1. Accounting Concepts:
The accompanying financial statements have been prepared to comply in
all material respects with the Accounting Standards issued by the
Institute of Chartered Accountants of India (ICAI) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on accrual basis.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
2. Use of Estimates :
The Management makes estimates and technical and other assumptions
regarding the amounts of income and expenses in accordance with Indian
GAAP in the preparation of the financial statements. Difference between
the actual results and estimates are recognised in the period in which
they are determined.
3. Accounting of Construction Contract:
The Company follows the percentage completion method as mentioned in
Accounting Standard (AS) 7 Construction Contracts on the basis of
physical measurement of work actually completed at the balance sheet
date, taking into account the contractual price and revision thereto by
estimating total revenue and total cost till completion of the contract
and profit so determined has been accounted for proportionate to the
percentage of actual work done.
Claims are accounted as income in the year of receipt of arbitration
award or acceptance by client or evidence of acceptance received.
4. Revenue Recognition:
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
Dividend is recognized as and when the right to receive payment is
established by the Balance Sheet date.
5. Fixed Assets:
Fixed Assets are valued at cost less accumulated depreciation /
amortization. Cost comprises the purchase price and any other expenses
related to acquisitions and installation and any attributable cost of
bringing the asset to its working condition for its intended use.
a) Depreciation on Fixed Assets is being provided on Written Down Value
Method as specified in Schedule XIV to the Companies Act, 1956.
b) Depreciation in respect of additions to fixed assets is provided on
pro-rata basis from the date on which such assets are acquired/ put to
c) Depreciation on assets sold, discarded or demolished during the year
is being provided at their respective rates on pro-rata up to the date
on which such assets are sold, discarded or demolished
7. Impairment of Assets:
The Company makes an assessment of any indicator that may lead to
impairment of assets on an annual basis. According to AS-28 on
Impairment of Assets an Asset is treated as impaired when the
carrying cost of asset exceeds its recoverable value. Impairment Loss
is charged to Profit & Loss a/c in the year in which impairment is
8. Valuation of Inventories:
a) Inventories are valued at the lower of cost or net realizable value
except waste/scrap which is valued at net realizable value. The cost
is computed on FIFO basis.
b) Work in Progress on construction contracts reflect the value of
material inputs and expenses including appropriate overheads incurred
on such contracts, at cost.
Long-term investments are carried at cost.
10. Lease Transactions:
Leases, where significant portion of risk and reward of ownership are
retained by the lesser, are classified as Operating Leases and lease
rentals thereon are charged to the Profit and Loss Account.
11. Provision for Taxes:
Provision for current tax is determined as the amount of tax payable in
respect of taxable income for the year, as per the provisions of Income
Tax Act, 1961.
Deferred Tax resulting from timing difference between book and taxable
profit for the year is accounted for using the tax rates and laws that
have been enacted or substantially enacted as on the balance sheet
12. Foreign Exchange Transaction:
Transactions in foreign currency are recorded in the books of accounts
in Indian rupees at the rate of exchange prevailing on the date of
13. Borrowing Cost:
Borrowing costs that are attributable to the acquisition and
construction of qualifying assets are capitalized as part of cost of
such assets till such time the assets is ready for its intended use. A
qualifying asset is one that requires substantial period of time to get
ready for its intended use. All other borrowing costs are charged to
the Profit & Loss Account as period costs.
14. Earnings Per Share:
Basic EPS is computed by dividing the net profit or loss for the period
attributable to equity shareholders by the weighted average number of
equity share outstanding during the year. Diluted EPS is computed using
the weighted average number of equity shares and diluted equity
equivalent shares outstanding during the year except where the result
would be anti- dilutive.
15. Provision, Contingent Liabilities and Contingent Assets:
Provision involving substantial degree of estimation in measurement is
recognize when there is a present obligation as a result of past events
and it is probable that there will be an outflow of resources.
Provisions are determined based on Management estimates required to
settle the obligation at the Balance Sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current Management
Contingent liabilities are not recognise but are disclosed in the
notes. Contingent asset are neither recognized nor disclosed in the
financial statements. Outstanding Bank Guarantee as on 31st March 2011
is Rs. 15,886.25 Lacs and outstanding Letter of Credit (L.C.) as on
31st March 2011 is Rs. 1,222.99 Lacs.
16. Segmental Reporting:
As the Management information system of the Company recognises and
monitors Construction as the only business segment, the accounting
standards Segmental Reporting does not apply.
17. Retirement Benefits:
i) Contribution to Provident Fund is charged to the profit and loss
account. Provident Fund contribution is made to the Government
Administered Provident Fund. Company has no further obligation beyond
this contribution charged in financial statement.
ii) Company also provides for Retirement Benefits in the form of
Gratuity. Such Benefits are provided for based on valuation on
projected unit credit method made by independent actuaries as at the
Balance Sheet date.
iii) Leave encashment is paid to employees on annual basis and
recognized as expenses when it is incurred
18. Accounting for Joint Venture Contracts:
In respect of contracts executed in integrated joint venture under
profit sharing arrangements (assessed as Partnership Firm under the
Income Tax laws) the profit or loss is accounted for, as when it is
determined by the joint venture and the net investment in the joint
venture is reflected as Investments / Current Assets.