Accounting Policies of Kaushalya Infrastructure Development Corpn.Ltd. Company

Mar 31, 2025

3. Summary of material accounting policies

3.01 Statement of compliance

The financial statements have been prepared
in accordance with Ind ASs notified under
the Companies (Indian Accounting Standard)
Rules, 2015, as amended, and the relevant

provisions of the Companies Act, 2013 (‘the
Act’), as applicable.

3.02 Use of Estimates

The preparation of separate financial
statements in conformity with the recognition
and measurement principles of Ind AS
requires the management of the Company to
make estimates and assumptions that affect
the reported balances of assets and liabilities,
disclosures relating to contingent liabilities as
at the date of the separate financial statements
and the reported amounts of income and
expense for the periods presented.

Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the
period in which the estimates are revised and
future periods are affected.

3.02.01 Construction activities

Construction activities includes long¬
term contracts for construction of
infrastructure facilities or projects priced
on a time and material basis etc. Revenues
from construction activities are recognised
over time using percentage of completion
method. Such percentage of completion
is determined as a proportion of the cost
incurred for work performed to date
relative to the total estimated contract costs.
The Company follows the policy ofrecognizing
the contract revenue as soon as the work is
completed, irrespective of the certification.
However, whenever the work gets certified,
the Company takes the certified portion of the
previously uncertified revenue and deducts the
same amount from the uncertified portion of
the revenue of the respective financial year.
Foreseeable losses on such contracts are
recognized when probable using the most
likely outcome or expected value method, as
the case may be, in the particular circumstance.

3.02.02 Hotel Operations

Revenue is recognised at the transaction price
that is allocated to the performance obligation.
Revenue includes room revenue, food and
beverage sale and other services which is
recognised once the rooms are occupied, food
and beverages are sold and other services have
been provided as per the contract with the
customer.

3.02.03 Other services / activities

Revenues from agricultural activities is
recognized at a point in time when the
agricultural produce is sold to the customers.
Revenue from trading activities is recognised
at a point in time when the goods is sold to the
customers.

3.02.04 Other Income

Interest: Interest income is recognized on
time proportion basis taking into account the
amount outstanding and the effective interest
rate applicable.

3.03 Employee Benefits

3.03.01 Short-term benefits

Short term employee benefits are recognised
as an expense at the undiscounted amount in
the Statement of Profit and Loss of the year in
which the related service is rendered.

3.03.02 Defined retirement benefits

The cost ofproviding defined benefit retirement
benefits are determined using the projected
unit credit method. The Company provides
gratuity benefits to its employees. Gratuity
liabilities are not funded. Remeasurements,
comprising actuarial gains and losses, return on
plan assets excluding amounts included in net
interest on the net benefit liability (asset) and
any change in the effect of the asset ceiling (if
applicable) are recognised in the balance sheet
with a charge or credit recognised in other
comprehensive income in the period in which
they occur. Remeasurement recognised in the
comprehensive income are not reclassified
to profit and loss but recognised directly in
the retained earnings. Past service costs are
recognised in profit and loss in the period in
which the amendment to plan occurs. Net
interest is calculated by applying the discount
rate to the net defined liability or asset at the
beginning of the period, taking into account
of any changes in the net defined benefit
liability(asset) during the period as a result of
contribution and benefit payments.

Defined benefit costs which are recognised in
profit and loss are categorised as follows:

- service cost (including current service
cost, past service cost, as well as
gains and losses on curtailments and
settlements); and

- net interest expense or income; and
The retirement benefit obligation recognised
in the separate financial statements represents
the actual deficit or surplus in the Company’s
defined benefit plans. Any surplus resulting
from this calculation is limited to the present
value of any economic benefits available in the
form of refunds from the plans or reduction in
future contributions to the plans.

The liability for termination benefit is
recognised at the earlier of when the entity can
no longer withdraw the offer of the termination
benefit and when the entity recognises any
related restructuring costs.

3.04 Taxation

i) Current tax

Current tax is the amount of tax
payable on the taxable profit for the
year as determined in accordance with
the provisions of the Income Tax Act,
1961. 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. The

current tax is calculated using tax rates
that have been enacted or substantively
enacted by the end of the reporting
period.

ii) Deferred tax

Deferred tax is recognised on temporary
differences between the carrying
amounts of assets and liabilities in
the separate financial statements and
the corresponding tax bases used in
the computation of taxable profits.
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 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. In addition, deferred
tax liabilities are not recognised if the
temporary difference arises from the
initial recognition of goodwill.

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
is realised, based on tax rates (and
tax laws) that have been enacted or
substantially enacted by the end of the
reporting period.

iii) Minimum alternate tax

Minimum Alternate Tax (MAT) paid
in accordance with the tax laws, which
gives future economic benefits in the
form of adjustment to future income tax
liability, is recognised as an asset in the
balance sheet when there is convincing
evidence that the Company will pay
normal income tax during the specified
period and it is probable that future
economic benefit associated with it will
flow to the Company.

iv) Current tax and deferred tax
Current tax and deferred tax are
recognised in Statement of Profit
and Loss, except when they relate
to items that are recognised in Other
Comprehensive Income or directly in
equity, in which case, the current and
deferred tax are also recognised in Other
Comprehensive Income or directly in
equity respectively. The current and
deferred tax arising from the initial
accounting for business combination,
are included in the accounting for the
business combination.

