Notes to Accounts of Pricol Ltd.

Mar 31, 2022

CONTINGENT LIABILITIES AND COMMITMENTS
	31-3-2022	31-3-2021
i) CONTINGENT LIABILITIES '' Lakhs		'' Lakhs
a)	On account of Pending Litigations -
	Excise, Service Tax and Customs Matters 1,130.87	1,281.44
	(excluding Interest if any)
	(Of which '' 87.76 Lakhs has been paid under protest)
	1,130.87	1,281.44
b)	Labour related Matters
	As at 31st March, 2022, the company has various labour related cases	pending before various legal
	forums, amounting to '' 3,361 Lakhs (Previous year - '' 2,733 Lakhs.)
c)	Others
	Letter of Credit 404.66	1,557.55
	Guarantees 16.41	238.66
	Other Claims not acknowledged as debts 295.64	295.64
	716.71	2,091.85

The company has reviewed all its pending litigations and proceedings and has adequately provided for, where provisions are required or disclosed as contingent liability where applicable, in its financial statements. The amount of provisions / contingent liabilities is based on management estimates and no significant liability is expected to arise out of the same.

CONTINGENT LIABILITIES AND COMMITMENTS
	31-3-2022	31-3-2021
i) CONTINGENT LIABILITIES '' Lakhs		'' Lakhs
a)	On account of Pending Litigations -
	Excise, Service Tax and Customs Matters 1,130.87	1,281.44
	(excluding Interest if any)
	(Of which '' 87.76 Lakhs has been paid under protest)
	1,130.87	1,281.44
b)	Labour related Matters
	As at 31st March, 2022, the company has various labour related cases	pending before various legal
	forums, amounting to '' 3,361 Lakhs (Previous year - '' 2,733 Lakhs.)
c)	Others
	Letter of Credit 404.66	1,557.55
	Guarantees 16.41	238.66
	Other Claims not acknowledged as debts 295.64	295.64
	716.71	2,091.85

The company has reviewed all its pending litigations and proceedings and has adequately provided for, where provisions are required or disclosed as contingent liability where applicable, in its financial statements. The amount of provisions / contingent liabilities is based on management estimates and no significant liability is expected to arise out of the same.

	ii) COMMITMENTS
	Estimated Value of Contracts remaining to be
	executed on Capital account	995.74	150.78
		2021-22	2020-21
		'' Lakhs	'' Lakhs
47.	RESEARCH AND DEVELOPMENT EXPENDITURE :
	Capital	323.56	151.56
	Revenue	3,495.01	2,253.11
		3,818.57	2,404.67
	Note : Research and Development expenses of Revenue nature have been classified under the relevant heads
	of accounts in the Statement of Profit and Loss and the expenditure of capital nature is grouped under PPE.
48.	In view of the considerable number of items diverse in composition, size and nature, it is not practicable to furnish
	particulars of materials consumed.
49.	PAYMENTS TO STATUTORY AUDITORS (EXCLUSIVE OF GST) : 1
	For Audit	41.25	41.25
	For Taxation Matters	20.00	17.75
	For Certification & Others	7.12	10.00
	Reimbursement of Expenses	1.51	1.69
	Total	69.88	70.69

ii. The management assessed that the fair value of cash and cash equivalents, trade receivables, loans, other financial assets, trade payables and other financial liabilities approximate the carrying amount largely due to short-term maturity 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.

Investments in subsidiaries are carried at cost.

iii. Fair values hierarchy

Financial assets and financial liabilities are measured at fair value in the financial statement and are grouped into three levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: Quoted prices (unadjusted) in active markets for financial instruments.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either

directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

* The Company has not disclosed the fair values for short term / current financial instruments (such as short term trade receivables, short term trade payables, Current Loans and Short term borrowings etc), because their carrying amounts are a reasonable approximation of Fair value.

iv. Measurement of fair values :

The basis of measurement in respect of each class of financial assets and liabilities are disclosed in point No.1(B)(xii) of significant accounting policies.

FINANCIAL RISK MANAGEMENT

The Company''s activities expose it to market risk, liquidity risk and credit risk. The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s 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.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

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 B: Moderate credit risk C: High credit risk

* Life time expected credit loss (if required) is provided for trade receivables and for those financial assets where the credit risk has increased significantly, since the initial recognition.

Based on business environment in which the Company operates, a default on a financial asset is considered when the counterparty fails to make payments within 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 declaring bankruptcy or litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Any subsequent recoveries made are recognised in statement of profit and loss.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities. Management monitors rolling forecasts of the Company''s 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. In addition, the Company''s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

d. Financial Currency Risk

The Company''s functional currency is Indian Rupees (INR). The Company undertakes transactions denominated in foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Company''s revenue from export markets and the costs of imports.

Adverse movements in the exchange rate between the Rupee and any relevant foreign currency results in increase in the Company''s overall debt position in Rupee terms without the Company having incurred additional debt and favourable movements in the exchange rates will conversely result in reduction in the Company''s receivables in foreign currency. In order to hedge exchange rate risk, the Company has a policy to hedge cash flows (either using natural hedge or an artificial hedge) upto a specific tenure using forward exchange contracts and hedges based on their Internal Foreign Curreny Exposure and risk management policy as approved by the management and in accordance with the applicable regulations where the Company operates.

The following table details the Company''s sensitivity to a 1% increase and decrease in the INR against the relevant foreign currencies net of hedge accounting impact. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 1% change in foreign currency rates, with all other variables held constant. A positive number below indicates an increase in profit or equity where INR strengthens 1% against the relevant currency. For a 1% weakening of INR against the relevant currency, there would be a comparable impact on profit or equity, and the balances below would be negative.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31,2022 and March 31,2021.

a) Income Tax Assessments are completed upto Assessment year 2017-18.

