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Accounting Policies of Triton Valves Ltd. Company

Mar 31, 2014

A. Basis of Preparation

These financial statements have been prepared in accordance with the generally accepted principles in India under the historical cost convention on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. These financial statements have been prepared to comply in all material respects with applicable accounting principles in India, the applicable Accounting Standards notified under Section 211(3C) of the companies Act, 1956. Pursuant to Circular 15/ 2013 dated 13th September, 2013 read with circular 08/ 2014 dated 4th April, 2014, till the standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

b. Use of Estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expense during the year. Examples of such estimates include provisions for doubtful receivables, employee benefits, provision for income taxes, the useful lives of depreciable fixed assets and provisions for impairment etc. Future results could differ due to changes in these estimates and the difference between the actual results and the estimates are recognised in the period in which the results are known/materialize.

c. Tangible Fixed Assets and Depreciation

(i) Tangible Fixed Assets are stated at cost net of Cenvat credit. Additions to Tangible Fixed Assets in the

Gross Block are stated at cost of acquisition and all costs relating to the acquisition and installation up to the date the asset is ready be put to use are capitalized. Borrowing costs relating to acquisition of fixed assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to us

(ii) Depreciation on the tangible fixed assets is provided on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956. Depreciation on additions to Plant and Machinery is provided for the proportionate period in use.

d. Intangible Fixed Assets and Amortization

Cost relating to software licenses, which are acquired, are capitalized and amortized on a straight - line basis over their useful life not exceeding five years.

e. Impairment of assets

At each Balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the Profit & Loss account to the extent the carrying amount exceeds the recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

f. Investments

Investments in equity shares are held as long term and are stated at cost. Provision is made when permanent diminution in value has arisen in the opinion of the Management. Current Investments are stated at the lower of cost and fair value.

g. Inventories:

(i) Inventories are valued at lower of cost or net realizable value.

(ii) Cost is determined following the weighted average method.

(iii) Unsold scrap at the end of the year is taken at an estimated realisable value.

h. Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

i. Revenue / Expenditure recognition

Sales are recognised on dispatch of goods to customers. Sales are inclusive of excise duty net of discount and sales tax. Income accruing in the current year and ascertainable/realisable with reasonable certainty on the date of financial statements is taken into account.

Expenses accruing in the accounting year and ascertainable with reasonable accuracy on the date of financial statement are provided in the accounts.

j. Foreign Currency Transactions

(i) Foreign currency transactions are recorded in the reporting currency, at the exchange rates prevailing on the date of the transaction.

(ii) Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end exchange rates and those covered by forward exchange contracts are determined by their respective contracts.

(iii) Premium for forward contracts is recognised as income or expenditure over the life of the contract.

(iv) Any income or expense on account of exchange difference either on settlement or on translation is recongnised in the Profit and Loss Account.

k. Research and Development

Revenue expenses relating to Research and Development are included under respective heads of expenditure. Capital expenditure on Research and Development is treated in the same manner as expenditure on other fixed assets.

l. Retirement Benefits

(i) The Company''s contributions to recognized funds such as Provident Fund, Employees State Insurance, Superannuation, etc. are charged to statement of Profit and Loss.

(ii) Gratuity liability is covered by a policy with Life Insurance Corporation of India. Annual contribution to the fund is charged to statement of Profit and Loss and the Liability has been provided as per actuarial Valuation by Life Insurance Corporation.

(iii) encashment is covered by a policy with Life Insurance Corporation of India. Annual contribution to the fund is charged to statement of Profit and Loss and the Liability has been provided as per actuarial Valuation by Life Insurance Corporation.

m. Accounting for Taxes on Income

Current tax is determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized on timing differences; being the difference between taxable incomes and accounting income that originate in one year and is capable of reversal in one or more subsequent years. Deferred tax assets and liabilities are computed on the timing differences applying the enacted tax rate. Deferred tax assets arising on account of unabsorbed depreciation or carry forward of tax losses are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future tax income will be available against which such deferred tax assets can be realized.

n. Borrowing Cost

Borrowing costs that are attributable to acquisition, construction or production of a qualifying asset are capitalised as a part of cost of such asset. All other borrowing costs are recognized as an expense in the year in which they are incurred.

o. Leases

Where the Company is lessee:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.

