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Accounting Policies of ITI Ltd. Company

Mar 31, 2015

1.00 Basis of Preparation of Financial Statements

1.01 The Financial Statements have been prepared as a going concern, in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention modified by accounting for fixed assets acquired free of cost or by gift, at the market value at the time of such acquisition and revaluation of certain fixed assets, on accrual basis of accounting. 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) and guidelines issued by the Securities and Exchange Board of India (SEBI). 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.

1.02 The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual result could differ from these estimates.

2.00 Fixed Assets

2.01 Fixed Assets are stated at cost of acquisition / installation (net of Modvat / Cenvat credit availed), less accumulated depreciation and impairment losses.

2.02 Fixed Assets acquired free of cost or gifted to ITI are stated at Market Value which is credited to the Capital Reserve, at the time of acquisition less accumulated depreciation and impairment losses.

2.03 Any Capital Grant-in-Aid given for a specifc project by any agency is initially credited to Grant-in-Aid (Capital) and this amount is adjusted to the statement of Proft and Loss over the useful life of the assets.

2.04 Expenditure on development of leasehold land is capitalized as Land Development Expenditure and is amortized over a period of 5 years, commencing from the year in which such expenditure is incurred.

2.05 Capital work in progress is stated at the amount expended up to the date of Balance Sheet.

2.06 In the event of revaluation of entire class of fixed assets, if the revalued amount is greater than the carrying amount of the fixed asset, such difference is taken to the revaluation reserve. If the revalued amount is lower than the carrying amount of the fixed asset and if the class of the asset has already been revalued, difference is set off against the amount available under the revaluation reserve for the same class of asset and excess thereof is charged to the statement of Profit and Loss.

3.00 Inventories

3.01 Raw materials, components and stores purchased for manufacturing/production activities are valued at lower of cost and net realizable value, after providing for obsolescence, if any. Cost is calculated on weighted average rate as at the end of the year. Where the same items are both purchased and manufactured, manufacturing costs are generally adopted.

3.02 Raw materials and production stores with ancillaries and fabricators are valued at lower of cost at the time of such issue and net realizable value, after providing for obsolescence, if any.

3.03 Manufactured items in Stock and Stock-in- Trade are valued at lower of cost excluding interest charges, administration overheads and sales overheads and at the net realizable value, after providing for obsolescence, if any.

3.04 Work-in-process

(i) Work-in-process (production) is valued on the basis of physically verified quantities at lower of cost excluding interest charges, administration overheads and sales overheads or at the net realizable value, after providing for obsolescence, if any.

(ii) Work-in-process (Installation) is valued at lower of cost as recorded in the Work Orders and net realizable value, after providing for obsolescence, if any.

3.05 Precious metals scrap is valued at net realizable value and brought to books at the year end.

4.00 Tools and Gauges

4.01 Expenditure on special purpose tools and fixtures is initially capitalized at cost and then amortized over production on a systematic basis, based on technical assessment.

4.02 Loose tools are charged to revenue at the time of issue.

5.00 Investments

Current Investments are carried at lower of cost and fair market value. Long term investments are carried at cost and provision for diminution in the value of such long term investments, other than temporary in nature, is made.

6.00 Intangible Assets

6.01 Expenses incurred during research phase till the establishment of commercial feasibility is charged off to Statement of Profit and Loss.

6.02 Expenditure on development of new products / technologies, development of software are capitalized individually at cost once their technical feasibility is established in accordance with the requirements of Accounting Standard 26, 'Intangible Asset'.

7.00 Depreciation

7.01 Depreciation is charged on Straight Line Method over the useful lives of the assets as estimated by the Management and the estimated useful lives are disclosed in Note No 13. Company believes that the useful lives as disclosed in Note No 13 best represent the useful lives of those assets based on internal assessment. However, independent technical evaluation by the external valuers is in progress. Hence the useful lives for those assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013. .

7.02 Depreciation on additions and deletions to fixed assets during a year is provided on pro rata basis as follows:

(a) Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

(b) In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.

7.03 Intangible assets are amortized and charged to revenue based on the economic benefits drawn by the company over the useful life not exceeding ten years based on techno commercial assessment.

7.04 In the case of depreciable assets which have been revalued, depreciation is calculated on straight line method on the revalued amount. Difference between depreciation on the asset based on revaluation and that on original cost, is transferred from revaluation reserve to the Statement of Proft and Loss.

8.00 Prior period items

Adjustments arising due to errors or omissions in the financial statements of earlier years are accounted under "Prior Period Adjustments", if the amount involved is Rs. 5.00 lakhs or more in each transaction.

9.00 Foreign currency transactions

9.01 Foreign currency transactions are recorded at the rates of exchange prevailing on the date of transaction. 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.

