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Notes to Accounts of Cosmo First Ltd.

Mar 31, 2022

Note:

a) Additions include '' 1.63 crores (31 March 2021: '' 0.01 crores) towards assets located at research and development facilities.

b) Contractual obligation

Refer note 40 (B) for disclosure of contractual commitments for the acquisition of property, plant and equipment.

c) Property, plant and equipment pledged as security

Refer note 21 and 26 for information on property, plant and equipment pledged as security by the Company.

d) During year ended 31 March 2020, the Company had executed an agreement for transfer of '' 5.145 acres (sellable area 16664.05 Sq Mtr) of land (classified under right of use assets) at B-14/10 MIDC Area, Waluj, Aurangabad, Maharashtra for a consideration of '' 15.43 crores and classified it as non current asset held for sale. Out of the aforesaid land, the Company had executed assignment deeds to the extent of 10,673.04 Sq. Mtr and completed the transfer during the financial year ended 31 March 2021. The Company had received advance amounting to '' 4.67 crores pursuant to the remaining 5,991.01 Sq. Mtr of land till 31 March 2021. The Company has executed assignment deeds for the remaining sellable area and completed the transfer process during the financial year ended 31 March 2022

ii) Leasing arrangements

Investment property comprises of land and building which is leased to subsidiary companies under long-term operating leases with rentals payable monthly. Refer note 42 for details on future minimum lease rentals.

iii) Fair value of the investment property as at 31 March 2022 is '' 8.84 crores. The Company has obtained independent valuation for its investment property from a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.

Notes:

(i) Of the above 242,051 shares have been allotted to erstwhile shareholders of Gujarat Propack Limited on amalgamation in the financial year 2002-03. No shares has been issued for consideration other than cash in the current reporting year and in last five years immediately preceding the current reporting year.

(ii) Of the above 8,486,705 shares have been allotted as fully paid bonus shares by capitalisation of capital reserves and share premium account in the financial year 2002-03. No shares have been issued as bonus shares in the current reporting year and in last five years immediately preceding the current reporting year.

(iii) The Board of Directors of the Company at their meeting held on 26 October 2020 had approved Buyback of 12,67,361 equity shares (6.52% of equity capital) of the Company, through the âTender Offerâ route for an aggregate amount of upto '' 73 crores at a price of 576 per equity share. The said equity shares bought back were extinguished on 24 December 2020. An amount of '' 90.55 crores (including income tax and direct buyback costs) had been utilized from the other equity for the aforesaid buyback including creation of capital redemption reserve account of '' 1.27 crores (representing the nominal value of the equity shares bought back). Consequent to the buyback, the paid-up equity share capital has reduced from '' 19.44 crores to '' 18.17 crores consisting of 1,81,72,715 equity shares of '' 10 each.

(iv) During the year, the Board of Directors declared an first interim dividend of '' 25 per equity share and second interim dividend of '' 10 per equity share (31 March 2021: '' 25 per equity shares)

During the year ended 31 March 2022 the amount of per share dividend recognised as distributions to equity shareholders was '' 35 per share (31 March 2021: '' 25 per share).

(v) Terms and rights attached to equity shares:

The Company has only one class of equity shares having the par value of '' 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by Board of Directors, if any, is subject to approval of shareholders in Annual General Meeting except in case of interim dividend.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after payment of all liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of reserves

(i) Capital reserve

Capital reserve was created under financial statements prepared in accordance with accounting standards notified under the section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (âprevious GAAP'') out of the profit earned from a specific transaction of capital nature.

(ii) Securities premium account

Securities premium reserve represents premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act 2013.

(iii) General reserve

The Company has transferred a portion of the net profit before declaring dividend to general reserve pursuant to the earlier provision of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act 2013.

(iv) Share options outstanding account

The reserve is used to recognize the grant date fair value of the options issued to employees under Company''s employee stock option plan.

(v) Treasury shares

This reserve represents Company''s own equity shares held by the Cosmo ESOP Trust which is created under the Employee Stock Option Plan, 2015.

(vi) Effective portion of cash flow hedges

The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. Such gains or losses will be reclassified to statement of profit and loss in the period in which the hedged transaction occurs.

(vii) Debt instruments through other comprehensive income

The Company has classified investments in perpetual bonds as at fair value through other comprehensive income (FVOCI) since:(a) perpetual bonds are held within a business model whose objective is achieved by both collecting contractual cash flows and selling those bonds; and (b) the contractual terms of perpetual bonds give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.This reserve represents changes in fair value of perpetual bonds from the date of such classification to the reporting date. When the perpetual bonds are derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.

(viii) Equity instruments through other comprehensive income

The Company had classified certain investments in unquoted equity shares as at fair value through other comprehensive income (FVOCI) since these investments were held for long term value accretion and not being actively traded. This reserve represents the cumulative gains (net of losses) arising on revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts reclassified, if any, to retained earnings when those instruments are disposed of.

(ix) Capital redemption reserve

This reserve represents a statutory, non-distributable reserve into which amounts are transferred following the redemption or purchase of a company''s own shares.

IFF COSMO FILMS

IBar Engineered to Enhance _

NOTES OF THE FINANCIAL STATEMENTS for the year ended 31 March, 2022

(All amounts in '' crores, unless otherwise stated)

Particulars

31 March 2022

31 March 2021

Amount Maximum outstanding amount outstanding during the year

Corporate guarantee given for subsidiary company - Cosmo Films Inc., USA

Total

- 46.85

Corporate guarantee was given for working capital facility obtained by the subsidiary.

41 RESEARCH AND DEVELOPMENT EXPENDITURE

Research and development expenditures incurred by the Company during the financial year are mentioned below:

Particulars	For the year ended Â¦31 March 2022 31 March 2021
Research and development capital expenditure (gross) Research and development revenue expenditure	1.63	0.01
Material and consumables	5.91	3.32
Employee benefits expense	5.14	3.50
Other expenses	1.62	0.77
	14.30	7.60
Sales for the year	2,781.56	2,026.30
Total research and development expenditure/sales	0.51%	0.38%

Assets purchased/capitalised for research and development centres

Description	R & D Centre
Gross carrying value
As at 31 March 2020	9.45
Additions	0.01
As at 31 March 2021	9.46
Additions	1.63
As at 31 March 2022	11.09
Accumulated depreciation
As at 31 March 2020	2.80
Depreciation for the year	0.71
As at 31 March 2021	3.51
Depreciation for the year	0.82
As at 31 March 2022	4.33
Net carrying amount as at 31 March 2021	5.95
Net carrying amount as at 31 March 2022	6.76

42 1. EMPLOYEE STOCK OPTION PLAN

Pursuant to the approval of the shareholders, the Company has introduced Cosmo Films Share Based Employee Benefit Scheme 2021 (CF SBEB Scheme, 2021) which supersedes earlier Cosmo Films Employees Stock Option Plan 2015 (CF ESOP 2015) to provide share based incentive to the eligible employees of the Company and its subsidiaries. However, Options already granted under CF ESOP 2015 will continue to be governed in accordance with the said Plan. The plan is implemented via trust route which will acquire the equity shares of the Company by secondary market acquisition, however, in case of any shortfall the Company will issue new shares as required. When exercisable, each option is convertible into one equity share.

The weighted average remaining contractual life outstanding as of 31 March 2021 was 3.84 years (31 March 2021: Nil years). The weighted average exercise price of options outstanding as of 31 March 2022 was '' 1800.00 (31 March 2021: '' Nil).

C) Market value of SARs as at the reporting date is used to determine the fair value amortised in the profit and loss account.

43 EMPLOYEE BENEFIT OBLIGATIONS 1) Gratuity

The Company makes contribution towards gratuity to a defined retirement benefits plan for qualifying employees. The Company has taken policy with Life Insurance Corporation of India to provide for payment of retirement benefits to vested employees. The present value of obligation is determined based on actuarial valuation. The expected contribution to the plan for next annual reporting period amounts to '' 3.22 crores (31 March 2021: '' 2.84 crores).

The weighted average duration of the defined benefit obligation as at 31 March 2022 is 4 years (31 March 2021: 4 years).

44 LEASES

A The Company has taken residential/commercial premises on lease. There are no restrictions placed upon the Company by entering into these leases and there are no subleases. The Company is prohibited from selling or pledging the underlying leased assets as security. The Company also has certain leases of various assets with lease terms of 12 months or less. The Company applies the âshort-term lease'' recognition exemptions for these leases.

B) Fair value hierarchy

The different levels of fair value have been defined below:

Level 1: Quoted prices for identical instruments in an active market;

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and

Level 3: Inputs which are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a net asset value or valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

Valuation process and technique used to determine fair values

(i) All financial instruments are initially recognised at cost and subsequently re-measured at fair value as described below:

a) The fair value of investment in quoted Equity Shares is measured at quoted price as at reporting date.

b) The fair value of investment in quoted Bonds and Debentures is measured based on the last traded price on stock exchange as at the reporting date.

c) The fair value of investments in Alternative Investment Funds and Mutual Funds is based on the net asset value (NAV) as stated by the issuers of these funds in the published statements as at the balance sheet date.

d) The fair value for unquoted instruments where Level 1 inputs are not available, the Company engages third party valuers, where required, to perform the valuation. Information about the valuation techniques used in determining the fair value of various assets is as follows:

i. Asset Approach : Net Assets Value Method

ii. Income Approach : Discounted Cash Flows Method

iii. Market Approach : Comparable Companies Multiples Method

(ii) Fair value for derivatives contracts is determined using observable forward and option exchange rates and yield curves as at the balance sheet date.

B) (ii) Fair value of financial assets and liabilities measured at amortised cost

The fair values of loans are not materially different from the amortised cost thereof. Further, the management assessed that fair values of trade receivables, cash and cash equivalents, other bank balances, other current financial assets (excluding derivative assets), current borrowings, trade payables and other current financial liabilities (excluding derivative liabilities) approximate their respective carrying amounts largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

All the long term borrowing facilities availed by the Company are variable rate facilities which are subject to changes in underlying interest rate indices. Further, the credit spread on these facilities are subject to change with changes in Company''s creditworthiness. The management believes that the current rate of interest on these loans are in close approximation from market rates applicable to the Company. Therefore, the management estimates that the fair value of these borrowings are approximate to their respective carrying values.

The fair value measurements disclosed in respect of financial assets and liabilities measured at amortised cost fall within Level 3 of fair value hierarchy.

A. Credit risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company''s exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.

Trade receivables

Credit risk related to trade receivables are mitigated by taking bank guarantees/letter of credit, from customers where credit risk is high. The Company closely monitors the credit-worthiness of the debtors through internal systems that are configured to define credit limits of customers, thereby, limiting the credit risk to pre-calculated amounts. The Company assesses increase in credit risk on an ongoing basis for amounts receivable that become past due and default is considered to have occurred when amounts receivable become one year past due. Company obtains the credit insurance for export debtors from Export Credit Guarantee Corporation (ECGC) of India and for domestic debtors from insurance company.

Investments

This risk refers to a situation where a particular bond issuer is unable to make the expected principal payments, interest rate payments, or both.

The Company''s deployment in debt instruments are primarily in bonds and debentures issued by highly rated banks, financial institutions and public sector undertakings. With respect to the Company''s investing activities, counter parties are shortlisted and exposure limits are determined on the basis of their credit rating (by independent agencies), financial statements and other relevant information. As these counter parties are Banks/ Financial Institutions /public sector undertakings with investment grade credit ratings and taking into account the experience of the Company over time, the counter party risk attached to such assets is considered to be insignificant.

Furthermore, with respect to the company''s investments in Equity and Preference instruments, Mutual Funds and AIF''s, since these investments are not exposed to counterparty risks, therefore they have been considered under low credit risk instruments.

Derivative instruments

Credit risk related to derivative instruments is managed by the Company by doing transactions with highly rated banks. Further, management has established limits for use of derivative instruments to minimise the concentration of risks and therefore mitigate financial loss through counterparties potential failure to make payments.

Other financial assets measured at amortised cost

Other financial assets measured at amortised cost includes loans and advances to employees, security deposits and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously.

Provision for expected credit losses

a) Expected credit losses for financial assets other than trade receivables

Company provides for expected credit losses on loans and advances other than trade receivables by assessing individual financial instruments for expectation of any credit losses. Since, the Company deals with only high-rated banks and financial institutions, credit risk in respect of cash and cash equivalents, other bank balances and bank deposits is evaluated as very low. In respect of loans, comprising of security deposits, credit risk is considered low because the Company is in possession of the underlying asset. In respect of other financial assets, credit risk is evaluated based on Company''s knowledge of the credit worthiness of those parties. The Company does not have any expected loss based impairment recognised on such assets considering their low credit risk nature.

b) Expected credit loss for financial assets under simplified approach

The Company recognises lifetime expected credit losses on trade receivables using a simplified approach, wherein Company has defined percentage of provision by analysing historical trend of default and such provision percentage determined have been considered to recognise life time expected credit losses on trade receivables (other than those where default criteria are met in which case the full expected loss against the amount recoverable is provided for). Customer advances amounting to '' 29.82 crores (31 March 2021 : '' 34.16 crores) were not considered for the purpose of computation of expected credit

B. Liquidity risk

Management monitors rolling forecasts of the liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

(ii) Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar, GBP, Euro and JPY. Fluctuations in foreign currency exchange rates may have an impact on profit or loss and the statement of change in equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.

Exposures on foreign currency loans are managed through a hedging policy, which is reviewed periodically to ensure that the results from fluctuating currency exchange rates are appropriately managed. The Company''s policy is to hedge material foreign exchange risk associated with borrowings, highly probable forecast sales and purchases transactions denominated in foreign currencies. The Company strives to achieve asset liability offset of foreign currency exposures and only the net position is hedged.

The Company uses forward exchange contracts, currency swaps, other derivatives and non-derivative instruments to hedge the effects of movements in exchange rates on foreign currency denominated assets, liabilities and highly probable forecast transactions. The sources of foreign exchange risk are outstanding

amounts payable for imported raw materials, capital goods and other supplies and as well as financing transactions and loans denominated in foreign currencies. The Company is also exposed to foreign exchange risk on its highly probable forecasted sales and purchases. The policy of the Company is to determine on a regular basis what portion of the foreign exchange risk on financing transactions and loans are to be hedged through forward exchange contracts and other instruments. Short-term net exposures are hedged progressively based on their maturity. The hedge mechanisms are reviewed periodically to ensure that the risk from fluctuating currency exchange rates is appropriately managed. The following analysis is based on the gross exposure as at the reporting date which could affect the profit or loss or other comprehensive income. Instruments designated in hedging relationship and hedge accounting disclosures are include in section âDerivative financial instruments and hedge accountingâ.

