Fedders Electric and Engineering Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2024

2. Significant accounting policies

2.1 Basis of preparation

The Standalone fmancial statements ("financial statements") have been prepared to comply m all
material aspects with the Indian Accounting Standard (Ind AS) notified under section 133 of the
Companies Act, 2013, read together with Rule 3 of the Companies (Indian Accounting
Standards) Rules, 2015 and as amended by the Ministry of Corporate Affairs (’MCA ) from tune
to tune.

The financial statements have been prepared under historical cost convention on accrual and
going concern basis, except for the certain fmancial instruments which have been measured at
fair value as required by relevant Ind ASs.

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 accoimtmg policy hitherto m use.

All the amounts included in the financial statements are reported m Crores of Indian Rupees, and
are rounded to the nearest Crores except per share data and unless stated otherwise.

The Fmancial statements have been prepared m accordance with Indian Accounting Standards to
the extent possible and requirements of all Ind AS have not been complied with m totality.

2.2 Use of Estimates & Basis of Measurement

IND AS enjoins management to make estimates and assumptions related to financial statements
that affect reported amount of assets, liabilities, revenue, expenses and contingent liabilities
pertaining to the year. Actual result may differ from such estmiates. Any revision m accoimtmg
estimates is recognized prospectively in the period of change and material revision, including its
impact on financial statements, is reported in the notes to accounts in the year of incorporation of
revision.

The financial statements have been prepared under the historical cost convention on the accrual
basis, except for certain financial instruments and provisions which are measured at fair value at
the end of each reporting period, as explamed in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for
goods and services.

2.3 Recognition of Income and Expenses

Revenue is measured at the fair value of the consideration received or receivable, taking mto
account the contractually defined terms of payment net of returns and allowances, trade
discounts, volume rebates and taxes or duties collected on behalf of thegovemment

Revenue towards satisfaction of performance obligation is measured at the amount of transaction
price (re net of variable consideration) allocated to the performance obhgation. The transaction
price of goods sold and services rendered is net of variable consideration on account of various
discounts/schemes, damages incurred offered by die company as a part of contract

Company recognizes revenue from sale of goods when significant risks and rewards of
ownership in the goods are transferred to the buyer as per the terms of the contract, which
coincides with the delivery ofgoods.

Interest Income from debt instruments is recognized using the effective interest rate (EIR). EIR is
the rate that exactly discounts the estmiated future cash flows over the expected hfe of financial
instrument, to the gross carrying amount of the financial assets or to the amortized cost of the
financialliability.

Dividend mcome is recognized when the Company’s right to receive payment is estabhshed on
or before the Balance Sheet date (Provided that it is probable that the economic benefit will flow
to the Company).

Export sales are accounted on the basis of date of bill of ladmg.

Interest mcome on investment m fixed deposit is recognized on time proportion basis at the
contractual rate.

Otlier incomes have been recognized on accrual basis m financial statements except for cash flow
information.

2.4 Property, Plant and Equipment

An item of Property . Plant and Equipment (PPE) is recognized as an asset, if and only'' if. it is
probable that the future economic benefits associated with the item will flow to the Company and
its cost can be measured reliably. PPE are initially recognized at cost. The mitial cost of PPE
comprises its purchase price (including non-refundable duties and taxes but excludmg any trade
discounts and rebates), and any directly attributable cost of bringing the asset to its working
condition and location for its mtended use.

Subsequent to initial recognition. PPE are stated at cost less accumulated depreciation and any
impairment losses. When significant parts of property, plant and equipment are required to be
replaced in regular intervals, the Company recognizes such parts as separate component of assets.
When an item of PPE is replaced, then its cany mg amount is de-recognized from the balance
sheet and cost of the new item of PPE is recognized. Further, in case the replaced part was not
being depreciated separately, the cost of the replacement is used as an indication to determine the
cost of the replaced part at the tune it was acquired.

The expenditures that are incurred after the item of PPE has been put to use, such as repairs and
maintenance, are normally charged to the statement of profit and loss m the period in which such
costs are mcurred

PPE / intangible assets are depreciated amortised over then estmiated useful lives, after taking
mto account estimated residual value Management reviews the estimated useful lives and
residual values of the assets annually m order to determine the amount of depreciation to be
recorded during any reporting period. The useful lives and residual values are based on the
Company’s historical experience with similar assets and take mto account anticipated
technological changes The depreciation /amortisation for future periods are revised if there are
significant changes from previous estimates

Any gam or loss on disposal /impairment of an item of property, plant and equipment is
recognised in Statement of profit and loss.

Depreciation is provided on straight lme method, at the rates determined based on the economic
useful lives of assets estmiated by the management: or at the rates prescribed under Schedule II
of the Companies Act, 2013, whichever is higher. Accordingly, the Company has used the
followmgrates:-

Assets of Rs. 5.000 or less are fully depreciated in the year of purchase

2.5 Investment Property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not
occupied by the Company, is classified as Investment Property. Investment Property is measured
initially at its cost, including transaction costs and where applicable borrowing costs. Subsequent
expenditure is capitalized to the asset''s carrying amount only when it is probable that future
economic benefits associated with the expenditure will flow'' to the Company and the cost of the
item can be measured reliably. All other repairs and mamtenance costs are expensed when
incurred When part of an investment property is replaced, the carrymg amount of the replaced
part is derecognized. Investment Properties (except freehold land) are depreciated usmg the
straight-line method over their estimated useful lives.

2.6 Intangible Assets

Intangible Assets with finite useful lives acquired by the Company are measured at cost less
accumulated amortization and accumulated impairment losses. Amortization is charged on a
straight-line basis over the estimated useful lives The estimated useful life and amortization
method are reviewed at the end of each annual reporting period, with the effect of any changes in
the estimate being accounted for on a prospective basis. On transition to hid AS. the Company
has elected to continue with the carrying value of all of intangible assets recognized as at April
01, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of
intangiblea ssets.

Gains or losses arising from derecognition of an intangible asset are measured as the difference
between the net disposal proceeds and the c any mg amount of the asset and are recognized
m the statement of profit and loss when the asset is derecognized.

2.7 Goodwill

No self-generated goodwill is recognized. Goodwill arises during the course of acquisition of an
entity in terms of accounting treatment provided in IND AS-103 dealmg with Business
Combination’. Goodwill represents the excess of consideration money over the fair value of net
assets of the entity under acquisition. Such goodwill is construed to have indefinite life and as
such is not subject to annual amortization but annual test of impairment under END AS - 36. Any
shortfall in consideration money vis-a-vis fair value of net assets on account of bargain purchase
is recognized m OCI at acquisition point and subsequently'' transferred to capital reserve-

2.8 Impairment of Non- Financial Assets

Intangible assets that have an indefinite useful life are not subject to amortization and are tested
annually for impairment or more frequently if events or changes m circumstances indicate that
they might be impaired. Other assets are tested for impairment whenever events or changes in
circumstances indicate that the earning amount may'' not be recoverable. An impairment loss is
recognized for the amount by which the asset''s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset''s fair value less costs of disposal and value m
use. For the purposes of assessmg impairment, assets are grouped at the lowest levels for which
there are separately'' identifiable cash inflows which are largely independent of the cash inflows
from other assets or groups of assets (cash-generating units). Non-fmancial assets that suffered
impairment are reviewed for possible reversal of the impairment at the end of each reporting
period.

An asset is considered as unpaired when at the date of Balance Sheet, there are indications of
unpainnent and the carry''ing amount of the asset, or where applicable, the cash generating unit to
which the asset belongs, exceeds its recoverable amount (i.e. the higher of the net asset selling
price and value in use) .The carry''ing amount is reduced to the recoverable amount and the
reduction is recognized as an impairment loss in the statement of profit and loss. The impairment
loss recognized in the prior accounting period is reversed if there has been a change in the
estimate of recoverable amount. Post impairment, depreciation is provided on the revised
carrying value of the unpaired asset oy^rer its remaining useful life.

2.9 Government -Subsidy /Grant

Government Grant is recognized only when there is a reasonable assurance that the entity'' will
comply with the conditions attachmg to them and the grants will be received.

a) Subsidy'' related to assets is recognized as deferred mcome which is recognized m the

statement of profit & loss on systematic basis over the useful life of the assets Purchase of
assets and receipts of related grants are separately disclosed in statement of cashflow.

b) Grants related to income are treated as other income m statement of profit & loss subject
to due disclosure about the nature ofgrant

2.10 Financial Instrument

a) Financial Assets

Initial Recognition and Measurement

All financial assets are recognized initially at fair value plus, in the case of financial assets
not recorded at fair value through profit or loss, transaction costs that are attributable to the
acquisition of the financial asset

Financial assets are classified, at initial recognition, as financial assets measured at fan-
value or as financial assets measured at amortized cost.

Subsequent Measurement

For purpose of subsequent measurement financial assets are classified m two broad
categones:-

l Fmancial Assets at fair value
it Financial assets at amortized cost

Where assets are measured at fair value, gams and losses are either recognized entirely in
the statement of profit and loss, or recognized in other comprehensive mcome. A financial
asset that meets the following two conditions is measured at amortized cost.

l. Business Model Test: The objective of the company''s business model is to hold the
financial asset to collect the contractual cashflows.

u. Cash flow characteristics test: The contractual terms of the financial asset give rise
on specified dates to cash flows that are solely payment of principal and mterest on
the principal amountoutstanding

A financial asset that meets the following two conditions is measured at fair value through
OCI:-

l Business Model Test: The financial asset is held within a busmess model w''liose
objective is achieved by both collecting contractual cash flows and selling financial
assets.

il Cash flow characteristics test: The contractual terms of die financial asset give rise
on specified dates to cash flow''s that are solely payment of prmcipal and mterest on
the prmcipal amount outstanding.

All odier financial assets are measured at fair value through profit and loss.

All equity investments are measured at fair value in the balance sheet, with value changes
recognized in the statement of profit and loss, except for those equity investments for
which the entity has elected irrevocable option to present value changes m OCI.

Investment in Associates, Joint Venture and Subsidiaries

The company has accounted for its investment in subsidiaries, associates and joint venture at
cost.

Impairment

The Company assesses on a forward lookmg basis the expected credit losses associated with
its assets earned at amortized cost and debt lnstniment earned at FVTOCI. The impairment
methodology applied depends on whether there has been a significant increase in credit risk
smee initial recognition. If credit risk has not mcreased significantly, twelve month ECL is
used to provide for impairment loss, otherwise lifetime ECL is used.

However, only in case of trade receivables, the Company applies the simplified approach
which requires expected lifetime losses to be recognized from initial recognition of the
receivables

b) Financial Liabilities

All financial liabilities are initially recognized at fair value and. in the case of loans and
borrowings and payables, net of directly attributable transaction costs.

Fmancial liabilities are classified as measured at amortized cost or fair value through profit
and loss (FVTPL). A financial liability is classified as FVTPL if it is classified as held for
tradmg. or it is a derivative or is designated as such on initial recognition. Fmancial Liabilities
at FVTPL are measured at fair value and net gain or losses, including any interest expense,
are recognized m statement of profit and loss. Other financial liabilities are subsequently
measured at amortized cost using the effectiv e interest method. Interest expense and foreign
exchange gams and losses are recognised m statement of profit and loss. Any gam or loss on
de-recogmtion is also recognized in statement of profit andloss.