9.02 Exchange differences arising on the settlement of monetary items or on reporting Company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or expenses in the year in which they arise.

10.00 Revenue Recognition

a) Sales include Excise Duty & Service Tax and excludes Sales Tax.

b) Revenue from sale of goods is recognized based on valid sales contract.

c) Revenue from customer accepted sale of goods/other sale of goods is recognized on the date of dispatch of goods from the company's premises to the customer. In the case of FoR destination contracts, if there is a reasonable expectation of the goods reaching destination within the accounting period, revenue is recognized. Goods ready for dispatch but held in the Company's premises at the customers specific request is also recognized as sale of goods.

d) Where prices are not established, sales are set up provisionally at prices likely to be realized.

e) Export sales are treated as sales on issue of Bill of Lading.

f) Revenue from installation and commissioning services is recognized on completion of installation and commissioning.

g) Revenue from annual maintenance contracts relating to the year is recognized when the contracts are entered into on a time proportionate basis.

h) Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during the year.

Revenue Recognition on Construction / Turnkey Contracts

g) Revenue is recognized on percentage completion method. Contract revenue and costs associated with the contract are recognized as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. Expected loss on the contract is fully accounted.

11.00 Other Income

a) Insurance and Customs Duty claims are accounted as and when claims are accepted by the respective authorities. Rental income is accounted on the basis of lease agreements entered with the parties to whom premises of the company are given under lease. Interest income is recognized on a time proportionate basis taking into account the amount outstanding and the rate applicable.

b) Dividend is accounted when the right to receive dividend is established by the Balance Sheet Date.

12.00 Warranty Liability

Warranty liability for contractual obligation in respect of equipments sold to customers is accounted on the basis of an annual technical assessment.

13.00 Government Grants

a) Government grants relating to Revenue are initially credited to Grant-in- Aid(Revenue).

b) Where the grants are intended to compensate cost/s incurred in an accounting year, an amount of grant to the extent of related cost are recognized as income in the Statement of Profit and Loss.

(i) Where the grants are for purpose of giving immediate financial support/ compensation for expenses incurred in a previous accounting period, with no further related cost/s, these are recognized as Extraordinary income in the Statement of Profit and Loss in the year of receipt.

14. Employee Benefits

a) Short-term employee benefits are recognized as an expense at the un discounted amount in the Statement of Profit & Loss of the year in which the related service is rendered.

b) Post employment benefit viz. gratuity and other long term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognized as an expense in the Statement of Profit & Loss of the year in which the employee has rendered services. Expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit & Loss.

c) Expenditure related to voluntary retirement scheme (VRS) is written off in the year of incidence.

15.00 Borrowing Cost

Borrowing cost, that is directly attributable to the acquisition/production or construction of inventories or fixed assets which require a substantial period to get ready for its intended use or to bring them to saleable condition is capitalized as part of the cost of the inventory or fixed assets valuation respectively.

16.00 Impairment of Assets

At the end of each Balance sheet date, the carrying amount of assets are reviewed, if there is any indication of impairment based on internal / external factors. If the estimated recoverable amount is found lesser than the carrying amount, then the impairment loss is recognized and assets are written down to the recoverable amount.

17.00 Current Tax and Deferred Tax

a) Tax expense comprises of current income and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.

b) Deferred income taxes reflect the impact of current year's timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

c) Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

18.00 Trade Receivables

Provision for Doubtful Trade Receivables is made on a case to case basis, on detailed review.

19.00 Provisions / Contingencies:

A provision is recognized for a present obligation as a result of past events if it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date. A contingent liability is disclosed, unless the possibility of an outfow of resources is remote.

20.00 Earnings Per Share:

Basic earnings per share are calculated by dividing the net proof or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net proof or loss for the period attributable to equity shareholders and weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

21.00 Segment Reporting:

The Company has primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and rendering other associated / ancillary services and there are no other reportable segments.


Mar 31, 2014

1.00 Basis of Preparation of Financial Statements

1.01 The Financial Statements have been prepared as a going concern, under the historical cost convention modifed by accounting for fixed assets acquired free of cost or by gift, at the market value at the time of such acquisition and revaluation of certain fixed assets, on accrual basis of accounting, unless otherwise stated, in compliance with all material aspects with the Accounting Standards notifed by Companies (Accounting Standards) rules 2006 (as amended) and all the relevant provisions of the Companies Act, 1956 read with General Circular No. 15/2013 dated 13th September 2013, issued by Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013.

1.02 The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual result could differ from these estimates.

2.00 Fixed Assets

2.01 Fixed Assets are stated at cost of acquisition / installation (net of Modvat / Cenvat credit availed), less accumulated depreciation and impairment losses.

