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Accounting Policies of TVS Srichakra Ltd. Company

Mar 31, 2017

A. Corporate Information

TVS Srichakra Limited (''TSL'' or ''the Company'') is a public limited company domiciled and incorporated in India having its registered office at TVS Building, 7-B West Veli Street, Madurai 625001. The Company''s shares are listed and traded on Stock Exchanges in India. The Company is engaged in the business of two-wheeler, three wheeler and other industrial tyre manufacturing.

B. Significant Accounting Policies

1 Basis of preparation

The Ministry of Corporate Affairs (''the MCA''), Government of India in exercise of the powers conferred by Section 133 read with Section 469 of the Companies Act, 2013 (The ''Act'') and sub-section 1 of Section 210A of the Companies Act, 1956 (''The Erstwhile Act'') in consultation with National Advisory Committee on Accounting Standards vide G.S.R. 111(E) dated 15th February, 2015 notified rules called Companies (Indian Accounting Standard) Rules, 2015 effective April 1, 2015. The MCA wide notification GSR 111(E) dated March 30, 2016 issued certain amendments to Ind AS vide Companies (Indian Accounting Standards) Amendment Rules 2016. The MCA wide notification GSR 404(E) dated April 6, 2016 introduced amendments to Schedule III of the Act, requiring companies to prepare the financial statements in compliance with Companies (Indian Accounting Standards) Rules, 2015.

The Company vide its Board resolution dated 18.04.2016 resolved to adopt Ind AS in preparation of financial statements for the year ended March 31, 2017, considering that this company is a consolidating entity to M/s.T V Sundram Iyengar & Sons private Limited, which mandatorily has to prepare Consolidated Financial Statements under Ind AS. pursuant to the above resolution and rules framed by MCA, the Company has prepared its financial statements as per Ind AS for the year ended March 31, 2017 with April 1, 2015 being the date of transition.

The comparative figures in the Balance Sheet as at March 31, 2016 and April 1, 2015 and Statement of Profit and Loss and Statement of Cash Flow for the year ended March 31, 2016 have been restated accordingly.

The financial statements of the Company have been prepared and presented in accordance with the Generally Accepted Accounting principles (GAAp) under the historical cost convention on accrual basis of accounting, except for items in Statement of Cash Flow and certain items of Assets and Liabilities that have been measured on fair value basis. GAAP comprises of Indian Accounting Standards as specified in Section 133 of the Act read together with Rule 4 of Companies (Indian Accounting Standard) Amendment Rules, 2016 to the extent applicable, pronouncements of regulatory bodies applicable to the Company and other provisions of the Act. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or revision to existing accounting standards requires a change in the accounting policy hitherto in use. Management evaluates all recently issued or revised accounting standards on an going concern basis.

All assets and liabilities have been classified as current or non-current as per the company''s normal operating cycle and other criteria set out in Note 31(B)(24). Based on the nature of products and services and the time between the acquisition of assets for processing and their realisation in cash and cash equivalent, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

2 Statement of Compliance with Ind AS

The Financial Statements comprising Balance Sheet, Statement of Profit and Loss, Statement of Changes in Equity, Statement of Cash Flow together with notes for the year ended March 31, 2017 have been prepared in accordance with Ind AS as notified above duly approved by the Board of Directors at its meeting held on 24.05.2017. These are the Company''s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2015. Refer Note 31(B)(5) for the details of first-time adoption exemptions availed by the Company.

Upto the year ended March 31, 2016, the Company prepared its financial statements in accordance with the requirements of previous GAAP, which includes Standards notified under the Companies (Accounting Standards) Rules, 2006.

3 Basis of measurement

"The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period. These are explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services."

4 Functional and Presentation Currency

Items included in financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (“the functional currency”). Indian rupee is the functional currency of the Company.

The Financial Statements are presented in Indian Rupees which is company''s presentation currency. All financial information presented in Indian Rupees has been rounded to the nearest Crores (Cr) with two decimals except where otherwise indicated.

5 First - time adoption of Ind AS - Mandatory Exceptions and Optional Exemptions

(i) Overall principle:

The Company has prepared the Balance Sheet as per Ind AS as of April 1, 2015, the transition date (opening Ind AS Balance Sheet) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying certain items from previous GAAp to Ind AS as required under the Ind AS, and applying Ind AS in the measurement of recognized assets and liabilities. However, this principle is subject to certain mandatory exceptions and certain optional exemptions availed by the Company as detailed below.

(ii) Exceptions to retrospective application of other Ind AS

i. Estimates: The Company has not made any changes to estimates made in accordance with previous GAAp.

ii. Ind AS 109 - Financial instruments (Derecognition of previously recognized financial assets/liabilities) - The Company has applied the Derecognition requirements prospectively.

iii. Ind AS 109 - Financial instruments (Hedge accounting) - The Company has not designated any hedge retrospectively.

iv. Ind AS 109 (financial instruments classification and measurement of financial asset) - The Company has evaluated the facts and circumstances existing on the date of transition to Ind AS for the purpose of classification and measurement of financial asset and accordingly has classified and measured financial assets on the date of transition.

v. Ind AS 109 financial instruments (impairment of financial assets)- The Company has applied impairment requirements retrospectively.

vi. Ind AS 109 - Embedded derivatives - The Company does not have any embedded derivative on the transition date.

vii. Financial instruments - government loans - The Company did not avail any Government loan as on the date of transition and hence the requirements of Ind AS 109, in this regard does not arise.

(iii) Exemptions from retrospective application of IND AS

i. Ind AS 103 Business combination:

The Company has elected not to apply Ind AS 103 to business combinations that occurred before the date of transition to Ind AS.

ii. Ind AS 102 share based payment:

The Company does not have any share based payment on the transition date hence the requirements of Ind AS 102, in this regard does not arise.

iii. Ind AS 104 Insurance contracts:

The Company does not have any insurance contracts on the transition date hence the requirements of Ind AS 104, in this regard does not arise.

iv. Ind AS 16 property, plant and equipment/Ind AS 38 Intangible asset:

The Company has elected to continue with the carrying amount for all of its ppE, intangible asset measured as per previous GAAp and use that as deemed cost as at the date of transition. The Company does not have any decommissioning liability as on transition date.

v. Ind AS 17 Leases

The Company has assessed all arrangements based on conditions existing as at the date of transition.

vi. Ind AS 21 Cumulative Translation Differences on Foreign Operations:

The Company does not have foreign operation and hence this exemption does not apply to the Company.

vii. Long term foreign currency monetary item:

The Company did not adopt the policy of amortising exchange differences on long term foreign currency monetary items and hence this exemption does not apply.

viii. Ind AS 27 Separate financial statements

The Company has elected to measure its investment in subsidiaries at cost determined in accordance with Ind AS 27 i.e. Original cost of investment in subsidiaries.

ix. Ind AS 32 financial instruments presentation

The Company has not issued any compound financial instruments and hence this exemption does not apply to the Company.

x. Ind AS 109 financial instruments

The Company has designated unquoted equity instruments in companies other than subsidiaries as at FVTOCI, based on the assessment made on the date of transition to Ind AS.

xi. Ind AS 105 Non-Current Assets held for Sale and Discontinued Operations:

The Company does not have any non-current asset/disposal group to be classified as held for sale. Hence, this exemption is not applicable to the Company.

6 Critical Accounting Judgments, Assumptions and Key Sources of Estimation Uncertainty

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, the disclosures of contingent assets and contingent liabilities at the date of financial statements, income and expenses during the period. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods which are affected.

Critical Judgements in applying accounting policies

a) Classification of investment in TVS Automobile Solutions Private Limited

The Company has investments in compulsory convertible preference shares of TVS Automobile Solutions private Limited ("TVS ASpL"). Based on the opinion of the management ,TVS ASpL is not considered to be an associate of the Company. Accordingly, the investment in preference shares have been designated as investment at FVToCI.

b) Lease classification

The Company enters into service / hiring arrangements for various assets / services. The determination of lease and classification of the service / hiring arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee''s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset''s economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.

