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Notes to Accounts of Balkrishna Industries Ltd.

Mar 31, 2023

General reserve

The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be reclassified subsequently to the statement of profit and loss.

Retained earnings

Retained earnings includes the Company''s cumulative earnings and losses respectively Remeasurements of the net defined benefit Plans

Remeasurements of defined benefit liability comprises actuarial gains and losses and return on plan assets (excluding interest income) Cash flow hedging reserve

The Company uses hedging instruments as part of its management of foreign currency risk associated with its highly probable forecast sale. For hedging foreign currency risk, the Company uses foreign currency forward contracts which are designated as cash flow hedges. To the extent these hedges are effective; the change in fair value of the hedging instrument is recognised in the cash flow hedging reserve. Amounts recognised in the cash flow hedging reserve is reclassified to profit or loss when the hedge item affects profit/(loss) i.e., when the designated sale occurs.

The company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income in which the relevant entity operates and the period over which deferred income tax assets will be recovered.

B. Measurement of fair values

Ind AS 107, ''Financial Instrument - Disclosure'' requires classification of the valuation method of financial instruments measured at fair value in the Balance Sheet, using a three level fair-value-hierarchy (which reflects the significance of inputs used in the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to un-observable inputs (Level 3 measurements). Fair value of derivative financial assets and liabilities are estimated by discounting expected future contractual cash flows using prevailing market interest rate curves. The three levels of the fair-value-hierarchy under Ind AS 107 are described below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level3. Transfers between Levels

There have been no transfers between Levels during the reporting periods

The following tables show the valuation techniques used in measuring Level 2 fair values, as well as the significant unobservable inputs used.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

â¢ Credit risk;

â¢ Liquidity risk; and

â¢ Market risk

i. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company risk management framework. The board of directors is responsible for developing and monitoring the Company risk management policies.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The audit committee oversees how management monitors compliance with the company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investments in debt securities, cash and cash equivalents, mutual funds, bonds etc.

The carrying amount of financial assets represents the maximum credit exposure.

Trade receivables

Around 78% of the sales are export sales. For major part of the sales, customer credit risk is managed by requiring domestic and export customers to pay advances before transfer of ownership, therefore substantially eliminating the Company''s credit risk in this respect.

Based on prior experience and an assessment of the current economic environment, management believes that no provision is required for credit risk wherever credit is extended to customers.

Concentration of credit risk

At 31st March 2023, the carrying amount of the Company''s most significant customer is '' 50,931 lakhs (Previous Year: '' 26,332 lakhs)

Loans to others

The credit worthiness of the counter party is evaluated by the management on an ongoing basis and necessary provisions are made wherever needed. The Company had made the provision for doubtful loans in earlier years of '' 1,650 lakhs. Up to 31st March, 2023 the Company had recovered '' 358 lakhs against this doubtful loan and as such the provision for such doubtful loan is reduced to '' 1,292 lakhs as on 31st March 2023. The Company has no collateral in respect of said loan.

Investment in debentures and preference shares

The Company does not perceive any risk as these are issued by reputed financial institution.

Investment in mutual funds and bonds

The investment in mutual funds and Government bonds are entered into with credit worthy fund houses, Government of India and financial institution. The credit worthiness of these counter parties are evaluated by the management on an ongoing basis and is considered to be good. The Company does not expect any losses from non-performance by these counter-parties.

Derivatives

The derivatives are entered into with the banks, with good credit ratings.

Cash and cash equivalents

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with the company''s policy. Investment in surplus funds are made mainly in Bonds and mutual funds with good returns and within approved credit ratings.

iii. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company''s reputation.

The Company has obtained fund and non-fund based working capital lines from various banks. The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

As at 31st March, 2023, the Company had working capital of '' 63,584 lakhs, including cash and cash equivalents of '' 3,075 lakhs and highly marketable current investments of '' 77,460 lakhs.

As at 31st March, 2022, the Company had working capital of '' 67,728 lakhs, including cash and cash equivalents of '' 2,945 lakhs and highly marketable current investments of '' 68,453 lakhs.

Exposure to liquidity risk

The table below analyses the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for:

The inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity. The disclosure shows net cash flow amounts for derivatives that are net cash-settled and gross cash inflow and outflow amounts for derivatives that have simultaneous gross cash settlement.

iv. Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates ) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, the Company''s exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

a) Currency risk

The company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchase, other expenses and borrowings are denominated and the functional currency of the company. The functional currency of the company is Indian Rupees (''). The currencies in which these transactions are primarily denominated are EURO and USD.

At any point in time, the Company generally hedges its estimated foreign currency exposure in respect of forecast sales over the forthcoming financial years in advance. The Company uses forward exchange contracts to hedge its currency risk. Such contracts are generally designated as cash flow hedges.

The Company, as per its risk management policy, uses foreign exchange forward contract and cross currency forward contracts primarily to hedge foreign exchange. The Company does not use derivative financial instruments for trading or speculative purposes.

Interest rate sensitivity - fixed rate instruments

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, since neither the carrying amount nor the future cash flow will fluctuate because of a change in market interest rates.

Interest rate sensitivity - variable rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased / decreased equity and profit or loss by amounts shown below. This analyses assumes that all other variables, in particular, foreign currency exchange rates, remain constant. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.

Offsetting financial assets and financial liabilities

The following table presents the recognised financial instruments that are offset, or subject to enforceable master netting arrangements and other similar agreements but not offset, as at 31st March, 2023 and 31st March, 2022. The column ''net amount'' shows the impact on the company''s balance sheet if all set-off rights were exercised.

NOTE NO.40 HEDGE ACCOUNTING

As part of its risk management strategy, the company endeavors to hedge its net foreign currency exposure of highly forecasted sale transactions for the forthcoming financial years in advance. The company uses forward contracts to hedge its currency exposure. Such contracts are designated as cash flow hedges.

The forward contracts are generally denominated in the same currency in which the sales realization is likely to take place.

For derivative contracts designated as hedge, the Company documents, at inception, the economic relationship between the hedging instrument and the hedged item, the hedge ratio, the risk management objective for undertaking the hedge and the methods used to assess the hedge effectiveness.

Financial contracts designated as hedges are accounted for in accordance with the requirements of Ind AS 109 depending upon the type of hedge.

The Company applies cash flow hedge accounting to hedge the variability in the future cash flows attributable to foreign exchange risk.

Hedge effectiveness is ascertained at the time of inception of the hedge and periodically thereafter. The Company assesses hedge effectiveness both on prospective and retrospective basis. The prospective hedge effectiveness test is a forward looking evaluation of whether or not the changes in the fair value or cash flows of the hedging position are expected to be highly effective on offsetting the changes in the fair value or cash flows of the hedged position over the term of the relationship. On the other hand, the retrospective hedge effectiveness test is a backward-looking evaluation of whether the changes in the fair value or cash flows of the hedging position have been highly effective in offsetting changes in the fair value or cash flows of the hedged position since the date of designation of the hedge.

Hedge effectiveness is assessed through the application of critical terms match method. Any ineffectiveness in a hedging relationship is accounted for in the statement of profit and loss.

NOTE NO.41 CAPITAL MANAGEMENT

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Company monitors capital using a ratio of ''net debt'' to ''equity''. For this purpose, net debt is defined as total debt, comprising interest-bearing loans and borrowings less cash and cash equivalents and current investments.

(B) Defined Benefit Plan

In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company has a defined benefit plan which provides for gratuity payments. The plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amounts are based on the respective employee''s last drawn salary and the years of employment with the Company. Liabilities in respect of the gratuity plan are determined by an actuarial valuation, based upon which the Company makes annual contributions to the Group Gratuity cum Life Assurance Schemes administered by the LIC of India, a funded defined benefit plan for qualifying employees.

The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at 31st March, 2023. 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 and the plan assets as at balance sheet date:

NOTE NO.53 OTHER STATUTORY INFORMATIONS:

i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.

ii) The Company does not have any transactions with struck off companies.

iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

v) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority

vi) 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.

vii) All the title deeds of immovable properties are in the name of Company.

viii) 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 Group 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,

ix) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

NOTE NO.54

The code of Social Security, 2020 (code) relating to employee benefits during employment and post-employment received Presidential assent in September 2020 and its effective date is yet to be notified. The Company will assess and record the impact of the Code, once it is effective.

NOTE NO.55

Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.

Mar 31, 2022

Estimation of fair value

The Company obtains independent valuations for its investment properties from an independent valuer.

The main inputs used for determining fair values of investment properties are the rental growth rates, expected vacancy rates, terminal yields and discount rates based on comparable transactions and industry data.

NOTE NO. 4A - RIGHT OF USE ASSETS

The Company has lease contracts for various item of buildings and vehicles in its operation. Lease of building generally have lease term between 2 to 4 years. The Companies obligation under it leases are secured by the lessor title to the lease assets. Generally the Company is restricted from assigning and sub leasing the lease assets. There are no major lease contracts that include extension and termination options and variable lease payments. The effective rate of interest for lease liabilities is 8.70%.

@ At the beginning of the FY 2021-22, 5,820 equity shares representing 0.01% were held by 21 Promoters of the Company. During the Year, in terms of Regulation 31A of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015, said 21 Promoters of the Company aggregating to 5,820 equity shares were Re-classified from Category of "Promoter" to the Category of "Public" vide BSE Limited and National Stock Exchange of India Limited approval letter dated 3rd December, 2021.

General reserve

Retained earnings

Retained earnings includes the Companyâs cumulative earnings and losses respectively Remeasurements of the net defined benefit Plans

Remeasurements of defined benefit liability comprises actuarial gains and losses and return on plan assets (excluding interest income)

Cash flow hedging reserve

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income in which the relevant entity operates and the period over which deferred income tax assets will be recovered.

NOTE NO.39 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT A. Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

B. Measurement of fair values

Ind AS 107, ''Financial Instrument - Disclosureâ requires classification of the valuation method of financial instruments measured at fair value in the Balance Sheet, using a three level fair-value-hierarchy (which reflects the significance of inputs used in the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to un-observable inputs (Level 3 measurements). Fair value of derivative financial assets and liabilities are estimated by discounting expected future contractual cash flows using prevailing market interest rate curves. The three levels of the fair-value-hierarchy under Ind AS 107 are described below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level3.

Transfers between Levels

There have been no transfers between Levels during the reporting periods

The following tables show the valuation techniques used in measuring Level 2 fair values, as well as the significant unobservable inputs used.

i. Risk management framework

The Companyâs board of directors has overall responsibility for the establishment and oversight of the Company risk management framework. The board of directors is responsible for developing and monitoring the Company risk management policies.

