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Accounting Policies of Cholamandalam Financial Holdings Ltd. Company

Mar 31, 2023

Note - 1. Background and Corporate Information

Cholamandalam Financial Holdings Limited (âthe Companyâ) (CIN: L65100TN1949PLC002905) is a Public Limited Company domiciled in India. The Company is listed on BSE Limited and National Stock Exchange of India Limited. The Registered Office of the Company is located at Dare House, No.234, NSC Bose Road, Chennai-600 001, Tamil Nadu.

Pursuant to a scheme of arrangement (âthe Schemeâ) the manufacturing business undertaking of the Company was vested in/ transferred to Tube Investments of India Limited (âthe Resulting Companyâ) vide the order of the National Company Law Tribunal, Chennai (âNCLTâ) dated July 17, 2017. The Scheme had an appointed date of April 1, 2016 and came into effect from August 1, 2017. The Company received certificate of registration dated January 06, 2020 as a non-deposit taking Systemically Important Core Investment Company (CIC-ND-SI), from the Reserve Bank of India (âRBIâ) to carry on the business as a Non-Banking Financial Institution.

The Company undertakes financial services business through its Subsidiaries - Cholamandalam MS General Insurance Company Limited for general insurance business and Cholamandalam Investment and Finance Company Limited for lending operations. Risk advisory services is carried out through a joint venture entity Cholamandalam MS Risk Services Limited.

The standalone financial statements are presented in Indian Rupees which is also functional currency of the Company and all values are rounded to the nearest crore, except when otherwise indicated.

The standalone financial statements were authorised for issue in accordance with a resolution of the directors on May 12, 2023.

Note - 1.1 Basis of preparation

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.

The standalone financial statements have been prepared on a historical cost basis, except for

fair value through other comprehensive income (âFVTOCIâ) instruments and certain financial assets and financial liabilities measured at fair value (refer accounting policy regarding financial instruments)

The regulatory disclosures as required by Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016 to be included as a part of the Notes to Accounts are prepared based on Ind AS standalone financial statements in line with RBI notifications DOR (NBFC).CC.PD. No.109/22.10.106/2019-20 dated March 13, 2020 and DoR (NBFC) (PD) CC. No. 117/03.10.001/2020-21 dated August 13, 2020. Refer Note 30 for the disclosures.

Note - 1.2 Presentation of financial statements

The Company presents its balance sheet in order of liquidity. An analysis regarding recovery or settlement within 12 months after the reporting date (current) and more than 12 months after the reporting date (non-current) is presented in Note 20 to the financial statements.

Financial assets and financial liabilities are generally reported gross in the balance sheet. They are only offset and reported net when, in addition to having an unconditional legally enforceable right to offset the recognised amounts without being contingent on a future event, the parties also intend to settle on a net basis in all the following circumstances:

(i) The normal course of business

(ii) The event of default

(iii) The event of insolvency or bankruptcy of the Company and/or its counterparties

Note - 1.3 Standards issued but not yet effective

There are no new standards / amendments to the standards that have been issued but not yet effective as at March 31,2023.

Note - 2. Significant accounting policiesNote - 2.1 Financial instruments - initial recognitionNote - 2.1.1 Date of recognition

Financial assets and liabilities are initially recognised on the trade date, i.e., the date that the Company becomes a party to the contractual provisions of the instrument. The Company recognises debt

securities and borrowings when funds reach the Company.

Note - 2.1.2 Initial measurement of financial instruments

The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the instruments. Financial instruments are initially measured at their fair value, except in the case of financial assets and financial liabilities recorded at Fair Value Through Profit & Loss (FVTPL), transaction costs are added to, or subtracted from, this amount.

Note - 2.1.3 Measurement categories of financial assets and liabilities

The Company classifies all its financial assets based on the business model for managing the assets and the assetâs contractual terms, measured at either (a) Amortised cost (b) FVTPL or (c) FVTOCI

Note - 2.2. Financial assets and liabilitiesNote - 2.2.1 Bank balances and financial investments at amortised cost

The Company measures Bank balances and other financial investments at amortised cost if both of the following conditions are met:

(i) the financial asset is held within a business model with the objective to hold financial assets to collect contractual cash flows; and

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

The details of these conditions are outlined below.

