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Accounting Policies of Ram Ratna Wires Ltd. Company

Mar 31, 2016

1 COMPANY OVERVIEW

The Company is engaged in the business of manufacturing engineering goods such as Enamelled Copper Wire & Strips, Enamelled Alluminium Wire, Submersible Winding Wire, Fibre Glass Covered Copper Wire & Strips, Paper Covered Copper Wire & Strips.

2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation:

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

2.2 Use of Estimates:

The preparation of financial statements is in conformity with Indian GAAP 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.

2.3 Fixed Assets:

a) Fixed Assets are stated at cost of acquisition or construction, less accumulated depreciation and accumulated impairment loss, if any. Cost include purchase price, tax & duty net of credit availed, if any and other direct cost attributable for acquisition or construction of assets up to the date the asset is ready for its intended use.

b) The foreign currency differences on Long Term Borrowings for acquiring of fixed assets are adjusted to the cost of assets.

c) Intangible assets are stated at cost of acquisition, less accumulated amortization and accumulated impairment loss, if any.

2.4 Depreciation:

a) Tangible Assets:

Depreciation on tangible fixed assets has been provided on the Straight Line Method as per the useful lives of the assets prescribed under Schedule II of the Act read with notes thereon.

b) Intangible Assets:

Computer Software’s are amortized on Straight Line Method over the estimated useful life of 5 years.

2.5 Valuation of Inventories:

a) Raw Materials, Work-in-progress and Finished goods are valued at the lower of cost or realizable value. The cost is determined using FIFO method.

b) The cost of purchase comprises of the purchase price including duties and taxes (other than those subsequently recoverable by the Company from the taxing authorities), freight inward and other expenditure directly attributable to the acquisition but net of trade discount, rebates, duties for import under advance licenses and other similar items.

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

d) Scrap is valued at net realizable value.

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

f) The cost of Inventories comprises the cost of purchases, the cost of conversion and the cost of packing materials in case of Finished Goods.

g) The cost of conversion comprises of Depreciation on Factory Buildings and Plant & Machineries, Power & Fuel, Factory Management and Administration Expenses, Repairs & Maintenance and Consumable Stores & Spares.

2.6 Investments:

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

2.7 Sales:

Sales include sales of finished goods, semi finished goods, scrap and excise duty but net off value added tax, rate difference and sales returns. Revenue from Sales is recognized when the substantial risk & rewards of ownership are transferred to the buyer.

2.8 Foreign Currency Transactions:

a) Foreign Currency Transactions are recorded at the exchange rate prevailing as at the date of transaction.

b) Foreign currency monetary items are restated at the closing exchange rates. Non-monetary items are recorded at exchange rate prevailing on the date of transaction.

c) The premium 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.

d) 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 are adjusted to carrying cost of net assets. The premium 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 respect of outstanding derivative contracts as on the Balance Sheet date for highly probable forecasted transactions are charged to Statement of Profit & Loss.

e) 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.

f) Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognized as income or expenses for the year.

2.9 Employee Benefits:

a) 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.

b) Defined Contribution plan:

A Defined Contribution Plan is a post employment benefit plan under which the Company makes contribution to Employee''s Provident Fund administrated by the Central Government. The Company''s contribution is charged to the Statement of Profit & Loss.

c) 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 make periodical contributions through its trustees.

d) Leave Salary:

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

2.10 Provision for Current and Deferred Tax:

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.

2.11 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.

2.12 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.

2.13 Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such 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 statement of profit and loss.

2.14 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present 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 on Financial Statements. Contingent Assets are neither recognized nor disclosed in the financial statements.

2.15 Cash Flow Statements:

The Cash Flow Statement is prepared under ''Indirect Method"

2.16 Segment Reporting:

The Company is primarily engaged in the business of Enamelled Wire & Strips. As such there is no separate reportable segment as defined by the Accounting Standard (AS-17) Segment Reporting.


Mar 31, 2015

1.1 Basis of Preparation

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

2.2 Use of Estimates

The preparation 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.

2.3 Depreciation:

a) Tangible Assets:

Depreciation on tangible fixed assets has been provided on Straight Line Method as per the useful life prescribed under Schedule II of the Act.

b) Intangible Assets:

Computer Softwares are amortised on Straight Line Method over the estimated useful life of 5 years.

