WABCO-TVS (INDIA) LIMITED INFORMATION MEMORANDUM ...

WABCO-TVS (INDIA) LIMITED INFORMATION MEMORANDUM
1. Significant accounting policies:
1.1 Basis of preparation of financial statements:
The financial statements are prepared under the historical cost convention, on
accrual basis of accounting and in conformity with the accounting principles
generally accepted in India.
1.2 Fixed Assets:
Fixed Assets are stated at cost of construction, acquisition or manufacturing
cost in case of assets fabricated by the company including expenditure
incurred in bringing the asset to usable condition as reduced by the Central
Value Added Tax (CENVAT) credit wherever applicable.
1.3 Depreciation:
Depreciation has been provided under the Straight Line Method at the rates
prescribed under Schedule XIV of the Companies Act 1956 with applicable
shift allowances. In respect of the assets added / sold during the period, prorata
depreciation has been provided.
Depreciation in respect of computers and vehicles has been provided at 30%
and 18% respectively which is higher than the rate prescribed under Schedule
XIV of the Companies Act, 1956.
Depreciation in respect of assets acquired during the year whose actual cost
does not exceed Rs.5,000/- has been provided at 100%.
1.4 Impairment of Assets:
An asset is treated as impaired when the carrying cost of the assets exceed
its recoverable value. Such impairment loss is charged to the profit and loss
account in the year in which an asset is identified as impaired. However, in
respect of certain plant and machinery the carrying amount net of
accumulated depreciation is less than the recoverable amount by Rs.9.62
lakhs and the impairment loss has been provided. This is included in
depreciation charge.
1.5 Investments:
Investments are valued at cost in line with the provisions of the Accounting
Standard 13. Provision in diminution in value of investment is made only if
such decline is other than temporary in the opinion of the management.
There is, however, no such diminution in the carrying cost of investments.
2. Share capital & reserves and surplus
2.1 The Company was incorporated on 18 th November 2004 with a paid up capital
of Rs.5.00 lakhs consisting of 1,00,000 equity shares of Rs.5/- each and
subscribed to by the Demerged company, namely SCL and six nominees.
2.2 In terms of the Scheme, the Company has issued and allotted 1,89,67,584
equity shares of Rs.5/- each aggregating to Rs.9,48,37,920 to the
shareholders of the Demerged Company, whose names were recorded in the
Register of members as on 2 nd May 2008 (the record date) in the ratio of one
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