Sensitivity analysis

The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments and the impact on other components of equity arises from foreign forward exchange contracts and non-derivative financial instruments designated as cash flow hedges.

b) The Company uses foreign currency forward contracts, foreign currency options contracts and non-derivative financial instruments (i.e. foreign currency borrowings) to mitigate exchange rate exposure arising from forecast sales and purchase in USD, EUR and GBP Also, the Company uses foreign currency options contracts, cross currency swap contracts and interest rate swap contracts to mitigate exchange rate exposure and interest rate exposure arising from foreign currency borrowings.

Hedge effectiveness is determined at inception of the hedge relationship and at every reporting period end through the assessment of the hedged items and hedging instrument to determine whether there is still an economic relationship between the two.

The critical terms of the foreign currency forwards and cross currency swaps entered into exactly match the terms of the hedged item. As such the economic relationship and hedge effectiveness are based on the qualitative factors and the use of a hypothetical derivative where appropriate.

In hedges of foreign currency borrowings and forecast transaction, ineffectiveness mainly arises because of Change in timing of hedged item from that of the hedging instrument and cost of hedging. The ineffectiveness in the hedges have been disclosed.

All derivative financial instruments used for hedge accounting are recognised initially at fair value and reported subsequently at fair value in the statement of financial position.

To the extent that the hedge is effective, changes in the fair value of derivatives designated as hedging instruments in cash flow hedges are recognised in other comprehensive income and included within the cash flow hedge reserve in equity. Any ineffectiveness in the hedge relationship is recognised immediately in profit or loss. At the time the hedged item affects profit or loss, any gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss and presented as a reclassification adjustment within other comprehensive income.

If a forecast transaction is no longer expected to occur, any related gain or loss recognised in other comprehensive income is transferred immediately to profit or loss. If the hedging relationship ceases to meet the effectiveness conditions, hedge accounting is discontinued, and the related gain or loss is held in the equity reserve until the forecast transaction occurs.

Other derivatives, which have not been designated in hedging relationship, are considered by management to be part of economic hedge arrangements but have not been formally designated.

48 CAPITAL MANAGEMENT

The Company''s capital management objectives are to ensure the Company''s ability to continue as a going concern as well as to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The Company monitors capital on the basis of the carrying amount of equity plus its subordinated loan, less cash and cash equivalents as presented on the face of the statement of financial position and cash flow hedges recognised in other comprehensive income.

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares. The amounts managed as capital by the Company are summarised as follows:

52 Per transfer pricing legislation under Sections 92-92F of the Income-tax Act, 1961, the Company is required to use certain specific methods in computing arm''s length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the âStudy'') to determine whether the transactions with associate enterprises undertaken during the financial year are on an âarms length basisâ. Management is of the opinion that the Company''s international transactions are at arm''s length and that the results of the on-going study will not have any impact on the financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

53 The Company continues to closely monitor the impact of the Covid-19 pandemic on all aspects of its business. The Company is engaged in the business of flexible packaging films which is part of essential commodities, and therefore, the pandemic had marginal impact on the business operations of the Company. The management has exercised due care in concluding significant accounting judgements and estimates, inter-alia, recoverability of receivables, impairment assessment of financial and non-financial assets, realisability of Inventory and accordingly noted no significant impact on its financial results. Further, management believes that the Company will be able to discharge the liabilities as and when falling due. The Company will continue to monitor current and future conditions and impact thereof on Company''s operations.

Mar 31, 2018

1. Corporate information, basis of preparation and summary of significant accounting policies

i) Corporate Information

Cosmo Films Limited (the âCompanyâ), manufacturers of Bi-axially Oriented Polypropylene Films (BOPP), was incorporated in India in 1981, under the Companies Act, 1956. The Company is engaged in the production of flexible packaging films. Companyâs product majorly comprises of BOPP Films, Thermal Films and Coated Films. In India, the Company is currently having manufacturing at Aurangabad & Shendra in Maharashtra and at Karjan in Gujarat. It also has its subsidiaries working in different countries.

ii) Basis of Preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.

These financial statements are separate financial statements of the Company. The Company has also prepared consolidated financial statements for the year ended 31 March 2018 in accordance with Ind AS 110 and the same were also approved for issue by the Board of Directors, along with these financial statements on 23 May 2018.

These financial statements for the year ended 31 March 2018 are the first financial statements prepared by the Company under Ind AS. For all periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (hereinafter referred to as âPrevious GAAPâ). The financial statements for the comparative year ended 31 March 2017 and opening balance sheet at the beginning of the comparative year as at 1 April, 2016 have been restated in accordance with Ind AS. Reconciliations and explanations of the effect of the transition from Previous GAAP to Ind AS on the Companyâs Balance Sheet, Statement of Profit and Loss and Statement of Cash Flows are provided in Note 48.

The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1 April, 2016 being the date of transition to Ind AS.

The financial results have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value:

* Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments); and

* Defined benefit plans - plan assets measured at fair value.

iii) Significant management judgement in applying accounting policies and estimation uncertainty

The following are the critical judgments and the key estimates concerning the future that management has made in the process of applying the Companyâs accounting policies and that may have the most significant effect on the amounts recognized in the financial Statements or that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Allowance for expected credit losses - The allowance for expected credit losses reflects managementâs estimate of losses inherent in its credit portfolio. This allowance is based on Companyâs estimate of the losses to be incurred, which derives from past experience with similar receivables, current and historical past due amounts, write-offs and collections, the careful monitoring of portfolio credit quality and current and projected economic and market conditions. Should the present economic and financial situation persist or even worsen, there could be a further deterioration in the financial situation of the Companyâs debtors compared to that already taken into consideration in calculating the allowances recognised in the financial statements.

Allowance for obsolete and slow-moving inventory- The allowance for obsolete and slow-moving inventory reflects managementâs estimate of the expected loss in value, and has been determined on the basis of past experience and historical and expected future trends in the used vehicle market. A worsening of the economic and financial situation could cause a further deterioration in conditions in the used vehicle market compared to that taken into consideration in calculating the allowances recognized in the financial statements.

Recognition of deferred tax assets - The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the future taxable income against which the deferred tax assets can be utilized.

Evaluation of indicators for impairment of assets - The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.

Provisions - At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.

Useful lives of depreciable/ amortisable assets -Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of assets.

Defined benefit obligation (DBO) - Managementâs estimate of the DBO is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

Fair value measurements - Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.

Contingent liabilities - The Company is the subject of legal proceedings and tax issues covering a range of matters, which are pending in various jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to predict the final outcome of such matters. The cases and claims against the Company often raise difficult and complex factual and legal issues, which are subject to many uncertainties, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction and the differences in applicable law. In the normal course of business management consults with legal counsel and certain other experts on matters related to litigation and taxes. The Company accrues a liability when it is determined that an adverse outcome is probable and the amount of the loss can be reasonably estimated.

vi) Standards issued but not yet effective

- Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.

- Ind AS 115- Revenue from Contract with Customers: On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.

The standard permits two possible methods of transition:

* Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors;

* Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach) The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.

The Company will adopt the standard on 1 April, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ended 31 March, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 is expected to be insignificant.

*Represents deemed cost on the date of transition to Ind AS.

Note:

a) Additions include Rs. 0.27 crores (31 March 2017: Rs. 4.32 crores; 1 April 2016: Rs. 0.31 crores) towards assets located at research and development facilities.

b) Contractual obligation

Refer note 37 for disclosure of contractual commitments for the acquisition of property, plant and equipment.

CF Global Holdings Limited, Mauritius wholly owned subsidiary of Cosmo Films Limited had been liquidated with effect from 31 March 2017. Consequently, the shares of CF (Netherlands) Holding Limited BV, which were previously owned by CF Global Holding Limited, Mauritius have been transferred to Cosmo Films Limited.

Refer notes 43 and 44 for disclosure of fair value in respect of financial assets measured at amortised cost and assessment of expected credit losses.

Note:

a) Pledged deposits represent âNil (31 March 2017: Rs. 0.13 crores; 1 April 2016: âNil) pledged with State Bank of India for bank guarantee

b) Refer notes 43 and 44 for disclosure of fair value in respect of financial assets measured at amortised cost and assessment of expected credit losses.

Note:

a) Pledged deposits represent Rs. 3.38 crores (31 March 2017: Rs. 4.26 crores; 1 April 2016: Rs. 0.97 crores) pledged against margin money for issue of letter of credit and bank guarantees.

b) The deposit of Rs. 5.00 crores (31 March 2017: Rs. 5.00 crores; 1 April 2016: Rs. 5.00 crores) is pledged against overdraft facility.

Refer notes 43 and 44 for disclosure of fair value in respect of financial assets measured at amortised cost and assessment of expected credit losses.

Notes:

(i) Of the above 242,051 shares have been allotted to erstwhile shareholders of Gujarat Propack Limited on amalgamation in the financial year 2002-03. No shares have been issued for consideration other than cash in the current reporting year and in last five years immediately preceding the current reporting year.

(iii) There has not been any buy-back of shares in the current reporting year and in last five years immediately preceding the current reporting year.

(iv) There is no movement in equity share capital during the current year and previous year.

(v) Terms and rights attached to equity shares:

The Company has only one class of equity shares having the par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by Board of Directors is subject to approval of shareholders in Annual General Meeting except in case of interim dividend.

Final dividend recommended by the board is Rs. 6 per equity share, (31 March 2017: Rs. 10) and is subject to shareholders approval.

During the year ended 31 March 2018 the amount of per share dividend recognised as distributions to equity shareholders was Rs. 10 per share (31 March 2017: âNil per share).

(vi) Details of shareholders holding more than 5% shares in the company

Nature and purpose of reserves

(i) Capital reserve

Capital reserve was created under the previous GAAP out of the profit earned from a specific transaction of capital nature.

(ii) Securities premium account

Securities premium account represents premium received on issue of shares. The account is utilised in accordance with the provisions of the Companies Act 2013.

(iii) General reserve

(iv) Employee share options outstanding account

The reserve is used to recognize the grant value of the options issued to employees under Companyâs employee stock option plan.

(v) Foreign currency monetary item translation difference account

FCMITDA represents exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements.

(vi) Treasury shares

Treasury shares represent Company''s own equity shares held by the Cosmo Films ESOP 2015 Trust which is created under the employee stock option plan.

(vii) Other comprehensive income (OCI) reserve

(a) The cash flow hedge reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. Such gains or losses will be reclassified to statement of profit and loss in the period in which the hedged transaction occurs.

(b) The Company has recognised remeasurements benefits on defined benefits plans through other comprehensive income.

Note:

(a) Cash credits/ working capital demand loans/ export packing credits are secured/to be secured by hypothecation of inventories, trade receivable and second charge on fixed assets except assests exclusively carved out.

On the basis of confirmation obtained from suppliers who have registered themselves under the Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act, 2006) and based on the information available with the Company, dues disclosed above as micro and small enterprises are as per the Micro, Small and Medium Enterprise Development Act, 2006 at the year end.

Refer notes 43 and 44 for disclosure of fair values in respect financial liabilities measured at amortised cost and analysis of maturity profiles.

The finance cost shown above is net of borrowing costs capitalised during the year ended 31 March 2018 is Rs. 1.76 crores (31 March 2017: Rs. 2.83 crores) (1 April 2016: âNil).

Notes:

Disputed demand for income tax includes a dispute of Rs. 4.83 crores (31 March 2017: Rs. 4.83; 1 April 2016: Rs. 4.83 crores) between the Company and income tax department over computation of deduction under section 80HHC of the Income Tax Act, 1961. The Company has filed a special leave petition against the order of Honâble High Court which has been accepted by Supreme Court and is pending. Based on the legal opinion taken from an independent expert, the management is of the view that it is more likely than not that matter will be decided in favour of the Company.

2: EMPLOYEE STOCK OPTION PLAN

Pursuant to the approval of the shareholders, the Company has introduced Cosmo Films Employees Stock Option Plan 2015 (CF ESOP 2015) to provide share based incentive to the eligible employees of the Company and its subsidiaries. The plan is implemented via trust route which will acquire the equity shares of the Company by secondary market acquisition, however, in case of any shortfall the Company will issue new shares as required.

A) Under the CF ESOP 2015, the Company has granted 200,000 options in financial year 2017-18 (31 March 2017: 250,000 options; 1 April 2016: 193,000 options) as per the details given hereunder:

The weighted average remaining contractual life outstanding as of 31 March 2018 was 11.47 years (31 March 2017: 12.07 years; 1 April 2016: 12.78 years).

C) The fair value of options has been done on the date of grant using Black-Scholes Model.

The key assumption in Black-Scholes Model for calculating fair value on grant are as under:

$ The expected volatility was determined based on historical volatility data.

*Options life is considered on the basis of earliest possible exercise after vesting

3 : EMPLOYEE BENEFIT OBLIGATIONS

1) Gratuity

The Company makes contribution towards gratuity to a defined retirement benefits plan for qualifying employees. The Company has taken policy with Life Insurance Corporation of India to provide for payment of retirement benefits to vested employees. The present value of obligation is determined based on acturial valuation. The expected contribution to the plan for next annual reporting period amounts to Rs. 0.13 crores.

The weighted average duration of the defined benefit obligation as at 31 March 2018 is 6 years (31 March 2017: 7 years)

The amounts recognised in the balance sheet and the movements in the net defined benefit obligation over the year are as follows:

Defined Contribution Plans

The Company also has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

4: LEASES

Operating leases

The Company has entered into agreements for taking on lease few properties under operating lease arrangements. The leases are non-cancellable and are ranging for the period upto 6 years and may be renewed for the further period based on mutual agreement of the parties.

