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Accounting Policies of NRB Bearings Ltd. Company

Mar 31, 2023

Significant accounting policies

a. Investment in subsidiaries

Investments in subsidiaries are accounted at cost less impairment in accordance with Ind AS 27 - Separate financial
statements. Impairment assessment is carried out based on the principles mentioned in "Impairment of non-financial
assets" below.

b. Foreign Currency Transactions

The functional currency of the Company is Indian National Rupee (INR) which is also the presentation currency. All
other currencies are accounted for as foreign currency.

Transactions denominated in foreign currencies are initially recorded at the exchange rate prevailing at the date of
transaction.

Foreign currency monetary items are reported using the closing exchange rates. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the
initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value is determined.

The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the
recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair
value gain or loss is recognised in other comprehensive income ("OCI") or standalone statement profit and loss are
also recognised in OCI or profit and loss, respectively).

The gain or loss arising on translation of monetary items are recognised in standalone statement of profit and loss
in the period in which they arise except for: exchange difference arising on settlement / restatement of long-term
foreign currency monetary items recognized in the standalone financial statements upto the year ended 31 March 2017

prepared under previous GAAP, which are capitalized as a part of the depreciable property plant and equipment''s to
which the monetary item relates and depreciated over the remaining useful life of such assets. If such monetary items
do not relate to acquisition of depreciable property plant and equipment''s, the exchange difference is amortised over
the maturity period or upto the date of settlement of such monetary item, whichever is earlier and charged to the
standalone statement of profit and loss.

c. Revenue Recognition

The Company derives revenues mainly from sale of manufactured goods. Revenue is recognised on satisfaction of
performance obligation upon transfer of control of promised products to customers in an amount that reflects the
consideration the Company expects to receive in exchange for those products. Revenue is measured based on the
transaction price, which is the consideration, adjusted for discounts, incentives and returns, etc., if any.

Revenue is recognised on satisfaction of performance obligation, i.e. upon transfer of control of promised products
to customers for an amount that reflects the consideration the Company expects to receive in exchange for those
products.

The Company does not expect to have any contracts where the period between the transfer of the promised products
to the customer and payment by the customer exceeds one year. As a consequence, it is not required to adjust any of
the transaction prices for the time value of money.

A Contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the
Company performs by transferring goods or services to a customer before the customer pays consideration or before
payment is due, a contract asset is recognised for the earned consideration that is conditional.

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received
consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the
Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or
the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs
under the contract.

Export entitlement from government authority are recognised in the profit or loss as other operating revenue when the
right to receive is established as per the terms of the scheme in respect of the exports made by the Company with no
future related cost and where there is no significant uncertainty regarding the ultimate collection of the relevant export
proceeds.

d. Other Income

Interest income for all debt instruments is recognised using the effective interest rate method. The effective
interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial assets to the gross carrying amount of a financial asset. When calculating the effective interest rate, the
Company estimates the expected cash flows by considering all the contractual terms of the financial instruments
(for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.
Dividend are recognised in standalone statement of profit or loss only when the right to receive payment is established,
it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the
dividend can be measured reliably.

e. Income tax

The income tax expense or credit for the period (current tax) is the tax payable on the current period''s taxable income
based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted by the end
of the reporting period.

Deferred income tax is recognised in full, using the balance sheet approach, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the standalone financial statements. However,
deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is
also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred
income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of
the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.

Deferred tax assets (Including Minimum Alternate Tax credit) are recognised for all deductible temporary differences
and unused tax losses or credits only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the company has a legally enforceable right to offset and intends either to settle on a net basis, or to
realise the assets and settle the liability simultaneously.

Current and deferred tax is recognised in standalone statement of profit and loss, except to the extent that it relates to
items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.

f. Leases

Measurement and recognition of leases

The Company assesses at contract inception whether a contract is, or contains, a lease. A lease is defined as ''a
contract, or part of a contract, that convey the right to use an asset (the underlying asset) for a period of time in
exchange for consideration''

To apply this definition, the Company assesses whether the contract meets three key criteria which are whether:

• the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified
by being identified at the time the asset is made available to the Company.

• the Company has the right to obtain substantially all of the economic benefits from use of the identified asset
throughout the period of use, considering its rights within the defined scope of the contract.

• the Company has the right to direct the use of the identified asset throughout the period of use. The Company
assesses whether it has the right to direct ''how and for what purpose'' the asset is used throughout the period of
use.

Company as a lessee

At lease commencement date, the Company recognises a right-of-use asset and a lease liability on the standalone
balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease
liability, any initial direct costs incurred by the Company and any lease payments made in advance of the lease
commencement date.

The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the
earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses
the right-of-use asset for impairment when such indicators exist.

At the commencement date, the Company measures the lease liability at the present value of the lease payments
unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the
Company''s incremental borrowing rate.

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in
substance, fixed), and payments arising from options reasonably certain to be exercised. Subsequent to initial
measurement, the liability will be reduced for payments made and increased for interest expenses. It is remeasured to
reflect any reassessment or modification.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset or standalone
statement of profit and loss, as the case may be.

On the balance sheet date, right-of-use assets have been included in property, plant and equipment and lease liabilities
have been included in financial liabilities (non-current and current).

The Company has elected to account for short-term leases and leases of low-value assets using the exemption /
practical expedient given under Ind AS 116, Leases. Instead of recognising a right-of-use asset and lease liability, the
payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term
or on another systematic basis if that basis is more representative of the pattern of the Company''s benefit.

Company as a lessor

Leases for which the Company is a lessor are classified as finance or operating lease.

Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis
over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate
for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on
their nature.

g. Impairment of non-financial assets

The carrying amount of the non-financial assets are reviewed at each balance sheet date if there is any indication of
impairment based on internal /external factors. An impairment loss is recognised whenever the carrying amount of
an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount of the assets (or where
applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price
and its value in use. Impairment loss is recognised in the statement of profit and loss.

After impairment, depreciation / amortisation (where applicable) is provided on the revised carrying amount of the
asset over its remaining useful life.

A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However,
the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual
depreciation / amortisation if there were no impairment.

h. Cash and cash equivalents

For the purpose of presentation in the standalone statement of cash flows, cash and cash equivalents includes cash on
hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities
of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value, and bank overdrafts.

i. Inventories

Raw material and components, work in progress and finished goods are stated at "cost or net realisable value whichever
is lower". Goods in transit are stated at cost. Cost formulae used is weighted average cost. Due allowance is estimated
and made for defective and obsolete items, wherever necessary, based on the past experience of the Company.

Cost comprises of all cost of purchase, cost of conversion and other cost incurred in bringing the inventories to their
present location and condition.

Costs of conversion and other costs are determined on the basis of standard cost method adjusted for variances
between standard costs and actual costs, unless such costs are specifically identifiable, in which case they are included
in the valuation at actuals.

j. Investments and financial assets
Classification

The Company classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income, or through
statement of profit or loss), and

• those measured at amortised cost.

The classification depends on the Company''s business model for managing the financial assets and the contractual
terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive
income. For investments in debt instruments, this will depend on the business model in which the investment is held.
For equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial
recognition to account for the equity investment at fair value through other comprehensive income.

The Company reclassifies debt investments when and only when its business model for managing those assets changes.

Trade receivables are recognised at their transaction price unless those contain significant financing component
determined in accordance with Ind AS 115 and subsequently measured at amortised cost using the effective interest
method, less provision for impairment.

Measurement

At initial recognition, the Company measures a financial asset, except trade receivables, at fair value plus or minus the
transaction costs. In case of financial assets classified at ''fair value through profit or loss'', the initial recognition is done
at fair value in accordance with para 5.1.1 of Ind AS 109. Further, as an exception to these principles, according to
para 5.1.3 read with para 5.1.1 of Ind AS 109, financial assets in the form of trade receivables, are initially measured
at their transaction price (as defined in Ind AS 115) unless those contain a significant financing component determined
in accordance with Ind AS 115.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows
are solely payment of principal and interest.

