A) System of Accounting
These financial statements are prepared in accordance with Indian
Generally Accepted Accounting Principles (GAAP) under the historical
cost convention on the accrual basis except for certain financial
instruments which are measured at fair values. GAAP comprises mandatory
accounting standards as prescribed 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).
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use.
B) Fixed Assets
i) All fixed assets are valued at cost net of Cenvat unless if any
assets are revalued and for which proper disclosure is made in the
ii) In the case of ongoing projects, all pre-operative expenses for the
project incurred upto the date of commercial production are capitalized
and apportioned to the cost of respective assets.
Depreciation on all the assets has been provided on Straight Line
Method (SLM)as per Schedule II of the Companies Act, 2013.
Assets individually costing Rs.5,000 or less are depreciated fully in the
year of purchase.
The general practice adopted by the Company for valuation of inventory
is as under
Raw materials : *At lower of cost and net realizable value. Store &
spares : At cost (weighted average cost)
Work in process : At cost
Finished goods : At cost or net realizable value, which ever is lower
(Also refer Accounting Policy G) Traded goods : At cost Scrap material
: At cost or net realizable value, which ever is lower
*Material and other supplies held for use in the production of the
inventories are not written down below cost if the finished goods in
which they will be incorporated are expected to be sold at or above
Investments are valued at cost of acquisition, which includes charges
such as Brokerage, Fees and Duties.
F) Expenditure during construction period
Expenditure incurred on projects under implementation are being treated
as pre-operative expenses pending allocation to the assets which are
being apportioned on commencement of commercial production.
G) Excise Duty
The Excise duty payable on finished goods dispatches is accounted on
the clearance thereof from the factory premises. Excise duty is
provided on the finished goods lying at the factory premises and not
yet dispatched as at the year end as per the Accounting Standard 2
Valuation of Inventories
H) Customs Duty
Customs Duty payable on imported raw materials, components and stores
and spares is recognized to the extent assessed by the customs
I) Foreign Currency Transaction
Foreign currency transactions during the accounting year are translated
at the rates prevalent on the transaction date. Exchange differences
arising from foreign currency fluctuations are dealt with on the date
of payment/receipt. Assets and Liabilities related to foreign currency
transactions remaining unsettled at the end of the year are translated
at the year end rate. The exchange difference is credited / charged to
Profit & Loss Account in case of revenue items and capital items.
J) Provision for Gratuity
Provision for Gratuity is made on the basis of actuarial valuation
based on the provisions of the Payment of Gratuity Act, 1972.
K) Leave Salary
Provision is made for value of unutilized leave due to employees at the
end of the year.
L) Customs Duty Benefit
Customs duty entitlement eligible under pass book scheme / DEPB is
accounted on accrual basis. Accordingly, import duty benefits against
exports affected during the year are accounted on estimate basis as
incentive till the end of the year in respect of duty free imports of
raw material yet to be made.
M) Amortization of Expenses
i) Equity Issue Expenses :
Expenditure incurred in equity issue is being treated as Deferred
Revenue Expenditure to be amortized over a period of ten years.
ii) Preliminary Expenses :
Preliminary expenses are amortized over a period of ten years.
iii) Debenture Issue Expenses :
Debenture Issue expenditure is amortized over the period of the
N) Impairment of Assets
The Company determines whether a provision should be made for
impairment loss on fixed assets (including Intangible Assets), by
considering the indications that an impairment loss may has occurred in
accordance with Accounting Standard - 28 Impairment of Assets.
Where the recoverable amount of any fixed assets is lower than its
carrying amount, a provision for impairment loss on fixed assets is
O) Revenue Recognition
Sales/Income of contracts/orders are booked based on work billed.
Sales are net of sales return & trade discounts.
P) Contingent Liability :
1 Unprovided Contingent Liabilities are disclosed in the accounts by
way of notes giving the nature and quantum of such liabilities.