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Accounting Policies of Leel Electricals Ltd. Company

Mar 31, 2018

1. Significant Accounting Policies

1.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards ( IND AS) notified under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time) and other relevant provision of the Act. The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities:

i) Certain financial assets and liabilities that is measured at fair value

ii) Defined benefit plans-plan assets measured at fair value.

2.2 Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non- current classification. An asset is treated as current when it is:

- Expected to be realized or intended to be sold or consumed in normal operating cycle

- Held primarily for purpose of trading

- Expected to be realized within twelve months after the reporting period, or

- cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in normal operating cycle

- It is held primarily for purpose of trading

- It is due to be settled within twelve months after the Reporting period, or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

For the purpose of current/non-current classification of assets and liabilities, the Company has ascertained its normal operating cycle as twelve months. This is based on nature of service and the between the acquisition of assets or inventories for the processing and their realization in cash and cash equivalents.

2.3 Use of Estimates

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of asset and liabilities on the date of the financial statements and the reported amount of the revenue and the expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

2.4 Property, Plant and Equipment (PPE)

An item of property, plant and equipment that qualifies as an assets is measured on initial recognition at cost.

PPE are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The initial cost of PPE comprise purchase price, taxes, duties, freight and other incidental expenses directly attributable and related to acquisition and installation of the concerned assets and are further adjusted by the amount of input tax credit availed wherever applicable., net of less accumulated depreciation and location for its intended use, including borrowing costs relating to the qualified asset over the period up to the date the assets are put to use is included in cost of relevant assets.

All other expenditure related to existing assets including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss in the period during which such expenditure is incurred.

The carrying amount of a property, plant and equipment is de-recognized when no future economic benefits are expected from its use or on disposal.

Machine spares that can be used only in connection with an item of fixed asset and their use is expected for more than one year are capitalized.

The Company had elected to consider the carrying value of all its property plant & equipment appearing in the financial statement prepared in accordance with accounting standards notified under the section 133 of the Company act 2013, read together with rule 7 of the companies (Accounts) Rules, 2014 and used the same as deemed cost in the opening Ind AS balance sheet prepared on 1st April, 2015.

Depreciation on property plant and equipment is provided on straight line method based on estimated useful life of assets as prescribed in schedule II to the Companies Act, 2013.Estimated useful lives of the assets are as follow:-

The property, plant and equipment acquired under finance leases, if any, is depreciated over the asset''s useful life or over the shorter of the asset''s useful life and the lease term if there is no reasonable certainty that the Company will obtain ownership at the end of the lease term.

Depreciation on the assets purchased during the year is provided on pro-rata basis from the date of purchase of the assets.

Gains and losses on de-recognition/disposals are determined as the difference between the net disposal proceeds and the carrying amount of those assets. Gains and Losses if any, are recognized in the statement of profit or loss on de-recognition or disposal as the case may be.

Capital Work-in-Progress

Cost of assets not ready for intended use, on the balance sheet date is shown as capital work in progress.

Projects under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

2.5 Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost less accumulated amortization and accumulated impairment losses, if any.

The cost of an intangible asset includes purchase cost (net of rebates and discounts), including any import duties and non-refundable taxes, and any directly attributable costs on making the asset ready for its intended use.

The Cost of Intangible assets are amortized on a straight line basis over their estimated useful life which is as follows:

Product Development Expenses

Cost of Product Development expenses will be amortized over its useful life of 5 Years.

The Company had elected to consider the carrying value of all its intangible assets appearing in the financial statement prepared in accordance with accounting standards notified under the section 133 of the Company act 2013, read together with rule 7 of the companies (Accounts) Rules, 2014 and used the same as deemed cost in the opening Ind AS balance sheet prepared on 1st April, 2015.

The amortization period and method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.

An intangible asset is derecognized on disposal or when no future economic benefits are expected from use. Gains and losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset are recognized in the statement of profit and loss when the asset is derecognized or on disposal.

2.6 Impairment of tangible assets and intangible assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication based on internal/ external factors that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.

The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount

2.7 Inventories

a) Basis of valuation

Inventories are valued at lower of cost and net realizable value after providing cost of obsolescence, if any. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. The comparison of cost and net realizable value is made on an item-by-item basis.

b) Method of valuation

Raw materials and consumables has been determined by using weighted average cost method and comprises all cost of purchase, freight costs, customs duty (wherever paid) taxes (other than those subsequently recoverable from Tax authorities) and all other cost incurred in beginning the inventory to their present location and condition. The cost is determined using the Weighted Average Method.

Work in progress include direct and indirect materials, direct and indirect labour and other manufacturing overheads incurred in bringing them to their respective present location and condition.

Finished goods includes direct and indirect materials, direct and indirect labour and other manufacturing overheads incurred in bringing them to their respective present location and condition. Cost is determined on moving weighted average basis.

Stock in transit lying in customs warehouse does not include custom duty payable, however, non-provision of duty does not affect the profit for the year.

2.8 Foreign Exchange Transactions

These financial statements are presented in Indian rupees (INR), which is the Company''s functional currency Transactions in foreign currency are recorded on initial recognition at the spot rate prevailing at the time of the transaction.

At the end of each reporting period

Monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date.

Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined.

Non-monetary items that are measured terms of historical cost in a foreign currency are not retranslated

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognized in profit or loss in the period in which they arise.

Exchange differences on monetary items are recognized in profit or loss in the period in which they arise except for:

Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as adjustment to interest costs on those foreign currency borrowings

The exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded in so far as they relate to the acquisition of depreciable capital assets are shown by addition to/deduction from the cost of the assets as per exemption provided under IND AS 21 read along with Ind AS 101 appendix ''D'' clause-D13AA.

Exchange differences on monetary items receivable from or payable to a foreign operation which settlement is neither planned nor likely to occur (therefore forming part of the investment in the foreign operation), which are recognized initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

2.9 Borrowing Cost

Borrowing costs specifically relating to the acquisition or construction of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the asset. All other borrowing costs are charged to profit & loss account in the period in which it is incurred except loan processing fees which is recognized as per Effective Interest Rate method. Borrowing costs consist of interest and other costs that Company incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

2.10 Employee Benefits

Contribution to Provident fund/Pension fund: Retirement benefits in the form of Provident Fund / Pension Schemes are defined contribution schemes and the contributions are charged to the Profit & Loss Account in the year when the contributions to the respective funds become due. The Company has no obligation other than contribution payable to these funds.

Gratuity liability and leave encashment is a defined benefit obligation and is provided for on the basis of an actuarial valuation made at the end of each financial year on using the projected unit credit method. However, The Company is in process of having arrangement with Insurance co. to administer its Superannuation & Gratuity Fund.

Defined benefit plans: Defined benefit costs are categorized as follows:

- service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements)

- net interest expense or income and

- measurement

The Company presents the first two components of defined benefit costs in profit or loss in the line item ''Employee benefits expense''. Curtailment gains and losses are accounted for as past service costs.

Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment.

Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period.

The retirement benefit obligation recognized in the balance sheet represents the actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

Liability for a termination benefit is recognized at the earlier of when the Company can no longer withdraw the offer of the termination benefit and when the Company recognizes any related restructuring costs.

Short-term and other long-term employee benefits: A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. These benefits include bonus/incentives and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date

The cost of the defined benefit gratuity plan and their present value are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The most sensitive is discount rate. The management has considers the interest rates of government bonds. Future salary increases and gratuity increases are based on expected future inflation rates.

2.11 Tax Expenses

Income Tax expense comprises of current tax and deferred tax charge or credit. Provision for current tax is made with reference to taxable income computed for the financial year for which the financial statements are prepared by applying the tax rates as applicable.

Current Tax: Current Income tax relating to items recognized outside the profit and loss is recognized outside the profit and loss (either in other comprehensive income or in equity)

Deferred Tax: Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized.

The carrying amount of deferred tax assets is reviewed as at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will not be available against which deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets are recognized for the unused tax credit to the extent that it is probable that taxable profits will be available against which the losses will be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits.