5 RELATED PARTY DISCLOSURES

In accordance with the required Indian Accounting Standard (IndAS-24) on related party disclosures where control exist and where transactions have taken place and description of the relationship as identified and certified by management are as follows:

i) List of related parties and relationships:

A. Subsidiary and step-down subsidiary companies

a) CF Global Holdings Limited, Mauritius (liquidated on 31 March 2017)

b) Cosmo Films Inc., USA

c) CF (Netherlands) Holdings Limited BV., Netherlands

d) Cosmo Films Japan (GK), Japan

e) Cosmo Films Korea Limited, Korea

f) CF Investment Holding Private (Thailand) Company Limited, Thailand

g) Cosmo Films (Singapore) Pte. Limited, Singapore

h) Cosmo Films Poland Sp Z.O.O (w.e.f. 29 January 2018), Poland

B. Enterprises over which Key managerial personnel of the Company and their relatives have significant influence:

a) Sunrise Manufacturing Company Limited

b) Prime Securities Limited

c) Cosmo Ferrites Limited

d) Cosmo Foundation

C. Key management personnel

a) Mr. Ashok Jaipuria, Chairman and Managing Director of Company

b) Mr. Anil Kumar Jain, Director of corporate affairs

c) Mr. H. K. Agrawal, Independent Director

d) Mr. Rajeev Gupta, Independent Director

e) Mrs. Alpana Parida, Non-Independent Director

f) Mr. Ashish Kumar Guha, Independent Director

g) Mr. Pratip Chaudhuri, Independent Director

h) Mr. H. N. Sinor, Independent Director

i) Mr. Vivek Nangia, Independent Director

j) Mr. Pankaj Poddar, Chief Executive Officer

k) Mr. Neeraj Jain, Chief Financial Officer

l) Ms. Jyoti Dixit, Company Secretary

Investment in subsidiaries are measured at cost as per Ind AS 27, âSeparate financial statementsâand hence, not presented here.

B) Fair value hierarchy

The different levels of fair value have been defined below:

Level 1: Quoted prices for identical instruments in an active market;

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and

Valuation process and technique used to determine fair values

(i) The fair value of investments in mutual fund units is based on the net asset value (NAV) as stated by the issuers of these mutual fund units in the published statements as at the balance sheet date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors.

(ii) In order to arrive at the fair value of unquoted investments, the company obtains independent valuations. The techniques used by the valuer are as follows:

a) Asset approach - Net assets value method

b) Income approach - Discounted cash flows (âDCFâ) method

c) Market approach - Enterprise value/Sales multiple method

B) (ii) Fair value of financial assets and liabilities measured at amortised cost

Fair value of instruments measured at amortised cost for which fair value is disclosed is as follows, these fair values are calculated using Level 3 inputs:

The management assessed that fair values of cash and cash equivalents, trade receivables, other receivables, borrowings, trade payables and other current financial liabilities approximate their respective carrying amounts largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The below mentioned methods and assumptions were used to estimate the fair values:

All the long term borrowing facilities availed by the Company are variable rate facilities which are subject to changes in underlying interest rate indices. Further, the credit spread on these facilities are subject to change with changes in Companyâs creditworthiness. The management believes that the current rate of interest on these loans are in close approximation from market rates applicable to the Company. Therefore, the management estimates that the fair value of these borrowings are approximate to their respective carrying values.

6 : RISK MANAGEMENT

The Companyâs activities expose it to market risk, liquidity risk and credit risk. The management has the overall responsibility for the establishment and oversight of the Companyâs risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

A. Credit risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company''s exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and other financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

Credit risk management Credit risk rating

The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A: Low credit risk on financial reporting date B: Moderate credit risk C: High credit risk

The Company provides for expected credit loss based on the following:

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within a reasonable time after the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company or debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.

Credit risk exposure

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.

Trade receivables

Other financial assets measured at amortised cost

Provision for expected credit losses

a) Expected credit losses for financial assets other than trade receivables

Company provides for expected credit losses on loans and advances other than trade receivables by assessing individual financial instruments for expectation of any credit losses. Since, the Company deals with only high-rated banks and financial institutions, credit risk in respect of cash and cash equivalents, other bank balances and bank deposits is evaluated as very low. In respect of loans, comprising of security deposits, credit risk is considered low because the Company is in possession of the underlying asset. In respect of other financial assets, credit risk is evaluated based on Companyâs knowledge of the credit worthiness of those parties and loss allowance is measured as lifetime expected credit losses. The Company does not have any expected loss based impairment recognised on such assets considering their low credit risk nature, though incurred loss provisions are disclosed under each sub-category of such financial assets.

b) Expected credit loss for financial assets under simplified approach

The Company recognizes lifetime expected credit losses on trade receivables using a simplified approach, wherein Company has defined percentage of provision by analysing historical trend of default based on the criteria defined above and such provision percentage determined have been considered to recognise life time expected credit losses on trade receivables (other than those where default criteria are met).

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

Financing arrangements

The Company has access to the following undrawn borrowing facilities at the end of reporting period:

Contractual maturities of financial liabilities

The tables below analyse the financial liabilities into relevant maturity Companyingâs based on their undiscounted contractual maturities (including interest).

Market Risk Interest Rate risk

The Companyâs policy is to minimise interest rate cash flow risk exposures on long-term financing. The Company is exposed to changes in market interest rates through bank borrowings at variable interest rates.

The following table illustrates the sensitivity of profit after tax and equity to a possible change in interest rates of /- 1% in current year (31 March 2017: /- 1%; 1 April 2016: /- 1%). These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

Foreign currency risk

Fluctuations in foreign currency exchange rates may have an impact on profit or loss and the statement of change in equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.

Exposures on foreign currency loans are managed through a hedging policy, which is reviewed periodically to ensure that the results from fluctuating currency exchange rates are appropriately managed. The Company strives to achieve asset liability offset of foreign currency exposures and only the net position is hedged.

The Company uses forward exchange contracts, currency swaps and other derivatives to hedge the effects of movements in exchange rates on foreign currency denominated assets and liabilities. The sources of foreign exchange risk are outstanding amounts payable for imported raw materials, capital goods and other supplies as well as financing transactions and loans denominated in foreign currencies. The Company is also exposed to foreign exchange risk on its exports. The policy of the Company is to determine on a regular basis what portion of the foreign exchange risk on financing transactions and loans are to be hedged through forward exchange contracts and other instruments. Short-term net exposures are hedged progressively based on their maturity. The hedge mechanisms are reviewed periodically to ensure that the risk from fluctuating currency exchange rates is appropriately managed. The following analysis is based on the gross exposure as at the reporting date which could affect the profit or loss or other comprehensive income. The exposure summarised below is mitigated by some of the derivative contracts entered into by the Company as disclosed under the section on âDerivative financial instrumentsâ.

Derivative financial instruments

The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency exchange rates and interest rates. The Company does not acquire derivative financial instruments for trading or speculative purposes. The derivative transactions are normally in the form of forward contracts, interest rate swaps and cross currency swaps and these are subject to the Company guidelines and policies. The fair values of all derivatives are separately recorded in the balance sheet within current and noncurrent assets and liabilities. Derivatives that are designated as hedges are classified as current or non-current depending on the maturity of the derivative.

The use of derivatives can give rise to credit and market risk. The Company tries to control credit risk as far as possible by only entering into contracts with reputable banks and financial institutions. The use of derivative instruments is subject to limits, authorities and regular monitoring by appropriate levels of management. The limits, authorities and monitoring systems are periodically reviewed by management and the Board. The market risk on derivatives is mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes.

The Company enters into forward exchange contracts for hedging highly probable forecast transactions and accounts for them as cash flow hedges and states them at fair value. Subsequent changes in fair value are recognised in equity until the hedged transactions occur, at which time the respective gains or losses are transferred to the income statement.

The cash flows related to above are expected to occur during the year ended 31 March 2019 and consequently may impact profit or loss for that year depending upon the change in the foreign exchange rates movements.

Derivative contracts entered into by the company and outstanding as at Balance Sheet date :

To hedge currency risks and interest related risks, the Company has entered into various derivatives contracts. The category wise break up of amount outstanding as on Balance Sheet date is given below :

Price risk Exposure

The Companyâs exposure to price risk arises from investments held and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit or loss. To manage the price risk arising from investments, the Company diversifies its portfolio of assets.

Sensitivity

The table below summarises the impact of increases/decreases of the index on the Companyâs equity and profit for the period :

7: CAPITAL MANAGEMENT

The Companyâs capital management objectives are to ensure the Companyâs ability to continue as a going concern as well as to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

Dividends not recognised at the end of the reporting period

In addition to the above dividends, the directors have recommended the payment of a final dividend of Rs. 6 per fully paid equity share. This proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting.

8 SEGMENT REPORTING

In accordance with Ind AS 108, the Board of directors being the Chief operating decision maker of the Company has determined its only one business segment of packaging films. Further, in terms of Paragraph 4 and 31 of Ind AS 108 âOperating Segmentsâ, entity wide disclosures have been presented below:

a) Revenue as per geographical markets:

b) There is no customer who has contributed of 10% or more in the revenue.

9 CASH FLOW

Reconciliation of liabilities arising from financing activities

The changes in the Companyâs liabilities arising from financing activities can be classified as follows:

10 FIRST TIME ADOPTION OF IND AS Transition to Ind AS

These are the companyâs first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS Balance Sheet at 1 April 2016 (the Companyâs date of transition). In preparing its opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is set out in the following tables and notes.

A. Ind AS optional exemptions

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

Ind AS optional exemptions

Deemed cost of property, plant and equipment

Ind AS 101 permits an entity to elect to measure an item of property, plant and equipment at the date of transition to Ind AS at its fair value and use that fair value as its deemed cost at that date.

Accordingly, the Company has elected to use the fair value of certain items of property, plant and equipment on the date of transition and designate the same as deemed cost on the date of transition. Fair value has been determined, by obtaining an external third party valuation, with reference to the depreciated replacement cost of similar assets, a level 3 valuation technique. For the remaining assets, the Company has applied Ind AS retrospectively, from the date of their acquisition.

Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVTPL on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments.

Deemed cost for investments in subsidiaries

The Company has elected to measure its investments in subsidiaries at their fair value determined as of 1 April 2016 (transition date). Fair value has been determined by obtaining an external third party valuation using discounted cash flow method, level 3 valuation technique.

Long term foreign currency monetary items

Ind AS 101 allows a first-time adopter to continue the policy adopted for the accounting for exchange differences arising on translation of the long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per previous GAAP.

The Company has opted for this exemption and continued its previous GAAP policy for accounting for exchange differences on long-term foreign currency monetary items recognized in the previous GAAP financial statements for the year ended 31 March 2017. Accordingly, foreign currency differences on such items attributable to the acquisition of property, plant and equipment are adjusted against their cost and depreciated prospectively over the remaining useful lives.

Ind AS mandatory exceptions

Estimates

An entityâs estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

a) Fair value of investment in equity instruments carried at FVTPL or FVOCI

b) Impairment of financial assets based on expected credit loss model.

Classification and measurement of financial assets and liabilities

The classification and measurement of financial assets will be made considering whether the conditions as per Ind AS 109 are met based on facts and circumstances existing at the date of transition.

Financial assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstances existing at the date of transition and if it is impracticable to assess the use of effective interest method, fair value of financial asset at the date of transition shall be the new carrying amount of that asset. The measurement exemption applies for financial liabilities as well.

Hedge accounting

The Company had designated various hedging relationships as cash flow hedges under the previous GAAP. On date of transition to Ind AS, the Company had assessed that all the designated hedging relationship qualifies for hedge accounting as per Ind AS 109. Consequently, the Company continues to apply hedge accounting on and after the date of transition to Ind AS.

B: Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Impact of Ind AS on the adoption in the statement of Cash Flows for the year ended 31 March 2017

There are no material adjustments of transition to the statement of Cash Flows to conform to Ind AS presentation for the year ended 31 March 2017.

Note 1:

Borrowings

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest method. Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred.

Note 2:

Property, plant and equipment- Government grant

Under Ind AS, the transfer of resources from the government in the form of a waiver of duty needs to be accounted for as government grant. Accordingly, the duty benefit availed under Export Promotion Capital Goods (EPCG) Scheme on purchase of plant and equipment has been recognised as government grant by an increase in the carrying value of plant and equipment with a corresponding credit to the deferred government grant. The increase in the value of plant and equipment is depreciated over the balance useful life of the asset. The deferred grant revenue is recognised in profit or loss over the expected useful life in the pattern of consumption of the benefit of the underlying asset. Under Previous GAAP, such benefits were being netted off with the cost of the respective item of plant and equipment.

Note 3:

Property, plant and equipment

Fair valuation as deemed cost for certain items of Property, Plant and Equipment :Ind AS 101 permits an entity to elect to measure an item of property, plant and equipment at the date of transition to Ind AS at its fair value and use that fair value as its deemed cost at that date. Accordingly, the Company has elected to use the fair value of certain items of property, plant and equipment on the date of transition and designate the same as deemed cost on the date of transition. Fair value has been determined, by obtaining an external third party valuation, with reference to the depreciated placement cost of similar assets, a level 3 valuation technique. For the remaining assets, the Company has applied Ind AS retrospectively, from the date of their acquisition.

Note 4:

Employee stock option plan

Pursuant to the approval of the shareholders, the Company has introduced Cosmo Films Employees Stock Option Plan 2015 (CF ESOP 2015) to provide share based incentive to the eligible employees of the Company and its subsidiaries. The plan is to be implemented via trust route which will acquire the equity shares of the Company by secondary market acquisition, however, in case of any shortfall the Company will issue new shares as required.

Note 5:

Derivative recognised at fair value

Under previous GAAP, the premium or discount arising at the inception of the forward contract was amortised as expense or income over the life of the contract and the exchange differences on such a contract was recognised in the statement of profit and loss in the reporting period in which the exchange rates change. Under Ind AS, all derivative contracts are measured at fair value through profit and loss at each reporting date.

Note 6:

Recognition of trade receivable

Under previous GAAP, discounted debtors against letter of credit were derecognised. Under Ind AS, since derecognition criteria is not met, trade receivables are presented at their gross amount.

Note 7:

Remeasurements of defined benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year.

Note 8:

Hedging reserve

Hedge accounting can only be applied prospectively from the transition date to transactions that satisfy the hedge accounting criteria in Ind AS 109, at that date. Hedging relationships cannot be designated retrospectively, and the supporting documentation cannot be created retrospectively. As a result, only hedging relationships that satisfied the hedge accounting criteria as of 1 April 2016, are reflected as hedges in the Companyâs results under Ind AS. The Company had designated various hedging relationships as cash flow hedge and fair value hedges under the previous GAAP. On the date of transition to Ind AS, the Company has assessed that all the designated hedging relationship qualifies for hedge accounting as per Ind AS 109. Consequently, the Company continues to apply hedge accounting on and after the date of transition to Ind AS.

