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Accounting Policies of Jyoti Structures Ltd. Company
Mar 31, 2025
Company Background
Jyoti Structures Limited (âthe Company'' or âJSL'') is engaged in manufacturing of transmission line towers, sub-station structures, tall antenna towers and masts. In addition, JSL is also a leading player in Turnkey / EPC projects involving survey, foundation, designing, fabrication, erection and stringing activities of extra high voltage transmission lines and procurement of major bought out items, supply of lattice and pipe type structures, civil works, erection, testing and commissioning of switchyard / substations and distribution networks.
The Company is a public limited Company domiciled and incorporated in India under the Companies Act, 1956. The registered office of the Company is located at Valecha Chambers, 6th Floor, New Link Road, Andheri (West), Mumbai - 400 053, Maharashtra, India.
1. Basis of Preparation of Financial Statements:(i) Compliance with Ind AS:
The financial statement comply in all material aspects with Ind AS notified under Section 133 of the companies Act, 2013 (the Act) {Companies (Indian Accounting Standards) Rules, 2015} and other relevant provision of the Act.
(ii) Historical Cost convention:
The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities and defined benefit plans that are measured at fair value at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2, âInventories'' or value in use in Ind AS 36 âImpairment of Assets'' or net present value of lease payments in Ind AS 116 âLeases'', as applicable.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1,2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
⢠Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
⢠Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
⢠Level 3 inputs are unobservable inputs for the asset or liability.
Above levels of fair values are applied consistently and generally, there are no transfers between the levels of fair value hierarchy unless the circumstances change warranting such transfer.
The principal accounting policies are set out below:
Assets and liabilities other than those relating to long-term contracts (i.e. supply or construction contracts) are classified as current if it is expected to be realized or settled within 12 months after the balance sheet date.
In the case of long-term contracts, the time between acquisition of assets for processing and realization of the entire proceeds under the contracts in cash or cash equivalent exceeds one year. Accordingly, for classification of assets and liabilities related to such contracts as current, duration of each contract is considered as its operating cycle, except for amounts with respect to legal cases or long pending disputes.
(iv) Interests in Jointly Controlled Operations:
A jointly controlled operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
When a Company undertakes its activities under jointly controlled operations, the Company as a joint operator recognizes in relation to its interest in a jointly controlled operation:
1. its assets, including its share of any assets held jointly.
2. its liabilities, including its share of any liabilities incurred jointly.
3. its revenue from the sale of its share of the output arising from the jointly controlled operation; and
4. its expenses, including its share of any expenses incurred jointly.
The Company accounts for the assets, liabilities, revenues, and expenses relating to its interest in a jointly controlled operation in accordance with the Ind AS applicable to the assets, liabilities, revenues, and expenses.
When a Company transacts with a jointly controlled operation in which a Company is a joint operator (such as a sale or contribution of assets), the Company is considered to be conducting the transaction with the other parties to the jointly controlled operation, and gains and losses resulting from the transactions are recognized in the Company''s financial statements only to the extent of other parties'' interests in the jointly controlled operation.
When a Company transacts with a jointly controlled operation in which a Company is a joint operator (such as a purchase of assets), the Company does not recognize its share of the gains and losses until it resells those assets to a third party.
(v) Non-current assets held for sale:
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction (rather than through continuing use) and a sale is considered highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. They are measured at the lower of their carrying amount and fair value less cost to sell.
Non-current assets are not depreciated or amortized while they are classified as held for sale and are presented separately from the other assets in the balance sheet. The liabilities related to the assets held for sale are presented separately from other liabilities in the balance sheet.
2. Key Accounting Estimates and Judgements:
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates and assumptions affect the application of accounting policies and reported amount of assets and liabilities, the disclosures of contingent assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Appropriate changes in the accounting estimates are incorporated by the management, if
actual results differ from those estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and, if material, their effects are disclosed in the notes to the financial statements.
The Company derives revenue principally from following streams:
⢠Sale of products (towers and bought out components)
⢠Sale of services
⢠Construction contracts
⢠Other Operating Revenue Sale of products:
Revenue from sale of products is recognised upon satisfaction of performance obligations, i.e. at a point of time, which occurs when the control is transferred to the customer.
Customers obtain control as per the incoterms. In determining the transaction price for sale of product, the Company considers the effects of variable consideration, if any. Invoices are issued according to contractual terms and are usually payable as per the credit period agreed with the customer.
Services rendered include tower testing and designing, operating and maintenance and other services. Revenue from providing services is recognised in the accounting period in which the services are rendered. Invoices are issued according to contractual terms and are usually payable as per the credit period agreed with the customer.
The Company recognises revenue from engineering, procurement and construction contracts (âEPC'') over the period of time, as performance obligations are satisfied over time due to continuous transfer of control to the customer. EPC contracts are generally accounted for as a single performance obligation as it involves complex integration of goods and services.
The revenue is recognized to the extent of transaction price allocated to the performance obligation satisfied. Transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party.
Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged off in profit or loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to fulfil a contract are amortized over the period of execution of the contract in proportion to the progress measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation.
The performance obligations are satisfied over time as the work progresses. The Company recognises revenue using input method (i.e. percentage-of-completion method), based primarily on contract cost incurred to date compared to total estimated contract costs. Changes to total estimated contract costs, if any, are recognised in the period in which they are determined as assessed at the contract level. If the consideration in the contract includes price variation clause or there are amendments in contracts, the Company estimates the amount of consideration to which it will be entitled in exchange for work performed.
Due to the nature of the work required to be performed on many of the performance obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgement.
Variability in the transaction price arises primarily due to liquidated damages, price variation clauses, changes in scope, incentives, discounts, if any. The Company considers its experience with similar transactions and expectations regarding the contract in estimating the amount of variable consideration to which it will be entitled and determining whether the estimated variable consideration should be constrained. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved. The estimates of variable consideration are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available. Progress billings are generally issued upon completion of certain phases of the work as stipulated in the contract. Billing terms of the over-time contracts vary but are generally based on achieving specified milestones. The difference between the timing of revenue recognised and customer billings result in changes to contract assets and contract liabilities. Payment is generally due upon receipt of the invoice, payable within 90 days or less. Contractual retention amounts billed to customers are generally due upon expiration of the contract period. The contracts generally result in revenue recognised in excess of billings which are presented as contract assets on the statement of financial position.
Amounts billed and due from customers are classified as receivables on the statement of financial position. The portion of the payments retained by the customer until final contract settlement is not considered a significant financing component since it is usually intended to provide customer with a form of security for Company''s remaining performance as specified under the contract, which is consistent
with the industry practice. Contract liabilities represent amounts billed to customers in excess of revenue recognised till date. A liability is recognised for advance payments, and it is not considered as a significant financing component because it is used to meet working capital requirements at the time of project mobilization stage. The same is presented as contract liability in the statement of financial position.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known to management.
For construction contracts the control is transferred over time and revenue is recognised based on the extent of progress towards completion of the performance obligations. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
Export benefits under Mercantile Export from India Scheme (MEIS), Service Export from India Scheme (SEIS), Duty Drawback benefits and Remission of Duties and Taxes on Export Products Scheme (RoDTEP) are accounted as revenue on accrual basis as and when export of goods take place, where there is a reasonable assurance that the benefit will be received and the Company will comply with all the attached conditions.
Interest income is recognized by using effective interest method.
Rental income arising from operating leases on plant and machinery and vehicles is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature.
The insurance claims are accounted for on accrual basis based on fair estimation of sanctions by the insurance companies.
5. Property, Plant and Equipment:
(i) Free hold land is carried at historical cost. All other items of property, plant and equipment are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less accumulated depreciation and impairment loss, if any.
(ii) Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
(iii) Tools and tackles having useful life of more than twelve months are capitalized as Property, Plant and Equipment.
(iv) The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized.
(v) The residual values and useful lives of property, plant and equipment are reviewed at each financial year end and changes, if any, are accounted in line with revisions to accounting estimates.
(vi) The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end and adjusted prospectively, if appropriate.
6. Capital work in progress and Capital advances:
Capital work-in-progress comprises of assets in the course of construction for production or/and supply of goods or services or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment loss. At the point when an asset is operating at management''s intended use, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset are capitalised where the asset is available for use and commissioning has been completed.
Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets arising on acquisition of business are measured at fair value as at date of acquisition. Intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.
The carrying amount of an intangible asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an intangible asset is measured as the difference between the net disposal proceeds and the carrying amount of the intangible asset and is recognized in the Statement of Profit and Loss when the asset is derecognized.
8. Depreciation / Amortization:
(a) Depreciation on tangible assets is provided on straight line method at the rates and in the manner prescribed in Schedule II of the Companies Act, 2013, except as stated in (b) below.
(b) On the tangible assets of foreign branches, depreciation is provided on straight line method. The applicable rates are based on the local laws and practices of the respective countries, except where the rates of depreciation are less than as prescribed in schedule II of the Act, the depreciation is provided as per the rates prescribed in schedule II to the Act.
(c) The Company amortizes computer software using the straight-line method over the period of 6 years.
(d) Leasehold Land is amortized over the period of lease.
(e) Tools and tackles are amortized over their estimated useful life.
(a) Raw materials, Construction materials including steel, cement and others, Components and Stores and Spares are valued at lower of cost or net realizable value.
(b) Cost of inventories is determined by using the weighted average method.
(c) Material purchased for supply against specific contracts is valued at cost or net realizable value as per the contract, whichever is lower.
(d) Work-in-progress at site is valued at cost including material cost and attributable overheads. Provision is made when expected realization is less than the carrying cost.
(e) Finished goods, black finished goods and work-in-progress are valued at cost or net realizable value, whichever is lower.
(f) Cost of black finished good, work-in-progress and finished goods comprises of direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated based on normal operating capacity.
(g) Scrap is valued at net realizable value.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial recognition and measurement:
Financial assets are recognized when the Company becomes a party to the contractual provisions of the instrument.
On initial recognition, a financial asset is recognized at fair value, in case of financial assets which are recognized at fair value through profit and loss (FVTPL), the transaction costs are recognized in the statement of profit and loss. In other cases, the transaction costs are attributed to the acquisition value of the financial asset.
Subsequent measurement:
For subsequent measurement, the Company classifies a financial asset in accordance with the following criteria:
a) The Company''s business model for managing financial assets and
b) The contractual cash flow characteristics of the financial asset.
Based on the above criteria, the Company classifies its financial assets into the following categories:
i. Financial assets measured at amortized cost
ii. Financial assets measured at fair value through other comprehensive income (FVTOCI) i. Financial assets measured at amortized cost:
A financial asset is measured at the amortized cost if both the following conditions are met:
a) The Company''s business model objective for managing the financial asset is to hold financial assets to collect contractual cash flows, and
b) 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 outstanding amount.
This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company. Such financial assets are subsequently measured at amortized cost using the effective interest method.
Under the effective interest method, the future cash receipts are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial asset over the relevant period of the financial asset to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest income over the relevant period of the financial asset. The same is included under other income in the Statement of Profit and Loss.
The amortized cost of a financial asset is also adjusted for loss allowance, if any. ii. Financial assets measured at FVTOCI:
A financial asset is measured at FVTOCI if both the following conditions are met:
a. The Company''s business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling the financial assets, and
b. 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 outstanding amount.
This category applies to certain investments in debt instruments. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Other Comprehensive Income (OCI). However, the Company recognizes interest income and impairment losses and its reversals in the Statement of Profit and Loss.
On Derecognition of such financial assets, cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement of Profit and Loss.
Further, the Company, through an irrevocable election at initial recognition, has measured certain investments in equity instruments at FVTOCI. The Company has made such election on an instrument by instrument basis. These equity instruments are neither held for trading nor are contingent consideration recognized under a business combination. Pursuant to such irrevocable election, subsequent changes in the fair value of such equity instruments are recognized in OCI.
On derecognition of such financial assets, cumulative gain or loss previously recognized in OCI is not reclassified from the equity to Statement of Profit and Loss. However, the Company may transfer such cumulative gain or loss into retained earnings within equity.
De-recognition:
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Company''s Balance Sheet) when any of the following occurs:
i. The contractual rights to cash flows from the financial asset expires;
ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;
iii. The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a âpass-through'' arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);
iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.
In cases where the Company has neither transferred nor retained substantially all the risks and rewards of the financial asset, but retains control of the financial asset, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
On derecognition of a financial asset, (except as mentioned in ii above for financial assets measured at FVTOCI), the difference between the carrying amount and the consideration received is recognized in the Statement of Profit and Loss.
Initial recognition and measurement:
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the fair value minus, in the case of financial liabilities not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial liability.
Subsequent measurement:
All financial liabilities of the Company are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method or at FVTPL.
(a) Financial Liabilities at FVTPL:
A financial liability is classified at FVTPL if it is classified as held for trading or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and changes therein, including any interest expenses, are recognized in the Statement of Profit & Loss (including Other Comprehensive Income).
(b) Financial Liabilities at Amortized Cost:
After initial recognition, financial liabilities other than those which are classified as FVTPL are subsequently measured at amortized cost using EIR method.
Amortized cost is calculated by taking into account any discount premium and fees or costs that are an integral part of the EIR. Under the effective interest method, the future cash payments are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial liability over the relevant period of the financial liability to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest expense over the relevant period of the financial liability. The same is included under finance cost in the Statement of Profit and Loss.
(c) Financial guarantee contracts:
(a) A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.
(b) Financial guarantee contracts issued by a Company are initially measured at their fair value and, if not designated as at FVTPL, are subsequently measured at the higher of:
(i) The amount of loss allowance determined in accordance with impairment requirements of Ind AS 109, âFinancial Instruments''; and
(ii) The amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of Ind AS 115, âRevenue from contract with customers''.
(c) The Financial guarantees issued to third parties on behalf of subsidiaries are recorded at fair value. The same is recognized as Other income in the statement of Profit and Loss.
Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the Derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.
11. Investments in Subsidiaries and Joint Ventures:
Investments in subsidiaries and joint ventures are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries and joint ventures, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. The Company considers a period of twelve months or more as a substantial period of time.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Finance expenses are recognized immediately 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.
All other borrowing costs are recognized in the Statement of Profit and Loss in the period in which they are incurred.
(a) Financial Assets:
The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:
i) Trade receivables
ii) Financial assets measured at amortized cost (other than trade receivables)
iii) Financial assets measured at fair value through other comprehensive income (FVTOCI).
The impairment provisions for trade receivables are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, credit risk, existing market conditions as well as forward-looking estimates at the end of each reporting period.
In the case of other assets (listed as ii and iii above), the Company determines if there has been a significant increase in credit risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL is measured and recognized as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance.
Subsequently, if the credit quality of the financial asset improves such that there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on 12-month ECL.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original effective interest rate.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial asset. 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months from the reporting date.
ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined by a range of outcomes, taking into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of future economic conditions.
As a practical expedient, the Company uses a provision matrix to measure lifetime ECL on its portfolio of trade receivables and other assets. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. At each reporting date, the historically observed default rates and changes in the forwardlooking estimates are updated.
(b) Non-Financial Assets:
At the end of each reporting period, the Company reviews the carrying amounts of its Property, plant and equipment, intangible and other non-current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. For the purpose of assessing impairment, assets are grouped at the lowest level, for which there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets or group of assets (cash-generating unit). Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in the Statement of Profit and Loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in the Statement of Profit and Loss.
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (functional currency). For each branch and jointly controlled operation situated outside India, the Company determines the functional currency and items included in the financial statements of each entity are measured using that functional currency of that respective branch and jointly controlled operation. The functional and presentation currency of the Company is Indian Rupees (INR). The financial statements are presented in Indian rupees (INR).
(i) Foreign Currency Transactions
Transactions in foreign currencies are translated into the functional currency of the company at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date.
Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.
Any income or expense on account of exchange difference, either on settlement or on translation, is recognized in Statement of Profit or Loss, except exchange difference arising from the translation of the items which are recognized in OCI.
(ii) Foreign Operations
(a) Assets and liabilities, both monetary and non- monetary are translated at the rates prevailing at the end of each reporting period and all resulting exchange differences are accumulated in the exchange differences on translation of foreign operations in the statement of changes in equity.
(b) Income and expense items are translated at the average exchange rates of the year and all resulting exchange differences are accumulated in the exchange differences on translation of foreign operations in the statement of changes in equity.
(c) On the disposal of a foreign operation all the exchange differences accumulated in other comprehensive income relating to that particular foreign operation attributable to the owners of the Company is reclassified in the statement of profit and loss.
As a lessee:
The Company assesses whether a contract is or contains a lease, at inception of the contract. Leases are recognized as right-of-use assets and a corresponding liability at the date at which the leased asset is available for use by the Company. Assets and liabilities arising from a lease are initially measured on present value basis. Lease liabilities include the net present value of the following lease payments:
⢠Lease payments less any lease incentives receivable
⢠Variable lease payments that vary to reflect changes in market rental rates, if any
⢠Amounts expected to be payable by the Company under residual value guarantees, if any
⢠Exercise price of the purchase option, if the Company is reasonably certain to exercise that option, and
⢠Payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.
The lease payments are discounted using the Company''s incremental borrowing rate (since the interest rate implicit in the lease cannot be readily determined). An incremental borrowing rate is the rate of interest that the Company would have to pay to borrow over a similar term, and a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Variable lease payments that depend on any key variable / condition, are recognized in profit or loss in the period in which the condition that triggers those payments occurs.
Right-of-use assets are measured at cost comprising the following:
⢠The amount of the initial measurement of lease liability
⢠Any lease payments made at or before the commencement date less any lease incentives received
⢠Any initial direct costs and
⢠Restoration costs.
Right-of-use assets are depreciated over the lease term on a straight-line basis.
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
As a lessor:
Lease income from operating leases where the Company is lessor is recognized in income on a straight line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
For presentation in the Statement of Cash Flows, cash and cash equivalents include cash on hand, deposits held at call, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash, and which are subject to an insignificant risk of changes in value, bank overdrafts and cash credits. Bank overdrafts and cash credits are shown within borrowings in current liabilities in the balance sheet.
17. Employees Benefits:a) Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
b) Long Term Employee Benefits:
I. Defined Contribution Plan:
The Company''s contributions to provident fund are considered as defined contribution plans. The Company recognizes contribution payable to a defined contribution plan as an expense in the Statement of Profit and Loss when the employees render services to the Company during the reporting period. If the contributions payable for services received from employees, before the reporting date exceeds the contributions already paid, the deficit payable is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the reporting date, the excess is recognized as an asset to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund.
II. Defined Benefit Plan:
The cost of providing defined benefits like Gratuity and Leave Encashment is determined using the Projected Unit Credit method with actuarial valuations being carried out at each reporting date. The defined benefit obligations recognized in the Balance Sheet represent the present value of the defined benefit obligations as reduced by the fair value of plan assets, if applicable. Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is recognized representing the present value of available refunds and reductions in future contributions to the plan. All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability / (asset) are recognized in the Statement of Profit and Loss. Re-measurements of the net defined benefit liability / (asset) comprising actuarial gains and losses and the return on the plan assets (excluding amounts included in net interest on the net defined benefit liability/asset), are recognized in Other Comprehensive Income. Such re-measurements are not reclassified to the Statement of Profit and Loss in the subsequent periods. The Company presents the above liability/(asset) as current and non-current in the Balance Sheet as per actuarial valuation by the independent actuary.