Measurement of debt instruments

Subsequent measurement of debt instruments depends on the Company''s business model for managing the asset and
the cash flow characteristics of the asset. There are three measurement categories into which the company classifies
its debt instruments:

• Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment that
is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss
when the asset is derecognised or impaired. Interest income from these financial assets is included in other income
using the effective interest rate method.

• Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual
cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal
and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying
amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and
foreign exchange gains and losses which are recognised in profit and loss. Interest income from these financial
assets is included in other income using the effective interest rate method.

• Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured
at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value
through profit or loss and is not part of a hedging relationship is recognised in profit or loss and presented net in the
standalone statement of profit and loss within other gains/(losses) in the period in which it arises. Interest income
from these financial assets is included in other income.

Measurement of equity instruments

The Company subsequently measures all equity investments at fair value. Where the Company''s management has
elected to present fair value gains and losses on equity investments in other comprehensive income, there is no
subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such investments are
recognised in statement of profit and loss as other income when the company''s right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognised in other gain / (losses)
in the standalone statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity
investments measured at FVOCI are not reported separately from other changes in fair value.

Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at
amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been
a significant increase in credit risk.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments,
which requires expected lifetime losses to be recognised from initial recognition of the receivables.

For other financial assets, the Company assesses if the credit risk on those financial assets has increased significantly
since initial recognition. If the credit risk has not increased significantly since initial recognition, the Company measures
the loss allowance at an amount equal to 12-month expected credit losses, else at an amount equal to the lifetime
expected credit losses.

When making this assessment, the Company uses the change in the risk of a default occurring over the expected life
of the financial asset. To make that assessment, the Company compares the risk of a default occurring on the financial
asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the date of initial
recognition and considers reasonable and supportable information, that is available without undue cost or effort, that
is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on
a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low
credit risk at the balance sheet date.

De-recognition of financial assets

A financial asset is derecognised only when

• The Company has transferred the rights to receive cash flows from the financial asset or

• retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation
to pay the cash flows to one or more recipients.

Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks
and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity
has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not
derecognised.

Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership
of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset.
Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of
continuing involvement in the financial asset.

k. Derivatives

The Company enters into certain derivative contracts to hedge risks which are not designated as hedges. Such contracts
are accounted for at fair value through profit or loss and are included in other gains / (losses).

The Company uses cross-currency interest rate swaps to hedge its risks associated with foreign currency fluctuations
relating to highly probable forecast transactions. The Company designates these cross-currency interest rate swaps in
a cash flow hedging relationship by applying the hedge accounting principles.

Derivative contracts are stated at fair value on the balance sheet at each reporting date. At inception of the hedge
relationship, the Company documents the economic relationship between the hedging instrument and the hedged
item, including whether changes in the cash flows of the hedging instrument are expected to offset changes in the
cash flows of the hedged item. The Company documents its risk management objective and strategy for undertaking
its hedging transactions. The Company designates amounts excluding foreign currency basis spread in the hedging
relationship for cross currency interest rate swaps. Changes in the fair value of the derivative contracts that are
designated and effective as hedges of future cash flows are recognised in the cash flow hedge reserve within other
comprehensive income (net of tax), and any ineffective portion is recognised immediately in the statement of profit
and loss. Amounts accumulated in equity are reclassified to the statement of Profit and Loss in the periods in which the
forecasted transactions occur.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no
longer qualifies for hedge accounting. Amounts accumulated in equity are reclassified to the statement of profit and
loss in the periods in which the forecast transactions affect profit or loss. For forecast transactions, any cumulative gain
or loss on the hedging instrument recognised in equity is retained there until the forecast transaction occurs.

If the forecast transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is
immediately transferred to the statement of profit and loss for the year.

l. Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset
and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must
be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company
or the counterparty.

m. Property plant and equipment (including Capital Work-in-Progress) and depreciation

Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost
less depreciation and accumulated impairment losses, if any. Historical costs include cost of acquisition inclusive of all
attributable cost of bringing the assets to their working condition.

Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only
when it is possible that future economic benefits associated with the item will flow to the Company and the cost
of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is
derecognised when replaced. All other repairs and maintenance are charged to standalone statement of profit and loss
during the reporting period in which they are incurred.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and
equipment as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of
these assets

Schedule II to the Companies Act, 2013 prescribes useful lives for property, plant and equipment and allows Companies
to use higher/lower useful lives and residual values if such useful lives and residual values can be technically supported
and justification for difference is disclosed in the standalone financial statements. The management believes that the
depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of property, plant and
equipment.

Depreciation/ amortisation on property plant and equipment''s has been provided on the straight-line method as per
the useful life assessed based on technical advice, taking into account the nature of the asset, the estimated use
of the asset on the basis of management''s best estimation of getting economic benefits from those class of assets.
Depreciation is provided pro rata from the date of addition or upto the date of disposal, as the case may be.

The Company uses its external technical expertise along with historical and industry trends for arriving at the economic
life of an asset.

Assets not yet ready for use are recognised as capital work in progress.

Gains / losses arising from disposals of assets are measured as the difference between the net disposal proceeds and
the carrying value of the asset on the date of disposal and are recognised in the statement of profit and loss, in the
period of disposal.

n. Investment Properties

Property that is held for long-term rental yields or for capital appreciation or both, and that is not used by the Company
for business purposes, is classified as investment property. Investment property is measured initially at its cost,
including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the
asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will
flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance costs are
expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part
is derecognised.

Investment properties are depreciated using the straight-line method over their estimated useful lives. Investment
properties generally have a useful life of 25-40 years. The useful life has been determined based on technical evaluation
performed by the management''s expert.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its investment properties
recognised as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of
investment properties.

o. Intangible assets and amortisation

Intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Cost
includes expenditure that is directly attributable to the acquisition of the intangible assets.

Identifiable intangible assets are recognised when it is probable that future economic benefits attributed to the asset
will flow to the Company and the cost of the asset can be reliably measured.

Software''s are capitalised at the amounts paid to acquire the respective license for use and the costs incurred towards
its development and are amortised, over the period of their useful lives, which is generally considered to be a period
not exceeding three / five years, depending upon the nature of the software. The assets'' useful lives are reviewed at
each financial year end. Amortisation is calculated pro-rata from the date of addition or upto the date of disposal, as
the case may be.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset on date of disposal and are recognised in the statement of
profit and loss when the asset is derecognised. Amortisation is provided pro rata from the date of addition or upto the
date of disposal, as the case may be.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets as at
1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of intangible assets.

Intangible assets under development include intangible assets which are not ready for intended use as on balance
sheet date.

p. Assets held-for-sale

Non-current assets or disposal groups comprising of assets and liabilities are classified as ''held for sale; when all the
following criteria are met -

(i) decision has been made to sell,

(ii) the assets are available for immediate sale in its present condition,

(iii) the assets are being actively marketed, and

(iv) sale has been agreed or is expected to be concluded within 12 months of the balance sheet date.

Assets held for sale are measured at the lower of their carrying amount and the fair value less costs to sell. Assets
classified as held for sale are presented separately in the balance sheet and are not depreciated post such classification.

q. Borrowings and other financial liabilities

Borrowings and other financial liabilities are initially recognised at fair value (net of transaction costs incurred).
Difference between the fair value and the transaction proceeds on initial recognition is recognised as an asset / liability
based on the underlying reason for the difference.

Subsequently all financial liabilities are measured at amortised cost using the effective interest rate method.

Borrowings are removed from the standalone balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished
or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss. The gain / loss is recognised in other equity in case of transaction with
shareholders.

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.

r. Borrowing costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added
to the cost of those assets, until such time the assets are substantially ready for their intended use. All other borrowing
costs are recognised as an expense in statement of profit and loss in the period in which they are incurred.


