Note 1:- SIGNIFICANT ACCOUNTING POLICIES 1. Presentation of Financial Statements :- The financial statements have been brpared in compliance to the requirements of the Companies Act, 2013 (the Act), applicable Accounting Standards and the requirements of Schedule-III of the Act. 2. Basis of brparation:- The Financial statements have been brpared under the historical cost convention, in accordance with applicable Accounting Standards and provisions of the Companies Act, 2013 as adopted consistently by the Company except for deined beneit pension/other funds obligations that have been measured at fair value. The carrying value of certain monetary items denominated in foreign currency is translated at the exchange rates applicable on the date of balance sheet. 3. Use of Estimates:- The brparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of the revenue and the expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized. 4. Revenue/Expenditure recognition:-- Sales rebrsent the net invoice value of goods and services provided to third parties after deducting discounts, outgoing sales tax and other duties, and are recognized when all signiicant risks and rewards/ownership are transferred to the customer. Sale of material by products are included in other operating revenue. Dividend income is recognized when the Company's right to receive payment is established. Interest income is recognized on accrual basis in the income statement. Expenditure is accounted for on accrual basis and provision is made for all known losses and liabilities. 5. Fixed Assets:- The initial cost of Fixed Assets comprise its purchase price, including import duties, net of modvat/cenvet, less accumulated debrciation and include directly attributable costs of bringing an asset to working condition and location for its intended use, including borrowing costs relating to the qualified asset over the period upto the date the asset is ready to commence commercial production. Adjustments arising from exchange rate variations relating to long term monetary items attributable to debrciable fixed assets are capitalized. Machine spares that can be used only in connection with an item of fixed asset and their use is expected to be irregular are capitalized. The replacement of such spares is charged to revenue. 6. Assets in the course of construction:- Assets in the course of construction are capitalized in the assets under construction account. At the point when an asset is operating at management's intended use, the cost of construction is transferred to appropriate category of fixed assets. Costs associated with the commissioning of an asset are capitalized where the asset is available for use but incapable of operating at normal levels until a period of commissioning has been completed. 7. Intangible assets:- In accordance with the Accounting Standard (AS) 26 relating to intangible assets, all costs incurred on technical know how/license fee relating to production process are charged to revenue in the year of incurrence. Technical know how/license fee relating to process design/plants/facilities are capitalized at the time of capitalization of the said plant/ facility and amortized over a period of three years. 8. Impairment of Assets:- Carrying amount of cash generating units/Fixed assets are reviewed for impairment, if events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The excess of recoverable amount over the carrying value of the asset is charged, as an impairment loss to the statement 11. Investment:- Investments are classified into Current and Non Current investments. Current investments are stated at lower of cost or market value. Non Current investments are stated at cost and provision for diminution in value is made only if such decline is other than temporary in the opinion of management. 12. Foreign Exchange Transactions:- Transactions denominated in foreign currencies are normally recorded at the exchange rate brvailing at the time of transaction. Monetary items denominated in foreign currencies outstanding at the year end are translated at the exchange rate applicable as of that date. Non-monetary items denominated in foreign currency are valued at the exchange rate brvailing on the date of transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss except in cases of long term monetary items where these relate to the acquisition of debrciable fixed assets in which case these are adjusted to the carrying cost of such assets. Exchange difference on forward exchange contracts are recognized in the Statement of Profit and Loss in the year in which the exchange rate changes except in the cases these relate to the debrciable ixed assets in which case these are adjusted to the carrying cost of such assets 13. Borrowing Cost:- Interest on borrowing is expensed in the statement of profit & loss except where it relates to qualifying asset in which case it is capitalized. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. Exchange difference arising from short term foreign currency borrowings to the extent that they are regarded as adjustment to interest cost is treated as finance cost and charged to statement of profit and loss except where it relates to qualifying asset in which case it is capitalised. All other borrowing costs are charged to revenue. 14. Employees Benefits:- i Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which related service is rendered. The Company has defined contribution plans for post retirement benefits, namely, Employees Provident Fund Scheme administered through provident fund commissioner and Superannuation Fund administered through Life Insurance Corporation of India and the company's contribution are charged to revenue every year. ii Company's contribution to state plans namely Employees State Insurance Fund is charged to revenue every year. The company has defined benefit plans namely Leave encashment / Compensated absence and Gratuity, the liability for which is determined on the basis of an Acturial valuation at the end of the year. Gratuity Trust is administered through Life Insurance Corporation of India. iii Termination benefits are recognized as an expense immediately. iv Gain or Loss arising out of actuarial evaluation are recognized immediately in the profit and loss account as income or expense. 15. Claims:- Claims receivable are accounted for depending on the certainty of receipt and claims payable are accounted for at the time of acceptance. 16. Excise Duty:- Excise duty is accounted for on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouse. 17. Tax Expense:- Current tax is provided after taking credit for allowance and exemptions using the tax rates and laws that have been enacted or substantially enacted by the Balance Sheet date. In case of matters under appeal due to disallowance or otherwise, provision is made when the said liabilities are accepted by the company. Deferred tax is provided on all temporary differences at the Balance Sheet date between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax asset arising from temporary differences are recognized to the extent there is virtual certainity of realization of asset in future. 18. Leases:- Assets acquired under finance lease from 01.04.2001 are capitalized at the lower of their fair value or the brsent value of the minimum lease payments. 19. Provision and Contingent Liability:- Show cause notices issued by various government authorities are not considered as obligation, when the demand notices are raised against such show cause notice and are disputed by the company then these are classiied as possible obligation. Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is a probable that there will be an outflow of resources that can be reliably estimated, will be required to settle such an obligation . Contingent liabilities are not recognized but are disclosed in notes 20. Derivative Financial Instruments:- In respect of the Financial derivative contracts the brmium / interest paid and proit / loss on settlement is charged to statement of profit & loss. The contracts entered into other than forward contracts are marked to market at year end and the resultant profit / loss is charged to statement of profit & loss except in the cases these relate to the debrciable fixed assets in which case these are adjusted to the carrying cost of such assets. 21. Contingencies & Commitments:- In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Where the potential liabilities have a low probability of crystallizing or are very difficult to quantify reliably, these are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements, although there can be no assurance regarding the final outcome of the legal proceedings, the company does not expect them to have a materially adverse impact on the financial position or profitability. NOTE 22:- Consumption of Raw Materials and components has been computed by adding purchase to the opening stock and deducting closing stock veri_ed physically by the management. NOTE 23:- The Company is primarily engaged in the business of manufacturing of components for automobiles for Indian market which are governed by the same set of risk and returns. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard on Segment Reporting (AS-17). Accordingly, segment information has not been disclosed. NOTE 26:- Previous year _gures have been regrouped, reworked, rearranged and reclassi_ed wherever considered necessary |