Note - 2.2.2 Business model assessment

The Company determines its business model at the level that best reflects how it manages Companyâs financial assets to achieve its business objective.

The Companyâs business model is not assessed on an instrument-by-instrument basis, but at a higher level of aggregated portfolios and is based on observable factors such as:

(i) how the performance of the business model and the financial assets held within that

business model are evaluated and reported to the entityâs key management personnel

(ii) the risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way those risks are managed

(iii) how managers of the business are compensated (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected)

(iv) the expected frequency, value and timing of sales are also important aspects of the Companyâs assessment

The business model assessment is based on reasonably expected scenarios without taking âworst caseâ or âstress caseâ scenarios into account. If cash flows after initial recognition are realised in a way that is different from the Companyâs original expectations, the Company does not change the classification of the remaining financial assets held in that business model but incorporates such information when assessing newly originated or newly purchased financial assets going forward.

Note - 2.2.3 The SPPI Test

As a second step of its classification process the Company assesses the contractual terms of financial assets to identify whether they meet the solely payments of principal and interest (SPPI) test.

âPrincipalâ for the purpose of this test is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset (for example, if there are repayments of principal or amortisation of the premium/discount).

The most significant elements of interest within a lending arrangement are typically the consideration for the time value of money and credit risk. To make the SPPI assessment, the Company applies judgement and considers relevant factors such as the currency in which the financial asset is denominated, and the period for which the interest rate is set.

In contrast, contractual terms that introduce a more than de minimis exposure to risks or volatility in the contractual cash flows that are unrelated to a basic

lending arrangement do not give rise to contractual cash flows that are solely payments of principal and interest on the amount outstanding. In such cases, the financial asset is required to be measured at FVTPL.

Note - 2.3. Equity instruments at Fair Value Through

Other Comprehensive Income (FVTOCI)

The Company subsequently measures all equity investments at fair value through statement of profit and loss, unless the Companyâs management has elected to classify irrevocably some of its equity investments as equity instruments at FVTOCI, when such instruments meet the definition of Equity under Ind AS 32 Financial Instruments: Presentation and are not held for trading but are held for strategic purpose. Such classification is determined on an instrument-by-instrument basis.

Gains and losses on these equity instruments are never recycled to statement of profit and loss. Dividends are recognised in statement of profit and loss as dividend income when the right of the payment has been established, except when the Company benefits from such proceeds as a recovery of part of the cost of the instrument, in which case, such gains are recorded in Other Comprehensive Income. Equity instruments at FVTOCI are not subject to an impairment assessment.

Investment in Subsidiaries and Joint Ventures are carried at Cost in the Financial Statements as permitted under Ind AS 27. These investments are assessed for impairment in the manner outlined in Note 2.16

Note - 2.4. Debt securities and other borrowed funds

After initial measurement, debt issued and other borrowed funds are subsequently measured at amortised cost. Amortised cost is calculated by taking the costs that are an integral part of the Effective Interest Rate.

Note - 2.5. Derecognition of financial assets and

liabilities

Note - 2.5.1 Financial assets

The Company also derecognises the financial asset if it has both transferred the financial asset and the transfer qualifies for derecognition.

Note - 2.5.2 Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference between the carrying value of the original financial liability and the consideration paid is recognised in the statement of profit and loss.

Note - 2.6 Recognition of Income

A. Revenue (other than interest income and dividend income covered by Ind AS 109 -Financial Instruments) is measured at fair value of the consideration received or receivable.

B. The Company recognises revenue from contracts with customers based on a five-step model as set out in Ind AS 115:

Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.

Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.

Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one

performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.

Step 5: Recognise revenue when (or as) the Company satisfies a performance obligation.

Note - 2.6.1 Brand fee

Brand fee income is recognised as and when the services are rendered in accordance with the terms and conditions of the relevant agreement.