2.4 Fixed Assets:

a) Fixed Assets are stated at cost, net of CENVAT/ Value Added Tax, less accumulated depreciation and impairment loss, if any.

b) The foreign currency differences on Long Term Borrowings for acquiring of fixed assets are adjusted to the cost of assets.

c) Intangible assets are stated at cost of acquisition, less accumulated amortisation.

2.5 Valuation of Inventories:

a) Raw Materials, Work-in-progress and Finished goods are valued at the lower of cost or realizable value. The cost is determined using FIFO method.

b) The cost of purchase comprises of the purchase price including duties and taxes (other than those subsequently recoverable by the Company from the taxing authorities), freight inward and other expenditure directly attributable to the acquisition but net of trade discount, rebates, duties for import under advance licenses and other similar items.

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

d) Scrap is valued at net realizable value.

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

f) The cost of Inventories comprises the cost of purchases, the cost of conversion and the cost of packing materials in case of Finished Goods.

g) The cost of conversion comprises of Depreciation on Factory Buildings and Plant & Machineries, Power & Fuel, Factory Management and Administration Expenses, Repairs & Maintenance and Consumable Stores & Spares.

2.6 Investments:

Long term investments in unquoted equity shares are stated at cost.

2.7 Sales:

Sales include sales of Finished Goods, Semi Finished Goods and excise duty but net of sales returns and rate difference.

2.8 Foreign Currency Transactions:

a) Foreign Currency Transactions are recorded at the exchange rate prevailing as at the date of transaction.

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

c) The premium 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.

d) 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 are adjusted to carrying cost of net assets. The premium 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 respect of outstanding derivative contracts as on the Balance Sheet date for highly probable forecasted transactions are charged to Statement of Profit & Loss.

e) 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.

f) Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as income or expenses for the year.

2.9 Employee Benefits:

a) 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.

b) 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.

c) 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 make periodical contributions through its trustees.

d) Leave Salary:

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

2.10 Provision for Current and Deferred Tax:

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.

2.11 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.

2.12 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.

2.13 Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such 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 statement of profit and loss.

2.14 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present 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 on Financial Statements. Contingent Assets are neither recognized nor disclosed in the financial statements.

2.15 Cash Flow Statements:

The Cash Flow Statement is prepared under 'Indirect Method"

2.16 Segment Reporting:

The Company is primarily engaged in the business of Enamelled Wire & Strips. As such there is no separate reportable segment as defined by the Accounting Standard (AS-17) Segment Reporting.


Mar 31, 2014

1.1 Basis of Preparation

The financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting with Generally Accepted Accounting Principles (GAAP) and Accounting Standards as prescribed by Accounting Standards (Rules) read with General Circular No. 15/2013 dated 13th September, 2013 issued by the Ministry of Corporate Affairs, as applicable and relevant provisions of the Companies Act, 1956 read with General Circular No. 08/2014 dated 4th April, 2014 issued by the Ministry of Corporate Affairs.

2.2 Use of Estimates

The preparation 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.

2.3 Depreciation:

Depreciation on Fixed Assets is provided on straight-line method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

2.4 Fixed Assets:

a) Fixed Assets are stated at cost net of CENVAT/ Value Added Tax, less accumulated depreciation and impairment loss, if any.

b) The foreign currency differences on Long Term Borrowings for acquiring of fixed assets are adjusted to the cost of assets.

2.5 Valuation of Inventories:

a) Raw Materials, Work-in-progress and Finished goods are valued at the lower of cost or realizable value. The cost is determined using FIFO method.

b) The cost of purchase comprises of the purchase price including duties and taxes (other than those subsequently recoverable by the Company from the taxing authorities), freight inward and other expenditure directly attributable to the acquisition but net of trade discount, rebates, duties for import under advance licenses and other similar items.

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

d) Scrap is valued at net realizable value.

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

f) The cost of Inventories comprises the cost of purchases, the cost of conversion and the cost of packing materials in case of Finished Goods.

g) The cost of conversion comprises of Depreciation on Factory Buildings and Plant & Machineries, Power & Fuel, Factory Management and Administration Expenses, Repairs & Maintenance and Consumable Stores & Spares.

2.6 Investments:

Long term investments in unquoted equity shares are stated at cost.

