Notes to Accounts of MIRC Electronics Ltd.

Mar 31, 2018

1. Corporate information

MIRC Electronics Limited ("the Company") is a listed entity incorporated in India. The address of registered office and principal place of business is Onida House, G-1, MIDC, Mahakali Caves Road, Andheri (East), Mumbai - 400093. The Company is principally engaged in manufacturing and trading of electronic items.

The Ordinary (Equity) shares of the company are listed on the National Stock Exchange ("NSE") and the Bombay Stock Exchange ("BSE").

The Company has only one class of equity shares having par value of Rs. 1 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, if any on the equity shares is recommended by the Board and approved by the shareholders at the 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.

In the current year the Company has allotted 1,92,00,000 Equity Shares and 1,92,00,000 Convertible Share Warrants (Convertible into 1 Equity Share each) at a issue price of Rs.37.53 per equity share (including a premium of Rs.36.53 per equity share) to the non-promoters on preferential basis. Consequent to the issue of equity shares, the paid up equity share capital of the Company has increased from Rs.2,119.39 lacs to Rs.2,311.39 lacs. The Company has received an amount of Rs.1,801.44 lacs being 25% of the value of warrants as per provisions of SEBI (ICDR) Regulations, 2009.

The company has not issued any equity shares as bonus or for consideration other than cash and has not bought back any shares during the period of five years immediately preceding 31st March, 2018.

NOTE 16 - OTHER EQUITY Nature and purpose of Reserves

Capital Reserve : The amount is largely on account of reduction in share capital.

Capital Redemption Reserve : The capital redemption reserve was created for buyback/redemption of shares.

Securities Premium Account : Securities Premium Reserve is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013.

General Reserve : The general reserves comprises of transfer of profits from retained earnings for appropriation purposes. The reserves can be distributed/utilised by the Company in accordance with the Companies Act, 2013.

Since the Company has been incurring losses in recent past period in addition to the carried forward losses, the company has not recognized Deferred Tax Asset as it is probable that sufficient future taxable profit will be not be available against which unused tax losses can be utilised.

Deferred tax assets are recognised only to the extent it is probable that either future taxable profits or reversal of deferred tax liabilities will be available, against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.

The Company has impact of expenditure charged to the statement of Profit and loss but allowed for tax purposes on payment basis of Rs.181.62 lacs on which the deferred tax asset is not recognised. Further, the Company also has tax losses and unabsorbed depreciation of Rs.17,217.45 lacs on which deferred tax asset is not recognised. Out of these losses, Rs.5,044.12 lacs does not have any expiry and Rs.12,173.33 lacs will expire by the year 2026.

Security and rate of interest

Cash Credit Facility, Loan from bank and Buyers credit from banks is secured by pari passu charge in favour of the bankers by mortgage/ hypothecation of Company''s immovable and movable properties at Wada and Onida House and immovable properties at Vasai. The interest on cash credit ranges from 12.00% to 16.00% , loan from banks is at 4.5% 6 month Libor and the interest on Buyers credit is libor plus spread.

2 The Board of Directors of the Company on 13th February, 2016 had approved a scheme of amalgamation between the Company and its wholly owned subsidiary Akasaka Electronics Limited ("the transferor Company") with effect from 1st April, 2015 (the appointed date). Akasaka Electronics Limited was a wholly owned subsidiary of MIRC Electronics Limited and was engaged in the business of manufacture of printed circuit boards. The Company had filed a petition in the High Court / NCLT for amalgamating the business of the subsidiary company w.e.f. 1 April 2015 to gain synergies of operations and to take benefits of economies in cost. NCLT vide its order dated 23rd March 2017 had issued an order approving the scheme of amalgamation between the subsidiary and the Company.

All assets aggregating Rs.1,807.63 lacs and liabilities aggregating Rs.771 lacs of the subsidiary have been taken over at book values. Capital Reserve Rs.207.55 lacs, Capital Redemption reserve Rs.99.23 lacs and Surplus in the statement of profit and loss account of Rs. (85.90) lacs of the subsidiary have been taken over at book values. Excess of investment over the share capital of the transferor Company, amounting to Rs.1,810.05 lacs has been adjusted in General Reserves of the Company.

For IND AS, the transition date for the company is 1st April 2016 and accordingly the impact of merger for IND AS financials has been given in the transition accounting.

3 Exceptional items -

The compensation has been paid as follows:-

The company has recognised total expenses of Rs.2,373.11 lacs for the year ended 31st March 2017 as exceptional items on account of the following reasons:

a) During September 2016, the Company had entered into a settlement agreement dated 13th September 2016 with workers of Wada factory to shift the worker''s to other locations as per the business requirements of the Company or pay compensation to workers who are willing to voluntarily retire from the services of the Company. The above agreement has been entered considering reduction in operations of the Company over the years. Out of total workers at Wada factory 166 workers had agreed to voluntarily retire from the services of the Company and accordingly the Company has recognized an expense of Rs.963.28 lacs in the Statement of Profit and Loss.

b) During the year, 2,648 preference shares have been allotted to the Company w.e.f. 1st December, 2016 against outstanding receivable of Rs.2,648 lacs as per the scheme of the arrangement filed by one of the party and approved by NCLT vide its order dated 24th August, 2017.

The Company has recognised preference shares and de-recognised outstanding receivables as on 1st December, 2016 in accordance with the terms of the approved scheme and recognised a loss of Rs.1,507 lacs in the Statement of Profit and Loss, arising on account of fair valuation of preference shares vis-a-vis carrying value of outstanding receivables.

c) Profit (net) on sale of land and building of Rs.97.17 lacs.

4 During the financial year 2015-16, the Company had allotted 1 (One) Warrant to Bennett Coleman & Co. Ltd. ( BCCL ) exercisable for equity shares aggregating to Rs.2,275.00 lacs. The company had received an amount of Rs.568.75 lacs being 25% of the value of Warrant from BCCL and had been disclosed as "Money received against share warrants" below Reserves and Surplus, with such warrant carrying an option / entitlement to the warrant holder to subscribe to equity shares of the face value of Re. 1/- each for cash at a minimum price of Rs.14.66/- each (including premium of Rs.13.66/- each) per share, as arrived in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as on the Relevant Date i.e. 27th May, 2015 or such higher price per share equal to the average of the weekly high and low of the closing prices of the equity share of the company as quoted on the National Stock Exchange of India Ltd. during the 26 (twenty six) weeks preceding the last date of 17th (seventeenth) month from the date of allotment of warrant i.e. 10th July, 2015 after making adjustment for any bonus issue / split / consolidation.

During the financial year 2016-17, the Company received balance 75% allotment money amounting Rs.1,706.25 lacs against exercise of warrants by BCCL. The Company has issued 1,55,18,417 equity shares of face value of Rs.1 per equity share to BCCL @ Rs.14.66 (including securities premium of Rs.13.66 per equity share).

As of March 31, 2017 the share capital has been increased by Rs.155.19 lacs and securities premium account by Rs. 2,119.82 lacs respectively.