2.02 Fixed Assets acquired free of cost or gifted to ITI are stated at Market Value which is credited to the Capital Reserve, at the time of acquisition less accumulated depreciation and impairment losses.

2.03 Any Capital Grant-in-Aid given for a Specific project by any agency is initially credited to Grant-in-Aid (Capital) and this amount is adjusted to the statement of Profit and Loss over the useful life of the assets.

2.04 Expenditure on development of leasehold land is capitalised as Land Development Expenditure and is amortized over a period of 5 years, commencing from the year in which such expenditure is incurred.

2.05 Capital work in progress is stated at the amount expended up to the date of Balance Sheet.

2.06 In the event of revaluation of entire class of fixed assets, if the revalued amount is greater than the carrying amount of the fixed asset, such difference is taken to the revaluation reserve. If the revalued amount is lower than the carrying amount of the fixed asset and if the class of the asset has already been revalued, difference is set off against the amount available under the revaluation reserve for the same class of asset and excess thereof is charged to the statement of Profit and Loss.

3.00 Inventories

3.01 Raw materials, components and stores purchased for manufacturing/production activities are valued at lower of cost and net realizable value, after providing for obsolescence, if any. Cost is calculated on weighted average rate as at the end of the year. Where the same items are both purchased and manufactured, manufacturing costs are generally adopted.

3.02 Raw materials and production stores with ancillaries and fabricators are valued at lower of cost at the time of such issue and net realizable value, after providing for obsolescence, if any.

3.03 Manufactured items in Stock and Stock-in- Trade are valued at lower of cost excluding interest charges, administration overheads and sales overheads and at the net realisable value, after providing for obsolescence, if any.

3.04 Work-in-process

(i) Work-in-process (production) is valued on the basis of physically verifed quantities at lower of cost excluding interest charges, administration overheads and sales overheads or at the net realisable value, after providing for obsolescence, if any.

(ii) Work-in-process (Installation) is valued at lower of cost as recorded in the Work Orders and net realizable value, after providing for obsolescence, if any.

3.05 Precious metals scrap is valued at net realizable value and brought to books at the year end.

4.00 Tools and Gauges

4.01 Expenditure on special purpose tools and fixtures is initially capitalized at cost and then amortized over production on a systematic basis, based on technical assessment.

4.02 Loose tools are charged to revenue at the time of issue.

5.00 Investments

Current Investments are carried at lower of cost and fair market value. Long term investments are carried at cost and provision for diminution in the value of such long term investments, other than temporary in nature, is made.

6.00 Intangible Assets

6.01 Expenses incurred during research phase till the establishment of commercial feasibility is charged off to Statement of Profit and Loss.

6.02 Expenditure on development of new products / technologies, development of software are capitalized individually at cost once their technical feasibility is established in accordance with the requirements of Accounting Standard 26, ''Intangible Asset''.

7.00 Depreciation

7.01 Depreciation is charged on Straight Line Method in accordance with the useful life of the asset as assessed by the Management. However the rates of depreciation adopted in the books are not less than the rates specified in Schedule-XIV of the Companies Act, 1956.

7.02 Depreciation on additions and deletions to fixed assets during a year is provided on pro rata basis as follows:

(a) Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

(b) In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.

7.03 Intangible assets are amortized and charged to revenue based on the economic benefits drawn by the company over the useful life not exceeding ten years based on techno commercial assessment.

7.04 In the case of depreciable assets which have been revalued, depreciation is calculated on straight line method on the revalued amount. Difference between depreciation on the asset based on revaluation and that on original cost, is transferred from revaluation reserve to the Statement of Profit and Loss.

8.00 Prior period items

Adjustments arising due to errors or omissions in the financial statements of earlier years are accounted under "Prior Period Adjustments", if the amount involved is Rs. 5.00 lakhs or more in each transaction.

9.0 Foreign currency transactions

9.01 Foreign currency transactions are recorded at the rates of exchange prevailing on the date of transaction. 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.

9.02 Exchange differences arising on the settlement of monetary items or on reporting Company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or expenses in the year in which they arise.

10.00 Revenue Recognition

a) Sales include Excise Duty & Service Tax and excludes Sales Tax.

b) Revenue from sale of goods is recognized based on valid sales contract.

c) Revenue from customer accepted sale of goods/other sale of goods is recognized on the date of dispatch of goods from the company''s premises to the customer. In the case of FoR destination contracts, if there is a reasonable expectation of the goods reaching destination within the accounting period, revenue is recognised. Goods ready for dispatch but held in the Company''s premises at the customers Specific request is also recognised as sale of goods.

d) Where prices are not established, sales are set up provisionally at prices likely to be realized.

e) Export sales are treated as sales on issue of Bill of Lading.

f) Revenue from installation and commissioning services is recognized on completion of installation and commissioning.

g) Revenue from annual maintenance contracts relating to the year is recognized when the contracts are entered into on a time proportionate basis.

h) Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during the year.

