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Accounting Policies of Force Motors Ltd. Company

Mar 31, 2023

1. THE CORPORATE INFORMATION

Force Motors Limited ("the Company") is a Public Limited Company domiciled and incorporated in India. The Registered Office of the Company is situated at Mumbai-Pune Road, Akurdi, Pune-411035. The Company''s ordinaryshares are listed onthe BombayStock Exchange.

The Company is a fully, vertically integrated automobile company, with expertise in design, development and manufacture of the full spectrum of vehicles, automotive components and aggregates. Its range of products includes Light Commercial Vehicles (LCV), Multi-Utility Vehicles (MUV), Small Commercial Vehicles (SCV), Special Vehicles (SV) and Agricultural Tractors.

2. SIGNIFICANTACCOUNTINGPOLICIES

(a) StatementofCompliance

The financial statements of the Company comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 ("theAct") [the Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

(b) Basis of Preparation

The financial statements have been prepared on the historical cost basis, except certain financial instruments and defined benefit plans, which are measured atfairvalues.

All assets and liabilities, other than deferred tax assets and liabilities, have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III (Division II) to the Act.

(c) RevenueRecognition

(i) Sales

Revenue towards satisfaction of performance obligation is measured attransaction price. Amounts disclosed as revenue are net of Value Added Taxes, Goods and Services Tax (GST), Returns, Discounts, Rebates and Incentives. The Company recognizes revenue, when it has transferred to the buyer the significant risks and rewards associated with the ownership of goods, no significant performance obligation is pending and the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the Company.

Trade Receivables that do not contain a significantfinancing component are measured at transaction price.

(ii) OtherIncomes

Other incomes are recognized when it is probable that the economic benefit will flow to the Company and the amount of income can be measured reliably.

(d) Inventories

Inventories are valued at lower of their cost or net realizable value. The cost of raw materials, stores and consumables is measured on moving weighted average basis.

Inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition.

Raw materials and bought out components are valued at the lower of cost or net realizable value. Cost is determined on the basis of the weighted average method.

Finished Goods and work-in-progress are carried at cost ornet realizable value, whichever is lower.

Stores, spares and tools other than obsolete and slow moving items are carried at cost. Obsolete and slow moving items are valued at cost or estimated net realizable value, whichever is lower.

(e) Property, PlantandEquipment

Property, plant and equipment, except land, are carried at historical cost of acquisition, construction or manufacturing cost, as the case may be, less accumulated depreciation and amortization. Freehold land is carried at cost of acquisition.

Cost represents all expenses directly attributable to bringing the asset to its working condition capable of operating in the manner intended. Costs incurred to manufacture property, plant and equipment and intangibles are reduced from the total expense under the head ''Expenditure included in above items capitalised'' in the Statement of Profit and Loss.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at regular intervals and adjusted prospectively, if appropriate.

(f) Intangible Assets

Intangible Assets acquired are stated at acquisition cost, less accumulated amortization and impaired losses, if any.

Intangible Assets internally generated

Expenditure incurred by the Company on development of know-how researched, is recognized as an intangible asset, if and only if the future economic benefits attributable to the use of such know-how are probable to flow to the Company and the costs/expenditure can be measured reliably.

(g) Investment Property

Investment property is measured at cost less accumulated depreciation.

(h) Impairment of assets

Assets are tested for impairment whenever events or changes in circumstances indicate thatthe carrying amount may not be recoverable.

(i) Depreciation & Amortization

(i) Property, Plant and Equipment

• The Depreciation on Property, Plant and Equipment is provided on straight-line method and as per Schedule-II to the Companies Act, 2013.

• Leasehold land is amortized overthe period of lease.

(ii) Intangible Assets

• Software andtheirimplementation costs arewritten off overthe period of 5 years.

• Technical Know-how acquired and internally generated is amortized overthe useful life of the assets, not exceeding 10 years.

(j) Borrowing Costs

Cost of borrowings incurred for acquisition, construction or production of qualifying asset is capitalized.

(k) Research and Development Expenses

Revenue expenditure on Research and Development is charged off as an expense in the year in which incurred and capital expenditure is grouped with Assets under appropriate heads and depreciation is provided as per rates applicable.

(l) Leases

(i) WheretheCompanyistheLessee

• The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initiallymeasuredatcost, whichcomprisestheinitial amountoftheleaseliabilityadjustedforanyleasepaymentsmadeatorbefore the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset orto restorethe underlying asset orthe site on which it is located, less any lease incentives received.

• The right-of-use asset is subsequently depreciated using the straight-line method overthe useful life ofthe right-of-use asset orthe endoftheleaseterm.

Short-term leases and leases of low-value assets

• The Company has elected notto recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis overthe lease term.

(ii) WheretheCompanyistheLessor

Lease rentals are recognized in the Statement of Profit and Loss. Costs, including depreciation, are recognized as an expense in the Statement of Profit andLoss.

(m) Investment in Subsidiary andJointVenture

The Company has elected to recognize its investments in Joint Venture at cost in accordance with the option available in Ind AS 27, ‘Separate Financial Statements''.

(n) CashandCashEquivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and cash on hand and short-term deposits with an original maturity of three months orless, which are subjectto an insignificant risk of changes in value.

(o) EarningsperShare

Basic earnings per share are computed by dividing the profit aftertax by the weighted average number of equity shares outstanding during the period.

(p) Foreigncurrencytransactions Transactions and balances

(i) Foreign Currencytransactions are recorded atthe rate ofexchange onthe date ofthetransaction.

(ii) Monetary items of Assets and Liabilities booked in foreign currency are translated in to rupee at the exchange rate prevailing at the Balance Sheet date.

(iii) Exchange difference resulting from settlement of such transaction and from translation of monetary items of Assets and Liabilities are recognizedinthe Statement of Profit andLoss.

