Accounting Policies of Nitin Fire Protection Industries Ltd. Company

Mar 31, 2014

(a) Fixed Assets and capital work in progress

(i) Tangible Assets are stated at acquisition cost, net of accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realisable value and are shown separately in the financial statements. Any expected loss is recognised immediately in the Statement of Profit and Loss. Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets which are carried at cost are recognised in the Statement of Profit and Loss.

(ii) Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortised on a straight line basis over their estimated useful lives. A rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use is considered by the Management. The amortisation period and the amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly. Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognised as income or expense in the Statement of Profit and Loss.

(iii) Capital work in progress (CWIP) & intangible assets under development includes cost of exploratory wells in progress, cost of fixed assets not ready to use and interest on loans attributable to the acquisition of qualifying fixed assets up to the date of their commissioning, if any.

(iv) Machinery spares which can be used only in connection with an item of fixed asset and whose use is not of regular nature are capitalised and written off over the estimated useful life of the relevant asset. The written down value of such spares is charged to the Statement of Profit and Loss on issue for consumption.

(b) Depreciation, amortisation and impairment:

(i) Depreciation-tangibles:

Depreciation on fixed assets is provided on written down value method in accordance with the provisions of Section 205(2) (b) of the Act in the manner and at the rates specified in Schedule XIV to the Act. Depreciation on additions/deductions is calculated pro rata from/to the number of days of additions/deductions. In respect of an asset for which impairment loss is recognised, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. In case of revalued assets, depreciation is computed on such revalued amounts and an appropriate amount transferred from revaluation reserve to Statement of Profit and Loss. Cost of leasehold land is amortised in proportion to the period of lease. Individual assets costing less than Rs. 5,000 are depreciated in full in the year of acquisition.

(ii) Amortisation-intangibles:

Intangible assets are initially measured at cost and amortised so as to reflect the pattern in which the asset''s economic benefits are consumed.

Expenditure on computer software is amortised on straight line method over a period of two years.

(iii) Impairment of assets:

The carrying amounts of fixed assets are reviewed at each Balance Sheet date to determine if there is any indication of impairment based on internal/external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(c) Investments:

Trade investments are investments made to enhance the Company''s business interests. Investments those are readily realisable and intended to be held for not more than a year are classified as "Other Current Assets". All other investments are classified as non-current (long term) investments.

Non-current investments including investments in subsidiaries (profit/loss earned or sustained by subsidiaries is not recognized in the books of account) and an associate are carried at cost and provisions recorded to recognise any declines, other than temporary, in the carrying amount of each investment. Cost of overseas investment comprises the Indian Rupee Value of the consideration paid for the investment.

(d) Inventories:

"Inventories are valued as follows:

Items of inventories are valued at lower of cost, computed on First In First Out basis and net realisable value. Such costs include material cost and other costs incurred in bringing the goods to their present location and condition. Goods in transit are valued at cost, which represents the costs incurred up to the stage at which the goods are in transit."

(e) Revenue recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and it can be reliably measured.

(i) Revenue from domestic sales is recognised on dispatch, which coincides with transfer of significant risks and rewards to customers and stated net of taxes and returns, as applicable. Revenue from exports is recognised when the significant risks and rewards of ownership of goods have passed to customers.

(ii) Fixed price contracts: Contract revenue is recognized only to the extent of cost incurred till such time the outcome of the job cannot be ascertained reliably. When the outcome of the contract is ascertained reliably contract revenue is recognized at cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date to the total estimated contract costs.

(iii) Income from services rendered on project related activities is recognised on due dates of the relevant contracts and is exclusive of service tax, wherever recovered.

(iv) Liquidated damages/penalties, if any, are provided based on management''s assessment of the estimated liability, as per contractual terms and/or acceptance.

(v) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

(vi) The Company is entitled to refund of Special Additional Duty paid on imported goods traded or consumed in Company''s activities within the prescribed time limit. Accordingly, refund is accrued on sale/consumption of such goods.

(vii) Dividend income is recognised when the right to receive dividend is established.

(f) Taxation:

(i) Tax expense comprises current tax and deferred tax charge or credit.

(a) Current tax is measured at the amounts expected to be paid to the Tax Authorities in accordance with the provisions of the Income Tax Act, 1961 prevailing for the relevant assessment year.