Revenue Recognition on Construction / Turnkey Contracts

g) Revenue is recognised on percentage completion method. Contract revenue and costs associated with the contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. Expected loss on the contract is fully accounted.

11.00 Other Income

a) Insurance and Customs Duty claims are accounted as and when claims are accepted by the respective authorities.

b) Rental income is accounted on the basis of lease agreements entered with the parties to whom premises of the company are given under lease.

c) Interest income is recognized on a time proportionate basis taking into account the amount outstanding and the rate applicable.

d) Dividend is accounted when the right to receive dividend is established by the Balance Sheet Date.

12.00 Warranty Liability

Warranty liability for contractual obligation in respect of equipments sold to customers is accounted on the basis of an annual technical assessment.

13.0 Government Grants

a) Government grants relating to Revenue are initially credited to Grant-in-Aid(Revenue).

b) Where the grants are intended to compensate cost/s incurred in an accounting year, an amount of grant to the extent of related cost are recognized as income in the Statement of Profit and Loss.

c) Where the grants are for purpose of giving immediate financial support/compensation for expenses incurred in a previous accounting period, with no further related cost/s, these are recognized as Extraordinary income in the Statement of Profit and Loss in the year of receipt.

14.0 Employee benefits

a) Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit & Loss of the year in which the related service is rendered.

b) Post employment benefit viz. gratuity and other long term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognised as an expense in the Statement of Profit & Loss of the year in which the employee has rendered services. Expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit & Loss.

c) Expenditure related to voluntary retirement scheme (VRS) is written off in the year of incidence.

15.00 Borrowing Cost

Borrowing cost, that is directly attributable to the acquisition/production or construction of inventories or fixed assets which require a substantial period to get ready for its intended use or to bring them to saleable condition is capitalised as part of the cost of the inventory or fixed assets valuation respectively.

16.00 Impairment of Assets

At the end of each Balance sheet date, the carrying amount of assets are reviewed, if there is any indication of impairment based on internal / external factors. If the estimated recoverable amount is found lesser than the carrying amount, then the impairment loss is recognized and assets are written down to the recoverable amount.

17.00 Current Tax and Deferred Tax

a) Tax expense comprises of current income and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.

b) Deferred income taxes refect the impact of current year''s timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

c) Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognised only to the extent that there is virtual certainty that suffcient future taxable income will be available against which such deferred tax assets can be realised.

18.00 Trade Receivables

Provision for Doubtful Trade Receivables is made on a case to case basis, on detailed review.

19.00 Provisions / Contingencies:

A provision is recognised for a present obligation as a result of past events if it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date. A contingent liability is disclosed, unless the possibility of an outflow of resources is remote.

20.00 Earnings Per Share:

Basic earnings per share are calculated by dividing the net Profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net Profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

21.00 Segment Reporting:

The Company has primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and rendering other associated / ancillary services and there are no other reportable segments.


Mar 31, 2012

1.0 Basis of Preparation of Financial Statements.

The Financial Statements have been prepared as a going concern, under the historical cost convention, on accrual basis of accounting in accordance with the provisions of the Companies Act 1956 and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India to the extent applicable.

2.00 Fixed Assets

2.01 Fixed Assets are recorded at cost net of MODVAT relief wherever availed.

2.02 Fixed Assets acquired free of cost or gifted to ITI are recorded at Market Value at the time of acquisition and the amount is credited to Capital Reserve.

2.03 Any Capital Grant-in-Aid given for a specific project by any agency is initially credited to Grant-in-Aid (Capital) and this amount is adjusted to the Profit and Loss Account over the useful life of the assets.

2.04 Expenditure on development of leasehold land is capitalised as Land Development Expenditure and is written off over a period of 5 years, commencing from the year in which such expenditure is incurred.

2.05 Capital Expenditure on R & D is treated as Fixed Assets.

2.06 To assess fair value of a tangible fixed asset revaluation of the tangible fixed asset is done. Such fair value of tangible fixed asset is appraised by professionally qualified valuers. The difference between the carrying amount of tangible fixed asset and revalued amount pertaining to the tangible asset is credited to a revaluation reserve in the Balance sheet.

3.00 Inventories

3.01 Raw materials, components and stores purchased for manufacturing / production activities are valued at weighted average rate as at the end of the year. Where the same items are both purchased and manufactured, manufacturing costs are generally adopted for valuation.

3.02 Raw materials and production stores with Ancillaries and Fabricators are valued at cost as at the time of issue to the Ancillaries and Fabricators.

