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Accounting Policies of Wheels India Ltd. Company

Mar 31, 2014

I) General:

The financial statements have been prepared on the historical cost convention in accordance with generally accepted accounting principles.

ii) Fixed Assets and Depreciation:

a) Fixed assets are stated at historical cost net of CenVAt and VAt credits as reduced by accumulated depreciation.

b) Depreciation on fixed assets has been provided -

i) At the rates specified in Schedule XIV of the Companies Act, 1956

- on straight line method for plant and machinery and buildings and

- on written down value method for electronic data processing machines and other fixed assets

ii) on the basis of estimated life of the capital tools.

c) Leasehold land:

Premium paid on leasehold land is amortised over the lease period.

d) The cost of software relating to eRP is amortised over the estimated useful life viz. 5 years. the cost of other intangible assets are amortised over the estimated useful life viz. 3 years.

e) i) The expenditure during construction period relating to the new projects till the commencement of commercial production is capitalised and allocated to fixed assets.

ii) In accordance with AS 16 - borrowing costs issued by the ICAI, the borrowing costs attributable to the new projects are capitalised till the commencement of commercial production and included in expenditure during construction period and allocated to fixed assets and other borrowing costs are recognised in the year in which it is incurred.

iii) Investments:

a) Long term investments are stated at cost less provision for diminution other than temporary if any, in value of such investments.

b) Current investments are stated at the lower of cost and fair value.

iv) Inventories:

The stock of raw materials, stores, loose tools and goods in transit are valued at cost (net of CenVAt and VAt credits on weighted average basis). the stock of fnished goods and work-in-process are valued at cost (net of CenVAt and VAt credits including appropriate overheads) or market value whichever is lower.

v) Revenue recognition:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred. Service revenues are recognised when services are rendered. Interest income is recognised on time proportion basis. dividend income is recognised when rights to receive payment is established

vi) Staff terminal benefits:

a) Provident Fund:

Eligible employees receive benefits from Provident Fund which is Defined contribution plan. both, the employees and the Company make monthly contributions to the regional provident fund authorities/ Company''s employees Provident Fund trust, equal to specified percentage of eligible covered employees salary. the Company has no other obligations than the monthly contributions.

b) Gratuity:

The gratuity plan provides for a lump sum payment to vested employees eligible for gratuity at the time of retirement, death, incapacity or termination of employment. Liabilities with regard to the gratuity plan are determined by actuarial valuation as at the balance Sheet date based upon which the Company contributes all the ascertained liabilities to LIC, who is the administrator of the plan.

c) Superannuation:

Eligible employees receive benefit from Superannuation at the time of retirement, death or leaving the services. the Company makes an annual contribution to LIC of India, equal to a Specific percentage of the eligible employee''s basic salary. Apart from this, the Company has no other obligation under this head.

d) Unencashed Leave Salary:

Unencashed leave salary is accounted on actuarial valuation and the Company contributes part of the ascertained liabilities to SbI Life Insurance Company Limited, who is the administrator of the plan.

vii) Research & Development expenses:

Revenue expenditure on Research & development is charged to profit & loss account in the year in which it is incurred.

viii) Foreign Currency Transactions:

The exchange differences arising on reporting of Long term Foreign Currency monetary Items at rates different from those at which the transactions were initially recorded during the financial year, in so far as they relate to depreciable capital assets are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset and in other cases are accumulated in Foreign Currency monetary Item translation difference Account and amortized over the balance period of such long term asset / liability but not beyond 31st march, 2020.

Foreign currency transactions other than the above items outstanding at the year end are accounted for at year end rates and the profit / loss so determined and also the realised exchange gains / losses are recognized in the profit and Loss statement. In respect of Forward exchange contracts, the difference between the forward rate and the exchange rate at the date of inception of the contract is recognized as income or expense over the period of the contract. Any profit or loss arising on cancellation or renewal of such forward exchange contracts is recognized as income or expense for the year.

ix) Export Incentives:

Export incentives are recognised as revenue as and when exports are made.

x) Derivative Contracts:

The profit/loss arising on derivative contracts is accounted for as income/expenditure on the date of settlement of the contract.