(b) Deferred tax charge or credit is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax charge or credit is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet. In respect of deferred tax charge or credit resulting from timing differences, which originate during the tax holiday period but is expected to reverse after such tax holiday period, is recognised in the year in which the timing differences originate using the tax rates and laws enacted or substantively enacted at the Balance Sheet date.

(ii) Tax on distributed profits payable is as per the provisions of Section 115O of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax regarded as tax on distribution of profits issued by the ICAI and is not considered in determination of the profits for the year.

(g) Cash flow statement:

The cash flow statement is prepared by the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and presents the cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances with banks.

(h) Foreign currency transactions:

(i) Initial recognition:

Transactions for import/export of goods are recorded at a rate notified by the customs authorities for invoice purposes. Other foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion:

Monetary items are translated at the closing exchange rate as on the date of the Balance Sheet and non-monetary items are reported using the exchange rate that existed on the date of the transaction.

(iii) Exchange differences:

Exchange differences arising on settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year or reported in the previous financial statements are recognised as income or expenses in the year in which they arise and disclosed as a net amount in the financial statements.

(i) Employee benefits:

(i) Employee benefits in the form of provident and family pension fund are defined contribution schemes and the contributions are charged to the Statement of Profit and Loss of the year when the contributions to the funds are due. The Company has no other obligations other than the contributions payable.

(ii) The present value of the obligation of gratuity is determined based on an actuarial valuation conducted by an independent actuary, using the projected unit credit method. Actuarial gains and losses on such valuation are recognised immediately in the Statement of Profit and Loss. The fair value of plan assets is administered by Life Insurance Corporation of India, is reduced from gross obligation under the defined benefit plan, to recognised the obligation on a net basis value.

(j) Earnings per share:

The basic earnings per share is computed by dividing the net profit or loss attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) and the weighted average number of equity shares outstanding during the year are adjusted for effects of all dilutive potential equity shares, except where the results are anti-dilutive. The number of shares and potentially dilutive equity shares are adjusted for share splits and bonus shares issued including for changes effected prior to the approval of the financial statements by the Board of Directors.

(k) Provisions, contingent liabilities and contingent assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the Notes to the Financial Statements. Contingent assets are neither recognised nor disclosed in the financial statements.

(l) Operating leases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight line basis over the lease period unless another systematic basis is more representative of the time pattern of the users benefit.

(m) Exploration and Development Costs:

The Company follows successful efforts method for accounting of oil & gas exploration and production activities, in respect of its participating interest in un-incorporated joint venture which includes:

(i) Survey costs are recognised as revenue expenditure in the year in which these are incurred.

(ii) Cost of exploratory wells is carried as exploratory wells in progress. Such exploratory wells in progress are capitalised in the year in which the producing property is created or is written off in the year when determined to be dry/abandoned.

(iii) All wells appearing as exploratory wells in progress which are more than two years old from the date of completion of drilling are charged to Statement of Profit and Loss, except those wells which have proved reserves and the development of the fields in which the wells are located has been planned.

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Mar 31, 2013

(a) Fixed Assets and capital work in progress

(i) Tangible Assets are stated at acquisition cost, net of accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realisable value and are shown separately in the financial statements. Any expected loss is recognised immediately in the Statement of Profit and Loss. Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets which are carried at cost are recognised in the Statement of Profit and Loss.

(ii) Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortised on a straight line basis over their estimated useful lives. A rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use is considered by the management. The amortisation period and the amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly. Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount ofthe asset and recognised as income or expense in the Statement of Profit and Loss.

(iii) Capital work in progress (CWIP) & intangible assets under development includes cost of exploratory wells in progress, cost of fixed assets not ready to use and interest on loans attributable to the acquisition of qualifying fixed assets up to the date of their commissioning, if any.

(iv) Machinery spares which can be used only in connection with an item of fixed asset and whose use is not of regular nature are capitalised and written off over the estimated useful life of the relevant asset. The written down value of such spares is charged to the Statement of Profit and Loss on issue for consumption.

(b) Depreciation, amortisation and impairment:

(i) Depreciation-tangibles:

Depreciation on fixed assets is provided on written down value method in accordance with the provisions of Section 205(2) (b) of the Act in the manner and at the rates specified in Schedule XIV to the Act. Depreciation on additions/deductions is calculated pro rata from/to the number of days of additions/deductions. In respect of an asset for which impairment loss is recognised, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. In case of revalued assets, depreciation is computed on such revalued amounts and an appropriate amount transferred from revaluation reserve to statement of profit and loss. Cost of leasehold land is amortised in proportion to the period of lease. Individual assets costing less than Rs.5,000 are depreciated in full in the year of acquisition.