2.12 Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease. When acquired, such assets are capitalized at fair value of the leased property or present value of minimum lease payments, at the inception of lease, whichever is lower.

Other leases are Operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight line basis over the lease term. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and amortized over the lease term on the straight line basis.

As a Lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Assets subject to operating leases are included in PPE. Rental income from operating lease is recognized on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Company''s expected inflationary cost increases, such increases are recognized in the year in which such benefits accrue.

As a lessee

Leases in which significant portions of risks and reward of ownership are not transferred to the Company as lessee are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases, such increases are recognized in the year in which such benefits accrue. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

Leases where the lessor effectively transfers substantially all the risks and benefits of ownership of the asset are classified as finance leases and are capitalized at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized as finance costs in the statement of profit and loss. Lease management fees, legal charges and other initial direct costs of lease are capitalized.

2.13 Fair Value Measurement

The Company measures certain financial instruments at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

i) In the principal market for the asset or liability, or

ii) In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets & liabilities on the basis of the nature, characteristics and the risks of the asset or liability and the level of the fair value hierarchy as explained above.

2.14 Financial Instrument

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial asset is any assets that is

- Cash;

- an equity instrument of another entity;

- a contractual right:

(i) to receive cash or another financial asset from another entity; or

(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the entity; or

- a contract that will or may be settled in the entity''s own equity instruments and is:

(i) a non-derivative for which the entity is or may be obliged to receive a variable number of the entity''s own equity instruments; or

(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity''s own equity instruments.

Financial assets includes non-current investments, loan to employees, security deposits, trade receivables and other eligible current and non-current assets

Financial Liability is any liabilities that is

- a contractual obligation :

(i) to deliver cash or another financial asset to another entity; or

(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the entity; or

- a contract that will or may be settled in the entity''s own equity instruments and is:

(i) a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity''s own equity instruments; or

(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity''s own equity instruments. For this purpose, rights, options or warrants to acquire a fixed number of the entity''s own equity instruments for a fixed amount of any currency are equity instruments if the entity offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments.

Financial liabilities includes Loans, trade payable and eligible current and non-current liabilities

i) Classification:

The Company classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss on the basis of both:

- the entity''s business model for managing the financial assets and

- the contractual cash flow characteristics of the financial asset.

A financial asset is measured at amortized cost if both of the following conditions are met, the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

- the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset is measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income.

All financial liabilities are subsequently measured at amortized cost using the effective interest method or fair value through profit or loss.

ii) Initial recognition and measurement

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value at initial recognition, plus or minus, any transaction cost that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss.

iii) Financial assets subsequent measurement

Financial assets as subsequent measured at amortized cost, fair value through other comprehensive income (FVOCI) or fair value through profit or loss (FVTPL) as the case may be.

Financial liabilities as subsequent measured at amortized cost or fair value through profit or loss

iv) Effective interest method

The effective interest method is a method of calculating the amortized cost of a debt instrument and allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognized on an effective interest basis for debt instruments other than those financial a classified as at FVTPL. Interest income is recognized in profit or loss and is included in the "Other income" line item.

v) Trade Receivables

Trade receivables are the contractual right to receive cash or other financial assets and recognized initially at fair value. Subsequently measured at amortized cost (Initial fair value less expected credit loss). Expected credit loss is the difference between all contractual cash flows that are due to the Company and all that the Company expects to receive (i.e. all cash shortfall), discounted at the effective interest rate.

vi) Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value other than investment in subsidiary, Associates and Joint venture. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument by- instrument basis

vii) Cash and cash Equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

viii) Impairment of Financial Assets

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.

ix) Financial liabilities

Financial liabilities are recognized initially at fair value less any directly attributable transaction costs. These are subsequently carried at amortized cost using the effective interest method or fair value through profit or loss. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments

x) Trade payables

Trade payables represent liabilities for goods and services provided to the Company prior to the end of financial year and which are unpaid. Trade payables are presented as current liabilities unless payment is not due within 12 months after the reporting period or not paid/payable within operating cycle. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.

xi) Borrowings

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the Company does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.

xii) Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of Company after deducting all of its liabilities. Equity instruments are recognized at the proceeds received, net of direct issue costs.

xiii) De-recognition of financial instrument

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for de-recognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company''s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

xiv) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously

xv) Derivative Financial Instruments

Derivatives are initially recognized at fair value at the date the derivative contracts are entered and are subsequently re-measured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss.

2.15 Provision and Contingent Liability

i. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

ii. Contingent liabilities, if material, are disclosed by way of notes unless the possibility of an outflow of resources embodying the economic benefit is remote and contingent assets, if any, is disclosed in the notes to financial statements.

iii. A provision is recognized, when Company has a present obligation (legal or constructive) as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made for the amount of obligation. The expense relating to the provision is presented in the profit and loss net of any reimbursement.

2.16 Earnings Per Share

Basic Earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. For the purpose of calculating Diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

2.17 Revenue

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for trade discounts, rebates and other similar allowances. Revenue includes excise duty however excludes GST, sales tax, value added tax, works contract and any other indirect taxes or amounts collected on behalf of the Government.

Revenue is recognized only when the significant risk and reward of the ownership is transferred to the buyer usually on delivery of the goods. Revenue is recognized to the extent that it is probable that the economic benefit will flow to the Company, revenue can be reliably measured and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Further, sales include revision in prices received from customers with retrospective effect. Similarly, price revision for material purchased has also been included in purchases. Further adjustments, if any, are made in the year of final settlement.

Interest Income is recognized using the effective interest rate method

Dividend income is recognized when the Company''s right to receive payment is established.

Export sales are accounted on the basis of date of bill of lading.

Payments made in respect of goods cleared as also provision made for goods lying in bonded warehouse.

2.18 Segment Reporting

i. Business Segment

As per Ind AS 108, the Company has reportable segments viz. Consumer Durable Business till 8th May 2017, OEM & packaged Air-conditioning and Heat Exchanger & Components Products during the year under review. Accordingly the reporting is done segment wise.

ii. Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The Company operates primarily in India and has presence in international markets as well. Its business is accordingly aligned geographically, catering to two markets. The Company has considered domestic and exports markets as geographical segments and accordingly disclosed these as separate segments. The geographical segments considered for disclosure are as follows;

- Sales within India represent sales made to customers located within India.

- Sales outside India represent sales made to customers located outside India.

2.19 Grants

Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and such grants can reasonably have a value placed upon them.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognized in profit or loss in the period in which they become receivable.

2.20 Research and development

Expenditure on research is recognized as an expenses when it is incurred. Expenditure on development with does not meet the criteria for recognition as an intangible assets recognized as an expenses when it is incurred

2.23 Event after reporting date

Where events occurring after balance sheet date provide evidence of condition that existed at the end of the reporting period, the impact of such event is adjusted within the financial statements. Otherwise, events after the balance sheet date of material size or nature are only disclosed.

2.24 Investment In subsidiary and associate companies

The Company has elected to recognise its investments in subsidiary and associate companies at cost in accordance with the option available in Ind AS 27, "Separate financial statement".

2.25 Recent accounting pronouncements

Standards issued but not yet effective

In March 2018, the ministry of corporate affairs (MCA) issued the companies (Indian accounting standards) Amendments rules 2018, notifying Ind AS 115, "Revenue from contract with customers", Appendix B to Ind AS 21, Foreign currency transaction and advance consideration made by international accounting standards board (IASB). These amendments are applicable to the Company from 1st April 2018. The Company will be adopting the amendments from their effective date.

a) Ind AS 115, Revenue from contract with customers.

Ind AS 115 Supersedes Ind AS 11, Construction contract and Ind AS 18, Revenue. Ind AS 115 require an entity to report information regarding nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customer. The principal of Ind As 115 is that an entity recognise revenue that demonstrate the transfer of promised goods and services to customer at an amount that reflect the consideration to which the entity expect to be entitled in exchange for those goods and services. The standards can be applied either retrospectively to each prior reporting period presented or can be applied retrospectively with recognition of cumulative effect of contracts that are not completed contacts at the date of initial application of standards.