In the current year the Company has allotted 1,92,00,000 Equity Shares and 1,92,00,000 Convertible Share Warrants (Convertible into 1 Equity Share each) at an issue price of Rs.37.53 per equity share (including a premium of Rs.36.53 per equity share) to the non-promoters on preferential basis in accordance with the provision of chapter VII of SEBI ICDR regulations. Consequent to the issue of equity shares, the paid up equity share capital of the Company has increased from Rs.2,119.39 lacs to Rs.2,311.39 lacs and securities premium account has increased from Rs.4,734.88 lacs to Rs.11,748.64 lacs as on 31st March, 2018. The Company has received an amount of ''1,801.44 lacs being 25% of the value of warrants as per provisions of SEBI (ICDR) Regulations, 2009 and remaining balance shall be paid before exchange of warrants for equity shares.. If the option to acquire equity shares is not excercised within 18 months from the date of issue of warrants, the amount paid shall be forfeited by the Company.

5 The Company at its extraordinary general meeting dated 29th March, 2017 have approved an Employee Stock option Scheme 2017. However the scheme is not yet offered to employees as on date and hence no effect is considered in the financial statements for the year ended 31st March, 2018.

6 There was a fire accident in February, 2012 at Roorkee Plant of the Company. The Company had made a claim of Rs.4,995.50 lacs in respect of loss and damages covered by the insurance policy. Against the total claim, on account payment of Rs.1,632.45 lacs had been realised from the Insurance company in the financial year 2013-14. Based on the communication received from surveyors appointed by the Insurance company, management had reassessed the recoverability of claim and consequently a further loss of Rs.623 lacs was charged to the statement of Profit and Loss during the year ended 31st March, 2015. During the year ended 31st March, 2016, the Company received an amount of Rs.2,474.70 lacs from the Insurance Company as full and final settlement against insurance claim receivable. For the balance amount of Rs.265.35 lacs the Company had gone for arbitration along with interest and other claims. In the current year the company has received the outstanding amount of Rs.265.35 lacs along with interest of Rs.153.91 lacs which is disclosed as interest received under other income.

Operating lease commitments - Company as lessee

The Company has entered into operating leases for office premises, godowns and residential accommodation, with lease terms between 11 months to six years. The company has the option, under some of its leases, to lease the assets for additional terms between 11 months to three years. The Company has paid ''625.16 lacs (31st March 2017 ''685.51 lacs) during the year towards minimum lease payment

In relation to above contingent liabilities, the Company has been advised by its legal counsel that it is possible, but not probable, that the action will succeed and accordingly no provision for liability has been recognised in the financial statements.

Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/ authorities.

7 Employee Benefits :

a) Defined contribution plans

The Company has recognised an expense of Rs.223.84 Lacs ( previous year Rs.248.56 Lacs) towards defined contribution plans, in respect of Provident Fund.

b) Defined benefit plans Gratuity

The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided depends on the member''s length of service and salary at the retirement date. Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit which will be equal to 15 days'' salary for each completed year of service.

The above sensitivity analysis are based on a change and assumption while holding all other assumptions constant. In practice this is unlikely to occur and changes in some of the assumptions may be co-related. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumption used in preparing the sensitivity analysis did not change compared to prior period.

The weighted average duration of the projected benefit obligation is approximately 3 years (31st March, 2017 - 4 years). The contribution expected to be made by the Company during the financial year 2018-19 is Rs.231.71 lacs.

Risk exposure:

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility:

The plan liabilities are calculated using a discount rate set with reference to government bond yield. If plan assets underperform this yield, it will result in deficit. These are subject to interest rate risk. To offset the risk, the plan assets have been deployed in high grade insurer managed funds.

Inflation rate risk:

Higher than expected increase in salary and medical cost will increase the defined benefit obligation.

Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not straight forward and depends upon the combination of salary increase, discount rate and vesting criterion.

8 First time adoption of Ind AS - Mandatory exceptions and optional exemption

The Company has adopted Ind AS with effect from 1st April, 2017 with comparatives being restated. Accordingly the impact of transition has been provided in the Opening Reserves as at 1st April 2016. The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule III.

Exemptions from retrospective application

Fair value as deemed cost exemption

The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying value at the date of transition.

Refer reconciliation of equity as per previous GAAP to Ind AS (Refer Note 41).

Note b

Long term borrowing difference of Rs.49.74 lacs is due to netting off of upfront fees paid on borrowing.

Note c

The increase is on account of merger of Akasaka Electronics Limited balances as of 1st April 2016.

Note d

The increase of Rs.23.97 lacs is due to merger of Akasaka Electronics Limited and Rs.77.42 lacs being financial liabilities reclassified from Other current liability. These increases are compensated by reclass of warranty provision of Rs. 88.62 lacs from trade payable to warranty provision.

Note e

The increase of Rs.167.67 lacs is on account of merger of Akasaka Electronics Limited. There is a reduction of Rs.77.42 lacs being reclass of financial liabilities from other current liabilities to trade payable. Further, the reduction of Rs.75.86 lacs is due to net impact of mark to market accounting of forward contracts outstanding as at 1st April 2016. Under Indian GAAP the forward contract accounting was done as per AS-11.

Note f

The reduction of Rs.88.62 lacs is due to reclass of warranty provision from trade payable to provisions.

Note g

The increase is on account of merger of Akasaka Electronics Limited.

Note h

The reduction is due to cancellation of investment on merger of Akasaka Electronics Limited.

Note i

The increase of Rs.80.20 lacs is on merger of Akasaka Electronics Limited. The reduction of Rs.52.50 lacs is upfront fees which is adjusted against borrowing, Rs.56.20 lacs being margin money balance is reclassified from loans and advances to other bank balances and Rs.405.24 lacs is on account of impact of the discounting of security deposit.

Note j

The increase is on account of merger of Akasaka Electronics Limited.

Note k

The increase is of Rs.37.72 lacs is due to merger of Akasaka Electronics Limited. The reduction of Rs.510.89 lacs is due to discounting of trade receivable from Adonis Electronics Ltd. and Rs.316.70 lacs is due to ECL provision made.

Note l

The increase is of Rs.297.61 lacs is due to merger of Akasaka Electronics Limited. and Rs.56.20 lacs is due to reclass of margin money from other non current asset.

Note m

The increase of Rs.951.03 lacs is due to merger of Akasaka Electronics Limited. The reduction of Rs. 61.60 lacs is due to mark to market accounting of forward contracts. Under Indian GAAP the Company accounted the same as per AS-11.

Refer reconciliation of equity as per previous GAAP to Ind AS (Refer Note 41).

Note b

The reduction is due to recovery of provision during the year.

Note c

The reduction is due to reclass of warranty provision from trade payable to short term provision.

Note d

The increase is on account of reclass of financial liabilities from other current liabilities.

Note e

The reduction is due to reclass of Rs.2,162.96 lacs from other current liabilities to finance liabilities. The further reduction is on account of mark to market accounting as per Ind-AS amounting to Rs.59.73 lacs.

Note f

The increase is due to reclass of warranty provision from trade payable to short term provision.