(ii) Amortisation-intangibles:

Intangible assets are initially measured at cost and amortised so as to reflect the pattern in which the asset''s economic benefits are consumed.

Expenditure on computer software is amortised on straight line method over a period of two years.

(iii) Impairment of assets:

The carrying amounts of fixed assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on internal/external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(c) Investments:

Trade investments are investments made to enhance the Company''s business interests. Investments those are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as non-current (long term) investments.

Non-current investments including investments in subsidiaries (profit/loss earned or sustained by subsidiaries is not recognized in the books of account) and an associate are carried at cost and provisions recorded to recognize any declines, other than temporary, in the carrying amount of each investment. Cost of overseas investment comprises the Indian Rupee Value of the consideration paid for the investment.

(d) Inventories:

Inventories are valued as follows: Items of inventories are valued at lower of cost, computed on FIFO basis and net realisable value. Such costs include material cost and other costs incurred in bringing the goods to their present location and condition. Goods in transit are valued at cost, which represents the costs incurred up to the stage at which the goods are in transit.

(e) Revenue recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and it can be reliably measured.

(i) Revenue from domestic sales is recognised on dispatch, which coincides with transfer of significant risks and rewards to customers and stated net of taxes and returns, as applicable. Revenue from exports is recognised when the significant risks and rewards of ownership of goods have passed to customers.

(ii) Fixed price contracts: Contract revenue is recognized only to the extent of cost incurred till such time the outcome of the job cannot be ascertained reliably. When the outcome of the contract is ascertained reliably contract revenue is recognized at cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date to the total estimated contract costs.

(iii) Income from services rendered on project related activities is recognised on due dates of the relevant contracts and is exclusive of service tax, wherever recovered.

(iv) Liquidated damages/penalties, if any, are provided based on management''s assessment of the estimated liability, as per contractual terms and/or acceptance.

(v) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

(vi) The Company is entitled to refund of Special Additional Duty paid on imported goods traded or consumed in Company''s activities within the prescribed time limit. Accordingly, refund is accrued on sale/consumption of such goods.

(vii) Dividend income is recognised when the right to receive dividend is established.

(f) Taxation:

(i) Tax expense comprises current tax and deferred tax charge or credit.

(a) Current tax is measured at the amounts expected to be paid to the Tax Authorities in accordance with the provisions of the Income Tax Act, 1961 prevailing for the relevant assessment year.

(b) Deferred tax charge or credit is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax charge or credit is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods in the statement of profit and loss and the cumulative effect thereof is reflected in the Balance Sheet. In respect of deferred tax charge or credit resulting from timing differences, which originate during the tax holiday period but is expected to reverse after such tax holiday period, is recognised in the year in which the timing differences originate using the tax rates and laws enacted or substantively enacted at the balance sheet date.

(ii) Tax on distributed profits payable is as per the provisions of Section 115O of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax regarded as tax on distribution of profits issued by the ICAI and is not considered in determination of the profits for the year.

(g) Cash flow statement:

The cash flow statement is prepared by the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and presents the cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances with banks.

(h) Foreign currency transactions:

(i) Initial recognition:

Transactions for import/export of goods are recorded at a rate notified by the customs authorities for invoice purposes. Other foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date ofthe transaction.

(ii) Conversion:

Monetary items are translated at the closing exchange rate as on the date of the balance sheet and non-monetary items are reported using the exchange rate that existed on the date ofthe transaction.

(iii) Exchange differences:

Exchange differences arising on settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year or reported in the previous financial statements are recognised as income or expenses in the year in which they arise and disclosed as a net amount in the financial statements.

(i) Employee benefits:

(i) Employee benefits in the form of provident and family pension fund are defined contribution schemes and the contributions are charged to the statement of profit and loss of the year when the contributions to the funds are due. The Company has no other obligations other than the contributions payable.

(ii) The present value ofthe obligation of gratuity is determined based on an actuarial valuation, using the Projected unit credit method.

Actuarial gains and losses on such valuation are recognised immediately in the statement of profit and loss. The fair value of plan assets is administered by Life Insurance Corporation of India, is reduced from gross obligation under the defined benefit plan, to recognised the obligation on a net basis value.