The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The audit committee oversees how management monitors compliance with the Companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investments in debt securities, cash and cash equivalents, mutual funds, bonds etc.

The carrying amount of financial assets represents the maximum credit exposure.

Trade receivables

Around 83% of the sales are export sales. For major part of the sales, customer credit risk is managed by requiring domestic and export customers to pay advances before transfer of ownership, therefore substantially eliminating the Companyâs credit risk in this respect.

Based on prior experience and an assessment of the current economic environment, management believes that no provision is required for credit risk wherever credit is extended to customers.

Concentration of credit risk

At 31st March, 2022, the carrying amount of the Company''s most significant customer is '' 26,332 Lakhs (previous Year '' 20 ,048 Lakhs) Loans to others

The credit worthiness of the counter party is evaluated by the management on an ongoing basis and necessary provisions are made wherever needed. The Company had made provisions of doubtful loan in earlier year of '' 1,650 Lakhs. Till 31st March, 2022 the Company had recovered '' 148 Lakhs against this doubtful loan and as such the provision for such doubtful loan was reduced to '' 1,502 Lakhs as on 31st March, 2022. The Company has no collateral securities in respect of said loan.

Investment in debentures and preference shares

The Company does not perceive any risk as these are issued by reputed financial institution.

Investment in mutual funds and bonds

Derivatives

The derivatives are entered into with the banks, with good credit ratings.

Cash and cash equivalents

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with the Company''s policy. Investment in surplus funds are made mainly in Bonds and mutual funds with good returns and within approved credit ratings.

ii. Liquidity risk

As at 31st March, 2022, the Company had working capital of '' 67,728 Lakhs, including cash and cash equivalents of '' 2,945 Lakhs, and highly marketable current investments of '' 68,453 Lakhs.

As at 31st March, 2021, the Company had working capital of '' 61,785 Lakhs, including cash and cash equivalents of '' 3,407 Lakhs, and highly marketable current investments of '' 39,203 Lakhs.

Exposure to liquidity risk

The table below analyses the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for:

* all non derivative financial liabilities

*net and gross settled derivative financial instruments for which the contractual maturities are essential for the understanding of the timing of the cash flows.

*Guarantees issued by the Company on behalf of subsidiaries are with respect to borrowings raised by the respective entities. These amounts will be payable on default by the concerned entity. As of the reporting date, none of the subsidiaries have defaulted and hence, the Company does not have any present obligation to third parties in relation to such guarantees.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates ) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, the Companyâs exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies. a) Currency risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchase, other expenses and borrowings are denominated and the functional currency of the Company. The functional currency of the Company is Indian Rupees (INR). The currencies in which these transactions are primarily denominated are EURO and USD.

At any point in time, the Company generally hedges its estimated foreign currency exposure in respect of forecasted sales over the forthcoming financial years in advance. The Company uses forward exchange contracts to hedge its currency risk . Such contracts are generally designated as cash flow hedges.

The strengthening / weakening of the respective foreign currencies with respect to functional currency of Company would result in increase or decrease in profit or loss and equity as shown in table below. This analysis assumes that all other variables, in particular interest rates, remain constant. The following analysis has been worked out based on the exposures as of the Balance Sheet date.

b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates.

For details of the Companyâs short-term loans and borrowings, including interest rate profiles, refer to Note 50 of these financial statements.

The Companyâs fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in IND AS 107, since neither the carrying amount nor the future cash flow will fluctuate because of a change in market interest rates.

Interest rate sensitivity - variable rate instruments

Hedge accounting

As part of its risk management strategy, the Company endeavours to hedge its net foreign currency exposure of highly forecasted sale transactions for the forthcoming financial years in advance. The Company uses forward contracts to hedge its currency exposure. Such contracts are designated as cash flow hedges.

The forward contracts are generally denominated in the same currency in which the sales realisation is likely to take place.

Financial contracts designated as hedges are accounted for in accordance with the requirements of Ind AS 109 depending upon the type of hedge.

The Company applies cash flow hedge accounting to hedge the variability in the future cash flows attributable to foreign exchange risk.

Hedge effectiveness is assessed through the application of critical terms match method. Any ineffectiveness in a hedging relationship is accounted for in the statement of profit and loss.

The Company has formally designated and documented hedge relationship from 1st April, 2016.

Disclosure of effects of hedge accounting on financial position

The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Company monitors capital using a ratio of ''net debtâ to ''equityâ. For this purpose, net debt is defined as total debt, comprising interest-bearing loans and borrowings less cash and cash equivalents and current investments.

Terms and conditions of transactions with related parties

* Parties identified by the Management and relied upon by the auditors.

$ All the related party transactions were made on terms equivalent to those that prevail in an armâs length transactions.

No amount in respect of related parties have been written off/back or are provided for.

NOTE NO.44 COVID-19

As per the current reports the COVID-19 pandemic is receding and most businesses are back to pre-pandemic levels. The Company does not see any challenge in the recoverability and carrying value of all its assets and investments.

The Company has various schemes for long-term benefits such as provident fund and superannuation. In case of funded schemes, the funds are recognised by the Income tax authorities and administered by appropriate authorities. The Companyâs defined contribution plans are superannuation and employeesâ pension scheme (under the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The liability of the Company on the exempt Provident Fund is restricted to the interest shortfall if any.

The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at 31st March, 2022. 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.

Other long-term employee benefits:

Compensated absences are payable to employees at the rate of daily basic salary for each day of accumulated leave partially at the year end and partially on death or on resignation or upon retirement. The charge towards compensated absences for the year ended 31st March, 2022 based on actuarial valuation using the projected accrued benefit method is '' 0.06 Lakhs (31st March, 2021 : '' 25.28 Lakhs).

In terms of Amendment to Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 (the CSR Rules 2021) effective from 22nd January, 2021,, if a Company fails to spend the prescribed CSR amount during the year and such unspent amount pertains to any ongoing project, the Company shall transfer the unspent amount to a special bank account to be opened by the Company in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account within a period of 30 days from the end of the relevant financial year. '' 3 Lakhs unspent during the FY 2021-2022 has been already deposited by the Company in a separate bank account within the stipulated period.

i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property.

ii) The Company does not have any transactions with struck off companies.

iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

v) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority

vi) 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.

vii) All the title deeds of immovable properties are in the name of Company.

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,

NOTE NO.56

The code of Social Security, 2020 (code) relating to employee benefits during employment and post-employment received Presidential asset in September, 2020 and its effective date is yet to be notified. The Company will assess and record the impact of the Code, once it is effective.

NOTE NO.57

Previous yearâs figures have been regrouped/reclassified wherever necessary to correspond with the current yearâs classification disclosure.

Mar 31, 2021

Measurement of fair values

Level 1: Level 1 heirarchy includes financial instruments measured using quoted prices.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level3. Transfers between Levels

There have been no transfers between Levels during the reporting periods

The following tables show the valuation techniques used in measuring Level 2 fair values, as well as the significant unobservable inputs used.

Financial risk management

The Company has exposure to the following risks arising from financial instruments:

â¢ Credit risk ;

â¢ Liquidity risk ; and

â¢ Market risk

i. Risk management framework

ii. Credit risk

The carrying amount of financial assets represents the maximum credit exposure.

Trade receivables

Based on prior experience and an assessment of the current economic environment, management believes that no provision is required for credit risk wherever credit is extended to customers.

Concentration of credit risk

At 31st March, 2021, the carrying amount of the Company''s most significant customer is '' 20,048 lakhs (previous Year '' 17,162 lakhs)

Loans to others

The credit worthiness of the counter party is evaluated by the management on an ongoing basis and necessary provisions are made wherever needed. The company had made provisions of doubtful loan in earlier years of '' 1,650 lakhs. During the previous year the Company had recovered '' 73 lakhs against this doubtful loan and as such the provision for such doubtful loan was reduced to '' 1,577 lakhs as on 31st March, 2020. The Company has no collateral securities in respect of said loan.

Investment in debentures and preference shares

The Company does not perceive any risk as these are issued by reputed financial institution.

Investment in mutual funds and bonds

Derivatives

The derivatives are entered into with the banks, with good credit ratings.

Cash and cash equivalents

Liquidity risk

As at 31st March, 2021, the Company had working capital of '' 62,068 lakhs, including cash and cash equivalents of '' 3,407 lakhs, and highly marketable current investments of '' 39,203 lakhs.

As at 31st March, 2020, the Company had working capital of '' 41,195 lakhs, including cash and cash equivalents of '' 2,324 lakhs, and highly marketable current investments of '' 35,112 lakhs.

Exposure to liquidity risk

The table below analyses the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for:

* all non derivative financial liabilities

* net and gross settled derivative financial instruments for which the contractual maturites are essential for the understanding of the timing of the cash flows.

^Guarantees issued by the company on behalf of subsidiaries are with respect to borrowings raised by the respective entities. These amounts will be payable on default by the concerned entity. As of the reporting date, none of the subsidiaries have defaulted and hence, the company does not have any present obligation to third parties in relation to such guarantees.

iv. Market risk

a) Currency risk

The company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchase, other expenses and borrowings are denominated and the functional currency of the company. The functional currency of the company is Indian Rupees (INR). The currencies in which these transactions are primarily denominated are EURO and USD.

At any point in time, the Company generally hedges its estimated foreign currency exposure in respect of forecast sales over the following 10 to 12 months. The Company uses forward exchange contracts to hedge its currency risk, most with a maturity of less than one year from the reporting date. Such contracts are generally designated as cash flow hedges.

Interest rate sensitivity - fixed rate instruments

Interest rate sensitivity - variable rate instruments

Hedge accounting

As part of its risk management strategy, the company endeavors to hedge its net foreign currency exposure of highly forecasted sale transactions for the next 10 to 12 months in advance. The company uses forward contracts to hedge its currency exposure. Such contracts are designated as cash flow hedges.

The forward contracts are generally denominated in the same currency in which the sales realization is likely to take place.

Financial contracts designated as hedges are accounted for in accordance with the requirements of Ind AS 109 depending upon the type of hedge.

The Company applies cash flow hedge accounting to hedge the variability in the future cash flows attributable to to foreign exchange risk.

Hedge effectiveness is assessed through the application of critical terms match method. Any ineffectiveness in a hedging relationship is accounted for in the statement of profit and loss.

The company has formally designated and documented hedge relationship from 1st April, 2016.

