Automobile Products of India Ltd. कंपली की लेखा नीति

Mar 31, 2024

i Property, Plant and Equipment
Recognition and Measurement

Property, Plant and Equipment are stated at cost of acquisition including attributable interest and finance costs, if any, till the date of acquisition/
installation of the assets less accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditure relating to Property,
Plant and Equipment is capitalised only when it is probable that future economic benefits associated with the item will flow to the Company and
the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the Statement of Profit and Loss as
incurred. The cost and related accumulated depreciation are eliminated from the financial statements, either on disposal or when retired from
active use and the resultant gain or loss are recognised in the Statement of Profit and Loss.

Capital work-in-progress, representing expenditure incurred in respect of assets under development and not ready for their intended use, are
carried at cost. Cost includes related acquisition expenses, construction cost, related borrowing cost and other direct expenditure.

Depreciation/ Amortisation

- No deprecation is charged on Freehold Land.

- Leasehold Land is amortised over the remaining period of lease.

- Depreciation on other tangible assets is provided on straight line basis considering the useful lives prescribed in Schedule II to the Act on a pro¬
rata basis.

ii Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

a Financial Assets
Initial Recognition

In the case of financial assets, which are not recorded at fair value through profit or loss (FVTPL), financial assets are recognised initially at
fair value plus transaction costs that are directly attributable to the acquisition of the financial asset. Purchases or sales of financial assets
that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are
recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

Classification

The Company classifies its financial assets either at Fair Value through Profit or Loss (FVTPL), Fair Value through Other Comprehensive
Income (FVTOCI) or at amortised Cost, based on the Company''s business model for managing the financial assets and their contractual
cash flows.

Subsequent Measurement

For purposes of subsequent measurement, financial assets are classified in following categories:

Financial Assets at Amortised Cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model with an objective to
hold these 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. Interest income from these financial assets
is included in finance income using the effective interest rate ("EIR") method. Impairment gains or losses arising on these assets are
recognised in the Statement of Profit and Loss.

Financial Assets Measured at Fair Value

Financial assets are measured at fair value through Other Comprehensive Income ("OCI") if these financial assets are held within a
business model with an objective to hold these assets in order to collect contractual cash flows or to sell these financial assets 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. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or
losses, interest revenue and foreign exchange gains and losses which are recognised in the Statement of Profit and Loss.

Financial asset not measured at amortised cost or at fair value through OCI is carried at FVTPL.

Impairment of Financial Assets

In accordance with Ind AS 109, the Company applies the expected credit loss ("ECL") model for measurement and recognition of
impairment loss on financial assets and credit risk exposures.

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables. Simplified approach does not
require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECL at each
reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a
significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for
impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the
instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to
recognising impairment loss allowance based on 12-month ECL.

ECL is the difference between all contractual cash flows that are due to the group in accordance with the contract and all the cash flows that
the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which
results from default events that are possible within 12 months after the reporting date.

De-recognition of Financial Assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the
rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial
asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does
not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all
of the risks and rewards of the transferred assets, the transferred assets are not derecognised.

b Equity Instruments and Financial Liabilities

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements
entered into and the definitions of a financial liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity
instruments which are issued for cash are recorded at the proceeds received, net of direct issue costs. Equity instruments which are issued
for consideration other than cash are recorded at fair value of the equity instrument.

Financial Liabilities
Initial Recognition

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings and payables as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable
transaction costs.

Subsequent Measurement

The measurement of financial liabilities depends on their classification, as described below
Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at
FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or
losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

Financial liabilities at amortised cost

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Any
difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the
borrowings in the Statement of Profit and Loss.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the
EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

De-recognition of Financial Liabilities

Financial liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled or expired. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as de-recognition of the original liability and recognition of a new liability.
The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

c Offsetting Financial Instruments

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company
currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and
settle the liability simultaneously.

iii Employee Benefits

a Defined Contribution Plan

Contributions to defined contribution schemes such as provident fund, employees’ state insurance, labour welfare are charged as an
expense based on the amount of contribution required to be made as and when services are rendered by the employees. The above
benefits are classified as Defined Contribution Schemes as the Company has no further obligations beyond the monthly contributions.