Based on preliminary assessment performed by the Company, the impact of application of the standards is not expected to be material.

b) Appendix B to Ind AS 21, foreign currency transaction and advance consideration.

The appendix clarifies that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the assets, expenses or income (or part of it) is the date on which an entity initially recognises the non-monetary assets or non-monetary liability arising from the payment or receipts in advance, then an entity must determine transaction date for each payment or receipts of advance in consideration. The impact of the appendix on the financial statements, as assessed by the Company, is expected to be not material.

2.26 Exceptional items

Exceptional items are transactions which due to their size or incidence are separately disclosed to enable a full understanding of the Company''s financial performance. Items which may be considered exceptional are significant restructuring charges, gains or losses on disposal of investments of subsidiaries, associate and joint ventures and impairment losses/write down in the value of investment in subsidiaries, associates and joint ventures and significant disposal of fixed assets.

Mar 31, 2017

1.1 Basis of preparation

The Company has adopted accounting policies that comply with Indian Accounting standards (INDAS or IND AS) notified by Ministry of Corporate Affairs vide notification dated 16th February, 2015 under Section 133 of the Companies Act 2013. Accounting policies have been applied consistently to all periods presented in these financial statements. The financial statements referred hereinafter have been prepared in accordance with the requirements and instructions of Schedule III to the Companies Act, 2013, amended from time to time applicable to Companies to whom IND AS applies.

The opening financial statements have been prepared in accordance with âIndian Accounting Standard 101 (First time Adoption of Indian Accounting Standards)â. The opening financial statements comprise Balance Sheet, Statement of Change in equity and its related notes.

The adopted accounting policies comply with each IND AS effective at the end of its first IND AS reporting period i.e. 31st March, 2017 except as specified in paragraphs 13-19 and Appendices B-D of IND AS 101. In the opening financial statements:

(i) All assets and liabilities have been recognized as required by IND AS.

(ii) All assets and liabilities have been derecognized which are not permitted by IND AS.

(iii) All assets, liabilities or components of equity have been reclassified in accordance with IND AS.

(iv) All assets and liabilities have been measured in accordance with IND AS.

The accounting policies used by the Company in its opening financial statement may differ from those previously used in accordance with Indian Generally Accepted Accounting Principles (GAAP) or the previous GAAP. The resulting adjustments, which have arises for events and transactions before the date of transition to IND AS, have been directly recognized in retained earnings at the date of transition to IND AS i.e. 1st April, 2015 (or, if appropriate, another category of equity) at the date of transition to IND AS.

The company estimates in accordance with IND AS at the date of transition to IND AS are consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

The company has explained how the transition from previous GAAP to IND AS has affected its reported Balance sheet and Statement of Profit & loss. Accordingly, The Companyâs first IND AS financial statements includes:

a. Reconciliations of its equity reported in accordance with previous GAAP to its equity in accordance with IND AS for both of the following dates:

(i) the date of transition to IND AS; and

(ii) the end of the latest period presented in the Companyâs most recent annual financial statements in accordance with previous GAAP.

b. Reconciliation to its total comprehensive income in accordance with IND AS for the latest period in the Companyâs most recent annual financial statements. The starting point for that reconciliation being the profit or loss under previous GAAP.

The Companyâs first IND AS financial statements includes three Balance Sheets, two Statements of profit and loss and two Statements of changes in equity and two cash flow and related notes.

The Companyâs first financial statements have been prepared in accordance with the IND AS prescribed. The preparation of the Companyâs first financial statements in conformity with IND AS requires the Company to exercise its judgement in the process of applying the accounting policies. It also requires the use of accounting estimates and assumptions that effect the reported amounts of assets and liabilities at the date of the financial statements. These estimates and assumptions are assessed on an ongoing basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances and presented under the historical cost convention on accrual basis of accounting.

1.2 Use of Estimates

1.3 Property, Plant and Equipment (PPE)

The Company has elected to use a previous GAAP cost (cost less accumulated depreciation and impairment losses (if any)) of an item of property, plant and equipment at, or before, the date of transition to IND AS as deemed cost at the date of transition in accordance with accounting policy option available in IND AS 101.

PPE are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The initial cost of PPE comprise its purchase price, including import duties, net of MODVAT/CENVAT, less accumulated depreciation and include any directly attributable costs of bringing an asset to working condition and location for its intended use, including borrowing costs relating to the qualified asset over the period up to the date the assets are put to use is included in cost of relevant assets. Exchange rate variations relating to long term monetary items is charged to profit & loss if foreign currency loan is taken after March 31, 2016.

The carrying amount of a property, plant and equipment is de-recognized when no future economic benefits are expected from its use or on disposal.

Machine spares that can be used only in connection with an item of fixed asset and their use is expected for more than one year are capitalized.

Depreciation on property plant and equipment is provided on straight line method based on estimated useful life of assets as prescribed in schedule II to the Companies Act, 2013. Estimated useful lives of the assets are as follow:-

The property, plant and equipment acquired under finance leases, if any, is depreciated over the assetâs useful life or over the shorter of the assetâs useful life and the lease term if there is no reasonable certainty that the Company will obtain ownership at the end of the lease term.

Depreciation on the assets purchased during the year is provided on pro-rata basis from the date of purchase of the assets.

Capital Work-in-Progress

Projects under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

1.4 Intangible Assets

The company has elected to use a previous GAAP cost (cost less accumulated depreciation and impairment losses (if any)) of an intangible assets at, or before, the date of transition to IND AS as deemed cost at the date of transition in accordance with accounting policy option in IND AS 101.

Intangible assets acquired separately are measured on initial recognition at cost less accumulated amortization and accumulated impairment losses, if any.

The cost of an intangible asset includes purchase cost (net of rebates and discounts), including any import duties and non-refundable taxes and any directly attributable costs on making the asset ready for its intended use.

The Cost of Intangible assets are amortized on a straight line basis over their estimated useful life which is as follows:

Logo of Brand âLLOYDâ

Cost of logo is amortized over its useful life of 6 years.

Product Development Expenses

Cost of Product Development expenses will be amortized over its useful life of 5 Years.

1.5 Inventories

Raw materials and consumables are valued at cost and includes purchase price, freight costs, customs duty (wherever paid) and are net of credit availed under CENVAT scheme. The cost is determined using the Weighted Average Method.

Stock in process is valued at own production costs after providing for obsolescence, if any. The own production costs includes direct and indirect materials, direct and indirect labour and other manufacturing overheads incurred in bringing them to their respective present location and condition.

Finished goods are valued at lower of own production costs on the basis of Weighted average method or net realizable value, after providing for obsolescence, if any. The own production costs includes direct and indirect materials, direct and indirect labour and other manufacturing overheads incurred in bringing them to their respective present location and condition.

Stock in transit lying in customs warehouse is valued at cost but does not include custom duty payable, however, non-provision of duty does not affect the profit for the year.

1.6 Impairment of tangible assets and intangible assets

At the end of each reporting period, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication based on internal/ external factors that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount

1.7 Foreign Exchange Transactions

These financial statements are presented in Indian rupees (INR), which is the Companyâs functional currency Transactions in foreign currency are recorded on initial recognition at the spot rate prevailing at the time of the transaction.

At the end of each reporting period

Monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date.

Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined.

Non-monetary items that are measured terms of historical cost in a foreign currency are not retranslated

Exchange differences on monetary items are recognized in profit or loss in the period in which they arise except for:

Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the year.

1.8 Borrowing Cost

Borrowing costs specifically relating to the acquisition or construction of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the asset. All other borrowing costs are charged to profit & loss account in the period in which it is incurred except loan processing fees which is recognized as per Effective Interest Rate method. Borrowing costs consist of interest and other costs that company incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

1.9 Employee Benefits

Contribution to Provident fund/Pension fund: Retirement benefits in the form of Provident Fund / Pension Schemes are defined contribution schemes and the contributions are charged to the Profit & Loss Account in the year when the contributions to the respective funds become due. The Company has no obligation other than contribution payable to these funds.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation made at the end of each financial year. However, The Company is in process of having arrangement with Insurance co. to administer its Superannuation & Gratuity Fund.

