The Financial accounts are brpared under the accrual basis at historical cost unless otherwise stated.

2.1.1      Land received from the Government as alienation/acquisition has been valued either at cost or estimated market value as indicated by State Government pending determination of liability.

2.1.2      The expenditure on development of open land is capitalized as part of the cost of land.

2.2          Other fixed assets are stated at cost. Cost includes, where applicable, allocation of expenditure during construction and expenditure as part of start up and commissioning.

2.3          Capital works, done internally, are valued at prime cost i.e., cost of direct labour, direct material and direct expenses

2.4.1      Initial pack of spares procured along with the plant, machinery and equipment are capitalized and debrciated in the same manner as plant and machinery.

2.4.2      When a major overhaul/revamping of the asset is carried out resulting in increase in future benefits from the existing beyond its brviously assessed standard of performance, additional expenditure incurred for such overhauling/revamping will be capitalized in the year in which the overhauling/revamping of the asset is completed.

2.4.3      Any purchase of spares subsequent to purchase of machinery and fitted into the equipment only results in maintaining the brviously estimated standard of performance and does not improve the brviously estimated standard of performance, the same will be charged off to revenue in the year of purchase.

2.4.4      Worn out spares on replacement which were in integral part of the existing asset will be transferred to scrap at NIL value.

2.5          Where actual cost of fixed assets cannot be accurately ascertained, such assets are initially capitalized on the basis of estimated cost. On ascertaining actual, gross block is adjusted and debrciation is provided proportionately over the balance life of the asset.

2.6          Pending disposal, unserviceable fixed assets are removed from the Fixed Assets Register and shown under ?Other Current Assets? as a separate line item at the lower of their net book value and net realisable value. As and when the disposal of such assets takes place, the difference between the carrying amount and the amount actually realized will be recognized as Loss / Profit from sale of Fixed Assets.

2.7          Debrciation on fixed assets is charged on straight-line method over the indicative useful life provided in Schedule II of the Companies Act, 2013, as amended from time to time.

2.8.1      In respect of certain fixed assets, debrciation has been provided over the useful life arrived on the basis of technical evaluation and differences disclosed in the financial statements in line with the provisions of the Companies Act 2013.

2.8.2      When major revamping/overhauling of a fixed asset is carried out, the extended life of the asset will be technically evaluated for arriving at the estimated revised life of the asset and debrciation will be charged systematically over the balance useful life of the asset.

2.9          In respect of Plant and Machinery, life brscribed for ?continuous process plant for which no special rate has been brscribed? is adopted. 

2.10        Assets whose actual cost does not exceed `5000/-, debrciation is provided at the rate of hundred percent in the year of capitalization.

2.11        Debrciation of tangible fixed assets is computed based on the useful lives of significant components having minimum threshold value of 5% or more of the original cost of asset and having different useful lives from that of the residual asset.

                Useful life of the significant components are estimated by the internal technical experts.

                Principal Asset costing `1 Crore and above only are identified for the purpose of componentization of assets.

As at the end of each balance sheet date, the carrying amount of assets is assessed as to whether there is any impairment. If the estimated recoverable amount is less than its carrying amount, the impairment loss is recognized and assets are written down to their recoverable amount.

Inventories are valued on the following basis:

4.1

At weighted average Cost.

4.2         

4.3

All consumables drawn from the Central Stores are charged off to expense. Only in respect of ?A? and ?B? class consumables identified by Management from time to time, the stock at the Shop floor/Shop sub-stores are brought to inventory at the close of the year at the weighted average rate. However, moulds, rolls, dies etc., in use at the close of the year, are valued at issue rates with reference to the balance life, technically estimated.

4.4

                At estimated realizable value for scrap.

4.5

Issued tools, instruments, gauges etc. are amortized uniformly over their estimated life.

4.6

4.7         

4.8

4.9.1      Stores declared surplus / unserviceable are transferred to salvage stores for disposal, and charged to revenue.

4.9.2      Provision for the non-moving raw materials, consumables and spares for over three years is made as under:

Raw materials                         :   85% of the book value

Consumables and Spares   :   50% of the book value

4.10        Stationery, uniforms, medical and canteen stores are charged off to revenue at the time of receipt.

5.1          Claims on underwriters/carriers towards loss / damage are accounted when monetary claims are brferred.

5.2          Claims for refund of customs duty       including project imports/port trust charge/excise duty are accounted on acceptance/receipt.

5.3.1      Liquidated Damages on suppliers are accounted on recovery.

5.3.2      Liquidated damages levied by the customers are charged off on recovery/advise by the customers. A provision is created for the likely claims of Liquidated Damages for shipments made where a reliable estimation can be made.