(a) Current Tax:
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from âprofit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities.
(b) Deferred Tax:
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with interests in jointly controlled operations except where it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled, or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets are not recognized for temporary differences between the carrying amount and tax bases of investments in subsidiaries, branches and associates and interest in joint arrangements where it is not probable that the differences will reverse in the foreseeable future and taxable profit will not be available against which the temporary differences can be utilized.
Deferred tax assets and liabilities are offset when there is legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset when an entity has legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. Deferred tax assets are recognized for all deductible temporary differences, unused tax losses and credits only if, it is probable that future taxable amounts will be available to utilize those temporary differences and losses.
(c) Minimum Alternate Tax (MAT):
MAT paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal taxes during the specified period under the Income Tax Act, 1961. The Company reviews the âMAT Credit Entitlement'' asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
(d) Current and deferred taxes are recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognised
in Other Comprehensive Income.
The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti-dilutive.
20. Provisions and Contingencies:
a) A provision is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
b) If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
c) A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require
an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
d) Contingent assets: A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. Contingent assets are not recognized but disclosed only when an inflow of economic benefits is probable.
Operating segments are reported in a manner consistent with internal reporting provided to the chief operating decision maker. The Board of Directors of the Company has been identified as chief operating decision maker, which assesses the financial performance and position of the Company and makes strategic decisions.
Exceptional Items include income/expenses that are considered to be part of ordinary activities, however of such significance and nature that separate disclosure enables the users of financial statements to understand the impact in more meaningful manner. Exceptional Items are identified by virtue of their size, nature and incidence.
All amounts disclosed in the financial statements and notes have been rounded off to the nearest crores as per the requirement of Schedule III, unless otherwise stated.
24. Critical estimates and judgements
In the application of the Company''s accounting policies, the Management of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. 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 affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Information about critical judgments in applying accounting policies, as well as estimates and assumptions that has the most significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in notes no.34:
a) Measurement and likelihood of the occurrence of provisions and contingencies.
b) Carrying value of receivables, loans and advances and their respective impairment.
c) Measurement of Provision required for Defect Liability Period and Liquidated Damages Payable as per Contracts.
d) Charging/ recognizing as receivables of Bank Guarantees invoked by banks.
e) Estimation of current tax expenses and Payable.
f) Financial Instruments.
g) Valuation of Inventories
h) The amount of liabilities recognized in the financial statements in respect of unrecognized claims preferred by financial and operational creditors.
The Company applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with the market participants to price the instrument. The Company''s assumptions are based on observable data as far as possible, otherwise on the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.
26. Employees Stock Option Scheme
Stock Options are granted to eligible employees under the JSL Employee Stock Option Scheme 2021 (âJSL ESOS 2021â) as may be decided by the Nomination & Remuneration Committee. Under Ind AS, the cost of JSL ESOS 2021 is recognized based on the fair value of Stock Options as on the grant date. The fair value of Stock Options granted is recognized in the Statement of Profit and Loss over the period in which the performance and / or service conditions are fulfilled for employees of the Company (other than those out on deputation).
Mar 31, 2024
NOTE - 33 STATEMENT OF MATERIAL ACCOUNTING POLICIES Company Background
Jyoti Structures Limited (''the Company'' or ''JSL'') is engaged in manufacturing of transmission line towers, sub-station structures, tall antenna towers and masts. In addition, JSL is also a leading player in Turnkey / EPC projects involving survey, foundation, designing, fabrication, erection and stringing activities of extra high voltage transmission lines and procurement of major bought out items, supply of lattice and pipe type structures, civil works, erection, testing and commissioning of switchyard / substations and distribution networks.
The Company is a public limited Company domiciled and incorporated in India under the Companies Act, 1956. The registered offic e of the Company is located at Valecha Chambers, 6th Floor, New Link Road, Andheri (West), Mumbai - 400 053, Maharashtra, India.
1. Basis of Preparation of Financial Statements:
(i) Compliance with Ind AS:
The financial statement comply in all material aspects with Ind AS notified under Section 133 of the companies Act, 2013 (the Act) {Companies (Indian Accounting Standards) Rules, 2015} and other relevant provision of the Act.
(ii) Historical Cost convention:
The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities and defined benefit plans that are measured at fair value at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2, ''Inventories'' or value in use in Ind AS 36 ''Impairment of Assets'' or net present value of lease payments in Ind AS 116 ''Leases'', as applicable.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1,2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
⢠Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
⢠Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
⢠Level 3 inputs are unobservable inputs for the asset or liability.
Above levels of fair values are applied consistently and generally, there are no transfers between the levels of fair value hierarchy unless the circumstances change warranting such transfer.
The principal accounting policies are set out below:
(iii) Operating Cycle
Assets and liabilities other than those relating to long-term contracts (i.e. supply or construction contracts) are classified as current if it is expected to realize or settle within 12 months after the balance sheet date.
In case of long-term contracts, the time between acquisition of assets for processing and realisation of the entire proceeds under the contracts in cash or cash equivalent exceeds one year. Accordingly, for classification of assets and liabilities related to such contracts as current, duration of each contract is considered as its operating cycle, except for amounts with respect to legal cases or long pending disputes.
(iv) Interests in Jointly Controlled Operations:
A jointly controlled operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
When a Company undertakes its activities under jointly controlled operations, the Company as a joint operator recognises in relation to its interest in a jointly controlled operation:
1. its assets, including its share of any assets held jointly;
2. its liabilities, including its share of any liabilities incurred jointly;
3. its revenue from the sale of its share of the output arising from the jointly controlled operation; and
4. its expenses, including its share of any expenses incurred jointly.
The Company accounts for the assets, liabilities, revenues, and expenses relating to its interest in a jointly controlled operation in accordance with the Ind AS applicable to the assets, liabilities, revenues, and expenses.
When a Company transacts with a jointly controlled operation in which a Company is a joint operator (such as a sale or contribution of assets), the Company is considered to be conducting the transaction with the other parties to the jointly controlled operation, and gains and losses resulting from the transactions are recognised in the Company''s financial statements only to the extent of other parties'' interests in the jointly controlled operation.
When a Company transacts with a jointly controlled operation in which a Company is a joint operator (such as a purchase of assets), the Company does not recognise its share of the gains and losses until it resells those assets to a third party.
(v) Non-current assets held for sale:
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction (rather than through continuing use) and a sale is considered highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. They are measured at the lower of their carrying amount and fair value less cost to sell.
Non-current assets are not depreciated or amortised while they are classified as held for sale and are presented separately from the other assets in the balance sheet. The liabilities related to the assets held for sale are presented separately from other liabilities in the balance sheet.
2. Key Accounting Estimates and Judgements:
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates and assumptions affect the application of accounting policies and reported amount of assets and liabilities, the disclosures of contingent assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Appropriate changes in the accounting estimates are incorporated by the management, if actual results differ from those estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and, if material, their effects are disclosed in the notes to the financial statements.
3. Revenue Recognition:
The Company derives revenue principally from following streams:
⢠Sale of products (towers and bought out components)
⢠Sale of services
⢠Construction contracts
⢠Other Operating Revenue Sale of products:
Revenue from sale of products is recognised upon satisfaction of performance obligations, i.e. at a point of time, which occurs when the control is transferred to the customer.
Customers obtain control as per the incoterms. In determining the transaction price for sale of product, the Company considers the effects of variable consideration, if any. Invoices are issued according to contractual terms and are usually payable as per the credit period agreed with the customer.
Sale of services:
Services rendered include tower testing and designing, operating and maintenance and other services. Revenue from providing services is recognised in the accounting period in which the services are rendered. Invoices are issued according to contractual terms and are usually payable as per the credit period agreed with the customer.
Construction contracts:
The Company recognises revenue from engineering, procurement and construction contracts (''EPC'') over the period of time, as performance obligations are satisfied over time due to continuous transfer of control to the customer. EPC contracts are generally accounted for as a single performance obligation as it involve complex integration of goods and services.
The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. T ransaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party.
Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in profit or loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to fulfil a contract are amortised over the period of execution of the contract in proportion to the progress measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation.
The performance obligations are satisfied over time as the work progresses. The Company recognises revenue using input method (i.e. percentage-of-completion method), based primarily on contract cost incurred to date compared to total estimated
contract costs. Changes to total estimated contract costs, if any, are recognised in the period in which they are determined as assessed at the contract level. If the consideration in the contract includes price variation clause or there are amendments in contracts, the Company estimates the amount of consideration to which it will be entitled in exchange for work performed.
Due to the nature of the work required to be performed on many of the performance obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgement.
Variability in the transaction price arises primarily due to liquidated damages, price variation clauses, changes in scope, incentives, discounts, if any. The Company considers its experience with similar transactions and expectations regarding the contract in estimating the amount of variable consideration to which it will be entitled and determining whether the estimated variable consideration should be constrained. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved. The estimates of variable consideration are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available. Progress billings are generally issued upon completion of certain phases of the work as stipulated in the contract. Billing terms of the over-time contracts vary but are generally based on achieving specified milestones. The difference between the timing of revenue recognised and customer billings result in changes to contract assets and contract liabilities. Payment is generally due upon receipt of the invoice, payable within 90 days or less. Contractual retention amounts billed to customers are generally due upon expiration of the contract period. The contracts generally result in revenue recognised in excess of billings which are presented as contract assets on the statement of financial position.
Amounts billed and due from customers are classified as receivables on the statement of financial position. The portion of the payments retained by the customer until final contract settlement is not considered a significant financing component since it is usually intended to provide customer with a form of security for Company''s remaining performance as specified under the contract, which is consistent with the industry practice. Contract liabilities represent amounts billed to customers in excess of revenue recognised till date. A liability is recognised for advance payments and it is not considered as a significant financing component because it is used to meet working capital requirements at the time of project mobilization stage. The same is presented as contract liability in the statement of financial position.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known to management.
For construction contracts the control is transferred over time and revenue is recognised based on the extent of progress towards completion of the performance obligations. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
4. Other Operating Revenue:
Export benefits under Mercantile Export from India Scheme (MEIS), Service Export from India Scheme (SEIS), Duty Drawback benefits and Remission of Duties and Taxes on Export Products Scheme (RoDTEP) are accounted as revenue on accrual basis as and when export of goods take place, where there is a reasonable assurance that the benefit will be received and the Company will comply with all the attached conditions.
Other income:
Interest income is recognized by using effective interest method.
Rental income arising from operating leases on plant and machinery and vehicles is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature.
The insurance claims are accounted for on accrual basis based on fair estimation of sanctions by the insurance companies.
5. Property, Plant and Equipment:
(i) Free hold land is carried at historical cost. All other items of property, plant and equipment are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less accumulated depreciation and impairment loss, if any.
(ii) Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
(iii) Tools and tackles having useful life of more than twelve months are capitalized as Property, Plant and Equipment.
(iv) The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized.
(v) The residual values and useful lives of property, plant and equipment are reviewed at each financial year end and changes, if any, are accounted in line with revisions to accounting estimates.
(vi) The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end and adjusted prospectively, if appropriate.
6. Capital work in progress and Capital advances:
Capital work-in-progress comprises of assets in the course of construction for production or/and supply of goods or services or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment loss. At the point when an asset is operating at management''s intended use, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset are capitalised where the asset is available for use and commissioning has been completed.
7. Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets arising on acquisition of business are measured at fair value as at date of acquisition. Intangible assets are carried at cost less accumulated amortisation and accumulated impairment loss, if any.
The carrying amount of an intangible asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an intangible asset is measured as the difference between the net disposal proceeds and the carrying amount of the intangible asset and is recognized in the Statement of Profit and Loss when the asset is derecognized.
8. Depreciation / Amortisation:
(a) Depreciation on tangible assets is provided on straight line method at the rates and in the manner prescribed in Schedule II of the Companies Act, 2013, except as stated in (b) below.
(b) On the tangible assets of foreign branches, depreciation is provided on straight line method. The applicable rates are based on the local laws and practices of the respective countries, except where the rates of depreciation are less than as prescribed in schedule II of the Act, the depreciation is provided as per the rates prescribed in schedule II to the Act.
(c) The Company amortizes computer software using the straight-line method over the period of 6 years.
(d) Leasehold Land is amortised over the period of lease.
(e) Tools and tackles are amortised over their estimated useful life.
9. Inventories:
(a) Raw materials, Construction materials including steel, cement and others, Components and Stores and Spares are valued at lower of cost or net realisable value.
(b) Cost of inventories is determined by using the weighted average method.
(c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract, whichever is lower.
(d) Work-in-progress at site is valued at cost including material cost and attributable overheads. Provision is made when expected realisation is lesser than the carrying cost.
(e) Finished goods, black finished goods and work-in-progress are valued at cost or net realisable value, whichever is lower.
(f) Cost of black finished good, work-in-progress and finished goods comprises of direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated based on normal operating capacity.
(g) Scrap is valued at net realisable value.
10. Financial Instruments:
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity in strument of another entity.
Financial Assets
Initial recognition and measurement:
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument.
On initial recognition, a financial asset is recognised at fair value, in case of financial assets which are recognised at fair value through profit and loss (FVTPL), the transaction costs are recognised in the statement of profit and loss. In other cases, the transaction costs are attributed to the acquisition value of the financial asset.
Subsequent measurement:
For subsequent measurement, the Company classifies a financial asset in accordance with the below criteria: a) The Company''s business model for managing the financial asset and
b) The contractual cash flow characteristics of the financial asset.
Based on the above criteria, the Company classifies its financial assets into the following categories:
i. Financial assets measured at amortized cost
ii. Financial assets measured at fair value through other comprehensive income (FVTOCI)
i. Financial assets measured at amortized cost:
A financial asset is measured at the amortized cost if both the following conditions are met:
a) The Company''s business model objective for managing the financial asset is to hold financial assets to collect contractual cash flows, and
b) 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.
This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company. Such financial assets are subsequently measured at amortized cost using the effective interest method.
Under the effective interest method, the future cash receipts are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial asset over the relevant period of the financial asset to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest income over the relevant period of the financial asset. The same is included under other income in the Statement of Profit and Loss.
The amortized cost of a financial asset is also adjusted for loss allowance, if any.
ii. Financial assets measured at FVTOCI:
A financial asset is measured at FVTOCI if both the following conditions are met:
a. The Company''s business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling the financial assets, and
b. 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.
This category applies to certain investments in debt instruments. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Other Comprehensive Income (OCI). However, the Company recognizes interest income and impairment losses and its reversals in the Statement of Profit and Loss.
On Derecognition of such financial assets, cumulative gain or loss previously recognized in OCI is reclassified from equity to State ment of Profit and Loss.
Further, the Company, through an irrevocable election at initial recognition, has measured certain investments in equity instruments at FVTOCI. The Company has made such election on an instrument by instrument basis. These equity instruments are neither held for trading nor are contingent consideration recognized under a business combination. Pursuant to such irrevocable election, subsequent changes in the fair value of such equity instruments are recognized in OCI.
On derecognition of such financial assets, cumulative gain or loss previously recognized in OCI is not reclassified from the equity to Statement of Profit and Loss. However, the Company may transfer such cumulative gain or loss into retained earnings within equity.
De-recognition:
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Company''s Balance Sheet) when any of the following occurs:
i. The contractual rights to cash flows from the financial asset expires;
ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;
iii. The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a ''pass-through'' arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);
iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.
In cases where Company has neither transferred nor retained substantially all the risks and rewards of the financial asset, but retains control of the financial asset, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
On derecognition of a financial asset, (except as mentioned in ii above for financial assets measured at FVTOCI), the difference between the carrying amount and the consideration received is recognized in the Statement of Profit and Loss.
Financial liabilities
Initial recognition and measurement:
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the fair value minus, in the case of financial liabilities not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial liability.
Subsequent measurement:
All financial liabilities of the Company are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method or at FVTPL.
(a) Financial Liabilities at FVTPL:
A financial liability is classified at FVTPL if it is classified as held for trading or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and changes therein, including any interest expenses, are recognized in Statement of Profit & Loss (including Other Comprehensive Income).
(b) Financial Liabilities at Amortised Cost:
After initial recognition, financial liabilities other than those which are classified as FVTPL are subsequently measured at amortised cost using EIR method.
Amortised cost is calculated by taking into account any discount premium and fees or costs that are integral part of the EIR. Under the effective interest method, the future cash payments are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial liability over the relevant period of the financial liability to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest expense over the relevant period of the financial liability. The same is included under finance cost in the Statement of Profit and Loss.
(c) Financial guarantee contracts:
(a) A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.
(b) Financial guarantee contracts issued by a Company are initially measured at their fair value and, if not designated as at FVTPL, are subsequently measured at the higher of:
(i) The amount of loss allowance determined in accordance with impairment requirements of Ind AS 109, ''Financial Instruments''; and
(ii) The amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 115, ''Revenue from contract with customers''.
(c) The Financial guarantees issued to third parties on behalf of subsidiaries are recorded at fair value. The same is recognised as Other income in the statement of Profit and Loss.
Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the Derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.
11. Investments in Subsidiaries and Joint Ventures:
Investments in subsidiaries and joint ventures are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its
recoverable amount. On disposal of investments in subsidiaries and joint ventures, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
12. Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. The Company considers a period of twelve months or more as a substantial period of time.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Finance expenses are recognised immediately in the Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Company''s policy on borrowing costs.
All other borrowing costs are recognised in the Statement of Profit and Loss in the period in which they are incurred.
13. Impairment of assets:
(a) Financial Assets:
The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:
i) Trade receivables
ii) Financial assets measured at amortized cost (other than trade receivables)
iii) Financial assets measured at fair value through other comprehensive income (FVTOCI).
The impairment provisions for trade receivables are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, credit risk, existing market conditions as well as forward looking estimates at the end of each reporting period.
In case of other assets (listed as ii and iii above), the Company determines if there has been a significant increase in credit risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL is measured and recognized as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance.
Subsequently, if the credit quality of the financial asset improves such that there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on 12-month ECL.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original effective interest rate.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial asset. 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months from the reporting date.
ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined by a range of outcomes, taking into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of future economic conditions.
As a practical expedient, the Company uses a provision matrix to measure lifetime ECL on its portfolio of trade receivables and other assets. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. At each reporting date, the historically observed default rates and changes in the forward-looking estimates are updated.
(b) Non-Financial Assets:
At the end of each reporting period, the Company reviews the carrying amounts of its Property, plant and equipment, intangible and other non-current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. For the purpose of assessing impairment, assets are grouped at the lowest level, for which there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets or group of assets (cash-generating unit). Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statement of Profit and Loss.
hen an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss.
14. Foreign Currency:
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (functional currency). For each branch and jointly controlled operation situated outside India, the Company determines the functional currency and items included in the financial statements of each entity are measured using that functional currency of that respective branch and jointly controlled operation. The functional and presentation currency of the Company is Indian Rupees (INR). The financial statements are presented in Indian rupees (INR).