3.05 Property, Plant and equipment

Land, buildings, Plant and equipment,
Furniture and Fixtures, Vehicles, Office
equipments held for use in the operations,
or for administrative purposes are stated
at cost less accumulated depreciation and
accumulated impairment losses. Freehold land
is not depreciated. Cost includes purchase cost
of materials, including import duties and non¬
refundable taxes, any directly attributable
costs of bringing an asset to the location and
condition of its intended use and borrowing
costs capitalised in accordance with the
Company’s accounting policy.

Depreciation is recognised so as to write
off the cost of assets (other than freehold
land) less their residual values over the

useful lives, using the straight-line method.
Depreciation of assets commences when the
assets are ready for their intended use. The
estimated useful lives, residual values and
depreciation method are reviewed at the end
of each reporting period, with the effect of any
changes is accounted as change in estimate on
a prospective basis.

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from
the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item
of property, plant and equipment is recognised
in Statement of Profit and Loss.

Upto March 31, 2019, assets acquired under
finance leases are depreciated over their
expected useful lives on the same basis as
owned asset. When there is no reasonable
certainty that ownership will be obtained by
the end of the lease term, assets are depreciated
over the shorter of the lease term and their
useful lives.

Estimated useful lives of the assets are as
follows:

Buildings : 30 to 60 years

Plant and equipment : 3 to 15 years
Furniture and Fixtures : 10 years
Office Equipments : 3 to 5 years
Computers : 3 years

Motor Vehicles : 5 to 8 years

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from
the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item
of property, plant and equipment is recognised
in profit and loss.

The Company has elected to continue with
the carrying value of all of its property, plant
and equipment recognized as of April 1, 2016
measured as per the previous GAAP and use
that carrying value as its deemed cost as of the
transition date.

3.06 Borrowing Costs

Borrowing cost attributable to the acquisition
of qualifying assets is added to the cost up
to the date when such assets are ready for
their intended use. Other borrowing costs are
recognized as expenses in the period in which
these are incurred.

3.07 Impairment of tangible and intangible
assets other than goodwill

At the end of each reporting period, the
Company reviews the carrying amounts of
its tangible and intangible assets (Other than
goodwill) to determine whether there is any
indication that those assets have suffered
any 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.

Recoverable amount is the higher of fair
value less costs of disposal 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 risks specific to the asset for
which the estimates of future cash flows have
not be adjusted.

If the recoverable amount of an asset or cash
generating unit is estimated to be less than the
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 profit and loss.
When an impairment loss subsequently
reverses, the carrying value of the asset or
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. Any reversal of an impairment
loss is recognised immediately in profit and
loss.

3.08 Inventories

Raw materials, stores and spares, finished
goods, other construction materials and fuel
are valued at lower of cost and net realisable
value after providing for obsolescence and
other losses, where considered necessary. Cost
includes purchase price, non-refundable taxes
and duties and other directly attributable costs
incurred in bringing the goods/services to the
point of sale. Work-in-progress is valued at
cost.

Value of inventories are generally ascertained
on the “FIFO” basis.

---

Mar 31, 2024

3. Summary of material accounting policies

3.01 Statement of compliance

The financial statements have been prepared
in accordance with Ind ASs notified under the
Companies (Indian Accounting Standard) Rules,
2015, as amended, and the relevant provisions
of the Companies Act, 2013 (‘the Act’), as
applicable.

3.02 Use of Estimates

The preparation of separate financial statements
in conformity with the recognition and
measurement principles of Ind AS requires the
management of the Company to make estimates
and assumptions that affect the reported balances
of assets and liabilities, disclosures relating to
contingent liabilities as at the date of the separate
financial statements and the reported amounts of
income and expense for the periods presented.

Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the
period in which the estimates are revised and
future periods are affected.

3.02 Revenue recognition

The Company has following major sources of
revenue:

3.02.01 Construction activities

Construction activities includes long-term
contracts for construction of infrastructure
facilities or projects priced on a time and material
basis etc. Revenues from construction activities
are recognised over time using percentage
of completion method. Such percentage of
completion is determined as a proportion of the
cost incurred for work performed to date relative
to the total estimated contract costs.

The Company follows the policy of recognizing
the contract revenue as soon as the work is
completed, irrespective of the certification.
However, whenever the work gets certified,
the Company takes the certified portion of the
previously uncertified revenue and deducts the
same amount from the uncertified portion of the
revenue of the respective financial year
Foreseeable losses on such contracts are
recognized when probable using the most likely
outcome or expected value method, as the case
may be, in the particular circumstance.

