AS - 1     Disclosure of Accounting Policies

Basis of Preparation

The financial statements of the Company have been brpared on accrual basis under the historical cost convention and in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) to comply with Accounting Standard specified under Section 133 of the Companies Act, 2013 (“the Act”) read the Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant Provisions of the Act / Companies Act 1956 (the 1956 Act), as applicable.

Use of Estimates

The brparation of financial statements is in conformity with Generally Accepted Accounting Principles (GAAP) in India, requires the management to make estimates and assumptions that affect the reporting amounts of assets and liabilities and the disclosures of contingent liabilities as at the date of financial statements and the reporting amounts of revenue and expenses during the reporting period.    

26.2        AS - 2     Valuation of Inventories

Raw Material, Work-in-Progress, Finished Goods are valued at lower of cost or net realizable value. The cost is determined using FIFO method.

The cost of inventories comprises of all costs of purchase, cost of conversion and packing materials in case of Finished Goods.

The cost of purchase comprises of the purchase price including duties & taxes (other than those subsequently recoverable by the Company from taxing authorities), freight inwards and other expenditure directly attributable to the acquisition but net of trade discounts, rebates and similar items.

The cost of conversion comprises of debrciation on Factory Building and Plant & Machinery (including Electrical Installations), Power & Fuel, Factory Management and Administration Expenses, Repairs & Maintenance and Consumable Stores & Spares.

Packing materials and Fuel are valued at lower of cost or net realizable value. The cost is determined using FIFO method.

Scrap is valued at net realizable value.

Consumable Stores and Spares being negligible percentage of Finished Goods are charged off to Statement of Profit and Loss in the year of purchase.

26.3        AS - 3     Cash Flow Statement

The cash flow statement is brpared under “Indirect Method”.

26.4       AS - 4     Contingencies and Events occurring after the Balance Sheet date

Provisions involving substantial degree of estimation in measurement are recognized when there is brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

26.5        AS - 6     Debrciation Accounting

A)     Tangible Assets

Debrciation on Tangible Fixed Assets has been provided on Straight Line Method as per the useful life brscribed under Schedule II of the Act.

B)      Intangible Assets

Intangible Assets are amortised on straight line over the estimated useful life of 3 to 5 years.

26.6        AS - 9     Revenue Recognition

Sales include sales of finished goods, semi finished goods, scrap and excise duty but net off rate difference and returns.

Revenue from Sales is recognised when the substantial risk & rewards of ownership are transferred to the buyer.

26.7        AS - 10  Accounting for Fixed Assets

Fixed Assets are stated at cost of acquisition or construction, less accumulated debrciation and impairment loss, if any.

Cost include purchase price, tax & duty net of credit availed, if any & other direct cost attributable for acquisition or construction of Assets up to the date the Assets is ready for its intended use (also refer to Policy on Borrowing Cost, Impairment of Assets & Effect of changes in Foreign Exchange Rate).

Further, foreign currency differences on Long Term Borrowings for acquiring Fixed Assets are adjusted to the cost of Fixed Assets or Foreign Currency Monetary Items Translation Difference and amortize / debrciate over the remaining life of the Assets.

26.8        AS - 11  Effects of changes in Foreign Exchange Rates

Foreign Currency Transactions are recorded at the exchange rate brvailing as at the date of transaction.

Current assets and liabilities in foreign currency at the balance sheet date are translated with reference to the year end exchange rates.

The brmium or discount that arises on entering into forward exchange contracts for hedging are measured by the difference between the exchange rate at the date of inception of the forward exchange contract and the forward rate.

Any revenue or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss except related to fixed assets that are adjusted to carrying cost of net assets. The brmium or discount on forward contracts entered into to hedge the foreign currency risks of a firm commitment is recognized over the life of contract. The mark to market loss in the respect of outstanding derivative contracts as on the Balance Sheet date for highly probable forecasted transactions are charged to Statement of Profit & Loss.

The Company uses foreign exchange forward contracts to hedge its exposure to fluctuations in foreign exchange rates. Net forward contracts liabilities are disclosed in the Balance Sheet.

26.9        AS - 13 Accounting for Investments

Long Term investments are stated at cost, after providing for any diminution in value, if such diminution is “other than temporary” in nature.

26.10     AS - 15  Employee Benefits

Short term benefits are recognized as an expense at the undiscounted amount in the Statement of Profit & Loss of the year in which related services are rendered.