Note g

The increase is due to investment in preference shares accounted at fair value as per scheme approved by NCLT (Refer note 35)

Note h

The reduction of Rs.227.83 lacs on account of reclass of discounted portion of deposit and reclass of Rs.10.55 lacs prepaid expenses from loans and advances to non current asset. The reduction of Rs.1,626.62 lacs on account of reclass of advance paid to vendor from loans to other non current asset. The reduction of Rs.1,741.44 lacs is on account of recognition of investment in lieu of security deposit and advances paid to Adonis Electronics Limited as per scheme approved by NCLT.

Note i

The increase of Rs.208.64 lacs is on account of reclass of discounted portion of deposit and Rs.10.55 lacs of prepaid expenses from loans and advances to other non current asset. The increase of Rs.1,626.62 lacs on account of reclass of advance paid to vendor from loans to other non current asset. The reduction of Rs.837.95 lacs is on account of recognition of investment in lieu of receivable from Adonis Electronics Limited as per scheme approved by NCLT.

Note j

The reduction is mainly on account of ECL accounting done as per Ind-AS.

Note k

The reduction is due to reclass from short term advances to other current asset.

Note l

The increase is on account of reclass of 1,540.33 lacs from short term advances to other current asset The reduction is due to reclass of Rs. 52.50 lacs from other current asset to borrowing being upfront fees paid. The balance reduction of '' 31.38 lacs is on account of mark to market accounting done as per Ind-AS.

The reduction of Rs.17.16 lacs is on account of amortisation of deferred rent expenses.

Note b

The reduction of Rs.898.97 lacs is on account of fair value loss on investments in Adonis Electronics Ltd.

Note c

The increase of Rs.14.29 lacs is on account of mark to market adjustment accounted on forward contract.

Note d

The reduction of Rs.2.96 lacs is on account of amortisation of upfront fees paid on borrowing.

Note e

The reduction of Rs.316.70 lacs is on account of ECL provision .

Note f

The increase / decrease is on account of impact taken as per notes "a" to "e" above and impact disclosed in Reconciliation of Statement of Profit and Loss for the year ended 31st March 2017 from Indian GAAP to Ind-AS.

The increase is on account of interest income of Rs.132.69 lacs accounted on the security deposit discounted as per Ind-AS and Rs.9.21 lacs accounted as interest income on investment carried at amortised cost.

Note b

The reduction is on account of amount accounted in OCI.

Note c

The reduction of Rs.140.22 lacs being forex gain on buyers credit and foreign currency borrowing reclassified from forex account to finance cost and Rs.160.77 lacs being forex loss on creditors reclassified from finance cost to forex account. Further the reduction of Rs.2.95 lacs comprises of Rs.14.07 lacs on account of mark to market adjustment accounted on forward contract and the increase of Rs.11.12 lacs is on account of amortisation of upfront fees paid on borrowing.

Note d

The reduction of Rs.1,318.23 lacs is due to reclass of expenses against revenue consisting of Rs.1,417.22 lacs being finance cost relating to revenue, Rs.202 lacs being foreign tour expenses and Rs.300.99 lacs being forex on foreign currency borrowing reclassed from forex account to finance cost. The increase of Rs. 97.47 lacs is on account of Rs.134.71 lacs accounted as rent expenses by amortising the deferred rent expenses and reduction of Rs. 37.24 lacs reversal of ECL provision .

Note e

The High sea sales and purchases of mobiles amounting to Rs. 261.29 lacs is netted off. The revenue is increased due to gross up of excise duty of Rs. 3,812.21 lacs and reduced due to netting of expenses pertaining to finance cost related to revenue Rs.1,417.22 lacs and foreign tour expenses of Rs. 202 lacs .

Fair Value hierarchy

The company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:

Level 1: Fair value measurement are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2: Fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3: Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs)

There were no transfers between Level 1 and Level 2 during the year.

Fair Valuation Techiques and Inputs used

Level 2 - Derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace.

Level 3 - The fair value of unquoted equity shares is determined using income approach (discounted cash flow).

Capital Management and Gearing ratio

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. From time to time, the Company reviews its policy related to dividend payment to shareholders, return capital to shareholders or fresh issue of shares. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio between 50% to 60%. The gearing ratio for current year is on lower side due to repayment of borrowings out of fresh capital issued during the year. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents as detailed in the notes below.

The Company''s capital management is intended to create value for shareholders by facilitating the meeting of its long-term and short-term goals. Its Capital structure consists of net debt (borrowings as detailed in notes below) and total equity.

(i) Debt is defined as long-term borrowings (including current maturities) and short-term borrowings (excluding derivative and contingent considerations).

(ii) Equity is defined as Equity share capital and other equity including reserves and surplus.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.

9. Research and development expenses consist of employee expenses and other expenses of Rs. 276.17 Lacs (previous year Rs. 258.87 Lacs), and Rs.65.96 Lacs (previous year Rs. 68.64 Lacs) respectively. Depreciation on Research and Development assets is Rs. 22.37 Lacs (previous year Rs. 22.07 Lacs) shown under Property ,Plant and Equipment''s.

Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties . This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Loans to Related party

The loan outstanding as on 1st April, 2016 to Adino Telecom Limited is unsecured and repayable on demand, The loan was repaid by Adino Telecom Limited in the financial year 2016-17. Interest was charged at 15%

10. The Company has incurred a net loss in its immediately three preceding financial years. Thus in accordance with Section 135 (5) of the Companies Act, 2013, the Company is not required to provide / spend any amount under Corporate Social Responsibility.

11. Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables and cash and cash equivalents that are derived directly from its operations.

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company''s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company''s senior management that the Company''s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below:

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises two types of risk: currency rate risk and interest rate risk. Financial instruments affected by market risks include loans and borrowings, deposits and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at 31st March, 2018 and 31st March, 2017. The analysis exclude the impact of movements in market variables on; the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities.

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Companies operating activities that is buying of Raw Material and Finished Goods from international buyers. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies. The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12 month period for hedges of purchases . The Company hedges its exposure to fluctuations on the translation into INR of its imports operations.This foreign currency risk Is hedged by using foreign currency forward contracts.

1. /- Gain / Loss

2. The impact of depreciation / appreciation on foreign currency other than USD on profit before tax of the Company is not material.

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changes in exchange rate on foreign currency exposure. The counterparty for these contracts is generally a Bank. These derivative financial instruments are valued based on quoted prices for similar asset and liabilities in active markets or inputs that is directly or indirectly observable in the marketplace. The following table gives details in respect of outstanding foreign exchange forward and option contracts.

(ii) Interest rate risk

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

The Company''s borrowings are commercial banks to meet the working capital requirements for operation of the business. The banks generally charge the card rate to the Company based on Annual appraisal by internal and external ratings. There is no major fluctuation on those interest rates charged by the bank during the period under audit.

(b ) Credit risk management

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a fianancial loss. The Company is exposed to credit risk from its operating activities (primarly trade receivables) and from its financing activities including foreign exchange transactions. The company generally deals with parties which has worthiness based on companys internal assessment.

Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. Processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments.