b Defined Benefit Plan

The Company also provides for gratuity which is a defined benefit plan, the liabilities of which is determined based on valuations, as at the
balance sheet date, made by an independent actuary using the projected unit credit method. Re-measurement, comprising of actuarial gains
and losses, in respect of gratuity are recognised in the OCI, in the period in which they occur. Re-measurement recognised in OCI are not
reclassified to the Statement of Profit and Loss in subsequent periods. Past service cost is recognised in the Statement of Profit and Loss in
the year of plan amendment or curtailment. The classification of the Company’s obligation into current and non-current is as per the actuarial
valuation report.

c Leave entitlement and compensated absences

Accumulated leave which is expected to be utilised within next twelve months, is treated as short-term employee benefit. Leave entitlement,
other than short term compensated absences, are provided based on a actuarial valuation, similar to that of gratuity benefit. Re¬
measurement, comprising of actuarial gains and losses, in respect of leave entitlement are recognised in the Statement of Profit and Loss in
the period in which they occur.

d Short-term Benefits

Short-term employee benefits such as salaries, wages, performance incentives etc. are recognised as expenses at the undiscounted
amounts in the Statement of Profit and Loss of the period in which the related service is rendered. Expenses on non-accumulating
compensated absences is recognised in the period in which the absences occur.

iv Cash and Cash Equivalents

Cash and cash equivalents in the Balance Sheet comprises of cash at banks and on hand, which are subject to an insignificant risk of changes
in value.

v Borrowing Costs

Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds. Also, the EIR amortisation
is included in finance costs.

Borrowing costs relating to acquisition, construction or production of a qualifying asset which takes substantial period of time to get ready for its
intended use are added to the cost of such asset to the extent they relate to the period till such assets are ready to be put to use. All other
borrowing costs are expensed in the Statement of Profit and Loss in the period in which they occur.

vi Government Grant

The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied
with, and the grants will be received.

Government grants relating to the purchase of property, plant and equipment are treated as deferred income and are recognized in net profit in
the statement of profit and loss on a systematic and rational basis over the useful life of the asset.

Government grants related to revenue are recognized on a systematic basis in net profit in the statement of profit and loss over the periods
necessary to match them with the related costs which they are intended to compensate.

When the Company receives grants of non-monetary assets, the asset and the grant are recorded at fair value amounts and released to profit or
loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset i.e. by equal annual instalments.

vii Revenue Recognition

a Revenue in respect of sale of goods is recognised when significant right and rewards are transferred to the customer. Revenue on account of
consultancy income is recognised as per the terms of the respective service / transaction.

b Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest
income is included under the head "other income" in the Statement of Profit and Loss.

viii Income Tax

Income tax comprises of current and deferred income tax. Income tax is recognised as an expense or income in the Statement of Profit and
Loss, except to the extent it relates to items directly recognised in equity or in OCI.

a Current Income Tax

Current income tax is recognised based on the estimated tax liability computed after taking credit for allowances and exemptions in
accordance with the Income Tax Act, 1961. Current income tax assets and liabilities are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date.

b Deferred Income Tax

Deferred tax is determined by applying the Balance Sheet approach. Deferred tax assets and liabilities are recognised for all deductible
temporary differences between the financial statements’ carrying amount of existing assets and liabilities and their respective tax base.
Deferred tax assets and liabilities are measured using the enacted tax rates or tax rates that are substantively enacted at the Balance Sheet
date. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the period that includes the enactment date.
Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the
temporary differences can be utilised. Such assets are reviewed at each Balance Sheet date to reassess realisation.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities. Current tax
assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.

Minimum Alternative Tax ("MAT") credit is recognised as an asset only when and to the extent it is probable that the Company will pay
normal income tax during the specified period.

ix Inventories

Inventories are valued at lower of cost or net realisable value.

x Impairment of Non-Financial Assets

As at each Balance Sheet date, the Company assesses whether there is an indication that a non-financial asset may be impaired and also
whether there is an indication of reversal of impairment loss recognised in the previous periods. If any indication exists, or when annual
impairment testing for an asset is required, the Company determines the recoverable amount and impairment loss is recognised when the
carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined:

- In case of an individual asset, at the higher of the assets'' fair value less cost to sell and value in use; and

- In case of cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of cash generating
unit''s fair value less cost to sell and value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current
market assessments of the time value of money and risk specified to the asset. In determining fair value less cost to sell, recent market
transaction are taken into account. If no such transaction can be identified, an appropriate valuation model is used.