Mar 31, 2018

a. Investment in subsidiaries

Investments in subsidiaries is accounted at cost less impairment in accordance with Ind AS 27 - Separate financial statements.

b. Foreign Currency Transactions

The functional currency of the Company is Indian national rupee (INR) which is also the presentation currency. All other currencies are accounted for as foreign currency.

Transactions denominated in foreign currencies are initially recorded at the exchange rate prevailing at the date of transaction.

Foreign currency monetary items are reported using the closing exchange rates. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

Exchange differences on monetory items are recognised in Statement of Profit and Loss in the period in which they arise except for: exchange difference arising on settlement / restatement of long-term foreign currency monetary items recognized in the financial statements for the year ended March 31, 2017 prepared under previous GAAP, are capitalized as a part of the depreciable property plant and equipments to which the monetary item relates and depreciated over the remaining useful life of such assets. If such monetary items do not relate to acquisition of depreciable property plant and equipments, the exchange difference is amortised over the maturity period / upto the date of settlement of such monetary item, whichever is earlier and charged to the Statement of Profit and Loss. The un-amortised exchange difference is carried under other equity as “Foreign currency monetary item translation difference account” net of tax effect thereon, where applicable.

c. Revenue Recognition

Revenue is measured at the fair value of consideration received or receivable. Revenue is recognised only when it can be reliably measured and it is probable that future economic benefits will flow to the company.

Revenue from operations includes sale of goods and scrap. Revenue from sale of goods is recognised when significant risk and rewards of ownership of the goods have passed to the customer. Amounts disclosed as revenue are inclusive of excise duty and net of returns, Goods and service tax, value added taxes and amounts collected on behalf of third parties.

d. Other Income

Interest income for all debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.

Dividend is recognised in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the company, and the amount of the dividend can be measured reliably. Interest income is recognised using effective interest method.

e. Income tax

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period.

Deferred income tax is provided in full, using the balance sheet approach, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the company has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

f. Leases As a lessee

Leases where the Company is a lessee and has substantially all the risks and rewards of ownership of the leased assets are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases.

As a lessor

Lease income from operating leases where the Company is a lessor is recognised in income on a straightline basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.

g. Impairment of non-financial assets

The carrying amount of the non-financial assets is reviewed at each Balance Sheet date if there is any indication of impairment based on internal /external factors. An impairment loss is recognised whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount of the assets (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. Impairment loss is recognised in the statement of profit and loss.

After impairment, depreciation / amortisation is provided on the revised carrying amount of the asset over its remaining useful life.

A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation / amortisation if there were no impairment.

h. Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

i. Trade receivable

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment

j. Inventories

Raw Material and components, work in progress, Finished Goods and Traded goods are stated at cost or net realisable value whichever is lower. Good in transit are stated at cost. Cost formulae used is weighted average cost. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the company.

Cost comprises of all cost of purchase, cost of conversion and other cost incurred in bringing the inventories to their present location and condition.

Costs of conversion and other costs are determined on the basis of standard cost method adjusted for variances between standard costs and actual costs, unless such costs are specifically identifiable, in which case they are included in the valuation at actuals.

k. Investments and financial assets Classification

The Company classifies its financial assets in the following measurement categories:

- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

- those measured at amortised cost.

The classification depends on the company’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

The Company reclassifies debt investments when and only when its business model for managing those assets changes.

Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Measurement of debt instruments

Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the company classifies its debt instruments:

- Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is included in finance income using the effective interest rate method.

- Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.

- Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss and presented net in the statement of profit and loss within other gains/(losses) in the period in which it arises. Interest income from these financial assets is included in other income.

Measurement of equity instruments

The company subsequently measures all equity investments at fair value. Where the company’s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such investments are recognised in profit or loss as other income when the company’s right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognised in other gain/ (losses) in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

De-recognition offinancial assets

A financial asset is derecognised only when

- The Company has transferred the rights to receive cash flows from the financial asset or

- retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the Company has transferred an asset, the company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.

Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.

l. Derivatives

The Company enters into certain derivative contracts to hedge risks which are not designated as hedges. Such contracts are accounted for at fair value through profit or loss and are included in other gains / (losses).

m. Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty.

n. Property plant and equipment (including Capital Work-in-Progress)

Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost less depreciation. Historical cost are stated at cost of acquisition inclusive of all attributable cost of bringing the assets to their working condition, less accumulated depreciation and accumulated impairment losses, if any.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is possible that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maitenance are charged to profit or loss during the reporting period in which they are incurred.

Schedule II to the Companies Act, 2013 prescribes useful lives for property, plant and equipments and allows Companies to use higher/lower useful lives and residual values if such useful lives and residual values can be technically supported and justification for difference is disclosed in the financial statements. The management believes that the depreciation rates currently used fairly reflect its estimate ofthe useful lives and residual values of property, plant and equipment.

Depreciation/ amortisation on property plant and equipments has been provided on the straight-line method as per the useful life assessed based on technical advice, taking into account the nature of the asset, the estimated use of the asset on the basis of management’s best estimation of getting economic benefits from those class of assets.

The Company uses its external technical expertise along with historical and industry trends for arriving at the economic life of an asset.

Assets not yet ready for use are recognised as capital work in progress.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

o. Investment Properties

Property that is held for long-term rental yields or for capital appreciation or both, and that is not used by the Company for business purposes, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised.

Investment properties are depreciated using the straight-line method over their estimated useful lives. Investment properties generally have a useful life of 25-40 years. The useful life has been determined based on technical evaluation performed by the management’s expert.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its investment properties recognised as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of investment properties.

p. Intangible Assets

Intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the intangible assets.

Identifiable intangible assets are recognised when it is probable that future economic benefits attributed to the asset will flow to the Company and the cost of the asset can be reliably measured.

Computer softwares are capitalised at the amounts paid to acquire the respective license for use and are amortised over the period of useful lives or period of three years, whichever is less. The assets’ useful lives are reviewed at each financial year end.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.

On transition to Ind AS, the company has elected to continue with the carrying value of all of its intangible assets as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of intangible assets.

q. Borrowings and other financial liabilities

Borrowings and other financial liabilities are initially recognised at fair value (net of transaction costs incurred). Difference between the fair value and the transaction proceeds on initial is recognised as an asset / liability based on the underlying reason for the difference.

Subsequently all financial liabilities are measured at amortised cost using the effective interest rate method.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. The gain / loss is recognised in other equity in case of transaction with shareholders.

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.

r. Borrowing Costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time the assets are substantially ready for their intended use. All other borrowing costs are recognised as an expense in Profit or Loss in the period in which they are incurred.

s. Provisions, Contingent Liabilities and contingent assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using equivalent period government securities interest rate. Unwinding of the discount is recognised in the statement of profit and loss as a finance cost. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Information on contingent liability is disclosed in the Notes to the Financial Statements. Contingent assets are not recognised, but disclosed in the financial statements. However, when the realisation of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognised as an asset.

t. Employee Benefits

A) Short term employee benefits: All employee benefits twelve months of rendering the services are classified as short term employee benefits. Benefits such as salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders the related service.

B) Post employment benefits

i. Defined Contribution Plans: The Company’s superannuation scheme, state governed provident fund and family pension scheme are defined contribution plans. The contribution paid/ payable under the schemes, is recognised during the period in which the employee renders the related service.

ii. Gratuity: The Company has computed its liability towards future payments of gratuity to employees, on actuarial valuation basis which is determined based on project unit credit method and the charge for current year is debited to the Statement of Profit and Loss. Actuarial gains and losses arising on the measurement of defined benefit obligation is charged/ credited to other comprehensive income.

iii. Compensated absences: Liabilities are determined on actuarial valuation basis which is determined based on project unit credit method and the charge for current year is debited to the Statement of Profit and Loss. Actuarial gains and losses arising on the measurement of defined benefit obligation is charged/ credited to profit or loss.

u. Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss (excluding other comprehensive income) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events such as bonus issue, bonus element in a right issue, shares split and reserve share splits (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss (excluding other comprehensive income) for the year attributable to equity share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

v. Operating Cycle

Based on the nature of products / activities of the company and the normal time between acquisition of assets and their realisation 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.

w. Contributed equity

Equity shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

x. Critical estimates and judgements

The preparation of Financial Statements in conformity with Ind AS which requires management to make estimates, assumptions and exercise judgement in applying the accounting policies that affect the reported amount of assets, liabilities and disclosure of contingent liabilities at the date of financial statements and the reported amounts of income and expenses during the year.

