1.00 Corporate Information
 
 Yuken India Limited (YIL) was established in 1976 in technical and
 financial collaboration with Yuken Kogyo Company Limited, Japan. YIL
 Manufacturing unit is located in Bangalore. Sales and distribution
 network is spread across India. Today YIL is the most preferred source
 of supply by most of the original equipment manufacturers in India. YIL
 manufacture wide range of Vane Pumps, Piston Pumps, Gear Pumps,
 Pressure Controls, Flow Controls, Directional Controls, Modular Control
 Valves, Servo Valves, Custom built/standard Hydraulic Systems and Chip
 Compactor. YIL established Foundry Division in 1984, catering to
 Hydraulics, Automobile, Machine Tools, Textile Machinery, Earth moving,
 Agriculture and Material Handling segments. YIL has been certified as
 an ISO- 9001:2008.
 
 2.00 BASIS OF ACCOUNTING
 
 The financial statements have been prepared on the accrual concept of
 accounting under the Historical Cost Convention in accordance with the
 generally accepted accounting principles and comply with the mandatory
 Accounting Standards in accordance with the relevant provisions of The
 Companies Act, 1956.
 
 2.01 Use of estimates
 
 The preparation of the financial statements in conformity with Indian
 GAAP requires the Management to make estimates and assumptions
 considered in the reported amounts of assets and liabilities (including
 contingent liabilities) and the reported income and expenses during the
 year. The Management believes that the estimates used in preparation of
 the financial statements are prudent and reasonable. Future results
 could differ due to these estimates and the differences between the
 actual results and the estimates are recognized in the periods in which
 the results are known / materialize.
 
 2.02
 
 INVENTORIES
 
 Inventories are valued as follows
 
 (i) a) Raw Materials & Components    At lower of cost on Moving Weighted
                                      Average
                                      value and net realizable value
 
 (ii) a) Material in transit          At lower of cost and net realizable 
                                      value
 
 b) Work in Process * 
 
 (iii) Finished Goods *               At lower of cost and net 
                                      realizable value
 
 (iv) Tools                           At lower of cost and net 
                                      realizable value
 
    (* Cost includes cost of material, direct labour and other applicable
       overheads)
 
 2.03 Cash and cash equivalents (for purposes of Cash Flow Statement)
 
 Cash comprises cash on hand and demand deposits with banks. Cash
 equivalents are short-term balances (with an original maturity of three
 months or less from the date of acquisition), highly liquid investments
 that are readily convertible into known amounts of cash and which are
 subject to insignificant risk of changes in value.
 
 2.04 Cash flow statement
 
 Cash flows are reported using the indirect method, whereby profit /
 (loss) before extraordinary items and tax is adjusted for the effects
 of transactions of non-cash nature and any deferrals or accruals of
 past or future cash receipts or payments. The cash flows from
 operating, investing and financing activities of the Company are
 segregated based on the available information.
 
 2.05 Depreciation / Amortization
 
 Depreciation on Fixed Assets is provided at the rates specified in
 Schedule XIV of the Companies Act 1956, under Technical Knowhow fee is
 amortized over a period of 5 years on pro-rata basis.
 
 Cost of License and Implementation of Enterprise Resource Planning
 (ERP) software is amortized over the Expenses incurred on research and
 developments are charged to revenue in the same year. Fixed assets
 purchases for research and development purposes are capitalized and
 depreciated as per the Company''s policy.
 
 2.06 Revenue recognition
 
 Sale of goods
 
 Sales are recognized on dispatch of goods when significant risks and
 rewards of ownership are considered to be transferred. Sales returns
 are recognized as and when ascertained and are reduced from the sales
 turnover of the year. Sales are inclusive of excise duty and are net of
 Sales Tax.
 
 Income from services
 
 Revenue from Hydraulic Training programme is recognized on completion
 of the Training program.
 
 2.07 Other income
 
 Interest income is accounted on accrual basis. Dividend income is
 accounted for when the right to receive it is established.
 
 2.08 Tangible fixed assets
 
 Fixed Assets are capitalized at cost inclusive of taxes, incidental
 expenses on freight, installation etc. and interest on borrowed funds
 attributable to acquisition of fixed assets for the period upto the
 date such asset is put to use.
 
 Fixed Assets taken on financial lease prior to April 1st ,2001 are not
 capitalized and lease rentals are absorbed in the Profit and Loss
 Account without reference to useful life of the asset, while assets
 acquired under Hire Purchase are capitalized.
 
 2.09 Capital work-in-progress:
 
 Projects under which assets are not ready for their intended use and
 other capital work-in-progress are carried at cost, comprising direct
 cost, related incidental expenses and attributable interest.
 
 2.10 Intangible assets
 
 Intangible assets are carried at cost less accumulated amortization and
 impairment losses, if any. The cost of an intangible asset comprises
 its purchase price, including any import duties and other taxes (other
 than those subsequently recoverable from the taxing authorities), and
 any directly attributable expenditure on making the asset ready for its
 intended use and net of any trade discounts and rebates. Subsequent
 expenditure on an intangible asset after its purchase is recognized as
 an expense when incurred unless it is probable that such expenditure
 will enable the asset to generate future economic benefits in excess of
 its originally assessed standards of performance and such expenditure
 can be measured and attributed to the asset reliably, in which case
 such expenditure is added to the cost of the asset.
 
 2.11 Foreign currency transactions and translations
 
 Transactions in Foreign Currency are accounted at exchange rates
 prevailing on the date of Transaction. Monetary items denominated in
 foreign currency and forward exchange contracts outstanding as at the
 end of the year are re-stated at year end rates. The loss or gain
 arising on restatement / settlement is adjusted to the Profit and Loss
 account.
 