3.03 Manufactured items in Stock and Stock-in-Trade are valued at cost excluding Interest Charges, Administration Overheads and Sales overheads or at the net realisable value whichever is less.

3.04 Work-in-process

(i) Work-in-process (production) is valued on the basis of physically verified quantities at cost excluding interest charges, administration overheads and sales overheads or at the net realisable value whichever is less.

(ii) Work-in-process (Installation) is valued at cost as recorded in the Work Orders.

3.05 Precious metals scrap is valued and brought to books at the year end.

4.00 Tools and Gauges

4.01 Expenditure on special purpose tools and fixtures is initially capitalised for amortisation on production, based on technical assessment.

4.02 Loose tools are charged to revenue at the time of issue.

5.00 Intangible Assets

5.01 Expenditure on training personnel, foreign technicians fee and expenses, technical know how, documentation etc. specific to the product / projects are recognised as intangible asset.

5.02 Expenditure on development of new products / technologies, development of software where enduring benefits are expected is recognised as intangible asset .

5.03 Intangible assets are recorded at cost initially.

6.00 Depreciation

6.01 Depreciation is charged on Straight Line Method in accordance with the useful life of the asset as assessed by the Management. However the rates of depreciation adopted in the books are not less than the rates specified in Schedule-XIV of the Companies Act, 1956.

6.02 Depreciation on additions and deletions to fixed assets during a year is provided on pro rata basis as follows:

(a) Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

(b) In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.

6.03 Depreciation on intangible assets are charged to revenue based on the economic benefits drawn by the company over the useful life not exceeding ten years based on techno-commercial assessment.

6.04 In the case of depreciable assets which have been revalued depreciation is calculated on straight line method on the revalued amount. The difference between depreciation on the asset based on revaluation and that on original cost is transferred from revaluation reserve to the Profit and Loss account

7.00 Prior period items

Adjustments arising due to errors or omissions in the financial statements of earlier years are accounted under "Prior Period Adjustments" if the amount involved is Rs. Five Lakhs or more in each transaction.

8.00 Rate of Foreign Exchange

Current Assets / Liabilities / Long term Liabilities towards imported fixed assets, equipments and components are initially accounted at the rate of exchange ruling on the date of transaction and outstanding liabilities on the Balance Sheet date are updated at the rate of exchange ruling on the date of Balance Sheet. The conversion difference is charged off in the Profit and Loss Account.

9.00 Recognition of Revenue

a) Sales include Excise Duty and exclude Sales Tax.

b) Revenue from sale of goods is recognized based on valid sales contract.

c) Revenue from customer accepted sale of goods/other sale of goods is recognized on the date of dispatch of goods from the company's premises to the customer. In the case of For destination contracts, if there is a reasonable expectation of the goods reaching destination within the accounting period, revenue is recognised. Goods ready for dispatch but held in the company's premises at the customers specific request is also recognized as sale of goods.

d) Where prices are not established, sales are set up provisionally at prices likely to be realized.

e) Export sales are treated as sales on issue of Bill of Lading.

f) Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during the year.

10.00 Warranty Liability

Warranty liability for contractual obligation in respect of equipments sold to customers is accounted on the basis of an annual technical assessment.

11.00 Government Grants

(i) Government grants relating to Revenue are initially credited to Grant-in-Aid (Revenue).

(ii) Where the grants are intended to compensate cost incurred in an accounting year an amount of grant to the extent of related cost are recognized as income in the Profit and Loss Account.

(iii) Where the grants are for purpose of giving immediate financial support/compensation for expenses incurred in a previous accounting period, with no further related cost, these are recognized as income in the Profit & Loss Account in the year of receipt.

12.00 Recognition of Revenue on Construction / Turnkey Contracts

Revenue is recognised on percentage completion method. The accounting of contract revenue and contract cost associated with the contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. Expected loss on the contract is fully accounted.

13.00 Employee Benefits

i) Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Post employment benefit viz. gratuity and other long-term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognised as an expense in the profit and loss account of the year in which the employee has rendered services. The expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long-term benefits are charged to the profit and loss account.

iii) VRS

(a) Where grant is received for VRS, expenditure related to VRS is fully charged to the Profit & Loss account in the year of incidence. Equivalent amount of grant is credited to Profit & Loss account.

(b) Where no grant is received for VRS, the expenditure related to VRS incurred up to 31st March 2010 will be deferred, which will be written off in equal installments by 31st March 2011, including the year of incidence. Such expenditure incurred after 31st March 2010 will be written off in the year of incidence.

14.00 Borrowing Cost

Borrowing cost, that is directly attributable to the acquisition / production or construction of fixed assets or inventories which require a substantial period to get ready for its intended use or to bring them to saleable condition is capitalised as part of the cost of the fixed assets or inventory valuation respectively.

