Accounting Policies of Kalindee Rail Nirman (Engineers) Ltd. Company

Mar 31, 2016

1. Corporate Information

(a) Kalindee Rail Nirman (Engineers) Ltd. (‘the Company’) is a public listed company registered under the erstwhile Companies Act, 1956 (superseded by Companies Act, 2013). The Company is in the business of construction, installation and setting up infrastructure for rail transport within and outside India.

(b) The Company''s principal place of business is located at ''2nd Floor, Building No. 9A, Cyber City, DLF Phase-III, Gurgaon - 122002'', India.

(c) These financial statements are presented in Indian Rupees ('').

(d) The Company has filed with the Hon’ble High Court at New Delhi on 24th April 2015 for merger with Texmaco Rail & Engineering Ltd. The merger scheme has already been approved by the Stock Exchange.

2. Significant accounting policies

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with Rule 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention.

2.2 Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles in Indian (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements and the result of operations during the year. Differences between actual results and estimates are recognized in the year in which the results are known or materialized. Examples of such estimates are estimated useful life of assets, classification of assets/liabilities as current or non-current in certain circumstances, provision for doubtful receivables and retirement benefits, etc. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

2.3 Fixed assets

Tangible fixed assets

Fixed assets are stated at historical cost less accumulated depreciation and impairment loss if any. Historical cost comprises the purchase price (net of cenvat / duty credits wherever applicable) and all direct costs attributable to bringing the asset to its working condition for intended use.

Intangible fixed assets

Capital expenditure on purchase and development of identifiable non-monetary assets without physical substance is recognized as intangible assets in accordance with principles given under AS-26 - Intangible assets. These are grouped and separately shown under the schedule of fixed assets. These are amortized over their respective expected useful lives.

2.4 Depreciation / amortization

Tangible fixed assets

Depreciation on fixed assets is provided on the basis of useful life of assets at the rates prescribed in Schedule

II to the Companies Act, 2013 on straight line basis with no residual value . All assets costing ? 5,000 or below are fully depreciated in the year of addition.

Intangible fixed assets

Intangible assets are amortized over a period not exceeding five years on a straight-line basis.

2.5 Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

Previously recognized impairment losses are reversed to the extent the recoverable amount exceeds the carrying amount.

2.6 Borrowing cost

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

2.7 Investments

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

2.8 Inventories

Raw material, stores and spares are valued at lower of cost and net realizable value. Stock of materials at project site has been done after providing for obsolescence, if any, at lower of cost or net realizable value. The valuation of work-in-progress during the period is determined as the aggregate of opening work-in-progress, cost of construction and construction overheads incurred during the year as reduced by cost of work completed.

2.9 Revenue recognition

(a) Revenue from construction contracts in accordance with Accounting Standard - 7 on “Construction Contracts” is recognized using the percentage of completion method. Percentage of completion method is determined as a proportion of cost incurred to date to the total estimated contract cost. Where the total cost of contract, based on technical and other estimates, is expected to exceed the corresponding contract value, such excess is provided during the year. For this purpose total contract costs are ascertained on the basis of actual costs incurred and costs to be incurred for completion of contract in progress, which is arrived at by the management based on the current technical data, forecasts and estimate of expenditure to be incurred in the future including contingencies. Revision in projected profit and loss arising from change in estimates are reflected in each accounting period which however cannot be disclosed separately in the financial statements as the effect thereof cannot be determined accurately. The income on account of claims / extra item works are recognized to the extent company expects reasonable certainty about receipts or acceptance from the client.

(b) In some old projects where substantial contract revenue has already been recognized in earlier periods, revenue is recognized as per Accounting Standard -9 "Revenue Recognition" where income from operations is determined and recognized, based on the bills raised on technical evaluation of work executed based on joint inspection with customers including railways. The income on account of claims/extra item works are recognized to the extent company expects reasonable certainty about receipts or acceptances from the client. The figures has been taken as per the management working on the basis of the work completed.

(c) Interest income is recognized on time basis and is determined by the amount outstanding and rate applicable.

(d) Dividend income is recognized as and when right to receive payment is established.

(e) Rental income / lease rentals are recognized on accrual basis in accordance with the terms of agreements.

