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Accounting Policies of Harita Seating Systems Ltd. Company

Mar 31, 2014

1) Rights Attached to Equity Shares : Shareholders are entitled to such rights as to attend meetings of the share holders, to receive dividend distributable and also have a right in residual interest in the assets of the Company. Further, share holders are entitled to right of inspection of the documents as provided in Companies Act, 1956.

2) Details of issue of Bonus shares in the last five years preceding the date on which Balance Sheet is prepared. Nil

ACCOUNTING STANDARD (3) - Cash flow statement

The cash flow statement is prepared under "indirect method" and the same is annexed.

ACCOUNTING STANDARD (4) -Contingencies and events occurring after the Balance Sheet date

Details regarding contested liabilities are furnished in Note No.3 and also disclosed under Accounting Standard - 29.

ACCOUNTING STANDARD (6) - Depreciation accounting

Depreciation has been provided under straight line method in respect of all assets other than those stated below at the rates prescribed under schedule XIV of the Companies Act, 1956 and on pro-rata basis on assets acquired/sold during the year. Depreciation in respect of the following assets have been provided higher than the rates prescribed under Schedule XIV of the Companies Act 1956. Computers 30%, Moulds 20%, Vehicles 18% & Tools & fixtures 25%.

Depreciation in respect of assets acquired during the year whose actual cost does not exceed Rs.5,000/- has been provided at 100%.

ACCOUNTING STANDARD (8) - R & D

This standard is withdrawn from 1st April, 2003

ACCOUNTING STANDARD (9) - Revenue recognition

The income of the company is derived from manufacture and sale of seating systems for automotive and non automotive applications and other parts and accessories for automotive and non automotive applications.

Indigenous sales are recognised based on raising of invoices and delivery of goods thereof to the carrier.

Export sales are recognised on the basis of date of let export certificate.

The revenue and expenditure are accounted on a going concern basis.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Income from services is recognised on rendering of services and as per terms of agreement.

Dividend Income is recognised when right to receive dividend is established.

ACCOUNTING STANDARD (10) - Accounting for fixed assets

Fixed assets are stated at cost including expenditure incurred in bringing them to usable condition less depreciation.

ACCOUNTING STANDARD (11) - Effects of changes in foreign exchange rates

Purchase of imported raw materials, components, spares and capital goods are accounted based on retirement memos from banks. In respect of liabilities on import of raw materials, components, spare parts and capital goods which are in transit and where invoices/bills are yet to be received, the liability is accounted based on the advance copies of documents at the market exchange rate prevailing on the date of the Balance Sheet.

External commercial borrowings for acquisition of an asset

The amendment to Accounting Standard-11 introduced by Government of India permitting fluctuation in exchange rates in relation to acquisition of capital assets to be added to or deducted from the carrying cost of such assets is not applicable as the company did not have any external commercial borrowings for acquisition of any asset.

The company has not entered into any transactions in derivative instruments and hence reporting on currency swapping/interest rate structure does not arise.

ACCOUNTING STANDARD (12) - Accounting for Government grants

During the year, the Company has not received any grant from Government.

ACCOUNTING STANDARD (13) - Accounting for Investments

Investments are valued at cost. Provision for diminution in the carrying cost of investments is made if such diminution is other than temporary in nature in the opinion of the management. (Refer Notes XIII of the Balance Sheet)

ACCOUNTING STANDARD (15) - Employee benefits

A Defined contribution plan

a) Contributions to provident fund is in the nature of defined contribution plan and are made to provident fund maintained by Government.

B Defined benefit plan

a) The Company extends defined benefit plans in the form of leave salary to employees. In addition, the Company also extends pension to senior managers. Provision for leave salary and pension is made on actuarial valuation basis.

b) The Company also extends defined benefit plan in the form of gratuity to employees. Contribution to gratuity is made to Life Insurance Corporation of India in accordance with the scheme framed by the corporation.

ACCOUNTING STANDARD (16) - Borrowing costs

During the year the Company has not incurred any borrowing cost within the meaning of this Accounting Standard.

ACCOUNTING STANDARD (17) - Segment reporting

The operations of the entity relate to manufacture of seating system for automotive & non automotive applications, and other parts and accessories for automotive and non automotive applications. The income from sale of other parts and accessories being individually less than ten percent of total revenue, no separate disclosure is made.