(iv) Exchange difference arising on translation offoreign currency liabilities for acquisition of Property, Plant and Equipments are adjusted to the Statement of Profitand Loss.

(v) The date ofthetransaction forthe purpose of determining the exchange rate to use on initial recognition ofthe related asset, expense or income (or part of it) is the date on which an entity initially recognizes the non-monetary asset or non-monetary liability arising from the payment or receipt of advance.

(q) Functional and presentation currency

Thesefinancial statements are presented in Indian Rupees, which isthe Company''sfunctional currency. All amounts disclosed in thefinancial statements and notes have been rounded off to nearest lakhs, unless otherwise stated.

(r) EmployeeBenefits Definedbenefitplans

(i) The accruing liability of Gratuity is covered by Employees Group Gratuity Scheme of Life Insurance Corporation of India (LIC) and the premium is accounted for in the year of accrual. The additional liability, if any, due to deficit in the Plan assets managed by LIC as compared to the present value of accrued liability on the basis of actuarial valuation, is recognized and provided for.

(ii) Provident fund contributions are made to Company''s Provident Fund Trust. The contributions are accounted for as defined benefit plans and are recognized as employee benefits expense when they are due. Deficits, if any, ofthe fund as compared to liability on the basis of an independent actuarial valuation is to be additionally contributed by the Company.

(iii) Current service cost and net interest on defined benefit obligation are directly recognized in the Statement of Profit and Loss.

(iv) Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the Statement of Changes in Equity andinthe Balance Sheet.

Defined contribution plans

(i) The Company''s superannuation scheme is a defined contribution plan. The contributions are recognized as employee benefit expense whenthey aredue.

(ii) Benefits in respect of compensated absence payable after 12 months are provided for, based on valuation, as at the Balance Sheet date, made by independent actuaries.

(iii) Defined contribution to Employees Pension Scheme 1995 is made to Government Provident Fund Authority and recognized as expense as and when due.

(s) Taxation

Current tax is determined as the amount of taxpayable in respect of taxable incomeforthe year. The Company''s current taxis calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognized on temporary differences between the tax base of assets and liabilities and their carrying amount in the financial statements. Deferred tax liabilities are recognized for all deductible temporary differences. Deferred tax assets are recognized to the extent it is probable that future taxable income will be available against which the deductible temporary differences could be utilized. Deferred tax is determined using tax ratesthat have been enacted or substantively enacted by the end of the reporting period.

Current and deferred taxes are recognized in profit or loss, except to the extent that it relate to the items that are recognized in other comprehensive income or directly in equity, in this case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity respectively.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax against which the MAT paid will be adjusted.

(t) Provisions and Contingent Liabilities

(i) Provision

A provision is recorded when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be requiredto settle the obligation and the amount can be reasonably estimated.

Provision is made for estimated warranty claims in respect of products sold which are still under warranty at the end of the reporting period. These claims are expected to be settled as and when warranty claims will arise. Management estimates the provision based on historical warranty claim information and any recenttrends that may suggestfuture claims could differfrom historical amounts.

(ii) Contingentliability

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

(u) Incentives

Incentives are disclosed as "Other Income", in the Financial Statements. Refer Note No. 28(a).

(v) Financial instruments

Equity investments at fairvalue through other comprehensive income

These include financial assets that are equity instruments and are irrevocably designated as such upon initial recognition. Subsequently, these are measured atfairvalue and changes therein are recognized directly in other comprehensive income, net of applicable incometaxes. Dividends from these equity investments are recognized in the Statement of Profit and Loss, when the right to receive payment has been established. When the equity investment is derecognized, the cumulative gain or loss in equity istransferred to retained earnings.

(w) Fairvaluemeasurement

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities based on the nature, characteristics and risks of the asset or liability and the level of the fairvalue hierarchy as;

• Level 1 - Quoted (unadjusted) market prices in active markets foridentical assets or liabilities.

• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

• Level 3 - Valuation techniquesfor which the lowest level inputthat is significanttothefairvalue measurement is unobservable.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizingthe use of unobservable inputs.

(x) Useofestimatesandjudgements

Detailed information about accounting judgements, estimates and assumption is included in the relevant notes.

(i) Estimation of defined benefit obligation-refer Note No. 37.

(ii) Estimation of provisionfor warranty claims-refer Note No. 18.

(iii) Estimated useful life and residual value of property, plant and equipments - refer Note No. 2(i) (i) above.

(iv) Estimated useful life of intangible assets- refer Note No. 2(i) (ii) above.

(v) Estimation of provisionforTax expenses-refer Note No. 2(s) above.

Estimation and underlying assumptions are reviewed on on-going basis. Revisions to estimates are recognized prospectively.

(y) Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 31st March 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from 1st April 2023, as below. The Company is evaluating the impact of these pronouncements on thefinancial statements.

(i) Ind AS 1 -Presentation of Financial Statements

(ii) Ind AS 12-Income Taxes

(iii) Ind AS 8 -Accounting Policies, Changes in Accounting Estimates and Errors


Mar 31, 2018

(a) Statement of Compliance

The financial statements of the Company comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [the Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions ofthe Act.

(b) Basis of preparation

The financial statements have been prepared on a historical cost basis, except certain financial instruments and defined benefit plans, which are measured at fairvalue.

(c) Revenue Recognition

(i) Sales :

Revenue is measured at the fair value of the consideration received or receivable. The Company recognizes revenue, when it has transferred to the buyer the significant risks and rewards associated with the goods and the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the Company.

(ii) OtherIncomes:

Other incomes are recognized when it is probable that the economic benefit will flow to the company and the amount of income can be measured reliably.

(d) Inventories

Inventories are valued at lower of their cost or net realizable value. The cost of raw materials, stores and consumables is measured on moving weighted averagebasis.

Inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition.

