retired from active use and held for sale are stated at the lower of their net book value and net realizable value and are disclosed separately.

Intangible Assets:

Intangible assets comprise of the application and other software procured through perpetual licences. The intangible assets are capitalized on implementation of such software and comprises of the prices paid for procuring the licences and implementation cost of such software.

Depreciation and Amortization methods, useful lives and residual value:

Depreciation and amortization has been provided for on the written down value method as per the useful life prescribed in Schedule II to the Companies Act, 2013, which are as follows:

* Plant and Equipment includes components for which depreciation is charged as per the useful life of the components.

The residual values are not more than 5% of the original cost of the asset. The assetsâ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An assetâs carrying amount is written down immediately to its recoverable amount if the assetâs carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss within other gains/(losses).

Impairment:

All Property, Plant and Equipment are tested for impairment at the end of each financial year. The impairment loss being the excess of carrying value over the recoverable value of the assets, if any, is charged to the Statement of Profit and Loss in the respective financial year. The impairment loss recognized in prior years is reversed in cases where the recoverable value exceeds the carrying value, upon reassessment in the subsequent years.

Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.

2.10 Inventories

Raw materials and Work-in Progress are stated at the lower of cost and net realizable value. Cost of raw materials comprises cost of purchases. Cost of work-in-progress comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Costs are assigned to individual items of inventory on the basis of first-in first-out (FIFO) basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

2.11 Provisions, contingent liabilities and contingent assets

Provisions are recognized when the Company has a present obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

A contingent liability is:

(a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or

(b) a present obligation that arises from past events but is not recognized because:

(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(ii) the amount of the obligation cannot be measured with sufficient reliability.

When it is probable at any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognized immediately.

2.12 Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

(i) Financial assets carried at amortized cost: - Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in other gains/(losses). Impairment losses are presented as separate line item in the statement of profit and loss.

(ii) Financial assets at fair value through other comprehensive income (FVOCI): - Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assetsâ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognized in profit and loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/(losses). Interest income from these financial assets is included in other income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in statement of profit and loss.

(m) Financial assets at fair value through profit or loss: - Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss is recognized in profit or loss and presented net within other gains/ (losses) in the period in which it arises. Interest income from these financial assets is included in other income.

(iv) Financial liabilities: - Financial liabilities are measured at amortized cost using the effective interest method.

Impairment of Financial Assets

The Company applies the expected credit loss model for recognizing impairment loss on financial assets measured at amortized cost, trade receivables, other contractual rights to receive cash or other financial asset.

For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115, the Company always measures the loss allowance at an amount equal to the lifetime expected credit losses. Further, for the purpose of measuring lifetime expected credit loss allowance for these assets, the Company has used a practical expedient method as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.

Derecognition of Financial Assets

A financial asset is derecognized only when

1. The Company has transferred the rights to receive cash flows from the financial asset or

2. retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognized. Where the Company has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.

Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognized if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognized to the extent of continuing involvement in the financial asset.

Income recognition

Interest income from financial assets at fair value through profit or loss is disclosed as interest income within other income. Interest income on financial assets at amortised cost and financial assets at FVOCI is calculated using the effective interest method is recognized in the statement of profit and loss as part of other income.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance).

2.13 Operating cycle

The Company''s activities (primarily construction activities) have an operating cycle that has a period of less than twelve months. The Company has selected the duration of the individual contracts as its operating cycle, wherever appropriate, for classification of its assets and liabilities as current and non-current.

2.14 Cash and cash equivalents

For the purpose of presentation in the Statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the Balance Sheet.

2.15 Trade Receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. Trade receivables are recognized initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognized at fair value. The Company holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.

2.16 Offsetting financial instruments

Financial Assets and Liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

2.17 Trade and Other Payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.

2.18 Borrowings

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss as other gains/(losses).

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the Company does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.

2.19 Borrowing Costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other borrowing costs are expensed in the period in which they are incurred.

2.20 Segment reporting

The Company operates in only one business segment viz. Supply of steel structure and site services for mechanical works. Therefore, segment-wise reporting under Ind AS 108 is not applicable.

2.21 Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.

Mar 31, 2018

1) Significant Accounting Policies:

1.1 Basis of preparation

(a) Compliance with INDAS

(b) Historical cost convention

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability.

1.2 Estimates

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the year. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

1.3 Revenue Recognition

(i) Revenue from sale of goods is recognized on dispatch of goods and on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Amount disclosed as revenue is inclusive of excise duty and net of returns, trade allowances, rebates, value added taxes, goods and service tax (GST) and amounts collected on behalf of third parties.

(ii) Income from Construction Contracts

When the outcome of a construction contract can be measured reliably, contract revenue and contract costs associated with the construction contract are recognized as revenue and expenses respectively by reference to the percentage of completion of the contact activity at the reporting date. The stage of completion is determined on the basis of actual work executed during the year, which is billable to the customer.

No profit is recognized till a minimum of 10% progress is achieved on the contract.

(iii) Income from services rendered is recognized based on the agreements/arrangements with the concerned parties and when the services are rendered.

(iv) Other Income - Interest income is accounted on accrual basis.

(v) Any amount received/receivable in respect of Arbitration Awards in favour of the Company is treated as income of the year of receipt of the award.

1.4 unbilled Revenue

Unbilled revenue represents value of work executed, billed subsequent to the Balance Sheet date and is valued at the contract price

1.5 Foreign Currency Translation

(i) Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates (âthe functional currencyâ). The financial statements are presented in Indian Rupees (INR), which is the Companyâs functional and presentation currency.

(ii) Transactions and balances

Transactions in foreign currency are recorded at the exchange rates prevailing on the date of transactions. Foreign currency monetary items outstanding at the Balance Sheet date are restated at the prevailing year-end rates. The resultant gain / loss upon such restatement along with gain / loss on account of foreign currency transactions is accounted in the Statement of Profit and Loss.

1.6 Employee Benefits

Employee benefits include provident fund, gratuity fund and compensated absences.

(i) Defined contribution plan

The Companyâs contribution to provident fund considered as defined contribution plan is charged as an expense in the Statement of Profit and Loss based on the amount of contribution required to be made and when services are rendered by the employees.

(ii) Defined benefit plan

For defined benefit retirement benefit plan, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), are reflected immediately in the Balance Sheet with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:

(i) Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

(ii) Net interest expense or income; and

(iii) Remeasurement

The Company presents the first two components of defined benefit costs in profit or loss in the line item âEmployee benefits expenseâ. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognized in the Balance Sheet represents the actual deficit or surplus in the Companyâs defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form reductions in future contributions to the plans.

(iii) Short-term employee benefits

A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

(iv) other long-term employee benefits

Other long-term employee benefit comprise of Compensated abscences which is provided for based on the actuarial valuation carried out as at the end of the year using the projected unit credit method.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

1.7 Earnings Per Share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

- the profit attributable to owners of the Company

- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares

(ii) Diluted Earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

1.8 Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Companyâs significant leasing arrangements are in respect of operating leases for premises that are cancelable in nature. The lease rentals under such agreements are recognized in the Statement of Profit and Loss as per the terms of the lease.