(i) Foreign Currency Transactions
Transactions in foreign currencies are translated into the functional currency of the company at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date.
Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.
Any income or expense on account of exchange difference, either on settlement or on translation, is recognised in Statement of Profit or Loss, except exchange difference arising from the translation of the items which are recognised in OCI.
(ii) Foreign Operations
(a) Assets and liabilities, both monetary and non- monetary are translated at the rates prevailing at the end of each reporting period and all resulting exchange differences are accumulated in the exchange differences on translation of foreign operations in the statement of changes in equity.
(b) Income and expense items are translated at the average exchange rates of the year and all resulting exchange differences are accumulated in the exchange differences on translation of foreign operations in the statement of changes in equity.
(c) On the disposal of a foreign operation all of the exchange differences accumulated in other comprehensive income relating to that particular foreign operation attributable to the owners of the Company is reclassified in the statement of profit and loss.
15. Leased Assets:
As a lessee:
The Company assesses whether a contract is or contains a lease, at inception of the contract. Leases are recognized as right-of-use assets and a corresponding liability at the date at which the leased asset is available for use by the Company. Assets and liabilities arising from a lease are initially measured on present value basis. Lease liabilities include the net present value of the following lease payments:
⢠Lease payments less any lease incentives receivable
⢠Variable lease payments that vary to reflect changes in market rental rates, if any
⢠Amounts expected to be payable by the Company under residual value guarantees, if any
⢠Exercise price of the purchase option, if the Company is reasonably certain to exercise that option, and
⢠Payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.
The lease payments are discounted using Company''s incremental borrowing rate (since the interest rate implicit in the lease cannot be readily determined). Incremental borrowing rate is the rate of interest that the Company would have to pay to borrow over a similar term, and a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Variable lease payments that depend on any key variable / condition, are recognised in profit or loss in the period in which the condition that triggers those payments occurs.
⢠Right-of-use assets are measured at cost comprising the following:
⢠The amount of the initial measurement of lease liability
⢠Any lease payments made at or before the commencement date less any lease incentives received
⢠Any initial direct costs and
⢠Restoration costs.
Right-of-use assets are depreciated over the lease term on a straight-line basis.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
As a lessor:
Lease income from operating leases where the Company is lessor is recognised in income on a straight line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expect ed inflationary cost increases.
16. Cash Flow Statement:
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for t he effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
For presentation in the Statement of Cash Flows, cash and cash equivalents includes cash on hand, deposits held at call, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, bank overdrafts and cash credits. Bank overdrafts and cash credits are shown within borrowings in current liabilities in the balance sheet.
17. Employees Benefits:
a) Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
b) Long Term Employee Benefits:
I. Defined Contribution Plan:
The Company''s contributions to provident fund are considered as defined contribution plans. The Company recognizes contribution payable to a defined contribution plan as an expense in the Statement of Profit and Loss when the employees render services to the Company during the reporting period. If the contributions payable for services received from employees, before the reporting date exceeds the contributions already paid, the deficit payable is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the reporting date, the excess is recognized as an asset to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund.
II. Defined Benefit Plan:
The cost of providing defined benefits like Gratuity and Leave Encashment is determined using the Projected Unit Credit method with actuarial valuations being carried out at each reporting date. The defined benefit obligations recognized in the Balance Sheet represent the present value of the defined benefit obligations as reduced by the fair value of plan assets, if applicable. Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is recognized representing the present value of available refunds and reductions in future contributions to the plan. All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability / (asset) are recognized in the Statement of Profit and Loss. Re-measurements of the net defined benefit liability / (asset) comprising actuarial gains and losses and the return on the plan assets (excluding amounts included in net interest on the net defined benefit liability/asset), are recognized in Other Comprehensive Income. Such re-measurements are not reclassified to the Statement of Profit and Loss in the subsequent periods. The Company presents the above liability/(asset) as current and non-current i7n the Balance Sheet as per actuarial valuation by the independent actuary.
18. Income Taxes:
(a) Current Tax:
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from ''profit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities.
(b) Deferred Tax:
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with interests in jointly controlled operations except where it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow f rom the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets are not recognised for temporary differences between the carrying amount and tax bases of investments in subsidiaries, branches and associates and interest in joint arrangements where it is not probable that the differences will reverse in the foreseeable future and taxable profit will not be available against which the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset when entity has legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and credits only if, it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
(c) Minimum Alternate Tax (MAT):
MAT paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal taxes during the specified period under the Income Tax Act, 1961. The Company reviews the ''MAT Credit Entitlement'' asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
(d) ferred taxes are recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognised in Other Comprehensive Income.
19. Earnings Per Share:
The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.
Mar 31, 2023
NOTE - 33 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Company Background
Jyoti Structures Limited (''the Company'' or âJSL'') is engaged in manufacturing of transmission line towers, sub-station structures, tall antenna towers / masts and railway electrification structures. In addition, JSL is also a leading player in Turnkey / EPC projects involving survey, foundation, designing, fabrication, erection and stringing activities of extra high voltage transmission lines and procurement of major bought out items, supply of lattice and pipe type structures, civil works, erection, testing and commissioning of switchyard / substations and distribution networks, both in India and overseas.
The Company is a public limited Company domiciled and incorporated in India under the Companies Act, 1956. The registered office of the Company is located at Valecha Chambers, 6th Floor, New Link Road, Andheri (West), Mumbai - 400 053, Maharashtra, India.
1. Basis of Preparation of Financial Statements:(i) Compliance with Ind AS:
The financial statement comply in all material aspects with Ind AS notified under Section 133 of the companies Act, 2013 (the Act) {Companies (Indian Accounting Standards) Rules, 2015} and other relevant provision of the Act.
(ii) Historical Cost convention:
The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities and defined benefit plans that are measured at fair value at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2, âInventories'' or value in use in Ind AS 36 âImpairment of Assets'' or net present value of lease payments in Ind AS 116 âLeases'', as applicable.
(iii) Current non-current classification:
All assets and liabilities are classified as current or non-current as per the company''s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, 12 months has been considered by the company for the purpose of current and non-current classification of assets and liabilities.
2. Key Accounting Estimates and Judgements:
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates and assumptions affect the application of accounting policies and reported amount of assets and liabilities, the disclosures of contingent assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Appropriate changes in the accounting estimates are incorporated by the management, if actual results differ from those estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and, if material, their effects are disclosed in the notes to the financial statements.
The Company derives revenue principally from following streams:
⢠Sale of products (towers and cables)
⢠Sale of services
⢠Construction contracts
⢠Other Operating Revenue Sale of products:
Revenue from sale of products is recognised upon satisfaction of performance obligations, i.e. at a point of time, which occurs when the control is transferred to the customer.
Customers obtain control as per the incoterms. In determining the transaction price for sale of product, the Company considers the effects of variable consideration, if any. Invoices are issued according to contractual terms and are usually payable as per the credit period agreed with the customer.
Services rendered include tower testing and designing, operating and maintenance and other services. Revenue from providing services is recognised in the accounting period in which the services are rendered. Invoices are issued according to contractual terms and are usually payable as per the credit period agreed with the customer.
The Company recognises revenue from engineering, procurement and construction contracts (''EPC'') over the period of time, as performance obligations are satisfied over time due to continuous transfer of control to the customer. EPC contracts are generally accounted for as a single performance obligation as it involve complex integration of goods and services.
The performance obligations are satisfied over time as the work progresses. The Company recognises revenue using input method (i.e. percentage-of-completion method), based primarily on contract cost incurred to date compared to total estimated contract costs. Changes to total estimated contract costs, if any, are recognised in the period in which they are determined as assessed at the contract level. If the consideration in the contract includes price variation clause or there are amendments in contracts, the Company estimates the amount of consideration to which it will be entitled in exchange for work performed.
Due to the nature of the work required to be performed on many of the performance obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgement.
Variability in the transaction price arises primarily due to liquidated damages, price variation clauses, changes in scope, incentives, discounts, if any. The Company considers its experience with similar transactions and expectations regarding the contract in estimating the amount of variable consideration to which it will be entitled and determining whether the estimated variable consideration should be constrained. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved. The estimates of variable consideration are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available. Progress billings are generally issued upon completion of certain phases of the work as stipulated in the contract. Billing terms of the over-time contracts vary but are generally based on achieving specified milestones. The difference between the timing of revenue recognised and customer billings result in changes to contract assets and contract liabilities. Payment is generally due upon receipt of the invoice, payable within 90 days or less. Contractual retention amounts billed to customers are generally due upon expiration of the contract period. The contracts generally result in revenue recognised in excess of billings which are presented as contract assets on the statement of financial position.
Amounts billed and due from customers are classified as receivables on the statement of financial position. The portion of the payments retained by the customer until final contract settlement is not considered a significant financing component since it is usually intended to provide customer with a form of security for Company''s remaining performance as specified under the contract, which is consistent with the industry practice. Contract liabilities represent amounts billed to customers in excess of revenue recognised till date. A liability is recognised for advance payments and it is not considered as a significant financing component because it is used to meet working capital requirements at the time of project mobilization stage. The same is presented as contract liability in the statement of financial position.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known to management.
For construction contracts the control is transferred over time and revenue is recognised based on the extent of progress towards completion of the performance obligations. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. The percentage of completion is based primarily on contract cost incurred to date compared to total estimated contract cost for each contract in order to reflect the effective completion of the project. This percentage of completion could be based on technical milestones or as per the contractual terms specified. A construction contract is considered completed when the last technical milestone is achieved, which occurs upon contractual transfer of ownership of the asset.
4. Property, Plant and Equipment:
(i) Free hold land is carried at historical cost. All other items of property, plant and equipment are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less accumulated depreciation and impairment loss, if any.
(ii) Transition to Ind AS:
On transition to Ind AS, the Company has elected to continue with the carrying value as its deemed cost of all of its property, plant and equipment recognised as at 1st April 2015, measured as per the previous GAAP, and use that carrying value as the deemed cost of such property, plant and equipment.
(iii) Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
(iv) Tools and tackles having useful life of more than twelve months are capitalized as Property, Plant and Equipment.
(v) The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized.
(vi) The residual values and useful lives of property, plant and equipment are reviewed at each financial year end and changes, if any, are accounted in line with revisions to accounting estimates.
(vii) The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end and adjusted prospectively, if appropriate.
5. Capital work in progress and Capital advances:
Capital work-in-progress comprises of assets in the course of construction for production or/and supply of goods or services or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment loss. At the point when an asset is operating at management''s intended use, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset are capitalised where the asset is available for use and commissioning has been completed.
Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets arising on acquisition of business are measured at fair value as at date of acquisition. Intangible assets are carried at cost less accumulated amortisation and accumulated impairment loss, if any.
The carrying amount of an intangible asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an intangible asset is measured as the difference between the net disposal proceeds and the carrying amount of the intangible asset and is recognized in the Statement of Profit and Loss when the asset is derecognized.
7. Depreciation / Amortisation:
(a) Depreciation on tangible assets is provided on straight line method at the rates and in the manner prescribed in Schedule II of the Companies Act, 2013, except as stated in (b) below.
(b) On the tangible assets of foreign branches, depreciation is provided on straight line method. The applicable rates are based on the local laws and practices of the respective countries, except where the rates of depreciation are less than as prescribed in schedule II of the Act, the depreciation is provided as per the rates prescribed in schedule II to the Act.
(c) The Company amortizes computer software using the straight-line method over the period of 6 years.
(d) Leasehold Land is amortised over the period of lease.
(e) Tools and tackles are amortised over their estimated useful life.
(a) Raw materials, Construction materials including steel, cement and others, Components and Stores and Spares are valued at lower of cost or net realisable value.
(b) Cost of inventories is determined by using the weighted average method.
(c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract, whichever is lower.
(d) Work-in-progress at site is valued at cost including material cost and attributable overheads. Provision is made when expected realisation is lesser than the carrying cost.
(e) Finished goods, black finished goods and work-in-progress are valued at cost or net realisable value, whichever is lower.
(f) Cost of black finished good, work-in-progress and finished goods comprises of direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated based on normal operating capacity.
(g) Scrap is valued at net realisable value.
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial recognition and measurement:
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument.
On initial recognition, a financial asset is recognised at fair value, in case of financial assets which are recognised at fair value through profit and loss (FVTPL), the transaction costs are recognised in the statement of profit and loss. In other cases, the transaction costs are attributed to the acquisition value of the financial asset.
Subsequent measurement:
For subsequent measurement, the Company classifies a financial asset in accordance with the below criteria:
a) The Company''s business model for managing the financial asset and
b) The contractual cash flow characteristics of the financial asset.
Based on the above criteria, the Company classifies its financial assets into the following categories:
i. Financial assets measured at amortized cost
ii. Financial assets measured at fair value through other comprehensive income (FVTOCI) i. Financial assets measured at amortized cost:
A financial asset is measured at the amortized cost if both the following conditions are met:
a) The Company''s business model objective for managing the financial asset is to hold financial assets to
collect contractual cash flows, and
b) 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.
This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company. Such financial assets are subsequently measured at amortized cost using the effective interest method.
Under the effective interest method, the future cash receipts are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial asset over the relevant period of the financial asset to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest income over the relevant period of the financial asset. The same is included under other income in the Statement of Profit and Loss.
The amortized cost of a financial asset is also adjusted for loss allowance, if any.
ii. Financial assets measured at FVTOCI:
A financial asset is measured at FVTOCI if both the following conditions are met:
a. The Company''s business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling the financial assets, and
b. 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.
This category applies to certain investments in debt instruments. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Other Comprehensive Income (OCI). However, the Company recognizes interest income and impairment losses and its reversals in the Statement of Profit and Loss.
On Derecognition of such financial assets, cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement of Profit and Loss.
Further, the Company, through an irrevocable election at initial recognition, has measured certain investments in equity instruments at FVTOCI. The Company has made such election on an instrument by instrument basis. These equity instruments are neither held for trading nor are contingent consideration recognized under a business combination. Pursuant to such irrevocable election, subsequent changes in the fair value of such equity instruments are recognized in OCI.
On derecognition of such financial assets, cumulative gain or loss previously recognized in OCI is not reclassified from the equity to Statement of Profit and Loss. However, the Company may transfer such cumulative gain or loss into retained earnings within equity.
De-recognition:
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Company''s Balance Sheet) when any of the following occurs:
i. The contractual rights to cash flows from the financial asset expires;
ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;
iii. The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a ''pass-through'' arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);
iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.
In cases where Company has neither transferred nor retained substantially all the risks and rewards of the financial asset, but retains control of the financial asset, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
On derecognition of a financial asset, (except as mentioned in ii above for financial assets measured at FVTOCI), the difference between the carrying amount and the consideration received is recognized in the Statement of Profit and Loss.
Initial recognition and measurement:
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the fair value minus, in the case of financial liabilities not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial liability.
Subsequent measurement:
All financial liabilities of the Company are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method or at FVTPL.
(a) Financial Liabilities at FVTPL:
A financial liability is classified at FVTPL if it is classified as held for trading or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and changes therein, including any interest expenses, are recognized in Statement of Profit & Loss (including Other Comprehensive Income).
(b) Financial Liabilities at Amortised Cost:
After initial recognition, financial liabilities other than those which are classified as FVTPL are subsequently measured at amortised cost using EIR method.
Amortised cost is calculated by taking into account any discount premium and fees or costs that are integral part of the EIR. Under the effective interest method, the future cash payments are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial liability over the relevant period of the financial liability to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest expense over the relevant period of the financial liability. The same is included under finance cost in the Statement of Profit and Loss.
Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the Derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.
11. Investments in Subsidiaries and Joint Ventures:
Investments in subsidiaries and joint ventures are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries and joint ventures, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
Upon first-time adoption of Ind AS, the Company has elected to measure its investments in subsidiaries and joint ventures at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e. 1st April, 2015.
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period to get ready for its intended use. All other borrowing costs are recognised as expenses in the period in which they are incurred.
13. Impairment of assets:(a) Financial Assets:
The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:
i) Trade receivables and lease receivables
ii) Financial assets measured at amortized cost (other than trade receivables and lease receivables)
iii) Financial assets measured at fair value through other comprehensive income (FVTOCI).
In case of trade receivables and lease receivables, the Company follows a simplified approach wherein an amount equal to lifetime ECL is measured and recognized as loss allowance.
In case of other assets (listed as ii and iii above), the Company determines if there has been a significant increase in credit risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL is measured and recognized as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance.
Subsequently, if the credit quality of the financial asset improves such that there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on 12-month ECL.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original effective interest rate.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial asset. 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months from the reporting date.
ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined by a range of outcomes, taking into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of future economic conditions.
As a practical expedient, the Company uses a provision matrix to measure lifetime ECL on its portfolio of trade receivables and other assets. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. At each reporting date, the historically observed default rates and changes in the forward-looking estimates are updated.
Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company''s assets. If any such indication exists, then recoverable amount of the asset is estimated. An impairment loss, if any, is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.
The impairment loss recognized in a prior accounting period is reversed, if there has been a change in the estimate of recoverable amount.
Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss, except for properties previously revalued with the revaluation taken to OCI. For such properties, the impairment is recognized in OCI up to the amount of any previous revaluation.
The functional currency of the company is the Indian rupee. These financial statements are presented in Indian rupees.
(i) Foreign Currency Transactions
Transactions in foreign currencies are translated into the functional currency of the company at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date.
Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.
Any income or expense on account of exchange difference, either on settlement or on translation, is recognised in Statement of Profit or Loss, except exchange difference arising from the translation of the items which are recognised in OCI.
(a) The assets and liabilities of foreign operations are translated into the functional currency at the rate prevailing at the end of the year. Income and expenditure are translated on the yearly average exchange rate prevailing during the year.
(b) From 1st April, 2015 onwards, the resultant exchange differences are recognised in OCI and accumulated in equity (as exchange differences on translating the financial statements of a foreign operation).
(c) When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount of exchange differences related to that foreign operation recognised in OCI is reclassified to profit or loss as part of the gain or loss on disposal.
15. Leased Assets:As a lessee:
The Company assesses whether a contract is or contains a lease, at inception of the contract. Leases are recognized as right-of-use assets and a corresponding liability at the date at which the leased asset is available for use by the Company. Assets and liabilities arising from a lease are initially measured on present value basis. Lease liabilities include the net present value of the following lease payments:
⢠Lease payments less any lease incentives receivable
⢠Variable lease payments that vary to reflect changes in market rental rates, if any
⢠Amounts expected to be payable by the Company under residual value guarantees, if any
⢠Exercise price of the purchase option, if the Company is reasonably certain to exercise that option, and
⢠Payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.
The lease payments are discounted using Company''s incremental borrowing rate (since the interest rate implicit in the lease cannot be readily determined). Incremental borrowing rate is the rate of interest that the Company would have to pay to borrow over a similar term, and a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Variable lease payments that depend on any key variable / condition, are recognised in profit or loss in the period in which the condition that triggers those payments occurs.