ACCOUNTING STANDARD (19) - Accounting for leases

The Company has taken the following assets under operating lease. The lease term is 5 years.

Plant & Equipment, Electrical Equipments.

ACCOUNTING STANDARD (21) - Consolidated financial statements

Consolidated financial statements of the Company and its subsidiary is enclosed.

ACCOUNTING STANDARD (22) - Accounting for taxes on income

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax liability and asset are recognised based on timing difference.

ACCOUNTING STANDARD (24) - Discontinuing operations

During the year the Company has not discontinued any of its operations.

ACCOUNTING STANDARD (25) - Interim financial reporting

The Company has elected to publish quarterly financial results which were subject to limited review by the statutory auditors.

ACCOUNTING STANDARD (27) - Financial reporting of interest in joint venture

Company and the Company''s joint venture partner viz. M/s. F.S Fehrer Automotive GmbH, Germany (Fehrer) holds equity shares in the subsidiary Company viz. Harita Fehrer Limited, Chennai (HFRL) in the ratio of 51:49

ACCOUNTING STANDARD (28) - Impairment of assets

As on the balance sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of those assets other than Rs.43.87 lakhs debited to statement of profit and loss (Refer note no.XXVI).


Mar 31, 2013

ACCOUNTING STANDARD (1) - Disclosure of accounting policies

The accounts are maintained on accrual basis as a going concern.

ACCOUNTING STANDARD (2) - Valuation of inventories

Inventories are valued in accordance with the method of valuation prescribed by The Institute of Chartered Accountants of India at weighted average cost or net realisable value, whichever is less.

ACCOUNTING STANDARD (3) - Cash flow statement

The cash flow statement is prepared under "indirect method" and the same is annexed.

ACCOUNTING STANDARD (4) -Contingencies and events occurring after the Balance Sheet date

Details regarding contested liabilities are furnished in Note No.3 and also disclosed under Accounting Standard - 29.

ACCOUNTING STANDARD (5) Net profit or loss for the period, prior period items and changes in accounting policies

Prior period Items

- Rates & Taxes

- Rent

Warranty Provision:

Provision made in this regard is retained for one year till 31st March 2012. Effective this year provision is retained for two years. Due to this change, profit for the year is down by Rs. 43.43 lakhs.

ACCOUNTING STANDARD (6) - Depreciation accounting

Depreciation has been provided under straight line method in respect of all assets other than those stated below at the rates prescribed under schedule XIV of the Companies Act, 1956 and on pro-rata basis on assets acquired/sold during the year. Depreciation in respect of the following assets have been provided higher than the rates prescribed under Schedule XIV of the Companies Act 1956. Computers 30%, Moulds 20%, Vehicles 18% & Tools & fixtures 25%.

Depreciation in respect of assets acquired during the year whose actual cost does not exceed Rs.5,000/- has been provided at 100%.

ACCOUNTING STANDARD (7) - Construction contracts

ACCOUNTING STANDARD (8) - R & D

This standard is deleted from 1st April, 2003

ACCOUNTING STANDARD (9) - Revenue recognition

The income of the company is derived from manufacture and sale of seating systems for automotive and non automotive applications and other parts and accessories for automotive and non automotive applications.

Indigenous sales are recognised based on raising of invoices and delivery of goods thereof to the carrier.

Export sales are recognised on the basis of date of let export certificate.

The revenue and expenditure are accounted on a going concern basis.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Income from services is recognised on rendering of services and as per terms of agreement.

Dividend Income is recognised when right to receive dividend is established.

ACCOUNTING STANDARD (10) - Accounting for fixed assets

Fixed assets are stated at cost including expenditure incurred in bringing them to usable condition less depreciation.

ACCOUNTING STANDARD (11) - Effects of changes in foreign exchange rates

Purchase of imported raw materials, components, spares and capital goods are accounted based on retirement memos from banks. In respect of liabilities on import of raw materials, components, spare parts and capital goods which are in transit and where invoices/bills are yet to be received, the liability is accounted based on the advance copies of documents at the market exchange rate prevailing on the date of the Balance Sheet.

Net foreign exchange gain credited to Profit and loss account included in other income.

