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Accounting Policies of Steel Strips Wheels Ltd. Company

Mar 31, 2015

1) CORPORATE INFORMATION

Steel Strips Wheels Limited (the Company) is a public limited Company registered in India under the Companies Act 1956. Its Shares are listed on both Bombay stock Exchange and National Stock Exchange. The Company is a leading manufacturer of Automotive Wheel rims.

2) BASIS OF PREPARATION

The financial statements have been prepared in accordance with generally accepted accounting principles in India(Indian GAAP) and to comply in all material respects with the mandatory Accounting Standards notified by Companies (Accounting Standards) rules 2006, read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of Companies Act, 2013 and relevant provisions of the Companies Act, 1956 (as amended) read with General Circular 1/19/2013 dated 4th April 2014 of Ministry of Corporate Affairs in respect of the relevant provisions/schedules/rules of Companies Act 2013. Further, the guidance notes/announcements issued by the institute of Chartered Accounts of India (ICAI) are also considered, wherever applicable except to the extent where compliance with other statutory promulgations overrides the same requiring a different treatment. The financial statements have been prepared under the historical cost convention on accrual basis.

The accounting policies have been consistently applied by the Company and except for the changes in accounting policy discussed more fully below, are consistent with those used in the previous year.

1) USE OF ESTIMATES

The preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities, as at the date of the financial statements. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from those estimates. Uncertainties about these estimates and assumptions could result in the outcomes requiring a material adjustment to the carrying amount of assets or liabilities in the future periods.

2) PRESENTATION OFF INANCIAL STATEMENTS

The Balance-sheet and statement of profit and loss are prepared and presented in the format prescribed in the schedule III of the Companies Act, 2013 ("the Act"). The disclosure requirements are presented as per the Companies (Accounting Standards) rules 2006, read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of Companies Act, 2013.

3) REVENUE RECOGNITION

Revenue is recognized to the extent that it improbable That economic benefits will flow to the Company and the revenue can be reliably measured.

A. SALE OF GOODS

Revenue from sale of goods is recognized when the significant risks and rewards of ownership in the goods are transferred to the buyer of goods as per the terms of contracts, the Company retains no effective control of the goods transferred to a degree usually associated with the ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. The Company collects Central Sales tax and value added taxes (VAT) on the behalf of the Government and therefore these are not economic flowing to the company. Hence they are excluded from Revenue. Excise duty deducted from revenue (Gross)is the amount that in included in the revenue (Gross)and not the entire amount of liability arising during the year.

B. INTEREST INCOME

Interest from bank is recognized on time proportion basis taking into account the amount outstanding and applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss account.

C. OTHER INCOME

(i) Dividend Income is accounted in the period in which the right to receive the same is established.

(ii) Insurance claim is recognized on acceptance of claim by Insurance Company.

(iii) Vat Subsidy(granted in the state of Jharkh and) has been accounted on the basisof75%of the Net VAT paid per annum up to a maximum of 75%of the total fixed capital investment for different duration. The subsidy is as per Mega Incentive Policy of Jharkhand Government. As per policy, industry with investment above Rs 50 crore are eligible for following incentives:

75% of the VAT paid up to maximum of 75% of cost of project (Net of land/building) within 7yearswhichever is earlier.

4) RECOGNITION OF EXPENSES

All Expenses are recognized on accrual basis.

A. COST OF MATERIAL CONSUMED AND CHANGE IN INVENTORIES

Cost of material consumed is primarily comprised of landed cost Of direct materials and supplies consumed in the manufacture of product including the effect of changes in the finished goods, Work-in progress and Scrap material.

B. EMPLOYEE BENEFIT EXPENSES

Employee benefit expenses comprises of Salaries, wages, bonus and incentives, employee welfare expenses, share options and statutory contributions such as Provident funds, ESI, gratuity etc.

C. OTHER EXPENSES

Other Expenses comprises of Manufacturing expenses, Administrative Expenses, Selling and distribution expenses and Research and development expense.

(i) Manufacturing Expenses includes expenses such as consumption of stores and spares, power consumed, repairs to plant and machinery and other direct expenses related to production of goods etc.