As a result of the COVID-19 pandemic, rent concessions have been granted to lessees. Amendment to Ind AS 116 ''Leases''w.r.t âCovid-19-Related Rent Concessionsâ provides lessees with an option to treat qualifying rent concessions in the same way as they would if they were not lease modifications. The Company has applied the practical expedient for all qualifying rent concessions and these concessions have been accounted as variable lease payments in the statement of profit and loss in the period in which they are granted.
Right-of-use assets are measured at cost comprising the following:
⢠The amount of the initial measurement of lease liability
⢠Any lease payments made at or before the commencement date less any lease incentives received
⢠Any initial direct costs and
⢠Restoration costs.
Right-of-use assets are depreciated over the lease term on a straight-line basis.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
Lease income from operating leases where the Company is lessor is recognised in income on a straight line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
For presentation in the Statement of Cash Flows, cash and cash equivalents includes cash on hand, deposits held at call, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, bank overdrafts and cash credits. Bank overdrafts and cash credits are shown within borrowings in current liabilities in the balance sheet.
a) Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
b) Long Term Employee Benefits:I. Defined Contribution Plan:
The Company''s contributions to provident fund are considered as defined contribution plans. The Company recognizes contribution payable to a defined contribution plan as an expense in the Statement of Profit and Loss when the employees render services to the Company during the reporting period. If the contributions payable for services received from employees, before the reporting date exceeds the contributions already paid, the deficit payable is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the reporting date, the excess is recognized as an asset to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund.
The cost of providing defined benefits like Gratuity and Leave Encashment is determined using the Projected Unit Credit method with actuarial valuations being carried out at each reporting date. The defined benefit obligations recognized in the Balance Sheet represent the present value of the defined benefit obligations as reduced by the fair value of plan assets, if applicable. Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is recognized representing the present value of available refunds and reductions in future contributions to the plan. All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability / (asset) are recognized in the Statement of Profit and Loss. Remeasurements of the net defined benefit liability / (asset) comprising actuarial gains and losses and the return on the plan assets (excluding amounts included in net interest on the net defined benefit liability/asset), are recognized in Other Comprehensive Income. Such re-measurements are not reclassified to the Statement of Profit and Loss in the subsequent periods. The Company presents the above liability/(asset) as current and non-current in the Balance Sheet as per actuarial valuation by the independent actuary.
18. Income Taxes:(a) Current Tax:
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from ''profit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities.
Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent periods is recognized using the tax rates and tax laws that have been enacted or substantively enacted.
A deferred tax liability is recognised based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised.
(c) Minimum Alternate Tax (MAT):
MAT paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal taxes during the specified period under the Income Tax Act, 1961. The Company reviews the ''MAT Credit Entitlement'' asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
(d) Current and deferred taxes are recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognised in Other Comprehensive Income. In this case, the tax is also recognized in Other Comprehensive Income.
The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.
20. Provisions and Contingencies:
a) A provision is recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
b) If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
c) A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Operating segments are reported in a manner consistent with internal reporting provided to chief operating decision maker. The Board of Directors of the Company has been identified as chief operating decision maker which assesses the financial performance and position of the Company, and makes strategic decisions.
For the purpose of presentation in statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short term highly liquid investments with original maturities of 3 months or less that are readily convertible to known amount of cash and which are subject to an insignificant risk of change in value.
Exceptional Items include income/expenses that are considered to be part of ordinary activities, however of such significance and nature that separate disclosure enables the users of financial statements to understand the impact in more meaningful manner. Exceptional Items are identified by virtue of their size, nature and incidence.
All amounts disclosed in the financial statements and notes have been rounded off to the nearest crore as per the requirement of Schedule III, unless otherwise stated.
25. Critical estimates and judgements
In the application of the Company''s accounting policies, the Management of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The Company applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with the market participants to price the instrument. The Company''s assumptions are based on observable data as far as possible, otherwise on the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.
Mar 31, 2015
1. Basis of Preparation of Financial Statements:
The financial statements have been prepared and presented under the
historical cost convention, on accrual basis of accounting, except for
certain fixed assets, which are revalued in accordance with generally
accepted accounting principles in India and the provisions of the
Companies Act, 2013. They are prepared in accordance with the
Accounting Standards specified under section 133 of the Companies Act,
2013 (''the Act'') read with Rule 7 of Companies (Accounts) Rules, 2014,
and other relevant provisions to the extent applicable.
2. Use of Estimates:
The preparation of financial statements requires estimates and
assumptions. These estimates and assumptions affect the reported amount
of assets and liabilities on the date of the financial statements and
the reported amount of revenues and expenses during the reporting
period. Differences between the actual results and the estimates are
recognised in the period in which the results are known / materialised.
3. Revenue Recognition:
(a) Sale of goods is recognised on completion of supplies as per the
terms of the contract and on transfer of risk and reward.
(b) Sales include excise duty and adjustment for price variation and
are net of claims accepted.
(c) In case of construction / erection contracts, revenue is recognised
based on the stage of completion determined as per the terms of the
contract. Sales / income are booked on the basis of running account
bills based on completed work and are net of claims accepted.
Escalations and other claims which are not acknowledged by customers
are not taken into account.
(d) Interest income is recognised on time proportion basis. The
insurance claims are accounted for on accrual basis based on fair
estimation of sanctions by the insurance companies.
4. Fixed Assets:
Fixed assets are stated at cost of acquisition or construction, net of
recoverable taxes including any cost attributable for bringing the
asset to its working condition for its intended use and includes amount
added on revaluation, less accumulated depreciation and impairment
loss, if any.
5. Depreciation / Amortisation:
(a) Depreciation on fixed assets is provided on Straight Line Method at
the rates and in the manner prescribed in Schedule II to the Companies
Act, 2013, except as stated in (b) below.
(b) On the fixed assets of integral foreign branches, depreciation is
provided on Straight Line Method. The applicable rates are based on the
local laws and practices of the respective countries, except where the
rates of depreciation are less than as prescribed in schedule II to the
Act, the depreciation is provided as per the rates prescribed in
Schedule II of the Act.
(c) In case of revalued assets, the difference between the depreciation
based on revaluation and the depreciation charged on historical cost is
recouped out of the revaluation reserve.
(d) Leasehold Land is amortised over the period of lease.
(e) Goodwill arising on amalgamation is amortised over a period of 5
years.
6. Investments:
Investments that are readily realisable and intended to be held for not
more than 12 months are classified as current investments. All other
investments are classified as long-term investment. Current investments
are carried at the lower of cost and fair value. Long-term investments
are carried at cost less diminution in value, if any. Provisions are
recognized for any decline, other than temporary, in the carrying value
of long term investments as determined by the management.
7. Inventories:
(a) Raw materials, Construction materials, Components and Stores and
Spares are valued at lower of cost or net realisable value.
(b) Cost of inventories is determined by using the weighted average
method.
(c) Material purchased for supply against specific contracts is valued
at cost or net realisable value as per the contract, whichever is
lower.
(d) Work-in-progress is valued at cost including material cost and
attributable overheads. Provision is made when expected realisation is
lesser than the carrying cost.
(e) Finished goods are valued at cost or net realisable value,
whichever is lower and inclusive of excise duty. ( f ) Tools and
tackles are amortised over their estimated useful life.
(g) Scrap is valued at net realisable value.
8. Borrowing Cost:
Borrowing costs that are directly attributable to the acquisition,
construction or production 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 recognised as expenses in the period in which
they are incurred.
9. Impairment of Assets:
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
Company''s fixed assets. If any such indication exists, then recoverable
amount of the asset is estimated. An impairment loss, if any, is
recognised whenever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is greater of the net
selling price and the value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value based
on an appropriate discount factor.
The impairment loss recognised in a prior accounting period is
reversed, if there has been a change in the estimate of recoverable
amount.
10. Debenture / Preference Share Issue Expenses:
Expenses incurred for issue of secured debentures and preference shares
made by the Company are written off as revenue expenditure during the
year of issue.
11. Foreign Currency Transactions:
(a) Transactions denominated in foreign currencies are accounted for at
the exchange rates prevailing on the dates of the transactions or that
approximates the actual rate at the dates of transactions.
(b) Monetary items denominated in foreign currencies remaining
unsettled at the year end are restated at the year end rates.
(c) Non-monetary items denominated in a foreign currency are stated at
cost.
(d) Any income or expense on account of exchange difference, either on
settlement or on translation, is recognized in Statement of Profit and
Loss.
(e) Financial Statements of Overseas Integral Operations are translated
as under:
i. Assets and liabilities are translated at the rate prevailing at the
end of the year. Income and expenditure are translated on the yearly
average exchange rate prevailing during the year.
ii. Fixed assets are translated at the average rate prevailing on
purchase / acquisition of assets. Depreciation is accounted at the same
exchange rate at which the assets are translated.
iii. The resultant exchange gains and losses are recognised in the
Statement of Profit and Loss.
(f) Forward Exchange Contracts:
I. In case of transactions covered by forward exchange contracts which
are not intended for trading or speculation purposes, premium or
discount is amortised as expense or income over the life of the
contract.
II. Exchange difference on such contracts is recognised in the
Statement of Profit and Loss in the year in which the exchange rates
change.
III. Profit or loss arising on cancellation or renewal of such forward
exchange contracts is recognised as income or expense for the year.
12. Excise Duty:
The excise duty in respect of closing inventory of finished goods is
included as part of the inventory. The amount of Central Value Added Ta
x (CENVAT) credit in respect of materials consumed for sales is
deducted from cost of materials consumed.
13. Leased Assets:
Operating Lease:
i) Lease payments are recognised as expense in the Statement of Profit
and Loss on straight line basis over the term of the lease.
ii) Assets given on operating lease are included in fixed assets. Lease
income is recognised in the Statement of Profit and Loss on straight
line basis over the term of the lease.
14. Employees Retirement and Other Benefits:
a) Short Term Employee Benefits:
Short term employee benefits are recognised as expenses at the
undiscounted amount in the period during which the services have been
rendered.
b) Long Term Employee Benefits:
1) Defned Contribution Plan:
The Company''s contribution to Provident Fund and Superannuation Fund
are charged to Statement of Profit and Loss on accrual basis.
2) Defned Benefit Plan:
i) Gratuity: The Company provides for the applicable gratuity based on
actuarial valuation as per the Projected Unit Credit Method.
ii) Leave Encashment: The Company provides for the liability at the
year end on account of unveiled earned leave as per the actuarial
valuation as per Projected Unit Credit Method.
iii) The cost of employee stock option attributable to current financial
year is accounted for and charged to Statement of Profit and Loss.
15. Taxes on Income:
a) Current Tax:
Provision for current Income Ta x is made on the estimated taxable
income using the applicable tax rates and tax laws.
b) Deferred Ta x
Deferred tax arising on the timing differences and which are capable of
reversal in one or more subsequent periods is recognised using the tax
rates and tax laws that have been enacted or substantively enacted.
Deferred tax asset is not recognised unless there is a virtual
certainty as regards to the reversal of the same in future years.
16. Earnings Per Share:
The basic earnings per share is computed by dividing the net profit
attributable to the equity shareholders for the year by the weighted
average number of equity shares outstanding during the reporting
period. Diluted earnings per share is computed by dividing the net
Profit attributable to the equity shareholders for the year by the
weighted average number of equity and dilutive equity equivalent shares
outstanding during the year, except where the results would be anti
dilutive.
17. Provisions and Contingencies:
a) A provision is recognised when there is a present obligation as a
result of a past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are reviewed at each balance
sheet date and adjusted to reflect the current best estimate.
b) A disclosure for a contingent liability is made when there is a
possible or present obligation that may but probably will not require
an outflow of resources. When there is a possible obligation in respect
of which the likelihood of outflow of resources is remote, no provision
or disclosure is made.
c) Contingent assets are neither recognised nor disclosed in the
financial statement.
18. Employees Stock Option Scheme:
Stock options granted to the employees of the company, under the
Employees Stock Option Scheme are evaluated as per the accounting
treatment prescribed by SEBI (Employee Stock Option Scheme and
Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess
of market value of the stock option, as on date of grant over the
exercise price of the option is recognised as deferred employee
compensation and is charged to Statement of Profit and Loss as employee
costs, on straight line method over the vesting period of the options.
Mar 31, 2014
1. Basis of Preparation of Financial Statements:
The financial statements have been prepared and presented under the
historical cost convention, on accrual basis of accounting, except for
certain fixed assets, which are revalued in accordance with generally
accepted accounting principles in India and the provisions of the
Companies Act, 1956. They are prepared in accordance with the
accounting standards notified under sub section (3C) of section 211 of
the Companies Act, 1956 read with the General Circular 15/2013 dated
13th September 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013 and other relevant provisions to
the extent applicable.
2. Use of Estimates:
The presentation of financial statements requires estimates and
assumptions. These estimates and assumptions affect the reported amount
of assets and liabilities on the date of the financial statements and
the reported amount of revenues and expenses during the reporting
period. Difference between the actual results and the estimates are
recognised in the period in which the results are known / materialised.
3. Revenue Recognition:
(a) Sale of goods is recognised on completion of supplies as per the
terms of the contract and on transfer of risk and reward.
(b) Sales include excise duty and adjustment for price variation and
are net of claims accepted.
(c) In case of construction / erection contracts, revenue is recognised
based on the stage of completion determined as per the terms of the
contract. Sales/income are booked on the basis of running account bills
based on completed work and are net of claims accepted. Escalations and
other claims which are not acknowledged by customers are not taken into
account.
(d) Interest income is recognised on time proportion basis. The
insurance claims are accounted for on accrual basis based on fair
estimation of sanctions by the insurance companies.
4. Fixed Assets:
Fixed assets are stated at cost of acquisition or construction, net of
recoverable taxes including any cost attributable for bringing the
asset to its working condition for its intended use and includes amount
added on revaluation, less accumulated depreciation and impairment
loss, if any.
5. Depreciation / Amortisation:
(a) 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, except on computer software and on fixed assets of Uganda,
Bhutan, Bangladesh, Kenya and South Africa branches.
(b) Computer software is depreciated over a period of 3 to 6 years
depending upon the expected useful life of the software.
(c) On the fixed assets of Uganda, Bangladesh, Bhutan, Kenya and South
Africa branches, depreciation is provided on Straight Line Method. The
applicable rates are based on the local laws and practices of the
respective countries.
(d) Assets individually costing Rs. 0.05 Lacs or less are depreciated
fully in the year of purchase.
(e) In case of revalued assets, the difference between the depreciation
based on revaluation and the depreciation charged on historical cost is
recouped out of the revaluation reserve.
(f) Leasehold Land is amortised over the period of lease.
(g) Goodwill arising on amalgamation is amortised over a period of 5
years.
6. Investments:
Long term investments are stated at cost. Provision for diminution in
value of such investments is made only if such a decline is other than
temporary.
7. Inventories:
(a) Raw materials, Construction materials, Components and Stores and
Spares are valued at lower of cost or net realisable value.
(b) Cost of inventories is determined by using the weighted average
method.
(c) Material purchased for supply against specific contracts is valued
at cost or net realisable value as per the contract, whichever is
lower.
(d) Work-in-progress is valued at cost including material cost and
attributable overheads. Provision is made when expected realisation is
lesser than the carrying cost.
(e) Finished goods are valued at cost or net realisable value,
whichever is lower and inclusive of excise duty.
(f) Tools and tackles are amortised over their estimated useful life
(g) Scrap is valued at net realisable value.
8. Borrowing Cost:
Borrowing costs that are directly attributable to the acquisition,
construction or production 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 recognised as expenses in the period in which
they are incurred.
9. Impairment of Assets:
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
Company''s fixed assets. If any such indication exists, then recoverable
amount of the asset is estimated. An impairment loss, if any, is
recognised whenever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is greater of the net
selling price and the value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value based
on an appropriate discount factor.
The impairment loss recognised in a prior accounting period is
reversed, if there has been a change in the estimate of recoverable
amount.
10. Debenture / Preference Share Issue Expenses:
Expenses incurred for issue of secured debentures and preference shares
made by the Company are written off as revenue expenditure during the
year of issue.
11. Foreign Currency Transactions:
(a) Transactions denominated in foreign currencies are accounted for at
the exchange rates prevailing on the dates of the transactions or that
approximates the actual rate at the dates of transactions.
(b) Monetary items denominated in foreign currencies remaining
unsettled at the year end are restated at the year end rates.
(c) Non-monetary items denominated in a foreign currency are stated at
costs.
(d) Any income or expense on account of exchange difference, either on
settlement or on translation, is recognized in the Statement of Profit
and Loss.
(e) Financial Statements of Overseas Integral Operations are translated
as under:
i. Assets and liabilities are translated at the rate prevailing at the
end of the year. Income and expenditure are translated on the yearly
average exchange rate prevailing during the year.
ii. Fixed assets are translated at the average rate prevailing on
purchase / acquisition of assets. Depreciation is accounted at the same
exchange rate at which the assets are translated.
iii. The resultant exchange gains and losses are recognised in the
Statement of Profit and Loss.
(f) Forward Exchange Contracts:
I. In case of transactions covered by forward exchange contracts which
are not intended for trading or speculation purposes, premium or
discount is amortised as expense or income over the life of the
contract.
II. Exchange difference on such contracts is recognised in the
Statement of Profit and Loss in the year in which the exchange rates
change.
III. Profit or loss arising on cancellation or renewal of such forward
exchange contracts is recognised as income or expense for the year.
12. Excise Duty:
The excise duty in respect of closing inventory of finished goods is
included as part of the inventory. The amount of Central Value Added
Tax (CENVAT) credit in respect of materials consumed for sales is
deducted from cost of materials consumed.
13. Leased Assets:
Operating Lease:
i) Lease payments are recognised as expense in the Statement of Profit
and Loss on straight line basis over the term of the lease.
ii) Assets given on operating lease are included in fixed assets. Lease
income is recognised in the Statement of Profit and Loss on straight
line basis over the term of the lease.
14. Employees Retirement and Other Benefits:
a) Short Term Employee Benefits:
Short term employee benefits are recognised as expenses at the
undiscounted amount in the period during which the services have been
rendered.
b) Long Term Employee Benefits:
1) Defined Contribution Plan:
The Company''s contribution to Provident Fund and Superannuation Fund
are charged to Statement of Profit and Loss on accrual basis.
2) Defined Benefit Plan:
i) Gratuity: The Company provides for the applicable gratuity based on
actuarial valuation as per the Projected Unit Credit Method.
ii) Leave Encashment: The Company provides for the liability at the
year end on account of unavailed earned leave as per the actuarial
valuation as per Projected Unit Credit Method.
iii) The cost of employee stock option attributable to current
financial year is accounted for and charged to Statement of Profit and
Loss.
15. Taxes on Income:
a) Current Tax:
Provision for current Income Tax is made on the estimated taxable
income using the applicable tax rates and tax laws.
b) Deferred Tax
Deferred tax arising on the timing differences and which are capable of
reversal in one or more subsequent periods is recognised using the tax
rates and tax laws that have been enacted or substantively enacted.
Deferred tax asset is not recognised unless there is a virtual
certainty as regards to the reversal of the same in future years.