(f) Insurance and other claims are accounted for as and when admitted by the appropriate authorities in view of uncertainty involved in ascertainment of final claim.

(g) The company is in the business of engineering, procurement and construction. The contract awarded to the company are on lump sum price basis and the price is inclusive of all taxes and duties. The turnover of the company hence includes the taxes and duties.

2.10 Leases

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.

Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Such assets are capitalized at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

Where the Company is the lessor

Assets subject to operating leases are included in fixed assets. Lease income is recognized in the statement of profit and loss on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss.

Assets given under a finance lease are recognized as a receivable at an amount equal to the net investment in the lease. Lease income is recognized over the period of the lease so as to yield a constant rate of return on the net investment in the lease. Initial direct costs relating to assets given on finance leases are charged to Statement of Profit and Loss.

2.11 Earnings per share

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

Joint venture interests accounted as above, other than investments in incorporated jointly controlled entities, are included in the segments to which they relate.

For smooth execution of the projects, the company has entered into various joint ventures which comes under the purview of joint control operations. The proportionate financials of the joint ventures has already been incorporated in the financial statements of the company.

2.13 Foreign exchange transactions and forward contracts

(a) Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(b) Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

The financial transactions of an integral foreign operation are translated using the exchange rates as if all its transactions had been entered into by the reporting enterprise itself.

(c) Exchange Differences

Exchange differences arising on a monetary item that, in substance, form part of the company''s net investment in a non-integral foreign operation is accumulated in a foreign currency translation reserve in the financial statements until the disposal of the net investment, at which time they are recognized as income or as an expense.

Exchange differences arising on the settlement of monetary items not covered above, or on reporting such monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

(d) Forward exchange contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.

2.14 Employee benefits

(a) Short-term employee benefits

The Employee benefits payable only within 12 months of rendering the services are classified as short-term employee benefits. Benefits such as salaries, leave travel allowance, short-term compensated absences, etc. and the expected cost of bonus are recognized in the period in which the employee renders the related services.

(b) Post employment benefits

Defined contribution plan : The Company has contributed to state governed Provident Fund Scheme, and Employee Pension Scheme which are Defined Contribution Plans. Contribution paid or payable under the Schemes is recognized during the period in which employee renders the related service.

Defined benefit plan : The Company’s gratuity scheme is a defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation carried out by an independent actuary, using the Projected unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The Company has an Employee Gratuity Fund managed by SBI Life Insurance Company. The provision made during the year is charged to profit and loss account.

(c) Other long-term employee benefits

Benefits under the Company’s leave encashment constitute other long term employee benefits, recognized as an expense in the statement of profit and loss for the period in which the employee has rendered services. Estimated liability on account of these benefits is actuarially determined based on the projected unit credit method using the yield on government bonds, as on the date of the balance sheet, as the discounting rate. Actuarial gains and losses are charged to the Statement of profit and loss.

2.15 Taxation

Income tax expense comprises current tax, deferred tax charge or credit. Current tax provision is made based on the tax liability computed after considering tax allowances and exemptions under the Income tax Act, 1961.

The deferred tax charge or credit and the corresponding deferred tax liability and assets are recognized using the tax rates that have been enacted or substantively enacted on the balance sheet date. Deferred tax assets are recognized only to the extent where there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward business loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet date to reassess their reliability.

Deferred tax consequences of timing differences that originate in the tax holiday period and reverse after the tax holiday period are recognized in the period in which the timing differences originate.

2.16 Provisions and contingent liabilities

The Company recognizes a provision when there is a present obligation as a result of a past event and it is more likely than not that there will be a outflow of resources embodying economic benefits to settle such obligations and the amount of such obligation can be reliably estimated. Provisions are not discounted to their present value and are determined based on the management’s estimation of the outflow required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect current management estimates. Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of future events, not wholly within the control of the Company. When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

2.17 Cash and cash equivalents

Cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.

2.18 Segment reporting Identification of segments:

The company’s operating business are organized and managed separately according to the nature of products manufactured and services provided, with each segment representing a strategic business unit that offers different products.

Allocation of common costs:

Common allocable costs are allocated to each segment on reasonable basis.

Unallocated Items:

Unallocable assets & liabilities represent the assets & liabilities not allocable to any segment as identified as per the Accounting Standard.

