1.                  Corporate Information

Endurance Technologies Private Limited (the Company) was established in 1985 as Anurang Engineering Company Private Limited to manufacture Aluminium Die Casting Products at Aurangabad Maharashtra (India). The Endurance group today is a global force in aluminium die casting (including alloy wheel), suspension, transmission and braking products with 19 plants across India, Italy and Germany.

2.                  Summary of Group's Significant Accounting Policies

A.                Basis of brparation of financial statements

The Consolidated Financial Statements of Endurance Technologies Private Limited ( the Company ), its subsidiary companies and a joint venture (together referred to as a Group) have been brpared to comply with generally accepted accounting principles applicable in India, the relevant provisions of the Companies Act, 1956 and in accordance with Accounting Standard 21 on  Consolidated Financial Statements , and Accounting Standard 27 on  Financial Reporting of Interests in Joint Ventures  notified under the Companies (Accounting Standards) Rules, 2006.

The financial statements are brpared under the historical cost convention on an accrual basis of accounting except in case of assets for which revaluation has been carried out. The Assets and Liabilities have been classified as current or non-current as per the operating cycle criteria as set out in the Revised Schedule VI to the Companies Act, 1956. The operating cycle of the Company is twelve months.

B.                 Principles of Consolidation:

The Consolidated Financial Statements have been brpared on the following basis:

i)        The financial statements of the Company, its subsidiary companies and joint venture have been combined on a line-by-line basis by adding together like items of assets, liabilities, income and expenses after eliminating intra-group balances, intra-group transactions and the resulting unrealised profits or losses.

ii)      The financial statements of the subsidiary companies and joint venture used in the consolidation are drawn up to the same reporting date as that of the Company i.e. year ended 31st March, 2013.

iii)    The excess of cost to the Company of its investments in the subsidiary companies / joint venture / over its share of equity of the subsidiary companies/ joint venture, at the dates on which the investments in the subsidiary companies / joint venture are made, is recognised as Goodwill being an asset in the Consolidated Financial Statements. Alternatively, where the share of equity in the subsidiary companies / joint venture as on the date of investment is in excess of cost of investment of the Company, it is recognised as Capital Reserve and shown under the head Reserves and Surplus, in the Consolidated Financial Statements.

iv)    The Consolidated Financial Statements are brpared using uniform accounting policies for like transactions and other events in similar circumstances except where stated otherwise.

v)      The financial statements of the joint venture company has been combined by using proportionate consolidation method and accordingly, venturer's share of each of the assets, liabilities, income and expenses of jointly controlled entity is reported as separate line items in the Consolidated Financial Statements.

vi)    Minority interest in the net assets of consolidated subsidiaries consists of the amount of equity attributable to the minority shareholders at the dates on which investments are made by the Company in the subsidiary companies and further movements in their share in the equity, subsequent to the dates of investments.

vii)  The following subsidiary companies are considered in the Consolidated Financial Statements:

Name of the Company	Country of Incorporation or Residence	Voting Power %
As at 31st March, 2013	As at 31st March, 2012
High Technology Transmission Systems (India) Private Limited	India	99%	99%
Endurance Overseas S.r.l (EOS.r.l)	Italy	100%	100%
Endurance Fondalmec S.p.A. (Formerly known as Fondalmec Officine Meccaniche S.p.A)	Italy	100%	100%
Amann Druckguss GmbH	Germany	100%	100%

viii)   The working result up to 17th October 2012 of following Joint Venture Company is considered in the consolidated financial statements:

Name of the Company	Country of Incorporation or Residence	Voting Power %
As at 17th October, 2012	As at 31st March, 2012
Magneti Marelli Shock Absorber's (I) P. Ltd. (Earlier known as Endurance Magneti Marelli Shock Absorber's (I) P. Ltd)	India	50%	50%

ix)    The Company has an investment in a company viz. Marathwada Auto Cluster (MAC). MAC has been incorporated primarily for certain brcise / agreed purpose, where in the profits will be applied for promoting its objects. Accordingly, the accounts of MAC are not considered in these financial statements, since the Company does not derive any direct benefits from its investments in MAC.

C.                Use of estimates:

The brparation 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. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

D.                Revenue Recognition

The Principles of revenue recognition are set out as below:

i)        Revenue from operations is recognized, net of returns and trade discounts, when the risk and rewards of ownership are passed on to the customers, which is generally on dispatch of goods. Revenue from operation includes Excise Duty but excludes Sales Tax and Value Added Tax.

ii)      Job-work receipts are accounted as and when the services are rendered.

iii)    Benefit on account of entitlement of import of goods free of duty under the  Duty Entitlement Pass Book under Duty exemption Scheme  (DEPB Scheme) is accounted in the year of export.

iv)    Interest Income is accounted on accrual basis. Dividend Income is accounted when the right to receive it is established.