16. Earnings Per Share:
The basic earnings per share is computed by dividing the net profit
attributable to the equity shareholders for the year by the weighted
average number of equity shares outstanding during the reporting
period. Diluted earnings per share is computed by dividing the net
profit attributable to the equity shareholders for the year by the
weighted average number of equity and dilutive equity equivalent shares
outstanding during the year, except where the results would be anti
dilutive.
17. Provisions and Contingencies:
a) A provision is recognised when there is a present obligation as a
result of a past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are reviewed at each balance
sheet date and adjusted to reflect the current best estimate.
b) A disclosure for a contingent liability is made when there is a
possible or present obligation that may but probably will not require
an outflow of resources. When there is a possible obligation in respect
of which the likelihood of outflow of resources is remote, no provision
or disclosure is made.
c) Contingent assets are neither recognised nor disclosed in the
financial statement.
18. Employees Stock Option Scheme:
Stock options granted to the employees of the company, under the
Employees Stock Option Scheme are evaluated as per the accounting
treatment prescribed by SEBI (Employee Stock Option Scheme and
Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess
of market value of the stock option, as on date of grant over the
exercise price of the option is recognised as deferred employee
compensation and is charged to Statement of Profit and Loss asemployee
costs, on straight line method over the vesting period of the options.
Mar 31, 2013
1. Basis of Preparation of Financial Statements:
The financial statements have been prepared and presented under the
historical cost convention, on accrual basis of accounting, except for
certain fixed assets which are revalued in accordance with generally
accepted accounting principles in India and the provisions of the
Companies Act, 1956. They are prepared in accordance with the
accounting standards notified under sub section (3C) of Section 211 of
the Companies Act, 1956 and other relevant provisions to the extent
applicable.
2. Use of Estimates:
The presentation of financial statements requires estimates and
assumptions. These estimates and assumptions affect the reported amount
of assets and liabilities on the date of the financial statements and
the reported amount of revenues and expenses during the reporting
period. Difference between the actual results and the estimates are
recognised in the period in which the results are known/materialised.
3. Revenue Recognition:
a) Sale of goods is recognised on completion of supplies as per the
terms of the contract and on transfer of risk and reward. Sales include
excise duty and adjustment for price variation and are net of claims
accepted.
b) In case of construction/erection contracts, revenue is recognised
based on the stage of completion determined as per the terms of the
contract. Sales/income are booked on the basis of running account bills
based on completed work and are net of claims accepted. Escalations and
other claims which are not acknowledged by customers are not taken into
account.
c) Interest income is recognised on time proportion basis.
d) The insurance claims are accounted for on accrual basis based on
fair estimation of sanction by the insurance companies.
4. Fixed Assets:
Fixed assets are stated at cost of acquisition or construction, net of
recoverable taxes including any cost attributable for bringing the
asset to its working condition for its intended use and includes amount
added on revaluation, less accumulated depreciation and impairment
loss, if any.
5. Depreciation/Amortisation:
a) 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 except on computer software and on fixed assets of Uganda,
Bhutan, Bangladesh and Kenya branches.
b) Computer software is depreciated over a period of 3 to 6 years
depending upon the expected useful life of the software.
c) On the fixed assets of Uganda, Bangladesh Bhutan and Kenya branches,
depreciation is provided on Straight Line Method. The applicable rates
are based on the local laws and practices of the respective countries.
d) Assets individually costing Rs. 0.05 Lacs or less are depreciated
fully in the year of purchase.
e) In case of revalued assets, the difference between the depreciation
based on revaluation and the depreciation charged on historical cost is
recouped out of the revaluation reserve.
f) Leasehold Land is amortised over the period of lease.
g) Goodwill arising on amalgamation is amortised over a period of 5
years.
6. Investments:
Long term investments are stated at cost. Provision for diminution in
value of such investments is made only if such a decline is other than
temporary.
7. Inventories:
a) Raw materials, Construction materials, Components and Stores and
Spares are valued at lower of cost or net realisable value.
b) Cost of inventories is determined by using the weighted average
method.
c) Material purchased for supply against specific contracts is valued
at cost or net realisable value as per the contract, whichever is
lower.
d) Work-in-progress is valued at cost including material cost and
attributable overheads. Provision is made when expected realisation is
lesser than the carrying cost.
e) Finished goods are valued at cost or net realisable value, whichever
is lower and inclusive of excise duty.
f) Scrap is valued at net realisable value.
8. Tools and Tackles:
Tools and tackles are amortised over their estimated useful life.
9. Borrowing Cost:
Borrowing costs that are directly attributable to the acquisition,
construction or production 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 recognised as expenses in the period in which
they are incurred.
10. Impairment of Assets:
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
Company''s fixed assets. If any such indication exists, then recoverable
amount of the asset is estimated. An impairment loss, if any, is
recognised whenever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is greater of the net
selling price and the value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value based
on an appropriate discount factor.
The impairment loss recognised in a prior accounting period is
reversed, if there has been a change in the estimate of recoverable
amount.
11. Debenture / Preference Share Issue Expenses:
Expenses incurred for issue of secured debentures and preference share
made by the Company, were written off as revenue expenditure during the
year of issue.
12. Foreign Currency Transactions:
a) Transactions denominated in foreign currencies are accounted for at
the exchange rates prevailing on the dates of the transactions or that
approximates the actual rate at the dates of transactions.
b) Monetary items denominated in foreign currencies, remaining
unsettled at the year end are restated at the year end rates.
c) Non-monetary items denominated in a foreign currency are stated at
costs.
d) Any income or expense on account of exchange difference either on
settlement or on translation is recognised in Statement of Profit and
Loss.
e) Financial Statements of Overseas Integral Operations are translated
as under:
i) Assets and liabilities are translated at the rate prevailing at the
end of the year. Income and expenditure are translated on the yearly
average exchange rate prevailing during the year.
ii) Fixed assets are translated at the average rate prevailing on
purchase/acquisition of assets. Depreciation is accounted at the same
rate at which the assets are translated.
iii) The resultant exchange gains and losses are recognised in the
Statement of Profit and Loss.
f) Forward Exchange Contracts:
i) In case of transactions covered by forward exchange contracts which
are not intended for trading or speculation purposes, premium or
discount is amortised as expense or income over the life of the
contract.
ii) Exchange difference on such contracts is recognised in the
Statement of Profit and Loss in the year in which the exchange rates
change.
iii) Profit or loss arising on cancellation or renewal of such forward
exchange contracts are recognised as income or expense for the year.
13. Excise Duty:
The excise duty in respect of closing inventory of finished goods is
included as part of the inventory. The amount of Central Value Added
Tax (CENVAT) credit in respect of materials consumed for sales is
deducted from cost of materials consumed.
14. Leased Assets:
Operating Lease:
i) Lease payments are recognised as expense in the Statement of Profit
and Loss on straight line basis over the term of the lease.
ii) Assets given on operating lease are included in fixed assets. Lease
income is recognised in the Statement of Profit and Loss on straight
line basis over the term of the lease.
15. Employees Retirement and Other Benefits:
a) Short Term Employee Benefits:
Short term employee benefits are recognised as expenses at the
undiscounted amount in the period during which the services have been
rendered.
b) Long Term Employee Benefits:
1) Defined Contribution Plan:
The Company''s contribution to Provident Fund and Superannuation Fund
are charged to Statement of Profit and Loss on accrual basis.
2) Defined Benefit Plan:
i) Gratuity: The company provides for gratuity based on actuarial
valuation as per the Projected Unit Credit Method.
ii) Leave Encashment: The company provides for liability at the year
end on account of unavailed earned leave as per the actuarial valuation
as per Projected Unit Credit Method.
iii) The bonus and leave travel allowance applicable to employees is
accounted for on accrual basis.
iv) The cost of employee stock option attributable to current financial
year is accounted for and charged to Statement of Profit and Loss.
16. Taxes on Income:
a) Current Tax:
Provision for current Income Tax is made on the estimated taxable
income using the applicable tax rates and tax laws.
b) Deferred Tax:
Deferred tax arising on the timing differences and which are capable of
reversal in one or more subsequent periods is recognised using the tax
rates and tax laws that have been enacted or substantively enacted.
Deferred tax asset is not recognised unless there is a virtual
certainty as regards to the reversal of the same in future years.
17. Earnings Per Share:
The basic earnings per share is computed by dividing the net profit
attributable to the equity shareholders for the year by the weighted
average number of equity shares outstanding during the reporting
period. Diluted earnings per share is computed by dividing the net
profit attributable to the equity shareholders for the year by the
weighted average number of equity and dilutive equity equivalent shares
outstanding during the year, except where the results would be anti
dilutive.
18. Provisions and Contingencies:
a) A provision is recognised when there is a present obligation as a
result of a past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are reviewed at each balance
sheet date and adjusted to reflect the current best estimate.
b) A disclosure for a contingent liability is made when there is a
possible or present obligation that may but probably will not require
an outflow of resources. When there is a possible obligation in respect
of which the likelihood of outflow of resources is remote, no provision
or disclosure is made.
c) Contingent assets are neither recognised nor disclosed in the
financial statement.
19. Employees Stock Option Scheme:
Stock options granted to the employees of the company, under the
Employees Stock Option Scheme are evaluated as per the accounting
treatment prescribed by SEBI (Employee Stock Option Scheme and
Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess
of market value of the stock option, as on date of grant over the
exercise price of the option is recognised as deferred employee
compensation and is charged to Statement of Profit and Loss as employee
costs, on straight line method over the vesting period of the options.
Mar 31, 2012
1. Basis of Preparation of Financial Statements:
The financial statements have been prepared and presented under the historical cost convention, on accrual basis of accounting, except for certain fixed assets which are revalued in accordance with generally accepted accounting principles in India and the provisions of the Companies Act, 1956. They are prepared in accordance with the accounting standards notified under sub section (3C) of section 211 of the Companies Act, 1956 and other relevant provisions to the extent applicable.
2. Use of Estimates:
The presentation of financial statements requires estimates and assumptions. These estimates and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and the estimates are recognised in the period in which the results are known/materialised.
3. Revenue Recognition:
a) Sale of goods is recognised on completion of supplies as per the terms of the contract and on transfer of risk and reward. Sales includes excise duty and adjustment for price variation and are net of claims accepted.
b) In case of construction/erection contracts, revenue is recognised based on the stage of completion determined as per the terms of the contract. Sales/income are booked on the basis of running account bills based on completed work and are net of claims accepted. Escalations and other claims which are not acknowledged by customers are not taken into account.
c) Interest income is recognised on time proportion basis.
d) The insurance claims are accounted for on accrual basis based on fair estimation of sanction by the insurance companies.
4. Fixed Assets:
Fixed assets are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less accumulated depreciation and impairment loss, if any.
5. Depreciation/Amortisation:
a) 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 except on computer software and on fixed assets of Uganda, Bhutan and Bangladesh branches.
b) Computer software is depreciated over a period of 3 to 6 years depending upon the expected useful life of the software.
c) On the fixed assets of Uganda, Bangladesh and Bhutan branches, depreciation is provided on Straight Line Method. The applicable rates are based on the local laws and practices of the respective countries.
d) Assets individually costing 0.05 Lacs or less are depreciated fully in the year of purchase.
e) In case of revalued assets, the difference between the depreciation based on revaluation and the depreciation charged on historical cost is recouped out of the revaluation reserve.
f) Leasehold Land is amortised over the period of lease.
g) Goodwill arising on amalgamation is amortised over a period of 5 years.
6. Investments:
Long term investments are stated at cost. Provision for diminution in value of such investments is made only if such a decline is other than temporary.
7. Inventories:
a) Raw materials, Construction materials, Components and Stores and Spares are valued at lower of cost or net realisable value.
b) Cost of inventories is determined by using the weighted average method.
c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract, whichever is lower.
d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when expected realisation is lesser than the carrying cost.
e) Finished goods are valued at cost or net realisable value, whichever is lower and inclusive of excise duty.
f) Scrap is valued at net realisable value.
8. Tools and Tackles:
Tools and tackles are amortised over their estimated useful life.
9. Borrowing Cost:
Borrowing costs that are directly attributable to the acquisition, construction or production 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 recognised as expenses in the period in which they are incurred.
10. Impairment of Assets:
Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any such indication exists, then recoverable amount of the asset is estimated. An impairment loss, if any, is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.
The impairment loss recognised in a prior accounting period is reversed, if there has been a change in the estimate of recoverable amount.
11. Debenture Issue Expenses:
Expenses incurred for issue of secured debentures made by the Company, were written off as revenue expenditure during the year of issue.
12. Foreign Currency Transactions:
a) Transactions denominated in foreign currencies are accounted for at the exchange rates prevailing on the dates of the transactions or that approximates the actual rate at the dates of transactions.
b) Monetary items denominated in foreign currencies, remaining unsettled at the year end are restated at the year end rates.
c) Non-monetary items denominated in a foreign currency are stated at costs.
d) Any income or expense on account of exchange difference either on settlement or on translation is recognised in Statement of Profit and Loss.
e) Financial Statements of Overseas Integral Operations are translated as under:
i) Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are translated on the yearly average exchange rate prevailing during the year.
ii) Fixed assets are translated at the average rate prevailing on purchase/acquisition of assets. Depreciation is accounted at the same rate at which the assets are translated.
iii) The resultant exchange gains and losses are recognised in the Statement of Profit and Loss.
f) Forward Exchange Contracts:
i) In case of transactions covered by forward exchange contracts which are not intended for trading or speculation purposes, premium or discount is amortised as expense or income over the life of the contract.
ii) Exchange difference on such contracts is recognised in the Statement of Profit and Loss in the year in which the exchange rates change.
iii) Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as income or expense for the year.
13. Excise Duty:
The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The amount of Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials consumed.
14. Leased Assets:
Operating Lease:
i) Lease payments are recognised as expense in the Statement of Profit and Loss on straight line basis over the term of the lease.
ii) Assets given on operating lease are included in fixed assets. Lease income is recognised in the Statement of Profit and Loss on straight line basis over the term of the lease.
15. Employees Retirement and Other Benefits:
a) Short Term Employee Benefits:
Short term employee benefits are recognised as expenses at the undiscounted amount in the period during which the services have been rendered.
b) Long Term Employee Benefits:
1) Defined Contribution Plan:
The Company's contribution to Provident Fund and Superannuation Fund are charged to Statement of Profit and Loss on accrual basis.
2) Defined Benefit Plan:
i) Gratuity: The company provides for gratuity based on actuarial valuation as per the Projected Unit Credit Method.
ii) Leave Encashment: The company provides for liability at the year end on account of unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.
iii) The bonus and leave travel allowance applicable to employees is accounted for on accrual basis.
iv) The cost of employee stock option attributable to current financial year is accounted for and charged to Statement of Profit and Loss.
16. Taxes on Income:
a) Current Tax:
Provision for current Income Tax is made on the estimated taxable income using the applicable tax rates and tax laws.
b) Deferred Tax
Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax asset is not recognised unless there is a virtual certainty as regards to the reversal of the same in future years.
17. Earnings Per Share:
The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.
18. Provisions and Contingencies:
a) A provision is recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
b) A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
c) Contingent assets are neither recognised nor disclosed in the financial statement.
19. Employees Stock Option Scheme:
Stock option granted to the employees of the company, under the Employees Stock Option Scheme are evaluated as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess of market value of the stock option, as on date of grant over the exercise price of the option is recognised as deferred employee compensation and is charged to Statement of Profit and Loss as employee costs, on straight line method over the vesting period of the options.
Mar 31, 2011
1. Basis of Preparation of Financial Statements:
The financial statements have been prepared and presented under the historical cost convention, on accrual basis of accounting, except for certain fixed assets which are revalued in accordance with generally accepted accounting principles in India and the provisions of the Companies Act, 1956. They are prepared in accordance with the accounting standards notified under sub section (3C) of section 211 of the Companies Act, 1956 and other relevant provisions to the extent applicable.
2. Use of Estimates:
The presentation of financial statements requires estimates and assumptions. These estimates and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and the estimates are recognised in the period in which the results are known/materialised.
3. Revenue Recognition:
a) Sale of goods is recognised on completion of supplies as per the terms of the contract and on transfer of risk and reward. Sales include excise duty and adjustment for price variation and are net of claims accepted.
b) In case of construction/erection contracts, revenue is recognised based on the stage of completion determined as per the terms of the contract. Sales/income are booked on the basis of running account bills based on completed work and are net of claims accepted. Escalations and other claims which are not acknowledged by customers are not taken into account.
c) Interest income is recognised on time proportion basis.
d) The insurance claims are accounted for on accrual basis based on fair estimation of sanction by the insurance companies.
4. Fixed Assets:
Fixed assets are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less accumulated depreciation and impairment loss, if any.
5. Depreciation/Amortisation:
a) 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 except on computer software and on fixed assets of Uganda, Tunisia and Bhutan branches.
b) Computer software is depreciated over a period of 3 to 6 years depending upon the expected useful life of the software.
c) On the fixed assets of Tunisia, Uganda and Bhutan branches, depreciation is provided on Straight Line Method. The applicable rates are based on the local laws and practices of the respective countries.
d) Assets individually costing 0.005 Million or less are depreciated fully in the year of purchase.
e) In case of revalued assets, the difference between the depreciation based on revaluation and the depreciation charged on historical cost is recouped out of the revaluation reserve.
f) Leasehold Land is amortised over the period of lease.
g) Goodwill arising on amalgamation is amortised over a period of 5 years.
6. Investments:
Long term investments are stated at cost. Provision for diminution in value of such investments is made only if such a decline is other than temporary.
7. Inventories:
a) Raw materials, Construction materials, Components and Stores and Spares are valued at lower of cost or net realisable value.
b) Cost of inventories has been determined by using the weighted average method.
c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract, whichever is lower.
d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when expected realisation is lesser than the carrying cost.
e) Finished goods are valued at cost or net realisable value, whichever is lower and inclusive of excise duty.
f) Scrap is valued at net realisable value.
8. Tools and Tackles:
Tools and tackles are amortised over their estimated useful life.
9. Borrowing Cost:
Borrowing costs that are directly attributable to the acquisition, construction or production 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 recognised as expenses in the period in which they are incurred.
10. Impairment of Assets:
Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Companys fixed assets. If any such indication exists, then recoverable amount of the asset is estimated. An impairment loss, if any, is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.
The impairment loss recognised in a prior accounting period is reversed, if there has been a change in the estimate of recoverable amount.
11. Debenture issue expenses:
Expenses incurred for issue of secured debentures made by the Company, are written off as revenue expenditure during the year of issue.
12. Foreign Currency Transactions:
a) Transactions denominated in foreign currencies are accounted for at the exchange rates prevailing on the dates of the transactions or that approximates the actual rate at the dates of transactions.
b) Monetary items denominated in foreign currencies, remaining unsettled at the year end are restated at the year end rates.
c) Non-monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical costs.
d) Any income or expense on account of exchange difference either on settlement or on translation is recognised in Profit and Loss Account.
e) Financial Statements of Overseas Integral Operations are translated as under:
i. Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are translated on the yearly average exchange rate prevailing during the year.
ii. Fixed assets are translated at the average rate prevailing on purchase/acquisition of assets. Depreciation is accounted at the same rate at which the assets are translated.
iii. The resultant exchange gains and losses are recognised in the Profit and Loss Account.
f) Forward Exchange Contracts:
i. In case of transactions covered by forward exchange contracts which are not intended for trading or speculation purposes, premium or discount is amortised as expense or income over the life of the contract.
ii. Exchange difference on such contracts is recognised in the Profit and Loss Account in the year in which the exchange rates change.
iii. Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as income or expense for the year.