15.00 Impairment of Assets

At the end of each Balance sheet date the carrying amount of assets are assessed as to whether there is any indication of impairment. If the estimated recoverable amount is found lesser than the carrying amount, then the impairment loss is recognized and assets are written down to the recoverable amount.

16.00 Deferred Tax

Deferred tax is recognized for all timing differences, subject to the consideration of prudence in respect of deferred tax assets.


Mar 31, 2011

1.0 Basis of Preparation of Financial Statements.

The Financial Statements have been prepared as a going concern, under the historical cost convention, on accrual basis of accounting in accordance with the provisions of the Companies Act 1956 and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India to the extent applicable.

2.00 Fixed Assets

2.01 Fixed Assets are recorded at cost net of MODVAT relief wherever availed.

2.02 Fixed Assets acquired free of cost or gifted to ITI are recorded at Market Value at the time of acquisition and the amount is credited to Capital Reserve.

2.03 Any Capital Grant-in-Aid given for a specific project by any agency is initially credited to Grant-in-Aid (Capital) and this amount is adjusted to the Profit and LossAccount over the useful lifeof the assets.

2.04 Expenditure on development of leasehold land is capitalised as Land Development Expenditure and is written off over a period of 5 years, commencing from the year in which such expenditure is incurred.

2.05 Capital Expenditure on R & D is treated as Fixed Assets.

2.06 To assess fair value of a tangible fixed asset revaluation of the tangible fixed asset is done. Such fair value of tangible fixed asset is appraised by professionally qualified valuers. The difference between the carrying amount of tangible fixed asset and revalued amount pertaining to the tangible asset is credited to a revaluation reserve in the Balance sheet.

3.00 Inventories

3.01 Raw materials, components and stores purchased for manufacturing / production activities are valued at weighted average rate as at the end of the year. Where the same items are both purchased and manufactured, manufacturing costs are generally adopted for valuation.

3.02 Raw materials and production stores withAncillaries and Fabricators are valued at cost as at the time of issue to theAncillaries and Fabricators.

3.03 Manufactured itemsinStock and Stock-in-Trade are valued at cost excluding Interest Charges, Administration Overheads and Sales overheads or at the net realisable value whichever is less.

3.04 Work-in-process

(i) Work-in-process (production) is valued on the basis of physically verified quantities at cost excluding interest charges, administration overheads and sales overheads or at the net realisable value whichever is less.

(ii) Work-in-process (Installation) is valued at cost as recordedinthe Work Orders.

3.05 Precious metals scrap is valued and brought to booksatthe year end.

4.00 Tools and Gauges

4.01 Expenditure on special purpose tools and fixtures is initially capitalised for amortisation on production, based on technical assessment.

4.02 Loose tools are charged to revenue at the time of issue.

5.00 Intangible Assets

5.01 Expenditure on training personnel, foreign technicians fee and expenses, technical know how, documentation etc. specific to the product / projects are recognised as intangible asset.

5.02 Expenditure on development of new products / technologies, development of software where enduring benefits are expected is recognised as intangible asset .

5.03 Intangible assets are recorded at cost initially.

6.00 Depreciation

6.01 Depreciation is charged on Straight Line Method in accordance with the useful life of the asset as assessed by the Management. However the rates of depreciation adopted in the books are not less than the rates specified in Schedule-XIV of the CompaniesAct,1956.

6.02 Depreciation on additions and deletions to fixed assets during a year is provided on pro rata basis as follows:

(a) Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

(b) In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.

6.03 Depreciation on intangible assets are charged to revenue based on the economic benefits drawn by the company over the useful life not exceeding ten years basedontechno-commercial assessment.

6.04 In the case of depreciable assets which have been revalued depreciation is calculated on straight line method on the revalued amount. The difference between depreciation on the asset based on revaluation and that on original cost is transferred from revaluation reserve to the Profit and Loss account

7.00 Prior period items

Adjustments arising due to errors or omissions in the financial statements of earlier years are accounted under "Prior Period Adjustments" if the amount involved is Rs. Five Lakhs or more in each transaction.

8.00 Rate of Foreign Exchange

Current Assets / Liabilities / Long term Liabilities towards imported fixed assets, equipments and components are initially accounted at the rate of exchange ruling on the date of transaction and outstanding liabilities on the Balance Sheet date are updated at the rate of exchange ruling on the date of Balance Sheet. The conversion difference is charged off in the Profit and Loss Account.