Where the Company is lessor:

Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets given under operating leases are included in fixed assets. Lease income on an operating lease is recognized in the Statement of Profit and Loss on a straight-line basis over the lease term. Costs, including depreciation, are recognized as an expense in the Statement of Profit and Loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the Statement of Profit and Loss.

p. Provisions

A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on the Management''s estimate of the amount required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the Management''s current estimates.

q. Segment Report

The Company has only one reportable business segment, which is automobile tyre and tube valves, cores and accessories and operates in a single business segment. Accordingly, the amounts appearing in the financial statements relate to the company''s single business segment.

r. Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

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.

s. Measurement of EBIDTA:

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present earnings before interest, tax, depreciation and amortization (EBIDTA) as a separate line item on the face of the statement of profit and loss. The company measures EBIDTA on the basis of profit / (loss) from continuing operations. In its measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.

(d) Terms/ rights attached to Equity Shares

I. The Company has only one class of Equity Shares having a par value of Rs. 10/- per share. Each holder of Equity Share is entitled to one vote per Share. ii. In event of liquidation of the Company, the holders of Equity Shares would 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.

I. Indian Rupee Term Loans from Banks (secured) consist of ;

Term Loan from HDFC Bank carrying interest rate @ 12% p.a. and repayable in 66 equated monthly instalments beginning from September 29, 2011.Term Loan from Kotak Mahindra Bank carrying interest rate @ PLR minus 2.65 p.a. and repayable in 50 equated monthly instalments beginning from June, 2013.

ii. Foreign currency Term Loans from Banks (secured) consist of;

ECB Term Loan from Standard Chartered Bank carrying interest rate @ 9.75% p.a. (Fully hedged) and repayable in 48 equated monthly instalments beginning from November, 2011.

iii. Indian Rupee Term Loan and Foreign Currency Term Loans are secured:

(a) by way of First pari passu charge, on hypothecation of all the plant and machinery at the Company''s existing plant at Belavadi Industrial Area and Hebbal Industrial Estate, Mysore, Company''s Registered Office and Company Flat at Bangalore,

(b) by way of First pari passu charge, on Equitable mortgage of Land and Building at Belavadi Industrial Area and Hebbal Industria Area, Mysore, Company''s Registered Office and Company Flat at Bangalore,(c) by way of Second Paripassu charge, on hypothecation of Company''s entire current assets including stocks of raw material, semi finished goods and finished goods, consumable stores and spares and such other movables, book debts, bills whether documentary or clean, outstanding monies, receivables, both present and future, and(d) further secured by personal guarantee of the Managing Director.

iv. Loan from Directors carryies an Interest @ 11.40% and the Loan is repayable after 31st March, 2015

(I) Cash credit from banks are secured:

(a) by way of first Paripassu charge, on hypothecation of Company''s entire current assets including stocks of raw material, semi finished goods and finished goods, consumable stores and spares and such other movables, book debts, bills whether documentary or clean, outstanding monies, receivables, both present and future,

(b) by way of Second paripassu charge, on hypothecation of all the plant and machinery at the company''s existing plant at Belavadi Industrial Area, Hebbal Industrial Area, Mysore and Company''s registered Office and Company Flat at Bangalore,

(c) by way of Second paripassu charge, on Equitable mortgage of Land and Building at Belavadi Industrial Area and Hebbal Indusatrial Area, Mysore, Company''s registered Office and Company Flat at Bangalore.

(d) further secured by personal guarantee of the Managing Director.


Mar 31, 2013

A. Conventions

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

b. Tangible FixedAssets and Depreciation

(i) Tangible FixedAssets are stated at cost net of Cenvat credit. Additions to Tangible FixedAssets in the Gross Block are stated at cost of acquisition and all costs relating to the acquisition and installation up to the date the asset is ready be put to use are capitalized. Borrowing costs relating to acquisition of fixed assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

(ii) Depreciation on the tangible fixed assets is provided on straight line method at the rates specified in Schedule XIV of the Companies Act 1956. Depreciation on additions to Plant and Machinery is provided for the proportionate period in use.

c. Intangible FixedAssets andAmortization

(iii) Cost relating to software licenses, which are acquired, are capitalized and amortized on a straight - line basis over their useful life not exceeding five years.

d. Investments

Investments in equity shares are held as long term and are stated at cost. Provision is made when permanent diminution in value has arisen in the opinion of the Management.

e. Inventories

(i) Inventories are valued at lower of cost or net realizable value.

(ii) Cost is determined following the weighted average method.

(iii) Unsold scrap at the end of the year is taken at an estimated realisable value.

f. Revenue / Expenditure Recognition

Sales are recognised on dispatch of goods to customers. Sales are inclusive of excise duty net of discount and sales tax. Income accruing in the current year and ascertainable/realisable with reasonable certainty on the date of financial statements is taken into account.