Assumptions and Key Sources of Estimation Uncertainty

a) Fair value measurements and valuation processes

"Some of the Company''s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third party qualified valuers to perform the valuation. Management works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model.

Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in Note 31(B)(22)."

b) Useful life of Property, Plant & Equipment (PPE)

The Company reviews the estimated useful lives of ppE at the end of each reporting period.

c) Employee Benefits - Defined Benefit Obligations (DBO)

Management''s estimate of the DBo is based on a number of critical underlying assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

7 Financial Instruments

a (i) Financial Assets - Investment in subsidiaries, associates and joint ventures

The Company records the investments in subsidiaries, associates and joint ventures at cost less impairment loss, if any.

(ii) Financial Assets - other than investment in subsidiaries, associates and joint ventures

Financial assets comprises of investments In equity and debt securities, trade receivables, cash and cash equivalents and other financial assets.

Initial recognition:

All financial assets are recognized initially at Fair value plus transaction costs that are attributable to the Acquisition of the financial asset (In case of financial assets not recorded at FVTPL, transaction costs are recognized immediately in Statement of Profit and Loss). Purchase or sale of financial asset within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date.

Subsequent measurement:

(i) Financial assets measured at amortized cost:

Financial assets held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are measured at amortized cost using effective interest rate (EIR) method. The EIR amortization is recognized as finance income in the Statement of Profit and Loss.

The Company while applying above criteria has classified the following at amortized cost

a) Trade receivable

b) Other financial assets

(ii) Financial asset at FVTOCI

Financial assets that are held within a business model whose objective is achieved by both collecting contractual cash flow and selling financial asset and the contractual terms of financial assets give rise on specified dates to cash flow that are solely payments of principal and interest on the principal amount outstanding are subsequently measured at FVTOCI. Fair value movements in financial assets at FVTOCI are recognized in other comprehensive income

Equity instruments held for trading are classified as FTVPL. For other equity instruments the Company classifies the same as FVTOCI. The classification is made on initial recognition and is irrevocable. Fair value changes on equity instruments at FVTOCI excluding dividends, are recognized in other comprehensive income (oCI).

(iii) Financial asset at FVTPL

All fair value changes are recognized in the Statement of Profit and Loss.

Derecognition on financial asset

Financial assets are derecognized when the contractual right to cash flows from the financial asset expire or the financial asset is transferred and the transfer qualifies for Derecognition. On Derecognition of a financial asset in its entirety, the difference between the carrying amount (measured at the date of Derecognition) and the consideration received (including any new asset obtained less any new liability Assumed) shall be recognized in the Statement of Profit and Loss (except for equity instruments designated as FVTOCI).

Impairment of financial asset

Trade receivables, lease receivables under Ind AS 109, investments in debt instruments that are carried at amortized cost, investments in debt instruments that are carried at FVTOCI are tested for impairment based on the expected credit losses for their respective financial asset

(i) Trade receivable

An impairment analysis is performed at each reporting date. The expected credit losses over lifetime of the asset are estimated by adopting the simplified approach using a provision matrix which is based on historical loss rate reflecting future economic conditions. In this approach, assets are grouped on the basis of similar credit characteristics such as industry, customer segment, past due status and other factors which are relevant to estimate the expected cash loss from these assets.

(ii) Other financial assets

Other financial assets are tested for impairment and expected credit losses are measured at an amount equal to 12 month expected credit loss. If the credit risk on the financial asset has increased significantly since initial recognition, then the expected credit losses are measured at an amount equal to life-time expected credit loss.

b. Financial liabilities

Initial recognition and measurement

Financial liabilities are initially recognized at fair value plus any transaction cost that are attributable to the acquisition of financial liability except financial liabilities at fair value through profit and loss which are initially measured at fair value.

Subsequent measurement

The financial liabilities are classified for subsequent measurement into following categories

- at amortized cost

- at fair value through the Statement of Profit and Loss

Financial liabilities at amortized cost

The Company is classifying the following under amortized cost;

a) Borrowings from banks

b) Borrowings from others

c) Finance lease liabilities

d) Trade payables

e) Other Financial Liabilities

Amortized cost for financial liabilities represents amount at which financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount.

Financial liability at Fair Value through Statement of Profit and Loss

Financial liabilities held for trading are measured at FVTPL.

De-recognition of financial liabilities

A financial liability is de-recognized when and only when, it is extinguished i.e. when the obligation specified in the contract is discharged or cancelled or expires.

c. Derivative financial instruments

Foreign exchange forward contracts and options are entered into by the Company to mitigate the risk of changes in foreign exchange rates associated with certain payables, receivables and forecasted transactions denominated in certain foreign currencies. The Company also enters into cross currency interest rate swaps for hedging the risk against variability in cash flows of its term loan. These derivative contracts that do not qualify for hedge accounting under Ind AS 109, are initially recognized at fair value on the date the contract is entered into and subsequently measured through Statement of Profit and Loss. Gains or loss arising from changes in the fair value of the derivative contracts are recognized in the Statement of Profit and Loss.

d. hedge Accounting

The Company has not designated any hedge instruments and hence requirements under Ind AS 109 in respect of hedge accounting does not arise.

e. Offsetting of financial assets and liabilities

Financial assets and liabilities are offset and the net amount is presented in Balance Sheet when, and only when, the Company has a legal right to offset the recognized amounts and intends either to settle on a net basis or to realize the assets and settle the liability simultaneously.

f. Reclassification of financial assets

The Company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.

8 Share capital

Equity Shares are classified as equity. Where any shares are issued, incremental costs directly attributable to the issue of new equity shares or share options will be recognized as deduction from equity, net of any tax effects.

9 Property, Plant and Equipment

property, plant and equipment is stated at cost less accumulated depreciation and where applicable, accumulated impairment losses. Cost includes expenditure that is directly attributable to acquisition of the asset. The cost of self constructed assets includes the cost of materials, direct labour and any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized net within "other income/other expenses" in the Statement of Profit and Loss.

Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefit embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is de-recognized. The cost of day to day servicing of property, plant and equipment are recognized in Statement of Profit or Loss.

Depreciation

Depreciation is recognized in the Statement of Profit and Loss under Straight Line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased asset are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the company will obtain ownership by the end of the lease term. Assets costing Rs.5000 or below acquired during the year considered not material and are depreciated in full retaining Re.1/- per asset. The Useful life other than that described in Schedule II adopted are furnished below.

Estimated useful life in years

plant and machinery other than generator sets - 20 Years Electronics - 6 Years

Moulds / trolleys / weighing balance / drums / pCI stand / storage stand / motor / pump - 6 Years The depreciation method, useful lives and residual value are reviewed at each of the reporting date.

10 Intangible assets

Intangible assets that are acquired by the Company, which have finite useful lives are measured at cost less accumulated amortization and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the intangible asset.

Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, are recognized in the Statement of Profit and Loss.

Amortization of intangible asset with finite useful lives

Amortization is recognized in the Statement of Profit and Loss on a straight line basis over the estimated useful lives of intangible assets from the date that they are available to use based on the estimates made by the management w.r.t the useful life and residual value.

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

11 Impairment of Non financial assets

The carrying amount of the Company''s non-financial asset, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated.

The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs to sell. In assessing the value in use and its fair value less cost to sell, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows into continuing use that are largely independent of cash inflows of other assets or group of asset (the cash generating unit).

An impairment loss is recognized if the carrying of amount an asset or its cash generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in the Statement of Profit and Loss. Impairment losses recognized in respect of cash generating unit are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit or group of units on a pro rata basis.