3.02.02 Hotel Operations

Revenue is recognised at the transaction price
that is allocated to the performance obligation.
Revenue includes room revenue, food and
beverage sale and other services which is
recognised once the rooms are occupied, food
and beverages are sold and other services have
been provided as per the contract with the
customer.

3.02.03 Other services / activities

Revenues from agricultural activities is
recognized at a point in time when the
agricultural produce is sold to the customers.
Revenue from trading activities is recognised
at a point in time when the goods is sold to the
customers.

3.02.04 Other Income

Interest: Interest income is recognized on time
proportion basis taking into account the amount
outstanding and the effective interest rate
applicable.

3.03 Employee Benefits

3.03.01 Short-term benefits

Short term employee benefits are recognised as
an expense at the undiscounted amount in the
Statement of Profit and Loss of the year in which
the related service is rendered.

3.03.02 Defined retirement benefits

The cost of providing defined benefit retirement
benefits are determined using the projected unit
credit method. The Company provides gratuity
benefits to its employees. Gratuity liabilities
are not funded. Remeasurements, comprising
actuarial gains and losses, return on plan assets
excluding amounts included in net interest on
the net benefit liability (asset) and any change
in the effect of the asset ceiling (if applicable)
are recognised in the balance sheet with a charge

or credit recognised in other comprehensive
income in the period in which they occur.
Remeasurement recognised in the comprehensive
income are not reclassified to profit and loss but
recognised directly in the retained earnings. Past
service costs are recognised in profit and loss
in the period in which the amendment to plan
occurs. Net interest is calculated by applying
the discount rate to the net defined liability or
asset at the beginning of the period, taking into
account of any changes in the net defined benefit
liability(asset) during the period as a result of
contribution and benefit payments.

Defined benefit costs which are recognised in
profit and loss are categorised as follows

- service cost (including current service
cost, past service cost, as well as gains and
losses on curtailments and settlements);
and

- net interest expense or income; and

The retirement benefit obligation recognised
in the separate financial statements represents
the actual deficit or surplus in the Company’s
defined benefit plans. Any surplus resulting from
this calculation is limited to the present value
of any economic benefits available in the form
of refunds from the plans or reduction in future
contributions to the plans.

The liability for termination benefit is recognised
at the earlier of when the entity can no longer
withdraw the offer of the termination benefit
and when the entity recognises any related
restructuring costs.

3.04 Taxation

i) Current tax

Current tax is the amount of tax payable
on the taxable profit for the year as
determined in accordance with the
provisions of the Income Tax Act, 1961.

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. The current tax is
calculated using tax rates that have been
enacted or substantively enacted by the
end of the reporting period.

ii) Deferred tax

Deferred tax is recognised on temporary
differences between the carrying amounts
of assets and liabilities in the separate
financial statements and the corresponding
tax bases used in the computation of
taxable profits. 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
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. In addition, deferred
tax liabilities are not recognised if the
temporary difference arises from the
initial recognition of goodwill.

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 is realised, based on
tax rates (and tax laws) that have been
enacted or substantially enacted by the
end of the reporting period.

iii) Minimum alternate tax

Minimum Alternate Tax (MAT) paid in
accordance with the tax laws, which gives
future economic benefits in the form of
adjustment to future income tax liability,
is recognised as an asset in the balance
sheet when there is convincing evidence
that the Company will pay normal
income tax during the specified period
and it is probable that future economic
benefit associated with it will flow to the
Company.

iv) Current tax and deferred tax

Current tax and deferred tax are
recognised in Statement of Profit
and Loss, except when they relate
to items that are recognised in Other
Comprehensive Income or directly in
equity, in which case, the current and
deferred tax are also recognised in Other
Comprehensive Income or directly in
equity respectively. The current and
deferred tax arising from the initial
accounting for business combination,
are included in the accounting for the
business combination.

3.05 Property, Plant and equipment

Land, buildings, Plant and equipment, Furniture
and Fixtures, Vehicles, Office equipments held
for use in the operations, or for administrative
purposes are stated at cost less accumulated
depreciation and accumulated impairment
losses. Freehold land is not depreciated. Cost
includes purchase cost of materials, including

import duties and non-refundable taxes, any
directly attributable costs of bringing an asset to
the location and condition of its intended use and
borrowing costs capitalised in accordance with
the Company’s accounting policy.

Depreciation is recognised so as to write off
the cost of assets (other than freehold land) less
their residual values over the useful lives, using
the straight-line method. Depreciation of assets
commences when the assets are ready for their
intended use. The estimated useful lives, residual
values and depreciation method are reviewed
at the end of each reporting period, with the
effect of any changes is accounted as change in
estimate on a prospective basis.

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from
the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item
of property, plant and equipment is recognised in
Statement of Profit and Loss.