Defined benefit plans: Defined benefit costs are categorized as follows:

- service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements)

- net interest expense or income; and

- measurement

The company presents the first two components of defined benefit costs in profit or loss in the line item âEmployee benefits expenseâ. Curtailment gains and losses are accounted for as past service costs.

Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.

The retirement benefit obligation recognized in the balance sheet represents the actual deficit or surplus in the Companyâs defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

Short-term and other long-term employee benefits: A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. These benefits include bonus/incentives and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

The most sensitive is discount rate. The management has considers the interest rates of government bonds. Future salary increases and gratuity increases are based on expected future inflation rates.

1.10 Tax Expenses

Current tax: Current Income tax relating to items recognized outside the profit and loss is recognized outside the profit and loss (either in other comprehensive income or in equity)

Deferred tax: Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized.

1.11 Leases

As a Lessor: Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Assets subject to operating leases are included in PPE. Rental income from operating lease is recognized on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the companyâs expected inflationary cost increases, such increases are recognized in the year in which such benefits accrue.

Costs, including depreciation, are recognized as an expense in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss.

As a lessee: Leases in which significant portions of risks and reward of ownership are not transferred to the company as lessee are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases, such increases are recognized in the year in which such benefits accrue. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

For arrangements entered into prior to 1 April 2015, the Company has determined whether the arrangement contain lease on the basis of facts and circumstances existing on the date of transition in accordance with IND AS 101 âFirst time adoption of Indian Accounting Standardsâ.

1.12 Fair Value Measurement

The Company measures certain financial instruments at fair value at each balance sheet date.

ii) In the principal market for the asset or liability, or

iii) In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Company.

A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

1.13 Financial Instrument

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial asset is any assets that is

- Cash;

- an equity instrument of another entity;

- a contractual right:

(i) to receive cash or another financial asset from another entity; or

(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the entity; or

- a contract that will or may be settled in the entityâs own equity instruments and is:

(i) a non-derivative for which the entity is or may be obliged to receive a variable number of the entityâs own equity instruments; or

(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entityâs own equity instruments.

Financial assets includes non-current investments, loan to employees, security deposits, trade receivables and other eligible current and non-current assets

Financial Liability is any liabilities that is

- a contractual obligation :

(i) to deliver cash or another financial asset to another entity; or

(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the entity; or

- a contract that will or may be settled in the entityâs own equity instruments and is:

(i) a non-derivative for which the entity is or may be obliged to deliver a variable number of the entityâs own equity instruments; or

(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entityâs own equity instruments. For this purpose, rights, options or warrants to acquire a fixed number of the entityâs own equity instruments for a fixed amount of any currency are equity instruments if the entity offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments.

Financial liabilities includes Loans, trade payable and eligible current and non-current liabilities.

i) Transitional Provisions in opening balance sheet per IND AS 101

The Company designates a previously recognized financial asset/financial liability as a financial asset/ financial liability measured at fair value on the basis of the facts and circumstances that exist at the date of transition to IND AS.

The Company designates an investment in an equity instrument other than investment in subsidiary, associates and Joint venture as at fair value through other comprehensive income on the basis of the facts and circumstances that exist at the date of transition to IND AS.

The Company has assessed whether a financial asset meets the conditions w.r.t classification criteria on the basis of the facts and circumstances that exist at the date of transition to Ind Ass, practically feasible.

ii) Classification:

The Company classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss on the basis of both:

- the entityâs business model for managing the financial assets and

- the contractual cash flow characteristics of the financial asset.

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

- the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset is measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income.

All financial liabilities are subsequently measured at amortized cost using the effective interest method or fair value through profit or loss.

iii) Initial recognition and measurement

The company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value at initial recognition, plus or minus, any transaction cost that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss.

iv) Financial assets subsequent measurement

Financial assets as subsequent measured at amortized cost, fair value through other comprehensive income (FVOCI) or fair value through profit or loss (FVTPL) as the case may be.

Financial liabilities as subsequent measured at amortized cost or fair value through profit or loss

v) Effective interest method

vi) trade Receivables

Trade receivables are the contractual right to receive cash or other financial assets and recognized initially at fair value. Subsequently measured at amortized cost (Initial fair value less expected credit loss). Expected credit loss is the difference between all contractual cash flows that are due to the company and all that the company expects to receive (i.e. all cash shortfall), discounted at the effective interest rate.

vii) Equity investments

All equity investments in scope of IND AS 109 are measured at fair value other than investment in subsidiary, Associates and Joint venture. For all other equity instruments, the company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument by- instrument basis

viii) Cash and cash Equivalents

ix) Impairment of Financial Assets

The company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.

x) Financial liabilities

xi) trade payables

xii) Borrowings

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the company does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.

xiii) Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of company after deducting all of its liabilities. Equity instruments are recognized at the proceeds received, net of direct issue costs.

xiv) De-recognition of financial instrument

The company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for de-recognition under IND AS 109. A financial liability (or a part of a financial liability) is derecognized from the companyâs balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

xv) Offsetting of financial instruments

xvi) Derivative Financial Instruments

1.14 Provision and Contingent Liability

iii. A provision is recognized, when company has a present obligation (legal or constructive) as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made for the amount of obligation. The expense relating to the provision is presented in the profit and loss net of any reimbursement.

1.15 Earnings Per Share

1.16 Revenue

Revenue is measured at the fair value of the consideration received or receivable, taking into account the contractually defined terms of payment net of returns and allowances, trade discounts and volume rebates, excluding taxes or duties collected on behalf of the government. Excise duty is the liability of manufacturer which forms the part of cost of production, irrespective of whether the goods are sold or not. Since the recovery of excise duty flows to the company on its own account, revenue includes excise duty. However, sales tax/ value added tax (VAT) is not received by the Company on its own account; rather it is tax collected on the value added to the commodity by the seller on behalf of the government, and hence it is excluded from revenue.

Revenue is recognized only when the significant risk and reward of the ownership is transferred to the buyer usually on delivery of the goods. Revenue is recognized to the extent that it is probable that the economic benefit will flow to the company, revenue can be reliably measured and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Interest Income is recognized using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash flows over the expected life of financial instrument, to the gross carrying amount of the financial assets or to the amortized cost of the financial liability.

Dividend income is recognized when the Companyâs right to receive payment is established. (Provided that it is probable that the economic benefit will flow to the company).

Export sales are accounted on the basis of date of bill of lading.

Payments made in respect of goods cleared as also provision made for goods lying in bonded warehouse.

1.17 Operating cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

1.18 Investments

Investments are either classified as current or long term investment based on Managementâs intention. Current investments (if any) are carried at the lower of cost and fair value of each investment individually. Investments in subsidiary company are of long-term strategic value. Cost for overseas investments comprises the Indian rupee value of the consideration paid for the investment translated at the exchange rate prevalent at the date of investment. Long term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

1.19 Segment Reporting

i. Business Segment

As per Accounting Standard 17 on segment reporting of ICAI, the Company has reportable segments viz. Radiators & Heat Exchanger, OEM & Railways, Consumer Durable Products during the year under review. Accordingly the reporting is done segment wise.

ii. Geographical Segment

- Sales within India represent sales made to customers located within India.

- Sales outside India represent sales made to customers located outside India.

1.20 Grants

Grants are recognized when there is reasonable assurance that the grant will be received and conditions attached to them are complied with.

1.21 Research and development

Research costs are expensed as incurred.

Mar 31, 2016

1. CORPORATE INFORMATION

Lloyd Electric & Engineering Limited is a public Company domiciled in India and incorporated under the provisions of the
Companies Act, 1956. Its shares are listed on National Stock Exchange of India Limited (NSE) & Bombay Stock Exchange Limited
(BSE) in India. The Company is the largest manufacturer of heat exchangers coils in India. It manufactures air conditioners for
various brands as OEM / ODM including its own brand of LLOYD. It is also engaged in the consumer durable business under "Lloyd"
brand which includes product portfolio like Air-Conditioner, LED TV, Washing Machines, Chest Freezers and other small home
appliances. The Company caters to both domestic and international markets.