Impairment losses of continuing operations, including impairment on inventories, are recognised in the Statement of Profit and Loss, except for
properties previously revalued with the revaluation taken to OCI. For such properties, the impairment is recognised in OCI up to the amount of
any previous revaluation.

When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of
impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised,
then the previously recognised impairment loss is reversed through the Statement of Profit and Loss.

xi Trade receivables

A receivable is classified as a ‘trade receivable’ if it is in respect of the amount due on account of goods sold or services rendered in the normal
course of business. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the EIR method,
less provision for impairment.

xii Trade payables

A payable is classified as a ‘trade payable’ if it is in respect of the amount due on account of goods purchased or services received in the normal
course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year
which are unpaid. These amounts are unsecured and are usually settled as per the payment terms stated in the contract. Trade and other
payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially
at their fair value and subsequently measured at amortised cost using the EIR method.

xiii Earnings Per Share

Basic earnings per share is computed by dividing the net profit or loss for the period attributable to the equity shareholders of the Company by
the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during
the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that
have changed the number of equity shares outstanding, without a corresponding change in resources.

Diluted earnings per share is computed by dividing the net profit or loss for the period attributable to the equity shareholders of the Company and
weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of
equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are
adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding
equity shares).

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Mar 31, 2014

A. Basis of accounting

The accounts are prepared on a historical cost convention except as stated otherwise. The Company follows an accrual basis of accounting. The financial statements are prepared in accordance with accounting standards as specified in the Companies (Accounting Standards) Rules, 2006 and the other relevant provisions of the Companies Act, 1956.

B. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities, at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

C. Fixed Assets

Tangible assets are stated at original cost of acquisition / construction / installation net off accumulated depreciation and impairment loss, if any. Cost includes cost of acquisition, construction and installation, taxes, duties, freight, other incidental expenses related to the acquisition, construction, installation and borrowing costs incurred during pre-operational period.

D. Depreciation

Depreciation on tangible assets (including on assets acquired under finance lease) is provided on written down value at the rates specified in Schedule XIV of the Companies Act, 1956.

E. Inventories

Inventories are valued at lower of cost or net realisable value.

F. Employee Benefits

Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit and Loss account of the year in which the related service is rendered.

Retirement benefits in the form of Gratuity are considered as defined benefit obligations and aro provided on the basis of the actuarial valuation, using the projected unit credit method as at the date of the Balance Sheet.

G. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

H. Accounting for Taxes on Income

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

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantially enacted at the Balance Sheet date. Deferred tax assets are recognized only to the extent there is virtual certainty that the assets can be realized in the future. Deferred tax assets are reviewed as at each Balance Sheet date.

I. Impairment of assets

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction in the carrying amount is treated as an impairment loss and is recognised in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost.

J. Revenue Recognition

Revenue in respect of sale of goods is recognised when significant right and rewards are transferred to customer. Revenue on account of brokerage is recognised on finalising of transactions

K. Earnings Per share

Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed and disclosed using weighted average number of common and dilutive common equivalent shares outstanding during the period, except when results would be anti dilutive.

L. Provisions, Contingent Liabilities & Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised as a liability but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

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Mar 31, 2012

A) BASIS OF ACCOUNTING :

The financial statements have been prepared under the historical cost convention, on accrual basis, in accordance with the Generally Accepted Accounting Principles (GAAP) in India and Accounting Standards as specified in Companies (Accounting Standards) Rules, 2006 as prescribed by the Central Government.

B) FIXED ASSETS:

a) Fixed assets are stated at the original cost of acquisition/construction installation, net of accumulated depreciation/amortization. Cost includes taxes, duties, freight and incidental expenses related to the acquisition, construction, installation and other pre-operational expenses.

b) Capital work-in-progress is stated at the amount expended up to the date of Balance Sheet including advances for capital expenditure.

C) DEPRECIATION :

As there are no depreciable assets, no depreciation is provided for this year.

D) CURRENT ASSETS AND LIABILITIES :

In the opinion of the Board, the current assets would, in the normal course of the business, realize the value stated in the Balance Sheet. All known and unsettled liabilities have been provided for in the books.