(j) Earnings per share:

The basic earnings per share is computed by dividing the net profit or loss attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) and the weighted average number of equity shares outstanding during the year are adjusted for effects of all dilutive potential equity shares, except where the results are anti-dilutive. The number of shares and potentially dilutive equity shares are adjusted for share splits and bonus shares issued including for changes effected prior to the approval ofthe financial statements by the Board of Directors.

(k) Provisions, contingent liabilities and contingent assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes to the Financial Statements. Contingent assets are neither recognized nor disclosed in the financial statements.

(l) Operating leases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight line basis over the lease period unless another systematic basis is more representative ofthe time pattern of the users benefit.

(m) Exploration and Development Costs:

The Company follows successful efforts method for accounting of oil & gas exploration and production activities, in respect of its participating interest in un-incorporated joint venture which includes:

(i) Survey costs are recognized as revenue expenditure in the year in which these are incurred.

(ii) Cost of exploratory wells is carried as exploratory wells in progress. Such exploratory wells in progress are capitalized in the year in which the producing property is created or is written off in the year when determined to be dry/abandoned.

(iii) All wells appearing as exploratory wells in progress which are more than two years old from the date of completion of drilling are charged to Statement of Profit and Loss except those wells which have proved reserves and the development of the fields in which the wells are located has been planned.

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Mar 31, 2012

(a) Fixed Assets and capital work in progress:

(i) Fixed assets are stated at cost of acquisition/installation or at revalued amounts, net of accumulated depreciation, amortisation and impairment losses, if any. Cost comprises the purchase price and other attributable costs of bringing the asset to their working condition for their intended use.

(ii) Capital work in progress (CWIP) includes cost of fixed assets not ready to use and interest on loans attributable to the acquisition of qualifying fixed assets upto the date of their commissioning, if any.

(iii) Machinery spares which can be used only in connection with an item of fixed asset and whose use is not of regular nature are capitalised and written off over the estimated useful life of the relevant asset. The written down value of such spares is charged to the Statement of Profit and Loss on issue for consumption.

(b) Depreciation, amortisation and impairment:

(i) Depreciation-tangibles:

Depreciation on fixed assets is provided on written down value method in accordance with the provisions of Section 205(2) (b) of the Act in the manner and at the rates specified in Schedule XIV to the Act. Depreciation on additions/deductions is calculated pro rata from/to the number of days of additions/deductions. In respect of an asset for which impairment loss is recognised, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. In case of revalued assets, depreciation is computed on such revalued amounts and an appropriate amount transferred from revaluation reserve to statement of profit and loss. Cost of leasehold land is amortised in proportion to the period of lease. Individual assets costing less than Rs.5,000 are depreciated in full in the year of acquisition.

(ii) Amortisation-intangibles:

Intangible assets are initially measured at cost and amortised so as to reflect the pattern in which the asset's economic benefits are consumed. Expenditure on computer software is amortised on straight line method over a period of two years.

(iii) Impairment of assets:

The carrying amounts of fixed assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on internal/external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(c) Investments:

Trade investments are investments made to enhance the Company's business interests. Investments those are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as non-current (long term) investments.

Non-current investments including investments in subsidiaries (profit/loss earned or sustained by subsidiaries is not recognized in the books of account), an associate and in a non-integrated un-incorporated joint venture are carried at cost and provisions recorded to recognize any declines, other than temporary, in the carrying amount of each investment. Cost of overseas investment comprises the Indian Rupee Value of the consideration paid for the investment.

(d) Inventories:

Inventories are valued as follows:

Items of inventories are valued at lower of cost, computed on FIFO basis and net realisable value. Such costs include material cost and other costs incurred in bringing the goods to their present location and condition.

Goods in transit are valued at cost, which represents the costs incurred upto the stage at which the goods are in transit.

(e) Revenue recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and it can be reliably measured.

(i) Revenue from domestic sales is recognised on dispatch, which coincides with transfer of significant risks and rewards to customers and stated net of taxes and returns, as applicable. Revenue from exports is recognised on the date of bill of lading and includes foreign exchange fluctuation on exports.

(ii) Income from services rendered on project related activities is recognised on due dates of the relevant contracts and is exclusive of service tax, wherever recovered.

(iii) Liquidated damages/penalties, if any, are provided based on management's assessment of the estimated liability, as per contractual terms and/or acceptance.

(iv) Surplus on sale of investments in subsidiaries is computed on the basis of the average carrying amount of the investment. Other income is accounted on accrual basis as and when the right to receive arises.

