1.  Accounting convention
 
 1.1 Financial statements are prepared in accordance with the generally
 accepted accounting principles including accounting standards in India
 under historical cost convention except so far as they relate to
 revaluation of certain land and buildings.
 
 1.2 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 the Revised Schedule VI to the Companies Act, 1956.
 Based on the nature of products and the time between the acquisition of
 assets for processing and their realization in cash and cash
 equivalents, the Company has determined its operating cycle as twelve
 months for the purpose of current - noncurrent classification of
 assets and liabilities.
 
 1.3 Use of estimates
 
 The preparation of the financial statements in conformity with the
 generally accepted accounting principles requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities on the date of the financial statements, disclosure of
 contingent liabilities and reported amounts of revenues and expenses
 for the year. Estimates are based on historical experience, where
 applicable and other assumptions that management believes are
 reasonable under the circumstances. Actual results could vary from
 these estimates and any such differences are dealt with in the period
 in which the results are known/ materialize.
 
 2.  Fixed assets and depreciation / amortization
 
 2.1 Cost of all civil works (including electrification and fittings) is
 capitalized with the exception of alterations and modifications of a
 capital nature to existing structures where the cost of such alteration
 or modification is Rs 1,00,000 and below. Other fixed assets, including
 intangible assets and assets given on lease, where the cost exceeds Rs.
 10,000 and the estimated useful life is two years or more, is
 capitalized. Cost of initial spares and tools is capitalized along with
 the respective assets. Cost of fixed assets is net of eligible credits
 under CENVAT / VAT Scheme. Expenditure directly related and incidental
 to construction / acquisition of tangible / intangible assets are
 capitalized up to the date the assets are ready for their intended use.
 Interest and other related costs, including amortized cost of
 borrowings attributable only to major projects are capitalized as part
 of the cost of the respective assets. Exchange differences are
 capitalized to the extent dealt with in para 5.2 below.
 
 2.2 Assets are depreciated / amortized, as below, on straight line
 basis:
 
 a) Leasehold land over the period of lease
 
 b) Leasehold land and buildings subject to revaluation, is calculated
 on the respective revalued amounts, over the balance useful life as
 determined by the valuers in the case of buildings and as per (a) above
 in the case of land;
 
 c) Buildings, plant and machinery (except assets subject to impairment)
 and other assets, including assets given on lease and assets in leased
 premises / customer premises, over their estimated useful lives or
 lives derived from the rates prescribed in Schedule XIV to the
 Companies Act, 1956, whichever is lower and in the case of intangible
 assets, over their estimated useful life;
 
 d) Assets subject to impairment, on the asset''s revised carrying
 amount, over its remaining useful life.
 
 2.3 Depreciation / amortization is provided on a pro-rata basis from
 the month the assets are put to use during the financial year. In
 respect of assets sold or disposed off during the year, depreciation /
 amortization is provided till the month of sale or disposal of the
 assets.
 
 3.  Investments
 
 Non-current investments are stated at cost. However, provision for
 diminution is made to recognize a decline, other than temporary, in the
 value of the investment, if any. Current investments are valued at
 lower of cost and fair value.
 
 4.  Inventories
 
 4.1 Inventories are valued at lower of cost and net realizable value;
 cost being ascertained on the following basis:
 
 - Stores, spares, consumable tools, raw materials and components and
 work-in-progress: On monthly moving weighted average basis.
 
 - In respect of works-made components, cost includes applicable
 production overheads.
 
 - Finished / trading goods: under absorption costing method.
 
 4.2 Cost includes taxes and duties and is net of eligible credits under
 CENVAT / VAT Schemes.
 
 4.3 Cost of patterns and dies is amortized equally over five years.
 
 4.4 Surplus / obsolete / slow moving inventories are adequately
 provided for.
 
 5.  Foreign currency transactions and derivatives
 
 5.1 Foreign currency transactions are recorded at the rates prevailing
 on the date of the transaction. Monetary assets and liabilities in
 foreign currency are translated at closing rate. Exchange differences
 arising on settlement or translation of monetary items other than those
 mentioned in para 5.2 below are recognized as income or expense in the
 Statement of Profit and Loss.
 
 5.2 Exchange differences on translation or settlement of long term
 foreign currency monetary items (i.e. whose term of settlement exceeds
 twelve months from date of its origination) at rates different from
 those at which they were initially recorded or reported in the previous
 financial statements, in so far as it relates to acquisition of
 depreciable assets are adjusted to the cost of the assets. In other
 cases, these are accumulated in Foreign currency monetary item
 translation difference account and amortized by recognition as income
 or expense in each period over the balance term of such items till
 settlement occurs but not beyond March 31, 2020.
 