Raw materials and bought out components are valued at the lower of cost or net realizable value. Cost is determined on the basis of the weighted averagemethod.

Finished Goods and work-in-progress are carried at cost or net realizable value, whichever is lower.

Stores, spares and tools other than obsolete and slow moving items are carried at cost. Obsolete and slow moving items are valued at cost or estimated net realizable value, whichever is lower.

(e) Property, Plantand Equipment

Property, plant and equipment, except land, are carried at historical cost of acquisition, construction or manufacturing cost, as the case may be, less accumulated depreciation and amortization. Freehold land is carried at cost of acquisition.

Cost represents all expenses directly attributable to bringingthe asset to its working condition capable of operating inthe mannerintended. Costs incurred to manufacture property, plant and equipment and intangible are reduced from the total expense under the head ‘Expenditure, included in above items, capitalised’ in the Statement of Profit and Loss.

(f) Intangible Assets

Intangible Assets acquired are stated at acquisition cost, less accumulated amortization and impaired losses, if any.

Intangible Assets internally generated:

Expenditure incurred by the Company on development of know-how researched, is recognized as an intangible asset, if and only if the future economic benefits attributable to the use of such know-how are probable to flow to the Company and the costs / expenditure can be measured reliably.

(g) InvestmentProperty

Investment property is measured at cost less accumulated depreciation.

(h) Impairmentofassets

Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

(i) Depreciation & Amortization

(i) Property, Plant andEquipment:

- The Depreciation on Property, Plant and Equipment is provided as per Schedule-II to the Companies Act, 2013.

- Leasehold land is amortized overthe period of lease.

(ii) IntangibleAssets:

- Software and theirimplementation costs are written off over the period of 5 years.

- Technical Know-how acquired and internally generated is amortized over the useful life of the assets, not exceeding 10 years.

(j) Borrowing Costs

Cost of borrowings incurred for acquisition, construction or production of qualifying asset is capitalized.

(k) Research and Development Expenses

Revenue expenditure on Research and Development is charged off as an expense in the year in which incurred and capital expenditure is grouped with Assets under appropriate heads and depreciation is provided as per rates applicable.

(l) Leases

(i) Where theCompanyisthe Lessee:

- Leases where the Lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense inthe Statement of Profit and Loss.

- Finance leases are capitalized at the inception ofthe lease atfairvalue ofthe leased property.

(ii) Where theCompanyisthe Lessor:

Lease rentals are recognized in the Statement of Profit and Loss. Costs, including depreciation, are recognized as an expense in the Statement of Profit and Loss.

(m) Earningsper Share

Basic earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares outstanding during the period.

(n) Foreign currency transactions Transactions and balances

(i) Foreign Currency transactions are recorded at the rate of exchange on the date ofthetransaction.

(ii) Monetary items of Assets and Liabilities booked in foreign currency are translated in to rupee at the exchange rate prevailing at the Balance Sheet date

(iii) Exchange difference resulting from settlement of such transaction and from translation of monetary items of Assets and Liabilities are recognized in the Statement of Profit and Loss.

(iv) Exchange difference arising on translation of foreign currency liabilities for acquisition of Property, Plant and Equipments are adjusted to the Statement of Profit and Loss

Functional and presentation currency

These financial statements are presented in Indian Rupees, which is the Company’s functional currency. All amounts disclosed in the financial statements and notes have been rounded off to nearest lakhs, unless otherwise stated.

(o) Employee Benefits Definedbenefitplans

(i) The accruing liability of Gratuity is covered by Employees Group Gratuity Scheme of Life Insurance Corporation of India (LIC) and the premium is accounted for in the year of accrual. The additional liability, if any, due to deficit in the Plan assets managed by LIC as compared to the present value of accrued liability on the basis of actuarial valuation, is recognized and provided for.

(ii) Provident fund contributions are made to Company’s Provident Fund Trust. The contributions are accounted for as defined benefit plans and the contributions are recognized as employee benefits expense when they are due. Deficits, if any, of the fund as compared to liability on the basis of an independent actuarial valuation is to be additionally contributed by the Company.

(iii) Current service cost andnet interest on defined benefit obligation are directly recognized in the Statement of Profit and Loss.

(iv) Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Defined contribution plans

(i) The Company’s superannuation scheme is a defined contribution plan. The contributions are recognized as employee benefit expenses whentheyaredue.

(ii) Benefits in respect of compensated absence payable after 12 months are provided for, based on valuation, as at the Balance Sheet date, made by independent actuaries.

(p) Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the year. The Company’s current tax is calculated using tax rates thathave been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognized on temporary differences between the tax base of assets and liabilities and their carrying amount in the financial statements. Deferred tax liabilities are recognized for all deductible temporary differences. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences could be utilized. Deferred tax is determined using tax rates that have been enacted orsubstantively enacted by the end of the reporting period.

Current and deferred tax are recognized in profit or loss, except to the extent that it relate to the items that are recognized in other comprehensive income or directly in equity, in this case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity respectively.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax against which the MAT paid will be adjusted.

(q) Provisions and Contingent Liabilities Provision:

A provision is recorded when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation andthe amount can be reasonably estimated.

Provision is made for estimated warranty claims in respect of products sold which are still under warranty at the end of the reporting period. These claims are expected to be settled as and when warranty claims arises. Management estimates the provision based on historical warranty claim information and any recent trends that may suggestfuture claims could differfrom historical amounts.

Contingentliability:

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

(r) Incentives

Incentives receivable/received are disclosed as “Other Income”, in the Financial Statements.

(s) Financial instruments

Equity investments at fairvalue through other comprehensive income

These include financial assets that are equity instruments and are irrevocably designated as such upon initial recognition. Subsequently, these are measured at fairvalue and changes therein are recognized directly in othercomprehensive income, net of applicable income taxes.