Reversal of impairment loss

Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists.

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss.

12 Leases

At the inception of a lease, the lease arrangement is classified either as finance or operating lease, based on the substance of the lease arrangement.

Asset taken on Finance lease:

A financial lease is recognized as an asset and liability at the commencement of lease, at lower of the fair value of leased asset or the present value of the minimum lease payments. Initial direct costs, if any, are also capitalized and subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payment made under finance leases are apportioned between the finance expenses and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Assets taken on operating lease:

Assets taken on operating leases are not recognized in the Company''s Balance Sheet. payments made under operating leases are recognized in the Statement of Profit and Loss on a straight line basis over the lease term of the lease.

Assets given on operating lease:

Assets given on operating lease are depreciated over the useful life of the assets. Rental income is recognized in Statement of Profit and Loss under straight line basis over the lease term.

Deposits provided to lessors:

Any lease deposit paid by the company to the lessors are discounted to its fair value and the difference between the fair value and the deposit amount is recognized as pre-payments.

Subsequent to initial recognition, the security deposit is measured at amortized cost using the effective interest method with the carrying amount increased over the lease period up to the refundable amount. The amount of increase in the carrying amount of deposit is recognized as interest income. The lease prepayment is amortized on a straight line basis over the lease term as lease rental expense.

13 Inventories

Inventories are measured at the lower of cost (determined using Weighted average method) and net realizable value. Cost comprises the fair value of consideration for the purchase and all directly attributable costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and estimated cost necessary to make the sale.

14 Provisions, Contingent Liabilities and Contingent Assets

provisions are recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefit will be required to settle the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risk specified to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as finance cost.

A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any impairment loss on the assets associated with that contract.

Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts, unless possibility of an outflow of resources embodying economic benefit is remote.

Contingent assets are disclosed in the Financial Statements by way of notes to accounts when an inflow of economic benefits is probable.

15 Revenue recognition

Revenue from the sale of goods is measured at fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognized when the significant risk and reward of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and the amount of revenue can be measured realibly. Transfer of risk and reward vary depending on the individual terms of the contract of sale.

16 Employee benefits

Employee benefits are accrued in the period in which the associated services are rendered by employees of the Company, as detailed below:

a) Defined contribution plan (Provident fund)

In accordance with Indian law, eligible employees receive benefit from provident fund, which is a defined contribution plan. Both the employee and employer make monthly contributions to the plan, each equal to a specific percentage of employee''s basic salary. The Company has no further obligations under the plan beyond its monthly contributions. The Company does not have any legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee service in the current and prior periods. Obligation for contributions to the plan is recognized as an employee benefit expense in the Statement of Profit and Loss when incurred.

b) Defined benefit plan (gratuity)

In accordance with applicable Indian laws, the Company provides for gratuity, which is a defined benefit retirement plan covering eligible employees. The Gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. The Company''s net obligation in respect of the gratuity plan is calculated by estimating the amount of future benefits that the employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognized past service cost and the fair value of plan assets are deducted. The discount rate is the yield at the reporting date on risk free government bonds that have maturity dates approximating the terms of the Company''s obligations. The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Company, the recognized asset is limited to the total of any unrecognized past service costs and the present value of economic benefit available in the form of any future refunds from the plan or reductions in the future contributions to the plan.

The Company recognizes all remeasurements of net defined benefit liability/asset directly in other comprehensive income and presented within equity. The Company has an employees'' gratuity fund managed by the ICICI prudential Life Insurance Company Limited.

c) Short term benefits

Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short term cash bonus or profit sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

d) Compensated absences

The employees of the Company are entitled to compensated absence. The employees can carry forward a portion of the unutilized accrued absence and utilize it in future periods or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence. The Company recognizes an obligation for compensated absences in the period in which the employee renders the services. The Company provides for the expected cost of compensated absence in statement of profit or loss as additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated based on actuarial valuations carried out by an independent actuary at the Balance Sheet date.

17 Finance Income and expense

Finance income comprises of interest income on funds invested, dividend income, fair value gains on financial assets at fair value through profit or loss. Interest income is recognized using effective interest method. Dividend income is recognized in Statement of Profit and Loss on date when the company''s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

Finance expense comprises of interest expense on loans and borrowings, bank charges, unwinding of discount on provision, fair value losses on financial asset through FVTPL that are recognized in the Statement of Profit and Loss.

18 Borrowing costs

Borrowing costs that are directly attributable to acquisition, construction or production of a qualifying asset are capitalized as part of cost of that asset. other borrowing costs are recognized as expenses in the period in which they are incurred. To the extent the Company borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the Company determines the amount of borrowings costs eligible for capitalization by applying a capitalization rate to the expenditure incurred on such asset. The capitalization rate is determined based on the weighted average of borrowing costs applicable to the borrowings of the Company which are outstanding during the period, other than borrowings made specifically towards purchase of qualifying asset. The amount of borrowing costs that the Company capitalizes during a period does not exceed the amount of borrowing costs incurred during that period.

19 Income taxes

Income tax expense comprises current and deferred tax. Income tax expense is recognized in the Statement of Profit and Loss except to the extent it relates to items recognized directly in equity or in other comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date. Minimum Alternate Tax (MAT) is accounted as current tax when the Company is subjected to such provisions of the Income Tax Act. However, credit of such MAT paid is available when the Company is subjected to tax as per normal provisions in the future. Credit on account of MAT is recognized as an asset based on the management''s estimate of its recoverability in the future.

Deferred tax is recognized using the Balance Sheet method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences:

(i) The initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss

(ii) Differences relating to investments in subsidiaries and associates to the extent that it is probable that they will not reverse in the foreseeable future.

(iii) Arising due to taxable temporary differences on the initial recognition of goodwill, as the same is not deductible for tax purposes.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred taxation arising on investments in subsidiaries and associates is recognized except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred taxation on temporary differences arising out of undistributed earnings of the equity-method accounted investee is recorded based on the management''s intention. If the intention is to realize the undistributed earnings through sale, deferred tax is measured at the capital gains tax rates that are expected to be applied to temporary differences when they reverse. However, when the intention is to realize the undistributed earnings through dividend, the Company''s share of the income and expenses of the equity-method accounted investee is recorded in the Statement of Profit and Loss after considering any taxes on dividend payable by equity-method accounted investee and no deferred tax is set up in the books as the tax liability is not with the Company.

20 Foreign Currency Transactions and balances

Transactions in foreign currencies are initially recognized in the financial statements using exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated to the relevant functional currency at the exchange rates prevailing at the reporting date. Nonmonetary assets and liabilities denominated in foreign currencies that are measured at fair value are re-translated to the functional currency at the exchange rate prevailing on the date that the fair value was determined. Nonmonetary assets and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction. Foreign currency differences arising on translation are recognized in Statement of Profit and Loss for determination of net profit or loss during the period."

21 Earnings per share

The Company presents basic and diluted earnings per share (EpS) data for its ordinary shares. Basic EpS is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Where ordinary shares are issued but not fully paid, they are treated in the calculation of basic earnings per share as a fraction of an ordinary share to the extent that they were entitled to participate in dividends during the period relative to a fully paid ordinary share. Diluted EpS is determined by adjusting profit or loss attributable to ordinary shareholders and the weighted average number of shares outstanding for the effects of all potential ordinary shares, which include share options granted to employee if any, to the extent that partly paid shares are not entitled to participate in dividends during the period. They are treated as equivalent of warrants or options in the calculation of diluted earnings per share.

22 Fair value measurement

Ind AS require the determination of fair value for both financial and non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal market or the most advantageous market must be accessible to the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

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

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The fair value hierarchy is described as below:

Level 1 - Unadjusted quoted prices In active market for identical assets and liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Unobservabale outputs for the assets and liabilities

For assets and liabilities that are recognized in the financial statement at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the heirachy by reassessing categorisation at the end of each reporting period.