12 a) Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standards:

Ind AS 115 - Revenue from Contracts with Customers

In March 2018, the Ministry of Corporate Affairs had notified Ind AS 115 (Revenue from Contracts with Customers) which would be applicable to the Company for accounting periods beginning on or after 1st April 2018. This Standard establishes the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. The Company is evaluating the requirements of the standard and its impact on its financial statements.

Amendments to Ind AS 12 - Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. These amendments are effective for annual periods beginning on or after 1st April, 2018. These amendments are not expected to have any material impact on the Company.

Dividend distribution to equity shareholders of the Company

The Company recognises a liability to make dividend distributions to its equity holders when the distribution is authorised and the distribution is no longer at its discretion. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity. In case of Interim Dividend, the liability is recognised on its declaration by the Board of Directors.

b) Changes in accounting policies and disclosures New and amended standards and interpretations

The Company applied for the first time certain amendments to the standards, which are effective for annual periods beginning on or after 1st April, 2017. The nature and the impact of each amendment is described below:

Amendments to Ind AS 7 Statement of Cash Flows: Disclosure Initiative

The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has provided the information for the current period.

13 The Company considers entire business under one segment i.e. Consumer Durable products. Further, there is no separately identifiable geographical segment and hence no reporting is made for segment.

14 There are no Micro and Small Enterprises, to whom the Company owes dues. This information as required to be disclosed under the Micro Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.

15 Significiant events after the reporting period

There were no significiant adjusting events that occurred subsequent to the reporting period other than the events disclosed in the relevant notes.

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Mar 31, 2017

1 During September 2016, the Company had entered into a settlement agreement dated 13th September 2016 with workers of Wada factory to shift the worker''s to other locations as per the business requirements of the Company or pay compensation to workers who are willing to voluntarily retire from the services of the Company. The above agreement has been entered considering reduction in operations of the Company over the years. Out of total workers at Wada factory 166 workers had agreed to voluntarily retire from the services of the Company and accordingly the Company has recognized an expense of Rs, 963.28 lacs in the Statement of Profit and Loss and classified it as an exceptional item.

The compensation has been paid as follows:-

a) 50% of the eligible compensation has been paid within 7 days from the date of receipt of signed resignation letter;

b) Balance 50% would be paid in 12 equated monthly installment starting from January 2017. As on 31st March 2017 an amount of Rs, 361.23 lacs is payable for the period April17 to December 2017 and disclosed under other current liabilities - Employee benefit payable.

2) During the previous year, the Company had allotted 1 (One) Warrant to Bennett Coleman & Co. Ltd. ( BCCL ) exercisable for equity shares aggregating to Rs, 2,275.00 lacs. The company had received an amount of Rs, 568.75 lacs being 25% of the value of Warrant from BCCL and had been disclosed as Money received against share warrants below Reserves and Surplus, with such warrant carrying an option / entitlement to the warrant holder to subscribe to equity shares of the face value of Re. 1/- each for cash at a minimum price of Rs, 14.66/- each (including premium of Rs, 13.66/- each) per share, as arrived in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as on the Relevant Date i.e. 27th May, 2015 or such higher price per share equal to the average of the weekly high and low of the closing prices of the equity share of the company as quoted on the National Stock Exchange of India Ltd. during the 26 (twenty six) weeks preceding the last date of 17th (seventeenth) month from the date of allotment of warrant i.e. 10th July, 2015 after making adjustment for any bonus issue / split / consolidation.

During the current year, the Company has received balance 75% allotment money amounting Rs, 1706.25 lacs against exercise of warrants by BCCL. The Company has issued 1,55,18,417 equity shares of face value of Rs, 1 per equity share to BCCL @ Rs, 14.66 (including securities premium of Rs, 13.66 per equity share).

As of March 31, 2017 the share capital of the Company has been increased by Rs, 155.19 lacs and securities premium account by Rs, 2119.82 lacs.

3) The Company at its extraordinary general meeting dated 29th March, 2017 have approved an Employee Stock option Scheme 2017. However the scheme is not yet offered to employees as on date and hence no effect is considered in the financial statements for the year ended 31st March, 2017.

4) There was a fire accident in February, 2012 at Roorkee Plant of the Company. The Company had made a claim of Rs, 4995.50 lacs in respect of loss and damages covered by the insurance policy. Against the total claim, on account payment of Rs, 1632.45 lacs had been realized from the Insurance company in the financial year 2013-14. Based on the communication received from surveyors appointed by the Insurance company, management had reassessed the recoverability of claim and consequently a further loss of Rs, 623 lacs was charged to the statement of Profit and Loss during the year ended 31st March, 2015. During the year ended 31st March, 2016, the Company received an amount of Rs, 2474.70 lacs from the Insurance Company as full and final settlement against insurance claim receivable. For the balance amount of Rs, 265.35 lacs the Company has gone for arbitration along with interest and other claims. The said amount of claim is included under Insurance claims receivable ( Refer Note 16).

In relation to above contingent liabilities, the Company has been advised by its legal counsel that it is possible, but not probable, that the action will succeed and accordingly no provision for liability has been recognized in the financial statements.

5) Employee Benefits :

a) Defined contribution plans

The Company has recognized an expense of Rs, 248.56 Lacs ( previous year Rs, 223.14 Lacs) towards defined contribution plans, in respect of Provident Fund.

b) Defined benefit plans Gratuity

Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit which will be equal to 15 days'' salary for each completed year of service. In other words, the policy is a defined benefit plan. Accordingly, the aforesaid insurance policy is the plan asset.

6) Foreign Currency exposure :

The Company enters into forward exchange contracts to hedge foreign exchange exposure of the company. The Company does not enters into any forward contract which is intended for trading or speculative purposes.

7) Research and development expenses consist of employee expenses and other expenses of Rs, 258.87 Lacs (previous year Rs, 286.11 Lacs), and Rs, 68.64 Lacs (previous year Rs, 80.35 Lacs) respectively. Depreciation on Research and Development assets is Rs, 22.07 Lacs (previous year Rs, 24.51 Lacs) shown under Fixed Assets.

8) There are no Micro and Small Enterprises, to whom the Company owes dues. This information as required to be disclosed under the Micro Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.

9) Related party Disclosure :

Related parties as defined under clause -3 of Accounting Standard ( AS - 18 ) " Related Party Disclosures " have been identified on the basis of representation made by key management personnel and information available with the Company.

