I) ACCOUNTING CONVENTIONS
 
 The financial statements are prepared under the historical cost
 convention on accrual basis and in accordance with the Accounting
 Standards issued under the Companies (Accounting Standards) Rules, 2006
 and the relevant presentational requirements of the Companies Act,
 1956.
 
 II) ACCOUNTING FOR ESTIMATES
 
 The preparation of financial statements is in conformity with the
 generally accepted accounting principles and requires estimates and
 assumptions to be made that affect reportable amount of assets and
 liabilities on date of financial statements and the reported amount of
 revenues and expenses during the reporting period. Difference between
 the actual results and estimates are recognized in the year in which
 the results are known/ materialized.
 
 III) FIXED ASSETS INCLUDING INTANGIBLE ASSETS AND
 DEPRECIATION/AMORTISATION
 
 a) Fixed assets including intangible assets are stated at cost net of
 cenvat, less accumulated depreciation and / or impairment loss, if any.
 Intangible assets comprise purchased computer software/licenses. All
 costs till commencement of commercial production attributable to the
 fixed assets and intangible assets are capitalized.
 
 b) Depreciation on fixed assets including intangible assets has been
 provided on straight-line method at the rates and in the manner
 prescribed in Schedule XIV to the Companies Act, 1956.
 
 c) The cost of Leasehold land is amortized over the period of lease.
 
 IV) INVESTMENTS
 
 Long term investments are stated at cost. Provision for diminution in
 value of long term investments is made only if such decline is not
 temporary in the opinion of the management.
 
 V) INVENTORIES
 
 a) Finished goods are valued at lower of cost or net realizable value.
 Cost is considered at material cost on moment moving weighted average
 basis plus appropriate overheads.
 
 b) Work in progress is valued at material cost on moment moving
 weighted average basis plus appropriate overheads.
 
 c) Scrap is valued at net realizable value.
 
 d) Other inventories are valued at cost on moment moving weighted
 average basis.
 
 e) The liability of excise duty on finished goods and scrap lying in
 the factory at year end is estimated on the basis of sales price of
 goods and excise rates prevailing on the said date, while determining
 the cost of closing stock of finished goods and scrap.
 
 VI) RETIREMENT BENEFITS
 
 Superannuation, Provident and Gratuity Funds are accounted for on
 accrual basis with corresponding payments to recognized scheme/fund.
 Short term employees benefits are recognized as an expense at the
 undiscounted amount in the profit and loss account for the year in
 which the related services rendered. The liability for gratuity (in the
 nature of a defined benefit obligation) is provided on the basis of
 actuarial valuation conducted by Life Insurance Company of India (LIC),
 since the gratuity scheme of the company is covered under a group
 gratuity cum life assurance cash accumulation policy of the LIC.
 
 VII) REVENUE RECOGNITION
 
 Sales and Job Charges are accounted for on the basis of date of
 dispatch except for export sales which are booked on the basis of date
 of custom clearance.
 
 VIII) DIVIDEND
 
 The dividend income is accounted for when the right to receive the
 payment is established.
 
 IX) GOVERNMENT GRANTS
 
 Government grant of the nature of promoters'' contribution is credited
 to capital reserve at the time of receipt.
 
 X) FOREIGN EXCHANGE TRANSACTIONS
 
 a) Transactions in foreign currencies are accounted for at the exchange
 rate prevailing at the date of transaction/ negotiations.
 
 b) Monetary foreign currencies items outstanding at the year end are
 restated into rupees at the rate of exchange prevailing on the Balance
 Sheet date.
 
 c) Non monetary foreign currency items are carried at cost.
 
 d) Any income or expenses on account of exchange difference either on
 settlement or on transaction is recognized in the profit and loss
 account.
 
 e) In respect of forward contracts, forward premium or discount arising
 at the inception of forward contract is amortized over the life of
 contract. Exchange differences on such contracts are recognized in the
 profit and loss account in the year in which exchange rates change. Any
 profit and loss arising on cancellation or renewal of forward exchange
 contract is recognized as income or as expense for the year.
 
 XI) BORROWING COSTS
 
 Borrowing Costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized as part of cost of
 such assets. Qualifying asset is one that necessarily takes substantial
 period of time to get ready for its intended use. Other borrowing costs
 are charged to revenue.
 
 XII) TAXATION
 
 The provision for current income tax liability is ascertained on the
 basis of assessable profits computed in accordance with the provisions
 of Income Tax Act, 1961. Deferred tax is recognized, subject to the
 consideration of prudence, on timing differences, being the difference
 between taxable income and accounting income that originate in one
 period and are capable of being reversed in one or more subsequent
 periods.
 
 XIII) CONTINGENCIES
 
 Contingent liabilities arising from claims, litigation, assessments,
 fines, penalties etc. are provided when it is probable that the
 contingency will result in the loss and reasonable estimate of the
 amount of the resulting loss can be made. Liabilities which are
 material and whose future outcome can not be ascertained with
 reasonable certainty are treated as contingent liabilities and
 disclosed by way of notes to account.
 
 XIV) ACCOUNTING FOR LEASES
 
 Lease payments under operating lease have been charged to profit and
 loss account as expense on straight line basis over the lease term.
 
 XV) SEGMENT REPORTING
 
 a) The Company has disclosed business segment as the primary segment
 for disclosure. The Company has identified four separate segments i.e.
 Fine Blanking Components, Mufflers, Spokes and Electricals. The
 Segments are identified with regard to the dominant source, nature of
 risks and returns, internal organization and management structure and
 internal reporting systems.
 
 b) The accounting policies adopted for segment reporting are in line
 with the accounting policies of the Company.
 
 c) Segment revenues, Results and Capital employed figures include the
 respective amounts identifiable to each of the segments. Interest and
 other financial charges/ incomes are reported at corporate level.
 Alsothose assets and liabilities which are not identifiable to the
 individual segments are reported at corporate level. 
 
 d) The inter segmental revenue is accounted for on the basis of
 transfer price agreed to amongst segments as per market trend.
 
 XVI) IMPAIRMENT LOSS
 
 An impairment loss is recognized when the carrying amount of fixed
 assets exceeds its recoverable amount. The recoverable amount of an
 asset is lower of net selling price and its value in use.
 
 XVII) CASH FLOW STATEMENT
 
 The Cash Flow Statement is prepared by the indirect method set out in
 Accounting Standard-3 on Cash Flow Statements and presents cash flows
 by operating, investing and financing activities of the Company. The
 Company considers all highly liquid financial instruments, which are
 readily convertible into cash, to be cash equivalents