Rental expense from operating leases is generally recognized on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases, such increases are recognized in the year in which such benefits accrue to lessor.

1.9 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1.9.1 Current tax

Current tax represents tax payable based on taxable profit for the year determined in accordance with the provisions of the Income tax Act, 1961. Taxable profit differs from âprofit before taxâ as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. Current tax is provided on the basis of the taxable income in accordance with and at the applicable tax rates and tax laws.

1.9.2 Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit not taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

1.10 Property, Plant and Equipment & Intangible Assets

Property, Plant and Equipment are carried at cost less accumulated depreciation and impairment losses, if any. The cost of Property, Plant and Equipment comprises its purchase price and other attributable expenditure incurred in making the asset ready for its intended use and interest on borrowings attributable to acquisition of qualifying Property, Plant and Equipment up to the date the asset is ready for its intended use.

Property, Plant and Equipment retired from active use and held for sale are stated at the lower of their net book value and net realizable value and are disclosed separately.

Transition to Ind AS

On transition to Ind AS in the financial year 2016/17, the Company had elected to continue with the carrying value of all of its Property, Plant and Equipment recognized as at 1 April 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the Property, Plant and Equipment.

Intangible Assets:

Intangible assets comprise of the application and other software procured through perpetual licenses. The intangible assets are capitalized on implementation of such software and comprises of the prices paid for procuring the licenses and implementation cost of such software.

Depreciation and Amortization :

Depreciation has been provided for on the written down value method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of working support structure, in which case, the life of the assets has been assessed as under, based on technical advice, taking into account the nature of asset, the estimated usage of the asset, the operating conditions of the asset, etc. The balance life of the working support structure is 15 years. Depreciation on components is charged as per the remaining useful life of the components.

1.11 Inventories

Raw materials are valued at lower of cost, ascertained on âFIFOâ method and net realizable value.

Work-in Progress is valued at the lower of cost and the net realizable value.

1.12 Provisions, contingent liabilities and contingent assets

Provisions are recognized only when there is a present obligation as a result of past events and when a reasonable estimate of the amount of obligation can be made. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

A contingent liability is:

(b) a present obligation that arises from past events but is not recognized because:

(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(ii) the amount of the obligation cannot be measured with sufficient reliability.

When it is probable at any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognized immediately.

1.13 Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

(i) Financial assets carried at amortized cost: - A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through other comprehensive income: - Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows that give rise on specified dates to solely payments of principal and interest on the principal amount outstanding and by selling financial assets.

The Company has made an irrevocable election to present in other comprehensive income subsequent changes in the fair value of equity investments not held for trading.

(iii) Financial assets at fair value through profit or loss: - Financial assets are measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in profit or loss.

(iv) Financial liabilities: - Financial liabilities are measured at amortized cost using the effective interest method. Impairment of Financial Assets

For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 11 and Ind AS 18, the Company always measures the loss allowance at an amount equal to the lifetime expected credit losses.

Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient method as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.

1.14 operating cycle

The Companyâs activities (primarily construction activities) have an operating cycle that has a period of less than twelve months. The Company has selected the duration of the individual contracts as its operating cycle, wherever appropriate, for classification of its assets and liabilities as current and non-current.

1.15 Cash and cash equivalents

For the purpose of presentation in the Statement of Cash Flow, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the Balance Sheet.

1.16 Trade Receivables

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment.

1.17 off setting financial instruments

1.18 Trade and other Payables

1.19 Borrowings

1.20 Borrowing Costs

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other borrowing costs are expensed in the period in which they are incurred.

1.21 Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.

(ii) The Company also computes the Expected Credit Loss Allowance (ECLA) by applying the average percentage of bad debts write-offs on turnover determined on a historical basis over the past 4 years. Expected Credit Loss Allowance is determined on the closing balance of all receivables (including unbilled revenue disclosed under other financial assets) from external customers at each reporting date.

No Expected Credit loss provision has been created for receivables from the Holding Company since the Company considers the life time credit risk of these financial assets to be very low.

Mar 31, 2016

1. Corporate Information

Artson Engineering Limited (âthe Companyââ) is a company limited by shares incorporated under the Companies Act, 1956. The Companyâs Registered Office is situated at Mumbai. The Companyâs shares are listed on the Bombay Stock Exchange (BSE) and the Scrip Code is 522134.

The Company was incorporated in 1978 and since inception, the Company has commissioned, on turn-key basis, several fuel storage and handling facility systems. The Company is in the business of Engineering, Procurement & Construction contract in Oil, Gas & Hydrocarbon (OG&H),steel and power sector and ancillary services, including manufacturing activityâs.

The Company was referred to the BIFR as a sick company under the provisions of Section 3 (1) (O) of the Sick Industrial Companies (Special Provisions) Act, 1985. The Companyâs reference as a sick company was registered under Case No. 152/ 2004 with the BIFR. At the hearing held on 27^th November 2007, the BIFR sanctioned the Rehabilitation Scheme of the Company and the Order sanctioning the scheme of rehabilitation was received by the Company on 18^th December 2007 (Sanctioned Scheme). The Company has made an application on 17^th October 2013 for extension of the Rehabilitation Scheme as referred above and pending the final hearing, the Sanctioned Scheme is under implementation.

2. Significant Accounting Policies:

The Significant Accounting Policies have been predominantly prescribed below in order of the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

i) Method of Accounting and preparation of the Financial Statements:

These financial statements have been prepared in accordance with the generally accepted accounting principles (GAAP) in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of services offered, the Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.

The Central Government in consultation with National Advisory Committee on Accounting Standards has amended Companies (Accounting Standards) Rules, 2006 (principal rulesâ), vide notification issued by Ministry of Corporate Affairs dated March 30^th 2016.The Company believes, that the principal rules have not been withdrawn or replaced and accordingly, the Companies (Accounting Standards) (Amendment) Rules, 2016 will apply for the accounting periods commencing on or after March 30^th, 2016.

ii) Revenue Recognition

a Manufacturing activities:

Sales of Goods is recognized when significant risks and rewards of ownership are transferred to buyer. Sales exclude amounts recovered towards Excise Duty and Sales Tax.

b Erection / Construction activities: Revenues from execution of contract is recognized on the Percentage Completion method. The stage of completion is determined on the basis of actual work executed during the year. Running bills are accounted as sales on monthly basis. No profit is recognized till a minimum of 10% progress is achieved on the contract except in case of contracts executed on cost-plus basis. Costs incurred and invoices raised in respect of such contracts are carried in the Balance Sheet as contracts-in-progress and advance billing respectively. When it is probable at any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognized immediately. In case of arbitration awards which are granted in favour of the Company, any amount to be received is treated as income in the year of receipt of such award. Liquidated damages/Penalties are accounted for as cost when such delays and causes are attributable to the Company or when deducted by the client.

c. Work done but not billed: Value of work executed, billed subsequent to the Balance Sheet date, is valued at the contract price.

d. i Income and Expenses are accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation.

ii VAT set-off is based on returns filed with appropriate authorities.

e. Bank Guarantee commission is accounted in the year of execution/renewal of guarantee written off up front or once the period of the guarantee.

iii) Use of Estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the year. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from those estimates and the difference between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

iv) Fixed Assets:

Tangible

Tangible fixed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost of fixed assets comprises its purchase price and other attributable expenditure incurred in making the asset ready for its intended use and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use.