E.                 Fixed Assets (Tangible and Intangible)

Fixed Assets are stated at cost of acquisition or construction where cost includes amount added/deducted on revaluation less accumulated debrciation / amortization and impairment loss, if any. Pre-operation expenses including trial run expenses (net of revenue) are capitalised. All costs relating to the acquisition and installation of fixed  assets  are  capitalised  and  include  borrowing  costs  relating  to  funds attributable to construction or acquisition of qualifying assets, up to the date the asset / plant is ready for intended use.

F.                 Debrciation and Amortisation

Debrciation on fixed assets is provided at the rates determined on straight line method over the useful life estimated by the Management or on the basis of debrciation rates brscribed under respective domestic laws, whichever is higher.

Leasehold land is amortised over the duration of the lease.

In respect of assets whose useful life has been revised, the unamortized debrciable amount has been charged over the revised remaining useful life.

G.                Foreign Currency Transactions

Transactions in foreign currencies are recorded at the exchange rates brvailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at the year-end exchange rates/forward contract rates. Exchange difference arising on settlement of transactions and translation of monetary items are recognised as income or expense in the year in which they arise.

Premium/Discount on forward contracts is amortized over the life of such contracts. Foreign exchange loss in respect of derivative instruments which are not covered by AS-11 is accounted based on mark to market valuation as on Balance Sheet date, mark to market gain is ignored on grounds of prudence.

On consolidation, the assets, liabilities and goodwill or capital reserve arising on the acquisition, of the Group's overseas operations are translated at exchange rates brvailing on the balance sheet date. Income and expenditure items are translated at the average exchange rates for the period / year. Exchange differences arising in case of Non integral Foreign Operations are recognised in the Group's foreign currency Translation Reserve classified under Reserves and Surplus.

H.                Leases:

(i)     Finance Lease

Assets acquired under finance leases are recognised at the lower of the fair value of the leased assets at inception and the brsent value of minimum lease payments. Lease payments are apportioned between the finance charge and the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability. Assets given under finance leases are recognised as receivables at an amount equal to the net investment in the lease and the finance income is based on a constant rate of return on the outstanding net investment.

(ii)   Operating Lease

Lease arrangements under which all risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease rental under operating lease are recognised in profit and loss account on straight line basis or other systematic basis over the lease term.

I.                   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.

J.                  Inventories

Inventories of raw materials and components, work-in-progress, stock-in-trade, stores and spares and tools and instruments are valued at the lower of cost and net realisable value after providing for obsolescence and other losses, where considered necessary. Cost is ascertained on a weighted average basis. The cost of work-in-progress and finished goods is determined on absorption cost basis. Excise duty in respect of inventory of finished goods manufactured is shown separately as an item of expense and included in valuation of inventory of finished goods.

K.                Employee Benefits

i)        Provident fund

The eligible employees of the Company and some of its subsidiaries are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the company/subsidiaries make monthly/annual contributions at a specified percentage of the covered employees' salary. The contributions, as specified under the law, are made to the provident fund and pension fund set up as irrevocable trust by the Company and its subsidiaries or to respective Regional Provident Fund Commissioner and the Central Provident Fund under the State Pension scheme. The Company and some of its subsidiaries are generally liable for monthly/annual contributions and any shortfall in the fund assets based on the government specified minimum rates of return or pension and recognises such contributions and shortfall, if any, as an expense in the year incurred.

ii)      Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees  at  retirement,  death  while  in  employment  or  on  termination  of employment  of  an  amount  equivalent  to  15/30  days  salary  payable  for  each completed year of service. Vesting occurs upon completion of five years of service.

For the employees of specified grades, 30 days salary is payable upon completion of 10 years of service. The Company accounts for the liability for gratuity benefits payable in future based on an independent actuarial valuation. The Company has taken a Group Gratuity cum Life Assurance Scheme with LIC of India for future payment of gratuity to the eligible employees.

iii)    Compensated absences

The Company provides for the encashment of compensated absences with pay subject to certain rules. The employees are entitled to accumulate compensated absences subject to certain limits, for future encashment. Accumulated leave, which is expected to be utilised within the next twelve months, is treated as short-term employee benefit and the accumulated leave expected to be carried forward beyond twelve month is treated as long-term employee benefit which are provided based on the number of days of unutilised compensated absence on the basis of an independent actuarial valuation.

The Company has taken a policy with LIC of India for future payment of compensated absences encashment to its employees.

L.                 Investments

Long term investments are valued at cost less diminution in value, if any, other than of temporary nature. Current investments are valued at lower of cost and fair value. Cost of Investment includes acquisition charges such as brokerage fees and duties.