Segment Policies:

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

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Mar 31, 2015

1. Corporate Information

(a) Kalindee Rail Nirman (Engineers) Ltd. ('the Company') is a public listed company registered under the erstwhile Companies Act, 1956 (superseded by Companies Act, 2013). The Company is in the business of construction, installation and setting up infrastructure for rail transport within and outside India.

(b) The Company's principal place of business is located at '2nd Floor, Building No. 9A, Cyber City, DLF Phase-III, Gurgaon - 122002', India.

(c) These financial statements are presented in Indian Rupees (Rs.)

(d) The Company has filed with the Hon'ble High Court at New Delhi on 24th April 2015 for merger with Texmaco Rail & Engineering Ltd. The merger scheme has already been approved by the Stock Exchange.

2.1 Basis of preparation

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing accounting standards notified under the erstwhile Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) {Companies (Accounting Standards) Rules, 2006 as amended} and other relevant provisions of the Companies Act, 2013.

2.2 Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles in India (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements and the result of operations during the year. Differences between actual results and estimates are recognised in the year in which the results are known or materialised. Examples of such estimates are estimated useful life of assets, classification of assets/liabilities as current or non-current in certain circumstances, provision for doubtful receivables and retirement benefits, etc. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

2.3 Fixed assets

Tangible fixed assets

Fixed assets are stated at historical cost less accumulated depreciation and impairment loss if any. Historical cost comprises the purchase price (net of cenvat / duty credits wherever applicable) and all direct costs attributable to bringing the asset to its working condition for intended use.

Intangible fixed assets

Capital expenditure on purchase and development of identifiable non-monetary assets without physical substance is recognized as intangible assets in accordance with principles given under AS-26 – Intangible assets. These are grouped and separately shown under the schedule of fixed assets. These are amortized over their respective expected useful lives.

2.4 Depreciation / amortisation

Tangible fixed assets

Depreciation on fixed assets is provided on the basis of useful life of assets at the rates prescribed in Schedule

II to the Companies Act, 2013. All assets costing Rs. 5,000 or below are fully depreciated in the year of addition.

Intangible fixed assets

Intangible assets are amortized over a period not exceeding five years on a straight-line basis.

2.5 Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. After impairment,depreciation isprovided on the revised carrying amountof the assetover its remaining useful life. Previously recognised impairment losses are reversed to the extent the recoverable amount exceeds the carrying amount.

2.6 Borrowing cost

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

2.7 Investments

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

2.8 Inventories

Raw Material, stores and spares are valued at lower of Cost and Net Realisable Value. Stock of materials at project site has been done after providing for obsolescence, if any, at lower of Cost or Net Realizable Value. The valuation of work-in-progress during the period is determined as the aggregate of opening work-in-progress, cost of construction and construction overheads incurred during the year as reduced by cost of work completed.

2.9 Revenue recognition

(a) Income from operations is determined and recognized, based on the bills raised on technical evaluation of work executed based on joint inspection with customers including railways. The income on account of claims / extra item works are recognized to the extent company expects reasonable certainty about receipts or acceptance from the client. The figures has been taken as per the management working on the basis of the work completed.

(b) Interest income is recognized on time basis and is determined by the amount outstanding and rate applicable.

(c) Dividend income is recognized as and when right to receive payment is established.

(d) Rental income / lease rentals are recognized on accrual basis in accordance with the terms of agreements.

(e) Insurance and other claims are accounted for as and when admitted by the appropriate authorities in view of uncertainty involved in ascertainment of final claim.

2.10 Leases

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term. Where the Company is the lessor

Assets subject to operating leases are included in fixed assets. Lease income is recognised in the statement of profit and loss on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the statement of profit and loss.

2.11 Accounting for interests in Joint Ventures

Interests in joint ventures are accounted as follows:

Joint venture interests accounted as above, other than investments in incorporated jointly controlled entities, are included in the segments to which they relate.

2.12 Foreign exchange transactions and forward contracts

(a) Initial recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(b) Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(c) Exchange Differences Exchange differences arising on a monetary item that, in substance, form part of the company's net investment in a non-integral foreign operation is accumulated in a foreign currency translation reserve in the financial statements until the disposal of the net investment, at which time they are recognized as income or as an expense. Exchange differences arising on the settlement of monetary items not covered above, or on reporting such monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

(d) Forward exchange contracts not intended for trading or speculation purposes The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.