Upto March 31, 2019, assets acquired under
finance leases are depreciated over their
expected useful lives on the same basis as owned
asset. When there is no reasonable certainty
that ownership will be obtained by the end of
the lease term, assets are depreciated over the
shorter of the lease term and their useful lives.
Estimated useful lives of the assets are as
follows:

Buildings : 30 to 60 years

Plant and equipment : 3 to 15 years
Furniture and Fixtures : 10 years
Office Equipments : 3 to 5 years
Computers : 3 years

Motor Vehicles : 5 to 8 years

An item of property, plant and equipment is
derecognised upon disposal or when no future

economic benefits are expected to arise from
the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item
of property, plant and equipment is recognised in
profit and loss.

The Company has elected to continue with
the carrying value of all of its property, plant
and equipment recognized as of April 1, 2016
measured as per the previous GAAP and use
that carrying value as its deemed cost as of the
transition date.

3.06 Borrowing Costs

Borrowing cost attributable to the acquisition
of qualifying assets is added to the cost up
to the date when such assets are ready for
their intended use. Other borrowing costs are
recognized as expenses in the period in which
these are incurred.

3.07 Impairment of tangible and intangible assets
other than goodwill

At the end of each reporting period, the Company
reviews the carrying amounts of its tangible
and intangible assets (Other than goodwill) to
determine whether there is any indication that
those assets have suffered any 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.

Recoverable amount is the higher of fair value
less costs of disposal 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 risks
specific to the asset for which the estimates of

future cash flows have not be adjusted.

If the recoverable amount of an asset or cash
generating unit is estimated to be less than the
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 profit and loss.

When an impairment loss subsequently reverses,
the carrying value of the asset or 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. Any reversal
of an impairment loss is recognised immediately
in profit and loss.

3.08 Inventories

Raw materials, stores and spares, finished goods,
other construction materials and fuel are valued
at lower of cost and net realisable value after
providing for obsolescence and other losses,
where considered necessary. Cost includes
purchase price, non-refundable taxes and duties
and other directly attributable costs incurred in
bringing the goods/services to the point of sale.
Work-in-progress is valued at cost.

Value of inventories are generally ascertained on
the “FIFO” basis.

---

Mar 31, 2015

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards as prescribed under Section 133 of the Companies Act, 2013('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act(to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The financial statements have been prepared on accrual basis under historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

1.3 Inventories

The stock of raw materials, stores and spares, other construction materials and fuel are valued at cost under FIFO method or net realizable value whichever is lower.

Work-in-progress is valued at cost.

1.4 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short- term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.5 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraor- dinary 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.

1.6 Depreciation

i) Tangible Fixed Assets

a) Depreciation is provided from the date the assets are ready to be put to use, on straight line method as per the useful life of the assets as prescribed under Part C of Schedule II of the Companies Act, 2013 except for the Plant & Machinery and Cycles purchased before FY 2004-05 where the management has estimated that there were no useful life of the aforementioned assets and thus differs from the useful life prescribed under the Act.

For the aforementioned assets, the company has charged amount of Rs. 40,43,060/- as depreciation in statement of profit & loss instead of deducting it from retained earnings for fair & better presentation of financial statements.

1.7 Revenue recognition

Income from services

Revenues from contracts priced on a time and material basis are recognized when services are rendered and related costs are incurred. Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognized over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion. Foreseeable losses on such contracts are recognized when probable.

Revenues from maintenance contracts are recognized pro-rata over the period of the contract.

Contract Income

a. The company follows the policy of recognizing the revenue as soon as the work is completed, irrespective of the certification. However, whenever the work gets certified, the company takes the certified portion of the previously uncertified revenue in the turnover and deducts the same amount from the uncertified portion of the revenue of the respective financial year.

b. It is to be noted that out of the total revenue of Rs. 6,08,33,560/- in the financial year 2014- 15, an amount of Rs. 5,94,17,000/- is pending for certification.

Income from Hotel

Income from hotel is recognized on accrual basis. Profit before depreciation from hotel business is recognized as income in statement of profit and loss. Depreciation and Taxes related to Hotel Business is shown under respective heads of statement of profit and loss.

1.8 Other income

Interest: Interest income is generally recognized on time proportion basis taking into account the amount outstanding and the rate applicable. Maintenance & Hire Charges : Income from Maintenance and Hire Charges is recognized on accrual basis.

1.9 Tangible Fixed Assets

Fixed assets are carried at cost less accumulated depreciation. The cost of fixed assets comprises its purchase price, directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition or construction of qualifying fixed assets, up to the date the asset is ready for its intended use. Subsequent expenditure on fixed assets after its purchase/completion is capitalised only if such expenditure results in an increase in the future benefits from such assets beyond its previously assessed standard of performance.

1.10 Investments

a. Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties. Investment in Lands are carried individually at cost less accumulated depreciation and impairment, if any.

1.11 Employee Benefits

Employee benefits include provident fund, ESI and gratuity. Contribution to Provident fund, ESI, Medical reimbursement etc. is charged to the Statement of Profit and Loss as incurred.

The provision for gratuity has been made, without any actuarial valuation, and also not paid to any gratuity fund.

