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Accounting Policies of Kalpataru Projects International Ltd. Company

Mar 31, 2023

1. CORPORATE INFORMATION

Kalpataru Power Transmission Limited (referred to as the âCompany") is a global EPC player with diversified interest in Buildings and Factories, power transmission & distribution, Roads and Bridges, Water pipe lines, railway track laying & electrification, oil & gas pipelines laying, etc.

The company is public limited company incorporated and domiciled in India having its registered office at Plot No. 101, Part-III, GIDC Estate, Sector -28, Gandhinagar 382028, Gujarat, India.

2. BASIS OF PREPARATION OF FINANCIAL STATEMENT

The Standalone or Separate financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time).

These Standalone Ind AS financial statements are presented in Indian Rupees (INR), which is Company''s presentation currency. All amounts have been rounded-off to the nearest crores, unless otherwise stated.

These standalone or separate financial statements were approved by the Company''s Board of Directors and authorised for issue on 8^th May, 2023.

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

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

â¢ 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

â¢ Level 3 inputs are unobservable inputs for the asset or liability.

3. USE OF ESTIMATES

The preparation of the financial statements in conformity with recognition and measurement principles of Ind AS requires the Management to make estimates and assumptions that affect the reported balance of assets and liabilities, disclosure relating to contingent liabilities as at the date of the financial statements and the reported amount of income and expense for the period. Estimates and underlying assumptions are reviewed on ongoing basis.

The estimates and underlying assumptions made by management are explained under respective policies. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, allowance for expected credit loss, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value/recoverable amount measurement, etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known.

4. SIGNIFICANT ACCOUNTING POLICIES

A. Revenue Recognition

(i) Revenue from construction contracts

Performance obligations with reference to construction contracts are satisfied over the period of time, and accordingly, Revenue from such contracts is recognized based on progress of performance determined using input method with reference to the cost incurred on contract and their estimated total costs. Revenue, measured at transaction price, is adjusted towards liquidated damages, time value of money and price variations/escalation, wherever, applicable. Variation in contract work and other claims are included to the

extent that the amount can be measured reliably and it is agreed with customer.

Estimates of revenue and costs are reviewed periodically and revised, wherever circumstances change, resulting increases or decreases in revenue determination, is recognized in the period in which estimates are revised.

The Company evaluates whether each contract consists of a single performance obligation or multiple performance obligations. Where the Company enters into multiple contracts with the same customer, the Company evaluates whether the contract is to be combined or not by evaluating various factors.

(ii) Operation and maintenance income

The Company recognises revenue from Operations and Maintenance services using the time-elapsed measure of progress i.e input method on a straight line basis.

(iii) Revenue from other contracts

Revenue from sale of products is recognized upon satisfaction of performance obligations based on an assessment of the transfer of control as per the terms of the contract.

(iv) Others

Dividends are recognized when right to receive payment is established.

Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the effective interest rate including interest on investments classified as fair value through profit or loss or fair value through other comprehensive income. Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss on accrual basis provided there is no uncertainty of realisation.

Export benefits are accounted as revenue on accrual basis as and when export of goods take place and where there is a reasonable assurance that the benefit will be received and the Company will comply with all the attached conditions.

B. Onerous contract

Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous contract is considered to exist where the Company has a contract

under which unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

C. Operating cycle

Operating cycle for the business activities of the company related to long term contracts [i.e. supply or construction contracts] covers the duration of the specific project/ contract 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 project/contract.

Assets and liabilities other than those relating to long-term contracts are classified as current if it is expected to realize or settle within 12 months after the balance sheet date.

D. Lease

The Company considers whether a contract is, or contains a lease. A lease is defined as âa contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration''. To apply this definition the Company assesses whether the contract meets three key evaluations which are whether:

â¢ the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Company.

â¢ the Company has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract.

â¢ the Company has the right to direct the use of the identified asset throughout the period of use. The Company assesses whether it has the right to direct âhow and for what purpose'' the asset is used throughout the period of use.

Measurement and recognition of leases as a lessee

At lease commencement date, the Company recognizes a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).

The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist. At the commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Company''s incremental borrowing rate.

The Company has elected to account for short-term leases using the practical expedients. Instead of recognizing a right-of-use asset and lease liability, the payments in relation to these are recognized as an expense in profit or loss on a straight-line basis over the lease term.

Certain lease arrangements include the option to extend or terminate the lease before the end of the lease term. The right-of-use assets and lease liabilities include these options when it is reasonably certain that the option will be exercised.

E. Foreign Currency

In preparing the financial statements, transaction in foreign currencies i.e. other than the company''s functional currency are recognised at rate of exchange prevailing for the month, on the dates of the transactions.

Foreign currency monetary assets and liabilities, remaining unsettled at the reporting date are translated at the exchange rate prevailing at reporting date.

Foreign exchange gain and losses resulting from the settlement of such transactions and from translation of monetary assets and liabilities denominated in foreign currency at the year end exchange rate are generally recognised in profit or loss.

Foreign currency non-monetary assets and liabilities, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated in to presentation currency as follows:

â¢ assets and liabilities are translated at the closing rate at the date of reporting

â¢ income and expenses at the exchange rate prevailing on the date of transaction

â¢ resulting exchange difference are recognized in other comprehensive income.

F. Income taxes

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

Current income taxes

The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period in the countries where the Company, its branches and jointly controlled operations operate and generate taxable income

Deferred income taxes

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 utilised.

Deferred tax assets are not recognised for temporary differences between the carrying amount and tax bases of investments in subsidiaries, branches and associates and interest in joint arrangements where it is not probable that the differences will reverse in the foreseeable future and taxable profit will not be available against which the temporary differences can be utilised

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.

Minimum Alternate Tax (MAT) paid in accordance with tax laws, which give rise to future economic benefits in the form of adjustment of future tax liability, is recognized as an asset

only when, based on convincing evidence, it is probable that the future economic benefits associated with it will flow to the Group and the assets can be measured reliably.

G. Inventories

Raw materials, fuel, semi-finished goods, finished goods, scraps, construction work in progress, construction materials and other stores and spares, tools are stated at lower of cost and net realizable value. Cost of purchased material is determined on the weighted average basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Scrap is valued at net realisable value.

Cost of work-in-progress and finished goods includes material cost, labour cost, and manufacturing overheads absorbed on the basis of normal capacity of production.

H. Cash and cash equivalents

For the purpose of presentation in statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with Banks/financial institutions, with original maturities of 3 months or less that are readily convertible to known amount of cash and which are subject to an insignificant risk of change in value.

I. Employee Benefitsa) Defined benefit plan

Gratuity liability is provided under a defined benefit plan and covered by payment thereof to gratuity fund under Group Gratuity Cash Accumulation Scheme of IRDA approved insurer under an irrevocable trust. The Company''s liability towards gratuity is determined on the basis of actuarial valuation done by an independent actuary, taking effect of actuarial gains and losses which is recognised in Other Comprehensive Income.

b) Defined contribution plan

Contribution to Provident Fund, a defined contribution plan is charged to the Statement of Profit and Loss.

c) Compensated absence

Provision for compensated absences is made on actuarial valuation as at the Balance Sheet date.

d) Short-term employee benefits

Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

J. Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. The determination of fair value net of cost to sell includes use of management estimates and assumptions.

K. Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets.

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

All other borrowing costs are recognised as expense in the period in which they are incurred.

L. Provisions and Contingent Asset /Liabilities

Provisions are recognised when there is present obligation (legal or constructive) as a result of a past event, it is probable that company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

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

Contingent Assets are not recognised but are disclosed in the notes to Financial Statements when economic inflow is probable.

M. Interests in Joint Operations

A joint operation is a Jointly controlled arrangement whereby the parties have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. When an entity undertakes its activities under joint operations, the Company as a joint operator recognises for the assets, liabilities, revenues, and expenses relating to its interest in a joint operation in accordance with the Ind AS applicable to the particular assets.

Transactions with the Joint operation by Company are recognized in the financial statements only to the extent of other parties'' interests in the joint operation.

N. Financial instruments

Financial instrument is a contract that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Classification

The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flows characteristics of the financial asset.

All financial liabilities are classified as subsequently measured at amortised cost except for financial liabilities

at fair value through profit or loss. Such liabilities, including derivatives, are subsequently measured at fair value, with any gains or losses arising on re-measurement recognised in profit or loss.

Initial recognition and measurement

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 asset and liabilities at fair value through profit & loss) are added to or deducted from the fair value measured on initial recognition of the financial assets or financial liabilities. Trade receivable that do not contain a significant financing component are measured at transaction price.

Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost using effective interest rate method, if:

(a) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

(b) 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.

Financial asset at fair value through other comprehensive income (FVTOCI)

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within business whose objective is achieved by both collecting contractual cash flow and selling asset financial asset and the contractual terms of financial asset give rise on specific dates to cash flows that are solely payment of principal and interest on principal amount outstanding.

Financial asset at fair value through profit or loss (FVTPL)

Financial assets are measured at fair value through profit or loss unless it is measured at amortized cost or fair value through other comprehensive income. Financial assets under this category are measured initially as well as at each reporting period at fair value with all changes recognised in the statement of profit and loss.

Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset.

On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.

Financial liabilities and equity instruments

Classification as debt or equity

Financial instruments are classified as a liability or equity according to the substance of the contractual arrangement and not its legal form.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a company are recognised at the proceeds received, net of issue costs.

Financial liabilities

All financial liabilities are subsequently measured at amortised cost. Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognised in profit or loss.

Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable

to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

Derivative Contracts

The Company enters into derivative financial instruments to hedge foreign currency / price risk on unexecuted firm commitments and highly probable forecast transactions.

Such derivatives financial instruments are initially recognized at fair value on the date on which the derivative contracts are entered into and are subsequently re-measured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in the statement of profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedging relationship and the nature of the hedged item.

Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.

Financial guarantee contracts issued by a Company entity are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:

â¢ the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and

â¢ the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of Ind AS 115.

O. Property, Plant and Equipment & Intangible assets

Property, Plant and Equipment are stated at cost or deemed cost applied on transition to Ind AS, less accumulated depreciation / amortization and impairment loss if any. Cost of acquisition/construction includes all direct cost net of recoverable taxes and expenditures incurred to bring the asset to its working condition and location for its intended use. All costs, including finance costs and adjustment

arising from exchange rate variations attributable to Property, Plant and Equipment till assets are ready to use, are capitalized.

P. Depreciation and Amortisation

Depreciation is provided on all depreciable property, plant and equipment over the useful life prescribed under schedule II to the Companies Act, 2013 except that:

a) Depreciation on plant and machinery of bio-mass energy plants is provided considering the useful life of plant as 20 years, as specified in Central Electricity Regulatory Commission and Rajasthan Electricity Regulatory Commission Regulations.

b) Depreciation on assets of overseas projects is provided at the rates and methods as per the best estimates of the management which is also in accordance with requirement of laws of respective foreign countries as detailed below:

Plant & Machineries	: 9% - 33%
Furniture & Fixtures, and	: 10 % - 33%
Office Equipment
Computers	: 10% - 50%
Vehicles	: 10% - 50%
Buildings	: 20% - 33.33%

c) Depreciation on Furniture & Fixtures and certain plant and machinery at construction sites is provided considering the useful life of 3 years and 5 years respectively based on past experience.

Depreciation is provided on Straight Line Method (SLM) except on assets pertaining to Research and Development Centre and one Unit (erstwhile Export Oriented Unit) which are provided on the basis of written down value method.