2.13 Employee benefits

(a) Short-term employee benefits The Employee benefits payable only within 12 months of rendering the services are classified as short-term employee benefits. Benefits such as salaries, leave travel allowance, short-term compensated absences, etc., and the expected cost of bonus are recognized in the period in which the employee renders the related services.

(b) Post employment benefits Defined contribution plan: The Company has contributed to state governed Provident Fund Scheme, and Employee Pension Scheme which are Defined Contribution Plans. Contribution paid or payable under the Schemes is recognized during the period in which employee renders the related service. Defined benefit plan: The Company's gratuity scheme is a defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation carried out by an independent actuary, using the Projected unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The Company has an Employee Gratuity Fund managed by SBI Life Insurance Company. The provision made during the year is charged to profit and loss account.

(c) Other long-term employee benefits Benefits under the Company's leave encashment constitute other long term employee benefits, recognised as 53 31st Annual Report 2014 - 2015 © an expense in the statement of profit and loss for the period in which the employee has rendered services. Estimated liability on account of these benefits is actuarially determined based on the projected unit credit method using the yield on government bonds, as on the date of the balance sheet, as the discounting rate. Actuarial gains and losses are charged to the Statement of profit and loss.

2.14 Taxation

Income tax expense comprises current tax, deferred tax charge or credit. Current tax provision is made based on the tax liability computed after considering tax allowances and exemptions under the Income tax Act, 1961. The deferred tax charge or credit and the corresponding deferred tax liability and assets are recognised using the tax rates that have been enacted or substantively enacted on the balance sheet date. Deferred tax assets are recognised only to the extent where there is reasonable certainty that the assets can be realised in future; however, where there is unabsorbed depreciation or carried forward business loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each balance sheet date to reassess their realisability. Deferred tax consequences of timing differences that originate in the tax holiday period and reverse after the tax holiday period are recognised in the period in which the timing differences originate.

2.15 Earnings per share

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

2.16 Provisions and contingent liabilities

The Company recognises a provision when there is a present obligation as a result of a past event and it is more likely than not that there will be a outflow of resources embodying economic benefits to settle such obligations and the amount of such obligation can be reliably estimated. Provisions are not discounted to their present value and are determined based on the management's estimation of the outflow required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect current management estimates. Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of future events, not wholly within the control of the Company. When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

2.17 Cash and cash equivalents

Cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.

2.18 Segment reporting

Identification of segments:

The company's operating business are organized and managed separately according to the nature of products manufactured and services provided , with each segment representing a strategic business unit that offers different products.

Allocation of common costs:

Common allocable costs are allocated to each segment on reasonable basis.

Unallocated Items:

Unallocable assets & liabilities represent the assets & liabilities not allocable to any segment as identified as per the Accounting Standard.

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Mar 31, 2013

1. Basis for preparation of Financial Statements:

The Financial Statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with generally accepted accounting principles in India and comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules 2006, to the extent applicable and in accordance with the Provisions of the Companies Act, 1956.

2. Use of Estimates:

Preparation of Financial Statements in conformity with Generally Accepted Accounting Principles required company Management to make estimates and assumptions that affect reported balance of assets & liabilities and disclosures relating to contingent assets & liabilities as of the date of Financials and reported amounts of income & expenses during the period. Examples of such estimate include Revenues and Profits expected to be earned on projects carried on by the company, contract costs expected to be incurred for completion of project, provision for doubtful debts, income taxes, etc. Actual results could differ from these estimates. Differences, if any, between the actual results and estimates are recognized in the period in which the results are known or materialized.

3. Expenditure:

Expenses are accounted on the accrual basis and provisions are made for all known losses and liabilities except for Bonus which is accounted for on cash basis.

4. Valuation of Inventories

Valuation of Inventories, representing stock of materials at project site has been done after providing for obsolescence, if any, at lower of Cost or Net Realizable Value. The valuation of work-in-progress during the period is determined as the aggregate of opening work-in- progress, cost of construction and construction overheads incurred during the year as reduced by cost of work completed.