2. BASIS OF PREPARATION

The Financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India
(GAAP). The Company has prepared these fnancial statements to comply in all material respects with the accounting standards the
relevant provision of the Companies Act, 2013. The fnancial statements have been prepared on an accrual basis and under the
historical cost convention, except for land acquired before 1st April, 1993 which are carried at revalued amounts.

The accounting policies adopted in the preparation of fnancial statements are consistent with those of previous year, except for
the change in accounting policy explained below.

2.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Use of estimates

The preparation of fnancial statements in conformity with Indian GAAP requires the management to make estimates and assumptions
that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities, at the
date of the fnancial statements. Although these estimates are based upon management''s best knowledge of current events and
actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in
the period in which the results are known / materialized.

b) Tangible Fixed Assets

Fixed assets except leasehold land are stated at cost less accumulated depreciation. The cost includes freight, duties, taxes and
other incidental expenses related to acquisition and installation. CENVAT claim, if any, on capital goods is reduced from the
cost.

Capital Work-in-Progress

Projects under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost, related incidental
expenses and attributable interest.

c) Depreciation on tangible fxed assets

i) After Notifcation of the New Companies Act, 2013 which comes into effect from April 01, 2014, Depreciation on fxed assets is
provided on straight-line basis at the rates prescribed in schedule II to the Companies Act, 2013.

ii) Depreciation on assets added during the year, is calculated on pro-rata basis with reference to the date of installation.

iii) Depreciation rates has been arrived after applying estimated life provided in the Schedule-II, for calculating depreciation
on various categories of assets following estimated life has been provided in the schedule

d) Intangible Assets

Intangible Assets are stated at cost of acquisition. Following intangible assets are carried at cost less accumulated
amortization and accumulated impairment losses, if any. Intangible assets are amortized on a straight line basis over the
estimated useful economic life. The following are the acquired intangible assets :

i) LOGO OF BRAND "LLOYD"

Cost of logo is amortized over its useful life of 6 years.

II) PRODUCT DEVELOPMENT EXPENSES

Cost of Product Development expenses will be amortized over its useful life of 5 Years.

e) Grant

Grants are recognized when there is reasonable assurance that the grant will be received and conditions attached to them are
complied with.

f) Research and development

Research costs are expensed as incurred.

g) Impairment of Assets

The carrying values of assets/cash generating units at each Balance Sheet date are reviewed for impairment of assets. If any
indication of such impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the
carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price
and their value in use. Value in use is arrived at by discounting the future cash fows to their present value based on an
appropriate discount factor. When there is indication that an impairment loss recognized for an asset in prior accounting periods
no longer exists or may have decreased such reversal of impairment loss is recognized.

h) Inventory Valuation

i) Raw materials and consumables are valued at cost as per the Weighted Average Method and include(s) customs duty wherever paid
and are net of credit availed under CENVAT scheme.

ii) Stock in process is valued at direct cost, i.e., cost of materials and variable manufacturing expenses.

iii) Finished goods are valued at lower of cost on the basis of weighted average method or net realizable value.

iv) Stock in transit lying in customs warehouse is valued at cost but does not include custom duty payable, however, non-
provision of duty does not affect the proft for the year.

i) Revenue Recognition

i) Income and Expenditure are recognized on accrual basis.

ii) Sale of goods

Revenue from sale of goods is recognized when all the signifcant risks and rewards of ownership of the goods have been passed to
the buyer, usually on delivery of the goods. The Company collects central sales taxes and value added taxes (VAT) on behalf of
the government and, therefore, these are not economic benefts fowing to the Company. Hence, they are excluded from revenue.
Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of
liability arising during the year.

iii) Export sales are accounted on the basis of date of bill of lading.

iv) Dividend income is recognized when the right to receive the dividend is established.

j) Investments

Long term Investments are stated at cost. Investments in subsidiary Company are of long-term strategic value. The diminution in
value of these investments has been provided.

k) Foreign currency transactions

i. Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange
rate between the reporting currency and the foreign currency at the date of the transaction.

ii. Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical
cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction and non-monetary items
which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange
rates that existed when the values were determined.

iii. Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting Company''s monetary items at rates different from
those at which they were initially recorded during the year or reported in previous fnancial statements, are recognized as income
or as expenses in the year in which they arise.

iv. Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income
over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency
monetary items, are recognized in the statement of proft and loss in the period in which the exchange rates change. Any proft or
loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the
year.

l) Retirement Benefts

Provident Fund

Retirement beneft in form of provident fund is a defned contribution scheme and the contributions are charged to the proft and
Loss account of the year when the contributions to the respective funds are due.

Gratuity

The Company''s liability in respect of payment of gratuity is provided on accrual basis as per actuarial valuation. The Company is
in process of having arrangement with Insurance Company to administer its Superannuation & Gratuity Fund.

Leave Encashment

Leave Encashment are valued at cost to Company basis without considering any discounting and salary increase and provided on the
basis of actual valuation.

m) Taxation

Current Tax

Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of
the Income Tax Act 1961, except for the overseas subsidiaries where current tax provisions is determined based on the local tax
laws. Deferred tax is recognized for all timing differences, subject to the consideration of prudence applying the tax rates that
have been substantively enacted by the Balance Sheet date.

Deferred Tax

Deferred tax liabilities represent the tax effect of temporary differences substantially on account of differences in the written
down value of Fixed Assets on account of differing depreciation methods and rates and other timing differences.

Minimum Alternate Tax

Minimum alternate tax (MAT) paid in a year is charged to the statement of proft and loss as current tax. The Company recognizes
MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax
during the specifed period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the
Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of
Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of proft and
loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and
writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specifed
period.

n) Borrowing Cost

Cost in connection with the borrowing of funds to the extent not directly related to the acquisition of fxed assets are amortized
and charged to the Proft and Loss Account, over the tenure of the loan. Borrowing cost to the extent directly attributable to
acquisition of fxed assets are added to the cost of fxed assets.

o) Segment Reporting

i. Business Segment

As per Accounting Standard 17 on segment reporting of ICAI, the Company has reportable segments viz. Radiators & Heat Exchanger,
OEM & Railways and Consumer Durable Products during the year under review. Accordingly, the reporting is done segment wise.

ii. Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The Company operates primarily in
India and has presence in international markets as well. Its business is accordingly aligned geographically, catering to two
markets. The Company has considered domestic and exports markets as geographical segments and accordingly disclosed these as
separate segments. The geographical segments considered for disclosure are as follows;

- Sales within India represent sales made to customers located within India.

- Sales outside India represent sales made to customers located outside India.

p) Earning Per Share

The earnings considered in ascertaining the Company''s Earnings per Share (EPS) comprise the net profts after tax. The number of
shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity
shares.

q) Cash Flow Statement

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard â3 issued by the Institute of Chartered
Accountants of India as required by the SEBI on Cash Flow Statement and presents cash fows by operating, investing and fnancing
activities of the Company. Cash and cash equivalents presented in the cash fow statement consists of cash in hand and demand
deposits with banks as on the Balance Sheet date.

r) Measurement of EBITDA

The Company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item
on the face of the statement of proft and loss. The Company measures EBITDA on the basis of proft/ (loss) from continuing
operations. In its measurement, the Company does not include depreciation and amortization expense, fnance costs and tax expense.

s) Sundry Debtors/Loans & Advances

Company as a policy obtains balance confrmation from Sundry Debtors, Creditors and other advances on monthly / quarterly / half
yearly basis depending upon quantum of transaction made with the parties. Considering the same company does not have all balance
confrmations as at 31st March 2016 the effect of the same, if any which is not likely to be material will be adjusted at the time
of confrmation.

t) Provisions /Contingencies

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outfow of
resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are
determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilities are not recognized and are disclosed in the Note No.30

u) Derivative Instruments

The Company has entered into derivative contracts in the nature of interest rate swaps and forward contracts with intention to
hedge its requirements and frm commitments. The contracts are mark to market and losses are recognized in the proft and loss
account. Gains arising on the same are not recognized on ground of prudence.

v) Deferred Revenue Expenditure

Cost of traveling, Consultancy fees and other expenses related to IRIS Certifcation are considered as deferred revenue
expenditure. 1/5 of the expenditures have been charged to Proft and Loss account.