Capital Management

I) Related Party Disclosures *

(Where transactions have taken place)

a) Key Management Personnel (KMP)

Mr. Arvind Poddar - Chairman & Managing Director, Mr. Rajiv Poddar - Joint Managing Director, Mr.Vipul Shah - Director & Company Secretary, Mr. Basant Bansal - Director Finance (upto 28.08.2o2o), Mr. Madhusudan Bajaj (w.e.f 28.08.2020)-President (commercial) & CFO.

b) Relatives of Key Management Personnel :

Mrs. Vijaylaxmi Poddar, Mrs. Khushboo Poddar, Mrs. Pooja Dhoot, Mr. Gunal Bansal (upto 28.08.2020), Mrs. Vijaya Bajaj (w.e.f. 28.08.2020)

c) Other Related Parties -(Enterprises-KMP having significant influence/owned by major shareholders) Clothing Culture Ltd. (upto 06.05.2019), Clothing Culture Pvt. Ltd. (w.e.f. 07.05.2019).

COVID-19

As per the current reports the Second wave of COVID-19 pandemic has peaked in most states in India. The Company is closely monitoring the impact due to COVID-19 on various aspects of its business including its customers / vendors / employees and other business partners. The Company has made a detailed assessment of its liquidity position for the Financial year 2021-22 including recoverability and carrying value of its assets comprising of Fixed assets as well as current assets including land and building, plant and machinery, investments, inventories, trade receivables etc. Based on current indicators of future economic condition, the Company expects to recover the carrying amount of these assets.

Disclosure of payable to vendors as defined under the "Micro, Small and Medium Enterprise Development Act, 2006" is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the year or on balance brought forward from previous year.

) Defined Benefit Plan

The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at 31st March, 2021. 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 and the plan assets as at balance sheet date:

In terms of Amendment to Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 (the CSR Rules 2021) effective from 22nd January, 2021, if a company fails to spend the prescribed CSR amount during the year and such unspent amount pertains to any ongoing project, the company shall transfer the unspent amount to a special bank account to be opened by the company in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account within a period of 30 days from the end of the relevant financial year. '' 420 lakhs unspent during the FY 2020-2021 has been already deposited by the Company in a separate bank account within the stipulated period.

NOTE NO.53

Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.

Mar 31, 2019

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

1 (A) General information

Balkrishna Industries Limited (âthe Companyâ) is engaged in the business of manufacturing and selling of âOff-Highway Tyresâ (OHT) in the specialist segments such as Agricultural, Industrial & Construction, Earthmovers & Port, Mining, Forestry, Lawn & Garden and All Terrain Vehicles (ATV).

The company is a public limited company incorporated and domiciled in India and has its registered office at Waluj MIDC, Aurangabad, Maharashtra, India.

Securities Premium Reserve

The amounts received in excess of the par value of Equity shares issued have been classified as Securities premium. In accordance with the provisions of Section 52 of the Indian Companies Act, 2013, the securities premium account can only be utilised for the purposes of issuing bonus shares, repurchasing the Companyâs shares, redemption of preference shares and debentures, and offsetting direct issue costs and discount allowed for the issue of shares or debentures.

General reserve

Retained earnings

Retained earnings includes the Companyâs cumulative earnings and losses respectively Remeasurements of the net defined benefit Plans

Remeasurements of defined benefit liability comprises actuarial gains and losses and return on plan assets (excluding interest income)

Cash flow hedging reserve

The Company uses hedging instruments as part of its management of foreign currency risk associated with its highly probable forecast sale. For hedging foreign currency risk, the Group uses foreign currency forward contracts which are designated as cash flow hedges. To the extent these hedges are effective; the change in fair value of the hedging instrument is recognised in the cash flow hedging reserve. Amounts recognised in the cash flow hedging reserve is reclassified to profit or loss when the hedge item affects profit/(loss) i.e., when the designated sale occurs.

The amounts receivable from customers become due after expiry of credit period which on an average is less than 45 days. There is no significant financing component in any transaction with the customers.

The Company provides performance warranty for its products. The amount of liability towards such warranty is not material.

B. Measurement of fair values

Ind AS 107, âFinancial Instrument - Disclosureâ requires classification of the valuation method of financial instruments measured at fair value in the Balance Sheet, using a three level fair-value-hierarchy (which reflects the significance of inputs used in the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to un-observable inputs (Level 3 measurements). Fair value of derivative financial assets and liabilities are estimated by discounting expected future contractual cash flows using prevailing market interest rate curves. The three levels of the fair-value-hierarchy under Ind AS 107 are described below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level3.

Transfers between Levels

There have been no transfers between Levels during the reporting periods

The following tables show the valuation techniques used in measuring Level 2 fair values, as well as the significant unobservable inputs used.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk ;

- Liquidity risk ; and

- Market risk

i. Risk management framework

The audit committee oversees how management monitors compliance with the companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investments in debt securities, cash and cash equivalents, mutual funds, bonds etc.

The carrying amount of financial assets represents the maximum credit exposure.

Trade receivables

Around 85% of the sales are export sales. For major part of the sales, customer credit risk is managed by requiring domestic and export customers to pay advances before transfer of ownership, therefore substantially eliminating the Companyâs credit risk in this respect.

Based on prior experience and an assessment of the current economic environment, management believes that no provision is required for credit risk wherever credit is extended to customers.

Concentration of credit risk

At 31st March 2019, the carrying amount of the Companyâs most significant customer is Rs. 21,376 Lakhs (previous Year Rs. 14,264 Lakhs) Loans to others

The credit worthiness of the counter party is evaluated by the management on an ongoing basis and necessary provisions are made wherever needed. The company has made provisions of Rs. 990 Lakhs as at 31st march 2019 (31 March 2018 : Rs. 660 Lakhs) in respect of such doubtful loan of Rs. 1,650 Lakhs. The Company has no collateral securities in respect of said loans.

Investment in debentures

The Company does not perceive any risk as these are issued by reputed financial institution.

Investment in mutual funds and bonds

Derivatives

The derivatives are entered into with the banks, with good credit ratings.

Cash and cash equivalents

Credit risk from balances with banks is managed by the Companyâs treasury department in accordance with the companyâs policy. Investment in surplus funds are made mainly in mutual funds with good returns and within approved credit ratings.

iii. Liquidity risk

As at 31st March 2019, the Company had working capital of Rs. 1,05,307 Lakhs, including cash and cash equivalents of Rs. 3,615 Lakhs, and highly marketable current investments of Rs. 76,346 Lakhs.

As at 31st March 2018, the Company had working capital of Rs. 59,504 Lakhs, including cash and cash equivalents of Rs. 1,761 Lakhs, and highly marketable current investments of Rs. 48,318 Lakhs.

Exposure to liquidity risk

The table below analyses the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for:

* all non derivative financial liabilities

* net and gross settled derivative financial instruments for which the contractual maturities are essential for the understanding of the timing of the cash flows.

iv. Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates ) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, the Companyâs exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

a) Currency risk

The company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchase, other expenses and borrowings are denominated and the functional currency of the company. The functional currency of the company is Indian Rupees (â). The currencies in which these transactions are primarily denominated are EURO and USD.

b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates. For details of the Companyâs short-term and long term loans and borrowings, including interest rate profiles, refer to Note 50 of these financial statements.

Interest rate sensitivity - fixed rate instruments

The companyâs fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in IND AS 107, since neither the carrying amount nor the future cash flow will fluctuate because of a change in market interest rates.

Interest rate sensitivity - variable rate instruments

Offsetting financial assets and financial liabilities

The following table presents the recognised financial instruments that are offset, or subject to enforceable master netting arrangements and other similar agreements but not offset, as at 31st March 2019 and 31st March 2018. The column ânet amountâ shows the impact on the companyâs balance sheet if all set-off rights were exercised.

NOTE NO.2 Hedge accounting

The forward contracts are generally denominated in the same currency in which the sales realization is likely to take place.

Financial contracts designated as hedges are accounted for in accordance with the requirements of Ind AS 109 depending upon the type of hedge.

The Company applies cash flow hedge accounting to hedge the variability in the future cash flows attributable to foreign exchange risk.

Hedge effectiveness is assessed through the application of critical terms match method. Any ineffectiveness in a hedging relationship is accounted for in the statement of profit and loss.

The company has formally designated and documented hedge relationship from 1st April 2016.

NOTE NO.3 Capital Management

The Company monitors capital using a ratio of ânet debtâ to âequityâ. For this purpose, net debt is defined as total debt, comprising interest-bearing loans and borrowings less cash and cash equivalents and current investments.

The Companyâs net debt to equity ratio is as follows.

NOTE NO.4 Earning Per Share (EPS)

Basic EPS and Diluted EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the company by the weighted average number of Equity shares outstanding during the year.

NOTE NO.5

I) Related Party Disclosures *

(Where transactions have taken place)

a) Key Management Personnel (KMP)

Mr. Arvind Poddar - Chairman & Managing Director, Mr. Rajiv Poddar - Joint Managing Director, Mr. Vipul Shah - Director & Company Secretary, Mr. Basant Bansal - Director Finance.

b) Relatives of Key Management Personnel :

Mrs. Vijaylaxmi Poddar, Mrs. Khushboo Poddar, Mrs. Pooja Dhoot, Mr. Gunal Bansal

c) Other Related Parties -(Enterprises-KMP having significant influence/owned by major shareholders) Clothing Culture Ltd,

Leases - Finance leases as lessee:

The company has entered into long-term leasing arrangements for land with government authorities which are in the nature of finance lease. These arrangements do not involve any material recurring payments, hence other disclosures are not given.

NOTE NO.6

As at 31st March,2019, the Company has certain dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (âMSMED Actâ). The disclosures pursuant to the said MSMED Act are as follows:

Disclosure of payable to vendors as defined under the âMicro, Small and Medium Enterprise Development Act, 2006â is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the year or on balance brought forward from previous year.

NOTE NO.7

Employee Benefit obligations

(A) Defined Contribution Plan

(B) Defined Benefit Plan

In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company has a defined benefit plan which provides for gratuity payments. The plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amounts are based on the respective employeeâs last drawn salary and the years of employment with the Company. Liabilities in respect of the gratuity plan are determined by an actuarial valuation, based upon which the Company makes annual contributions to the Group Gratuity cum Life Assurance Schemes administered by the LIC of India, a funded defined benefit plan for qualifying employees.

The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at 31st March 2019. 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.

(vi) Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

The above sensitivity analyses have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the reporting date. In practice, generally it does not occur. When we change one variable, it affects to others. In calculating the sensitivity, project unit credit method at the end of the reporting period has been applied.

Other long-term employee benefits:

Compensated absences are payable to employees at the rate of daily basic salary for each day of accumulated leave partially at the year end and partially on death or on resignation or upon retirement. The charge towards compensated absences for the year ended 31st March 2019 based on actuarial valuation using the projected accrued benefit method is Rs. 204 Lakhs (31st March 2018 : Rs. 301 Lakhs).