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

Fair values have been determined for measuerment and/or disclosures purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(i) Investments in equity and debt securities

The fair value is determined by reference to their quoted price at the reporting period. In the absence of quoted price, the fair value of the financial asset is measured using valuation techniques

(ii) Trade and other receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. However in respect of such financial statements, fair value generally approximates the carrying amount due to the short term nature of such assets. This fair value is determined for disclosure purpose or when acquired in a business combination.

(iii) Lease Security Deposits

Lease deposit paid by the Company to the lessors are discounted to its fair value based on the market rate of interest at the reporting date. For operating lease, where the interest rate implicit in the lease contract is not available, the market rate of interest is determined by reference to the interest on bank deposits.

(iv) Derivatives

The fair value of forward exchange contracts is based on quoted price. Fair value reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the Company and the counter party when appropriate.

(v) Non derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flow discounted at the market rate of interest at the reporting date. For financial lease, the market rate of interest is determined by reference to similar lease agreements.

23 Dividend distribution to Equity shareholders

Dividend distribution to equity shareholders is distribution to owners of capital in statement of changes in equity, in the period in which it was paid.

24 Current and non-current classification

An asset is classified as current if:

(a) it is expected to be realized or sold or consumed in the Company''s normal operating cycle;

(b) it is held primarily for the purpose of trading;

(c) it is expected to be realized within twelve months after the reporting period; or

(d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current if:

(a) it is expected to be settled in normal operating cycle;

(b) it is held primarily for the purpose of trading;

(c) it is expected to be settled within twelve months after the reporting period;

(d) it has no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current.

25 Statement of Cash Flow

Cash flows are reported using the indirect method, whereby, profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows are segregated into operating, investing and financing activities.

26 Segment Reporting

Operating segments are identified and reported taking into account the different risks and returns, the organization structure and the internal reporting systems. The Company operates only in one segment namely manufacturing of two-wheeler, three-wheeler and other industrial tyres and tubes.


Mar 31, 2016

1 AS 1: DISCLOSURE OF ACCOUNTING POLICIES:

The financial statements are prepared on a going concern concept under the historical cost convention on accrual basis and in accordance with the requirements of the Companies Act 2013 and after considering the mandatory accounting standards.

2 AS 2: VALUATION OF INVENTORIES:

Raw Materials, stores and spares are valued at cost arrived by applying the Weighted average method. Cost consists of cost of materials, Cess, Duty & Freight.

Work in progress is valued at cost applying weighted average method. Cost Includes cost of Materials, Labour and Other appropriate overheads.

Finished goods are valued at lower of cost and realizable value. Cost for this purpose comprises materials, labour and other appropriate overheads and excise duty.

3 AS 3: CASH FLOW STATEMENTS:

The Cash flow statement has been prepared under ‘Indirect method’

4 AS 6: DEPRECIATION ACCOUNTING:

The Companies Act, 2013 stipulates systematic allocation of the depreciable amount of an asset over its useful life. The Act requires that useful life and depreciation for significant components of an asset should be determined separately. The Act also prescribes that a maximum of 5% of the cost can be retained as residual value and the balance 95% to be depreciated over the useful life of the asset / component. This method has been followed by the Company.

All tangible assets are depreciated under the straight line method. The Company has adopted useful life specified in Schedule II of the Companies Act, 2013, except on certain category of assets / components for which the Company has re-assessed the same, based on Chartered Engineer’s technical evaluation in accordance with Part A of Schedule II to the Companies Act, 2013. Assets costing Rs.5000 or below acquired during the year is depreciated in full retaining Rs.1 per asset.

Depreciation is provided for on pro-rata basis on additions and deletions made during the year.

The carrying amount of components as on the first day of the financial year is depreciated over the remaining useful life of the asset as per schedule II of the Companies’ Act, 2013. Where the remaining useful life of an asset is Nil, the carrying amount is written-off in the statement of profit and loss after retaining the residual value.

5 AS 9: REVENUE RECOGNITION:

Income of the Company is derived from sale of manufactured goods and includes excise duty but exclude sales tax and value added tax.

Domestic sales are recognized net of returns on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers.

Export sales are recognized on the basis of date of bill of lading. Export benefits, if any, are recognized on post shipment basis.

Interest incomes are recognized using the time proportion method based on the rates implicit in the transaction. Dividend income is recognized when the right to receive dividend is established.

6 AS 10: ACCOUNTING FOR FIXED ASSETS:

Gross block of fixed assets are shown at the costs of acquisition, which includes taxes, duties (net of CENVAT and VAT input credits availed) and other identifiable direct expenses incurred.

7 AS 11: ACCOUNTING FOR EFFECTS IN FOREIGN EXCHANGE RATES:

Transactions are recorded at equivalent rupee values at the exchange rate prevailing on the date of transaction or at the rates that closely approximate the rate at the date of the transaction.

The difference on account of fluctuation at the rate of exchange prevailing on the date of transaction and the date of realization is recognized in the statement of profit and loss.

Foreign currency assets and liabilities are restated at the rates ruling at the year end and the difference is recognized in the statement of profit and loss.

Forward premium in respect of forward exchange contracts is amortized and recognized over the life of the contract.

8 AS 12 : GOVERNMENT GRANTS

Capital Subsidy received from Government is credited to Capital Reserves

9 AS 13: ACCOUNTING FOR INVESTMENTS:

All the investments are long term investments. Investments are stated at cost. Diminutions in respect of long-term investments are provided for when there is a permanent diminution in the value of such investments.

10 AS 15(REVISED): ACCOUNTING FOR RETIREMENT BENEFITS:

The Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company provides a lumpsum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the employees’ salary and tenure of employment. Liabilities with regard to the retirement plan are determined by an independent actuarial valuation at the balance sheet date, based on which the Company contributes all the ascertained liabilities to the Company’s gratuity fund maintained by ICICI Prudential Life Insurance Co. Ltd.

Leave encashment is provided for based on actuarial valuation.

Employees above a certain category are participants in the Company’s superannuation fund, for which the Company makes annual contributions based on their salaries to a fund maintained by the Life Insurance Corporation of India.

The Company makes its statutory contribution to the employees’ provident fund to the Employees’ Provident Fund Organization of the Government of India.

The Company makes contribution to the employees’ health scheme for those employees governed by the ESI Act.

The Company has adopted the revised accounting standard on employees benefit (AS-15, revised) issued by the Institute of Chartered Accountants of India.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation:

11 AS 16: BORROWING COST:

Interests on borrowings are capitalized wherever there is substantial period of time between the date of borrowing and date on which the assets are put to use.

12 AS 17: SEGMENT REPORTING:

The Company operates only in one segment and hence the disclosure requirements of Accounting standard on Segment reporting ( AS 17) issued by the Institute of Chartered Accountants of India are not applicable.

13 AS 19: LEASES:

The operating lease entered in an earlier year is for a period of 10 years.

The details of maturity profile of future operating lease payments are furnished below:

a The total of future minimum lease payments under non-cancellable operating lease for each of the following periods (Net) :

b Total of minimum sub-lease payments expected to be received under non-cancellable sub-leases at the Balance Sheet date Not Applicable

c Lease payments recognized in the Statement of Profit and Loss for the year under the head rent Paid Rs in Crores 7.31

14 AS 20: EARNINGS PER SHARE:

Basic earnings per share are disclosed in the Statement of Profit and Loss. There is no diluted earning per share as there are no dilutive potential equity shares.

15 AS 22: ACCOUNTING FOR TAXES ON INCOME:

The Company provides for current taxes at current rates under the provisions of the Income Tax Act, 1961. Disputed taxes are not provided for, but disclosed in the notes on accounts. The Company provides for deferred tax arising on account of temporary and reversible timing differences on account of depreciation, employees’ benefits and expenditure which are allowed under the Income tax act only on payment basis.