2.11 Fair Value Measurement

The Company measures certain fmancial instruments at fair value at each Balance Sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability m an
orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transacuon to sell the asset or transfer the
liability takes placeeither:

i. In the principal market for the asset or liability, or

11 In the absence of a principal market, m the most advantageous market for the asset or
liability.

The principal or the most advantageous market must be accessible by the Company. The fair
value of an asset or a liability is measured usmg the assumptions that market participants would
use when pnemg the asset or liability assuming that market participants act in their economic
best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s
ability to generate economic benefits by usmg the asset m its highest and best use or by selling it

The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs

All assets and liabilities for which fair value is measured or disclosed in the financial statements
are categorised within the fair value hierarchy, described as follows, based on the lowest level
input that is significant to the fair value measurement as a whole:

Level 1: Quoted (unadjusted) prices for identical assets or Labilities in active markets
Level 2: Significant inputs to the fair value measurement are directly or indirectly observable
Level 3: Significant inputs to the fair value measurement are unobservable

For assets and Labilities that are recognised in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels m the hierarchy by re¬
assessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets &
liabilities on the basis of the nature, characteristics and the risks of the asset or liability and the
level of the fair value hierarchy as explained above.

2.12 Lease assets

The determination of whether an arrangement is a lease ls based on whether fulfillment of the
arrangement is dependent on the use of a specific asset and the arrangement conveys a right to
use the asset, even if that right is not explicitly specified m anaiTangement.

Leases where the lessor transfers substantially all the risks and rewards of ownership of the
leased asset are classified as finance lease and other leases are classified as operatmglease.

Operating lease receipts / payments are recognized as an mcome / expense on a straight-line basis
over the lease term.

Contmgent rents are recognized as mcome / expense m the period m which they are earned.''''
incurred.

2.13 Inventory

a) Basis of valuation

Inventories are valued at lower of cost and net realizable value after providing cost of
obsolescence, if any. However, materials and other items held for use m the production of
inventories are not written down below cost if the fimshed products m which they will be
incorporated are expected to be sold at or above cost. The comparison of cost and net
realizable value is made on an item-by''-item basis.

b) Method of valuation

Raw materials and consumables has been determined by using FIFO cost method and
comprises all cost of purchase, freight costs, customs duty (wherever paid) taxes (other than
those subsequently recoverable from Tax Authorities) and all other cost incurred m bringing
the inventory to their present location and condition. The cost is determined usmg the FIFO
metod.

Work in progress include direct and mdirect materials, direct and indirect labour and other
manufacturing overheads incurred in bringing them to their respective present location and
condition.

Finished goods mcludes direct and mdirect materials, direct and indirect labour and other
manufacturing overheads incurred in bnngmg them to their respective present location and
condition. Cost is determined on moving cost basis.

2.14 Employee benefits

The Company’s employee benefits mainly mclude wages, salaries, bonuses, contribution to
plans, defined benefit plans, compensated absences, deferred compensation and share-based
payments The employee benefits are recognized in the year in which the associated services are
rendered by the Company employees.

Defined contribution plans

The contributions to defined contribution plans are recognized m profit or loss as and when the
services are rendered by employees. The Company has no further obligations under these plans
beyond its periodic contributions.

Provident Fund and Employees’ State Insurance Schemes

All employees of the Company are entitled to receive benefits under the Provident Fund, which
is a defined contribution plan. Both the employee and the employer make monthly contributions
to the plan at a predetermined rate (presently 12%) of the employees'' basic salary The
contributions are made to the fund administered and managed by the Government of India, hi
addition, some employees of the Company are covered under the employees'' state insurance
schemes, which are also defined contribution schemes recognized and administered by the
Government of India

Defined benefit plans

In accordance with the local laws and regulations, all the employees m India are entitled for the
Gratuity plan. The said plan requires a lump-sum payment to eligible employees (meetmg the
required vesting service condition) at retirement or termination of employment, based on a pre¬
defined formula.

The Company provides for the liability towards the said plans on the basis of actuarial valuation
earned out quarterly as at the reporting date, by an independent qualified actuary using the
projected-umt-credit method.

The obhgation towards the said benefits is recognized in the balance sheet, at the present value
of the defined benefit obligations less the fair value of plan assets (bemg the funded portion).
The present value of the said obligation is determined by discounting the estmiated future cash
outflows, usmg interest rates of govemmentbonds.

The interest income / (expense) are calculated by applying the above mentioned discount rate to
the plan assets and defined benefit obligations liability. The net interest income / (expense) on
the net defined benefit liability is recognized m the statement of profit and loss. However, the

related re-measurements of the net defined benefit liability are recognized directly in the other
comprehensive mcome m the period m which they arise. The said re-measurements comprise of
actuarial gams and losses (arising from experience adjustments and changes m actuarial
assumptions), the return on plan assets (excluding mterest). Re-measurements are not re¬
classified to the statement of profit and loss in any of the subsequent periods.

Other long-term employee benefits

The employees of die Company are entitled to compensated absences as well as odier long-term
benefits. Compensated absences benefit comprises of encashment and availment of leave
balances diat were earned by the employees over die period of past employment.

The Company provides for the liability towards the said benefit on the basis of actuarial
valuation carried out quarterly as at the reportmg date, by an mdependent qualified actuary usmg
the projected-unit-credit method. The related re-measurements are recognized in the statement
of profit and loss in the period m which they arise

2.15 Tax Expenses

Income Tax expense comprises of current tax and deferred tax charge or credit. Provision for
current tax is made with reference to taxable mcome computed for the financial year for which
the financial statements are prepared by applying the tax rates asapplicable.

Current Tax

The current tax is calculated on the basis of the tax rates, laws and regulations, which have been
enacted or substantively enacted as at the reportmg date in die respective countries where the
Company operates and generate taxable mcome. The payment made m excess / (shortfall) of the
respective Company''s mcome tax obhgation for the period are recognized m the Balance Sheet
as current mcome tax assets /liabilities.

Deferred Tax

Deferred tax is provided usmg the Balance Sheet approach on temporary differences at the
reportmg date between the tax bases of assets and liabilities and their earning amounts for
financial reportmg purpose at reportmg date. Deferred mcome tax assets and liabilities are
measured usmg tax rates and tax laws that have been enacted or substantively enacted by the
Balance Sheet date and are expected to apply to taxable mcome in the years in which those
temporary differences are expected to be recovered or settled.

The carrying amount of deferred tax assets is reviewed at each reportmg date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or
part of the deferred tax asset to be utilized.

Unrecognized deferred tax assets are re-assessed at each reportmg date and are recognized to the
extent that it has become probable that future taxable profits will allow the deferred tax asset to
berecovered.

Current and deferred tax is recognized m statement of profit or loss, except to the extent that it
relates to items recognized in other comprehensive mcome or directly m equity''. In this case, the
tax is also recognized m other comprehensive income or directly in equity, respectively.

Minimum Alternate Tax

Minimum Alternate Tax credit is recognized as an asset only when and to the extent there is
convincing evidence that the Company will pay normal mcome tax during the specified period.
Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit
asset is written down to the extent there is no longer a convincing evidence to the effect that the
Company will pay normal mcome tax during the specified period.

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Mar 31, 2016

1.1 corporate information

Fedders Lloyd Corporation Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on National Stock Exchange of India Limited (NSE) & Bombay Stock Exchange Limited (BSE) in India and well diversified in the field of Environment Control Systems (ECS), fabrication of steel structures for Power, commercial and industrial construction projects and implementation of high power transmission lines. The Company has also been into exports of power equipments/components to various funded projects by multilateral agencies.

The Company has been generating revenues mainly from three segments:-

1. Environmental Control Systems

2. Steel Structures & Engineering

3. Power Transmission & Distribution and Overhead Electrification (OHE)

1.2 BASIS OF PREPARATION

The Financial Statements of the company have been prepared in accordance with Generally Accepted Accounting Principles in India (GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards specified under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 (as amended). The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

1.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

a) Use of estimates

The preparation of Financial Statements in conformity with Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities, at the date of the Financial Statements. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

b) Tangible Fixed Assets:

Fixed assets except leasehold land are stated at cost less accumulated depreciation. The cost includes freight, duties, taxes and other incidental expenses related to acquisition and installation. CENVAT claim, if any, on capital goods is reduced from the cost.

Capital Work-in-Progress

Projects under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

c) Depreciation on tangible fixed assets

i) After enactment of the Companies Act, 2013, Depreciation on fixed assets is provided on straight-line basis at the rates prescribed in Schedule II to the Companies Act, 2013.

ii) Depreciation on assets added during the year, is calculated on pro-rata basis with reference to the date of installation.

d) Intangible Assets

Intangible Assets are stated at cost of acquisition.

e) Grant

Grants are recognized when there is reasonable assurance that the grant will be received and conditions attached to them are complied with.

f) Research and Development

Research costs are expensed as incurred.

g) Impairment of Assets

The carrying values of assets/cash generating units at each Balance Sheet date are reviewed for impairment of assets. If any indication of such impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in prior accounting periods no longer exists or may have decreased such reversal of impairment loss is recognized.

h) Inventory Valuation:

i) Raw materials and consumables are valued at cost net of MODVAT as per the FIFO method after providing for cost of obsolescence value.

ii) Stock in process is valued at direct cost i.e. cost of materials and variable manufacturing expenses.

iii) Finished goods are valued at lower of cost or net realizable value.

iv) Stock in transit lying in customs warehouse is valued at cost but does not include custom duty payable, however, non-provision of duty does not affect the profit for the year.

i) Revenue Recognition:

i) Income and Expenditure are recognized on accrual basis.

ii) Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects Central Sales Taxes and Value Added Taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

iii) Export sales are accounted on the basis of date of bill of lading.

iv) Sales and service include excise duty and adjustments made towards liquidated damages and price variation, wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers, are not taken into account.

v) Revenue from project related activity is recognized on the basis of running bills raised on the basis of completion of the project activities.

vi) Dividend income is recognized when the right to receive the dividend is established.

j) Investments

Long term Investments are stated at cost. Investments in subsidiary company are of long-term strategic value and the diminution, if any, in the value of these investments is temporary in nature.

k) Foreign currency transactions

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 and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

iii. Exchange Differences

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 as expenses in the year in which they arise.

iv. Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the Statement of Profit and Loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the year.

l) Retirement Benefits:

Provident Fund:-

Retirement benefit in form of provident fund is a defined contribution scheme and the contributions are charged to the Profit and Loss account of the period when the contributions to the respective funds are due.

Gratuity:-

The Company''s liability in respect of payment of gratuity is provided on accrual basis as per actuarial valuation. The Company is in process of having arrangement with Insurance co. to administer its Superannuation & Gratuity Fund.