Expenses accruing in the accounting year and ascertainable with reasonable accuracy on the date of financial statement are provided in the accounts.

g. Foreign Currency Transactions

(i) Foreign currency transactions are recorded in the reporting currency, at the exchange rates prevailing on the date of the transaction.

(ii) Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end exchange rates and those covered by forward exchange contracts are determined by their respective contracts.

(iii) Premium for forward contracts is recognised as income or expenditure over the life of the contract.

(iv) Any income or expense on account of exchange difference either on settlement or on translation is recongnised in the Profit and LossAccount.

h. Research and Development

Revenue expenses relating to Research and Development are included under respective heads of expenditure. Capital expenditure on Research and Development is treated in the same manner as expenditure on other fixed assets.

i. Retirement Benefits

(i) The Company''s contributions to recognized funds such as Provident Fund, Employees State Insurance, Superannuation, etc. are charged to Profit and Loss account.

(ii) Gratuity liability is covered by a policy with Life Insurance Corporation of India. Annual contribution to the fund is charged to revenue and the Liability has been provided as per actuarial Valuation by Life Insurance Corporation.

(iii) Leave encashment is covered by a policy with Life Insurance Corporation of India. Annual contribution to the fund is charged to revenue and the Liability has been provided as per actuarial Valuation by Life Insurance Corporation.

j. Accounting for Taxes on Income

Current tax is determined in accordance with the provisions of the Income TaxAct, 1961.

Deferred tax is recognized on timing differences; being the difference between taxable incomes and accounting income that originate in one year and is capable of reversal in one or more subsequent years. Deferred tax assets and liabilities are computed on the timing differences applying the enacted tax rate. Deferred tax assets arising on account of unabsorbed depreciation or carry forward of tax losses are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future tax income will be available against which such deferred tax assets can be realized.

k. Borrowing Cost

Borrowing costs that are attributable to acquisition, construction or production of a qualifying asset are capitalised as a part of cost of such asset. All other borrowing costs are recognized as an expense in the year in which they are incurred.

l. Impairment ofAssets

At each Balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the Statement of Profit & Loss to the extent the carrying amount exceeds the recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

m. Provisions

A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on the Management''s estimate of the amount required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the Management''s current estimates.

n. Segment Report

The Company has only one reportable business segment, which is automobile tyre and tube valves, cores and accessories and operates in a single business segment based on the nature of the services, the risk and returns, the organization structure and the internal financial reporting systems. Accordingly, the amounts appearing in the financial statements relate to the company''s single business segment.

o. Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to Equity Shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

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.

p. Measurement of EBIDTA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present earnings before interest, tax, depreciation and amortization (EBIDTA) as a separate line item on the face of the statement of profit and loss. The Company measures EBIDTA on the basis of profit / (loss) from continuing operations. In its measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.


Mar 31, 2012

A. Conventions

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

b. Tangible Fixed Assets and Depreciation

(i) Tangible Fixed Assets are stated at cost net of Cenvat credit. Additions to Tangible Fixed Assets in the Gross Block are stated at cost of acquisition and all costs relating to the acquisition and installation up to the date the asset is ready be put to use are capitalized. Borrowing costs relating to acquisition of fixed assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

(ii) Depreciation on the tangible fixed assets is provided on straight line method at the rates specified in Schedule XIV of the Companies Act 1956. Depreciation on additions to Plant and Machinery is provided for the proportionate period in use.

c. Intangible Fixed Assets and Amortization

(iii) Cost relating to software licenses, which are acquired, are capitalized and amortized on a straight - line basis over their useful life not exceeding five years.

d. Investments

Investments in equity shares are held as long term and are stated at cost. Provision is made when permanent diminution in value has arisen in the opinion of the Management.

e. Inventories:

(i) Inventories are valued at lower of cost or net realizable value.

(ii) Cost is determined following the weighted average method.

(iii) Unsold scrap at the end of the year is taken at an estimated realisable value.

f. Revenue / Expenditure recognition

Sales are recognised on dispatch of goods to customers. Sales are inclusive of excise duty net of discount and sales tax. Income accruing in the current year and ascertainable/realisable with reasonable certainty on the date of financial statements is taken into account.

Expenses accruing in the accounting year and ascertainable with reasonable accuracy on the date of financial statement are provided in the accounts.

g. Foreign Currency Transactions

(i) Foreign currency transactions are recorded in the reporting currency, at the exchange rates prevailing on the date of the transaction.

(ii) Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end exchange rates and those covered by forward exchange contracts are determined by their respective contracts.

(iii) Premium for forward contracts is recognised as income or expenditure over the life of the contract.