5. Cash Flow Statement:

Cash Flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing and investing activities of the company are segregated

6. Events occurring after the date of Balance Sheet:

Materials events occurring after the date of Balance Sheet are taken into cognizance.

7. Depreciation:

Depreciation in respect of fixed assets, is provided adopting straight line method at the rates provided under Schedule XIV to the Companies Act, 1956.

8. Revenue Recognition:

* Income from operations is determined and recognized, based on the bills raised on technical evaluation of work executed based on joint inspection with customers including railways. The income on account of claims / extra item works are recognized to the extent company expects reasonable certainty about receipts or acceptance from the client. In case of quarterly results the figures has been taken as per the management working on the basis of the work completed

* Interest income is recognized on time basis and is determined by the amount outstanding and rate applicable.

* Dividend income is recognized as and when right to receive payment is established.

* Rental income / lease rentals are recognized on accrual basis in accordance with the terms of agreements.

9. Fixed Assets:

Fixed assets are stated at cost of acquisition including directly attributable costs for bringing the asset into use, less accumulated depreciation.

10. Foreign Currency Transaction:

Foreign currency transactions are restated at the rates ruling at the time of receipt / payment and all exchange losses / gains arising there from are adjusted to the respective accounts. All monetary items denominated in foreign currency are converted at the rates prevailing on the date of the Financial Statement.

11. Investments:

There were no investment at year end.

12. Employee Benefits:

a) Short-Term Employee Benefits:

The Employee benefits payable only within 12 months of rendering the services are classified as Short-Term Employee Benefits. Benefits such as salaries, leave travel allowance, short-term compensated absences, etc., and the expected cost of bonus are recognized in the period in which the employee renders the related services.

b) Post Employment Benefits:

i) Defined Contribution Plans:

The company has contributed to state governed Provident Fund Scheme, and Employee Pension Scheme which are Defined Contribution Plans. Contribution paid or payable under the Schemes is recognized during the period in which employee renders the related service.

ii) Defined Benefit Plans:

The Employees' Gratuity is a Defined Benefit Plan. The present value of the obligation under such plan is determined based on the actuarial valuation using the projected unit credit method which recognized each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the financial obligation. The company has an Employee Gratuity Fund managed by SBI Life Insurance company. The provision made during the year is charged to Profit and Loss Account.

Liability in respect of leave encashment is provided for on actuarial basis using the projected unit credit method same as above.

13. Borrowing Costs:

Cost of funds borrowed for acquisition of fixed assets up to the date the asset is put to use is added to the value of the assets.

14. Cash and Bank Balances:

Cash & Bank balances also include fixed deposits, margin money deposited, earmarked balances and other bank balances which have restriction on repatriation.

15. Earning per Share:

Basic Earning per Share is computed by dividing net income for the year by the weighted average number of equity shares outstanding during the period.

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

16. Provision for Taxation:

Deferred Tax is recognized, subject to the consideration of prudence, in respect of deferred tax assets or liabilities, on timing differences, being the difference between taxable incomes and accounting incomes that originate in one period and are reversible in one or more subsequent periods.

17. Accounting for interest in joint ventures:

Interest in joint ventures jointly controlled, company's raises its bill for work done by the company for JV and the same is taken as turnover receipt, and payments are included in respective expenses.

18. Operating cycle for current and non-current classification:

Operating cycle for the business activities of the company covers the duration of the specific project/contract/service including the defect liability period, wherever applicable and extends up to the realization of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business.

19. Provision and Contingent Liabilities:

Provision is recognized when an enterprise has a present obligation as a result of past event and is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

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Mar 31, 2012

1. Basis for preparation of Financial Statements:

The Financial Statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with generally accepted accounting principles in India and comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules 2006, to the extent applicable and in accordance with the Provisions of the Companies Act, 1956.

2. Use of Estimates:

Preparation of Financial Statements in conformity with Generally Accepted Accounting Principles required Company Management to make estimates and assumptions that affect reported balance of assets & liabilities and disclosures relating to contingent assets & liabilities as of the date of Financials and reported amounts of income & expenses during the period. Examples of such estimate include Revenues and Profits expected to be earned on projects carried on by the Company, contract costs expected to be incurred for completion of project, provision for doubtful debts, in come taxes, etc. Actual results could differ from these estimates. Differences, if any, between the actual results and estimates are recognized in the period in which the results are known or materialized.