The company has filed revised returns / made additional claims in respect of certain deductions and exemptions. These claims have been rejected by the Assessing Officer against which the company has preferred an appeal before various appellate authorities. Certain claims allowed in appeal has been challenged by the Income Tax Department.

During the previous year 2020-21, the company had reviewed the pending tax litigations and opted for the settlement scheme under the "Vivad se Vishwas Scheme" (VsVs) for some of the years under which the taxes were under dispute. Necessary forms were filed and settlement orders / certificate were received in respect of these years. Consequent to the above, the excess provision (net) made in respect of those years were reversed and recognised as income during the year and disclosed under Taxation-earlier years in the statement of profit and loss.

In respect of the other years, in which the company has not opted for the VsVs, the management is of the view that the provision for taxation available in the books is adequate and no significant liability is expected to arise out of the litigation.

b) As professionally advised, the company has claimed the loss on disposal of investment in subsidiary (Pricol Espana S.L. Spain) amounting to '' 40,798.58 Lakhs as business loss in the return filed for the assessment year 2021-22. The company has appropriately accounted for current taxes in accordance with - Ind As 12, Appendix - C “Uncertain tax position”.

Significant Management Judgements are involved in determining provision for tax, deferred tax and recoverability of deferred tax asset. The recoverability of Deferred Tax Asset is based on estimates of taxable income in future and the management is fairly confident that there will be sufficient future profits to utilise the deferred tax asset.

The figures for tax losses disclosed above are based on Income Tax returns filed / provisional computation of tax for the financial year 2021-22 and are subject to change based on Income Tax assessments and appeals. (Refer Note.55)

Defined Benefit Plan

The Company has an obligation towards gratuity, a defined benefit obligation. The benefits are governed by the Payment of Gratuity Act, 1972. The company makes lumpsum payment to vested employees an amount based on 15 days last drawn basic salary including dearness allowance (if any) for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The most recent actuarial valuation of the defined benefit obligation was carried out at the balance sheet date. The present value of the defined benefit obligations and the related current service cost and past service cost were measured using the Projected Unit Credit Method.

The Company has disclosed the suppliers who have registered themselves under "Micro, Small and Medium Enterprises Development Act, 2006 to the extent they have confirmed.

62. The company''s operation were adversely impacted by the outbreak of Covid-19 pandemic during the first quarter of current year. The Company has taken into account all the possible impact of Covid-19 in preparation of standalone financial statements. The situation is continuously evolving, the impact assessed may be different from the estimates made as at the date of approval of these financial statements and management will continue to monitor any material changes arising due to the impact of this pandemic on financial and operational performance of the company and take necessary measures to address the situation.

63. On 26th May 2021, the Board approved the amalgamation of Pricol Wiping Systems India Limited ("PWSIL”), a Wholly Owned Subsidiary company with its Holding Company, Pricol Limited with effect from 1st April 2021 ("Appointed Date”) by way of a Scheme of Amalgamation, subject to all regulatory approvals. Upon the Scheme becoming effective, all assets and Liabilities, including reserves of the Transferor Companies shall be recorded in the books of the Transferee Company at their existing carrying values under ‘Pooling of Interest Method'' as described in Appendix "C” of Indian Accounting Standards 103 ("Ind AS 103”), Business Combinations.

64. The New Code on Social Security 2020 (the Code) has been enacted which would impact the contribution by the company towards PF and Gratuity. The effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in the period in which the said Code becomes effective and the rules framed thereunder are published.

65. EVENTS OCCURING AFTER THE BALANCE SHEET DATE

No adjusting or significant non-adjusting events have occurred between 31 March 2022 and the date of authorisation of these standalone financial statements.

66. Power & Utilities is net of Wind Power of '' 65.53 Lakhs (Previous year - '' 65.40 Lakhs) representing units supplied to the grid against which equivalent consumption was made in-house.

72. DIVIDEND

The company has not proposed / paid any dividend during the year.

73. ADDITIONAL DISCLOSURE RELATING TO SCHEDULE III AMENDMENT OF COMPANIES ACT 2013(i) Details of Benami property:

No proceedings have been initiated or are pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

(ii) Utilisation of borrowed funds and share premium:

A) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

B) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b) Provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(iii) Compliance with number of layers of companies:

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(iv) Undisclosed income:

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(v) Details of crypto currency or virtual currency:

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(vi) Valuation of Property, Plant & Equipment, intangible asset and investment property:

The Company has not revalued its property, plant and equipment (including Right of Use Assets) or intangible assets or both during the current or previous year.

(vii) Compliance with approved scheme(s) of arrangements:

Refer Note.51, in relation to the Scheme of Amalgamation with Erstwhile Pricol Limited. The intangible assets, including Goodwill represented by Customer relationship and Assembled work force, are being amortised over its estimated useful life of 15 years from the appointed date.

(viii) Loans to Related Parties and others:

The Company had not granted any loans or advances in the nature of loans to promoters, directors, KMP''s and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person that:

a) are repayable on demand or

b) without specifying any terms or period of repayment.

(x) Wilful Defaulter:

The Company had not been declared a wilful defaulter by any bank or financial institution or other lender (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

(xi) The Company does not have any charges or satisfaction which is yet to be register with Registrar of Companies (ROC) beyond the statutory period.

74. Previous year''s figures are reclassified / recasted wherever necessary to conform to the current year''s classification including those as required consequent to amendments in Schedule III.