Leave Encashment:-

Leave Encashment are valued at cost to company basis without considering any discounting and salary increase and provided on the basis of actual valuation.

m) Taxation:

Current Tax:

Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961, except for the overseas subsidiaries and joint ventures where current tax provisions is determined based on the local tax laws. Deferred tax is recognized for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the Balance Sheet date.

Deferred Tax:

Deferred tax liabilities represent the tax effect of temporary differences substantially on account of differences in the written down value of Fixed Assets on account of differing depreciation methods and rates and other timing differences.

Minimum Alternate Tax:

Minimum Alternate Tax (MAT) paid during a period is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax under the Income Tax Act, 1961, the said asset is created by way of credit to the Statement of Profit and Loss and shown as "MAT Credit Entitlement.” The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

n) Borrowing Cost

Cost in connection with the borrowing of funds to the extent not directly related to the acquisition of fixed assets are amortized and charged to the Profit and Loss Account, over the tenure of the loan. Borrowing cost to the extent directly attributable to acquisition of fixed assets are added to the cost of fixed assets.

o) Segment Reporting

As per Accounting Standard 17 on segment reporting of Institute of Chartered Accountants of India ("ICAI"), the Company has reportable segments viz. Environmental Control Systems, Steel Structural & Engineering and Power Projects during the period under review. Accordingly the reporting is done segment wise.

p) Earning Per Share

The earnings considered in ascertaining the Company''s Earnings per Share (EPS) comprise the net profits after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

q) Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard-3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

r) Sundry Debtors/Loans & Advances

Company, as a policy, obtains balance confirmation from Sundry Debtors, Creditors and other advances on monthly/ quarterly/half yearly basis depending upon quantum of transaction made with the parties. Considering the same, Company does not have all balance confirmations as at 31^st March, 2016 the effect of the same, if any, which is not likely to be material will be adjusted at the time of confirmation.

s) Provisions/Contingencies

A provision is recognized when there is a present 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 determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilities are not recognized and are disclosed in the Notes to Financial Statement.

t) Derivative Instruments

The Company has entered into derivative contracts in the nature of interest rate swaps and forward contracts with intention to hedge its requirements and firm commitments. The contracts are mark to market and losses are recognized in the Profit and Loss account. Gains arising on the same are not recognized on ground of prudence.

u) Deferred Revenue Expenditure

Cost of travelling, Consultancy fee and other expenses related to IRIS Certification are considered as deferred revenue expenditure. 1/5 of the expenditures have been charged to Profit and Loss account.

---

Jun 30, 2015

A) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities, at the date of the financial statements. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

b) Tangible Fixed Assets:

Fixed assets except leasehold land are stated at cost less accumulated depreciation. The cost includes freight, duties, taxes and other incidental expenses related to acquisition and installation. CENVAT claim, if any, on capital goods is reduced from the cost.

Capital Work-in-Progress

Projects under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

c) Depreciation on tangible fixed assets

i) After notification of the New Companies Act 2013 which comes into effect from 1 April 2014, Depreciation on fixed assets is provided on straight-line basis at the rates prescribed in schedule II to the Companies Act, 2013.

ii) Depreciation on assets added during the year, is calculated on pro-rata basis with reference to the date of installation.

iii) Depreciation rates have been arrived after applying estimated life provided in the Schedule - II. For calculating depreciation on various categories of assets following estimated life has been provided in the schedule :

Type of Assets Life inYears

Building 30Year

Plant & Machinery 15 year

Office Equipment''s 5Year

Vehicles 8Year

Furniture & Fixtures 10Year

d) Intangible Assets

Intangible Assets are stated at cost of acquisition.

e) GRANT

Grants are recognized when there is reasonable assurance that the grant will be received and conditions attached to them are complied with.

f) Research and development Research costs are expensed as incurred.

g) Impairment of Assets:

The carrying values of assets/cash generating units at each Balance Sheet date are reviewed for impairment of assets. If any indication of such impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in prior accounting periods no longer exists or may have decreased such reversal of impairment loss is recognized.

h) Inventory Valuation:

i) Raw materials and consumables are valued at cost net of modvat as per the FIFO method after providing for cost of obsolescence value.

ii) Stock in process is valued at direct cost, i.e., cost of materials and variable manufacturing expenses.

iii) Finished goods are valued at lower of cost or net realizable value.

iv) Stock in transit lying in customs warehouse is valued at cost but does not include custom duty payable, however, non-provision of duty does not affect the profit for the year.

i) Revenue Recognition:

i) Income and Expenditure are recognized on accrual basis.

ii) Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects central sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

iii) Export sales are accounted on the basis of date of bill of lading.

iv) Sales and service include excise duty and adjustments made towards liquidated damages and price variation, wherever applicable. Escalation and other claims, which are not ascertainable / acknowledged by customers, are not taken into account.

v) Revenue from project related activity is recognized on the basis of running bills raised on the basis of completion of the project activities.

vi) Dividend income is recognized when the right to receive the dividend is established.

j) Investments:

Long term Investments are stated at cost. Investments in subsidiary company are of long-term strategic value and the diminution if any in the value of these investments is temporary in nature.

k) Foreign currency transactions:

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 and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

iii. Exchange Differences

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 as expenses in the year in which they arise.

iv. Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the year.

l) Retirement Benefits:

Provident Fund:-

Retirement benefit in form of provident fund is a defined contribution scheme and the contributions are charged to the profit and Loss account of the year when the contributions to the respective funds are due.

Gratuity:-

The company''s liability in respect of payment of gratuity is provided on accrual basis as per actuarial valuation. The company is in process of having arrangement with Insurance co. to administer its Superannuation & Gratuity Fund.

Leave Encashment:-

Leave Encashment are valued at cost to company basis without considering any discounting and salary increase and provided on the basis of actual valuation.

m) Taxation:

Current Tax:

Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act 1961, except for the overseas subsidiaries and joint ventures where current tax provisions is determined based on the local tax laws. Deferred tax is recognized for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the Balance Sheet date.

Deferred Tax:

Deferred tax liabilities represent the tax effect of temporary differences substantially on account of differences in the written down value of Fixed Assets on account of differing depreciation methods and rates and other timing differences.

The breakup of deferred tax assets and liabilities into major components at the year ended are as below

Particulars Amount (Rs. in Crores)

DeferredTax Liabilities

Depreciation Difference & other Provision 4.10

Deferred tax Assets

Other Provision 0.07

Net Deferred Tax Liability 4.03

Minimum Alternate Tax:

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

n) Borrowing Cost:

Cost in connection with the borrowing of funds to the extent not directly related to the acquisition of fixed assets are amortized and charged to the Profit and Loss Account, over the tenure of the loan. Borrowing cost to the extent directly attributable to acquisition of fixed assets is added to the cost of fixed assets.

o) Segment Reporting:

As per Accounting Standard 17 on segment reporting of ICAI, the Company has reportable segments viz. Environmental Control Systems, Steel Structural & Engineering and Power Projects during the year under review. Accordingly the reporting is done segment wise.

p) Earning Per Share:

The earnings considered in ascertaining the Company''s Earnings per Share (EPS) comprise the net profits after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

q) Cash Flow Statement:

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

r) Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance costs and tax expense.

s) Sundry Debtors/Loans & Advances:

Company as a policy obtains balance confirmation from Sundry Debtors, Creditors and other advances on monthly / quarterly / half yearly basis depending upon quantum of transaction made with the parties. Considering the same company does not have all balance confirmations as at 30 June 2015 the effect of the same, if any which is not likely to be material will be adjusted at the time of confirmation.

t) Provisions /Contingencies:

A provision is recognized when there is a present 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 determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilities are not recognized and are disclosed in the Notes to financial statement.

u) Derivative Instruments:

The Company has entered into derivative contracts in the nature of interest rate swaps and forward contracts with intention to hedge its requirements and firm commitments. The contracts are mark to market and losses are recognized in the profit and loss account. Gains arising on the same are not recognized on ground of prudence.

v) Deferred Revenue Expenditure:

Cost of traveling, Consultancy fees and other expenses related to IRIS Certification are considered as deferred revenue expenditure. 1/5 of the expenditures have been charged to Profit and Loss account.

---

Jun 30, 2014

1. BASIS OF PREPARATION

The Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in India (GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

a) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities, at the date of the financial statements. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

b) Tangible Fixed Assets

Fixed assets except leasehold land are stated at cost less accumulated depreciation. The cost includes freight, duties, taxes and other incidental expenses related to acquisition and installation. CENVAT claim, if any, on capital goods is reduced from the cost.

Capital Work-in-Progress

Projects under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

c) Depreciation on tangible fixed assets

i) After notification of the New Companies Act, 2013 which comes into effect from April 01, 2014, Depreciation on fixed assets is provided on straight-line basis at the rates prescribed in schedule II to the Companies Act, 2013.

ii) Depreciation on assets added during the year, is calculated on pro-rata basis with reference to the date of installation.

iii) Depreciation rates has been arrived after applying estimated life provided in the Schedule - II. For calculating depreciation on various categories of assets following estimated life has been provided in the schedule

Type of Assets Life in Years

Building 30 Year

Plant & Machinery 15 Year

Office Equipment''s 5 Year

Vehicles 8 Year

Furniture & Fixtures 10 Year

d) Intangible Assets

Intangible Assets are stated at cost of acquisition.

e) Grant

Grants are recognized when there is reasonable assurance that the grant will be received and conditions attached to them are complied with.

f) Research and development

Research costs are expensed as incurred.

g) Impairment of Assets

The carrying values of assets/cash generating units at each Balance Sheet date are reviewed for impairment of assets. If any indication of such impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in prior accounting periods no longer exists or may have decreased such reversal of impairment loss is recognized.

h) Inventory Valuation

i) Raw materials and consumables are valued at cost net of modvat as per the FIFO method after providing for cost of obsolescence value.

ii) Stock in process is valued at direct cost, i.e., cost of materials and variable manufacturing expenses.

iii) Finished goods are valued at lower of cost or net realizable value.

iv) Stock in transit lying in customs warehouse is valued at cost but does not include custom duty payable, however, non-provision of duty does not affect the profit for the year.

i) Revenue Recognition

i) Income and Expenditure are recognized on accrual basis.

ii) Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects central sales taxes and value added taxes (VAT) on behalf of the government and therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

iii) Export sales are accounted on the basis of date of bill of lading.

iv) Sales and service include excise duty and adjustments made towards liquidated damages and price variation, wherever applicable. Escalation and other claims, which are not ascertainable / acknowledged by customers, are not taken into account.

v) Revenue from project related activity is recognized on the basis of running bills raised on the basis of completion of the project activities.

vi) Dividend income is recognized when the right to receive the dividend is established.

j) Investments

Long term Investments are stated at cost. Investments in subsidiary company are of long-term strategic value and the diminution if any in the value of these investments is temporary in nature.

k) Foreign currency transactions

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 and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

iii. Exchange Differences

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 as expenses in the year in which they arise.

iv. Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the year.

l) Retirement Benefits

Provident Fund

Retirement benefit in form of provident fund is a defined contribution scheme and the contributions are charged to the profit and Loss account of the year when the contributions to the respective funds are due.

