B. Material accounting policies

1.B.1. Goodwill

Goodwill represents the cost of acquired business as
established at the date of acquisition of the business
in excess of the acquirer's interest in the net fair value
of the identifiable assets, liabilities and contingent
liabilities less accumulated impairment losses, if any.
Goodwill is tested for impairment annually or when

events or circumstances indicate that the implied fair
value of goodwill is less than its carrying amount.

For the purposes of impairment testing, goodwill is
allocated to each of the Company's cash-generating units
(or groups of cash-generating units) that is expected to
benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been
allocated is tested for impairment annually, or more
frequently when there is an indication that the unit
may be impaired. If the recoverable amount of the
cash-generating unit is less than its carrying amount,
the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit
and then to the other assets of the unit pro rata based
on the carrying amount of each asset in the unit.
Any impairment loss for goodwill is recognised directly in
profit or loss. An impairment loss recognised for goodwill
is not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the
attributable amount of goodwill is included in the
determination of the profit or loss on disposal.

I.B.2. a) Interests in Joint Operations

Company enters into Joint Venture arrangement
with other parties for execution of construction
arrangements for which an unincorporated vehicle is
formed having an independent legal status for the tax
purpose i.e. Association of person/Body of individual
etc. Such arrangement (also called as joint operations)
is considered as extension of business, if in accordance
with the terms of the arrangement, Company acts as
a principal and remains solely liable for the executing
the entire project on its own, funding or contributing
assets and is also responsible for all the liabilities in
the unincorporated vehicle. Accordingly, all the assets,
liabilities, revenue and expenses pertaining to such
unincorporated vehicle is consolidated in the separate
financial statements of the Company.

Similarly, in case the Company is acting as an agent in
such kind of arrangements, where the other party to the
arrangement is solely liable for the executing the entire
project on its own, funding or contributing assets and is
also responsible for all the liabilities in the unincorporated
vehicle. Accordingly, the Company recognises its share
of profits/fees as determined in the arrangement in the
separate financial statements of the Company.

I.B.2. b) Interest in unincorporated Joint ventures

When the Company enters into a joint venture (JV)
arrangement with other parties and an unincorporated
vehicle is formed which has a separate status for tax
purposes (i.e. Association of person/Body of individual
etc.) and if as per the terms of agreement, the Company
remains liable for all the liabilities of the unincorporated
vehicle and is also responsible for funding or contributing
assets to the unincorporated vehicle for construction
activity, this unincorporated vehicle (also considered
and called as joint operation) has been considered as
an extension of the Company from accounting point of
view and assets, liabilities, revenue and expenses are
consolidated on the basis of its share in the operations
in the separate financial statement of the Company.

1.B.3.Revenue recognition
Sale of goods

Revenue from sale of goods 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. Invoices are issued according to contractual
terms and are usually payable as per the credit period
agreed with the customer.

Rendering of 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 involves 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 the performance obligations, the estimation of total
revenue and cost at completion is complex, subject
to many variables and requires significant judgment.
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.
Various agreements are entered with customers wherein
the Company pays a certain portion of the finance cost
to the funding agencies of the project. In practice, these
payments are considered as payment on behalf of the
customer. These payments are not related to a distinct
service or product by customer. An estimated amount to
be paid over the lifecycle of the project is calculated and
accordingly the same is accounted for as a reduction of
contract revenue.

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 the customers
are generally due upon expiration of the contract period
or any other conditions as mentioned in the contract.

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 since 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.
Amounts received before the related work is performed
are disclosed in the Balance Sheet as contract liability
and termed as "Advances from customer”.

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 by 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.

Dividend and interest income

Dividend income from investments is recognised
when the shareholder's right to receive payment has
been established (provided that it is probable that the
economic benefits will flow to the Company and the
amount of income can be measured reliably).

Interest income from a financial asset is recognised
when it is probable that the economic benefits will flow
to the Company and the amount of income can be
measured reliably. Interest income is accrued on a time
basis, by reference to the principal outstanding and at
the effective interest rate applicable, which is the rate

that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that
asset's net carrying amount on initial recognition.

Other operating income

Income from export incentives is recognised on
cash basis to the extent the ultimate realisation is
reasonably certain.

1.B.4. Foreign currencies

(i) Functional and presentation currency

Items included in the standalone financial statements
of each of the Company's entities are measured using
the currency of the primary economic environment in
which the entity operates ('the functional currency').
The standalone financial statement is presented in
Indian Rupee (INR), which is Company's functional
and presentation currency. For each entity (branches
and Joint Operations), the Company determines the
functional currency and items included in the financial
statements of each entity are measured using that
functional currency.

In preparing these Standalone financial statements, the
Company has applied following policies:

A) Foreign Branches of the Company (outside India
with functional currency other than presentation
currency): -

1. Income and expense items are translated
at the exchange rates at the dates of the
transactions and all resulting exchange
differences are recognised in the Standalone
Statement of Profit and Loss.

2. Non-monetary assets and liabilities are
measured in terms of historical cost in
foreign currencies and are not translated at
the rates prevailing at the reporting period.
Monetary assets and liabilities are translated
at the rates prevailing at the end of each
reporting period. Exchange differences on
translations are recognised in the Standalone
Statement of Profit and Loss.

B) Joint Operations and subsidiaries outside India
with functional currency other than presentation
currency:

1. Assets and liabilities, both monetary and
non-monetary are translated at the rates
prevailing at the end of each reporting year.

2. Income and expense items are translated at
the average exchange rates for the period,
unless exchange rates fluctuate significantly
during that period, in which case the exchange
rates at the dates of the transactions are
used. Exchange differences arising, if any, are
recognised in other comprehensive income
and accumulated in equity (and attributed to
non-controlling interests as appropriate).

(ii) Foreign currency transactions and balances

In preparing the standalone financial statements
of each individual Company entity, transactions
in currencies other than the entity's functional
currency (foreign currencies) are recognised at
the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting period,
monetary items denominated in foreign currencies
are retranslated at the rates prevailing at that date.
Non-monetary items carried at fair value that are
denominated in foreign currencies are retranslated
at the rates prevailing at the date when the fair
value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign
currency are not retranslated.

Exchange differences on monetary items are
recognised in Statement of Profit and Loss in the
period in which they arise except for:

• Exchange differences on transactions
entered into in order to hedge certain foreign
currency risks; and

• Exchange differences on monetary items
receivable from or payable to a foreign
operation for which settlement is neither
planned nor likely to occur (therefore forming
part of the net investment in the foreign
operation), which are recognised initially in
other comprehensive income and reclassified
from equity to profit or loss on repayment of
the monetary items.

On the disposal of a foreign operation (i.e. a disposal
of the Company's entire interest in a foreign
operation, a disposal involving loss of control over a
foreign operation, or a partial disposal of an interest
in a foreign operation of which the retained interest
becomes a financial asset), all of the exchange
differences accumulated in equity in respect of
that operation attributable to the owners of the
Company are reclassified to profit or loss.

In addition, in relation to a partial disposal of
a foreign operation that does not result in the
Company losing control over the foreign operation,
the proportionate share of accumulated exchange
differences is re-attributed to non-controlling
interests and are not recognised in profit or loss.
For all other partial disposals (i.e. partial disposals
of associates or joint arrangements that do not
result in the Company losing significant influence
or joint control), the proportionate share of the
accumulated exchange differences is reclassified
to profit or loss.

Goodwill and fair value adjustments to identifiable
assets acquired and liabilities assumed
through acquisition of a foreign operation are
treated as assets and liabilities of the foreign
operation and translated at the rate of exchange
prevailing at the end of each reporting period.
Exchange differences on such items are recognised
in other comprehensive income.

I.B.5. Borrowing costs

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.

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.

All other borrowing costs are recognised in profit or loss
in the period in which they are incurred.

I.B.6. Employee benefits

1.B.6.1 Retirement benefit costs and termination benefits

Employee benefits include provident fund, superannuation
fund, employee state insurance scheme, gratuity fund,
compensated absences and leave encashment.

Payments to defined contribution retirement benefit
plans are recognised as an expense when employees
have rendered service entitling them to the contributions.

The liability or asset recognised in the balance sheet in
respect of defined benefit plan is the present value of
the defined benefit obligation at the end of the reporting
period less fair value of plan assets.

For defined retirement benefit plans, the cost of providing
benefits is determined using the Projected Unit Credit
Method, with actuarial valuations being carried out at the
end of each annual reporting period. Re-measurement,
comprising actuarial gains and losses, the effect of
the changes to the asset ceiling (if applicable) and the
return on plan assets (excluding net interest), is reflected
immediately in the balance sheet with a charge or credit
recognised in other comprehensive income in the period
in which they occur. Remeasurement recognised in
other comprehensive income is reflected immediately in
retained earnings and is not reclassified to profit or loss.
Past service cost is recognised in profit or loss in the
period of a plan amendment. Net interest is calculated by
applying the discount rate at the beginning of the period
to the net defined benefit liability or asset.

Defined benefit costs are categorised as follows:

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

• Net interest expense or income; and

• Re-measurement

The Company presents the first two components of
defined benefit costs in profit or loss in the line item
'Employee benefits expense'. Curtailment gains and
losses are accounted for as past service costs.

The present value of the defined benefit plan liability is
calculated using a discount rate which is determined
by reference to market yields at the end of the reporting
period on government bonds.

The retirement benefit obligation recognized in the
standalone 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 reductions in future
contributions to the plans.

A liability for a 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.

1.B.6.2 Short-term and other long-term employee
benefits

A liability is recognised for benefits accruing to
employees in respect of salaries, wages and other
short-term employee benefits in the period the related
service is rendered at the undiscounted amount of the
benefits expected to be paid in exchange for that service.

Provision for leave benefits to employees is based on
actuarial valuation done by projected accrued benefit
method at the reporting date.

I.B.7. Taxation

Income tax expense represents the sum of the tax
currently payable and deferred tax.

1.B.7.1 Current tax

The income tax expense or credit for the period is the
tax payable on the current period's taxable income
based on the applicable income tax rate for each
jurisdiction adjusted by changes in deferred tax assets
and liabilities attributable to temporary differences and
to unused tax losses.

The current income tax charge is calculated on the
basis of the tax laws enacted or substantively enacted
at the end of the reporting period in the countries where
the company and its joint operation operates and
generates taxable income. Management periodically
evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject
to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid
to the tax authorities.

1.B.7.2 Deferred tax

Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts
in the standalone financial statements. However, deferred
tax liabilities are not recognized if they arise from the
initial recognition of goodwill. Deferred income tax is also
not accounted for if it arises from initial recognition of an
asset or liability in a transaction other than a business
combination that at the time of the transaction affects
neither accounting profit nor taxable profit (tax loss).
Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by
the end of the reporting period and are expected to apply
when the related deferred income tax is realised or the
deferred income tax liability is settled.

Deferred tax assets are recognized for all deductible
temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to
utilise those temporary differences and losses.

Deferred tax liabilities are not recognized for temporary
differences between the carrying amount and tax
bases of investments in branches and interest in joint
arrangements where the Company is able to control the
timing of the reversal of the temporary differences and
it is probable that the differences will not reverse in the
foreseeable future.

Deferred tax assets are not recognized for temporary
differences between the carrying amount and tax
bases of investments in branches 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 difference can be utilised.

Deferred tax assets and liabilities are offset when there
is a 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
tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on
a net basis, or to realise the asset and settle the liability
simultaneously.

Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable
tax regulation is subject to interpretation and considers
whether it is probable that the taxation authority will
accept tax position taken by the Company. Uncertain tax
positions are reflected in the overall measurement of
the Company's tax expense and are based on the
most likely amount or the expected value arrived at by
the Company which provides a better prediction of the
resolution of uncertainty. Uncertain tax positions are
monitored and updated as and when new information
becomes available, typically upon examination or action
by the taxing authorities or through statute expiration
and judicial precedent. The Company considers whether
a particular amount payable or receivable for interest
and penalties is an income tax, in which case Ind AS
12 is applied to that amount. When an amount payable
for interest and penalties is determined to be within the
scope of Ind AS 37, it is presented as part of financing
cost or other expenses, respectively unless when there is
an overall settlement with tax authority and the interest

and penalties cannot be identified separately in which
case it is determined to be part of income taxes.

1.B.7.3 Current and deferred tax for the year

Current and deferred tax are recognised in profit or 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. Where current tax or deferred
tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting
for the business combination.

.B.8 Property, plant and equipment

Property, plant and equipment are carried at cost less
accumulated depreciation and impairment losses, if any.
The cost of property, plant and equipment comprises its
purchase price net of any trade discounts and rebates,
any import duties and other taxes (other than those
subsequently recoverable from the tax authorities), any
directly attributable expenditure on making the asset
ready for its intended use, other incidental expenses
and interest on borrowings attributable to acquisition of
qualifying fixed assets up to the date the asset is ready
for its intended use. It also includes initial estimate of the
costs of dismantling and removing the item and restoring
the site on which it is located. Replacement cost of an
item of property, plant and equipment is capitalised if
replacement meets the recognition criteria.

Carrying amount of items replaced is derecognised.
Cost of major inspections is recognised in the
carrying amount of property, plant and equipment as
a replacement, if recognition criteria are satisfied and
any remaining carrying amount of the cost of previous
inspection is derecognised. 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 (if
they meet the asset recognition criteria) and depreciated
over the useful life of the principal item of the relevant
assets. Depreciation is recognised using straight-line
method so as to write off the cost of the assets (other
than freehold land and capital work-in-progress) less
their residual values over their useful life specified in
Schedule II to the Act, or in case of assets where the
useful life was determined by technical evaluation, over
the useful life so determined. Subsequent expenditure
on property, plant and equipment after its purchase /
completion is capitalised only if such expenditure results
in an increase in the future benefits from such asset
beyond its previously assessed standard of performance.

Estimated useful lives of the assets are as follows:
Buildings - 60 years

Furniture and fixtures - 10 years

Vehicles - 8 - 9 years

Office equipment - 5 years

Freehold land is not depreciated

For following assets estimated useful life is different than
the useful life prescribed in schedule II to the Companies
Act, 2013 and has been assessed on technical advice,
taking into account the nature of the asset, the
estimated usage of the asset, the operating conditions
of the asset, past history of replacement, anticipated
technological changes, manufacturers warranties and
maintenance support, etc.

Plant & Equipment (except Tunnel Boring Machines),
Concreting, Crushing, Piling, Road making, Laboratory &
Welding Equipment, Floating Equipment - 20 Years.

Tunnel Boring Machines - Length of the tunnel bored
over life of the construction project for where it is used.

Cost of shuttering materials, issued to jobs, is charged
off equally over a period of four 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 determined
as the difference between the sales proceeds and
the carrying amount of the asset and is recognised in
profit or loss.

1.B.8.1 Capital work-in-progress

Property, plant and equipment that are not yet ready for
their intended use are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.

.B.9 Intangible assets

Intangible assets with finite useful lives that are
acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses.
Amortisation is recognised on a straight-line basis over
their estimated useful lives. The estimated useful life
and amortisation method are reviewed at the end of
each reporting period, with the effect of any changes in
estimate being accounted for on a prospective basis.
Intangible assets with indefinite useful lives that are
acquired separately are carried at cost less accumulated
impairment losses. Useful life is as below:

Computer software - 5 years

An intangible asset is derecognised on disposal, or
when no future economic benefits are expected from
use or disposal. Gains or losses from derecognition of
an intangible asset, measured at the difference between
the net disposal proceeds and the carrying amount of
the asset is recognised in profit or loss when the asset
is derecognised.

1.B. 10 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 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.
When a reasonable and consistent basis of allocation
can be identified, corporate assets are also allocated to
individual cash-generating units, or otherwise they are
allocated to the smallest Company of cash-generating
units for which a reasonable and consistent allocation
basis can be identified.

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 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 profit or loss, unless
the relevant asset is carried at a revalued amount,
in which case the impairment loss is treated as a
revaluation decrease.

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 recognised
for the asset (or cash-generating unit) in prior years.
A reversal of an impairment loss is recognised
immediately in profit or loss.

1.B.11 Inventories

Inventories are stated at the lower of cost and net
realisable value. Net realisable value represents the
estimated selling price for inventories less all estimated
costs of completion and costs necessary to make
the sale. Cost is determined on the basis of weighted
average method.