E) CONTINGENT LIABILITY :

Liabilities of contingent nature are disclosed at their estimated value in the Notes to Accounts as per AS- 29

F) IMPAIRMENT OF ASSETS :

The Company recognizes impairment of all assets other than the assets which are specifically excluded under AS -28 on Impairment of Assets issued by the ICAI after comparing the asset's recoverable value with its carrying amounts in the books. In case the carrying amount exceeds the recoverable value, impairment losses are provided for.

G) BORROWING COSTS :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. Other borrowing costs are charged off to Revenue.

H) INVESTMENTS:

Investments that are readily realizable and are intended to be held for not more than one year from the date on which such investment are made are classified as current investments. All the other investments are classified as long term investments. Current investments are carried at cost or fair value, whichever is lower. Long term investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of investments, such reduction being determined and made for each investment individually.

I) ACCOUNTING FOR TAXES ON INCOME :

a) Current tax is determined as the amount of tax payable in respect of taxable income of the year.

b) Deferred tax is recognized subject to consideration of prudence, on timing difference, being the difference between taxable income and accounting income that originates in one period and is capable of reversal in one or more subsequent periods and measured using prevailing enacted or substantively enacted tax rates.

J) EARNINGS PER SHARE :

Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed and disclosed using weighted average number of common and dilutive common equivalent shares outstanding during the period, except when results would be anti dilutive.

K) REVENUE RECOGNITION :

Incomes & Expenses are accounted for on Accrual Basis.

L) MISCELLANEOUS EXPENDITURE:

Preliminary Expenses are amortized over a period of 5 years.

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Mar 31, 2011

BASIS OF ACCOUNTING :

The financial statements are prepared under historical cost convention on an accrual basis and are in accordance with the requirements of the Companies Act, 1956.

FIXED ASSETS :

The fixed assets are stated at their original cost including incidental expenses related to acquisition and installation, less accumulated depreciation. Cost comprises of the purchase price and any other attributable Cost of bringing the asset to its working condition for its intended use.

DEPRECIATION :

Depreciation is provided on the Written Down Value method at the rates specified in schedule XIV to the Companies Act 1956 . There is no depreciation provided for this year.

CURRENT ASSETS AND LIABILITIES:-

In the opinion of the board , the current assets would in the normal course of the business realize the value stated in the Balance Sheet. All known and unsettled liabilities have been provided for in the books.

CONTINGENT LIABILITY

Liabilities of contingent nature are disclosed at their estimated value in the Notes on accounts As per AS- 29

IMPAIRMENT OF ASSETS

The company recognises impairment of all assets other than the assets which are specifically excluded under AS -28 on Impairment of Assets issued by the ICAI after comparing the asset's recoverable value with its carrying amounts in the books. In case the carrying amount exceeds the recoverable value, impairment losses are provided for.

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Mar 31, 2003

I. Method of Accounting:

The financial statements are prepared on the basis of historical cost convention.

ii. Fixed Assets and Depreciation:

Fixed assets are stated at cost less accumulated depreciation.

Depreciation is provided on the straight line method on a pro-rata basis at the rates specified under Schedule XIV of the Companies Act, 1956, except for items costing less than Rs.5,0007- each, which are depreciated fully in the year of acquisition.

iii. Inventories:

Loose tools are valued at cost. Other inventories are valued at cost or net realisable value whichever is lower.

iv. Retirement benefits:

Provident Fund contributions are provided and paid at applicable rates to the Provident Fund authorities.

Gratuity liability is covered under a Group Gratuity Scheme with the Life Insurance Corporation of India (LIC)

v. Deferred Revenue Expenditure:

Liability under voluntary retirement scheme is charged to profit and loss account over a period of 5 years from the accounting year in which the liability is incurred.

1.B. The Board for Industrial and Financial Reconstruction (BIFR) has in its order dated 14.11.1996 declared the Company as a "Sick Industrial Company" within the meaning of Section 3( 1 )(o) of the Sick Industrial Companies Act, 1985. The Company suspended operations at the Bhandup Vehicles Division from 28th January 1993.