The Management believes that these estimates are prudent and reasonable and are based upon the Management’s best knowledge of current events and actions. Actual results could differ from these estimates and differences between actual results and estimates are recognised in the periods in which the results are known or materialised.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

i) Property, plant and equipment, Investment Properties and Intangible Assets:

Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful lives and residual values as per schedule II of the Companies Act, 2013 or are based on the Company’s historical experience with similar assets and taking into account anticipated technological changes, whichever is more appropriate.

ii) Income Tax:

The Company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to an adjustment to the amounts reported in the standalone financial statements.

iii) Contingencies:

Management has estimated the possible outflow of resources at the end of each annual reporting financial year, if any, in respect of contingencies/claim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

iv) Impairmentoffinancialassets:

The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

v) Impairment of non-financial assets:

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash Generating Units (CGU) fair value less costs of disposal and its value in use.

It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent to those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

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. In determining fair value less cost of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value indicators.

vi. Defined benefit obligation

The cost of post-employment benefits is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rate of return on assets, future salary increases and mortality rates. Due to the long term nature of these plans such estimates are subject to significant uncertainty. The assumptions used are disclosed in Note 46.

y. Standard issued but not yet effective Ind AS 115

On 28 March 2018, the Ministry of Corporate Affairs (MCA), in consultation with the National Advisory Committee on Accounting Standards, has issued Companies (Indian Accounting Standards) Amendment Rules, 2018 to amend the Companies (Indian Accounting Standards) Rules, 2015. This results in introduction of Ind AS 115, Revenue from Contracts with customers,that comprehensively revamps the revenue recognition guidance. Consequently, Ind AS 18 and Ind AS11 have been withdrawn, and other standards are suitably modified. The amendment is applicable to the Company from 01 April 2018. The Company is currently assessing the potential impact of this amendment.

Appendix B of Ind AS 21

This appendix is for determining the date of transaction where the entity has received / paid any foreign currency advances. This appendix states that the date of transaction shall be the date on which such advance is received or paid. Therefore these non-monetary advances will not be restated at the time of their adjustment against the particular transaction. The Company is currently assessing the potential impact of this amendment.


Mar 31, 2017

1. Corporate Information:

NRB Bearings Limited (''Company'') incorporated in 1965, is engaged in the manufacture of ball and roller bearings.

2. Significant accounting policies:

(i) Basis of accounting

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention.

(ii) Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

(iii) Fixed assets and depreciation/amortization

(a) All fixed assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working condition for its intended use less accumulated depreciation/amortization and impairment losses, if any.

(b) Depreciation/ amortization on fixed assets has been provided on the straight-line method as per the useful life assessed based on technical advice, taking into account the nature of the asset, the estimated use of the asset on the basis of management''s best estimation of getting economic benefits from those class of assets. The Company uses its external technical expertise along with historical and industry trends for arriving at the economic life of an asset.

(iv) Impairment

The carrying amounts of assets are reviewed at each balance sheet date to ascertain whether there is any indication of impairment based on internal/external factors. Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amount. Recoverable amount is the higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less the cost of disposal.

(v) Foreign currency transactions

(a) Transactions in foreign currency are recorded at the original rates of exchange in force at the time transactions are affected.

(b) Foreign currency denominated assets and liabilities are reported as follows:

(i) Monetary items are translated into rupees at the exchange rates prevailing at the balance sheet date. Non-monetary items such as fixed assets are carried at their historical rupee values.

(ii) Gains/losses arising on settlement of foreign currency transactions or restatement of foreign currency denominated assets and liabilities (monetary items) are recognized in the statement of profit and loss, except for long term assets/liabilities which pertain to acquisition of fixed assets which are adjusted in the cost of fixed assets (Refer Note 44).

(c) In case of forward exchange covers, the premium or discount arising at the inception of the contract is amortized as expense or income over the life of the contract except those relating to hedged long term liabilities which pertain to acquisition of fixed assets which are adjusted to the cost of fixed assets. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or as expense in the period in which such cancellation or renewal is made.

(d) Swap transactions are entered by the Company to hedge its exposure against movements in foreign exchange rates and interest rates.

(e) Gains/losses arising on swap transactions are recognized in the statement of profit and loss.

(vi) Investments

Long-term investments are stated at cost less provision for diminution, other than temporary, in the value of investments, if any. Current investments are stated at lower of cost and fair value.

(vii) Inventories

Inventories are valued at the lower of cost (weighted average method) and net realizable value. Costs of conversion and other costs are determined on the basis of standard cost method adjusted for variances between standard costs and actual costs, unless such costs are specifically identifiable, in which case they are included in the valuation at actual.

(viii) Sale of products

(a) Sales including export benefits thereon are recognized when the products are shipped, i.e. when the seller has transferred to the buyer, the property in the goods, for a price, or all significant risk and rewards of ownership have been transferred to the buyer without the seller retaining any effective control over the goods.

(b) Sales are inclusive of excise duty but exclusive of sales tax and value added tax and are net of sales return.

(ix) Other Income

Interest and rent income are accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

(x) Employee benefits

(a) Short term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

(b) Long term benefits:

(i) Defined Contribution Plans :

1. Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the Company make monthly contributions at a specified percentage of the employees'' eligible salary (currently 12% of employees'' eligible salary).

The contributions are made to the Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the Company has no further obligations beyond making the contribution.

2. Superannuation

The eligible employees of the Company are entitled to receive post employment benefits in respect of superannuation scheme, in which the Company makes monthly contributions at 15% of employees'' eligible salary. The contributions are made to an insurance Company on behalf of the trust managed by the Company (currently HDFC Standard Life Insurance Company Limited). Superannuation scheme is classified as Defined Contribution Plan as the Company has no further obligations beyond making the contribution.

The Company''s contributions to Defined Contribution Plans are charged to the statement of profit and loss as and when incurred.

(ii) Defined Benefit Plan / Other Employee Benefit :

1. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service.

Vesting occurs upon completion of five years of service. The Company has arrangements with insurance companies (currently ICICI Prudential Life Insurance Company Limited, HDFC Standard Life Insurance Company Limited and Kotak Mahindra Old Mutual Life Insurance Company Limited) for future payments of gratuities on behalf of the trusts established for this purpose. The Company accounts for gratuity benefits payable in future based on an independent actuarial valuation as at the year end. Actuarial gains and losses are recognized in the statement of profit and loss.

2. Compensated absences

The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/ availment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation as at year end. Actuarial gains and losses are recognized in the statement of profit and loss.

(xi) Voluntary retirement compensation

Voluntary retirement compensation is fully expensed in the year in which the liability is incurred.

(xii) Research and development expenditure

Capital expenditure on research and development is treated in the same way as other fixed assets. Revenue expenditure is written off in the year in which it is incurred.

(xiii) Borrowing costs

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

(xiv) Operating Lease

Assets taken on lease under which, all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognized as expenses on accrual basis in accordance with the respective lease agreements.

(xv) Taxation

Taxation expenses comprise current tax and deferred tax.

(a) Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961.

(b) Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized only if there is reasonable certainty supported by convincing evidence that there will be sufficient future taxable income available to realize the asset. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realize the assets.

(xvi) Provisions and Contingent Liabilities

A provision is recognized when the Company has a present obligation as a result of past events 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the notes to accounts. Contingent assets are not recognized in the financial statements.

(xvii) Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

(xviii) Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

(xix) Cash and cash equivalents (for purpose of cash flow statement)

The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.

