NOTES ANNEXED TO AND FORMING PART OF BALANCE SHEET AS AT 31.03.2015 AND STATEMENT OF PROFIT AND LOSS AND ALSO THE CASH FLOW STATEMENT FOR THE YEAR ENDED ON THAI1 DATE

Note -1 Company Overview:

The company in the field of turnkey execution - from design , detail engineering , manufacture , supply, installation , testing and commissioning of complete range of Hydro mechanical equipment of hydro electric power and irrigation projects . The company is also diversified in the real estate, hotel and infra structures segments etc.

1. STATEMENT OF SIGNIFICAN ACCOUNTING POLICIES

1.1 ACCOUNTING CONVENTION:

The financial statements of the company have been brpared to comply with the Indian Generally Accepted Accounting Principles (Indian GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as brscribed under Section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014 the provisions of the Act (to the extent notified).

The financial statements have been brpared under the historical cost convention method on an accrual basis except for certain fixed assets which are carried at revalued amounts. The accounting policies have been consistently applied by the company and are consistent with those used in the brvious year. Claims of liquidated damages on supplies, Warranties, fuel escalation charges payable to the electricity board which are accounted for on acceptance and other claims accounted for receipt/ payment basis, In view of uncertainty involved.

12 FIXED ASSETS AND DEbrCIATION:

(a) Fixed Assets (Other than land & building, plant & machinery of the company which have been re-valued and stated at the revalued figures ) are stated at cost net of cenvat less accumulated debrciation and impairment losses, if any. Cost of acquisition or construction is inclusive of freight, duties, taxes and incidental/broperative expenses and interest on loans attributable to the acquisition of assets up to the date of commissioning of assets . Capital subsidy received against specific assets is reduced from the value of relevant fixed assets .

(b) The debrciation on Fixed assets is provided to the extent of debrciable amount on WDV method of debrciation except in the case of assets pertaining to Hotel and Cineplex divisions where Debrciation is provided on SLM Method. Debrciation is provided based on useful life of the asset as brscribed in schedule II to the Companies Act 2013.

(c) Lease hold land are not amortized.

1.3 Expenditure on New project and substantial expansion

Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which is neither related to the construction activity nor is incidental thereto is charged to the statement of profit and loss. Income earned during construction period is deducted from the total of the indirect expenditure.

B) Hotel Division :

Stock of operating supplies i.e. crockery, cutlery, glassware, utensils, linen etc. in circulation are written off as and when issued from the stores .

1.5 Foreign currency Transaction :

a) Transactions in foreign currencies are recorded on initial recognition at the exchange rates brvailing on the date of  the transaction or at rates closely approximate the rate at the date of the transaction.

b) Monetary items (i.e. receivables, payables, loans etc) denominated in foreign currencies at the year end are reported using the exchange rate brvailing at tire reporting date. In case of non monetary items, which are measured in terms of

Historical Cost denominated in a foreign currency, are reported using the exchange rate at die date of the transactions. Exchange differences arising on the settlement of monetary Items or on reporting monetary items of company at rates different from tiiose at which they were initially recorded during the year, or reported in brvious financial statements, are recognized as Income or as Expenses in the year which they arise.

1.6 Revenue Recognition:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the Revenue can be reliably measured. Revenue from operations (gross) is net of adjustments on account of cancellation  returns. Excise duty deducted in the revenue (gross).

a) Engineering Division :

i) Accounting of construction contracts:

In case of item rates contracts on the basis of physical measurement of work actually completed on the basis of running bills approved by the buyers at the balance sheet date , Escalation and erection receipts are accounted for on the basis of bills/invoices acknowledged or paid by lire project authorities.

ii) Accounting of supply contract sales of goods:-

Revenue from supply contract is recognized when the substantial risk and reward of ownership is transferred to the buyer which coincides with the dispatches of the goods to the customers.

iii) Accounting policy for claims :-

Claims are accounted as income in the year of acceptance of Arbitration award by client or evidence of payment received.

iv) Accounting for Joint venture Contracts: -

a) Contracts executed in joint venture under work sharing arrangement (Consortium) are accounted in accordance with the Accounting policy followed by the company as that of an independent contracts to the extent of company's share in the work executed .

> In respect of contract executed in joint ventures under profit sharing arrangement (Assessment as AOP/Firm 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 investment, loans and advance or current liabilities.

b) Hotel and Cinema Divisions :

Sales comprises of sales of goods, room sales etc. are excluding sales tax/VAT. It is being accounted for net of returns/ discount/claims etc .

c) Real estate Division/Projects:

For projects commenced on or after l-April-2012 and also to projects which have already commenced but where revenue is being recognized for the first time on or after l-April-2012.

Revenue from constructed properties/project is recognized in accordance with the "Revised guidance note issued by the institute of Chartered Accountants of India ("ICAI") on "Accounting for Real Estate Transaction (Revised 2012).

The estimates of salable area and cost are revised periodically by the management. The effect of such changes to estimates is recognized in the period such changes are determined. As per this guidance Note, the revenue have been recognized on percentage of completion method provided all of the following conditions are meet at the reporting date:-

i) Required critical approvals for commencement of the project have been obtained .

ii) At least 25% of estimated construction and development cost (Excluding land cost) have been incurred.

iii) At least 25% of the saleable project area is secured by the agreements to sell/application form (containing salient terms of the agreement to sell) and.

iv) At least 10% of the total revenue as per agreement to sell are realized in respect of these agreements .

d) Dividend Incomes: Revenue is recognized when the shareholder's right to receive payment is established by the balance sheet date . Dividend from subsidiaries is recognized even if the same is declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the Companies Act., 2013.

e) Income of interest on refund of income tax is accounted for in the year, the order is passed by the concerned authority.

