Vidya Wires Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

i. Revenue

Revenue from contracts with customers is recognised when control of the goods and services are
transferred to the customer at an amount that reflects the consideration to which the Company
expects to be entitled in exchange for those goods or services. The Company assesses promises in the
contract that there are separate performance obligations to which a portion of the transaction price is
allocated.

Revenue is measured based on the transaction price as specified in the contract with the customer. It
excludes taxes or other amounts collected from customers in its capacity as an agent. In determining the
transaction price, the Company considers below, if any:

Variable Consideration: This includes trade discounts, rebates and returns. It is estimated at contract
inception and constrained until it is highly probable that a significant revenue reversal in the amount of
cumulative revenue recognised will not occur when the associated uncertainty with the variable
consideration is subsequently resolved. It is reassessed at the end of each reporting period.

Consideration payable to a customer: Such Amounts are accounted for a reduction of transaction
price and therefore, of revenue unless the payment to the customer is in exchange for a distinct good or
service that the customer transfers to the Company.

Trade Receivable: A receivable represents the Company'' right to an amount of consideration that is
unconditional i.e., only the passage of time is required before payment of consideration is due.

ii. Property Plant and Equipment

An item of property, plant and equipment is recognised as an asset if it is probable that the future
economic benefits associated with the item will flow to the Company and its cost can be measured
reliably. This recognition principle is applied to the costs incurred initially to acquire an item of
property, plant and equipment and also to the costs incurred subsequently to add to, replace part of,
or service it. All other repair and maintenance costs, including regular servicing, are recognised in the
statement of profit and loss as incurred. When a replacement occurs, the carrying value of the
replaced part is de-recognised. Where an item of property, plant and equipment comprises major
components having different useful lives, these components are accounted for as separate items.

Freehold land is carried at historical cost. All other items of property, plant and equipment are stated
at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. The
cost of an item of property, plant and equipment comprises of its purchase price including import
duties and other non-refundable purchase taxes or levies, directly attributable cost of bringing the
asset to its working condition for its intended use and the initial estimate of decommissioning,
restoration and similar liabilities, if any. Any trade discount or rebate is deducted in arriving at the
purchase price. Cost includes cost of replacing a part of a plant and equipment if the recognition
criteria are met.

Items such as spare parts, stand-by equipment and servicing equipment that meet the definition of
property, plant and equipment are capitalized at cost and depreciated over their useful life.

The cost and related accumulated depreciation are eliminated from the Standalone Financial
Statement upon sale or retirement of the property, plant and equipment and the resultant gains or
losses are recognised in the statement of profit and loss. Property, plant and equipment to be
disposed of is reported at the lower of the carrying value or the fair value less cost of sale.

iii. Other Intangible Assets

Other Intangible assets acquired are initially measured at cost. Other intangible assets arising on
acquisition of business are measured at fair value as at date of acquisition. Following initial
recognition, other intangible assets with defined useful lives are carried at cost less accumulated
amortization and accumulated impairment loss, if any. Internally generated intangibles are not
capitalized, and the related expenditure is reflected in Standalone Statement of profit and loss in the
period in which the expenditure is incurred.

Computer Software, an intangible asset, is measured on initial recognition at cost. Costs comprise of
license fees and cost of system integration services and development.

The carrying amount of an intangible asset is derecognized on disposal or when no future economic
benefits are expected from its use or disposal. On de-recognition the intangible asset is measured as
the difference between the net disposal proceeds and the carrying amount of the intangible asset
and is recognized in the Standalone Financial statement of profit and loss.

iv. Depreciation on property, plant and equipment and amortization of other intangible Assets

Depreciation on property, plant and equipment is calculated in the Standalone statement of Profit
and Loss on a straight-line method using the management assessed useful lives of the assets which is
in line with the manner prescribed in Schedule II to the Companies Act, 2013.

Other Intangible Assets with finite lives are amortized on a straight-line basis over the estimated
useful economic life. The amortization expense on other intangible assets with finite lives is
recognized in the statement of profit and loss.

The estimated useful lives and residual values are reviewed at the end of each financial year. If any of these
expectations differ from previous estimates, such change is accounted for as a change in an accounting
estimate and adjusted prospectively, if any.

