Mar 31, 2023
1 Corporate Information
Tantia Constructions Limited (hereinafter referred to as "Company") is one of the most proficient civil infrastructure solutions providers in India. Incorporated as a private limited Company in 1964 which became public limited Company in 1982, the Company is engaged in executing critical infrastructure projects. It began operations in the railways segment and over the years expanded to six other core infrastructure segments namely roads, urban development, infrastructure and industrial fabrication, power, marine and aviation.
Pursuant to an application made by State Bank of India, the Honâble National Company Law Tribunal, Kolkata bench (hereinafter referred to as "Adjudicating Authority"), vide its order dated 13th day of March 2019, had ordered the commencement of the corporate insolvency resolution process (hereinafter referred to as CIR process") in respect of the company under the provisions of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ''the Code").
During the CIR process, expression of interest was sought against which applications were received, out of which a Consortium of EDCL Infrastructure Limited and Upendra Singh Constructions Private Limited were selected as the "Successful Resolution Applicant". Pursuant to its order (hereinafter referred to as NCLT Order") dated 24th day of February 2020 (hereinafter referred to as the "effective date"), the Adjudicating Authority approved the Resolution Plan (hereinafter referred to as the "Approved Resolution Plan") submitted by the successful Resolution Applicants (hereinafter referred to as the "RA") for the Company under Section 31 of the Code. As per the terms of Section 31 of the Code, the Approved Resolution Plan shall be binding on the Company, its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan. As per the Approved Resolution Plan, a Monitoring Committee (hereinafter referred to as the "MC") has been formed to oversee its implementation and to manage the affairs of the Company as a going concern until the transfer of control of the Company to the Resolution Applicant. During the implementation of the Approved Resolution Plan, the erstwhile Board of Directors stands retired with their powers suspended and the stated MC in charge of the Company for the relevant period.
Considering the above, the financial statements are being presented on a âGoing Concernâ basis.
The financial statements were certified by the Chartered Secretary (Key Managerial Personell of the Company) and members of the MC and taken on record by the MC at the meeting held on 30th May, 2023.
2 Basis of preparation
a) Statement of Compliance
These standalone financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 (hereinafter referred to as the "Act") (to the extent notified) and the Indian Accounting Standards (hereinafter referred to as "Ind AS") notified under the the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereto issued by Ministry of Corporate Affairs under section 133 of the Act. In addition, the guidance notes/ announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment.
These standalone Financial Statements have been prepared under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing standard requires a change in the accounting policy hitherto in use.
b) Functional and presentation currency
The financial statements are presented in Indian Rupees (âRsâ) which is Companyâs presentation currency and amounts have been rounded to the nearest Lakhs, except where otherwise indicated.
c) Basis of preparation
The financial statements have been prepared on historical cost convention on the accrual basis, except for the following items:
(i) Certain financial assets and financial liabilities measured at fair value;
(ii) Employee''s defined benefit plan as per actuarial valuation.
Fair value is the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions, regardless of whether that price is directly observable or estimated using another valuation technique. In determining 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 valuing the asset or liability at the measurement date.
For recognition of Income and Expenses, mercantile system of accounting is followed except in case of insurance claims where on the ground of prudence and as well as uncertainty in realization, the same is accounted for as and when accepted/ received.
d) Use of judgments and estimates
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively.
Critical accounting judgements and key sources of estimation uncertainty: Key assumptions -
(i) Useful lives of Property, plant and equipment:
The Company uses its technical expertise along with historical and industry trends for determining the economic life of an asset/ component of an asset. The useful lives are reviewed by management periodically and revised, if appropriate. In case of a revision, the unamortised depreciable amount is charged over the remaining useful life of the assets.
(ii) Fair value measurement of financial instruments:
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using certain valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.
(iii) Defined benefit plans:
The cost of the defined benefit plan includes gratuity and the present value of the gratuity obligation are determined using actuarial valuations using projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
(iv) Recognition and measurement of provisions and contingencies:
The certain key assumptions about the likelihood and magnitude of an outflow of resources. Provision is towards known contractual obligation, litigation cases and pending assessments in respect of taxes, duties and other levies, if any, in respect of which management believes that there are present obligations and the settlement of such obligations are expected to result in outflow of resources, to the extent provided for.
e) Measurement of fair values
A number of the Company''s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
The Company has an established control framework with respect to the measurement of fair values.
The management regularly reviews significant unobservable inputs and valuation adjustments.
Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
3 Significant accounting policies
a) Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1 - Presentation of Financial Statements based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
Operating cycle for the business activities of the company covers the duration of the specific project/ contract/ product line/ service 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 lines of business.
b) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
i. Financial Assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Trade receivables are initially measured at transaction price. Regular way purchase and sale of financial assets are accounted for at trade date.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in three categories:
⢠Amortised cost
⢠Fair value through other comprehensive income (FVTOCI)
⢠Fair value through profit or loss (FVTPL)
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
Financial assets at amortised cost
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The effective interest rate (EIR) amortisation is included in finance income in the profit or loss.
Financial assets at FVTOCI
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI).
Financial assets at FVTPL
A financial asset which is not classified in any of the above categories are measured at FVTPL.
Financial assets included within the FVTPL category are measured at fair value with all changes recognised in the Statement of Profit & Loss.
Other equity investments
All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in âOther Comprehensive Incomeâ.
Investments in Subsidiaries, Associates and Joint-Ventures
The Company has accounted for its equity instruments in Subsidiaries, Associates and Joint-Ventures at cost except where Investments are accounted for at cost shall be accounted in accordance with Ind AS 105, wherein they are classified as assets held for sale.
Derecognition
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109.
ii. Financial liability
Initial recognition and measurement
Financial liabilities are initially recognised at fair value plus any transaction cost that are attributable to the acquisition of the financial liabilities except financial liabilities at fair value through profit or loss which are intially measured at fair value.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified in following categories:
⢠Financial liabilities through profit or loss (FVTPL)
⢠Financial liabilities at amortised cost
Financial liabilities through FVTPL
A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss.
Financial liabilities at amortised cost
Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and any gain or loss on derecognition are recognised in profit or loss.
Interest bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximates fair value due to the short maturity of these instruments.
Financial guarantee contract
Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation.
Derecognition
A financial liability (or a part of a financial liability) is derecognized from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
iii. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
c) Property, Plant and Equipment
i. Recognition and measurement
Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and accumulated impairment losses, if any. The cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located. Borrowing costs directly attributable to the acquisition or construction of those qualifying property, plant and equipment, which necessarily take a substantial period of time to get ready for their intended use, are capitalised.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate components of property, plant and equipment.
Assets retired from active use and held for disposal are stated at the lower of their net book value and net realisable value and shown under âOther current assetsâ.
A fixed asset is eliminated from the financial statements on disposal or when no further benefit is expected from its use and disposal. Any gain or loss on disposal of an item of property, plant and equipment is recognised in statement of profit or loss.
Expenses incurred relating to project, net of income earned during the project development stage prior to its intended use, are considered as pre - operative expenses and disclosed under Capital Work - in - Progress.
ii. Subsequent expenditure
Subsequent expenditure is capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Company. Ongoing repairs and maintenance are expensed as incurred.
iii. Depreciation and amortisation Tangible Assets
Depreciation on fixed assets is provided based on useful life of the assets as prescribed in Schedule - II to the Companies Act, 2013.
Intangible Assets
These are amortized over the best estimates of its useful economic life as decided by the management.
d) Intangible Assets
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and any accumulated impairment losses. They are amortised over the best estimates of its useful economic life as decided by the management. An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal.
e) Inventories
i) Stock of construction materials, stores and spares and fuel (except for those relating to Construction activities) are valued at cost (weighted average basis) or net realizable value whichever is lower.
ii) Cost of construction materials, stores, spares and fuel used in construction activities are valued at cost (weighted average basis).
iii) Work-in-progress is valued at cost and reflects the work done but not certified.
iv) The cost of inventories comprises all cost of purchase, cost of conversion and other incidental cost incurred in bringing the inventories to their present location and condition.
v) Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and estimated cost necessary to make the sale.
f) Impairment
i. Impairment of financial instruments: financial assets
Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financials assets in FVTPL category.