(xx) 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 twelve


Mar 31, 2016

1. Corporate Information:

NRB Bearings Limited incorporated in 1965, is engaged in the manufacture of ball and roller bearings.

2. Significant accounting policies:

(i) Basis of accounting

The financial statements of the Company have been prepared in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section
133 of the Companies Act, 2013, and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as
applicable. The financial statements have been prepared on accrual basis under the historical cost convention.

(ii) Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make
estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent
liabilities) and the reported income and expenses during the year. The Management believes that the estimates
used in preparation of the financial statements are prudent and reasonable. Future results could differ due to
these estimates and the differences between the actual results and the estimates are recognized in the periods
in which the results are known / materialize.

(iii) Fixed assets and depreciation/amortization

(a) All fixed assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its
working condition for its intended use less accumulated depreciation/amortization and impairment losses,
if any.

(b) Depreciation/ amortization on fixed assets has been provided on the straight-line method as per the useful
life assessed based on technical advice, taking into account the nature of the asset, the estimated use of the
asset on the basis of management''s best estimation of getting economic benefits from those class of assets.
The Company uses its external technical expertise along with historical and industry trends for arriving at
the economic life of an asset.

(c) Also see Note 2(xiii) below.
(iv) Impairment

The carrying amounts of assets are reviewed at each balance sheet date to ascertain whether there is any
indication of impairment based on internal/external factors. Impairment loss is provided to the extent the carrying
amount of assets exceeds their recoverable amount. Recoverable amount is the higher of an asset''s net selling
price and its value in use. Value in use is the present value of estimated future cash fows expected to arise from
the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount
obtainable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less
the cost of disposal.


(v) Foreign currency transactions

(a) Transactions in foreign currency are recorded at the original rates of exchange in force at the time
transactions are affected.

(b) Foreign currency denominated assets and liabilities are reported as follows:

(i) Monetary items are translated into rupees at the exchange rates prevailing at the balance sheet date.
Non-monetary items such as fixed assets are carried at their historical rupee values.

(ii) Gains/losses arising on settlement of foreign currency transactions or restatement of foreign currency
denominated assets and liabilities (monetary items) are recognized in the statement of Profit and loss,
except for long term assets/liabilities which pertain to acquisition of fixed assets which are adjusted in
the cost of fixed assets (Refer Note 43).

(c) In case of forward exchange covers, the premium or discount arising at the inception of the contract is
amortized as expense or income over the life of the contract except those relating to hedged long term
liabilities which pertain to acquisition of fixed assets which are adjusted to the cost of fixed assets. Any Profit
or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or
as expense in the period in which such cancellation or renewal is made.

(d) Swap transactions are entered by the Company to hedge its exposure against movements in foreign
exchange rates and interest rates.

(e) Gains/losses arising on swap transactions are recognized in the statement of Profit and loss.

(vi) Investments

Long-term investments are stated at cost less provision for diminution, other than temporary, in the value of
investments, if any. Current investments are stated at lower of cost and fair value.

(vii) Inventories

Inventories are valued at the lower of cost (weighted average method) and net realizable value. Costs of
conversion and other costs are determined on the basis of standard cost method adjusted for variances between
standard costs and actual costs, unless such costs are specifically identifiable, in which case they are included in
the valuation at actual.

(viii) Sale of products

(a) Sales including export benefits thereon are recognized when the products are shipped, i.e. when the seller
has transferred to the buyer, the property in the goods, for a price, or all significant risk and rewards of
ownership have been transferred to the buyer without the seller retaining any effective control over the
goods.

(b) Sales are inclusive of excise duty but exclusive of sales tax and value added tax and are net of sales
return.

(ix) Other Income

Interest and rent income are accounted on accrual basis. Dividend income is accounted for when the right to
receive it is established.

(x) Employee benefits

(a) Short term employee benefits are recognized as an expense at the undiscounted amount in the statement
of Profit and loss of the year in which the related service is rendered.

(b) Long term benefits:

(i) Defined Contribution Plans :

1. Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefits in
respect of provident and family pension fund, in which both employees and the Company make
monthly contributions at a specified percentage of the employees'' eligible salary (currently 12%
of employees'' eligible salary).


The contributions are made to the Regional Provident Fund Commissioner. Provident Fund and
Family Pension Fund are classified as Defined Contribution Plans as the Company has no further
obligations beyond making the contribution.

2. Superannuation

The eligible employees of the Company are entitled to receive post employment benefits in
respect of superannuation scheme, in which the Company makes monthly contributions at
15% of employees'' eligible salary. The contributions are made to an insurance Company on
behalf of the trust managed by the Company (currently HDFC Standard Life Insurance Company
Limited). Superannuation scheme is classified as Defined Contribution Plan as the Company has
no further obligations beyond making the contribution.

The Company''s contributions to Defined Contribution Plans are charged to the statement of
Profit and loss as and when incurred.

(ii) Defined Benefit Plan / Other Employee Benefit :

1. Gratuity

The Company has an obligation towards gratuity, a Defined benefit retirement plan covering
eligible employees. The plan provides a lump sum payment to vested employees at retirement,
death while in employment or on termination of employment of an amount equivalent to 15
days salary payable for each completed year of service.

Vesting occurs upon completion of five years of service. The Company has arrangements
with insurance companies (currently ICICI Prudential Life Insurance Company Limited, HDFC
Standard Life Insurance Company Limited and Kotak Mahindra Old Mutual Life Insurance
Company Limited) for future payments of gratuities on behalf of the trusts established for this
purpose. The Company accounts for gratuity benefits payable in future based on an independent
actuarial valuation as at the year end. Actuarial gains and losses are recognized in the statement
of Profit and loss.

2. Compensated absences

The Company provides for encashment of leave or leave with pay subject to certain rules. The
employees are entitled to accumulate leave subject to certain limits for future encashment/
a ailment. The liability is provided based on the number of days of unutilized leave at each
balance sheet date on the basis of an independent actuarial valuation as at year end. Actuarial
gains and losses are recognized in the statement of Profit and loss.

(xi) Voluntary retirement compensation

Voluntary retirement compensation is fully expensed in the year in which the liability is incurred.

(xii) Research and development expenditure

Capital expenditure on research and development is treated in the same way as other fixed assets. Revenue
expenditure is written off in the year in which it is incurred.

(xiii) Borrowing costs

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are
capitalized. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its
intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

(xiv) Operating Lease

Assets taken on lease under which, all the risks and rewards of ownership are effectively retained by the less or
are classified as operating leases. Lease payments under operating leases are recognized as expenses on
accrual basis in accordance with the respective lease agreements.

(xv) Taxation

Taxation expenses comprise current tax and deferred tax.

(a) Current tax is the amount of tax payable on the taxable income for the year as determined in accordance
with the applicable tax rates and the provisions of the Income Tax Act, 1961.


(b) Deferred tax is recognized on timing differences, being the differences between the taxable income
and the accounting income that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or
substantively enacted as at the reporting date. Deferred tax liabilities are recognized for all timing
differences. Deferred tax assets are recognized only if there is reasonable certainty supported by
convincing evidence that there will be sufficient future taxable income available to realize the asset.

(xvi) Provisions and Contingent Liabilities

A provision is recognized when the Company has a present obligation as a result of past events 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 (excluding retirement benefits) are not discounted to their present value and
are determined based on the best estimate required to settle the obligation at the balance sheet date. These
are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the notes to accounts. Contingent assets are not recognized in the financial statements.

(xvii) Earnings per share

Basic earnings per share is computed by dividing the Profit / (loss) after tax (including the post tax effect of
extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the Profit / (loss) after tax (including the post tax effect
of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net
of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of
equity shares considered for deriving basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive potential equity shares.

(xviii) Cash fow statement

Cash fows are reported using the indirect method, whereby Profit / (loss) before extraordinary items and tax
is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future
cash receipts or payments. The cash fows from operating, investing and financing activities of the Company
are segregated based on the available information.