M.               Taxes on Income

Current tax expense is calculated in accordance with the provision of Income Tax Act, 1961, except for the overseas subsidiaries where current tax provision is determined based on the local tax laws.

Deferred tax is recognised, for all timing differences, subject to the consideration of prudence, applying the tax rates that have been substantively enacted by the Balance Sheet date. Deferred tax assets in respect of unabsorbed debrciation and carry forward of tax losses are recognised if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised.

N.                Impairment of Assets

The  Company  reviews  the  carrying  amounts  of  its  fixed  assets  annually  to determine  whether  there  is  any  indication  that  those  assets  suffered  an impairment loss. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their brsent value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

O.                Research and development expenses

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product's technological feasibility has been established, in which case such expenditure is capitalised. The amount capitalised comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Fixed assets utilised for research and development are capitalised and debrciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets.

P.                 Borrowing Cost:

Interest and other costs incurred in connection with the borrowing of the funds are charged  to  revenue  on  accrual  basis  except  those  borrowing  costs  which  are directly attributable to the acquisition or construction of those Qualifying assets, which necessarily take a substantial period of time to get ready for their intended use. Such costs are capitalised with the Qualifying assets.

Q.                Goodwill on Consolidation

Goodwill on Consolidation rebrsents the difference between the Group's share in the net worth of the investee company at the time of acquisition and the cost of investment made. The said goodwill is not amortised; however, it is tested for impairment at each Balance Sheet date and impairment loss, if any, is provided for.

R.                Provisions and Contingencies

A provision is recognised when the Company has a brsent 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 brsent 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. Contingent assets are not recognised in the financial statements.

S.                  Earnings per share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard 20 on Earnings per Share.  Basic earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is  computed  by  dividing the net  profit  or  loss  for the period  by  the weighted average number of equity shares outstanding during the period as adjusted for the effects of all diluted potential equity shares except where the results are anti-dilutive.

T.                 Cash Flow Statement

The Cash Flow Statement is brpared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and brsents cash flows by operating, investing and financing activities of the Group.

U.                Business Segments

The Group is engaged mainly in the business of automobile components. This in the context of Accounting Standard 17 on Segment Reporting is considered to constitute one single reportable primary segment. The Group has disclosed geographical market as its secondary segment.

V.                Government grants and export incentives:

The Company is entitled to various incentives from government authorities in respect of manufacturing units located in developing regions. The Company accounts for its entitlements on accrual basis on approval of the initial claim by the relevant authorities.

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

Employee Benefits

a)      Defined contribution plan:

Amount recognized as an expense in the statement of profit and loss in respect of defined contribution plans is Rs. 81.72 million (Previous year Rs. 71.64 million). The same is included in contribution to provident and other funds. Refer Employee expenses                         

b)      Defined benefit plan: The Company provides for its liability towards gratuity as per the actuary valuation. The brsent value of the accrued gratuity minus fund value is provided in the books of accounts.

c)      Employees severance indemnity

The actuarial evaluation of TFR fund is made according to the accrued benefit methodology by means of the Projected Unit Credit Method. Such methodology is substantiated by evaluations accounting for current average value of pension bonds accrued on the basis of the worker's service until the time when that evaluation is made.

Net of Rs.3.85 million (Previous year Rs.2.44 million) rebrsenting excess of fair value of plan assets over the liability as at the year-end in respect of one of the subsidiaries.

In addition to above, Company paid directly Rs. 8.54 million (brvious year Rs. 1.41 million) as gratuity to left employees.    

 In respect of funded benefits with respect to gratuity, the fair value of plan assets rebrsents the amounts invested through Insurer Managed Funds.

Experience history

                                                                                           For the year ended 31st March,

Particulars	2013	2012	2011	2010	2009
Defined benefit obligation at end of the period	133.38	103.29	72.87	48.84	36.03
Plan assets at end of the period	33.28	32.34	22.25	17.13	18.24
Funded status surplus/(deficit)	(100.08)	(70.95)	(50.62)	(31.71)	(17.79)
Experience gain / (loss) adjustments on plan liabilities	(3.47)	(16.68)	(8.07)	23.37	5.28
Experience (gain) / loss adjustments on plan assets	(0.24)	(0.97)	(0.13)	15.24	0.51

a)      The discount rate is based on the brvailing market yields of Government securities as at the balance sheet date for the estimated terms of the obligations.

b)      Expected rate of return of plan assets: This is based on the expectation of the average long term rate of return expected on investments of the Fund during the estimated term of obligations.

c)      Salary escalation rate: The estimates of future salary increases considered taking into the account the inflation, seniority, promotion and other relevant factors.