The outstanding derivative contracts are revalued at the end of the year and while the net loss arising there from is debited to profit and loss account, the net unrealised gain is ignored, except in case where they relate to borrowing costs that are attributable to the acquisition of Fixed Assets, in which case they are adjusted to the carrying cost of such fixed assets.

xi) Operating Leases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classifed as operating leases. Operating lease payments are recognised as an expense in the revenue account as per the lease terms.

xii) Earnings per share:

Earnings per share (ePS) is computed by dividing the net profit / (loss) after tax for the year attributable to the equity shareholders by weighted average number of equity shares outstanding during the year.

xiii) Taxes on Income:

Current tax is the amount of tax payable on the taxable income for the year and is determined in accordance with the provisions of the Income tax Act, 1961.

Deferred tax is recognised on timing differences; being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be suffcient future taxable income available to realise such assets. Other deferred tax assets are recognised if there is reasonable certainty that there will be suffcient future taxable income available to realise such assets.

xiv) Provisions and Contingencies:

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligations. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made.


Mar 31, 2013

I) General:

The financial statements have been prepared on the historical cost convention in accordance with generally accepted accounting principles.

ii) Fixed Assets and Depreciation:

a) Fixed assets are stated at historical cost net of CENVAT and VAT credits as reduced by accumulated depreciation.

b) Depreciation on fixed assets has been provided -

i) at the rates specified in Schedule XIV of the Companies Act, 1956

- on straight line method for plant and machinery and buildings and

- on written down value method for electronic data processing machines and other fixed assets

ii) on the basis of estimated life of the capital tools.

c) Leasehold land:

Premium paid on leasehold land is amortised over the lease period.

d) The cost of software relating to ERP is amortised over the estimated useful life viz. 5 years. The cost of other intangible assets are amortised over the estimated useful life viz. 3 years.

e) i) The expenditure during construction period relating to the new projects till the commencement of commercial production is capitalised and allocated to fixed assets.

ii) In accordance with AS 16 - Borrowing costs issued by the ICAI, the borrowing costs attributable to the new projects are capitalised till the commencement of commercial production and included in expenditure during construction period and allocated to fixed assets and other borrowing costs are recognised in the year in which it is incurred.

iii) Investments:

Investments are stated at cost less provision for dimunition other than temporary if any, in value of such investments.

iv) Inventories:

The stock of raw materials, stores, loose tools and goods in transit are valued at cost (net of CENVAT and VAT credits on weighted average basis). The stock of finished goods and work-in-process are valued at cost (net of CENVAT and VAT credits including appropriate overheads) or market value whichever is lower.

v) Revenue recognition:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred. Service revenues are recognised when services are rendered. Interest income is recognised on time proportion basis.

vi) Staff terminal benefits:

a) Provident Fund:

Eligible employees receive benefits from Provident Fund which is defined contribution plan. Both, the employees and the Company make monthly contributions to the regional provident fund authorities/ Company''s Employees Provident Fund Trust, equal to specified percentage of eligible covered employees salary. The Company has no other obligations than the monthly contributions.

b) Gratuity:

The gratuity plan provides for a lump sum payment to vested employees eligible for gratuity at the time of retirement, death, incapacity or termination of employment. Liabilities with regard to the gratuity plan are determined by actuarial valuation as at the Balance Sheet date based upon which the Company contributes all the ascertained liabilities to LIC, who is the administrator of the plan.

c) Superannuation:

Eligible employees receive benefit from Superannuation at the time of retirement, death or leaving the services. The Company makes an annual contribution to LIC of India, equal to a specific percentage of the eligible employee''s basic salary. Apart from this, the Company has no other obligation under this head.

d) Unencashed Leave Salary:

Unencashed leave salary is accounted on actuarial valuation and the Company contributes part of the ascertained liabilities to SBI Life Insurance Company Limited, who is the administrator of the plan.

vii) Research & Development expenses:

Revenue expenditure on Research & Development is charged to profit & loss account in the year in which it is incurred.

viii) Foreign Currency Transactions:

The exchange differences arising on reporting of Long Term Foreign Currency Monetary Items at rates different from those at which the transactions were initially recorded during the financial year, in so far as they relate to depreciable capital assets are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset and in other cases are accumulated in Foreign Currency Monetary Item Translation Difference Account and amortized over the balance period of such long term asset / liability but not beyond 31st March, 2020.

Foreign currency transactions other than the above items outstanding at the year end are accounted for at year end rates and the profit / loss so determined and also the realised exchange gains / losses are recognized in the Profit and Loss statement. In respect of Forward Exchange contracts, the difference between the forward rate and the exchange rate at the date of inception of the contract is recognized as income or expense over the period of the contract. Any profit or loss arising on cancellation or renewal of such forward exchange contracts is recognized as income or expense for the year.

ix) Export Incentives:

Export incentives are recognised as revenue as and when exports are made.

x) Derivative Contracts:

The profit/loss arising on derivative contracts is accounted for as income/expenditure on the date of settlement of the contract.