Note 9:

Investment in subsidiaries - Fair valuation as deemed cost:

The Company has elected to measure investment in equity shares of its subsidiary company at the date of transition at its fair value and use that fair value as its deemed cost as at that date. Accordingly investments in equity shares of subsidiaries has decreased by Rs. 79.21 crore as at 31 March 2017 and 1 April 2016 with a corresponding credit to retained earnings.

Note 10:

Adjustments for consolidation of Cosmo Films ESOP 2015 Trust (''ESOP Trust'')

ESOP Trust that has been allotted the shares which have not vested yet, for distribution to employees of the Company, has been consolidated on line by line basis by reducing from Other equity of the Company the value of such shares held by the trust as treasury shares.

Note 11:

Excise duty

Under Previous GAAP, revenue from sale of goods was presented net of excise duty whereas under Ind AS the revenue from sale of goods is presented inclusive of excise duty. The excise duty is presented on the face of the Statement of profit and loss as part of expenses.

Note 12:

Minimum Alternate Tax (âMATâ)

Ind AS 12 requires classification of MAT credit as deferred tax asset. Accordingly, the Company has reclassified MAT credit from loans and advances to deferred tax asset on each reporting date. There is no impact on the total equity or profit as a result of this adjustment.

Note 13:

Deferred tax

Under Previous GAAP, deferred tax was accounted using the income statement approach, on the timing differences between the taxable profit and accounting profits for the period. Under Ind AS, deferred tax is recognized following balance sheet approach on the temporary differences between the carrying amount of asset or liability in the balance sheet and its tax base. In addition, various transitional adjustments have also led to recognition of deferred taxes on new temporary differences

11 Per transfer pricing legislation under sections 92-92F of the Income tax Act, 1961, the Company is required to use certain specific methods in computing armâs length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the âStudyâ) to determine whether the transactions with associate enterprises undertaken during the financial year are on an âarms length basisâ. Management is of the opinion that the Companyâs international transactions are at armâs length and that the results of the on-going study will not have any impact on the financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

12 PREVIOUS YEARS FIGURES

Corresponding figures for the previous year have been regrouped/rearranged, whenever necessary to confirm to current year classification.

Mar 31, 2017

1 SHARE CAPITAL

Notes:

i) Of the above 242,051 shares have been allotted to erstwhile shareholders of Gujarat Propack Limited on amalgamation in the financial year 2002-03. No shares has been issued for consideration other than cash in the current reporting year and in last five years immediately preceding the current reporting year.

ii) Of the above 8,486,705 shares have been allotted as fully paid bonus shares by capitalisation of capital reserves and share premium account in the financial year 2002-03. No shares has been issued as bonus shares in the current reporting year and in last five years immediately preceding the current reporting year.

iii) There has not been any buy-back of shares in the current reporting year and in last five years immediately preceding the current reporting year.

iv) There is no movement in equity share capital during the current year and previous year.

v) Terms and rights attached to equity shares:

The Company has only one class of equity shares having the par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by Board of Directors is subject to approval of shareholders in Annual General Meeting except in case of interim dividend.

During the year Board of Directors declared an interim dividend of Rs.Nil per equity share, (previous year Rs.10 per equity shares). Final dividend is recommended by the board is Rs.10 per equity share, (previous year Rs.Nil) and is subject to shareholders approval.

During the year ended 31 March 2017 the amount of per share dividend recognised as distributions to equity shareholders was Rs.Nil per share (previous year Rs.10 per share).

vi) Details of shareholders holding more than 5% shares in the Company

2 LONG TERM BORROWINGS

Notes:

a) Foreign currency loans comprises of :

(i) Loan of USD 10,000,000 taken from ICICI Bank during the financial year 2010-11 and carries interest rate based upon Libor plus 400 bps per annum. The loan is repayable in 5 equal semi-annual instalments of USD 2,000,000 each after moratorium of 3.5 years from the date of loan. This loan has been repaid during the year.

(ii) Loan of USD 13,272,220 taken from Landesbank Baden Wurttemberg Bank (LBBW) during the financial year 2008-09 and 2009-10 and carries interest rate based upon Libor plus 37.5 bps per annum. The loan is repayable in 16 equal semi-annual instalments of about USD 832,640 each after six month from the date of start of commercial production. This loan has been repaid during the year.

(iii) Loan of USD 10,000,000 taken from International Finance Corporation Bank during the financial year 2011-12 and 2013-14 and carries interest rate based upon Libor plus 400 bps per annum. The loan is repayable in 17 semi annual instalments after moratorium of 2.5 years from the date of loan.

(iv) Loan of EUR 10,367,450 taken from Landesbank Baden Wurttemberg Bank (LBBW) during the financial year 2012-13 and 2014-15 and carries interest based upon Euribor plus 105 bps per annum. The loan is repayable in 17 equal semi-annual instalments of EUR 609,850 each after six month from the signing of final acceptance certificate for start of commercial production.

(v) Loan of USD 7,000,000 taken from DBS Bank Limited during the financial year 2012-13 and carries interest rate based upon Libor plus 225 bps per annum. The loan is repayable in 8 semi-annual installments starting from April 2015. (The loan has been fully hedged into an equivalent Rupee loan with fixed rate of interest).

(vi) Loan of USD 7,177,230 taken from EXIM Bank of India during the financial year 2015-16 & 2016-17 and carries interest rate based upon Libor plus 275 bps per annum. The loan is repayable in 24 equal quarterly instalments commencing after a moratorium of 18 months from scheduled commercial operation date or actual commercial operation date whichever is earlier.

(vii) Loan of EUR 13,605,291 taken from Landesbank Baden Wurttemberg Bank (LBBW) during the financial year 2015-16 and 2016-17 and carries interest rate based upon Euribor plus 60 bps per annum. The loan is repayable in 20 equal semi-annual instalments after six month from the date of start of commercial production.

viii) Loans of Rs.300,000,000 and Rs.600,000,000 were taken from State Bank of India. As on 27 May 2016, outstanding loan amount was converted into fully hedged FCNR loans of USD 7,821,000. The tenure of facilities remain in-line with the original sanction. The loan of Rs.300,000,000 has been repaid in full during the financial year 2015-16.

b) Rupee term loans comprises of:

(i) Loan of Rs.30 crores taken from State Bank of India during the financial year 2012-13 and 2013-14 and carries interest rate based upon base rate plus 2.25% per annum. The loan is repayable after a moratorium of 12 month from the date of disbursement in 8 equal quarterly instalments of Rs.3.75 crores each. The loan had been repaid during financial year 2015-16. During the financial year 2014-15, loan was converted into fully hedged FCNR loan. Refer note a (viii).

(ii) Loan of Rs.60 crores taken from State Bank of India during the financial year 2013-14 and carries interest rate based upon base rate plus 2.3% per annum. The loan is repayable after a moratorium of 24 month from the date of disbursement in 24 equal quarterly instalments of Rs.2.5 crores each. This loan has been converted into fully hedged FCNR loan. Refer note a (viii).

(iii) Loan of Rs.27.76 crores taken from IDBI Bank during the financial year 2014-15 and 2015-16 and carries interest based upon base rate plus 2.5% per annum. The loan is repayable in 10 structured half yearly instalments starting from 31 March 2018.

(iv) Loan of Rs.15 crores taken from ICICI Bank during the financial year 2015-16 and carries interest rate based upon base rate plus 2.75% per annum. The loan is repayable in 16 quarterly instalments starting from 30 June 2016. This loan has been repaid during the year.

(v) Loan of Rs.35 crores taken from IndusInd Bank during the financial year 2016-17 and carries interest rate based upon Mibor plus 465 bps per annum. The loan is repayable in 17 equal quarterly instalments after moratorium of 12 months from the first date of disbursement.

(vi) Loan of Rs.45 crores taken from SVC Co-opeartive Bank Limited during the financial year 2016-17 and carries interest rate based upon SBIâs 6 month MCLR plus 165 bps per annum to be reset on quarterly basis.The loan is repayable in 15 quarterly instalments of Rs.3 crores each after moratorium of 12 months from the date of disbursement.

c) Vehicle loans taken from Union Bank of India carries interest @10.5%-12% per annum. This loan is repayable in 3 years.

d) Details of security for each type of borrowings:-

(i) Foreign currency loan from ICICI Bank is secured by charge on all of the Companyâs moveable and immovable fixed assets, both present and future, other than assets specifically carved out, ranking pari passu with other lenders and Second pari passu charge on current assets of the company both present and future. The loan has been repaid and security has been released during financial year 2016-17.

(ii) Foreign currency loan from Landesbank Baden Wurttemberg Bank (LBBW) taken in financial year 2008-09 and financial year 2009-10 is secured against hypothecation of machinery financed out of the loan amount at the Companyâs plant at Karjan - Vadodara. The loan has been repaid and security has been released during financial year 16-17.

(iii) Foreign currency loan from International Finance Corporation Bank is secured by first ranking security interest over all present and future movable and immovable fixed assets other than assets specifically carved out, ranking pari passu with the other lenders and second pari passu charge on current assets of the company both present and future.

(iv) Foreign currency loan from Landesbank Baden Wurttemberg Bank (LBBW) taken in financial year 2012-13 and 2014-15 is secured against hypothecation of machinery financed out of the loan amount at the Companyâs new plant at Shendra, Aurangabad.

(v) Foreign currency loan from DBS Bank is secured by pari passu charge on the movable and immovable fixed assets both present and future of the Company, other than assets specifically carved out and Second pari passu charge on current assets of the company both present and future.

vi) Foreign currency loan from EXIM bank taken in financial year 2015-16 and 2016-17 is secured against (i) First pari passu charge over the movable and immovable fixed assets of the company both present and future, other than assets specifically carved out (ii) Second pari passu charge on current assets of the company both present and future.

(vii) Foreign currency loan from Landesbank Baden Wurttemberg Bank (LBBW) taken in financial year 2015-16 and 2016-17 is secured against hypothecation of machinery financed out of the loan amount at the Companyâs plant at Karjan, Aurangabad.

(viii) Rupee term loan of Rs.60 crores from State Bank of India is secured against (i) First pari passu charge over the movable and immovable fixed assets of the company both present and future, other than assets specifically carved out. (ii) Second pari passu charge on current assets of the company both present and future.

ix) Corporate Loan from IDBI Bank taken in financial year 2014-15 and 2015-16 is secured against (i) Demand Promissory Note (ii) First pari passu charge over the movable and immovable fixed assets of the company both present and future, other than assets specifically carved out. (iii) Second pari passu charge on current assets of the company both present and future.

(x) Rupee term loan taken from ICICI Bank in financial year 2015-16 is secured against (i) First pari passu charge over the movable and immovable fixed assets of the company both present and future, other than assets specifically carved out. (ii) Second pari passu charge on current assets of the company both present and future. The loan has been repaid and security has been released during the financial year 2016-17.

(xi) Rupee term loan taken from IndusInd Bank in the financial year 2016-17 is secured against (i) First pari-passu charge over movable and immovable fixed assets of the Company both present and future, other than assets specifically carved out. (ii) Second pari-passu charge on current assets of the company both present and future.

(xii) Rupee term loan taken from SVC Co-operative Bank Limited in financial year 2016-17 is secured against (i) First pari-passu charge over movable and immovable fixed assets of the Company both present and future, other than assets specifically carved out. (ii) Second pari-passu charge on current assets of the company both present and future.

(xiii) Vehicle loans from Union Bank of India are secured against hypothecation of respective vehicles.

e) Current maturities of long term borrowings are disclosed under the head other current liabilities.

3 DEFERRED TAX LIABILITIES (NET)

Notes:

a) Cash credits/ working capital demand loans/ export packing credits are secured/to be secured by hypothecation of inventories, trade receivable and second charge on fixed assets secured to financial institutions except assets exclusively charged.

Cash credit and working capital demand loans from the bank comprises of the following:

(i) Cash credit/working capital demand loan of Rs.30 crores sanctioned by Export Import Bank of India is repayable on demand and carries interest rate from 9% to 12% per annum.

(ii) Working capital demand loan of Rs.20 crores sanctioned by HDFC Bank is repayable on demand and carries interest rate from 9% to 12% per annum.

(iii) Cash credit/working capital demand loan of Rs.15 crores sanctioned by ICICI Bank is repayable on demand and carries interest from 9% to 12% per annum.

(iv) Cash credit/working capital demand loan of Rs.65 crores sanctioned by Union Bank of India is repayable on demand and carries interest from 9% to 12% per annum.

(v) Cash credit/working capital demand loan of Rs.37 crores sanctioned by YES Bank of India is repayable on demand and carries interest from 9% to 12% per annum.

(vi) Cash credit/working capital demand loan of Rs.40 crores sanctioned by IDBI Bank is repayable on demand and carries interest from 9% to 12% per annum.

(vii) Cash credit of Rs.50 crores sanctioned by State Bank of India is repayable on demand and carries interest from 9% to 12% per annum.

(viii) Cash credit/working capital demand loan/export packing credit of Rs.20 crores sanctioned by DBS Bank is repayable on demand and carries interest from 9% to 12% per annum.

(ix) Cash credit/working capital demand loan/export packing credit of Rs.30 crores sanctioned by Rabobank is repayable on demand and carries interest from 9% to 12% per annum.

b) Overdraft of Rs.5 crores from HDFC Bank is secured against pledge of the fixed deposits of the Company and is repayable on demand and carries interest rate as mutually decided.

4 EXCEPTIONAL ITEMS

Exceptional items represents net loss on foreign currency transaction and translation amounting to Rs.0.42 crores (previous year Rs.6.36 crores). Due to significant volatility in foreign currency exchange rates, the company has considered loss on foreign exchange fluctuation as an exception item.

5 CONTINGENT LIABILITIES AND COMMITMENTS

(i) Contingent liabilities

a) Disputed demand for income tax includes a dispute of Rs.4.83 crores (previous year Rs.4.83) between the Company and income tax department over computation of deduction under section 80HHC of the Income Tax Act, 1961. The Company has filed a special leave petition against the order of Honâble Court which has been accepted by Supreme Court and is pending. Based on the legal opinion taken from an independent expert, the management is of the view that it is more likely than not that matter will be decided in favour of the Company.

b) It represents discounted export debtors amounting to Rs.4.81 crores (Previous year Rs.0.76 crores) against letter of credit and other discounted debtors of Rs.10.39 crores (Previous year Rs.6.45 crores) which has 90% credit insurance coverage from Export Credit and Guarantee Corporation of India Limited. All the discounted invoices have been reduced from Trade Receivables in note 15.

c) It represents discounted domestic debtors amount to Rs.1.58 crores (Previous year Rs.2.28 crores) against letter of credit. All the discounted invoices have been reduced from Trade Receivables in note 15.