9.00 Recognition of Revenue

a) Sales include Excise Duty and exclude Sales Tax.

b) Revenue from sale of goods is recognized based on valid sales contract.

c) Revenue from customer accepted sale of goods/other sale of goods is recognized on the date of dispatch of goods from the company's premises to the customer. In the case of FOR destination contracts, if there is a reasonable expectation of the goods reaching destination within the accounting period, revenue is recognised. Goods ready for dispatch but held in the company's premises at the customers specific request is also recognised as sale of goods.

d) Where prices are not established, sales are set up provisionally at prices likely to be realized.

e) Export sales are treated as sales on issue of Bill of Lading.

f) Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during the year.

10.00 Warranty Liability

Warranty liability for contractual obligation in respect of equipments sold to customers is accounted on the basis of anannual technical assessment.

11.00 Government Grants

(i) Government grants relating to Revenue are initially credited to Grant-in-Aid (Revenue).

(ii) Where the grants are intended to compensate cost incurred in an accounting year an amount of grant to the extent of related cost are recognized as income in the Profit and Loss Account.

(iii) Where the grants are for purpose of giving immediate financial support/compensation for expenses incurred in a previous accounting period, with no further related cost, these are recognized as income in the Profit & Loss Account in the year of receipt.

12.00 Recognition of Revenue on Construction / Turnkey Contracts

Revenue is recognised on percentage completion method. The accounting of contract revenue and contract cost associated with the contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. Expected loss on the contract is fully accounted.

13.00 Employee Benefits

i) Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Post employment benefit viz. gratuity and other long-term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognised as an expense in the profit and loss account of the year in which the employee has rendered services. The expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long- term benefits are charged to the profit and loss account.

iii) VRS

(a) Where grant is received for VRS, expenditure related to VRS is fully charged to the Profit & Loss account in the year of incidence. Equivalent amount of grant is credited to Profit & Loss account.

(b) Where no grant is received for VRS, the expenditure related to VRS incurred up to 31st March 2010 will be deferred, which will be written off in equal installments by 31st March 2011, including the year of incidence. Such expenditure incurred after 31st March 2010 will be written off in the year of incidence.

14.00 Borrowing Cost

Borrowing cost, that is directly attributable to the acquisition / production or construction of fixed assets or inventories which require a substantial period to get ready for its intended use or to bring them to saleable condition is capitalised as part of the cost of the fixed assets or inventory valuation respectively.

15.00 Impairment of Assets

At the end of each Balance sheet date the carrying amount of assets are assessed as to whether there is any indication of impairment. If the estimated recoverable amount is found lesser than the carrying amount, then the impairment loss is recognized and assets are written down to the recoverable amount.

16.00 Deferred Tax

Deferred tax is recognized for all timing differences, subject to the consideration of prudence in respect of deferred tax assets.














Mar 31, 2010

1.0 Basis of Preparation of Financial Statements.

The Financial Statements have been prepared as a going concern, under the historical cost convention, on accrual basis of accounting in accordance with the provisions of the Companies Act 1956 and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India to the extent applicable.

2.00 Fixed Assets

2.01 Fixed Assets are recorded at cost net of MODVAT relief wherever availed.

2.02 Fixed Assets acquired free of cost or gifted to ITI are recorded at Market Value at the time of acquisition and the amount is credited to Capital Reserve.

2.03 Any Capital Grant-in-Aid given for a specific project by any agency is initially credited to Grant- in-Aid (Capital) and this amount is adjusted to the Profit and Loss Account over the useful life of the assets.

2.04 Expenditure on development of leasehold land is capitalised as Land Development Expenditure and is written off over a period of 5 years, commencing from the year in which such expenditure is incurred.

2.05 Capital Expenditure on R & D is treated as Fixed Assets.

2.06 To assess fair value of a tangible fixed asset revaluation of the tangible fixed asset is done. Such fair value of tangible fixed asset is appraised by professionally qualified valuers. The difference between the carrying amount of tangible fixed asset and revalued amount pertaining to the tangible asset is credited to a revaluation reserve in the Balance sheet.

3.00 Inventories

3.01 Raw materials, components and stores purchased for manufacturing / production activities are valued at weighted average rate as at the end of the year. Where the same items are both purchased and manufactured, manufacturing costs are generally adopted for valuation.

3.02 Raw materials and production stores with Ancillaries and Fabricators are valued at cost as at the time of issue to the Ancillaries and Fabricators.

3.03 Manufactured items in Stock and Stock-in-Trade are valued at cost excluding Interest Charges, Administration Overheads and Sales overheads or at the net realisable value whichever is less.

3.04 Work-in-process

(i) Work-in-process (production) is valued on the basis of physically verified quantities at cost excluding interest charges, administration overheads and sales overheads or at the net realisable value whichever is less.

(ii) Work-in-process (Installation) is valued at cost as recorded in the Work Orders.