2.7 Sales:

Sales include sales of Finished Goods, Semi Finished Goods and excise duty but net of sales returns and rate difference.

2.8 Foreign Currency Transactions:

a) Foreign Currency Transactions are recorded at the exchange rate prevailing as at the date of transaction.

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

c) The premium 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.

d) 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 are adjusted to carrying cost of net assets. The premium or discount on forward contracts entered into to hedge the foreign currency risks of a firm commitment is recognized over the life of contract.

e) 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.

2.9 Employee Benefits:

a) 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.

b) 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.

c) 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 make periodical contributions through its trustees.

d) Leave Salary:

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

2.10 Provision for Current and Deferred Tax:

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.

2.11 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.

2.12 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.

2.13 Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such 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 statement of Profit and Loss.

2.14 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present 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 on Accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.

2.15 Segment Reporting:

The Company is operating in one segment only i.e. Enamelled Wires and Strips.

3.3 Terms/ rights attached to Equity Shares

The Company has only one class of shares referred to as equity shares having face value of Rs. 5/- per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by Board of Directors is subject to approval of the Shareholders in the ensuring Annual General Meeting, except in the case of interim dividend.

As per the Companies Act,1956 the holders of equity shares will be entitled to receive remaining assets of the Company, after the distribution of all preferential amounts in the event of the liquidation of the Company. The distribution will be in proportion to the number of equity shares held by the Shareholders.

5.3 Term Loan is secured by way of first pari passu charge with the consortium lenders over the existing immovable properties (excluding immovable property at Rakholi, Silvassa) and the present and future movable fixed assets of the Company and pari passu second charge with the consortium lenders over the present and future current assets of the Company and further secured by personal guarantees of some Directors and a relative of Directors.

5.4 Interest on External Commercial Borrowing ( ECB ) is hedged through Interest rate swap @ 5.51%.

5.5 Vehicle Loans are secured by way of hypothecation of specific vehicle.

5.7 Public Deposits taken by the Company are under the provisions of Section 58A & 58 AA of the Companies Act, 1956 and rules made there under. Fixed deposits carry interest rates from 9.50% to 11% depending upon their tenure.

5.8 Other Unsecured Loans carry interest rates from 11% to 13% with tenure more than two years.

8.1 Secured Working Capital Loans are secured by first pari passu charge with the consortium lenders over the entire current assets, present and future, such as stock, book debts, other receivables, etc. and pari passu second charge with the consortium lenders over the existing immovable properties (excluding immovable property at Rakholi, Silvassa) and the present and future movable fixed assets of the Company and further secured by personal guarantees of some Directors and a relative of Directors.

8.2 For the Unsecured Loans, personal guarantees have been given by some Directors and a relative of Directors.

12.1 For relevant Accounting Policies refer Notes 2.3, 2.4, 2.8 & 2.13

12.2 Net Exchange Difference of Rs. 4.02 lacs ( Previous Year Rs. 2.64 lacs) on Factory Buildings and Rs. 5.45 lacs (Previous Year Rs. 14.06 lacs) on Plant & Machineries is capitalized.

12.3 Interest of Rs. NIL /- ( Previous Year Rs. 0.32 lacs) on Plant & Machineries is capitalised.

14.1 Rental Deposits include Rs. 45.50 lacs (P.Y. Rs. 45.50 lacs) due from related parties and Rs. 3.50 lacs (P.Y. Rs. 3.50 lacs) due from a Private Company in which one of the Director is interested (Note 35)

15.1 For mode of valuation for each class of Inventories (Note 2.5)

16.1 *For relevant Accounting Policy (Note 2.8) and for forward contracts (Note 36).


Mar 31, 2013

1.1 Basis of Preparation:

The financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting with Generally Accepted Accounting Principles (GAAP) and Accounting Standards issued by the Institute of Chartered Accountants of India, as applicable and relevant provisions of the Companies Act, 1956.

1.2 Use of Estimates:

The preparation 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.

1.3 Depreciation:

Depreciation on Fixed Assets is provided on straight-line method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

1.4 Fixed Assets:

a) Fixed Assets are stated at cost net of CENVAT/Value Added Tax, less accumulated depreciation and impairment loss, if any.

b) The foreign currency differences on Long Term Borrowings are adjusted to the cost of assets.