 5.3 Gains and losses on certain forward contracts designated as
 effective Cash flow hedges are recognized in the Hedge Reserve Account
 till the underlying forecasted transaction occurs.
 
 5.4 Gains and losses on all other derivatives (including forward
 contracts not designated as Cash flow hedge) are recognized in the
 Statement of Profit and Loss. Premium or discount on forward contracts
 is amortized over the life of the contract.
 
 5.5 Investments in equity capital of companies registered outside India
 are carried in the Balance Sheet at the rates prevailing on the date
 of the transaction.
 
 5.6 Income / expenditure of overseas branches are recognized at the
 average rate prevailing during the month in which transaction occurred.
 
 6.  Amortization of deferred expenditure
 
 Expenditure incurred on raising loans is amortized over the period of
 such borrowings. Premium paid on prepayment of any borrowing is
 amortized over the unexpired period thereof or sixty months, whichever
 is less. Expenditure incurred on issue of debentures is adjusted
 against Securities Premium Account.
 
 7.  Segment Reporting
 
 The Company''s primary segment is identified as business segment based
 on nature of product, risks, returns and the internal business
 reporting system and secondary segment is identified based on
 geographical location of the customers.  As per Accounting Standard -
 17, the Company is principally engaged in a single business segment
 viz. Commercial vehicles and related components.
 
 8.  Revenue recognition
 
 8.1 Revenue from sale of products is recognized on dispatch or
 appropriation of goods in accordance with the terms of sale and is
 inclusive of excise duty. Revenue arising due to price escalation claim
 is recognized in the period when such claim is made in accordance with
 terms of sale.
 
 8.2 Revenue from services is recognized in accordance with the specific
 terms of contract on performance.
 
 8.3 Other operating revenues comprise of income from ancillary
 activities incidental to the operations of the Company and is recognized
 when the right to receive the income is established as per the terms of
 the contract.
 
 9.  Leases
 
 9.1 Leases in which the Company transfers substantially all the risks
 and rewards of ownership of the asset are classified as finance leases.
 Assets given under finance lease are recognized as a receivable at an
 amount equal to the net investment in the lease. After the initial
 recognition, the Company apportions lease rentals between principal
 repayment and interest income so as to achieve a constant periodic rate
 of return on the net investment outstanding in respect of the finance
 lease. The interest income is recognized in the Statement of Profit and
 Loss. Initial direct costs such as legal costs, brokerage costs, etc.,
 are recognized immediately in the Statement of Profit and Loss.
 
 9.2 Leases in which the Company does not transfer substantially all the
 risks and rewards of ownership of the asset are classified as operating
 leases. Assets subject to operating leases are included in fixed
 assets. Lease income on an operating lease is recognized in the
 Statement of Profit and Loss on a straight line basis over the lease
 terms. Costs, including depreciation, are recognized as an expense in
 the Statement of Profit and Loss. Initial direct costs such as legal
 costs, brokerage costs etc. are recognized immediately in the Statement
 of Profit and Loss.
 
 10.  Government grants
 
 Grants in the form of capital/investment subsidy are treated as Capital
 reserve. Export incentives and incentives in the nature of subsidies
 given by the Government are reckoned in revenue in the year of
 eligibility.
 
 11.  Research and Development Costs
 
 Expenditure on the design and production of prototypes is charged to
 revenue as incurred. Product development costs, including knowhow
 developed / acquired, incurred on new vehicle/ engine platforms,
 variants on existing platforms and aggregates are recognized as
 Intangible assets and amortized.
 
 12.  Employee benefits
 
 12.1 Short term employee benefit obligations are estimated and provided
 for.
 
 12.2 Post-employment benefits and other long term employee benefits
 
 - Defined contribution plans:
 
 Company''s contribution to provident fund, superannuation fund, employee
 state insurance and other funds are determined under the relevant
 schemes and / or statute and charged to revenue.
 
 - Defined benefit plans and compensated absences:
 
 Company''s liability towards gratuity, other retirement benefits and
 compensated absences are actuarially determined at each balance sheet
 date using the projected unit credit method. Actuarial gains and losses
 are recognized in revenue.
 
 13.  Product warranties
 
 Provision for product warranties is made for contractual obligations in
 accordance with the policy in force and is estimated for the unexpired
 period.
 
 14.  Deferred tax
 
 Deferred tax is recognized on timing differences, being the difference
 between taxable income and accounting income that originate in one
 period and are capable of reversing in one or more subsequent periods.
 
 Deferred tax asset pertaining to unabsorbed depreciation and carry
 forward of losses are recognized only to the extent there is a virtual
 certainty of its realization.