NOTE NO.8

During the year under review, Thristha Synthetics Limited, the wholly owned subsidiary of your Company, incorporated in year 2013, has voluntarily make an application with the Registrar of Companies (ROC), Mumbai, Ministry of Corporate Affairs, for striking off their name from the records of ROC after meeting / discharging all the necessary requirements for striking off, which is currently under process.

NOTE NO.9

EVENTS AFTER THE REPORTING PERIOD

The Board of Directors have recommended a final dividend of Rs. 2 (100 %) per equity share of Rs. 2/-each. The cash outgo on account of final dividend and dividend tax will be Rs. 4661 Lakhs.

NOTE NO.10

Previous yearâs figures have been regrouped/reclassified wherever necessary to correspond with the current yearâs classification/ disclosure.

Mar 31, 2018

1. (a) General information

The company is a public limited company incorporated and domiciled in India and has its registered office at Waluj MIDC, Aurangabad, Maharashtra, India.

Securities premium reserve

General reserve

Retained earnings

Retained earnings includes the Companyâs cumulative earnings and losses respectively Remeasurements of the net defined benefit Plans

Remeasurements of defined benefit liability comprises actuarial gains and losses and return on plan assets (excluding interest income) Cash flow hedging reserve

The company uses hedging instruments as part of its management of foreign currency risk associated with its highly probable forecast sale. For hedging foreign currency risk, the company uses foreign currency forward contracts which are designated as cash flow hedges. To the extent these hedges are effective; the change in fair value of the hedging instrument is recognised in the cash flow hedging reserve. Amounts recognised in the cash flow hedging reserve is reclassified to profit or loss when the hedge item affects profit/(loss) i.e., when the designated sale occurs.

The company offsets Deferred tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

B. Measurement of fair values

Level 1: Level 1 heirarchy includes financial instruments measured using quoted prices.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. Transfers between Levels 3

The following tables show the valuation techniques used in measuring Level 2 fair values, as well as the significant unobservable inputs used.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk ;

- Liquidity risk ; and

- Market risk

i. Risk management framework

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investments in debt securities, cash and cash equivalents, mutual funds, bonds etc.

The carrying amount of financial assets represents the maximum credit exposure.

Trade receivables

Based on prior experience and an assessment of the current economic environment, management believes that no provision is required for credit risk wherever credit is extended to customers.

Concentration of credit risk

At 31st March 2018, the carrying amount of the Companyâs most significant customer is Rs.14,264 lakhs (previous Year Rs.8,855 lakhs)

Loans to others

The credit worthiness of the counter party is evaluated by the management on an ongoing basis and necessary provisions are made wherever needed. The company has made provisions of Rs.660 Lakhs as at 31st march 2018 in respect of such doubtful loans. The Company has no collateral securities in respect of said loans.

Investment in Debentures

The Company does not perceive any risk as these are issued by reputed financial institution.

Investment in mutual funds and bonds

The investment in mutual funds, Government bonds are entered into with credit worthy fund houses, Government of India and financial institution. The credit worthiness of these counter parties are evaluated by the management on an ongoing basis and is considered to be good. The Company does not expect any losses from non-performance by these counter-parties.

Derivatives

The derivatives are entered into with the banks with good credit ratings.

Cash and cash equivalents

iii. Liquidity risk

As at 31st March, 2018, the Company had working capital of Rs.58,715 lakhs, including cash and cash equivalents of Rs.1,761 lakhs, and highly marketable current investments of Rs.48,318 lakhs.

As at 31st March, 2017, the Company had working capital of Rs.10,720 lakhs, including cash and cash equivalents of Rs.1,149 lakhs, and highly marketable current investments of Rs.46,180 lakhs.

Exposure to liquidity risk

The table below analyses the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for:

* all non derivative financial liabilities

* net and gross settled derivative financial instruments for which the contractual maturities are essential for the understanding of the timing of the cash flows.

*Guarantees issued by the company on behalf of subsidiaries are with respect to borrowings raised by the respective entities. These amounts will be payable on default by the concerned entity. As of the reporting date, none of the subsidiaries have defaulted and hence, the company does not have any present obligation to third parties in relation to such guarantees.

iv. Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates ) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, the Companyâs exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

a) Currency risk

The company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchase, other expenses and borrowings are denominated and the functional currency of the company. The function- al currency of the company is Indian Rupees (â). The currencies in which these transactions are primarily denominated are EURO and USD.

At any point in time, the Company generally hedges its estimated foreign currency exposure in respect of forecast sales over the following 12 to 18 months. The Company uses forward exchange contracts to hedge its currency risk, most with a maturity of less than one year from the reporting date. Such contracts are generally designated as cash flow hedges.

Hedge accounting is followed from 1st April 2016.

b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates.

For details of the Companyâs short-term and long term loans and borrowings, including interest rate profiles, refer to Note 50 of these financial statements.

Interest rate sensitivity - fixed rate instruments

Interest rate sensitivity - variable rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased / decreased equity and profit or (loss) by amounts shown below. This analysis assumes that all other variables, in particular, foreign currency exchange rates, remain constant. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.

Offsetting financial assets and financial liabilities

The following table presents the recognised financial instruments that are offset, or subject to enforceable master netting arrangements and other similar agreements but not offset, as at 31st March 2018 and 31st March 2017. The column ânet amountâ shows the impact on the companyâs balance sheet if all set-off rights were exercised.

NOTE NO.2

Hedge accounting

As part of its risk management strategy, the company endeavors to hedge its net foreign currency exposure of highly forecasted sale transactions for the next 12 to 18 months in advance. The company uses forward contracts to hedge its currency exposure. Such contracts are designated as cash flow hedges.

The forward contracts are generally denominated in the same currency in which the sales realization is likely to take place. The hedge ratio is 1:1.

Financial contracts designated as hedges are accounted for in accordance with the requirements of Ind AS 109 depending upon the type of hedge.

The Company applies cash flow hedge accounting to hedge the variability in the future cash flows attributable to to foreign exchange risk.

Hedge effectiveness is assessed through the application of critical terms match method. Any ineffectiveness in a hedging relationship is accounted for in the statement of profit and loss.

The company has formally designated and documented hedge relationship from 1st April 2016.

NOTE NO. 3

Capital Management

NOTE NO.4

Earning Per Share (EPS):

* On 27th December, 2017, the Company allotted 9,66,58,595 Equity Shares of Rs.2 each as fully paid-up Bonus Equity Shares in the ratio of 1:1 to all registered shareholders as on the record date by capitalisation of reserves. Consequently, in accordance with Ind AS 33 âEarnings per Shareâ, figure for the year ended 31st March 2017 have been adjusted to give effect to the allotment of the Bonus Shares.

NOTE NO.5

Related Party Disclosures ⁴

(Where transactions have taken place)

a) Key Management Personnel (KMP)

Mr. Arvind Poddar - Chairman & Managing Director, Mr. Rajiv Poddar - Joint Managing Director, Mr.Vipul Shah - Director & Company Secretary, Mr. Basant Bansal - Director Finance.

b) Relatives of Key Management Personnel :

Mrs. Vijayalaxmi Poddar, Mrs. Khushboo Poddar, Mrs. Pooja Dhoot, Mr. Abhishek Bansal (upto 15th April, 2016), Mr. Gunal Bansal (w.e.f. 16th April, 2016)

c) Other Related Parties -(Enterprises-KMP having significant influence/owned by major shareholders) Clothing Culture Ltd.

d) The company has following subsidiary companies:

II Related Party Transactions$

Terms and conditions of transactions with related parties

* Parties identified by the Management and relied upon by the auditors.

$ All the related party transactions were made on terms equivalent to those that prevail in an armâs length transactions. No amount in respect of related parties have been written off/back or are provided for.

Leases - Finance leases as lessee:

NOTE NO.6

a) As at 31st March,2018, there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

b) The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

NOTE NO.7

Employee Benefit obligations

(A) Defined Contribution Plan

(B) Defined Benefit Plan

In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company has a defined benefit plan which provides for gratuity payments. The plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amounts are based on the respective employeeâs last drawn salary and the years of employment with the Company. Liabilities in respect of the gratuity plan are determined by an actuarial valuation, based upon which the Company makes annual contributions to the Group Gratuity cum Life Assurance Schemes administered by the LIC of India, a funded defined benefit plan for qualifying employees.

The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at 31st March, 2018. 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 and the plan assets as at balance sheet date:

Other long-term employee benefits:

Compensated absences are payable to employees at the rate of daily basic salary for each day of accumulated leave partially at the year end and partially on death or on resignation or upon retirement. The charge towards compensated absences for the year ended 31st March, 2018 based on actuarial valuation using the projected accrued benefit method is Rs.301 lakhs (31st March, 2017 : Rs.59 lakhs).

NOTE NO.8

The Board of Directors of the Company, on 18th May, 2016, have approved the Scheme of Amalgamation of its wholly owned subsidiary company M/s. BKT Exim Limited into itself under sections 391 to 394 and any other applicable provisions of the Companies Act, 1956 and Companies Act, 2013, to the extent notified and applicable. The Company has filed the necessary petition in the Bombay High Court, which was transferred to the National Company Law Tribunal (NCLT). NCLT has approved the Scheme of Amalgamation on 24th January, 2018 and on filing the NCLT Order with the Registrar of Companies, Mumbai, the Scheme became effective on 21st February, 2018. The appointed date was 1st April, 2015.

Pursuant to the Scheme:

(i) The assets, liabilities and reserves of BKT EXIM Ltd. has been vested with the Company and have been recorded at their book value.

(ii) The effect of the Scheme has been considered in these financial statements for the year ended 31st March, 2018 and 31st March, 2017.

(iii) The authorised share capital of the Company stands increased to Rs.9,100 lakhs consisting of 44,50,00,000 Equity Shares of Rs.2 each and 20,00,000 Redeemable Preference Shares of Rs.10 each.

NOTE NO.9

EVENTS AFTER THE REPORTING PERIOD

The Board of Directors have recommended a final dividend of Rs.1.50 (75 %) per equity share of Rs.2/-each. The cash outgo on account of final dividend and dividend tax will be Rs.3,496 Lakhs.

NOTE NO.10

Previous yearâs figures have been regrouped/reclassified wherever necessary to correspond with the current yearâs classification/disclosure.

Mar 31, 2017

1. (a) General information

The company is a public limited company incorporated and domiciled in India and has its registered office at Waluj MIDC, Aurangabad, Maharashtra, India.

NOTE NO. 2

First - time adoption of Ind AS

I. 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(b) have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the presentation of an opening Ind AS balance sheet at 1 April 2015 (the Companyâs date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amount 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 and financial performance is set out in the following tables and notes.