Gratuity

The Company''s liability in respect of payment of gratuity is provided on accrual basis as per actuarial valuation. The Company is in process of having arrangement with Insurance co. to administer its Superannuation & Gratuity Fund.

Leave Encashment

Leave Encashment are valued at cost to Company basis without considering any discounting and salary increase and provided on the basis of actual valuation.

m) Taxation

Current Tax

Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act 1961, except for the overseas subsidiaries and joint ventures where current tax provisions is determined based on the local tax laws. Deferred tax is recognized for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the Balance Sheet date.

Deferred Tax

Deferred tax liabilities represent the tax effect of temporary differences substantially on account of differences in the written down value of Fixed Assets on account of differing depreciation methods and rates and other timing differences.

The breakup of deferred tax assets and liabilities into major components at the year ended are as below

Particulars Amount (Rs. in Million)

Deferred Tax Liabilities Depreciation difference & other Provision 44.63

Deferred Tax Assets Other Provision 3.56

Net Deferred Tax Liability 41.07

Minimum Alternate Tax

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

n) Borrowing Cost

Cost in connection with the borrowing of funds to the extent not directly related to the acquisition of fixed assets are amortized and charged to the Profit and Loss Account, over the tenure of the loan. Borrowing cost to the extent directly attributable to acquisition of fixed assets are added to the cost of fixed assets.

o) Segment Reporting

As per Accounting Standard 17 on segment reporting of ICAI, the Company has reportable segments viz. Environmental Control Systems, Steel Structural & Engineering and Power Projects during the year under review. Accordingly the reporting is done segment wise.

p) Earning Per Share

The earnings considered in ascertaining the Company''s Earnings per Share (EPS) comprise the net profits after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

q) Cash Flow Statement

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

r) Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The Company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.

s) Sundry Debtors/Loans & Advances

Company as a policy obtains balance confirmation from Sundry Debtors, Creditors and other advances on monthly / quarterly / half yearly basis depending upon quantum of transaction made with the parties. Considering the same Company does not have all balance confirmations as at June 30, 2014 the effect of the same, if any which is not likely to be material will be adjusted at the time of confirmation.

t) Provisions /Contingencies

A provision is recognized when there is a present 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 determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilities are not recognized and are disclosed in the Notes to financial statement.

u) Derivative Instruments

The Company has entered into derivative contracts in the nature of interest rate swaps and forward contracts with intention to hedge its requirements and firm commitments. The contracts are mark to market and losses are recognized in the profit and loss account. Gains arising on the same are not recognized on ground of prudence.

v) Deferred Revenue Expenditure

Cost of traveling, Consultancy fees and other expenses related to IRIS Certification are considered as deferred revenue expenditure. 1/5 of the expenditures have been charged to Profit and Loss account.

Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per the records of the Company, including its register of shareholders/members and other declaration received from the shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

Note

1. Indian ruppee loan from State Bank of Hyderabad carries interest @ 12.50%. The loan is repayable in 16 quarterly installment of Rs. 1.5625 crores each after monotorium of 1 year from the date of loan i.e. 24.03.2011.

2. Indian ruppee loan from Karnataka Bank carries interest @ 12.5% P.A. The loan is repayable in equal monthly instalment of Rs. 26.76 lacs, with last instalment due in January''16.

3. Foreign Currency Loan (ECB )-1 of USD 7.32 Million from ICICI BANK carries interest @ 6 mths LIBOR plus 4%. The loan is repayable in 22 quarterly installments starting from 18 months from the date of first draw-down i.e.3rd Oct''11.

4. Foreign Currency Loan (ECB)-2 of USD 3.3 Million from ICICI BANK carries interest @ 6 mths LIBOR plus 4 %. The loan is repayable in 22 quarterly Installment starting from 18 months from the date of first draw-down i.e. 1st June''11.

5. Foreign Currency Loan (ECB)-3 of USD 4 Million from ICICI BANK carries interest @ 6 mths LIBOR plus 4 %. The loan is repayable in 22 quarterly Installment starting from 18 months from the date of first draw-down i.e.29th April''11.

6. Foreign Currency Loan(ECB) of USD 5.5 Million from Standard Chartered Bank carries interest @ LIBOR plus 2.90%. The loan is repayable in 16 equal quarterly instalments begining from 15th month from the date of first draw-down i.e. 3rd Oct''11.

7. Indian ruppee loan from State Bank of India carries interest @ 12.50%. The loan is repayable in 16 quarterly installment of Rs. 1.5625 crores each after monotorium of 1 year from the date of loan i.e. 28.09.2012.

---

Jun 30, 2013

A) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities, at the date of the financial statements. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

b) Tangible Fixed Assets

Fixed assets except leasehold land are stated at cost less accumulated depreciation. The cost includes freight, duties, taxes and other incidental expenses related to acquisition and installation. CENVAT claim, if any, on capital goods is reduced from the cost.

Capital Work-in-Progress

Projects under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

c) Depreciation on tangible fixed assets

i) Depreciation on fixed assets (other than land) is provided on written down value method at the rates prescribed in Schedule XIV to the Companies Act, 1956.

ii) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on addition to fixed assets on a/c revaluation of assets.

d) Intangible Assets

Intangible Assets are stated at cost of acquisition .

e) Grant

Grants are recognized when there is reasonable assurance that the grant will be received and conditions attached to them are complied with.

f) Research and development

Research costs are expensed as incurred.

g) Impairment of Assets

The carrying values of assets/cash generating units at each Balance Sheet date are reviewed for impairment of assets. If any indication of such impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in prior accounting periods no longer exists or may have decreased such reversal of impairment loss is recognized.

h) Inventory Valuation

i) Raw materials and consumables are valued at cost net of modvat as per the FIFO method after providing for cost of obsolescence value.

ii) Stock in process is valued at direct cost, i.e., cost of materials and variable manufacturing expenses.

iii) Finished goods are valued at lower of cost or net realizable value.

iv) Stock in transit lying in customs warehouse is valued at cost but does not include custom duty payable, however, non-provision of duty does not affect the profit for the year.

i) Revenue Recognition

i) Income and Expenditure are recognized on accrual basis.

ii) Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects central sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

iii) Export sales are accounted on the basis of date of bill of lading.

iv) Sales and service include excise duty and adjustments made towards liquidated damages and price variation, wherever applicable. Escalation and other claims, which are not ascertainable / acknowledged by customers, are not taken into account.

v) Revenue from project related activity is recognized on the basis of running bills raised on the basis of completion of the project activities.

vi) Dividend income is recognized when the right to receive the dividend is established.

j) Investments

Long term Investments are stated at cost. Investments in subsidiary company are of long-term strategic value and the diminution if any in the value of these investments is temporary in nature.

k) Foreign currency transactions

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 and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

iii. Exchange Differences

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 as expenses in the year in which they arise.

iv. Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the year.

l) Retirement Benefits

Provident Fund

Retirement benefit in form of provident fund is a defined contribution scheme and the contributions are charged to the profit and Loss account of the year when the contributions to the respective funds are due.

Gratuity

The company''s liability in respect of payment of gratuity is provided on accrual basis as per actuarial valuation. The company is in process of having arrangement with Insurance co. to administer its Superannuation & Gratuity Fund.

Leave Encashment

Leave Encashment are valued at cost to company basis without considering any discounting and salary increase and provided on the basis of actual valuation.

m) Taxation

Current Tax

Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act 1961, except for the overseas subsidiaries and joint ventures where current tax provisions is determined based on the local tax laws. Deferred tax is recognized for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the Balance Sheet date.

Deferred Tax

Deferred tax liabilities represent the tax effect of temporary differences substantially on account of differences in the written down value of Fixed Assets on account of differing depreciation methods and rates and other timing differences.

Minimum Alternate Tax

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

n) Borrowing Cost

Cost in connection with the borrowing of funds to the extent not directly related to the acquisition of fixed assets are amortized and charged to the Profit and Loss Account, over the tenure of the loan. Borrowing cost to the extent directly attributable to acquisition of fixed assets are added to the cost of fixed assets.

o) Segment Reporting

As per Accounting Standard 17 on segment reporting of ICAI, the Company has reportable segments viz. Environmental Control Systems, Steel Structural & Engineering and Power Projects during the year under review. Accordingly the reporting is done segment wise.

p) Earning Per Share

The earnings considered in ascertaining the Company''s Earnings per Share (EPS) comprise the net profits after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

q) Cash Flow Statement

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

r) Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance costs and tax expense.

s) Sundry Debtors/Loans & Advances

Company as a policy obtains balance confirmation from Sundry Debtors, Creditors and other advances on monthly / quarterly / half yearly basis depending upon quantum of transaction made with the parties. Considering the same company does not have all balance confirmations as at June 30, 2013 the effect of the same, if any which is not likely to be material will be adjusted at the time of confirmation.

t) Provisions /Contingencies

A provision is recognized when there is a present 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 determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilities are not recognized and are disclosed in the Notes to financial statement.

u) Derivative Instruments

The Company has entered into derivative contracts in the nature of interest rate swaps and forward contracts with intention to hedge its requirements and firm commitments. The contracts are mark to market and losses are recognized in the profit and loss account. Gains arising on the same are not recognized on ground of prudence.

v) Deferred Revenue Expenditure

Cost of traveling, Consultancy fees and other expenses related to IRIS Certification are considered as deferred revenue expenditure. 1/5 of the expenditures have been charged to Profit and Loss account.

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Jun 30, 2012

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, and the Provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING

a) All income and expenditure are recognized on accrual basis.

b) Sales tax is not passed through Profit & Loss a/c and is therefore not included in sales.

c) Excise duty & Custom duty are passed through Profit & Loss a/c.

d) Mod vat availed on purchases of raw material and other inputs is reduced from its purchases and accordingly purchase of raw material are stated at net of cost.

C. FIXED ASSETS AND DEPRECIATION

Fixed Assets are stated at cost less accumulated depreciation. The cost including freight & other incidental expenses related to acquisition and installation .

D. DEPRECIATION :

a) Depreciation on fixed assets ( other than land ) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956.

b) Revaluation reserve has been utilised to the extent of amount needed to set-off depreciation on addition to fixed assets on a/c revaluation of assets.

E. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions other than fixed Assets are recorded at exchange rate prevailing at the time of transaction and realized gains and losses on this account are recognized in Profit and Loss Account. There is no foreign currency liability against acquisition of fixed assets at the year end.

F. INVESTMENTS

Investments are stated at cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary in the opinion of the management.

G. INVENTORIES

a) Raw materials, stores and spares and stock-in-transit are valued at cost net of mod vat as per the FIFO method after providing for cost of obsolescence value.

b) Work in progress is valued at cost including related overheads.

c) Finished goods are valued at lower of cost or net realizable value.

d) Stock in transit lying in warehouse is valued at cost and does not include custom duty payable.

H. EMPLOYEES RETIREMENT BENEFITS

a) The company's contribution to the provident fund are charged to profit and loss account.

b) The Company is taking effective step to get the liability for retirement benefits evaluated from Actuary and to take the LIC Employees Gratuity Scheme Policy.

c) As per past practice of the company, leave encashment is given as per rules of the company. No Liability is provided.