Intangible assets are amortized over a period of five years on straight line basis.

Q. Impairment

a) Financial asset

Company applies as per Ind AS 109 expected credit loss model for recognizing impairment loss on trade receivables, other contractual rights to receive cash or other financial asset.

b) Non-Financial asset

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment.

If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount.

Intangible assets with indefinite life are tested for impairment at every period end. Impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount.

The recoverable amount is the higher of the fair value less cost of disposal and their value in use. Value in use is arrived at by discounting the future cash flows to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset for which the estimates of future cash flows have not been adjusted. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss.

R. Business combination under common control

Business combinations involving entities or businesses under common control are accounted for using the pooling of interest method. Under pooling of interest method, the assets and liabilities of the combining entities or businesses are reflected at their carrying amounts after making adjustments necessary to harmonize the accounting policies. The financial information in the financial statements in respect of prior periods is restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. The identity of the reserves is preserved in the same form in which they appeared in the financial statements of the transferor and the difference, if any, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve.

S. Investments in subsidiaries, associates and joint ventures

Investments in subsidiaries, associates and joint ventures are carried at cost/deemed cost applied on transition to Ind AS, less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of investment is assessed and an impairment provision is recognised, if required immediately to its recoverable amount. On disposal of such investments, difference

between the net disposal proceeds and carrying amount is recognised in the statement of profit and loss.

T. Earnings Per share

Basic earnings per share are computed by dividing profit or loss for the period of the Company by dividing weighted average number of equity shares outstanding during the period. The company did not have dilutive potential equity shares in any period presented.

U. Ministry of Corporate Affairs (âMCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 31^st March, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:

Ind AS 1- Presentation of Financial Statements- This amendment requires the entities to disclose their material accounting policies rather than their significant accounting

policies. The effective date for adoption of this amendment is annual periods beginning on or after 1^st April, 2023.

Ind AS 8-Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of accounting estimates and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after 1^st April, 2023.

Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after 1^st April, 2023.

The Company is evaluating the impact of the amendments on the financial statement.

Mar 31, 2022

Q Corporate information

Kalpataru Power Transmission Limited (referred to as the "Company") is a global EPC player with diversified interest in power transmission and distribution, oil and gas pipeline, railways and biomass based power generation.

The Company is public limited company incorporated and domiciled in India having its registered office at Plot No. 101, Part-Ill, GIDC Estate, Sector -28, Gandhinagar 382028, Gujarat, India.

| Basis of preparation of Financial Statement

These Standalone Ind AS financial statements are presented in Indian Rupees (INR), which is Companyâs presentation currency. All amounts have been rounded-off to the nearest Crores, unless otherwise stated.

These standalone or separate financial statements were approved by the Companyâs Board of Directors and authorised for issue on 14 May, 2022.

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

â¢ 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

â¢ Level 3 inputs are unobservable inputs for the asset or liability.

| Use of Estimates

In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are included in the following notes:

Useful lives of property, plant and equipment

The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods. Policy for the same has been explained under Note 4(P).

Impairment of Investments

The Company reviews its carrying value of investments carried at cost, annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.

Valuation of deferred tax assets

The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. The policy for the same has been explained under Note 4(F).

Q Significant Accounting Policiesa. Revenue Recognition(i) Revenue from construction contracts

Performance obligations with reference to construction contracts are satisfied over the

period of time, and accordingly, Revenue from such contracts is recognised based on progress of performance determined using input method with reference to the cost incurred on contract and their estimated total costs. Revenue is adjusted towards liquidated damages, time value of money and price variations / escalation, wherever, applicable. Variation in contract work and other claims are included to the extent that the amount can be measured reliably and it is agreed with customer. Estimates of revenue and costs are reviewed periodically and revised, wherever circumstances change, resulting increases or decreases in revenue determination, is recognised in the period in which estimates are revised.

(ii) Revenue from other contracts

Revenue from sale of goods is recognised at the point in time when control of the goods is transferred to the customer, which generally coincides with the delivery of goods to customers. Revenue from services are recognised when services are rendered.

(iii) Others

Revenue from Bio Mass division is recognised on supply of electricity generated to the customer. Dividends are recognised when right to receive payment is established. Interest income is recognised on time proportion basis.

Export benefits are accounted as revenue on accrual basis as and when export of goods take place.

B. Onerous contract

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Company has a contract under which unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

C. Operating cycle

Operating cycle for the business activities of the Company related to long term contracts [i.e. supply or construction contracts] covers the duration of the specific project / contract including the defect liability period, wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective project / contract.

Assets and liabilities other than those relating to longterm contracts are classified as current if it is expected to realise or settle within 12 months after the balance sheet date.

D. Lease

The Company considers whether a contract is, or contains a lease. A lease is defined as ''a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for considerationâ. To apply this definition the Company assesses whether the contract meets three key evaluations which are whether:

â¢ the Company has the right to direct the use of the identified asset throughout the period of use. The Company assesses whether it has the right to direct ''how and for what purposeâ the asset is used throughout the period of use.

Measurement and recognition of leases as a lessee

At lease commencement date, the Company recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).

The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date

to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist. At the commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Companyâs incremental borrowing rate.

The Company has elected to account for short-term leases using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term.

E. Foreign Currency

In preparing the financial statements, transaction in foreign currencies i.e. other than the Companyâs functional currency are recognised at rate of exchange prevailing for the month, on the dates of the transactions. Foreign currency monetary assets and liabilities, remaining unsettled at the reporting date are translated at the exchange rate prevailing at reporting date and differences are recognised in statement of profit and loss. Foreign currency non-monetary assets and liabilities, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated in to presentation currency as follows:

â¢ assets and liabilities are translated at the closing rate at the date of reporting

â¢ income and expenses at the exchange rate prevailing on the date of transaction

â¢ resulting exchange difference are recognised in other comprehensive income.

F. income taxes

Income tax expense comprises Current tax and deferred tax. Current and deferred tax are recognised in the

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

Current income taxes

Tax on income for the current period is determined on the basis of estimated taxable income and tax credit computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred income taxes

Deferred tax is recognised 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 recognised for all taxable temporary differences. Deferred tax assets are generally recognised 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 utilised.

G. inventories

Raw materials, fuel, semi-finished goods, finished goods, scraps, construction work in progress, construction materials and other stores and spares, tools are stated at lower of cost and net realisable value. Cost of purchased material is determined on the weighted average basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Scrap is valued at net realisable value.

Cost of work-in-progress and finished goods includes material cost, labour cost, and manufacturing overheads absorbed on the basis of normal capacity of production.

H. Cash and cash equivalents

For the purpose of presentation in statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with Banks / financial institutions, with original maturities of 3 months or less that are readily convertible to known amount of cash and which are subject to an insignificant risk of change in value.

I. Employee Benefits

a) Defined benefit plan

Gratuity liability is provided under a defined benefit plan and covered by payment thereof to gratuity fund under Group Gratuity Cash Accumulation Scheme of IRDA approved insurer under an irrevocable trust. The Companyâs liability towards gratuity is determined on the basis of actuarial valuation done by an independent actuary, taking effect of actuarial gains and losses which is recognised in Other Comprehensive Income.

b) Defined contribution plan

Contribution to Provident Fund, a defined contribution plan is charged to the Statement of Profit and Loss.

c) Compensated absence

Provision for compensated absences is made on actuarial valuation as at the Balance Sheet date.

d) Short-term employee benefits

Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

J. Non-current assets held for sale

K. Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets.

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

All other borrowing costs are recognised as expense in the period in which they are incurred.

L. Provisions and contingent Asset / Liabilities Provisions are recognised when there is present obligation (legal or constructive) as a result of a past event, it is probable that company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as expenses for legal claims, service warranties and other obligations are 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).

M. interests in Joint operations

Transactions with the Joint operation by Company are recognised in the financial statements only to the extent of other partiesâ interests in the joint operation.

N. Financial instruments

Financial instrument is a contract that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Classification

All financial liabilities are classified as subsequently measured at amortised cost except for financial liabilities at fair value through profit or loss. Such liabilities, including derivatives, are subsequently measured at fair value, with any gains or losses arising on re-measurement recognised in profit or loss.

Initial recognition and measurement

Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost using effective interest rate method, if:

(a) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

(b) 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.

Financial asset at fair value through other comprehensive income (FVTOCI)

Financial asset at fair value through profit or loss (FVTPL)

Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or fair value through other comprehensive income. Financial assets under this category are measured initially as well as at each reporting period at fair value with all changes recognised in the statement of profit and loss.

Derecognition of financial assets

On derecognition of a financial asset in its entirety, the difference between the assetâs carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.

Financial liabilities and equity instruments

Classification as debt or equity

Financial instruments are classified as a liability or equity according to the substance of the contractual arrangement and not its legal form.

Equity instruments

Financial liabilities

Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Companyâs obligations are discharged, cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

Derivative Contracts

The Company enters into derivative financial instruments to hedge foreign currency / price risk on unexecuted firm commitments and highly probable forecast transactions.

Such derivatives financial instruments are initially recognised at fair value on the date on which the derivative contracts are entered into and are subsequently re-measured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in the statement of profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedging relationship and the nature of the hedged item.

Financial guarantee contracts

Financial guarantee contracts issued by a Company entity are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:

â¢ the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and

â¢ the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 115.

0. Property, Plant and Equipment & intangible assets

Property, Plant and Equipment are stated at cost of acquisition / construction net of recoverable taxes and include amounts added on revaluation, less accumulated depreciation / amortisation and impairment loss, if any. All costs, including finance costs and adjustment arising from exchange rate variations attributable to Property, Plant and Equipment till assets are put to use, are capitalised.

P Depreciation and Amortisation

Depreciation is provided on all depreciable property, plant and equipment over the useful life prescribed under schedule II to the Companies Act, 2013 except that:

Plant & Machineries	: 10% - 25%
Furniture & Fixtures, Office	: 10 % - 33%
Equipment
Computers	: 10% - 50%
Vehicles	: 15% - 38%

c) Depreciation on Furniture & Fixtures and certain plant and machinery at construction sites is provided considering the useful life of 3 years and 5 years respectively based on past experience. Depreciation is provided on Straight Line Method (SLM) except on assets pertaining to Research and Development Centre and one Unit (erstwhile Export Oriented Unit) which are provided on the basis of written down value method.

Intangible assets are amortised over a period of five years on straight line basis.

Q. impairment

a) Financial asset

Company applies as per Ind AS 109 expected credit loss model for recognising impairment loss

on trade receivables, other contractual rights to receive cash or other financial asset.

b) Non-Financial asset

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the higher of the fair value less cost of disposal and their value in use. Value in use is arrived at by discounting the future cash flows to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset for which the estimates of future cash flows have not been adjusted. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss.

R. Earnings Per share

Basic earnings per share are computed by dividing profit or loss for the period of the Company by dividing weighted average number of equity shares outstanding during the period. The Company did not have dilutive potential equity shares in any period presented.

S. The Ministry of Corporate Affairs (MCA), on 23 March, 2022 notified amendments to existing Ind AS through Companies (Indian Accounting Standards) Amendment Rule, 2022. The new standard is effective for accounting periods beginning on or after 1 April, 2022. Key Amendments relating to the same whose financial statements are required to comply with Companies (Indian Accounting Standards) Rules 2015 are:

1. Ind AS 16 Property, Plant and Equipment -For items produced during testing/trail phase, clarification added that revenue generated out of the same shall not be recognised in SOPL and considered as part of cost of PPE.