External commercial borrowings for acquisition of an asset

The amendment to Accounting Standard-11 introduced by Government of India permitting fluctuation in exchange rates in relation to acquisition of capital assets to be added to or deducted from the carrying cost of such assets is not applicable as the company did not have any external commercial borrowings for acquisition of any asset.

The company has not entered into any transactions in derivative instruments and hence reporting on currency swapping/interest rate structure does not arise.

ACCOUNTING STANDARD (12) - Accounting for Government grants

During the year, the Company has not received any grant from Government.

ACCOUNTING STANDARD (13) - Accounting for Investments

Investments are valued at cost. Provision for diminution in the carrying cost of investments is made if such diminution is other than temporary in nature in the opinion of the management. (Refer Notes XIII of the Balance Sheet)

ACCOUNTING STANDARD (14) - Accounting for amalgamation

ACCOUNTING STANDARD (15) - Employee benefits

A Defined contribution plan

a) Contributions to provident fund is in the nature of defined contribution plan and are made to provident fund maintained by Government.

B Defined benefit plan

a) the company extends defined benefit plans in the form of leave salary to employees. In addition, the company also extends pension to senior managers. Provision for leave salary and pension is made on actuarial valuation basis.

b) The company also extends defined benefit plan in the form of gratuity to employees. Contribution to gratuity is made to Life Insurance Corporation of India in accordance with the scheme framed by the corporation.

ACCOUNTING STANDARD (16) - Borrowing costs

During the year the Company has not incurred any borrowing cost within the meaning of this Accounting Standard.

ACCOUNTING STANDARD (17) - Segment reporting

The operations of the entity relate to manufacture of seating system for automotive & non automotive applications, and other parts and accessories for automotive and non automotive applications. The income from sale of other parts and accessories being individually less than ten percent of total revenue, no separate disclosure is made.

ACCOUNTING STANDARD (18) - Related party disclosures

A) List of related parties as per Clause 3(a) of the Standard where control exists. Reporting Entity : Harita Seating Systems Limited, Chennai Holding Companies : Nil

Subsidiary Company : Harita Fehrer Limited, Chennai

(01.04.2012 to 31.03.2013)

B) List of related parties as per Clause 3(c) of the Standard

Key Management Personnel : Mr.A.G.Giridharan

Manager under the provisions of the Companies Act, 1956.

ACCOUNTING STANDARD (20) - Earnings per share

Earnings per share is calculated by dividing the profit attributable to the shareholders by the number of equity shares outstanding as at the close of the year

ACCOUNTING STANDARD (21) - Consolidated financial statements

Consolidated financial statements of the Company and its subsidiary is enclosed.

ACCOUNTING STANDARD (22) - Accounting for taxes on income

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax liability and asset are recognised based on timing difference.

ACCOUNTING STANDARD (24) - Discontinuing operations

During the year the Company has not discontinued any of its operations.

ACCOUNTING STANDARD (25) - Interim financial reporting

The Company has elected to publish quarterly financial results which were subject to limited review by the statutory auditors.

ACCOUNTING STANDARD (26) - Intangible assets

Amortisation for intangibles has been provided as under: (i) Software is amortised over a period of two years.

- Estimated useful life of the asset

- Amortisation rates used

ACCOUNTING STANDARD (27) - Financial reporting of interest in joint venture

Company and the Company''s joint venture partner viz. M/s. F. S Fehrer Automotive GmbH, Germany (Fehrer) holds equity shares in the subsidiary Company viz. Harita Fehrer limited, Chennai (HFRL) in the ratio of 51:49

ACCOUNTING STANDARD (28) - Impairment of assets

As on the balance sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence there is no impairment loss on the assets of the company for the year.

ACCOUNTING STANDARD (29) - Provisions, contingent liabilities and contingent assets


Mar 31, 2012

ACCOUNTING STANDARD (1) - Disclosure of accounting policies

The accounts are maintained on accrual basis as a going concern.

ACCOUNTING STANDARD (2) - Valuation of inventories

Inventories are valued in accordance with the method of valuation prescribed by The Institute of Chartered Accountants of India at weighted average cost or net realizable value, whichever is less.

b) Changes in accounting policies

During the year, the Company has changed the accounting policy on provision of depreciation on moulds from number of shots basis to straight line method. This change has no material impact on profitability.