3. Expenditure:

Expenses are accounted on the accrual basis and provisions are made for all known losses and liabilities except for Bonus which is accounted for on cash basis.

4. Valuation of Inventories

Valuation of Inventories, representing stock of materials at project site has been done after providing for obsolescence, if any, at lower of Cost or Net Realizable Value. The valuation of work-in-progress during the period is determined as the aggregate of opening work-in-progress, cost of construction and construction overheads incurred during the year as reduced by cost of work completed.

5. Cash Flow Statement:

Cash Flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing and investing activities of the Company are segregated.

6. Events occurring after the date of Balance Sheet:

Materials events occurring after the date of Balance Sheet are taken into cognizance.

7. Depreciation:

Depreciation in respect of fixed assets, is provided adopting straight line method at the rates provided under Schedule XIV to the Companies Act, 1956.

8. Revenue Recognition:

- Income from operations is determined and recognized, based on the bills raised on technical evaluation of work executed based on joint inspection with customers including railways. The income on account of claims / extra item works are recognized to the extent company expects reasonable certainty about receipts or acceptance from the client.

- Interest income is recognized on time basis and is determined by the amount outstanding and rate applicable.

- Dividend income is recognized as and when right to receive payment is established.

- Rental income / lease rentals are recognized on accrual basis in accordance with the terms of agreements.

9. Fixed Assets:

Fixed assets are stated at cost of acquisition including directly attributable costs for bringing the asset into use, less accumulated depreciation.

10. Foreign Currency Transaction:

Foreign currency transactions are restated at the rates ruling at the time of receipt / payment and all exchange losses / gains arising there from are adjusted to the respective accounts. All monetary items denominated in foreign currency are converted at the rates prevailing on the date of the Financial Statement.

11. Investments:

There were no investment atyear end.

12. Employee Benefits:

a) Short-Term Employee Benefits:

The Employee benefits payable only within 12 months of rendering the services are classified as Short-Term Employee Benefits. Benefits such as salaries, leave travel allowance, short-term compensated absences, etc., and the expected cost of bonus are recognized in the period in which the employee renders the related services.

b) Post Employment Benefits:

i) Defined Contribution Plans:

The Company has contributed to state governed Provident Fund Scheme, and Employee Pension Scheme which are Defined Contribution Plans. Contribution paid or payable under the Schemes is recognized during the period in which employee renders the related service.

ii) Defined Benefit Plans:

The Employees' Gratuity is a Defined Benefit Plan. The present value of the obligation under such plan is determined based on the actuarial valuation using the projected unit credit method which recognized each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the financial obligation. The Company has an Employee Gratuity Fund managed by SBI Life Insurance Company. The provision made during the year is charged to Profit and Loss Account.

Liability in respect of leave encashment is provided for on actuarial basis using the projected unit credit method same as above.

13. Borrowing Costs:

Cost of funds borrowed for acquisition of fixed assets up to the date the asset is put to use is added to the value of the assets.

14. Cash and Bank Balances:

Cash & Bank balances also include fixed deposits, margin money deposited, earmarked balances and other bank balances which have restriction on repatriation

15. Earning per Share:

Basic Earning per Share is computed by dividing net income for the year by the weighted average number of equity shares outstanding during the period.

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

16. Provision for Taxation:

Deferred Tax is recognized, subject to the consideration of prudence, in respect of deferred tax assets or liabilities, on timing differences, being the difference between taxable incomes and accounting incomes that originate in one period and are reversible in one or more subsequent periods.

17. Accounting for interest in joint ventures:

Interest in joint ventures jointly controlled, Company's raises its bill for work done by the company for JV and the same is taken as turnover receipt, and payments are included in respective expenses.

18. Operating cycle for current and non-current classification:

Operating cycle for the business activities of the company covers the duration of the specific project/contract/service including the defect liability period, wherever applicable and extends up to the realization of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business

19. Provision and Contingent Liabilities:

Provision is recognized when an enterprise has a present obligation as a result of past event and is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made

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Mar 31, 2011

1. Basis for preparation of Financial Statements:

The Financial Statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with generally accepted accounting principles in India and comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules 2006, to the extent applicable and in accordance with the Provisions of the Companies Act, 1956.