The outstanding derivative contracts are revalued at the end of the year and while the net loss arising therefrom is debited to profit and loss account, the net unrealised gain is ignored, except in case where they relate to borrowing costs that are attributable to the acquisition of Fixed Assets, in which case they are adjusted to the carrying cost of such fixed assets.

xi) Operating Leases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the revenue account as per the lease terms.

xii) Taxes on Income:

Current tax is the amount of tax payable on the taxable income for the year and is determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing differences; being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Other deferred tax assets are recognised if there is reasonable certainty that there will be sufficient future taxable income available to realise such assets.

xiii) Provisions and Contingencies:

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligations. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made.


Mar 31, 2012

I) General:

The financial statements have been prepared on the historical cost convention in accordance with generally accepted accounting principles.

ii) Presentation and disclosure of financial statements:

During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

iii) Fixed Assets and Depreciation:

a) Fixed assets are stated at historical cost net of CENVAT and VAT credits as reduced by accumulated depreciation.

b) Depreciation on fixed assets has been provided -

(i) at the rates specified in Schedule XIV of the Companies Act, 1956

- on straight line method for plant and machinery and buildings and

- on written down value method for electronic data processing machines and other fixed assets.

(ii) on the basis of estimated life of the capital tools.

c) Leasehold land:

Premium paid on leasehold land is amortised over the lease period.

d) The cost of software relating to ERP is amortised over the estimated useful life viz. 5 years. The cost of other intangible assets are amortised over the estimated useful life viz. 3 years.

e) (i) The expenditure during construction period relating to the new projects till the commencement of commercial production is capitalised and allocated to fixed assets.

(ii) In accordance with AS 16 - Borrowing costs issued by the ICAI, the borrowing costs attributable to the new projects are capitalised till the commencement of commercial production and included in expenditure during construction period and allocated to fixed assets and other borrowing costs are recognised in the year in which it is incurred.

iv) Investments:

Investments are stated at cost less provision for dimunition other than temporary if any, in value of such investments.

v) Inventories:

The stock of raw materials, stores, loose tools and goods in transit are valued at cost (net of CENVAT and VAT credits on weighted average basis). The stock of finished goods and work-in-process are valued at cost (net of CENVAT and VAT credits including appropriate overheads) or market value whichever is lower.

vi) Revenue recognition:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred. Service revenues are recognised when services are rendered. Interest income is recognised on time proportion basis.

vii) Staff terminal benefits:

a) Provident Fund:

Eligible employees receive benefits from Provident Fund which is defined contribution plan. Both, the employees and the Company make monthly contributions to the regional provident fund authorities/ Company's Employees Provident Fund Trust, equal to specified percentage of eligible covered employees salary. The Company has no other obligations than the monthly contributions.

b) Gratuity:

The gratuity plan provides for a lump sum payment to vested employees eligible for gratuity at the time of retirement, death, incapacity or termination of employment. Liabilities with regard to the gratuity plan are determined by actuarial valuation as at the Balance Sheet date based upon which the Company contributes all the ascertained liabilities to LIC, who is the administrator of the plan.

c) Superannuation:

Eligible employees receive benefit from Superannuation at the time of retirement, death or leaving the services. The Company makes an annual contribution to LIC of India, equal to a specific percentage of the eligible employee's basic salary. Apart from this, the Company has no other obligation under this head.

d) Unencashed Leave Salary:

Unencashed leave salary is accounted on actuarial valuation and the Company contributes part of the ascertained liabilities to SBI Life Insurance, who is the administrator of the plan.

viii) Research & Development expenses:

Revenue expenditure on Research & Development is charged to profit & loss statement in the year in which it is incurred.

ix) Foreign Currency Transactions:

The exchange differences arising on reporting of Long Term Foreign Currency Monetary Items at rates different from those at which the transactions were initially recorded during the financial year, in so far as they relate to depreciable capital assets are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset and in other cases are accumulated in Foreign Currency Monetary Item Translation Difference Account and amortized over the balance period of such long term asset / liability but not beyond 31st March, 2020.