(ii) Administrative Expenses includes expenses like Rent (including lease rent), Insurance charges, Rates fees and taxes, auditor's remunerations, advertisements expenses, other repairs, travelling expenses of staff, Managerial commissions, telephone and telex etc.

(iii) Selling and Distribution Expenses include business promotion, Freight charges on dispatches to customers, rebate and discounts, Royalties on sales etc.

(iv) Research and Development Expenses

a) Revenue Expenses

Research and development expense comprises revenue expenses on research are expensed under the respective head of accounts in the period in which it is occurred.

b) Development Expenses

Development expenditure on new products is capitalized as intangible assets so that it will amortized over the useful life of the assets. If all of the following can be demonstrated:

- The technical feasibility of completing the intangible asset so that it Will be available for use or sale.

- The Company has intention to complete the intangible asset and use corselet.

- The Company has ability to use or sell the intangible asset.

- The manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to bused internally, the use fullness of intangible assets.

- The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.

- The Company has ability to measure the expenditure attributable to the intangible asset during its development reliably. Other development costs that do not meet above criteria are expensed in the period in which they are incurred.

5) EXTRA ORDINARY AND EXCEPTIONAL ITEMS

Income or expenses that arise from events or transactions that are clearly differs from the ordinary activities of the Company are classified as extraordinary items. Specific disclosure of such events/transactions is made in the financial statements. Similarly, any external events beyond the control of the Company, significantly impacting income or expense, is also treated as extra ordinary item and disclosed as such.

Item of income or expense pertaining to ordinary activities of Company that demands separate disclosure considering the size, type or incidence, to improve understanding of the performance of the Company are classified as an exceptional item and accordingly disclosed in the notes to accounts.

6) INVENTORIES

A. Raw materials lying at Factory and job workers have been valued lower of weighted average cost or net realizable value. However these items are considered to be realizable at cost if the finished products in which they will be used are expected to be spoliator above cost.

B. Stocks in process have been valued at lower of cost or net realizable value. Cost includes raw material cost plus proportionate of conversion cost (based on normal capacity of production) comprising of direct materials; direct lab our, power consumed, and other overheads directly associated with production process.

C. Finished goods lying at factory have been valued at lower of weighted average cost or net realizable value. Cost includes related overheads and excise duty paid/payable on such goods.

D. Scrap has-been valued at net realizable value.

E. Store and Spares have been valued at weighted average cost.

(Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and estimated cost necessary to make the sale)

7) TANGIBLE FIXED ASSETS

Fixed assets are stated at original cost net of tax/duty credit availed, if any, less accumulated depreciation and cumulative impairment and those which have been revaluated are stated at the values determined by the values less accumulated depreciation and cumulative impairment. Cost of acquisition is inclusive of freight and other incidental expenses and interest on loan taken for the acquisition of qualifying assets up to the date of commissioning of assets. Subsequent expenditure related to item of fixed asset is added to its book value only if it increases the future benefits from the existing assets beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day to day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gain or losses arising from de-recognition of fixed assets are measured as the difference between the net disposable proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

The exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, insofar as they relate to the acquisition of a depreciable capital asset, have been added to or deducted from the cost of the asset and shall be depreciated over the balance useful life of the asset.

Die Tooling, developed in-house, includes cost of material and other direct/ incidental expense on in-house development.

Tangible Assets not ready for the intended use on the date of the balance Sheet are disclosed as "capital work in progress". (Also refer to policy on leases, borrowing costs, impairment of assets and foreign currency transactions infra.)

8) DEPRECIATION/ AMORTIZATION ON TANGIBLE FIXED ASSETS

Depreciation is the systematic allocation of the depreciable amount of an asset over useful life. The depreciable amount of an asset is the cost of an asset or other amount substituted for cost, less its residual value.

A. OWNED ASSETS

(i) Pursuant to applicability of Schedule II, of Companies Act 2013, with effect from 1st April 2014, Management has reassessed the useful life of tangible assets based on the internal and external technical evaluation. The Depreciation on fixed assets is provided on straight line method in accordance with applicable Schedule of the Companies Act, 2013.

(ii) Depreciation for addition to/deductions from, owned assets is Calculated on pro-rata basis from the date of such addition or, as the case may be, up to the date on which such asset has been sold, discarded, demolished or destroyed.