13. Excise Duty:
The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The amount of Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials consumed.
14. Leased Assets:
Operating Lease:
i. Lease payments are recognised as expense in the Profit and Loss Account on straight line basis over the term of the lease.
ii. Assets given on operating lease are included in fixed assets. Lease income is recognised in the Profit and Loss Account on straight line basis over the term of the lease.
15. Employee Benefits:
a. Short Term Employee Benefits:
Short term employee benefits are recognised as expenses at the undiscounted amount in the period during which the services have been rendered.
b. Long Term Employee Benefits:
1. Defined Contribution Plan:
The Companys contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account on accrual basis.
2. Defined Benefit Plan:
i. Gratuity: The Company provides for gratuity based on actuarial valuation as per the Projected Unit Credit Method.
ii. Leave encashment: The Company provides for liability at the year end on account of unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.
iii. The bonus and leave travel allowance applicable to employees is accounted for on accrual basis.
iv. The cost of employee stock option attributable to current financial year is accounted for and charged to Profit and Loss Account.
16. Taxes on Income:
a. Current Tax:
Provision for current Income Tax is made on the estimated taxable income using the applicable tax rates and tax laws.
b. Deferred Tax:
Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax asset is not recognised unless there is a virtual certainty as regards to the reversal of the same in future years.
17. Earnings Per Share:
The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.
18. Provisions and Contingencies:
a. A provision is recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
b. A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
c. Contingent assets are neither recognised nor disclosed in the financial statement.
19. Employees Stock Option Scheme:
Stock option granted to the employees of the Company, under the Employees Stock Option Scheme are evaluated as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess of market value of the stock option, as on date of grant over the exercise price of the option is recognised as deferred employee compensation and is charged to Profit and Loss Account as employee costs, on straight line method over the vesting period of the options.
Mar 31, 2010
1. Basis of preparation of Financial Statements:
The financial statements have been prepared and presented under the historical cost convention, on accrual basis of accounting, except for certain fixed assets which are revalued in accordance with generally accepted accounting principles in India and the provisions of the Companies Act 1956. They are prepared in accordance with accounting standards notified under sub section (3C) of section 211 of the Companies Act, 1956 and other relevant provisions to the extent applicable.
2. Revenue Recognition:
a) Sale of goods is recognised on completion of supplies as per the terms of the contract and upon raising commercial invoices. Sales include excise duty and adjustment for price variation and are net of claims accepted.
b) In case of construction / erection contracts, revenue is recognised based on stage of completion determined as per the terms of the contract. Sales / income are booked on the basis of running account bills based on completed work and are net of claims accepted. Escalations and other claims which are not acknowledged by customers are not taken into account.
c) Leasing income is accounted as per principles of AS 19 Accounting for Leases.
d) Interest income is accounted for on time proportion basis.
e) The insurance claims are accounted for on accrual basis based on fair estimation of sanction by the insurance companies.
3. Fixed Assets:
Fixed Assets are stated at cost of acquisition or construction, net of CENVAT / VAT credit as availed; including any cost attributable for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less of accumulated depreciation and impairment loss, if any.
4. Depreciation / Amortisation:
a) Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on computer software and on Fixed Assets of Ethiopia, Abu Dhabi, Uganda and Tunisia Branches.
b) Computer software is depreciated over a period of 3 to 6 years depending upon the expected useful life of the software.
c) On the Fixed Assets of Ethiopia Branch, the depreciation is provided on Written Down Value Method and in Tunisia, Abu Dhabi and Uganda Branches depreciation is provided on Straight Line Method. The applicable rates are based on the local laws and practices of the respective countries.
d) In case of revalued assets, the difference between the depreciation based on revaluation and the depreciation charged on historical cost is recouped out of the Revaluation Reserve.
e) Leasehold land is amortised over the period of lease.
f) Goodwill arising on amalgamation is amortised over a period of 5 years.
5. Investments:
Long term investments are stated at cost. Provision for diminution in value of such investments is made only if such a decline is other than temporary.
6. Inventories:
a) Raw Materials, Construction materials, Components and Stores & Spares are valued at lower of cost or net realisable value.
b) Cost of inventories has been determined by using the weighted average cost formula.
c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract, whichever is lower.
d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when expected realisation is lesser than the carrying cost.
e) Finished goods are valued at cost or net realisable value, whichever is lower and inclusive of excise duty.
f) Scrap is valued at net realisable value.
7. Tools and Tackles:
Tools and tackles are amortised over their estimated life.
8. Borrowing Cost:
Borrowing costs that are directly attributable to the acquisition, construction or production 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 recognized as expenses in the period in which they are incurred.
9. Impairment of Assets:
Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Companys fixed assets. If any such indication exists, then recoverable amount of the asset is estimated. An impairment loss, if any, is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.
10. Share issue expenses:
Expenses incurred for issue of Equity Shares made by the Company were written off over a period of 5 years in equal installments. However, from the current year, no such expenses are carried forward and the full balance is written off during the year.
11. Foreign Currency Transactions:
a) Transactions in foreign currencies are accounted for at the exchange rates prevailing on the dates of the transactions or that approximates the actual rate at the dates of transactions.
b) Monetary items denominated in foreign currencies, remaining unsettled at the year end are restated at the closing rates.
c) Non-monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical costs.
d) Any income or expense on account of exchange difference either on settlement or on translation is recognized in Profit and Loss account.
e) Financial Statements of Overseas Integral operations are translated as under :
a. Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are translated on the yearly average exchange rate prevailing during the year.
b. Fixed assets are translated at the average rate prevailing on purchase / acquisition of assets. Depreciation is accounted at the same rate at which the assets are translated.
c. The resultant exchange gains and losses are recognised in the Profit and Loss account.
f) Forward Exchange Contracts:
a. In case of transactions covered by forward exchange contracts which are not intended for trading or speculation purposes, premium or discount is amortised as expense or income over the life of the contract.
b. Exchange difference on such contracts is recognised in the Profit and Loss account in the year in which the exchange rates change.
c. Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as income or expense for the year.
12. Excise Duty:
The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The amount of Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials consumed.
13. Leased Assets:
Operating Lease:
i. Lease payments are recognized as expense in the Profit and Loss account on straight line basis over the term of the lease.
ii. Asset given on operating lease are included in Fixed Assets. Lease income is recognized in the Profit and Loss account on straight line basis over the term of the lease.
14. Employees retirement and other benefits:
a) Short term employee benefits:
Short term employee benefits are recognised in the period during which the services have been rendered.
b) Long term Employee Benefits:
a. Defined contribution plan:
The Companys contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account on accrual basis.
b. Defined benefit plan:
i. Gratuity: The Company provides for gratuity based on actuarial valuation as per the Projected Unit Credit Method.
ii. Leave encashment: The Company provides for liability at the year end on account of unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.
iii. The bonus and leave travel allowance applicable to employees is accounted for on accrual basis.
iv. The cost of employee stock option attributable to current financial year is accounted for and charged to Profit and Loss account.
15. Taxes on Income:
a) Current Tax:
Provision for current Income Tax is made on the estimated taxable income using the applicable tax rates and tax laws.
b) Deferred Tax:
Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets are not recognised unless there is a virtual certainty as regards to the reversal of the same in future years.
16. Earnings Per Share:
The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of Equity Shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.
17. Use of Estimates:
The presentation of financial statements requires estimates and assumptions. These estimates and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual result and the estimates are recognized in the period in which the results are known /materialized.
18. Provisions and Contingencies:
a) A provision is recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
b) A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
19. Employees Stock Option Scheme:
Stock option granted to the employees of the Company, under the Employees Stock Option Scheme are evaluated as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess of market value of the Stock Option, as on date of grant over the exercise price of the options is recognised as deferred employee compensation and is charged to Profit and Loss account as employee costs, on straight line method over the vesting period of the options.
Mar 31, 2009
1. Basis of preparation of Financial Statements:
The financial statements have been prepared and presented under the historical cost convention, on accrual basis of accounting. They are prepared in accordance with accounting standards notified under sub section (3C) of section 211 of the Companies Act, 1956 and other relevant provisions to the extent applicable.
2. Revenue Recognition:
a) Sale of goods is recognised on completion of supplies as per the terms of the contract and upon raising commercial invoice. Sales include excise duty and adjustment for price variation and are net of claims accepted.
b) In case of construction / erection contracts, revenue is recognised based on stage of completion determined as per the terms of the contract. Sales / income are booked on the basis of running bills based on completed work and are net of claims accepted. Escalations and other claims which are not acknowledged by customers are not taken into account.
c) Leasing income is accounted for on accrual basis.
d) Interest income is accounted for on time proportion basis.
e) The insurance claims are accounted for on accrual basis based on fair estimation of sanction by the insurance companies.
3. Fixed Assets:
Fixed Assets are stated at cost of acquisition or construction, including any cost attributable for bringing the asset to its working condition for its intended use and less of accumulated depreciation. Loss on impairment of an asset, if any, is ascertained and recognised at the year end.
4. Depreciation:
a) Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on computer software and on Fixed Assets of Ethiopia, Abu Dhabi, Uganda and Tunisia Branches.
b) On the Fixed Assets of Ethiopia Branch, the depreciation is provided on Written Down Value Method and in Tunisia, Abu Dhabi and Uganda Branches depreciation is provided on Straight Line Method. The applicable rates are based on the local laws and practices of the respective countries and they range between:
Office equipments 10% to 20%
Vehicles 20% to 50%
Computer 25% to 50%
Furniture 20% to 50%
Plant and Machinery 20%
c) Leasehold land is amortised over the period of lease.
d) Computer software is depreciated over a period of 3 years.
5. Investments:
Long term Investments are stated at cost, except where there is a diminution in value other than temporary in which case the carrying value is reduced to recognise the decline.
6. Inventories:
a) Raw Materials, Construction materials, Components and Stores & Spares are valued at lower of cost or net realisable value.
b) Cost of inventories has been determined by using the weighted average cost formula.
c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract, whichever is lower.
d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when expected realisation is lesser than the carrying cost.
e) Finished goods are valued at cost or net realisable value whichever is lower and inclusive of excise duty. f) Tools and tackles are valued at cost and proportionately written off over a period of three years.
g) Scrap is valued at net realisable value.
7. Impairment of Assets :
Impairment loss, if any, is provided to the extent the carrying amount of asset exceeds its recoverable amount. The recoverable amount is higher of the asset's net selling price and its value in use.
8. Share issue expenses :
Expenses incurred for issue of Equity Shares made by the Company are written off over a period of 5 years in equal installments.
9. Excise Duty:
The excise duty in respect of closing inventory of finished goods is included as part of inventory. The amount of Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials consumed.
10. Employees retirement and other benefits: Short term employee benefits:
Short term employee benefits are recognised in the period during which the services have been rendered.
Long term Employee Benefits:
a. Defined contribution plan :
The Companys contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account on accrual basis.
b. Defined benefit plan :
i. Gratuity:
The company provides for gratuity based on actuarial valuation as per the Projected Unit Credit Method.
ii. Leave encashment:
The company provides for liability at the year end on account of unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.
iii. The cost of employee stock option attributable to current financial year is accounted for and charged to profit & loss account.
iv. The bonus and leave travel allowance applicable to employees is accounted for on accrual basis.
11. Taxes on Income :
a) Current Tax:
Provision for current income tax is made on the estimated taxable income using the applicable tax rates and tax laws.
b) Deferred Tax:
Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets are not recognised unless there is a virtual certainty as regards to the reversal of the same in future years.
12. Earnings Per Share:
The basic earning per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.
13. Provisions and Contingencies:
a) A provision is recognised when there is present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
b) A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
14. Employees Stock Option Scheme :
Stock option granted to the employees of the company under the Employees Stock Option Scheme are evaluated as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 issued by Securities and Exchange Board of India. Accordingly excess of market value of the Stock Option as on date of grant over the exercise price of the Options is recognised as deferred employee compensation and is charged to profit & loss accounts as employee costs on straight line method over the vesting period of the Options.
Mar 31, 2008
1. Basis of preparation of Financial Statements:
The financial statements have been prepared and presented under the historical cost convention, on accrual basis of accounting and in compliance with accounting standards prescribed to the extent applicable.
2. Revenue Recognition:
a) Sale of goods is recognised on completing the supplies as per Set / Completed Tower basis and upon raising commercial invoice. Sales include excise duty and adjustment for price variation and are net of claims accepted.
b) In case of construction contracts, revenue is recognized as per percentage completion method and sales / income are booked on the basis of running bills based on completed work as per Accounting Standard - 7 and are net of claims accepted. Escalations and other claims which are not ascertainable / acknowledged by customers are not taken into account.
c) Leasing income is accounted for on accrual basis.
d) The insurance claims are accounted for on accrual basis based on fair estimation of possible sanction of claims by the insurance companies.
3. Fixed Assets:
Fixed Assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition for its intended use and less of accumulated depreciation.
4. Depreciation:
a) Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on Fixed Assets of Ethiopia and Tunisia Branches.
b) On all Fixed Assets of Ethiopia Branch, the depreciation is provided on Written Down Value Method at the rates applicable in Ethiopia. If the depreciation had been provided on all fixed assets of the Ethiopia Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956; the profit of the Company would have been lower by Rs. 0.25 Million (P.Y. lower by Rs. 0.09 Million).
c) On all Fixed Assets of Tunisia Branch, the depreciation is provided on Straight Line Method at the rates applicable in Tunisia. If the depreciation had been provided on all fixed assets of the Tunisia Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956; the profit of the Company would have been higher by Rs. 0.02 Million (P.Y. Rs. 0.008 Million).
d) Leasehold land is amortised over the period of lease.
5. Investments:
Investments are stated at cost, except where there is a diminution in value other than temporary in which case the carrying value is reduced to recognize the decline.
6. Inventories:
a) Raw Materials, Construction materials, Components and Stores & Spares are valued at lower of cost or net realisable value.
b) Cost of inventories has been determined by using the weighted average cost formula.
c) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when expected realization is lesser than the carrying cost.
d) Finished goods are valued at cost or net realisable value whichever is lower and inclusive of excise duty.
e) Tools and tackles are valued at cost less amounts written off.
f) Scrap is valued at net realisable value.
7. Impairment of Assets:
Impairment loss if any is provided to the extent the carrying amount of asset exceeds its recoverable amount. The recoverable amount is higher of the assets net selling price and its value in use.
8. Amortisation:
a) Deferred Revenue Expenditure and Issue expenses:
Deferred Revenue Expenses and Expenses incurred for issue of Equity Shares made by the Company are written off over a period of 5 years in equal instalments.
b) Cost of Stock Options:
The cost of employee stock options granted is recognised on issue of Stock options and such cost is amortised as per SEBI guidelines.
9. Government Grant:
The amount of government grant received as compensation for expenses is credited to Profit & Loss Account, under the head "Income From Other Operations".
10. Foreign Currency Transactions:
Transactions in foreign currencies, other than those covered by Forward Contracts, are accounted for at the exchange rates prevailing on the dates of transactions. Assets and Liabilities remaining unsettled at the end of the year, other than those covered by Forward Contracts are reported at the closing rates. Gains and Losses on translation and realised gains and losses on foreign currency transactions, are recognised in the Profit and Loss Account. Non-monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical costs. Foreign Branches: (Integral)
a) Fixed assets are translated at the rates on the date of purchase / acquisition of assets.
b) Monetary items are translated at the year end exchange rates which reflect the likely realization. Income and expenditure are translated on the average rate of exchange.
c) The resultant exchange gains and losses are recognised in the Profit and Loss Account.
11. Excise Duty:
The excise duty in respect of closing inventory of finished goods is included as part of inventory. The amount of Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials consumed.
12. Employees retirement and other benefits:
a) Defined contribution plan:
The Companys contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account.
b) Defined benefit plan:
The Companys contribution to Gratuity Fund is towards premium on LICs policy taken by the Trustees of the Fund to cover the gratuity liability. The Company is liable to make further contribution in case funds in the hands of the trustees are not sufficient to meet the claims of the employees. The Management is of the opinion that the Gratuity funds will be sufficient to cover the future liability of gratuity and no further provision is required to be made on this account.
c) The Bonus to employees is accounted for on accrual basis.
d) The liability on account of Leave Encashment and Leave Travel Allowance is accounted for on accrual basis.
e) The cost of employee stock option attributable to current financial year is accounted for and charged to Profit & Loss Account.
13. Taxes on Income:
The current tax is determined as the amount of tax payable in respect of estimated taxable income for the period. Deferred tax is recognized subject to the consideration of prudence, on timing difference, being the difference between taxable income and accounting income for a period that originate in one period and is capable of reversal in one or more subsequent periods. Deferred tax asset are recognised only when there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.
14. Earnings Per Share:
The basic earning per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.
15. Provisions and Contingencies:
a) A provision is recognized when there is present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
b) A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
16. Employees Stock Option Scheme :
Stock option granted to the employees of the company under the Employees Stock Option Scheme are evaluated as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 issued by Securities and Exchange Board of India. Accordingly excess of market value of the Stock Option as on date of grant over the exercise price of the Options is recognized as deferred employee compensation and is charged to profit & loss accounts as employee costs on straight line method over the vesting period of the Options.
Mar 31, 2007
1. Significant Accounting Policies:
a) System of Accounting:
Generally Mercantile System of Accounting is followed.
b) Revenue Recognition:
i) Sale of goods is recognized on completing the supplies as per Set/Completed Tower basis and upon raising commercial invoice. Sales include excise duty and adjustment for price variation and are net of claims accepted.
ii) In case of construction contracts, revenue is recognized as per percentage completion method and sales/income are booked on the basis of running bills based on completed work as per Accounting Standard - 7 and are net of claims accepted. Escalations and other claims which are not ascertainable/acknowledged by customers are not taken into account.
iii) Leasing income is accounted for on accrual basis.
iv) The insurance claims are accounted for on accrual basis based on fair estimation of possible sanction of claims by the insurance companies.
c) Amortisation:
i) Deferred Revenue Expenditure and Issue expenses:
Deferred Revenue Expenses and Expenses incurred for issue of Equity Shares made by the Company are written off over a period of 5 years.
ii) Cost of Stock Option
The cost of Employee Stock Option granted is recognized on issue of Stock Options and such cost is amortised as per SEBI guidelines.
d) Government Grant:
i) The amount of government grant received in respect of depreciable fixed assets is credited to Deferred Government Grant Account and income there from is recognized in the Profit & Loss Account over the balance life of assets for which it is received.
ii) The amount of government grant received as compensation for expenses is credited to Profit & Loss Account, under the head "Income From Other Operations".
e) Foreign Currency Transactions:
Transactions in foreign currencies, other than those covered by Forward Contracts, are accounted for at the exchange rates prevailing on the dates of transactions. Assets and Liabilities remaining unsettled at the end of the year, other than those covered by Forward Contracts are reported at the closing rates. Gains and Losses on translations and realised gains and losses on foreign currency transactions, other than those relating to fixed assets, are recognised in the Profit and Loss Account. In respect of liabilities directly incurred to acquire specific Fixed Assets, the same are adjusted to the carrying cost of those Fixed Assets. Non-monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical costs.
f) Inventories:
i) Raw Materials, Construction Materials, Components and Stores & Spares are valued at cost using the weighted average cost formula.
ii) Cost of inventories has been determined by using the weighted average cost formula.
iii) Work-in-progress is valued at cost.
iv) Finished goods are valued at cost or net realisable value whichever is lower and inclusive of excise duty.
v) Tools and tackles are valued at cost less amounts written off.
vi) Scrap is valued at net realisable value.
g) Investments:
Investments are stated at cost, except where there is a diminution in value other than temporary in which case the carrying value is reduced to recognize the decline.
h) Fixed Assets:
Fixed Assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition for its intended use and less of accumulated depreciation.
i) Depreciation:
i) Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on Fixed Assets of Oman, Ethiopia & Tunisia Branches.
ii) The Fixed Assets of Oman Branch have been fully depreciated in the current year.
iii) On all Fixed Assets of Ethiopia Branch, the depreciation is provided on Written Down Value Method at the rates applicable in Ethiopia.