Names of related parties with whom transactions have taken place & description of relationship :

1. Subsidiary Akasaka Electronics Ltd. ( Refer Note 26)

2. Key Management Personnel Mr. G.L. Mirchandani - Chairman & Managing Director

Mr. V.J. Mansukhani - Managing Director

Mr. Kaval Mirchandani - Executive Director

(wef. 26th May, 2016)

Mr. S. K. Dhoot - Whole - time Director

Mr. G. Sundar - Chief Executive Officer

Mr. Aashay S. Khandwala - Head Corporate Affairs, Legal and Company Secretary

(Joined wef. 26th March, 2014 - Resigned wef. 15th April, 2015) Mr. Lalit Chendvankar - Head Corporate Affairs, Legal and Company Secretary

(Joined wef. 13th August, 2015)

Mr. Muthu Elango - Chief Financial Officer

( Joined wef 8th November, 2014 - Resigned wef. 13th August, 2015) Mr. Subrat Nayak - Head of Finance (Joined wef. 14th March, 2016)

- Chief Financial Officer (wef. 22nd April, 2016)

3. Relatives of Key Management Mrs. Gita Mirchandani (Wife of Mr.G.L. Mirchandani)

^Personnel Mrs. Marissa Mansukhani (Wife of Mr.V.J.Mansukhani)

Mr. Sasha Mirchandani (Son of Mr.G.L. Mirchandani)

Mr. Akshay Mansukhani (Son of Mr.V.J. Mansukhani)

Ms. Ayesha Mansukhani (Daughter of Mr.V.J. Mansukhani)

G. L. Mirchandani (H.U.F.)

V. J. Mansukhani (H.U.F.)

4. Enterprise over which any Iwai Electronics Pvt. Ltd.

^{person described in 2} & ^{3 is} Adino Telecom Ltd. having significiant influence

Gulita Wealth Advisors Pvt. Ltd.

Adino Electronics Ltd.

Algorhythm Tech Pvt. Ltd.

Gulita Securities Ltd.

---

Mar 31, 2016

(b) Rights, Preferences and Restrictions Attached to Equity Shares

The company has only one class of equity shares having par value of Re.1 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, if any on the equity shares is recommended by the Board and approved by the shareholders at the 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.

(c) Pursuant to rights issue of equity shares, the Company has allotted 5, 44, 82,524 equity shares of '' 1 each at a premium of '' 5 per share on 22nd October, 2014

(d) Details of Shareholders holding more than 5 % shares in the company:

Effective April 1, 2014, the Company had provided depreciation on straight line (SL) basis, based on the useful life of tangible assets as specified in Schedule II to the Companies Act, 2013. Accordingly, the carrying amount, net of residual value, as on that date had been depreciated over the revised remaining useful life of the assets. As a result, the charge for depreciation is higher by'' 158.84 lacs for the year ended 31st March 2015.

Further carrying amount of'' 674.57 lacs (deferred tax'' 218.86 lacs, net of deferred tax'' 455.71 lacs) in respect of assets whose useful life was already exhausted as on April 01,2014 had been adjusted to opening balance of surplus in the statement of profit and loss in the previous financial year.

# Excise duty on sales amounting to '' 4,437.54 lacs [previous year '' 5,344.15 lacs] has been reduced from sales in the Statement of Profit and Loss and excise duty on increase / (decrease) in stock amounting to ''112.85 lacs [previous year '' 61.72 lacs ] has been considered as (income) / expense in note 25 of financial statements.

1) There was a fire accident in February, 2012 at Roorkee Plant of the Company. The Company had made a claim of ''4995.50 lacs in respect of loss and damages covered by the insurance policy.

-Against the total claim, on account payment of '' 1632.45 lacs had been realized from the Insurance company in the previous year.

Based on the communication received from surveyors appointed by the Insurance Company, management had reassessed the recoverability of claim and consequently a further loss of '' 623.00 lacs were charged to the statement of Profit and Loss during the previous year ended 31st March, 2015. During the current year, the Company has received an amount of ''2474.70 lacs from the Insurance Company as full and final settlement against insurance claim receivable of ''2740.05 lacs (included under other current asset - Refer note 16). The Company has gone for arbitration for the balance amount along with interest and other claims.

2) Employee Benefits:

a) Defined contribution plans

The Company has recognized an expense of ''223.14 Lacs ( previous year '' 221.41 Lacs) towards defined contribution plans, in respect of Provident Fund.

b) Defined benefit plans Gratuity

Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit which will be equal to 15 days'' salary for each completed year of service. In other words, the policy is a defined benefit plan. Accordingly, the aforesaid insurance policy is the plan asset.

* Of the Total Provision, the Company expects to pay an amount of Rs, 137.72 lacs to the fund in the year 2016-17

* All the assets are categorized as Insurer Managed Funds

3) The Company during the previous year allotted 5, 44, 82,524 equity shares at a premium of Rs 5 per share. Consequently, the paid up share capital increased from Rs,1,417.52 lacs to Rs, 1,962.34 lacs and Securities Premium increased by Rs, 2,621.96 lacs (net of rights Issue expenses) in previous year.

Pursuant to stipulation imposed by the financial institutions the promoters provided an unsecured loan of Rs, 3,200.00 lacs to the Company in FY 2013-14. The Company during the previous year issued equity shares of Rs, 2,646.05 lacs against the unsecured loan and refunded the balance amount to the promoters.

4) The Company considers entire business under one segment i.e. Consumer Durable products. Further, there is no separately identifiable geographical segment and hence no reporting is made for segment.

5) Foreign Currency exposure:

The Company enters into forward exchange contracts to hedge foreign exchange exposure of the company. The Company does not enter into any forward contract which is intended for trading or speculative purposes.

The details of Forward exchange contracts outstanding as on the balance sheet date are as follows :

6) Research and development expenses consist of personnel expenses of RS,286.11 Lacs (previous year Rs,325.16 Lacs) and other expenses of RS, 80.35 Lacs (previous year rs, 97.39 Lacs). Depreciation on Research and Development assets is RS, 24.51 Lacs (previous year Rs, 32.45 Lacs) shown under Fixed Assets.

7) There are no Micro and Small Enterprises, to whom the Company owes dues. This information as required to be disclosed under the Micro Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.

8) Related party Disclosure:

Related parties as defined under clause -3 of Accounting Standard ( AS - 18 ) " Related Party Disclosures " have been identified on the basis of representation made by key management personnel and information available with the company.

Names of related parties with whom transactions have taken place & description of relationship:

Note:

i) Figures in brackets are of previous year

9) Provision for Warranty:

Warranty costs are provided based on technical estimate of the costs required to be incurred for repairs, replacement, material cost and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over contractual warranty period.

10) Exceptional items for the current year ended 31st March, 2016 includes profit on sale of land and building at Noida of ''466.93 lacs (Previous year profit on sale of Noida and Thane property of ''944.93 lacs.) and profit on sale of other miscellaneous assets of RS,2.77 lacs (Previous year loss on sale of other miscellaneous asset of ''0.06 lacs). An amount of ''825 lacs was receivable on account of sale of land and building at Noida during the previous year which is disclosed under Loans and advances - refer note no.11. The said amount is received during the year.

11) During the year, the Company has allotted 1 (One) Warrant to Bennett Coleman & Co. Ltd. (BCCL ) exercisable for equity shares aggregating to rs, 2,275.00 lacs. The company has received an amount of RS,568.75 lacs being 25% of the value of Warrant from BCCL and has been disclosed as "Money received against share warrants" below Reserves and Surplus, with such warrant carrying an option / entitlement to the warrant holder to subscribe to equity shares of the face value of Re. 1/- each for cash at a minimum price of RS, 14.66/- each (including premium of Rs, 13.66/- each) per share, as arrived in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as on the Relevant Date i.e. 27th May, 2015 or such higher price per share equal to the average of the weekly high and low of the closing prices of the equity share of the company as quoted on the National Stock Exchange of India Ltd. during the 26 (twenty six) weeks preceding the last date of 17th (seventeenth) month from the date of allotment of warrant i.e. 10th July, 2015 after making adjustment for any bonus issue / split / consolidation.