(v) The Company is entitled to refund of Special Additional Duty paid on imported goods traded or consumed in Company's activities within the prescribed time limit. Accordingly, refund is accrued on sale/consumption of such goods.

(f) Taxation:

(i) Tax expense comprises current tax and deferred tax charge or credit.

(a) Current tax is measured at the amounts expected to be paid to the Tax Authorities in accordance with the provisions of the Income Tax Act, 1961 prevailing for the relevant assessment year.

(b) Deferred tax charge or credit is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax charge or credit is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods in the statement of profit and loss and the cumulative effect thereof is reflected in the Balance Sheet. In respect of deferred tax charge or credit resulting from timing differences, which originate during the tax holiday period but is expected to reverse after such tax holiday period, is recognised in the year in which the timing differences originate using the tax rates and laws enacted or substantively enacted at the balance sheet date.

(ii) Tax on distributed profits payable is as per the provisions of Section 115O of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax regarded as tax on distribution of profits issued by the ICAI and is not considered in determination of the profits for the year.

(g) Cash flow statement:

The cash flow statement is prepared by the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and presents the cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances with banks.

(h) Foreign currency transactions:

(i) Initial recognition:

Transactions for import/export of goods are recorded at a rate notified by the customs authorities for invoice purposes. Other foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion:

Monetary items are translated at the closing exchange rate as on the date of the balance sheet and non-monetary items are reported using the exchange rate that existed on the date of the transaction.

(iii) Exchange differences:

Exchange differences arising on settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year or reported in the previous financial statements are recognised as income or expenses in the year in which they arise and disclosed as a net amount in the financial statements.

(i) Retirement benefits:

Retirement benefits in the form of provident and family pension fund are defined contribution schemes and the contributions are charged to the statement of profit and loss of the year when the contributions to the funds are due. The Company has no other obligations other than the contributions payable.

(j) Earnings per share:

The basic earnings per share is computed by dividing the net profit or loss attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) and the weighted average number of equity shares outstanding during the year are adjusted for effects of all dilutive potential equity shares, except where the results are anti-dilutive. The number of shares and potentially dilutive equity shares are adjusted for share splits and bonus shares issued including for changes effected prior to the approval of the financial statements by the Board of Directors.

(k) Provisions, contingent liabilities and contingent assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes to the Financial Statements. Contingent assets are neither recognized nor disclosed in the financial statements.

(l) Operating leases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight line basis over the lease period unless another systematic basis is more representative of the time pattern of the users benefit.

(m) Accounting for interest in a joint venture:

Interest in a non-integrated un-incorporated joint venture being in the nature of an investment, is accounted as specified in AS-13 'Accounting for Investments'.

(n) Borrowing Costs:

Borrowing cost attributable to the acquisition or construction of qualifying assets, as defined in Accounting Standard 16 on "Borrowing Costs" are capitalized as part of the cost of such assets upto the date when the asset is ready for its intended use. Other borrowing costs are expensed as incurred.

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Mar 31, 2011

[A] Fixed assets:

(i) Fixed assets are stated at cost of acquisition/installation or at revalued amounts, net of accumulated depreciation, amortisation and impairment losses, if any. Cost comprises the purchase price and other attributable costs of bringing the asset to their working condition for their intended use.

(ii) Machinery spares which can be used only in connection with an item of fixed asset and whose use is not of regular nature are capitalised and written off over the estimated useful life of the relevant asset. The written down value of such spares is charged to the profit and Loss Account on issue for consumption.

[B] Depreciation, amortisation and impairment:

(i) Depreciation-tangibles:

Depreciation on fixed assets is provided on written down value method in accordance with the provisions of Section 205(2) (b) of the Act in the manner and at the rates specified in Schedule XIV to the Act. Depreciation on additions/deductions is calculated pro rata from/to the number of days of additions/deductions. In respect of an asset for which impairment loss is recognised, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. In case of revalued assets" depreciation is computed on such revalued amounts and an appropriate amount transferred from revaluation reserve to profit and loss account. Cost of leasehold land is amortised in proportion to the period of lease. Individual assets costing less than Rs.5,000 are depreciated in full in the year of acquisition.

(ii) Amortisation-intangibles:

Intangible assets are initially measured at cost and amortised so as to reflect the pattern in which the asset's economic benefits are consumed.

Expenditure on computer software and technical know how fees are amortised on straight line method over a period of two years.

(iii) Impairment of assets:

The carrying amounts of fixed assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on internal/external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

[C] Investments:

Trade investments are investments made to enhance the Company's business interests. Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments.