For financial assets other than trade receivables, as per Ind AS 109, the Company recognises 12 month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. The Company''s trade receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall.
The impairment losses and reversals are recognised in Statement of Profit and Loss.
ii. Impairment of non-financial assets
The Companyâs non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest Company of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs. If any such indication exists the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
An impairment loss is recognised in the Statement of Profit and Loss to the extent, assetâs carrying amount exceeds its recoverable amount. The recoverable amount is higher of an assetâs fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pretax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
g) Employee Benefits
i. Short-term employee benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
ii. Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company makes specified monthly contributions towards Provident Fund, ESI and Medical. The Companyâs contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
iii. Defined benefit plans
I. Gratuity
Liability on account of Gratuity is:
- Covered through recognized gratuity fund managed by Life Insurance Corporation of India and contributions are charged to revenue; and
- Balance if any, is provided on the basis of valuation of the liability by an independent Actuary as at the year end.
II. Leave Encashment
Liability for leave encashment is treated as a long term liability and is provided on the basis of valuation by an independent Actuary as at the year end.
Re-measurement of defined benefit plans in respect of post-employment are charged to the Other Comprehensive Income.
iv. Compensated absences
The Company has a policy on compensated absences and as per policy employees can carry forward unutilised accrued compensated absences and utilise it in next service period or receive cash compensation. Since the compensated absences fall due wholly within twelve months after the end of the period in which the employees render the related service and are also expected to be utilised wholly within twelve months after the end of such period, the benefit is classified as a current employee benefit. The Company records an obligation for such compensated absences in the year in which the employee renders the services that increase this entitlement. The obligation is measured at actuals at the year end as per the policy of the Company. The expected cost of accumulating compensated absences is determined by the management at each balance sheet date measured based on the amount expected to be paid/ availed as a result of the unused entitlement that has accumulated at the balance sheet date. Non-accumulating compensated absences are recognized in the period in which the absences occur.
h) Provisions (other than for employee benefits), Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement and 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 to settle the obligation and when a reliable estimate of the amount of the obligation can be made.
Contingent liabilities are disclosed only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. The Company does not recognize a contingent liability but only makes disclosures for the same in the Financial Statements.
Contingent assets where it is probable that future economic benefits will flow to the Company are not recognised but disclosed in the financial statements.
i) Revenue Recognition
On Construction Contracts:
The companies recognizes revenue when the control of the goods and services is transferred to the customer as against the transfer of risk and rewards. As per the Company''s current revenue recognition practices, transfer of control happens at the same point as transfer of risk and rewards thus not effecting the revenue recognition. The amount of revenue recognised reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company has adopted the modified transitional approach as permitted by the standard under which the comparative financial information is not restated. The accounting changes required by the standard are not having material effect on the Company financial statements and no transitional adjustment is recognised in retained earnings at April 1, 2018, though there would be additional disclosure requirements for the company to comply with.
Contract modifications are accounted for when additions, deletions or changes are approved either to the scope or price or both. Goods/services added that are not distinct are accounted for on a cumulative catch up basis. Goods / services those that are distinct are accounted for prospectively as a separate contract, if the additional goods/services are priced at the standalone selling price else as a termination of the existing contract and creation of a new contract . In cases where the additional work has been approved but the corresponding change in price has not been determined, the recognition of revenue is made for an amount with respect to which it is highly probable that a significant reversal will not occur. If the consideration promised in a contract includes a variable amount, this amount is recognised only to the extent that it is highly probable that a significant reversal in the amount recognised will not occur.
On Sale of Goods:
- In case of sale of goods, the transfer of property in goods results in the transfer of significant risks and rewards of ownership to the buyer and revenue is recognized at the time of transfer of property. Sales are net of taxes, returns, trade discounts etc.
j) Recognition of dividend income and interest income Dividends
Dividend income is recognised when the Companyâs right to receive the payment is established, which is generally when shareholders approve the dividend.
Interest income
For all debt instruments measured either at amortised cost or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses. Interest income is included in finance income in the Statement of Profit and Loss.
k) Leases
Lease income from operating leases (excluding amount for services on maintenance, etc. and contingent rentals) where the Company is a lessor is recognized in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases and another systematic basis is more representative of the time pattern in which userâs benefit derived from the leased asset is diminished. Contingent rent is recognized in the period when earned. The respective leased assets are included in the balance sheet according to the nature of the asset.
l) Income tax
Income tax expense comprises of current and deferred tax. Current tax and deferred tax is recognized in the Statement of Profit or Loss except to the extent that it relates to a business combination, or items recognized directly in equity or in OCI.
i. Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, on the basis of taxable profits computed for the current accounting period in accordance with the Income Tax Act, 1961, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
ii. Deferred tax
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 and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
m) Borrowing costs
Borrowing costs are interest and other costs incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.
n) Foreign currencies transactions
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date. All other foreign currency assets and liabilities are stated at the rates prevailing at the date of transaction other than those covered by forward contracts, which are stated at the contracted rate. Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss.
o) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM").
The board of directors of the Company, which has been identified as being the CODM, generally assesses the financial performance and position of the Company and makes strategic decisions, however as per Approved Resolution Plan the power of Board of Directors remain suspended and in its place the Monitoring Committee is empowered with the power.
p) Earnings per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q) Interest in Joint venture
In respect of its interest as joint venture the company recognise its interest in a joint venture as an investment and accounts for the investment in accordance with Ind AS 28 "Investment in associates and joint ventures''.
Mar 31, 2016
A. Corporate Information
Tantia Constructions Limited (''The Company'') is one of the most experienced civil infrastructure solutions providers in India. Incorporated as a private limited Company in 1964 which became public limited Company in 1982, the Company is engaged in executing critical infrastructure projects. It began operations in the railways segment and over the years extended to seven core infrastructure segments of railways, roads, urban development, infrastructure and industrial fabrication, power, marine and aviation.
B. Summary of significant accounting policies
1. Basis of Preparation of Financial Statements
The Financial Statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and in accordance with Generally Accepted Accounting Principles (Indian GAAP) and comply in all material aspect with the applicable Accounting Standards notified under section 211 (3C) (which continues to be applicable in term of general circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act 2013) and other relevant provisions of the Companies Act, 1956.
For recognition of Income and Expenses, mercantile system of accounting is followed except in case of insurance claims where on the ground of prudence and as well as uncertainty in realization, the same is accounted for as and when accepted/received.
The accounting policies adopted in the preparation of Financial Statements are consistent with those of the previous year.
2. Use of Estimates:
The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
3. Change in Accounting Policies :
There is no change in accounting policies during the current financial year.
4. Inventories
a) Stock of Construction materials, stores and spares and fuel (except for those relating to Construction activities) are valued at cost (weighted average basis) or net realizable value whichever is lower.
b) Cost of Construction materials, stores, spares and fuel used in construction activities are valued at cost (weighted average basis).
c) Work-in-progress is valued at cost and reflects the work done but not certified.
d) The cost of inventories comprises all cost of purchase, cost of conversion and other incidental cost incurred in bringing the inventories to their present location and condition.
e) Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and estimated cost necessary to make the sale.
5. Fixed Assets
Tangible Fixed Assets are stated at cost of acquisition inclusive of duties (net of VAT where input credit is availed) together with any incidental costs for bringing the asset to its working condition for its intended use less accumulated depreciation/amortization and impairment losses, if any.
Capital work in progress is stated at amounts spent up to the date of the Financial Statement.
Intangible assets comprise of License fees and other implementation cost of software (SAP) acquired for in-house use and is net of amortization. Intangible assets under development are stated at cost.
6. Depreciation / Amortization Tangible Assets
Depreciation on fixed assets is provided on Straight Line Method (SLM) and is provided based on useful life of the assets as prescribed in Schedule - II to the Companies Act, 2013.
Intangible Assets
These are amortized over the best estimates of its useful life.
7. Impairment of Assets
On annual basis the Company makes an assessment of any indicator that may lead to impairment of assets. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. If any indication of such impairment exists, the reasonable amounts of those assets are estimated and impairment loss is recognized. The impairment loss recognized in prior accounting period is adjusted if there has been a change in the estimate of recoverable amount.