I. RESEARCH AND DEVELOPMENTS

Revenue expenditure is charged to profit & loss account of the year in which they are incurred.

J. EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the dispatch of goods from factory premises. No provision is made for excise duty in respect of finished products lying in the factory premises.

K. SEGMENT REPORTING:

As per Accounting Standard 17 on segment reporting of ICAI, the Company has reportable segments viz Environmental Control System. Steel Structural & Engineering and Power Projects during the year under review. Accordingly the reporting is done segment wise.

The Company's operations predominantly comprise of manufacturing and sale of Air-conditioning and parts thereof. Sale of Consumer Durable products other than Air-conditioners are insignificant. The geographical segmentations are also insignificant.

L. MANAGEMENT ESTIMATION

The financial statements are prepared in conformity with generally accepted accounting principles and applicable accounting standards, which may require management to make estimates and assumptions. These may affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the date of financial statements and the reported amount of the revenue and expenses during the reporting period. Actual report later could differ from these estimates.

M. IMPAIRMENT OF ASSETS

In the opinion of the Company management there is no impairment to the assets to which Accounting Standard - 28 "Impairment of Assets" applied requiring any revenue recognition.

N. TAXATIONS

Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act 1961, except for the overseas subsidiaries and joint ventures where current tax provisions is determined based on the local tax laws. Deferred tax is recognized for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the Balance sheet date.

Deferred Tax

Deferred Tax liabilities represent the tax effect of temporary differences substantially on account of differences in the written down value of Fixed Assets on account of differing depreciation methods and rates and other timing differences.

O. MINIMUM ALTERNATE TAX

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal Income tax during the specified period i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset will be created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

P. BORROWING COSTS:

Borrowing cost that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized asa part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

Q. EARNING PER SHARE

The earnings considered in ascertaining the Company's Earnings per Share(EPS) comprise the net profits after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

R. DERIVATIVE INSTRUMENTS.

The Company has not entered in to the derivative instruments, Forward contracts other than those entered into , to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast transactions are treated as foreign currency and accounted accordingly. Exchange difference arising on such contracts are recognised in the period in which they arise and premium paid/received is accounted as expense/income over the period of the contract.

S. CASH FLOW STATEMENT

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard-3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating , investing and financing activities of the Company. Cash and cash equivalent presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

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Jun 30, 2011

1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, accounting standards and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

2 REVENUE RECOGNITION

a) All income and expenditure are recognized on accrual basis.

b) The sales is recognized on the dispatch of goods inclusive of excise duty wherever applicable and are net of trade discount.

c) Sales tax is not passed through Profit & Loss Account and is therefore not included in sales.

d) Excise Duty & Custom duty are passed through Profit & Loss A/c.

e) Modvat availed on purchases of raw material and other inputs are reduced from its purchase and accordingly purchases of raw material are stated at net of cost.

3 FIXED ASSETS

a) Fixed Assets are stated at their original cost including freight and other incidental expenses related to acquisition and installation, less accumulated depreciation.

b) In case of land and building market value has been substituted for cost based on the valuation report adopted in the meeting of Board of Director on 24-04-99.

c) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on addition to fixed assets on account of revaluation of assets.

4 DEPRECIATION

a) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

b) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on addition to fixed assets on account of revaluation of assets.

c) Depreciation on addition to assets or on sale of assets is calculated on pro-rata basis.

b) There is no foreign currency liability against acquisition of fixed assets at the year end.

5. INVESTMENTS

Long term investments are stated at cost. Provision for diminution in the value of long-term investment is made only if such decline is other than temporary in the opinion of the management.

Investments in subsidiary company are of long-term strategic value and the diminution, if any in the value of these investments is temporary in nature.

6 INVENTORIES

a) Raw materials, stores and spares and stock-in-transit are valued at cost net of MODVAT as per the First in First out (FIFO) method after providing for cost of obsolescence value.

b) Work in progress is valued at cost including related overheads.

c) Finished goods are valued at lower of cost or net realizable value.

d) Stock in transit lying in warehouse is valued at cost and does not include custom duty payable. However, non-provision of duty does not affect profit for the year.

7 EMPLOYEES RETIREMENT BENEFITS

a) The Company's contribution to the provident fund is charged to profit and loss account.

b) The Company's liability in respect of payment of gratuity and leave encashment is provided on accrual basis. Company has made the provision of gratuity and leave encashment of Rs.267.93 Lacs up to 30th June 2011 and actuarial valuation is subject to management.

8 RESEARCH AND DEVELOPMENTS

Revenue expenditure is charged to profit & loss account of the year in which they incurred.

9 EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the dispatch of goods from factory premises. No provision has been made for excise duty in respect of finished products lying in the factory premises.

10 MANAGEMENT ESTIMATION

The financial statements are prepared in conformity with generally accepted accounting principles and applicable accounting standards, which may require management to make estimates and assumptions. These may affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the date of financial statements and the reported amount of the revenue and expenses during the reporting period. Actual report later could differ from these estimates.

11 IMPAIRMENT OF ASSETS

In the opinion of the Company management there is no impairment to the assets to which Accounting Standard- 28 "Impairment of Assets" applied requiring any revenue recognition.

12 TAXATION Current Tax:

The tax expenses for the year, comprising current tax is included in determining the net profit for the year.

A Provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws.

Deferred Tax:

The Deferred Tax Liability / Asset is Provided for timing difference between book profit and taxable profits is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date.

13 BORROWING COST

Borrowing cost that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

14 EARNING PER SHARE

The earnings considered in ascertaining the Company's Earnings per Share (EPS) comprise the net profits after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

15 CASH FLOW STATEMENT

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

16 SUNDRY DEBTORS/LOANS & ADVANCES

Sundry Debtors, Creditors and other advances are subject to confirmation. The effect of the same, if any which is not likely to be material, will be adjusted at the time of confirmation.

17 PROVISIONS /CONTINGENCIES

A provision is recognized when there is a present 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 determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilities are not recognized and are disclosed in the Notes on Accounts.

18 DERIVATIVE INSTRUMENTS

The Company has not entered into the derivative instruments. Forward Contract other than those entered into, to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast transactions are treated as foreign currency transactions and accounted accordingly. Exchange difference arising on such contracts are recognized in the period in which they arise and premium paid/received is accounted as expenses/income over the period of the contract.

---

Jun 30, 2010

1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, accounting standards and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

2 REVENUE RECOGNITION:

a) All income and expenditure are recognized on accrual basis.

b) The sales is recognized on the dispatch of goods inclusive of excise duty wherever app icable and are net of trade discount.

c) Sales tax is not passed through Profit & Loss Account and is therefore not included in sales.

d) Excise duty & Custom duty are passed through Profit & Loss A/c.

e) Modvat availed on purchases of raw material and other inputs are reduced from its purchase and accordingly purchases of raw material are stated at net of cost.

3 FIXED ASSETS:

a) Fixed Assets are stated at their original cost including freight and other incidental expenses related to acquisition and installation, less accumulated depreciation.

b) In case of land and building market value has been substituted for cost based on the valuation report adopted in the meeting of Board of Director on 24-04-99.

c) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on addition to fxed assets on account of revaluation of assets.

4 DEPRECIATION:

a) Depreciation on fxed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in Schedule XIV of the Companies Act 1956.

b) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on addition to fxed assets on account of revaluation of assets.

c) Depreciation on addition to assets or on sale of assets is calculated on pro-rata basis.

5 ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS:

a) Foreign currency transactions other than Fixed Assets are recorded at exchange rate prevailing at the time of transaction and realized gains and losses on this account are recognized in Profit & Loss Account.

b) There is no foreign currency liability against acquisition of fxed assets at the year end.

6. INVESTMENTS:

Long term investments are stated at cost. Provision for diminution in the value of long-term investment is made only if such decline is other than temporary in the opinion of the management.

Investments in subsidiary company are of long-term strategic value and the diminution, if any in the value of these investments is temporary in nature.

7 INVENTORIES:

a) Raw materials, stores and spares and stock-in-transit are valued at cost net of MODVAT as per the First in First out (FIFO) method after providing for cost of obsolescence value.

b) Work in progress is valued at cost including related overheads.

c) Finished goods are valued at lower of cost or net realizable value.

d) Stock in transit lying in warehouse is valued at cost and does not include custom duty payable. However, non-provision of duty does not affect Profit for the year.

8 EMPLOYEES RETIREMENT BENEFITS

a) The Companys contribution to the provident fund is charged to Profit & Loss Account.

b) The Companys liability in respect of payment of gratuity and leave encashment is provided on accrual basis. Company has made the provision of gratuity and leave encashment of Rs 264.95 Lacs upto 30th June 2010 and actuarial valuation is subject to management.

9 RESEARCH AND DEVELOPMENTS

Revenue expenditure is charged to Profit & Loss Account of the year in which they incurred.

10 EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the dispatch of goods from factory premises. No provision has been made for excise duty in respect of fnished products lying in the factory premises.

11 MANAGEMENT ESTIMATION

The financial statements are prepared in conformity with generally accepted accounting principles and applicable accounting standards, which may require management to make estimates and assumptions. These may affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the date of financial statements and the reported amount of the revenue and expenses during the reporting period.Actual report later could differ from these estimates.

12 IMPAIRMENT OF ASSETS

In the opinion of the Companys management there is no impairment to the assets to which Accounting Standard-28 "Impairment of Assets" applied requiring any revenue recognition.

13 TAXATION Current Tax:

The tax expenses for the year, comprising current tax is included in determining the net Profit for the year.

A Provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws.

Deferred Tax:

The Deferred Tax Liability / Asset is provided for timing difference between book profit and taxable profits is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the Balance Sheet date.

14 BORROWING COST

Borrowing cost that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

15 EARNINGS PER SHARE

The earnings considered in ascertaining the Companys Earnings per Share (EPS) comprise the net profits after taxThe number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

16 CASH FLOW STATEMENT

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

17 SUNDRY DEBTORS/LOANS & ADVANCES

Sundry Debtors, Creditors and other advances are subject to confrmation. The effect of the same, if any which is not likely to be material, will be adjusted at the time of confrmation.

18 PROVISIONS /CONTINGENCIES

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outfow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilities are not recognized and are disclosed in the Notes on Accounts.

19 DERIVATIVE INSTRUMENTS

The Company has not entered into the derivative instruments. Forward Contract other than those entered into, to hedge foreign currency risk on unexecuted frm commitments or of highly probable forecast transactions are treated as foreign currency transactions and accounted accordingly. Exchange difference arising on such contracts are recognized in the period in which they arise and premium paid/ received is accounted as expenses/income over the period of the contract.

---

Jun 30, 2009

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, accounting standards and the provisions of the Companies Act, 1956 as adopted consistently by the Board.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

2. REVENUE RECOGNITION:

a) All income and expenditure are recognized on accrual basis.

b) The sales is recognized on the dispatch of goods inclusive of excise duty wherever applicable and are net of trade discount.

c) Sales tax is not passed through Profit & Loss Account and is therefore not included in sales.

d) Excise Duty & Custom duty are passed through Profit & Loss A/c.

e) Modvat availed on purchases of raw material and other inputs are reduced from its purchase and accordingly purchases of raw material are stated at net of cost.