1.7 Cost of Revenue (Real estate Division):

Cost of constructed properties/project includes cost of land (including cost, of development right/land under agreements to purchase) estimated internal development charges, direct overheads construction costs and development/construction materials, which is to the statement of profit and loss based on the revenue recognized as per the accounting policy, in consonance with the concept of matching costs and revenue, final adjustment is made upon completions of the specific project. Cost incurred /items purchased specifically for projects are taken as consumed as and when incurred/ received.

1.8 Unbilled receivable:

Unbilled receivables disclosed under "Other current Assets" rebrsents revenue recognized based on percentage of completion method over and above the amount due as per the payment plans agreed with the customers.

1.9 INVESTMENTS:

Investments that are readily realizable and intended to be held for not more than a year from the dale on which such investments are made, are classified as current investments. All other investments are classified as long Term Investments on initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, Provision for diminution in the value is made to recognize a decline other than temporary in the value of the investments.

1.10 RESEARCH AND DEVELOPMENT:

The revenue expenditure on research and development if any is charged as an expense in die year in which it is incurred. Capital expenditure if any is included in fixed assets

1.11 Borrowing costs:

Borrowing costs directly attributable to die acquisition, construction or production of an assets that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consists of interest and other costs that an entity incurs in connection with the borrowing of funds.

1.12 TAXATION :

(a) Current & Deferred Tax

Tax expense comprises of current tax and deferred tax. Current tax is measured at die amount expected to be paid to the tax authorities, using die applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognised only to the extent diat there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case diere are unabsorbed debrciation or losses, are recognised if diere is virtual certainty that sufficient future taxable income will be available to realize the same.

Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.

(b) Dividend Tax

Tax on distributed profits payable in accordance with the provisions of section 115 O of the Income Tax Act., 1961 which is accounted for in accordance widi the Guidance Not on Accounting for Corporate Dividend tax is regarded as a tax on distribution of profits and is not considered in determination of profits for the year.

1.13 Retirement and other employee benefits:

a) Retirement benefit in the form of provident fund is a defined benefit obligation of die company and die contributions are charged to the statement of profit and loss of the year when the contributions to the funds are due. The company is liable to meet the Shortfall, if any , in payment of intent at the rates declared by the central Government, and such liability is recognized in the year of shortfall.

b) Gratuity:

Gratuity liability is a defined benefit obligation of the company. The Company provides for gratuity to all eligible employees. The benefit is in the form of Lump sum payments to vested employees on resignation, retirement, 011 death while in employment or on termination of employment of and amount equivalent to 15 days basic salary payable to each completed year of services. Vesting occurs upon completion of 5 years of services. The company has not made annual contributions to funds administered by trustees or managed by insurance companies. Actuarial valuation for the liabilities has been provided as per report submitted by the certified valuer.

c) Leave Salaries:

Liabilities for privilege leave benefits, in accordance with the rules of the company is provided for, as brvailing salary rate for the entire un-availed leave balance as at the balance sheet date. Actuarial valuation for the liabilities has been provided as per report submitted by the certified valuer.

1.14 Impairment of assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss 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 estimation of recoverable amount

1.15 Provisions, contingent liabilities & Assets:

A Provision is recognized when an enterprise has a brsent obligation as a result of past event, it is probable that an outflow of resources will be required to settled the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not disclosed to its brsent value and are determined based on best management 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 . Other contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statement.

1.16 Earning per Share:

Basic earnings per share is calculated by dividing the Net Profit or Loss for the year attributable to equity share holders (After deducting taxes etc.) by the weighted average number of the equity shares outstanding during the year are adjusted for the effect.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year are attributable to equity share holders and the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares.

1.17 Use of Estimate:

The brparation of financial statements in conformity with the generally accepted accounting principles (GAAP) requires the management to make judgment, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and Liabilities and the disclosure of contingent liabilities, at the end of the reporting period.

Although these estimates are based upon management's best knowledge of current events and actions , uncertainty about these assumptions and estimates could result in the out comes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

1.18 Operating Lease:

Operating Lease receipts and payments are recognized as income or expense in the statement of profit and loss as per the terms of the lease agreement.

1.19 Cash flow statement:

The Cash flow statement is brpaid using "in direct method " set out in Accounting Standard - 3 cash flow statement "and brsents the cash flow by operating, investing and financing activities of the company. Cash and Cash equivalents brsented in the cash flow statement consist of cash on hand and highly liquid bank balances.

2.45 Figures for brvious year have been re-arranged/regrouped wherever necessary to Make them comparable.

2.46 Note 1 & 2 form an integral Part of the Balance Sheet & Statement of Profit and Loss and Cash Flow Statement have been duly authenticated.

SIGNED FOR IDENTIFICATION

For M.C. BHANDARI & CO.

Firm's Registration No. 303002E

CHARTERED ACCOUNTANTS

(S.K. MAHIPAL)

 PARTNER M.No. 70366

For and on behalf of Board of Directors

(D. P. KOTHARI) '

Managing Director  (DIN:00220342)

(Sunil Kothari)

Joint Managing DIRECTOR

 (DIN: 00220940)

(REENAJAIN)

(Company Secretary)

S.K.Jain

(C.F.O.)

Place: Delhi  

DATED: 30.05.2015