(iv) Any income or expense on account of exchange difference either on settlement or on translation is recongnised in the Profit and Loss Account.

h. Research and Development

Revenue expenses relating to Research and Development are included under respective heads of expenditure. Capital expenditure on Research and Development is treated in the same manner as expenditure on other fixed assets.

i. Retirement Benefits

(i) The Company's contributions to recognized funds such as Provident Fund, Employees State Insurance, Superannuation, etc. are charged to Profit and Loss account.

(ii) Gratuity liability is covered by a policy with Life Insurance Corporation of India. Annual contribution to the fund is charged to revenue and the Liability has been provided as per actuarial Valuation by Life Insurance Corporation.

(iii) Leave encashment is covered by a policy with Life Insurance Corporation of India. Annual contribution to the fund is charged to revenue and the Liability has been provided as per actuarial Valuation by Life Insurance Corporation.

j. Accounting for Taxes on Income

Current tax is determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized on timing differences; being the difference between taxable incomes and accounting income that originate in one year and is capable of reversal in one or more subsequent years. Deferred tax assets and liabilities are computed on the timing differences applying the enacted tax rate. Deferred tax assets arising on account of unabsorbed depreciation or carry forward of tax losses are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future tax income will be available against which such deferred tax assets can be realized.

k. Borrowing Cost

Borrowing costs that are attributable to acquisition, construction or production of a qualifying asset are capitalised as a part of cost of such asset. All other borrowing costs are recognized as an expense in the year in which they are incurred.

I. Impairment of assets

At each Balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the Profit £t Loss account to the extent the carrying amount exceeds the recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

m. Provisions

A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on the Management's estimate of the amount required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the Management's current estimates.

n. Segment Report

The Company has only one reportable business segment, which is automobile tyre and tube valves, cores and accessories and operates in a single business segment based on the nature of the services, the risk and returns, the organization structure and the internal financial reporting systems. Accordingly, the amounts appearing in the financial statements relate to the Company's single business segment.

o. Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

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.

p. Measurement of EBIDTA:

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present earnings before interest, tax, depreciation and amortization (EBIDTA) as a separate line item on the face of the statement of profit and loss. The Company measures EBIDTA on the basis of profit / (loss) from continuing operations. In its measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.


Mar 31, 2011

1. Conventions

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

2. Fixed Assets and Depreciation

(i) Fixed Assets are stated at cost net of cenvat credit. Additions to Fixed Assets in the Gross Block are stated at cost of acquisition and all costs relating to the acquisition and installation up to the date the asset is ready to put to use are capitalized. Borrowing costs relating to acquisition of fixed assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

(ii) Depreciation on the fixed assets is provided on straight line method at the rates specified in Schedule XIV of the Companies Act 1956. Depreciation on additions to Plant and Machinery is provided for the proportionate period in use. Assets depreciated up to 95% of value are excluded from provision for depreciation.

3. Investments

Investments in equity shares are held as long term and are stated at cost. Provision is made when permanent diminution in value has arisen in the opinion of the Management.

4. Inventories

(i) Inventories are valued at lower of cost or net realizable value.

(ii) Cost is Determined following weighted average method.

(ii) Unsold scrap at the end of the year is taken at estimated realisable value.

5. Revenue / Expenditure recognition

Sales are recognised on dispatch of goods to customers. Sales are inclusive of excise duty net of discount and sales tax. Income accruing in the current year and ascertainable/realisable with reasonable certainty on the date of financial statements is taken into account.

Expenses accruing in the accounting year and ascertainable with reasonable accuracy on the date of financial statement are provided in the accounts.

6. Foreign Currency Transactions

(i) Foreign currency transactions are recorded in the reporting currency, at the exchange rates prevailing on the date of the transaction.

(ii) Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end exchange rates and those covered by forward exchange contracts are determined by their respective contracts.

(iii) Premium for forward contracts is recognised as income or expenditure over the life of the contract.

(iv) Any income or expense on account of exchange difference either on settlement or on translation is recongnised in the Profit and Loss Account.

7. Research and Development

Revenue expenditure relating to Research and Development are included under respective heads of expenditure. Capital expenditure on Research and Development are treated in the same manner as expenditure on other fixed assets.

8. Retirement Benefits

(i) The Companys contributions to recognized funds such as Provident Fund, Employees State Insurance, Superannuation, etc., are charged to Profit and Loss account.

(ii) Gratuity liability is covered by a policy with Life Insurance Corporation of India. Annual contribution to the fund is charged to revenue and the Liability has been provided as per actuarial Valuation by Life Insurance Corporation.

(iii) Leave encashment has been provided on the basis of actuarial valuation at the Balance Sheet carried out by an independent actuary.

