(a) Basis of Preparation
 
 The financial statements have been prepared to comply in all material
 respects with the standards notified under The Companies (Accounting
 Standards) Rules, 2006 and the relevant provisions of the Companies
 Act, 1956. The financial statements have been prepared under historical
 cost convention on an accrual basis except in case of assets for which
 provision for impairment is made. The accounting policies have been
 consistently applied by the Company and except for the changes in
 accounting policy discussed more fully below, are consistent with those
 used in the previous year.
 
 (b) Use of estimates
 
 The preparation of financial statements requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities, the disclosure of contingent liabilities on the date
 of the financial statements and the reported amounts of revenues and
 expenses during the period reported. Actual results could differ from
 those estimated. Any revision to accounting estimates is recognised in
 accordance with the requirements of the respective accounting standard.
 
 (c) Inventories
 
 Inventories are valued as follows:
 
 Raw materials, components, stores and spares
 
 Lower of cost or net realizable value. However, materials and other
 items held for use in the production of inventories are not written
 down below cost if the finished products in which they will be
 incorporated are expected to be sold at or above cost. Cost is
 determined on a FIFO basis.  Cost includes relevant cost of bringing
 those material at their present location and condition.
 
 Work-in-progress and finished goods
 
 Lower of cost or net realizable value. Cost includes Direct Materials
 and Labour and a proportion of Manufacturing Overheads based on normal
 operating capacity or actual production whichever is less. Cost of
 finished goods includes excise duty.
 
 Net Realizable Value is the estimated selling price in the ordinary
 course of business, less estimated costs of completion and estimated
 costs necessary to make the sale.
 
 (d) Events occurring after the balance sheet date
 
 Material events occurring after the date of balance sheet are
 recognized and are dealt with appropriately in accordance with
 generally accepted accounting principles and as provided in AS-5
 
 (e) Depreciation
 
 Depreciation is provided using the Straight Line Method as per the
 rates prescribed under schedule XIV of the Companies Act, 1956 except
 in case of :
 
 Leasehold Land - Amortised over the period of the lease.
 
 Intangible Asset - Amortised over a period of 5 years as estimated by
 the management.
 
 (f) Revenue Recognition
 
 Revenue is recognized to the extent that it is probable that the
 economic benefits will flow to the Company and the revenue can be
 reliably measured.
 
 Sales of Goods
 
 Revenue is recognised when the significant risks and rewards of
 ownership of the goods have passed to the buyer. Excise Duty included
 in the amount of turnover (gross) are deducted from turnover (gross)
 for disclosure of net turnover in the P&L account.
 
 Interest
 
 Revenue is recognised on a time proportion basis taking into account
 the amount outstanding and the rate applicable.
 
 Dividends
 
 Revenue is recognised when the companys right to receive payment is
 established by the balance sheet date.
 
 (g) Fixed Assets
 
 Fixed assets are stated at cost, less accumulated depreciation and
 impairment losses. Cost comprises the purchase price and any
 attributable cost of bringing the asset to its working condition for
 its intended use, net of CENVAT recoverable. Financing costs relating
 to construction of fixed assets are also included to the extent they
 relate to the period till such assets are ready to be put to use.
 Financing costs not relating to construction of fixed assets are
 charged to the income statements.
 
 (h) Foreign currency transactions
 
 (i) Initial Recognition
 
 Foreign currency transactions are recorded in the reporting currency,
 by applying to the foreign currency amount the exchange rate between
 the reporting currency and the foreign currency at the date of the
 transaction.
 
 (ii) Conversion
 
 Foreign currency monetary items are reported using the closing rate.
 
 (iii) Exchange Differences
 
 Exchange differences arising on the settlement of monetary items or on
 reporting monetary items
 
 of company at rates different from those at which they were initially
 recorded during the year, or reported in previous financial statements,
 are recognised as income or as expense in the year in which they arise.
 
 (i) Investments
 
 Investments that are readily realisable and intended to be held for not
 more than a year are classified as current investments. All other
 investments are classified as long-term investments.  Current
 Investments are carried at lower of cost and fair value determined on
 an individual investment basis. Long term investments are carried at
 cost, less provision for diminution in value other than temporary.
 