(iii) Residual values of assets have been consideredat5% of the original cost of the assets.

(iv) Difference of Exchange Rate fluctuation on imported plant and machineries procured out of long term foreign currency loans is amortized over the residual life of relevant plant and machineries.

(v) Depreciation on assets carried at carrying amount as on 01.04.2014 and is depreciated as per Straight line method over the remaining useful life of the assets. Further the assets whose remaining useful life are nil, has been recognized in the opening balance of retained earnings. Refer the same as transition a provision of the Companies Act.

(vi) The depreciation calculation is based on the balance useful lives of assets and shift working. Depreciation on assets used on double shift basis have been increase by 50% for that period and Depreciation on assets used in triple shift basis have be calculated on the basis of100% for that period, Except for assets in respect of which no extra shift depreciation is permitted(indicated by NESD in Part C of the schedule).

(vii) Management has reassessed the useful life of plant and machineries based on the internal and external technical evaluation which is different from useful life prescribed under the act. The reassessed useful life is tabulated as:

B. LEASED ASSETS

Land acquired under long term lease is classified under "Tangible Assets" and Is amortized over the period of lease.

9) IN TANGIBLE ASSETS AND AMORTIZATION

Intangible assets are stated at original cost net of tax/duty credit availed, if any, less accumulated amortization and cumulative impairment. Intangible assets are recognized when it is probable that the future economic benefits are attributable to the asset will flow to the enterprise and the cost of asset can be measured reliably. Intangible assets are amortized over their useful life. Intangible Assets not ready for the intended use notched ate of balance sheet are disclosed as" intangible assets under development"

10) IMPAIRMENT OF ASSETS

A. At each Balance Sheet date, the carrying amount of assets is tested Based on internal/ external factors, for impairment so as to determine: (i) The provision for impairment loss, if any; and

(ii) The reversal of impairment loss recognized in previous periods, if any,

B. Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: (i) In the case of an individual asset ,higher of the net selling price and the value in use.

(ii) In the case of a cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of the cash generating unit's net selling price and the value in use. (Value in use is determined as the present value of estimated future cash flows discounted to their present value at the weighted average cost of Capital, from the continuing use of an asset and from its disposal at the End of its useful life). Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

11) TRANSACTIONS IN FOREIGN CURRENCY

A. INITIAL RECOGNITION

Foreign currency transactions are recorded in the reporting currency, By applying to the foreign currency amount the applicable exchange rate on date of the transaction.

B. CONVERSION

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

C. EXCHANGE DIFFERENCES

Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise. Exchange differences relating to acquisition of imported fixed assets Are adjusted in the carrying cost of the respective Fixed Assets.

D. FOR WARD EXCHANGEC ON TRACTSNOT INTENDED FOR TRADING OR SPECULATION PURPOSES

The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchanged inferences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year. Gain or loss on contracts relating to acquisition of imported Fixed Assets is adjusted to the carrying cost of Fixed Assets.

12) BORROWING COST

Borrowing costs that are attributable to acquisition or construction of a qualifying asset are capitalized/inventories as part of cost of such assets till a such a time the asset is ready for its intended use/or sale. Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expenses in the period in which they are incurred.

13) EMPLOYEE BENEFITS

A. SHORT TERM EMPLOYEE BENEFITS

All employee benefits falling due wholly with in twelve months of rendering the services are classified as short term employee benefits. The benefit likes salaries, wages, short term compensated absence etc. and the Expected cost of bonus, and ex-gratia is recognized in the period in which the employee renders the related services.

B. POST EMPLOYMENT BENEFITS

(i) DEFINED CONTRIBUTION PLANS

Provident fund, family pension fund and employee state in assurance scheme

As per the employee Provident funds and misc provisions Act 1952, all employee of the Company are entitled to receive benefits under the provident fund and family pension fund which is defined contribution plan. These contributions are made to the funds administrated and managed by Government of India. In addition some employee of the Company are covered under employee state insurance scheme Act 1948 which is also defined contribution schemes recognized and administered by Government of India.