16 AS 25: INTERIM FINANCIAL REPORTING:

Quarterly results are published in accordance with the guidelines issued by the Securities and Exchange Board of India. The recognition and measurement principles as laid down in the standard are followed with respect to such results. Quarterly financial results are also subjected to a limited financial review by the auditors as required.

17 AS 26: INTANGIBLE ASSETS:

The Company amortizes intangible assets taking into consideration the useful life based on the estimates made by the management. Where the management considers that an intangible asset does not have a value as at the end of the accounting year, such intangible asset is fully amortized.

18 AS 28: IMPAIRMENT OF ASSETS:

The Company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in the carrying amount of the Company’s fixed assets. If any such indication exists, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

19 AS 29: PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

a) Provisions for expenses are made on estimated basis, based upon the judgment of the Company.

b) Contingent Liabilities are not provided for but disclosed in the notes on accounts.

c) There are no contingent assets.


Mar 31, 2015

1. AS 1: DISCLOSURE OF ACCOUNTING POLICIES:

The financial statements are prepared on a going concern concept under the historical cost convention on accrual basis and in accordance with the requirements of the Companies Act 2013 and after considering the mandatory accounting standards issued by the Institute of Chartered Accountants of India.

2. AS 2: VALUATION OF INVENTORIES:

Raw Materials, stores and spares are valued at cost arrived by applying the Weighted Average Method. Cost consists of cost of materials, Cess, Duty & Freight.

Work in progress is valued at cost applying weighted average method. Cost includes cost of Materials, Labour and other appropriate overheads.

Finished goods are valued at lower of cost and realizable value. Cost for this purpose comprises materials, labour and other appropriate overheads and Excise Duty.

3. AS 3: CASH FLOW STATEMENTS:

The Cash flow statement has been prepared under ''Indirect method'' set out in AS-3 and pursuant to the listing agreement with the stock exchanges.

4. AS 6: DEPRECIATION ACCOUNTING:

The Companies Act, 2013 stipulates systematic allocation of the depreciable amount of an asset over its useful life. The Act also prescribes that a maximum of 5% of the cost can be retained as residual value and the balance 95% to be depreciated over the useful life of the asset. This method has been followed by the Company.

All tangible assets are depreciated under the straight line method. The Company has adopted useful life specified in Schedule II of the Companies Act, 2013, except on certain category of assets for which the company has re-assessed the same, based on Chartered Engineer''s technical evaluation in accordance with Part A of Schedule II to the Companies Act, 2013. Assets costing Rs. 5000 or below acquired during the year is continued to be depreciated in full retaining Rs.1 per asset.

Depreciation is provided for on pro-rata basis on additions and deletions made during the year.

The carrying amount of assets as on the first day of the financial year is depreciated over the remaining useful life of the asset as per schedule II of the Companies Act, 2013. Where the remaining useful life of an asset is Nil, the carrying amount is written-off in the statement of profit and loss after retaining the residual value.

5. AS 9: REVENUE RECOGNITION:

Income of the company is derived from sale of manufactured goods and includes excise duty but exclude sales tax and value added tax.

Domestic sales are recognized net of returns on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers.

Export sales are recognized on the basis of date of bill of lading. Export benefits, if any, are recognized on post shipment basis.

Interest incomes are recognized using the time proportion method based on the rates implicit in the transaction. Dividend income is recognized when the right to receive dividend is established.

6. AS 10: ACCOUNTING FOR FIXED ASSETS:

Gross block of fixed assets are shown at the costs of acquisition, which includes taxes, duties (net of CENVAT and VAT input credits availed) and other identifiable direct expenses incurred.

7. AS 11: ACCOUNTING FOR EFFECTS IN FOREIGN EXCHANGE RATES:

Transactions are recorded at equivalent rupee values at the exchange rate prevailing on the date of transaction or at the rates that closely approximate the rate at the date of the transaction.

The difference on account of fluctuation at the rate of exchange prevailing on the date of transaction and the date of realization is recognized in the statement of profit and loss.

Foreign currency assets and liabilities are restated at the rates ruling at the year end and the difference is recognized in the statement of profit and loss.

Forward premium in respect of forward exchange contracts is amortized and recognized over the life of the contract.

8. AS 13: ACCOUNTING FOR INVESTMENTS:

All the investments are long term investments. Investments are stated at cost. Diminutions in respect of long-term investments are provided for when there is a permanent diminution in the value of such investments.

9. AS 15 (REVISED): ACCOUNTING FOR RETIREMENT BENEFITS:

The Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the employees'' salary and tenure of employment. Liabilities with regard to the retirement plan are determined by an independent actuarial valuation at the balance sheet date, based on which the Company contributes all the ascertained liabilities to the Company''s gratuity fund maintained by ICICI Prudential Life Insurance Co. Ltd

Leave encashment is provided for based on actuarial valuation.

Employees above a certain category are participants in the Company''s superannuation fund, for which the Company makes annual contributions based on their salaries to a fund maintained by the Life Insurance Corporation of India.

The Company makes its statutory contribution to the employees'' provident fund to the Employees'' Provident Fund Organization of the Government of India.

The Company makes contribution to the employees'' health scheme for those employees governed by the ESI Act.

The Company has adopted the revised accounting standard on employees benefit (AS-15, revised) issued by the Institute of Chartered Accountants of India.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation:

(Rs. In Crores)

LEAVE ENCASHMENT

Particulars 31.3.2015 31.3.2014

Obligations at period 2.55 2.50 beginning Service Cost 0.46 0.42

Interest cost 0.16 0.20

Actuarial (gain)/loss 1.14 (0.01)

Benefits paid (0.86) (0.56)

Obligations at the period end 3.45 2.55

GRATUITY

Particulars 31.3.2015 31.3.2014

Obligations at period beginning 12.57 11.74

Service Cost 1.56 0.54

Interest cost 0.96 1.05

Actuarial (gain)/loss 4.18 (0.20)

Benefits paid (0.60) (0.56)

Obligations at the period end 18.67 12.57

GRATUITY

Change in plan assets 31.3.2015 31.3.2014

Plan assets at the beginning of the year 12.08 10.34

Expected return on the plan assets 0.95 0.86

Actuarial gain/(loss) 0.97 0.04

Contributions 0.49 1.40

Benefits paid (0.60) (0.56)

Plan assets at the year end, 13.89 12.08 fair value

Reconciliation of the defined plan obligations and fair value of plan assets at the year end:

Fair value of the plan assets 13.89 at the year end

Defined plan obligations at the year end 18.67

Assets/(liabilities) recognized in the 4.78 Balance Sheet

Gratuity cost: 31.3.2015 31.3.2014

Service Cost 1.56 0.54

Interest Cost 0.96 1.05

Expected return on plan assets (0.95) (0.86)

Actuarial (gains)/losses 3.21 (0.24)

Net gratuity cost 4.78 0.49

Assumptions: Gratuity Leave Encashment

Discount Factor 7.82% 7.82%

Estimated Return on Plan Assets 8.00% -

Salary Increase 6.00% 6.00%

Attrition Rate 5.00% 5.00%

Retirement Age 58 & 60 Years 58 & 60 Years

10. AS 16: Borrowing Cost:

Interests on borrowings are capitalized wherever there is substantial period of time between the date of borrowing and date on which the assets are put to use.

11. AS 17: Segment reporting:

The company operates only in one segment and hence the disclosure requirements of Accounting Standard on Segment reporting (AS 17) issued by the Institute of Chartered Accountants of India are not applicable.

12. AS 19: Leases:

The operating lease entered in an earlier year is for a period of 10 years.