NOTES:- 1. Out of the above Equity Shares

a) Includes 40,00,000 Equity Share alloted in the year 2006-07 on conversion of warrants issued on preferential basis during the
year 2005-06.

b) Includes 92,00,000 underlying Equity Shares representing 46,00,000 Global Depository Receipts issued during the year 2005-06.

c) In the year 2006-07 the Company had forfeited 13,300 equity shares due to the non-payment of allotment money. The Board of
Directors had annulled the forfeiture of 400 Equity shares on receipt of payment advice by the shareholders and accordingly 400
Equity Shares had been restored back.

d) 43,20,000 no of Equity Shares of Rs. 10/- each were alloted during the fnancial year 2013-14 in favour of shareholders of
erstwhile Perfect Radiators & Oil Coolers Pvt. Ltd. (PROC) on account of merger of PROC with the Company retrospectively since
01.04.2011.

e) Includes 8,85,000 equity shares alloted to Promoter Group Entities on January 29, 2016, upon conversion of equivalent no. of
warrants issued on preferential basis.

(b) Terms/rights attached to equity shares

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

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

Money received against Share Warrants represents amounts received towards warrants which entitles the warrant holders, the option
to apply for and be alloted equivalent number of equity shares of the face value of Rs. 10/- Each.

During the previous fnancial year, the Company has issued to its Promoter Group Entities 60,00,000 Warrants at a price of Rs.
152/- each entitling them for subscription of equivalent number of Equity Shares of Rs. 10/- each (including premium of Rs. 142/-
each share) in accordance with chapter VII of SEBI (Issue of Capital & Disclosure Requirments) Regulations, 2009. During the
current year, allottees of 8,85,000 warrants have exercised their right to convert the warrants into equity shares by paying
balance 75% of the consideration aggregating Rs.10,08,90,000 and consequently 8,85,000 equity shares were issued to them.

The holder of the remaining warrants are required to exercise the option to subscribe to equity shares before the expiry of 18
months from the date of allotment of warrants i.e. on or before on 12th September, 2016 upon payment of the balance 75% of the
consideration of warrants.

As per the records of the Company, including its register of shareholders/members and other declaration received from the
shareholders regarding benefcial interest, the above shareholding represents both legal and benefcial ownerships of shares.

Note:- 1. Indian rupee loan for Rs. 35.00 Crores from IDBI Ltd. carries interest @ 12.25% P.A on Rs. 17.50 Crores and @ 11.50%
P.A. on

Rs. 17.50 Crores. The Loan is repayable in 16 quarterly installments of Rs. 2.19 crores each after monotorium of 12 Months from
the

date of loan i.e. 31st March, 2013. Company has taken disbursement of Rs. 31.50 Crores.

2. Indian rupee loan for Rs. 120.00 Crores from SBI carriers interest @ 11.00% P.A. The Loan is repayable in 24 quarterly
installments of Rs. 5.00 crores each after monotorium of 12 Months from the date of loan i.e. 30.06.2013.

3. Indian rupee loan for Rs. 20.00 Crores from SBBJ carries interest @ 12% P.A. The Loan is repayable in 16 Quarterly
installments of Rs. 1.25 Crores each after monotorium of 9 Months from the date of Loan i.e. 01.09.2015.

4. The above loans are Secured by way of frst charge on Pari-Passu basis on the fxed assets of the Company and second
hypothecation charge on the Stock/Book Debts.

Mar 31, 2015

A) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities, at the date of the financial statements. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

b) Tangible Fixed Assets:

Fixed assets except leasehold land are stated at cost less accumulated depreciation. The cost includes freight, duties, taxes and other incidental expenses related to acquisition and installation. CENVAT claim, if any, on capital goods is reduced from the cost.

Capital Work-in-Progress

Projects under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

c) Depreciation on tangible fixed assets

i) After Notification of the New Companies Act, 2013 which comes into effect from April 01, 2014,

Depreciation on fixed assets is provided on straight-line basis at the rates prescribed in schedule II to the Companies Act, 2013.

ii) Depreciation on assets added during the year, is calculated on pro-rata basis with reference to the date of installation.

ii) Depreciation rates has been arrived after applying estimated life provided in the Schedule-II, for calculating depreciation on various categories of assets following estimated life has been provided in the schedule

Type of Assets Life in Years

Building 30 Years

Plant & Machinery 15 Years

Office Equipments 5 Years

Vehicles 8 Years

Furniture & Fixtures 10 Years

d) Intangible Assets

Intangible Assets are stated at cost of acquisition. Following intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortized on a straight line basis over the estimated useful economic life. The following are the acquired intangible assets :

i) LOGO OF BRAND "LLOYD"

Cost of logo is amortized over its useful life of 5 years.

ii) PRODUCT DEVELOPMENT EXPENSES

Cost of Product Development expenses will be amortized over its useful life of 5 Years.

e) Grant

Grants are recognized when there is reasonable assurance that the grant will be received and conditions attached to them are complied with.

f) Research and development

Research costs are expensed as incurred.

g) Impairment of Assets:

The carrying values of assets/cash generating units at each Balance Sheet date are reviewed for impairment of assets. If any indication of such impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in prior accounting periods no longer exists or may have decreased such reversal of impairment loss is recognized.

h) Inventory Valuation:

i) Raw materials and consumables are valued at cost as per the Weighted Average Method and include(s) customs duty wherever paid, and are net of credit availed under CENVAT scheme.

i) Stock in process is valued at direct cost, i.e., cost of materials and variable manufacturing expenses.

iii) Finished goods are valued at lower of cost on the basis of Weighted average method or net realizable value.

iv) Stock in transit lying in customs warehouse is valued at cost but does not include custom duty payable, however, non-provision of duty does not affect the profit for the year.

i) Revenue Recognition:

i) Income and Expenditure are recognized on accrual basis.

ii) Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects central sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

iii) Export sales are accounted on the basis of date of bill of lading.

iv) Dividend income is recognized when the right to receive the dividend is established.

j) Investments:

Long term Investments are stated at cost. Investments in subsidiary company are of long-term strategic value. The diminution in value of these investments has been provided.

k) Foreign currency transactions:

i. Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

ii. Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

iii. Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

iv. Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in thestatement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the year.

l) Retirement Benefits:

Provident Fund:- Retirement benefit in form of provident fund is a defined contribution scheme and the contributions are charged to the profit and Loss account of the year when the contributions to the respective funds are due.

Gratuity:- The company's liability in respect of payment of gratuity is provided on accrual basis as per actuarial valuation. The company is in process of having arrangement with insurance company to administer its Superannuation & Gratuity Fund.

Leave Encashment:- Leave Encashment are valued at cost to company basis without considering any discounting and salary increase and provided on the basis of actual valuation.

m) Taxation:

Current Tax:

Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961, except for the overseas subsidiaries and joint ventures where current tax provisions is determined based on the local tax laws. Deferred tax is recognized for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the Balance Sheet date.

Deferred Tax:

Deferred tax liabilities represent the tax effect of temporary differences substantially on account of differences in the written down value of Fixed Assets on account of differing depreciation methods and rates and other timing differences.

Minimum Alternate Tax

Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

n) Borrowing Cost:

Cost in connection with the borrowing of funds to the extent not directly related to the acquisition of fixed assets are amortized and charged to the Profit and Loss Account, over the tenure of the loan. Borrowing cost to the extent directly attributable to acquisition of fixed assets are added to the cost of fixed assets.

o) Segment Reporting:

i. Business Segment

As per Accounting Standard 17 on segment reporting of ICAI, the Company has reportable segments viz. Radiators & Heat Exchanger, OEM & Railways, Consumer Durable Products during the year under review. Accordingly the reporting is done segment wise.

ii. Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The Company operates primarily in India and has presence in international markets as well. Its business is accordingly aligned geographically, catering to two markets. The Company has considered domestic and exports markets as geographical segments and accordingly disclosed these as separate segments. The geographical segments considered for disclosure are as follows;

- Sales within India represent sales made to customers located within India.