II. Exemptions from retrospective application

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

a) Deemed cost for Property, Plant and Equipment (PPE), Intangible assets and Investment property

Ind AS 101 permits a first time adopters to continue with the carrying value for all its property, plant and equipment, intangible assets and investment property 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.

Accordingly, the company has elected to measure all of its PPE, intangible asset and investment property at their previous GAAP carrying values.

b) Deemed cost for investment in subsidiary

The Company has elected to use the previous GAAP carrying amount of its investment in subsidiary on the date of transition as its deemed cost on that date, in its separate financial statements.

c) Designation of previously recognised financial

Instruments Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI 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 quoted equity shares.

The remaining voluntary exemptions as per Ind AS 101 - First time adoption either do not apply or are not relevant to the Company

III. Exceptions from full retrospective application:

a) Sales tax deferral loan

By applying the exception available as per Ind AS 101, the company has used previous GAAP carrying amount of the loan at the date of transition to Ind AS as the carrying amount of the loan in the opening Ind AS Balance Sheet.

b) Hedge accounting

Hedge accounting is applied from 1st April 2016 and therefore previous period comparative i.e., F.Y 2015-16 has not been restated and the same will continue to reflect fair value through profit and loss accounting.

c) Estimates

Upon an assessment of the estimates made under Indian GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS, except where estimates were required by Ind AS and not required by Indian GAAP The company made estimate for following items in accrodance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at FVOCI; and

- Investment in debt instruments carried at FVTPL.

d) Classification and measurement of financial assets

The Company has classified and measured the financial assets (investment in debt instruments) on the basis of facts and circumstances that exist at the date of transition to Ind AS.

e) Long term foreign currency monetary items

Under previous GAAP, paragraph 46/ 46A of AS 11 The Effects of Changes in Foreign Exchange rate, provide an alternative accounting treatment to companies with respect to exchange differences arising on restatement of long term foreign currency monetary items. Exchange differences on account of depreciable assets could be added/deducted from the cost of the depreciable asset, which would then be depreciated over the balance life of the asset. The company has availed optional exemption to continue the above accounting treatment in respect of the long term foreign currency monetary items recognised in the financial statements for the period immediately before the begining of first Ind As reporting period i.e 1st April 2016. The remaining mandatory exceptions either do not apply or are not relevant to the Company.

(f) Reconciliation of statement of Cash Flow;

There are no material adjustments to the statement of cash flow as reported under previous GAAP

(g) Notes to the reconciliation:

1. Fair valuation of investments in mutual funds

Under previous GAAP, investments in mutual funds were classified as long term investments or current investments based on the intended holding period and realisability. Current investments were measured at lower of cost or market price as of each reporting date while long term investments were measured at cost reduced for dimunition. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended 31 March 2016.

2. Fair valuation of Investment in quoted equity shares

Under previous GAAP, investments in quoted equity shares were classified as non current investments based on the intended holding period and realisability and was measured at cost as of each reporting date. Under Ind AS, these investments are required to be measured at Fair Value through Other Comprehensive Income (FVOCI) or Profit and Loss (FVTPL) and the company has elected to measure it at FVOCI. The resulting fair value changes of these investments have been recognised in retained earnings as at the date of transition.

3. Proposed dividend

Indian GAAP, proposed dividends are recognised as a liability in the period to which they relate, irrespective of when they are declared. Under Ind-AS, a proposed dividend is recognised as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid. In the case of the Company, the declaration of dividend occurs after transition date. Therefore, the liability recorded for this dividend has been derecognised against retained earnings.

4. Deferred revenue

Ind AS 18 requires an evaluation of continuing managerial involvement and effective control of goods in case of sale of goods. In view of this requirement, the company has deferred revenue of sale of goods.

5. Accounting for derivative and foreign exchange differences

a) Ind AS 109 requires all derivatives to be measured at fair value as per Ind AS 113 on the reporting date with both unrealised gains and losses being recognised in the statement of profit and loss for the period in which such changes arise, unless hedge accounting is applied. Accordingly the company has fair valued foreign currency forward contracts outstanding as at transition date and as at 31st March 2016 and recognised gain / loss in the retained earnings and statement of profit and loss respectively and corresponding effect is given to asset or liability for gain and loss respectively, as Derivative Asset and Derivative liability.

b) The group has also translated all financial assets / financial liabilities denominated in foreign currency at the year end rates.

6. Interest bearing loans and borrowings :

Under Indian GAAP, transaction costs incurred in connection with interest bearing loans and borrowings are amortised upfront and charged to profit or loss for the period. Under Ind-AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method or amortised on straight line basis over the period of loan.

7. Fair valuation of preference shares:

The investment in preference shares with below market rate of interest was made with the objective of procuring electricity from the vendor at a subsidised rate when compared to the market rates. As per Ind AS 109, investments in preference shares is to measured at fair value using market rate of interest for discounting of future cash flows from those investments. The difference between the fair value and nominal value of the preference shares is treated as prepaid power cost. The preference shares have been subsequently amortised under effective interest rate method and the prepaid power cost on a straight line basis over the term of the preference shares. This has resulted in recognising prepaid power cost and corresponding reduction in investment amount.

8. Other deferred tax adjustments :

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

9. Government Grant:

Apportionment of Government Grant recognised under Export Promotion Capital Goods (EPCG) scheme and corresponding charge of depreciation on account of grossing-up of Property, Plant & Equipment.

10. Property, Plant and Equipment: Interest bearing loans and borrowings:

Under Indian GAAP, transaction costs incurred in connection with interest bearing loans and borrowings are capitalized as a part of PPE. Under Ind-AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method or amortised on straight line basis over the period of loan. To restate the carrying amount of loan in accordance with Ind AS 109, the carrying amount of PPE as at the date of the transition is reduced by the amount of processing cost (net of cumulative depreciation impact).

11. Remeasurement of post employment benefit obligation:

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 and loss under the previous GAAP.

B. Measurement of fair values

Level 1: Level 1 Heirarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market are determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3. e.g. unlisted equity securities.

Transfers between Levels

There have been no transfers between Levels during the reporting periods

The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk ;

- Liquidity risk ; and

- Market risk

i. Risk management framework

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investments in debt securities, cash and cash equivalents, mutual funds, bonds etc.

The carrying amount of financial assets represents the maximum credit exposure.

Trade and other receivables

Based on prior experience and an assessment of the current economic environment, management believes that no provision is required for credit risk wherever credit is extended to customers.

Concentration of credit risk

At 31st March 2017, the carrying amount of the Companyâs most significant customer is INR 8,855 Lakhs (31st March, 2016 : INR 6,971 Lakhs; 1st April, 2015 : INR 5,218 Lakhs)

Loans to others

The credit worthiness of the counter party is evaluated by the management on an ongoing basis and is considered to be good. The Company did not have any amounts that were past due but not impaired. The Company has no collateral in respect of these loans.

Investment in debentures

The company does not pereceive any risk as these are either issued by subsidiary company or other reputed financial institution.

Investment in mutual funds and bonds

The investment in mutual funds, Government bonds are entered into with credit worthy fund houses, Government of India and financial institution respectively. The credit worthiness of these counter parties are evaluated by the management on an ongoing basis and is considered to be good. The Company does not expect any losses from non-performance by these counter-parties.

Derivatives

The derivatives are entered into with bank and financial institution counterparties with good credit ratings.

Cash and cash equivalents

Credit risk from balances with banks is managed by the Companyâs treasury department in accordance with the companyâs policy. Investment of surplus funds are made in mainly in mutual funds with good returns and within approved credit ratings.

Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired.

iii. Liquidity risk

As at 31st March, 2017, the Company had working capital of INR 10,430 Lakhs, including cash and cash equivalents of INR 1,141 Lakhs, and highly marketable current investment of INR 45,898 Lakhs.

As at 31st March, 2016, the Company had working capital of INR 4,868 Lakhs, including cash and cash equivalents of INR 30,118 Lakhs, and highly marketable current investment of INR 27,966 Lakhs.

As at 1st April, 2015 the Company had working capital of INR 77,677 Lakhs, including cash and cash equivalents of INR 43,037 Lakhs, and highly marketable current investment of INR 42,506 Lakhs.

Exposure to liquidity risk

The table below analyses the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for:

* all non derivative financial liabilities

* net and gross settled derivative financial instruments for which the contractual maturites are essential for the understanding of the timing of the cash flows.

^Guarantees issued by the company on behalf of step down subsidiaries are with respect to borrowings raised by the respective entities. These amounts will be payable on default by the concerned entity. As of the reporting date, none of the step down subsidiaries have defaulted and hence, the company does not have any present obligation to third parties in relation to such guarantees.

iv. Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates ) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, the Companyâs exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

a) Currency risk

The company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchase, other expenses and borrowings are denominated and the functional currency of the company. The functional currency of the company is Indian Rupees (INR). The currencies in which these transactions are primarily denominated are EURO and USD.

At any point in time, the Company generally hedges its estimated foreign currency exposure in respect of its forecast sales over the following 12 to 18 months. The Company uses forward exchange contracts to hedge its currency risk. Such contracts are generally designated as cash flow hedges.

Hedge accounting is followed from 1st April, 2016.

Sensitivity analysis

The strenghtening / weakening of the respective foreign currencies with respect to functional currency of Company would result in increase or decrease in profit or loss and equity as shown in table below. This analysis assumes that all other variables, in particular interest rates, remain constant. The following analysis has been worked out based on the exposures as of the date of statements of financial position.

b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates.

For details of the Companyâs short-term and long term loans and borrowings, including interest rate profiles, refer to Note 52 of these financial statements.

Interest rate sensitivity - fixed rate instruments

Interest rate sensitivity - variable rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased / decreased equity and profit or loss by amounts shown below. This analysis assumes that all other variables, in particular, foreign currency exchange rates, remain constant. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.

Offsetting financial assets and financial liabilities

The following table presents the recognised financial instruments that are offset, or subject to enforceable master netting arrangements and other similar agreements but not offset, as at 31st March 2017, 31st March 2016 and 1st April 2015. The column ânet amountâ shows the impact on the companyâs balance sheet if all set-off rights were exercised.

NOTE NO.3

Hedge accounting

As part of its risk management strategy, the company generally hedges its net foreign currency exposure of highly forecasted sale transactions for the next 12 to 18 months in advance. The company uses forward contracts to hedge its currency exposure. Such contracts are designated as cash flow hedges.

The forward contracts are generally denominated in the same currency in which the sales realization is likely to take place. The hedge ratio is 1:1.

Financial contracts designated as hedges are accounted for in accordance with the requirements of Ind AS 109 depending upon the type of hedge.

The Company applies cash flow hedge accounting to hedge the variability in the future cash flows attributable to foreign exchange risk.