1.12 Borrowing Costs

Borrowing cost attributable to the acquisition of qualifying assets is added to the cost up to the date when such assets are ready for their intended use. Other borrowing costs are recognized as expenses in the period in which these are incurred.

1.13 Segment reporting

As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

1.14 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1.15 Taxes on income

"Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961".

Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. However, if there are unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized only if there is virtual certainty that there will be sufficient future taxable income available to realise the assets.

1.16 Joint Venture Operations

In respect of contracts executed in Integrated Joint Ventures under profit sharing arrangement (assessed as AOP under Income tax laws), the services rendered to the Joint Ventures are accounted as income on accrual basis. The profit / loss is accounted for, as and when it is determined by the Joint Venture and the net investment in the Joint Venture is reflected as investments, loans & advances or current liabilities.

1.17 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.

When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

1.18 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not recognised in the financial statements.

1.19 Service Tax Input Credits

Service tax input credit is accounted for in the books in the period in which the underlying service received.

1.20 Operating Cycle:

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 36 months for real estate & infrastructure projects and 12 months for others for the purpose of classification of its assets and liabilities as current and non-current.

1.21 Advances to Subsidiaries :

The amount of Rs. 482,462,888/- in aggregate is standing as advance to its subsidiaries & associates at the balance sheet date out of which advances to the tune of Rs. 480,986,485/- is outstanding, which was advanced for purchase of land by the subsidiaries & associates made under agreement. The Company had entered into agreements with Kaushalya Township (P) Ltd., Kaushalya Nirman (P) Ltd. and Orion Abasaan (P) Ltd. that whenever they will sell land or developed land or project on the land the Company's interest shall be safeguarded as per the terms of the agreement.

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Mar 31, 2014

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

2.3 Inventories

The stock of raw materials, stores and spares, other construction materials and fuel are valued at cost under FIFO method or net realizable value whichever is lower. Work-in-progress is valued at cost.

2.4 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

2.5 Cash flow statement

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.

2.6 Depreciation

Depreciation is charged on Straight Line Method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956.

2.7 Revenue recognition

Income from services

Revenues from contracts priced on a time and material basis are recognised when services are rendered and related costs are incurred. Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognised over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion. Foreseeable losses on such contracts are recognised when probable.

Revenues from maintenance contracts are recognised pro-rata over the period of the contract.

Contract Income

a. The company follows the policy of recognizing the

revenue as soon as the work is completed, irrespective of the certification. However,

whenever the work gets certified, the company takes the certified portion of the previously uncertified revenue in the turnover and deducts the same amount from the uncertified portion of the revenue of the respective financial year.

b. It is to be noted that out of the total revenue of Rs.15,77,35,831/- in the financial year 2013-14, an amount of Rs. 2,75,00,000/- is pending for certification.

Income from Hotel:

Income from hotel is recognized on accrual basis.

2.8 Other income

Interest: Interest income is generally recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

2.9 Tangible Fixed Assets

a. ''Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Exchange differences arising on

restatement/settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Fixed assets acquired and put to use for project purpose are capitalized and depreciation thereon is included in the project cost till commissioning of the project.

Fixed assets acquired in full or part exchange for another asset are recorded at the fair market value or the net book value of the asset given up, adjusted for any balancing cash consideration. Fair market value is determined either for the assets acquired or asset given up, whichever is more clearly evident. Fixed assets acquired in exchange for securities of the Company are recorded at the fair market value of the assets or the fair market value of the securities issued, whichever is more clearly evident.

''Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realizable value and are disclosed separately in the Balance Sheet.

b. However, few machines are lying idle, though depreciation has been charged on them in the usual manner.

2.10 Investments

a. Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties.

Investment properties are carried individually at cost less accumulated depreciation and impairment, if any. Investment properties are capitalized and depreciated (where applicable) in accordance with the policy stated for Tangible Fixed Assets. Impairment of investment property is determined in accordance with the policy stated for Impairment of Assets.

b. Investment in Private companies :

The company has investment to the tune of Rs. 12,34,10,000/- in the equity shares of few Private companies, by way of conversion of advances into investment, (details of which has been shown in Note 12 under "Trade Investments" in the ''Others'' category), which has ersulted to a share holding of more than 20% voting power in each of such private companies.

However, the company has confirmed that it does not have the right to exercise any sort of influence in those companies, event if it holds a substantial percentage of voting power.

2.11 Employee Benefits

Employee benefits include provident fund, ESI and gratuity. Contribution to Provident fund, ESI, Medical reimbursement etc. is charged to the Profit and Loss account as incurred.

The provision for gratuity has been made, without any actuarial valuation, and also not paid to any gratuity fund.

2.12 Borrowing Costs

Borrowing cost attributable to the acquisition of qualifying assets is added to the cost up to the date when such assets are ready for their intended use. Other borrowing costs are recognized as expenses in the period in which these are incurred.