Long term investments including investments in subsidiaries (profit/loss earned or sustained by subsidiaries is not recognized in the books of account), an associate and in a non-integrated un-incorporated joint venture are carried at cost and provisions recorded to recognize any declines, other than temporary, in the carrying amount of each investment. Cost of overseas investment comprises the Indian Rupee Value of the consideration paid for the investment.

[D] Inventories: Inventories are valued as follows:

Materials and components are valued at lower of cost, computed on FIFO basis and net realisable value. Such costs include material cost and other costs incurred in bringing the goods to their present location and condition.

Goods in transit are valued at cost, which represents the costs incurred upto the stage at which the goods are in transit.

[E] Revenue recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and it can be reliably measured.

(i) Revenue from domestic sales is recognised on dispatch, which coincides with transfer of significant risks and rewards to customers and statednet of taxes andreturns, as applicable. Revenue from exports is recognised on the date of bill of lading and includes foreign exchange fluctuation on exports.

(ii) Income from services rendered on project related activities is recognised on due dates of the relevant contracts and is exclusive of service tax, wherever recovered

(iii) Liquidated damages/penalties, are provided based on management's assessment of the estimated liability, as per contractual terms and/or acceptance.

(iv) Surplus on sale of investments in subsidiaries is computed on the basis of the average carrying amount of the investment. Other income is accounted on accrual basis as and when the right to receive arises.

(v) The Company is entitled to refund of Special Additional Duty paid on imported goods traded or consumed in Company's activities with in the prescribed time limit. Accordingly refundi is accured on sale/ consumption of such goods.

[F] Taxation:

(i) Tax expense comprises current tax including wealth tax and deferred tax charge or credit.

(a) Current tax including wealth tax are measured at the amounts expected to be paid to the Tax Authorities in accordance with the provisions ofthe Income Tax Act, 1961 prevailing for the relevant assessment year.

(b) Deferred tax charge or credit is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax charge or credit is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods in the profit and loss account and the cumulative effect thereof is reflected in the Balance Sheet. In respect of deferred tax charge or credit resulting from timing differences, which originate during the tax holiday period but is expected to reverse after such tax holiday period, is recognised in the year in which the timing differences originate using the tax rates and laws enacted or substantively enacted at the balance sheet date.

(ii) Tax on distributed profits payable is as per the provisions of Section 1 ISO of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax regarded as tax on distribution of profits issued by the ICAI and is not considered in determination of the prof its for the year.

[G] Cash flow statement:

The cash flow statement is prepared by the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and presents the cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash balance on hand and balances with banks.

[H] Foreign currency transactions and balance:

(i) Initial recognition:

Transactions for import/export of goods are recorded at a rate notified by the customs authorities for invoice purposes. Other foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the transaction.

(ii) Conversion:

Monetary items are translated at the closing exchange rate as on the date of the balance sheet and non-monetary items are reported using the exchange rate that existed on the date of the transaction.

(iii) Exchange Differences:

Exchange differences arising on settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year or reported in the previous financial statements are recognised as income or expenses mthe year in which they arise, takento therelevant revenj; heads in the profit and loss account and disclosed asanet amount in the Notes to the Financial Statements.

[I] Retirement benefits:

(i) Employee Benefits such as salaries, allowances, non-monetary benefits and employee benefits under defined contribution plans such as provident and other funds, which fall due for payment within a period of twelve months after rendering service, are charged as expense to the profit and loss account in the period in which the service is rendered.

(ii) Employee Benefits under defined benefit plans, gratuity which fall due for payment after a period of twelve months from rendering semce or after completion of employment,are measured by the projected unit cost method, on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. TheCompany's obligations recognized in the balance sheet represent the present value of obligations as reduced by the fair value of plan assets, where applicable. Actuarial Gains and losses are recognised immediately in the Profit and Loss Account.

[J] Earnings per share:

The basic earnings per share is computed by dividing the net profit or loss attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) and the weighted average number of equity shares outstanding during the period are adjusted for effects of all dilutive potential equity shares, except where the results are anti-dilutive. The number offhares and potentially dilutive equity shares are adjusted for share splits.

[K] Provisions, contingentliabilities and contingent assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an out flow of resources.Contingent liabilities are not recognised but are disclosed in the Notes to the Financial Statements. Contingent assets are neither recognised nor disclosed in the financial statements.