Note - 2.6.2 Interest income covered by Ind AS 109

Under Ind AS 109, interest income is recorded using the effective interest rate (âEIRâ) method for all financial instruments measured at amortised cost. The EIR is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument or, when appropriate, a shorter period, to the net carrying amount of the financial asset. The EIR (and therefore, the amortised cost of the asset) is calculated by taking into account of fees and costs that are an integral part of the EIR.

Note - 2.6.3 Dividend income covered by Ind AS 109

Dividend income (including from FVTOCI investments) is recognised when the Companyâs right to receive the payment is established, it is probable that the economic benefits associated with the dividend will flow to the entity and the amount of the dividend can be measured reliably. This is generally when the shareholders approve the dividend.

Note - 2.7 TaxesNote - 2.7.1 Current tax

Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from, or paid to, the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted, or substantively enacted, by the reporting date and generates taxable income.

Current income tax relating to items recognised outside statement of profit and loss is recognised

outside statement of profit and loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Companyâs management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

The appendix addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of Ind AS 12 Income Taxes. It does not apply to taxes or levies outside the scope of Ind AS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Appendix specifically addresses the following:

(i) Whether an entity considers uncertain tax treatments separately

(ii) The assumptions an entity makes about the examination of tax treatments by taxation authorities

(iii) How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates

(iv) How an entity considers changes in facts and circumstances

The Company determines whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty.

The Company applies significant judgement in identifying uncertainties over income tax treatments. Upon adoption of Appendix C to Ind AS 12, the Company considered whether it has uncertain tax positions. The Company is of the view that it is probable that its tax treatments will be accepted by the taxation authorities. Matters addressed in the Appendix did not have an impact on the standalone financial statements of the Company.

Note - 2.7.2 Deferred Tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

(i) when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

(ii) i n respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised

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.

date. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Note - 2.8 Share Based Payments

Stock options are granted to the employees of the Resulting Company under the stock option scheme. The costs of stock options granted to the employees (equity-settled awards) of the Company are measured at the fair value of the equity instruments granted. For each stock option, the measurement of fair value is performed on the grant date. The grant date is the date on which the Company and the employees agree to the stock option scheme. The fair value so determined is revised only if the stock option scheme is modified in a manner that is beneficial to the employees. The compensation cost related to the Stock options allotted are being accounted for by the Resulting Company.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. If the options vests in instalments (i.e., the options vest pro rata over the service period), then each instalment is treated as a separate share option grant because each instalment has a different vesting period.

Note - 2.9 Provisions and Contingent Liabilities

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. When the effect of the time value of money is material, the Company determines the level of provision by discounting the expected cash flows at a pre-tax rate reflecting the current rates specific to the liability. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. The Company does not recognize a contingent liability but discloses its existence in the Financial Statements.

Note - 2.10 Dividends on ordinary shares

The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

Note - 2.11 Determination of Fair value

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

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

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

(ii) In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

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

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

market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as summarised below:

(i) Level 1 financial instruments - Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that the Company has access to at the measurement date. The Company considers markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on the balance sheet date.

(ii) Level 2 financial instruments -Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the entire period of the instrumentâs life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, the Company will classify the instruments as Level 3.

(iii) Level 3 financial instruments -Those that include one or more unobservable input that is significant to the measurement as whole.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have

occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Company evaluates the levelling at each reporting period on an instrument-by-instrument basis and reclassifies instruments, when necessary, based on the facts at the end of the reporting period.

Note - 2.12 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits with banks. Cash equivalents are short-term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of change in value.

Note - 2.13 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) before 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.

For the purpose of the Statement of cash flows, cash and cash equivalents as defined above, are net of outstanding bank overdrafts, if any, as they are considered an integral part of the cash management of the Company.

Note - 2.14. Goods and Service Tax (GST) Input Credit

Input Tax Credit is accounted for in the books in the period when the underlying service / supply received is accounted, and when there is no uncertainty in availing / utilising the same. Company avails eligible input credit as per the relevant Law and the ineligible credit is set off to respective expense.

Note - 2.15 Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in statement of profit and loss in the period in which the expenditure is incurred.

Intangible assets are amortised over the useful economic life and assessed for impairment

whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.

Amortisation is calculated using the straight-line method to write down the cost of intangible assets to their residual values over their estimated useful life of 3 years.

