STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES FOR THE YEAR ENDED 31st MARCH 2015 NOTE –

1. Basis of Preparation of Financial Statements:

The financial statements have been brpared and brsented under the historical cost convention, on accrual basis of accounting, except for certain fixed assets, which are revalued in accordance with generally accepted accounting principles in India and the provisions of the Companies Act, 2013. They are brpared in accordance with the Accounting Standards specified under section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of Companies (Accounts) Rules, 2014, and other relevant provisions to the extent applicable.

2. Use of Estimates:

The brparation of financial statements requires estimates and assumptions. These estimates and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and the estimates are recognised in the period in which the results are known / materialised.

3. Revenue Recognition:

(a) Sale of goods is recognised on completion of supplies as per the terms of the contract and on transfer of risk and reward.

(b) Sales include excise duty and adjustment for price variation and are net of claims accepted.

(c) In case of construction / erection contracts, revenue is recognised based on the stage of completion determined as per the terms of the contract. Sales / income are booked on the basis of running account bills based on completed work and are net of claims accepted. Escalations and other claims which are not acknowledged by customers are not taken into account.

(d) Interest income is recognised on time proportion basis. The insurance claims are accounted for on accrual basis based on fair estimation of sanctions by the insurance companies.

4. Fixed Assets:

Fixed assets are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less accumulated debrciation and impairment loss, if any.

5. Debrciation / Amortisation:

(a) Debrciation on fixed assets is provided on Straight Line Method at the rates and in the manner brscribed in Schedule II to the Companies Act, 2013, except as stated in (b) below.

(b) On the fixed assets of integral foreign branches, debrciation is provided on Straight Line Method. The applicable rates are based on the local laws and practices of the respective countries, except where the rates of debrciation are less than as brscribed in schedule II to the Act, the debrciation is provided as per the rates brscribed in Schedule II of the Act.

(c) In case of revalued assets, the difference between the debrciation based on revaluation and the debrciation charged on historical cost is recouped out of the revaluation reserve.

(d) Leasehold Land is amortised over the period of lease.

(e) Goodwill arising on amalgamation is amortised over a period of 5 years.

6. Investments:

Investments that are readily realisable and intended to be held for not more than 12 months are classified as current investments. All other investments are classified as long-term investment. Current investments are carried at the lower of cost and fair value. Long-term investments are carried at cost less diminution in value, if any. Provisions are recognized for any decline, other than temporary, in the carrying value of long term investments as determined by the management.

7. Inventories:

(a) Raw materials, Construction materials, Components and Stores and Spares are valued at lower of cost or net realisable value.

(b) Cost of inventories is determined by using the weighted average method.

(c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract, whichever is lower.

(d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when expected realisation is lesser than the carrying cost.

(e) Finished goods are valued at cost or net realisable value, whichever is lower and inclusive of excise duty.

(f) Tools and tackles are amortised over their estimated useful life.

(g) Scrap is valued at net realisable value.

8. Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expenses in the period in which they are incurred.

9. Impairment of Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any such indication exists, then recoverable amount of the asset is estimated. An impairment loss, if any, is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and the value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value based on an appropriate discount factor

The impairment loss recognised in a prior accounting period is reversed, if there has been a change in the estimate of recoverable amount.

10. Debenture / Preference Share Issue Expenses:

Expenses incurred for issue of secured debentures and brference shares made by the Company are written off as revenue expenditure during the year of issue.

11. Foreign Currency Transactions:

(a) Transactions denominated in foreign currencies are accounted for at the exchange rates brvailing on the dates of the transactions or that approximates the actual rate at the dates of transactions.

(b) Monetary items denominated in foreign currencies remaining unsettled at the year end are restated at the year end rates.

(c) Non-monetary items denominated in a foreign currency are stated at cost.

(d) Any income or expense on account of exchange difference, either on settlement or on translation, is recognized in Statement of Profit and Loss.

(e) Financial Statements of Overseas Integral Operations are translated as under:

i. Assets and liabilities are translated at the rate brvailing at the end of the year. Income and expenditure are translated on the yearly average exchange rate brvailing during the year.

ii. Fixed assets are translated at the average rate brvailing on purchase / acquisition of assets. Debrciation is accounted at the same exchange rate at which the assets are translated.

iii. The resultant exchange gains and losses are recognised in the Statement of Profit and Loss.

(f) Forward Exchange Contracts:

I. In case of transactions covered by forward exchange contracts which are not intended for trading or speculation purposes, brmium or discount is amortised as expense or income over the life of the contract.

II. Exchange difference on such contracts is recognised in the Statement of Profit and Loss in the year in which the exchange rates change.

III. Profit or loss arising on cancellation or renewal of such forward exchange contracts is recognised as income or expense for the year.

12. Excise Duty:

The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The amount of Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials consumed.

13. Leased Assets: Operating Lease:

i) Lease payments are recognised as expense in the Statement of Profit and Loss on straight line basis over the term of the lease.

ii) Assets given on operating lease are included in fixed assets. Lease income is recognised in the Statement of Profit and Loss on straight line basis over the term of the lease.

14. Employees Retirement and Other Benefits:

a) Short Term Employee Benefits:

Short term employee benefits are recognised as expenses at the undiscounted amount in the period during which the services have been rendered.

b) Long Term Employee Benefits:

1) Defined Contribution Plan:

The Company's contribution to Provident Fund and Superannuation Fund are charged to Statement of Profit and Loss on accrual basis.

2) Defined Benefit Plan:

i) Gratuity: The Company provides for the applicable gratuity based on actuarial valuation as per the Projected Unit Credit Method.

ii) Leave Encashment: The Company provides for the liability at the year end on account of unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.

iii) The cost of employee stock option attributable to current financial year is accounted for and charged to Statement of Profit and Loss.

15. Taxes on Income:

a) Current Tax:

Provision for current Income Tax is made on the estimated taxable income using the applicable tax rates and tax laws.

b) Deferred Tax

Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax asset is not recognised unless there is a virtual certainty as regards to the reversal of the same in future years.

16. Earnings Per Share:

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti dilutive.

17. Provisions and Contingencies:

a) A provision is recognised when there is a brsent obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

b) A disclosure for a contingent liability is made when there is a possible or brsent obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

c) Contingent assets are neither recognised nor disclosed in the financial statement.

18. Employees Stock Option Scheme:

Stock options granted to the employees of the company, under the Employees Stock Option Scheme are evaluated as per the accounting treatment brscribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess of market value of the stock option, as on date of grant over the exercise price of the option is recognised as deferred employee compensation and is charged to Statement of Profit and Loss as employee costs, on straight line method over the vesting period of the options.