1.5 Valuation of Inventories:

a) Raw Materials, Work-in-progress and Finished goods are valued at the lower of cost or realizable value. The cost is determined using FIFO method.

b) The cost of purchase comprises of the purchase price including duties and taxes (other than those subsequently recoverable by the Company from the taxing authorities), freight inward and other expenditure directly attributable to the acquisition but net of trade discount, rebates, duties for import under advance licenses and other similar items.

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

d) Scrap is valued at net realizable value.

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

f) The cost of Inventories comprises the cost of purchases, the cost of conversion and the cost of packing materials in case of Finished Goods.

g) The cost of conversion comprises of Depreciation on Factory Buildings and Plant & Machineries, Power & Fuel, Factory Management and Administration Expenses, Repairs & Maintenance and Consumable Stores & Spares.

1.6 Investments:

Long term investments in unquoted equity shares are stated at cost.

1.7 Sales:

Sales include sales of Finished Goods, Semi Finished Goods and excise duty but net of sales returns and rate difference.

1.8 Foreign Currency Transactions:

a) Foreign Currency Transactions are recorded at the exchange rate prevailing as at the date of transaction.

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

c) The premium 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.

d) 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 are adjusted to carrying cost of net assets. The premium or discount on forward contracts entered into to hedge the foreign currency risks of a firm commitment is recognized over the life of contract.

e) 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.

1.9 Employee Benefits:

a) 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.

b) 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.

c) 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 trustees make periodical contributions.

d) Leave Salary:

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

1.10 Provision for Current and Deferred Tax:

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.

1.11 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.

1.12 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.

1.13 Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such 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 statement of profit and loss.

1.14 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present 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 on Financial Statements. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.15 Segment Reporting:

The Company is operating in one segment only i.e. Enamelled Wires and Strips.


Mar 31, 2012

1.1 Basis of Preparation:

The financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting with Generally Accepted Accounting Principles (GAAP) and Accounting Standards issued by the Institute of Chartered Accountants of India, as applicable and relevant provisions of the Companies Act, 1956.

1.2 Use of Estimates:

The preparation 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.

1.3 Depreciation:

Depreciation on Fixed Assets is provided on straight-line method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

1.4 Fixed Assets:

a) Fixed Assets are stated at cost net of CENVAT/Value Added Tax, less accumulated depreciation and impairment loss, if any.

b) The foreign currency differences on Long Term Borrowings are adjusted to the cost of assets.

1.5 Valuation of Inventories:

a) Raw Materials, Work-in-progress and Finished goods are valued at the lower of cost or realizable value. The cost is determined using FIFO method.

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

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

d) Scrap is valued at net realizable value.

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

f) The cost of Inventories comprises the cost of purchases, the cost of conversion and the cost of packing materials in case of Finished Goods.

g) The cost of conversion comprises of Depreciation on Factory Buildings and Plant & Machineries, Power & Fuel, Factory Management and Administration Expenses, Repairs & Maintenance and Consumable Stores & Spares.

1.6 Investments:

Long term investments in unquoted equity shares are stated at cost.

1.7 Sales:

Sales include sales of Finished Goods, Semi Finished Goods and excise duty but net of sales returns and rate difference.

1.8 Foreign Currency Transactions:

a) Foreign Currency Transactions are recorded at the exchange rate prevailing as at the date of transaction.

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

c) The premium 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.

d) 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 are adjusted to carrying cost of net assets. The premium or discount on forward contracts entered into to hedge the foreign currency risks of a firm commitment is recognized over the life of contract.

e) 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.

1.9 Employee Benefits:

a) 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.

b) 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.

c) 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 trustees make periodical contributions.

d) Leave Salary:

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

1.10 Provision for Current and Deferred Tax:

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.

1.11 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.

1.12 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.

1.13 Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such 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 statement of profit and loss.

1.14 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present 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 to Financial Statements. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.15 Segment Reporting:

The Company is operating in one segment only i.e. Enamelled Wires and Strips.


Mar 31, 2011

I) Basis of Preparation:

The financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting with Generally Accepted Accounting Principles (GAAP) and Accounting Standards issued by Institute of Chartered Accountants of India, as applicable and relevant provisions of Companies Act, 1956.

ii) Use of Estimation:

The preparation of financial statements is in conformity with Generally Accepted Accounting Principles (GAAP) in India, requires the management to make estimation and assumptions that affect the reporting amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements.

