a) Term Loans:
 
 Foreign Currency ECB Loan, USD Loan and Rupee Term Loans are secured by
 hypothecation of movable fixed assets both present & future (Other than
 those exclusively charged to the banks mentioned in (b) hereunder), of
 the Company ranking first pari-passu charge basis among Axis Bank
 Limited, Citibank N.A., IDBI Bank Limited, Export-Import Bank of India,
 Kotak Mahindra Bank Limited, State Bank of Hyderabad, State Bank of
 Patiala, Standard Chartered Bank and Yes Bank Limited. These Loans are
 also secured by mortgage by way of deposit of title deeds of the
 immovable properties of the Company situated at Dharuhera and Gurgaon
 ranking pari-passu charge basis amongst the said banks except that of
 USD / INR Loan equivalent to Rs.50.00 Crores from Export Import Bank of
 India, Rupee Term Loan/Non Funded Limit of Rs.40.00 Crores from State
 Bank of Hyderabad, Rupee Term Loan of Rs.50.00 Crores from State Bank
 of Patiala and Rupee Term Loan from Axis Bank Limited for Rs.25.00
 Crores which are yet to be secured by mortgage of deposit of title
 deeds of abovesaid properties of the Company. Term Loan of Rs. 25.00
 Crores from Yes Bank Limited is additionally secured by corporate
 guarantee of an Associate Company and personel guarantees of Managing
 Director, Joint Managing Director and a Director of the Company.
 
 b) Capex - Non Funded Facilities:
 
 Capex - Non Funded Facilities of Rs.11.00 Crores, Rs.11.00 Crores &
 Rs.10.00 Crores respectively availed from IDBI Bank Limited, Kotak
 Mahindra Bank Limited & Yes Bank Limited are secured by exclusive
 charge on all machineries/assets imported/ acquired by utilising the
 said facilities.
 
 c) Working Capital Loans:
 
 Working Capital Loans from Banks are secured by hypothecation of
 current assets including receivables & inventories, both present &
 future, ranking first pari-passu charge basis among Axis Bank Limited,
 Citibank N.A., DBS Bank Limited, HDFC Bank Limited, IDBI Bank Limited,
 Kotak Mahindra Bank Limited, Standard Chartered Bank, State Bank of
 Hyderabad, State Bank of India, State Bank of Patiala, The Hongkong &
 Shanghai Banking Corporation Limited and Yes Bank Limited.
 
 d) Other Loans:
 
 Other Loans from Banks and Companies are secured against hypothecation
 of the vehicles financed.
 
 UNSECURED LOANS
 
 Unsecured Foreign Currency Loans are Buyers'' Credit Facility taken from
 various Banks located outside India under secured Non-Funded Facilities
 sanctioned and guaranteed by Banks in India viz. Axis Bank Limited, DBS
 Bank Limited, State Bank of Patiala, Standard Chartered Bank and Yes
 Bank Limited. It also includes a Packing Credit Foreign Currency
 Facility taken from Kotak Mahindra Bank Limited.
 
 Schedule 15 - NOTES ON ACCOUNTS
 
 1.  SIGNIFICANT ACCOUNTING POLICIES
 
 i) Accounting Convention:
 
 The financial statements are prepared under the historical cost
 convention on accrual basis in accordance with Generally Accepted
 Accounting Principles (GAAP) and Accounting Standards issued under the
 Companies (Accounting Standards) Amended Rules, 2009 and provisions of
 the Companies Act, 1956.
 
 ii) Fixed Assets and Depreciation:
 
 Fixed assets are stated at cost less accumulated depreciation.
 Depreciation on Building and Plant & Machinery is charged on pro-rata
 basis at the straight line method rates as prescribed in Schedule XIV
 of the Companies Act, 1956 except on plant and machinery costing less
 than Rs.5000/- each in value, which are depreciated at the rate of 100%
 in the year of purchase.  Depreciation on rest of the fixed assets is
 provided on pro-rata basis at the WDV method at the rates prescribed in
 Schedule XIV of the Companies Act, 1956.
 
 iii) Investments:
 
 Long Term Investments are carried at cost less provision for diminution
 in value other than temporary, if any.
 
 iv) Inventories:
 
 Raw Materials, Components, Stores and Spares, Loose Tools and
 Work-in-Process are valued at cost. Finished Goods are valued at cost
 or realizable value whichever is less. By-products and Scrap are valued
 at realizable value. The basis of determining cost for various
 categories of inventories are as follows:
 
 Raw Material, Components, Stores & Spares and Loose Tools At cost
 (Weighted Average) Material in transit At cost Work-in-Process At
 Material cost plus Conversion cost on the basis of absorption costing
 Finished Goods At Material cost plus Conversion cost on the basis of
 absorption costing (inclusive of Excise Duty payable) Inventory of
 finished goods includes closing stock of scrap.
 