The details of maturity profile of future operating lease payments are furnished below:

a. The total of future minimum lease payments under non-cancellable operating lease for each of the following periods (Net):

Rs. In Crores

* Not later than one year 10.66

* Later than one year and not later than five years 53.04

* Later than five years 1.01

b. Total of minimum sub-lease payments expected to be received

under non-cancellable sub-leases at the Balance Sheet date Not Applicable

c. Lease payments recognized in the Statement of Profit and Loss for the year under the head rent paid Rs. 7.12 Crores.

13. AS 20: Earnings Per Share:

Basic earnings per share are disclosed in the Statement of Profit and Loss. There is no diluted earning per share as there are no dilutive potential equity shares.

14. AS 22: Accounting for taxes on income:

The company provides for current taxes at current rates under the provisions of the Income Tax Act, 1961. Disputed taxes are not provided for, but disclosed in the notes on accounts. The company provides for deferred tax arising on account of temporary and reversible timing differences on account of depreciation, employees'' benefits and expenditure which are allowed under the Income tax act only on payment basis.

15. AS 25: Interim financial reporting:

Quarterly results are published in accordance with the guidelines issued by the Securities and Exchange Board of India. The recognition and measurement principles as laid down in the standard are followed with respect to such results. Quarterly financial results are also subjected to a limited financial review by the auditors as required.

16. AS 26: Intangible Assets:

The company amortizes intangible assets taking into consideration the useful life based on the estimates made by the management. Where the management considers that an intangible asset does not have a value as at the end of the accounting year, such intangible asset is fully amortized.

17. AS 28: Impairment of Assets:

The company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in the carrying amount of the company''s fixed assets. If any such indication exists, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

18. AS 29: Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions for expenses are made on estimated basis, based upon the judgment of the company.

b) Contingent Liabilities are not provided for but disclosed in the notes on accounts.

c) There are no contingent assets.

Rs. in Crores

Contingent liabilities : 31.3.2015 31.3.2014

Balance at the beginning of the year 74.88 50.04

Additions / (Deletions) during the year 9.09 24.84

Balance at the end of the year 83.97 74.88

Liabilities disputed and not provided for:

- Income tax, Sales Tax & Excise duty:

Balance at the beginning of the year 22.74 2.15

Additions / (Deletions) during the year (14.67) 20.59

Balance at the end of the year 8.07 22.74


Mar 31, 2014

1. AS 1: Disclosure of accounting policies:

The financial statements are prepared on a going concern concept under the historical cost convention on accrual basis and in accordance with the requirements of the Companies Act, 1956 and after considering the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India.

2. AS 2: Valuation of inventories:

Raw Materials, stores and spares are valued at cost arrived by applying the Weighted Average Method. Cost consists of cost of materials, Cess, Duty & Freight.

Work in progress is valued at cost applying weighted average method. Cost includes cost of Materials, Labour and other appropriate overheads.

Finished goods are valued at lower of cost and realizable value. Cost for this purpose comprises materials, labour and other appropriate overheads and Excise Duty.

3. AS 3: Cash flow statements:

Pursuant to the listing agreement with the Stock Exchanges, the Company has attached cash flow statement to the Balance Sheet and Statement of Profit and Loss. The cash flow statement is prepared under ''Indirect method''.

4. AS 6: Depreciation accounting:

i. All assets are depreciated on Straight Line Method at the rates prescribed in Schedule XIV of the Companies'' Act, 1956.

ii. Depreciation is provided for on pro-rata basis on additions and deletions made during the year. Assets costing Rs.5000/- and below are depreciated in full.

5. AS 9: Revenue Recognition:

Income of the Company is derived from sale of manufactured goods and includes Excise Duty and is net of sales returns and trade discounts. Domestic sales are recognized on the basis of sales invoices raised. Export sales are recognized on the basis of date of bills of lading. Export benefits, if any, are recognized on post shipment basis.

Interest incomes/expenses are recognized using the time proportion method based on the rates implicit in the transaction. Dividend income is recognized when the right to receive dividend is established.

6. AS 10: Accounting for fixed assets:

Gross block of fixed assets are shown at the costs of acquisition, which includes taxes, duties (net of CENVAT and VAT input credits availed) and other identifiable direct expenses incurred.

7. AS 11: Accounting for effects in foreign exchange rates:

Transactions are accounted at equivalent rupee values at the agreed forward contract rates. The difference on account of fluctuation at the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue.

Foreign currency assets and liabilities are restated at the rates ruling at the year end and the difference recognized in the statement of Profit and Loss.

8. AS 13: Accounting for Investments:

All the investments are long term investments. Diminutions in respect of long term investments are provided for when there is a permanent diminution in the value of such investments.

Investments are stated at cost. In respect of investments where the realizable value is less than cost, lower value has been adopted.

9. AS 15 (revised): Accounting for retirement benefits:

The Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the employees'' salary and tenure of employment. Liabilities with regard to the retirement plan are determined by an independent actuarial valuation at the Balance Sheet date, based on which the Company contributes all the ascertained liabilities to the Company''s gratuity fund.

Leave encashment is provided for based on actuarial valuation.

Employees above a certain category are participants in the Company''s Superannuation Fund, for which the Company makes annual contributions based on their salaries and tenure of employment to a fund maintained by the Life Insurance Corporation of India.

The Company makes its statutory contribution to the Employees'' Provident Fund to the Employees'' Provident Fund Organization of the Government of India.

The Company makes contribution to the employees'' health scheme for those employees governed by the ESI Act.

The Company has adopted the revised accounting standard on employees benefit (AS-15, revised) issued by the Institute of Chartered Accountants of India.

10. AS 16: Borrowing Cost:

Interests on borrowings are capitalized wherever there is substantial period of time between the date of borrowing and date on which the assets are put to use.

11. AS 17: Segment reporting:

The company operates only in one segment and hence the disclosure requirements of Accounting Standard on Segment reporting (AS 17) issued by the Institute of Chartered Accountants of India are not applicable.

12. AS 19: Leases:

The operating lease entered in the immediately preceding year is for a period of 10 years. The details of maturity profile of future operating lease payments are furnished below:

13. AS 20: Earnings Per Share:

Basic earnings per share are disclosed in the Profit and Loss. There is no diluted earning per share as there are no dilutive potential equity shares.

14. AS 22: Accounting for taxes on income:

The company provides for current taxes at current rates under the provisions of the Income Tax Act, 196 Disputed taxes are not provided for, but disclosed in the notes on accounts. The company provides for deferre tax arising on account of temporary and reversible timing differences on account of depreciation, employee benefits and expenditure which are allowed under the Income Tax Act only on payment basis.

15. AS 25: Interim financial reporting:

Quarterly results are published in accordance with the guidelines issued by the Securities and Exchang Board of India. The recognition and measurement principles as laid down in the standard are followed wit respect to such results. Quarterly financial results are also subjected to a limited financial review by th Auditors as required.

16. AS 26: Intangible Assets:

The company capitalizes non integral software as intangible assets. The intangible assets are depreciated the rates applicable to computers in Schedule XIV of the Companies Act, 1956 under the Straight Line metho

17. AS 28: Impairment of Assets:

The company makes an assessment on the balance sheet date to determine whether there is any indicatio of impairment in the carrying amount of the company''s fixed assets. If any such indication exists, the recoverab amounts are estimated and an impairment loss is recognized whenever the carrying amount of an ass exceeds its recoverable amount.

18. AS 29: Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions for expenses are made on estimated basis, based upon the judgment of the company.

b) Contingent Liabilities are not provided for but disclosed in the notes on accounts.

c) There are no contingent assets.


Mar 31, 2012

A. Details of Security for Secured Loans

Working Capital facilities availed from State Bank of India are secured by a first charge by way of hypothecation of Stock of Raw Materials, Stores, Work in Progress, Finished goods and Book Debts.