Intangible

Intangible Assets are initially recognized at cost and are stated at cost less depreciation and impairment (if any). The cost of an internally generated intangible asset comprises all expenditure that can be directly attributed, or allocated on a reasonable and consistent basis, to creating, producing and making the asset ready for its intended use. The Intangible Assets comprise of Computer Software.

v) Depreciation /Amortization on Fixed Assets:

a. Depreciation has been provided for on the written down value method as per the useful life prescribed in Schedule II to the Companies Act, 2013.

b. Leasehold Land, for 99 years and Leasehold Improvements are amortized over the period of the lease.

c. Company had provided additional depreciation on reasonable basis on the assets which are not lying under the custody of the company.

vi) Impairment of Assets:

As at each Balance Sheet date, the Company assesses the realizable value of all the assets. If there is any indication of fall in the realizable value over the carrying cost of the assets, impairment in value of the assets is recognized.

vii) Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts-in-progress, being technical matters, are estimated and certified by the Company''s technical personnel.

b. Stock of all the raw materials, construction materials, stores and spares lying at store, sites/factory have been valued at the lower of cost (FIFO) and the net realizable value.

c. Work-in Progress are valued at the lower of cost and the net realizable value.

viii) Investments:

a. Investments intended to be held for more than one year are classified as long-term investments and are carried at cost of acquisition inclusive of other attributable expenses. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature.

b. Current Investments are carried at the lower of cost and the fair value.

ix) Foreign Currency Transactions:

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

b Monetary assets and liabilities denominated in foreign currencies at the year-end are translated at the year-end exchange rates.

c. The Exchange differences on conversion are credited or charged to the Statement of Profit and Loss.

d. Financial statement of foreign operations, which are integral operations are translated using the same principles as stated above except following items which are translated as below:

x) Employee benefits:

a. The Company''s contribution to Provident Fund is charged to the Statement of Profit and Loss.

b. Other long-term employee benefits comprise compensated absences which is provided based on an actuarial valuation carried out in accordance with AS 15 as at the Balance Sheet date.

c. The gratuity liability, which is a defined benefit plan, is provided on the basis of actuarial valuation as at the Balance Sheet date on the Projected Unit Credit method and the same is funded with Life Insurance Corporation of India.

xi) Segment Reporting:

The Company is in the business of Engineering, Procurement & Construction contract in Oil, Gas & Hydrocarbon (OG&H) Sector, steel and power Sector and ancillary services, including manufacturing activity. More than 90% of the income is only from Engineering, Procurement & Construction contracts in OG & H Sector, Steel and Power Sector and ancillary services. The projects are executed both in India and abroad. Considering the core activity of the Company as above, the primary segment is geographical segment. Accordingly, the reportable segments of the Company are:

1. Domestic

2. Overseas

xii) Earnings Per Share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 ''Earnings per share''. Basic earnings per share, is computed by dividing the net profit or loss for the year, by the weighted average number of equity shares outstanding during the year.

xiii) Taxation (including Deferred Tax):

Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of the taxable income in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods are recognized using the tax rates, and tax laws that have been enacted or substantively enacted, subject to prudence. Deferred tax assets on unabsorbed depreciation and carry forward of losses are not recognized unless there is a virtual certainty that there will be sufficient future taxable income available to realize such assets.

xiv) Borrowing Costs:

Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets, are capitalized.

xv) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized for liabilities that can be measured only by using substantial degree of estimation, if:

a. The Company has a present obligation as a result of past events.

b. A probable outflow of resources is expected to settle the obligation.

c. The amount of the obligation is best estimate required to settle the obligation at the Balance Sheet date.

d. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

Reimbursement expected in respect of the expenditure required to settle a provision is recognized only when it is virtually certain that reimbursement will be received.

Contingent Liability is disclosed in the case of :

a. A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation,

b. A present obligation when no reliable estimate is possible, and

c. A possible obligation arising from past events where the probability of outflow of resources is not remote.

Contingent Assets are neither recognized, nor disclosed. Provisions and Contingent Liabilities are reviewed at each Balance Sheet date.

xvi) Extraordinary Items:

The Extraordinary items are Income or Expenses that arise from events of transactions that are clearly distinct from the ordinary activities and therefore, are not expected to recur frequently or regularly.

The nature and amount of each extraordinary item is identified and disclosed in the Statement of Profit and Loss in a manner that its impact on current profit or loss can be perceived.

xvii) Operating Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognized as operating leases. Lease rents under operating leases are recognized in the Statement of Profit and Loss on a straight-line basis over the lease period.

Mar 31, 2015

The Significant Accounting Policies have been predominantly prescribed below in order of the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

i) Method of Accounting and preparation of the Financial Statements:

These financial statements have been prepared in accordance with the generally accepted accounting principles (GAAP) in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply with all material aspects of the accounting standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the company.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of services offered, the Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.

ii) Revenue Recognition

a. Manufacturing activities:

Sales of Goods is recognised when significant risks and rewards of ownership are transferred to buyer. Sales exclude amount recovered towards Excise Duty and Sales Tax.

b. Erection / Construction activities: Revenues from execution of contract is recognized on the Percentage Completion method. The stage of completion is determined on the basis of actual work executed during the year. Running bills are accounted as sales on monthly basis. No profit is recognised till a minimum of 10% progress is achieved on the contract except in case of contracts executed on cost-plus basis. Costs incurred and invoices raised in respect of such contracts are carried in the Balance Sheet as contracts-in-progress and advance billing respectively. When it is probable at any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognised immediately. In case of arbitration awards which are granted in favour of the Company, any amount to be received is treated as income in the year of receipt of such award. Liquidated damages/Penalties are accounted for as cost when such delays and causes are attributable to the Company or when deducted by the client.

c. Work done but not billed: Value of work executed, billed subsequent to the Balance Sheet date, is valued at the contract price.

d. i Income and Expenses are accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation.

ii VAT set-off is based on returns filed with appropriate authorities.

e. Bank Guarantee commission is accounted in the year of execution/renewal of guarantee.

iii) Use of Estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the year. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from those estimates and the difference between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

iv) Fixed Assets:

Tangible

All tangible fixed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost of fixed assets comprises its purchase price and other attributable expenditure incurred in making the asset ready for its intended use and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use.