2. Use of Estimates:

Preparation of Financial Statements in conformity with Generally Accepted Accounting Principles required Company Management to make estimates and assumptions that affect reported balance of assets & liabilities and disclosures relating to contingent assets & liabilities as of the date of Financials and reported amounts of income & expenses during the period. Examples of such estimate include Revenues and Profits expected to be earned on projects carried on by the Company, contract costs expected to be incurred for completion of project, provision for doubtful debts, income taxes, etc.Actual results could differ from these estimates. Differences, if any, between the actual results and estimates are recognized in the period in which the results are known or materialized.

3. Expenditure:

Expenses are accounted on the accrual basis and provisions are made for all known losses and liabilities except for Bonus which is accounted for on cash basis.

4. Valuation of Inventories

Valuation of Inventories, representing stock of materials at project site has been done after providing for obsolescence, if any, at lower of Cost or Net Realizable Value. The valuation of work-in-progress during the period is determined as the aggregate of opening work-in-progress, cost of construction and construction overheads incurred during the year as reduced by cost of work completed.

5. Cash Flow Statement:

Cash Flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments The cash flows from regular revenue generating, financing and investing activities of the Company are segregated.

6. Events occurring after the date of Balance Sheet:

Materials events occurring after the date of Balance Sheet are taken into cognizance.

7. Depreciation:

Depreciation in respect of fixed assets, is provided adopting straight line method at the rates provided under Schedule XIV to the Companies Act, 1956.

8. Revenue Recognition:

- Income from operations is determined and recognized, based on the bills raised on technical evaluation of work executed based on joint inspection with customers including railways. The income on account of claims / extra item works are recognized to the extent company expects reasonable certainty about receipts or acceptance from the client.

- Interest income is recognized on time basis and is determined by the amount outstanding and rate applicable.

- Dividend income is recognized as and when right to receive payment is established.

- Rental income / lease rentals are recognized on accrual basis in accordance with the terms of agreements.

9. Fixed Assets:

Fixed assets are stated at cost of acquisition including directly attributable costs for bringing the asset into use, less accumulated depreciation.

10. Foreign Currency Transaction:

Foreign currency transactions are restated at the rates ruling at the time of receipt / payment and all exchange losses / gains arising therefrom are adjusted to the respective accounts. All monetary items denominated in foreign currency are converted at the rates prevailing on the date of the Financial Statement.

11. Investments:

There were no investment at year end.

12. Employee Benefits:

a) Short-Term Employee Benefits:

The Employee benefits payable only within 12 months of rendering the services are classified as Short-Term Employee Benefits. Benefits such as salaries, leave travel allowance, short-term compensated absences, etc., and the expected cost of bonus are recognized in the period in which the employee renders the related services.

b) Post Employment Benefits:

i) Defined Contribution Plans:

The Company has contributed to state governed Provident Fund Scheme, and Employee Pension Scheme which are Defined Contribution Plans. Contribution paid or payable under the Schemes is recognized during the period in which employee renders the related service.

ii) Defined Benefit Plans:

The Employees' Gratuity is a Defined Benefit Plan. The present value of the obligation under such plan is determined based on the actuarial valuation using the projected unit credit method which recognized each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the financial obligation. The Company has an Employee Gratuity Fund managed by SBI Life Insurance Company. The provision made during the year is charged to Profit and Loss Account.

Liability in respect of leave encashment is provided for on actuarial basis using the projected unit credit method same as above.

13. Borrowing Costs:

Cost of funds borrowed for acquisition of fixed assets up to the date the asset is put to use is added to the value of the assets.

14. Earning per Share:

Basic Earning per Share is computed by dividing net income for the year by the weighted average number of equity shares outstanding during the period.

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

15. Provision for Taxation:

Deferred Tax is recognized, subject to the consideration of prudence, in respect of deferred tax assets or liabilities, on timing differences, being the difference between taxable incomes and accounting incomes that originate in one period and are reversible in one or more subsequent periods.