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

Note - 2.16 Impairment of Financial & Non-Financial

Assets

Note - 2.16.1 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, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or cash-generating unitâs (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of 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 costs of disposal, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Companyâs cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow projections beyond periods covered by the most recent budgets / forecasts, the Company extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products, industries, or country or countries in which the entity operates, or for the market in which the asset is used.

a change in the assumptions used to determine the assetâs recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

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

Note - 2.16.2 Impairment of Financial Assets

For financial assets for which the Company has no reasonable expectations of recovering either the entire outstanding amount, or a proportion thereof, the gross carrying amount of the financial asset is provided for / written-off.

Note - 2.17 Earnings Per Share

Basic Earnings Per Share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

Mar 31, 2022

Cholamandalam Financial Holdings Limited (âthe Companyâ) (CIN:L65100TN1949PLC002905) is a Public Limited Company domiciled in India. The Company is listed on BSE Limited and National Stock Exchange of India Limited. The Registered Office of the Company is located at Dare House, No.234, NSC Bose Road, Chennai-600 001, Tamil Nadu.

The standalone financial statements are presented in Indian Rupees which is also functional currency of the Company and all values are rounded to the nearest crore, except when otherwise indicated.

The standalone financial statements were authorised for issue in accordance with a resolution of the directors on May 11,2022.

Note - 1.1 Basis of preparation

The standalone financial statements have been prepared on a historical cost basis, except for fair value through other comprehensive income (âFVTOCIâ) instruments and certain financial assets and financial liabilities measured at fair value (refer accounting policy regarding financial instruments).

Note - 1.2 Presentation of financial statements

Financial assets and financial liabilities are generally reported gross in the balance sheet. They are only offset and reported net when in addition to having an unconditional legally enforceable right to offset the recognised amounts without being contingent on a future event, the parties also intend to settle on a net basis in all the following circumstances

(i) The normal course of business

(ii) The event of default

(iii) The event of insolvency or bankruptcy of the Company and/or its counterparties

Note - 1.3 Standards issued but not yet effective

There are no new standards / amendments to the standards that have been issued but not yet effective as at March 31,2022.

Note - 2. Significant accounting policiesNote - 2.1 Financial instruments - initial recognitionNote - 2.1.1 Date of recognition

Note - 2.1.2 Initial measurement of financial instruments

Note - 2.1.3 Measurement categories of financial assets and liabilities

The Company classifies all its financial assets based on the business model for managing the assets and the assetâs contractual terms, measured at either (a) Amortised cost (b) FVTPL or (c) FVTOCI

Note - 2.2. Financial assets and liabilitiesNote - 2.2.1 Bank balances and financial investments at amortised cost

The Company measures Bank balances and other financial investments at amortised cost if both of the following conditions are met:

(i) the financial asset is held within a business model with the objective to hold financial assets to collect contractual cash flows; and

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

The details of these conditions are outlined below.

Note - 2.2.2 Business model assessment

The Company determines its business model at the level that best reflects how it manages Companyâs financial assets to achieve its business objective.

The Companyâs business model is not assessed on an instrument-by-instrument basis, but at a higher level of aggregated portfolios and is based on observable factors such as:

(i) how the performance of the business model and the financial assets held within that business model are evaluated and reported to the entityâs key management personnel;

(ii) the risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way those risks are managed;

(iii) how managers of the business are compensated (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected);

(iv) the expected frequency, value and timing of sales are also important aspects of the Companyâs assessment.

Note - 2.2.3 The SPPI Test

As a second step of its classification process the Company assesses the contractual terms of financial assets to identify whether they meet the solely payments of principal and interest (SPPI) test.

In contrast, contractual terms that introduce a more than de minimis exposure to risks or volatility in the contractual cash flows that are unrelated to a basic lending arrangement do not give rise to contractual cash flows that are solely payments of principal and interest on the amount outstanding. In such cases, the financial asset is required to be measured at FVTPL.