5.4          Disputed/Time barred debts from Govt. Depts. & PSUs are not treated as Doubtful Debts, however, on a review appropriate provisions/write offs are made in the books of accounts on a case to case basis.

5.5          Provision for Doubtful Debts is made on the amounts due from other than Govt.Depts. & PSUs at the rates determined by the Board. (Less than one year ? Nil, One to Two years 10%, Two to Three years 25%, Three to Four years 50%, Four to Five years 80% and above Five years 100%).

5.6          Provision towards warranty against supplies: ?Provision for Contingencies & Warranty? to take care of rejected/returned material by customers is provided at 0.25% of turnover related to Manufactured Products.

6.1          Gratuity payable to eligible employees is administered by a separate Trust, which has taken a policy with LICGGF. Demands made by the trust on account of annual renewal brmium of the LIC policy are charged to Statement of Profit and Loss.

6.2          The retirement benefit relating to leave encashment is administered through a Group Leave Encashment Scheme with LIC of India. The annual demand raised by LIC based on actuarial valuation is charged to Statement of Profit and Loss.

6.3          Settlement Allowance: Employees are paid eligible amount at the time of separation (except on resignation and termination) for their settlement.

6.4          Pension Scheme for the eligible employees, as per Government Guidelines, is administered by a separate Trust, which has taken a policy with LIC of India. Company contributes to the Trust as per the provisions of the guidelines and contributions are charged to Statement of Profit and Loss.

7.1          Sales include Excise Duty

7.2.1      In case of sales Ex-Works contracts, sale is set up when the goods are handed over to the carrier/agent for desptach to the buyer and wherever customer?s prior inspection is stipulated, sale is accounted only after acceptance by customer?s inspector.

7.2.2      In the case of sales on FOR/FOB destination contracts, sale is set up considering the expected time in respect of despatches to reach the destination within the accounting period, subject to adjustments based on actual receipt of material at destination.

7.3          Where sale prices are not established,    sales are set up on provisional basis at prices likely to be realized.

7.4          Claims for additional revenue in respect of sales contracts/orders are accounted for as Sales in the year in which such revenue materializes.

8.1          Fixed Assets under the heads Land & Development, Roads & Bridges, Drainage, Sewerage and water system and Buildings & Internal Services are verified once in 3 years. All other Fixed Assets are verified once in the Financial Year. Reconciliation is made for all items except minor value items like miscellaneous shop equipment, furniture, office equipment etc., individually valued `2000/- and less.

8.2          Inventories of work-in-process,  finished goods, raw materials and  consumables in the Company brmises are verified at the end of the financial year.

8.3          Inventories of raw materials, stores and spares in the Central Stores are verified on perpetual basis as per norms fixed from time to time and reconciled. Provisional adjustments are made to revenue, in respect of discrepancies pending reconciliation.

9.1          Foreign currency transactions are recorded in the reporting currency by applying the exchange rate between the reporting currency and the foreign currency at the date of transaction.

9.2          Monetary items denominated in foreign currencies at the year end are restated at year end rates and Non-monetary items are carried at cost.

9.3          Exchange differences arising on settlement/restatement at rates different from those at which were initially recorded are recognized as income or as expenses in the year in which they arise.

10.1        Investments that are readily realizable and intended to be held for not more than a year are classified as current investments and are carried at lower of cost or fair value determined on an individual investment basis.

10.2        All other investments are classified as long term investments and are carried at cost after providing for any diminution in value, if such diminution is of a permanent nature.

                Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as a part of the cost of such assets. All other borrowing costs are charged to revenue.

                Deferred Tax is recognized, subject to the consideration of prudence, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets are recognized to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Extra-ordinary and exceptional items are separately disclosed in the Statement of Profit & Loss.

A provision is recognized when the company has a brsent obligation as a result of 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 not discounted to its brsent value and are determined based on best 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.

All expenditure and income are accounted for under natural heads of accounts. Where necessary, allocation of expenditure on functional basis has been given by way of note to the financial statements.

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6.1          Gratuity payable to eligible employees is administered by a separate Trust, which has taken a policy with LICGGF. Demands made by the trust on account of annual renewal brmium of the LIC policy are charged to Statement of Profit and Loss.

6.2          The retirement benefit relating to leave encashment is administered through a Group Leave Encashment Scheme with LIC of India. The annual demand raised by LIC based on actuarial valuation is charged to Statement of Profit and Loss.

6.3          Settlement Allowance: Employees are paid eligible amount at the time of separation (except on resignation and termination) for their settlement.

6.4          Pension Scheme for the eligible employees, as per Government Guidelines, is administered by a separate Trust, which has taken a policy with LIC of India. Company contributes to the Trust as per the provisions of the guidelines and contributions are charged to Statement of Profit and Loss