(ii) Commitments

a) Capital Commitment

The Company has the following commitments:

b) The following amounts are to be credited to investor education and protection fund as and when due:

6 Employee benefits

(a) Defined benefit plans (funded)

7 RELATED PARTY DISCLOSURE

In accordance with the required Accounting Standard (AS-18) on related party disclosures where control exist and where transactions have taken place and description of the relationship as identified and certified by management are as follows:

i) List of related parties and relationships:

A. Subsidiary and step-down subsidiary companies

a) CF Global Holdings Limited, Mauritius (liquidated on 31 March 2017)

b) Cosmo Films Inc., USA

c) CF (Netherlands) Holdings Limited BV, Netherlands

d) Cosmo Films Japan (GK)

e) Cosmo Films Korea Limited, Korea

B. Enterprises over which Key managerial personnel of the Company and their relatives have significant influence:

a) Sunrise Manufacturing Company Limited

b) Prime Securities limited

c) Cosmo Ferrites limited

d) Cosmo Foundation

e) Gayatri & Annapurana

C. Key management personnel

a) Mr. Ashok Jaipuria Chairman and Managing Director

8 OPERATING LEASE

The Company has entered into agreements for taking on lease some of office premises under operating lease arrangements. The leases are non-cancellable and are ranging for the period upto 3 years and may be renewed for the further period based on mutual agreement of the parties.

9 EMPLOYEE STOCK OPTION PLAN

Pursuant to the approval of the shareholders, the Company has introduced Cosmo Films Employees Stock Option Plan 2015 (CF ESOP 2015) to provide share based incentive to the eligible employees of the Company and its subsidiaries. The plan is to be implemented via trust route which will acquire the equity shares of the Company by secondary market acquisition, however, in case of any shortfall the Company will issue new shares as required.

A) Under the CF ESOP 2015, the Company has granted 250,000 options in financial year 2016-17 (previous year 193,000 options) as per the details given hereunder:

B) Movement of options granted

The weighted average remaining contractual life outstanding as of 31 March 2017 was 12.07 years (previous year 12.78 years).

C) The fair value of options used to compute performa net income and earning per equity share has been done on the date of grant using Black-Scholes Model. The key assumption in Black-Scholes Model for calculating fair value on grant are as under:

D) Had the compensation cost for stock options granted being determined based on fair value approach, the Companyâs net profit and earning per share would have been as follows

10 DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE

I) Derivative instruments

a) Foreign currency exposure hedged by derivative instruments (against imports):

Notes:

b) The Company entered into interest rate swap contract (floating rate to fixed rate) to hedge its risk associated with LIBOR fluctuations and such instruments qualify as effective hedges. During the year, the contract has been settled by the Company. The mark to market loss as on 31 March 2017 is estimated at Rs.Nil (previous year Rs.0.14 crores).

c) The Company has entered into a cross currency swap agreement with DBS Bank for hedging of instalment and interest rate for term loan amounting to USD 7,000,000 taken in the previous year. The mark to market gain as on 31 March 2017 is estimated at Rs.5.21 crores (previous year loss Rs.7.26 crores).

d) The Company entered into Vanilla European options to hedge two of its ECBs amounting to USD 8,000,000 and USD 4,995,838 respectively during the prior years. During the current year, these contracts has been settled by the Company. The mark to market gain on these options as on 31 March 2017 is estimated at Rs.Nil (previous year Rs.2.07 crores)

e) The Company has entered into a cross currency swap agreement with IndusInd Bank for hedging of instalment of IFC term loan amounting to USD 983,386 in current financial year. The mark to market loss as on 31 March 2017 is estimated at Rs.0.08 crores (previous year Rs.Nil).

f) The Company has entered into European options to hedge its External Commercial Borrowings amounting to USD 1,399,894 during financcial year 2015-16. During the current year, the contracts has been settled by the Company. The mark to market gain on these options as on 31st March 2017 is Rs.Nil (previous year Rs.0.15 crores).

g) The Company has entered into a cross currency swap agreement with IndusInd Bank for hedging of instalment of term loan amounting to USD 5,200,594.35 in current financial year. The mark to market loss as on 31 March 2017 is estimated at Rs.3.02 crores (previous year Rs.Nil).

h) The Company has converted loan of 60 crores taken from SBI bank in FCNR loan and entered into an hedge agreement with the same bank. The mark to market loss as on 31 March 2017 is estimated at Rs.3.66 crores (previous year Rs.Nil).

ii) Particulars of unhedged foreign currency exposure as at the reporting date

11 CORPORATE SOCIAL RESPONSIBILITY

a) Gross amount required to be spent by the Company during the year in compliance with section 135 of the Companies Act, 2013 is Rs.1.27 crores (previous year Rs.0.46).

b) Amount spent during the year on -

12 DISCLOSURE ON SPECIFIED BANK NOTES:

During the year, the Company has specified Bank Notes (SBN) or other denomination notes as defined in the MCA Notification, G.S.R. 308(E), dated 31 March 2017. The Details of SBN held and transacted during the period from 8 November 2016 to 30 December 2016, the denomination-wise SBNs and other notes as per the notification are as follows:

13 Per transfer pricing legislation under sections 92-92F of the Income tax Act, 1961, the Company is required to use certain specific methods in computing armâs length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the âStudyâ) to determine whether the transactions with associate enterprises undertaken during the financial year are on an âarms length basisâ. Management is of the opinion that the Companyâs international transactions are at armâs length and that the results of the ongoing study will not have any impact on the financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

14 PREVIOUS YEARS FIGURES

Corresponding figures for the previous year have been regrouped/rearranged, whenever necessary to confirm to current year classification.

Mar 31, 2016

(i) Of the above 242,051 (previous year 242,051) shares have been allotted to erstwhile shareholders of Gujarat Propack Limited on amalgamation.

(ii) Of the above 8,486,705 (previous year 8,486,705) shares have been allotted as fully paid bonus shares by capitalization of capital reserves and share premium account.

a) There is no movement in equity share capital during the current year and previous year.

b) Terms and rights attached to equity shares

The Company has only one class of equity shares having the par value of '' 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by Board of Directors is subject to approval of shareholders in Annual General Meeting except in case of interim dividend.

During the year Board of Directors declared an interim dividend of '' 10 per equity share, (previous year '' Nil). No Final dividend is recommended by the Board.

During the year ended 31 March 2016 the amount of per share dividend recognized as distributions to equity shareholders was ''10 per share (previous year Rs, 3.50 per share).

Notes:

a) Foreign currency loans comprises of :

(i) Loan of USD 10,000,000 taken from ICICI Bank during the financial year 2010-11 and carries interest @ Libor 400 bps per annum. The loan is repayable in 5 equal semi-annual installments of USD 2,000,000 each after moratorium of 3.5 years from the date of loan.

(ii) Loan of USD 13,272,220 taken from Landsman Baden Wurttemberg Bank (LBBW) during the financial year 200809 and 2009-10 and carries interest @ Libor 375 bps per annum. The loan is repayable in 16 equal semi-annual installments of approx. USD 832,640 each after six month from the date of start of commercial production.

(iii) Loan of USD 10,000,000 taken from International Finance Corporation Bank during the financial year 2011-12 and 2013-14 and carries interest @ Libor 400 bps per annum. The loan is repayable in 17 semi-annual installments after moratorium of 2.5 years from the date of loan.

(iv) Loan of EUR 10,367,450 taken from Landsman Baden Wurttemberg Bank (LBBW) during the financial year 2012-13 and 2014-15 and carries interest @ Euribor 105 bps per annum. The loan is repayable in 17 equal semi-annual installments of EUR 609,850 each after six month from the signing of final acceptance certificate for start of commercial production.

(v) Loan of USD 7,000,000 taken from DBS Bank Limited during the financial year 2012-13 and carries interest @ Libor 225 bps per annum. The loan is repayable in 8 semi-annual installments of USD starting from April-2015. (The loan has been fully hedged into an equivalent Rupee loan with fixed rate of interest).

(vi) Loan of USD 2,405,472 taken from EXIM Bank of India during the financial year 2015-16 and carries interest @ Libor Margin per annum. The loan is repayable in 24 substantially equal quarterly installments commencing after a moratorium of 18 months from scheduled commercial operation date or actual commercial operation date whichever is earlier.

(vii) Loan of EUR 235,120 taken from Landes bank Baden Wurttemberg Bank (LBBW) during the financial year 201516 and carries interest @ Euribor Margin per annum. The loan is repayable in 20 equal semi-annual installments after six month from the date of start of commercial production.

viii) Loans of Rs, 300,000,000 and Rs, 600,000,000 taken from State Bank of India were converted into fully hedged FCNR loans. The tenure of facilities remain in-line with the original sanction.

b) Rupee term loans comprises of :

(i) Loan of Rs, 300,000,000 taken from State Bank of India during the financial year 2012-13 and 2013-14 and carries interest @ base rate 2.25% per annum. The loan is repayable after a moratorium of 12 month from the date of disbursement in 8 equal quarterly installments of Rs, 37,500,000. This loan has been repaid during the year. During the year loan was converted into fully hedged FCNR loan. Refer note a viii).

(ii) Loan of Rs, 600,000,000 taken from State Bank of India during the financial year 2013-14 and carries interest @ base rate 2.3% per annum. The loan is repayable after a moratorium of 24 month from the date of disbursement in 24 equal quarterly installments of Rs, 25,000,000. During the year loan was converted into fully hedged FCNR loan. Refer note a viii).

(iii) Loan of Rs, 277,644,000 taken from IDBI Bank during the financial year 2014-15 and 2015-16 and carries interest @ base rate 2.5% per annum. The loan is repayable in 10 structured half yearly installments starting from 31 March 2018.

(iv) Loan of Rs, 150,000,000 taken from ICICI Bank during the financial year 2015-16 and carries interest @ base rate 2.75% per annum. The loan is repayable in 16 quarterly installments starting from 30 June 2016.

c) Vehicle loans taken from Union Bank of India carries interest @10.5% -12% per annum. This loan is repayable within

3 years.

d) Details of security for each type of borrowings:-

(i) Foreign currency loan from ICICI Bank is secured by charge on all of the CompanyRs,s moveable and immovable fixed assets, both present and future, save and except excluded assets, ranking pari passu with other lenders and Second pari passu charge on current assets of the company both present and future.

(iii) Foreign currency loan from International Finance Corporation Bank is secured by first ranking security interest over all present and future movable and immovable fixed assets except the excluded assets, ranking pari passu with the other lenders and Second pari passu charge on current assets of the company both present and future.

(iv) Foreign currency loan from Landesbank Baden Wurttemberg Bank (LBBW) taken in financial year 2012-13 and 2014-15 is secured against hypothecation of machinery financed out of the loan amount at the Company''s new plant at Shendra, Aurangabad.

(v) Foreign currency loan from DBS Bank is secured by pari passu charge on the movable and immovable fixed assets both present and future of the Company, except the excluded assists and Second pari passu charge on current assets of the company both present and future.

vi) Foreign currency loan from EXIM bank taken in financial year 2015-16 is secured against (i) First pari passu charge over the movable and immovable fixed assets of the company both present and future, except excluded assets (ii) Second pari passu charge on current assets of the company both present and future.

(vii) Foreign currency loan from Landesbank Baden Wurttemberg Bank (LBBW) taken in financial year 2015-16 is secured against hypothecation of machinery financed out of the loan amount at the Company''s plant at Karjan, Aurangabad.

(viii) Rupee term loan of Rs, 30 crores from State Bank of India is secured against (i) First pari passu charge over the movable and immovable fixed assets of the company both present and future, except excluded assets

(ii) Second pari passu charge on current assets of the company both present and future. The loan has been repaid and security has been released during FY 15-16.

(ix) Rupee term loan of Rs, 60 crores from State Bank of India is secured against (i) First pari passu charge over the movable and immovable fixed assets of the company both present and future, except excluded assets (ii) Second pari passu charge on current assets of the company both present and future.

x) Corporate Loan from IDBI Bank taken in financial year 2014-15 and 2015-16 is secured against (i) DP Note (ii) First pari passu charge over the movable and immovable fixed assets of the company both present and future, except excluded assets (iii) Second pari passu charge on current assets of the company both present and future.

(xi) Rupee term loan taken from ICICI in financial year 2015-16 is secured against (i) First pari passu charge over the movable and immovable fixed assets of the company both present and future, except excluded assets (ii) Second pari passu charge on current assets of the company both present and future.

(xii) Vehicle loans from Union Bank of India are secured against hypothecation of vehicles financed out of the loan amount.

e) Current maturities of long term borrowings are disclosed under the head other current liabilites.

a) Cash credits/ working capital demand loans/ export packing credits are secured/to be secured by hypothecation of inventories, trade receivable and second charge on fixed assets secured to financial institutions except assets exclusively charged.

Cash credit and working capital demand loans from the bank comprises of the following:

(i) Cash credit/working capital demand loan of Rs, 30 crores sanctioned by Export Import Bank of India is repayable on demand and carries interest as mutually decided.

(ii) Working capital demand loan of Rs, 20 crores sanctioned by HDFC Bank is repayable on demand and carries interest rate as mutually decided.

(iii) Cash credit/working capital demand of Rs, 15 crores sanctioned by ICICI Bank is repayable on demand and carries interest @ base rate 3.00% per annum.

(iv) Cash credit/working capital demand of Rs, 65 crores sanctioned by Union Bank of India is repayable on demand and carries interest @ base rate 2.00% per annum.

(v) Cash credit/working capital demand of Rs, 15 crores sanctioned by YES Bank of India is repayable on demand and carries interest @ base rate 2.50% per annum.

(vi) Cash credit/working capital demand of Rs, 40 crores sanctioned by IDBI Bank is repayable on demand and carries interest @ base rate 2.00% per annum.

(vii) Cash credit of Rs, 50 crores sanctioned by State Bank of India is repayable on demand and carries interest @ base rate 1.50% per annum.