(xix) Cash and cash equivalents (for purpose of cash fow statement)

The Company considers all highly liquid financial instruments, which are readily convertible into known amounts
of cash that are subject to an insignificant risk of change in value and having original maturities of three months
or less from the date of purchase, to be cash equivalents.

(xx) 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 twelve
months for the purpose of classification of its assets and liabilities as current and non-current.


Mar 31, 2015

1. Basis of accounting

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention.

2. Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

3. Fixed assets and depreciation/amortisation

(a) All fixed assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working condition for its intended use less accumulated depreciation/amortization and impairment losses, if any.

(b) Depreciation/ amortisation on fixed assets has been provided on the straight-line method as per the useful life assessed based on technical advice, taking into account the nature of the asset, the estimated use of the asset on the basis of management''s best estimation of getting economic benefits from those class of assets. The Company uses its external technical expertise along with historical and industry trends for arriving at the economic life on an asset.

4. Impairment

The carrying amounts of assets are reviewed at each balance sheet date to ascertain whether there is any indication of impairment based on internal/external factors. Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amount. Recoverable amount is the higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less the cost of disposal.

5. Foreign currency transactions

i. Transactions in foreign currency are recorded at the original rates of exchange in force at the time transactions are effected.

ii. Foreign currency denominated assets and liabilities are reported as follows:

a) Monetary items are translated into rupees at the exchange rates prevailing at the balance sheet date. Non-monetary items such as fixed assets are carried at their historical rupee values.

b) Gains/losses arising on settlement of foreign currency transactions or restatement of foreign currency denominated assets and liabilities (monetary items) are recognised in the statement of profit and loss, except for long term assets/liabilities which pertain to acquisition of fixed assets which are adjusted in the cost of fixed assets (Refer Note 43).

iii. In case of forward exchange covers, the premium or discount arising at the inception of the contract is amortised as expense or income over the life of the contract except those relating to hedged long term liabilities which pertain to acquisition of fixed assets which are adjusted to the cost of fixed assets. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognised as income or as expense in the period in which such cancellation or renewal is made.

iv. Swap transactions are entered by the Company to hedge its exposure against movements in foreign exchange rates and interest rates.

v. Gains/losses arising on swap transactions are recognized in the statement of profit and loss.

6. Investments

Long-term investments are stated at cost less provision for diminution, other than temporary, in the value of investments, if any. Current investments are stated at lower of cost and fair value.

7. Inventories

Inventories are valued at the lower of cost (weighted average method) and net realisable value. Costs of conversion and other costs are determined on the basis of standard cost method adjusted for variances between standard costs and actual costs, unless such costs are specifically identifiable, in which case they are included in the valuation at actuals.

8. Sale of products

(a) Sales are recognized when the seller has transferred to the buyer, the property in the goods, for a price, or all significant risk and rewards of ownership have been transferred to the buyer without the seller retaining any effective control over the goods.

(b) Sales are inclusive of excise duty but exclusive of sales tax and value added tax and are net of sales return.

9. Other Income

Interest and rent income are accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

10. Employee benefits

(a) Short term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

(b) Long term benefits:

(i) Defined Contribution Plans :

1. Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the Company make monthly contributions at a specified percentage of the employees'' eligible salary (currently 12% of employees'' eligible salary).

The contributions are made to the Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the Company has no further obligations beyond making the contribution.

2. Superannuation

The eligible employees of the Company are entitled to receive post employment benefits in respect of superannuation scheme, in which the Company makes monthly contributions at 15% of employees'' eligible salary. The contributions are made to an insurance Company on behalf of the trust managed by the Company (currently HDFC Standard Life Insurance Company Limited). Superannuation scheme is classified as Defined Contribution Plan as the Company has no further obligations beyond making the contribution.

The Company''s contributions to Defined Contribution Plans are charged to the statement of profit and loss as and when incurred.

(ii) Defined Benefit Plan / Other Employee Benefit :

1. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service.

Vesting occurs upon completion of five years of service. The Company has arrangements with insurance companies (currently ICICI Prudential Life Insurance Company Limited, HDFC Standard Life Insurance Company Limited and Kotak Mahindra Old Mutual Life Insurance Company Limited) for future payments of gratuities on behalf of the trusts established for this purpose. The Company accounts for gratuity benefits payable in future based on an independent actuarial valuation as at the year end. Actuarial gains and losses are recognized in the statement of profit and loss.

2. Compensated absences

The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/ availment. The liability is provided based on the number of days of unutilised leave at each balance sheet date on the basis of an independent actuarial valuation as at year end. Actuarial gains and losses are recognized in the statement of profit and loss.

11. Voluntary retirement compensation

Voluntary retirement compensation is fully expensed in the year in which the liability is incurred.

12. Research and development expenditure

Capital expenditure on research and development is treated in the same way as other fixed assets. Revenue expenditure is written off in the year in which it is incurred.

13. Borrowing costs

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

14. Operating Lease

Assets taken on lease under which, all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as expenses on accrual basis in accordance with the respective lease agreements.

15. Taxation

Taxation expenses comprise current tax and deferred tax.

(a) Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961.

(b) Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised.

16. Provisions and Contingent Liabilities

A provision is recognised when the Company has a present obligation as a result of past events 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 (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the notes to accounts. Contingent assets are not recognised in the financial statements.

17. Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

18. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

19. Cash and cash equivalents (for purpose of cash flow statement)

The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.

20. Operating Cycle

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

iv) Rights attached to equity shares:

a) Right to receive dividend as may be approved by the Board / Annual General Meeting.

b) The equity shares are not repayable except in the case of a buy back, reduction of capital or winding up in terms of the provisions of the Companies Act, 2013

c) Every member of the Company holding equity shares has a right to attend the General Meeting of the Company and has a right to speak and on a show of hands, has one vote if he is present in person and on a poll shall have the right to vote in proportion to his share of the paid- up capital of the Company.

Footnote:

There are no amounts due to the suppliers covered under Micro, Small and Medium Enterprise Development Act, 2006; this information takes into account only those suppliers who have responded to the enquiries made by the Company for this purpose. This has been relied upon by auditors.

Footnote:

The Company had in its Board meeting dated 22nd May, 2014, accepted the proposal of its Subsidiary to change the redemption terms of Preference Shares, earlier scheduled to be fully redeemed on 18th June, 2014. As per the revised terms, Rs. 150 lacs was redeemed on 18th June, 2014 and the balance of Rs 50 lacs will be redeemed equally over the period of two years on 18th June, 2015 and 18th June, 2016 with an enhanced coupon rate of 11% p.a. effective 18th June, 2014 till its redemption. Accordingly, investment of Rs 25 lacs in Preference Shares of Subsidiary is classified as Current and balance of Rs 25 lacs is classified as Non-Current.


Mar 31, 2013

(i) Basis of accounting

The financial statements are prepared under historical cost convention on an accrual basis and are in accordance with the requirements of the Companies Act, 1956, and comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the said Act. The accounting policies adopted in preparation of the financial statements are consistent with those followed in the previous year.

(ii) Use of estimates

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known / materialized.

(iii) Fixed assets and depreciation/amortisation

(a) All fixed assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working condition for its intended use less accumulated depreciation.

(b) Depreciation/amortisation for the year has been provided on the straight line method, in the manner and at the rates prescribed in Schedule XIV to the Companies Act, 1956, except that leasehold land is amortised over the period of the lease and computer software is amortised over a period of 36 months.

(c) Also see Note 2(xiii) below.

(iv) Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amount. Recoverable amount is the higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less the cost of disposal.

(v) Foreign currency transactions

(a) Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. In respect of monetary items denominated in foreign currencies, exchange differences arising out of settlement or on conversion at the closing rate are recognised in the statement of profit and loss. Exchange differences arising on long term foreign currency monetary items relating to acquisition of depreciable capital assets, are adjusted to the carrying amount of fixed assets.

(b) Swap transactions are entered by the company to hedge its exposure against movements in foreign exchange rates and interest rates.