8. Revenue Recognition On Construction Contracts:
- The contract revenue is recognized by reference to the stage of completion of the contract activity at the reporting date of the Financial Statements on the basis of percentage completion method.
- The stage of completion of contracts is measured by reference to the proportion that the contract costs incurred for work completed up to the reporting date bear to the estimated total contract costs for each contract.
- Losses on contracts are fully accounted for as an expense immediately when it is certain that the total contract costs will exceed the total contract price. Total contract cost is ascertained on the basis of actual cost and cost to be incurred for the completion of contracts in progress which is determined by the management based on technical data, forecast and estimates of expenditure to be incurred in future.
- Price escalation claims and other additional claims are recognized as revenue when:
i. They are realized or receipts thereof which are mutually settled or reasonably ascertained.
ii. Negotiations with the client have reached such an advanced stage that there is reasonable certainty that the client will accept the claim.
ii. Amount that is probable, if accepted by the client, to be measured reliably by the Company.
On Sale of Goods:
- In case of sale of goods, the transfer of property in goods results in the transfer of significant risks and rewards of ownership to the buyer and revenue is recognized at the time of transfer of property.
9. Foreign Currency Transactions
Transactions in foreign currency are recorded using the exchange rate prevailing at the date of transactions. Monetary assets and liabilities related to foreign currency transactions unsettled at the end of the year are translated at year end rate. All other foreign currency assets and liabilities are stated at the rates prevailing at the date of transaction other than those covered by forward contracts, which are stated at the contracted rate. Exchange differences arising on foreign currency transactions are recognized in the Statement of Profit & Loss.
10. Investment
Long-term investments are stated at cost, provision is made to recognize a decline, if any, other than temporary, in the value of long term investments. Investments in Joint Ventures are stated at cost.
Current investments being readily realizable and intended to be held for less than a year are carried at cost or market rate whichever is lower, on individual investment basis.
11. Employee Benefit (Retirement and Post Employment Benefit)
Liability for employee benefits, both short and long term, for present and past services which are due as per the terms of employment are recorded in accordance with Accounting Standard (AS) - 15 "Employee Benefits" notified by Companies (Accounting Standards) Rules, 2006.
I. Gratuity
Liability on account of Gratuity is:
- Covered through recognized gratuity fund managed by Life Insurance Corporation of India and contributions are charged to revenue; and
- Balance if any, is provided on the basis of valuation of the liability by an independent Actuary as at the year end.
II. Provident Fund, ESI and Medical
Contribution to provident fund (defined contribution plan) and ESI made to government administered Provident Fund and ESI are recognized as expenses. The company has no further obligation beyond its monthly contribution. Those employees who are not covered under ESI scheme (as stated in the Act) are eligible for medical re-imbursement as per the HR policy of the Company.
III. Leave Encashment
Liability for leave encashment is treated as a long term liability and is provided on the basis of valuation by an independent Actuary as at the year end.
12. Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the Statement of Profit and Loss.
13. Segment Reporting Identification of Segments
The Company has identified that its business segments are the primary segments. The Company''s businesses are organized and managed separately according to the nature of activity, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.
Allocation of common costs
Common allocable costs are allocated to each segment on case to case basis applying the ratio, appropriate to each relevant case. Revenue and expenses, which relates to the enterprise as a whole and are not allocable to segment on a reasonable basis, have been included under the head "Unallocated - Common".
Segment Policies
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
14. Earnings Per Share
The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS) - 20, "EPS" notified by Companies (Accounting Standards) Rules, 2006. Basic earnings per equity share is calculated by dividing the net profit for the year attributable to equity share holders by the weighted average number of the equity shares outstanding during the year. Diluted earnings per share is calculated by dividing the net profit during the year, adjusted for the effects of all dilutive potential equity share, attributable to the equity shareholders by the weighted average number of the equity shares and dilutive equity potential equity shares outstanding during the year except where the results are anti dilutive.
15. Taxation
Tax expenses comprise of current tax and deferred tax.
Current tax is determined in respect of taxable income for the year based on Income Tax Act 1961. Deferred tax is recognized, subject to consideration of prudence, on timing difference (being the difference between taxable income and accounting income that originates in one period and are capable of being reversed in one or more subsequent years) and is measured using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date and are recognized only if there is reasonable certainty that they will be realized.
16. Accounting of Joint Venture contracts
a) In respect of its interest in Jointly Controlled Operations, the Company recognizes the asset that it controls and the liability that it incurs along with the expenses that it incurs and the income it earns from the Joint Venture in accordance with Accounting Standards (AS) 27.
b) In respect of its interest in the Jointly Controlled Entity, the same is recognized as an Investment in accordance with Accounting Standard (AS) 13, "Accounting for Investment".
17. Provision, Contingent Liabilities & 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 Financial Statement. Disputed demands in respect of Income Tax and Sales Tax etc are disclosed as contingent liability. Payments in respect of such demands, if any, are shown as advance, till the final outcome.
Contingent Assets are neither recognized nor disclosed in the Financial Statements.
Mar 31, 2015
A. Corporate Information
Tantia Constructions Limited ('The Company') is one of the most
experienced civil infrastructure solutions providers in India.
Incorporated as a private limited Company in 1964 which became public
limited Company in 1982, the Company is engaged in executing critical
infrastructure projects. It began operations in the railways segment
and over the years extended to seven core infrastructure segments of
railways, roads, urban development, infrastructure and industrial
fabrication, power, marine and aviation.
1. Basis of Preparation of Financial Statements
The Financial Statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and in
accordance with Generally Accepted Accounting Principles (Indian GAAP)
and comply in all material aspect with the applicable Accounting
Standards notified under section 211 (3C) (which continues to be
applicable in term of general circular 15/2013 dated September 13, 2013
of the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act 2013) and other relevant provisions of the Companies
Act,1956.
For recognition of Income and Expenses mercantile system of accounting
is followed except in case of insurance claims where on the ground of
prudence and as well as uncertainty in realization, the same is
accounted for as and when accepted/received.
The accounting policies adopted in the preparation of Financial
Statements are consistent with those of previous year.
2. Use of Estimates:
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires estimates and
assumptions to be made that affect reported amount of assets and
liabilities and disclosure of contingent liabilities on the date of
financial statements and the reported amount of revenues and expenses
during the reporting period. Difference between the actual results and
estimates are recognized in the period in which the results are known /
materialized.
3. Change in Accounting Policies:
There is no change in accounting policies during the current financial
year.
4. Inventories
a) Stock of Construction materials, stores and spares and fuel (except
for those relating to Construction activities) are valued at cost
(weighted average basis) or net realizable value whichever is lower.
b) Cost of Construction materials, stores, spares and fuel used in
construction activities are valued at cost (weighted average basis).
c) Work-in-progress is valued at cost and reflects the work done but
not certified.
d) The cost of inventories comprises all cost of purchase, cost of
conversion and other incidental cost incurred in bringing the
inventories to their present location and condition.
e) Net realizable value is the estimated selling price in the ordinary
course of business less the estimated cost of completion and estimated
cost necessary to make the sale.
5. Fixed Assets
Tangible Fixed Assets are stated at cost of acquisition inclusive of
duties (net of VAT where input credit is availed) together with any
incidental costs for bringing the asset to its working condition for
its intended use less accumulated depreciation/amortization and
impairment losses, if any.
Capital work in progress is stated at amounts spent up to the date of
the Financial Statement. Intangible assets comprise of License fees
and other implementation cost of software (SAP) acquired for in- house
use and is net of amortization. Intangible assets under development are
stated at cost.
6. Depreciation / Amortization Tangible Assets
Depreciation on fixed assets is provided on Straight Line Method (SLM)
method and is provided based on useful life of the assets as prescribed
in Schedule - II to the Companies Act, 2013.
Intangible Assets
These are amortized over the best estimates of its useful life.