ACCOUNTING STANDARD (3) - Depreciation accounting

Depreciation has been provided under straight line method in respect of all assets at the rates prescribed under Schedule XIV of the Companies Act, 1956 and on pro-rata basis on assets acquired/sold during the year. Depreciation in respect of computers and vehicles has been provided at 30% and 18% respectively which is higher than the rate prescribed in Schedule XIV of the Companies Act, 1956.

Until the year ended 31st March 2002, moulds were depreciated by applying rates fixed under Schedule XIV of the Companies Act, 1956.This method is continued for moulds acquired before 31st March, 2002 and put to use. In respect of moulds acquired on and after 1st April, 2002 and put to use, depreciation is charged based on quantity of seat cushions manufactured.


Mar 31, 2011

ACCOUNTING STANDARD (1) - Disclosure of accounting policies

The accounts are maintained on accrual basis as a going concern.

ACCOUNTING STANDARD (2) - Valuation of inventories

Inventories are valued in accordance with the method of valuation prescribed by the Institute of Chartered Accountants of India at weighted average rates and in applicable cases at lower of cost or net realisable value.

ACCOUNTING STANDARD (3) - Cash flow statement

The cash flow statement is prepared under "indirect method" and the same is annexed.

ACCOUNTING STANDARD (4) -Contingencies and events occurring after the balance sheet date

Details regarding contested liabilities are furnished in Note No.3 and also disclosed under Accounting Standard - 29.

ACCOUNTING STANDARD (5) Net profit or loss for the period, prior period items and changes in accounting policies

b) Changes in accounting policies

Work trolleys till March 31, 2010 were capitalised on acquisition and depreciation was claimed. From this year onwards cost of acquisition of work trolleys are charged off. This change has no material impact on profit.

ACCOUNTING STANDARD (6) - Depreciation accounting

Depreciation has been provided under straight line method in respect of all assets at the rates prescribed under schedule XIV of the Companies Act, 1956 and on pro-rata basis on assets acquired / sold during the year. Depreciation in respect of computers and vehicles has been provided at 30% and 18% respectively which is higher than the rate prescribed in schedule XIV of the Companies Act, 1956.

Until the year ended 31st March, 2002, moulds were depreciated by applying rates fixed under schedule XIV of the Companies Act, 1956.This method is continued for moulds acquired before 31st March, 2002 and put to use. In respect of moulds acquired on and after 1st April, 2002 and put to use, depreciation is charged based on quantity of seat cushions manufactured.

Until the year ended 31st March, 2002, tools and fixtures were depreciated by applying rates fixed under schedule XIV of the Companies Act,1956. This method is continued for tools and fixtures acquired before 31st March, 2002 and put to use. In respect of tools and fixtures acquired on and after 1st April, 2002 and put to use, depreciation is charged at 25%.

Depreciation in respect of assets acquired during the year whose actual cost does not exceed Rs.5,000/- has been provided at 100%.

During the year accelerated depreciation provided on moulds used for slow moving items.

ACCOUNTING STANDARD (7) - Construction contracts Not applicable Not applicable

ACCOUNTING STANDARD (8) - R & D

This standard is deleted from 1st April, 2003

ACCOUNTING STANDARD (9) - Revenue recognition

The income of the Company is derived from manufacture and sale of seating systems for automotive and non automotive application and other parts and accessories for automotive and non automotive application.

Indigenous sales are recognised based on raising of invoices and delivery of goods thereof to the carrier.

Export sales are recognised on the basis of date of let export certificate and includes realised exchange fluctuations on exports (Gain - Rs.22.18 lakhs).

The revenue and expenditure are accounted on a going concern basis.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Income from services is recognised on rendering of services and as per terms of agreement.

ACCOUNTING STANDARD (10) - Accounting for fixed assets

Fixed assets are stated at cost including expenditure incurred in bringing them to usable condition less depreciation.

ACCOUNTING STANDARD (11) - Effects of changes in foreign exchange rates

Purchase of imported raw materials, components, spares and capital goods are accounted based on retirement memos from banks. In respect of liabilities on import of raw materials, components, spare parts and capital goods which are in transit and where invoices / bills are yet to be received, the liability is accounted based on the advance copies of documents at the market exchange rate prevailing on the date of the Balance Sheet.