Dividends from these equity investments are recognized in the Statement of Profit and Loss, when the right to receive payment has been established. When the equity investment is derecognized, the cumulative gain or loss in equity is transferred to retained earnings.

(t) Fairvalue measurement

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities based on the nature, characteristics and risks ofthe asset orliability andthe level of thefairvalue hierarchy as;

- Level 1 - Quoted (unadjusted) market prices in active markets foridentical assets orliabilities

- Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

- Level 3 - Valuation techniques forwhich the lowest level input that is significant to the fair value measurement is unobservable

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

(u) Useofestimatesand judgements

Detailed information about accounting judgements, estimates and assumption is included in the relevant notes.

(i) Estimation of defined benefit obligation - refer Note 36.

(ii) Estimation of provision for warranty claims - refer Note 18.

(iii) Estimated useful life of intangible assets- refer Note 2(i) (ii) above.

Estimation and underlying assumptions are reviewed on ongoing basis. Revisions to estimates are recognized prospectively.

(v) Recent accounting pronouncements

New Accounting pronouncements affecting amounts reported and/ordisclosures in thefinancial statements.

The Company has not applied the following revisions to Ind AS that have been issued but are not yet effective. The Company is evaluating the impact of these pronouncements onthefinancial statements.

Ind AS 40 - Investment Property

Ind AS 21 - The effects of Changes in Foreign Exchange Rates

IndAS12-IncomeTaxes

Ind AS 28 - Investments in Associates and JointVentures Ind AS 112-Disclosure of Interests in Other Entities.

Ind AS 115-Revenue from Contracts with Customers


Mar 31, 2017

Notes to Financial Statements for the year ended 31st March 2017

1. THE CORPORATE INFORMATION

Force Motors Limited is a Public Limited Company domiciled and incorporated in India. The Registered Office of the Company is situated at Mumbai-Pune Road, Akurdi, Pune - 411 035. The Company’s ordinary shares are listed on the Bombay Stock Exchange.

The Company is a fully, vertically integrated automobile company, with expertise in design, development and manufacture of the full spectrum of automotive components, aggregates and vehicles. Its range of products includes Light Commercial Vehicles (LCV), Multi-Utility Vehicles (MUV), Small Commercial Vehicles (SCV), Sports Utility Vehicles (SUV) and Agricultural Tractors.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The financial statements of the Company comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [the Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

The financial statements up to year ended 31st March 2016 were prepared in accordance with the Accounting Standards notified under accounting principles generally accepted in India (Indian GAAP), including Accounting Standards notified under the section 133 of the Companies Act 2013, read together with the Companies (Accounts) Rules, 2006 (as amended) and other relevant portions of the Act.

These are the Company’s first financial statements prepared in accordance with Ind AS. The Company has applied Ind AS 101, First-time Adoption of Indian Accounting Standards. The transition has been carried out from Indian GAAP which is considered as the Previous GAAP as defined in Ind AS 101. An explanation of how the transition to Ind AS has affected the reported Balance Sheet, Statement of Profit and Loss and Cash flows of the Company is provided in Note 47.

(b) Basis of measurement

The financial statements have been prepared on a historical cost basis, except certain financial instruments and defined benefit plans, which are measured affair value.

(c) Inventories

Inventories are valued at lower of their cost or net realizable value. The cost of raw materials, stores and consumables is measured on moving weighted average basis.

(d) Property, Plant and Equipment

Property, Plant and Equipment are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Freehold land is measured at historical cost.

(e) Investment Property

Investment property is measured at cost less accumulated depreciation.

(f) Depreciation & Amortization

(i) Property, Plant and Equipment:

- The Depreciation on Property, Plant and Equipment is provided as per Schedule-ll to the Companies Act, 2013.

- Leasehold land is amortized over the period of lease.

(ii) Intangible Assets:

- Software and their implementation costs are written off overt he period of 5 years.

- Technical Know-how acquired and internally generated is amortized over the useful life of the assets, not exceeding 10 years.

(g) Borrowing Costs

Cost of borrowings incurred for acquisition, construction or production of qualifying asset is capitalized.

(h) Research and Development Expenses

Revenue expenditure on Research and Development is charged off as an expense in the year in which incurred and capital expenditure is grouped with Assets under appropriate heads and depreciation is provided as per rates applicable.

(i) Leases

(i) Where the Company is the Lessee:

- Leases where the Less or effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss.

- Finance leases are capitalized at the inception of the lease at fair value of the leased property.

(ii) Where the Company is the Less or:

Lease rentals are recognized in the Statement of Profit and Loss. Costs, including depreciation, are recognized as an expense in the Statement of Profit and Loss.

(j) Foreign currency transactions Transactions and balances

(i) Foreign Currency transactions are recorded at the rate of exchange on the date of the transaction.

(ii) Monetary items of Assets and Liabilities booked in foreign currency are translated in to rupee at the exchange rate prevailing at the Balance Sheet date

(iii) Exchange difference resulting from settlement of such transaction and from translation of monetary items of Assets and Liabilities are recognized in the Statement of Profit and Loss.

(iv) Exchange difference arising on translation of foreign currency liabilities for acquisition of Property, Plant and Equipments are adjusted to the Statement of Profit and Loss

Functional and presentation currency

These financial statements are presented in Indian Rupees, which is the Company’s functional currency. All amounts disclosed in the financial statements and notes have been rounded off to nearest lakhs, unless otherwise stated.

(k) Employee Benefits Defined benefit plans

- The accruing liability of Gratuity is covered by Employees Group Gratuity Scheme of Life Insurance Corporation of India (LIC) and the premium is accounted for in the year of accrual. The additional liability, if any, due to deficit in the Plan assets managed by LIC as compared to the present value of accrued liability on the basis of actuarial valuation, is recognized and provided for.