 (j) Employee Benefits
 
 Gratuity
 
 The Gratuity Liability is defined benefit obligation. The company has
 created Employees Group Gratuity Fund which has taken a Group Gratuity
 Insurance Policy from Life Insurance Corporation of India (LIC).
 Premium on above policy as intimated by LIC is charged to the Profit &
 Loss Account. The adequacy of balances available is compared with
 actuarial valuation obtained at the period end. Shortfall, if any, is
 provided for in the Profit & Loss Account.
 
 Provident Fund
 
 Retirement benefits in the form of Provident fund is a defined
 contribution scheme in which both employees and the Company make
 monthly contributions at a specified percentage of the covered
 employees salary (currently 12% of employees salary). The
 contribution are charged to the profit and loss account of the year
 when the contribution to the respective funds are due.
 
 Leave Salary
 
 The Company provides for the encashment of leave or leave with pay
 subject to certain rules. The employees are entitled to accumulate
 leave subject to certain limits, for future encashment. The liability
 is provided based on the number of days of unutilised leave at each
 balance sheet date.
 
 (k) Borrowing Cost
 
 Borrowing costs that are directly attributable to the acquisition,
 construction or production of a qualifying asset are capitalised as
 part of the cost of that asset. Other borrowing costs are recognized as
 an expense in the period in which they are incurred.
 
 (l) Segment Reporting
 
 The company is engaged mainly in the business of automobile products.
 These, in the context of Accounting Standard 17 on Segment Reporting,
 as specified in the Companies (Accounting Standard) Rules, 2006, are
 considered to constitute one single primary segment. Further, there is
 no reportable secondary segment i.e. Geographical segment.
 
 (m) Earning Per Share
 
 Basic earning per share are calculated by dividing the net profit or
 loss for the period attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the period. Partly
 paid equity shares are treated as a fraction of an equity share to the
 extent that
 
 they were entitled to participate in dividends relative to a fully paid
 equity share during the reporting period.
 
 (n) Income Taxes
 
 Current tax is the amount of tax payable on the taxable income for the
 year as determined in accordance with the provisions of the Income Tax
 Act, 1961.
 
 Deferred tax is recognised, on 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.
 
 (o) Intangible assets
 
 Product Development Cost
 
 Product Development Cost incurred on new vehicles platforms, variants
 on existing platforms and new vehicles aggregates are recognized as
 intangible assets and are included under fixed assets.  These amounts
 are amortized over sixty months from the commencement of commercial
 production i.e. from June 1, 2009.
 
 (p) Impairment
 
 The carrying amounts of assets are reviewed at each balance sheet date
 if there are impairment indicator. An impairment loss is recognized
 wherever the carrying amount of an asset exceeds its recoverable
 amount. The recoverable amount is the greater of the assets net
 selling price and value in use.
 
 After impairment, depreciation is provided on the revised carrying
 amount of the asset over its remaining useful life.
 
 A previously recognised impairment loss is increased or decreased based
 on reassessment of recoverable amount, which is carried out if the
 change is significant. However the carrying value after reversal is not
 increased beyond the carrying value that would have prevailed by
 charging usual depreciation if there was no impairment.
 
 (q) Provisions
 
 A provision is recognised when an enterprise has a present obligation
 as a result of past event; it is probable that an outflow of resources
 will be required to settle the obligation, in respect of which a
 reliable estimate can be made. Provision are not discounted to its
 present value and are determined based on best estimate required to
 settle the obligation at the balance sheet date.  These are reviewed at
 each balance sheet date and adjusted to reflect the current best
 estimates.
 
 (r) Product Warranty Expenses
 
 The estimated liability for product warranties is recorded when
 products are sold. These estimates are established using historical
 information on the nature, frequency and average cost of warranty
 claims and management estimates regarding possible future incidence
 based on corrective actions on product failures. However any risk
 covered by insurance policy premium paid on such policy are charged to
 revenue in the year in which it is incurred.