The estimated useful life of items of property, plant and equipment and other intangible assets are:

v. Investments in Subsidiaries, Joint Ventures, and Associates

In separate financial statements, such investments are carried at cost in accordance with Ind AS 27,
less impairment, if any. Dividends from these investments are recognized in the Statement of Profit
and Loss when the right to receive is established.

vi. Shares in Co-operative Banks

Shares in co-operative banks, being subject to restrictions on transfer and often without an active
market quotation, are carried at cost less impairment, if any, as permitted under Ind AS 109 where fair
value cannot be measured reliably without undue cost or effort.

Dividend income from such investments is recognized in profit or loss when the Groups right to
receive is established.

vii. Impairment of Assets
Impairment of financial assets

The Company applies loss allowance using the expected credit loss (ECL) model for the financial
assets which are measured at amortized cost. Loss allowance for trade receivables with no
significant financing component is measured at an amount equal to lifetime ECL.

Lifetime expected credit losses are the expected credit losses that result from all possible default
events over the expected life of a financial instrument. For all other financial assets, ECLs are
measured at an amount equal to 12-month ECL, unless there has been a significant increase in credit
risk for initial recognition in which case those are measured at lifetime ECL.

12-month expected credit losses are the portion of expected credit losses that result from default
events that are possible within 12 months after the reporting date (or a shorter period if the
expected life of the instrument is less than 12 months).

Impairment of non-financial assets

At each reporting date, the Company reviews the carrying values of its non-financial assets (other
than inventories and deferred tax assets) to determine whether there is any indication that the
carrying value of those assets may not be recoverable through continuing use. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of
impairment loss (if any).

For impairment testing, assets are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of other
assets or Cash Generating Units (CGU).

The recoverable amount of an individual asset or CGU is the greater of its value in use and its fair
value less costs of disposal. Value in use is based on the estimated future cash flows, discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset or CGU.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable
amount.

A previously recognised impairment loss is further provided or reversed depending on changes in
the circumstances and to the extent that carrying amount of the assets does not exceed the

carrying amount that would have been determined if no impairment loss had previously been
recognized.

viii. Inventories

Raw Materials, Work-in-progress, Stock in trade and Finished goods are valued at the lower of cost
or net realizable value. The cost is determined using First in first out (FIFO) method.

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

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.

The cost of conversion comprises of depreciation on factory buildings and plant and machineries,
power and fuel, factory management and administration expenses, repairs and maintenance and
consumable stores and spares.

Packing Materials, Consumable Stores and Spares 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.

ix. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.

The Company recognizes financial assets and financial liabilities when it becomes a party to the
contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value
on initial recognition, except for trade receivables which are initially measured at transaction price.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and
financial liabilities that are not at fair value through profit or loss are added to / deducted from the
fair value on initial recognition.

x. Financial AssetsCash & Bank BalancesCash and bank balances consist of:

Cash and cash equivalents - which includes cash on hand, deposits held at call with banks and other
short-term deposits which are readily convertible into known amounts of cash, are subject to an
insignificant risk of change in value and have original maturities of 3 months or less from the date of
such deposits. These balances with banks are unrestricted for withdrawal and usage.

Other bank balances - which includes balances and deposits with banks that are restricted for
withdrawal and usage.

Financial assets carried at amortized Cost

A financial asset are subsequently measured at amortized cost if it is held within a business model

whose objective is to hold the asset in order to collect contractual cash flows and the contractual
terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding, using the Effective Interest Rate (EIR)
method less impairment, if any, the amortization of EIR and loss arising from impairment, if any is
recognised in the Standalone statement of profit and loss.

Financial assets measured at fair value

A financial asset is measured at fair value through other comprehensive income if it is held within a
business model whose objective is to hold these assets in order to collect contractual cash flows or
to sell these financial assets and the contractual terms of the financial assets give rise on specified
dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding. Fair value movements are recognised in the other comprehensive income.

