A) Accounting Concepts :
The company follows the Mercantile system of Accounting and recognises
Income and Expenditure on Accrual basis. The accounts are prepared on
historical cost basis, as a going concern, and are consistent with
generally accepted accounting principles subject to the comments made
in our audit report of even date.
B) Fixed Assets :
Fixed Assets are recorded at cost of acquisition or construction,
Expenses related to Load Management System Department are capitalised
except Rs.24.98 Crores.
C) Investments :
Investments are stated at cost/acquisition.
D) Foreign Currency Transactions :
Income and Expenditure and Assets and Liabilities related to foreign
currency transactions are related at exchange rates prevailing on the
date of payment and receipt. Transaction of imported raw materials are
translated at exchange rates prevailing on the dates on which the
material was physically received by the company or on the dates on
which payments were made.
E) Inventories :
FINISHED GOODS :
Valued at Cost, Cost for own manufactured goods includes material,
labour and related factory overheads excluding depreciation.
Considering raw material, labour and related overheads.
RAW MATERIALS :
At cost, FIFO method is used wherever applicable.
F) Research and Development :
Research and Development Cost (other than cost of fixed assets
acquired) are charged as an expense in the year in which they are
G) Public Issue Expenses :
Public Issue Expenses are amortised proportionately over a period of
H) Gratuity :
Gratuity and other retirement benefits to employees are considered only
on the basis of actual payment.
I) Depreciation :
Depreciation on fixed assets is provided on written down value at the
rates prescribed under Schedule XIV of the companies Act, 1956. However
no depreciation is charged by the Management on LTLMS system under
J) Contingent Liabilities :
Contingent Liabilities are not provided for, but are disclosed by way
of Notes to Accounts.
K) Revenue Recognition :
Technical Knowhow Fees, Preliminary Expenses, Testing Equipment and
Public Issues Expenses are amortised proportionately over a period of
L) The loans granted to the companies under the same management, as
defined under Section 370 1(B) of the Companies Act, 1956, have been
M) Events occurring after the Balance Sheet Date :-
There is a dispute between the Company & Maharashtra State Electricity
Board regarding fulfilment of LTLMS installation order. Now the matter
has been referred to Arbitrators and the same is pending with
Arbitrators for final award.