External commercial borrowings for acquisition of an asset

The amendment to Accounting Standard -11 introduced by Government of India permitting fluctuation in exchange rates in relation to acquisition of capital assets to be added to or deducted from the carrying cost of such assets is not applicable as the Company did not have any external commercial borrowings for acquisition of any asset.

The Company has not entered into any transaction in derivative instruments and hence reporting on currency swapping / interest rate structure does not arise.

ACCOUNTING STANDARD (12) - Accounting for Government grants

No grant has been received during the year.

ACCOUNTING STANDARD (13) - Accounting for Investments

Investments are valued at cost. Provision for diminution in the carrying cost of investments is made, if such diminution is other than temporary in nature in the opinion of the management. (Refer Schedule VII of the Balance Sheet)

ACCOUNTING STANDARD (14) - Accounting for

amalgamation Not applicable Not applicable

ACCOUNTING STANDARD (15) - Employee benefits

A Defined contribution plan

a) Contributions to provident fund is in the nature of defined contribution plan and are made to provident fund maintained by Government.

B Defined benefit plan

a) The Company extends defined benefit plans in the form of leave salary to employees. In addition, the Company also extends pension to senior managers. Provision for leave salary and pension is made on actuarial valuation basis.

b) The Company also extends defined benefit plan in the form of gratuity to employees. Contribution to gratuity is made to Life Insurance Corporation of India in accordance with the scheme framed by the corporation.

ACCOUNTING STANDARD (16) - Borrowing costs

During the year the Company has not incurred any borrowing costs within the meaning of Accounting Standards issued by The Institute of Chartered Accountants of India.

ACCOUNTING STANDARD (17) - Segment reporting

The operations of the entity relate to manufacture of seating system for automotive & non automotive applications, and other parts and accessories for automotive and non automotive applications. The income from sale of other parts and accessories being individually less than ten percent of total revenue, no separate disclosure is made.

ACCOUNTING STANDARD (18) - Related party disclosures

A) List of related parties as per clause 3(a) of the Standard where control exists.

Reporting Entity : Harita Seating Systems Limited, Chennai

Subsidiary Company : Harita Fehrer Limited, Chennai 01.04.2010 to 31.03.2011

B) List of related parties as per clause 3(c) of the Standard

Key Management Personnel : Mr.A.G.Giridharan Manager under the provisions of the Companies Act, 1956.

ACCOUNTING STANDARD (19) - Accounting for leases Not applicable Not applicable

ACCOUNTING STANDARD (20) - Earnings per share

Disclosure is made in the Profit & Loss Account as per the requirement of the standard.

ACCOUNTING STANDARD (21) - Consolidated financial statement

Consolidated financial statements of the Company and its subsidiary is enclosed.

ACCOUNTING STANDARD (22) - Accounting for taxes on income

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax liability and asset are recognised based on timing difference.

ACCOUNTING STANDARD (23) - Accounting for

investments in associates in consolidated

financial statements Not applicable Not applicable

ACCOUNTING STANDARD (24) - Discontinuing operations

During the year the Company discontinued the operations at Bengaluru. The closure does not affect the earning generating capacity.

ACCOUNTING STANDARD (25) - Interim financial reporting

The Company has elected to publish quarterly financial results which were subject to limited review by the statutory auditors.

ACCOUNTING STANDARD (26) - Intangible assets

During the year the Company acquired the following assets falling under the definition of intangible assets as per the Accounting Standard and the following disclosure is made in respect of those assets.

ACCOUNTING STANDARD (27) - Financial reporting of interest in joint venture

Harita Fehrer Limited, Chennai (HFRL) the subsidiary company made the final allotment of 30,14,676 equity shares of face value of Rs.10/- each for cash at a price of Rs.51.78 per share (including a premium of Rs.41.78 per share) aggregating to Rs.15.61 crores on 14th February 2011, to the Joint Venture Partner, viz., M/s. F.S. Fehrer Automotive GmbH, Germany (Fehrer), by virtue of the memorandum of understanding dated 28.05.2009. Subsequent to the allotment, the shareholding pattern between the Company and Fehrer is in the ratio of 51:49

ACCOUNTING STANDARD (28) - Impairment of assets

As on the balance sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence there is no impairment loss on the assets of the Company for the year. (Previous year : Rs.54.88 lakhs)

 
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