 v) Inter-unit transfers of finished goods are made at market price.
 Closing Stock of such material at Balance Sheet date is evaluated at
 cost.
 
 vi) Impairment of Assets:
 
 At each Balance Sheet date, the Company reviews, whether there is any
 indication that an asset may be impaired. If any such indication
 exists, the Company estimates the recoverable amount. If the carrying
 amount of the asset exceed its recoverable amount, an impairment loss
 is recognized in the Profit & Loss Account to the extent the carrying
 amount exceeds the recoverable amount.
 
 vii) Retirement Benefits:
 
 The Company has various Schemes of retirement benefits such as
 Provident Fund, Gratuity and Earned Leaves.
 
 a) Post Employment Benefit Plans:
 
 Payment to defined contribution retirement benefit scheme is charged as
 an expense as they fall due.
 
 For defined benefit schemes, the cost of providing benefits is
 determined using Projected Unit Credit Method, with actuarial valuation
 being carried out at each Balance Sheet date. Actual gains & losses are
 recognized in full in the Profit & Loss Account for the period in which
 they occur.
 
 The retirement benefit obligations recognised in the Balance Sheet
 represent the present value of the defined benefit obligations as
 adjusted for unrecognized past service cost and as reduced by the fair
 value of scheme assets. Any asset resulting from this calculation is
 limited to past service cost, plus the present value of available
 refunds and reductions in future contributions to the scheme.
 
 b) Defined Benefit Plan:
 
 I) Gratuity Plan
 
 The Company makes annual contribution to the Employee''s Group
 Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of
 India, a funded defined benefit plan for qualifying employees. The
 scheme provides for lump sum payment to vested employees at retirement,
 death while in employment or on termination of employment of an amount
 equivalent to 15 days salary payable for each completed year of service
 or part thereof in excess of 6 months. Vesting occurs upon completion
 of 5 years of service.
 
 II) Leave Encashment Plan
 
 The Company is maintaining a Fund called Rico Auto Industries Limited
 Employee Group Leave Encashment Assurance Scheme for leave encashment
 benefits of the employees by paying contribution to Life Insurance
 Corporation of India.  The contribution paid to the Fund is charged to
 revenue.
 
 viii) Sales:
 
 Revenue from sale of goods is recognized on transfer of all significant
 risks and rewards of ownership to the buyer which coincides with
 dispatch of goods from factory to the customers in case of domestic
 sale. Sale value is inclusive of Excise Duty paid on the clearance of
 goods. Export Sale/Income is accounted for at exchange rate prevailing
 at the time of sale.  Effect of foreign exchange fluctuation on the
 export sales realized is booked in Miscellaneous Income/ Miscellaneous
 Expenses Account under the head Exchange Rate Fluctuation account.
 
 ix) Insurance claims which are not significant and not determinable are
 being accounted for on receipt basis.
 
 x) Prior period and Extra-ordinary items and changes in Accounting
 Policies having material impact on the financial affairs of the Company
 are disclosed.
 
 xi) Financial Derivatives Hedging Contracts are accounted on the date
 of their settlement and realized gain/loss in respect of settled
 contracts are recognized in the Profit and Loss Account at that time.
 
 xii) Material events occurring after the Balance Sheet date are taken
 into cognizance.
 
 xiii) Depending on facts of each case and after due evaluation of
 relevant legal aspects, claims against the Company not acknowledged as
 debts are disclosed as contingent liabilities. In respect of the
 statutory matters, contingent liabilities are disclosed only for those
 demand(s) that are contested by the Company before any Appellate
 Authority.
 
 xiv) Research and Development expenses:
 
 Revenue expenditure incurred on Research and Development is charged to
 revenue in the year it is incurred. Capital Expenditure is included in
 respective heads under fixed assets.
 
 xv) Interest on Borrowed Funds:
 
 In respect of new units/major expansions, the interest paid/payable on
 borrowed funds, attributable to construction of building and
 acquisition/erection of Plant and Machinery is capitalized upto the
 date of construction/acquisition/erection of aforesaid assets.
 
 xvi) Foreign Currency Transactions:
 
 Transactions in Foreign Currency are recorded at exchange rate
 prevailing on the date of transactions. Assets and liabilities
 outstanding as at the close of the accounting year are re-instated at
 the exchange rate prevailing at the closing of that accounting year and
 difference so arising in respect of Current Assets and Current
 Liabilities is transferred to Profit & Loss Account.
 
 xvii) The Company creates a provision when there is a present
 obligation as a result of a past event where the out flow of economic
 resources is probable and a reliable estimate of the amount of
 obligation can be made. The disclosure is made for possible or present
 obligations that may, but probably will not, require out flow of
 resources as contingent liabilities in the financial statements.