3. FIXED ASSETS:

a) Fixed Assets are stated at their original cost including freight and other incidental expenses related to acquisition and installation, less accumulated depreciation.

b) In case of land and building market value has been substituted for cost based on the valuation report adopted in the meeting of Board of Director on 24-04-99

c) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on addition to fixed assets on account of revaluation of assets.

a) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

b) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on addition to fixed assets on account of revaluation of assets.

c) Depreciation on addition to assets or on sale of assets is calculated on pro-rata basis.

4. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS:

a) Foreign currency transactions other than Fixed Assets are recorded at exchange rate prevailing at the time of transaction and realized gains and losses on this account are recognized in Profit & Loss Account.

b) There is no foreign currency liability against acquisition of fixed assets at the year end.

5. INVESTMENTS:

Long term investments are stated at cost. Provision for diminution in the value of long-term investment is made only if such decline is other than temporary in the opinion of the management.

Investments in subsidiary company are of long term strategic value and the diminution, if any in the value of these investments is temporary in nature.

6. INVENTORIES:

a) Raw materials, stores and spares and stock-in-transit are valued at cost net of MODVAT as per the First in First out (FIFO) method after providing for cost of obsolescence value.

b) Work in progress is valued at cost including related overheads.

c) Finished goods are valued at lower of cost or net realizable value.

d) Stock in transit lying in warehouse is valued at cost and does not include custom duty payable. However, non-provision of duty does not affect profit for the year.

7. EMPLOYEES RETIREMENT BENEFITS

a) The Companys contribution to the provident fund is charged to profit and loss account.

b) The Companys liability in respect of payment of gratuity and leave encashment is provided on accrual basis. During the year. Company has made the provision of gratuity and leave encashment of Rs. 39.49 Lacs upto 30th June, 2009.

8. RESEARCH AND DEVELOPMENTS

Revenue expenditure is charged to profit & loss account of the year in which they incurred.

9. EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the dispatch of goods from factory premises. No provision has been made for excise duty in respect of finished products lying in the factory premises.

10. MANAGEMENT ESTIMATION

The financial statements are prepared in conformity with generally accepted accounting principles and applicable accounting standards, which may require management to make estimates and assumptions. These may affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the date of financial statements and the reported amount of the revenue and expenses during the reporting period. Actual report later could differ from these estimates.

11. IMPAIRMENT OF ASSETS

In the opinion of the Companys management, there is no impairment to the assets to which Accounting Standard-28 "Impairment of Assets" applied requiring any revenue recognition.

12. TAXATION

Current Tax:

The tax expenses for the year, comprising current tax and fringe benefit tax is included in determining the net profit for the year.

A Provision is made for the current tax and fringe benefit tax based on tax liability computed in accordance with relevant tax rates and tax laws.

Deferred Tax:

The Deferred Tax Liability/ Asset is Provided for timing difference between book profit and taxable profits is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date.

13. BORROWING COST

Borrowing cost that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

14. EARNING PER SHARE

The earnings considered in ascertaining the Companys Earnings per Share (EPS) comprise the net profits after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

15. CASH FLOW STATEMENT

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

16. SUNDRY DEBTORS/LOANS & ADVANCES

Sundry Debtors, Creditors and other advances are subject to confirmation. The effect of the same, if any which is not likely to be material, will be adjusted at the time of conformation.

17. PROVISIONS /CONTINGENCIES

A provision is recognized when there is a present 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 determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilities are not recognized and are disclosed in the Notes on Accounts.

18. DERIVATIVE INSTRUMENTS

The Company has not entered into the derivative instruments. Forward Contract other than those entered into, to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast transactions are treated as foreign currency transactions and accounted accordingly. Exchange difference arising on such contracts are recognized in the period in which they arise and premium paid/received is accounted as expenses/income over the period of the contract.

---

Jun 30, 2008

1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, accounting standards and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

2 REVENUE RECOGNITION:

a) All income and expenditure are recognized on accrual basis.

b) The sales is recognized on the dispatch of goods inclusive of excise duty wherever applicable and are net of trade discount.

c) Sales tax is not passed through Profit & Loss Account and is therefore not included in sales.

d) Excise Duty & Custom duty are passed through Profit & Loss A/c.

e) Modvat availed on purchases of raw material and other inputs are reduced from its purchase and accordingly purchases of raw material are stated at net of cost.

3 FIXED ASSETS:

a) Fixed Assets are stated at their original cost including freight and other incidental expenses related to acquisition and installation, less accumulated depreciation.

b) In case of land and building market value has been substituted for cost based on the valuation report adopted in the meeting of Board of Directors on 24-04-99.

c) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on addition to fixed assets on account of revaluation of assets.

d) During the year, the Company has written off some assets whose WDV is less than Rs. 5,000/-. These assets have no existence at present. The total value of written off assets is Rs. 0.06 Lacs.

4 DEPRECIATION:

a) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956.

b) Revaluation reserve has been utilized to the extent of amount needed to set-off depreciation on addition to fixed assets on account of revaluation of assets.

c) Depreciation on addition to assets or on sale of assets is calculated on pro-rata basis.

5 ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS:

a) Foreign currency transactions other than Fixed Assets are recorded at exchange rate prevailing at the time of transaction and realized gains and losses on this account are recognized in Profits Loss Account.

b) There is no foreign currency liability against acquisition of fixed assets at the year end.

6 INVESTMENTS:

Long term investments are stated at cost. Provision for diminution in the value of long-term investment is made only if such decline is other than temporary in the opinion of the management.

7 INVENTORIES:

a) Raw materials, stores and spares and stock-in-transit are valued at cost net of MODVAT as per the First in First out (FIFO) method after providing for cost of obsolescence value.

b) Work in progress is valued at cost including related overheads.

c) Finished goods are valued at lower of cost or net realizable value.

d) Stock in transit lying in warehouse is valued at cost and does not include custom duty payable. However, non-provision of duty does not affect profit for the year.

8 EMPLOYEES RETIREMENT BENEFITS

a) The Companys contribution to the provident fund is charged to profit and loss account.

b) The Companys liability in respect of payment of gratuity and leave encashment is provided on accrual basis. During the year, the Company has made the provision of gratuity of Rs. 137.25 Lac and leave encashment of Rs. 0.65 lacs upto 30th June 2008.

9 RESEARCH AND DEVELOPMENTS

Revenue expenditure is charged to profit & loss account of the year in which they incurred.

10 EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the dispatch of goods from factory premises. No provision has been made for excise duty in respect of finished products lying in the factory premises.

11 SEGMENT REPORTING

Primary Segment information (by Business Segment): During the year under review, the Company had only one business segment hence the primary segment reporting requirement are not applicable for the year ended 30th June, 2008.

12 MANAGEMENT ESTIMATION

The financial statements are prepared in conformity with generally accepted accounting principles and applicable accounting standards, which may require management to make estimates and assumptions. These may affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the date of financial statements and the reported amount of the revenue and expenses during the reporting period. Actual report later could differ from these estimates.

13 IMPAIRMENT OF ASSETS

In opinion of the Companys management there is no impairment to the assets to which Accounting Standard-28 "Impairment of Assets" applied requiring any revenue recognition.

14 TAXATION

Current Tax:

The tax expenses for the year, comprising current tax and fringe benefit tax is included in determining the net profit for the year.

A Provision is made for the current tax and fringe benefit tax based on tax liability computed in accordance with relevant tax rates and tax laws.

Deferred Tax:

The Deferred Tax Liability / Asset is Provided for timing difference between book profit and taxable profits is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date.

15 BORROWING COST

Borrowing cost that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

16 EARNING PER SHARE

The earnings considered in ascertaining the Companys Earnings per Share (EPS) comprise the net profits after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

17 CASH FLOW STATEMENT

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

18 SUNDRY DEBTORS/LOANS & ADVANCES

Sundry Debtors, Creditors and other advances are subject to confirmation. The effect of the same, if any which is not likely to be material, will be adjusted at the time of confirmation.

19 PROVISIONS /CONTINGENCIES

A provision is recognized when there is a present 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 determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilities are not recognized and are disclosed in the Notes to Accounts (II).

20 DERIVATIVE INSTRUMENTS

The Company has not entered into the derivative instruments. Forward Contract other than those entered into, to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast transactions are treated as foreign currency transactions and accounted accordingly. Exchange difference arising on such contracts are recognized in the period in which they arise and premium paid/received is accounted as expenses/income over the period of the contract.

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Jun 30, 2007

A. Basis of preperation of financial statements

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generallay accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING

a) All income and expenditure are recognised on accrual basis.

b) The sales is recognised on the despatch of goods inclusive of excise duty wherever applicable and are net of trade discount.

c) Sales tax is not passed through Profit & Loss ale and is therefore not included is sales.

d) Excise duty & Custom duty are passed through Profit & Loss a/c

e) Modvate availed on purchases of raw material and other input is reduced from its purchases and accordingly purchases of raw material are stated at net of cost.

C. FIXED ASSETS

Fixed Assets are stated at their original cost including freight & other incidental expenses related to acquisition and installation, less accumulated depreciation.

In the case of land and building market value has been substituted for cost based on the valuation report adopted in the meeting of Board of Director on 24-4-99.

D. DEPRECIATION:

a) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the prescribed in schedule XIV of the Companies Act 1956.

b) Revaluation reserve has been utilised to the extent of amount needed to set-off depreciation on addition to fixed assets on a/c of revaluation of assets.

c) Depreciation on addition to assets or on sale of assets, is calculated on pro rata basis.

E. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions other than fixed,Assets are recorded at exchange rate prevailing at the time of transaction and realised gains and losses on this account are recoganised in Profit & Loss Account. There is no foreign curreny liability against acquisition of fixed assets at the year end.

F. INVESTMENTS

Long term Investment are stated at cost. Provision for diminution in the value of long term investment is made only if such decline is other than temporary in the opinion of the management.

a INVENTORIES

a) Raw materials, stores and spares and stock-in-transit are valued at cost net of modvate as per the first in first out method after providing for cost of obsolescence value.

b) Work in progress is valued at cost including related overheads.

c) Finished goods are valued at lower of cost or net realiseable value.

d) Stock in transit lying in warehouse is valued at cost and does not indued custom duty payable. However, non provision of duty does not affect profit for the year.

H. EMPLOYEES RETIREMENT BENEFITS

a) The companys contribution to the providend fund are charged to profit and loss account.

b) The Company is taking effective step to get the liability for retirement benefits evaluated from actuary and to take the LIC Employees Gratuity Scheme Policy.

c) As per past practice of the company, Leave encashment is given as per rules of the company. No liability is provided.

I. RESEARCH AND DEVELOPMENTS

Revenue expenditure is charged to profit & loss account of the year in which they are incurred.

J. EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the despatch of goods from factory premises. No provision has been made for excise duty in respect of finished products lying in the factory premises.