Intangible

Intangible Assets are initially recognised at cost and are stated at cost less depreciation and impairment (if any). The cost of an internally generated intangible asset comprises all expenditure that can be directly attributed, or allocated on a reasonable and consistent basis, to creating, producing and making the asset ready for its intended use. These Intangible Assets comprise of Computer Softwares.

v) Depreciation /Amortization on Fixed Assets:

a. Depreciation has been provided for on the written down value method as per the useful life prescribed in Schedule II to the Companies Act, 2013.

b. Leasehold Land, for 99 years and Leasehold Improvements are amortised over the period of the lease.

vi) Impairment of Assets:

As at each Balance Sheet date, the Company assesses the realisable value of all the assets. If there is any indication of fall in the realisable value over the carrying cost of the assets, impairment in value of the assets is recognised.

vii) Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts-in-progress, being technical matters, are estimated and certified by the Company's technical personnel.

b. Stock of all the raw materials, construction materials, stores and spares lying at store, sites/ factory have been valued at the lower of cost (FIFO) and the net realisable value.

c. Work-in Progress are valued at the lower of cost and the net realisable value.

viii) Investments:

a. Investments intended to be held for more than one year are classified as long term investments and are carried at cost of acquisition inclusive of other attributable expenses. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature in the value of such investments.

b. Current Investments is carried at the lower of cost and the fair value.

ix) Foreign Currency Transactions:

a. Transactions in foreign currency are recorded at the exchange rates prevailing on the date of transaction.

b. Monetary assets and liabilities denominated in foreign currencies at the year-end are translated at the year-end exchange rates.

c. The exchange difference on conversion are credited or charged to the Statement of Profit and Loss.

d. Financial statement of foreign operations, which are integral operations are translated using the same principles as stated above except following items which are translated as below:

Sr. Nature of the account Policy No.

1. Opening and Closing Exchange Rate at the commencement Work-in-progress and close of the year respectively.

2. Fixed Assets and Exchange Rate used for the Depreciation translation of the respective date of purchase of fixed assets.

x) Employee benefits:

a. The Company's contribution to Provident Fund is charged to the Statement of Profit and Loss.

b. Other long-term employee benefits comprise compensated absences which is provided based on an actuarial valuation carried out in accordance with AS 15 as at the Balance Sheet date.

c. The gratuity liability, which is a defined benefit plan, is provided on the basis of actuarial valuation as at the Balance Sheet date on the projected unit credit method and the same is funded with Life Insurance Corporation of India.

xi) Segment Reporting:

The Company is in the business of Engineering, Procurement & Construction contract in Oil, Gas & Hydrocarbon (OG&H) Sector and ancillary services, including manufacturing activity. More than 90% of the income is only from Engineering & Construction contracts in OG&H Sector and ancillary services. The projects are executed both in India and abroad. Considering the core activity of the Company as above, the primary segment is geographical segment. Accordingly, the reportable segments of the Company are:

1. Domestic

2. Overseas

xii) Earnings Per Share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 'Earnings per share'. Basic earnings per share, is computed by dividing the net profit or loss for the year, by the weighted average number of equity shares outstanding during the year.

xiii) Taxation (including Deferred Tax):

Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of the taxable income in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods are recognised using the tax rates, and tax laws that have been enacted or substantively enacted, subject to prudence. Deferred tax assets on unabsorbed depreciation and carry forward of losses are not recognised unless there is a virtual certainty that there will be sufficient future taxable income available to realise such assets.

xiv) Borrowing Costs:

Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets, are capitalised.

xv) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised for liabilities that can be measured only by using substantial degree of estimation, if:

a. The Company has a present obligation as a result of past events.

b. A probable outflow of resources is expected to settle the obligation.

c. The amount of the obligation is best estimate required to settle the obligation at the Balance Sheet date.

d. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

Reimbursement expected in respect of the expenditure required to settle a provision is recognized only when it is virtually certain that reimbursement will be received.

Contingent Liability is disclosed in the case of :

a. A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation,

b. A present obligation when no reliable estimate is possible, and

c. A possible obligation arising from past events where the probability of outflow of resources is not remote.

Contingent Assets are neither recognised, nor disclosed. Provision, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

xvi) Extraordinary Items:

The Extraordinary items are Income or Expenses that arise from events of transactions that are clearly distinct from the ordinary activities and therefore, are not expected to recur frequently or regularly.

The nature and amount of each extra ordinary item is identified and disclosed in the Statement of Profit and Loss in a manner that its impact on current profit or loss can be perceived.

xvii) Operating Leases:

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rents under operating leases are recognised in the profit and loss account on a straight line.

Mar 31, 2014

The Significant Accounting Policies have been predominantly prescribed below in order of the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended)

i) Method of Accounting and preparation of the Financial Statements:

The financial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the accounting principles, generally accepted in India and in accordance with Accounting Standards referred to in section 211(3C) of the Companies Act, 1956.

ii) Revenue Recognition

a Manufacturing activities:

Sales of Goods is recognized as per the terms of sales. Sales exclude amount recovered towards Excise Duty and Sales Tax

b Erection / Construction activities:

Revenues from execution of contract is recognized on the Percentage Completion method. The stage of completion is determined on the basis of actual work executed during the year. Running bills are accounted as sales on monthly basis. No profit is recognized till a minimum of 10% progress is achieved on the contract except in case of contracts executed on cost-plus basis. Costs incurred and invoices raised in respect of such contracts are carried in the Balance Sheet as contract in progress and advance billing respectively. When it is probable at any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognized immediately In case of arbitration awards which are granted in favour of the Company, any amount to be received is treated as ncome in the year of receipt of such award. Liquidated damages/Penalties are accounted for as cost when such delays and causes are attributable to the Company or when deducted by the client

c. Work done but not billed: Value of work executed, billed subsequent to the Balance Sheet date, is valued at the contract price

d. i. Income and Expenses are accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation

ii. VAT set-off is based on returns filed with appropriate authorities

e. Bank Guarantee commission is accounted in the year of execution/renewal of guarantee

iii) Use of Estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ from those estimates and the difference between the actual results and the estimates are recognized in the periods in which the results are known/materialise

iv) Fixed Assets:

All tangible fixed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost of fixed assets comprises its purchase price and other attributable expenditure incurred in making the asset ready for its intended use and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use

v) Depreciation /Amortization on Fixed Assets:

a. Depreciation has been provided for on the written down value method at the rates specified in Schedule XIV of the Companies Act, 1956

b. All the Fixed Assets costing less than Rs. 5,000/- each are fully depreciated in the year of acquisition

c. Leasehold Land and Leasehold Improvements are amortized over the period of the lease

vi) Impairment of Assets:

As at each Balance Sheet date, the Company assesses the realizable value of all the assets. If there is any indication of fall in the realizable value over the carrying cost of the assets, impairment in value of the assets is recognized

vii) Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts in progress, being technical matters, are estimated and certified by the Company''s technical personnel

b. Stock of all the raw materials, construction materials , stores and spares lying at store, sites/ factory have been valued at cost on First in First Out basis

c. Work-in Progress are valued at the lower of cost and the net realizable value viii) Investments:

a. Investments intended to be held for more than one year are classified as long term investments and are carried at cost of acquisition inclusive of other attributable expenses or fair value whichever is lower. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature, in the value of such investments

b. Current Investments are carried at the lower of cost and the fair value ix) Foreign Currency Transactions:

a. Transactions in foreign currency are recorded at the exchange rates prevailing on the date of transaction

b. Monetary assets and liabilities denominated in foreign currencies at the year-end are translated at the year-end exchange rates

c. The exchange difference on conversion are credited or charged to the Statement of Profit and Loss

d. Financial statement of Foreign operations, which are integral operations are translated using the same principles as stated above except following items which are translated as below:

x) Employee benefits:

a. The Company''s contribution to Provident Fund is charged to the Statement of Profit and Loss

b. Other long term employee benefits comprise compensated absences which is provided based on an actuarial valuation carried out in accordance with AS 15 as at the Balance Sheet date

c. The gratuity liability, which is a defined benefit plan, is provided on the basis of actuarial valuation as on Balance Sheet date on the projected unit credit method and the same is funded with Life Insurance Corporation of India

xi) Segment Reporting:

The Company is in the business of Engineering, Procurement & Construction contract in Oil, Gas & Hydrocarbon (OG&H) Sector and ancillary services, including manufacturing activity. More than 90% of the income is only from Engineering & Construction contracts in OG&H Sector and ancillary services. The projects are executed both in India and abroad Considering the core activity of the Company as above, the primary segment is geographical segment. Accordingly the reportable segments of the Company are:

1. Domestic

2. Overseas

xii) Earnings Per Share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 ''Earnings per share'' Basic earnings per share, is computed by dividing the net profit or loss for the year, by the weighted average number of equity shares outstanding during the year

xiii) Taxation (including Deferred Tax):

Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of the taxable ncome in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods are recognized using the tax rates, and tax laws that have been enacted or substantively enacted, subject to prudence. Deferred tax assets on unabsorbed depreciation and carryforward of losses are not recognized unless there is a virtual certainty that there will be sufficient future taxable income available to realize such assets

xiv) Borrowing Costs:

Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets, are capitalized

xv) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized for liabilities that can be measured only by using substantial degree of estimation, if:

a. The Company has a present obligation as a result of past events

b. A probable outflow of resources is expected to settle the obligation

c. The amount of the obligation is best estimate required to settle the obligation at the Balance Sheet date

d. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate

Reimbursement expected in respect of the expenditure required to settle a provision is recognized only when it is virtually certain that reimbursement will be received

Contingent Liability is disclosed in the case of

a. A present obligation arises from past events, when it is not probable that an outflow of resources will be required to settle the obligation

b. A present obligation when no reliable estimate is possible, and

c. A possible obligation arising from past events where the probability of outflow of resources is not remote

Contingent Assets are neither recognized, nor disclosed. Provision, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date

xvi) Extraordinary Items:

The Extraordinary items are Income or Expenses that arise from events of transactions that are clearly distinct from the ordinary activities and therefore, are not expected to recur frequently or regularly

The nature and amount of each extra ordinary items is identified and disclosed in the Statement of Profit and Loss in a manner that its impact on current profit or loss can be perceived

b. Terms/rights attached to equity shares

The Company''s issued, subscribed and paid-up capital comprises of equity shares only and no preference share have been ssued. The Company''s paid-up capital comprises only one class, i.e. equity shares having par value of Rs. 1 per share. Each holder of equity share is entitled to one vote per share

The liability of the members is limited.

The Company''s shares are listed on the Bombay Stock Exchange Limited (BSE)

Restriction on distribution of Dividend

Pursuant to the Provisions of the Sanctioned Scheme, the Company is not permitted to declare any dividend to the equity shareholders without the prior approval of the BIFR/Monitoring Agency (MA) during the period of rehabilitation

c. No bonus shares have been issued, no shares have been issued for consideration other than cash and no shares have been bought back during the last five years

e. Reduction in paid-up value of equity shares

Pursuant to the provisions of the Sanctioned Scheme, effective 26th December 2007 the paid-up value of the equity shares has been reduced from Rs. 10/- per share to Rs. 1/- per share fully paid-up. On reduction, the paid-up capital of the Company was reduced to Rs. 92,30,000 comprising of 92,30,000 equity shares of Rs. 1/- each. On 4th January 2008, the Company has allotted 2,76,90,000 equity shares of Rs. 1/- each to Tata Projects Limited. Consequent to the allotment of these shares, the Company has become a subsidiary of Tata Projects Limited (shareholding of 75% in the Company''s paid-up capital). The Company''s paid-up capital has thus been increased to Rs. 3,69,20,000 comprising of 3,69,20,000 equity shares of Rs. 1/- each

Mar 31, 2013

The Signifcant Accounting Policies have been predominantly prescribed below in order of the Accounting Standards notifed under the Companies (Accounting Standards) Rules, 2006 (as amended).

(i) Method of Accounting and preparation of Financial Statement:

The fnancial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the generally accepted accounting principles, in India and in accordance with accounting standards notifed under the Companies (Accounting Standards) Rules, 2006

(ii) Revenue Recognition

a. Manufacturing activities:

Sales of Goods is recognized when signifcant risks pass to the buyer as per the terms of sales. Sales exclude amount recovered towards Excise Duty and Sales Tax.

b. Erection/Construction activities:

Revenue is recognized when there is certainty as to measurability and collectability exists. Revenues from execution of contract are recognized on the Percentage of Completion method. The stage of completion is determined on the basis of actual work executed during the year. Running bills are accounted as sales on monthly basis. No proft is recognized till a minimum of 10% progress is achieved on the contract except in case of contracts executed on Cost-plus basis. Costs incurred and invoices raised in respect of such contracts are carried in the Balance Sheet as contracts in progress and advance billing respectively. When it is probable at any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognized immediately. Liquidated damages/Penalties are accounted for as cost when such delays and causes are attributable to the Company or when deducted by the Client.

c. work done but not billed:

Value of work executed, billed subsequent to the Balance Sheet date, is valued at contract price.

d. i. Income and Expenses are accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation.

ii. VAT set-off is based on returns fled with appropriate authorities.

e. Bank Guarantee commission is accounted in the year of execution/renewal of guarantee.

(iii) Fixed Assets:

All tangible and intangible fxed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost comprises of purchase price and other attributable expenses incurred up to acquisition and installation.

(iv) Depreciation/Amortisation on Fixed Assets:

a. Depreciation has been provided for on the written down value method at the rates specifed in Schedule XIV of the Companies Act, 1956 except as stated below.

b. All Fixed Assets costing less than Rs. 5,000/- each are fully depreciated in the year of acquisition.

c. Leasehold Improvements are amortised over the period of the lease.

d. Computer software being an intangible asset is amortized at 40% on written down value basis.

(v) Impairment of Assets:

As at each Balance Sheet date, the Company assesses the realizable value of all the assets. If there is any indication of fall in the realizable value over the carrying cost of the assets, impairment in value of the assets is recognized.