75. All figures are in Lakhs unless otherwise stated.

1

Remuneration to auditors during the previous year 2020-21 includes '' 15.08 Lakhs towards Rights Issue related

services included in share issue expenses and adjusted against premium on issue of shares.

50. Balances in parties accounts are subject to confirmation / reconciliation. Appropriate adjustments, if any, will be made as and when the balances are reconciled.

51. AMALGAMATION OF ERSTWHILE PRICOL LIMITED WITH THE COMPANY :

The Hon''ble High Court of Judicature at Madras vide its order dated 6th October, 2016 has sanctioned the Scheme of Amalgamation of erstwhile Pricol Limited (‘Transferor Company'') with erstwhile Pricol Pune Limited (‘Transferee Company'') with the appointed date as 1st April, 2015. Pursuant to the Scheme of Amalgamation, the Transferee Company was renamed as "Pricol Limited" vide fresh Certificate of Incorporation granted by Ministry of Corporate Affairs on 18th November, 2016.

The Amalgamation was accounted in financial year 2016-17 under the "Purchase Method” as per the then prevailing Accounting Standard 14 - "Accounting for Amalgamation”, as per the Scheme of Amalgamation approved by the High Court of Judicature at Madras, which is different from the accounting treatment prescribed under Ind AS 103 - "Business Combinations”. The intangible assets, including Goodwill represented by Customer relationship and Assembled work force, are being amortised over its estimated useful life of 15 years from the appointed date.

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Mar 31, 2018

The Company has identified the following property to be in the nature of investment property as they are being held to earn rentals:-

(i) Land and Building at Karamadai

2.3. (a). The company has elected to use the exemption available under Ind AS 101 to continue the carrying value for its Investment properties, measured as per previous GAAP and use that as its deemed cost as at the date of transition (April 1, 2016).

i) Amount recognised in Statement of Profit and Loss for investment properties

ii) Fair Valuation of Investment Property - Rs. 116.200 Million

The fair valuation of investment property was obtained at the date of transition to Ind AS.

The Management belives that the fair valuation of the investment property as on the Balance Sheet date would not be significantly different from the valuation obtained as at the transition date.

# These shares have been given as a security against foreign currency term loan availed by Pricol Espana S.L. Spain. All the above investments have been acquired by the company on account of merger of Pricol Limited (erstwhile) with the company except for Pricol Wiping Systems India Limited which was formed by the company as 100% subsidiary during the year.

Trade Receivables have been given as securities for the borrowings availed by the Company. Refer to Note No. 2.25.

Trade Receivables are non interest bearing and or generally on credit terms in the range of 30 - 90 days.

The company’s exposure to credit and currency risk and loss allowances related to Trade Receivables are disclosed in Note No. 2.49.

An impairment loss of Rs. 191.193 Million for write down of the disposed group to its lower of its carrying amount and its fair value less cost to sell has been recognised under other expenses. During the year 2017-18, the company has identified certain assets not in use to be disposed off and is committed to a plan to sell the non current asset. Accordingly, these assets are presented as “Assets held for Sale”. These assets do not meet the definition of discontinued operation as per Ind AS 105 “Non-current Assets Held for Sale and Discontinued operation”.

Terms / rights attached to equity shares :

The company has only one class of equity shares having a par value of Rs. 1/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amount. The distribution will be in proportion to the number of equity shares held by the shareholders.

Details of Shares held by Holding Company :

There are no Shares held by Holding Company / Subsidiaries of ultimate Holding Company as on 31st March 2018. Details of Shares issued for consideration other than Cash :

94,796,721 shares of Rs. 1/- each were allotted for consideration other than cash during the current financial year in terms of the Scheme of Amalgamation with Erstwhile Pricol Limited which was sanctioned by the Hon’ble High Court of Judicature at Madras on 6th October 2016.

There are no shares allotted by way of Bonus Shares and there have been no shares bought back in the immediately preceeding five years.

Term Loan of Rs. 200 Million from HDFC Bank is repayable in 12 quarterly instalments of Rs. 16.667 Million each. Interest is payable on monthly basis at the rate of Bank One year MCLR. The loan is secured by exclusive charge by hypothecation of specific plant and machinery. Present Outstanding as on 31st March, 2018 is Rs. 200 Million. (Balance as on 31st March, 2017 - Nil, As on 1st April, 2016 - Nil).

Term Loan of Rs. 116.667 Million from Bank of Bahrain and Kuwait B.S.C is repayable in 8 quarterly instalments of Rs. 16.667 Million each. Interest is payable on monthly basis at the rate of Bank One year MCLR plus 0.10% . The loan is secured by movable fixed assets of Plant V situated at Gat No. 180-187, Global Raisoni Industrial Park, Alandi-Markal Road, Phulgaon, Tal-Haveli, Pune - 412 216. Present Outstanding as on 31st March, 2018 is Rs. 116.667 Million. (Balance as on 31st March, 2017 - Nil, As on 1st April 2016 - Nil).

For Current Maturities of Long Term Debt Refer to Note No. 2.27.

Working Capital Facilities from State Bank of India, ICICI Bank and HDFC Bank are secured by pari-passu first charge on the current assets of the company. Working Capital Facilities are further secured by pari-passu second charge on the specific immovable properties situated at Plant I - Perianaickenpalayam, Coimbatore District, Tamilnadu.

Working Capital Facilities from Banks are repayable on demand and carries interest rates varying from 7.80% to 9.65% p.a.

There are no interest amounts paid / payable to Micro, Small and Medium Enterprises. The information in relation to dues to Micro Enterprises and Small Enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company, which has been relied upon by the auditors.