- Provident fund contributions are made to Company’s Provident Fund Trust. The contributions are accounted for as defined benefit plans and the contributions are recognized as employee benefits expense when they are due. Deficits, if any, of the fund as compared to the liability, on the basis of an independent actuarial valuation, is to be additionally contributed by the Company.

- Current service cost and net interest on defined benefit obligation are directly recognized in the Statement of Profit and Loss.

- Re-measurement of defined benefit plans, comprising of actuarial gains or losses, return on plan assets excluding interest income are recognized immediately in balance sheet with corresponding debit or credit to Other Comprehensive Income. Re-measurements are not reclassified to profit or loss in subsequent period.

Defined contribution plans

- The Company’s superannuation scheme is a defined contribution plan. The contributions are recognized as employee benefit expenses when they are due.

- Benefits in respect of compensated absence payable after 12 months are provided for, based on valuation, as at the Balance Sheet date, made by independent actuaries.

(I) Incentives

Incentives receivable/ received are disclosed as "Other Income", in the Financial Statements.

(m) Financial instruments

Equity investments at fair value through other comprehensive income

These include financial assets that are equity instruments and are irrevocably designated as such upon initial recognition. Subsequently, these are measured atfair value and changes therein are recognized directly in other comprehensive income, net of applicable income taxes. Dividends from these equity investments are recognized in the Statement of Profit and Loss, when the right to receive payment has been established. When the equity investment is derecognized, the cumulative gain or loss in equity is transferred to retained earnings.

(n) Fair value measurement

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities based on the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as;

- Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

- Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

- Level 3 -Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

(o) Significant accounting judgments, estimates and assumptions

Detailed information about accounting judgments, estimates and assumption is included in the relevant notes.

(i) Estimation of defined benefit obligation - refer Note 36

(ii) Estimation of provision for warranty claims - refer Note 18.

(iii) Estimated useful life of intangible assets - refer Note 2(f)(ii) above.

Estimation and underlying assumptions are reviewed on ongoing basis. Revisions to estimates are recognized prospectively.

(p) Recent accounting pronouncements

New Accounting pronouncements affecting amounts reported and / or disclosures in the financial statements.

The Company has not applied the following revisions to Ind AS that have been issued but are not yet effective. The Company is evaluating the impact of these pronouncements on the financial statements.

Amendments to Ind AS 107 - Statement of Cash Flows

In March 2017, the Ministry of Corporate Affairs issued amendments to Ind AS 107 - Statement of Cash Flows introducing additional disclosures that will enable users of financial statements to evaluate changes in liabilities arising from financial activities. The amendment is effective from 1st April 2017.

* The fair value of the investments in unquoted equity shares have been estimated using valuation technique which approximates its carrying value. ** For determination of fair values of quoted equity investments, the investments classified as FVTOCI. Refer Note 37.

*** Investment in subsidiary is accounted at cost in accordance with "Ind AS 27" Separate financial statements.

-* Denotes amount less than Rs, 50,000/-

(c) As reported earlier, a foreign company has initiated legal proceedings in a foreign court, in respect of notional and unfounded claims for damages, without there being any enforceable agreement, relating to export business. The Company has obtained opinion from a Senior Counsel, in respect of these alleged claims against the Company. The Company has been advised that such notional/ unfounded claims are not as per the applicable law nor these claims, if any, can be enforced in the Court of Law in India. This information is being disclosed as per the provisions of Schedule III to the Companies Act, 2013, only to indicate the alleged claims made against the Company and the developments in respect thereof. Moreover, considering the period lapsed, since the conclusion of the said legal proceedings, the Company does not expect any impact of this litigation on its financial position.


Mar 31, 2016

Notes to Financial Statements for the year ended 31st March, 2016.

1. ACCOUNTING POLICIES

A. Depreciation:

(a) Tangible Assets :

The Depreciation on Fixed assets is provided as per the Schedule-II to the Companies Act, 2013.

(b) Intangible Assets:

(i) Software and their implementation costs are written off over the period of 5 years.

(ii) Technical Know-how acquired and internally generated are amortized over the useful life of the assets, not exceeding 10 years.

(c) Leasehold land is amortized over the period of lease.

B. Investments (Long Term):

Investments (Long Term) are valued at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of investments.

C. Valuation of Inventory:

Inventories are valued at lower of their cost or net realizable value. The cost of raw materials, stores and consumables is measured on moving weighted average basis.

D. Employees Retirement Benefit:

The accruing liability of Gratuity is covered by Employees Group Gratuity Scheme of Life Insurance Corporation of India (LIC) and the premium is accounted for in the year of accrual. The additional liability, if any, due to deficit in the Plan assets managed by LIC as compared to the present value of accrued liability on the basis of actuarial valuation, is recognized and provided for.

Benefits in respect of leave encashable at retirement / cessation are provided for, based on valuation, as at the Balance Sheet date, made by independent actuaries.

E. Research and Development Expenses:

Revenue expenditure on Research and Development is charged off as an expense in the year in which incurred and capital expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable.

F. Foreign Currency Transactions:

(a) Foreign Currency transactions are recorded at the rate of exchange on the date of the transaction.

(b) Monetary items of Assets and Liabilities booked in foreign currency are translated into rupee at the exchange rate prevailing at the Balance Sheet date.

(c) Exchange difference resulting from settlement of such transaction and from translation of monetary items of Assets and Liabilities are recognized in the Statement of Profit and Loss.

(d) The premium or discounts arising on Forward Contracts is amortized over the life of the Contract.

(e) Exchange difference arising on translation of foreign currency liabilities for acquisition of fixed assets are adjusted to the Statement of Profit and Loss.

G. Cost of borrowings incurred for acquisition, construction or production of qualifying asset is capitalized as per Accounting Standard (AS 16) the Companies (Accounting Standard) Rules, 2006.