 In case of items which are covered by forward exchange contracts, the
 difference between the yearend rate and rate on the date of the
 contract is recognized as exchange difference and the premium paid on
 forward contracts is recognized over the life of the contract. Non
 monetary foreign currency items are carried at cost.
 
 2.12 Investments
 
 Long-term investments are carried individually at cost less provision
 for diminution, other than temporary, in the value of such investments.
 
 2.13 Employee benefits
 
 Employee benefits include provident fund, superannuation fund, gratuity
 fund, compensated absences.
 
 Defined contribution plans
 
 The Company''s contribution to provident fund and superannuation fund
 are considered as defined contribution plans and are charged as an
 expense as they fall due based on the amount of contribution required
 to be made.
 
 Defined benefit plans
 
 For defined benefit plans in the form of gratuity fund the cost of
 providing benefits is determined using the Projected Unit Credit
 method, with actuarial valuations being carried out at each Balance
 Sheet date. Actuarial gains and losses are recognized in the Statement
 of Profit and Loss in the period in which they occur. Past service cost
 is recognized immediately to the extent that the benefits are already
 vested and otherwise is amortized on a straight-line basis over the
 average period until the benefits become vested. The retirement benefit
 obligation recognized in the Balance Sheet represents the present value
 of the defined benefit obligation as adjusted for unrecognized past
 service cost, 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 schemes.
 
 Short-term employee benefits
 
 The undiscounted amount of short-term employee benefits expected to be
 paid in exchange for the services rendered by employees are recognized
 during the year when the employees render the service. These benefits
 include performance incentive and compensated absences which are
 expected to occur within twelve months after the end of the period in
 which the employee renders the related service. The cost of such
 compensated absences is accounted as under:
 
 (a) in case of accumulated compensated absences, when employees render
 the services that increase their entitlement of future compensated
 absences; and
 
 (b) in case of non-accumulating compensated absences, when the absences
 occur.
 
 Long-term employee benefits
 
 Compensated absences which are not expected to occur within twelve
 months after the end of the period in which the employee renders the
 related service are recognized as a liability at the present value of
 the defined benefit obligation as at the Balance Sheet date less the
 fair value of the plan assets out of which the obligations are expected
 to be settled.  Long Service Awards are recognized as a liability at
 the present value of the defined benefit obligation as at the Balance
 Sheet date.
 
 2.14 Borrowing costs
 
 Borrowing costs include interest, amortization of ancillary costs
 incurred and exchange differences arising from foreign currency
 borrowings to the extent they are regarded as an adjustment to the
 interest cost. Costs in connection with the borrowing of funds to the
 extent not directly related to the acquisition of qualifying assets are
 charged to the Statement of Profit and Loss over the tenure of the
 loan. Borrowing costs, allocated to and utilized for qualifying assets,
 pertaining to the period from commencement of activities relating to
 construction / development of the qualifying asset up to the date of
 capitalization of such asset is added to the cost of the assets.
 Capitalization of borrowing costs is suspended and charged to the
 Statement of Profit and Loss during extended periods when active
 development activity on the qualifying assets is interrupted.
 
 2.15 Leases
 
 Assets taken on lease where the company acquires substantially the
 entire risks and rewards incidental to ownership are classified as
 finance leases. The amount recorded is the lesser of the present value
 of minimum lease rental and other incidental expenses during the lease
 term or the fair value of the assets taken on lease. The rental
 obligations, net of interest charges, are reflected as secured loans.
 Leases that do not transfer substantially all the risks and rewards of
 ownership are classified as operating leases and recorded as expense as
 and when the payments are made over the lease term.
 
 2.16 Earnings per share
 
 In determining the earning per share, the Company considers the net
 profit after tax. The number of shares used in computing basic earnings
 per share is the weighted average number of shares outstanding during
 the period. The number of shares used in computing diluted earning per
 share comprises the weighted average shares considered for deriving
 basic earnings per share and also the weighted average number of equity
 shares that could have been issued on the conversion of all dilutive
 potential equity shares. Dilutive potential equity shares are deemed
 converted as of the beginning of the period unless issued at a later
 date
 
 2.17 Taxes on income Current Tax :
 
 Current tax expense is determined in accordance with the provisions of
 the Income - tax Act, 1961.
 
 Minimum alternate tax (MAT) paid in accordance with the tax laws, which
 gives rise to future economic benefits in the ''orm of adjustment of
 future income tax liability, is considered as an asset if there is
 convincing evidence that the Company will pay normal income tax.
 
 Deferred Tax:
 
 Deferred tax assets and liabilities are measured using the tax rate
 which have been enacted or substantively enacted at the Balance Sheet
 date. Deferred tax expense or benefit 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 assets are recognized only to the extent that there is a
 reasonable certainty of their realization. Where there is unabsorbed
 depreciation or carried forward losses, deferred tax asset is
 recognized only if there is virtual certainty of realization of such
 asset.
 
 2.18 Impairment of assets
 
 Consideration is given at each Balance Sheet date to determine whether
 there is any indication of impairment of the carrying amount of the
 Company''s fixed assets. If any indication exists, an impairment loss is
 recognized when the carrying amount exceeds greater of net selling
 price and value in use.
 
 A previously recognized impairment loss is further provided or reversed
 depending on changes in circumstances.
 
 2.19 Provisions and contingencies
 
 A provision is recognized when the Company has a present obligation as
 a result of past events and 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.  Provisions (excluding retirement
 benefits) are not discounted to their present value and are determined
 based on the 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. Contingent liabilities
 are disclosed in the Notes.