3.05 Precious metals scrap is valued and brought to books at the year end.

4.00 Tools and Gauges

4.01 Expenditure on special purpose tools and fixtures is initially capitalised for amortisation on production, based on technical assessment.

4.02 Loose tools are charged to revenue at the time of issue.

5.00 Intangible Assets

5.01 Expenditure on training personnel, foreign technicians fee and expenses, technical know how, documentation etc. specific to the product / projects are recognised as intangible asset.

5.02 Expenditure on development of new products / technologies, development of software where enduring benefits are expected is recognised as intangible asset.

5.03 Intangible assets are recorded at cost initially.

6.00 Depreciation

6.01 Depreciation is charged on Straight Line Method in accordance with the useful life of the asset as assessed by the Management. However the rates of depreciation adopted in the books are not less than the rates specified in Schedule-XIV of the Companies Act, 1956.

6.02 Depreciation on additions and deletions to fixed assets during a year is provided on pro rata basis as follows:

(a) Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

(b) In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.

6.03 Depreciation on intangible assets are charged to revenue based on the economic benefits drawn by the company over the useful life not exceeding ten years based on techno-commercial assessment.

6.04 In the case of depreciable assets which have been revalued depreciation is calculated on straight line method on the revalued amount. The difference between depreciation on the asset based on revaluation and that on original cost is transferred from revaluation reserve to the Profit and Loss account

7.00 Prior period items

Adjustments arising due to errors or omissions in the financial statements of earlier years are accounted under "Prior Period Adjustments" if the amount involved is Rs. Five Lakhs or more in each transaction.

8.00 Rate of Foreign Exchange

Current Assets / Liabilities / Long term Liabilities towards imported fixed assets, equipments and components are initially accounted at the rate of exchange ruling on the date of transaction and outstanding liabilities on the Balance Sheet date are updated at the rate of exchange ruling on the date of Balance Sheet. The conversion difference is charged off in the Profit and Loss Account.

9.00 Recognition of Revenue

a) Sales include Excise Duty and exclude Sales , Tax.

b) Revenue from sale of goods is recognized based on valid sales contract.

c) Revenue from customer accepted sale of goods/other sale of goods is recognized on the date of dispatch of goods from the companys premises to the customer. In the case of FOR destination contracts, if there is a reasonable expectation of the goods reaching destination within the accounting period, revenue is recognised. Goods ready for dispatch but held in the companys premises at the customers specific request is also recognised as sale of goods.

d) Where prices are not established, sales are set up provisionally at prices likely to be realized.

e) Export sales are treated as sales on issue of Bill of Lading.

f) Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during the year.

10.00 Warranty Liability

Warranty liability for contractual obligation in respect of equipments sold to customers is accounted on the basis of an annual technical assessment.

11.00 Government Grants

(i) Government grants relating to Revenue are initially credited to Grant-in-Aid (Revenue).

(ii) Where the grants are intended to compensate cost incurred in an accounting year an amount of grant to the extent of related cost are recognized as income in the Profit and Loss Account.

(iii) Where the grants are for purpose of giving immediate financial support/compensation for expenses incurred in a previous accounting period, with no further related cost, these are recognized as income in the Profit & Loss Account in the year of receipt.

12.00 Recognition of Revenue on Construction / Turnkey Contracts

Revenue is recognised on percentage completion method. The accounting of contract revenue and contract cost associated with the contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. Expected loss on the contract is fully accounted.

13.00 Employee Benefits

i) Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Post employment benefit viz. gratuity and other long-term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognised as an expense in the profit and loss account of the year in which the employee has rendered services. The expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long-term benefits are charged to the profit and loss account.

iii) VRS

(a) Where grant is received for VRS, expenditure related to VRS is fully charged to the Profit & Loss account in the year of incidence. Equivalent amount of grant is credited to Profit & Loss account.

(b) Where no grant is received for VRS, the expenditure related to VRS incurred up to 31st March 2009 will be deferred, which will be written off in equal installments by 31st March 2010, including the year ofincidence. Such expenditure incurred after 31st March 2009 will be written off in the year of incidence.

14.00 Borrowing Cost

Borrowing cost, that is directly attributable to the acquisition / production or construction of fixed assets or inventories which require a substantial period to jet ready for its intended use or to bring them to saleable condition is capitalised as part of the cost of the fixed assets or inventory valuation respectively.

15.00 Impairment of Assets

At the end of each Balance sheet date the carrying amount of assets are assessed as to whether there is any indication of impairment. If the estimated recoverable amount is found lesser than the carrying amount, then the impairment loss is recognized and assets are written down to the recoverable amount.

16.00 Deferred Tax

Deferred tax is recognised for all timing differences, subject to the consideration of prudence in respect of deferred tax assets.

 
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