2. Ind AS 37 Provisions, Contingent Liabilities & Contingent Assets - Guidance on what constitutes cost of fulfilling contracts (to determine whether the contract is onerous or not) is included.

3. Ind AS 41 Agriculture- This aligns the fair value measurement in Ind AS 41 with the requirements of Ind AS 113 Fair Value Measurement to use internally consistent cash flows and discount rates and enables preparers to determine whether to use pre-tax or post-tax cash flows and discount rates for the most appropriate fair value measurement.

4. Ind AS 101 - First time Adoption of Ind AS -Measurement of Foreign Currency Translation Difference in case of subsidiary/associate/ JVâs date of transition to Ind AS is subsequent to that of Parent - FCTR in the books of subsidiary/ associate/JV can be measured based Consolidated Financial Statements.

5. Ind AS 103 - Business Combination - Reference to revised Conceptual Framework. For contingent liabilities / levies, clarification is added on how to apply the principles for recognition of contingent liabilities from Ind AS 37. Recognition of contingent assets is not allowed.

6. Ind AS 109 Financial Instruments - The amendment clarifies which fees an entity includes when it applies the ''10 per centâ test in assessing whether to derecognise a financial liability.

The Company is evaluating the impact of the amendments on the financial statement.

Mar 31, 2019

1. Corporate Information

Kalpataru Power Transmission Limited (referred to as the "Companyâ) is a global EPC player with diversified interest in power transmission and distribution, oil and gas pipeline, railways and biomass based power generation.

The company is public limited company incorporated and domiciled in India having its registered office at Plot No. 101, Part-III, GIDC Estate, Sector -28, Gandhinagar 382028, Gujarat, India

2. Basis of Preparation of Financial Statement

These Standalone Ind AS financial statements are presented in Indian Rupees (INR), which is Company''s presentation currency. All financial information have been prepared in Indian rupees (INR). All amounts have been rounded-off to the nearest Lakhs, unless otherwise stated.

These standalone or separate financial statements were approved by the Company''s Board of Directors and authorized for issue on May 9, 2019.

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 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.

3. Use of Estimates

In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are included in the following notes:

Useful Lives of Property, Plant and Equipment

Impairment of Investments

Valuation of Deferred Tax Assets

The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. The policy for the same has been explained under Note 5(E).

4. Significant Accounting Policies

A. Revenue Recognition

(i) Revenue from construction contracts

Performance obligations with reference to construction contracts are satisfied over the period of time, and accordingly, Revenue from such contracts is recognized based on progress of performance determined using input method with reference to the cost incurred on contract and their estimated total costs. Revenue is adjusted towards liquidated damages, time value of money and price variations/ escalation, wherever, applicable. Variation in contract work and other claims are included to the extent that the amount can be measured reliably and it is agreed with customer.

(ii) Revenue from other contracts

Revenue from sale of goods is recognized at the point in time when control of the goods is transferred to the customer, which generally coincides with the delivery of goods to customers. Revenue from services are recognized when services are rendered.

(iii) Others

Revenue from Bio Mass division is recognized on supply of electricity generated to the customer.

Dividend are recognized when right to receive payment is established. Interest income is recognized on time proportion basis.

Export benefits are accounted as revenue on accrual basis as and when export of goods take place.

B. Onerous contract

Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous contract is considered to exist where the Company has a contract under which unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

C. Operating cycle

Operating cycle for the business activities of the company (i.e supply/ construction contracts) covers the duration of the specific project/ contract 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 project/ contract.

Assets and liabilities other than those relating to long-term contracts are classified as current if it is expected to realize or settle within 12 months after the balance sheet date.

D. Lease

Company''s leasing arrangements where risk and rewards incidental to ownership of assets substantially vest to lessor are classified as operating lease. Operating lease payments are recognized on straight line basis over the lease term in the statement of profit and loss unless the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases

E. Foreign currency

In preparing the financial statements, transaction in foreign currencies i.e. other than the company''s functional currency are recognized at rate of exchange prevailing for the month on the dates of the transactions.

Foreign currency monetary assets and liabilities, remaining unsettled at the reporting date are translated at the exchange rate prevailing at reporting date and differences are recognized in statement of profit and loss. Foreign currency non-monetary assets and liabilities, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated in to presentation currency as follows:

- assets and liabilities are translated at the closing rate at the date of reporting

- income and expenses at the exchange rate prevailing on the date of transaction

- resulting exchange difference are recognized in other comprehensive income.

F. Income taxes

Income tax expense comprises current tax expense and net change in the deferred tax asset or liability during the year. Current and deferred tax are recognized in the statement of 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.

Current income taxes

Tax on income for the current period is determined on the basis of estimated taxable income and tax credit computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred income taxes

G. Inventories

Raw materials, fuel, semi-finished goods, finished goods, scraps, construction work in progress, construction materials and other stores and spares, tools are stated at lower of cost and net realizable value. The cost of inventories is computed on weighted average basis. Manufacturing overheads are absorbed on the basis of normal/ actual capacity of production.

H. Employee Benefits

a) Defined benefit Plan

b) Defined contribution Plan

Contribution to Provident Fund, a defined contribution plan is charged to the Statement of Profit and Loss.

c) Compensated absence

Provision for compensated absences is made on actuarial valuation as at the Balance Sheet date.

d) Short-term employee benefits

Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

I. Non-current assets held for sale

J. Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expense in the period in which they are incurred.

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

All other borrowing costs are recognized as expense in the period in which they are incurred.

K. Provisions and Contingent Asset /Liabilities

Provisions are recognized when there is present obligation (legal or constructive) as a result of a past event, it is probable that company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized as expenses for legal claims, service warranties and other obligations are 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).

Contingent Assets are not recognized but are disclosed in the notes to Financial Statements when economic inflow is probable.

L. Interests in Joint Operations

A joint operation is a jointly controlled arrangement whereby the parties have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. When a group entity undertakes its activities under joint operations, the Company as a joint operator recognizes for the assets, liabilities, revenues, and expenses relating to its interest in a joint operation in accordance with the Ind AS applicable to the particular assets.

Transactions with the Joint operation by Company are recognized in the financial statements only to the extent of other parties'' interests in the joint operation.

M. Financial Instruments

Financial instrument is a contract that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Classification

The Company classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flows characteristics of the financial asset.

All financial liabilities are classified as subsequently measured at amortized cost except for financial liabilities at fair value through profit or loss. Such liabilities, including derivatives, are subsequently measured at fair value, with any gains or losses arising on re-measurement recognized in profit or loss.

Initial recognition and measurement

Financial assets at amortized cost

Financial assets are subsequently measured at amortized cost using effective interest rate method, if:

(a) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

(b) 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.

Financial asset at fair value through other comprehensive income (FVTOCI)

Financial asset at fair value through profit or loss (FVTPL)

Derecognition of financial assets

Financial liabilities and equity instruments Classification as debt or equity

Financial instruments are classified as a liability or equity according to the substance of the contractual arrangement and not its legal form.

Equity instruments

Financial liabilities

All financial liabilities are subsequently measured at amortized cost. Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognized in profit or loss.

Derecognition of financial liabilities

difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

Derivative Contracts

The Company enters into derivative financial instruments to hedge foreign currency / price risk on unexecuted firm commitments and highly probable forecast transactions.

Financial guarantee contracts

Financial guarantee contracts issued by a Company entity are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:

- the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and

- the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of Ind AS 115.

N. Property, Plant and Equipment & Intangible assets

Property, Plant and Equipment are stated at cost of acquisition/construction net of recoverable taxes and include amounts added on revaluation, less accumulated depreciation / amortization and impairment loss, if any. All costs, including finance costs and adjustment arising from exchange rate variations attributable to Property, Plant and Equipment till assets are put to use, are capitalized.

O. Depreciation

Depreciation is provided on all depreciable property, plant and equipment over the useful life prescribed under schedule II to the Companies Act, 2013 except that:

a) Depreciation on plant and machinery of bio-mass energy plants is provided considering the useful life of plant as 20 years, as specified in CERC and RERC Regulations.

Plant & Machineries : 10% - 25%

Furniture & Fixtures, Office Equipment : 10 % - 33% Computers : 10% - 50%

Vehicles : 15% - 38%

c) Depreciation on Furniture & Fixtures at construction sites is provided considering the useful life of 3 years based on past experience.

Depreciation is provided on Straight Line Method (SLM) except on assets pertaining to Research and Development Centre and one Unit (erstwhile Export Oriented Unit) is provided on the basis of written down value method.

Intangible assets are amortized over a period of five years on straight line basis.

P. Impairment

a) Financial asset

Company applies as per Ind AS 109 expected credit loss model for recognizing impairment loss on trade receivables, other contractual rights to receive cash or other financial asset.

b) Non-Financial asset

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the higher of the fair value less cost of disposal and their value in use. Value in use is arrived at by discounting the future cash flows to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset for which the estimates of future cash flows have not been adjusted. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss.

Q. Earnings Per share

Basic earnings per share are computed by dividing profit or loss of the Company by dividing weighted average number of equity shares outstanding during the period. The company did not have any potential to dilutive securities in any period presented.

R. Exemptions on first time adoption of Ind AS

(a) The Company has opted to continue with the carrying value for all of its property, plant and equipment and intangible assets as recognized in the financial statements prepared under Previous GAAP and use the same as deemed cost in the financial statement as at the transition date.

(b) The carrying amounts of the Company''s investments in its subsidiary and associate companies as per the financial statements of the Company prepared under Previous GAAP, are considered as deemed cost for measuring such investments in the opening Ind AS Balance Sheet.

S. Standards issued but not yet effective

The Ministry of Corporate Affairs (MCA), on March,30, 2019 notified Ind AS 116, "Leasesâ as part of Companies (Indian Accounting Standards) Amendment Rule, 2018. The new standard is effective for accounting periods beginning on or after April 1, 2019. The Company is evaluating the disclosure requirements of the amendments and its effect on the financial statements.

6.1 (a) Investment in equity instrument in JMC Projects (India) Limited includes RS,85.49 Lakhs arising on initial recognition of financial guarantee, given by the Company on behalf of JMC Projects (India) Limited, at fair value. Face value of each equity share was subdivided from RS,10 per share to RS,2 per share with effective from on October 4, 2018.

(b) Investment in equity instrument of Shree Shubham Logistics Limited includes RS,625.71 Lakhs arising on initial recognition of investment in 4% redeemable preference shares at fair value and RS,420.64 Lakhs arising on initial recognition of financial guarantee, given by the Company on behalf of Shree Shubham Logistics Limited, at fair value.

(c) 30,04,337 (Previous Year - 30,04,337) Equity Shares of Jhajjar KT Transco Private Limited, 42,09,400 (Previous Year - 42,09,400) Equity Shares of Kalpataru Satpura Transco Private Limited, 2,69,87,832 (Previous Year - 1,09,39,500) shares of Alipurduar Transmission Limited and 1,13,22,000 (Previous Year - Nil) shares of Kohima-Mariani Transmission Limited have been pledged with Banks and Financial Institutions for providing financial assistance to them.

(d) 55,64,069 (Previous Year - 55,64,069) Equity Shares of Shree Shubham Logistics Limited has been pledged with a Bank.

6.2 Assets Classified as held for sales

In the quarter ended March,31, 2019, the Company initiated identification and evaluation of potential buyer for its subsidiaries Kalpataru Satpura Transco Private Limited, Alipurduar Transmission Limited and joint ventures Jhajjar KT Transco Private Limited, Kohima Mariani Transmission Limited. Accordingly, investments amounting to RS,36,695.51 lakhs have been classified as held for sale. On reclassification, these investments have been measured at the lower of carrying amount and its fair value.