(viii) Cash credit/working capital loan/export packing credit of Rs, 20 crores sanctioned by DBS Bank is repayable on demand and carries interest as mutually agreed.

b) Overdraft of Rs, 5 crores from HDFC Bank is secured against pledge of the fixed deposit of the Company and is repayable on demand and carries interest rate as mutually decided.

* Micro and small enterprises have been identified by the Company from the available information, which has been relied upon by the auditors. According to such identification, there are no dues to micro and small enterprises that are reportable as per the Micro, Small and Medium Enterprises Development Act, 2006 as at the year end.

a) Capitalization of foreign exchange differences

The foreign exchange difference capitalized during the year ended 31 March 2016 was Rs, 10.81 crores (previous year Rs, 11.27 crores).

b) The Company has reassessed the useful life of fixed assets in accordance with the guidelines under Schedule II of the Companies Act, 2013 with effect from 1 April 2014 .

c) Additions include Rs, 0.31 crores (previous year ^ 0.47 Crores) towards assets located at research and development facilities.

1. EXCEPTIONAL ITEMS

Exceptional items represents net loss on foreign currency transaction and translation amounting to Rs, 6.36 crores (previous year loss Rs, 9.20 crores). Due to significant volatility in foreign currency exchange rates, the Company has considered loss on foreign exchange fluctuation as an exception item.

i) Disputed demand for income tax includes a dispute of Rs, 4.83 crores (previous year Rs, 4.83 crores) between the Company and income tax department over computation of deduction under section 80HHC of the Income-Tax Act, 1961. The Company has filed a special leave petition against the order of Hon''ble Court which has been accepted by Supreme Court and is pending. Based on the legal opinion taken from an independent expert, the management is of the view that it is more likely than not that matter will be decided in favour of the Company.

ii) It represents discounted export debtors amount to Rs, 0.76 crores (previous year Rs, 9.12 Crores) against letter of credit and other discounted debtors of Rs, 6.45 crores (previous year Rs, 11.22 Crores ) which has 90% credit insurance coverage from Export Credit and Guarantee Corporation of India Limited. All the discounted invoices have been reduced from trade receivables in note 14.

iii) It represents discounted domestic debtors amount to Rs, 2.28 crores (previous year 3.89 crores) against letter of credit. All the discounted invoices have been reduced from trade receivables in note 14.

2 EMPLOYEE BENEFITS

a) Defined benefit plans (funded)

The Company makes contribution towards gratuity to a defined contribution retirement benefits plan for qualifying employees. The Company has taken policy with Life Insurance Corporation of India to provide for payment of retirement benefits to vested employees. The present value of obligation is determined based on actuarial valuation.

3. RELATED PARTY DISCLOSURE

i) List of related parties and relationships:

A. Subsidiary and step-down subsidiary companies

a) CF Global Holdings Limited, Mauritius

b) Cosmo Films Inc., USA

c) CF (Netherlands) Holdings Limited BV., Netherlands

d) Cosmo Films Japan (GK)

e) Cosmo Films Korea Limited, Korea

f) CF Investment Holding Private (Thailand) Company Limited, Thailand.

g) Cosmo Films (Singapore) Pte. Limited

B. Enterprises over which key managerial personnel of the Company and their relatives have significant influence:

a) Sunrise Manufacturing Company Limited

b) Prime Securities Limited

c) Cosmo Ferrites Limited

d) Cosmo Foundation

4. OPERATING LEASE

a) The Company has entered into agreements for taking on lease some of office premises under operating lease arrangements. The leases are non-cancellable and are ranging for the period upto 3 years and may be renewed for a further period based on mutual agreement of the parties.

5. EMPLOYEE STOCK OPTION PLAN

Pursuant to the approval of the shareholders, the company has introduced Cosmo Films Employees Stock Option Plan 2015 (CF ESOP 2015) to provide share based incentive to the eligible employees of the Company and its subsidiaries. The plan is to be implemented via trust route which will acquire the equity shares of the Company by secondary market acquisition, however, in case of any shortfall the company will issue new shares as required.

b) The Company has entered into interest rate swap contract (floating rate to fixed rate) to hedge its risk associated with LIBOR fluctuations and such instruments qualify as effective hedges. In accordance with Accounting Standard

6., âFinancial Instruments - recognition and measurementâ the mark to market loss as on 31 March 2016 is estimated at Rs, 0.14 crores (previous year Rs, 0.43 crores).

c) The Company has entered into a cross currency swap agreement with DBS Bank for hedging of installment and interest rate for term loan amounting to USD 7,000,000 taken in the previous year. In accordance with Accounting Standard 30, âFinancial Instruments - recognition and measurementâ the mark to market gain as on 31 March 2016 is estimated at Rs, 7.26 crores (previous year gain Rs, 5.25 crores).

d) The Company has entered into vanilla European options to hedge two of its External Commercial Borrowings amounting to USD 8,000,000 and USD 4,995,838 respectively during the previous year. In accordance with Accounting Standard 30, âFinancial Instruments - recognition and measurementâ the mark to market gain on these options as on 31 March 2016 is estimated at Rs, 2.07 crores.

e) The Company has entered into European options to hedge its External Commercial Borrowings amounting to USD 1,399,894 during FY 15-16. In accordance with Accounting Standard 30, âFinancial Instruments - recognition and measurementâ the mark to market gain on these options as on 31 March 2016 is estimated at Rs,0.15 crores.

7. Tax Expenses is net of reversal of Rs, 3.46 crores relating to the previous year arising mainly on account of section 10AA of the Income Tax Act, 1961.

8. CORPORATE SOCIAL RESPONSIBILITY

a) Gross amount required to be spent by the company during the year in compliance with section 135 of the Companies Act 2013 is Rs, 0.46 crores (Previous year Rs, 0.44 crores).

9. Per transfer pricing legislation under sections 92-92F of the Income-Tax Act, 1961, the Company is required to use certain specific methods in computing arm''s length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the âStudy'') to determine whether the transactions with associate enterprises undertaken during the financial year are on an âarms length basisâ. Management is of the opinion that the Company''s international transactions are at arm''s length and that the results of the on-going study will not have any impact on the financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

10. PREVIOUS YEARS FIGURES

Corresponding figures for the previous year have been regrouped/rearranged, whenever necessary to confirm to current year classification.

Mar 31, 2015

1. (i) Of the above 242,051 (Previous year 242,051) shares have been alloted to erstwhile shareholders of Gujarat Propack Limited on amalgamation.

(ii) Of the above 8,486,705 (Previous year 8,486,705) shares have been allotted as fully paid bonus shares by capitalisation of capital reserves and share premium account.

2. a) There is no movement in equity share capital during the current year and previous year.

b) Terms and rights attached to equity shares

The Company has only one class of equity shares having the par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees.

During the year ended 31 March 2015 the amount of per share dividend recognised as distributions to equity shareholders was Rs. 3.50 per share (previous year Rs. 1 per share). The dividend proposed by Board of Directors is subject to approval of shareholders in Annual General Meeting.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after payment of all liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. a) Foreign currency loans comprises of :

(i) Loan of USD 10,000,000 taken from ICICI Bank during the financial year 2010-11 and carries interest @ Libor 400 bps per annum. The loan is repayable in 5 equal semi annual installments of USD 2,000,000 each after moratorium of 3.5 years from the date of loan.

(ii) Loan of USD 13,272,220 taken from Landesbank Baden Wurttemberg Bank (LBBW) during the financial year 2008-09 and 2009-10 and carries interest @ Libor 37.5 bps per annum. The loan is repayable in 16 equal semi annual installments of approx. USD 832,640 each after six month from the date of start of commercial production.

(iii) Loan of USD 10,000,000 taken from IFC Bank during the financial year 2011-12 and 2013-14 and carries interest @ Libor 400 bps per annum. The loan is repayable in 17 semi-annual installments after moratrorium of 2.5 years from the date of loan.

(iv) Loan of EUR 10,367,450 taken from Landesbank Baden Wurttemberg Bank (LBBW) during the financial year 2012- 13 to 2014-15 and carries interest @ Euribor 105 bps per annum. The loan is repayable in 17 equal semi annual installments of EUR 609,850 each after six month from the signing of final acceptance certificate for start of commercial production.

(v) Loan of USD 7,000,000 taken from DBS Bank Limited during the financial year 2012-13 and carries interest @ Libor 225 bps per annum. The loan is repayable in 8 semi-annual installments from April-2015. (The loan has been fully hedged into an equivalent Rupee loan with fixed rate of interest).

b) Rupee term loans comprises of :

(i) Loan of Rs. 108,675,000 taken from Kotak Mahindra Bank during the financial year 2011-12 and carries interest @ base rate 3.75% per annum. The loan is repayable in 78 equal monthly installments of Rs. 1,393,000 alongwith interest from the date of loan. The loan has been repaid in full during the Financial Year 2014-15.

(ii) Loan of Rs. 300,000,000 taken from SBI during the financial year 2012-13 and 2013-14 and carries interest @ base rate 2.25% per annum. The loan is repayable after a moratorium of 12 month from the date of disbursement in 8 equal quarterly installments of Rs. 37,500,000.

(iii) Loan of Rs. 600,000,000 taken from SBI during the financial year 2013-14 and carries interest @ base rate 2.3% per annum. The loan is repayable after a moratorium of 24 month from the date of disbursement in 24 equal quarterly installments of Rs. 25,000,000.

(iv) Loan of Rs. 128,700,000 taken from IDBI Bank during the financial year 2014-15 and carries interest @ base rate 2.5% per annum. The loan is repayable in 10 structured half yearly installments starting from 31 March 2018.

c) Vehicle loans taken from Union Bank of India carries interest @10.5% -12% per annum. This loan is repayable in 3 years.

d) Details of security for each type of borrowings:-

(i) Foreign currency loan from ICICI Bank is secured by subservient charge on all of the Company's movable fixed assets, both present and future, save and except plant and machineries at Baska and Chikalthana and any assets charged exclusively to other lenders.

(ii) Foreign currency loan from Landesbank Baden Wurttemberg Bank (LBBW) taken in financial year 2008-09 and financial year 2009-10 is secured against hypothecation of machinery financed out of the loan amount at the Company's plant at Karjan, Vadodara.

(iii) Foreign currency loan from IFC Bank is secured by first ranking security interest over all present and future movable and immovable fixed assets except the excluded assets, ranking pari passu with the other lenders.

(iv) Foreign currency loan from Landesbank Baden Wurttemberg Bank (LBBW) taken in financial year 2012-13 and 2013-14 is secured against hypothecation of machinery financed out of the loan amount at the Company's new plant at Shendra, Aurangabad.

(v) Foreign currency loan from DBS Bank is secured by pari passu charge on the movable and immovable fixed assets both present and future of the Company, except the excluded assests.

vi) Rupee term loan from Kotak Mahindra Bank is secured against mortage by way of exclusive charge on the immovable properties being commercial properties situated at 1004-1010, 10th Floor, DLF Tower, Jasola New Delhi. The loan has been repaid and security released during Financial Year 2014-15.

vii) Corporate loan from IDBI Bank taken in financial year 2014-15 is secured against (i) DP Note (ii) first pari passu charge over the movable and immovable fixed assets of the company both present and future, excluding assets having exclusive charge (iii) second pari passu charge on current assets of the company both present and future.

(viii) Rupee term loan of Rs. 30 crores from SBI is secured against pari-passu charge with other term lenders on entire movable and immovable fixed assets of the Company, both present and future except excluded assets.

(ix) Rupee term loan of Rs. 60 crores from SBI is secured against pari-passu charge with other term lenders on entire movable and immovable fixed assets of the Company, both present and future except excluded assets.

(x) Vehicle loans from Union Bank of India are secured against hypothecation of vehicles financed out of the loan amount.

e) Current maturities of long term borrowings are disclosed under the head other current liabilites.

4. Notes:

a) Cash credits/ working capital demand loans/ export packing credits are secured/to be secured by hypothecation of inventories, trade receivable and second charge on fixed assets secured to financial institutions except assets exclusively charged.

Cash credit and working capital demand loans from the bank comprises of the following:

(i) Cash credit/working capital demand loan of Rs. 30 crores sanctioned by Export Import Bank of India is repayable on demand and carries interest rate as mutually decided.

(ii) Working capital demand loan of Rs. 20 crores sanctioned by HDFC Bank is repayable on demand and carries interest rate as mutually decided.

(iii) Cash credit/working capital demand of Rs. 15 crores sanctioned by ICICI Bank is repayable on demand and carries interest @ base rate 3.00% per annum.

(iv) Cash credit/working capital demand of Rs. 25 crores sanctioned by ING Vysya Bank is repayable on demand and carries interest @ base rate 2.35% per annum.

(v) Cash credit/working capital demand of Rs. 65 crores sanctioned by Union Bank of India is repayable on demand and carries interest @ base rate 2% per annum.

(vi) Cash credit/working capital demand of Rs. 15 crores sanctioned by YES Bank of India is repayable on demand and carries interest @ base rate 2.5% per annum.

(vii) Cash credit/working capital demand of Rs. 40 crores sanctioned by IDBI Bank is repayable on demand and carries interest @ base rate 2.0 per annum.

(viii) Cash credit of Rs. 50 crores sanctioned by State Bank of India is repayable on demand and carries interest @ base rate 1.5% per annum.

(ix) Cash credit/working capital loan/export packing credit of Rs. 20 crores sanctioned by DBS Bank is repayable on demand and carries interest as mutually agreed.

5. EXCEPTIONAL ITEMS

Exceptional items represents net loss on foreign currency transaction and translation amounting to ` 9.20 crores (previous year loss ` 20.50 crores).

6. Contingent liabilities and commitments

(i) Contingent liabilities

Particulars As at As at 31 March 2015 31 March 2014

a) Disputed demands for income tax (refer note g below) 4.83 4.83

b) Disputed demands for excise and custom duty and service tax 5.17 3.81

c) Disputed demands for labour/ employee dispute 5.09 4.15

d) Claim against the Company not acknowledged as debts 0.15 0.12

e) Discounting of export customer invoices (refer note h below) 20.34 25.14

f) Discounting of domestic customer invoices (refer note i below) 3.89 -

g) Disputed demand for income tax includes a dispute of Rs. 4.83 crores (previous year Rs. 4.83) between the Company and income tax department over computation of deduction under section 80HHC of the Income Tax Act, 1961. The Company has filed a special leave petition against the order of Hon'ble Court which has been accepted by Supreme Court and is pending. Based on the legal opinion taken from an independent expert, the management is of the view that it is more likely than not that matter will be decided in favour of the Company.

h) It represents discounted export debtors amount to Rs. 9.12 crores (previous year Rs. 12.46 crores) against letter of credit and other discounted debtors of Rs. 11.22 crores (previous year Rs. 12.68 crores) which has 90% credit insurance coverage from ECGC. All the discounted invoices have been reduced from Trade Receivables in note 15.

i) It represents discounted domestic debtors amount to Rs. 3.89 crores (previous year Rs. Nil) against letter of credit. All the discounted invoices have been reduced from Trade Receivables in note 15.

j) The Company has given corporate guarantee for term loan facility of Rs. Nil (previous year Rs. 8.41 crores) availed by its step down subsidiary.