Hedge effectiveness is assessed through the application of critical terms match method. Any ineffectiveness in a hedging relationship is accounted for in the statement of profit and loss.

The company has formally designated and documented hedge relationship from 1st April 2016.

NOTE NO. 4

Capital Management

The Companyâs net debt to equity ratio as at 31st March 2017, 31st March 2016 and 1st April 2015 was as follows.

NOTE NO. 5

DISCLOSURE ON SPECIFIED BANK NOTES (SBNs)

During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated 31st March, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016, the denomination wise SBNs and other notes as per the notification is given below:

NOTE NO.6

Earning Per Share (EPS):

NOTE NO.7

Related Party Disclosures *

(Where transactions have taken place)

I Related Party Relationships

a) Key Management Personnel (KMP)

Mr. Arvind Poddar - Chairman & Managing Director, Mrs. Vijayalaxmi Poddar - Executive Director( up to 08.08.2015), Mr. Rajiv Poddar - Joint Managing Director, Mr.Vipul Shah - Director & Company Secretary#, Mr. Basant Bansal - Director Finance.

b) Relatives of Key Management Personnel :

Mrs. Vijayalaxmi Poddar-( w.e.f. 09.08.2015 ) Mrs. Khushboo Poddar, Mrs. Pooja Dhoot, Mrs. Shyamlata Poddar, Mr. Abhishek Bansal, Mr, Gunal Bansal

c) Other Related Parties -(Enterprises-KMP having significant influence/owned by major shareholders) Clothing Culture Ltd.

NOTE NO.8

a) As at 31st March,2017, there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

NOTE NO.9

Employee Benefit obligations

(A) Defined Contribution Plan

The Company has various schemes for long-term benefits such as provident fund and superannuation. In case of funded schemes, the funds are recognised by the Income tax authorities and administered through trustees /appropriate authorities. The Companyâs defined contribution plans are superannuation and employeesâ pension scheme (under the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The liability of the Company on the exempt Provident Fund managed by the trustees is restricted to the interest shortfall if any.

(B) Defined Benefit Plan

In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company has a defined benefit plan which provides for gratuity payments. The plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amounts are based on the respective employeeâs last drawn salary and the years of employment with the Company. Liabilities in respect of the gratuity plan are determined by an actuarial valuation, based upon which the Company makes annual contributions to the Group Gratuity cum Life Assurance Schemes administered by the LIC of India, a funded defined benefit plan for qualifying employees. Trustees administer the contributions made by the Company to the gratuity scheme.

The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at 31st March 2017. 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 and the plan assets as at balance sheet date:

NOTE NO.10

EVENTS AFTER THE REPORTING PERIOD

The Board of Directors have recommended a final dividend of Rs.2.50 (125 %) per equity share of Rs.2/-each. The cash outgo on account of final dividend and dividend tax will be INR 2,908 Lakhs.

NOTE NO.11

Previous yearâs figures have been regrouped/reclassified wherever necessary to correspond with the current yearâs classification/disclosure.

Mar 31, 2015

NOTE NO.1 Current Year Previous Year Rupees Rupees

Contingent Liabilities and Commitments

(i) Contingent Liabilities

(a) Claims against the Company not acknowledged as debts

* Disputed claims for 103,77,77,048 145,49,46,696 excise, sales tax, customs and service tax

* Disputed income tax 4,73,05,121 22,45,010 demands

(b) Guarantees given by 15,05,90,479 13,41,01,626 the Company''s bankers on behalf of the Company against the Company''s Indemnity

(c) Corporate Guarantee given by the Company:

* To the President of India 334,56,88,269 858,75,00,000 through commissioner of Custom

(ii) Commitments

Estimated amount of contracts 204,71,90,222 296,73,80,759 remaining to be executed on capital account and not provided for

NOTE NO.2

A scheme of arrangement ("Scheme") under section 391 to 394 of the Companies Act, 1956 between Balkrishna Industries Limited (the Company), Balkrishna Paper Mills Limited (BPML), Nirvikara Paper Mill Limited (NPML), their respective shareholders and creditors was approved by Hon''ble High Court of Judicature at Bombay vide Order dated 19th December 2014.

Pursuant to the Scheme:

(a) BPML, which was engaged in the business of manufacturing of paper board, has been amalgamated with the Company with effect from the Appointed Date, i.e., 1st April 2013 whereby,

(i) The assets, liabilities and reserves of BPML has been vested with the Company and have been recorded at their respective book value, under the pooling of interest method of accounting for amalgamation.

(ii) 3,80,00,000 Equity shares of Rs. 10 each fully paid and 19,50,000 Preference Shares of Rs.10 each fully paid of BPML held by the Company have been cancelled.

(iii) No shares have been issued to the shareholders of BPML pursuant to the amalgamation.

(b) The Paper Division Undertaking of the Company have been demerged into NPML with effect from the Effective Date, i.e., 10th February 2015, whereby the Company''s investment of Rs. 5,00,000 in the share capital of NPML stands cancelled and an aggregate of 1,07,39,844 equity shares of Rs. 10 each of NPML were issued to the equity shareholders of the Company in the ratio of 1 equity share of NPML for every 9 equity shares held in the Company.

(c) The effect of the Scheme has been considered in these financial statements for the year ended 31st March, 2015 and therefore to that extent, the figures of the current year are not comparable with those of the previous year

(d) From the effective date the authorised share capital of the Company stands increased to Rs. 90,00,00,000 consisting of 44,00,00,000 Equity Shares of Rs. 2 each and 20,00,000 Redeemable Preference Shares of Rs. 10 each.

NOTE NO.3

(i) Figures in brackets in notes 35,40 and 42 pertain to previous year.

(ii) Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/ disclosure.

Mar 31, 2014

Current Year Previous Year NOTE NO.1 Rupees Rupees

Contingent Liabilities and commitments

(i) Contingent Liabilities

(a) Claims against the Company not acknowledge as debts

- Disputed claims for excise, sales tax, customs and service tax 145,49,46,696 22,63,07,241

- Disputed income tax demands 22,45,010 4,68,97,728

(b) Guarantees given by the Company''s bankers on behalf of the Company 13,41,01,626 12,44,17,577 against the Company''s Indemnity

(c) Corporate Guarantee given by the Company:

- To the President of India through commissioner of Custom 858,75,00,000 2000,00,00,000

- To other Company NIL 7,27,68,750

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account 296,73,80,759 385,10,22,142 and not provided for

NOTE NO.2

SEGMENT INFORMATION

(a) Primary Business Segments:- The Company has only one business segment, namely Tyres therefore primary business segment reporting as required by AS-17 is not applicable.

NOTE NO.3

I) Related Party Disclosures *

(Where transactions have taken place)

(a) Key Management Personnel (KMP)

Mr. Arvind Poddar - Managing Director, Mrs. VijayaLaxmi Poddar - Executive Director (w.e.f 30.05.2012) Mr. Rajiv Poddar - Joint Managing Director, Mr. Anurag Poddar - Executive Director (upto 29.05.2012), Mr. Vipul Shah - Director & Company Secretary

(b) Relatives of Key Management Personnel :

Mrs. Khushboo Poddar, Mrs. Pooja Dhoot, Mrs. Shyamlata Poddar (w.e.f. 01.06.2012)

(c) Other Related Parties -(Enterprises-KMP having significant influence/owned by major shareholders) Siyaram Silk Mills Ltd., Balgopal Holding & Traders Ltd., and Clothing Culture Ltd.

Disclosure in Respect of Material Related Party Transaction during the year :

1 Purchase of Goods/Materials includes : Balgopal Holding & Traders Limited. Rs. NIL (Previous Year Rs.28,02,800), Clothing Culture Limited. Rs.1,08,66,887 (Previous Year Rs.13,86,885), Siyaram Silk Mills Limited Rs.NIL (Previous Year Rs.7,71,775).

2 Sale of Goods/Materials includes : Clothing Culture Limited. Rs.3,33,851 (Previous Year Rs.4,59,19,286).

3 Expenses reimbursed includes : Siyaram Silk Mills Limited Rs.NIL (Previous Year Rs.13,838 ).

4 Rent Paid includes : Mrs. Pooja Dhoot Rs.1,04,71,428 (Previous Year Rs. 25,86,246).

5 Rent Received includes : Clothing Culture Limited Rs.5,39,329 (Previous Year Rs.2,69,664).

6 Recovery of Expenses includes : Clothing Culture Limited Rs.37,565 (Previous Year Rs.8,47,556), Siyaram Silk Mills Limited Rs.NIL (Previous Year Rs. 3,37,699).

7 Sale of Fixed Assets includes : Siyaram Silk Mills Limited Rs.NIL (Previous Year Rs.61,96,613).

8 Purchase of Fixed Assets includes under Other Related Parties : Siyaram Silk Mills Limited Rs. NIL (Previous Year Rs.5,17,399).

9 Assignment of Insurance Policy includes- under KMP : Mrs. VijayaLaxmi Poddar Rs.NIL (Previous Year Rs. 93,43,554), under Relative of KMP Mrs. Shyamlata Poddar Rs.NIL (Previous Year Rs. 52,47,080).

10 Surrender of Insurance Policy includes : Mr. Anurag Poddar Rs.NIL (Previous Year Rs. 32,33,379).

11 Loan Given ( ICD ) includes : Balgopal Holding & Traders Limited Rs.NIL (Previous Year Rs.1,50,00,000), Clothing Culture Limited Rs. NIL (Previous Year Rs.1,50,00,000).

12 Loan Refund Received ( ICD )includes : Balgopal Holding & Traders Limited Rs.NIL (Previous Year Rs.1,50,00,000), Clothing Culture Limited Rs.NIL (Previous Year Rs.1,50,00,000).

13 Interest Received on Loan Given ( ICD ) includes : Balgopal Holding & Traders Limited Rs.NIL (Previous Year Rs.39,452), Clothing Culture Limited Rs.NIL (Previous Year Rs.2,38,356).

14 Payment to Key Managerial Personnel includes : Mr. Arvind Poddar Rs.16,20,04,921 (Previous Year Rs. 11,34,27,542), Mr. Rajiv Poddar Rs.10,14,74,589 (Previous Year Rs. 6,34,45,602), Mrs. Vijaylaxmi Poddar Rs.8,38,46,617 (Previous Year Rs.4,98,16,119), Mr. Anurag Poddar Rs.NIL (Previous Year Rs.19,16,210), Mr. Vipul Shah Rs.27,12,870 (Previous Year Rs.21,01,751), Payment to Relatives of Key Managerial Personnel includes : Mrs. Khushboo Poddar Rs.30,00,036 (Previous Year Rs.30,00,036), Mrs. Shyamlata Poddar Rs.30,00,036 (Previous Year Rs.17,00,018).