Note : Revenue from operations, was disclosed Gross of Excise Duty till 30th June, 2017. The Government of India has implemented Goods and Services Tax (“GST”) from 1st July, 2017 replacing excise duty, service tax and other indirect taxes. Accordingly, the excise duty for the year ended 31st March 2017 and excise duty till 30th June, 2017 has been shown under Expenditure.

1.1. Balances in parties accounts are subject to confirmation / reconciliation. Appropriate adjustments, if any, will be made as and when the balances are reconciled.

In view of the considerable number of items diverse in composition, size and nature, it is not practicable to furnish particulars of materials consumed.

1.2. AMALGAMATION OF ERSTWHILE PRICOL LIMITED WITH THE COMPANY :

The Hon’ble High Court of Judicature at Madras vide its order dated 6th October, 2016 had sanctioned the Scheme of Amalgamation of erstwhile Pricol Limited (‘Transferor Company’) with erstwhile Pricol Pune Limited (‘Transferee Company’) with the appointed date as 1st April, 2015. Pursuant to the Scheme of Amalgamation, the Transferee Company was renamed as “Pricol Limited” vide fresh Certificate of Incorporation granted by Ministry of Corporate Affairs on 18th November, 2016.

The Amalgamation was accounted in financial year 2016-17 under the “Purchase Method” as per the then prevailing Accounting Standard 14 - “Accounting for Amalgamation”, as per the Scheme of Amalgamation approved by the High Court of Judicature at Madras, which is different from the accounting treatment prescribed under Ind AS 103 - “Business Combinations”. The intangible assets, including Goodwill represented by Customer relationship and Assembled work force, are being amortised over its estimated useful life of 15 years from the appointed date.

The working results of the transferor company for the period 01.04.2015 to 31.03.2016 has been adjusted appropriately in the Retained Earnings.

ii. The management assessed that the fair value of cash and cash equivalents, trade receivables, loans, other financial assets, trade payables and other financial liabilities approximate the carrying amount largely due to short-term maturity 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 Company has measured investments in subsidiaries at the deemed cost. The Company has considered the carrying amount under previous GAAP as the deemed cost. Investments in subsidiaries are carried at cost.

iii. Fair values hierarchy

Financial assets and financial liabilities are measured at fair value in the financial statement and are grouped into three levels of a fair value hierarchy.

The three Levels are defined based on the observability of significant inputs to the measurement, as follows : Level 1 : Quoted prices (unadjusted) in active markets for financial instruments.

Level 2 : Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 : Unobservable inputs for the asset or liability.

1.3. FINANCIAL RISK MANAGEMENT

The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s 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 refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

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 B: Moderate credit risk C: High credit risk

* Life time expected credit loss (if required) is provided for trade receivables and for those financial assets where the credit risk has increased significantly, since the initial recognition.

Based on business environment in which the Company operates, a default on a financial asset is considered when the counterparty fails to make payments within 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 declaring bankruptcy or litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Any subsequent recoveries made are recognised in statement of profit and loss.

b. Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities. Management monitors rolling forecasts of the Company’s 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. In addition, the Company’s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

c. Interest rate risk

The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, ‘Financial Instruments - Disclosures’, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates. However, the Company’s variable rate borrowings are subject to interest rate risk. Below is the overall exposure of the borrowings:

Sensitivity

The following table demonstrates the sensitivity to a reasonably possible change (100 basis points) in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the impact on variable rate borrowings, as follows:

d. Financial Currency Risk

The Company’s functional currency is Indian Rupees (INR). The Company undertakes transactions denominated in foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Company’s revenue from export markets and the costs of imports.

Adverse movements in the exchange rate between the Rupee and any relevant foreign currency result’s in increase in the Company’s overall debt position in Rupee terms without the Company having incurred additional debt and favourable movements in the exchange rates will conversely result in reduction in the Company’s receivables in foreign currency. In order to hedge exchange rate risk, the Company has a policy to hedge cash flows (either using natural hedge or an artificial hedge) upto a specific tenure using forward exchange contracts and hedges based on their Internal Foreign Curreny Exposure and risk management policy as approved by the management and in accordance with the applicable regulations where the Company operates.

The carrying amounts of the Company’s monetary assets and monetary liabilities at the end of the reporting period are as follows :

The following table details the Company’s sensitivity to a 1% increase and decrease in the INR against the relevant foreign currencies net of hedge accounting impact. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 1% change in foreign currency rates, with all other variables held constant.

1.4. CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

1.5. FIRST TIME ADOPTION OF IND AS

1. Explanation of transition to Ind AS

These are the Company’s first financial statements prepared in accordance with Ind AS. The accounting policies have been applied consistently 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 Company’s date of transition). An explanation of how the transition from financial statements prepared in accordance with accounting standards notified under the Section 133 of the Act, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP) to Ind AS has affected the Company’s financial position, financial performance and cash flows is set-out in the following tables and notes:

2. Ind AS optional exemptions

Ind-AS 101, ‘First-time Adoption of Indian Accounting Standards’, allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind-AS. The Company has accordingly applied the following exemptions.

Deemed cost for property, plant and equipment, investment properties and intangible assets

Ind AS 101 ‘First-time Adoption of Indian Accounting Standards’ permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38, ‘Intangible Assets’. Accordingly, the Company has elected to measure all of its property, plant and equipment & intangible assets at their previous GAAP carrying value.

Investment in subsidiaries, associates and joint ventures

Ind AS 101, ‘First-time Adoption of Indian Accounting Standards’ allows a Company to measure investments in subsidiaries, associates and joint ventures at the deemed cost. The Company has considered the carrying amount under previous GAAP as the deemed cost.