16. Provision and Contingent Liabilities:

Provision is recognized when an enterprise has a present obligation as a result of past event and is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

---

Mar 31, 2010

1. Basis for preparation of Financial Statements:

The Financial Statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with generally accepted accounting principles in India and comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules 2006, to the extent applicable and in accordance with the Provisions of the Companies Act, 1956.

2. Use of Estimates:

Preparation of Financial Statements in conformity with Generally Accepted Accounting Principles required Company Management to make estimates and assumptions that affect reported balance of assets & liabilities and disclosures relating to contingent assets & liabilities as of the date of Financials and reported amounts of income & expenses during the period. Examples of such estimate include Revenues and Profits expected to be earned on projects carried on by the Company, contract costs expected to be incurred for completion of project, provision for doubtful debts, income taxes, etc. Actual results could differ from these estimates. Differences, if any, between the actual results and estimates are recognized in the period in which the results are known or materialized.

3. Expenditure:

Expenses are accounted on the accrual basis and provisions are made for all known losses and liabilities.

4. Valuation of Inventories

Valuation of Inventories, representing stock of materials at project site has been done after providing for obsolescence, if any, at lower of Cost or Net Realizable Value. The valuation of work-in-progress during the period is determined as the aggregate of opening work-in-progress, cost of construction and construction overheads incurred during the year as reduced by cost of work completed.

5. Cash Flow Statement:

Cash Flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing and investing activities of the Company are segregated.

6. Events occurring after the date of Balance Sheet:

Materials events occurring after the date of Balance Sheet are taken into cognizance.

7. Depreciation:

Depreciation in respect of fixed assets, is provided adopting straight line method at the rates provided under Schedule XIV to the Companies Act, 1956.

8. Revenue Recognition:

- Income from operations is determined and recognized, based on the bills raised on technical evaluation of work executed based on joint inspection with customers including railways. The income on account of claims/extra item works are recognized to the extent company expects reasonable certainty about receipts or acceptance from the client.

- Interest income is recognized on time basis and is determined by the amount outstanding and rate applicable.

- Dividend income is recognized as and when right to receive payment is established.

- Rental income/lease rentals are recognized on accrual basis in accordance with the terms of agreements.

9. Fixed Assets:

Fixed assets are stated at cost of acquisition including directly attributable costs for bringing the asset into use, less accumulated depreciation.

10. Foreign Currency Transaction:

Foreign currency transactions are restated at the rates ruling at the time of receipt/payment and all exchange losses/gains arising therefrom are adjusted to the respective accounts. All monetary items denominated in foreign currency are converted at the rates prevailing on the date of the Financial Statement.

11. Investments:

There were no investment at year end.

12. Employee Benefits:

(a) Short-Term Employee Benefits:

The Employee benefits payable only within 12 months of rendering the services are classified as Short- Term Employee Benefits. Benefits such as salaries, leave travel allowance, short-term compensated absences, etc., and the expected cost of bonus are recognized in the period in which the employee renders the related services.

(b) Post Employment Benefits:

(i) Defined Contribution Plans:

The Company has contributed to state governed Provident Fund Scheme, and Employee Pension Scheme which are Defined Contribution Plans. Contribution paid or payable under the Schemes is recognized during the period in which employee renders the related service. (ii) Defined Benefit Plans:

The Employees Gratuity is a Defined Benefit Plan. The present value of the obligation under such plan is determined based on the actuarial valuation using the projected unit credit method which recognized each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the financial obligation. The Company has an Employee Gratuity Fund managed by SBI Life Insurance Company. The provision made during the year is charged to Profit and Loss Account.

Liability in respect of leave encashment is provided for on actuarial basis using the projected unit credit method same as above.

13. Borrowing Costs:

Cost of funds borrowed for acquisition of fixed assets up to the date the asset is put to use is added to the value of the assets.

14. Earning per Share:

Basic Earning per Share is computed by dividing net income for the year by the weighted average number of equity shares outstanding during the period.

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

15. Provision for Taxation:

Deferred Tax is recognized, subject to the consideration of prudence, in respect of deferred tax assets or liabilities, on timing differences, being the difference between taxable incomes and accounting incomes that originate in one period and are reversible in one or more subsequent periods.

16. Provision and Contingent Liabilities:

Provision is recognized when an enterprise has a present obligation as a result of past event and is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.