The Company's contributions to these schemes are recognized as expense in profit and loss account during the period in which the employee renders the related service

(ii) DEFINED BENEFIT PLANS

a) GRATUITY

The company provides for gratuity obligations through a defined benefits retirement plan ('The Gratuity Plan') covering all employees. The present value of the obligation under such Defined benefits plan is determined based on actuarial valuation using the Project Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measure each unit separately to buildup final obligation .The obligation is measured at the present value of the estimated cash flows. The discount rate used for determining the present value of the defined obligation under defined benefit plan, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized in profit and loss account sand when determined. The company makes annual contribution to LIC for the gratuity plan in respect of all the employees' liability on the basis of actuarial valuation done by the LIC. The company also provides for additional liability, in case of excess contribution, determined by the independent actuary based on actuarial valuation using the Project Unit Credit method as compared to actuarial valuation Determined by LIC and vice versa

b) LEAVE LIABILITY

The Company provides forth liability at the year end on account of unveiled Earned leave as per the actuarial valuation.

The leave encashment liability is covered through ha policy taken from Life Insurance Corporation of India. The contribution towards premium of the policy is charged to revenue every year. Actuarial gain or losses are recognized immediately in the statement Of profit and loss.

The interest element in the actuarial valuation of defined benefits plans, which comprises the implicit interest cost and the impact of the changes in discount rate, is classified under finance costs. The balance charge is recognized as employee benefit expenses in the statement of profit and loss account

C. LONG TERM EMPLOYEE BENEFITS

The obligation for long term employee benefits such as long term compensated absences, long service award etc are recognized in the similar manner as in the case of defined benefit plans as mention in(ii).

D. EMPLOYEE TERMINATION BENEFITS

Termination benefits such as compensation under voluntary retirement cum pension scheme are recognized as expense in the period in which they are incurred.

14) INVESTMENTS

A. CURRENT INVESTMENTS

Investments, which are readily realizable and are intended to be held for not more than one year from the date of acquisition, are classified as current investments. All other investments are classified as long term investments.

B. LONGTERM INVESTMENTS

Long-term investments including unquoted shares are carried at cost after providing diminution in value, if such diminution is other than temporary in nature. However mutual funds investments are valued at its net realizable value. Purchase and sale of investments are recognized based on the trade date accounting.

15) LEASES

A. FINANCE LEASE

Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Such assets are capitalized at the inception of the lease at the lower of the air value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

B. OPERATING LEASE

Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by the lesson are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis.

16) SEGMENT REPORTING

A. IDENTIFICATION OF SEGMENTS

The Company's operating businesses are organized and managed Separately according to the nature of products and services provided, with each segment representing strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

B. SEGMENT ACCOUNTING POLICIES

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

17) ACCOUNTING FOR TAXES ON INCOME

Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-Tax Act,1961 enacted in India and tax laws prevailing in there sportive tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at their porting date. Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred taxis measured using theta rates and the tax laws enacted or substantively enacted at the reporting date.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are review detach reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a Legal yen force able right exists to set-off current tax assets against Current tax liabilities and the deferred tax assets and deferred taxes Relate to the same tax able entity and the same taxation authority.

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of accredit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

18) PROVISIONS,CONTINGENT LIABILITIESANDCONTINGENT ASSETS

Provisions for expenses are recognized for liabilities that can be measured Only by using a substantial degree of estimation, if (i) The Company Has a present obligation as a result of past event (ii) A probable out flow of resources is expected to settle the obligation and (iii) The amount of the obligation can be reliably estimated.

Contingent liability is disclosed in case of

(i) A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation.

(ii) A Present obligation arising From past events, when no reliable estimate is possible.

(iii) A possible obligation arising from past events where the Probability of out flow of resources is not remote.

However contingent assets are neither recognized, nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date and adjusted to reflect the correct management estimates.

19) EARNING PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes and dividend noncumulative preference shares for the year)by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends related to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for event of bonus issue/rightissueetc; bonus Elementinarights issue to existing shareholders; share split; and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

20) CASHAND CASH EQUIVALENTS

Cash and cash equivalents balances include cash in hand, fixed deposits, margin money deposits, earmarked balances with banks and other bank balances such as dividend accounts, which have restrictions on repatriation.

21) EMPLOYEE STOCK OPTIONSCHEME.