- The Company has incurred a net loss in its three immediately preceding financial years. Thus in accordance with Section 135 (5) of the Companies Act, 2013, the Company is not required to provide / spend any amount under its Corporate Social Responsibility policy.

- The Board of Directors of the Company has approved a scheme of amalgamation between the Company and its wholly owned subsidiary Akasaka Electronics Limited with effect from 1st April, 2015. The scheme is subject to approval of the High Court and hence no effect of the same is given in the financial statement.

- Figures for the previous year have been regrouped where necessary to conform to current year''s classification.

---

Mar 31, 2015

Basis of Preparation

The financial statements of the company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1. SHARE CAPITAL

(a) Rights, Preferences and Restrictions Attached to Equity Shares

The company has only one class of equity shares having par value of Rs. 1 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, if any on the equity shares is recommended by the Board and approved by the shareholders at the 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.

(b) Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash.

In FY 2009-10 : 7,48,96,669 Equity Shares were alloted and 7,48,96,575 Equity Shares were cancelled as per the Scheme of Amalgamation of Guviso Holdings Private Limited with the Company.

(c) Pursuant to rights issue of equity shares, the Company has allotted 5,44,82,524 equity shares of Rs. 1 each at a premium of Rs. 5 per share on 22nd October, 2014

2) There was a fire accident in February 2012 at Roorkee Plant of the Company. The Company had made a claim of Rs. 4995.50 lacs in respect of loss and damages covered by the insurance policy. Against the total claim, on account payment of Rs. 1632.45 lacs has been realised from the Insurance company . During the year, based on the communication received from surveyors appointed by the Insurance company, management has reassessed the recoverability of claim and consequently a further loss of Rs. 623 lacs has been charged to statement of Profit and Loss.

3) Contingent Liabilities and Commitments :

31st March 31st March 2015 2014 Rs.in lacs Rs.in lacs

Contingent Liabilities

a) Guarantees given to Bank against which 760.93 715.01 Rs. Nil (previous year Rs. Nil) has been deposited as margin money

b) Guarantees given to bank on behalf of subsidiary company

- Akasaka Electronics Limited 1,669.00 1,732.00

c) Income tax demands in respect of which appeals have been filed 323.42 -

d) Excise Duty, Service Tax and Custom Duty in respect of which appeals have 2,496.25 2,563.62 been filed

e) Claims made against the Company not acknowledged as debts 11,007.64 10,624.53

Commitments

Estimated amount of contracts remaining to be executed on capital account not provided - 2.46 for (net of advances)

In respect of the above contingent liabilities, the future cash outflows are determinable only on receipt of judgements pending at various forums / authorities.

4) Employee Benefits :

a) Defined contribution plans

The Company has recognised an expense of Rs. 221.41 lacs ( previous year Rs. 254.56 lacs) towards defined contribution plans, in respect of Provident Fund during the year and in respect of Provident Fund and Superannuation Fund until previous year.

b) Defined benefit plans Gratuity

Company has covered its gratuity liability by a Group Gratuity Policy named 'Employee Group Gratuity Assurance Scheme' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit which will be equal to 15 days' salary for each completed year of service. In other words, the policy is a defined benefit plan. Accordingly, the aforesaid insurance policy is the plan asset.

c) The expected rate of return on plan assets which is 7.95% relates to the benchmark rate available on Government Securities (G. sec.) for the tenure of 10 years i.e the expected term of obligation. The rate is taken as per the deal rate as on 31st March, 2015 as suggested under AS 15 (Revised 2005)

d) The estimates of future salary increases, considered in acturial valuation, take in to account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

5) The Company has during the year allotted 5,44,82,524 equity shares at a premium of Rs. 5 per share. Consequently, the paid up share capital has increased from Rs. 1417.52 lacs to Rs. 1962.34 lacs and Securities Premium has increased by Rs. 2,621.96 lacs (net of rights Issue expenses).

Pursuant to stipulation imposed by the financial institutions the promoters in the previous year provided an unsecured loan of Rs. 3,200 lacs to the Company. The Company during the current year has issued equity shares of Rs. 2,646.05 lacs against the unsecured loan and has refunded the balance amount to the promoters.

6) The Company considers entire business under one segment i.e. Consumer Durable products. Further, there is no seperately identifable geographical segment and hence no reporting is made for segment.

7) Research and development expenses consist of personnel expenses and other expenses of Rs. 325.16 lacs ( previous year Rs. 399.82 lacs ), and Rs. 97.39 lacs ( previous year Rs. 131.90 lacs ) respectively. Depreciation on Research and Development assets is Rs. 32.45 lacs ( previous year Rs. 31.62 lacs ) shown under Fixed Assets.

8) There are no Micro and Small Enterprises, to whom the Company owes dues. This information as required to be disclosed under the Micro Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.

9) Related party Disclosure :

Related parties as defined under clause -3 of Accounting Standard ( AS - 18 ) " Related Party Disclosures " have been identified on the basis of representation made by key management personnel and information available with the company.

Names of related parties with whom transactions have taken place and description of relationship :

1. Subsidiary

Akasaka Electronics Ltd.

2. Key Management Personnel

Mr. G.L. Mirchandani - Chairman & Managing Director

Mr. V.J. Mansukhani - Managing Director

Mr. S. K. Dhoot - Whole - time Director

Mr. G. Sundar - Chief Executive Officer

Mr. Aashay S. Khandwala - Head Corporate Affairs, Legal and Company Secretary (Joined wef. 26th March, 2014)

Mr. Anoopkumar Pillai - Head Corporate Affairs, Legal and Company Secretary (Resigned wef. 19th November, 2013)

Mr. Muthu Elango - Chief Financial Officer (Joined wef. 7th November, 2014)

Mr. Predeep Gupta - Chief Financial Officer (Resigned wef. 7th November, 2014)

3. Relatives of Key Management Personnel

Mrs. Gita Mirchandani ( Wife of Mr. G.L. Mirchandani)

Mrs. Marissa Mansukhani (Wife of Mr. VJ.Mansukhani)

Mr. Kaval Mirchandani ( Son of Mr. G.L. Mirchandani)

Mr. Sasha Mirchandani ( Son of Mr. G.L. Mirchandani)

Mr. Akshay Mansukhani (Son of Mr. V.J. Mansukhani)

Ms. Ayesha Mansukhani (Daughter of Mr. V.J. Mansukhani)

G.L. Mirchandani (H.U.F.)

V.J. Mansukhani (H.U.F.)

4. Enterprise over which any person described in 2 & 3 is having significiant influence

Iwai Electronics Pvt. Ltd.

Adino Telecom Ltd.

Gulita Wealth Advisors Pvt. Ltd.

Adino Electronics Ltd.

IIFL Investment Adviser & Trustee Services Ltd. ( Formerly IIFL Trustee Services Ltd.)

Gulita Securities Ltd.