If the depreciation had been provided on all fixed assets of the Ethiopia Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profit of the Company would have been lower by Rs.0.09 Million (P.Y. higher by Rs. 1.73 Million)
iv) On all Fixed Assets of Tunisia Branch, the depreciation is provided on Straight Line Method at the rates applicable in Tunisia.
If the depreciation had been provided on all fixed assets of the Tunisia Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profit of the Company would have been higher by Rs. 0.008 Million (P.Y. Rs. 0.001 Million)
j) Proposed Dividend:
Dividend proposed by the board of Directors is provided for in the books of accounts pending approval at the Annual General Meeting.
k) Excise Duty:
The excise duty in respect of closing inventory of finished goods is included as part of inventory. The amount of Central Value Added Tax (CENVAT) credits in respect of materials consumed for sales is deducted from cost of materials consumed.
l) Employees' retirement and other benefits:
i) The Company's contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account.
ii) The Company's contribution to Gratuity Fund is towards premium on LIC's policy taken by the Trustees of the Fund to cover the gratuity liability. The Company is liable to make further contribution in case funds in the hands of the trustees are not sufficient to meet the claims of the employees.
iii) The Bonus to employees is accounted for on accrual basis.
iv) The liability on account of Leave Encashment is accounted for on accrual basis.
v) The cost of employee stock option attributable to current financial year is accounted for and charged to profit & loss account.
m) Taxes on Income:
The current tax is determined as the amount of tax payable in respect of Taxable income for the period. Deferred tax is recognized subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent periods.
n) Earnings Per Share:
The basic earning per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.
o) Provisions and Contingencies:
i) A provision is recognized when there is present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.
ii) A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Mar 31, 2006
A) System of Accounting:
Generally Mercantile System of Accounting is followed.
b) Revenue Recognition:
i) Sale of goods is recognised on completing the supplies as per Set/Completed Tower basis and upon raising commercial invoice. Sales include excise duty and adjustment for price variation.
ii) In case of construction contracts, revenue is recognized in percentage completion method and sales/income are booked on the basis of running bills based on completed work as per Accounting Standard - 7. However, certain escalations and other claims which are not ascertainable/acknowledged by customers are not taken into account.
iii) Leasing income is accounted for on accrual basis.
iv) The insurance claims are accounted for on accrual basis based on fair estimation of possible sanction of claims by the insurance companies.
c) Amortisation:
i) Deferred Revenue Expenditure and Issue expenses:
Deferred Revenue Expenses and Expenses incurred for issue of Equity Shares made by the Company are written off over a period of 5 years.
ii) Cost of Stock Option
The cost of Employee Stock option Granted is recognised on issue of Stock options and such cost is amortised as per SEBI guidelines.
d) Government Grant:
i) The amount of government grant received in respect of depreciable fixed assets is credited to Deferred Government Grant Account and income there from is recognised in the Profit & Loss Account over the balance life of assets for which it is received.
ii) The amount of government grant received as compensation for expenses is credited to Profit & Loss Account, under the head "Income From Other Operations".
e) Foreign Currency Transactions:
Transactions in foreign currencies, other than those covered by Forward Contracts, are accounted for at the exchange rates prevailing on the dates of transactions. Assets and Liabilities remaining unsettled at the end of the year, other than those covered by Forward Contracts are reported at the closing rates. Gains and Losses on translations and realised gains and losses on foreign currency transactions, other than those relating to fixed assets, are recognised in the Profit and Loss Account. In respect of liabilities directly incurred to acquire specific Fixed Assets, the same are adjusted to the carrying cost of those Fixed Assets. Non-monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical costs.
f) Inventories:
i) Raw Materials, Construction materials, Components and Stores & Spares are valued at cost.
ii) Work-in-progress is valued at cost.
iii) Finished goods are valued at cost or net realisable value whichever is lower and inclusive of excise duty.
iv) Tools and tackles are valued at cost less amounts written off.
v) Scrap is valued at net realisable value.
vi) Cost of inventories has been determined by using the weighted average cost formula.
g) Investments:
Investments are stated at cost.
h) Fixed Assets:
Fixed Assets are stated at cost, inclusive of incidental expenses.
i) Depreciation:
i) Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on Fixed Assets of Oman, Ethiopia & Tunisia Branches.
ii) On all Fixed Assets of Oman Branch, the depreciation is provided on Straight Line Method at the uniform rate of 15% on pro-rata basis.
If the depreciation would have been provided on all Fixed Assets of Oman Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profit of the Company would have been higher by Rs. 0.04 Lacs (P.Y. Rs. 0.04 Lacs)
iii) On all Fixed Assets of Ethiopia Branch, the depreciation is provided on Written Down Value Method at the rates applicable in Ethiopia.
If the depreciation had been provided on all fixed assets of the Ethiopia Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profit of the Company would have been higher by Rs. 17.30 Lacs (P.Y. Rs. 13.29 Lacs)
iv) On all Fixed Assets of Tunisia Branch, the depreciation is provided on Straight Line Method at the rates applicable in Tunisia.
If the depreciation had been provided on all fixed assets of the Tunisia Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profit of the Company would have been higher by Rs. 0.01 Lacs (P.Y Rs. 0.003 Lacs)
j) Employees' retirement and other benefits:
i) The Company's contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account.
ii) The Company's contribution to Gratuity Fund is towards premium on LIC's policy taken by the Trustees of the Fund to cover the gratuity liability. The company is liable to make further contribution in case funds in the hands of the trustees are not sufficient to meet the claims of the employees.
iii) The Bonus to employees is accounted for on accrual basis.
iv) The liability on account of Leave Encashment is accounted for on accrual basis.
v) The cost of employee stock option attributable to current financial year is accounted for and charged to profit & loss account.
Mar 31, 2005
1. Significant Accounting Policies:
a) System of Accounting:
Generally Mercantile System of Accounting is followed.
b) Revenue Recognition:
i) Sale of goods is recognised on completing the supplies as per Set/Completed Tower basis and upon raising commercial invoice. Sales include excise duty and adjustment for price variation.
ii) In case of construction contracts, revenue is recognized in percentage completion method and sales/income are booked on the basis of running bills based on completed work as per Accounting Standard-7. However, certain escalations and other claims which are not ascertainable/acknowledged by customers are not taken into account.
iii) Leasing income is accounted for on accrual basis.
iv) The insurance claims are accounted for on accrual basis based on fair estimation of possible sanction of claims by the insurance companies.
c) Amortisation of Deferred Revenue Expenditure and Issue expenses:
Deferred Revenue Expenses and Expenses incurred for issue of Equity Shares made by the Company are written off over a period of 5 years.
d) Government Grant:
i) The amount of government grant received in respect of depreciable fixed assets is credited to Deferred Government Grant Account and income there from is recognised in the Profit & Loss Account over the balance life of assets for which it is received.
ii) The amount of government grant received as compensation for expenses is credited to Profit & Loss Account, under the head "Income From Other Operations"
e) Foreign Currency Transactions:
Transactions in foreign currencies, other than those covered by Forward Contracts, are accounted for at the exchange rates prevailing on the dates of transactions. Assets and Liabilities remaining unsettled at the end of the year, other than those covered by Forward Contracts are reported at the closing rates. Gains and Losses on translations and realised gains and losses on foreign currency transactions, other than those relating to fixed assets, are recognised in the Profit and Loss Account. In respect of liabilities directly incurred to acquire specific Fixed Assets, the same are adjusted to the carrying cost of those Fixed Assets. Non-monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical costs.
f) Inventories:
i) Raw Materials, Construction materials, Components and Stores & Spares are valued at cost.
ii) Work-in-progress is valued at cost.
iii) Finished goods are valued at cost or net realisable value whichever is lower and inclusive of excise duty.
iv) Tools and tackles are valued at cost less amounts written off.
v) Scrap is valued at net realisable value.
vi) Cost of inventories has been determined by using the weighted average cost formula.
g) Investments:
Investments are stated at cost.
h) Fixed Assets:
Fixed Assets are stated at cost, inclusive of incidental expenses.
i) Depreciation:
i) Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on Fixed Assets of Oman, Ethiopia & Tunisia Branches.
ii) On all Fixed Assets of Oman Branch, the depreciation is provided on Straight Line Method at the uniform rate of 15% on pro-rata basis.
If the depreciation would have been provided on all Fixed Assets of Oman Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profit of the Company would have been higher by Rs. 0.04 Lacs (P.Y. Rs. 0.04 Lacs).
iii) On all Fixed Assets of Ethiopia Branch, the depreciation is provided on Written Down Value Method at the rates applicable in Ethiopia.
If the depreciation had been provided on all fixed assets of the Ethiopia Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profit of the Company would have been higher by Rs. 13.29 Lacs (P.Y. Rs. 26.74 Lacs).
iv) On all Fixed Assets of Tunisia Branch, the depreciation is provided on Straight Method at the rates applicable in Tunisia.
If the depreciation had been provided on all fixed assets of the Tunisia Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profit of the Company would have been higher by Rs. 0.003 Lacs (P.Y. Rs. Nil Lacs).
j) Employees' retirement and other benefits:
i) The Company's contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account.
ii) The Company's contribution to Gratuity Fund is towards premium on LIC's policy taken by the Trustees of the Fund to cover the gratuity liability. The company is liable to make further contribution in case funds in the hands of the trustees are not sufficient to meet the claims of the employees.
iii) The Bonus to employees is accounted for on accrual basis.
iv) The liability on account of Leave Encashment is accounted for on accrual basis.
Mar 31, 2004
1. Significant Accounting Policies :
a) System of Accounting :
Generally Mercantile System of Accounting is followed.
b) Revenue Recognition :
i) Sale of goods is recognised on completing the supplies as per Set/Completed Tower basis and upon raising commercial invoice. Sales include excise duty and adjustment for price variation.
ii) In case of construction contracts, revenue is recognised on percentage of completion method as per AS-7. However, certain escalations and other claims which are not ascertainable/acknowledged by customers, are not taken into account.
iii) Leasing income is accounted for on accrual basis.
iv) The insurance claims are accounted for on accrual basis based on fair estimation of possible sanction of claims by the insurance companies.
c) Amortisation of Deferred Revenue Expenditure and Issue expenses:
Deferred Revenue Expenses and Expenses incurred for Issue of Equity Shares made by the Company are written off over a period of 5 years.
d) Government Grant:
i) The amount of government grant received in respect of depreciable fixed assets is credited to Deferred Government Grant Account and income therefrom is recognised in the Profit & Loss Account over the balance life of assets for which it is received.
ii) The amount of government grant received as compensation for expenses is credited to Profit & Loss Account, under the head "Income From Other Operations"
e) Foreign Currency Transactions :
Transactions in foreign currencies, other than those covered by Forward Contracts, are accounted for at the exchange rates prevailing on the dates of transactions. Assets and Liabilities remaining unsettled at the end of the year, other than those covered by Forward Contracts are reported at the closing rates. Gains and Losses on translations and realised gains and losses on foreign currency transactions, other than those relating to fixed assets, are recognised in the Profit and Loss Account. In respect of liabilities directly incurred to acquire specific Fixed Assets, the same are adjusted to the carrying cost of those Fixed Assets. Non-monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical costs.
f) Inventories:
i) Raw Materials, Construction materials, Components and Stores & Spares are valued at cost.
ii) Work-in-progress is valued at cost.
iii) Finished goods are valued at cost or net realisable value whichever is lower and inclusive of excise duty.
iv) Tools and tackles are valued at cost less amounts written off.
v) Scrap is valued at net realisable value.
vi) Cost of inventories has been determined by using the weighted average cost formula.
g) Investments:
Investments are stated at cost.
h) Fixed Assets:
Fixed Assets are stated at cost, inclusive of incidental expenses.
i) Depreciation :
i) Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except on Fixed Assets of Oman & Ethiopia Branches.
ii) On all Fixed Assets of Oman Branch, the depreciation is provided on Straight Line Method at the uniform rate of 15% on pro-rata basis. If the depreciation would have been provided on all Fixed Assets of Oman Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profit of the Company would have been higher by Rs. 0.04 Lacs (P.Y. Rs. 0.59 Lacs)
iii) On all Fixed Assets of Ethiopia Branch, the depreciation is provided on Written Down Value Method at the rates applicable in Ethiopia. If the depreciation had been provided on all fixed assets of the Ethiopia Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profit of the Company would have been higher by Rs. 26.74 Lacs (P.Y. Rs. 15.21 Lacs)
j) Employees retirement and other benefits :
i) The Companys contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account.
ii) The Companys contribution to Gratuity Fund is towards premium on LICs policy taken by the Trustees of the Fund to cover the gratuity liability. The company is liable to make further contribution in case funds in the hands of the trustees are not sufficient to meet the claims of the employees.
iii) The Bonus to employees is accounted for on accrual basis.
iv) The liability on account of Leave Encashment is accounted for on accrual basis.
Mar 31, 2003
1. Significant Accounting Policies :
a) System of Accounting : Generally Mercantile System of Accounting is followed.
b) Revenue Recognition :
i) Sale of goods is recognised on completing the supplies as per Set/Completed Tower basis and upon raising commercial invoice.
ii) In case of construction contracts, revenue is recognised on percentage completion method as per AS-7.
iii) Leasing income is accounted for on accrual basis.
iv) The insurance claims are accounted for on accrual basis based on fair estimation of possible sanction of claims by the insurance companies.
c) Issue expenses:
Expenses for issue of Equity Shares made by the Company are written off over a period of 5 years.
d) Government Grant :
i) The amount of government grant received in respect of depreciable fixed assets is credited to Deferred Government Grant Account and income therefrom is recognised in the Profit & Loss Account over the balance life of assets for which it is received.
ii) The amount of government grant received as compensation for expenses is credited to Profit & Loss Account, under the head "Income From Other Operations"
e) Foreign Currency Transactions :
Transactions in foreign currencies, other than those covered by Forward Contracts, are accounted for at the exchange rates prevailing on the dates of transactions. Assets and Liabilities remaining unsettled at the end of the year, other than those covered by Forward Contracts are reported at the closing rates. Gains and Losses on translations and realised gains and losses on foreign currency transactions, other than those relating to fixed assets, are recognised in the Profit and Loss Account, whereas in respect of liabilities directly incurred to acquire specific Fixed Assets, the same are adjusted to the carrying cost of those Fixed Assets. Non-monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical costs.
f) Inventories :
i) Raw Materials, Construction materials, Components and Stores & Spares are valued at cost.
ii) Work-in-progress is valued at cost.
iii) Finished goods are valued at cost or net realisable value whichever is lower and inclusive of excise duty.
iv) Tools and tackles are valued at cost less amounts written off except as stated in Note No. 1 (i) (ii) below.
v) Scrap is valued at net realisable value.
vi) Cost of inventories has been determined by using the weighted average cost formula.
g) Investments: Investments are stated at cost.
h) Fixed Assets : Fixed Assets are capitalised at cost, inclusive of incidental expenses.
i) Depreciation :
i) On all Fixed Assets except Leased Assets and Fixed Assets of Oman & Ethiopia Branch, depreciation is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
ii) On all Fixed Assets of Oman Branch, the depreciation is provided on Straight Line Method at the uniform rate of 15% on pro-rata basis. The depreciation on Tools & Tackles pertaining to Oman Branch has been included in depreciation on Plant & Machinery. If the depreciation had been provided on all Fixed Assets of Oman Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profit of the Company would have been higher by Rs. 0.59 Lacs (P.Y. loss would have been lower by Rs. 1.56 Lacs)
iii) On all Fixed Assets of Ethiopia Branch, the depreciation is provided on Straight Line Method at the rates applicable in Ethiopia. If the depreciation had been provided on all fixed assets of the Ethiopia Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profit of the Company would have been higher by Rs. 15.21 Lacs (P.Y. loss would have been lower by Rs.4.33 Lacs).
iv) Depreciation on Leased Assets is provided on the basis of primary lease period of the assets.
j) Employees retirement and other benefits :
i) The Companys contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account.
ii) The Companys contribution to Gratuity Fund is towards premium on LICs policy taken by the Trustees of the Fund to cover the gratuity liability. The company is liable to make further contribution in case funds in the hands of the trustees are not sufficient to meet the claims of the employees.
iii) The Bonus to employees is accounted for on accrual basis.
iv) The liability on account of Leave Encashment is accounted for on accrual basis.