Note - 2.3 Equity instruments at Fair Value Through

Other Comprehensive Income (FVTOCI)

Note - 2.4 Debt securities and other borrowed funds

Note - 2.5 Derecognition of financial assets and

liabilities

Note - 2.5.1 Financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial

assets) is derecognised when the rights to receive cash flows from the financial asset have expired. The Company also derecognises the financial asset if it has both transferred the financial asset and the transfer qualifies for derecognition.

Note - 2.5.2 Financial liabilities

Note - 2.6 Recognition of Income

A. Revenue (other than interest income and dividend income covered by Ind AS 109 -Financial Instruments) is measured at fair value of the consideration received or receivable.

B. The Company recognises revenue from contracts with customers based on a five-step model as set out in Ind AS 115:

Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer;

Step 4: Allocate the transaction price to the performance obligations in the contract:

For a contract that has more than one performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation;

Step 5: Recognise revenue when (or as) the Company satisfies a performance obligation.

Note - 2.6.1 Brand fee

Brand fee income is recognised as and when the services are rendered in accordance with the terms and conditions of the relevant agreement.

Note - 2.6.2 Interest income covered by Ind AS 109

Note - 2.6.3 Dividend income covered by Ind AS 109

Note - 2.7 Taxes

Note - 2.7.1 Current tax

Current income tax relating to items recognised outside statement of profit and loss is recognised outside statement of profit and loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Companyâs management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(i) Whether an entity considers uncertain tax treatments separately;

(ii) The assumptions an entity makes about the examination of tax treatments by taxation authorities;

(iii) How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates;

(iv) How an entity considers changes in facts and circumstances.

Note - 2.7.2 Deferred Tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

(i) when the deferred tax asset relating to the deductible, temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;

(ii) i n respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future, and taxable profit will be available against which the temporary differences can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Note - 2.8 Share Based Payments

Note - 2.9 Provisions and Contingent Liabilities

Note - 2.10 Dividends on ordinary shares

Note - 2.11 Determination of Fair value

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

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

(ii) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants

would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

(ii) Level 2 financial instruments - Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the entire period of the instrumentâs life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to

the entire measurement, the Company will classify the instruments as Level 3.

(iii) Level 3 financial instruments - Those that include one or more unobservable input that is significant to the measurement as whole.

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

The Company evaluates the levelling at each reporting period on an instrument-by-instrument basis and reclassifies instruments, when necessary, based on the facts at the end of the reporting period.

Note - 2.12 Cash and cash equivalents

Note - 2.13 Cash Flow Statement

Note - 2.14 Goods and Service Tax (GST) Input Credit

Note - 2.15 Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial

recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in statement of profit and loss in the period in which the expenditure is incurred.

Intangible assets are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.

Amortisation is calculated using the straight-line method to write down the cost of intangible assets to their residual values over their estimated useful life of 3 years.

Note - 2.16 Impairment of Financial & Non-Financial

Assets

Note - 2.16.1 Impairment of Non-Financial Assets

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 costs of disposal, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

An assessment is made at each reporting date as to whether there is any indication that previously

recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the assetâs or cash generating unitâs recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the assetâs recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

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

Note - 2.16.2. Impairment of Financial Assets

Note - 2.17 Earnings Per Share

Basic Earnings Per Share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

Mar 31, 2019

1. Significant accounting policies

1.1 Financial instruments - initial recognition

1.1.1 Date of recognition

Financial assets and liabilities are initially recognised on the trade date, i.e., the date that the Company becomes a party to the contractual provisions of the instrument.

1.1.2 Initial measurement of financial instruments

The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the instruments.

Financial instruments are initially measured at their fair value, except in the case of financial assets and financial liabilities recorded at Fair Value Through Profit & Loss (FVTPL), transaction costs are added to, or subtracted from, this amount.

1.1.3 Measurement categories of financial assets and liabilities

The Company classifies all of its financial assets based on the business model for managing the assets and the assetâs contractual terms, measured at either:

- Amortised cost

- FVTPL

- FVTOCI

1.2 Financial Assets and Liabilities

1.2.1 Bank balances, Loans, Trade receivables and financial investments at amortised cost

The Company measures Bank balances, Loans, and other financial investments at amortised cost if both of the following conditions are met:

The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and

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

The details of these conditions are outlined below.