11.2 The contract assets represents amount due from customer, primarily relate to the Company''s rights to consideration for work executed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional, that is when invoice is raised on achievement of contractual milestone. This usually occurs when the Company issues an invoice to the customer. The contract liabilities represents amount due to customer, primarily relate invoice raised on customer on achievement of milestone for which revenue to be recognized over the period of time.

11.3 Increase in contract assets is mainly due to increase in business activities and in certain contracts on account of contractual milestones not achieved. During the year ended March,31, 2019, RS,81,247.88 Lakhs of contract assets as of April 1, 2018 has been reclassified to Trade receivables upon billing to customers on completion of milestones. .

11.4 In case of EPC contracts, amount in the range of 10-20% of the contract value is paid as an advance and 10-20% amount released at the end of project and balance amount is paid progressively based on the agreed milestone in the contract.

11.5 Revenue recognized for the current period includes RS,23,308 Lakhs, that was classified as amount due to customer at the beginning of the year.

12.1 Amount of RS,372.32 Lakhs (Previous Year RS,60.12 Lakhs) has been recognized as an expense in the statement of profit and loss to bring inventory at net realisable value.

12.2 Refer accounting policy 4 G for valuation of inventories

16.2The Company has only one class of Equity Shares having par value of RS,2 per share. Each holder of Equity Shares is entitled to one vote per share. The dividend is declared and paid on being proposed by the Board of Directors after the approval of the Shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all liabilities. The distribution will be in proportion to the number of Equity Shares held by the shareholder.

18.2 Rupee Loans from Banks

(a) RS,558.13 Lakhs (Previous Year RS,494.82 Lakhs) carries interest in range of 8.00% - 9.52% p.a. and is repayable in 36 equal monthly instalments along with interest. The Loan is secured by hypothecation of specific Vehicles.

(b) RS,1,500.00 Lakhs (Previous Year RS,2,500 Lakhs) carries interest of 8.30% -8.95% p.a.,secured by hypothecation of specific moveable fixed assets and is repayable in 22 equal quarterly installment ending on December 31, 2019.

(c) RS,7,350.00 Lakhs (Previous Year RS,9,450.00 Lakhs) carries interest of 8.5% -9.00% p.a, secured by pari passu charges on movable and immovable fixed assets of transmission & distribution and infrastructure division of the company to the extent of 1.25 times of outstanding facility and pledge of 5,564,069 number of equity shares in Shree Shubham Logistics Limited. It is repayable in 20 Equal quarterly installments ending on September 30, 2022.

Working Capital Facilities from Banks are secured in favour of consortium of bankers by hypothecation of stocks, stores and spares, book debts, bills receivable and all other movable assets on pari passu basis and also secured by movable and immovable fixed assets (including land and building situated at Gandhinagar, Gujarat) of transmission and distribution division and infrastructure division of company.

Short term loan from Bank represents discounted trade receivable. As the company has not transferred the significant risks and rewards relating to these trade receivables, it continue to recognize the full carrying amount of the trade receivables and has recognized the cash received as a unsecured borrowing.

30.1 The Hon''ble Supreme Court of India ("SCâ) by their order dated February 28, 2019, in the case of Surya Roshani Limited & others v/s EPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Subsequently, a review petition against this decision has been filed and is pending for disposal.

In view of the management, the liability for the period from date of the SC order to March,31, 2019 is not significant. Further, pending decision on the subject review petition and directions from the EPFO, the impact for the past period, if any, is not ascertainable and consequently no effect has been given in the accounts. Accordingly, this has been disclosed as a Contingent liability in the financial statements.

(b) Company has given undertakings to the term lenders of Alipurduar Transmission Limited and Kohima Mariani Transmission Limited to meet cost overrun of the Project.

(c) Company''s wholly owned subsidiary in Sweden has acquired 85% equity stake in Linjemontage I Grastorp AB, Sweden on April 29, 2019, which is engaged in similar business.

Mar 31, 2018

1. CORPORATE INFORMATION

Kalpataru Power Transmission Limited (referred to as âthe companyâ) is a global EPC player with diversified interest in power transmission and distribution, oil and gas pipeline, railways and biomass based power generation.

The company is public limited company incorporated and domiciled in India having its registered office is Plot No. 101, Part-III, GIDC Estate, Sector -28, Gandhinagar 382028, Gujarat, India

2. Basis of preparation of Financial Statement

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015. The date of transition to Ind AS is April 1, 2015.

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 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.

3. Use of Estimates

In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are included in the following notes:

Useful lives of property, plant and equipment

Impairment of Investments

The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for

Valuation of deferred tax assets

The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. The policy for the same has been explained under Note 4 (E ).

4. SIGNIFICANT ACCOUNTING POLICIES

A. Revenue Recognition

(i) Revenue from construction contracts

Revenue from construction contracts is recognized based on the stage of completion determined with reference to the costs incurred on contracts and their estimated total costs. When it is probable that the total contract cost will exceed total contract revenue, expected loss is recognized as an expense immediately.

Revenue is adjusted towards liquidated damages and price variations, wherever applicable. Escalation, variations in contract work and other claims are included to the extent that the amount can be measured reliably and its receipt is considered probable. Revenue is recognized to the extent of cost incurred that are expected to be recoverable till such time the outcome of the contract cannot be ascertained reliably.

(ii) Revenue from other contracts

Sale of goods is recognized, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Revenue from services is recognized when services are rendered. Sales exclude sales tax/ value added tax and service tax wherever separately charged to the customers.

(iii) Others

Revenue from Bio-mass division is recognized on supply of electricity generated to the customer.

Dividends are recorded when the right to receive payment is established. Interest income is recognized on time proportion basis.

B. Operating cycle

Operating cycle for the business activities of the company covers the duration of the specific project/ contract 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 project/contract.

C. Lease

Companyâs leasing arrangements where risk and rewards incidental to ownership of assets substantially vest to lessor are classified as operating lease. Operating lease payments are recognized on straight line basis over the lease term in the statement of profit and loss unless the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases

D. Foreign Currency

In preparing the financial statements, transaction in foreign currencies i.e other than the companyâs functional currency are recognized at rate of exchange prevailing for the month on the dates of the transactions.

Foreign currency monetary assets and liabilities, remaining unsettled at the end of the year are translated at the exchange rate prevailing at the end of the year and differences are recognized in statement of profit and loss.

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated in to presentation currency as follows:

- assets and liabilities are translated at the closing rate at the date of the balance sheet

- income and expenses at the exchange rate prevailing on the date of transaction

- resulting exchange difference are recognized in other comprehensive income.

E. Income taxes

Current income taxes

Tax on income for the current period is determined on the basis of estimated taxable income and tax credit computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred income taxes

F. Inventories

Raw materials, Fuel, Semi finished goods, finished goods, scraps, construction work in progress, construction materials and other stores and spares, tools are stated at lower of cost and net realizable value. The cost of inventories is computed on weighted average basis.

G. Employee Benefits

a) Defined benefit plan

Gratuity liability is provided under a defined benefit plan, under Group Gratuity Cash Accumulation Schemes under an irrevocable trust. The Companyâs liability towards gratuity is determined on the basis of actuarial valuation done by an independent actuary, taking effect of actuarial gains and losses which is recognized in Other Comprehensive Income.

b) Defined contribution plan

Contribution to Provident Fund, a defined contribution plan is charged to the Statement of Profit and Loss.

c) Compensated absence

Provision for compensated absences is made on actuarial valuation as at the Balance Sheet date.

d) Short-term employee benefits

Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

H. Non-current assets held for sale

Non-current assets and disposal Group of assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset (or disposal group) and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification

Non-current assets (and disposal group) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

I. Borrowing Costs

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

All other borrowing costs are recognized as expense in the period in which they are incurred.

J. Provisions and Contingent Asset /Liabilities

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).

Contingent Assets are not recognized but disclosed in the Financial Statements when economic inflow is probable.

K. Government Grant

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate.

L. Financial instruments

Financial instrument is a contract that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Classification:

Initial recognition and measurement

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 asset and liabilities at fair value through profit & loss) are added to or deducted from the fair value measured on initial recognition of the financial assets or financial liabilities.

Financial assets at amortized cost

Financial assets are subsequently measured at amortized cost using effective interest rate method, if:

(a) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

(b) 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.

This category generally applies to trade and other receivables.

Financial asset at fair value through other comprehensive income (FVTOCI)

Financial asset at fair value through profit or loss (FVTPL)

Derecognition of financial assets

On derecognition of a financial asset in its entirety, the difference between the assetâs carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.

Financial liabilities and equity instruments

Classification as debt or equity

Financial instruments are classified as a liability or equity according to the substance of the contractual arrangement and not its legal form.

Equity instruments

Financial liabilities

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Companyâs obligations are discharged, cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly. a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

Derivative Contracts

The Company enters into derivative financial instruments to hedge foreign currency / price risk on unexecuted firm commitments and highly probable forecast transactions.

Financial guarantee contracts

Financial guarantee contracts issued by a Company entity are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:

- the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and

- the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of Ind AS 18.

M. Property, Plant and Equipment & Intangible Assets

Property, Plant and Equipment are stated at cost of acquisition/construction net of recoverable taxes and include amounts added on revaluation, less accumulated depreciation / amortization and impairment loss, if any. All costs, including finance costs and adjustment arising from exchange rate variations attributable to fixed assets till assets are put to use, are capitalized.

N. Depreciation

Depreciation is provided on all depreciable fixed assets over useful life of the assets estimated by the management. Useful life of these assets are different from the useful life prescribed under Part C of Schedule II to the Companies Act, 2013.:

a) Depreciation on plant and machinery of bio-mass energy plants is provided considering the useful life of plant as 20 years, as specified in CERC and RERC Regulations.

c) Depreciation on Furniture & Fixtures at construction sites is provided considering the useful life of 3 years based on past experience.

Depreciation is provided on Straight Line Method (SLM) except on assets pertaining to Research and Development Centre one Unit (erstwhile Export Oriented Unit) is provided on the basis of written down value method.

Intangible assets are amortized over a period of five years.

For transition to Ind AS, the company elected to continue with carrying value of all its Property, plant, equipment and intangible assets recognized as of 1^st April, 2015 (transition date) measured as per the previous GAAP and use that carrying value as deemed cost as of the transition date.

O. Impairment

a) Financial asset

Company applies as per Ind AS 109 expected credit loss model for recognizing impairment loss on trade receivables, other contractual rights to receive cash or other financial asset.

b) Non-Financial asset

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the higher of the fair value less cost of disposal and their value in use. Value in use is arrived at by discounting the future cash flows to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset for which the estimates of future cash flows have not been adjusted. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss.

P. Earnings Per share

Q. Exemptions on first time adoption of Ind AS

(b) The carrying amounts of the Companyâs investments in its subsidiary and associate companies as per the financial statements of the Company prepared under Previous GAAP are considered as deemed cost for measuring such investments in the opening Ind AS Balance Sheet.

R. Standards issued but not yet effective

The Ministry of Corporate Affairs (MCA), on 28 March 2018, notified Ind AS 115, Revenue from Contracts with Customers as part of the Companies (Indian Accounting Standards) Amendment Rules,2018. The new standard is effective for accounting periods beginning on or after 1 April,2018. The Company is evaluating the disclosure requirements of the amendments and its effect on the financial statements.