10) Provision for Warranty :

Warranty costs are provided based on technical estimate of the costs required to be incurred for repairs, replacement, material cost and past experience in repect of warranty costs. It is expected that this expenditure will be incurred over contractual warranty period.

11) Other income for the current year ended 31st March, 2015 includes profit on sale of land and building at Noida and Thane property of Rs. 944.87 lacs. Further an amount of Rs. 825 lacs is receivable on account of sale of land and building at Noida.

12) The Board of Directors of the Company at its meeting held on 24th April, 2015 have considered and approved issuance of 3,25,00,000 warrants (exercisable into equity shares) on preferential basis to persons other than promoters and promoter group at a price determined as per SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009, as amended and the same is subject to approval of the shareholders.

13) The Company has incurred a net loss in its three immediately preceding financial years. Thus in accordance with Section 135 (5) of the Companies Act, 2013, the Company is not required to provide / spend any amount under its Corporate Social Responsibility policy.

14) The figures of previous year were audited by a firm of Chartered accountants other than S R B C & CO LLP. Figures for the previous year have been regrouped where necessary to conform to current year's classification.

---

Mar 31, 2013

1.1 Rights, Preferences and Restrictions attached to Equity Shares

The Company has one class of equity shares having a par value of Re. 1 per share. Each shareholder is entitled to one vote per equity share. The shareholders are entitled to dividend declared on proportionate basis. On liquidation of the Company, the equity shareholders are eligible to receive remaining assets of the Company after distribution of all preferential amounts in proportion to their shareholding.

1.2 Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash.

In FY 2009-10 : 7,48,96,669 Equity Shares were alloted and 7,48,96,575 Equity Shares were cancelled as per the Scheme of Amalgamation of Guviso Holdings Pvt. Ltd. with the Company.

NOTE 2 - DEFFERED TAX LIABILITY

The Company has recognized Deferred Tax in accordance with the requirements of (Accounting Standard) AS-22 on "Accounting for Taxes on Income" as notifed under the Companies (Accounting Standards) Rules, 2006. The breakup of Net Deferred Tax Liabilty (DTL) is as follows :

3) a. Exceptional item of previous year represents expected loss of Rs. 501.22 lacs on account of major fre on 8th February, 2012 at one of the Company''s factory located at Roorkee Uttarkhand

b. In respect of the said fre incident the Company has made claim from insurance company and the amount (net of provision) of Rs. 4995.50 lacs for the loss made in the earlier year is carried as Insurance claim receivable under other current assets in the Balance Sheet. An adhoc amount of Rs. 1500 lacs has been received subsequent to the Balance Sheet date against the said receivables and the Management is confdent of balance recovery.

4) The Company has a normal operating cycle of less than twelve months, hence a period of twelve months has been considered for bifurcation of Assets and Liabilities into Current and Non-Current as required by Revised Schedule VI of the Companies Act, 1956 for preparation of the fnancial statements.

5) During the year net debit in respect of foreign exchange fuctuation is Rs. 639.88 lacs (previous year debit of Rs. 576.28 lacs). Out of this credit of Rs. 531.31 lacs (previous year debit of Rs. 102.33 lacs) is in respect of raw material purchases, debit of Rs. 44.86 lacs (previous year debit of Rs. 6.87 lacs) is in respect of export of goods (included in miscellaneous expenses), and debit of Rs. 1126.33 lacs (previous year debit of Rs. 467.08 lacs) is in respect of premium on forward contracts included in fnance cost .

6) Contingent Liabilities and Commitments

(Rs.in Lacs)

PARTICULARS 31st March 2013 31st March 2012

Contingent Liabilities

a) Guarantees given to Bank against which Rs.Nil (previous 1453.35 1565.22 year Rs.Nil) has been deposited as margin money

b) Guarantees given to bank on behalf of Subsidiary company 2132.00 2132.00

Akasaka Electronics Ltd.

c) Income tax demands in respect of which appeals have been fled 188.45 77.69

d) Excise Duty, Service Tax and Custom Duty in respect of which 2708.80 31136.40 appeals have been fled (Refer note below)

e) Claims made against the Company not acknowledged as debts 6661.85 3681.12 Commitments

Estimated amount of contracts remaining to be executed on capital 21.17 100.34 account not provided for (net of advances)

Note : In the earlier year, the Company has received a demand of Service Tax of Rs. 29777.33 lacs from the Commissioner of Central Excise. As per the management, the demand is not tenable and the Company has received favourable order from CESTAT for stay of the said demand.

7) Employee Defned Benefts :

a) Defned contribution plans

The Company has recognised an expense of Rs. 241.47 lacs (previous year Rs. 291.59 lacs) towards defned contribution plans, in respect of Provident Fund and Superannuation Fund

b) Description of the Plan

Gratuity

Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by Life Insurance Corporation of India. Under the plan, employee at retirement is eligible for beneft which will be equal to 15 days salary for each completed year of service. In other words, the policy is a defned beneft plan. Accordingly, the aforesaid insurance policy is the plan asset.

Leave encashment

The leave encashment beneft scheme is a defned beneft plan and is wholly unfunded. Hence, there are no planned assets attributable to the obligation.

8) In the earlier year, Mobile Communication Device was treated as a separate segment and accordingly disclosure required under (AS) -17 on "Segment Reporting" was made in the Consolidated Financial Statements. Based on the composition of sales Mobile Communication Device is no longer considered as a seperate reportable segment and hence the Company is left with only one reportable segment ie. Consumer Durable products. Further, there is no seperately identifable geographical segment and hence no reporting is made for segment.

9) Research and Development expenses consist of personnel expenses and other expenses of Rs. 437.90 lacs (previous year Rs. 571.99 lacs), and Rs. 119.41 lacs (previous year Rs. 295.23 lacs) respectively. Depreciation on Research and Development assets is Rs. 33.79 lacs (previous year Rs. 39.53 lacs) shown under Fixed Assets.

10a) Balances of Trade Receivables, Loans and Advances and Deposits are subject to confrmation and reconciliation.

b) There is no amount due and outstanding, as at 31st March, 2013 to be credited to Investor Education and Protection Fund.

11) Previous year''s fgures have been rearranged and regrouped wherever necessary.

---

Mar 31, 2012

1) There was a major fire on 8th February, 2012 at one of the Company's factory located at Roorkee, Uttarakhand, affecting the entire operations of the factory. Fixed assets of written down value of Rs 2936.63 and stock valuing Rs 1773.17, aggregating Rs 4709.80 were destroyed in the fire. The assets were fully covered under the insurance policy. The amount of Rs 4409.80 is expected to be recovered from the insurance company and shown as insurance claim receivable. The management is confident of recovering the same. The balance amount of Rs 300 along with the expenditure incurred of Rs 201.22 (including salaries and wages of Rs 21.72) has been charged to the Profit and Loss Statement and the aggregate amount of Rs 501.22 has been treated as an exceptional item.