(c) Gains/losses arising on swap transactions are recognized in the statement of profit and loss.

(vi) Investments

Long-term investments are stated at cost less provision for diminution, other than temporary, in the value of investments, if any. Current investments are stated at lower of cost and fair value.

(vii) Inventories

Inventories are valued at the lower of cost (weighted average method) and net realisable value. Costs of conversion and other costs are determined on the basis of standard cost method adjusted for variances between standard costs and actual costs, unless such costs are specifically identifiable, in which case they are included in the valuation at actuals.

(viii) Sale of products

(a) Sales are recognized in accordance with Accounting Standard 9 viz. when the seller has transferred to the buyer, the property in the goods, for a price, or all significant risk and rewards of ownership have been transferred to the buyer without the seller retaining any effective control over the goods.

(b) Sales are inclusive of excise duty and are net of sales return.

(ix) Other Income

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

(x) Employee benefits

(a) Short term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

(b) Long term benefits:

(i) Defined Contribution Plans :

1. Provident and Family Pension Fund

The eligible employees of the company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the company make monthly contributions at a specified percentage of the employees'' eligible salary (currently 12% of employees'' eligible salary). The contributions are made to the Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the company has no further obligations beyond making the contribution.

2. Superannuation

The eligible employees of the company are entitled to receive post employment benefits in respect of superannuation scheme, in which the company makes quarterly contributions at 15% of employees'' eligible salary. The contributions are made to an insurance company on behalf of the trust managed by the company (currently HDFC Standard Life Insurance Company Limited). Superannuation scheme is classified as Defined Contribution Plan as the Company has no further obligations beyond making the contribution.

The Company''s contributions to Defined Contribution Plans are charged to the statement of profit and loss as incurred.

(ii) Defined Benefit Plan / Other Employee Benefit :

1. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service.

Vesting occurs upon completion of five years of service. The Company has arrangements with insurance companies (currently ICICI Prudential Life Insurance Company Limited and HDFC Standard Life Insurance Company Limited) for future payments of gratuities on behalf of the trusts established for this purpose. The Company accounts for gratuity benefits payable in future based on an independent actuarial valuation as at the year end. Actuarial gains and losses are recognized in the statement of profit and loss.

2. Compensated absences

The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/ availment. The liability is provided based on the number of days of unutilised leave at each balance sheet date on the basis of an independent actuarial valuation as at year end. Actuarial gains and losses are recognized in the statement of profit and loss.

(xi) Voluntary retirement compensation

Voluntary retirement compensation is fully expensed in the year in which the liability is incurred.

(xii) Research and development expenditure

Capital expenditure on research and development is treated in the same way as other fixed assets. Revenue expenditure is written off in the year in which it is incurred.

(xiii) Borrowing costs

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

(xiv) Operating Lease

Assets taken on lease under which, all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as expenses on accrual basis in accordance with the respective lease agreements.

(xv) Taxation

Taxation expenses comprise current tax and deferred tax.

(a) 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.

(b) Deferred tax is recognized on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(xvi) Contingent Liabilities

Contingent liabilities are disclosed in the notes on accounts. Provision is made in the accounts if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

(xvii) Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

(xviii) Operating Cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation 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.


Mar 31, 2012

(i) Basis of accounting

The financial statements are prepared under historical cost convention on an accrual basis and are in accordance with the requirements of the Companies Act, 1956, and comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the said Act. The accounting policies adopted in preparation of the financial statements are consistent with those followed in the previous year.

(ii) Use of estimates

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known / materialized.

(iii) Fixed assets and depreciation/amortisation

(a) All fixed assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working condition for its intended use less accumulated depreciation.

(b) Depreciation/amortisation for the year has been provided on the straight line method, in the manner and at the rates prescribed in Schedule XIV to the Companies Act, 1956, except that leasehold land is amortised over the period of the lease and computer software is amortised over a period of 36 months.

(c) Also see Note 2(xii) below.

(iv) Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amount. Recoverable amount is the higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of an asset in an arm's length transaction between knowledgeable, willing parties, less the cost of disposal.

(v) Foreign currency transactions

(a) Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. In respect of monetary items denominated in foreign currencies, exchange differences arising out of settlement or on conversion at the closing rate are recognised in the statement of profit and loss. Exchange differences arising on long term foreign currency monetary items relating to acquisition of depreciable capital assets, are adjusted to the carrying amount of fixed assets.

(b) Swap transactions are entered by the company to hedge its exposure against movements in foreign exchange rates and interest rates.

(c) Gains/losses arising on swap transactions are recognized in the statement of profit and loss.

(vi) Investments

Long-term investments are stated at cost less provision for diminution, other than temporary, in the value of investments, if any. Current investments are stated at lower of cost and fair value.

(vii) Inventories

Inventories are valued at the lower of cost (weighted average method) and net realisable value. Costs of conversion and other costs are determined on the basis of standard cost method adjusted for variances between standard costs and actual costs, unless such costs are specifically identifable, in which case they are included in the valuation at actual.

(viii) Sale of products

(a) Sales are recognized in accordance with Accounting Standard 9 viz. when the seller has transferred to the buyer, the property in the goods, for a price, or all significant risk and rewards of ownership have been transferred to the buyer without the seller retaining any effective control over the goods.

(b) Sales are inclusive of excise duty and are net of sales return.

(ix) Employee benefits

(a) Short term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

(b) Long term benefits:

(i) Defend Contribution Plans :

1. Provident and Family Pension Fund

The eligible employees of the company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the company make monthly contributions at a specified percentage of the employees' eligible salary (currently 12% of employees' eligible salary). The contributions are made to the Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as Defend Contribution Plans as the company has no further obligations beyond making the contribution.

2. Superannuation

The eligible employees of the company are entitled to receive post employment benefits in respect of superannuation scheme, in which the company makes quarterly contributions at 15% of employees' eligible salary. The contributions are made to an insurance company on behalf of the trust managed by the company (currently HDFC Standard Life Insurance Company Limited). Superannuation scheme is classified as Defend Contribution Plan as the Company has no further obligations beyond making the contribution.

The Company's contributions to Defend Contribution Plans are charged to the statement of profit and loss as incurred.

(ii) Defend Benefit Plan / Other Employee Benefit :

1. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company has arrangements with the insurance company (currently HDFC Standard Life Insurance Company Limited) for future payments of gratuities on behalf of the trusts established for this purpose. The Company accounts for gratuity benefits payable in future based on an independent actuarial valuation as at the year end. Actuarial gains and losses are recognized in the statement of profit and loss.

2. Compensated absences

The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/ a ailment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation as at year end. Actuarial gains and losses are recognized in the statement of profit and loss.

(x) voluntary retirement compensation

Voluntary retirement compensation is fully expensed in the year in which the liability is incurred.

(xi) Research and development expenditure

Capital expenditure on research and development is treated in the same way as other fixed assets. Revenue expenditure is written off in the year in which it is incurred.

(xii) Borrowing costs

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

(xiii) Operating Lease

Assets taken on lease under which, all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as expenses on accrual basis in accordance with the respective lease agreements.

(xiv) Taxation

Taxation expenses comprise current tax and deferred tax.

(a) 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.

(b) Deferred tax is recognized on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(xv) Contingent Liabilities

Contingent liabilities are disclosed in the notes on accounts. Provision is made in the accounts if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

(xvi) Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.


Mar 31, 2011

1. Basis of accounting

The financial statements are prepared under historical cost convention on an accrual basis and are in accordance with the requirements of the Companies Act, 1956, and comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the said Act.

2. Use of estimates

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known / materialized.

3. Fixed assets and depreciation

(a) All fixed assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working condition for its intended use less accumulated depreciation.

(b) Depreciation for the year has been provided on the straight line method, in the manner and at the rates prescribed in Schedule XIV to the Companies Act, 1956, except that leasehold land is amortised over the period of the lease and computer software is amortised over a period of 36 months.

(c) Also see Note 12 below.

4. Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amount. Recoverable amount is the higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of an asset in an arm's length transaction between knowledgeable, willing parties, less the cost of disposal.

5. Foreign currency transactions

(a) Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. In respect of monetary items denominated in foreign currencies, exchange differences arising out of settlement or on conversion at the closing rate are recognised in the profit and loss account. Exchange differences arising on long term foreign currency monetary items relating to acquisition of depreciable capital assets, are adjusted to the carrying amount of fixed assets.

(b) Swap transactions are entered by the company to hedge its exposure against movements in foreign exchange rates and interest rates.

(c) Gains/losses arising on swap transactions are recognized in the profit and loss account.

6. Investments

Long-term investments are stated at cost less provision for diminution in the value of investments, if any. Current investments are stated at lower of cost and fair value.

7. Inventories

Stores and spare parts and Stock-in-trade comprising of raw materials, bought out components & packing materials, manufactured components, work-in-progress and finished goods are valued at the lower of cost and net realisable value. Material costs included in the valuation of stock-in-trade are determined on the basis of weighted average method. Costs of conversion and other costs are determined on the basis of standard cost method adjusted for variances between standard costs and actual costs, unless such costs are specifically identifiable, in which case they are included in the valuation at actuals.

8. Sales

(a) Sales are recognized in accordance with Accounting Standard 9 viz. when the seller has transferred to the buyer, the property in the goods, for a price, or all significant risk and rewards of ownership have been transferred to the buyer without the seller retaining any effective control over the goods.

(b) Sales are inclusive of excise duty and are net of sales return.

9. Employee benefits

(a) Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

(b) Long term benefits

(i) Defined Contribution Plans :

1. Provident and Family Pension Fund

The eligible employees of the company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the company make monthly contributions at a specified percentage of the employees' eligible salary (currently 12% of employees' eligible salary). The contributions are made to the Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the company has no further obligations beyond making the contribution.

2. Superannuation

The eligible employees of the company are entitled to receive post employment benefits in respect of superannuation scheme, in which the company makes quarterly contributions at 15% of employees' eligible salary. The contributions are made to an insurance company on behalf of the trust managed by the company (currently HDFC Standard Life Insurance Company Limited). Superannuation scheme is classified as Defined Contribution Plan as the Company has no further obligations beyond making the contribution.

The Company's contributions to Defined Contribution Plans are charged to profit and loss account as incurred.

(ii) Defined Benefit Plans / Other Employee Benefit:

1. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company has arrangements with the insurance company (currently HDFC Standard Life Insurance Company Limited) for future payments of gratuities on behalf of the trusts established for this purpose. The Company accounts for gratuity benefits payable in future based on an independent actuarial valuation as at the year end. Actuarial gains and losses are recognized in the profit and loss account.

2. Compensated absences

The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/availment. The liability is provided based on the number of days of unutilised leave at each balance sheet date on the basis of an independent actuarial valuation as at year end. Actuarial gains and losses are recognized in the profit and loss account.

10. Voluntary retirement compensation

Voluntary retirement compensation is fully expensed in the year in which the liability is incurred.

11. Research and development expenditure

Capital expenditure on research and development is treated in the same way as other fixed assets. Revenue expenditure is written off in the year in which it is incurred.

12. Borrowing costs

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

13. Operating Lease

Assets taken on lease under which, all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as expenses on accrual basis in accordance with the respective lease agreements.

14. Taxation

Taxation expenses comprise current tax and deferred tax.

(a) 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.

(b) Deferred tax is recognized on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

15. Contingent Liabilities

Contingent liabilities are disclosed in the notes on accounts. Provision is made in the accounts if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.


Mar 31, 2010

1. Basis of accounting

The financial statements are prepared under historical cost convention on an accrual basis and are in accordance with the requirements of the Companies Act, 1956, and comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the said Act.

2. Use of estimates

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known / materialized.

3. Fixed assets and depreciation

(a) All fixed assets are stated at cost of acquisition, including any attributable cost for bringing the asset to its working condition for its intended use less accumulated depreciation.

(b) Depreciation for the year has been provided on the straight line method, in the manner and at the rates prescribed in Schedule XIV to the Companies Act, 1956, except that leasehold land is amortised over the period of the lease and computer software is amortised over a period of 36 months.

(c) Also see Note 12 below.

4. Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amount. Recoverable amount is the higher of an assets net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of an asset in an arms length transaction between knowledgeable, willing parties, less the cost of disposal.

5. Foreign currency transactions

(a) Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. In respect of monetary items denominated in foreign currencies, exchange differences arising out of settlement or on conversion at the closing rate are recognised in the profit and loss account. Exchange differences arising on long term foreign currency monetary items relating to acquisition of depreciable capital assets, are adjusted to the carrying amount of fixed assets.

(b) Swap transactions are entered by the company to hedge its exposure against movements in foreign exchange rates and interest rates.

(c) Gains/losses arising on swap transactions are recognized in the profit and loss account.

6. Investments

Long-term investments are stated at cost less provision for diminution in the value of investments, if any. Current investments are stated at lower of cost and fair value.

7. Inventories

Stores and spare parts and Stock-in-trade comprising of raw materials, bought out components & packing materials, manufactured components, work-in-progress and finished goods are valued at the lower of cost

and net realisable value. Material costs included in the valuation of stock-in-trade are determined on the basis of weighted average method. Costs of conversion and other costs are determined on the basis of standard cost method adjusted for variances between standard costs and actual costs, unless such costs are specifically identifiable, in which case they are included in the valuation at actuals.

8. Sales

(a) Sales are recognized in accordance with Accounting Standard 9 viz. when the seller has transferred to the buyer, the property in the goods, for a price, or all significant risk and rewards of ownership have been transferred to the buyer without the seller retaining any effective control over the goods.

(b) Sales are inclusive of excise duty and are net of sales returns.

9. Employee benefits

(a) Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

(b) Long term benefits

(i) Defined Contribution Plans :

1. Provident and Family Pension Fund

The eligible employees of the company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the company make monthly contributions at a specified percentage of the employees eligible salary (currently 12% of employees eligible salary). The contributions are made to the Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the company has no further obligations beyond making the contribution.

2. Superannuation

The eligible employees of the company are entitled to receive post employment benefits in respect of superannuation scheme, in which the company makes quarterly contributions at 15% of employees eligible salary. The contributions are made to an insurance company on behalf of the trust managed by the company (currently HDFC Standard Life Insurance Company Limited). Superannuation scheme is classified as Defined Contribution Plan as the Company has no further obligations beyond making the contribution.

The Companys contributions to Defined Contribution Plans are charged to profit and loss account as incurred.

(ii) Defined Benefit Plans / Other Employee Benefit:

1. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company has arrangements with the insurance company (currently HDFC Standard Life Insurance Company Limited) for future payments of gratuities on behalf of the trusts established for this purpose. The ComDanv accounts for

gratuity benefits payable in future based on an independent actuarial valuation as at the year end. Actuarial gains and losses are recognized in the profit and loss account.

2. Compensated absences

The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/availment. The liability is provided based on the number of days of unutilised leave at each balance sheet date on the basis of an independent actuarial valuation as at year end. Actuarial gains and losses are recognized in the profit and loss account.

10. Voluntary retirement compensation

Voluntary retirement compensation is fully expensed in the year in which the liability is incurred.

11. Research and development expenditure

Capital expenditure on research and development is treated in the same way as other fixed assets. Revenue expenditure is written off in the year in which it is incurred.

12. Borrowing costs

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

13. Operating Lease

Assets taken on lease under which, all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as expenses on accrual basis in accordance with the respective lease agreements.

14. Taxation

Taxation expenses comprise current tax, deferred tax and fringe benefit tax.

(a) 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.

(b) Deferred tax is recognized on timing differences between taxable.income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(c) Fringe benefit tax is the amount of tax payable on the value of benefits provided to employees for the year as determined in accordance with the provisions of the Income-tax Act, 1961.

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