6.1 (a) Investment in equity instrument in JMC Projects (India) Limited includes '' 85.49 Lakhs arising on initial recognition of financial guarantee, given by the Company on behalf of JMC Projects (India) Limited, at fair value.

(b) Investment in equity instrument of Shree Shubham Logistics Limited includes '' 625.71 Lakhs arising on initial recognition of investment in 4% redeemable preference shares at fair value and '' 420.64 Lakhs arising on initial recognition of financial guarantee, given by the Company on behalf of Shree Shubham Logistics Limited, at fair value.

(c) 30,04,337 (Previous Year - 30,04,337) Equity Shares of Jhajjar KT Transco Private Limited, 42,09,400 (Previous Year - 42,09,400) Equity Shares of Kalpataru Satpura Transco Private Limited and 1,09,39,500 (Previous Year - 1,09,39,500) shares of Alipurduar Transmission Limited have been pledged with Banks and Financial Institutions for providing financial assistance to them.

(d) 55,64,069 (Previous Year - 55,64,069) Equity Shares of Shree Shubham Logistics Limited has been pledged with a Bank for providing financial assistance to them.

16.2 The Company has only one class of Equity Shares having par value of ''2 per share. Each holder of Equity Shares is entitled to one vote per share. The dividend is declared and paid on being proposed by the Board of Directors after the approval of the Shareholders in the ensuing Annual General Meeting.

16.3 Details of shareholders holding more than 5% shares in the company

17.1 Share premium account is used to record the premium on issue of shares. This is utilized in accordance with the provisions of the Companies Act, 2013.

17.2 Debenture Redemption Reserve is created as required under the provisions of the Companies Act, 2013 and rules framed there under.

17.3 The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by the transfer from one component of equity to another and is not an items of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

18.2 Foreign Currency Loans from Banks

(a) Rs, Nil (Previous Year Rs, 1,296.77 Lakhs) carries interest of 6 months Libor spread secured by exclusive charge over entire current assets, escrow of receivables including receivables pertaining to Rwanda Project and is repayable in 7 Equal monthly installment ending on October 28, 2017.

(b) Rs, Nil (Previous Year Rs, 778.07 Lakhs) carries interest of 6 months Libor spread secured by exclusive charge over entire current assets, escrow of receivables including receivables pertaining to Egypt Project and is repayable in 10 Equal monthly installment ending on June 28, 2017.

18.3 Rupee Loans from Banks

(a) Rs, 494.82 Lakhs (Previous Year Rs, 321.72 Lakhs) carries interest in range of 9.00% - 11.00% p.a. and is repayable in 36 equal monthly installments along with interest. The Loan is secured by hypothecation of specific Vehicles.

(b) Rs, 2,500.00 Lakhs (Previous Year Rs, 3,500 Lakhs) carries interest in the range of 9.30% - 9.80% p.a.,secured by hypothecation of specific moveable fixed assets and is repayable in 22 Equal Quarterly installment ending on December 31, 2019.

(c) Rs, 9,450.00 Lakhs (Previous Year Rs, 10,500.00 Lakhs) carries interest in the range of 9.35% - 9.40% p.a., secured by pari passu charges on movable and immovable fixed assets of transmission & distribution and infrastructure division of the company to the extent of 1.25 times of outstanding facility and pledge of 55,64,069 number of equity shares in Shree Shubham Logistics Limited. It is repayable in 20 Equal Quarterly installment ending on September 30, 2022.

Working Capital Facilities from Banks are secured in favour of consortium of bankers by hypothecation of stocks, stores and spares, book debts, bills receivable and all other movable assets on pari passu basis. Also secured by movable and immovable fixed assets (including land and building situated at Gandhinagar, Gujarat) of transmission and distribution division and infrastructure division of company.

All current trade payables are non interest bearing and payable or settled with in normal operating cycle of the Company.

41. The Companyâs significant leasing/ licensing arrangements are mainly in respect of residential / office premises and equipments, which are operating leases. The aggregate lease rental payable on these leasing arrangements are charged as rent and equipment hire charges in these accounts amounting to Rs, 6,886.49 Lakhs (previous year Rs, 5,936.72 Lakhs). These leasing arrangements are for a period not exceeding 9 years and are in most cases renewable by mutual consent, on mutually agreeable terms. Future lease rental payable in respect of assets on lease for not later than 1 year is Rs, 2,805.05 Lakhs (previous year Rs, 1,875.08 Lakhs), for later than 1 year but not later than 5 years is Rs, 2,924.81 Lakhs (previous year Rs, 716.39 Lakhs) and for later than 5 years but not later than 9 years is Rs, 934.71 Lakhs (previous year Rs, 14.56 Lakhs ).

42. Disclosure under Regulation 34 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and section 186(4) of the Companies Act, 2013.

42.3 Details of Investments made by the company are given in Note 6 . Details of guarantees provided are given in Note 30.

42.4 All loans given and guarantees provided are for the purposes of the business.

43. A sum of Rs,157.55 Lakhs received (Previous Year Rs, 394.72 Lakhs) from eligible Gold Standard Certified Emission Reduction (GSCERs) from Atmospheric GmbH of Germany, on account of generation of electricity from agricultural residues like mustard crop residue and other agricultural crop residue at Tonk Power Plant under the Clean Development Mechanism (CDM) of Kyoto Protocol for preventing environmental degradation. There is no CERâs under certification as on 31.03.2018.

Mar 31, 2017

1. CORPORATE INFORMATION

The company is public limited company incorporated and domiciled in India having its registered office at Plot No. 101, Part-III, GIDC Estate, Sector -28, Gandhinagar 382028, Gujarat, India

2. Basis of preparation of Financial Statement

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

Upto the year ended March 31, 2016, the company prepared its financial statements in accordance with the requirements of previous GAAP, which includes standards notified under the companies (Accounting Standards) Rules, 2006.These are the companyâs first Ind AS financial statements. The date of transition to Ind AS is April 1, 2015. In accordance with Ind AS 101 First time adoption of Indian Accounting Standard, the company has presented a reconciliation from the presentation of financial under previous GAAP to Ind AS shareholderâs equity as at March 31, 2016 and April 1, 2015. Refer Note 30 for the details of such reconciliations and exemptions availed by the Company on first-time adoption.

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.

3. Use of Estimates

In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are included in the following notes:

Useful lives of property, plant and equipment

Impairment of Investments

Valuation of deferred tax assets

The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. The policy for the same has been explained under Note E.

4. significant accounting policies

A. Revenue Recognition

(i) Revenue from construction contracts

Revenue is adjusted towards liquidated damages wherever delay are attributable to the company and price variations, wherever applicable. Escalation, variations in contract work and other claims are included to the extent that the amount can be measured reliably and its receipt is considered probable. Revenue is recognized to the extent of cost incurred that are expected to be recoverable till such time the outcome of the contract cannot be ascertained reliably.

(ii) Revenue from other contracts

(iii) Others

Revenue from Bio-mass division is recognized on supply of electricity generated to the customer.

Dividends are recorded when the right to receive payment is established. Interest income is recognized on time proportion basis.

B. Operating cycle

C. Lease

Companyâs leasing arrangements where risk and rewards incidental to ownership of assets substantially vest to less or are classified as operating lease. Operating lease payments are recognized on straight line basis over the lease term in the statement of profit and loss unless the payments to the less or are structured to increase in line with expected general inflation to compensate for the less orâs expected inflationary cost increases

D. Foreign Currency

In preparing the financial statements, transactions in foreign currencies i.e. other than the companyâs functional currency are recognized at rate of exchange prevailing for the month on the date of the transaction.

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated in to presentation currency as follows:

- assets and liabilities are translated at the closing rate at the date of the balance sheet

- income and expenses at the exchange rate prevailing on the date of transaction

- resulting exchange difference are recognized in other comprehensive income.

E. income taxes

Current income taxes

Tax on income for the current period is determined on the basis of estimated taxable income and tax credit computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred income taxes

F. inventories

G. Employee Benefits

a) Defined benefit plan

b) Defined contribution plan

Contribution to Provident Fund, a defined contribution plan is charged to the Statement of Profit and Loss.

c) Compensated absence

Provision for compensated absences is made on actuarial valuation as at the Balance Sheet date.

d) Short-term employee benefits

Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

H. Excise Duty

The liability for excise duty in respect of materials lying in factory/ bonded premises is provided for in the accounts.

i. Non-current assets held for sale

Non-current assets (and disposal group) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

J. Borrowing Costs

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

All other borrowing costs are recognized as expense in the period in which they are incurred.

K. Provisions and Contingent Asset /Liabilities

Provisions are recognized when there is present obligation (legal or constructive) as a result of a past event, it is probable that company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

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

Contingent Assets are not recognized but disclosed in the Financial Statements when economic inflow is probable.

L. Government Grant

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received

M. Financial instruments

Financial instrument is a contract that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Classification:

Initial recognition and measurement

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 asset and liabilities at fair value through profit & loss) are added to or deducted from the fair value measured on initial recognition of the financial assets or financial liabilities.

Financial assets at amortized cost

Financial assets are subsequently measured at amortized cost using effective interest rate method, if:

(a) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

(b) 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.

This category generally applies to trade and other receivables.

Financial asset at fair value through other comprehensive income (FVTOCI)

Financial asset at fair value through profit or loss (FVTPL)

Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset.

On derecognition of a financial asset in its entirety, the difference between the assetâs carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.

Financial liabilities and equity instruments

Classification as debt or equity

Financial instruments are classified as a liability or equity according to the substance of the contractual arrangement and not its legal form.

Equity instruments

Financial liabilities

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Companyâs obligations are discharged, cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

Derivative Contracts

The Company enters into derivative financial instruments to hedge foreign currency / price risk on unexecuted firm commitments and highly probable forecast transactions.

Financial guarantee contracts

Financial guarantee contracts issued by a Company entity are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:

- the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and

- the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of Ind AS 18.

N. Property, Plant and equipment & intangible assets

Property, Plant and Equipment are stated at cost of acquisition/construction net of recoverable taxes and include amounts added on revaluation, less accumulated depreciation / amortization and impairment loss, if any. All costs, including finance costs and adjustment arising from exchange rate variations attributable to fixed assets till assets are put to use, are capitalized.

O. Depreciation

a) Depreciation on plant and machinery of bio-mass energy plants is provided considering the useful life of plant as 20 years, as specified in CERC and RERC Regulations.

c) Depreciation on Furniture & Fixtures at construction sites is provided considering the useful life of 3 years based on past experience.

Intangible assets are amortized over a period of five years.

For transition to Ind AS, the company elected to continue with carrying value of all its Property, plant, equipment and intangible assets recognized as of April 1, 2015 (transition date) measured as per the previous GAAP and use that carrying value as deemed cost as of the transition date.

P. impairment

a) Financial asset

Company applies as per Ind AS 109 expected credit loss model for recognizing impairment loss on trade receivables, other contractual rights to receive cash or other financial asset.

b) Non-Financial asset

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the higher of the fair value less cost of disposal and their value in use. Value in use is arrived at by discounting the future cash flows to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset for which the estimates of future cash flows have not been adjusted. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss.

Q. Earnings Per share

R. Exemptions on first time adoption of Ind AS

(b) The carrying amounts of the Companyâs investments in its subsidiary and associate companies as per the financial statements of the Company prepared under Previous GAAP, are considered as deemed cost for measuring such investments in the opening Ind AS Balance Sheet.

S. Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules 2017, notifying amendments to Ind AS 7, Statement of Cash Flows and Ind AS 102, Share Based Payments. The amendments to Ind AS 7 are applicable to the company from April 1, 2017 and Ind AS 102 is not applicable to the company. The Company is evaluating the disclosure requirements of the amendments and its effect on the financial statements.

6.1 (a) 30,04,337 (As at March 31, 2016 - 30,04,337, As at April 1, 2015 -58,93,123 ) Equity Shares of Jhajjar KT Transco Private Limited, 42,09,400 (As at March 31, 2016 - 42,09,400, As at April 1, 2015 - 48,57,000 ) Equity Shares of Kalpataru Satpura Transco Pvt. Ltd and 1,09,39,500 (As at March 31, 2016 - nil, As at April 1, 2015 -nil) shares of Alipurduar Transmission Limited have been pledged with Banks and Financial Institutions for providing financial assistance to them.

(b) 55,64,069 (As at March 31, 2016 - 55,64,069, As at April 1, 2015 - nil ) Equity Shares of Shree Shubham Logistics Limited has been pledged with a Bank for obtaining financial assistance.

(c) Investment in equity instrument of JMC Projects (India) Limited includesRs, 85.49 Lakhs arising on initial recognition of financial guarantee, given by the Company on behalf of JMC Projects (India) Limited, at fair value.

(d) Investment in equity instrument of Shree Shubham Logistics Limited includes Rs,625.71 Lakhs arising on initial recognition of investment in 4% redeemable preference shares at fair value and Rs, 420.64 Lakhs arising on initial recognition of financial guarantee, given by the Company on behalf of Shree Shubham Logistics Limited, at fair value.

Mar 31, 2015

A. Basis of preparation of Financial Statement

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention except for certain fixed assets which are revalued.

B. Use of Estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income 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 due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

C. Fixed Assets:

Fixed assets are stated at cost of acquisition/construction net of recoverable taxes and include amounts added on revaluation, less accumulated depreciation / amortization and impairment loss, if any. All costs, including finance costs and adjustment arising from exchange rate variations attributable to fixed assets till assets are put to use, are capitalized.

D. Depreciation and Amortization:

Depreciation is provided on all depreciable fixed assets existing as on 31st March 2014 based on remaining useful life and on assets added after 31st March, 2014 as per useful life prescribed in Schedule II to the Companies Act, 2013 on pro-rata basis, except:

a) Depreciation on plant and machinery of bio-mass energy plants is provided considering the useful life of plant as 20 years, as specified in CERC and RERC Regulations.

b) Depreciation on assets of overseas projects is provided at the rates and methods as per the requirement of laws of respective foreign countries as detailed in note no. 11.3

c) Depreciation on Furniture & Fixtures at construction sites is provided considering the useful life of 3 years based on past experience.

d) Intangible assets are amortized over a period of five years.

Depreciation is provided on Straight Line Method (SLM) except on assets pertaining to Research and Development Centre and one Unit (erstwhile Export Oriented Unit) is provided on the basis of written down value method.

E. Impairment of assets:

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets.

F. Investments:

Long term investments are stated at cost after deducting the provision for diminution in value, if any, other than of a temporary nature. Current investments are stated at lower of cost and fair value.

G. Inventories:

Raw materials, Fuel, Semi finished goods, Finished goods, scraps, construction work in progress, construction and other stores and spares, tools are stated at lower of cost and net estimated realizable value. The cost of inventories is computed on weighted average basis.

H. Revenue Recognition:

(i) Transmission & Distribution Division:

Sales are recognized on delivery of materials and transfer of significant risk & reward. Sales include excise duty, freight receipts and export benefits but exclude Value Added Tax.

Erection and works contract revenue for work completed is recognized on percentage of completion method based on completion of physical proportion of the contract work. When it is probable that total contract cost will exceed the total contract revenue, the expected loss is recognized immediately. (ii) Infrastructure EPC Division:

Revenue is recognized by adding the aggregate cost and proportionate margin using the percentage completion method.

Percentage of completion is determined as a proportion of cost incurred to date to the total estimated contract cost. When it is probable that total contract cost will exceed the total contract revenue, the expected loss is recognized immediately. (iii) Bio-mass Energy Division:

Revenue is recognized on supply of electricity generated to the customer.

(iv) Others

Dividends are recorded when the right to receive payment is established. Interest income is recognized on time proportion basis.

I. Trade receivables as at the year end under the contract are disclosed net of advances relating to the respective contracts received and outstanding at the year end.

J. Operating Cycle:

Operating cycle for the business activities of the company covers the duration of the specific project/ contract 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 project/contract.

K. Employee Benefits:

(i) Gratuity liability is provided under a defined benefit plan, under Group Gratuity Cash Accumulation Schemes under an irrevocable trust. The Company''s liability towards gratuity is determined on the basis of actuarial valuation done by an independent actuary, taking effect of actuarial gains and losses.

(ii) Contribution to Provident Fund, a defined contribution plan is charged to the Statement of Profit and Loss.

(iii) Provision for compensated absences is made on actuarial valuation as at the Balance Sheet date.

(iv) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

L. Excise Duty:

The liability for excise duty in respect of materials lying in factory/ bonded premises is provided for in the accounts.

M. Foreign Currency Transactions and Translations:

Foreign currency transactions are accounted during the year at the exchange rates prevailing for the month on the date of transaction.

Foreign currency monetary assets and liabilities, remaining unsettled at the end of the year are translated at the exchange rate prevailing at the end of the year and differences are adjusted in the Statement of Profit and Loss.

In case of transactions covered by forward exchange contracts, which are not intended for trading or speculation purpose, premium or discount are amortized as expenses or income over the life of the contract.

Any profit or losses arising on settlement or cancellation of such forward contracts or options are recognized in the Statement of Profit and Loss for year in which settlement or cancellation takes place.

Translation of overseas jobs / projects of non-integral foreign operations:

a) Assets and liabilities at the rates prevailing at the end of the year.

b) Income and expenses at the exchange rate prevailing on the date of transaction.

c) Resulting exchange differences are accumulated in foreign currency translation reserve account.

N. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expense in the period in which they are incurred.

O. Taxes on Income:

a) Tax on income for the current period is determined on the basis of estimated taxable income and tax credit computed in accordance with the provisions of the Income Tax Act, 1961.

b) Deferred tax is recognized on timing difference between estimated taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s) and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

c) Deferred tax assets arising on account of unabsorbed losses or unabsorbed depreciation are recognized and carried forward only to the extent that there is virtual certainty supported by convincing evidence and Deferred tax assets arising on account of other timing differences are recognized to the extent there is reasonable certainty, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

P. Provisions, Contingent Liabilities and Contingent Assets:

i) Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and that probability requires an outflow of resources.

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

Mar 31, 2014

A. Basis of preparation of Financial Statement

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 ("the 1956 Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act/ 2013 Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention except for certain fixed assets which are revalued.

B. Use of Estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income 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 due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

C. Fixed Assets:

Fixed assets are stated at cost of acquisition/construction net of recoverable taxes and include amounts added on revaluation, less accumulated depreciation / amortization and impairment loss, if any. All costs, including finance costs and adjustment arising from exchange rate variations attributable to fixed assets till assets are put to use, are capitalized.

D. Depreciation and Amortization:

Depreciation is provided on the basis of straight-line method on all depreciable fixed assets at the rates prescribed in Schedule -XIV of the Companies Act, 1956, on pro-rata basis except:

a) Depreciation pertaining to assets of Research and Development Centre and of one Unit (erstwhile Export Oriented Unit) is provided on the basis of written down value method.

b) Depreciation on plant and machinery of bio-mass energy plants is provided at a higher rate at 7.5% instead of the prescribed rate for continuous process plant considering the useful life of plant supported by technical evaluation and report.

c) In case of revalued assets, the difference between the depreciation based on revalued cost and the depreciation charged on historical cost is recouped out of revaluation reserve.

d) Depreciation on assets of overseas projects is provided at the rates as per the requirement of laws of respective foreign countries. Such rates of depreciation in each overseas project are higher than the depreciation at prescribed rates under Schedule-XIV of the Companies Act, 1956.

e) Depreciation on all the vehicles in the Company is provided at a higher rate at 15% instead of the prescribed rate, considering the useful life of vehicles based on technical evaluation of the management.

f) Intangible assets are amortized over a period of five years on prorata basis.

E. Impairment of assets:

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets.

F. Investments:

Long term investments are stated at cost after deducting the provision for diminution in value, if any, other than of a temporary nature. Current investments are stated at lower of cost and fair value.

G. Inventories:

Raw materials, Fuel, Semi finished goods, Finished goods, scraps, construction work in progress, construction and other stores and spares, tools are stated at lower of cost and net estimated realizable value. The cost of inventories is computed on weighted average basis.

H. Revenue Recognition:

(i) Transmission & Distribution Division:

Sales are recognized on delivery of materials. Sales include excise duty, freight receipts and export benefits but exclude Value Added Tax.

Erection and works contract revenue for work completed is recognized on percentage of completion method based on completion of physical proportion of the contract work. When it is probable that total contract cost will exceed the total contract revenue, the expected loss is recognized immediately.

(ii) Infrastructure EPC Division:

Revenue is recognized by adding the aggregate cost and proportionate margin using the percentage completion method. Percentage of completion is determined as a proportion of cost incurred to date to the total estimated contract cost. When it is probable that total contract cost will exceed the total contract revenue, the expected loss is recognized immediately.

(iii) Bio-mass Energy Division:

Revenue is recognized on supply of electricity generated to the customer.

(iv) Others

Dividends are recorded when the right to receive payment is established. Interest income is recognized on time proportion basis.

I. Trade receivables as at the year end under the contract are disclosed net of advances relating to the respective contracts received and outstanding at the year end.

J. Operating Cycle:

Operating cycle for the business activities of the company covers the duration of the specific project/ contract 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 project/contract.

K. Retirement Benefits:

(i) Gratuity liability is provided under a defined benefit plan, under Group Gratuity Cash Accumulation Schemes under an irrevocable trust. The Company''s liability towards gratuity is determined on the basis of actuarial valuation done by an independent actuary, taking effect of actuarial gains and losses.

(ii) Contribution to Provident Fund, a defined contribution plan is charged to the Statement of Profit and Loss.

(iii) Provision for leave encashment liability is made on actuarial valuation as at the Balance Sheet date.

(iv) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

L. Excise Duty:

The liability for excise duty in respect of materials lying in factory/ bonded premises is provided for in the accounts.

M. Foreign Currency Transactions and Translations:

Foreign currency transactions are accounted during the year at the exchange rates prevailing for the month on the date of transaction.

Foreign currency monetary assets and liabilities, remaining unsettled at the end of the year are translated at the exchange rate prevailing at the end of the year and differences are adjusted in the Statement of Profit and Loss.

In case of transactions covered by forward exchange contracts, which are not intended for trading or speculation purpose, premium or discount are amortized as expenses or income over the life of the contract.

Any profit or losses arising on settlement or cancellation of such forward contracts or options are recognized in the Statement of Profit and Loss for year in which settlement or cancellation takes place.

Translation of overseas jobs / projects of non-integral foreign operations:

a) Assets and liabilities at the rates prevailing at the end of the year.

b) Income and expenses at the exchange rate prevailing on the date of transaction.

c) Resulting exchange differences are accumulated in foreign currency translation reserve account.

N. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expense in the period in which they are incurred.