Business Combinations

The Company has elected to apply Ind AS 103 prospectively to business combinations occuring after its transition date. Business combinations which have occured prior to the transition date have not been restated.

3. Ind AS mandatory exceptions Estimates

An entity’s 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 31 March, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP.

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, ‘Financial

Instruments’ 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 elements of modified time value of money i.e. 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. Measurement of Financial assets at amortised cost using effective interest rate method, wherever applicable, has been made retrospectively. The measurement exemption applies for financial liailities as well.

De-recognition of Financial assets and liabilities

Ind AS 101, ‘First-time Adoption of Indian Accounting Standards’ requires a first-time adopter to apply the de-recognition provisions of Ind AS 109, ‘Financial Instruments’ prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101, ‘Firsttime Adoption of Indian Accounting Standards’ allows a first-time adopter to apply the derecognition requirements in Ind AS 109, ‘Financial Instruments’ retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109,’Financial Instruments’ to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109, ‘Financial Instruments’ prospectively from the date of transition to Ind AS.

First-time Ind AS adoption reconciliations

In preparing our opening Ind AS balance sheet, we have adjusted amounts reported in financial statements prepared in accordance with previous GAAP. An explanation of how the transition from previous GAAP to Ind AS has affected our financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates previously made except where required by Ind ASs.

Note : A Scheme of Amalgamation between Erstwhile Pricol Limited (Transferor Company) and Erstwhile Pricol Pune Limited (Transferee Company) was approved by the Hon’ble High Court of Judicature at Madras on 6th October, 2016 as explained in Note No. 2.47. Necessary effect for the Scheme was given during the financial year 2016-17 after the scheme was approved by the high court. Consequently, the Ind AS adjustments pertaining to the Transferor Company is appropriately given effect in the figures of 2016-17 as detailed above.

(vii) Notes to the reconciliation

1. Financial Assets at Amortised cost :

Under previous GAAP, the security deposits (received and paid) were carried at nominal value. Ind AS requires these liabilities / assets to be measured at fair value and subsequently these liabilities / assets are measured at amortised cost. At the initial recognition, the company has recognised the difference between deposit fair value and nominal value as, unearned rental income in case of rental advance received and prepaid rental expenses in case of rental advance paid, and same is being recognised as rental income / rental expenses on straight line basis over the lease period. Further, Company recognises notional interest expense / interest income on these deposits over the lease term.

2. Financial assets carried at fair value through profit and loss :

Under previous GAAP, investments in Mutual funds were carried at cost or net realisable value, whichever was lower as per AS 13. Under Ind AS, such investments are carried at fair value through profit or loss.

3. Deferred tax:

Recognition of deferred tax on unused tax losses :

Under previous GAAP, deferred tax assets were not recognised due to lack of virtual certainty over the existence of future taxable profits against which the unused tax losses can be adjusted. Consequent to amalgamation, the company expects that it is probable that taxable profit will be available against which the losses can be utilised. Hence, deferred tax assets have been recognised on unused tax losses of the amalgamated entity.

Recognition / Reversal of Deferred Tax on items meeting recognition :

Under previous GAAP, no deferred tax was recognised on the enhanced value of Buildings on account of amalgamation as the same was treated to be as a permanent difference. However deferred tax has been recognised on the same as it meets the recognition criteria as per Ind AS.

4. Financial Guarantee Contracts :

Under previous GAAP, financial guarantee contracts were disclosed under “Contingent liabilities”. As per Ind AS, financial guarantee contracts are recognised initially as liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequenty, the liablity is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation.

5. Government Grants :

As per Ind AS 20, Government grants related to depreciable assets are usually recognised in profit or loss over the periods and in the proportions in which depreciation expense on those assets is recognised. Grants received in relation to certain PPE were reduced from the carrying value of the PPE under previous GAAP. Consequent to the above Ind AS, such grants have been recognised as Deferred Income, with retrospective adjustment in the reserves and surplus.

6. Land held under Finance Lease:

The company holds certain Land under long term lease arrangement which was out of the purview of AS 19 “Leases”. As per Ind AS 17, A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset and assets includes land. Based on conditions mentioned in Ind AS 17, the above arrangements were classified as a Finance lease transaction and were measured at lower of fair value or present value of minimum lease payments and liabilities is created for an equivalent amount. Each lease rental paid is allocated between the liability and interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

7. Provision for loss allowance for Trade receivables:

As per Ind AS 109, the Company is required to apply expected credit loss model for recognising the allowances for doubtful debts. The company has re-estimated the provision for loss allowance for debtors using the expected credit loss model and has made adjustments in respect of the same.

8. Other comprehensive income :

Under previous GAAP, there was no concept of ‘Other Comprehensive income’ (OCI). Under Ind AS, certain items of income and expenses needs to be recognised under the Other Comprehensive Income, such as remeasurement gains / losses of defined employee benefits, fair valuation gains / losses of financial assets designated through OCI, etc. A reconciliation of the profit / loss as per previous GAAP to profit / loss as per Ind AS has been presented.

9. Tax impact on adjustments :

Retained earnings and statement of profit and loss has been adjusted consequent to the Ind AS transition adjustments with corresponding impact to deferred tax, wherever applicable.

10. Reclassifications under Ind AS :

Assets and Liabilities have been regrouped / reclassified wherever required to conform to the requirements of Ind ASs.

Significant Management Judgements are involved in determining provision for tax, deferred tax and recoverability of deferred tax asset. The recoverability of Deferred Tax Asset is based on estimates of taxable income in future and the management is fairly confident that there will be sufficient future profits to utilise the deferred tax asset.