(vi) Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts-in-progress, being technical matters, are estimated and certifed by the Company''s technical personnel.

b. Stock of raw materials, construction materials, stores and spares lying at store, sites/factory have been valued at the lower of cost on First in First Out basis and the net realizable value.

c. Work-in-Progress is valued at the lower of cost and net realizable value.

d. Sale in transit are valued at respective contract price.

(vii) Investments:

a. Investments intended to be held for more than one year are classifed as long term investments and are carried at cost of acquisition inclusive of other attributable expenses or fair value whichever is lower. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature.

b. Current Investments are carried at the lower of cost and fair value.

(viii) Foreign Currency Transactions:

a. Sales and expenditure relating to overseas jobs/projects have been converted at the exchange rates prevailing on the date of transaction.

b. Assets and liabilities denominated in foreign currencies at the year-end are normally translated at the year- end exchange rates.

c. The exchange difference on conversion are credited or charged to the Statement of Proft and Loss.

d. Financial statements of foreign operations, which are integral operations are translated using the same principles as stated above except following items which are translated as below:

Sl. No. Nature of the account Policy

1. Opening and Closing Work-in-progress Exchange Rate at the commencement and close of

the year respectively.

2. Fixed Assets and Depreciation Exchange Rate used for the translation of the

respective date of purchase of fxed assets.

(ix) Retirement benefts:

a. The Company''s contribution to Provident Fund is charged to the Statement of Proft and Loss.

b. Leave encashment beneft at the time of retirement/cessation of service as calculated on the basis of actuarial valuation, is charged to the Statement of Proft and Loss.

c. Gratuity liability, which is a defned beneft plan, is provided on the basis of actuarial valuation as on the Balance Sheet date and the same is funded with Life Insurance Corporation of India as per its advice.

(x) Segment Reporting:

The Company is in the business of Engineering, Procurement & Construction contract in Oil, Gas & Hydrocarbon (OG&H) Sector and ancillary services, including Manufacturing activity. More than 90% of the income is derived from Engineering & Construction contracts in OG&H Sector and ancillary services. The projects are executed both in India and abroad. Considering the core activity of the Company as above, the primary segment is Geographical segment. Accordingly the reportable segment of the Company is geographic as follows:

1. Domestic

2. Overseas

(xi) Earnings Per Share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 ''Earnings per share''. Basic earnings per share, is computed by dividing the net proft or loss for the year by the weighted average number of equity shares outstanding during the year.

(xii) Taxation (including Deferred Tax):

Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of taxable income in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods, are recognized using the tax rates, and tax laws that have been enacted or substantively enacted. Deferred tax assets on timing differences, other than on unabsorbed depreciation and carry forward of loss, are recognized if their a reasonable certainty of their reversal. However deferred tax assets on unabsorbed depreciation and carry forward of losses is recognized only if there is virtual certainty.

(xiii) Borrowing Costs:

Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets are capitalized.

(xiv) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized for liabilities that can be measured only by using substantial degree of estimation, if

a. The Company has a present obligation as a result of past event.

b. A probable outfow of resources is expected to settle the obligation, and

c. The amount of the obligation can be reliably estimated.

Reimbursement expected in respect of the expenditure required to settle a provision is recognized only when it is virtually certain that reimbursement will be received.

Contingent Liability is disclosed in the case of:

a. A present obligation arises from past events, when it is not probable that an outfow of resources will be required to settle the obligation,

b. A present obligation when no reliable estimate is possible, and

c. A possible obligation arising from past events where the probability of outfow of resources is not remote.

Contingent Assets are neither recognized, nor disclosed. Provision, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

(xv) Extraordinary Items:

The Extraordinary items are Income or Expenses that arise from events of transactions that are clearly distinct from the ordinary activities of enterprises and therefore, are not expected to recur frequently or regularly.

The nature and amount of each extra ordinary items is identifed and disclosed in the Statement of Proft and Loss in a manner that its impact on current proft or loss can be perceived.

Mar 31, 2012

I. Method of Accounting and preparation of Financial Statement:

The financial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the accounting principles, generally accepted in India and in accordance with accounting standards referred to in section 211(3C) of the Companies Act, 1956.

II. Revenue Recognition:

a. Manufacturing activities

Sale of Goods is recognized as per the terms of sales. Sales exclude amount recovered towards Excise Duty and Sales Tax.

b. Erection / Construction activities: Revenues from execution of contract is recognized on Percentage Completion method. The stage of completion is determined on the basis of actual work executed during the period. Running bills are accounted as sales on monthly basis. No profit is recognized till a minimum of 10% progress is achieved on the contract except in case of contracts executed on Cost-plus basis. Cost incurred and invoices raised in respect of such contract are carried in the Balance Sheet as contract in progress and advance billing respectively. When it is probable at any stage of the contract, that the total cost will exceed the total contract revenue, the expected loss recognized immediately.

c. Work done but not billed: Value of work executed, billed subsequent to balance sheet date, is valued at contract price.

d. i Income and Expenses are accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation. ii VAT set-off is based on returns filed with appropriate authorities.

e. Bank Guarantee commission is accounted in the year of execution/renewal of guarantee.

III. Fixed Assets:

All tangible fixed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost comprises of purchase price and other attributable expenses incurred up to acquisition and installation.

IV. Depreciation /Amortisation on Fixed Assets:

a. Depreciation has been provided for on the written down value method at the rates specified in Schedule XIV of the Companies Act, 1956.

b. All the Fixed Assets costing less than Rs 5,000/- each are fully depreciated in the year of acquisition.

c. Lease hold Improvements is Amortised over the period of the Lease.

V. Impairment of Assets:

As at each Balance Sheet date, the Company assesses the realizable value of all the assets. If there is any indication of fall in the realizable value over carrying cost of the assets, impairment in value of the assets is recognized.

VI. Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts in progress, being technical matters, are estimated and certified by the Company's technical personnel.

b. Stock of all the raw materials, construction materials, stores and spares lying at store, sites/factory have been valued at cost on First In First Out basis.

c. Work-in-Progress are valued at lower of cost and net realizable value.

VII. Investments:

a. Investments intended to be held for more than one year are classified as long term investments and are carried at cost of acquisition inclusive of other attributable expenses or fair value whichever is lower. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature.

b. Current Investments are carried at lower of cost and fair value.

VIII. Foreign Currency Transactions:

a. Sales and expenditure relating to overseas jobs/projects have been converted at the exchange rates prevailing on the date of transaction.

b. Assets and liabilities denominated in foreign currencies at the year-end are normally translated at the year-end exchange rates.

c. The exchange difference on conversion are credited or charged to profit and loss account.

IX. Retirement benefits:

a. The Company's contribution to Provident fund is charged to the Profit and Loss Account.

b. Leave encashment benefit at the time of retirement/cessation of service as calculated on the basis of actuarial valuation, is charged to the Profit and Loss Account.

c. The Gratuity liability, which is a defined benefit plan, is provided on the basis of actuarial valuation as on balance sheet date and same is funded with Life Insurance Corporation of India as per its advice.