The BIFR has approved the rehabilitation Scheme for the Company on 14.11.1996. In December 1996, the labour union at Bhandup went on appeal for the stay of the sanctioned scheme of BIFR. Appellate Authority for Industrial and Financial Reconstruction (AAIFR) confirmed the BIFR scheme, in May 1997. The Vehicle Division at Bhandup stood closed effective from end January 1997.

The sanctioned scheme of BIFR and the Order passed by AAIFR provided for.

i. Closure of Vehicles Division at Bhandup and settlement of labour.

ii. One time settlement (OTS) with the Financial Institutions.

iii. Deferment of various dues to Government and Semi- government bodies and payment thereon in instalment with interest;

iv. Payment to pressing creditors

v. Relinquishment of arrears of dividend by preference shareholders and redemption of Preference Shares.

vi. The promoters were required to bring in the required funds for implementing the rehabilitation scheme.

vii. After the hearing on 24.5.2001, the BIFR ordered ;

(a) Extension of the Accounting year to 30.09.2001 and

(b) Conversion of the funds brought in by the Promoters to meet the revised cost of the Scheme, into equity and its de-rating, so as to keep the equity capital at Rs.7 crores.

BIFR also further directed that after this processes are completed and the latest Audited Accounts show positive net worth, they would decide whether the company could be discharged out of their purview.

The accounts for the period ended 30.09.2001 and 31-03-2002 incorporated the consequential adjustment in this regard. The accounts for the year ended 31-03-0-2003 also shows a positive net worth taking into account the available shareholders funds.

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Sep 30, 2001

I. Method of Accounting:

The financial statements are prepared on the basis of historical cost convention.

ii. Fixed assets and, Depreciation:

Fixed assets are stated at cost less accumulated depreciation.

Depreciation is provided on the straight line method on a pro-rata basis at the rates specified under Schedule XIV of the Companies Act, 1956, except for items costing less than Rs.5,000/- each, which are depreciated fully in the year of acquisition.

iii Inventories:

Loose tools are valued at cost. Other inventories are valued at cost or net realisable value whichever is lower.

iv Retirement benefits:

Provident Fund contributions are provided and paid at applicable rates to the Provident Fund authorities.

Gratuity liability is covered under a Group Gratuity Scheme with the Life Insurance Corporation of India (LIC) v Deferred Revenue Expenditure:

Liability under voluntary retirement scheme is charged to profit and loss account over a period of 5 years from the accounting year in which the liability is incurred.

1. B.The Board for Industrial and Financial Reconstruction (BIFR) has

in its order dated 14.11.1996 declared the Company as a "Sick Industrial Company" within the meaning of Section 3(1 )(o) of the Sick Industrial Companies Act, 1985. The Company suspended operations at the Bhandup Vehicles Division from 28th January 1993.

The BIFR has approved the rehabilitation Scheme for the Company on 14.11.1996. in December 1996, the labour union at Bhandup went on appeal for the stay of. the sanctioned scheme of BIFR. Appellate Authority for Industrial and Financial Reconstruction (AAIFR) confirmed the BIFR scheme in May 1997. The Vehicle Division at Bhandup stood closed effective from end January 1997.

The sanctioned scheme of BIFR and the Order passed by AAIFR provided for.

i. Closure of Vehicles Division at Bhandup.

ii. One time settlement (OTS) with the Financial Institutions.

iii. Deferment of various dues to Government and Semi-government bodies and payment thereon in instalment with interest;

iv. Payment to pressing creditors

v. Relinquishment of arrears of dividend by preference shareholders and redemption of preference shares.

vi. The promoters were required to bring in the required funds for implementing the rehabilitation scheme.

vii. After the hearing on 24.05.2001, the BIFR ordered

a. Extension of accounting year to 30.09.2001 and

b. Conversion of the funds brought in by the promoters to meet the revised cost of the scheme, into equity and its de-rating, so as to keep the capital at 7 crores.

BIFR also further directed that these process are completed and the latest audited accounts show positive net worth, they would decide whether the company could be discharged out of their purview.

The accounts for the period ended 30.09.2001 incorporate the consequential adjustment in this regard. The accounts for the period show a positive net worth taking into account the available shareholders fund.

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Mar 31, 2000

(i) Method of Accounting: The financial statements are prepared on the basis of historical cost convention.