The figures for tax losses disclosed above are based on income tax returns filed and are subject to change based on income tax assessments and appeals, if any (Refer to Note No. 2.57).

1.6. DISCLOSURE REQUIREMENTS UNDER IND AS 17 “LEASES”

As Lessee:

Finance Lease Arrangements:

The Company has identified certain lease arrangements as a Long term finance Lease arrangement. Details of such arrangements are given below:

* The company is in the process of disposing this Land. Refer to Note No. 2.17 on “Assets held for Sale”.

The minimum lease payments and the present value of minimum lease payments as at 31 March, 2018 in respect of aforesaid plant and equipment acquired under the finance leases are as follows :

As Lessor:

Finance Lease Arrangements

The Company has not entered into any Finance lease arrangements as a Lessor.

Operating Lease Arrangements

The company has entered into certain operating lease arrangements for renting its assets or part thereof.

1) Total Rental income recognised in the Statement of Profit and Loss :

2) The Company has not entered into any non-cancellable operating lease and hence the disclosure in respect of future expected minimum lease rentals receivable is not applicable.

1.7. EMPLOYEE BENEFITS

Defined contribution plan

The Company’s contribution to provident fund, employee state insurance scheme and superannuation fund are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.

Defined Benefit Plan

The Company has an obligation towards gratuity, a defined benefit obligation. The benefits are governed by the Payment of Gratuity Act, 1972. The company makes lumpsum payment to vested employees an amount based on 15 days last drawn basic salary including dearness allowance (if any) for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The most recent actuarial valuation of the defined benefit obligation was carried out at the balance sheet date. The present value of the defined benefit obligations and the related current service cost and past service cost were measured using the Projected Unit Credit Method.

Based on the actuarial valuation obtained in this respect, the following table sets out the details of the employee benefit obligation as at balance sheet date :

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

viii) Sensitivity Analysis

Significant Actuarial Assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and employee turnover. The sensitivity analysis below, have been determined based on reasonably possible changes of the assumptions occurring at end of the reporting period, while holding all other assumptions constant. The result of Sensitivity analysis is given below:

These plans typically expose the Company to actuarial risks such as: investment risk, interest risk, longevity risk and salary risk.

Name of the Risk and its Description

Investment risk - The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest risk - A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.

Longevity risk - The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk - The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

1.8. SEGMENT REPORTING :

As per Ind AS 108 “Operating Segments”, segment information has been provided under the Notes to Consolidatd Financial Statements.

1.9. Income Tax Assessments are completed upto Assessment Year 2015-16. The Company has preferred appeals against certain disallowances made in the assessments. In the opinion of the Company the provision for taxation available in the books of accounts is adequate.

The company has filed revised returns / made additional claims in respect of certain deductions and exemptions. These claims have been rejected by the Assessing Officer against which the company has preferred an appeal before the Commissioner of Income Tax (Appeals). Necessary adjustments in respect of Income Tax / MAT Credit Entitlements would be recognised in the books of account as and when the appeals are disposed off.

1.10. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE :

No adjusting or significant non-adjusting events have occurred between 31 March 2018 and the date of authorisation of these standalone financial statements.

1.11. The Board of Directors of the Company have recommended a final dividend of Rs. 1/- per share, (100% on the face value of Rs. 1/-) aggregating to Rs. 94.797 Million, on the equity shares of the company, for the year ended 31st March, 2018, which is subject to the approval of the shareholders at the Annual General Meeting.

1.12. Previous year’s figures are reclassified wherever necessary to conform to the current year’s classification.

1.13. All figures are in Million unless otherwise stated.

1.14. RELATED PARTY DISCLOSURE AS PER INDIAN ACCOUNTING STANDARD

1 : i) Names of related parties and description of relationship :

1. Enterprises where control exists :

Subsidiary Companies : PT Pricol Surya Indonesia, Pricol Asia Pte Limited, Singapore, Pricol Espana Sociedad Limitada, Spain, Pricol Wiping Systems India Limited, Integral Investments Limited (Disposed off during the year 2016-17)

Step Down Subsidiaries : Pricol Do Brasil Componentes Automotivos LtdA, Brazil - Subsidiary of Pricol Espana Sociedad Limitada, Pricol Wiping Systems Czech s.r.o, Czech Republic - Subsidiary of Pricol Espana Sociedad Limitada, PMP PAL International s.r.o, Czech Republic - Subsidiary of Pricol Wiping Systems Czech s.r.o, Pricol Wiping Systems Mexico S.A.de C.V, Mexico - Subsidiary of Pricol Espana Sociedad Limitada, PT Sripri Wiring Systems, Indonesia - Subsidiary of PT Pricol Surya Indonesia.

2. Related parties where significant influence exists and with whom transactions have taken place during the year :

a) Partnership firms under common control : Bhavani Global Enterprises, Ellargi & Co, Libra Industries, Ramani & Shankar, Pricol Gourmet and Retreats (Formerly, V.M. Hospitality).

b) Private Companies : Bull Machines (P) Limited, C.R.I. Pumps Private Limited.

c) Public Companies : Pricol Holdings Limited, PPL Enterprises Limited, Pricol Travel Limited, Pricol Properties Limited, Pricol Engineering Industries Limited, Pricol Corporate Services Limited, Target Manpower Services Limited.

d) Trusts under common control : N D Foundation, Siruthuli.

e) Key Management Personnel : Mr. Vijay Mohan - Non Executive Director, upto 11th November, 2017, Mrs. Vanitha Mohan, Chairman - Executive Director, Mr. Vikram Mohan - Managing Director - Executive Director, Mr. R. Vidhya Shankar - Non Executive Director, Mr. Suresh Jagannathan -Non Executive Director, Mr. G. Soundararajan - Non Executive Director, Mr. C.R. Swaminathan -Non Executive Director, upto 28th February, 2018, Mr. K. Murali Mohan - Non Executive Director - upto 31st March, 2018, Mrs. Sriya Chari - Non Executive Director, Mr.G.Sundararaman - President.