- Sales outside India represent sales made to customers located outside India.

p) Earning Per Share:

The earnings considered in ascertaining the Company's Earnings Per Share (EPS) comprise the net profits after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

q) Cash Flow Statement:

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

r) Measurement of EBITDA

The company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance costs and tax expense.

s) Sundry Debtors/Loans & Advances:

Company as a policy obtains balance confirmation from Sundry Debtors, Creditors and other advances on monthly / quarterly / half yearly basis depending upon quantum of transaction made with the parties. Considering the same company does not have all balance confirmations as at 31st March 2015, the effect of the same, if any which is not likely to be material will be adjusted at the time of confirmation.

t) Provisions /Contingencies:

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilities are not recognized and are disclosed in the Note No.29

u) Derivative Instruments:

The Company has entered into derivative contracts in the nature of interest rate swaps and forward contracts with intention to hedge its requirements and firm commitments. The contracts are mark to market and losses are recognized in the profit and loss account. Gains arising on the same are not recognized on ground of prudence.

v) Deferred Revenue Expenditure:

Cost of traveling, Consultancy fees and other expenses related to IRIS Certification are considered as deferred revenue expenditure. 1/5 of the expenditures have been charged to Profit and Loss account.

Mar 31, 2012

A) Change in accounting policies

Presentation and disclosure of financial statements

During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

b) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities, at the date of the financial statements. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Uncertainties about these estimates and assumption could result in the outcomes requiring a material adjustment to the carrying amount of assets or liabilities in the future periods.

c) Tangible Fixed Assets:

Fixed assets except leasehold land are stated at cost less accumulated depreciation. The cost includes freight, duties, taxes and other incidental expenses related to acquisition and installation. CENVAT claim, if any, on capital goods is reduced from the cost.

Capital Work-in-Progress

Projects under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

d) Depreciation on tangible fixed assets

i) Depreciation on fixed assets is provided on straight-line basis at the rates prescribed in schedule XIV to the Companies Act, 1956.

ii) Depreciation on assets added during the year, is calculated on pro-rata basis with reference to the date of installation.

e) Intangible Assets

Intangible Assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortized on a straight line basis over the estimated useful economic life. The following are the acquired intangible assets :

i) LOGO OF BRAND "LLOYD"

Cost of logo is amortized over its useful life of 5 years.

f) GRANT

Grants are recognized when there is reasonable assurance that the grant will be received and conditions attached to them are complied with.

g) Research and development

Research costs are expensed as incurred.

h) Impairment of Assets:

The carrying values of assets/cash generating units at each Balance Sheet date are reviewed for impairment of assets. If any indication of such impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in prior accounting periods no longer exists or may have decreased such reversal of impairment loss is recognized.

i) Inventory Valuation:

i) Raw materials and consumables are valued at cost as per the Weighted Average Method and include(s) customs duty wherever paid, and are net of credit availed under CENVAT scheme.

ii) Stock in process is valued at direct cost, i.e., cost of materials and variable manufacturing expenses.

iii) Finished goods are valued at lower of cost or net realizable value.

iv) Stock in transit lying in customs warehouse is valued at cost but does not include custom duty payable, however, non-provision of duty does not affect the profit for the year.

j) Revenue Recognition:

i) Income and Expenditure are recognized on accrual basis.

ii) Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects central sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

iii) Export sales are accounted on the basis of date of bill of lading.

iv) Dividend income is recognized when the right to receive the dividend is established.

k) Investments:

Long term Investments are stated at cost. Investments in subsidiary company are of long-term strategic value and the diminution if any in the value of these investments is temporary in nature.

l) Foreign currency transactions:

i. Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

ii. Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

iii. Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

iv. Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the year.

m) Retirement Benefits:

Provident Fund:-

Retirement benefit in form of provident fund is a defined contribution scheme and the contributions are charged to the profit and Loss account of the year when the contributions to the respective funds are due.

Gratuity:-

The company's liability in respect of payment of gratuity is provided on accrual basis as per actuarial valuation. The company is in process of having arrangement with Insurance co. to administer its Superannuation & Gratuity Fund.

Leave Encashment:-

Leave Encashment are valued at cost to company basis without considering any discounting and salary increase and provided on the basis of actual valuation.

n) Taxation:

Current Tax:

Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act 1961, except for the overseas subsidiaries and joint ventures where current tax provisions is determined based on the local tax laws. Deferred tax is recognized for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the Balance Sheet date.

Deferred Tax:

Deferred tax liabilities represent the tax effect of temporary differences substantially on account of differences in the written down value of Fixed Assets on account of differing depreciation methods and rates and other timing differences.

Minimum Alternate Tax

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

o) Borrowing Cost:

Cost in connection with the borrowing of funds to the extent not directly related to the acquisition of fixed assets are amortized and charged to the Profit and Loss Account, over the tenure of the loan. Borrowing cost to the extent directly attributable to acquisition of fixed assets are added to the cost of fixed assets.

p) Segment Reporting:

The Company's operations predominantly comprise of manufacturing and sale of Air-conditioning and parts thereof. Sale of Consumer Durable products other than Air-conditioners are insignificant. The geographical segmentations are also insignificant.

q) Earning Per Share:

The earnings considered in ascertaining the Company's Earnings per Share (EPS) comprise the net profits after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

r) Cash Flow Statement:

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

s) Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance costs and tax expense.

t) Sundry Debtors/Loans & Advances:

Sundry Debtors, Creditors and other advances are subject to confirmation. The effect of the same, if any which is not likely to be material will be adjusted at the time of confirmation.

u) Provisions /Contingencies:

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilities are not recognized and are disclosed in the Notes on Accounts.

v) Derivative Instruments:

The Company has entered into derivative contracts in the nature of interest rate swaps and forward contracts with intention to hedge its requirements and firm commitments. The contracts are mark to market and losses are recognized in the profit and loss account. Gains arising on the same are not recognized on ground of prudence.

w) Deferred Revenue Expenditure:

Cost of traveling, Consultancy fees and other expenses related to IRIS Certification are considered as deferred revenue expenditure. 1/5 of the expenditures have been charged to Profit and Loss account.

Mar 31, 2011

A) Basis of Preparation of Financial statements:

The financial statements are prepared under the historical cost convention in accordance with generally accepted accounting principles and the provisions of the Companies Act, 1956.

b) Revenue Recognition:

i) Income and Expenditure are recognized on accrual basis.

ii) Sales are accounted on dispatch of products and sales value includes excise duty.

iii) Export sales are accounted on the basis of date of bill of lading.

iv) Dividend income is recognised when the right to receive the dividend is established.

c) Fixed Assets :

Fixed assets except leasehold land are stated at cost less accumulated depreciation. The cost includes freight, duties, taxes and other incidental expenses related to acquisition and installation. CENVAT claim, if any, on capital goods is reduced from the cost.

d) Depreciation:

I) Depreciation on fixed assets is provided on straight-line basis at the rates prescribed in schedule XIV to the Companies Act, 1956.

ii) Depreciation on assets added during the year, is calculated on pro-rata basis with reference to the date of

installation.

e) Inventory Valuation:

i) Raw materials and consumables are valued at cost as per the First in First Out (FIFO) method and include(s) customs duty wherever paid, and are net of credit availed under CENVAT scheme.

ii) Stock in process is valued at direct cost, i.e., cost of materials and variable manufacturing expenses.

iii) Finished goods are valued at lower of cost or net realizable value.

iv) Stock in transit lying in customs warehouse is valued at cost but does not include custom duty payable, however, non-provision of duty does not affect the profit for the year.

f) Investments:

Long term Investments are stated at cost. Investments in subsidiary company are of long-term and strategic nature . The diminution if any in the value of these investments is temporary in nature.

g) Foreign currency transactions:

- Income and Expenses in foreign exchange are accounted at the transaction rate prevailing at the time of transaction.