7. Impairment of Assets
On annual basis the Company makes an assessment of any indicator that
may lead to impairment of assets. An asset is treated as impaired when
the carrying cost of the asset exceeds its recoverable value. If any
indication of such impairment exists, the reasonable amounts of those
assets are estimated and impairment loss is recognized. The impairment
loss recognized in prior accounting period is adjusted if there has
been a change in the estimate of recoverable amount.
8. Revenue Recognition On Construction Contracts:
- The contract revenue is recognized by reference to the stage of
completion of the contract activity at the reporting date of the
Financial Statements on the basis of percentage completion method.
- The stage of completion of contracts is measured by reference to
the proportion that the contract costs incurred for work completed up
to the reporting date bear to the estimated total contract costs for
each contract.
- Losses on contracts are fully accounted for as an expense
immediately when it is certain that the total contract costs will
exceed the total contract price. Total contract cost are ascertained on
the basis of actual cost and cost to be incurred for the completion of
contracts in progress which is determined by the management based on
technical data, forecast and estimates of expenditure to be incurred in
future.
- Price escalation claims and other additional claims are recognized
as revenue when:
i. They are realized or receipts thereof are mutually settled or
reasonably ascertained.
ii. Negotiations with the client have reached such an advanced stage
that there is reasonable certainty that the client will accept the
claim.
iii. Amount that is probable, if accepted by the client, to be measured
reliably by the Company.
On Sale of Goods:
- In case of sale of goods, the transfer of property in goods results
in the transfer of significant risks and rewards of ownership to the
buyer and revenue is recognized at the time of transfer of property.
9. Foreign Currency Transactions
Transactions in foreign currency are recorded using the exchange rate
prevailing at the date of transactions. Monetary assets and
liabilities related to foreign currency transactions unsettled at the
end of the year are translated at year end rate. All other foreign
currency assets and liabilities are stated at the rates prevailing at
the date of transaction other than those covered by forward contracts,
which are stated at the contracted rate. Exchange differences arising
on foreign currency transactions are recognized in the Statement of
Profit & Loss.
10. Investment
Long-term investments are stated at cost, provision is made to
recognize a decline, if any, other than temporary, in the value of long
term investments. Investments in Joint Ventures are stated at cost.
Current investments being readily realizable and intended to be held
for less than a year are carried at cost or market rate whichever is
lower, on individual investment basis.
11. Employee Benefit (Retirement and Post Employment Benefit)
Liability for employee benefits, both short and long term, for present
and past services which are due as per the terms of employment are
recorded in accordance with Accounting Standard (AS) - 15 "Employee
Benefits" notified by Companies (Accounting Standards) Rules, 2006.
I. Gratuity
Liability on account of Gratuity is:
- Covered through recognized gratuity fund managed by Life Insurance
Corporation of India and contributions are charged to revenue; and
- Balance if any, is provided on the basis of valuation of the
liability by an independent Actuary as at the year end.
II. Provident Fund, ESI and Medical
Contribution to provident fund (defined contribution plan) and ESI made
to government administered Provident Fund and ESI are recognized as
expenses. The company has no further obligation beyond its monthly
contribution. Those employees who are not covered under ESI scheme (as
stated in the Act) are eligible for medical re-imbursement as per the
HR policy of the Company.
III. Leave Encashment
Liability for leave encashment is treated as a long term liability and
is provided on the basis of valuation by an independent Actuary as at
the year end.
12. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to the Statement of Profit and Loss.
13. Segment Reporting Identification of Segments
The Company has identified that its business segments are the primary
segments. The Company's businesses are organized and managed separately
according to the nature of activity, with each segment representing a
strategic business unit that offers different products and serves
different markets. The analysis of geographical segments is based on
the areas in which major operating divisions of the Company operate.
Allocation of common costs
Common allocable costs are allocated to each segment on case to case
basis applying the ratio, appropriate to each relevant case. Revenue
and expenses, which relates to the enterprise as a whole and are not
allocable to segment on a reasonable basis, have been included under
the head "Unallocated - Common".
Segment Policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
14. Earnings Per Share
The Company reports basic and diluted earnings per share in accordance
with Accounting Standard (AS) - 20, "EPS" notified by Companies
(Accounting Standards) Rules, 2006. Basic earnings per equity share is
calculated by dividing the net profit for the year attributable to
equity share holders by the weighted average number of the equity
shares outstanding during the year. Diluted earnings per share is
calculated by dividing the net profit during the year, adjusted for the
effects of all dilutive potential equity share, attributable to the
equity share holders by the weighted average number of the equity
shares and dilutive equity potential equity shares outstanding during
the year except where the results are anti dilutive.
15. Taxation
Tax expenses comprise of current tax and deferred tax.
Current tax is determined in respect of taxable income for the year
based on Income Tax Act 1961. Deferred tax is recognized, subject to
consideration of prudence, on timing difference (being the difference
between taxable income and accounting income that originates in one
period and are capable of being reversed in one or more subsequent
years) and is measured using tax rates and laws that have been enacted
or substantively enacted by the Balance Sheet date. Deferred tax assets
are reviewed at each Balance Sheet date and are recognized only if
there is reasonable certainty that they will be realized.
16. Accounting of Joint Venture contracts
a) In respect of its interest in Jointly Controlled Operations, the
Company recognize the asset that it controls and the liability that it
incurs along with the expenses that it incurs and the income it earns
from the Joint Venture in accordance with Accounting Standards (AS) 27.
b) In respect of its interest in Jointly Controlled Entity, the same is
recognized as an Investment in accordance with Accounting Standard (AS)
13, "Accounting for Investment". a
17. Provision, Contingent Liabilities & 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 Financial Statement. Disputed demands in respect of Income Tax
and Sales Tax etc are disclosed as contingent liability. Payments in
respect of such demands, if any, are shown as advance, till the final
outcome.
Mar 31, 2014
1. Basis of Preparation of Financial Statements
The Financial Statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and in
accordance with Generally Accepted Accounting Principles (Indian GAAP)
and comply in all material aspect with the applicable Accounting
Standards notified under section 211 (3C) (which continues to be
applicable in term of general circular 15/2013 dated September 13, 2013
of the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act 2013) and other relevant provisions of the Companies
Act,1956.
For recognition of Income and Expenses mercantile system of accounting
is followed except in case of insurance claims where on the ground of
prudence and as well as uncertainty in realization, the same is
accounted for as and when accepted/received.
The accounting policies adopted in the preparation of Financial
Statements are consistent with those of previous year.
2. Use of Estimates :
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires estimates and
assumptions to be made that affect reported amount of assets and
liabilities and disclosure of contingent liabilities on the date
of financial statements and the reported amount of revenues and
expenses during the reporting period. Difference between the actual
results and estimates are recognized in the period in which the
results are known / materialized.
3. Change in Accounting Policies :
There is no change in accounting policies during the current financial
year.
4. Inventories
a) Stock of Construction materials, stores and spares and fuel (except
for those relating to Construction activities) are valued at cost
(weighted average basis) or net realizable value whichever is lower.
b) Cost of Construction materials, stores, spares and fuel used in
construction activities are valued at cost (weighted average basis).
c) Work-in-progress is valued at cost and reflects the work done but
not certified.
d) The cost of inventories comprises all cost of purchase, cost of
conversion and other incidental cost incurred in bringing the
inventories to their present location and condition.
e) Net realizable value is the estimated selling price in the ordinary
course of business less the estimated cost of completion and estimated
cost necessary to make the sale.
5. Fixed Assets
Tangible Fixed Assets are stated at cost of acquisition inclusive of
duties (net of VAT where input credit is availed) together with any
incidental costs for bringing the asset to its working condition for
its intended use less accumulated depreciation/amortizati''on and
impairment losses, if any.
Capital work in progress is stated at amounts spent up to the date of
the Financial Statement.
Intangible assets comprise of License fees
and other implementation cost of software (SAP) acquired for in-house
use and is net of amortization. Intangible assets under
development are stated at cost.
6. Depreciation / Amortization
Depreciation on fixed assets acquired upto the year ended on Diwali
2040 S.Y. (Corresponding to 3rd November 1983) is provided by applying
the rates specified in Schedule-XIV of the Companies Act 1956 and
calculated on written down value method.