Defined Contribution Plan:

Provident Fund deducted from employees together with employer’s contribution is remitted to Employee’s Provident Fund administered by the Central Government and employer’s contribution is charged to the Statement of Profit & Loss.

Defined Benefit Plan: 

Gratuity liability is a defined benefit obligation and is provided for on the basis of actuarial valuation on Project Unit Credit Method made at the end of each financial year. The scheme is maintained and administered by LIC to which the Company makes periodical contributions through trustees.

Leave Salary:

The liability towards compensated absence is recognized based on actuarial valuation carried out using the Projected Unit Credit Method.

26.11     AS - 16  Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets upto the date the Asset is ready for intended use, based on borrowing incurred specifically for financing the Assets or weighted average rate of all other borrowings, if no specific borrowing have been incurred for the Assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit & Loss.

26.12     AS - 17  Segment Reporting

The Company is primarily engaged in the business of PVC Insulated Cables. As such there is no separate reportable segment as defined by the Accounting Standard on Segment Reporting.

26.13     AS - 18  Related Party Disclosure

Disclosures are made as per the requirements of the Standard, under Note 33.

26.14     AS - 19  Accounting for Lease

Operating Lease : Lease arrangements where the risk and rewards incidental to ownership of an asset substantially vest with the lessor are recognized as an operating lease. Lease rentals under operating lease are recognized in the statement of Profit & Loss on accrual basis.

26.15     AS - 20  Earnings per Share

In determining earnings per share, the Company considers the net profit after tax and extraordinary items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year.

26.16     AS - 22  Accounting for Taxes on Income

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from ‘timing difference’ between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the asset will be realized in future.

26.17     AS - 28  Impairment of Assets

An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value.  An impairment loss is charged for when an asset is identified as impaired.

 SIGNIFICANT ACCOUNTING POLICIES

26.1        AS - 1     Disclosure of Accounting Policies

Basis of Preparation

The financial statements of the Company have been brpared on accrual basis under the historical cost convention and in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) to comply with Accounting Standard specified under Section 133 of the Companies Act, 2013 (“the Act”) read the Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant Provisions of the Act / Companies Act 1956 (the 1956 Act), as applicable.

Use of Estimates

The brparation of financial statements is in conformity with Generally Accepted Accounting Principles (GAAP) in India, requires the management to make estimates and assumptions that affect the reporting amounts of assets and liabilities and the disclosures of contingent liabilities as at the date of financial statements and the reporting amounts of revenue and expenses during the reporting period.    

26.2        AS - 2     Valuation of Inventories

Raw Material, Work-in-Progress, Finished Goods are valued at lower of cost or net realizable value. The cost is determined using FIFO method.

The cost of inventories comprises of all costs of purchase, cost of conversion and packing materials in case of Finished Goods.

The cost of purchase comprises of the purchase price including duties & taxes (other than those subsequently recoverable by the Company from taxing authorities), freight inwards and other expenditure directly attributable to the acquisition but net of trade discounts, rebates and similar items.

The cost of conversion comprises of debrciation on Factory Building and Plant & Machinery (including Electrical Installations), Power & Fuel, Factory Management and Administration Expenses, Repairs & Maintenance and Consumable Stores & Spares.

Packing materials and Fuel are valued at lower of cost or net realizable value. The cost is determined using FIFO method.

Scrap is valued at net realizable value.

Consumable Stores and Spares being negligible percentage of Finished Goods are charged off to Statement of Profit and Loss in the year of purchase.

26.3        AS - 3     Cash Flow Statement

The cash flow statement is brpared under “Indirect Method”.

26.4       AS - 4     Contingencies and Events occurring after the Balance Sheet date

Provisions involving substantial degree of estimation in measurement are recognized when there is brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

26.5        AS - 6     Debrciation Accounting

A)     Tangible Assets

Debrciation on Tangible Fixed Assets has been provided on Straight Line Method as per the useful life brscribed under Schedule II of the Act.

B)      Intangible Assets

Intangible Assets are amortised on straight line over the estimated useful life of 3 to 5 years.

26.6        AS - 9     Revenue Recognition

Sales include sales of finished goods, semi finished goods, scrap and excise duty but net off rate difference and returns.

Revenue from Sales is recognised when the substantial risk & rewards of ownership are transferred to the buyer.