K. SEGMENT REPORTING

Primery Seqment information (by Business Segment)

The company has only one business segment. Hence the primary segment reporting requirement are not applicable.

L. MANAGEMENT ESTIMATION

The financial statements are prepared confirmity with generally accepted accounting principles and applicable accounting standards, which may require management to make estimates and assumptions, may affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of the revenue and expenses during the reported period. Actual report later could differ from the estimate.

M. IMPAIRENT OF ASSETS

In the opinion of the company management there is no impairment to the assets to which Accounting Standard - 28 "Impairement of Assets" applied requiring any revenue recognition.

N. TAXATION

Current Tax:- A provision is made for the current tax and fringe benefit tax based on tax liabilities computed in accordance with relevant tax rules and tax laws.

Deferred Tax :- The Deferred Tax Liability / Asset is provided for timing difference between book profit and taxable profits is accounted for using the tax rates and laws that have been enacted or substantinely enacted as on the balance sheet date.

0. BORROWING COSTS:

Interest and other borrowing cost are recgnised as an expense in the period in which they are incurred.

---

Jun 30, 2005

I. SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, accounting standards and the provisions of the Companies Act, 1956 as adopted consistently by the company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING

a) All income and expenditure are recognised on accrual basis.

b) The sales is recognised on the despatch of goods inclusive of excise duty wherever applicable and are net of trade discount.

C. FIXED ASSETS

Fixed Assets are stated at their original cost including freight & other incidential expenses related to acquisition and installation, less accumulated depreciation.

In case of land and building market value has been substituted for cost based on the valuation report adopted in the meeting of Board of Director on 24-4-99.

D. DEPRECIATION

a) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956.

b) Revaluation reserve has been utilised to the extent of amount needed to set-off depreciation on addition to fixed assets on account of revaluation of assets.

c) Depreciation on addition to assets or on sale of assets, is calculated on pro-rata basis.

E. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions other than Fixed Assets are recorded at exchange rate prevailing at the time of transaction and realised gains and losses on this account are recognised in Profit & Loss Account.

There is no foreign currency liability against acquisition of fixed assets at the year end.

F. INVESTMENTS

Long term Investment are stated at cost. Provision for diminution in the value of long term investment is made only if such decline is other than temporary in the opinion of the management.

G. INVENTORIES

a) Raw-materials, stores and spares and stock-in-transit are valued at cost net of MODVAT as per the First In First Out (FIFO) method after providing for cost of obsolescence value.

b) Work in progress is valued at cost including related overheads.

c) Finished goods are valued at lower of cost or net realiseable value.

d) Stock in transit lying in warehouse is valued at cost and does not include custom duty payable. However, non provision of duty does not affect profit for the year.

H. EMPLOYEES RETIREMENT BENEFITS

a) The company's contribution to the provident fund are charged to profit and loss account.

b) The Company is taking effective step to get the liability for retirement benefits evaluated from Actuary and to take the LIC Employees Gratuity Scheme Policy.

c) As per past practice of the company, leave encashment is given as per rules of the company. No liability is provided.

I. RESEARCH AND DEVELOPMENTS

Revenue expenditure is charged to profit & loss account of the year in which they are incurred.

J. EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the despatch of goods from factory premises.

No provision has been made for excise duty in respect of finished products lying in the factory premises.

K. SEGMENT REPORTING

Primary Segment information(by Business Segment) :- The company has only one business segment. Hence the primary segment reporting requirement are not applicable.

L. TAXATION

Current Tax :- The Income tax is provided on taxable income determined as per Income Tax Act 1961.

Deferred Tax :- The Deferred Tax Liability/Asset is provided for timing difference between book profit and taxable profits is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date.

M. SHARE CAPITAL

The Company alloted 1,00,00,000 warrants @ Rs.30/- per warrant to Perfect Radiators & Oil Coolers Private Limited, Rajul Estates Private Limited and Sunrise Management & Estates Private Limited on 7th May 2005. The Company has received 10% of the issue price of the warrants at the time of allotment, amounting to Rs.3,00,00,000/- from the allottees. The said warrants would be converted at the option of warrant holders into equal number of the equity shares of Rs. 10/- each at a premium of Rs. 20/- per share of the company within a period of 18 months from the date of allotment. If the warrant holders do not exercise their right of conversion, then the said amount would be forfeited by the company.

---

Jun 30, 2004

I. SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, accounting standard and the provisions of the Companies Act, 1956 as adopted consistently by the company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING

a) All income and expenditure are recognised on accrual basis.

b) The sales is recognised on the despatch of goods inclusive of excise duty wherever applicable and are net of trade discount.

C. FIXED ASSETS

Fixed Assets are stated at their original cost including freight & other incidential expenses related to acquisition and installation, less accumulated depreciation.

In the case of land and building market value has been substituted for cost based on the valuation report adopted in the meeting of Board of Directors on 24-4-99.

D. DEPRECIATION:

a) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956.

b) Revaluation Reserve has been utilised to the extent of amount needed to set-off depreciation on addition to fixed assets on a/c of revaluation of assets.

c) Depreciation on addition to assets or on sale of assets, is calculated on pro rata basis.

E. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions other than Fixed Assets are recorded at exchange rate prevailing at the time of transaction and realised gains and losses on this account are recognised in Profit & Loss Account.

There is no foreign currency liability against acquisition of fixed assets at the year end.

F. INVESTMENTS

Long term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management.

G. INVENTORIES

a) Raw materials, stores and spares and stock-in-transit are valued at cost net of MODVAT as per the first in first out method after providing for cost of obsolescence value.

b) Work in progress is valued at cost including related overheads.

c) Finished goods are valued at lower of cost or net realiseable value.

d) Stock in transit lying in warehouse is valued at cost and does not include custom duty payable. However , non provision of duty does not affect profit for the year.

H. EMPLOYEES RETIREMENT BENEFITS

a) The company's contribution to the providend fund are charged to profit and loss account.

b) The Company is taking effective step to get the liability for retirement benefits evaluated from Actuary and to take the LIC Employees Gratuity Scheme Policy.

c) As per past practice of the company. Leave encashment is given as per rules of the company. No liability is provided.

I. RESEARCH AND DEVELOPMENTS

Revenue Expenditure is charged to Profit & Loss Account of the year in which they are incurred.

j. EXCISE DUTY

Excise Duty is accounted for as and when the same is paid on the despatch of goods from factory premises.

No provision has been made for excise duty in respect of finished products lying in the factory premises.

---

Jun 30, 2003

I. SIGNIFICANT ACCOUNTING POLICIES

A. Basis of preparation of financial statements

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, accounting standards and the provisions of the Companies Act, 1956 as adopted consistently by the company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING

All income and expenditure are recognised on accrual basis.

C. FIXED ASSETS

Fixed Assets are stated at cost of acquisition/construction less accumulated depreciation. In the case of land and building market value has been substituted for cost based on the variation report adopted in the meeting of Board of Director on 24.4.99.

D. DEPRECIATION:

a) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956.

b) Revaluation reserve has been utilised to the extent of amount needed to set-off depreciation on addition to fixed assets on a/c of revaluation of assets.

E. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions other than fixed Assets are recorded at exchange rate prevailing at the time of transaction and realised gains and losses on this account are recognised in Profit & Loss Account. There is no foreign currency liability against acquisition of fixed assets at the year end.

F. Previous years figures have been re-grouped/re-arranged as and wherever found necessary.

G. The balances of Intra-Group companies & sister units are subject to confirmation.

H. INVESTMENTS

Long term Investment are stated at cost.

I. INVENTORIES

a) Raw materials, stores and spares and stock-in-transit are valued at cost net of MODVAT.

b) Work in progress is valued at cost including related overheads.

c) Finished goods are valued at lower of cost or net realisable value.

J. EMPLOYEES RETIREMENT BENEFITS

a) The company's contribution to the providend fund are charged to Profit and Loss Account.

b) The Company is taking effective steps to get the liability for retirement benefits evaluated from Actuary and to take the LIC Employees Gratuity Scheme Policy.

c) As per past practice of the company, Leave encashment is given as per rules of the company.

No liability is provided.

K. RESEARCH AND DEVELOPMENTS

Revenue expenditure is charged to Profit & Loss Account of the year in which they are incurred.

L. EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the despatch of goods from factory premises. No provision has been made for excise duty in respect of finished products lying in the factory premises.

M. SEGMENT REPORTING

Primary Segment information (by Business Segment): The company has only one business segment. Hence the primary segment reporting requirement are not applicable

N. TAXATION

Current Tax :- The Income tax is provided on taxable income determined as per Income Tax Act 1961.

Deferred Tax :- The Deferred Tax Liability/Asset is provided for timing difference.

---

Jun 30, 2002

I. SIGNIFICANT ACCOUNTING POLICIES

A. Basis of preparation of financial statements

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, accounting standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING

All income and expenditure are recognised on accrual basis.

C. FIXED ASSETS AND DEPRECIATION

a) Fixed Assets are stated at cost of acquisition/construction less accumulated depreciation. In the case of land and building market value has been substituted for cost based on the valuation report adopted in the meeting of Board of Director on 24-4-99.

b) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956.

c) Revaluation reserve has been utilised to the extent of amount needed to set-off depreciation on addition to fixed assets on a/c of revaluation of assets.

D. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions other than fixed Assets are recorded at exchange rate prevailing at the time of transection as per the accounting standards issued by the Institute of Chartered Accountants of India.

There is no foreign currency liability against acquisition of fixed assets at the year end.

E. Previous years figures have been re-grouped.

F. INVESTMENTS

Long-term Investment are stated at cost.

G. INVENTORIES

a) Raw materials, stores and spares and stock-in-transit are valued at cost net of modvate.

b) Work in progress is valued at cost including related overheads.

c) Finished goods are valued at lower of cost or net realiseable value.

H. EMPLOYEES RETIREMENT BENEFITS

a) The conpanys contribution to the providend fund are charged to profit and loss account.

b) The Company is taking effective step to get the liability for retirement benefits eveluated from Actuary and to take the LIC Employees Gratuity Scheme Policy,

c) As per past practice of the company, Leave encashment is given as per rules of the company. No liability is provided.

I. RESEARCH AND DEVELOPMENTS

Revenue expenditure is charged to profit & loss account of the year in which they are incurred.

J. EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the despatch of goods from factory premises. No provision has been made for excise duty in respect of finished products lying in the factory premises.

K. SEGMENT REPORTING

Primary segment infarmation (By business segment). The Company has only one business segment. Hence the primary segment reporting requirement are not applicable.

L.TAXATION

Current Tax-The income tax is provided on taxable Income determined as per Income Tax Act, 1961, Deferred Tax Liability:-

The deferred tax liability is provided for timing difference as per Accounting Standard 22 issued by the Institute of chartered Accountants of India.

