The Financial Statements are prepared under the historical cost
convention, on going concern concept and in compliance with the
relevant accounting principles, accounting standards issued by the
Institute of Chartered Accountants of India and relevant provisions of
the Companies Act, 1956. The company follows the mercantile system of
accounting and recognizes income and expenditure on accrual basis to
the extent measurable and where there is certainty of ultimate
realization in respect of incomes. The significant accounting policies
adopted by the Company are detailed below:
1. Fixed Assets, Intangible Assets and Capital Work-in-Progress
Fixed assets are stated at cost, less accumulated depreciation. Direct
costs are capitalized until fixed assets are ready for use. Capital
work-in-progress comprises outstanding advances paid to acquire fixed
assets, and the cost of fixed assets that are not yet ready for their
intended use at the balance sheet date. Intangible assets are recorded
at the consideration paid for acquisition.
Long term investments are valued at their acquisition cost. Any decline
in the value of the investment, other than a temporary decline, is
recognized and provided for in the profit and loss account. Short-term
investments are carried at cost or their market values which ever is
3. Revenue Recognition
Revenue from the sale of goods is accounted for on the basis of actual
dispatches of goods. Sales are inclusive of excise duty but net of
sales tax and VAT. Materials returned/ rejected are accounted for in
the year of return/rejection.
4. Foreign Currency Transaction
The transactions in foreign currency recorded at the exchange rate
prevailing on the date of transaction. Monetary liability / assets on
account of foreign currency are converted at the exchange rates
prevailing as at the end of the year. Exchange differences are
appropriately dealt within the profit and loss account.
5. Depreciation / Amortization
Depreciation has been provided on single shift basis on fixed assets on
straight line methods at the rate and in the manner specified in
Schedule XIV to the Companies Act, 1956 except for fixed assets of PVC
Cable division for which written down value method has been adopted.
The Intangible assets of the Company are amortized over lease nerind nr
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6. Valuation of Inventories
a) Raw Materials, Stores and Spares and Packing Materia] are valued at
lower of cost, based on FIFO basis (Net of CENVAT Credit) or net
b) Work in Progress is valued at their estimated absorption cost (Net
of CENVAT). Cost of Stock in Process includes cost of raw materials and
estimated overheads up to the stage of completion.
c) Finished Goods are valued at lower of cost of production or net
realizable value. Cost of finished goods includes cost of raw material,
cost of manufacturing, cost of conversion and other cost incurred in
finishing the goods.
d) Scrap is valued at estimated net realizable value.
7. Retirement Benefits
Liability in respect of retirement benefit is provided for and/or
funded and charged to profit and loss account as follows:-
Provident Fund: Retirement Benefits in the 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. There are no other obligations other than the
contribution payable to the respective fund.
Gratuity: - Liability in respect of Gratuity, the company is accounting
the gratuity at the time of actual payment to the employee.
Leave Encashment: - As determined on the basis of accumulated leave to
the credit of employees at the period ended.
8. Taxes on Income
Current Tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of Income Tax Act,
Deferred Tax reflects the effect of temporary timing differences
between the assets and liabilities recognized for financial reporting
purposes and the amounts that are recognized for current tax purposes.
As a matter of prudence deferred tax assets are recognized and carried
forward only to the extent, there is a reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized.
Minimum Alternative Tax (MAT) credit asset is recognized in the Balance
Sheet where it is likely that it will be adjusted against the discharge
of the tax liability in future under Income Tax, 1961.
9. Use of Estimates
The financial statements were prepared in conformity with generally
accepted accounting principles, which requires management to make
assumptions that effect the reported amounts of assets and liabilities
and disclosure of contingent liabilities at the date of the financial
statements and the results of operations during the end of the
reporting years. Although these estimates are based upon the best
knowledge of the management of current events and actions, actual
results could differ from these estimates
10. Impairment of Assets
No Provision for impairment of assets is required since the management
is of the opinion that the recoverable amount of fixed assets is equal
to the amount at which they are stated in the balance sheet.
11. Borrowing Cost
Borrowing Costs attributable to the acquisition or construction of a
qualifying asset is capitalized as part of the cost of the asset. Other
borrowing costs are recognized as an expense in the period in which
they are incurred.
Lease rental in respect of operating lease arrangements are charged to
expense on a straight line basis over the term of the related lease
13. Provisions, Contingent Liabilities and Contingent Assets
The Company creates provisions only when there is a present obligation
as a result of past events and when reliable estimate of the amount of
the obligation can be made. Contingent liability is disclosed for (i)
Possible obligation which will be confirmed only by future events not
wholly within the control of the company or (ii) recent obligations
arising from past events where it is not probable that an outflow of
resources will be required to settle the obligation on a reliable
estimate of the amount of the obligations cannot be made. Contingent
assets are not recognized in the financial statements since this may
result in the recognition of income that may never be realized.
14. Cash Flow Statements
Cash flows are reported using the indirect method, where by net profit
before tax is adjusted for the effects of transactions of a non cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the company are segregated.