1. AS 1: Disclosure of accounting policies:

The financial statements are prepared on a going concern concept under the historical cost convention on accrual basis and in accordance with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India.

2. AS 2: Valuation of inventories:

Raw Materials, stores and spares are valued at cost arrived by applying the Weighted Average Method. Cost consists of cost of materials, Cess, Duty & Freight.

Work in progress is valued at cost applying weighted average method. Cost includes cost of Materials, Labour and other appropriate overheads.

Finished goods are valued at lower of cost and realizable value. Cost for this purpose comprises materials, labour and other appropriate overheads and Excise Duty.

3. AS 3: Cash flow statements:

Pursuant to the listing agreement with the Stock Exchanges, the Company has attached cash flow statement to the Balance Sheet and Statement of Profit and Loss. The cash flow statement is prepared under 'Indirect method'.

4. AS 6: Depreciation accounting:

i. All assets are depreciated on Straight Line Method at the rates prescribed in Schedule XIV of the Companies' Act, 1956.

ii. Depreciation is provided for on pro-rata basis on additions and deletions made during the year. Assets costing Rs.5000/- and below are depreciated in full.

5. AS 9: Revenue Recognition:

Income of the Company is derived from sale of manufactured goods and includes Excise Duty and is net of sales returns and trade discounts. Domestic sales are recognized on the basis of sales invoices raised. Export sales are recognized on the basis of date of bills of lading. Export benefits, if any, are recognized on post shipment basis.

Interest incomes/expenses are recognized using the time proportion method based on the rates implicit in the transaction. Dividend income is recognized when the right to receive dividend is established.

6. AS 10: Accounting for fixed assets:

Gross block of fixed assets are shown at the costs of acquisition, which includes taxes, duties (net of CENVAT and VAT input credits availed) and other identifiable direct expenses incurred.

7. AS 11: Accounting for effects in foreign exchange rates:

Transactions are accounted at equivalent rupee values at the agreed forward contract rates. The difference on account of fluctuation at the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue.

Foreign currency assets and liabilities are restated at the rates ruling at the year end and the difference recognized in the Profit and Loss Account.

8. AS 13: Accounting for Investments:

All the investments are long term investments. Diminution in respect of long term investments are provided for when there is a permanent diminution in the value of such investments.

Investments are stated at cost. In respect of investments where the realizable value is less than cost, lower value has been adopted.

9. AS 15 (revised): Accounting for retirement benefits:

The Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the employees' salary and tenure of employment. Liabilities with regard to the retirement plan are determined by an independent actuarial valuation at the Balance Sheet date, based on which the Company contributes all the ascertained liabilities to the Company's gratuity fund.

Leave encashment is provided for based on actuarial valuation.

Employees above a certain category are participants in the Company's Superannuation Fund, for which the Company makes annual contributions based on their salaries and tenure of employment to a fund maintained by the Life Insurance Corporation of India.

The Company makes its statutory contribution to the Employees' Provident Fund to the Employees' Provident Fund Organization of the Government of India.

The Company makes contribution to the employees' health scheme for those employees governed by the ESI Act.

The Company has adopted the revised accounting standard on employees benefit (AS-15, revised) issued by the Institute of Chartered Accountants of India.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation:

Investment details of plan assets:

The Company contributes the liability as per actuarial valuation to the Company's gratuity fund manager, ICICI Prudential Life Insurance Co. Ltd.

10. AS 16: Borrowing Cost:

Interests on borrowings are capitalized wherever there is substantial period of time between the date of borrowing and date on which the assets are put to use.

11. AS 17: Segment reporting:

The company operates only in one segment and hence the disclosure requirements of Accounting Standard on Segment reporting (AS 17) issued by the Institute of Chartered Accountants of India are not applicable.

13. AS 20: Earnings Per Share:

Basic earnings per share are disclosed in the Profit and Loss Account. There is no diluted earnings per share as there are no dilutive potential equity shares.

14. AS 22: Accounting for taxes on income:

The company provides for current taxes at current rates under the provisions of the Income Tax Act, 1962. Disputed taxes are not provided for, but disclosed in the notes on accounts. The company provides for deferred tax arising on account of temporary and reversible timing differences on account of depreciation, employees' benefits and expenditure which are allowed under the Income Tax Act only on payment basis.

15. AS 25: Interim financial reporting:

Quarterly results are published in accordance with the guidelines issued by the Securities and Exchange Board of India. The recognition and measurement principles as laid down in the standard are followed with respect to such results. Quarterly financial results are also subjected to a limited financial review by the Auditors as required.

16. AS 26: Intangible Assets:

The company capitalizes on integral software as intangible assets. The intangible assets are depreciated at the rates applicable to computers in Schedule XIV of the Companies' Act, 1956 under the Straight Line Method.

17. AS 28: Impairment of Assets:

The company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in the carrying amount of the company's fixed assets. If any such indication exists, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

18. AS 29: Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions for expenses are made on estimated basis, based upon the judgment of the company.

b) Contingent Liabilities are not provided for but disclosed in the notes on accounts.

c) There are no contingent assets.

(Rs. In Lakhs)

Contingent liabilities: 31.3.2012 31.3.2011

Balance at the beginning of the year 4244.52 5347.35

Additions /(Deletions) during the year 8403.95 (1102.83)

Balance at the end of the year 12648.47 4244.52

Liabilities disputed and not provided for: - Sales Tax & Excise: 31.3.2012 31.3.2011

Balance at the beginning of the year 193.16 201.97

Additions /(Deletions) during the year 11.63 (881)

Balance at the end of the year 204.79 193.16


Mar 31, 2011

1. AS 1: Disclosure of accounting policies:

The financial statements are prepared on a going concern concept under the historical cost convention on accrual basis and in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India.

2. AS 2: Valuation of inventories:

Raw Materials, and stores and spares are valued at cost arrived by applying the first in first out method. Cost consists of cost of materials, Cess, Duty & Freight.

Work in progress is valued at cost. Cost Includes cost of materials, labour and other appropriate overheads.

Finished goods are valued at lower of cost and realizable value. Cost for this purpose comprises materials, labour and other appropriate overheads and Excise Duty.

3. AS 3: Cash flow statements:

Pursuant to the listing agreement with the Stock Exchanges, the Company has attached Cash Flow Statement to the Balance Sheet and the Profit and Loss Account.

4. AS 6: Depreciation accounting:

i. All assets are depreciated on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956.

ii. Depreciation is provided for on pro-rata basis on additions and deletions made during the year. Assets costing Rs.5000/ and below are depreciated in full.

5. AS 9: Revenue Recognition:

Income of the Company is derived from sale of manufactured goods and includes Excise Duty and is net of sales returns and trade discounts. Domestic sales are recognized on the basis of sales invoices raised. Export sales are recognized on the basis of date of bills of lading. Export benefits, if any, are recognized on post shipment basis.

Interest income/expenses are recognized using the time proportion method based on the rates implicit in the transaction. Dividend income is recognized when the right to receive dividend is established.

6. AS 10: Accounting for fixed assets:

Gross block of fixed assets are shown at the costs of acquisition, which includes taxes, duties (net of CENVAT and VAT input credits availed) and other identifiable direct expenses incurred.

7. AS 11: Accounting for effects in foreign exchange rates:

Transactions are accounted at equivalent rupee values based on exchange rate prevailing on the date of transaction. The difference on account of fluctuation at the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue.

Foreign currency assets and liabilities are restated at the rates ruling at the year end and the difference recognized in the Profit and Loss Account.

8. AS 13: Accounting for Investments:

All the investments are long term investments. Diminution in respect of long term investments are provided for when there is a permanent diminution in the value of such investments.

Investments are stated at cost. In respect of investments where the realizable value is less than cost, lower value has been adopted.