H. Leases:

(a) Where the Company is the Lessee:

Leases where the Lesser effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss.

(b) Where the Company is the Lesser:

Assets subject to operating leases are included in fixed assets, lease income is recognized in the Statement of Profit and Loss. Costs, including depreciation, are recognized as an expense in the Statement of Profit and Loss.

I. Incentives:

Incentives receivable / received are disclosed as “Other Income”, in the Financial Statements.

(b) Terms/rights attached to equity shares :

The Company has issued equity shares. All equity shares issued rank pari passu in respect of distribution of dividend and repayment of capital. 1,30,32,914 Equity Shares are quoted equity shares with no restriction on transfer of shares. 27,600 Equity Shares are ''A'' equity shares which are transferrable only to permanent employees of the Company. 1,15,748 Equity Shares are Second ''A'' equity shares which are transferrable to permanent employees, who have put in five years of service with the Company.

(c) During the year ended 31st March, 2016, the Company has distributed a dividend Rs. 5 (Rs. 3) per share on 1,31,76,262 (1,31,76,262) Equity Shares of Rs. 10 each fully paid up.

The Board of Directors, in their meeting held on 12th March, 2016, has approved an Interim Dividend of Rs. 10 per share on 1,31,76,262 Equity Shares of Rs. 10 each fully paid up. The Interim Dividend paid for the year ended 31st March 2016 amounted to Rs. 13,17,62,620.

(d) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(e) Shares held by holding/ultimate holding company and/or their subsidiaries/associates

(i) The Company is a subsidiary of Jaya Hind Investments Private Limited, which holds 55.92% (55.92%) 73,68,697 (73,68,697) shares in the Company.

(ii) Jaya Hind Industries Limited, being associate company of Jaya Hind Investments Private Limited, holds 0.08% (0.08%) 10,909 (10,909) shares in the Company.


Mar 31, 2015

A. Depreciation:

(a) Tangible Assets :

The Depreciation on Fixed assets is provided as per the Schedule-II to the Companies Act, 2013.

(b) Intangible Assets:

(i) Software and their implementation costs are written off over the period of 5 years.

(ii) Technical Know-how acquired and internally generated are amortized over the useful life of the assets, not exceeding 10 years.

(c) Leasehold land is amortized over the period of lease.

B. Investments (Long Term):

Investments (Long Term) are valued at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of investments.

C. Valuation of Inventory:

Inventories are valued at lower of their cost or net realisable value. The cost of raw materials, stores and consumables is measured on moving weighted average basis.

D. Employees Retirement Benefit:

The accruing liability of Gratuity is covered by Employees Group Gratuity Scheme of Life Insurance Corporation of India (LIC) and the premium is accounted for in the year of accrual. The additional liability, if any, due to deficit in the Plan assets managed by LIC as compared to the present value of accrued liability on the basis of actuarial valuation, is recognised and provided for.

Benefits in respect of leave encashable at retirement / cessation are provided for, based on valuation, as at the Balance Sheet date, made by independent actuaries.

E. Research and Development Expenses:

Revenue expenditure on Research and Development is charged off as an expense in the year in which incurred and capital expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable.

F. Foreign Currency Transactions:

(a) Foreign Currency transactions are recorded at the rate of exchange on the date of the transaction.

(b) Monetary items of Assets and Liabilities booked in foreign currency are translated into rupee at the exchange rate prevailing at the Balance Sheet date.

(c) Exchange difference resulting from settlement of such transaction and from translation of monetary items of Assets and Liabilities are recognised in the Statement of Profit and Loss.

(d) The premium or discounts arising on Forward Contracts is amortized Over the life of the Contract.

(e) Exchange difference arising on translation of foreign currency liabilities for acquisition of fixed assets are adjusted to the Statement of Profit and Loss.

G. Cost of borrowings incurred for acquisition, construction or production of qualifying asset is capitalised as per Accounting Standard (AS 16) the Companies (Accounting Standard) Rules, 2006.

H. Leases:

(a) Where the Company is the Lessee:

Leases where the Lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss.

(b) Where the Company is the Lessor:

Assets subject to operating leases are included in fixed assets, lease income is recognised in the Statement of Profit and Loss. Costs, including depreciation, are recognised as an expense in the Statement of Profit and Loss.

I. Incentives:

Incentives receivable / received are disclosed as "Other Income", in the Financial Statements.


Mar 31, 2014

A. Depreciation :

(a) Tangible Assets :

The Depreciation on Fixed assets is provided on straight line method at the rates as per Schedule-XIV to the Companies Act, 1956.

(b) Intangible Assets :

(i) Software and their implementation costs are written off over the period of 5 years.

(ii) Technical Know-how acquired and internally generated are amortised over the useful life of the assets, not exceeding ten years.

(c) Lease hold land is amortised over the period of lease.

B. Investments (Long Term) :

Investments (Long Term) are valued at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of investments.

C. Valuation of Inventory :

Inventories are valued at lower of their cost or net realisable value. The cost of raw materials, stores and consumables is measured on moving weighted average basis.

D. Employees Retirement Benefit :

The accruing liability of Gratuity is covered by Employees Group Gratuity Scheme of Life Insurance Corporation of India (LIC) and the premium is accounted for in the year of accrual The additional liability, if any, due to deficit in the Plan assets managed by LIC as compared to the present value of accrued liability on the basis of actuarial valuation, is recognised and provided for.

Benefits in respect of leave encashable at retirement / cessation are provided for based on valuation, as at the Balance Sheet date, made by independent actuaries.

E. Research and Development Expenses :

Revenue expenditure on Research and Development is charged off as an expense in the year in which incurred and capital expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable

F Foreign Currency Transactions :

(a) Foreign Currency transactions are recorded at the rate of exchange on the date of the transaction.

