1.1. Basis of preparation of Financial Statements
The financial statements are prepared under the historical cost
convention, on accrual basis and in accordance with the Generally
Accepted Accounting Principles in India(Indian GAAP) and comply with
the Accounting Standards prescribed in the Companies (Accounting
Standards) Rules, 2006 and the relevant provisions of the Companies
1.2. Use of estimates
The preparation of the financial statements in conformity with the
generally accepted accounting principles requires the management to
make estimates and assumptions that affect the reported amount of
assets and liabilities as of the date of the financial statements and
the reported amount of revenues and expenses for the year and
disclosure of contingent liabilities as of the date of Balance Sheet.
The estimates and assumptions used in the accompanying financial
statements are based upon the management''s evaluation of relevant facts
and circumstances as of the date of the financial statements. Actual
amounts could differ from these estimates.
1.3. Fixed Assets
Fixed Assets are carried at cost less accumulated depreciation. Cost
includes related taxes, duties, freight, insurance etc. attributable to
acquisition and installation of assets and borrowing costs incurred up
to the date of commencing operations. Impairment loss is recognised,
where applicable, when the carrying value of fixed assets exceeds its
market value or the value in use whichever is higher.
Depreciation on Fixed Assets is provided on Straight Line Method as per
Schedule XIV of the Companies Act, 1956. Depreciation on impaired
assets is provided by adjusting the depreciation charge in the
remaining periods so as to allocate the asset''s revised carrying amount
over its remaining useful life. Intangible Assets are amortised over a
period of three years.
All investments are valued at cost. Diminution in the value of
investments other than temporary in nature is provided for.
Materials at site are valued at cost on FIFO method. Work-in-Progress
in respect of contracts till attaining a reasonable progress level and
in property development till significant risks and rewards of ownership
are transferred is valued at cost.
1.7. Revenue Recognition
i) Revenue in respect of construction contracts including Property
Development activity is recognised on percentage of completion method.
Percentage of completion is arrived at as the proportion of contract
costs incurred (including directly attributable borrowing costs) up to
the Balance Sheet date to the estimated total contract costs.
ii) Dividend from investments is accounted when received.
1.8. Contract Revenue /Sales
i) Revenue in respect of billed and unbilled contracts/property
development in progress includes recognised profits based on percentage
of completion and retention on bills. Provision for expected losses is
made irrespective of percentage of completion.
ii) Revenue from Property Development activity is recognised when
significant risks and rewards of ownership in the land and/or building
are transferred to the customer.
iii) Bill raised for value of work done in respect of completed and
ongoing contracts including retention on bill is disclosed as proceeds
iv) Sale of goods and services are recognized when the goods are
delivered or services rendered.
v) Sales are recorded net of trade discounts/ rebates exclusive of
1.9. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of assets that necessarily takes substantial period of
time to get ready for intended use are treated as part of the cost of
such assets. All other borrowing costs are charged to revenue.
1.10. Employee Benefits
a. Short Term
Short term employee benefits, including accumulated compensated
absences, are recognized as an expense as per the Company''s scheme,
based on expected obligations on undiscounted basis.
b. Long term
i. Long term employee benefits comprise of leave encashment which is
provided for based on the actuarial valuation using the projected unit
ii. Provident Fund
Contributions are made to the Company''s Employees Provident Fund Trust
in accordance with the fund rules. The interest rate payable by the
trust to the beneficiaries every year is being notified by the
Government. The company has an obligation to make good the shortfall,
if any, between the return from the investments of the trust and the
notified interest rate.
This is defined contribution plan. Fixed contributions to the
Superannuation Fund administered by trustees and managed by Life
Insurance Corporation of India are charged to the Profit and Loss
Account. The Company has no further obligations for future
superannuation benefits other than its annual contributions and
recognizes such contributions as an expense in the year incurred.
The Company makes annual contribution to a Gratuity Fund administered
by trustees and managed by Life Insurance Corporation of India (LIC).
Liability for future gratuity benefits is accounted based on actuarial
valuation, as at the Balance Sheet date, determined every year by LIC
using projected unit credit method. Actuarial gains and losses,
comprising of experience adjustments and the effects of changes in
actuarial assumptions, are recognised immediately in the profit and
Provision for current tax is made based on the liability computed in
accordance with the relevant tax rates and tax laws. Provision for
deferred tax is made for timing differences arising between the taxable
income and accounting income calculated at the tax rates enacted or
substantially enacted by the Balance Sheet date. Deferred tax assets
are recognized only if there is a virtual certainty that they will be
realised and are reviewed for appropriateness of their respective
carrying values at each Balance Sheet date.
1.12. Provisions & Contingent Liabilities:
Provisions are recognized for known liabilities that can be measured
where the Company has a present obligation as a result of past event.
Contingent Liabilities are disclosed by way of note.