15 Payables to Key Management Personnel includes : Mr. Arvind Poddar Rs.12,60,00,000 (Previous Year Rs. 7,20,00,000), Mr. Rajiv Poddar Rs.7,54,83,871 (Previous Year Rs. 3,60,00,000), Mrs. Vijaylaxmi Poddar Rs.6,00,00,000 (Previous Year Rs.3,01,93,548), Mr. Vipul Shah Rs. 83,311(Previous Year Rs.90,836) and Payables to Relatives of Key Managerial Personnel includes : Mrs. Khushboo Poddar Rs.8,400 (Previous Year Rs.8,400), Mrs. Shyamlata Poddar Rs.8,400 (Previous Year Rs. 7,000).

NOTE NO.4

a) As at 31st March,2014, there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

b) The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

a) Defined Contribution Plans- The Company''s contribution to defined contribution plans aggregating to Rs.5,90,05,947 (Previous Year Rs.5,28,68,129) has been recognised in the statement of profit and loss account under the heading ''Contribution to Provident and Other Funds'' (Note No. 27) .

b) The assumption of future salary increase, considered in actuarial valuation, takes into account of inflation and other relevant factors.

NOTE NO.5

Miscellaneous Expenses includes Rs. NIL ( Previous Year Rs.11,00,000) paid to a Political Party, Bhartiya Janta Party - Gujarat Pradesh

NOTE NO.6

The Company has received approval from stock exchanges in connection with its scheme of arrangement of its two subsidiary Companies namely Balkrishna Paper Mills Limited and Balkrishna Synthetics Limited, has filed Application in the High Court of Bombay for its approval.

NOTE NO.7

i) Figures in brackets in notes 33,34,39,41 and 49 pertain to previous year.

ii) Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.

Mar 31, 2013

NOTE NO.1

Amount remitted in foreign currency on account of dividend:

The Company has not made any remittance in foreign currencies on account of dividend and does not have information as to the extent to which remittance in foreign currencies on account of dividend has been made by or on behalf of the non resident shareholders. The particulars of dividends paid to non-resident shareholders are as under :

NOTE NO.2 SEGMENT INFORMATION

(a) Primary Business Segments:-

The Company has only one business segment, namely Tyres therefore primary business segment reporting as required by AS-17 is not applicable.

(b) Secondary Segment - Geographical by location of customers

NOTE NO.3

I) Related Party Disclosures *

(Where transactions have taken place)

(a) Key Management Personnel (KMP)

Mr. Arvind Poddar - Managing Director, Mrs. Vijaylaxmi Poddar - Executive Director (w.e.f 30.05.2012), Mr. Rajiv Poddar - Executive Director , Mr. Anurag Poddar - Executive Director (upto 29.05.2012) , Mr. Basantkumar Bansal - Director Finance. (upto 11.02.2012), Mr. Vipul Shah - Director and Company Secretary (w.e.f. 11.02.2012)

(b) Relatives of Key Management Personnel :

Mrs. Khushboo Poddar, Mrs. Pooja Dhoot, Mrs. Shyamlata Poddar (w.e.f. 01.06.2012)

(c) Other Related Parties -(Enterprises-KMP having significant influence/owned by major shareholders) Siyaram Silk Mills Ltd., Govind Rubber Ltd., SPG Infrastructure Ltd., GRL International Ltd.(upto 02.12.2011), Balgopal Holding & Traders Ltd., and Clothing Culture Ltd.

Disclosure in Respect of Material Related Party Transaction during the year :

1 Purchase of Goods/Materials/Services includes : Balgopal Holding & Traders Ltd. Rs. 28,02,800 (Previous Year Rs.NIL), Clothing Culture Ltd. Rs.13,86,885 (Previous Year Rs.NIL), Siyaram Silk Mills Limited Rs.7,71,775 (Previous Year Rs.21,61,286),Govind Rubber Limited Rs.NIL (Previous Year Rs.27,58,322).

2 Sale of Goods/Materials/Services includes : Clothing Culture Ltd. Rs.4,59,19,286, (Previous Year Rs.NIL), Siyaram Silk Mills Limited Rs.NIL (Previous Year Rs.23,999), Govind Rubber Limited Rs.NIL (Previous Year Rs.15,41,254).

3 Expenses reimbursed inludes : Siyaram Silk Mills Limited Rs.13,838 (Previous Year Rs.NIL).

4 Rent Paid includes : Mrs. Pooja Dhoot Rs. 25,86,246 (Previous Year Rs.NIL).

5 Rent Received includes : Clothing Culture Limited Rs.2,69,664 (Previous Year Rs.NIL), Grl International Limited Rs.NIL (Previous Year Rs.15,88,320).

6 Recovery of Expenses includes : Clothing Culture Limited Rs. 8,47,556 (Previous Year Rs.NIL), Govind Rubber Limited Rs.1,608 (Previous Year Rs.4,73,498),Siyaram Silk Mills Limited Rs.3,37,699 (Previous Year Rs. 96,913).

7 Sale of Fixed Assets includes : Siyaram Silk Mills Limited Rs.61,96,613 (Previous Year Rs.NIL).

8 Purchase of Fixed Assets includes under Other Related Parties : Siyaram Silk Mills Limited Rs.5,17,399 (Previous Year Rs.NIL),Spg Infrastructure Limited Rs.NIL (Previous Year Rs.2,31,50,155) and purchase of Fixed Assets includes under KMP: Mr. Arvind Poddar Rs.NIL (Previous Year Rs.5,65,25,000), Mr. Rajiv Poddar Rs.NIL (Previous Year Rs.10,25,50,000).

9 Assignment of Insurance Policy includes- under KMP : Mrs. Vijaylaxmi Poddar Rs. 93,43,554 (Previous Year Rs. NIL), under Relative of KMP Mrs. Shyamlata Poddar Rs.52,47,080 (Previouse Year Rs. NIL)

10 Surrender of Insurance Policy includes : Mr. Anurag Poddar of Rs. 32,33,379 (Previous Year Rs. NIL).

11 Loan Given ( ICD ) includes : Balgopal Holding & Traders Limited Rs.1,50,00,000 (Previous Year Rs.NIL), Clothing Culture Limited Rs.1,50,00,000 (Previous Year Rs.NIL).

12 Loan Refund Received ( ICD ) includes : Balgopal Holding & Traders Limited Rs.1,50,00,000 (Previous Year Rs.NIL), Clothing Culture Limited Rs.1,50,00,000 (Previous Year Rs.NIL).

13 Interest Received on Loan Given ( ICD ) includes : Balgopal Holding & Traders Limited Rs.39,452 (Previous Year Rs.NIL), Clothing Culture Limited Rs.2,38,356 (Previous Year Rs.NIL).

14 Remuneration to Key Managerial Personnel includes : Mr. Arvind Poddar Rs.11,34,27,542 (Previous Year Rs. 5,18,02178), Mr. Rajiv Poddar Rs.6,34,45,602 (Previous Year Rs. 1,19,15,753), Mrs. Vijaylaxmi Poddar Rs.4,98,16,119 (Previous Year Rs.NIL), Mr. Anurag Poddar Rs.19,16,210 (Previous Year Rs.1,19,22,852), Mr. Vipul Shah Rs.21,01,751 (Previous Year Rs.3,55,331), Mr. Basantkumar Bansal Rs. NIL (Previous Year Rs.66,59,964) and Remuneration to Relatives of Key Managerial Personnel includes : Mrs. Khushboo Poddar Rs.30,00,036 (Previous Year Rs.5,52,460), Mrs. Shyamlata Poddar Rs. 17,00,018 (Previous Year Rs.NIL).

15 Payables to Key Management Personnel includes : Mr. Arvind Poddar Rs.7,20,00,000 (Previous Year Rs. 4,00,00,000), Mr. Rajiv Poddar Rs.3,60,00,000 (Previous Year Rs. 72,00,000), Mrs. Vijaylaxmi Poddar Rs.3,01,93,548 (Previous Year Rs.NIL), Mr. Anurag Poddar Rs.NIL (Previous Year Rs.72,00,000), Mr. Vipul Shah Rs.90,836 (Previous Year Rs.23,101), Mr. Basantkumar Bansal Rs. NIL (Previous Year Rs.52,650) , Payables to Relatives of Key Managerial Personnel includes : Mrs. Khushboo Poddar Rs.8,400 (Previous Year Rs.8,400), Mrs. Shyamlata Poddar Rs. 7,000 (Previous Year Rs.NIL) and Payables to Other Related Parties includes : Siyaram Silk Mills Limited Rs. NIL (Previous Year Rs. 2,23,130).

16 Receivables From Other Related Parties includes : Govind Rubber Limited Rs. NIL (Previous Year Rs. 13,410).

NOTE NO.4

(a) As at 31st March,2013, there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

(b) The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

NOTE NO.5

Other Operating Revenue includes Rs.22,09,548 (Previous Year Rs. 22,09,548) in respect of refund of Regulatory Liability Charges paid in earlier years to Maharashtra State Electricity Board.

NOTE NO.6

Miscellaneous Expenses includes Rs.11,00,000 (Previous Year NIL) paid to a Political Party, Bhartiya Janta Party - Gujarat Pradesh.

NOTE NO.7

i) Figures in brackets in notes 33,34,39,41 and 49 pertain to previous year.

ii) Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.

Mar 31, 2012

Current Year Previous Year NOTE NO.1 Rupees Rupees

Contingent Liabilities and commitments

(i) Contingent Liabilities

(a) Claims against the Company not acknowledge as debts

- Disputed claims for excise, sales tax and service tax 14,04,01,849 13,63,57,729

-Disputed income tax demands 7,90,00,211 13,87,94,873

(b) Guarantees given by the Company's bankers on behalf of the Company against 12,03,47,980 11,56,09,293 the Company's Indemnity

(c) Corporate Guarantee given by the Company:

- To President of India through commissioner of Custom 1581,25,00,000 650,00,00,000

- To the Subsidiary Company 77,66,504 NIL

-To the other Company 1,85,31,186 NIL

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and not 739,22,50,639 272,21,65,628 provided for

(b) Till the year ended 31st March, 2011, the Company in accordance with the pre-revised Schedule VI requirement, was recognising dividend declared by subsidiary companies after the reporting date in the current year's statement of Profit and Loss if such dividend pertained to the period ending on or before the reporting date.The revised Schedule VI, applicable for financial years commencing on or after 1st April, 2011 does not contain this requirment. Hence, to comply with AS-9 Revnue Recognition the Company has recognised dividend as income only when the right to receive the same is establised by the reporting date.