1.2.2 Business model assessment

The Company determines its business model at the level that best reflects how it manages Companyâs financial assets to achieve its business objective.

The Company''s business model is not assessed on an instrument-by-instrument basis, but at a higher level of aggregated portfolios and is based on observable factors such as:

(i) How the performance of the business model and the financial assets held within that business model are evaluated and reported to the entity''s key management personnel

(ii) The risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way those risks are managed

(iii) How managers of the business are compensated (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected)

(iv) The expected frequency, value and timing of sales are also important aspects of the Companyâs assessment.

The business model assessment is based on reasonably expected scenarios without taking ''worst case'' or ''stress caseâ scenarios into account. If cash flows after initial recognition are realised in a way that is different from the Company''s original expectations, the Company does not change the classification of the remaining financial assets held in that business model, but incorporates such information when assessing newly originated or newly purchased financial assets going forward.

1.2.3 The SPPI Test

Is a second step of its classification process the Company assesses the contractual terms of financial assets to identify whether they meet the solely payments of principal and interest (SPPI) test.

â Principalâ for the purpose of this test is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset (for example, if there are repayments of principal or amortisation of the premium / discount).

1.3 Equity instruments (other than investments in subsidiaries, joint ventures and associates as referred to in Note 2.11) at Fair Value Through Other Comprehensive Income (FVTOCI)

The Company subsequently measures all equity investments at fair value through profit or loss, unless the Company âs management has elected to classify irrevocably some of its equity investments as equity instruments at FVTOCI, when such instruments meet the definition of Equity under Ind AS 32 Financial Instruments: Presentation and are not held for trading.

Such classification is determined on an instrument-by-instrument basis.

Gains and losses on these equity instruments are never recycled to profit or loss. Dividends are recognised in profit or loss as dividend income when the right of the payment has been established, except when the Company benefits from such proceeds as a recovery of part of the cost of the instrument, in which case, such gains are recorded in OCI. Equity instruments at FVTOCI are not subject to an impairment assessment.

1.4 Derecognition of financial assets and liabilities

1.4.1 Financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when the rights to receive cash flows from the financial asset have expired. The Company also derecognises the financial asset if it has both transferred the financial asset and the transfer qualifies for derecognition.

1.4.2 Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference between the carrying value of the original financial liability and the consideration paid is recognised in the statement of profit & loss.

1.5 Recognition of Income

A. Revenue (other than Interest Income and dividend Income covered by Ind AS 109-Financial Instruments) is measured at fair value of the consideration received or receivable. Ind AS 115 Revenue from contracts with customers outlines a single comprehensive model of accounting for revenue arising from contracts with customers.

B. The Company recognises revenue from contracts with customers based on a five step model as set out in Ind AS 115:

Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.

Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.

Step 5: Recognise revenue when (or as) the Company satisfies a performance obligation.

1.5.1 Brand fee

Brand fee income is recognised as and when the services are rendered in accordance with the terms and conditions of the relevant agreement.

Interest income and dividend income covered by Ind AS 109:

1.5.2 Interest income

Under Ind AS 109 interest income is recorded using the effective interest rate (âEIRâ) method for all financial instruments measured at amortised cost. The EIR is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument or, when appropriate, a shorter period, to the net carrying amount of the financial asset. The EIR (and therefore, the amortised cost of the asset) is calculated by taking into account of fees and costs that are an integral part of the EIR.

1.5.3 Dividend Income

1.6 Taxes

1.6.1 Current tax

Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

1.6.2 Deferred Tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

- In respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

- When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

- In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside profit or loss is recognised outside profit/(loss) (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

1.7 Share Based Payments

Stock options are granted to the employees under the stock option scheme. The costs of stock options granted to the employees (equity-settled awards) of the company are measured at the fair value of the equity instruments granted. For each stock option, the measurement of fair value is performed on the grant date. The grant date is the date on which the Company and the employees agree to the stock option scheme. The fair value so determined is revised only if the stock option scheme is modified in a manner that is beneficial to the employees.

This cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves/ stock options outstanding account in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Companyâs best estimate of the number of equity instruments that will ultimately vest. The statement of profit and loss expense or Credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

If the options vests in instalments (i.e. the options vest pro rata over the service period), then each instalment is treated as a separate share option grant because each instalment has a different vesting period.

1.8 Provisions and Contingent Liabilities

1.9 Dividends on ordinary shares

1.10 Determination of Fair value

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

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

- Level 1 financial instruments - Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that the Company has access to at the measurement date. The Company considers markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on the balance sheet date.

- Level 2 financial instruments - Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the entire period of the instrumentâs life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, the Company will classify the instruments as Level 3.

- Level 3 financial instruments - Those that include one or more unobservable input that is significant to the measurement as whole.

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

The Company evaluates the levelling at each reporting period on an instrument-by-instrument basis and reclassifies instruments when necessary based on the facts at the end of the reporting period.

1.11 Equity Investment in Subsidiaries and Joint Ventures

Investment in Subsidiaries and Joint Ventures are carried at Cost in the Separate Financial Statements as permitted under Ind AS 27.

1.12 Cash and Cash Equivalents

Cash and Cash equivalents comprises cash on hand and demand deposits with banks. Cash equivalents are short-term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of change in value.

1.13 Cash Flow Statement

A ash flows are reported using the indirect method, whereby profit / (loss) before 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.

For the purpose of the Statement of cash flows, cash and cash equivalents as defined above, net of outstanding bank overdrafts, if any, as they are considered an integral part of the cash management of the Company.

1.14 Input Tax credit (Service Tax/ Goods and Service Tax)

1.15 Earnings Per Share

Basic Earnings Per Share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity 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 for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

Mar 31, 2018

1.1. Presentation and Disclosure of Financial Statements

An asset has been classified as current when it satisfies any of the following criteria:

a) It is expected to be realized in, or is intended for sale or consumption in, the Companyâs normal operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is expected to be realized within twelve months after the reporting date; or

d) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

A liability has been classified as current when it satisfies any of the following criteria:

a) It is expected to be settled in the Companyâs normal operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is due to be settled within twelve months after the reporting date; or

d) The Company does not have an unconditional right to defer settlements of the liability for at least twelve months after the reporting date.

All other assets and liabilities have been classified as noncurrent.

Based on the nature of activities, the Company has determined its operating cycle as twelve months for the above purpose of classification as current and non-current.

1.2. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, like provision for employee benefits, provision for doubtful advances, provision for taxation, etc., during and at the end of the reporting period. Although these estimates are based on the managementâs best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

1.3. Cash and Cash Equivalents

Cash and Cash Equivalents for the purpose of cash flow statement comprise Cash at Bank and Short Term Investments with an original maturity of 3 months of less.

1.4. Cash Flow Statement

1.5. Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made or on the Balance Sheet date, are classified as current investments. All other investments are classified as Non-current / Long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Long-term investments are stated at cost and provision for diminution in value is made, where such diminution is other than that of temporary in nature. Current Investments are stated at lower of cost and fair value determined on the basis of each category of investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

1.6. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Service revenues are recognised on completion of services.

Dividend income is accounted when right to receive such dividend is established.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Profit / loss on sale of investments is recognised at the time of sale.

Brand fee income is recognised as and when the services are rendered in accordance with the terms and conditions of the relevant agreement.

1.7. Taxes on Income

Current Tax is the amount of tax payable on the taxable income for the year and is determined in accordance with the provisions of the Income Tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred Tax is recognised on timing differences, being the differences between taxable income and 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 tax laws enacted or substantively enacted as at the reporting date.

Deferred tax assets are recognised if there is reasonable certainty that there will be sufficient future taxable income available to realise such assets. However, if there are unabsorbed depreciation and carry forward of losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence, that there will be sufficient future taxable income available to realise such assets. The carrying amount of deferred tax assets are reviewed at each reporting date.

Current Tax and Deferred Tax relating to items directly recognised in Reserves are recognised in Reserves and not in the Statement of Profit and Loss.

1.8. Provisions and Contingencies

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on 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.

