1. Method of Accounting: The Financial Statements have been prepared
on historical cost convention. The Company follows the accrual basis of
accounting. The Financial Statements are prepared in accordance with
the accounting standards specified in the Companies (Accounting
Standards) Rules, 2006 notified by the Central Government in terms of
Section 211(3C) of the Companies Act, 1956.
2. Revenue Recognition: Sales includes inter-divisional transfers,
sale of scrap, Sales Outsource Products, Sales related to Engineering
Procurement and Contract Services, Excise duty Paid, Value Added tax
and Invoices for price escalation as per Contracts with the relevant
customers on accrual basis.
3. Fixed Assets: Fixed Assets are stated at cost less accumulated
depreciation up to the year. Expenditure incurred on improvement or
replacement, which in the opinion of the management is likely to
substantially increase the life of the assets and future benefits from
it, is capitalized. Capital expenditure includes advances for assets
under erection/ installation are being grouped under capital work in
4. Depreciation: Depreciation is charged on Straight Line basis at
rates specified in Schedule XIV of the Companies Act.1956. Depreciation
on addition / deletion or discarded Fixed Assets during the year is
charged on pro - rata basis.
5. Expenditure during construction period: All pre-operative project
expenditure (net of income accrued), including interest on borrowings
incurred up to the date of installation is capitalized are added
pro-rata to the cost of fixed assets. Foundation costs are allocated
as certified by management.
6. Investment: Long-term investments are valued at cost. Provision is
made for diminution, other than temporary, in the value of investments.
a) Inventories of finished goods are valued at lower of costs or net
realizable value inclusive of excise duty. Work in process (including
finished stock pending QC inspection) is valued at cost representing
material, labour and apportioned overheads as certified by the
Other inventories are valued at cost. Materials related to Projects
under implementation are valued at standard cost.
b) Cost of work-in-progress and finished goods includes material cost,
labour cost, and manufacturing overheads absorbed on the basis of
normal capacity of production.
8. Provident Fund and Retirement Benefits: Contribution to Provident
Fund is accounted on actual liability basis. Provision for Gratuity and
Leave Encashment is made based on actuarial valuation.
9. Excise Duty: Excise Duty payable on finished goods held as stock in
the works is included in the expenditure and in such stocks as per the
provisions of Section 145 of the Income tax Act, 1961.
10. Foreign Currency Transactions: The Company has no Branch offices
outside India. The Foreign currency transaction are recorded on initial
recognition in the reporting currency by applying the exchange rate
prevailing at the date of transaction. Any Income or Expense on account
of exchange rate difference is recognized in the Income and Expenditure
11. Borrowing Costs: Borrowing costs that are attributable to the
acquisition, construction or production of qualifying assets are
capitalized as part of the cost of such assets. A qualifying asset is
one that necessarily takes a substantial period of time to get ready
for its intended use. All other borrowing costs are charged to revenue.
12. Income Tax: Provision for Current Income Tax is made after
considering Company''s claims under the Income Tax Act, 1961. This
Liability is calculated at the applicable tax rate or Minimum Alternate
Rate under Section 115JB of the Income Tax Act 1961 as the case may be.
13. Deferred Tax : Deferred Tax is Calculated at the tax rates and
Laws that have been enacted or substantially enacted as of Balance
Sheet date and is recognized on timing differences that originated in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax assets, subject to consideration of prudence are
recognized and carried forward only to the extent that they can be
14. Impairment of Assets: The Company has examined carrying cost of
its identified Cash Generating Units (CGU) by comparing present value
of estimated future cash flows from such CGUs, in terms of Accounting
Standard-28 on impairment of Assets, and in absence of any indication
of being potential impairment of Assets, no provision for impairment is
required as assets of none of CGUs are impaired during the financial
year under consideration.
15. Uses of Estimates: The preparation of financial statements
requires estimates and assumptions to be made that affect the reported
amount of assets and liabilities on the date of financial statements
and the reported amount of revenue and expenses during the reporting
period. Difference between the actual results and estimates are
recognised in the period in which results are known/materialised.
16. Derivative Contracts: Company as such in the current financial
year has entered into any such Derivative Contracts.
17. Operating Cycle: Assets and liabilities other than those relating
to long- term contracts (i.e. Supply or turnkey contracts) are
classified as current if it is expected to realise or settle within 12
Months after the balance sheet date.
In case of long-term contracts, the time between acquisition of assets
for processing and realisation of the entire proceeds under the
contracts in cash or cash equivalent exceeds one year. Accordingly for
classification of assets and liabilities related to such contracts as
current, duration of each contract is considered as its operating cycle