2.13 Segment reporting

The Company is solely engaged in construction contracts for infrastructure development. The other business i.e. hotel is insignificant in terms of risk as well as rewards since it does not constitutes even 1% in terms of revenue, expenses and profit as given in table below.

As such there are no separately identifiable primary segments.

In so far as geographical segment is concerned, the company is carrying out its business only in domestic markets. Therefore, there are no separately identifiable geographical segments.

2.14 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

2.15 Taxes on income

"Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Current and deferred tax relating to items directly recognized in equity is recognized in equity and not in the Statement of Profit and Loss.

2.16 Joint Venture Operations

The accounts of the Company reflect its share of the Assets, Liabilities, Income and Expenditure of the Joint Venture Operations which are accounted on the basis of

the audited accounts of the Joint Ventures on line-by-line basis with similar items in the Company''s accounts to the extent of the participating interest of the Company as per the Joint Venture Agreements.

In respect of contracts executed in Integrated Joint Ventures under profit sharing arrangement (assessed as AOP under Income tax laws), the services rendered to the Joint Ventures are accounted as income on accrual basis. The profit / loss is accounted for, as and when it is determined by the Joint Venture and the net investment in the Joint Venture is reflected as investments, loans & advances or current liabilities.

2.17 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

2.18 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

2.19 Service Tax Input Credits

Service tax input credit is accounted for in the books in the period in which the underlying service received.

2.20 Advances to Subsidiaries :

The Company has advance Rs. 517,833,183/- in aggregate to its subsidiaries, out of which advances to the tune of Rs. 516,319,945/- has been made under agreements to purchase land. Amount to Rs. 513,541,675/- had already been utilized by the subsdiaries for the purchase of land. However, transfer of land to the parent company is yet to be made as acquisition of land is under progress.

Notes:

(i) Includes deposits amounting to Rs. 17,941,708/- (As at 31 March, 2013Rs.14,367,250/-) which have an original maturity of more than 12 months.

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Mar 31, 2013

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known/materialize.

1.3 Inventories

The stock of raw materials, stores and spares, other construction materials and fuel are valued at cost under FIFO method or net realizable value whichever is lower.

Work-in-progress is valued at cost.

1.4 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.5 Cash flow statement

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.

1.6 Depreciation

Depreciation is charged on Straight Line Method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956.

1.7 Revenue recognition income from services

Revenues from contracts priced on a time and material basis are recognised when services are rendered and related costs are incurred. Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognised over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion. Foreseeable losses on such contracts are recognised when probable.

Revenues from maintenance contracts are recognised pro- rata over the period of the contract.

Contract Income

a. The company follows the policy of recognizing the revenue as soon as the work is completed, irrespective of the certification. However, whenever the work gets certified, the company takes the certified portion of the previously uncertified revenue in the turnover and deducts the same amount from the uncertified portion of the revenue of the respective financial year.

b. It is to be noted that out of the total revenue of Rs. 26,37,05,308/- in the financial year 2012-13, an amount of Rs. 22,59,25,079/- is pending for certification.

c. An amount of Rs. 20,06,43,402/- is included in the contract revenue, on which TDS is not reflected in FORM 26AS.

Income from Hotel

Income from hotel is recognized on accrual basis.

1.8 Other income

Interest: Interest income is generally recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

1.9 Tangible Fixed Assets

a. ''Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Exchange differences arising on restatement/ settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Fixed assets acquired and put to use for project purpose are capitalized and depreciation thereon is included in the project cost till commissioning of the project.

Fixed assets acquired in full or part exchange for another asset are recorded at the fair market value or the net book value of the asset given up, adjusted for any balancing cash consideration. Fair market value is determined either for the assets acquired or asset given up, whichever is more clearly evident. Fixed assets acquired in exchange for securities of the Company are recorded at the fair market value of the assets or the fair market value of the securities issued, whichever is more clearly evident.

Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realizable value and are disclosed separately in the Balance Sheet.

b. However, at some of the sites, fixed assets are lying idle, though depreciation has been charged on them in the usual manner.

1.10 Investments

a. Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value.

Cost of investments includes acquisition charges such as brokerage, fees and duties.

Investment properties are carried individually at cost less accumulated depreciation and impairment, if any. Investment properties are capitalized and depreciated (where applicable) in accordance with the policy stated for Tangible Fixed Assets. Impairment of investment property is determined in accordance with the policy stated for Impairment of Assets.

b. Investment in Private companies:

The company has invested a sum of Rs. 12,34,10,000/- in the equity shares of few Private companies, by way of conversion of advances into investment, (details of which has been shown in Note 12 under "Trade Investments" in the ''Others'' category), which has resulted to a share of more than 20% voting power in each of such private companies.

However, the company has confirmed that it does not have the right to exercise any sort of influence in those companies, even if it holds a substantial percentage of voting power

1.11 Employee Benefits

Employee benefits include provident fund, ESI and gratuity. Contribution to Provident fund, ESI, Medical reimbursement etc. is charged to the Profit and Loss account as incurred.