Mar 31, 2002
1. Significant Accounting Policies :
a) System of Accounting :
Generally Mercantile System of Accounting is followed.
b) Revenue Recognition :
i) Sale of goods is recognised at the time of despatch to customers on the basis of excise invoice.
ii) in case of construction contracts, revenue is recognized on percentage of completion method as per AS-7.
iii) Leasing income is accounted for on accrual basis, iv) The insurance claims are accounted for on accrual basis based on fair estimation of possible sanction of claims by the insurance companies.
c) Issue expenses:
Expenses for issue of Equity Shares made by the Company are written off over a period of 5 years.
d) Government Grant :
i) The amount of government grant received in respect of depreciable fixed assets is credited to Deferred Government Grant Account and income therefrom is recognised in the Profit & Loss Account over the balance life of assets for which it is received.
ii) The amount of government grant received as compensation for expenses is credited to Profit & Loss Account, under the head "Income From Other Operations".
e) Foreign Currency Transactions :
Transactions in foreign currencies, other than those covered by Forward Contracts, are accounted for at the exchange rates prevailing on the dates of transactions. Assets and Liabilities remaining unsettled at the end of the year, other than those covered by Forward Contracts are reported at the closing rates. Gains and Losses on translations and realised gains and losses on foreign currency transactions, other than those relating to fixed assets, are recognised in the Profit and Loss Account, whereas in respect of liabilities directly incurred to acquire specific Fixed Assets, the same are adjusted to the carrying cost of those Fixed Assets. Non-monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical costs.
f) inventories :
i) Raw Materials, Construction materials, Components and Stores & Spares are valued at cost.
ii) Work-in-progress is valued at cost.
iii) Finished goods are valued at cost or net realisable value whichever is lower and inclusive of excise duty.
iv) Tools and tackles are valued at cost less amounts written off except as stated in Note No. 1 (i) (ii) below.
v) Scrap is valued at net realisable value,
vi) Cost of inventories has been determined by using the weighted average cost formula.
g) Investments :
Investments are stated at cost.
h) Fixed Assets :
Fixed Assets are capitalised at cost, inclusive of incidental expenses.
i) Depreciation :
i) On all Fixed Assets except Leased Assets and Fixed Assets of Oman & Ethiopia Branch, depreciation is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
ii) On all Fixed Assets of Oman Branch, the depreciation is provided on Straight Line Method at the uniform rate of 15% on pro-rata basis. The depreciation on Tools & Tackles pertaining to Oman Branch has been included in depreciation on Plant & Machinery. If the depreciation had been provided on all Fixed Assets of Oman Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the loss of the Company would have been lower by Rs. 1.56 Lacs (P.Y. Rs. 0.89 Lacs)
iii) On all Fixed Assets of Ethiopia Branch, the depreciation is provided on straight Line Method at the rates applicable in Ethiopia, if the depreciation had been provided on all fixed assets of the Ethiopia Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the loss of the Company would have been lower by Rs. 4.33 Lacs.
iv) Depreciation on Leased Assets is provided on the basis of primary lease period of the assets.
j) Employees retirement and other benefits :
i) The Companys contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account.
ii) The Companys contribution to Gratuity Fund is towards premium on LICs policy taken by the Trustees of the Fund to cover the gratuity liability. The company is liable to make further contribution in case funds in the hands of the trustees are not sufficient to meet the claims of the employees.
iii) The Bonus to employees is accounted for on accrual basis.
iv) The liability on account of Leave Encashment is accounted for on accrual basis.
Mar 31, 2001
(a) System of Accounting :
Generally Mercantile System of Accounting is followed unless otherwise stated.
(b) Revenue Recognition:
i) Sale of goods is recognised at the time of despatch to customers.
ii) In case of construction contracts and orders to be executed over a period of more than one year, the Sales/Income are booked on the basis of running bills based on completed work without postponing the same till completion of the entire project which may take up to 5 years.
iii) Leasing income is accounted for on accrual basis.
iv) Insurance claims are accounted for as and when received. The same is done on conservative basis in order to avoid the possibility of uncertainty about the amount for which the claims may be actually settled by the Insurance Companies at a later date.
(c) Issue expenses:
Expenses for issue of Equity Shares made by the Company are written off over a period of 5 years as against a period of 10Years followed till last year. Proportionate expenditure has been written off during the year. Due to this change in policy, "Amortisation of Share Issue Expenses" debited to Profit & Loss Account are higher by P¯s. 9.39 Lacs and consequently, the profit for the year is lower by equal amount.
(d) Government Grant:
i) The amount of government grant received in respect of depreciable fixed assets is credited to Deferred Government Grant Account and income therefrom is recognised in the Profit & Loss Account over the life of assets for which it is received.
ii) The amount of government grant received as compensation for expenses is credited to Profit & Loss Account, under the head "Income From Other Operations".
(e) Foreign Currency Transactions (Other than Foreign Branch):
Transactions in foreign currencies, other than those covered by Forward Contracts, are accounted for at the exchange rates prevailing on the dates of transactions. Assets and Liabilities remaining unsettled at the end of the year, other than those covered by Forward Contracts are reported at the closing rates. Gains and Losses on translations and realised gains and losses on foreign currency transactions, other than those relating to Fixed Assets, are recognised in the Profit and Loss Account, whereas in respect of liabilities directly incurred to acquire specific Fixed Assets, the same are adjusted to the carrying cost of those Fixed Assets. Non-monetary items other than Fixed Assets denominated in a foreign currency are stated in terms of historical costs.
(f) Inventories:
i) Raw Materials, Construction materials, Components and Stores & Spares are valued at cost.
ii) Work-in-progress is valued at cost.
iii) Finished goods are valued at cost or net realisable value whichever is lower and inclusive of excise duty.
iv) Tools and tackles are valued at cost less amounts written off.
v) Scrap is valued at net realisable value.
vi) Cost of inventories has been determined by using the weighted average cost formula.
(g) Investments:
Investments are stated at cost.
(h) Fixed Assets:
Fixed Assets are capitalised at cost, inclusive of incidental expenses.
(i) Depreciation:
i) On all Fixed Assets except Leased Assets and Fixed Assets of Oman Branch, depreciation is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
ii) On all Fixed Assets of Oman Branch, the depreciation is provided on Straight Line Method at the uniform rate of 15% on pro-rata basis. The depreciation on Tools & Tackles pertaining to Oman Branch has been included in depreciation on Plant & Machinery. If the depreciation had been provided on all Fixed Assets of Oman Branch on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, the profits of the Company would have been higher by Rs. 0.89 Lacs.
iii) Depreciation on Leased Assets is provided on the basis of primary lease period of the assets.
(j) Employees' retirement and other benefits :
i) The Company's contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account.
ii) The Company's contribution to Gratuity Fund is towards premium on LIC's policy taken by the Trustees of the Fund to cover the Gratuity liability. The Company is liable to make further contribution in case funds in the hands of the trustees are not sufficient to meet the claims of the employees.
iii) Bonus to employees and Ex-gratia are accounted for at the time of payment after the same is actually declared every year.
iv) The liability on account of leave encashment is not provided for on the Balance Sheet date since the same is not ascertainable/material.
Mar 31, 2000
(a) System of Accounting :
Generally Mercantile System of Accounting is followed unless otherwise stated.
(b) Revenue Recognition :
(i) Sale of goods is recognised at the time of despatch to customers.
(ii) Sales/Income in case of construction contracts and orders to be executed over a period of more than one year are booked on the basis of running bills based on completed work.
(iii) Leasing income is accounted for as and when received.
(iv) Insurance claims are accounted for as and when received.
(c) Issue Expenses :
Expenses for issue of Equity Shares made by the Company are written off over a period of 10 years and proportionate expenditure has been written off during the year.
(d) Government Grant :
(i) The amount of government grant received in respect of depreciable fixed assets is credited to Deferred Government Grant Account and income there from is recognised in the Profit & Loss Account over the life of assets for which it is received.
(ii) The amount of government grant received as compensation for expenses is credited to Profit & Loss Account under the head "Income From Other Operations."
(e) Foreign Currency Transactions :
Transactions in foreign currencies, other than those covered by Forward Contracts, are accounted for at the exchange rates prevailing on the dates of transactions. Assets and Liabilities remaining unsettled at the end of the year, other than those covered by Forward Contracts are reported at the closing rates. Gains and Losses on translations and realised gains and losses on foreign currency transactions, other than those relating to fixed assets, are recognised in the Profit and Loss Account, whereas in respect of liabilities directly incurred to acquired specific Fixed Assets, the same are adjusted to the carrying cost of those Fixed Assets. Non monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical cost.
(f) Inventories :
(i) Raw Materials, Construction materials, Components and Stores & Spares are valued at cost.
(ii) Work-in-progress is valued at cost.
(iii) Finished goods are valued at cost or net realisable value whichever is lower.
(iv) Tools and tackles are valued at cost less amounts written off.
(v) Scrap is valued at net realisable value.
(vi) Cost of inventories has been determined by using the weighted average cost formula.
(g) Investments :
Investments are stated at cost.
(h) Fixed Assets :
Fixed Assets are required at cost, inclusive of incidental expenses.
(i) Depreciation :
(i) On all Fixed Assets except the Leased Assets, depreciation is provided on straight-line method at the rate and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
(ii) Depreciation on Leased Assets is provided on the basis of primary lease period of the assets.
(j) Employees' retirement and other benefits :
(i) The Companies contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account.
(ii) The Companies contribution to Gratuity Fund is towards premium on LIC's policy taken by the Trustees the Fund to cover the gratuity liability. The company is liable to make further contribution in case funds the hands of the trustees are not sufficient to meet the claims of the employees.
(iii) Bonus to employees and Ex-gratia are accounted for at the time of payment.
(iv) The liability on account of leave encashment is not ascertained or provided for on the Balance Sheet date.
Mar 31, 1999
1. System of Accounting :
Generally Mercantile System of Accounting is followed unless otherwise stated. Bonus to employees, Ex-gratia, Gratuity and Contribution to Superannuation Fund are accounted for at the time of payment. Insurance claims are accounted for as and when received.
2. Revenue Recognition :
i) Sale of goods is recognised at the time of despatch to customers.
ii) Sales/Income in case of construction contracts and orders to be executed over a period of more than one year are booked on the basis of running bills based on completed work.
iii) Leasing income is accounted for on accrual basis.
3. Issue expenses :
Expenses for issue of Equity Shares made by the Company are written off over a period of 10 years and proportionate expenditure has been written off during the year.
4. Government Grant :
The amount of government grant received is credited to Deferred Government Grant Account and income therefrom is recognised over the life of assets for which it is received.
5. Foreign Currency Transactions :
Transactions in foreign currencies, other than those covered by Forward Contracts, are accounted for at the exchange rates prevailing on the dates of transactions. Assets and Liabilities remaining unsettled at the end of the year, other than those covered by Forward Contracts are reported at the closing rates. Gains and Losses on translations and realised gains and losses on foreign currency transactions, other than those relating to fixed assets, are recognised in the Profit and Loss Account, whereas in respect of liabilities directly incurred to acquire specific Fixed Assets, the same are adjusted to the carrying cost of those Fixed Assets. Non-monetary items other than fixed assets denominated in a foreign currency are stated in terms of historical cost.
6. Inventories :
i) Raw Materials, Construction materials, Components and Stores & Spares are valued at cost. Scrap is valued at net realisable value.
ii) Work-in-progress is valued at cost.
iii) Finished goods are valued at cost or net realisable value whichever is lower.
iv) Tools and tackles are valued at cost less amounts written off.
7. Investments :
Investments are stated at cost.
8. Fixed Assets :
Fixed Assets are capitalised at cost, inclusive of incidental expenses.
9. Depreciation :
i) On all Fixed Assets except the Leased Assets, depreciation is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
ii) Depreciation on Leased Assets is provided on the basis of primary lease period of the assets.
10. Employees' retirement and other benefits :
i) The Company's contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account.
ii) The Company's contribution to Gratuity Fund is towards premium on LIC's policy taken by the Trustees of the Fund to cover the gratuity liability. The Company is liable to make further contribution in case funds in the hands of the trustees are not sufficient to meet the claims of the employees.
iii) The liability on account of leave encashment is not ascertained or provided for on the Balance Sheet date.,
Mar 31, 1998
1) System of Accounting
Generally Mercantile System of Accounting is followed unless otherwise stated. Excise/Customs Duty are accounted for as and when paid. Bonus to employees, Ex-gratia, Gratuity and Contribution to Superannuation Fund are accounted for at the time of payment. Insurance claims are accounted for as and when received.
2) Revenue Recognition :
i) Sale of goods is recognised at the time of despatch to customers. ii) Sales/Income in case of construction contracts and orders to be executed over a period of more than one year are booked on the basis of running bills based on completed work. iii) Leasing income is accounted for on accrual basis.
3) Issue expenses :
Expenses for issue of Equity Shares made by the Company are written off over a period of 10 years and proportionate expenditure has been written off during the year.
4) Government Grant :
The amount of government grant received is credited to Deferred Government Grant Account and income therefrom is recognised over the life of assets for which it is received.
5) Foreign Currency Transactions :
Transactions in foreign currencies, other than those covered by Forward Contracts, are accounted for at the exchange rates prevailing on the dates of transactions. Assets and Liabilities remaining unsettled at the end of the year, other than those covered by Forward Contracts are reported at the closing rates. Gains and Losses on translations and realised gains and losses on foreign currency transactions, other than those relating to fixed assets, are recognised in the Profit and Loss Account, whereas in respect of liabilities directly incurred to acquire specific Fixed Assets, the same are adjusted to the carrying cost of those Fixed Assets.
6) Inventories :
i) Raw Materials and Stores & Spares-are valued at cost. Scrap is valued at net realisable value. ii) Work-in-progress is valued at estimated cost. iii) Finished goods are valued at estimated cost or net realisable value, whichever is lower. iv) Tools and Tackles are valued at estimated value.
7) Investments :
Investments are stated at cost.
8) Fixed Assets :
Fixed Assets are capitalised at cost inclusive of incidental expenses.
9) Depreciation :
i) On all Fixed Assets except the Leased Assets, depreciation is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. ii) Depreciation on Leased Assets is provided on the basis of primary lease period of the assets.
10) Employees' Retirement and other Benefits :
i) The Company's contribution to Provident Fund and Superannuation Fund are charged to Profit and Loss Account. ii) The Company's contribution to Gratuity Fund is towards premium on LIC's policy taken by the Trustees of the Fund to cover the gratuity liability. The Company is liable to make further contribution in case funds in the hands of the Trustees are not sufficient to meet the claims of the employees. iii) The liability on account of leave encashment is not ascertained or provided for on the Balance Sheet date.
Mar 31, 1997
System of Accounting:
Generally Mercantile System of Accounting is followed unless otherwise stated. Excise/Customs Duty are accounted for as and when paid. Bonus to employees is accounted for at the time of payment. Interest received on allotment money, interest on Fixed Deposits with bankers and interest on Investments in SBI/IDBI Bonds is accounted for as when received.
Revenue Recognition: Sales/Income in case of construction contracts and orders to be executed over a period of more than one year are booked on the basis of running bills based on completed work.
Leasing income is accounted on accrual basis.
Issue Expense: Expenses for issue of Equity Shares made by the Company are written off over a period of 10 years and proportionate expenditure has been written off during the year.
Government Grant: The amount of government grant received is credited to Deferred Government Grant Account and income therefrom is recognised over the life of assets for which it is received.
Foreign Currency Transactions: Transactions in foreign currencies, other than those covered by Forward Contracts, are accounted for at the exchange rates prevailing on the dates of transactions. Assets and Liabilities remaining unsettled at the end of the year, other than those covered by Forward Contracts, are translated at the closing rates. Gains and Losses on translations and realised gains & losses on foreign currency transactions, other than those relating to Fixed Assets, are recognised in the Profit and Loss Account; whereas in respect of liabilities incurred to acquire Fixed Assets, the same are adjusted to the carrying costs of Fixed Assets.
Inventories: Raw Materials and Stores & Spares are valued at cost. The scrap is valued at net realisable value.
Work-in-progress is valued at estimated cost.
Finished goods are valued at estimated cost or net realisable value whichever is lower.
Tools and Tackles are valued at estimated value.
Investments: Investments are stated at cost.
Fixed Assets: Fixed Assets are capitalised at cost, inclusive of incidental expenses.
Depreciation: On all Fixed Assets, except the Leased Assets, depreciation is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
Depreciation on Leased Assets is provided on the basis of primary lease period of the assets.
Mar 31, 1996
Generally Mercantile system of Accounting is followed unless otherwise stated.
Valuation of inventories is made as under: Raw materials and stores & spares are valued at cost and the scrap is valued at net realisable value.
Work-in-progress is valued at estimated cost.
Finished goods are valued at estimated cost or net realisable value whichever is lower.
Tools and Tackles are valued at estimated value.
Investments are stated at cost.
All fixed assets are capitalised at cost, inclusive of incidental expenses,
Depreciation on Leased Assets has been provided on the basis of primary lease period of the assets. On all other fixed assets, depreciation is provided on Straight Line Method at the rate and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
Expenses for issue of equity shares made by the Company are written off over a period of 10 years and proportionate expenditure has been written off during the year.
Sales/income in case of Construction Contracts and orders to be executed over a period of more than one year are booked on the basis of running bills based on completed work.
Leasing income is accounted on accrual basis.
The amount of government grant received is credited to Deferred Government Grant Account and income therefrom is recognised over the life of assets for which it is received.
All the assets and liabilities in foreign currency as on 31st March, 1996 are accounted for at the rate of exchange prevailing as on that date.
Mar 31, 1995
Generally mercantile system of accounting is allowed unless otherwise stated.
Valuation of inventories are made as under :- Raw materials and stores & spares are valued at Cost.
Work-in-progress is valued at estimated cost.
Finished Goods are valued at estimated cost or realisable value whichever is lower as compared to valuation at contract price in the earlier years. This change has been implemented based on the advice of the Bankers of the Company. If the finished goods stock would have been valued on the same basis as that of last years the stock of finished goods would have been higher by Rs.40.96 lakhs and profit for the year would have been higher by the same amount.
Tools and Tackles are valued at estimated value.
All fixed assets are capitalised at cost inclusive of expenses.
Depreciation on Leased Assets has been provided based on the Primary lease period of the assets. On all other fixed assets depreciation is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
Expenses for issue of equity shares made by the Company during the year 198990 and for the Rights Issue made during the year 1992-93 are written off over a period of 10 years and proportionate expenditure has been written off during the year.
Samcoroe in case of Construction Contracts and orders to be executed over a period of financial years are booked on the basis of minning bills based on completed work.
Lease income is accounted on accrual basis.
Mar 31, 1994
A) Generally mercantile system of accounting is followed unless
otherwise stated.
b) Valuation of Inventories are made as under:-
i) Raw materials, stores and spares and work-in-progress at cost.
ii) Finished goods at contract price.
iii) Tools and Tackles at depreciated value.
c) All fixed assets are capitalised at cost inclusive of expenses.
d) Depreciation on Fixed Assets is calculated on Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
e) Expenses for issue of equity shares made by the company during the year 1989-90 and for the Rights Issue made during the year 1992-93 are written-off over a period of 10 years and proportionate Expenditure has been written-off during the year.
f) Sales/Income is case of contract and orders to be executed over a period of financial year are booked on the basis of running bills based on completed work.
Mar 31, 1993
Depreciation on Fixed Assets is calculated on Straight Line Method at rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.
Inventories Raw materials, stores and spares and work in progress at cost. Finished Goods at contract price. Tools and Tackless at depreciated value.
All fixed assets are capitalised at cost inclusive of expenses.
Mar 31, 1992
Depreciation on Fixed Assets is provided under the Straight Line Method at rates prescribed in Schedule XIV of the Companies Act, 1956.
Inventories Raw materials, stores and spares and work in progress at cost. Finished Goods at contract price. Tools and Tackless at depreciated value.
All fixed assets are capitalised at cost inclusive of expenses.
Mar 31, 1991
Depreciation on Fixed Assets is provided on Straight Line Method
at rates prescribed in Schedule XIV of the Companies Act, 1956.
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More Information on Jyoti Structures Ltd.
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Jyoti Structures Ltd. Tools
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Jyoti Structures Ltd. Company Details
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Company History
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Jyoti Structures Ltd. Key Financial Ratios
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Jyoti Structures Ltd. Results
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Jyoti Structures Ltd. Financial Data
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Jyoti Structures Ltd. Reports
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- Auditors Report
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Jyoti Structures Ltd. Corporate Announcements
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