X. Segment Reporting:

The Company is in the business of Engineering, Procurement & Construction contract in Oil, Gas & Hydrocarbon (OG&H) Sector and ancillary services including Manufacturing activity. More than 90% of the income is only from Engineering & Construction contracts in OG&H Sector and ancillary services. The projects are executed both in India and abroad. Considering the core activity of the Company as above, the primary segment is Geographical segment. Accordingly the reportable Segment of the Company are:

1. Domestic

2. Overseas

XI. Earnings Per Share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 'Earnings per share' issued by the Institute of Chartered Accountants of India. Basic earnings per share, is computed by dividing the net profit or loss for the year, by the weighted average number of equity shares outstanding, during the year.

XII. Taxation (including Deferred Tax):

Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of taxable income in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods, are recognised using the tax rates, and tax laws that have been enacted or substantively enacted, subject to prudence.

XIII. Borrowing Costs:

Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets, are capitalised.

XIV. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised for liabilities that can be measured only by using substantial degree of estimation, if

a. The Company has a present obligation as a result of past event.

b. A probable outflow of resources is expected to settle the obligation, and

c. The amount of the obligation can be reliably estimated.

Reimbursement expected in respect of the expenditure required to settle a provision is recognized only when it is virtually certain that reimbursement will be received.

Contingent Liability is disclosed in the case of:

a. A present obligation arises from past events, when it is not probable that an outflow of resources will be required to settle the obligation,

b. A present obligation when no reliable estimate is possible, and

c. A possible obligation arising from past events where the probability of outflow of resources is not remote. Contingent Assets are neither recognized, nor disclosed. Provision, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

XV. Extraordinary Items:

The Extraordinary items are Income or Expenses that arise from events of transactions that are clearly distinct from the ordinary activities of enterprises and therefore, are not expected to recur frequently or regularly.

The nature and amount of each extraordinary items is identified and disclosed in the Statement of Profit and Loss in a manner that its impact on current profit or loss can be perceived.

(b) Terms/rights attached to equity shares

The Company's paid up capital comprises only one class i.e equity shares having par value of Rs 1/- per share. Each holder of equity share is entitled to one vote per share.

The Liability of the Member is limited.

The Company's shares are listed on the Bombay Stock Exchange Limited (BSE).

Restriction on distribution of Dividend: Pursuant to the Provisions of the Sanctioned Scheme, the Company is not permitted to declare any dividend to the equity shareholders without the prior approval of the BIFR/Monitoring Agency (MA) during the period of rehabilitation.

(e) Reduction in paid-up value of equity shares

Pursuant to the provisions of the Sanctioned Scheme, effective 26th December 2007 the paid-up value of the equity shares has been reduced from Rs 10/- per share to Rs 1/- per share fully paid up. On reduction, the paid up capital of the Company was reduced to Rs 9,230,000/- comprising of 9,230,000 equity share of Rs 1/- each. On 4th January 2008, the Company has allotted 27,690,000 equity share of Rs 1/- each to Tata Projects Limited. Consequent to the allotment of these shares, the Company has become a subsidiary of Tata Projects Limited (shareholding of 75% in the Company's paid up capital). The Company's paid up capital has thus been increased to Rs 36,920,000/- comprising of 36,920,000 equity share of Rs 1/- each.

(a) Loans & Advances from Related Parties (Holding Company)

In terms of the Sanctioned Scheme of BIFR dated 18th December 2007, the Company has obtained term loan from the Strategic Investor viz. Tata Projects Limited (Holding Company) against the security of immovable property and all title deeds of the property are deposited with the Holding Company. The loan from the Holding Company (Non-current portion) is repayable in 2 (two) equal annual installments falling due on 31st March of 2014 and 2015, respectively.

(b) HDFC Bank Ltd. - Vehicle Loan : Hypothecation on Motor Vehicle.

Mar 31, 2011

I. Method of Accounting & Revenue Recognition:

a. The financial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the accounting principles, generally accepted in India and in accordance with accounting standards referred to in section 211(3C) of the Companies Act, 1956.

b. Manufacturing activities: Sales of Goods is recognized as per the terms of sales. Sales exclude amount recovered towards Excise Duty and Sales Tax.

c. Erection/Construction activities: Revenues from execution of contract is recognized on Percentage Completion method. The stage of completion is determined on the basis of actual work executed during the period. Running bills are accounted as sales on monthly basis. No profit is recognized till a minimum of 10% progress is achieved on the contract. Cost incurred and invoices raised in respect of such contract are carried in the Balance Sheet as contract in progress and advance billing respectively. When it is probable at any stage of the contract, that the total cost will exceed the total contract revenue, the expected loss is recognized immediately.

d. Work done but not billed: Value of work executed, billed subsequent to balance sheet date, is valued at contract price.

e. i. Income and Expenses are accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation.

ii. VAT set-off is based on returns filed with appropriate authorities.

f. Bank guarantee commission is accounted in the year of execution /renewal of guarantee.

II. Fixed Assets:

All tangible fixed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost comprises of purchase price and other attributable expenses incurred up to acquisition and installation.

III. Depreciation/Amortisation on Fixed Assets:

a. Depreciation has been provided for on the written down value method at the rates specified in Schedule XIV of the Companies Act, 1956.

b. All the Fixed Assets costing less than Rs 5,000/- each are fully depreciated in the year of acquisition.

c. Lease hold Improvements is amortised over the period of the Lease.

IV. Impairment of Assets:

As at each Balance sheet date, the Company assesses the realizable value of all the assets. If there is any indication of fall in the realizable value over carrying cost of the assets, impairment in value of the assets is recognized.

V. Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts in progress, being technical matters, are estimated and certified by the Company's technical personnel.

b. Stock of all the raw materials, construction materials, stores and spares lying at store, sites/ factory have been valued at cost on First in First Out basis.

c. Work-in Progress are valued at lower of cost and net realizable value.

VI. Investments:

Investments intended to be held for more than one year are classified as long term investments and are carried at cost of acquisition inclusive of other attributable expenses or fair value whichever is lower. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature. Current Investments are carried at lower of cost and fair value.

VII. Foreign Currency Transactions:

a. Sales and expenditure relating to overseas jobs/projects have been converted at the exchange rates prevailing on the date of transaction.

b. Assets and liabilities denominated in foreign currencies at the year end are normally translated at the year end exchange rates.

c. The exchange difference on conversion are credited or charged to profit and loss account.

d. Financial statement of Foreign operations, which are integral operations are translated using the same principles as stated above except following items which are translated as below:

Sr. Nature of the account Policy No. 1. Opening and Closing Work-in- Exchange rate at the commencement progress and close of the year respecti- vely.

2. Fixed Assets and Depreciation Exchange rate used for the translation of the respective date of purchase of fixed assets.

VIII. Retirement benefts:

a. The Company's contribution to Provident fund is charged to the Profit and Loss Account.

b. Leave encashment benefit at the time of retirement/cessation of employment as calculated on the basis of actuarial valuation, is charged to the Profit and Loss Account.

c. The Gratuity liability, which is a defined benefit plan, is provided on the basis of actuarial valuation as on balance sheet date and same is funded with Life Insurance Corporation of India as per their advice.