The provision for gratuity has been made, without any actuarial valuation, and also not paid to any gratuity fund.

1.12 Borrowing Costs

Borrowing cost attributable to the acquisition of qualifying assets is added to the cost up to the date when such assets are ready for their intended use. Other borrowing costs are recognized as expenses in the period in which these are incurred.

1.13 Segment reporting

The Company is solely engaged in construction contracts for infrastructure development. The other business i.e. hotel is insignificant in terms of risk as well as rewards since it does not constitutes even 1% in terms of revenue, expenses and profit as given in table below:

As such there are no separately identifiable primary segments.

In so far as geographical segment is concerned, the company is carrying out its business only in domestic markets. Therefore, there are no separately identifiable geographical segments.

1.14 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1.15 Taxes on income

"Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Current and deferred tax relating to items directly recognized in equity is recognized in equity and not in the Statement of Profit and Loss.

1.16 Joint Venture Operations

The accounts of the Company reflect its share of the Assets,

Liabilities, Income and Expenditure of the Joint Venture Operations which are accounted on the basis of the audited accounts of the Joint Ventures on line-by-line basis with similar items in the Company''s accounts to the extent of the participating interest of the Company as per the Joint Venture Agreements.

In respect of contracts executed in Integrated Joint Ventures under profit sharing arrangement (assessed as AOP under Income tax laws), the services rendered to the Joint Ventures are accounted as income on accrual basis. The profit / loss is accounted for, as and when it is determined by the Joint Venture and the net investment in the Joint Venture is reflected as investments, loans & advances or current liabilities.

1.17 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

1.18 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

1.19 Service Tax Input Credits

Service tax input credit is accounted for in the books in the period in which the underlying service received.

1.20 Prior Period Items

An amount of Rs. 19,67,006/-, as disclosed in the contract revenue of the current year is appearing to be the revenue of the prior period as per the records and other documents, referred by us.

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Mar 31, 2012

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known/materialize.

1.3 Inventories

The stock of raw materials, stores and spares, other construction materials and fuel are valued at cost under FIFO method or net realizable value whichever is lower.

Work-in-progress is valued at cost.

1.4 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.5 Cash flow statement

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.

1.6 Depreciation

Depreciation is charged on Straight Line Method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956.

1.7 Revenue recognition

Income from services

Revenues from contracts priced on a time and material basis are recognised when services are rendered and related costs are incurred. Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognised over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion. Foreseeable losses on such contracts are recognised when probable.

Revenues from maintenance contracts are recognised pro- rata over the period of the contract.

Contract Income

a. The company follows the policy of recognizing the revenue as soon as the work is completed, irrespective of the certification. However, whenever the work gets certified, the company takes the certified portion of the previously uncertified revenue in the turnover and deducts the same amount from the uncertified portion of the revenue of the respective financial year.

b. An amount of Rs. 10,35,55,161/- as disclosed by the company, as the revenue of the prior periods and considered to be doubtful, during the limited review for the quarter ending 31st March''2012, has now been revalued to Rs. 37,71,475/- only, which has been written off as Unrecoverable Contract expenses, during the current financial year.

c. An amount of Rs. 53,19,36,351/- is included in the contract revenue, on which TDS is not reflected in FORM 26AS.

1.8 Other income

Interest income is accounted on accrual basis.

1.9 Tangible Fixed Assets

Fixed assets, are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalised and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Fixed assets acquired and put to use for project purpose are capitalised and depreciation thereon is included in the project cost till commissioning of the project.

Fixed assets acquired in full or part exchange for another asset are recorded at the fair market value or the net book value of the asset given up, adjusted for any balancing cash consideration. Fair market value is determined either for the assets acquired or asset given up, whichever is more clearly evident. Fixed assets acquired in exchange for securities of the Company are recorded at the fair market value of the assets or the fair market value of the securities issued, whichever is more clearly evident.

Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realisable value and are disclosed separately in the Balance Sheet.

1.10 Investments

long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties.

Investment properties are carried individually at cost less accumulated depreciation and impairment, if any. Investment properties are capitalised and depreciated (where applicable) in accordance with the policy stated for Tangible Fixed Assets. Impairment of investment property is determined in accordance with the policy stated for Impairment of Assets.

1.11 Employee Benefits

Employee benefits include provident fund, ESI and gratuity. Contribution to Provident fund, ESI, Medical reimbursement etc. is charged to the Profit and Loss account as incurred.

The provision for gratuity has been made, but not paid to any gratuity fund.

1.12 Borrowing Costs

AS-16: Borrowing Costs is not applicable to the company during the current year.

1.13 Segment reporting

The Company is solely engaged in construction contracts for infrastructure development. The other business i.e. hotel is insignificant in terms of risk as well as rewards since it does not constitutes even 1% in terms of revenue, expenses and profit as given in table below:

As such there are no separately identifiable primary segments.

In so far as geographical segment is concerned, the company is carrying out its business only in domestic markets. Therefore, there are no separately identifiable geographical segments.

1.14 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1.15 Taxes on income

"Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences.

Current and deferred tax relating to items directly recognized in equity is recognized in equity and not in the Statement of Profit and Loss.

1.16 Joint Venture Operations

The accounts of the Company reflect its share of the Assets, Liabilities, Income and Expenditure of the Joint Venture Operations which are accounted on the basis of the audited accounts of the Joint Ventures on line-by-line basis with similar items in the Company''s accounts to the extent of the participating interest of the Company as per the Joint Venture Agreements.

In respect of contracts executed in Integrated Joint Ventures under profit sharing arrangement (assessed as AOP under Income tax laws), the services rendered to the Joint Ventures are accounted as income on accrual basis. The profit / loss is accounted for, as and when it is determined by the Joint Venture and the net investment in the Joint Venture is reflected as investments, loans & advances or current liabilities.

1.17 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

1.18 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

1.19 Service Tax Input Credits

Service tax input credit is accounted for in the books in the period in which the underlying service received.

1.20 Sundry Debtors

Sundry Debtors, to the tune of Rs. 37,71,475/- , are considered to be doubtful, the recovery of which has ceased to be probable. Hence, the management has decided to write off the same as "Unrecoverable Contract Expenses", in accordance with the Paragraph 27 of the Accounting Standard 7.

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Mar 31, 2010

Basis of Preparation of Financial Statements

The Financial Statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and in accordance with Accounting Principles generally accepted in India (Indian GAAP) and comply with the applicable accounting standards issued by the Institute of Chartered Accountants of India, and the relevant provisions of the Companies Act 1956 except where otherwise stated.

For recognition of Income and Expenses mercantile system of accounting is followed except in case of insurance claims. The accounting policies have been consistently applied by the Company unless otherwise stated.

Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known.

Inventories

The stock of raw materials, stores and spares, other construction materials and fuel are valued at cost under FIFO method or net realizable value whichever is lower.

Work-in-Progress is valued at cost.

Depreciation/Amortization

Depreciation on fixed assets is charged on Straight Line Method at the rates and in the manner prescribed under Schedule -XIV of the Companies Act 1956.

Revenue Recognition

On Construction Contracts

The contract revenue is recognized by reference to the stage of completion of the contract activity at the reporting date of the financial statements on the basis of percentage completion method. Further, it is recognized whether completed works are certified by the principal or not.

The revenue from hotel business is recognized on completion of service rendered.

Interest income is recognized on an accrual basis.

Income from plant and Machinery/Equipments on hire contract are recognized on accrual basis over the contract period.

Price escalation claims and other additional claims including those under arbitration are recognized as revenue when:

- They are realized or receipts thereof are mutually settled or reasonably ascertained.

- Negotiations with the client have reached an advanced stage such that client will accept the claim.

- Amount that is probable, if accepted by the client can be measured reliably by the Company.

Fixed Assets

Fixed Assets are stated at cost of acquisition together with any incidental costs for bringing the asset to its working condition for its intended use less accumulated depreciation and impairment losses, if any.

Capital work in progress is stated at amounts spent up to the date of the Balance Sheet.

Investment

Long-term investments are stated at cost, provision is made to recognize a decline, other than temporary, in the value of long term investments.

Current investments are carried at cost or market rates whichever is less, on individual investment basis.

Employee Benefit (Retirement and Post Employment Benefit)

Contribution to defined benefit schemes such as Provident Fund, ESI, Medical reimbursement etc. are charged to profit and loss account as incurred. The contributions are made to Government administered Provident Fund and ESI towards which the Company has no further obligations beyond its monthly contributions.

Gratuity

The present value of the obligation is determined based on an acturial valuation. The provision made but not paid.

Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of assets which take substantial period of time to get ready for its intended use are capitalized as part of the cost of those assets. Other borrowing costs are recognized as expenses in the period in which they are incurred.

Earnings Per Share

Basic earning per share is calculated by dividing the net Profit or Loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earning per share, the net Profit or Loss for the year attributable to the equity share holders and weighted average number of share outstanding if any are adjusted for the effects of all dilutive potential equity shares.

Taxation

Tax expenses comprise of current tax and deferred tax.

Current tax is determined in respect of taxable income for the year based on applicable tax rates and laws.

Deferred tax is recognized, subject to consideration of prudence, on timing difference being the difference between taxable income and accounting income that originates in one period and one capable of set off in one on more subsequent year and is measured using tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are reviewed at each balance sheet date to re-assess excess realization.

Impairment of Assets

On annual basis the Company makes an assessment of any indicator that may lead to impairment of assets. An asset is treated as impaired when the carrying cost of the asset exceeds the recoverable value. Recoverable amount is higher of an assets net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

Transaction in Foreign Exchange

Transaction in respect of foreign exchange are recorded at exchange rates prevailing on the date of transaction.

Prior period and Extraordinary items and changes in Accounting policies:

Prior period and Extraordinary items and changes in Accounting policies having material impact on the financial affairs of the company are disclosed.