9. Accounting for Taxes on Income

Current tax is determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized on timing differences; being the difference between taxable incomes and accounting income that originate in one year and is capable of reversal in one or more subsequent years. Deferred tax assets and liabilities are computed on the timing differences applying the enacted tax rate. Deferred tax assets arising on account of unabsorbed depreciation or carry forward of tax losses are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future tax income will be available against which such deferred tax assets can be realized.

10. Borrowing Cost

Borrowing costs that are attributable to acquisition, construction or production of a qualifying asset are capitalised as a part of cost of such asset. All other borrowing costs are recognized as an expense in the year in which they are incurred.

11. Impairment of assets

At each Balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the Profit & Loss account to the extent the carrying amount exceeds the recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

12. Provisions

A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on the Managements estimate of the amount required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the Managements current estimates.

13. Segment Report

The Company has only one reportable business segment, which is automobile tyre and tube valves, cores and accessories and operates in a single business segment based on the nature of the services, the risk and returns, the organization structure and the internal financial reporting systems. Accordingly, the amounts appearing in the financial statements relate to the companys single business segment.

14. Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

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.


Mar 31, 2010

1. Conventions

The financial statements are prepared under historical cost conventions in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant disclosure requirements of the Companies Act, 1956.

2. Fixed Assets and Depreciation

i Fixed Assets are stated at cost net of cenvat credit. Additions to Fixed Assets in the Gross Block are stated at cost of acquisition and all costs relating to the acquisition and installation up to the date the asset is put into use are capitalized. Borrowing costs relating to acquisition of fixed assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

ii Depreciation on the fixed assets is provided on straight line method at the rates specified in Schedule XIV of the Companies Act 1956. Depreciation on additions to Plant and Machinery is provided for the proportionate period in use. Assets depreciated up to 95% of value are excluded from provision for depreciation.

3. Investments

Investments in equity shares are held as long term and are stated at cost. Provision is made when permanent diminution in value has arisen in the opinion of the Management.

4. Inventories:

i Raw Materials, Stores 8t Spares and Bought out Items are valued at cost or net realizable value whichever is less.

ii Work-in-process is valued at factory cost.

iii Finished goods are valued at lower of cost or net-realisable value and are inclusive of excise duty.

iv Unsold scrap at the end of the year is taken at estimated realisable value.

5. Revenue / Expenditure recognition

Sales are recognised on dispatch of goods to customers. Sales are inclusive of excise duty net of discount

and sales tax. Income accruing in the current year and ascertainable/realisable with reasonable certainty on the date of financial statements is taken into account.

Expenses accruing in the accounting year and ascertainable with reasonable accuracy on the date of financial statement are provided in the accounts.

6. Foreign Currency Transactions

i Foreign currency transactions are recorded in the reporting currency, at the exchange rates prevailing on the date of the transaction.

ii Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end exchange rates and those covered by forward exchange contracts are determined by their respective contracts.

iii Premium for forward contracts is recognised as income or expenditure over the life of the contract.

iv Any income or expense on account of exchange difference either on settlement or on translation is recongnised in the Profit and Loss Account.

7. Research and Development

Revenue expenditure relating to Research and Development are included under respective heads of expenditure. Capital expenditure on Research and Development are treated in the same manner as expenditure on other fixed assets.

8. Retirement Benefits

i The Companys contributions to recognized funds such as Provident Fund, Employees State Insurance, Superannuation, etc., are charged to Profit and Loss account.

ii Gratuity liability is covered by a policy with Life Insurance Corporation of India. Annual contribution to the fund is charged to revenue. iii Leave encashment has been provided on the basis of actuarial valuation at the Balance Sheet carried out by an independent actuary.

9. Accounting for Taxes on Income

Current tax is determined in accordance with the provisions of the Income Tax Act, 1961. Deferred tax resulting from timing difference between book profit and tax profit is accounted for under the liability method, at the rate prescribed by the Accounting Standards to the extent that timing differences are expected to crystalise.

10. Borrowing Cost

Borrowing costs that are attributable to acquisition, construction or production of a qualifying asset are capitalised as a part of cost of such asset. All other borrowing costs are recognized as an expense in the year in which they are incurred.

11. Impairment of assets

At each Balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the Profit 6t Loss account to the extent the carrying amount exceeds the recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

12. Provisions

A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on the Managements estimate of the amount required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the Managements current estimates.

13. Segment Report

In accordance with the provisions of the Accounting Standard 17, the Company has one reportable primary segment consisting of automobile tyre and tube valves, cores and accessories. Hence, segment reporting as defined is not applicable.

 
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