NOTE NO.2

SEGMENT INFORMATION

(a) Primary Business Segments:-

The Company has only one business segment, namely Tyres (including Tubes and Flaps) therefore primary business segment reporting as required by AS-17 is not applicable.

NOTE NO.3

I) Related Party Disclosures *

(Where transactions have taken place)

(a) Key Management Personnel(KMP)

Mr. Arvind Poddar - Managing Director,

Mr. Rajiv Poddar - Executive Director,

Mr. Anurag Poddar - Executive Director,

Mr. B.K.Bansal - Director Finance (upto 11.02.2012),

Mr. Vipul Shah (w.e.f. 11.02.2012).

(b) Relatives of Key Management Personnel :

Mrs. Khushboo Poddar(w.e.f. 14.04.2010).

(c) Other Related Parties - (Enterprises-KMP having significant influence/owned by major shareholders) Siyaram Silk Mills Ltd., Govind Rubber Ltd., SPG Infrastructure Ltd., GRL International Ltd. (upto 02.12.2011), BKT Moulds Ltd. (upto 31.05.2010).

NOTE NO.4

(a) As at 31st March,2012, there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

(b) The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

(a) Defined Contribution Plans-

The Company's contribution to defined contribution plans aggregating to Rs.3,74,79,154 (Previous Year Rs.2,99,24,817) has been recognised in the statement of profit and loss account under the heading 'Contribution to Provident and Other Funds' (Note No. 27).

(b) The assumption of future salary increase, considered in actuarial valuation, takes into account of inflation and other relevant factors.

NOTE NO.5

Other Operating Revenue includes Rs.22,09,548, (Previous Year Rs. 37,66,616) in respect of refund of Regulatory Liability Charges paid in earlier years to Maharashtra State Electricity Board.

NOTE NO.6

i) Figures in brackets in notes 33,35,39,41 and 49 pertain to previous year.

ii) The Revised Schedule VI to the Companies Act,1956 has become effective from current financial year for the prepration of financial statements. It has significantly changed the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/ disclosure.

Mar 31, 2011

Current Year Previous Year Rupees Rupees

1 Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) 272,21,65,628 58,31,36,817

2 Contingent Liabilities in respect of:

a) Guarantees given by the Companys bankers on behalf of the Company against the Companys indemnity 11,56,09,293 11,23,04,431

b) Corporate Guarantee given by the Company to President of India through commissioner of Custom 650,00,00,000 NIL

c) Interest payable on redemption of Foreign Currency Convertible Bonds Series B NIL 6,63,40,768

d) Disputed claims for excise, sales tax and service tax 13,63,57,729 10,47,06,650

e) Disputed income tax demands 13,87,94,873 8,10,81,240

(The outflow in respect of contingent liabilities is totally uncertain as the same depends on the final outcome of the disputes, wherever applicable)

3 Nature of security in respect of ÃSecured LoansÃ

I Working Capital Loans from Banks:

Cash Credits, Packing Credit, Bills Discounting and Buyers Credit:

Secured by first charge by way of hypothecation of stock of raw materials, stores and spares, stock in process, finished goods, material in transit, book debts and other movables on pari-passu basis and further secured by second parri-passu charge on fixed assets of the Company, both present and future.

II Term Loans from Bank:

Secured by hypothecation by way of first parri-passu charge on the all present and future movable assets of the Company situated at Chopanki,Waluj and Bhiwadi units.

III Term Loans from Others

DEG - Deutsche Investitions-und Entwicklungsgesellschaft mbH (In the previous year) Secured by pari-passu first charge on entire fixed assets of the Company, situated at Bhiwadi and Chopanki units and Wind farm at Jaisalmer, all in the state of Rajasthan.

4 Miscellaneous Income :

Miscellaneous Income includes Rs.37,66,616 (Previous Year Rs.47,79,584) in respect of refund of Regulatory Liability Charges paid in earlier years to Maharashtra State Electricity Board.

5 Pursuant to the sanction of the Honourable High Court, Bombay to the scheme of amalgamation, the assets and Liabilities of BKT Moulds Limited, a subsidiary of the Company, have been amalgamated with the Company with effect from 01/06/2010 in accordance with the Scheme so sanctioned. The effect of the amalgamation has been given in the accounts as per the Scheme sanctioned.

The amalgamation has been accounted for under the ÃThe Purchase MethodÃ as prescribed by AS-14. Accordinly the Assets and Liabilities of BKT Moulds Limited have been taken over on the basis of their fair values. As a result an amount of Rs.1,06,06,067 is transfered to Capital Surplus Reserve. (Reference is also invited to Note no. 16(c) hereunder).

18 SEGMENT INFORMATION

a) Primary Business Segments:-

The Company has only one business segment, namely Tyres(including Tubes and Flaps) therefore primary business segment reporting as required by AS-17 is not applicable.

20 I) Related Party Disclosures *

(Where transactions have taken place)

a) Key Management Personnel (KMP)

Mr. Arvind M. Poddar - Managing Director, Mr.Rajiv A. Poddar - Executive Director , Mr. Anurag P. Poddar - Executive Director Mr. B.K.Bansal - Director Finance.

b) Relatives of Key Management Personnel : Mrs. Khushboo R. Poddar (w.e.f. 14/04/2010).

c) Other Related Parties -(Enterprises-KMP having significant influence/owned by major shareholders) Siyaram Silk Mills Ltd., Govind Rubber Ltd., SPG Infrastructure Ltd., GRL International Ltd.,BKT Moulds Ltd.,Balgopal Holding & Traders Ltd.,S P Finance & Trading Ltd., S P Investrade (India) Ltd.,Sanchna Trading & Finance Ltd.,Poddar Brothers Investment Pvt. Ltd.

25 a) As at 31st March,2011, there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises

Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. b) The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

26 Foreign Currency Convertible Bonds (FCCB)

During the year the Company has repaid 4.5% FCCB series B aggregating to USD 22 million on due date(i.e 30/12/2010).

27 Derivative Instruments

a) Hedging Contracts :

i) The Company uses forward exchange contracts to hedge its exposure to foreign exchanges and the Company does not use

such contracts for trading or speculation purpose. ii) Derivative Instruments outstanding

29 a) Figures in brackets in Notes 9,10,11,18, and 20 pertain to previous year.

b) The Previous year figures have been re-arranged and/or regrouped wherever necessary to make them comparable.

Mar 31, 2010

1 Nature of security in respect of "Secured Loans"

I Working Capital Loans from Banks:

Cash Credits, Packing Credit, Bills Discounting and Buyers Credit:

Secured by first charge by way of hypothecation of stock of raw materials, stores and spares, stock in process, finished goods, material in transit, book debts and other movables on pari-passu basis and further secured by second charge on fixed assets of the Company, both present and future, except certain fixed assets on which exclusive charge created in favour of G.E. Capital Services India.

II Term Loans from Bank:

Secured by hypothecation by way of parri-passu charge on the all present and future movable assets of the Company situated at Chopanki,Waluj and Bhiwadi units.

III Term Loans from Others

a) DEG - Deutsche Investitions-und Entwicklungsgesellschaft mbH

Secured by pari-passu first charge on entire fixed assets of the Company, situated at Bhiwadi and Chopanki units and Wind farm at Jaisalmer, all in the state of Rajasthan.

b) G.E. Capital Services India ( In the previous year) Secured by exclusive first charge by way of hypothecation of specific machineries purchased out of the proceeds of the said loan.

2 Miscellaneous Income :

Miscellaneous Income includes Rs.47,79,584 (Previous Year Rs.21,40,506) in respect of refund of Regulatory Liabilities Charges paid in earlier years to Maharashtra State Electricity Board.

3 Extra Ordinary Item in the previous year represents the difference between the actual payment and provision of Rs. 98,00,000 made in earlier year, included along with other expenses incurred , on account of stamp duty payable on transfer of assets of erstwhile Paper and Textiles Processing Divisions of the Company to two separate wholly owned subsidiary Companies.

4 I) Related Party Disclosures *

(Where transactions have taken place)

a) Key Management Personnel (KMP) Mr. Arvind M. Poddar - Managing Director, Mr.Rajiv A. Poddar - Executive Director (w.e.f. 22/01/2009), Mr. Anurag P. Poddar- Executive Director (w.e.f. 22/01/2009), Mr. B.K. Bansal - Director Finance (w.e.f. 26/07/2008), Mr. Trilok Chand Goel - Sr. President cum Director (upto 25/07/2008).

b) Relatives of Key Management Personnel : Mr. Rajiv A.Poddar (upto 21/01/2009).

c) Other Related Parties -(Enterprises-KMP having significant influence/owned by major shareholders) Siyaram Silk Mills Ltd., Govind Rubber Ltd., SPG Infrastructure Ltd., GRL International Ltd., BKT Moulds Limited.

5 a) As at 31st March,2010, there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

b) The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

6 Foreign Currency Convertible Bonds (FCCB)

a) The Company raised FCCB during the year 2005-06 aggregating to USD 40 million which included:

i) Zero coupon ÃSeries AÃ bonds aggregating to USD 18 million, convertible at a price of Rs. 1,080 per share by applying a pre-determined exchange rate of Rs. 45.66 per USD and,

ii) 4.5% FCCB ÃSeries BÃ aggregating to USD 22 million with redemption premium of 1.5% p.a. payable on cumulative basis at the time of redemption i.e. on 31st December 2010, convertible at the option of bondholders at a price of Rs. 1,375 per share by applying a pre-determined exchange rate of Rs. 45.66 per USD. If all these bonds are converted into shares, then the Share Capital of the Company will increase by 7,30,560 Equity Shares of Rs 10 each.

b) The ÃSeries AÃ bonds, during the year 2005-06 were subsequently converted into equity shares upon exercising the conversion right by the Bondholders.

The Company allotted them 7,60,999 shares of Rs.10 each at a pre-determined premium of Rs. 1,070 each.

7 Derivative Instruments a) Hedging Contracts :

i) The Company uses forward exchange contracts to hedge its exposure to foreign exchanges and the Company does not use such contracts for trading or speculation purpose.

a) Defined Contribution Plans- The CompanyÃs contribution to defined contribution plans aggregating to Rs.2,65,12,602 (Previous Year Rs.1,87,21,509) has been recognised in the statement of profit and loss account under the heading ÃContribution to Provident and Other FundsÃ (Schedule ÃPÃ ) .

b) The assumption of future salary increase, considered in actuarial valuation, takes into account of inflation and other relevant factors.

8 a) Figures in brackets in Notes 9,10,11,18, and 20 pertain to Previous Year.

b) The Previous Year figures have been re-arranged and/or regrouped wherever necessary to make them comparable.

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