In respect of the assets acquired thereafter, other than Construction
Accessories and Intangible Assets depreciation is charged on the
straight line method at the rates prescribed in Schedule- XIV of the
Companies'' Act 1956. Construction Accessories are depreciated over a
period of five years on straight line method from the year of addition.
Intangible Assets are amortized over the best estimates of its useful
life.
Depreciation on fixed assets acquired/disposed off during the year, is
provided on pro-rata basis with reference to the date of
acquisition/disposal.
7. Impairment of Assets
On annual basis the Company makes an assessment of any indicator that
may lead to impairment of assets. An asset is treated as impaired when
the carrying cost of the asset exceeds its recoverable value. If any
indication of such impairment exists, the reasonable amounts of those
assets are estimated and impairment loss is recognized. The impairment
loss recognized in prior accounting period is adjusted if there has
been a change in the estimate of recoverable amount.
8. Revenue Recognition
On Construction Contracts :
- The contract revenue is recognized by reference to the stage of
completion of the contract activity at the reporting date
of the Financial Statements on the basis of percentage completion
method.
- The stage of completion of contracts is measured by reference to
the proportion that the contract costs incurred for work completed upto
the reporting date bear to the estimated total contract costs for each
contract.
- Losses on contracts are fully accounted for as an expense
immediately when it is certain that the total contract costs will
exceed the total contract price. Total contract cost are ascertained on
the basis of actual cost and cost to be incurred for the completion of
contracts in progress which is determined by the management based on
technical data, forecast and estimates of expenditure to be incurred in
future.
- Price escalation claims and other additional claims are recognized
as revenue when:
i. They are realized or receipts thereof are mutually settled or
reasonably ascertained.
ii. Negotiations with the client have reached such an advanced stage
that there is reasonable certainty that the client will accept the
claim.
iii. Amount that is probable, if accepted by the client, to be measured
reliably by the Company.
On Sale of Goods :
- In case of sale of goods, the transfer of property in goods results
in the transfer of significant risks and rewards of ownership to the
buyer and revenue is recognized at the time of transfer of property.
9. Foreign Currency Transactions
Transactions in foreign currency are recorded using the exchange rate
prevailing at the date of transactions. Monetary assets and liabilities
related to foreign currency transactions unsettled at the end of the
year are translated at year end rate. All other foreign currency assets
and liabilities are stated at the rates prevailing at the date of
transaction other than those covered by forward contracts, which are
stated at the contracted rate. Exchange differences arising on foreign
currency transactions are recognized in the Statement of Profit & Loss.
10. Investment
Long-term investments are stated at cost, provision is made to
recognize a decline, if any, other than temporary, in the value of long
term investments. Investments in Joint Ventures are stated at cost.
Current investments being readily realizable and intended to be held
for less than a year are carried at cost or market rate whichever is
lower, on individual investment basis.
11. Employee Benefit (Retirement and Post Employment Benefit)
Liability for employee benefits, both short and long term, for present
and past services which are due as per the terms of employment are
recorded in accordance with Accounting Standard (AS) - 15 "Employee
Benefits" notified by Companies (Accounting Standards) Rules, 2006.
I. Gratuity
Liability on account of Gratuity is :
- Covered through recognized gratuity fund managed by Life Insurance
Corporation of India and contributions are charged to revenue; and
- Balance if any, is provided on the basis of valuation of the
liability by an independent Actuary as at the year end.
II. Provident Fund, ESI and Medical
Contribution to provident fund (defined contribution plan) and ESI made
to government administered Provident Fund and ESI are recognized as
expenses. The company has no further obligation beyond its monthly contribution. Those employees who are not covered under ESI scheme
(as stated in the Act) are eligible for medical re-imbursement as per
the HR policy of the Company.
III. Leave Encashment
Liability for leave encashment is treated as a long term liability and
is provided on the basis of valuation by an independent Actuary as at
the year end.
12. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to the Statement of Profit and Loss.
13. Segment Reporting
Identification of Segments
The Company has identified that its business segments are the primary
segments. The Company''s businesses are organized and managed separately
according to the nature of activity, with each segment representing a
strategic business unit that offers different products and serves
different markets. The analysis of geographical segments is based on
the areas in which major operating divisions of the Company operate.
Allocation of common costs
Common allocable costs are allocated to each segment on case to case
basis applying the ratio, appropriate to each relevant case. Revenue
and expenses, which relates to the enterprise as a whole and are not
allocable to segment on a reasonable basis, have been included under
the head "Unallocated - Common".
Segment Policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
14. Earnings Per Share
The Company reports basic and diluted earnings per share in accordance
with Accounting Standard (AS) - 20, "EPS" notified by Companies
(Accounting Standards) Rules, 2006. Basic earnings per equity share is
calculated by dividing the net profit for the year attributable to
equity share holders by the weighted average number of the equity
shares outstanding during the year. Diluted earnings per share is
calculated by dividing the net profit during the year, adjusted for the
effects of all dilutive potential equity share, attributable to the
equity share holders by the weighted average number of the equity
shares and dilutive equity potential equity shares outstanding during
the year except where the results are anti dilutive.
15. Taxation
Tax expenses comprise of current tax and deferred tax.
Current tax is determined in respect of taxable income for the year
based on Income Tax Act 1961. Deferred tax is recognized, subject to
consideration of prudence, on timing difference (being the difference
between taxable income and accounting income that originates in one
period and are capable of being reversed in one or more subsequent
years) and is measured using tax rates and laws that have been enacted
or substantively enacted by the Balance Sheet date. Deferred tax
assets are reviewed at each Balance Sheet date and are recognized
only if there is reasonable certainty that they will be realized.
16. Accounting of Joint Venture contracts
a) In respect of its interest in Jointly Controlled Operations, the
Company recognize the asset that it controls and the liability that it
incurs along with the expenses that it incurs and the income it earns
from the Joint Venture in accordance with Accounting Standards (AS) 27.
b) In respect of its interest in Jointly Controlled
Entity, the same is recognized as an Investment in accordance with
Accounting Standard (AS) 13, "Accounting for Investment".
17. Provision, Contingent Liabilities & 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 Financial Statement. Disputed demands in respect of Income
Tax and Sales Tax etc are disclosed as contingent liability. Payments
in respect of such demands, if any, are shown as advance, till the
final outcome.
Contingent Assets are neither recognized nor disclosed in the Financial
Statements.
i) The Company has only one class of equity shares having a par value
of Rs.10 per share. Each holder of equity share is entitled to one vote
per share. The Company declares and pays dividends in Indian Rupee. The
dividend proposed by the Board of Directors is subject to the approval
of the share holders in the ensuing Annual General Meeting.
ii) In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts, in the proportion to
their shareholding.
The Company had issued cumulative redeemable preference shares having a
par value of Rs. 10 per share on 8th January 2005. The preference share
holders do not carry any voting right at shareholders meeting except in
case of special meeting of preference share holders only. The
preference share holders are entitled to dividend @ 10.5% on prorata
basis before equity share holders are paid dividend. The preference
shares are redeemable at the option of shareholder with a notice of 90
days or at the option of the Company with 30 days notice within a
maximum period of 10 years from the date of issue. In the event of
liquidation of the Company, the holders of preference shares will be
entitled to receive remaining assets of the Company, after distribution
of all preferential amounts and before distribution of anything to the
equity share holder. The distribution will be in the proportion to the
no. of shares held by the shareholder.
Mar 31, 2012
1. Basis of Preparation of Financial Statements
The Financial Statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and in
accordance with Generally Accepted Accounting Principles (Indian GAAP)
and comply in all material aspect with the applicable Accounting
Standards notified under Section 211(3C) of the Companies Act, 1956,
and the relevant provisions of the Companies Act, 1956, except where
otherwise stated.
During the year ended March 31, 2012, the Revised Schedule VI notified
under the Companies Act, 1956, has become applicable to the Company for
preparation and presentation of its financial statements. The
adaptation of Revised Schedule VI does not impact the recognition and
measurement principles followed for preparation of financial
statements. However, it has significant impact on presentation and
disclosure made in the financial statements. The Company has also
reclassified the previous year figure in accordance with the
requirements applicable in the current year in terms of Revised
Schedule VI.