Stock Options granted to employee under the Stock option scheme are accounted at intrinsic value as per the accounting treatment prescribed by the Securities and Exchange Board of India (Employee stock Option scheme and Employee Stock purchase Scheme) Guidelines 1999 and Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. Accordingly the excess of market price, determined as per the guidelines and guidance note, of underlying equity shares (market value), over the exercise price of the options is recognized as deferred stock compensation expenses as is charged to the statement of profit and loss account on straight line basis over the vesting period of the options. The amortized portion of the cost is shown under share holder funds.


Mar 31, 2013

I) Accounting Convention

The financial statements are prepared under the historical cost convention in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act 1956 and relevant presentational requirements of the Companies Act, 1956.

ii) Fixed Assets

Fixed assets are stated at cost (net of CENVAT) less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses and interest on loan taken for the acquisition of qualifying assets up to the date of commissioning of assets.

The exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, have been added to or deducted from the cost of the asset and shall be depreciated over the balance useful life of the asset.

Die Tooling, developed in-house, includes cost of material, taxes and duties and other direct/ incidental expense on in-house development.

(iii) Depreciation/ amortization

a. Depreciation on fixed assets (other than those referred to in b and c below) is provided on straight line method in accordance with Schedule XIV to the Companies Act, 1956.

b. Depreciation on assets costing Rs. 5,000 or less is provided 100% on prorata basis for days put in use.

c. The leasehold land is amortized over the period of lease.

d. Difference of Exchange Rate fluctuation on imported plant and machineries procured out of long term foreign currency loans is amortized over the residual life of relevant plant and machineries.

iv) Inventories

a. Raw materials lying at Factory and job workers have been valued at cost.

b. Stocks in process have been valued at Raw material cost plus proportionate of conversion cost.

c. Finished goods lying at factory have been valued at Raw material cost plus conversion cost including excise duty payable.

d. Scrap has been valued at net realizable value.

e. Stores and Spares have been valued at cost.

v) Investments

Long-term investments are carried at cost less provision, if any, for diminution in value which is other than temporary. Current investments are carried at lower of cost and fair value.

vi) Transactions in Foreign Currency

i) Foreign currency transactions are recorded at the exchange rate prevailing as at the date of transactions except export sales which are recorded at a rate notified by the customs for invoice purposes. Such rate is notified in the last week of the month and is adopted for recording export sales of the next month. The exchange fluctuation arising as a result of negotiation of export bill is accounted for as difference in exchange rates.

ii) Monetary items denominated in a foreign currency are reported at the closing rate as at the date of balance sheet. The reinstatement difference is charged to profit and loss account.

Hi) Non-monetary items (fixed assets and loans) denominated in a foreign currency are reinstated as at the date of balance sheet. The difference on re-instatement is carried to relevant non-monetary items.

vii) Employee Benefits

The Company has various schemes of retirement benefits such as provident fund, gratuity and leave encashment, which is dealt with as under:

i) Contributions to provident fund are made in accordance with the provisions of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952 and are charged to revenue every year.

ii) Provision for Gratuity is made based on actuarial valuation. The gratuity liability in respect of employees of the Company is covered through a policy taken by a trust from Life Insurance Corporation of India. The contribution towards premium of the policy to the trust is charged to revenue every year.

Hi) Provision for leave encashment is made based on actuarial valuation. The leave encashment liability is covered through a policy taken from Life Insurance Corporation of India. The contribution towards premium of the policy is charged to revenue every year.

viii) Borrowing costs

Borrowing costs that are attributable to acquisition or construction of a qualifying asset are capitalized as part of cost of such assets. Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expenses in the period in which they are incurred.

ix) Cenvat

The balance in the Service Tax and Modvat account is shown as current asset.

x) Revenue Recognition

Sales revenue is recognized as and when goods are handed overtop carrier.

- Insurance claim is recognized on actual receipt basis.

