Accounting Policies of Vardhaman Wires & Polymers Ltd. Company

Mar 31, 2011

1. General

The Financial Statements are prepared under historical cost convention on accrual basis and they are in consonance with generally accepted accounting principles in India and applicable Accounting Standards notified u/s 211 (3C) of the Companies Act, 1956. Effect of deviations, if any from the accounting standards is disclosed in the accounts, wherever relevant and material.

2. Use of Estimates

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

3. Fixed Assets

Fixed assets are stated at cost of acquisition / construction. The cost of fixed assets includes direct / indirect apportioned expenses incurred for the purpose of acquiring fixed assets, net of cenvat credit on qualifying assets.

4. Depreciation

Depreciation is charged on written down value method (WDV), at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on additions during the year to fixed assets is charged on pro-rata basis.

5. Investments

Investments are stated at cost.

6. Inventories

Inventories are valued in accordance with Accounting Standard (AS) - 2 at lower of cost and net realizable value on FIFO Basis.

7. Impairment of Assets

Impairment of assets is recognized when there is an indication of impairment. On such indication, the recoverable amount of asset is estimated and if such estimation is less than its book value, the book value is reduced to its recoverable amount.

8. Revenue Recognition

(i) Sales are accounted for on dispatch of products from the ware houses and which are followed by transfer of risk and reward to the customers upto the time the financial statements of the Company are adopted.

(ii) Insurance Claims are accounted as and when admitted.

(iii) Other income is accounted on accrual basis except when the realization of such income is uncertain.

9. Foreign Currency Transactions

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currency are restated at year end exchange rates. Exchange differences arising on settlement of transactions and on restatement of monetary items are recognized as income or expense in the year in which they arise.

10. Selling / Business Development Expenses

Selling and other expenses payable on sales are recognized on determination of amount payable in accordance with arrangements / contracts with the parties.

11. Taxes on Income

i. Provision for current tax is made for the amount of tax payable in respect of taxable income for the year under Income Tax Act, 1961.

ii. Deferred tax is recognized on timing differences; being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized only to the extent there is virtual certainty of its realization.

12. Provisions and Contingent liabilities

i) Provisions in respect of present obligations arising out of past events are made in the accounts when reliable estimates can be made of the amount of the obligation.

ii) Contingent liabilities are disclosed by way of a note to the Financial Statements, after careful evaluation by the management of the facts and legal aspects of the matter involved.

13. Employee Benefits

Short Term Employee Benefits are recognized as an expense at the undiscounted amounts in the profit and loss account of year in which the related services are rendered.

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Mar 31, 2010

1. General

The Financial Statements are prepared under historical cost convention on accrual basis and they are in consonance with generally accepted accounting principles in India and applicable Accounting Standards notified u/s 211 (3C) of the Companies Act, 1956. Effect of deviations, if any from the accounting standards is disclosed in the accounts, wherever relevant and material.

2. Use of Estimates

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

3. Fixed Assets

Fixed assets are stated at cost of acquisition / construction. The cost of fixed assets includes direct / indirect apportioned expenses incurred for the purpose of acquiring fixed assets, net of cenvat credit on qualifying assets.

4. Depreciation

Depreciation is charged on written down value method (WDV), at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on additions during the year to fixed assets is charged on pro-rata basis.

5. Investments

Investments are stated at cost.

6. Inventories

Inventories are valued in accordance with Accounting Standard (AS) - 2 at lower of cost and net realizable value.

7. Impairment of Assets

Impairment of assets is recognized when there is an indication of impairment. On such indication, the recoverable amount of asset is estimated and if such estimation is less than its book value, the book value is reduced to its recoverable amount.

8. Revenue Recognition

(i) Sales are accounted for on dispatch of products from the ware houses and which are followed by transfer of risk and reward to the customers upto the time the financial statements of the Company are adopted.

(ii) Insurance Claims are accounted as and when admitted.

(iii) Other income is accounted on accrual basis except when the realization of such income is uncertain.

9. Foreign Currency Transactions

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currency are restated at year end exchange rates. Exchange differences arising on settlement of transactions and on restatement of monetary items are recognized as income or expense in the year in which they arise.

10. Selling / Business Development Expenses

Selling and other expenses payable on sales are recognized on determination of amount payable in accordance with arrangements / contracts with the parties.

11. Taxes on Income

Deferred tax is recognized on timing differences; being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized only to the extent there is virtual certainty of its realization.

12. Provisions and Contingent liabilities

i) Provisions in respect of present obligations arising out of past events are made in the accounts when reliable estimates can be made of the amount of the obligation.

ii) Contingent liabilities are disclosed by way of a note to the Financial Statements, after careful evaluation by the management of the facts and legal aspects of the matter involved.

13. Employee Benefits

Short Term Employee Benefits are recognized as an expense at the undiscounted amounts in the profit and loss account of year in which the related services are rendered.