M. CONTINGENT LIABILITIES:

Letter of Credit Rs. 18899907

Bank Gurantees Rs. 6525471

N. Related Party Disclosures : (in which some Directors are interested)

a) Related Companies:- Nature of Relationship (Associate Co./Subsidiary Co/Directors Interested)

Airserco Pvt. Ltd Directors Interested

Lloyd Elect. & Engg Ltd Directors Interested

b) Key Management Personnel:

Name of Related Party Nature of Relationship/Transaction

Mr. Bharat Raj Punj Part Time Director

c) Transaction with Related Companies

Transactions Amount (Rs.)

Purchase of goods 25113257.78

Sales of goods 1988327.55

---

Jun 30, 2001

A. Basis of preparation of financial statements

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING

All income and expenditure are recognised on accrual basis.

C. FIXED ASSETS AND DEPRECIATION

a) Fixed Assets are stated at cost of acquisition/construction less accumulated depreciation, in the case of land and building market value has been substituted for cost based on the valuation report adopted in the meeting of Board of Director on 24-4-99.

b) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956.

c) Revaluation reserve has been utilised to the extent of amount needed to set-off depreciation on addition to fixed assets on a/c of revaluation of assets.

D. Accounting for foreign currency transactions

Foreign currency transactions other than fixed Assets are recorded at exchange rate prevailing at the time of transaction and realised gains and losses on this account are recognised in Profit and Loss Account.

There is no foreign currency liability against acquisition of fixed assets at the year end.

E. Previous years figures have been re-grouped.

F. INVESTMENTS

a) Investment are stated at cost.

b) A provision for diminution is made to recognise the decline other than temporary in the value of long term investments.

G. INVENTORIES

a) Raw materials, stores and spares and stock-in-transit are valued at cost net of modvat.

b) Work in progress is valued at cost including related overheads.

c) Finished goods are valued at lower of cost or net realisable value.

H. EMPLOYEES RETIREMENT BENEFITS

The company is taking effective step to get the liability for retirement benefits evaluated from Actuary and to take the LIC Employees Gratuity Scheme Policy.

I. Research and developments

Revenue expenditure is charged to profit & loss account of the year in which they are incurred.

J. EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the despatch of goods from factory premises. No provision has been made for excise duty in respect of finished products lying in the factory premises.

---

Jun 30, 2000

SIGNIFICANT ACCOUNTING POLICIES

A. Basis of preperation of financial statements

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING

All income and expenditure are recognised on accrual basis.

C. FIXED ASSETS AND DEPRECIATION

a) Fixed Assets are stated at cost of acquisition/construction less accumulated depreciation, in the case of land and building market value has been substituted for cost based on the valuation report adopted in the meeting of Board of Director on 24-4-99.

b) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956.

c) Revaluation reserve has been utilised to the extent of amount needed to set-off depreciation on addition to fixed assets on a/c of revaluation of assets.

D. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions other than fixed Assets are recorded at exchange rate prevailing at the time of transaction and realised gains and losses on this account are recognised in Profit and Loss Account.

There is no foreign currency liability against acquisition of fixed assets at the year end.

E. During the year, the balances due to/due from Intra-Group Companies have been netted-off and as a result thereof the Loans and Advances do not show any amount due from Companies in which some Directors are intrested. Previous Years figures have also been regrouped in this regard.

F. INVESTMENTS

Investments are stated at cost.

G. INVENTORIES

a) Raw materials, stores and spares and stock-in-transit are valued at cost net of MODVAT.

b) Work in progress is valued at cost including related overheads.

c) Finished goods are valued at lower of cost or net realisable value.

H. EMPLOYEES RETIREMENT BENEFITS

The Company is taking effective step to get the liability for retirement benefits evaluated from Actuary and to take the LIC Employees Gratuity Scheme Policy.

I. RESEARCH AND DEVELOPMENTS

Revenue expenditure is charged to profit & loss account of the year in which they are incurred.

J. EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the despatch of goods from factory premises. No provision has been made for excise duty in respect of finished products lying in the factory premises.

---

Jun 30, 1999

I. SIGNIFICANT ACCOUNTING POLICIES

A. Basis of preparation of financial statements

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING

All income and expenditure are recognised on accrual basis.

C. FIXED ASSETS AND DEPRECIATION

a) Fixed Assets are stated at cost of acquisition/construction less accumulated depreciation.in the case of land and building market value has been substituted for cost based on the valuation report adopted in the meeting of Board of Director on 24-4-99.

b) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956.

c) Revaluation reserve has been utilised to the extent of amount needed to set-off depreciation on addition to fixed assets on a/c of revaluation of assets.

D. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are recorded at the Exchange rate prevailing at the time of the transactions and the liabilities are recorded at the exchange rate prevailing at the time of payment.

E. During the year, the balances due to/due from Intra-Group Companies have been netted-off and as a result thereof the Loans and Advances do not show any amount due from Firms/Companies in which some Directors are interested. Previous Years figures have also been regrouped in this regard.

F. INVESTMENTS

Investment are stated at cost.

G. INVENTORIES

a) Finished goods, raw materials, stores and spares and stock-in-transit are valued at cost

b) Work in progress is valued at cost including related overheads.

H. EMPLOYEES RETIREMENT BENEFITS

The Company has decided to account for the payment of gratuity as and when paid.

I. RESEARCH AND DEVELOPMENTS

Revenue expenditure is charged to profit & loss account of the year in which they are incurred.

J. EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the despatch of goods from factory premises.

No provision has been made for excise duty in respect of finished products lying in the factory premises.

K. CONTINGENT LIABILITIES :

Letter of Credit Rs. 2306807.00

Bank Guarantees Rs. 3150402.00

Excise duty of Rs. 6.76 lacs is in dispute and cases are pending in different courts. the matter is sub-judice.

---

Jun 30, 1998

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS :

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principals, and the provisions of the Companies Act, 1956 as adopted consistenly by the Company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING :

All income and expenditure are recognised on accrual basis.

C. FIXED ASSETS AND DEPRECIATION :

a) Fixed Assets are stated at cost of acquisition/construction less accumulated depreciation except on land where no depreciation is charged.

b) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956.

D. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS :

Export sales are recorded at the Exchange rate prevailing at the time of the transactions and the receipts are recorded at the exchange rate prevailing at the time of receipt.

E. During the year, the balances due to/due from intra-Group Companies have been netted - off and as a result thereof the Loans and Advances do not show any amount due from Firms/Companies in which some Directors are interested. Previous Years' figures have also been regrouped in this regard.

F. INVESTMENTS :

Investment are stated at cost.

G. INVENTORIES :

a) Finished goods, raw materials, stores and spares and stock-in-transit are valued at cost.

b) Work in progress is valued at cost including related overheads.

H. EMPLOYEES RETIREMENT BENEFITS :

The Company has decided to account for the payment of gratuity as and when paid.

I. RESEARCH AND DEVELOPMENTS :

Revenue expenditure is charged to profit & loss account of the year in which they are incurred.

J. EXCISE DUTY :

Excise duty is accounted for as and when the same is paid on the despatch of goods from factory premises.

---

Jun 30, 1997

A. Basis of preparation of financial statements

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles,and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING

All income and expenditure are recognised on accrual basis.

C. FIXED ASSETS AND DEPRECIATION

a) Fixed Assets are stated at cost of acquisition/construction less accumulated depreciation except on land where no depreciation is charged.

b) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956.

D. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS

Export sales are recorded at the Exchange rate prevailing at the time of the transactions and the receipts are recorded at the exchange rate prevailing at the time of receipt.

E. INVESTMENTS

Investments are stated at cost.

F. INVENTORIES

a) Finished goods, raw materials, stores and spares and stock-in-transit are valued at cost

b) Work in progress is valued at cost including related overheads.

G. EMPLOYEES RETIREMENT BENEFITS

The Company has decided to account for the payment of gratuity as and when paid.

H. RESEARCH AND DEVELOPMENTS

Revenue expenditure is charged to profit & loss account of the year in which they are incurred.

I. EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the dispatch of goods from factory premises.

No provision has been made for excise duty in respect of finished products lying in the factory premises.

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Jun 30, 1996

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, and the provisions of the Companies Act, 1956 as adopted consistently by the Company. b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING All income and expenditure are recognised on accrual basis except Interest income which is accounted for on receipt basis.

C. FIXED ASSETS AND DEPRECIATION a) Fixed Assets are stated at cost of acquisition/construction less accumulated depreciation except on land where no depreciation is charged.

b) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956.

D. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS Export sales are recorded at the Exchange rate prevailing at the time of the transactions and the receipts are recorded at the exchange rate prevailing at the time of receipt.

E. INVESTMENTS Investment are stated at cost.

F. INVENTORIES a) Finished goods raw materials, stores and spares and stock-in-transit are valued at cost b) Work in progress is valued at cost including related overheads.

G. EMPLOYEES RETIREMENT BENEFITS The Company has decided to account for the payment of gratuity as and when paid.

H. RESEARCH AND DEVELOPMENT Revenue expenditure is charged to profit & loss account of the year in which they are incurred.

I. EXCISE DUTY Excise duty is accounted for as and when the same is paid on the despatch of goods from factory premises. No provision has been made for excise duty in respect of finished products lying in the factory premises.

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Jun 30, 1995

A. Basis of preparation of financial statements

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING

All income and expenditure are recognised on accrual basis except Interest income which is accounted for on receipt basis.

C. FIXED ASSETS AND DEPRECIATION

a) Fixed Assets are stated at cost of acquisition/construction less accumulated depreciation except on land where no depreciation is charged.

b) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956.

D. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS

Export sales are recorded at the Exchange rate prevailing at the time of the transactions and the receipts are recorded at the exchange rate prevailing at the time of receipt. E. INVENTORIES

a) Finished goods, raw materials, stores and spares and stock-in-transit are valued at cost

b) Work in progress is valued at cost including related overheads.

F. EMPLOYEES RETIREMENT BENEFITS

The Company has decided to account the payment of gratuity as and when paid.

G. RESEARCH AND DEVELOPMENT

Revenue expenditure is charged to profit & loss account of the year in which they are incurred.

H. EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the despatch of goods from factory premises. No provision is made for excise duty in respect of finished products lying in the factory premises.

A. Basis of preparation of financial statements

a) The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company.

B. BASIS OF ACCOUNTING

All income and expenditure are recognised on accrual basis except Interest income which is accounted for on receipt basis.

C. FIXED ASSETS AND DEPRECIATION

a) Fixed Assets are stated at cost of acquisition/construction less accumulated depreciation except on land where no depreciation is charged.

b) Depreciation on fixed assets (other than land) is charged on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956.

D. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS

Export sales are recorded at the Exchange rate prevailing at the time of the transactions and the receipts are recorded at the exchange rate prevailing at the time of receipt. E. INVENTORIES

a) Finished goods, raw materials, stores and spares and stock-in-transit are valued at cost

b) Work in progress is valued at cost including related overheads.

F. EMPLOYEES RETIREMENT BENEFITS

The Company has decided to account the payment of gratuity as and when paid.

G. RESEARCH AND DEVELOPMENT

Revenue expenditure is charged to profit & loss account of the year in which they are incurred.

H. EXCISE DUTY

Excise duty is accounted for as and when the same is paid on the despatch of goods from factory premises. No provision is made for excise duty in respect of finished products lying in the factory premises.