(b) Monetary items of Assets and Liabilities booked in foreign currency are translated into rupee at the exchange rate prevailing at the Balance Sheet date.

(c) Exchange difference resulting from settlement of such transaction and from translation of monetary items of Assets and Liabilities are recognised in the Statement of Profit and Loss.

(d) The premium or discounts arising on Forward Contracts is amortized over the life of the Contract.

(e) Exchange difference arising on translation of foreign currency liabilities for acquisition of fixed assets are adjusted to the Statement of Profit and Loss.

G. Cost of borrowings incurred for acquisition, construction or production of qualifying asset is capitalised as per the Accounting Standard No. AS 16 - the Companies (Accounting Standard) Rules 2006.

H. Leases :

(a) Where the Company is the Lessee :

Leases where the Lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss.

(b) Where the Company is the Lessor :

Assets subject to operating leases are included in fixed assets, lease income is recognised in the Statement of Profit and Loss. Costs, including depreciation, are recognised as an expense in the Statement of Profit and Loss.

I. Incentives :

Incentives receivable / received are disclosed as "Other Income", in the Financial Statements.

(b) Terms/rights attached to equity shares :

The Company has issued equity shares. All equity shares issued rank pari passu in respect of distribution of dividend and repayment of capital. 13,032,914 equity shares are quoted equity shares with no restriction on transfer of shares. 27,600 equity shares are ''A'' equity shares which are transferrable only to permanent employees of the Company. 1,15,748 equity shares are Second ''A'' equity shares which are transferrable to permanent employees, who have put in five years of service with the Company.

(c) The Board of Directors has recommended a dividend oF 3 f 3) per share on 1,31,76,262 (1,31,76,262) equity shares of -10 each fully paid up.

(d) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(e) Shares held by holding/ultimate holding company and/or their subsidiaries/associates

The Company is a subsidiary of Jaya Hind Investments Private Limited, which holds 51.98% (68,48,497 shares) in the Company we f. 17th February, 2014

Deposits accepted by the Company are for a period ranging between 1 to 3 years from the date of acceptance of each deposits.


Mar 31, 2013

A. Depreciation:

(a) TangibleAssets :

The Depreciation on Fixed assets is provided on straight line method at the rates as per Schedule-XIV of the Companies Act'' 1956.

(b) Intangible Assets:

(i) Software and their implementation costs are written off over the period of 5 years.

(ii) Technical Know-how acquired and internally generated are amortised over the useful life of the assets'' not exceeding ten years.

(c) Lease hold land is amortised over the period of lease.

B. Investments (Long Term):

Investments (Long Term) are valued at cost. A provision for diminution is made to recognise a decline'' other than temporary'' in the value of investments.

C. Valuation of Inventory:

Inventories are valued at lower of their cost or net realisable value. The cost of raw materials'' stores and consumables is measured on moving weighted average basis.

D. Employees Retirement Benefit:

The accruing liability of Gratuity is covered by Employees Group Gratuity Scheme of Life Insurance Corporation of India (LIC) and the premium is accounted for in the year of accrual. The additional liability'' if any'' due to deficit in the Plan assets managed by LIC as compared to the present value of accrued liability on the basis of actuarial valuation'' is recognised and provided for.

Benefits in respect of leave encashable at retirement / cessation are provided for based on valuation'' as at the Balance Sheet date'' made by independent actuaries.

E. Research and Development Expenses:

Revenue expenditure on Research and Development is charged off as an expense in the year in which incurred and capital expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable.

F. Foreign Currency Transactions:

(a) Foreign Currency transactions are recorded at the rate of exchange on the date of the transaction.

(b) Monetary items of Assets and Liabilities booked in foreign currency are translated into rupee at the exchange rate prevailing at the Balance Sheet date.

(c) Exchange difference resulting from settlement of such transaction and from translation of monetary items of Assets and Liabilities are recognised in the Statement of Profit and Loss.

(d) The premium ordiscounts arising on Forward Contracts is amortized over the life of the Contract.

(e) Exchange difference arising on translation of foreign currency liabilities for acquisition of fixed assets are adjusted to the Statement of Profit and Loss.

G. Cost of borrowings incurred for acquisition'' construction or production of qualifying asset is capitalised as per the Accounting Standard No. AS 16 - the Company''s (Accounting Standard) Rules'' 2006.

H. Leases:

(a) Where the Company is the Lessee:

Leases where the Lessor effectively retains substantially all the risks and benefits of ownership of the leased item'' are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss.

(b) Where the Company is the Lessor:

Assets subject to operating leases are included in fixed assets'' lease income is recognised in the Statement of Profit and Loss. Costs'' including depreciation'' are recognised as an expense in the Statement of Profit and Loss.


Mar 31, 2012

A. Depreciation:

(a) Tangible Assets :

The Depreciation on Fixed assets is provided on straight line method at the rates as per Schedule-XIV of the Companies Act, 1956.

(b) Intangible Assets:

(i) Software and their implementation costs are written off over the period of 5 years.

(ii) Technical Know-how acquired and internally generated are amortised over the useful life of the assets, not exceeding ten years.

(c) Lease hold land is amortised over the period of lease.

B. Investments (Long Term):

Investments (Long Term) are valued at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of investments.

C. Valuation of Inventory:

Inventories are valued at lower of their cost or net realisable value. The cost of raw material, stores and consumables is measured on moving weighted average basis.

D. Employees Retirement Benefit:

The accruing liability of Gratuity is covered by Employees Group Gratuity Scheme of Life Insurance Corporation of India and the premium is accounted for in the year of accrual. The additional liability, if any, due to deficit in the Plan assets managed by LIC as compared to the present value of accrued liability on the basis of actuarial valuation, is recognised and provided for.

Benefits in respect of leave encashable at retirement / cessation are provided for based on valuation, as at the Balance Sheet date, made by independent actuaries.

