Mar 31, 2018
NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended 31st March, 2018
1. CORPORATE AND GENERAL INFORMATION
MBL Infrastructure Limited ("the Company") is a public limited company domiciled and incorporated in India and its equity shares are listed at Bombay Stock Exchange (BSE) /National Stock Exchange (NSE). The registered office is located at Divine Bliss, 2/3, Judges Court Road, 1st Floor, Kolkata 700027, India to be shifted to New Delhi in terms of approved Resolution Plan. The Company is principally engaged in the business of providing engineering and construction services.
2. STATEMENT OF COMPLIANCE
The financial statements have been prepared in accordance with Ind AS prescribed under Section 133 of the Companies Act, 2013 ("Act") read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) (Amendment) Rules, 2016.
Recent Pronouncements
On March 28, 2018, Ministry of Corporate Affairs ("MCA") has issued the Companies (Indian Accounting Standards) Amendment Rules, 2018 notifying Ind AS 115, "Revenue from Contract with Customers" and Appendix B to Ind AS 21 "Foreign currency transactions and advance consideration" which are applicable with effect from financial periods beginning on or after 1st April, 2018.
Ind AS 115 - Revenue from Contract with Customers
The standard requires that an entity should recognize revenue to depict the transfer of promised goods or services to customers for an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers. The effect of this amendment on the financial statements of the Company is being evaluated.
Ind AS 21 - Appendix B "Foreign currency transactions and advance consideration"
This Appendix applies to a foreign currency transaction (or part of it) when an entity recognizes a non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration before the entity recognizes the related asset, expense or income (or part of it). The effect of this amendment on the financial statements of the Company is being evaluated."
3. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The financial statements have been prepared under the historical cost convention on accrual basis except certain financial instruments that are measured in terms of relevant Ind AS at amortized costs at the end of each reporting period.
Historical cost convention is generally based on the fair value of the consideration given in exchange for goods and services.
Operating cycle for the business activities of the company covers the normal duration of the project/ contract/ service including the defect obligation period, wherever applicable, and extends up to the realization of receivables (including retention money) within the credit period normally applicable to the respective project. In cases where the operating cycle cannot be identified in the normal course, the same has been assumed to have duration of twelve months. Accordingly, all Assets and Liabilities have been classified as current or non-current as per the operating cycle and other criteria set out in Ind AS 1 ''Presentation of financial statements'' and Schedule III to the Companies Act, 2013.The standalone financial statements are presented in Indian Rupees (''INR''), which is the Company''s functional and presentation currency and all amounts are rounded to the nearest Lakhs in two decimals (except otherwise indicated).
(b) Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions.
The Company categorizes assets and liabilities measured at fair value into one of three levels depending on the ability to observe inputs employed for such measurement:
(a) Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
(b) Level 2: inputs other than quoted prices included within level 1 that are observable either directly or indirectly for the asset or liability.
(c) Level 3: inputs for the asset or liability which are not based on observable market data (unobservable inputs).
The company has an established control framework with respect to the measurement of fair values. This includes a finance team that has overall
responsibility for overseeing all significant fair value measurements who regularly review significant unobservable inputs, valuation adjustments and fair value hierarchy under which the valuation should be classified.
(c) Accounting Estimates
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operation during the reported period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates which are recognized in the period in which they are determined. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision effects only that period or in the period of the revision and future periods if the revision affects both current and future years.
(d) Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
(e) Recoverability of claims
The Company has claims in respect of cost over-run arising due to client caused delays, suspension of projects, deviation in design and change in scope of work etc., which are at various stages of negotiation/ discussion with the clients or under arbitration. The readability of these claims are estimated based on contractual terms, historical experience with similar claims as well as legal opinion obtained from internal and external experts, wherever necessary. Changes in facts of the case or the legal framework may impact readability of these claims.
(f) Property Plant and Equipment (PPE)
Property, plant and equipment are stated at cost of acquisition, construction and subsequent improvements thereto less accumulated depreciation and impairment losses, if any. For this purpose, cost include deemed cost on the date of transition and comprises purchase price of assets or its construction cost including duties and taxes, inward freight and other expenses incidental to acquisition or installation and adjustment for exchange differences wherever applicable and any cost directly attributable to bring the asset into the location and condition necessary for it to be capable of operating in the manner intended by the management.
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognized in the income statement when incurred.
Depreciation :
Depreciation on PPE is provided as per Schedule II of the Companies Act, 2013 on straight line method.
Assets costing rupees five thousand or less are being depreciated fully in the year of addition/acquisition.
(g) Derecognition of Tangible assets:
An item of PPE is de-recognized upon disposal or when no future economic benefits are expected to arise from its use or disposal. Gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the Statement of Profit and Loss.
(h) Inventories:
Construction materials are valued at lower of cost and fair value (except scrap/ waste which are valued at net realizable value). Cost of inventories is ascertained on FIFO basis.
Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and selling costs. The cost is computed on weighted average basis.
Provision for obsolescence in inventories is made, whenever required.
(i) Financial assets and financial liabilities
Financial assets and financial liabilities (financial instruments) are recognized when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the Statement of Profit and Loss.
The financial assets and financial liabilities are classified as current if they are expected to be realized or settled within operating cycle of the company or otherwise these are classified as non-current.