2) During the year net debit in respect of foreign exchange fluctuation is Rs 576.28 (previous year credit of Rs 937.57). Out of this debit of Rs 102.33 (previous year credit of Rs 1189.59) is in respect of raw material purchases, debit of Rs 6.87 (previous year debit of Rs 43.92) is in respect of export of goods (included in miscellaneous expenses), debit of Rs Nil (previous year debit of Rs 25.99 ) is in respect of secured loans ( included in finance cost ) and debit of Rs 467.08 ( previous year Rs 182.11 ) is in respect of premium on forward contracts included in finance cost .

Rs in lacs

3) Contingent Liabilities and Commitments

PARTICULARS 31st March, 2012 31st March, 2011

Contingent Liabilities

a) Guarantees given to Bank against which Rs Nil (previous year Rs Nil) has 1565.22 585.51 been deposited as margin money

b) Guarantees given to bank on behalf of subsidiary company - Akasaka Electronics Limited 2132.00 1870.00

c) Income tax demands in respect of which appeals have been filed 77.69 82.16

d) Excise and Custom Duty in respect of which appeals have been filed 31136.40 595.44

e) Claims made against the Company not acknowledged as debts 3681.12 5429.58

Commitments

Estimated amount of contracts remaining to be executed on capital account not 100.34 199.54 provided for (net of advances)

4) Employee Defined Benefits

a) Defined contribution plans

The Company has recognised an expense of Rs291.59 ( previous year Rs279.90 ) towards defined contribution plans, in respect of Provident Fund and Superannuation Fund.

b) Description of the Plan Gratuity

Company has covered its gratuity liability by a Group Gratuity Policy named 'Employee Group Gratuity Assurance Scheme' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit which will be equal to 15 days salary for each completed year of service. In other words, the policy is a defined benefit plan. Accordingly, the aforesaid insurance policy is the plan asset.

Leave encashment

The leave encashment benefit scheme is a defined benefit plan and is wholly unfunded. Hence, there are no planned assets attributable to the obligation.

5) Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standards (AS) - 17 on Segment Reporting as notified under the Companies (Accounting Standards) Rules, 2006.

6) Research and development expenses consist of personnel expenses and other expenses of Rs 571.99 (previous year Rs 815.62), and Rs 295.23 (previous year Rs 273.13) respectively. Depreciation on Research and Development assets is Rs 39.53 (previous year Rs 39.32) shown under Fixed Assets.

7) a) Balances of Trade Payable, Trade Recievable, Loans and Advances and Deposits are subject to confirmation and reconciliation.

b) There is no amount due and outstanding, as at 31st March, 2012 to be credited to Investor Education and Protection Fund.

8) Previous year's figures have been rearranged and regrouped wherever necessary.

Signatures to Note '1' to '28' forming part of the Balance Sheet and Profit and Loss Statement

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Mar 31, 2010

1. The Company enters into forward contract for hedgeing of foreign currency transaction. The premium/ discount for such transactions are pro-rated over the period of the contract. Such premium/ discount is accounted under material consumption. The exchange gain or loss on account of foreign exchange transactions settlement or on reinstatement at the year end is credited/ debited to the Profit and Loss account.

During the year net credit in respect of foreign exchange fluctuation gain is Rs.2903.71 (previous year debit of Rs.6053.51). Out of this credit of Rs.3072.10 is in respect of raw material purchases, debit of Rs.109.63 is in respect of export of goods (included in miscellaneous expenses), debit of Rs.58.76 is in respect of secured loans (included in financial expenses).

2. Contingent Liabilities

31st March, 2010 31st March, 2009

a) Guarantees given to Bank against which Rs. Nil 213.98 340.34 (Previous Year Rs. Nil) has been deposited as margin money

b) Guarantees given to bank on behalf of subsidiary companies

- Akasaka Electronics Limited 1670.00 1870.00

c) Income tax demands in respect of which appeals have 505.92 1142.73 been filed

d) Excise and Customs Duty in respect of which appeals 798.22 771.65 have been filed

e) Claims made against the Company not acknowledged 5487.45 2910.84 as debts

3. Estimated amount of contracts remaining to be executed 322.44 1093.92 on capital account not provided for (net of advances)

4. Employee benefits

a) Description of the Plan:

Gratuity –

Company has covered its gratuity liability by a Group Gratuity Policy named ‘Employee Group Gratuity Assurance Scheme’ issued by Life Insurance Corporation of India. Under the plan, employee at retirement is eligible for benefit which will be equal to 15 days salary for each completed year of service. In other words, the policy is a defined benefit plan. Accordingly, the aforesaid insurance policy is the plan asset.

Leave encashment –

The leave encashment benefit scheme is a defined benefit plan and is wholly unfunded. Hence, there are no planned assets attributable to the obligation.

5. Research and development expenses consist of personnel expenses and other expenses of Rs.703.42 (previous year Rs.724.12) and Rs.261.77 (previous year Rs.331.92) respectively. Depreciation on Research and Development assets is Rs.42.73 (previous year Rs.47.20) shown under Fixed Assets.

6. a) Balances of Sundry Debtors, Creditors, Loans and Advances and Deposits are subject to confirmation and reconciliation.

b) There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2010. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company

c) There is no amount due and Outstanding, as at 31st March, 2010 to be credited to Investor Education and Protection Fund.

7. The Company is mainly engaged in Consumer Durables business, which as per Accounting Standard (AS-17) “Segment Reporting” is considered the only reportable segment. There is no seperately identifiable geographical segment.

8. a) Provision for Taxation comprises of current tax Rs. 426.03 and deferred tax Rs. 1.95. The current tax includes wealth tax of Rs.1.02 and Fringe Benefit tax of earlier year short paid of Rs. 8.66.

9. Related Party Disclosures

Related parties as defined under Clause-3 of Accounting Standard (AS - 18) “Related Party Disclosures” have been identified on the basis of representation made by key management personnel and information available with the Company.

Names of related parties and description of relationship:

1. Holding Company Guviso Holdings Pvt. Ltd. (amalgamated w.e.f. 15 July, 2008)

2. Subsidiary Akasaka Electronics Ltd._

3. Key Management Personnel

Mr. G.L. Mirchandani - Chairman and Managing Director of

Mirc Electronics Ltd.

Mr. V.J. Mansukhani - Managing Director of Mirc Electronics Ltd.

4. Relatives of Key Management Personnel

Mrs. Gita Mirchandani (Wife of Mr. G.L. Mirchandani) Mrs. Marissa Mansukhani (Wife of Mr. V.J. Mansukhani) Mr. Sasha Mirchandani (Son of Mr. G.L. Mirchandani) Mr. Kaval Mirchandani (Son of Mr. G.L. Mirchandani) Mr. Akshay Mansukhani (Son of Mr. V.J. Mansukhani) Ms. Ayesha Mansukhani (Daughter of Mr. V.J. Mansukhani) G.L. Mirchandani (H.U.F.) V.J. Mansukhani (H.U.F.)

5. Enterprise over which any person described in 3 and 4 is able to exercise significiant influence

Iwai Electronics Pvt. Ltd.

Adino Telecom Ltd.

Gulita Wealth Advisors Pvt. Ltd. (erstwhile Bombay Container Terminals Pvt. Ltd.)

10. Previous year’s figures have been rearranged and regrouped wherever necessary.