(ii) Commitments

The Company has the following commitments :

Particulars As at As at 31 March 2015 31 March 2014

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 10.89 4.94

Letter of credit opened for which the material has not been shipped 61.17 75.16 as on the date of the balance sheet.

iii) The following amounts are to be credited to investor education and protection fund as and when due:

Particulars As at As at 31 March 2015 31 March 2014

Unclaimed dividend 0.78 0.84

7. Employee benefits

Defined benefit plans (funded)

The Company makes contribution towards gratuity to a defined contribution retirement benefits plan for qualifying employees. The Company has taken policy with Life Insurance Corporation of India to provide for payment of retirement benefit to vested employees. The present value of obligation is determined based on the actuarial valuation.

8. Related party disclosure

In accordance with the required Accounting Standard (AS-18) on related party disclosures where control exist and where transactions have taken place and description of the relationship as identified and certified by management are as follows:

i) List of related parties and relationships:

A. Subsidiary and step-down subsidiary companies

a) CF Global Holdings Limited, Mauritius

b) Cosmo Films Inc., USA

c) CF (Netherlands) Holdings Limited BV., Netherlands

d) Cosmo Films (Singapore) Pte. Limited, Singapore

e) Cosmo Films Japan (GK)

f) Cosmo Films Korea Limited, Korea

g) CF Investment Holding Private (Thailand) Company Limited, Thiland

B. Enterprises over which Key managerial personnel of the Company and their relatives have significant influence:

a) Pravasi Enterprises Limited

b) Sunrise Manufacturing Company Private Limited

c) Cosmo foundation

C. Key management personnel

a) Mr. Ashok Jaipuria, Chairman and Managing Director

9. Notes:

i) The Company has entered into interest rate swap contract (floating rate to fixed rate) to hedge its risk associated with LIBOR fluctuations and such instruments qualify as effective hedges. In accordance with Accounting Standard 30, "Financial Instruments - recognition and measurement" the mark to market loss as on 31 March, 2015 is estimated at Rs. 0.43 crores (previous year Rs. 0.81 crores).

ii) The Company has entered into a cross currency swap agreement with DBS Bank for hedging of installment and interest rate for term loan amounting to USD 7,000,000 taken in the previous year. In accordance with Accounting Standard 30, "Financial Instruments - recognition and measurement" the mark to market gain as on 31 March 2015 is estimated at Rs. 5.25 crores (previous year loss Rs. 4.99 crores).

iii) The Company has entered into currency options to hedge two of its ECBs amounting to USD 8,000,000 and USD 4,995,838 respectively during the previous year. In accordance with Accounting Standard 30, "Financial Instruments - recognition and measurement" the mark to market gain on these options as on 31 March 2015 is estimated at Rs. 1.14 crores.

10. Building includes Rs. 0.64 crores (previous year Rs. 0.64 crores) towards cost of residential space in a Co-operative Housing Society. The Company has taken possession of the same in terms of agreement to sell. Conveyance deed is yet to be registered. Besides, the amount includes cost of shares of the said society received by the Company which are yet to be transferred in the name of the Company.

11. Per transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm's length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the 'Study') to determine whether the transactions with associate enterprises undertaken during the financial year are on an "arms length basis". Management is of the opinion that the Company's international transactions are at arm's length and that the results of the on-going study will not have any impact on the financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

12. Previous years figures

Previous years figures have been regrouped / rearranged wherever considered necessary.

Mar 31, 2013

1. Employee benefits

Defined benefit plans (funded)

The Company makes contribution towards gratuity to a defined contribution retirement benefits plan for qualifying employees. The Company has taken policy with Life Insurance Corporation of India to provide for payment of retirement benefits to vested employees. The present value of obligation is determined based on actuarial valuation.

2. Related party disclosure

In accordance with the required Accounting Standard (AS-18) on related party disclosures where control exist and where transactions have taken place and description of the relationship as identified and certified by management are as follows:

i) List of related parties and relationships:

A. Subsidiary and step-down subsidiary companies

a) CF Global Holdings Limited, Mauritius

b) Cosmo Films Inc., USA

c) CF (Netherlands) Holdings Limited BV., Netherlands

d) Cosmo Films (Singapore) Pte. Limited, Singapore

e) Cosmo Films Japan (GK)

f) Cosmo Films Korea Limited, Korea

B. Enterprises over which Key managerial personnel of the Company and their relatives have significant influence:

a) Pravasi Enterprises Limited

b) Sunrise Manufacturing Company Private Limited

C. Key management personnel

a) Mr. Ashok Jaipuria, Chairman and Managing Director

3 a) Building includes Rs 0.64 crores towards cost of residential space in a Co-operative Housing Society. The Company has taken possession of the same in terms of agreement to sell. Conveyance deed is yet to be registered. Besides, the amount includes cost of shares of the said society received by the Company which are yet to be transferred in the name of the Company.

b) Building includes cost of 5 shares of Rs 50 each of Pluto Appartment Co-operative Housing Society Limited paid as part of cost of flat.

4. Per transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm''s length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the ''Study'') to determine whether the transactions with associate enterprises undertaken during the financial year are on an "arms length basis". Management is of the opinion that the Company''s international transactions are at arm''s length and that the results of the on-going study will not have any impact on the financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

5. Previous years figures

Previous years figures have been regrouped/rearranged wherever considered necessary.

Mar 31, 2012

Notes:

(i) Of the above 242,051 shares have been alloted to erstwhile shareholders of Gujarat Propack Limited on amalgamation.

(ii) 8,486,705 shares have been allotted as fully paid bonus shares by capitalisation of capital reserves and share premium account.

(a) There is no movement in equity share capital during the current year and previous year.

(b) Terms and rights attached to equity shares

The Company has only one class of equity shares having the par value of Rs 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees.

During the year ended 31 March, 2012 the amount of per share dividend recognised as distributions to equity shareholders was Rs 5 (previous year Rs 5 per share).

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after payment of all liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

Notes:

a) Foreign currency loans comprises of :

(i) Loan of USD 10,000,000 taken from ICICI Bank during the financial year 2010-11 and carries interest @ Libor 400 bps per annum. The loan is repayable in 5 equal semi annual installments of USD 2,000,000 each after moratorium of 3.5 years from the date of loan.

(ii) Loan of USD 7,500,000 taken from HSBC PLC Bank during the financial year 2008-09 and carries interest @ Libor 150 bps per annum. The loan is repayable in 6 equal semi annual installments of USD 1,250,000 each after moratorium of 2.5 years from the date of loan.

(iii) Loan of USD 13,272,220 taken from Landesbank Baden Wurttemberg Bank (LBBW) during the financial year 2008-09 and 2009-10 and carries interest @ Libor 37.5 bps per annum. The loan is repayable in 16 equal semi annual install- ments of approx. USD 832,640 each after six month from the date of start of commercial production.

(iv) Loan of USD 5,000,000 taken from IFC Bank during the financial year 2011-12 and carries interest @ Libor 400 bps per annum. The loan is repayable in 15 equal semi-annual installments of USD 333,333 after moratrorium of 2.5 years from the date of loan.

b) Rupee term loans comprises of :

(i) Loan of Rs 108,675,000 taken from Kotak Mahindra Bank during the financial year 2011-12 and carries interest @ base rate 3.75% per annum. The loan is repayable in 78 equal monthly installments of Rs 1,393,000 alongwith interest from the date of loan.

(ii) Loan of Rs 318,159,170 taken from IDBI Bank during the financial year 2008-09 and carries interest @ base rate 2.65% per annum. The loan is repayable in 10 equal semi annual installments of Rs 31,815,917 alongwith interest from the date of loan.

c) Vehicle loans taken from Union Bank of India carries interest @10.5% -12% per annum. This loan is repayable in 3 years.

d) Details of security for each type of borrowings:-

(i) Foreign currency loan from ICICI Bank is secured by subservient charge on all of the Company's moveable fixed assets, both present and future, save and except plant and machineries at Baska and Chikalthana and any assets charged exculsively to other lenders.

(ii) Foreign currency loan from Landesbank Baden Wurttemberg Bank (LBBW) are secured against hypothecation of machinery financed out of the loan amount.

(iii) Foreign currency loan from HSBC PLC Bank is secured by first pari-passu charge over the entire fixed assets of the Company except assets exclusively charged to Landesbank Baden Wurttemberg Bank (LBBW) and other assets exempted by the security trustee from the creation of security itself.

iv) Foreign currency loan from IFC Bank is secured by first ranking security interest, ranking pari passu with the other lenders over all assets and rights subject to the security documents.

(v) Rupee term loan from Kotak Mahindra Bank is secured against mortgage by way of exclusive charge on the immov- able properties being commercial properties situated at 1004-1010, 10th floor, DLF Towers, Jasola, New Delhi.

(vi) Rupee term loan from IDBI Bank is secured against pari-passu first charge on entire fixed assets of the Company by way of extension except assets exclusively charged to Landesbank Baden Wurttemberg (LBBW).

(vii) Vehicle loans from Union Bank of India are secured against hypothecation of vehicles financed out of the loan amount.

e) Current maturities of long term borrowings are disclosed under the head other current liabilites.

Notes:

a) Cash credits/ working capital demand loans are secured by hypothecation of inventories, trade receivable and second charge on fixed assets secured to financial institutions except assets exclusively charged.

Cash credit and working capital demand loans from the bank comprises of the following:

(i) Cash credit/working capital demand loan of Rs 30 crores sanctioned by Export Import Bank of India is repayable on demand and carries interest rate @ 11.75% per annum, Libor 4.75% and 12% per anuum for PCFC INR, PCFC USD and working capital demand loan respectively.

(ii) Cash credit/working capital demand loan of Rs 15 crores sanctioned by CITI Bank is repayable on demand and carries interest as mutually decided.

(iii) Working capital demand of Rs 20 crores sanctioned by HDFC Bank is repayable on demand and carries interest rate as mutually decided.

(iv) Cash credit/working capital demand of Rs 15 crores sanctioned by ICICI Bank is repayable on demand and carries interest rate @ base rate 4% per annum.

(v) Cash credit/working capital demand of Rs 25 crores sanctioned by ING Vysya Bank is repayable on demand and carries interest rate @ base rate 3% per annum.

(vi) Cash credit/working capital demand of Rs 55 crores sanctioned by Union Bank of India is repayable on demand and carries interest rate @ base rate 3% per annum.

(vii) Cash credit/working capital demand of Rs 25 crores sanctioned by YES Bank is repayable on demand and carries interest rate as mutually decided.

(viii) Cash credit/working capital demand of Rs 20 crores sanctioned by Kotak Mahindra Bank is repayable on demand and carries interest rate as mutually decided.

(ix) Cash credit/working capital demand of Rs 30 crores sanctioned by IDBI Bank is repayable on demand and carries interest rate @ base rate 2.5% per annum.

(x) Cash credit of Rs 50 crores sanctioned by State Bank of India is repayable on demand and carries interest @ base rate 4% per annum."

b) Overdraft of Rs 5 crores from HDFC Bank are secured against pledge of the fixed deposits of the Company is repayable on demand and carries interest rate @ 11.5% per annum.

c) This comprises of unsecured portion of cash credit/working capital demand loan of Rs 25 crores sanctioned by YES Bank and is repayable on demand. This also includes unsecured portion of cash credit balance from Kotak Mahindra Bank and carries interest rate as mutually decided.

d) Short term loans of Rs 10 crores is taken from Tata Capital Financials Services Limited, is repayable after 3 months and carries interest rate @ 12% per annum.

* The Company has circulated letters to all its suppliers requesting them to confirm whether they are covered under the Micro, Small and Medium Enterprises Development Act, 2006 ('MSMED'). Certain suppliers have provided the necessary confirmation alongwith the evidence of being Micro or Small enterprises. However from the majority of the suppliers these confirmations are still awaited. On the basis of available information no principal or interest is payable at the year end to any supplier covered under MSMED.

1. EXCEPTIONAL ITEMS

Exceptional items comprises of:

a) Profit on sale of land amounting to Rs 11.38 crores (previous year Nil) consequent to effective transfer of economic benefit to the buyer under the registered agreement to sale.

b) Net loss on foreign currency transaction and translation Rs 4.48 crores (previous year gain Rs 5.10 crores).

2. CONTINGENT LIABILITIES AND COMMITMENTS

(i) Contingent liabilities

Particulars As at As at 31 March 2012 31 March 2011

a) Disputed demands for income tax (refer note h below) 11.43 22.35

b) Disputed demands for excise and custom duty and service tax 4.01 4.29

c) Disputed demands for labour/ employee dispute 0.51 -

d) Claims against the Company not acknowledged as debts 0.15 0.50

e) Bonds executed in favour of government departments - 3.51

f) Rs 7.59 crores (previous year Rs 8.94 crores) realised on discounting of letter of credits which have been reduced from debtors in these accounts.

g) Letter of credit for Rs 22.06 crores (previous year Rs 22.50 crores) have been opened for which the material has not been shipped as on the date of the balance sheet.

h) Disputed demand for income tax includes a dispute of Rs 4.83 crores (previous year Rs 4.24) between the Company and income tax department over computation of deduction under section 80HHC of the Income Tax Act, 1961. During the year ended 31 March, 2012, the Honourable High Court of Delhi has passed an order against the Company in this matter. The Company has filed a special leave petition against the this order in the Supreme Court which has also been accepted. Based on the legal opinion taken from an independent expert, the management is of the view that it is more likely than not that matter will be decided in favour of the Company.

i) The company has claimed exemption benefits under sales tax incentive scheme for the financial years from 2000-01 to 2009-10 (Upto Aug'2009), though the tax has been paid under protest for some years. The said benefits have not been allowed during assessment for the financial years 2000-01 to 2005-06 for which appeals have been filed. The company has paid and expensed Rs 6.06 Crores (Previous year Rs 6.06 Crores) for the financial year 2000-01 to 2002-03 and 2005-06 to 2006-07. In the financial years 2003-04 to 2004-05 the Company opted not to pay the sales tax by claiming the incentive, against which Company has received a demand of Rs 12.77 Crores (Previous year Rs 12.77 Crores). The company has created a provision of Rs 8.60 Crores (excluding interest and penalty) for these 2 financial years. The company has further paid and created a provision of Rs 5.89 Crores (Previous year Rs 5.89 Crores) for the financial year 2007-08 to 2009-10 (assessment is pending).

