I.            ACCOUNTING METHOD:

The financial accounts are brpared under the historical cost convention on accrual basis in accordance with the applicable Accounting Standards.  II.          USE OF ESTIMATES:

The brsentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that may affect the reported amount of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimated.III.        VALUATION OF INVESTMENTS:

a)    Long term investments are valued at cost after deducting provisions made, if any, for other than temporary diminution in the value.

b)    Short term investments are valued at lower of cost or fair market value.IV.         FIXED ASSETS:

a)  Tangible

     Fixed assets procured and capital works executed internally by the Company are shown at cost.

             b)  Intangible

     Expenditure incurred on software is capitalized under “Intangible Assets” and shall include expenditure incurred on:-

(i)           procurement of software

(ii)          acquisition/development of software

(iii)         upgradation/enhancement of existing software resulting in enhancement in economic benefit.

c)    Fixed Assets acquired with financial assistance from outside agency either wholly or partially are capitalised at net cost to the Company.V.           DEbrCIATION

a)    Debrciation on fixed assets is charged on the straight-line method as per the useful life brscribed in schedule II of the Companies Act, 2013, keeping a residual value of 5% except for computers and data processing units where no residual value is retained.

b)  Additions to assets costing ` 5000 or less are debrciated at 100%.

c)   Lease rent on leasehold land is amortised over the lease period.

d)    Intangible Assets are amortised over a period of five years or over a period of their useful life, whichever is less.

e)    Cost of loose tools, individually costing over ` 5000, is written off evenly over a period of five years, commencing from the year of purchase. The closing balance of loose tools is shown under current assets – inventories and the amortisation is shown as consumption.  VI.         VALUATION OF INVENTORIES:

Inventories are valued after providing for obsolescence / un-usability / deterioration determined on the basis of assessment by the management as under:-

(i)           Raw materials, stores and spares are valued at the weighted average cost.

(ii)          Equipment for specific projects are valued at cost.  In case of cancelled projects and surplus items, at cost or estimated realizable value, whichever is lower. Valuation of partial issues, where break-up values are not available, is based on technical estimates.

(iii)         Stock-in-transit including non-codified items are valued at cost.

(iv)         Inventory of Foreclosed Projects are valued at cost or estimated realizable value, whichever is lower.

(v)          Scrap is valued at cost or estimated realizable value whichever is lower.

(vi)         Work-in-Progress is valued as under:-

1)    Cost Plus Contracts:

“At costs incurred plus profits accrued up to the reporting date as per Contract/Letter of Intent”

2)    Fixed Price Contracts:

(a)       Where profit can be reliably measured:

“At costs incurred up to the reporting date plus profits recognized under percentage completion method in the proportion the actual costs incurred bear to the estimated total cost to completion as on that date.”

 (b)    Where loss is anticipated:

“When it is probable that total contract costs will exceed the total contract revenue, the expected loss is fully recognized as an expense immediately, irrespective of physical progress achieved on the reporting date.”

3)    Ship Repair Contracts:

(a)      Work done against contracts extending up to 12 months is valued at cost or realizable value, whichever is lower. Profit, if any, is recognized in the year in which the repair is completed.

(b)      For contracts extending beyond 12 months the valuation is done as per policy for construction contracts as stated above.

(vii)        Finished products are valued at lower of cost or net realizable value.

(viii)       Medical stores are charged off to revenue at the time of purchase.  VII.    SALES:

(i)           Sales against contracts are reflected in the accounts of the year in which the deliveries are made to the customer.

(ii)          Sale values are ascertained in accordance with the contractual provisions.

(iii)         Where the contract prices are not finalized, sales are accounted for on provisional basis.

(iv)         Additional revenue, in respect of contracts completed in earlier years, is accounted for as sales in the year in which such revenue materializes.

(v)          Credit notes issued to customers and deductions accepted are reduced from sales in the year in which they are effected.

(vi)         Sales include Excise Duty and Service Tax, wherever applicable, and exclude Value Added Tax, Central Sales Tax and Works Contract Tax etc.

VIII. MVAT / CENTRAL EXCISE DUTY / SERVICE TAX / TCS:

MVAT / Central Excise Duty / Service tax collected / receivable from customers, Tax collected at source is not treated as part of Company’s trading receipts.

IX.  INSURANCE CLAIMS:

Amounts due against insurance claims are accounted for on accrual basis.  In respect of claims not finally settled by the underwriters, credits are reckoned, based on the Company’s estimate of the realizable value.

X.   LIQUIDATED DAMAGES:

Liquidated damages recovered from suppliers’ bills are included in Other Income except for cost plus contracts.

XI.   INTEREST EXPENSES:

Interest charges other than interest on custom duty, which is treated as part of custom duty incurred during the year, are treated as part of overhead expenditure and are apportioned to various production jobs carried out during the year.XII.   EMPLOYEES BENEFITS:

(i)         The Company’s contribution to Provident Fund, Pension Fund, ESIC and Labour Welfare Fund, are recognized on accrued basis and there are no other obligations other than such contribution payable.

(ii)        The liability towards gratuity in respect of all employees is provided on the basis of actuarial valuation and is being remitted to a separate Trust.

(iii)       The liability towards encashment of leave is assessed at year end by actuarial method.

(iv)       Post Retirement Medical Benefits in respect of existing employees are provided on the basis of accrued basis for Executives and on actuarial valuation basis for Non Executives.

(v)        Traveling expenses are provided on estimate basis.XIII. VARIATION IN FOREIGN EXCHANGE RATES:

i)         Initial recognition

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

ii)       Conversion

       Foreign currency monetary items are reported using the closing rate.  Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Advances paid to Foreign suppliers for material/services are treated as non-monetary assets and consequently are reported using exchange rate at the date of transaction.

iii)      Exchange Differences

       Exchange differences arising on the settlement of monetary items or on reporting a company’s monetary items at rates different from those 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 in which they arise.  XIV. TAXES ON INCOME:

(i)    Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of Income tax Act, 1961.

(ii)    Deferred tax is recognized, on timing difference, being difference between taxable income and accounting income for the year that originate in one period and are capable of reversal in one or more subsequent periods and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

       Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

XV.  IMPAIRMENT OF ASSETS:

       Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount.  Recoverable amount being higher than assets’ net selling price and its value which is the brsent value of estimated future cash flows expected to arise from the continuing use of the assets and from their disposal at the end of useful life.XVI. PROVISIONS:        A provision is recognized when the Company has a brsent obligation as a result of past event; 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.

.   EMPLOYEES BENEFITS:

(i)         The Company’s contribution to Provident Fund, Pension Fund, ESIC and Labour Welfare Fund, are recognized on accrued basis and there are no other obligations other than such contribution payable.

(ii)        The liability towards gratuity in respect of all employees is provided on the basis of actuarial valuation and is being remitted to a separate Trust.

(iii)       The liability towards encashment of leave is assessed at year end by actuarial method.

(iv)       Post Retirement Medical Benefits in respect of existing employees are provided on the basis of accrued basis for Executives and on actuarial valuation basis for Non Executives.

(v)        Traveling expenses are provided on estimate basis.