NOTES FORMING PART OF THE FINANCIAL STATEMENTS

1 SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of accounting and brparation of financial statements :

The financial statements have been brpared on historical cost convention and as a going concern basis and in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

The financial statements are brpared under the historical cost convention, except for certain Fixed Assets which are carried at revalued amounts. The company follows mercantile system of accounting and recognizes income and expenditure on accrual basis except those with significant uncertainties and interest payable on delayed payment of statutory dues.

1.2 Use of estimates

The brparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known/materialize.

1.3 Inventories :

Inventories are valued at cost on FIFO basis or net realizable value whichever is lower; cost is ascertained on the following basis :

a) Raw Material, Packing Material, Tools, Dies, Spares and Consumable are valued at cost plus direct cost incurred to bring the stock to its existing level.

b) Work in progress/ Finished Goods are valued at cost of manufacturing based on cost of Raw material and labour and overheads cost up to the relevant stage of completion.

c) Tools and Dies under process have been valued on percentage completion based on estimated cost of production and development of respective tools and dies.

d) Cost includes taxes and duties as applicable.

1.4 Cash flow statement:

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.5 Events occurring after the date of Balance Sheet :

Material events occurring after the date of Balance Sheet are considered up to the date of approval of the accounts by the board of directors. There are no substantial events having an impact on the results of the current year Balance Sheet.

1.6 Debrciation :

Debrciation on Fixed Assets is provided to the extent of debrciable amount on the Straight Line Method (SLM). Debrciation is provided based on useful life of the assets as brscribed in Schedule II to the Companies Act, 2013.

Intangible assets are written off over the period of 5 years & Research & Development is written off over 10 years. Debrciation on fixed assets, added/disposed off during the year, is provided on pro-rata monthly basis with reference to date of addition/disposal.

In case of revalued Asset the debrciation is calculated as per above method, and the difference between revalued value and original value is reduced from the total Debrciation and same is also reduced from the Revaluation Reserve.

1.7 Revenue recognition :

Sales are accounted on net off less Sales Returns/Rejection. Revenue from sale of products is recognized upon passage of title to the customer on acceptance of goods which generally coincides with the dispatch of materials. Sales include excise duty but exclude sales tax and value added tax.

Dividend Income is recognized when the right to receive the dividend is unconditional at the Balance Sheet date. Interest Income is recognized on accrual basis.

1.8 Fixed Asset : Tangible Assets

Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated debrciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost, if any and any cost directly attributable to bringing the asset to its working condition for its intended use.

Tools & Dies

Tools & Dies designed/ manufactured in house have been capitalized considering direct cost of the material, wages paid to tool room employees, and other incidental expenses and proportionate overheads including borrowing cost related

Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

Capital work in Progress :

The Expenditure which are of Capital nature and the assets for which it is incurred which has not come into existence/ put to use during the year is shown under this head.

1.9 Foreign currency transactions and translations :

Foreign Exchange transactions are accounted for at exchange rate brvailing on the date of transactions. Year-end monetary asset and liabilities in foreign currency are translated at the applicable year-end exchange rate and the resultant difference in case of revenue item is recognized as gain/loss for the year and in case of capital account the same is adjusted against the respective fixed asset.

The brmium or discount arising on forward exchange contract including those entered into, to hedge foreign currency risk of a firm commitment or highly probable forecast transaction other than those which are not intended for trading or speculative purpose, are amortized as expenses or income over the life of the contract. Exchange difference on such contract is recognized in the profit & loss account of the reporting period in which the exchange rate changes. Any profit or loss arising on cancellation or renewal of such forward exchange contract is recognized as income or as expense of the year.

The Company has decided not to exercise the option available under amendment to AS-11 relating to "the effects of changes in Foreign Exchange Rates" in respect of its long term foreign currency monetary items and accordingly is continuing to follow the principles laid down in AS-11 before such amendment.