Ix. Segment Reporting:

The Company is in the business of Engineering Procurement contracts & Construction in Oil and Gas and Hydrocarbon sector and ancillary services including Manufacturing activity. More than 90% of the income is only from Engineering & Construction contract in Oil and Gas Sector and ancillary services. The projects are executed both in India and abroad. Considering the core activity of the company as above, the primary segment is Geographical segment. Accordingly the reportable Segment of the Company are:

a. Domestic

b. Overseas

X. Earnings per share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 'Earnings per share' issued by the Institute of Chartered Accountants of India. Basic earnings per share, is computed by dividing the net profit or loss for the year, by the weighted average number of equity shares outstanding, during the year.

XI. Taxation (including Deferred Tax): Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of taxable income in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods, are recognised using the tax rates, and tax laws that have been enacted or substantively enacted, subject to prudence.

XII. Borrowing Costs: Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets, are capitalised.

XIII. Provisions, Contingent Liabilities and Contingent Assets: Provision are recognised for liabilities that can be measured only by using substantial degree of estimation, if:

a. The Company has a present obligation as a result of past event.

b. A probable outflow of resources is expected to settle the obligation, and

c. The amount of the obligation can be reliably estimated.

Reimbursement expected in respect of the expenditure required to settle a provision is recognized only when it is virtually certain that reimbursement will be received.

Contingent Liability is disclosed in the case of:

a. A present obligation arises from past events, when it is not probable that an outflow of resources will be required to settle the obligation,

b. A present obligation when no reliable estimate is possible, and

c. A possible obligation arising from past events where the probability of outflow of resources is not remote.

Contingent Assets are neither recognized, nor disclosed. Provision, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

Mar 31, 2010

I. Method of Accounting & Revenue Recognition:

a. The financial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the accounting principles, generally accepted in India and in accordance with accounting standards referred to in Section 211(3C) of the Companies Act, 1956.

b. Manufacturing activities: During the year no Manufacturing Activity has been carried out.

c. Erection/Construction activities: Sales have been stated exclusive of excise duty. Revenue from execution of contracts is recognized on Percentage Completion method. The stage of completion is determined on the basis of actual work executed during the period. Running bills are accounted as sales on monthly basis. No profit is recognized till a minimum of 10% progress is achieved on the contract. Cost incurred and invoices raised in respect of such contracts are carried in the balance sheet as contract in progress and advance billing respectively.

d. Work done but not billed: Value of work executed, billed subsequent to balance sheet date, is valued at contract price.

e. i. Income and Expenses are mainly accounted on accrual basis except capital incentive from Government authorities and liquidated damages to the extent under negotiation,

ii. Sales Tax set-off is based on returns filed with appropriate authorities.

f. Bank guarantee commission is accounted in the year of execution/renewal of guarantee.

g. As prudence, all debtors (including advances), creditors, unless disputed, beyond 36 months are written off/ written back.

II. Fixed Assets:

All tangible fixed assets are stated at historical cost (as reduced by CENVAT credit) less accumulated depreciation. The cost comprises of purchase price and other attributable expenses incurred up to acquisition and installation.

III. Depreciation:

a. Depreciation has been provided for on the written down value method at the rates specified in Schedule XIV to the Companies Act, 1956 except for the factory building at Nashik which is depreciated @ 5% per annum.

b. All the Fixed Assets costing less than Rs. 5,000/- each are fully depreciated in the year of acquisition.

IV. Impairment of Assets:

As at each Balance sheet date, the Company assesses the realizable value of all the assets. If there is any indication of fall in the realizable value over carrying cost of the assets, impairment in value of the assets is recognized.

V. Valuation of Inventories:

a. Stage of completion and cost of completion in respect of engineering and construction contracts in progress, being technical matters, are estimated and certified by the Companys technical personnel.

b. Stock of all the raw materials, construction materials, stores and spares lying at store/sites have been valued at cost on First-in-First-Out basis.

VI. Investments:

Investments intended to be held for more than one year are classified as long term investments and are carried at cost of acquisition inclusive of other attributable expenses or fair value whichever is lower. Diminution in the value of investment is provided for, if such diminution is of other than temporary nature. Current Investments are carried at lower of cost and fair value.

VII. Foreign Currency Transactions:

a. Sales and expenditure relating to overseas jobs/projects have been converted at the exchange rates prevailing at the end of the month in which the transaction is entered or at the last rate available.

b. Assets and liabilities denominated in foreign currencies at the year-end are normally translated at the year-end exchange rates.

c. The exchange difference on conversion are credited or charged to profit and loss account.

d. Financial statement of overseas operations, which are integral operations are translated using the same principles as stated above except following items which are translated as below:

Sr. No. Nature of the account Policy

1. Opening and Closing Work-in-progress Rate at the commencement and end of the year

respectively.

2. Fixed Assets and Depreciation Rate used for the translation of the respective

date of purchase of fixed assets.

VIM. Retirement benefits:

a. The Companys contribution to Provident fund is charged to the Profit and Loss Account.

b. Leave encashment benefit at the time of retirement/cessation of service as calculated on the basis of actuarial valuation, is charged to the Profit and Loss Account.

c. The Gratuity liability, which is a defined benefit plan, is provided on the basis of actuarial valuation as on the Balance Sheet date and same is funded with Life Insurance Corporation of India as per their advice.

IX. Segment Reporting:

The Company has only one business segment i.e. Engineering & Construction activity. There is no distinguishable component of the Company providing a product or service or group of products or services that is subject to risks and returns that are different from other segments. As the Company also exports, the segment for the Company is based on location of customers/export destinations.

X. Earnings per share:

The Company reports basic earnings per share in accordance with the Accounting Standard 20 Earnings per share issued by the Institute of Chartered Accountants of India. Basic earnings per share, is computed by dividing the net profit or loss for the year, by the weighted average number of equity shares outstanding, during the year.

XI. Taxation (including Deferred Tax):

Provision for Income Tax is made for both current and deferred taxes. Current tax is provided on the basis of taxable income in accordance with and at the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods, are recognised using the tax rates, and tax laws that have been enacted or substantively enacted, subject to prudence.

XII. Borrowing Costs:

Borrowing costs which are directly attributable to acquisition, construction and production of qualifying assets are capitalised.

XIII. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised for liabilities that can be measured only by using substantial degree of estimation, if:

a. the Company has a present obligation as a result of past event;

b. a probable outflow of resources is expected to settle the obligation; and

c. the amount of the obligation can be reliably estimated.

Reimbursement expected in respect of the expenditure required to settle a provision is recognised only when it is virtually certain that reimbursement will be received.

A Contingent Liability is disclosed in the case of:

a. a present obligation arises from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

b. a present obligation when no reliable estimate is possible; and

c. a possible obligation arising from past events where the probability of outflow of resources is not remote.

Contingent Assets are neither recognised, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

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