- Assets purchased are capitalized at rates prevailing on the date of purchase

- Balances in foreign bank accounts, Exchange Earners Foreign Currency Account are translated into Indian Rupees at rates prevailing at the year-end.

h) Retirement Benefits:

Provident Fund:-

Retirement benefit in form of provident fund is a defined contribution scheme and the contributions are charged to the profit and Loss account of the year when the contributions to the respective funds are due.

Gratuity:-

The company's liability in respect of payment of gratuity is provided on accrual basis and actuarial valuation is subject to management.

Leave Encashment:-

Leave Encashment are valued at cost to company basis without considering any discounting and salary increase and provided on the basis of actual valuation.

i) Borrowing Cost:

Cost in connection with the borrowing of funds to the extent not directly related to the acquisition of fixed assets are amortized and charged to the Profit and Loss Account, over the tenure of the loan. Borrowing cost to the extent directly attributable to acquisition of fixed assets are added to the cost of fixed assets.

j) Taxation:

Current Tax:

Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act 1961, except for the overseas subsidiaries and joint ventures where current tax provisions is determined based on the local tax laws. Deferred tax is recognized for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the Balance Sheet date.

Deferred Tax:

Deferred tax liabilities represent the tax effect of temporary differences substantially on account of differences in the written down value of Fixed Assets on account of differing depreciation methods and rates and other timing differences.

k) Capital Work-in-Progress

Projects under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

I) Use of Estimation:

The financial statements are prepared in conformity with generally accepted accounting principles and applicable accounting standards, which may require management to make estimates and assumptions. These may affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the date of financial statements and the reported amount of the revenue and expenses during the reporting period. Actual report later could differ from these estimates.

m) Impairment of Assets:

The carrying values of assets/cash generating units at each Balance Sheet date are reviewed for impairment of assets. If any indication of such impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount.The recoverable amount is the greater of the net selling price and their value in use.Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in prior accounting periods no longer exists or may have decreased such reversal of impairment loss is recognized.

n) Segment Reporting:

The Company's operations predominantly comprise of manufacturing and sale of Air-conditioning and parts thereof.The geographical segmentations are insignificant.

o) Earning Per Share:

The earnings considered in ascertaining the Company's Earnings per Share (EPS) comprise the net profits after tax.The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

p) Cash Flow Statement:

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard -3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

q) Sundry Debtors/Loans & Advances:

Sundry Debtors,Creditors and other advances are subject to confirmation.The effect of the same, if any which is not likely to be material will be adjusted at the time of confirmation.

r) Provisions/Contingencies:

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilitiesare not recognized and are disclosed in the Notes on Accounts.

s) Derivative Instruments:

The Company has entered into derivative contracts in the nature of interest rate swaps and forward contracts with intention to hedge its requirements and firm commitments.The contracts are markto market and losses are recognized in the profit and loss account.Gains arising on the same are not recognized on ground of prudence.

t) Deferred Revenue Expenditure:

Cost of traveling, Consultancy fees and other expenses related to International Certification are considered as deferred revenue expenditure. 1 /5 of the expenditures have been charged to Profit and Loss account.

u) Debenture issue Expenses:

Debenture issue expenses are adjusted against the Securities Premium Account as permissible under Section 78 (2) of theCompaniesAct1956.

Mar 31, 2010

A) Basis of Preparation of Financial statements:

The financial statements are prepared under the historical cost convention in accordance with generally accepted accounting principles and the provisions of Companies Act, 1956.

b) Revenue Recognition:

i) Income and Expenditure are recognized on accrual basis.

ii) Sales are accounted on dispatch of products and sales value includes excise duty.

iii) Export sales are accounted on the basis of date of bill of lading.

iv) Dividend income is recognised when the right to receive the dividend is established.

c) Fixed Assets:

Fixed assets except leasehold land are stated at cost less accumulated depreciation. The cost includes freight, duties, taxes and other incidental expenses related to acquisition and installation. CENVAT claim, if any, on capital goods is reduced from the cost.

d) Depreciation:

i) Depreciation on fixed assets is provided on straight-line basis at the rates prescribed in schedule XIV to the Companies Act, 1956.

ii) Depreciation on assets added during the year, is calculated on pro-rata basis with reference to the date of installation.

e) Inventory Valuation:

i) Raw materials and consumables are valued at cost as per the First in First Out (FIFO) method and include(s) customs duty wherever paid, and are net of credit availed under CENVAT scheme.

ii) Stock in process is valued at direct cost, i.e., cost of materials and variable manufacturing expenses.

iii) Finished goods are valued at lower of cost or net realizable value.

iv) Stock in transit lying in customs warehouse is valued at cost but does not include custom duty payable, however, non-provision of duty does not affect the profit for the year.

f) Investments:

Long term Investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long-term investments. Investments in subsidiary company are of long-term strategic value and the diminution if any in the value of these investments is temporary in nature.

g) Foreign currency transactions:

- Income and Expenses in foreign exchange are accounted at the average rate prevailing during the month of transaction.

- Income and expenses on foreign projects are accounted at average rate for the year.

- Assets purchased are capitalized at rates prevailing on date of purchase

- Balances in foreign bank accounts, Exchange Earners Foreign Currency Account are translated into Indian Rupees at rates prevailing at the year-end.

h) Retirement Benefits:

The companys contribution to the provident fund is charged to profit and loss account.

The companys liability in respect of payment of gratuity is provided on accrual basis and actuarial valuation is subject to management.

. Leave Encashment: The Company has provided an adhoc provision as

accrued liability during the year which is subject to acturial valuation.

i) Borrowing Cost:

Borrowing cost that is directly attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

j) Taxation:

Current Tax:

The tax expenses for the year, comprising current tax is included in determining the net profit for the year.

A Provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws.

Deferred Tax:

Deferred tax liabilities represent the tax effect of temporary differences substantially on account of differences in the written down value of Fixed Assets on account of differing depreciation methods and rates and other timing differences.

k) Expenditure during construction and on new projects

In the case of new industrial units and substantial expansion of existing units, all pre operating expenditure specifically for the project, incurred upto the date of installation, is capitalized and added pro rata to the cost of fixed assets.

l) Management Estimation:

The financial statements are prepared in conformity with generally accepted accounting principles and applicable accounting standards, which may require management to make estimates and assumptions. These may affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the date of financial statements and the reported amount of the revenue and expenses during the reporting period. Actual report later could differ from these estimates.

m) Impairment of Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

n) Segment Reporting:

The Company is engaged in only one segment i.e. air conditioners and its parts. Hence segment reporting is not applicable.

o) Earning Per Share:

The earnings considered in ascertaining the Companys Earnings per Share (EPS) comprise the net profits after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

p) Cash Flow Statement:

The Cash Flow statement is prepared by the indirect method set out in Accounting standard Ã3 issued by the Institute of Chartered Accountants of India as required by the SEBI on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consists of cash in hand and demand deposits with banks as on the Balance Sheet date.

q) Sundry Debtors/Loans & Advances:

Sundry Debtors, Creditors and other advances are subject to confirmation. The effect of the same, if any which is not likely to be material will be adjusted at the time of confirmation.

r) Provisions /Contingencies:

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on best estimate of the amount required to settle the obligation at the Balance Sheet date.

Contingent liabilities are not recognized and are disclosed in the Notes on Accounts.

s) Derivative Instruments:

The Company has not entered into the derivative instruments. Forward Contract other than those entered into, to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast transactions are treated as foreign currency transactions and accounted accordingly. Exchange difference arising on such contracts is recognized in the period in which they arise and premium paid/received is accounted as expenses/income over the period of the contract.

t) Deferred Revenue Expenditure:

Cost of traveling & Consultancy fees related to Lloyd Coils Europe and Janka Engineering s.r.o. are considered as deferred revenue expenditure.

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