O. Taxes on Income:

a) Tax on income for the current period is determined on the basis of estimated taxable income and tax credit computed in accordance with the provisions of the Income Tax Act, 1961.

b) Deferred tax is recognised on timing difference between estimated taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s) and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

c) Deferred tax assets arising on account of unabsorbed losses or unabsorbed depreciation are recognized and carried forward only to the extent that there is virtual certainty supported by convincing evidence and Deferred tax assets arising on account of other timing differences are recognised to the extent there is reasonable certainty, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

P. Provisions, Contingent Liabilities and Contingent Assets:

i) Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and that probability requires an outflow of resources.

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

Mar 31, 2013

A. Basis of preparation of Financial Statement

The Financial Statements are prepared under the historical cost convention, except for certain fixed assets which are revalued, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

B. Use of Estimates:

The presentation of financial statements requires certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized.

C. Fixed Assets:

Fixed assets are stated at cost of acquisition/construction net of recoverable taxes and include amounts added on revaluation, less accumulated depreciation / amortization and impairment loss, if any. All costs, including finance costs and adjustment arising from exchange rate variations attributable to fixed assets till assets are put to use, are capitalized.

D. Depreciation:

Depreciation is provided on the basis of straight-line method on all depreciable fixed assets at the rates prescribed in Schedule -XIV of the Companies Act, 1956, on pro-rata basis except:

a) Depreciation pertaining to assets of Research and Development Centre and of the Export Oriented Unit is provided on the basis of written down value method.

b) Depreciation on plant and machinery of bio-mass energy plants is provided at a higher rate at 7.5% instead of the prescribed rate for continuous process plant considering the useful life of plant supported by technical evaluation and report.

c) In case of revalued assets, the difference between the depreciation based on revalued cost and the depreciation charged on historical cost is recouped out of revaluation reserve.

d) Depreciation on assets of overseas projects is provided at the rates as per the requirement of laws of respective foreign countries. Such rates of depreciation in each overseas project are higher than the depreciation at prescribed rates under Schedule-XIV of the Companies Act, 1956.

e) Depreciation on all the vehicles in the Company is provided at a higher rate at 15% instead of the prescribed rate, considering the useful life of vehicles based on technical evaluation of the management.

f) Intangible assets are amortized over a period of five years on prorata basis.

E. Impairment of assets:

The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the assets is estimated. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating units exceeds its recoverable amount. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount and recognized in compliance with AS-28.

F. Investments:

Long term investments are stated at cost after deducting the provision for diminution in value, if any, other than of a temporary nature. Current investments are stated at lower of cost and fair value.

G. Inventories:

Raw materials, Fuel, Semi finished goods, Finished goods, scraps, construction work in progress, construction and other stores and spares, tools are stated at lower of cost and net estimated realizable value. The cost of inventories is computed on weighted average basis.

H. Revenue Recognition:

(i) Transmission & Distribution Division:

Sales are recognized on delivery of materials. Sales include excise duty, freight receipts and export benefits but exclude Value Added Tax.

Erection and works contract revenue for work completed is recognized on percentage of completion method based on completion of physical proportion of the contract work. When it is probable that total contract cost will exceed the total contract revenue, the expected loss is recognized immediately,

(ii) Infrastructure EPC Division:

Revenue is recognized by adding the aggregate cost and proportionate margin using the percentage completion method. Percentage of completion is determined as a proportion of cost incurred to date to the total estimated contract cost. When it is probable that total contract cost will exceed the total contract revenue, the expected loss is recognized immediately.

(iii) Bio-mass Energy Division:

Revenue is recognized on supply of electricity generated to the customer.

(iv) Others

Dividends are recorded when the right to receive payment is established. Interest income is recognized on time proportion basis.

I. Trade receivables as at the year end under the contract are disclosed net of advances relating to the respective contracts received and outstanding at the year end.

J. Operating Cycle:

Operating cycle for the business activities of the company covers the duration of the specific project/ contract 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 project/contract,

K. Retirement Benefits:

(i) Gratuity liability is provided under a defined benefit plan, under Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India under an irrevocable trust. The Company''s liability towards gratuity is determined on the basis of actuarial valuation done by an independent actuary.

(ii) Contribution to Provident Fund, a defined contribution plan is charged to the Statement of Profit and Loss.

(iii) Provision for leave encashment liability is made on actuarial valuation as at the Balance Sheet date.

(iv) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

L. Excise/Custom Duty:

The liability for excise and custom duty in respect of materials lying in factory/bonded premises is accounted for as and when they are cleared / debonded.

M. Foreign Currency Transactions:

Foreign currency transactions are accounted during the year at the exchange rates prevailing for the month of transaction.

Foreign currency assets and liabilities, remaining unsettled at the end of the year are translated at the exchange rate prevailing at the end of the year and differences are adjusted in the Statement of Profit and Loss.

In case of transactions covered by forward exchange contracts, which are not intended for trading or speculation purpose, premium or discount are amortized as expenses or income over the life of the contract.

Any profit or losses arising on settlement or cancellation of such forward contracts or options are recognized in the Statement of Profit and Loss for year in which settlement or cancellation takes place.

Translation of overseas jobs / projects of non-integral foreign operations:

a) Assets and liabilities at the rates prevailing at the end of the year

b) Income and expenses at the exchange rate prevailing for the month of transaction.

c) Resulting exchange differences are accumulated in foreign currency translation reserve account.

N. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expense in the period in which they are incurred.

O. Taxes on Income:

a) Tax on income for the current period is determined on the basis of estimated taxable income and tax credit computed in accordance with the provisions of the Income Tax Act, 1961.

b) Deferred tax is recognized on timing difference between estimated taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s) and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

c) Deferred tax assets which arise mainly on account of expenses debited to Statement of Profit and Loss but allowable under Income Tax Act, 1961 in subsequent year(s), unabsorbed losses or unabsorbed depreciation are recognized and carried forward only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

N. Provisions, Contingent Liabilities and Contingent Assets:

i) Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and that probability requires an outflow of resources.

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

Mar 31, 2012

A. Basis of preparation of Financial Statement

The Financial Statements are prepared under the historical cost convention, except for certain fixed assets which are revalued, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

B. Use of Estimates:

The presentation of financial statements requires certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized.

C. Fixed Assets:

Fixed assets are stated at cost of acquisition/construction net of recoverable taxes and include amounts added on revaluation, less accumulated depreciation / amortization and impairment loss, if any. All costs, including finance costs and adjustment arising from exchange rate variations attributable to fixed assets till assets are put to use, are capitalized.

D. Depreciation:

Depreciation is provided on the basis of straight-line method on all depreciable fixed assets at the rates prescribed in Schedule -XIV of the Companies Act, 1956, on pro-rata basis except:

a) Depreciation pertaining to assets of Research and Development Centre and of the Export Oriented Unit is provided on the basis of written down value method.

b) Depreciation on plant and machinery of bio-mass energy plants is provided at a higher rate at 7.5% instead of the prescribed rate for continuous process plant considering the useful life of plant supported by technical evaluation and report.

c) In case of revalued assets, the difference between the depreciation based on revalued cost and the depreciation charged on historical cost is recouped out of revaluation reserve.

d) Depreciation on assets of overseas projects is provided at the rates as per the requirement of laws of respective foreign countries. Such rates of depreciation in each overseas project are higher than the depreciation at prescribed rates under Schedule-XIV of the Companies Act, 1956.

e) Depreciation on all the vehicles in the Company is provided at a higher rate at 15% instead of the prescribed rate, considering the useful life of vehicles based on technical evaluation of the management.

f) Intangible assets are amortized over a period of five years on prorata basis.

E. Impairment of assets:

The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the assets is estimated. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating units exceeds its recoverable amount. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount and recognized in compliance with AS-28.

F. Investments:

Long term investments are stated at cost after deducting the provision for diminution in value, if any, other than of a temporary nature. Current investments are stated at lower of cost and fair value.

G. Inventories:

Raw materials, Fuel, Semi finished goods, Finished goods, scraps, construction work in progress, construction and other stores and spares, tools are stated at lower of cost and net estimated realizable value. The cost of inventories is computed on weighted average basis.

H. Revenue Recognition:

(i) Transmission & Distribution Division:

Sales are recognized on delivery of materials. Sales include excise duty, freight receipts and export benefits but exclude VAT.

Erection and works contract revenue for work completed is recognized on percentage of completion method based on completion of physical proportion of the contract work. When it is probable that total contract cost will exceed the total contract revenue, the expected loss is recognized immediately.

(ii) Infrastructure Division:

Revenue is recognized by adding the aggregate cost and proportionate margin using the percentage completion method. Percentage of completion is determined as a proportion of cost incurred to date to the total estimated contract cost. When it is probable that total contract cost will exceed the total contract revenue, the expected loss is recognized immediately.

(iii) Bio-mass Energy Division:

Revenue is recognized on supply of electricity generated to the customer.

(iv) Others

Dividends are recorded when the right to receive payment is established. Interest income is recognized on time proportion basis.

I. Retirement Benefits:

(i) Gratuity liability is provided under a defined benefit plan, under Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India under an irrevocable trust. The Company's liability towards gratuity is determined on the basis of actuarial valuation done by an independent actuary.

(ii) Contribution to Provident Fund, a defined contribution plan is charged to the Profit and Loss Account.

(iii) Provision for leave encashment liability is made on actuarial valuation as at the Balance Sheet date.

(iv) Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

J. Excise/Custom Duty:

The liability for excise and custom duty in respect of materials lying in factory/bonded premises is accounted for as and when they are cleared / debonded.

K. Foreign Currency Transactions:

Foreign currency transactions are accounted during the year at the exchange rates prevailing for the month of transaction. Foreign currency assets and liabilities, remaining unsettled at the end of the year are translated at the exchange rate prevailing at the end of the year and difference is adjusted to respective accounts in profit & loss account.

In case of transactions covered by forward exchange contracts, which are not intended for trading or speculation purpose, premium or discount are amortized as expenses or income over the life of the contract.

Any profit or losses arising on settlement or cancellation of foreign currency forward contracts or options are recognized in profit & loss account for year in which settlement or cancellation takes place.

Translation of overseas jobs / projects of non-integral foreign operations:

a) Assets and liabilities at the rates prevailing at the end of the year.

b) Income and expenses at the exchange rate prevailing for the month of transaction.

c) Resulting exchange differences are accumulated in foreign currency translation reserve account.

L. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expense in the period in which they are incurred.

M. Taxes on Income:

a) Tax on income for the current period is determined on the basis of estimated taxable income and tax credit computed in accordance with the provisions of the Income Tax Act, 1961.

b) Deferred tax is recognized on timing difference between estimated taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s) and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

c) Deferred tax assets which arise mainly on account of unabsorbed losses or unabsorbed depreciation are recognized and carried forward only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

N. Provisions, Contingent Liabilities and Contingent Assets:

i) Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and that probability requires an outflow of resources.

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

Mar 31, 2011

A. Basis of Accounting:

(i) The financial statements have been prepared in accordance with relevant accounting standards under the historical cost convention, except as stated in note 1 B.

(ii) The accounts have been prepared on accrual basis of accountancy in accordance with the accounting principles generally accepted in India.

B. Fixed Assets:

Fixed assets are stated at cost of acquisition/construction/revalued amount less accumulated depreciation.