(L) Operating leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight line basis over the lease periodunless another systematic basis is more representative of the time pattern of the users benefit.

[M] Accountingforinterestin a joint venture:

Interest in a non-integrated un-incorporated joint venture being in the nature of an investment, is accounted as specified in AS-13 Accounting for Investments'.

[N] Borrowing Costs:

Borrowing cost attributable to the acquisition or construction of qualifying assets, as defined in Accounting Standard 16 on "Borrowing Costs" are capitalized as part of the cost of such assets upto the date when the asset is ready for its intended use. Other borrowing costs are expensed as incurred.

[O] Proposed dividend:

Dividend proposed by the directors as appropriation of profits is provided for in the books of account, pending approval of share holders at the annual general meeting.

(P] Miscellaneous expenditure:

Miscellaneous expenditure is charged to revenue in the year of its occurrence.

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Mar 31, 2010

(a) Basis of preparation of financial statements:

(i) The accompanying financial statements have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP), under the historical cost convention (except for revaluation of certain fixed assets) on accrual basis of accounting".GAAP comprises mandatory accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) issued by the Central Government in exercise of the power conferred under sub-section (I) (a) of section 642, therelevantprovisionsof the Ac tandguidehnes issuedbythe Securities and ExchangeBoardofmdia. GAAP also includes other relevant pronouncements of the Institute of Chartered Accountants of India (ICAI). Accounting policies have been consistently applied except where a newly issued accounting standard, if initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hifherto in use. Management evaluates all recently issued or revisedaccounting standards onan ongoing basis.

(ii) The preparation of the financial statements in conformity with GAAP requires the management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the results of operations during the reporting periods. These estimates are based upon the managementsbestknowledgeof currenteventsandactions.Actoalresultscoulddifferfromtheseestimates.

2. Accountingpolicies:

Significant accounting policies are summarised below:

(a) Fixed assets:

(i) Fixed assets are stated at cost of acquisition/installation or at revalued amounts, net of accumulated depreciation, amortisation and impairment losses, if any. Cost comprises the purchase price and other attributable costs of brmging the asset to their workingconditionfortheirintendeduse.

(ii) Machinery spares which can be used only in connection with an item of fixed asset and whose use is not of regular nature are written off over the estimated useful life of the relevant asset. The written down value of such spares is charged to the Profit and LossAccountonissueforconsumption.

(b) Depreciation, amortisation and impairment:

(i) Depreciation-tangibles:

Depreciation onfixed assets isprovided on written downvaluemethodinaccordancewiththeprovisionsofSection205(2)(b) of the Act in the manner and at the rates specified in Schedule XIV to the Act. Depreciation on additions/deductions is calculated pro rata from/to the number of days of additions/deductions. In respect of an asset for which impairment loss is recognised, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. In case of revalued assets" depreciation is computed on such revalued amounts and an appropriate amount transferred from revaluation reserve to profit and loss account. Cost of leasehold land is amortised in proportion to the period of lease. Individual assets costinglessthanRs.5,000aredepreciatedinfullintheyearofacquisition.

(ii) Amortisation-intangibles:

Intangible assets are initially measured at cost and amortised so as to reflect the pattern in which the assets economic benefits are consumed.

Expenditure on computer software and technical know how fees are amortised on written down value method over a period of two years.

(iii) Impairment of assets:

The carrying amounts of fixed assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on internal/external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessmgthevalueinuse,theestimated faturecashflowsarediscountedtothepresentvaluebyusingweightedaveragecostof capital. A previously recognised impairment loss is further provided or reversed depending on changes in circumstances. However, me carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(c) Investments:

Trade investments are investments made to enhance the Companys business interests. Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments.

(i) Long term investments including investments in wholly owned subsidiaries (profit/loss earned or sustained by wholly owned subsidiariesarenotrecogmzedinthebooksofaccount)andinanon4ntegratedun -mcorporatedjomtventurearecarriedatcost and provisions recorded to recognize any declines, other than temporary, in the carrying amount of each investment. Cost of ove 4asinvestment comprises themdianRupeeValueoftheconsiderationpaidforthe investment.

(ii) Current investments are valuedat lower of costandnetrea lizablevalue.

(d) Inventories:

Inventories are valued asfollows:

Materials and components are valued at lower of cost, computed on FIFO basis and net realisable value. Such costs include material costandother cos*"incurred in bringing the goods to their present location and condition.

Goods in transit are valued at cost, which represents the costs incurredupto the stage at which the goods are in transit.