For recognition of Income and Expenses mercantile system of accounting
is followed except in case of insurance claims where on the ground of
prudence and as well as uncertainty in realization, the same is
accounted for as and when accepted/received.
The accounting policies have been consistently applied by the Company
except for the changes mentioned in Para 3.
2. Use of Estimates:
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires estimates and
assumptions to be made that affect reported amount of assets and
liabilities and disclosure of contingent liabilities on the date of
financial statements and the reported amount of revenues and expenses
during the reporting period. Difference between the actual results and
estimates are recognized in the period in which the results are known.
3. Change in Accounting Policies:
a) During the year under review the Company has credited gross bill
amount as revenue, instead of net of retention as it was thought to be
a better presentation of Financial Statement. Due to such change there
has been an increase of gross contract receipt to the extent of Rs. 708
relating to last year.
4. Inventories
a) Stock of raw materials, stores and spares and fuel (except for those
relating to Construction activities) are valued at cost (weighted
average basis) or net realisable value whichever is lower.
b) Cost of Raw materials, stores, spares and fuel used in construction
activities are valued at cost (weighted average basis).
c) Work-in-progress is valued at cost and reflects the work done but
not certified.
d) The cost of inventories comprises all cost of purchase, cost of
conversion and other incidental cost incurred in bringing the
inventories to their present location and condition.
e) Net realisable value is the estimated selling price in the ordinary
course of business less the estimated cost of completion and estimated
cost necessary to make the sale.
5. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net
of VAT where input credit is availed) together with any incidental
costs for bringing the asset to its working condition for its intended
use less accumulated depreciation and impairment losses, if any.
Capital work in progress is stated at amounts spent up to the date of
the Financial Statement.
Intangible assets comprise of License fees and other implementation
cost of software (SAP) acquired for in-house use and is net of
amortization. Intangible assets under development are stated at cost.
6. Depreciation / Amortization
Depreciation on fixed assets acquired upto the year ended on Diwali
2040 S.Y. (Corresponding to 3rd November 1983) is provided by applying
the rates specified in Schedule-XIV of the Companies Act, 1956 and
calculated on written down value method.
In respect of the assets acquired thereafter, other than Construction
Accessories and Intangible Asset's depreciation is charged on the
straight line method at the rates prescribed in Schedule-XIV of the
Companies' Act 1956. Construction Accessories are depreciated over a
period of five years on straight line method from the year of addition.
Intangible Assets are amortized over the best estimates of its useful
life.
7. Impairment of Assets
On annual basis the Company makes an assessment of any indicator that
may lead to impairment of assets. An asset is treated as impaired when
the carrying cost of the asset exceeds the recoverable value. If any
indication of such impairment exists, the reasonable amounts of those
assets are estimated and impairment loss is recognized. The impairment
loss recognized in prior accounting period is adjusted if there has
been a change in the estimate of recoverable amount.
8. Revenue Recognition
On Construction Contracts:
- The contract revenue is recognized by reference to the stage of
completion of the contract activity at the reporting date of the
financial statements on the basis of percentage completion method.
- The stage of completion of contracts is measured by reference to the
proportion that the contract costs incurred for work performed upto the
reporting date bear to the estimated total contract costs for each
contract.
- Losses on contracts are fully accounted for as an expense immediately
when it is certain that the total contract costs will exceed the total
contract price. Total contract cost are ascertained on the basis of
actual cost and cost to be incurred for the completion of contracts in
progress which is determined by the management based on technical data,
forecast and estimates of expenditure to be incurred in future.
- Price escalation claims and other additional claims are recognized as
revenue when:
i. They are realized or receipts thereof are mutually settled or
reasonably ascertained.
ii. Negotiations with the client have reached such an advanced stage
that there is reasonable certainty that the client will accept the
claim.
iii. Amount that is probable, if accepted by the client, to be measured
reliably by the Company.
On Sale of Goods:
- In case of sale of goods, the transfer of property in goods results
in the transfer of significant risks and rewards of ownership to the
buyer and revenue is recognized at the time of transfer of property.
9. Foreign Currency Transactions
Transactions in foreign currency are recorded using the exchange rate
prevailing at the date of transactions. Monetary assets and liabilities
related to foreign currency transactions unsettled at the end of the
year are translated at year end rate. All other foreign currency assets
and liabilities are stated at the rates prevailing at the date of
transaction other than those covered by forward contracts, which are
stated at the contracted rate. Exchange differences arising on foreign
currency transactions are recognized in the Statement of Profit & Loss.
10. Investment
Long-term investments are stated at cost, provision is made to
recognize a decline, if any, other than temporary, in the value of long
term investments. Investments in Joint Ventures are stated at cost.
Current investments being readily realisable and intended to be held
for less than a year are carried at cost or market rate whichever is
lower, on individual investment basis.
11. Employee Benefit (Retirement and Post Employment Benefit)
Liability for employee benefits, both short and long term, for present
and past services which are due as per the terms of employment are
recorded in accordance with Accounting Standard (AS) Ã 15 "Employee
Benefits" notified by Companies (Accounting Standard) Rules, 2006.
I. Gratuity
Liability on account of Gratuity is:
- Covered through recognized gratuity fund managed by Life Insurance
Corporation of India and contributions are charged to revenue; and
- Balance if any, is provided on the basis of valuation of the
liability by and independent Actuary as at the year end.
II. Provident Fund, ESI and Medical
Contribution to provident fund (defined contribution plan) and ESI made
to government administered Provident Fund and ESI are recognized as
expenses. The company has no further obligation beyond its monthly
contribution. Those employees who are not covered under ESI scheme (as
stated in the Act) are eligible for medical re-imbursement as per the
HR policy of the Company.
III. Leave Encashment
Liability for leave encashment is treated as a long term liability and
is provided on the basis of valuation by an independent Actuary as at
the year end.
12. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to the Statement of Profit and Loss.
13. Earnings Per Share
The Company reports basic and diluted earnings per share in accordance
with Accounting Standard (AS) - 20, "EPS" notified by Companies
(Accounting Standards) Rules, 2006. Basic earnings per equity share is
computed by dividing the net profit for the year attributable to the
equity share holders by the weighted average number of the equity
shares outstanding during the year. Diluted earnings per share is
computed by dividing the net profit during the year, adjusted for the
effects of dilutive potential equity share, attributable to the equity
share holders by the weighted average number of the equity shares and
dilutive equity potential equity shares outstanding during the year
except where the results are anti dilutive.
14. Taxation
Tax expenses comprise of current tax and deferred tax.
Current tax is determined in respect of taxable income for the year
based on Income Tax Act 1961. Deferred tax is recognized, subject to
consideration of prudence, on timing difference (being the difference
between taxable income and accounting income that originates in one
period and are capable of being reversed in one or more subsequent
years) and is measured using tax rates and laws that have been enacted
or substantively enacted by the Balance Sheet date. Deferred tax assets
are reviewed at each Balance Sheet date and are recognized only if
there is reasonable certainty that they will be realized.
15. Accounting of Joint Venture contracts
a) In respect of its interest in Jointly Controlled Operations, the
Company recognize the asset that it controls and the liability that in
incurs along with the expenses that it incurs and the income it earns
from the Joint Venture in accordance with Accounting Standards (AS) 27.
b) In respect of its interest in Jointly Controlled Entity, the same is
recognized as an Investment in accordance with Accounting Standard (AS)
13, Accounting for Investment.
16. Provision, Contingent Liabilities & 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 recognised but are disclosed in the
Notes to Accounts. Disputed demands in respect of Income Tax and Sales
Tax etc are disclosed as contingent liability. Payments in respect of
such demands, if any, are shown as advance, till the final outcome.
Contingent Assets are neither recognized nor disclosed in the financial
statements.
Mar 31, 2011
1. Nature of Operations
Tantia Constructions Limited (ÃThe Company') is one of the most
experienced civil infrastructure solutions providers in India.