26.7        AS - 10  Accounting for Fixed Assets

Fixed Assets are stated at cost of acquisition or construction, less accumulated debrciation and impairment loss, if any.

Cost include purchase price, tax & duty net of credit availed, if any & other direct cost attributable for acquisition or construction of Assets up to the date the Assets is ready for its intended use (also refer to Policy on Borrowing Cost, Impairment of Assets & Effect of changes in Foreign Exchange Rate).

Further, foreign currency differences on Long Term Borrowings for acquiring Fixed Assets are adjusted to the cost of Fixed Assets or Foreign Currency Monetary Items Translation Difference and amortize / debrciate over the remaining life of the Assets.

26.8        AS - 11  Effects of changes in Foreign Exchange Rates

Foreign Currency Transactions are recorded at the exchange rate brvailing as at the date of transaction.

Current assets and liabilities in foreign currency at the balance sheet date are translated with reference to the year end exchange rates.

The brmium or discount that arises on entering into forward exchange contracts for hedging are measured by the difference between the exchange rate at the date of inception of the forward exchange contract and the forward rate.

Any revenue or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss except related to fixed assets that are adjusted to carrying cost of net assets. The brmium or discount on forward contracts entered into to hedge the foreign currency risks of a firm commitment is recognized over the life of contract. The mark to market loss in the respect of outstanding derivative contracts as on the Balance Sheet date for highly probable forecasted transactions are charged to Statement of Profit & Loss.

The Company uses foreign exchange forward contracts to hedge its exposure to fluctuations in foreign exchange rates. Net forward contracts liabilities are disclosed in the Balance Sheet.

26.9        AS - 13 Accounting for Investments

Long Term investments are stated at cost, after providing for any diminution in value, if such diminution is “other than temporary” in nature.

26.10     AS - 15  Employee Benefits

Short term benefits are recognized as an expense at the undiscounted amount in the Statement of Profit & Loss of the year in which related services are rendered.

Defined Contribution Plan:

Provident Fund deducted from employees together with employer’s contribution is remitted to Employee’s Provident Fund administered by the Central Government and employer’s contribution is charged to the Statement of Profit & Loss.

Defined Benefit Plan: 

Gratuity liability is a defined benefit obligation and is provided for on the basis of actuarial valuation on Project Unit Credit Method made at the end of each financial year. The scheme is maintained and administered by LIC to which the Company makes periodical contributions through trustees.

Leave Salary:

The liability towards compensated absence is recognized based on actuarial valuation carried out using the Projected Unit Credit Method.

26.11     AS - 16  Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets upto the date the Asset is ready for intended use, based on borrowing incurred specifically for financing the Assets or weighted average rate of all other borrowings, if no specific borrowing have been incurred for the Assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit & Loss.

26.12     AS - 17  Segment Reporting

The Company is primarily engaged in the business of PVC Insulated Cables. As such there is no separate reportable segment as defined by the Accounting Standard on Segment Reporting.

26.13     AS - 18  Related Party Disclosure

Disclosures are made as per the requirements of the Standard, under Note 33.

26.14     AS - 19  Accounting for Lease

Operating Lease : Lease arrangements where the risk and rewards incidental to ownership of an asset substantially vest with the lessor are recognized as an operating lease. Lease rentals under operating lease are recognized in the statement of Profit & Loss on accrual basis.

26.15     AS - 20  Earnings per Share

In determining earnings per share, the Company considers the net profit after tax and extraordinary items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year.

26.16     AS - 22  Accounting for Taxes on Income

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from ‘timing difference’ between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the asset will be realized in future.

26.17     AS - 28  Impairment of Assets

An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value.  An impairment loss is charged for when an asset is identified as impaired.

AS - 15  Employee Benefits

Short term benefits are recognized as an expense at the undiscounted amount in the Statement of Profit & Loss of the year in which related services are rendered.

Defined Contribution Plan:

Provident Fund deducted from employees together with employer’s contribution is remitted to Employee’s Provident Fund administered by the Central Government and employer’s contribution is charged to the Statement of Profit & Loss.

Defined Benefit Plan: 

Gratuity liability is a defined benefit obligation and is provided for on the basis of actuarial valuation on Project Unit Credit Method made at the end of each financial year. The scheme is maintained and administered by LIC to which the Company makes periodical contributions through trustees.

Leave Salary:

The liability towards compensated absence is recognized based on actuarial valuation carried out using the Projected Unit Credit Method.