1.1 Basis of Preparation of Financial Statements
The financial statements have been prepared on accrual basis of
accounting in conformity with the generally accepted accounting
principles in India (GAAP) and comply with Accounting Standards
prescribed by the Companies (Accounting Standard) Rules, 2006 and the
relevant provisions of the Companies Act, 1956.
1.2 Use of Estimates
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent liabilities at the date
of the financial statements and the reported amount of revenues and
expenses during the reporting period. Although these estimates are
based upon management''s best knowledge of current events and actions,
actual results could differ from these estimates. Difference between
the actual results and estimates are recognized in the period in which
the results are known / materialized.
1.3 Fixed Assets
Tangible assets are valued at cost of acquisition less accumulated
depreciation and impairment loss, if any. Cost comprises the purchase
price and any attributable cost of bringing the asset to its working
condition for its intended use. Assets acquired under Hire Purchase
arrangements are recorded at their cash values and the finance charges
are charged to Profit and Loss Account as accrued. Small second hand
assets acquired at sites for the use of employees are charged to
Depreciation on Fixed Assets is provided as per Schedule XIV of the
Companies Act, 1956 under straight line method except assets deployed
at foreign branches is provided as per the provisions of local laws at
the following rates:
1.5 Impairment of Assets
The carrying cost of assets is reviewed at each Balance Sheet date to
determine whether there is any indication of impairment of assets. An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is the greater
of the asset''s net selling price and value in use.
Inventories are valued at cost under FIFO method or net realizable
value, whichever is lower.
Long term Investments are valued at cost. Current Investments are
stated lower of cost or fair market value. Provision for diminution in
the value of long term investments is made only if such a decline is
other than temporary.
1.8 Revenue Recognition:
a) Revenue is accounted for following Percentage of Completion method
of accounting in respect of the Construction Contracts. The stage of
completion determined on the basis of physical proportion of the
contract work. Extra work and variation in contract (as mutually
agreed), to the extent that it is probable that they will result in
revenue. Bills submitted but not certified are also included in
revenue. Claims on construction contracts are included based on
management''s estimates of the profitability that they will result in
additional revenue, they are capable of being reliably measured, there
is a reasonable basis to support the claim and that such claims would
be admitted either wholly or in part.
b) Share of Profit / Loss from joint ventures is accounted for in
respect of the financial year of the venture, ending on the Balance
Sheet date, on the basis of their audited / unaudited accounts.
c) Price escalation claims and additional claims including those under
arbitration are recognized as revenue when they are realized or
receipts thereof are mutually settled or reasonably ascertained.
d) Site start up expenses is charged off in the year these are
e) Liabilities on account of Service Tax to the extent not reimbursable
by the Clients have been charged off to the Profit & Loss Account.
f) Interest income is recognized on a time proportion basis taking into
the amount outstanding and the rate applicable.
1.9 Borrowing Cost
Borrowing costs, attributable to acquisition and construction of
qualifying assets, are capitalized as a part of the cost of such asset
up to the date when such assets are ready for its intended use. Other
borrowing costs are charged to the Profit and Loss Account.
1.10 Employee Benefits
The company has adopted the Revised Accounting Standard 15 Employee
benefits prescribed by Companies (Accounting Standards) Rules, 2006
with effect from 1st April 2007.
I) Short term benefits
Short terms employee benefits are charged off at the undiscounted
amount in the year in which the related service is rendered.
ii) Post employment benefits
Post employment benefits are charged off in the year in which the
employee has rendered services. The amount charged off is recognized at
the present value of the amounts payable determined using actuarial
valuation technique. Actuarial gains and losses in respect of post
employment benefits are charged to Profit and Loss Account.
1.11 Foreign Currency transactions
Transactions in foreign currencies are recognized in the reporting
currency at the prevailing exchange rates on the transaction dates.
Foreign currency monetary items are reported using the closing rate.
Exchange difference arising on the settlement of monetary items or on
reporting monetary items of the Company at rates different from those
at which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or expenses in
the year in which they arise. Transactions completed during the year
are accounted for at the then ruling rate. Financial Statements of
foreign branches are treated as non-integral operation. In translating
the financial statement of foreign branches, the assets and
liabilities, both monetary and non monetary, has been translated at the
closing rate and income and expense items are translated at the average
rate for the period. The resultant exchange differences are accumulated
in Foreign Currency Translation Reserve Account.
Foreign exchange difference on account of a depreciable asset is
adjusted in the cost of the depreciable asset, which would be
depreciated over the balance life of the asset. In other cases, the
foreign exchange difference is accumulated in a Foreign Currency
Monetary Item Translation Difference Account and amortized over the
balance period of such long term assets/liabilities. For this purpose,
the company treats a foreign monetary item as ''Long-term Foreign
Currency Monetary Item if it has a term of 12 months or more at the
date of its origination.
All other exchange differences are recognized as income or as expenses
in the period in which they arise.
1.12 Financial Derivatives & Hedging Transactions
Financial derivatives and hedging contracts are accounted on the date
of their settlement and realized gain/ loss in respect of settled
contracts is recognized in the profit & loss account along with the
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred Tax liability is recognized being
the difference between taxable incomes and accounting income that
originate in one period and are capable of reversal in one or more
1.14 Provisions, Contingent Liabilities and 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. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Contingent assets are neither
recognized nor disclosed in the financial statements.
1.15 Earnings per share
Earnings per shares 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.
1.16 Cash and Bank Balance
Cash and Bank Balance as indicated in the Cash Flow Statement comprise
cash at bank and in hand and highly liquid investments that are readily
convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value.
1.17 Event occurring after the Balance Sheet Date
Material events if any occurring after Balance Sheet date is taken into