(e) Revenuerecognition:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and it can be reliably measured.

(i) The revenues in respect of project related activities are recognised on percentage completion method as specified in AS-7 Construction Contracts (Revised 2002). Percentage of completion is determined based on surveys of work performed, which is certified by an operating agency appointedby the customer

(ii) Revenue from domestic sales (other than project related activities) is recognised on dispatch which coincides with transfer of significant risks and rewards to customers and stated net of taxes and returns, as applicable. Revenue from exports is recognised on the date of bill of lading and includes foreign exchange fluctuation on exports.

(iii) Income from services rendered onproject related activities is recognised on due dates of the relevant contracts and is exclusive of service tax, wherever recovered

(iv) Dividend income on investments is accounted for when the right to receive the payment is established. Other income is accountedonaccrualbasisasandwhentherighttoreceivearises

(v) The Company is entitled to refund of Special Additional Duty (SAD) paid on imported goods traded or consumed in CompanyWivitieswithmtheprescribedto

(f) Taxation:

(i) Tax expense comprises current tax including wealth tax and deferred tax charge or credit.

(a) Current tax including wealth tax are measured at the amounts expected to be paid to the Tax Authorities in accordance withtheprovisionsofthe Income TaxAct, 1961 prevailing for the relevant assessment year.

(b) Deferred tax charge or credit is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax charge or credit is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods in the profit and loss account and the cumulative effect thereof is reflected in the Balance Sheet. In respect of deferred tax charge or credit resulting from timing differences which originate during the tax holiday period but is expected to reverse after such tax holiday period, is recognised in the year in which the timing differences originate using the tax rates and laws enacted or substantively enacted at the balance sheet date.

(ii) Tax on distributed profits payable is as per the provisions of Section 115 O of the Income Tax Act, 1961 is in accordance with the Guidance Note cm Accounting for Corporate Dividend Tax regarded as tax on distribution of profits issued by the ICAI and isnotconsideredindeterminationoftheprofitsfortheyear.

(g) Cash flow statement:

The cash flow statement is prepared by the Indirect Method set out in AS-3(Revised) Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash balance on hand and balance swith banks.

(h) Foreigncurrencytran saction sand balance:

(i) Initialrecognition:

Transactions for import/export of goods are recorded at a rate notified by the customs authorities for invoice purposes. Other foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between there portmgcurrencyandtheforeigncurrenc yatthetoeofXtransaction.

(ii) Conversion:

Monetary items are translated at the closing exchange rate as on the date of the balance sheet and non monetary items are reportedusingtheexchangeratethatexistedonthedafeofthetransaction.

(iii) Exchange Differences:

Exchange differences arising on settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year or reported in the previous financial statements are recognised as income or expenses in the year in which they arise, takento the relevant revenJ;heads in the profit and loss account and disclosed as a net amount in the Notes to the Financial Statements.

(i) Securities premium account:

Securities premium account represents premium received pursuant to issue of equity shares. Expenses pertaining to issue of equity shares (IPO) are charged to securities premium account.

0) Retirementbeneflts:

(i) Retirement benefits in the form of provident and family pension fund are defined contribution schemes and the contributions are charged to the profit and loss account of the year when the contributions to the funds are due. The Company has no other obligationsotherthanthecontributionspayable.

(ii) Gratuity liability is a defined benefit obligation and is covered under a Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India (LIC) .The gratuity liability is charged to the profit and loss account on the basis of an actuarial valuation on ProjectedUnitCreditMethodcarriedoutbyLIConce in threeyears.

(k) Earningspershare:

The basic earnings per share is computed by dividing the net profit or loss attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) and the weighted average number of equity shares outstanding during the period are adjusted for effects of all dilutive potential equity shares, except where the results are anti-dilutive.

(1) Provisions, contingent liabilities and contingent assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Continent liabilities are not recognised but are disclosed in theNotes to the FinancialStatements.Contingentassetsareneitherrecognisednor disclosed in thefinancial statements.

(m) Accounting for interest in a joint venture:

Interest in a non-integrated un-incorporated joint venture being in the nature of an investment, is accounted as specified in AS-13 Accountingforlnvesrments.

(n) Proposed dividend:

Dividend proposed by the directors as appropriation of profits is provided for in the books of account, pending approval of shareholdersattheannualgeneralmeeting

(o) Miscellaneous expenditure

Preliminary expenses are charged to revenue in the year of its occurrence.