(ii) Fixed assets and Depreciation: Fixed assets are stated at cost less accumulated depreciation.

Depreciation is provided on the straight line method on a pro- rata basis at the rates specified under Schedule XIV of the Companies Act, 1956, except for items costing less than Rs.5,000/- each, which are depreciated fully in the year of acquisition.

(iii) Inventories: Loose tools are valued at cost. Other inventories are valued at cost or net realisable value whichever is lower.

(iv) Retirement benefits: Provident Fund contributions are provided and paid at applicable rates to the Provident Fund authorities.

Gratuity liability is covered under a Group Gratuity Scheme with the Life Insurance Corporation of India (LIC)

(v) Deferred Revenue Expenditure: Liability under voluntary retirement scheme is charged to profit and loss account over period of five years from the accounting year in which the liability is incurred.

2. (a) In respect of sundry debtors and loans and advances, provision

for bad and doubtful debts and loans and advances has been made by the management; however it is subject to any adjustment which may arise on final settlement of dues.

(b) Sundry debtors and loans and advances considered good include Rs.25.11 lakhs and Rs.8.72 lakhs (previous year Rs.25.11 lakhs and Rs. 8.72 lakhs) respectively, in respect of which the company has filed suits against parties for the recovery thereof.

(c) Sundry debtors, loans and advances and creditors are subject to Confirmation and consequent reconciliation and adjustment if necessary.

3. Owing to acute problem of liquidity, the Company has not deposited the Provident Fund (PF) dues, Employees State Insurance (ESI) dues and tax deducted at source with the appropriate authorities. Deferment in respect of these liabilities has been provided in the BIFR approved Scheme.

4. The Company has taken Group Gratuity Master Insurance Policies with Life Insurance Corporation of India (LIC) for future payments of gratuities to retiring employees. The premium thereon has been so computed as to cover the liability under the Scheme in respect of all employees at the end of their future anticipated service with the Company. However, if the liability for payment of gratuity is in excess of the amounts available with the LIC the shortfall will have to be made good by the Company. The quantum of such shortfall has not been ascertained or provided for,

During the year 1994-95 the Company announced a Voluntary Retirement Scheme (VRS) and many employees opted for the same. The Company has paid the gratuity from its funds due to non- availability of funds from LIC on account of non-payment of premium.

In view of the above, the future liability in respect of gratuity stands diminished and arrears of premium have to be recomputed. The matter has been discussed with the LIC and the liabilities need to be computed in view of the subsequent settlement of the remaining employees of the Bhandup division under the BIFR scheme.

Therefore premia due for the years ended 31st March, 1994, 1995 1996, 1997, 1998 ,1999 and 2000 have not been ascertained and provided in the books.

5. Contingent liabilities not provided for

(a) Demands aggregating Rs. 38.75 lakhs (Previous year Rs.38.75 lakhs) raised by the income-tax authorities for various assessment years in respect of which the company is in appeal;

(b) Delayed payment charges and claims against the Company not acknowledged as debts: Not ascertained.

(c) In respect of warranty claims received but not processed upto 31st March, 2000 the amount of liability is not determined.

6. Pending Sales tax matters in respect of Aurangabad Division aggregating Rs. 10.86 (previous year Rs. 25.17 lakhs) lakhs in appeal the outcome of which is awaited.

7. The company has filed a suit against certain parties for the eviction from its land at Bhandup measuring 2,288 square meters.

8. Provision no longer required written back shown in other income is in respect of the closed Bhandup unit and pertains to balances prior to 1995 for which the company has not received any claims.

Notes :

(A) The figures for consumption of different categories of raw materials and components arrived at by valuing the actual quantity of raw materials and components issued from stores at the average rate arrived at on the basis of opening stock and purchases of the first eleven months. The difference between the consumption arrived at as above and the book value of consumption (arrived at as stated below) is included in others.

The book value of consumption of raw materials and components has been arrived at on the basis of opening stocks plus purchases less closing stock and accordingly includes adjustments for excesses and shortages observed on physical verification of stock.

(B) The item spare parts in paragraph 4(c) of Part II of Schedule VI to the Companies Act, 1956 is interpreted to mean spare parts used in manufacture of finished products or sold as such and not spare parts used for repairs and maintenance of plant and machinery.