- Interest from bank is recognized on accrual basis.

xi) Recognition of expenses

Expenses are recognized on accrual basis except Technical know-how fees and Royalty on sales which is recognized on cash basis.

xii) Impairment of Assets

At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss, i.e., the amount by which the carrying amount of asset exceeds its recoverable amount is provided in the books of account.

xiii) Accounting for taxes on income

Provision for taxation for the year is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originates in one period and are capable of reversal in one or more subsequent periods. In respect of carry forward of losses and unabsorbed depreciation, deferred tax assets are recognized based on virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

MAT credit entitlement is recognized as an asset and carried under Loans and advances.

xiv) Leases

Leases where lessor effectively retains substantially all the risk and benefits of ownership of the leased items are classified as operating leases. Operating lease payments are recognised as expenses in the profit and loss account on straight line bases over the lease term.

xv) Provision involving substantial degree of estimate in measurement are recognized when there is present obligation as result of past events and it is probable that there will be an outflow of resources, contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2012

I) Accounting Convention

The financial statements are prepared under the historical cost convention in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act 1956 and relevant presentational requirements of the Companies Act, 1956.

ii) Fixed Assets

Fixed assets are stated at cost (net of CENVAT) less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses and interest on loan taken for the acquisition of qualifying assets up to the date of commissioning of assets.

The exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, have been added to or deducted from the cost of the asset and shall be depreciated overthe balance useful life of the asset.

Die Tooling, developed in-house, includes cost of material, taxes and duties and other direct/ incidental expense on in- house development.

iii) Depreciation/ amortization

a. Depreciation on fixed assets (other than those referred to in b and c below) is provided on straight line method in accordance with Schedule XIV to the Companies Act, 1956.

b. Depreciation on assets costing Rs. 5,000 or less is provided 100% on prorata basis for days put in use.

c. The leasehold land is amortized overthe period of lease.

d. Difference of Exchange Rate fluctuation on imported plant and machineries procured out of long term foreign currency loans is amortized overthe residual life of relevant plantand machineries.

iv) Inventories

a. Raw materials lying at Factory and job workers have been valued at cost.

b. Stocks in process have been valued at Raw material cost plus proportionate of conversion cost.

c. Finished goods lying at factory have been valued at Raw material cost plus conversion cost including excise duty payable.

d. Scrap has been valued at net realizable value.

e. Stores and Spares have been valued at cost.

v) Investments

Long-term investments are carried at cost less provision, if any, for diminution in value which is other than temporary. Current investments are carried at lowerofcost and fair value.

vi) Transactions in Foreign Currency

i) Foreign currency transactions are recorded at the exchange rate prevailing as at the date of transactions except export sales which are recorded at a rate notified by the customs for invoice purposes. Such rate is notified in the last week of the month and is adopted for recording export sales of the next month. The exchange fluctuation arising as a result of negotiation of export bill is accounted foras difference in exchange rates.

ii) Monetary items denominated in a foreign currency are reported at the closing rate as at the date of balance sheet. The reinstatement difference is charged to profit and loss account.

iii) Non-monetary items (fixed assets and loans) denominated in a foreign currency are reinstated as at the date of balance sheet. The difference on re-instatement is carried to relevant non-monetary items.

vii) Employee Benefits

The Company has various schemes of retirement benefits such as provident fund, gratuity and leave encashment, which is dealt with as under

i) Contributions to provident fund are made in accordance with the provisions of Employees' Provident Fund and Miscellaneous Provisions Act, 1952 and are charged to revenue every year.

ii) Provision for Gratuity is made based on actuarial valuation. The gratuity liability in respect of employees of the Company is covered through a policy taken by a trust from Life Insurance Corporation of India. The contribution towards premium of the policy to the trust is charged to revenue every year.

iii) Provision for leave encashment is made based on actuarial valuation. The leave encashment liability is covered through a policy taken from Life Insurance Corporation of India. The contribution towards premium of the policy is charged to revenue every year.

viii) Borrowing costs

Borrowing costs that are attributable to acquisition or construction of a qualifying asset are capitalized as part of cost of such assets. Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expenses in the period in which they are incurred.

ix) Cenvat

The balance in the Service Tax and Modvat account is shown as current asset.

x) Revenue Recognition

Sales revenue is recognized as and when goods are handed over to carrier.

Insurance claim is recognized on actual receipt basis.