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Mar 31, 2017

Previous year - 100,000,000 Equity Shares of Rs, 1/- each)

* Pursuant to the Scheme of Amalgamation, the Authorized Share Capital of the Company stands increased to Rs, 582 Million from Rs, 100 Million. (Refer to Note No. 2.40)

Terms / rights attached to equity shares :

The company has only one class of equity shares having a par value of Rs, 1/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amount. The distribution will be in proportion to the number of equity shares held by the shareholders.

Details of Shares held by Holding Company :

There are no Shares held by Holding Company / Subsidiaries of ultimate Holding Company as on 31st March 2017. Details of Shares issued for consideration other than in cash :

94,796,721 shares of Rs, 1/- each were allotted for consideration other than cash during the current financial year in terms of the Scheme of Amalgamation with Erstwhile Pricol Limited which was sanctioned by the Hon''ble High Court of Judicature at Madras on 6th October 2016.

During the year 2011-12, 4,950,000 Equity Shares of Rs, 10/- each were allotted as fully paid-up pursuant to contract without payments being received in cash. During the year 2015-16, Erstwhile Pricol Limited acquired 5,000,000 Equity Shares of Rs, 10/- each from Johnson Control Enterprise Limited, UK. These shares were subsequently cancelled pursuant to Scheme of Amalgamation.

There were no shares allotted by way of Bonus Shares and there have been no shares bought back in the immediately preceding five years.

Term loan from Indian bank is secured by way of hypothecation of machineries and other fixed assets of the Company. The rate of interest is 14.20% and the loan was repayable in four quarterly installments after an initial holiday period of 2 years from the date of first a ailment. Interest to be serviced as and when charged. The above loan has been precludes during the year 2016-17. Hence there is no outstanding as on 31st March 2017 (Previous year - Rs, 20 Million).

Term Loan of Rs, 300 Million for Medium Term Working Capital from Bank of Bahrain and Kuwait B.S.C. is repayable in 12 quarterly installments of Rs, 25 Million each. Interest is payable on monthly basis at the rate of Bank Base Rate plus

0.10%. The loan is secured by pari-passu first charge on the specific land and building of Plant III situated at Billichi Village, Coimbatore District. Present Outstanding as on 31st March, 2017 is Rs, 50 Million.

Term Loan of Rs, 200 Million from HDFC Bank is repayable in 12 quarterly installments of Rs, 16.667 Million each. Interest is payable on monthly basis at the rate of Bank Base Rate plus 0.50%. The loan is secured by pari-passu first charge by hypothecation of specific plant and machinery and pari-passu first charge by way of mortgage of immovable property situated at IMT Manesar, Gurugram. Present Outstanding as on 31st March, 2017 is Rs, 83.333 Million.

Term Loan of Rs, 200 Million from Federal Bank is repayable in 12 quarterly installments of Rs, 16.667 Million each. Interest is payable on monthly basis at the rate of Bank Base Rate plus 0.10% . The loan is secured by Equitable mortgage of immovable property on pari-passu first charge basis and hypothecation of specific Plant & Machinery on pari-passu first charge basis with HDFC Bank. Present Outstanding as on 31st March, 2017 is Rs, 183.333 Million.

Working Capital Facilities from State Bank of India, ICICI Bank, Axis Bank and HDFC Bank are secured by pari-passu first charge on the current assets of the company. Working Capital Facilities are further secured by pari-passu second charge on the specific immovable properties situated at Plant I - Perianaickenpalayam, Coimbatore District, Tamilnadu.

Working Capital Facilities from Bank of Bahrain and Kuwait B.S.C. is secured by pari-passu first charge on the specific land and building of Plant III situated at Billichi Village, Coimbatore District.

Working Capital Facilities from Banks are repayable on demand and carries interest rates varying from 9.65% to

11.10 % p.a.

There are no interest amounts paid / payable to Micro Enterprises and Small Enterprises. The information in relation to dues to Micro Enterprises and Small Enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company, which has been relied upon by the auditors.

In view of the considerable number of items diverse in composition, size and nature, it is not practicable to furnish particulars of materials consumed.

1. Income Tax Assessments are completed upto Assessment Year 2014-15. The Company has preferred appeals against certain disallowances made in the assessments. In the opinion of the Company the provision for taxation available in the books of accounts is adequate.

2. AMALGAMATION OF ERSTWHILE PRICOL LIMITED WITH THE COMPANY :

(a) The shareholders of Erstwhile Pricol Limited (Transferor Company) and Erstwhile Pricol Pune Limited (Transferee Company) approved the Scheme of Amalgamation ("Scheme") of Transferor Company with the appointed date as 1st April, 2015. Pricol Limited was engaged in the manufacturing, marketing, trading and export of Automotive Components and precision engineered products to Original Equipment Manufacturers and Replacement Market. The said scheme was as sanctioned by the Hon''ble High Court of Judicature at Madras on 6th October, 2016. The certified copy of the High Court sanctioning the Scheme was filed with Ministry of Corporate Affairs on 1st November, 2016 (Effective Date). The scheme has accordingly been given effect to in the financial statements. The amalgamation has been accounted for under the “Purchase Method” as prescribed under Accounting Standard 14 - “Accounting for Amalgamations” (AS 14) notified under the Companies Act 2013. Accordingly, giving effect to the Scheme of Amalgamation, all the assets (including intangible assets if any whether or not recorded in the books of Transferor Company) and liabilities of Transferor Company were recorded in the books of the Transferee Company at their respective fair values. In respect of Inter-company Owings, the outstanding balance (Net) of Rs, 50.390 Million have been eliminated. Pursuant to the Scheme of Amalgamation, the Transferee Company was renamed as "Pricol Limited" vide fresh Certificate of Incorporation granted by the Ministry of Corporate Affairs on 18th November, 2016.

