a. Use of Estimates
In preparing the financial statements in conformity with accounting
principles generally accepted in India, Management is required to make
estimates and assumption that affect the reported amounts of assets and
liabilities as at the date of the financial statements and the amounts
of revenue and expenses during the reported period. Actual results
could differ from those estimates. Any revision to such estimates is
recognised in the period the same is determined.
b. Tangible Fixed Assets
Fixed assets are stated at cost of acquisition inclusive of taxes,
duties, freight and other incidental expenses related to acquisition
and installation less accumulated depreciation.
Self constructed assets are capitalised at cost including an
appropriate share of overhead.
c. Depreciation on Tangible Fixed Assets
Depreciation is provided on Straight Line Method at the rates specified
in Schedule -XIV to the Companies Act, 1956.
Depreciation on addition / deletion of fixed assets during the year is
provided on pro-rata basis with reference to the date of addition /
d. Borrowing Costs
Borrowing costs that are attributable to the acquisition, construction
or production of a qualifying asset are capitalised as part of cost of
such asset till such time the asset is ready for its intended use or
sale. All other borrowing costs are recognised as an expense in the
period in which they are incurred.
Investments in integrated Joint ventures are carried at cost net of
adjustments for the Company''s share in profits or losses as recognised.
f. Accounting for Joint Ventures Contracts
i. Contracts executed in Joint Venture under work sharing arrangement
(consortium) are accounted for in accordance with the accounting policy
followed by the Company as that of an independent contract to the
extent work is executed.
ii. In respect of contracts executed in Integrated Joint Ventures
under profit sharing arrangement (assessed as AOP under Income Tax
Laws), the services rendered to the Joint Ventures are accounted for as
income on accrual basis. The profit / Loss is accounted for, as and
when it is determined by the Joint Venture and the net investment in
the Joint Venture is reflected as investments, loans and advances or
i. Raw Materials, Stores & Spares and Finished Goods
Raw Materials, construction materials and Finished Goods are valued at
the lower of cost and net realisable value.
ii. Work in Progress
The work in progress is valued as percentage of completion contract
method as per Accounting Standard 7 on Construction Contracts issued
by the Institute of Chartered Accountants of India.
h. Revenue Recognition
The Company follows the percentage of completion method as per
Accounting Standard - 7 on Construction Contracts issued by the
Institute of Chartered Accountants of India to recognise revenue in
respect of contracts executed. Contract revenue is accounted for on the
basis of bills submitted to clients/bill certified by clients and does
not include material supplied by the clients free of cost. Other
revenue and expenses are accounted for on accrual basis.
i. Taxes on Income
The Tax expenses comprise of current tax and deferred tax charged or
credited to the profit and loss account for the year. Current tax is
calculated in accordance with the tax laws applicable to the current
financial year. The deferred tax charge or credit is recognised using
the tax rates and tax laws that have been enacted by the Balance Sheet
date. Where there are unabsorbed depreciation or carry forward losses,
deferred tax assets are recognised only if there is virtual certainty
of realisation of such assets. Other deferred tax assets are recognised
only to the extent there is reasonable certainty of realisation in
future. At each Balance Sheet date, recognised and unrecognised
deferred tax assets are reviewed.
j. Employee Benefits
i) Defined contribution plans
Contributions paid/payable to defined contribution plans comprising of
provident fund is recognised as expenses during the period in which the
employees perform the services that the payments cover.
The Company makes monthly contributions and has no further obligations
under the plan beyond its contributions.
ii) Defined benefit plan
Gratuity for employees is covered under a scheme of SBI Life Insurance
and contributions in respect of such scheme are recognised in the
Profit and Loss Account. The liability as at the Balance Sheet date is
provided for based on the actuarial valuation, at the Balance Sheet
date, carried out by an independent actuary. Actuarial gains and losses
comprise experience adjustments and the effect of changes in the
actuarial assumptions and are recognised immediately in the Profit and
Loss account as income or expense.
iii) Short term employee benefits
Short term employee benefits including compensated absences as at the
Balance Sheet date are recognised as an expense as per the Company''s
schemes based on the expected obligation on an undiscounted basis.
k. Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when an enterprise has a present obligation as a result
of past event; it is probable that an outflow of resources will be
required to settle the obligation, in respect of which a reliable
estimate can be made. Provisions are not discounted to its present
value and are determined based on best estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
Balance Sheet date and adjusted to reflect the current best estimates.
Contingent Liabilities are not recognised but are disclosed in the
notes to accounts. Disputed demands in respect of Central Excise, VAT
Income Tax and Sales Tax are disclosed as Contingent Liabilities.
Payment in respect of such demands, if any, is shown as advance, till
the final outcome of the matter. Contingent Assets are neither
recognised nor disclosed in the financial statements..
l. Earning 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 no. of equity shares outstanding during the period.
The weighted average no. of equity shares outstanding during the period
is adjusted for events of shares split.
For the purpose of calculating diluted earning per share, the net
profit or loss for the period attributable to the equity share holders
and weighted average no. of equity shares outstanding during the period
is adjusted for the effects of all dilutive potential equity shares.
m. Overdue Charges in Respect of Loans
Overdue charges if any levied by financial institutions / banks/NBFC
are not considered during the currency of the loan. The same is
considered as a financial expense in the year of final settlement of