Interestfrom bank is recognized on accrual basis.

xi) Recognition of expenses

Expenses are recognized on accrual basis except Technical know-how fees and Royalty on sales which is recognized on cash basis.

xii) Impairment of Assets

At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss, i.e., the amount by which the carrying amount of asset exceeds its recoverable amount is provided in the books of account.

xiii) Accounting for taxes on income

Provision for taxation for the year is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originates in one period and are capable of reversal in one or more subsequent periods. In respect of carry forward of losses and unabsorbed depreciation, deferred tax assets are recognized based on virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

MAT credit entitlement is recognized as an asset and carried under Loans and advances.

xiv) Provision involving substantial degree of estimate in measurement are recognised when there is present obligation as result of past events and it is probable that there will be an outflow of resources, contigent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nordisclosed in the financial statements.


Mar 31, 2011

I) Accounting Convention

The financial statements are prepared under the historical cost convention in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act 1956 and relevant presentational requirements of the Companies Act, 1956.

ii) Fixed Assets

Fixed assets are stated at cost (net of CENVAT) less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses and interest on loan taken for the acquisition of qualifying assets up to the date of commissioning of assets. The exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, have been added to or deducted from the cost of the asset and shall be depreciated over the balance useful life of the asset.

Die Tooling, developed in-house, includes cost of material, taxes and duties and other direct/ incidental expense on in-house development.

iii) Depreciation/ amortization

a. Depreciation on fixed assets (other than those referred to in b and c below) is provided on straight line method in accordance with Schedule XIVtotheCompaniesAct,1956.

b. Depreciation on assets costing Rs. 5,000 or less is provided 100% on prorata basis for days put in use.

c. The leasehold land is amortized over the period of lease.

d. Difference of Exchange Rate fluctuation on imported plant and machineries procured out of long term foreign currency loans is amortized over the residual life of relevant plant and machineries.

iv) Inventories

a. Raw materials lying at Factory and job workers have been valued at cost.

b. Stocks in process have been valued at Raw material cost plus proportionate of conversion cost.

c. Finished goods lying at factory have been valued at Raw material cost plus conversion cost including excise duty payable.

d. Scrap has been valued at net realizable value.

e. Stores and Spares have been valued at cost.

v) Investments

Long-term investments are carried at cost less provision, if any, for diminution in value which is other than temporary. Current investments are carried at lower of cost and fairvalue.

vi) Transactions in Foreign Currency

i) Foreign currency transactions are recorded at the exchange rate prevailing as at the date of transactions except export sales which are recorded at a rate notified by the customs for invoice purposes. Such rate is notified in the last week of the month and is adopted for recording export sales of the next month. The exchange fluctuation arising as a result of negotiation of export bill is accounted for as difference in exchange rates.

ii) Monetary items denominated in a foreign currency are reported at the closing rate as at the date of balance sheet. The reinstatement difference is charged to profit and loss account.

ill) Non-monetary items (fixed assets and loans) denominated in a foreign currency are reinstated as at the date of balance sheet. The difference on re-instatement is carried to relevant non-monetary items.

vii) Employee Benefits

The Company has various schemes of retirement benefits such as provident fund, gratuity and leave encashment, which is dealt with as under

i) Contributions to provident fund are made in accordance with the provisions of Employees' Provident Fund and Miscellaneous Provisions Act, 1952 and are charged to revenue every year.

ii) Provision for Gratuity is made based on actuarial valuation. The gratuity liability in respect of employees of the Company is covered through a policy taken by a trust from Life Insurance Corporation of India. The contribution towards premium of the policy to the trust is charged to revenue every year.

ill) Provision for leave encashment is made based on actuarial valuation. The leave encashment liability is covered through a policy taken from Life Insurance Corporation of India The contribution towards premium of the policy is charged to revenue every year.

viii) Borrowing costs

Borrowing costs that are attributable to acquisition or construction of a qualifying asset are capitalized as part of cost of such assets. Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expenses in the period in which they are incurred.

ix) Cenvat

The balance in the Service Tax and Modvat account is shown as current asset.

x) Revenue Recognition

Sales revenue is recognized as and when goods are handed overto carrier.

- Insurance claim is recognized on actual receipt basis.