9. AS 15 (revised): Accounting for retirement benefits:

The Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company provides a lump-sum payment to vested employees at retirement, death, incapacitation, or termination of employment, of an amount based on the employees salary and tenure of employment. Liabilities with regard to the retirement plan are determined by an independent actuarial valuation at the Balance Sheet date, based upon which the Company contributes all the ascertained liabilities to the Companys gratuity fund.

Leave encashment is provided for based on actuarial valuation.

Employees above a certain category are participants in the Companys Superannuation Fund, for which the Company makes annual contributions based upon their salaries and tenure of employment to a fund maintained by the Life Insurance Corporation of India.

The Company makes its statutory contribution to the Employees Provident Fund to the Employees Provident Fund Organization of the Government of India.

The Company makes contribution to the employees health scheme for those employees governed by the ESI Act.

The Company has adopted the revised Accounting Standard on employees benefit (AS-15, revised) issued by the Institute of Chartered Accountants of India.

Investment details of plan assets:

The Company contributes the liability as per actuarial valuation to the Companys gratuity fund manager, ICICI Prudential Life Insurance Co. Ltd.

10. AS 16: Borrowing Cost:

Interests on borrowings are capitalized wherever there is substantial period of time between the date of borrowing and date on which the assets are put to use.

11. AS 17: Segment reporting:

The Company operates only in one segment and hence the disclosure requirements of Accounting Standard on Segment reporting ( AS 17) issued by the Institute of Chartered Accountants of India are not applicable.

12. AS 19: Leases:

The Company has entered into hire purchase transactions for a period of five years which are in the nature of financial leases as per the provisions of the above standard.

13. AS 20: Earnings Per Share:

Basic earnings per share are disclosed in the Profit and Loss Account. There is no diluted earning per share as there are no dilutive potential equity shares.

14. AS 22: Accounting for taxes on income:

The Company provides for current taxes at current rates under the provisions of the Income Tax Act, 1961. Disputed taxes are not provided for, but disclosed in the notes on accounts. The Company provides for deferred

tax arising on account of temporary and reversible timing differences on account of depreciation, employees benefits and expenditure which are allowed under the Income Tax Act only on payment basis.

15. AS 25: Interim financial reporting:

Quarterly results are published in accordance with the guidelines issued by the Securities and Exchange Board of India. The recognition and measurement principles as laid down in the standard are followed with respect to such results. Quarterly financial results are also subjected to a limited financial review by the Auditors as required.

16. AS 26: Intangible Assets:

The Company capitalizes non integral software as intangible assets. The intangible assets are depreciated at the rates applicable to computers in Schedule XIV of the Companies Act, 1956 under the Straight Line Method.

17. AS 28: Impairment of Assets:

The Company makes an assessment on the Balance Sheet date to determine whether there is any indication of impairment in the carrying amount of the Companys fixed assets. If any such indication exists, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

18. AS 29: Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions for expenses are made on estimated basis, based upon the judgment of the Company.

b) Contingent Liabilities are not provided for but disclosed in the notes on accounts.

c) There are no contingent assets.


Mar 31, 2010

1. AS 1: Disclosure of accounting policies:

The financial statements are prepared on a going concern concept under the historical cost convention on accrual basis and in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India.

2. AS 2: Valuation of inventories:

Raw Materials, work in progress and stores and spares are valued at cost arrived by applying the first in first out method.

Finished goods are valued at lower of cost and realizable value. Cost for this purpose comprises materials, labour and other appropriate overheads and excise duty.

3. AS 3: Cash flow statements:

Pursuant to the listing agreement with the Stock Exchanges, the Company has attached cash flow statement to the Balance Sheet and the Profit and Loss Account.

4. AS 6: Depreciation accounting:

i. All assets are depreciated on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956.

ii. Depreciation is provided for on pro-rata basis on additions and deletions made during the year. Assets costing Rs.5,000/-and below are depreciated in full.

5. AS 9: Revenue Recognition:

Income of the Company is derived from sale of manufactured goods and includes excise duty and is net of sales returns and trade discounts. Domestic sales are recognized on the basis of sales invoices raised. Export sales are recognized on the basis of date of bills of lading. Export benefits, if any, are recognized on post shipment basis.

Interest income/expenses are recognized using the time proportion method based on the rates implicit in the transaction. Dividend income is recognized when the right to receive dividend is established.

6. AS 10: Accounting for fixed assets:

Gross block of fixed assets are shown at the costs of acquisition, which includes taxes, duties (net of CENVAT and VAT input credits availed) and other identifiable direct expenses incurred.

7. AS 11: Accounting for effects in foreign exchange rates:

Transactions are accounted at equivalent rupee values based on exchange rate prevailing on the date of transaction. The difference on account of fluctuation at the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue.

Foreign currency assets and liabilities are restated at the rates ruling at the year end and the difference recognized in the Profit and Loss Account.

8. AS 13: Accounting for Investments:

All the investments are long term investments. Diminution in respect of long term investments are provided for when there is a permanent diminution in the value of such investments.

Investments are stated at cost. In respect of investments where the realizable value is less than cost, lower value has been adopted.

9. AS 15(revised): Accounting for retirement benefits:

The Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company provides a lump-sum payment to vested employees at retirement, death, incapacitation, or termination of employment, of an amount based on the employees salary and tenure of employment. Liabilities with regard to the retirement plan are determined by an independent actuarial valuation at the balance sheet date, based upon which the Company contributes all the ascertained liabilities to the Companys gratuity fund.

Leave encashment is provided for based on actuarial valuation.

Employees above a certain category are participants in the Companys superannuation fund, for which the Company makes annual contributions based upon their salaries and tenure of employment to a fund maintained by the Life Insurance Corporation of India.

The Company makes its statutory contribution to the Employees Provident Fund to the Employees Provident Fund Organization of the Government of India.

The Company makes contribution to the employees health scheme for those employees governed by the ESI Act.

The Company has adopted the revised accounting standard on employees benefit (AS-15, revised) issued by the Institute of Chartered Accountants of India.

Investment details of plan assets:

The Company contributes the liability as per actuarial valuation to the Companys gratuity fund manager, ICICI Prudential Life Insurance Co. Ltd.

10. AS 16: Borrowing Cost:

Interests on borrowings are capitalized wherever there is substantial period of time between the date of borrowing and date on which the assets are put to use.

11. AS 17: Segment reporting:

The Company operates only in one segment and hence the disclosure requirements of Accounting Standard on Segment reporting ( AS 17) issued by the Institute of Chartered Accountants of India are not applicable.

13. AS 20: Earnings Per Share:

Basic earnings per share are disclosed in the Profit and Loss Account. There is no diluted earning per share as there are no dilutive potential equity shares.

14. AS 22: Accounting for taxes on income:

The Company provides for current taxes at current rates under the provisions of the Income Tax Act, 1961. Disputed taxes are not provided for, but disclosed in the notes on accounts. The Company provides for deferred tax arising on account of temporary and reversible timing differences on account of depreciation, employees benefits and expenditure which are allowed under the Income Tax Act only on payment basis.

15. AS 25: Interim financial reporting:

Quarterly results are published in accordance with the guidelines issued by the Securities and Exchange Board of India. The recognition and measurement principles as laid down in the standard are followed with respect to such results. Quarterly financial results are also subjected to a limited financial review by the Auditors as required.

16. AS 26: Intangible Assets:

The Company capitalizes non integral software as intangible assets. The intangible assets are depreciated at the rates applicable to computers in Schedule XIV of the Companies Act, 1956 under the Straight Line Method.

17. AS 28: Impairment of Assets:

The Company makes an assessment on the Balance Sheet date to determine whether there is any indication of impairment in the carrying amount of the Companys fixed assets. If any such indication exists, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

18. AS 29: Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions for expenses are made on estimated basis, based upon the judgment of the Company.

b) Contingent Liabilities are not provided for but disclosed in the notes on accounts.

c) There are no contingent assets.

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