1.10Government grants, subsidies and export incentives :

Government grants and subsidies are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants/subsidy will be received. The same is treated as revenue/capital as per the scheme framed by the Government and the same is routed through statement of Profit & Loss account.

1.11 Investments :

Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties.

1.12 Employee benefits Costs :

Employee benefits include provident fund, gratuity fund and compensated absences.

Defined contribution plans

The Company's contributions to provident fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

Contribution in respect of Gratuity is made to the approved Gratuity Fund maintained by Life Insurance Corporation Of India Ltd. The liability in respect of Bonus and for Leave Encashment is provided on actual basis.

1.13 Employee Stock Options :

Employee Stock Options are evaluated and accounted on intrinsic value method as per the accounting treatment brscribed by Guidance Note on 'Accounting for Employee Share -Based Payments' issued by ICAI read with SEBI ( Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines 1999 issued by SEBI. The excess of market value, if any, of the stock option as on the date of grant over the exercise price of the options is recognized as deferred employee compensation and is charged to the profit & loss account on vesting basis over the vesting period of the option .The un-amortized portion of the deferred employee compensation is reduced from Employee Stock Option outstanding, which is shown under Reserves & Surplus.

1.14Borrowing costs :

Borrowing costs that are directly attributable to the acquisition, construction or production of fixed assets are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

1.15 Segment reporting:-

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.

1.16 Earnings per share :

Basic earnings per share is computed by dividing the profit/(loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/(loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period brsented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1.17 Taxes on income :

Tax Expenses comprises of Current Tax, Wealth Tax and Deferred Tax. A provision for current tax is made based on tax liability computed in accordance with relevant tax rates and tax laws.

Current and deferred tax relating to items directly recognised in equity and not in the Statement of Profit and Loss

Deferred Tax-Asset/ Liability :

The Accounting Standard 22 "Accounting for Taxes on Income" issued by the Institute of Chartered accountants of India, has become applicable to the Company. The Deferred Tax is recognized for all timing differences being the difference between "Taxable Income" and "Accounting Income" that originate in one period, and are capable of reversal in one or more subsequent periods and measured using relevant enacted tax rates. Deferred Tax Assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying value at each balance sheet date.

1.18 Research & Development:

Research & Development expenditure incurred on the identified product/ process is carried forward when its future recoverability can reasonably regarded as assured. Expenditure incurred till the commencement of production/process is carried forward under capital work in process. The expenditure carried forward is amortized over the period not exceeding ten years.

1.19lmpairment of assets :

The Management periodically assesses, using external and internal sources whether there is an indication that an asset may be impaired. If an asset is impaired, the company recognizes impairment loss as the excess of carrying amount of the asset over recoverable amount.

1.20Provisions, Contingent Liabilities and Contingent assets :

Provision is recognised in the accounts when there is a brsent obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to their brsent value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the financial statements.

Note 28 Disclosures under Accounting Standards -17 (Segment Reporting)

Based on the Accounting Standard - 17 on "Segment Reporting" (AS-17), issued by the Institute of Chartered Accountants of India, business segment of the company is the primary segment comprises of business of manufacturing sheet metal auto components and assemblies thereof. As the company operates only in a single primary business segment, therefore the disclosure requirements as per Accounting Standard 17 "Segment Reporting" are not applicable to the Company.

Note 33 Previous year's figures

Disclosure and brsentation made in the financial statements as per Revised Schedule VI. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

AS PER OUR REPORT OF EVEN DATE ATTACHED

FOR A. R. SULAKHE & CO.

CHARTERED ACCOUNTANTS

FIRM REGISTRATION NO. 110540W

CA. ANAND SULAKHE

Partner

Mem. No. 33451

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

PRAKASH NIMBALKAR Chairman DIN:00109947

SHIVAJI AKHADE Managing Director DIN: 00006755

UMESH CHAVAN Executive Director and CEO DIN: 06908966

R T GOEL Chief Financial Officer

ASHISH GUPTA Company Secretary

Place : Pune

Date : May 27