(b) Upon the Scheme being effective, in consideration of the transfer and vesting of the entire undertaking of the business of the Transferor Company, the shareholders of the Transferor Company as on the Record date (6th December, 2016) have been allotted one equity share of Rs, 1 each fully paid-up of Transferee Company for every one equity share of Rs, 1 each fully paid-up in the Transferor Company. Thus, the Transferee Company has allotted 94,796,721 Equity Share of Rs, 1 each fully paid-up and the Transferee Company has accounted for Securities Premium of Rs, 7,412.156 Million representing a premium of Rs, 78.19 per equity share. The shares held by the Transferor Company in Transferee Company stands cancelled pursuant to Scheme of Amalgamation.

(c) Intangible Assets acquired by the Transferee Company pursuant to amalgamation include :

(i) separately identified intangible assets like Brand / Trade Mark, Patents & Developed Technology

(ii) Goodwill comprising other intangible assets namely Customer Relationships and Assembled Workforce, in line with Accounting Standard - 26 (AS 26) on “Intangible Assets”. Such Goodwill has been treated at par with other separately identified intangible assets and is amortized over a period of 15 years. Para 19 of

AS-14 considers a period of 5 years as appropriate to amortize the goodwill on amalgamation unless a longer period is justified. The company has made a technical evaluation on the useful life, which has been relied upon by the auditors, based on which the goodwill has been amortized over a period of 15 years. Disclosure of impact on adopting a longer useful life in the financial statements :

The amortization expense for the year would have been higher by Rs, 198.680 Million, the profit for the year would have been lower by Rs, 198.680 Million, adjustment pursuant to Scheme of Amalgamation in the opening balance of Deficit in the Statement of Profit and Loss higher by Rs, 198.680 Million and the resultant Reserves and Surplus lower by Rs, 397.360 Million.

(d) The working results of the transferor company for the period 1st April, 2015 to 31st March, 2016 has been adjusted in the opening balance of Surplus / (Deficit) in Statement of Profit and Loss.

3. a) PARTICULARS REGARDING DEFINED BENEFIT PLAN :

The company operates a defined benefit plan for payment of post employment benefits in the form of Gratuity. Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided in the Payment of Gratuity Act, 1972. The terms of the benefits are common for all the employees of the company.

4. SEGMENT REPORTING :

As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

5 The company has filed revised returns / made additional claims in respect of certain deductions and exemptions. These claims have been rejected by the Assessing Officer against which the company has preferred an appeal before the Commissioner of Income Tax (Appeals). Necessary adjustments in respect of Income Tax / MAT Credit Entitlements would be recognized in the books of account as and when the appeals are disposed off.

# On 15th June, 2016, the Company sold its 100% shareholding in its wholly owned subsidiary company M/s. Integral Investments Limited for a consideration of Rs, 27.837 Million resulting in a profit of Rs, 5.337 Million.

6. Deletion to Freehold Land represents Donation of a piece of Land having restricted use, to a public charitable institution for which the conveyance and registration formalities are pending.

7 The Board of Directors of the Company have recommended a dividend of Rs, 1/- per share, (100% on the face value of Rs, 1/-) aggregating to Rs, 94.797 Million on the equity shares of the company for the year ended 31st March, 2017, which is subject to the approval of the shareholders at the Annual General Meeting. The Ministry of Corporate Affairs through amendments to Companies (Accounting Standards) Amendment Rules, 2016, dated 30th March, 2016 has amended Accounting Standard (AS)-4 “Contingencies and Events occurring after Balance Sheet date”. Consequently, the company has not accounted for proposed dividend as liability as at 31 st March, 2017.

8. Previous year''s figures are reclassified wherever necessary to conform to the current year''s classification.

9 All figures are in Million unless otherwise stated.

10 RELATED PARTY DISCLOSURE AS PER ACCOUNTING STANDARD 18 :

(i) Names of related parties and description of relationship:

1. Enterprises where control exists :

Subsidiary Companies : PT Pricol Surya Indonesia, Pricol Asia Pte. Limited, Singapore, Pricol do Brasil Components Automotives LtdA, Brazil, (Subsidiary of Pricol Espana S.L. Spain), Pricol Espana S.L. Spain, Integral Investments Limited, India - Disposed off in current year, Coimbatore Metal Works Limited, India -Disposed off during 2015-16.

11. Related parties where significant influence exists and with whom transactions have taken place during the year :

a) Partnership firms under common control : Bhavani Global Enterprises, Ellargi & Co, Libra Industries.

b) Public Limited Companies : Pricol Holdings Limited, PPL Enterprises Limited, Pricol Properties Limited, Pricol Technologies Limited, Pricol Travel Limited, Pricol Engineering Industries Limited, Pricol Corporate Services Limited, Prinfra Limited, Target Manpower Services Limited.

c) Key Management Personnel : Mrs. Vanitha Mohan, Mr. Vikram Mohan

d) Relatives of Key Management Personnel : Mr.Vijay Mohan