Incorporated as a private limited Company in 1964 which became public
limited Company in 1982, the Company is engaged in executing critical
infrastructure projects. It began operations in the railways segment
and over the years extended to seven core infrastructure segments of
railways, roads, urban development, infrastructure and industrial
fabrication, power, marine and aviation.
2. Basis of Preparation of Financial Statements
The Financial Statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and in
accordance with Generally Accepted Accounting Principles (Indian GAAP)
and comply in all material aspect with the applicable accounting
standards notified under Section 211(3C) of the Companies Act, 1956,
and the relevant provisions of the Companies Act, 1956 except where
otherwise stated.
For recognition of Income and Expenses mercantile system of accounting
is followed except in case of insurance claims where on the ground of
prudence as well as uncertainty in realisation, the same is accounted
for as and when accepted/received.
The accounting policies have been consistently applied by the Company
except for the changes mentioned in Para 4.
3. Use of Estimates:
The preparation of financial statements in conformity with the
Generally Accepted Accounting Principles requires estimates and
assumptions to be made that affect reported amount of assets and
liabilities and disclosure of contingent liabilities on the date of
financial statements and the reported amount of revenues and expenses
during the reporting period. Difference between the actual results and
estimates are recognised in the period in which the results are known.
4. Change in Accounting Policies:
a) During the year the Company has capitalised the cost of Construction
Accessories which will be depreciated on straight line method over a
period of five years (being the useful life as estimated by the
management). Previously such accessories were charged to revenue as
consumption. However, the impact of the above change on Company's
profit is not ascertainable.
b) During the year the Company has deferred the site establishment
expenses i.e. the initial cost it has incurred on setting up the basic
infrastructure required to execute the new projects and the same is
amortised over the useful life of the projects. Previously such costs
were charged to revenue. However, due to this change the profit of the
Company has gone up by Rs. 33,453 thousands.
c) During the year, Company has credited revenue as billed amount net
of retention money because the retention money does not arise or accrue
in the year in which the job is executed but at a later date depending
on the satisfactory completion of the contract. Due to this change
there is an impact of reduction of income by Rs. 70,791 thousands.
5. Inventories
a) Stock of raw materials, stores and spares and fuel (except for those
relating to Construction activities) are valued at cost (weighted
average basis) or net realisable value whichever is lower.
b) Cost of Raw materials, stores, spares and fuel used in construction
activities are valued at cost (weighted average basis).
c) Work-in-progress is valued at cost and reflects the work done but
not certified.
d) The cost of inventories comprises all cost of purchase, cost of
conversion and other incidental cost incurred in bringing the
inventories to their present location and condition.
e) Net realisable value is the estimated selling price in the ordinary
course of business less the estimated cost of completion and estimated
cost necessary to make the sale.
6. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net
of VAT where input credit is availed) together with any incidental
costs for bringing the asset to its working condition for its intended
use less accumulated depreciation and impairment losses, if any.
Capital work in progress is stated at amounts spent up to the date of
the Balance Sheet.
Intangible assets comprise of License fees and other implementation
cost of software (SAP) acquired for in-house use and is net of
amortisation.
7. Depreciation / amortisation
Depreciation on fixed assets acquired upto the year ended on Diwali
2040 S.Y. (Corresponding to 3rd November, 1983) is provided by applying
the rates specified in Schedule-XIV of the Companies Act 1956 and
calculated on written down value method.
In respect of the assets acquired thereafter, other than Construction
Accessories and Intangible Asset's depreciation is charged on the
straight line method at the rates prescribed in Schedule-XIV of the
Companies' Act, 1956. Construction Accessories are depreciated over a
period of five years on straight line method from the year of addition.
Intangible Assets are amortised over the best estimates of its useful
life.
8. Impairment of Assets
On annual basis the Company makes an assessment of any indicator that
may lead to impairment of assets. An asset is treated as impaired when
the carrying cost of the asset exceeds the recoverable value. If any
indication of such impairment exists, the reasonable amounts of those
assets are estimated and impairment loss is recognised. The impairment
loss recognised in prior accounting period is adjusted if there has
been a change in the estimate of recoverable amount.
9. Revenue Recognition
On Construction Contracts:
- The contract revenue is recognised by reference to the stage of
completion of the contract activity at the reporting date of the
financial statements on the basis of percentage completion method.
- The stage of completion of contracts is measured by reference to the
proportion that the contract costs incurred for work performed upto the
reporting date bear to the estimated total contract costs for each
contract.
- Losses on contracts are fully accounted for as an expense immediately
when it is certain that the total contract costs will exceed the total
contract price. Total contract cost are ascertained on the basis of
actual cost and cost to be incurred for the completion of contracts in
progress which is determined by the management based on technical data,
forecast and estimates of expenditure to be incurred in future.
- Price escalation claims and other additional claims are recognised as
revenue when:
i. They are realised or receipts thereof are mutually settled or
reasonably ascertained.
ii. Negotiations with the client have reached such an advanced stage
that there is reasonable certainty that the client will accept the
claim.
iii. Amount that is probable, if accepted by the client, to be measured
reliably by the Company.
On Sale of Goods:
- In case of sale of goods, the transfer of property in goods results
in the transfer of significant risks and rewards of ownership to the
buyer and revenue is recognised at the time of transfer of property.
10. Foreign Currency Transactions
Transactions in foreign currency are recorded using the exchange rate
prevailing at the date of transactions. Monetary assets and liabilities
related to foreign currency transactions unsettled at the end of the
year are translated at year end rate. All other foreign currency assets
and liabilities are stated at the rates prevailing at the date of
transaction other than those covered by forward contracts, which are
stated at the contracted rate. Exchange differences arising on foreign
currency transactions are recognised in the Profit & Loss Account.
11. Investment
Long-term investments are stated at cost, provision is made to
recognise a decline, if any, other than temporary, in the value of long
term investments. Investments in Joint Ventures are stated at cost.
Current investments being readily realisable and intended to be held
for less than a year are carried at cost or market rate whichever is
lower, on individual investment basis.
12. Employee Benefit (Retirement and Post Employment Benefit)
Liability for employee benefits, both short and long term, for present
and past services which are due as per the terms of employment are
recorded in accordance with Accounting Standard (AS) Ã 15 ÃEmployee
Benefitsà notified by Companies (Accounting Standard) Rules, 2006.
I. Gratuity
Liability on account of Gratuity is:
- Covered through recognised gratuity fund managed by Life Insurance
Corporation of India and contributions are charged to revenue; and
- Balance if any, is provided on the basis of valuation of the
liability by an independent actuary as at the year end.
II. Provident Fund, ESI and Medical
Contribution to provident fund (defined contribution plan) and ESI made
to government administered Provident Fund and ESI are recognised as
expenses. The Company has no further obligation beyond its monthly
contribution. Those employees who are not covered under ESI scheme (as
stated in the Act) get medical re-imbursement as per the HR policy of
the Company.
III. Leave Encashment
Liability for leave encashment is treated as a long term liability and
is provided on the basis of valuation by an independent actuary as at
the year end.
13. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to Profit and Loss account.
14. Earnings Per Share
The Company reports basic and diluted earnings per share in accordance
with Accounting Standard (AS) - 20, ÃEPSÃ notified by Companies
(Accounting Standards) Rules, 2006. Basic earnings per equity share is
computed by dividing the net profit for the year attributable to the
equity share holders by the weighted average number of the equity
shares outstanding during the year. Diluted earnings per share is
computed by dividing the net profit during the year, adjusted for the
effects of dilutive potential equity share, attributable to the equity
share holders by the weighted average number of the equity shares and
dilutive equity potential equity shares outstanding during the year
except where the results are anti dilutive.
15. Taxation
Tax expenses comprise of current tax and deferred tax.
Current tax is determined in respect of taxable income for the year
based on Income Tax Act 1961. Deferred tax is recognised, subject to
consideration of prudence, on timing difference (being the difference
between taxable income and accounting income that originates in one
period and are capable of being reversed in one or more subsequent
years) and is measured using tax rates and laws that have been enacted
or substantively enacted by the Balance Sheet date. Deferred tax assets
are reviewed at each Balance Sheet date and are recognised only if
there is reasonable certainty that they will be realised.
