a. Basis of Preparation: The financial statements are prepared under
historical cost convention, on accrual basis of accounting, to comply
in all material aspects with all the applicable Accounting Principles
in India, the applicable Accounting Standards notified u/s 211(3C) of
the Companies Act, 1956 and the relevant provisions of the Companies
b. Use of Estimates: The preparation of financial statements in
conformity with Generally Accepted Accounting Principles requires
estimates and assumptions to be made that affect the reported amounts
of assets and liabilities and disclosure of contingent liabilities on
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.
Differences between actual results and estimates are recognized in the
periods in which the results are known/materialize.
c. Fixed Assets and Depreciation: Fixed Assets are stated at cost of
acquisition or construction (including installation cost upto the date
put to use, net of specific credits) less accumulated depreciation.
Depreciation is provided using straight-line method based on useful
lives as estimated by the management. The management estimate of useful
lives for various assets is: Factory Building/Building- 28/60 years,
Machinery - 8V2 years, Motor Cars - 10 years, Motor Truck - 8V2 years,
Furniture - 6 years, Office equipments - 6 years, Computer/Software - 3
years, Electrical Equipments - 6 years, Cycle - 2 years, Motorcycle - 7
years, Rails and Trolley - 7 years and Ship - 8V2 years. Depreciation
on additions and deletions to assets during the year is provided
d. Inventories: Stores, embedded goods and spare parts and Work in
progress are valued at cost (FIFO basis) and contract rates
respectively. Work in Progress in respect of Project development and
Buildings held as stock-in-trade are valued at cost or net realizable
value, whichever is lower.
e. Impairment of Assets: An asset is treated as impaired when the
carrying cost of assets exceeds its recoverable value. An impairment
loss is charged to profit and loss account in the year in which an
asset is identified as impaired. The impairment loss recognized in
prior accounting periods is reversed if there has been a change in the
estimate of recoverable amount.
f. Retirement Benefits: Contribution to Provident/Family
Pension/Gratuity Funds are made to recognized funds and charged to the
Profit and Loss account. Provision for incremental liability in respect
of Gratuity and Leave encashment is made as per independent Actuarial
valuation at the year-end.
g. Foreign Currency Transactions/Translations: Transactions in foreign
currency including acquisition of fixed assets are recorded at the
prevailing exchange rates on the date of the transaction. All monetary
assets and monetary liabilities in foreign currencies are translated at
the relevant rates of exchange prevailing at the year-end. Exchange
differences arising out of payment/restatement of long term liabilities
relating to Fixed Assets are capitalized in accordance with The
Companies (Accounting Standards) Amendment Rules 2009, relating to
AS-11 The Effects of the changes in Foreign Exchange Rates, vide
notification dated March 31, 2009 and further amended on May 13, 2011.
Revenue transactions at the Foreign Branch/projects are translated at
average rate. Fixed Assets are translated at rate prevailing on the
date of purchase. Net exchange rate difference is recognized in the
Profit and Loss Account. Depreciation is translated at rates used for
h. In respect of Derivative Contracts, gain/loss on settlement are
recognized and charged to Profit and Loss Accounts.
i. Investments: are stated at cost. Permanent diminution, if any, is
j. Recognition of Income and Expenditure: Revenue from contracts is
recognized on the percentage
completion method based on billing schedules agreed with the client on
a progressive completion basis. In case the estimated total cost of a
contract based on technical and other estimate is expected to exceed
the corresponding contract value, such excess is accounted for. Claims
and variations are recognized as revenue on acceptance of concerned
authorities or on receipt of Award or on evidence of its final
acceptability. Revenue on Project Development is recognized on
execution of sale agreement. Other Revenues and expenses are accounted
on accrual basis.
k. Borrowing Costs: Borrowing costs directly attributable and
identifiable to the acquisition or construction of qualifying assets
are capitalized till the date such qualifying assets are ready to be
put to use.
L. Taxation: The tax expense comprises of current tax and deferred
tax. Current tax is calculated in accordance with the tax laws
applicable to the current financial year. Deferred tax resulting from
timing difference between book and taxable profit is accounted for
using the tax rates and tax laws that have been enacted by the balance
sheet date. Deferred tax assets are recognized only to the extent there
is virtual certainty of realization in future.
m. a. Where the Joint Venture Agreement provides for execution of
contracts under work sharing pattern, the Company''s share of
revenue/expenses in the works executed by it is accounted on percentage
completion method as per the accounting policies followed by it in
respect of contracts.
b. Where the Integrated Joint Venture Agreement provides for execution
of contracts under profit sharing arrangement, Company''s share in the
profit/loss is accounted for as and when determined. The services
rendered to Joint Ventures are accounted as income, on accrual basis.
n. Employees Stock Option Plan: Compensation expenses under Employee
Stock Option Plan representing excess of market price of the shares on
the date of grant of option over the exercise price of option is
amortized on a straight-line basis over the vesting period.
o. Provisions and Contingent Liabilities: The Company recognizes a
provision when there is a present obligation as a result of a past
event that probably requires an outflow of resources and a reliable
estimate can be made of the amount of the obligation. A disclosure for
a contingent liability is made when there is a possible obligation or a
present obligation that may, but probably will not, requires an outflow
of resources. Where there is a possible obligation or a present
obligation that the likelihood of outflow of resources is remote, no
provision or disclosure is made.