Foreign currency transactions other than the above items outstanding at the year end are accounted for at year end rates and the profit / loss so determined and also the realised exchange gains / losses are recognized in the Profit and Loss Statement. In respect of Forward Exchange contracts, the difference between the forward rate and the exchange rate at the date of inception of the contract is recognized as income or expense over the period of the contract. Any profit or loss arising on cancellation or renewal of such forward exchange contracts is recognized as income or expense for the year.

x) Export Incentives:

Export incentives are recognised as revenue as and when exports are made.

xi) Derivative Contracts:

The profit / loss arising on derivative contracts is accounted for as income/expenditure on the date of settlement of the contract.

The outstanding derivative contracts are revalued at the end of the year and while the net loss arising therefrom is debited to profit and loss statement, the net unrealised gain is ignored, except in case where they relate to borrowing costs that are attributable to the acquisition of Fixed Assets, in which case they are adjusted to the carrying cost of such fixed assets.

xii) Operating Leases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the revenue account as per the lease terms.

xiii) Taxes on Income:

Current tax is the amount of tax payable on the taxable income for the year and is determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing differences; being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Other deferred tax assets are recognised if there is reasonable certainty that there will be sufficient future taxable income available to realise such assets.

xiv) Provisions and Contingencies:

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligations. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made.


Mar 31, 2011

I) General:

The financial statements have been prepared on the historical cost convention in accordance with generally accepted accounting principles.

ii) Fixed Assets & Depreciation:

a) Fixed assets are stated at historical cost net of cenvat and vat credits as reduced by accumulated depreciation.

b) Depreciation on fixed assets has been provided -

i) at the rates specified in Schedule XIV of the Companies Act, 1956

- on straight line method for plant and machinery and buildings and

- on written down value method for electronic data processing machines and other fixed assets. ii) on the basis of estimated life of the capital tools.

c) Leasehold land:

Premium paid on leasehold land is amortised over the lease period.

d) The cost of intangible assets being computer software (other than software relating to ERP) is amortised over the estimated useful life viz. 3 years. The cost of software relating to ERP is amortised over the estimated useful life viz. 5 years.

e) i) The expenditure during construction period relating to the new projects till the commencement of commercial production is capitalised and allocated to fixed assets.

ii) In accordance with AS 16 - Borrowing costs issued by the ICAI, the borrowing costs attributable to the new projects are capitalised till the commencement of commercial production and included in expenditure during construction period and allocated to fixed assets and other borrowing costs are recognised in the year in which it is incurred.

iii) Investments:

Investments are stated at cost less provision for diminution other than temporary if any, in value of such investments.

iv) Inventories:

The stock of raw materials, stores, loose tools and goods in transit are valued at cost (net of cenvat and vat credits on weighted average basis). The stock of finished goods and work-in-process are valued at cost (net of cenvat and vat credits including appropriate overheads) or market value whichever is lower.

v) Staff terminal benefits:

a) Provident Fund:

Eligible employees receive benefits from Provident Fund which is defned contribution plan. Both, the employees and the Company make monthly contributions to the provident fund authorities, equal to specified percentage of eligible covered employees salary. The Company has no other obligations than the monthly contributions.

b) Gratuity:

The gratuity plan provides for a lump sum payment to vested employees at the time of retirement, death, incapacity or termination of employment. Liabilities with regard to the gratuity plan are determined by actuarial valuation as at the Balance Sheet date based upon which the Company contributes all the ascertained liabilities to LIC, who are the trustees / administrator of the plan.

c) Superannuation:

Eligible employees receive benefit from Superannuation at the time of retirement, death or leaving the services. The Company makes an annual contribution to LIC of India, equal to a specific percentage of the eligible employees basic salary. Apart from this, the Company has no other obligation under this head, than the annual contribution.

d) Unencashed Leave Salary:

Unencashed leave salary is accounted on actuarial valuation.

vi) Research & Development expenses:

Revenue expenditure on Research & Development is charged to profit & loss account in the year in which it is incurred.

vii) Foreign Currency Transactions:

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 financial year, in so far as they relate to depreciable capital assets are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset and in other cases are accumulated in Foreign Currency Monetary Item Translation Difference Account and amortized over the balance period of such long term asset / liability but not beyond 31st March, 2012.

Foreign currency transactions other than the above items outstanding at the year end are accounted for at year end rates and the profit / loss so determined and also the realised exchange gains / losses are recognized in the Profit and Loss Account. In respect of Forward Exchange contracts, the difference between the forward rate and the exchange rate at the date of inception of the contract is recognized as income or expense over the period of the contract. Any profit or loss arising on cancellation or renewal of such forward exchange contracts is recognized as income or expense for the year.

viii) Export Incentives:

Export incentives are recognised as revenue as and when exports are made.

ix) Derivative Contracts:

The profit/loss arising on derivative contracts is accounted for as income/expenditure on the date of settlement of the contract.