C. Depreciation:

Depreciation is provided on the basis of straight-line method on all depreciable fi xed assets at the rates prescribed in Schedule ÃXIV of the Companies Act, 1956, on prorata basis except:

a) Depreciation pertaining to assets of Research and Development Centre and of the Export Oriented Unit is provided on the basis of written down value method.

b) Depreciation on plant and machinery of bio-mass energy plants is provided at a higher rate at 7.5% instead of the prescribed rate for continuous process plant considering the useful life of plant supported by technical evaluation and report.

c) In case of revalued assets, the difference between the depreciation based on revalued cost and the depreciation charged on historical cost is recouped out of revaluation reserve.

d) Depreciation on assets of overseas projects is provided at the rates as per the requirement of laws of respective foreign countries. Such rates of depreciation in each overseas project are higher than the depreciation rates prescribed under Schedule-XIV by the Companies Act, 1956.

e) Depreciation on all the vehicles in the Company is provided at a higher rate at 15% instead of the prescribed rate, considering the useful life of vehicles based on technical evaluation by the management.

f) Intangible assets are amortized over a period of fi ve years on prorata basis.

D. Revenue Recognition:

(i) Transmission & Distribution Division:

Sales are recognized on delivery of materials. Sales includes excise duty, freight receipts and export benefi ts but excludes VAT.

Erection and works contract revenue for work completed is recognized on percentage of completion method based on completion of physical proportion of the contract work. When it is probable that total contract cost will exceed the total contract revenue, the expected loss is recognized immediately.

(ii) Infrastructure Division: Revenue is recognized by adding the aggregate cost and proportionate margin using the percentage completion method. Percentage of completion is determined as a proportion of cost incurred to date to the total estimated contract cost. When it is probable that total contract cost will exceed the total contract revenue, the expected loss is recognized immediately.

(iii) Bio-mass Energy Division: Revenue is recognized on supply of electricity generated to the customer.

(iv) Real Estate Division: Revenue is recognized at the time of transfer of signifi cant risks and rewards of ownership to the buyer on executing agreement for sale. Estimated cost of completion against sales recognized, wherever applicable, is provided for in Profit and loss account. Advances received against booking of units are appearing as current liabilities.

(v) Others Dividends are recorded when the right to receive payment is established. Interest income is recognized on time proportion basis.

E. Inventories:

(i) Transmission & Distribution Division:

Raw materials, semi-fi nished goods, fi nished goods, scraps, construction work-in-progress and construction and other stores-spares & tools are stated at lower of cost and net realizable value. The cost of inventories is computed on weighted average basis.

(ii) Infrastructure Division:

Construction material, stores-spares & tools and construction work-in-progress are valued at lower of cost or net realizable value. The cost is computed on weighted average basis.

(iii) Biomass Energy Division:

Fuel and stores, spares and tools are stated at lower of cost and net realizable value. The cost of fuel, stores, spares and tools are computed on weighted average basis.

(iv) Real Estate Division:

Finished and semi-fi nished inventory are stated at lower of cost and net realizable value. Cost is computed on average cost basis which includes payments made against agreement to purchase land, development cost direct and attributable towards the specifi c real estate project and cost of borrowings as stated in note 1 J.

F. Investments:

Long term investments are stated at cost after deducting the provision for diminution in value, if any, other than of a temporary nature. Current investments are stated at lower of cost or fair value.

G. Retirement Benefits:

(i) Gratuity liability is provided under a defined benefit plan, under Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India under an irrevocable trust. The Companys liability towards gratuity is determined on the basis of actuarial valuation done by an independent actuary.

(ii) Contribution to Provident Fund, a defined contribution plan is charged to the Profit and Loss Account.

(iii) Provision for leave encashment liability is made on actuarial valuation as at the Balance Sheet date.

(iv) All other short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

H. Excise/Custom Duty:

The liability for excise and custom duty in respect of materials lying in factory/bonded premises is accounted for as and when they are cleared / debonded.

I. Foreign Currency Transactions:

Foreign currency transactions are accounted for at the exchange rate of the date of transaction. Foreign currency monetary assets and liabilities, remaining unsettled at the end of the year are translated at the exchange rate prevailing at the end of the year and difference is adjusted to respective accounts in profit & loss account. The exchange gain or loss between forward exchange contract rate and exchange rate at the date of transaction are recognized in profit and loss account over the life of the contract. Any profit or loss arising on settlement or cancellation of foreign currency forward contracts or options are recognized in profit & loss account for period in which settlement or cancellation takes place. Translation of overseas jobs / projects of non-integral foreign operations: -

a) Assets and liabilities at the rates prevailing at the end of the year.

b) Income and expenses at the exchange rate of the date of transaction.

c) Resulting exchange differences are accumulated in foreign currency translation reserve account.

J. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expense in the period in which they are incurred.

K. Impairment of assets:

The carrying amount of assets, is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exist, the recoverable amount of the assets is estimated. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating units exceeds its recoverable amount. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount and recognized in compliance with AS-28.

L. Taxes on Income:

a) Tax on income for the current period is determined on the basis of estimated taxable income and tax credit computed in accordance with the provisions of the Income Tax Act, 1961.

b) Deferred tax is recognized on timing difference between the accounting income and the estimated taxable income for the period and quantifi ed using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

c) Deferred tax assets which arise mainly on account of unabsorbed losses or unabsorbed depreciation are recognized and carried forward only to the extent that there is virtual certainty supported by convincing evidence that suffi cient future taxable income will be available against which such deferred tax assets can be realized.

M. Use of Estimates:

The presentation of financial statements requires certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized.

N. Preliminary Expenses:

Preliminary expenses incurred are charged to revenue.

O. Provisions, Contingent Liabilities and Contingent Assets:

i) Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and that probability requires an outfl ow of resources.

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

Mar 31, 2010

A. Basis of Accounting:

(i) The financial statements have been prepared in accordance with relevant accounting standards under the historical cost convention, except as stated in note 1 B.

(ii) The accounts have been prepared on accrual basis of accountancy in accordance with the accounting principles generally accepted in India.

B. Fixed Assets:

Fixed assets are stated at cost of acquisition/construction/revalued amount less accumulated depreciation.

C. Depreciation:

Depreciation is provided on the basis of straight-line method on all depreciable fixed assets at the rates prescribed in Schedule -XIV of the Companies Act, 1956, on prorata basis except:

a) Depreciation pertaining to assets of Research and Development Centre and of the Export Oriented Unit is provided on the basis of written down value method.

b) Depreciation on plant and machinery of bio-mass energy plants is provided at a higher rate at 7.5% instead of the prescribed rate for continuous process plant considering the useful life of plant supported by technical evaluation and report.

c) In case of revalued assets, the difference between the depreciation based on revalued cost and the depreciation charged on historical cost is recouped out of revaluation reserve.

d) Depreciation on assets of overseas projects is provided at the rates as per the requirement of laws of respective foreign countries. Such rates of depreciation in each overseas project are higher than the depreciation at prescribed rates under Schedule-XIV of the Companies Act, 1956.

e) Depreciation on all the vehicles in the Company is provided at a higher rate at 15% instead of the prescribed rate, considering the useful life of vehicles based on technical evaluation of the management.

f) Intangible assets are amortized over a period of five years from the day they are acquired on prorata basis.

D. Revenue Recognition:

(i) Transmission & Distribution Division:

Sales are recognized on delivery of materials. Sales includes excise duty and export benefits being Duty Entitlement Pass book credits but excludes Sales Tax.

Erection and works contract revenue for work completed is recognized on percentage of completion method based on completion of physical proportion of the contract work. When it is probable that total contract cost will exceed the total contract revenue, the expected loss is recognized immediately.

(ii) Infrastructure Division:

Revenue is recognized by adding the aggregate cost and proportionate margin using the percentage completion method. Percentage of completion is determined as a proportion of cost incurred to date to the total estimated contract cost. When it is probable that total contract cost will exceed the total contract revenue, the expected loss is recognized immediately.

(iii) Bio-mass Energy Division:

Revenue is recognized on supply of electricity generated to the customer.

(iv) Real Estate Division:

Revenue is recognized at the time of transfer of significant risks and rewards of ownership to the buyer on executing agreement for sale. Estimated cost of completion against sales recognized, wherever applicable, is provided for in profit and loss account. Advances received against booking of units are appearing as current liabilities.

(v) Others:

Dividends are recorded when the right to receive payment is established. Interest income is recognized on time proportion basis.

E. Inventories:

(i) Transmission & Distribution Division:

Raw materials, semi-finished goods, finished goods, scraps and construction work-in-progress and other stores-spares and tools and trading goods are stated at lower of cost and net realizable value. The cost of inventories is computed on weighted average basis.

(ii) Infrastructure Division: Ã

Construction material and stores, spares and tools are valued at lower of cost or net realizable value. The cost is computed on weighted average basis.

(iii) Biomass Energy Division: Fuel and stores, spares and tools are stated at lower of cost and net realizable value. The cost of fuel, stores, spares and tools are computed on weighted average basis.

(iv) Real Estate Division: Finished and semi-finished inventory are stated at lower of cost and net realizable value. Cost is computed on average cost basis which includes payments made against agreement to purchase land, development cost direct and attributable towards the specific real estate project and cost of borrowings as stated in note 1 J.

F. Investments:

Long term investments are stated at cost after deducting the provision for diminution in value, if any, other than of a temporary nature. Current investments are stated at lower of cost or fair value.

G. Retirement Benefits:

(i) Gratuity liability is provided under a defined benefit plan, under Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India under an irrevocable trust. The Companys liability towards gratuity is determined on the basis of actuarial valuation done by an independent actuary.

(ii) Contribution to Provident Fund, a defined contribution plan is charged to the Profit and Loss Account.

(iii) Provision for leave encashment liability is made on actuarial valuation as at the Balance Sheet date.

(iv) All other short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered. H. Excise/Custom Duty:

The liability for excise and custom duty in respect of materials lying in factory/bonded premises is accounted for as and when they are cleared / debonded.

I. Foreign Currency Transactions:

Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of transactions. Assets and liabilities, remaining unsettled at the end of the year are translated at the exchange rate prevailing at the end of the year and difference is adjusted to respective accounts in profit & loss account. The exchange gain or loss between forward exchange contract rate and exchange rate at the date of transaction are recognized in profit and loss account over the life of the contract.

Translation of overseas jobs / projects of non-integral foreign operations: -

a) Assets and liabilities at rates prevailing at the end of the year,

b) Income and expenses at the average rate for the year, and

c) Resulting exchange differences are accumulated in foreign currency translation reserve account.

In respect of foreign currency option contracts which are entered into hedge, the cost of these contracts, if any, is expensed over the period of the contract. Any profit or loss arising on settlement or cancellation of currency options is recognized as income or expenses for the period in which settlement or cancellation takes place.

J. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expense in the period in which they are incurred.

K. Impairment of assets:

The carrying amount of assets, is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exist, the recoverable amount of the assets is estimated. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating units exceeds its recoverable amount. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount and recognized in compliance with AS-28.

L. Taxes on Income:

a) Tax on income for the current period is determined on the basis of estimated taxable income and tax credit computed in accordance with the provisions of the Income Tax Act, 1961.

b) Deferred tax is recognized on timing difference between the accounting income and the estimated taxable income for the period and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

c) Deferred tax assets which arise mainly on account of unabsorbed losses or unabsorbed depreciation are recognized and carried forward only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

M. Use of Estimates:

The presentation of financial statements requires certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized.

N. Deferred Revenue Expenses: Preliminary expenses incurred are charged to revenue.

O. Provisions, Contingent Liabilities and Contingent Assets:

i) Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and that probably requires an outflow of resources.

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

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