E. Research and Development Expenses :

Revenue expenditure on Research and Development is charged off as an expense in the year in which incurred and capital expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable.

F. Foreign Currency Transactions:

(a) Foreign Currency transactions are recorded at the rate of exchange on the date of the transaction.

(b) Monetary items of Assets and Liabilities booked in foreign currency are translated into rupee at the exchange rate prevailing atthe Balance Sheet date.

(c) Exchange difference resulting from settlement of such transaction and from translation of monetary items of Assets and Liabilities are recognised in the Profit and Loss account.

(d) The premium or discounts arising on Forward Contracts is amortized overthe life of the Contract.

(e) Exchange difference arising on translation of foreign currency liabilities for acquisition of fixed assets are adjusted to the Profit and Loss account.

G. Cost of borrowings incurred for acquisition, construction or production of qualifying asset is capitalised as per the Accounting Standard No. AS 16 issued by the Institute of Chartered Accountants of India.

H. Leases:

(a) Where the Company is the Lessee :

Leases where the Lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account.

(b) Where the Company is the Lessor:

Assets subject to operating leases are included in fixed assets, lease income is recognised in the Profit and Loss Account. Costs, including depreciation, are recognised as an expense in the Profit and Loss Account.


Mar 31, 2011

A. Depreciation :

(a) Tangible Assets :

The Depreciation on Fixed assets is provided on straight line method at the rates as per Schedule-XIV of the Companies Act, 1956.

(b) Intangible Assets :

(i) Software and their implementation costs are written off over the period of 5 years.

(ii) Technical Know-how acquired and internally generated are amortised over the useful life of the assets, not exceeding ten years.

(c) Lease hold land is amortised over the period of lease.

B. Investments (Long Term) :

Investments (Long Term) are valued at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of investments.

C. Valuation of Inventory :

Inventories are valued at lower of their cost or net realisable value. The cost of raw material, stores and consumables is measured on moving weighted average basis.

D. Employees Retirement Benefit :

The accruing liability of Gratuity is covered by Employees Group Gratuity Scheme of Life Insurance Corporation of India and the premium is accounted for in the year of accrual. The additional liability, if any, due to deficit in the Plan assets managed by LIC as compared to the present value of accrued liability on the basis of actuarial valuation, is recognised and provided for.

Benefits in respect of leave encashable at retirement / cessation are provided for based on valuation, as at the Balance Sheet date, made by independent actuaries.

E. Research and Development Expenses:

Revenue expenditure on Research and Development is charged off as an expense in the year in which incurred and capital expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable.

F. Foreign Currency Transactions:

(a) Foreign Currency transactions are recorded at the rate of exchange on the date of the transaction.

(b) Monetary items of Assets and Liabilities booked in foreign currency are translated in to rupee at the exchange rate prevailing at the Balance Sheet date.

(c) Exchange difference resulting from settlement of such transaction and from translation of monetary items of Assets and Liabilities are recognised in the Profit and Loss account.

(d) The premium or discounts arising on Forward Contracts is amortized over the life of the Contract.

(e) Exchange difference arising on translation of foreign currency liabilities for acquisition of fixed assets are adjusted to the Profit and Loss account.

G. Cost of borrowings incurred for acquisition, construction or production of qualifying asset is capitalised as per the Accounting Standard No. AS 16 issued by the Institute of Chartered Accountants of India.

H. Leases :

(a) Where the Company is the Lessee :

Leases where the Lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account.

(b) Where the Company is the Lessor :

Assets subject to operating leases are included in fixed assets, lease income is recognised in the Profit and Loss Account. Costs, including depreciation are recognised as an expense in the Profit and Loss Account.


Mar 31, 2010

A. Depreciation :

(a) Tangible Assets :

The Depreciation on Fixed assets is provided on straight line method at the rates as per Schedule-XIV of the Companies Act, 1956.

(b) Intangible Assets :

(i) Software and their implementation costs are written off over the period of 5 years.

(ii) Technical Know-how acquired and internally generated are amortised over the useful life of the assets, not exceeding ten years.

(c) Lease hold landisamortised over the periodoflease.

B. Investments (Long Term) :

Investments (Long Term) are valued at cost. A provision for diminutionis made torecognise a decline, other than temporary, in the value of investments.

C. ValuationofInventory :

Inventories are valued at lower of their cost or net realisable value. The cost of raw material, stores and consumables is measured on moving weighted average basis.

D. Employees RetirementBenefit :

The accruing liability of Gratuity is covered by Employees Group Gratuity Scheme of Life Insurance Corporation of India and the premium is accounted for in the year of accrual. The additional liability, if any, due to deficit in the Plan assets managed by LIC as compared to the present value of accrued liability on the basis of actuarial valuation, is recognised and provided for.

Benefits in respect of leave encashable at retirement / cessation are provided for based on valuation, as at the Balance Sheet date, madebyindependent actuaries.

E. Research and Development Expenses:

Revenue expenditure on Research and Development is charged off as an expense in the year in which incurred and capital expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable.

F. Foreign Currency Transactions:

(a) Foreign Currency transactions are recorded at the rate of exchange ont he date of the transaction.

(b) Monetary items of Assets and Liabilities booked in foreign currency are translated in to rupee at the exchange rate prevailing at the Balance Sheet date.

(c) Exchange difference resulting from settlement of such transaction and from translation of monetary items of Assets and Liabilities are recognised in the Profit and Loss account.

(d) The premium or discounts arising on Forward Contracts is amortized over the life of the Contract.

(e) Exchange difference arising on translation of foreign currency liabilities for acquisition of fixed assets are adjusted to the Profit and Loss account.

G. Cost of borrowings incurred for acquisition, construction or production of qualifying asset is capitalised as per the Accounting Standard No. AS 16 issued by the Institute of Chartered Accountants of India.

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