(iii) Depreciation:

Depreciation on Fixed Assets is provided on straight-line method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

(iv) Fixed Assets:

Fixed Assets are stated at cost net of CENVAT/Value Added Tax, less accumulated depreciation and impairment loss, if any.

(v) Valuation of Inventories:

a) Raw materials, Work-in-progress and Finished goods are valued at the lower of cost or realisable value. The cost is determined using FIFO method.

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

c) Packing Materials and Fuel are valued at lower of cost or net realisable value. The cost is determined using FIFO method.

d) Scrap is valued at net realizable value.

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

f) The cost of inventories comprises the cost of purchases, the cost of conversion and the cost of packing materials in case of Finished Goods.

g) The cost of conversion comprises of Depreciation on Factory Building and Plant & Machinery, Power & Fuel, Factory Management and Administration Expenses, Repairs & Maintenance and Consumable Stores & Spares.

(vi) Investments:

Long term investment in unquoted equity shares are stated at cost.

(vii) Sales:

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

(viii) Foreign Currency Transactions:

a) Foreign Currency Transactions are recorded at the exchange rate prevailing on the date of transaction.

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

c) The premium 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.

d) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account except related to fixed assets are adjusted to carrying cost of net assets. The premium or discount on forward contract entered into to hedge the foreign currency risks of a firm commitment is recognized over the life of contract.

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

(ix) Employee Benefits:

a) Short term benefits are recognized as an expense at the undiscounted amount in profit & loss account of the year in which related services are rendered.

b) 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 Profit & Loss account.

c) 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 trustees make periodica] contributions.

d) Leave Salary:

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

(x) Provision for Current and Deferred Tax:

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.

(xi) Earnings per share:

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

(xii) 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.

(xiii) Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such 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 revenue.

(xiv) Provision, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present 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.


Mar 31, 2010

I) Basis of Preparation

The financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting with Generally Accepted Accounting Principles (GAAP) and Accounting Standards issued by Institute of 1

Chartered Accountants of India, as applicable and relevant provision of Companies Act, 1956.

ii) Use of Estimation

The preparation of financial statements is in conformity with Generally Accepted Accounting Principles (GAAP) in India, requires the management to make estimation and assumptions that affect the reporting amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements.

(iii) Depreciation

Depreciation on Fixed Assets is provided on straight-line method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

(iv) Fixed Assets

Fixed Assets are stated at cost net of CENVAT/Value Added Tax, less accumulated depreciation and impairment loss, if any.

(v) Valuation of Inventories

a) Raw materials, Work-in-progress and Finished goods are valued at the lower of cost or realisable value. The cost is determined using FIFO method.

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

c) Packing Materials and Fuel are valued at lower of cost or net realisable value. The cost is determined using FIFO method.

d) Scrap is valued at net realizable value.

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

f) The cost of inventories comprises the cost of purchases, the cost of conversion and the cost of packing materials in case of Finished Goods.

g) The cost of conversion comprises of Depreciation on Factory Building and Plant & Machinery, Power & Fuel, Factory Management and Administration expenses, Repairs & Maintenance and Consumable Stores & Spares

(vi) Investments

Long term investment in unquoted equity shares are stated at cost.

(vii) Sales

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

(viii) Foreign Currency Transactions

a) Foreign Currency Transactions are recorded at the exchange rate prevailing on the date of transaction

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

c) The premium or discount that arise on entering into a 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.

d) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account. The premium or discount on forward contract entered into to hedge the foreign currency risks of a firm commitment is recognized over the life of contract.

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

(ix) Employee Benefits

a) Short term benefits are recognized as an expense at the undiscounted amount in profit & loss account of the year in which related services are rendered.

b) Defined Contribution plan

Provident Fund deducted from employees together with employers contribution is remitted to Employees Provident Fund administered by the Central Government, and employers contribution is charged to Profit & Loss account.

c) 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 trustees make periodical contributions.

d) Leave Salary:

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

(x) Provision for Current and Deferred Tax

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.

(xi) Earnings per share

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

(xii) Impairment of Assets:

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

(xiii) Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its ntended use. All other borrowing costs are charged to revenue.

(xiv) Provision, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present 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.

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