16. Accounting of Joint Venture contracts
a) In respect of its interest in Jointly Controlled Operations, the
Company recognise the asset that it controls and the liability that in
incurs along with the expenses that it incurs and the income it earns
from the Joint Venture in accordance with Accounting Standards (AS) 27.
b) In respect of its interest in Jointly Controlled Entity, the same is
recognised as an Investment in accordance with Accounting Standard (AS)
13, Accounting for Investment.
17. Provision, Contingent Liabilities & 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 Accounts. Disputed demands in respect of Income Tax and Sales
Tax etc are disclosed as contingent liability. Payments in respect of
such demands, if any, are shown as advance, till the final outcome.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2010
1. Nature of Operations
Tantia Constructions Limited (The Company) is one of the oldest general
civil infrastructure solutions providers in India. Incorporated as a
private limited Company in 1964 which became public limited Company in
1982, the Company is engaged in executing critical infrastructure
proects. It began operations in the railways segment and over the years
extended to seven core infrastructure segm ents of railways, roads
urban development, industial, power, marine and aviation.
2. Basis of Preparation of Financial Statements
The Financial Statements have been prepared and presented under he
historical cost convention on the accrual basis of accounting and in
accordance with Generally Accepted Accounting Principles (Indian GAAP)
and comply with the applicable accounting standards notified under
Section 2113C) of he Companes Act, 1956 and the relevant provisions of
the Companies Act, 1956 except where otherwise stated.
For recognition of Income and Expenses mercantile system of accounting
is followed except in case of insurance claims.
The accounting polices have been consistently applied by the Company
unless otherwise stated.
3. Use of Estim ates
The preparation of financial statem ents requies estm ates and
assumptions to be m ade that affect reported am ount of assets and
labilities on he date of financial statements and he reported am ount
of revenues and expenses during he reporting period. Difference between
the actual results and estmates are recognised in the period in whih
the results are known.
4. Inventories
a) Stock of raw materials, stores and spares, other construction
materials and fuel are valued at cost (weighted average basis) or net
realisable value whihever is lower.
b) Work-in-progress is valued at cost and refects the work done but not
certifed.
5. Depreciation / Am ortisation
Depreciation on fixed assets acquired upto the year ended on Diwali
2040 S.Y. Corresponding to 3rd November, 1983) is provided by applying
the rates specifed in Schedue-XIV of the Com panes Act, 1956 and
calculated on written down value method.
In respect of the other assets acquied thereafter depreciation is
charged on he straight line method at the rates prescrbed in Schedue-
XIV of the Companes Act, 1956
Intangible Assets are recorded at the consideration paid for
acquisition of such assets and are carried at cost ess accumulated
Amortisation.
6. Revenue Recognition
On Constuction Contracts
* The contract revenue is recognised by reference to the stage of
completion of the contract activity at the reporting date of he
financial statements on the basis of percentage competion method.
* The stage of competion of contracts is measured by reference to the
proportion that the contract costs incurred for work performed upto the
reporing date bear to the estm ated total contract costs for each
contract.
* Losses on contracts are fully accounted for as an expense,
immediately when it is certain that the total contract costs will
exceed the total contract price.
* Price escalation claims and other addiional claims including those
under arbitration are recognised as revenue when: i They are realised
or receipts thereof are mutually settled or reasonably ascertained.
i. Negotiations with he client have reached such an advanced stage
such that there is reasonable certainty that the client will accept the
claim.
ii. Amount that is probable, if accepted by the clent, to be measured
reliably by the Company.
7. Fixed Assets
Fixed Assets are stated at cost of acquisition together with any
incidental costs for bringing the asset to is working condition for its
intended use ess accumulated depreciation and impaiment losses, if any.
Capital work in progress is stated at amount spent up to the date of
the Balance Sheet.Intangible assets comprise of License fees and other
implementation cost of software SAP) acquired for in-house use is net
off am ortization, if any.
8. Foreign Currency Transactions
Transactions in foreign currency are recorded using the exchange rate
prevailing at the date of transactions. At the Balance Sheet date
monetary assets and liabilites denominated in foreign currency are
recorded using the closing exchange rates. All other foreign currency
assets and liabilities are stated at the rates ruling at the year end
other than those covered by forward contracts , which are stated at the
contracted rate. Exchange differences arising on foreign currency
transactions are recognised in the Profit& Loss Account.
9. Investment
Long-term investments a restated at cost, provision is made to
recognise a decline, other than temporary , in the value of long term
investm ents. Current investments a re carried at cost or m arket rate
whichever is less, on individual investment basis . Investments in
Joint Ventures are stated at cost.
10 . Employee Benefit (Retirement and Post Employment Benefit)
Contribution to defined benefits chemes such as Provident Fund, ESI,
Medicalre-imbursem entetc . are charged to profit and loss account as
in curred . The contributions a re made to Governmentadm inistered
Provident Fund and ESI tow ards which the Company has no further
obligations beyond its monthly contributions. Those employees who are
not covered under ESI scheme (as stated in the Act) get medical re - im
bursement as per the HR policy of the Company.
The Company also provides forretirment benefits in the form of gratuity
an d leave en cash m ent. Such benefits a re provided for, based on the
valuation as at the balance sheet date made by independent actuaries.
The company has taken policy of Group Gratuity Scheme from LICI. In
respect of Gratuity , the company provides in its books of account the
shortfall in the fund balanceas per and in depend ent actuary valuation
subject to minimum of the premium claimed by LICI (as on 31st M arch).
11. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets . A qualifying as set is one that necessarily takes
subsequent period of time to get ready for intended use. All other
borrowing costs are charged to Profit and Loss account.
12. Earnings Per Share
Basic earning per share is calculated by dividing the net Profit or
Loss for the period attributable to equity share holders by the
weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earning per share , the net
Profit or Loss for the year attributable to the equity share holders
and weighted average number of share outstanding if any are adjusted
for the effects of all dilutive potentialequity shares .
13. Taxation
Tax expenses comprise of current tax, deferred tax and fringe benefit
tax.
i) Current tax is determined in respect of taxable income for the year
based on applicable tax rates and laws. On the basis of the opinion
taken from an Expert the Company is continuing to avail of the benefit
of deductions u/s 80IA of the Income Tax Act, 1961 for the eligible
projects.
i) Deferred tax is recognised, subject to consideration of prudence, on
timing difference being the difference between taxable income and
accounting income that originates in one period an dare capable of
being set off in one on m ore subsequent ye ars and is measured using
taxrates and laws that have been enacted or substantively enacted by
the balance sheet date. Deferred tax assets are reviewed at each
balance sheet date to and a rerecognised only if there is reasonable
certainty that they will be realised .
14. Accounting of Joint Venture contracts
a) The contracts executed in Joint Venture under work sharing arrangem
ent (consortium ) are accounted in accordance with the accounting
policy followed by the Company as that of an independent contract to
the extent work is executed.
b) In joint venture contracts under profit sharing arrangem ents ,
services rendered to joint ventures are accounted as income on accrual
basis , profit or loss is accounted as when determined by the
jointventure and Net Investment in the jointventure is reflected as
investm ents or loans and advances or current liabilities. The
proportionate contract receipts of joint ventures are reflected as
contract receipts of joint ventures and the same has been shown as
expenses of joint venture as a conservative approach.
15. Impairment of Assets
On annual basis the Company makes an assessm ent of any indicator that
may lead to impairment of assets. An asset is treated as impaired when
the carrying cost of the as set is exceeds the recoverable value. If
any indication of such impairment exists, the reasonable amounts of
those assets are estim ated and impairment loss is recognised, if the
carrying amount of those assets exceeds their recoverable amount. The
impairment loss recognised in prior accounting period is adjusted if
there has been a change in the estimate of re coverable mount.
16. Provision, Contingent Liabilities & 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 willbe an outflow of resoures.
Contingent liabilities are not recognised but a re disclosed in the
notes to accounts . Disputed dem ands in respect of Income Tax, Sales
Tax a re disclosed as contingent liability . Payments in respect of
suchde mands, if any, are shown as advance, till the final outcome .
Contingent Assets are neither recognised nor disclosed in the financial
statements .