The Company in respect of equity instruments which are not held for trading has made an
irrevocable election to present the subsequent changes in fair value of such equity instruments in
other comprehensive income. Such an election is made by the Company on an instrument-by¬
instrument basis at the time of initial recognition of such equity investments. On de-recognition,
cumulative gain or loss previously recognised in other comprehensive income is reclassified from the
equity to retained earnings in the statement of changes in equity.

A financial asset not classified as either amortized cost or at fair value through other comprehensive
income is carried at fair value through the Standalone statement of profit and loss.

De-Recognition of Financial Assets

A financial asset is de-recognised only when

• The contractual rights to cash flows from the financial asset expires

• The Company has transferred the contractual rights to receive cash flows from the financial asset
or

• Retains the contractual rights to receive the cash flows of the financial asset but assumes a
contractual obligation to pay the cash flows to one or more recipients.

Where the Company has transferred an asset, the Company evaluates whether it has transferred
substantially all risks and rewards of ownership of the financial asset. In such cases, the financial
asset is de-recognised. Where the entity has not transferred substantially all risks and rewards of
ownership of the financial asset, the financial asset is not de-recognised. Where the entity has
neither transferred a financial asset nor retains substantially all risks and rewards of ownership of
the financial asset, the financial asset is de-recognised if the Company has not retained control of
the financial asset. Where the Company retain control of the financial asset, the asset is continued
to be recognised to the extent of continuing involvement in the financial asset.

xi. Financial Liabilities

a. Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the
substance of the contractual arrangements entered into and the definitions of a financial liability and an
equity instrument.

b. Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company
after deducting all its liabilities. Equity instruments are recorded at the proceeds received, net of direct
issue costs.

c. Financial Liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are
subsequently measured at amortized cost using the effective interest rate method. Financial liabilities
carried at fair value through profit or losses are measured at fair value with all changes in fair value
recognized in the Standalone Financial Statement of Profit and Loss.

Interest bearing loans and overdrafts are initially measured at fair value, and are subsequently
measured at amortized cost using effective interest rate method. Any difference between proceeds
(net of transaction cost) and the settlement amount of borrowing is recognised over the terms of the
borrowings in the Standalone Financial Statement of Profit and Loss.

d. De-Recognition

A financial liability is de-recognised when the obligation specified in the contract is discharged,
cancelled or has expired.

xii. Financial Guarantee Contracts

Financial guarantee contracts are those contracts that require specific payment to be made to
reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when
due in accordance with the terms of a debt instrument. Financial guarantee contracts are
recognised initially as a liability at fair value adjusted for transaction cost that are directly
attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher
of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the
amount recognized less cumulative amortization.

xiii. Derivative Financial Contracts

The Company enter into derivative financial contracts in the nature of forward currency contracts
with banks to reduce business risks which arise from its exposures to foreign exchange. The
instruments are employed as hedges of transactions included in Standalone Financial Statement or
for highly probable forecast transactions / firm contractual commitments.

Derivatives are initially accounted for and measured at fair value from the date the derivative
contract is entered into and are subsequently re-measured to their fair value at the end of each
reporting period. Any change therein is generally recognised in the Standalone Financial Statement
of profit and loss. Derivatives are carried as financial assets when fair value is positive and as
financial liabilities when fair value is negative.

xiv. Offsetting Financial Instruments

Financial assets and liabilities are off-set and the net amount is reported in the Standalone Financial
Statement where there is a legally enforceable right to offset the recognised amounts and there is
an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The
legally enforceable right must not be contingent on future events and must be enforceable in the
normal course of business and in the event of default, insolvency or bankruptcy of the Company.

xv. Fair Value Measurement

The Company measures financial instruments at fair value in accordance with the accounting
policies mentioned above. Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date.
The fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either in the principal market for asset or liability or in the absence
of a principal market, in the most advantageous market for the asset or liability.

All assets and liabilities for which fair value is measured or disclosed in the Standalone Financial
Statement are categorized within the fair value hierarchy that categorizes into three levels,
described as follows:

Level 1 — quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly

Level 3 — inputs that are unobservable for the asset or liability.

For assets and liabilities that are recognized in the Standalone Financial Statement at fair value on a
recurring basis, the Company determines whether transfers have occurred between levels in the
hierarchy by re-assessing categorization at the end of each reporting period and discloses the
same.