The outstanding derivative contracts are revalued at the end of the year and while the net loss arising therefrom is debited to profit and loss account, the net unrealised gain is ignored, except in case where they relate to borrowing costs that are attributable to the acquisition of Fixed Assets, in which case they are adjusted to the carrying cost of such fixed assets.


Mar 31, 2010

(i) General:

The financial statements have been prepared on the historical cost convention in accordance with generally accepted accounting principles.

(ii) Fixed Assets & Depreciation:

a) Fixed assets are stated at historical cost net of cenvat credits as reduced by accumulated depreciation

b) Depreciation on fixed assets has been provided -

(i) at the rates specified in Schedule XIV of the Companies Act, 1956

- on straight line method for plant and machinery and buildings and

- on written down value method for electronic data processing machines and other fixed assets

(ii) on the basis of estimated life of the capital tools

c) Leasehold land:

Premium paid on leasehold land is amortised over the lease period.

d) The cost of intangible assets being computer software (other than software relating to ERP) is amortised over the estimated useful life viz. 3 years. The cost of software relating to ERP is amortised over the estimated useful life viz. 5 years

e) (i) The expenditure during construction period relating to the new projects till the commencement of commercial production is capitalised and allocated to fixed assets

(ii) In accordance with AS 16 - Borrowing costs issued by the ICAI, the borrowing costs attributable to the new projects are capitalised till the commencement of commercial production and included in expenditure during construction period and allocated to fixed assets and other borrowing costs are recognised in the year in which it is incurred.

(iii) Investments:

Investments are valued at cost or market value whichever is lower.

(iv) Inventories:

The stock of raw materials, stores, loose tools and goods in transit are valued at cost (net of cenvat and vat credits on weighted average basis). The stock of finished goods and work-in- process are valued at cost (net of cenvat and vat credits including appropriate overheads) or market value whichever is lower.

(v) Staff terminal benefits:

a) Provident Fund:

Eligible employees receive benefits from Provident Fund which is defined contribution plan. Both the employees and the Company make monthly contributions to the provident fund authorities, equal to specified percentage of eligible covered employees salary. The Company has no other obligations than the monthly contributions.

b) Gratuity:

The gratuity plan provides for a lump sum payment to vested employees at the time of retirement, death, incapacity or termination of employment. Liabilities with regard to the gratuity plan are determined by actuarial valuation as at the Balance Sheet date based upon which the Company contributes all the ascertained liabilities to LIC, who are the trustees / administrator of the plan.

c) Superannuation:

Eligible employees receive benefit from Superannuation at the time of retirement, death or leaving the services. The Company makes an annual contribution to LIC of India, equal to a specific percentage of the eligible employees basic salary. Apart from this the Company has no other obligation under this head, than the annual contribution.

d) Unencashed Leave Salary:

Unencashed leave salary is accounted on actuarial valuation.

(vi) Research & Development expenses:

Revenue expenditure on Research & Development is charged to profit & loss account in the year in which it is incurred.

(vii) Foreign Currency Transactions:

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 financial year, in so far as they relate to depreciable capital assets are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset and in other cases are accumu- lated in Foreign Currency Monetary Item Translation Difference Account and amortized over the balance period of such long term asset / liability but not beyond 31st March 2011.

Foreign currency transactions other than the above items outstanding at the year end are accounted for at year end rates and the profit / loss so determined and also the realised exchange gains / losses are recognized in the Profit and Loss Account. In respect of Forward exchange contracts, the difference between the forward rate and the exchange rate at the date of inception of the contract is recognized as income or expense over the period of the contract. Any profit or loss arising on cancellation or renewal of such forward exchange contracts is recognized as income or expense for the year.

(viii) Export Incentives:

Export incentives are recognised as revenue as and when exports are made.

(ix) Derivative Contracts:

The profit/loss arising on derivative contracts is accounted for as income/expenditure on the date of settlement of the contract

The outstanding derivative contracts are revalued at the end of the year and while the net loss arising therefrom is debited to profit and loss account, the net unrealised gain is ignored, except in case where they relate to borrowing costs that are attributable to the acquisition of Fixed Assets, in which case they are adjusted to the carrying cost of such fixed assets.

 
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