The classification of financial instruments whether to be measured at Amortized Cost, at Fair Value through Profit and Loss (FVTPL) or at Fair Value Through Other Comprehensive Income (FVTOCI) depends on the objective and contractual terms to which they relate. Classification of financial instruments are determined on initial recognition.
(i) Cash and cash equivalents
All highly liquid financial instruments, which are readily convertible into determinable amounts of cash and which are subject to an insignificant risk of change in value and are having original maturities of three months or less from the date of purchase, are considered as cash equivalents. Cash and cash equivalents includes balances with banks which are unrestricted for withdrawal and usage.
(ii) Financial Assets and Financial Liabilities measured at amortized cost
Financial Assets held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are measured at amortized cost.
The above Financial Assets and Financial Liabilities subsequent to initial recognition are measured at amortized cost using Effective Interest Rate (EIR) method.
The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts (including all fees and points paid or received, transaction costs and other premiums or discounts) through the expected life of the Financial Asset or Financial Liability to the gross carrying amount of the financial asset or to the mortised cost of financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
(iii) Financial Asset at Fair Value through Other Comprehensive Income (FVTOCI)
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Subsequent to initial recognition, they are measured at fair value and changes therein are recognized directly in other comprehensive income.
(iv) For the purpose of para (ii) and (iii) above, principal is the fair value of the financial asset at initial recognition and interest consists of consideration for the time value of money and associated credit risk.
(v) Financial Assets or Liabilities at Fair value through profit or loss
Financial Instruments which does not meet the criteria of amortised cost or fair value through other comprehensive income are classified as Fair Value through Profit or loss. These are recognized at fair value and changes therein are recognized in the statement of profit and loss.
(vi) Investment in Subsidiaries and associates are being carried at cost.
(vii) Impairment of financial assets
The Company evaluates whether there is any objective evidence that financial assets including loan, trade and other receivables are impaired and determines the amount of impairment allowance as a result of the inability of the parties to make required payments. The Company bases the estimates on the ageing of the receivables, credit-worthiness of the receivables and historical write-off experience and variation in the credit risk on year to year basis.
(viii) Derecognition of financial instruments
The Company derecognizes a financial asset or a group of financial assets when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
On derecognition of a financial asset (except for equity instruments designated as FVTOCI), the difference between the asset''s carrying amount and the sum of the consideration received and receivable are recognized in statement of profit and loss.
On derecognition of assets measured at FVTOCI, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
Financial liabilities are derecognized if the Company''s obligations specified in the contract expire or are discharged or cancelled. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in Statement of Profit and Loss.
(j) Foreign Currency Transactions
Transactions in foreign currencies are translated into the functional currency at the exchange rates prevailing on the date of the transactions. Foreign currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate as at the date of transaction. The loss or gain thereon and also on the exchange differences on settlement of the foreign currency transactions during the year are recognized as income or expense in the statement of profit and loss. Foreign exchange gain/loss to the extent considered as an adjustment to Interest Cost are considered as part of borrowing cost.
(k) Equity Share Capital
An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Par value of the equity shares is recorded as share capital and the amount received in excess of par value is classified as Securities Premium. Costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects.
(I) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a legal or constructive obligation as a result of past events and it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of obligation. Provisions are not recognized for future operating losses. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
Contingent liabilities are not recognized and are disclosed by way of notes to the financial statements when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or when there is a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the same or a reliable estimate of the amount in this respect cannot be made.
Contingent assets are not recognized but disclosed in the financial statements by way of notes to accounts when an inflow of economic benefits is probable.
Provisions for onerous contracts are recorded in the statements of operations when it becomes known that the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received.
(m) Employee Benefits
Employee benefits are accrued in the year in which services are rendered by the employees. Short term employee benefits are recognized as an expense in the statement of profit and loss for the year in which the related service is rendered.
Contribution to defined contribution plans such as Provident Fund etc, is being made in accordance with statute and are recognized as and when incurred.
Contribution to defined benefit plans consisting of contribution to gratuity are determined at close of the year at present value of the amount payable using actuarial valuation techniques. Actuarial gain and losses arising from experience adjustments and changes in actuarial assumptions are recognized in other comprehensive income.
Other long term employee benefits consisting of Leave Encashment are determined at close of the year at present value of the amount payable using actuarial valuation techniques. The changes in the amount payable including actuarial gain/loss are recognized in other comprehensive income.
(n) Revenue recognition
- In respect of construction/ project related activity, the Company follows percentage of completion method. Percentage of completion is determined by survey of work performed / physical measurement of work actually completed at the balance sheet date taking into account contractual price/ unit rates and revision thereto.
- Revenue in respect of claims is recognized to the extent the Company is reasonably certain of their realization.
- Other operational income is recognized on rendering of related services, as per the terms of the contracts.
- Other items of income are accounted as and when the right to receive arises.
- Dividend income
Dividend income is accounted for when the right to receive the same is established, which is generally when shareholders approve the dividend.
- Interest income
Finance income is accrued on a time proportion basis, by reference to the principal outstanding and the applicable EIR. Other income is accounted for on accrual basis. Where the receipt of income is uncertain, it is accounted for on receipt basis.
(o) Borrowing costs
Borrowing cost comprises of interest and other costs incurred in connection with the borrowing of the funds. All borrowing costs are recognized in the Statement of Profit and Loss using the effective interest method except to the extent attributable to qualifying Property Plant Equipment (PPE) which are capitalized to the cost of the related assets. A qualifying PPE is an asset, that necessarily takes a substantial period of time to get ready for its intended use or sale. Borrowing cost also includes exchange differences to the extent considered as an adjustment to the borrowing costs.
(p) Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.
Finance Lease
Finance Lease that transfer substantially all of the risks and benefits incidental to ownership of the leased item, are capitalized at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and a reduction in the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability wwwW. Finance charges are recognized in finance costs in the statement of profit and loss unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Company''s policy on borrowing costs.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating Lease
Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by lessor are classified as operating leases.
Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned. Payments/ receipts under operating lease are recorded in the Statement of Profit and Loss on a straight line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.
(q) Taxes on income
Income tax expense representing the sum of current tax expenses and the net charge of the deferred taxes is recognized in the income statement except to the extent that it relates to items recognized directly in equity or other comprehensive income.
Current Tax
Current income tax is provided on the taxable income and recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is accounted for using the balance sheet liability method in respect of temporary Differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit as well as for unused tax losses or credits. In principle, deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Deferred tax assets and liabilities are also recognized on temporary differences arising from business combinations except to the extent they arise from goodwill that is not taken into account for tax purposes.
Deferred taxes are calculated at the enacted or substantially enacted tax rates that are expected to apply when the asset or liability is settled. Deferred tax is charged or credited to the income statement, except when it relates to items credited or charged directly to other comprehensive income in equity, in which case the corresponding deferred tax is also recognized directly in equity.
(r) Earnings per share
Basic Earnings per share is calculated by dividing the profit from continuing operations and total profit, both attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.
Diluted earnings per share is computed using the net profit for the year attributable to the shareholder'' and weighted average number of equity and potential equity shares outstanding during the year including share options, convertible preference shares and debentures, except where the result would be anti-dilutive. Potential equity shares that are converted during the year are included in the calculation of diluted earnings per share, from the beginning of the year or date of issuance of such potential equity shares, to the date of conversion.
(s) Segment accounting
Operating segments are identified and reported taking into account the different risk and return, organization structure and internal reporting system.
Mar 31, 2016
a. Basis of Preparation of Financial Statements
(i) The financial statements have been prepared under the historical cost convention and in accordance with the generally accepted accounting principles in India including the accounting standard notified under the provisions of the Companies act, 2013.
(ii) The Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis.
b. Use of Estimates
the preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of income and expenses and disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting year end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.
c. Revenue Recognition
(i) In respect of construction/ project related activity, the Company follows percentage of completion method. Percentage of completion is determined by survey of work performed / physical measurement of work actually completed at the balance sheet date taking into account contractual price/ unit rates and revision thereto.
(ii) Revenue in respect of claims is recognized to the extent the Company is reasonably certain of their realization.
(iii) Other operational income is recognized on rendering of related services, as per the terms of the contracts.
(iv) Other items of income are accounted as and when the right to receive arises.
d. Fixed Assets, Depreciation and Amortization
(i) Fixed assets are stated at their original cost. Cost includes acquisition price, attributable expenses and pre-operational expenses. Fixed assets retired from active use are valued at net realizable value.
(ii) Depreciation on fixed assets is provided based on useful life of the assets as prescribed in Schedule II to the Companies act, 2013. In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over their remaining useful life.
(iii) Assets acquired on equipment finance (hire purchase) are stated at their cash values.
(iv.) Lease hold land, if any, is amortized over the period of lease.
e. Investments
Long term investments are valued at cost. Provision for diminution in the value of long term investments is made only if such decline is other than temporary.
f. Foreign Currency Transactions
(i) The reporting currency of the Company is the Indian Rupee.
(ii) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.
(iii) Monetary items denominated in foreign currencies, if any, at the end of the year are restated at year end rates.
(iv). Non monetary foreign currency items are carried at cost.
(v) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the statement of profit and loss.
g. Financial Derivatives & Hedging transactions
(i) the Company uses foreign currency forward contracts to hedge foreign currency risk arising from future transactions in respect of which firm commitments are made or which are highly probable forecast transactions. the Company designates these forward contracts in a hedging relationship by applying the hedge accounting principles of AS-30, Financial Instruments: Recognition and Measurement.
(ii) the Company uses foreign currency forward contracts as hedges of its exposure to foreign currency risk in forecasted transactions and firm commitments. In accordance with the recognition and measurement principles set out in AS-30, gains/losses on mark to market of derivative financial instruments are recognized in the Statement of Profit and Loss. Gains and losses arising on account of rollover/ cancellation of forward contracts are recognized as income/expense of the period in which such rollover/cancellation takes place.
h. Leases
The Company''s significant leasing arrangements are in respect of operating leases for premises and quarries for varying periods and the lease can be renewed as per mutual agreement. The aggregate lease rents payable are charged as rent in the statement of profit and loss. There is no restriction or contingent rent in the lease agreements. All leases are cancellable in nature.
i. Inventories
Construction materials are valued at cost or net realizable value whichever is lower. Cost of inventories is ascertained on FIFO basis.
j. Taxes on Income
i) Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961.
ii) 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 substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is reasonable certainty that the assets will be adjusted in future. The carrying amount of deferred tax assets are reviewed at each balance sheet date. In case of unabsorbed depreciation and losses, deferred tax assets are recognized and carried forward only to the extent there is a virtual certainty that the asset will be adjusted in future.
iii) MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by The Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.
k. Employee Benefits
(i) All employees benefits payable wholly within twelve months of rendering the service such as salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognized in the period in which the employees render the related services.
(ii) Retirement benefit in the form of provident fund is a defined contribution scheme and the contributions are charged to the statement of profit and loss when the contributions to the respective funds are accrued. Gratuity liability is a defined benefit obligation and is provided for on the basis of actuarial valuation made at the end of each financial year. Short term and long term compensated absences are provided for based on actuarial valuation at the year end. Actuarial gains/losses are immediately taken to the Statement of Profit and Loss and are not deferred.
l. Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss.
m. Accounting for Joint Venture Contracts
(i) Contracts executed in joint venture under work sharing arrangement (consortium) are accounted in accordance with the accounting policy followed by the Company as that of an independent contract to the extent work is executed.
(ii) Assets, liabilities and expenditure arising out of contracts executed wholly by the Company pursuant to a joint venture contract are recognized under respective heads in the financial statements. Income from the contract is accounted net of joint ventureâs share under income from operations in these financial statements.
(iii) Share of turnover attributable to the Company in respect of contracts executed by the other joint venture partners pursuant to joint venture agreement, is accounted under income from operations in these financial statements.
n. Impairment of Assets
The carrying amount of assets is reviewed at each balance sheet date to determine if there is any indication of impairment thereof based on external / internal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount, which represents the greater of the net selling price of assets and their ''value in use''. The estimated future cash flows are discounted to their present value at appropriate rate arrived at after considering the prevailing interest rates and weighted average cost of capital.
o. Provision, 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. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
Mar 31, 2014
A. Basis of Preparation of Financial Statements
(i) The financial statements have been prepared under the historical
cost convention and in accordance with the generally
accepted accounting principles and the provisions of the Companies Act,
1956. (ii) The Company follows mercantile system of accounting and
recognizes income and expenditure on accrual basis.
b. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, the reported amounts of income and expenses and
disclosure of contingent liabilities at the date of the financial
statements and the result of operations during the reporting year end.
Although these estimates are based upon management''s best knowledge of
current events and actions, actual results could differ from these
estimates.
c. Revenue Recognition
(i) In respect of construction/ project related activity, the Company
follows percentage of completion method. Percentage of completion is
determined by survey of work performed / physical measurement of work
actually completed at the balance Sheet date taking into account
contractual price/ unit rates and revision thereto.
(ii) Revenue in respect of claims is recognised to the extent the
Company is reasonably certain of their realisation.
(iii) Other operational income is recognised on rendering of related
services, as per the terms of the contracts.
(iv) Other items of income are accounted as and when the right to
receive arises.
(v) Each contract is recognised as a profit centre. Payments/
reimbursements under the same are grouped under direct and other
expenses.
d. Fixed Assets, Depreciation and Amortisation
(i) Fixed assets are stated at their original cost. Cost includes
acquisition price, attributable expenses and pre-operational
expenses. Fixed Assets retired from active use are valued at net
realisable value. (ii) Depreciation on fixed assets is provided on
straight line method at the rates and in the manner prescribed in
Schedule
XIV to the Companies Act, 1956. In case of impairment, if any,
depreciation is provided on the revised carrying amount
of the assets over their remaining useful life. (iii) Assets acquired
on equipment finance (hire purchase) are stated at their cash values.
(iv) Leasehold land,if any, is amortised over the period of lease.
e. Investments
Long term investments are valued at cost. Provision for diminution in
the value of long term investments is made only if such decline is
other than temporary.
f. Foreign Currency Transactions
(i) The reporting currency of the Company is the Indian Rupee.
(ii) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(iii) Monetary items denominated in foreign currencies, if any, at the
end of the year are restated at year end rates. (iv) Non monetary
foreign currency items are carried at cost. (v) Any income or expense
on account of exchange difference either on settlement or on
translation is recognised in the statement of profit and loss.
g. Financial Derivatives & Hedging transactions
(i) The company uses derivative financial instruments such as forward
exchange contracts, options, currency swaps, etc., to hedge its risks
associated with foreign currency fluctuations relating to the
underlying transactions.
(ii) Financial derivatives and hedging contracts are accounted on the
date of their settlement and realised gain/loss in respect of settled
contracts is recognised in the Statement of Profit and Loss along with
the underlying transactions.
h. Leases
The Company''s significant leasing arrangements are in respect of
operating leases for premises and quarries for varying periods and the
lease can be renewed as per mutual agreement. The aggregate lease rents
payable are charged as rent in the statement of profit and loss. There
is no restriction or contingent rent in the lease agreements. All
leases are cancelable in nature.
i. Inventories
Construction materials are valued at cost or net realisable value
whichever is lower. Cost of inventories is ascertained on FIFO basis.
j. Taxes on Income
(i) Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961.
(ii) 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 substantively enacted as on the balance
sheet date. The deferred tax asset is recognised and carried forward
only to the extent that there is reasonable certainty that the assets
will be adjusted in future. The carrying amount of deferred tax assets
are reviewed at each balance sheet date. In case of unabsorbed
depreciation and losses, deferred tax assets are recognised and carried
forward only to the extent there is a virtual certainty that the asset
will be adjusted in future.
k. Employee Benefits
(i) All employees benefits payable wholly within twelve months of
rendering the service such as salaries, wages, short term compensated
absences, etc. and the expected cost of bonus, ex-gratia are
recognised in the period in which the employees render the related
services.
(ii) Retirement benefit in the form of provident fund is a defined
contribution scheme and the contributions are charged to the statement
of profit and loss when the contributions to the respective funds are
accrued. Gratuity liability is a defined benefit obligation and is
provided for on the basis of actuarial valuation made at the end of
each financial year. Short term and long term compensated absences are
provided for based on actuarial valuation at the year end.
Actuarial gains/losses are immediately taken to statement of profit and
loss and are not deferred.
l. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to statement of profit and loss.
m. Accounting for Joint Venture Contracts
(i) Contracts executed in joint venture under work sharing arrangement
(consortium) are accounted in accordance with the accounting policy
followed by the Company as that of an independent contract to the
extent work is executed.
(ii) Assets, liabilities and expenditure arising out of contracts
executed wholly by the Company pursuant to a joint venture contract are
recognised under respective heads in the financial statements. Income
from the contract is accounted net of joint venturer''s share under
income from operations in these financial statements.
(iii) Share of turnover attributable to the Company in respect of
contracts executed by the other joint venture partners pursuant to
joint venture agreement, is accounted under income from operations in
these financial statements.
n. Impairment of Assets
The carrying amount of assets is reviewed at each balance sheet date to
determine if there is any indication of impairment thereof based on
external / internal factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount, which
represents the greater of the net selling price of assets and their
''value in use''. The estimated future cash flows are discounted to their
present value at appropriate rate arrived at after considering the
prevailing interest rates and weighted average cost of capital.
o. Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2013
A. Basis of Preparation of Financial Statements
(i) The financial statements have been prepared under the historical
cost convention and in accordance with the generally accepted
accounting principles and the provisions of the Companies Act, 1956.
(ii) The Company follows mercantile system of accounting and recognises
income and expenditure on accrual basis.
b. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, the reported amounts of income and expenses and
disclosure of contingent liabilities at the date of the financial
statements and the result of operations during the reporting year end.
Although these estimates are based upon management''s best knowledge of
current events and actions, actual results could differ from these
estimates.
c. Revenue Recognition
(i) In respect of construction/ project related activity, the Company
follows percentage of completion method. Percentage of completion is
determined by survey of work performed/physical measurement of work
actually completed at the Balance Sheet date taking into account
contractual price/ unit rates and revision thereto.
(ii) Revenue in respect of claims is recognised to the extent the
Company is reasonably certain of their realisation.
(iii) Other operational income is recognised on rendering of related
services, as per the terms of the contracts.
(iv) Other items of income are accounted as and when the right to
receive arises.
(v) Each contract is recognised as a profit centre. Payments/
reimbursements under the same are grouped under direct and other
expenses.
d. Fixed Assets, Depreciation and Amortisation
(i) Fixed assets are stated at their original cost. Cost includes
acquisition price, attributable expenses and pre-operational expenses.
Fixed Assets retired from active use are valued at net realisable
value. (ii) Depreciation on fixed assets is provided on straight line
method at the rates and in the manner prescribed in Schedule
XIV to the Companies Act, 1956. In case of impairment, if any,
depreciation is provided on the revised carrying amount of the assets
over their remaining useful life. (iii) Assets acquired on equipment
finance (hire purchase) are stated at their cash values. (iv)
Leasehold land,if any, is amortised over the period of lease.
e. Investments
Long term investments are valued at cost. Provision for diminution in
the value of long term investments is made only if such decline is
other than temporary.
f. Foreign Currency Transactions
(i) The reporting currency of the Company is the Indian Rupee pf).
(ii) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction. (iii) Monetary items denominated in foreign currencies,
if any, at the end of the year are restated at year end rates. (iv)
Non monetary foreign currency items are carried at cost. (v) Any
income or expense on account of exchange difference either on
settlement or on translation is recognised in
the statement of profit and loss.
g. Financial Derivatives & Hedging Transactions
(i) The Company uses derivative financial instruments such as forward
exchange contracts, options, currency swaps, etc., to hedge its risks
associated with foreign currency fluctuations relating to the
underlying transactions.
(ii) Financial derivatives and hedging contracts are accounted on the
date of their settlement and realised gain/loss in respect of settled
contracts is recognised in the Statement of Profit and Loss along with
the underlying transactions. h. Leases
The Company''s significant leasing arrangements are in respect of
operating leases for premises and quarries for varying periods and the
lease can be renewed as per mutual agreement. The aggregate lease rents
payable are charged as rent in the Statement of Profit and Loss. There
is no restriction or contingent rent in the lease agreements. All
leases are cancelable in nature. i. Inventories Construction
materials are valued at cost or net realisable value whichever is
lower. Cost of inventories is ascertained on FIFO basis.
j. Taxes on Income
(i) Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961.
(ii) 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 substantively enacted as on the balance
sheet date. The deferred tax asset is recognised and carried forward
only to the extent that there is reasonable certainty that the assets
will be adjusted in future. The carrying amount of deferred tax assets
are reviewed at each balance sheet date. In case of unabsorbed
depreciation and losses, deferred tax assets are recognised and carried
forward only to the extent there is a virtual certainty that the asset
will be adjusted in future. k. Employee Benefits
(i) All employees benefits payable wholly within twelve months of
rendering the service such as salaries, wages, short term compensated
absences, etc. and the expected cost of bonus, ex-gratia are recognised
in the period in which the employees render the related services.
(ii) Retirement benefit in the form of provident fund is a defined
contribution scheme and the contributions are charged to the statement
of profit and loss when the contributions to the respective funds are
accrued. Gratuity liability is a defined benefit obligation and is
provided for on the basis of actuarial valuation made at the end of
each financial year. Short term and long term compensated absences are
provided for based on actuarial valuation at the year end. Actuarial
gains/losses are immediately taken to statement of profit and loss and
are not deferred. I. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to statement of profit and loss. m.
Accounting for Joint Venture Contracts
(i) Contracts executed in joint venture under work sharing arrangement
(consortium) are accounted in accordance with the accounting policy
followed by the Company as that of an independent contract to the
extent work is executed.
(ii) Assets, liabilities and expenditure arising out of contracts
executed wholly by the Company pursuant to a joint venture contract are
recognised under respective heads in the financial statements. Income
from the contract is accounted net of joint venturer''s share under
income from operations in these financial statements.
(iii) Share of turnover attributable to the Company in respect of
contracts executed by the other joint venture partners pursuant to
joint venture agreement, is accounted under income from operations in
these financial statements. n. Impairment of Assets
The carrying amount of assets is reviewed at each balance sheet date to
determine if there is any indication of impairment thereof based on
external / internal factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount, which
represents the greater of the net elling price of assets and their
Value in use''. The estimated future cash flows are discounted to their
present value at appropriate rate arrived at after considering the
prevailing interest rates and weighted average cost of capital.
o. Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2012
A. Basis of Preparation of Financial Statements
(i) The financial statements have been prepared under the historical
cost convention and in accordance with the generally accepted
accounting principles and the provisions of the Companies Act, 1956.
(ii) The Company follows mercantile system of accounting and recognises
income and expenditure on accrual basis.
b. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, the reported amounts of income and expenses and
disclosure of contingent liabilities at the date of the financial
statements and the result of operations during the reporting year end.
Although these estimates are based upon management's best knowledge of
current events and actions, actual results could differ from these
estimates.
c. Revenue Recognition
(i) In respect of construction/ project related activity, the Company
follows percentage of completion method. Percentage of completion is
determined by survey of work performed / physical measurement of work
actually completed at the balance Sheet date taking into account
contractual price/ unit rates and revision thereto.
(ii) Revenue in respect of claims is recognised to the extent the
Company is reasonably certain of their realisation.
(iii) Other operational income is recognised on rendering of related
services, as per the terms of the contracts.
(iv) Other items of income are accounted as and when the right to
receive arises.
(v) Each contract is recognised as a profit centre. Payments/
reimbursements under the same are grouped under direct and other
expenses.
d. Fixed Assets, Depreciation and Amortisation
(i) Fixed assets are stated at their original cost. Cost includes
acquisition price, attributable expenses and pre- operational expenses.
Fixed Assets retired from active use are valued at net realisable
value.
(ii) Depreciation on fixed assets is provided on straight line method
at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956. In case of impairment, if any, depreciation is
provided on the revised carrying amount of the assets over their
remaining useful life.
(iii) Assets acquired on equipment finance (hire purchase) are stated
at their cash values.
(iv) Leasehold land, if any, is amortised over the period of lease.
e. Investments
Long term investments are valued at cost. Provision for diminution in
the value of long term investments is made only if such decline is
other than temporary.
f. Foreign Currency Transactions
(i) The reporting currency of the Company is the Indian Rupee.
(ii) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(iii) Monetary items denominated in foreign currencies, if any, at the
end of the year are restated at year end rates.
(iv) Non monetary foreign currency items are carried at cost.
(v) Any income or expense on account of exchange difference either on
settlement or on translation is recognised in the statement of profit
and loss.
g. Leases
The Company's significant leasing arrangements are in respect of
operating leases for premises and quarries for varying periods and the
lease can be renewed as per mutual agreement. The aggregate lease rents
payable are charged as rent in the statement of profit and loss. There
is no restriction or contingent rent in the lease agreements. All
leases are cancelable in nature.
h. Inventories
Construction materials are valued at cost or net realisable value
whichever is lower. Cost of inventories is ascertained on FIFO basis.
i. Taxes on Income
i) Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
ii) 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 substantively enacted as on the balance
sheet date. The deferred tax asset is recognised and carried forward
only to the extent that there is reasonable certainty that the assets
will be adjusted in future. The carrying amount of deferred tax assets
are reviewed at each balance sheet date. In case of unabsorbed
depreciation and losses, deferred tax assets are recognised and carried
forward only to the extent there is a virtual certainty that the asset
will be adjusted in future.
j. Employee Benefits
(i) All employees benefits payable wholly within twelve months of
rendering the service such as salaries, wages, short term compensated
absences, etc. and the expected cost of bonus, ex-gratia are recognised
in the period in which the employees render the related services.
(ii) Retirement benefit in the form of provident fund is a defined
contribution scheme and the contributions are charged to the statement
of profit and loss when the contributions to the respective funds are
accrued. Gratuity liability is a defined benefit obligation and is
provided for on the basis of actuarial valuation made at the end of
each financial year. Short term and long term compensated absences are
provided for based on actuarial valuation at the year end. Actuarial
gains/losses are immediately taken to statement of profit and loss and
are not deferred.
k. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to statement of profit and loss.
l. Accounting for Joint Venture Contracts
(i) Contracts executed in joint venture under work sharing arrangement
(consortium) are accounted in accordance with the accounting policy
followed by the Company as that of an independent contract to the
extent work is executed.
(ii) Assets, liabilities and expenditure arising out of contracts
executed wholly by the Company pursuant to a joint venture contract are
recognised under respective heads in the financial statements. Income
from the contract is accounted net of joint venturer's share under
income from operations in these financial statements.
(iii) Share of turnover attributable to the Company in respect of
contracts executed by the other joint venture partners pursuant to
joint venture agreement, is accounted under income from operations in
these financial statements.
m. Impairment of Assets
The carrying amount of assets is reviewed at each balance sheet date to
determine if there is any indication of impairment thereof based on
external / internal factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount, which
represents the greater of the net selling price of assets and their
'value in use'. The estimated future cash flows are discounted to their
present value at appropriate rate arrived at after considering the
prevailing interest rates and weighted average cost of capital.
n. Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2011
A. Basis of Preparation of Financial Statements
(i) The financial statements have been prepared under the historical
cost convention (other than certain Fixed Assets which are stated at
revalued amount) and in accordance with the generally accepted
accounting principles and the provisions of the Companies Act, 1956.
(ii) The Company follows mercantile system of accounting and recognises
income and expenditure on accrual basis.
b. Use of Estimates
The preparation of Financial Statements in conformity with generally
accepted accounting principles requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, the reported amounts of income and expenses and
disclosure of contingent liabilities at the date of the financial
statements and the result of operations during the reporting year end.
Although these estimates are based upon management's best knowledge of
current events and actions, actual results could differ from these
estimates.
c. Revenue Recognition
(i) Sale is recognised on despatch of goods and net of Value Added Tax
(VAT).
(ii) In respect of construction/ project related activity, the Company
follows Percentage of Completion Method. Percentage of Completion is
determined by survey of work performed / physical measurement of work
actually completed at the Balance Sheet date taking into account
Contractual Price/ Unit Rates and revision thereto.
(iii) Revenue in respect of claims is recognised to the extent the
Company is reasonably certain of their realisation.
(iv) Other operational income is recognised on rendering of related
services, as per the terms of the contracts.
(v) Other items of income are accounted as and when the right to
receive arises.
d. Each Contract is recognised as a Profit Centre. Payments/
reimbursements under the same are grouped under Direct and Other
Expenses.
e. Fixed Assets and Depreciation
(i) Fixed Assets are stated at their original cost (other than certain
Fixed Assets which are stated at revalued amount). Cost includes
acquisition price, attributable expenses and preoperational expenses.
Fixed Assets retired from active use are valued at net realisable
value.
(ii) Depreciation on fixed assets is provided on straight line method
at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956.
In case of impairment, if any, depreciation is provided on the revised
carrying amount of the assets over their remaining useful life.
(iii) Assets acquired on Equipment Finance (hire purchase) are stated
at their cash values.
(iv) Lease hold land is amortised over the period of lease.
f. Investments
Long term Investments are valued at cost. Provision for diminution in
the value of long term investments is made only if such decline is
other than temporary.
g. Foreign Currency Transactions
(i) The reporting currency of the Company is the Indian Rupee.
(ii) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(iii) Monetary items denominated in foreign currencies, if any, at the
end of the year are restated at year end rates.
(iv) Non monetary foreign currency items are carried at cost.
(v) Any income or expense on account of exchange difference either on
settlement or on translation is recognised in the Profit and Loss
account.
h. Leases
The Company's significant leasing arrangements are in respect of
operating leases for premises and quarries for varying periods and the
lease can be renewed as per mutual agreement. The aggregate lease rents
payable are charged as Rent in the Profit and Loss Account. There is no
restriction or contingent rent in the lease agreements. All leases are
cancelable in nature.
i. Inventories
Stock of goods is valued at cost or net realisable value whichever is
lower. Cost of inventories is ascertained on FIFO basis.
j. Taxes on Income
i) Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961.
ii) 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 substantively enacted as on the Balance
Sheet date. The deferred tax asset is recognised and carried forward
only to the extent that there is reasonable certainty that the assets
will be adjusted in future. The carrying amount of Deferred Tax Assets
are reviewed at each Balance Sheet Date.
In case of unabsorbed depreciation and losses, deferred tax assets are
recognised and carried forward only to the extent there is a virtual
certainty that the asset will be adjusted in future.
k. Employees' Benefits
(i) All employees benefits payable wholly within twelve months of
rendering the service such as salaries, wages, short term compensated
absences, etc. and the expected cost of bonus, ex-gratia are recognised
in the period in which the employees render the related services.
(ii) Retirement benefit in the form of Provident Fund is a defined
contribution scheme and the contributions are charged to the Profit and
Loss Account of the year when the contributions to the respective funds
are accrued.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of actuarial valuation made at the end of each financial
year.
Short term compensated absences are provided for based on estimates.
Other long term benefits being liability for leave encashment are
provided for based on actuarial valuation at the year end.
Actuarial gains/losses are immediately taken to profit and loss account
and are not deferred.
I. Accounting for Joint Venture Contracts
(i) Contracts executed in joint Venture under work sharing arrangement
(consortium) are accounted in accordance with the accounting policy
followed by the Company as that of an independent contract to the
extent work is executed.
(ii) Assets, liabilities and expenditure arising out of contracts
executed wholly by the Company pursuant to a joint venture contract are
recognised under respective heads in the financial statements. Income
from the contract is accounted net of joint venturer's share under
turnover in these financial statements.
(iii) Share of turnover attributable to the Company in respect of
contracts executed by the other joint venture partners pursuant to
Joint Venture Agreement, is accounted under turnover in these financial
statements.
m. Impairment of Assets
The carrying amount of assets is reviewed at each balance sheet date to
determine if there is any indication of impairment thereof based on
external / internal factors. An impairment loss is recognised wherever
the carrying amount of an asset exceeds its recoverable amount, which
represents the greater of the net selling price of assets and their
'value in use'. The estimated future cash flows are discounted to their
present value at appropriate rate arrived at after considering the
prevailing interest rates and weighted average cost of capital.
n. Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2010
A. Basis of Preparation of Financial Statements
i) The financial statements have been prepared under the historical
cost convention (other than certain Fixed Assets which are stated at
revalued amount) and in accordance with the generally accepted
accounting principles and the provisions of the Companies Act, 1956.
(ii) The Company follows mercantile system of accounting and recognises
significant items of income and expenditure on accrual basis.
b. Revenue Recognition
(i) Sale is recognised on despatch of goods and net of Value Added Tax
(VAT).
(ii) In respect of construction/ project related activity, the Company
follows Percentage of Completion Method. Percentage of Completion is
determined by survey of work performed / physical measurement of work
actually completed at the Balance Sheet date taking into account
Contractual Price/ Unit Rates and revision thereto.
(iii) Revenue in respect of claims is recognised to the extent the
Company is reasonably certain of their realisation.
(iv) Other operational income is recognised on rendering of related
services, as per the terms of the contracts.
(v) Other items of income are accounted as and when the right to
receive arises.
c. Each Contract is recognised as a Profit Centre. Payments/
reimbursements under the same are grouped under Direct and Other
Expenses.
d. Fixed Assets and Depreciation
(i) Fixed Assets are stated at their original cost. Cost includes
acquisition price, attributable expenses and pre-operational expenses.
Fixed Assets retired from active use are valued at net realisable
value.
(ii) Depreciation on fixed assets is provided on straight line method
at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956.
In case of impairment, if any, depreciation is provided on the revised
carrying amount of the assets over their remaining useful life.
(iii) Assets acquired on Equipment Finance (hire purchase) are stated
at their cash values.
(iv) The difference between depreciation provided based on revalued
amount and that on historical cost is transferred from Revaluation
Reserve to Profit and Loss Account.
e. Investments
Long term Investments are valued at cost. Provision for diminution in
the value of long term investments is made only if such decline is
other than temporary.
f. Foreign Currency Transactions
(i) The reporting currency of the Company is the Indian Rupee.
(ii) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(iii) Monetary items denominated in foreign currencies, if any, at the
end of the year are restated at year end rates.
(iv) Non monetary foreign currency items are carried at cost.
(v) Any income or expense on account of exchange difference either on
settlement or on translation is recognised in the Profit and Loss
account.
g. Leases
The Companys significant leasing arrangements are in respect of
operating leases for premises. The aggregate lease rents payable are
charged as rent in the Profit and Loss Account.
h. Inventories
Stock of goods is valued at cost or net realisable value whichever is
lower. Cost of inventories is ascertained on FIFO basis.
i. Taxes on Income
i) Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961.
ii) 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 substantively enacted as on the balance
sheet date. The deferred tax asset is recognised and carried forward
only to the extent that there is reasonable certainty that the assets
will be adjusted in future. In case of unabsorbed depreciation and
losses, deferred tax assets are recognised and carried forward only to
the extent there is a virtual certainty that the asset will be adjusted
in future.
j. Employees Benefits
(i) All employees benefits payable wholly within twelve months of
rendering the service such as salaries, wages, short term compensated
absences, etc. and the expected cost of bonus, ex-gratia are recognized
in the period in which the employees render the related
services.
(ii) Retirement benefit in the form of Provident Fund is a defined
contribution scheme and the contributions are charged to the Profit and
Loss Account of the year when the contributions to the respective funds
are accrued. There are no obligations other than the contribution
payable to the respective funds.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of actuarial valuation made at the end of each financial
year.
Short term compensated absences are provided for based on estimates.
Long term compensated absences are provided for based on actuarial
valuation.
Actuarial gains/losses are immediately taken to profit and loss account
and are not deferred.
k. Accounting for Joint Venture Contracts
(i) Contracts executed in joint Venture under work sharing arrangement
(consortium) are accounted in accordance with the accounting policy
followed by the Company as that of an independent contract to the
extent work is executed. (ii) Assets, liabilities and expenditure
arising out of contracts executed wholly by the Company pursuant to a
joint venture contract are recognised under respective heads in the
financial statements. Income from the contract is accounted net of
joint venturers share under turnover in these financial statements.
(iii) Share of turnover attributable to the Company in respect of
contracts executed by the other joint venture partners pursuant to
Joint Venture Agreement, is accounted under turnover in these financial
statements.
l. Impairment of Assets
The carrying amount of assets is reviewed at each balance sheet date to
determine if there is any indication of impairment thereof based on
external / internal factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount, which
represents the greater of the net selling price of assets and their
value in use. The estimated future cash flows are discounted to their
present value at appropriate rate arrived at after considering the
prevailing interest rates and weighted average cost of capital.
m. Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
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