Electrex (India) Ltd. कंपली की लेखा नीति

Sep 30, 2000

1 Accounting Convention

The Company generally follows accrual system of accounting and financial statements are prepared based on historical cost convention.

2 Fixed Assets and Depreciation

2.1 Fixed Assets are valued at cost less accumulated depreciation. Cost is inclusive of duties,taxes and other incidental expenses.

2.2 The Company follows the Straight Line Method of Depreciation on all its fixed assets.

2.3 The rates of depreciation charged on all fixed assets are those specified in Schedule XIV to the Companies Act, 1956 except for technical knowhow fees, which is charged at 1/6th of the cost per annum. Depreciation is not provided on fixed assets sold, discarded, etc. during the year.

3 Inventory Valuation

3.1 Raw materials are valued at cost or net realizable value whichever is lower, based on FIFO basis.

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

3.3 Work-in-Progress is valued at the finished goods valuation reduced by estimated amount of expenditure yet to be incurred on the same.

4 Revenue Recognition

Sale of goods (including inter unit transfer for captive consumption) is recognized on despatch to customers. Sales include excise duty but exclude sales tax.

5. Expenditure

Expenses are generally accounted on accrual basis and are stated net of recoveries.

6 Excise and Customs Duty

6.1 Excise duty payable in respect of finished goods and manufactured components is provided for in the books of accounts.

6.2 Customs duty payable on components, raw materials, stores and spares lying in customs bonded warehouses is accounted for on debonding.

7 Foreign Currency Transactions

7.1 Foreign Currency transactions are accounted for at the original rates of exchange in force at the time transactions are effected. All exchange differences arising on repayment of liabilities incurred for acquisition of Fixed Assets are adjusted in the carrying amount of the respective Fixed Assets. Exchange differences arising on settlement of other transactions are recognized in the Profit and Loss Account.

7.2 Monetary items (other than those related to acquisition of Fixed Assets) denominated in Foreign Currency are restated using the exchange rates prevailing at the date of the Balance Sheet, and resulting net exchange difference is recognized in the Profit and Loss Account.

8 Retirement Benefits

8.1 The Company has a Provident Fund Scheme for all of its employees and the contributioins payable to Government Provident Fund are charged to Profit and Loss Account on accrual basis.

8.2 Provision for Gratuity has been made based on the actuarial valuation in line with Accounting Standard - 15 issued by the Institute of Chartered Accountants of India.

8.3 Provision for leave encashment has bS8n mads on accrual basis as per trie Companys policies.

9 Write-off Of Miscellaneous expenditure

Preliminary and initial share issue expenses are written off over a period of ten years.

10 Contingent Liabilities

Contingent Liabilities are disclosed by way of notes to the Balance Sheet after careful evaluation of facts and legal aspects of the matter involved.