- Interest from bank is recognized on accrual basis.

xi) Recognition of expenses

Expenses are recognized on accrual basis except Technical know-how fees and Royalty on sales which is recognized on cash basis.

xii) Impairment of Assets

At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss, i.e., the amount by which the carrying amount of asset exceeds its recoverable amount is provided in the books of account.

xiii) Accounting for taxes on income

Provision for taxation for the year is ascertained on the basis of assessable profits computed in accordance with the provisions ofthelncome-taxAct,1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originates in one period and are capable of reversal in one or more subsequent periods. In respect of carry forward of losses and unabsorbed depreciation, deferred tax assets are recognized based on virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

MAT credit entitlement is recognized as an asset and carried Under Loans and advances.


Mar 31, 2010

I) Accounting Convention

The financial statements are prepared under the historical cost convention in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act 1956 and relevant presentational requirements of the Companies Act, 1956.

ii) Fixed Assets

Fixed assets are stated at cost (net of CENVAT) less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses and interest on loan taken for the acquisition of qualifying assets up to the date of commissioning of assets. The exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, have been added to or deducted from the cost of the asset and shall be depreciated over the balance useful life of the asset.

Die Tooling, developed in-house, includes cost of material, taxes and duties and other direct/ incidental expense on in-house development.

iii) Depreciation / Amortization

a. Depreciation on fixed assets (other than those referred to in b and c below) is provided on straight line method in accordance with Schedule XIV to the Companies Act, 1956.

b. Depreciation on assets costing Rs. 5,000 or less is provided 100% on prorata basis for days put in use.

c. The leasehold land is amortized over the period of lease.

d. Difference of Exchange Rate fluctuation on imported plant and machineries procured out of long term foreign currency loans is amortized over the residual life of relevant plant and machineries.

iv) Inventories

a. Raw materials lying at Factory and job workers have been valued at cost.

b. Stocks in process have been valued at Raw material cost plus proportionate of conversion cost.

c. Finished goods lying at factory have been valued at Raw material cost plus conversion cost including excise duty payable.

d. Scrap has been valued at net realizable value.

e. Stores and Spares have been valued at cost.

v) Investments

Long-term investments are carried at cost less provision, if any, for diminution in value which is other than temporary. Current investments are carried at lower of cost and fair value.

vi) Transactions in Foreign Currency

i) Foreign currency transactions are recorded at the exchange rate prevailing as at the date of transactions except export sales which are recorded at a rate notified by the customs for invoice purposes. Such rate is notified in the last week of the month and is adopted for recording export sales of the next month. The exchange fluctuation arising as a result of negotiation of export bill is accounted for as difference in exchange rates.

ii) Monetary items denominated in a foreign currency are reported at the closing rate as at the date of balance sheet. The reinstatement difference is charged to profit and loss account.

iii) Non-monetary items (fixed assets and loans) denominated in a foreign currency are reinstated as at the date of balance sheet. The difference on re- instatement is carried to relevant non-monetary items.

vii) Employee Benefits

The Company has various schemes of retirement benefits such as provident fund, gratuity and leave encashment, which is dealt with as under

i) Contributions to provident fund are made in accordance with the provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952 and are charged to revenue every year.

ii) The gratuity liability in respect of employees of the Company is covered through a policy taken by a trust from Life Insurance Corporation of India. The contribution towards premium of the policy to the trust is charged to revenue every year.

iii) Provision for leave encashment is made based on actuarial valuation. The leave encashment liability is covered through a policy taken from Life Insurance Corporation of India. The contribution towards premium of the policy is charged to revenue every year.

viii) Borrowing costs

Borrowing costs that are attributable to acquisition or construction of a qualifying asset are capitalized as part of cost of such assets. Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expenses in the period in which they are incurred.

ix) Cenvat

The balance in the Service Tax and Modvat account is shown as current asset.

x) Revenue Recognition

- Sales revenue is recognized as and when goods are handed over to carrier.

- Insurance claim is recognized on actual receipt basis.

- Interest from bank is recognized on accrual basis.

xi) Recognition of expenses

Expenses are recognized on accrual basis except Technical know-how fees which is recognized on cash basis.

xii) Impairment of Assets

At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss, i.e., the amount by which the carrying amount of asset exceeds its recoverable amount is provided in the books of account.

xiii) Accounting for taxes on income

Provision for taxation for the year is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originates in one period and are capable of reversal in one or more subsequent periods. In respect of carry forward of losses and unabsorbed depreciation, deferred tax assets are recognized based on virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized