Note [2] - Material Accounting Policies

1. Basis of preparation of Financial Statements

a) Statement of Compliance:

The financial statements have been prepared in
accordance with Indian Accounting Standards (Ind -AS)
as notified by Ministry of Corporate Affairs under the
Companies (Indian Accounting Standards) Rules, 2015
and subsequent amendments thereof as well as with the
additional requirements applicable to financial statements
as set forth in Companies Act, 2013 and amended thereof.

b) Basis of measurement

The financial statements have been prepared on a going
concern basis and on an accrual method of accounting.
Historical cost is used in preparation of the financial
statements except as otherwise mentioned in the policy.

c) Functional and presentation currency

The financial statements are prepared in INR, which is the
Company's functional currency.

d) Use of Estimates and Judgments

The preparation of the financial statements in conformity
with Ind AS requires management to make judgements,
estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may
differ from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised prospectively.

Critical estimates and judgements in applying accounting
policies

Estimates and judgements made in applying accounting
policies that have significant effect on the amounts recognized
in the financial statements are as follows:

i) Revenue

The Company uses input method based on cost approach
in accounting for the revenue in respect of construction
contracts. Use of input method requires the Company to
estimate its costs relative to the total expected costs in the
satisfaction of its performance obligation. The estimates
are assessed continually during the term of the contract
and the company re-measures its progress towards
complete satisfaction of its performance obligations
satisfied over time at the end of each reporting period.

Company updates its estimated transaction price at each
reporting period, to represent faithfully the circumstances
present at the end of the reporting period and the changes
in circumstances during the reporting period.

ii) Property, plant and equipment

The charge in respect of periodic depreciation is derived
after estimating the asset's expected useful life and
the expected residual value at the end of its life. The
depreciation method, useful lives and residual values of
Company's assets are estimated by management at the
time the asset is acquired and reviewed during each
financial year.

iii) Employee Benefit Plans

Employee defined benefit plans and long term benefit
plans are measured on the basis of actuarial assumptions.
However, any changes in these assumptions may
have impact on the reported amount of obligation and
expenses.

iv) Provisions and contingencies

Assessments undertaken in recognising provisions and
contingencies have been made as per the best judgement
of the management based on the current available
information.

2. Property, Plant & Equipment (PPE)

Property, plant and equipment are carried at cost less
accumulated depreciation and accumulated impairment
losses, if any. Such cost includes the cost of replacing
part of the plant and equipment and borrowing costs on
Eligible Assets if the recognition criteria are met.

When significant parts of plant and equipment are
required to be replaced at intervals, the Company
depreciates them separately based on their specific useful
lives. Likewise, when a major inspection is performed, its
cost is recognised in the carrying amount of the plant and
equipment as a replacement if the recognition criteria
are satisfied. All other repair and maintenance costs are
recognised in profit or loss as incurred.

Significant components with different useful lives are
accounted for and depreciated separately.

Depreciation on property, plant and equipment (other
than those used abroad under contract) is charged on
straight-line method as per the useful life prescribed in
Schedule II of the Companies Act, 2013, except in the
following items where estimated useful life is based on
technically assessed estimated useful life:-

Depreciation methods, useful lives and residual values are
reviewed in each financial year and changes, if any, are
accounted for prospectively.

Property Plant & Equipment costing Rs. 10,000/- or less
and those whose written down value as at the beginning
of the year is Rs.10,000/- or less, are depreciated fully.

At erection / project sites: The cost of roads, bridges and
culverts is fully amortized over the tenure of the contract,
while sheds, railway sidings, electrical installations and
other similar enabling works (other than temporary
structures) are depreciated over the tenure of the contract
after retaining residual value, if any.

Assets used outside India pursuant to long term contracts
are depreciated over the duration of the initial contract.

Temporary structures are fully depreciated in the year of
construction.

An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss
arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the
carrying amount of the asset) is included in the statement
of profit and loss when the asset is derecognised.

3. Leases

At the inception of an arrangement, the Company
determines whether such an arrangement is or contains a
lease.

a. Right-of-use assets

Right-of-use assets are amortised over the shorter of the
lease term and their useful lives unless it is reasonably
certain that the Company will obtain ownership by the
end of the lease term.

b. Lease liabilities

Upon initial recognition, assets taken on lease are
capitalized under right-of-use assets at cost which
comprises initial measurement of lease liability at present
value, initial lease payments less incentives, initial direct
costs and estimated cost of dismantling and removing the
underlying assets, if any.

Lease payments made under leases are apportioned
between the finance expense and the reduction of
the outstanding lease liability. The finance expense is
allocated to each period during the lease term so as
to produce a constant periodic rate of interest on the
remaining balance of the liability.

c. Short term leases and leases of low-value assets

The Company applies the short-term lease recognition
exemption to its short-term leases (i.e., those leases
that have a lease term of 12 months or less from the
commencement date and do not contain a purchase
option). It also applies the lease of low-value assets
recognition exemption that are considered to be low
value. Lease payments on short-term leases and leases of
low-value assets are recognised as expense on a straight¬
line basis over the lease term.

d. For Assets given on finance lease, the Company
recognizes finance income over the lease term using
effective interest rate method. Initial direct costs incurred
are included in the initial measurement of the finance
lease receivable and reduce the amount of income
recognized over the lease term.

Lease income arising from operating lease is recognized
as income over the lease period on a straight-line basis
except where the periodic increase in lease rentals is in
line with expected general inflation.

4. Intangible assets

Intangible items costing more than D10000/- are
evaluated for capitalization and are carried at cost less
accumulated amortization and accumulated impairment,
if any.

Intangible assets are amortised in Statement of Profit
and Loss on a straight-line method over the estimated
useful lives from the date that they are available for use.
The estimated useful lives for the intangible assets are as
follows:

Software 3 years

Others 10 years

Intangible assets having WDV D10000/- or less at the
beginning of the year are amortized fully.

Amortization period and amortization methods are
reviewed in each financial year and changes, if any, are
accounted for prospectively.

Research and development expenditure

Expenditure on research activities is recognized in
statement of profit and loss as incurred. Expenditure
on development activities is capitalized only if the
expenditure can be measured reliably, the product or
process is technically and commercially feasible, future
economic benefits are probable and the company intends
to and has sufficient resources to complete development
and to use or sell the asset. The expenditure capitalized
includes the cost of materials, direct labour, overhead
costs that are directly attributable to preparing the asset
for its intended use, and borrowing costs, if any.

Assets acquired for purposes of research and development
are capitalized.

5. Borrowing costs

Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, are added
to the cost of such assets.

An asset that necessarily takes a substantial period of
time, considered as more than twelve months, to get
ready for its intended use or sale is a qualifying asset for
the purpose.

All other borrowing costs are recognized in the statement
of profit and loss in the period in which they are incurred.

6. Investments in Joint ventures

Investments in joint ventures are accounted at cost less
impairment losses, if any.

If the intention of the management is to dispose the
investment in near future, it is classified as held for sale
and measured at lower of its carrying amount and fair
value less costs to sell.

7. Inventories

Inventory is valued at cost or net realizable value,
whichever is lower. In respect of valuation of finished
goods and work-in-progress, cost means factory cost. In
respect of raw material, components, loose tools, stores
and spares cost means weighted average cost.

8. Revenue from contracts with customers

Revenue from contract with customers is recognized
when a performance obligation is satisfied by transfer of
promised goods or services to a customer.

For performance obligation satisfied over time, the
revenue recognition is done by measuring the progress
towards complete satisfaction of performance obligation.
The progress is measured in terms of a proportion of
actual cost incurred to-date, to the total estimated cost
attributable to the performance obligation. i.e input
method.

The Company transfers control of a good or service over
time and therefore satisfies a performance obligation and
recognises revenue over a period of time if one of the
following criteria is met:

(a) the customer simultaneously consumes the benefit
of the Company's performance or

(b) the customer controls the asset as it is being created/
enhanced by the Company's performance or

(c) there is no alternative use of the asset and the
Company has either explicit or implicit right of
payment considering legal precedents,

In all other cases, performance obligation is considered
as satisfied at a point in time.

The revenue is recognised to the extent of transaction
price allocated to the performance obligation satisfied.
Transaction price is the amount of consideration to which
the Company expects to be entitled in exchange for
transferring goods or services to a customer excluding
amounts collected on behalf of a third party.

Other Income

Dividend income is recognized in statement of profit and
loss on the date on which the Company's right to receive
payment is established.

Interest Income is recognized using effective interest rate
method.

Claims for export incentives/ duty drawbacks, duty
refunds and insurance are accounted for on accrual basis.

9. Foreign currency Translation/Transaction

Transaction in foreign currencies are initially recorded at
the exchange rate prevailing on the date of the transaction
first qualifies for recognition.

Foreign currency denominated monetary assets and
liabilities are translated into the functional currency at
exchange rates in effect at the end of each reporting
period. Foreign exchange gains or losses arising from
settlement and translations are recognized in the
statement of profit and loss.

Non-monetary assets and non-monetary liabilities
denominated in a foreign currency and measured
at historical cost are translated at the exchange rate
prevailing at the date of transaction.

10. Employee Benefits
Defined contribution plans

The Company's contribution to Pension fund including
Family Pension Fund for the employees is covered under
defined contribution plan and is recognized as employee
benefit expense in statement of profit and loss in the
periods during which services are rendered by employees.

Defined benefit plans

The Company's gratuity scheme, provident fund scheme,
travel claims on retirement and post-retirement medical
facility scheme are in the nature of defined benefit plans.

The liability recognized in the balance sheet in respect
of these defined benefit plan is the present value of the
defined benefit obligation at the end of the reporting
period less the fair value of plan assets, if any. The defined
benefit obligation is calculated annually by independent
actuaries using the projected unit credit method.
The present value of the defined benefit obligation is
determined by discounting the estimated future cash
outflows using an appropriate government bond rate that
have terms to maturity approximating to the terms of the
related liability.

Remeasurements comprising actuarial gains and losses
as well as the difference between the return on plan
assets and the amounts included in net interest on the net
defined benefits liability (asset) are recognized in other
comprehensive income (net of income tax).

Other expenses related to defined benefit plans are
recognized in statement of profit and loss.

Long term Leave Liability

The Company measures the expected cost of accumulating
compensated absences as the additional amount expected
to be paid as a result of the unused entitlement that has
accumulated at the end of the reporting period. Expense on
non-accumulating compensated absences is recognized
in the period in which the absences occur. The Company
records a liability for accumulated balance based on
actuarial valuation determined using projected unit credit
method. Remeasurements and other expenses related to
long term benefit plans are recognized in statement of
profit and loss.