Based upon favorable decision of Hon'ble Maharashtra Sales Tax Tribunal, Mumbai for the year 2001-02 and Hon'ble High Court Judgement in a similar matter, the management is of the view that it is more likely that the matter will be decided in their favour.

The company has already expensed an amount of Rs 20.57 Crores (Previous year Rs 19.99 crores) in respect of these financial years.

j) In respect of capital goods imported under EPCG Scheme, bonds of Rs 225.93 crores has been executed in favour of the President of India for import at a concessional rate of custom duty. Export obligation of Rs 876.66 crores (previous year Rs 872.18 crores) has been completed and balance obligation is Nil (previous year Rs 4.48 crores).

k) (i) The Company has given corporate guarantee for term loan facility of USD 14 million availed by its step down subsidiary.

(ii) A step down subsidiary is to pay a sum of USD 3.65 million to ACCO Brand towards balance amount of purchase consideration for which Company has given corporate guarantee.

3. EMPLOYEE BENEFITS

Defined benefit plans (funded)

The Company makes contribution towards gratuity to a defined contribution retirement benefits plan for qualifying employees. The Company has taken policy with Life Insurance Corporation of India to provide for payment of retirement benefits to vested employees. The present value of obligation is determined based on actuarial valuation.

4. RELATED PARTY DISCLOSURE

In accordance with the required Accounting Standard (AS-18) on related party disclosures where control exist and where transactions have taken place and description of the relationship as identified and certified by management are as follows:

i) List of related parties and relationships:

A. Subsidiary and step-down subsidiary companies

a) CF Global Holdings Limited, Mauritius

b) Cosmo Films Inc., USA

c) CF (Netherlands) Holdings Limited BV., Netherlands

d) Cosmo Films (Singapore) Pte. Limited, Singapore

e) Cosmo Films Hwa Seung Co. Limited, Korea (ceased to be fellow subsidiary w.e.f. 31 December 2011)

f) Cosmo Films Korea Limited, Korea

B. Enterprises over which Key managerial personnel of the Company and their relatives have significant influence

a) Pravasi Enterprises Limited

b) Sunrise Manufacturing Company Private Limited

C. Key management personnel

a) Mr. Ashok Jaipuria Chairman and Managing Director

5. (a) Building includes Rs 0.64 crores towards cost of residential space in a Co-operative Housing Society. The Company has taken possession of the same in terms of agreement to sell. Conveyance deed is yet to be registered. Besides, the amount includes cost of shares of the said society received by the Company which are yet to be transferred in the name of the Company.

(b) Building includes cost of 5 shares of Rs 50 each of Pluto Appartment Co-operative Housing Society Limited paid as part of cost of flat.

6. Per transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm's length prices of international transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company has appointed independent consultants for conducting a Transfer Pricing Study (the 'Study') to determine whether the transactions with associate enterprises undertaken during the financial year are on an "arms length basis". Management is of the opinion that the Company's international transactions are at arm's length and that the results of the on-going study will not have any impact on the financial statements and the independent consultants appointed have also preliminarily confirmed that they do not expect any transfer pricing adjustments.

7. Previous years figures

Till the year ended 31 March 2011 the Company was using pre-revised schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012 the revised schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figures to confirm to this year's classification. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, its significantly impacts presentation and disclosure made in the financial statements, particularly presentation of balance sheet.

Mar 31, 2011

Current Year Previous Year

Rs. Crores Rs. Crores

1. Estimated amount of contracts ( net of advances) remaining to be executed on capital account and not provided for 74.63 11.70

2. Contingent Liabilities not provided for in respect of

a) Bank guarantees (including deferred guarantees) 8.09 4.31

b) Disputed demands for Income tax, Sales Tax, Excise duty, etc. 26.64 15.32

c) Claims against the company not acknowledged as debts 0.50 1.68

d) Bonds executed in favour of government departments 3.51 3.51

3. The company has received Rs. 8.94 crores (previous year Rs. 5.57 crores) on discounting of letter of credits which have been reduced from debtors in these accounts.

4. The company has opened Letter of credit for Rs. 22.50 crores (Previous year Rs.19.57 crores) for which the material has not been shipped as on the date of the Balance sheet.

5. Figures for previous year have been regrouped / rearranged wherever considered necessary.

6. In respect of capital goods imported under EPCG Scheme, Bonds of Rs. 225.93 crores has been executed in favour of the President of India for import at a concessional rate of custom duty. Export obligation of Rs. 872.18 crores has been completed and balance obligation of Rs. 4.48 crores is to be completed by 28th September 2018.

7. Capital work in progress includes Rs. 4.19 crores (previous year Rs. 1.09 crores) being expenditure incurred on development of SAP ERP software. This intangible asset will be capitalized on completion and will be amortised over a period of 10 years as per Accounting Standard (AS 26) on Intangible Assets" issued by Institute of Chartered Accountants of India.

8. The company in its extra-ordinary general meeting held on 11th January, 2008 resolved to issue and allot equity shares not exceeding 1000000 in number under Employee Stock Option Scheme at such price and at such time as may be decided by the board. No equity shares have been issued or allotted.

9. a. The company has entered into interest rate swap contract

(floating rate to fixed rate) to hedge its risk associated with LIBOR fluctuations. In accordance with Accounting Standard 30, "Financial Instruments - recognition and measurement" the mark to market loss as on 31st March, 2011 is estimated at Rs. 2.27 crores (previous year Rs. 2.18 crores) on such instruments which qualify as effective hedges. The estimated loss has been provided by creating hedging reserve.

Mar 31, 2010

Current Year Previous Year

Rs. Crores Rs. Crores

1. Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for 11.70 0.12

2. Contingent Liabilities not provided for in respect of

a) Bank guarantees (including deferred guarantees) 4.31 5.23

b) Disputed demands for Income tax, Sales Tax, Excise duty, etc. 15.3 26.55

c) Claims against the company not acknowledged as debts 1.54

3. The company has received Rs. 5.57 crores (previous year Rs. 7.86 crores) on discounting of letter of credits which have been reduced from debtors in these accounts.

4. The company has opened Letter of credit for Rs. 19.57 crores (Previous year Rs. 18.97 crores) for which the material has not been shipped as on the date of the Balance sheet.

5. Figures for previous year have been regrouped / rearranged wherever considered necessary.

6. In respect of capital goods imported under EPCG Scheme, the company has executed bonds of Rs. 224.52 crores in favour of the President of India for import at a concessional rate of custom duty. The company is under an obligation to export products for Rs. 737.43 crores (FOB) within a period of eight years from the date of issue of license i.e. 16.09.2008 for import of capital goods. The company has exported goods worth Rs. 122.84 crores (FOB) till 31.03.2010.

7. In terms of the approval of the shareholders of the company and as per the applicable statutory provisions, the company on 4th February, 2008, has issued and allotted 3100000 warrants convertible into same number of equity shares of the company of Rs. 10 each at a price of Rs. 107 (including a premium of Rs. 97) per warrant on preferential basis to the persons belonging to promoter group of the company. The warrant holders have paid Rs. 10.70 per warrant. The warrant holders have a right to apply for equity shares of the company at any time within 18 months from the date of allotment of warrants. Due to non exercise of option within the stipulated time, the company has cancelled the warrants and forfeited the amount of advance paid on warrants and credited the amount to Capital Reserve account in accordance with the generally accepted accounting principles.

8. The company in its extra-ordinary general meeting held on 11th January, 2008 resolved to issue and allot equity shares not exceeding 1000000 in number under Employee Stock Option Scheme at such price and at such time as may be decided by the board. No equity shares have been issued or allotted.

9. The company has entered into interest rate swap contract (floating rate to fixed rate) to hedge its risk associated with LIBOR fluctuations. In accordance with Accounting Standard 30, "Financial Instruments - recognition and measurement" the mark to market loss as on 31st March, 2010 is estimated at Rs. 2.18 crores on such instruments which qualify as effective hedges.

10.a.The company has given corporate guarantee for term loan facility of USD 14 million availed by its step down subsidiary.

b. A step down subsidiary is to pay a sum of USD 3.65 mn to ACCO Brand towards balance amount of purchase consideration for which company has given corporate guarantee.

11. The company has claimed/will claim 100% Deferral/ Exemption benefits under sales tax for the financial years from 1996-97 to 2009-10 on the basis of decision of the Honble First Bench of the Maharashtra Sales Tax Tribunal at Mumbai in case of M/s Pee Vee Textile Ltd. and VIP Industries Ltd. The said benefits have not been allowed to the company for the financial years 1996-97 to 2004-05 and the company has gone in appeal (for financial year 2004-05 appeal is to be filed) and for the financial years 2005-06 to 2008-09 VAT audit report has been filed and for the financial year 2009-10 quarterly returns have been filed. The company has received demand of Rs. 12.77 crores (previous year Rs. 0.07 crores) in respect of financial years for which assessment has been completed against which provision of Rs.10.12 crores (previous year Rs. 10.12 crores) is available in these accounts. Besides, provision of Rs. 4.42 crores (previous year Rs. 3.63 crores) is available in respect of financial years for which assessment is to be completed.

Based upon legal opinion received and Honble Maharashtra Sales Tax Tribunal Mumbai judgments for financial years 1996-97,1997-98 and 2001-02 setting aside the order of the first appellate authority and remanding the matter back to the first appellate authority to decide afresh the matter following Mumbai High court judgement in the case of M/s Pee Vee Textiles Ltd, the company is hopeful that the matter will be decided in its favour. Consequent upon favourable judgment, the company will be entitled to an income of Rs. 20.84 crores (including amount paid and charged to profit & loss account) which has not been considered in these accounts.

12. In pursuance of Accounting Standard on Impairment on Assets (AS-28) issued by Institute of Chartered Accountants of India the company had identified and impaired certain assets / cash generating units. There is no further impairment / reversal during the year.

13. The Company has circulated letters to all its suppliers requesting them to confirm whether they are covered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED). Certain suppliers have provided the necessary confirmation alongwith the evidence of being Micro or small enterprises. However from the majority of the suppliers these confirmations are still awaited. On the basis of available information no principal or interest is payable at the year end to any supplier covered under MSMED. Further no interest was payable or paid during the year to any such supplier.

14. Extra ordinary item represents income tax paid for earlier years (previous year figure represents gain due to change in method of depreciation from written down value method to straight line method on plant and machinery of line IV,V and VI with retrospective effect).

15. Related Party Disclosure

(i) Names of related parties and description of relationship

(a) Subsidiary & Step-down Subsidiary Companies

- Cosmo Films, Inc., USA

- CF Global Holdings Limited, Mauritius

- CF (Netherlands) Holdings Limited B.V., Netherlands

- Cosmo Films (Singapore) Pte. Limited, Singapore

- Cosmo Films Hwa Seung Co. Limited, Korea

(b) Associates

- Cosmo Ferrites Limited

(c) Key Managerial Personnel & their relatives

- Sh. Ashok Jaipuria, Chairman & Managing Director

(d) Enterprises over which Key Managerial Personnel have significant influence

- Pravasi Enterprises Limited

(iii) Other relevant information:

(a) Related parties enlisted in (i) above are those having transaction with the company.

(b) The above excludes sitting fee of Rs. 0.06 crores (Previous year Rs. 0.05 crores) paid to non-executive directors.

(c) Previous year figures are given in brackets.

16. Employee Benefit Obligations:

The various benefits provided to employees has been classified as under :-

a) Defined Contribution Plans

The company makes contribution towards superannuation to a defined contribution retirement benefits plan for qualifying employees. The superannuation fund is administered by the Trustees of Cosmo Films Limited Superannuation Fund. The fund has taken policy with Life Insurance Corporation of India to provide for payment of retirement benefits to vested employees. During the year contribution paid to the superannuation fund Rs. 0.98 crores (previous year Rs. 0.88 crores) by the company to cover fully the benefits to be paid to the employees has been charged to the profit & loss account.

b) State Plans

Provident Fund is accrued on monthly basis in accordance with the terms of contract with the employees and is deposited with the "Statutory Provident Fund". During the year Rs. 1.39 crores (previous year Rs.1.22 crores) has been paid as contribution to the Statutory Provident Fund as employers contribution which has been charged to the profit & loss account. Besides, Employee State Insurance in respect of eligible employees is also being deposited with the statutory fund. During the year Rs. 0.03 crores (previous year Rs. 0.02 crores) have been paid to the fund as employers contribution which has been charged to the profit & loss account.

c) Defined Benefit Plans (Funded)

The company makes contribution towards gratuity to a defined contribution retirement benefits plan for qualifying employees. The gratuity fund is administered by the Trustees of Cosmo Films Limited Gratuity Fund. The fund has taken policy with Life Insurance Corporation of India to provide for payment of retirement benefits to vested employees. The present value of obligation is determined based on actuarial valuation.

d) Defined Benefit Plans (Unfunded)

In respect of leave encashment the present value of obligation is determined based on actuarial valuation by an independent actuary based on LIC 1994-96 (ultimate) mortality table. The actuarial valuation is based on terminal salary determined by assuming an appropriate annual salary rise and discounted by assuming an imputed rate of interest. The difference between the obligation at the beginning of the year Rs. 1.49 crores (previous year Rs. 1.11 crores) and at the end of the year Rs. 1.90 crores (previous year Rs.1.49 crores) together with the amount paid during the year Rs. 0.41 crores (previous year Rs. 0.24 crores) has been charged to the profit & loss account.

17. During the year 124 MT (Previous year nil) of raw material worth Rs. 3.33 crores (previous year nil) was sold. Corresponding sale price of such material was Rs. 3.32 crores (Previous year nil).

18. Information pursuant to the provision of Part II & Part IV of schedule VI of Companies Act, 1956

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