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

1.9. Earnings Per Share

1.10. Employees Stock Option

Stock options granted to the employees under the stock option scheme are evaluated as per the accounting treatment prescribed by Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the Guidance Note on Accounting for Employee Share-based payments. The Company follows the intrinsic value method of accounting for the options and accordingly, the excess of market value of the stock options as on date of grant, if any, over the exercise price of the options is recognized as deferred employee compensation and is charged to the Statement of Profit and Loss on graded vesting basis over the vesting period of the options.

Mar 31, 2017

1. Corporate Information

TI Financial Holdings Limited ("the Company") was formerly known as Tube Investments of India Limited and is a Public Limited Company domiciled in India. The Company is listed on Bombay Stock Exchange and National Stock Exchange. The Registered Office of the Company is located at 234, NSC Bose Road, Chennai, Tamilnadu.

The Company was originally incorporated as "T.I. Cycles of India Limited" on 9^th September 1949 under the Companies Act, 1913. On 15^th September 1958, the name was changed to "Tube Investments of India Limited" (CIN: L65100TN1949PLC002905).

The Company had multiple businesses broadly classified into Manufacturing Business and Financial Services Business. In order to segregate the manufacturing business and financial service business, it was decided to demerge the Manufacturing Business Undertaking on a going concern basis into a separate entity with mirror image shareholding.

Pursuant to the Scheme of Arrangement ("the Scheme") the details relating to which are more elaborately provided under Note 44 below, the Manufacturing Business Undertaking of the Company was vested in/transferred to Tube Investments of India Limited ("Resulting Company", formerly known as TI Financial Holdings Limited) vide the Order of the National Company Law Tribunal, Chennai ("NCLT") dated 17^th July 2017 sanctioning the Scheme ("Order of NCLT"). The Scheme was given effect by filing of a certified copy of the Order of NCLT on 1^st August 2017 by the Company and the Resulting Company with the Registrar of Companies, Tamil Nadu, Chennai. The Scheme is effective from the Appointed Date i.e. 1^st April 2016.

The Company continues to engage in Financial Services Businesses through its Subsidiary, Joint Venture and Associate Company viz., Insurance Business (through its Subsidiary, Cholamandalam MS General Insurance Company Limited), Risk Services (through its Joint Venture Company, Cholamandalam MS Risk Services Limited), Non-Banking Financial Business (through its Associate Company, Cholamandalam Investment and Finance Company Limited).

Pursuant to the Scheme, the Name of the Company is being changed to "TI Financial Holdings Limited".

The standalone financial statements were authorised for issue in accordance with a resolution of the directors on 9^th August 2017.

2. Basis of Preparation

As referred to in Note 1 above, upon the Scheme coming into effect and with effect from the appointed date of 1^st April 2016, the Company has become a Core Investment Company (CIC). Consequently, the Ministry of Corporate Affairs (MCA) notification dated 16^th February 2015 announcing the Companies (Indian Accounting Standards) Rules, 2015 as amended (Ind AS) is currently not applicable to the Company. Accordingly, these financial statements have been prepared on the basis of Generally Accepted Accounting Principles in India ("Indian GAAP") and by applying the historical cost convention on an accrual basis, to comply in all material respects with the Accounting Standards specified under section 133 of the Companies Act 2013 read with Rule 7 of Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment Rules 2016. The accounting policies adopted in the preparation of financial statements are consistent with those followed in the previous year.

3. Summary of Significant Accounting Policies

3.1. Presentation and Disclosure of Financial Statements

An asset has been classified as current when it satisfies any of the following criteria;

a) It is expected to be realized in, or is intended for sale or consumption in, the Company''s normal operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is expected to be realized within twelve months after the reporting date; or

d) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

A liability has been classified as current when it satisfies any of the following criteria;

a) It is expected to be settled in the Company''s normal operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is due to be settled within twelve months after the reporting date; or

d) The Company does not have an unconditional right to defer settlements of the liability for at least twelve months after the reporting date.

All other assets and liabilities have been classified as non-current.

Based on the nature of activities, the Company has determined its operating cycle as twelve months for the above purpose of classification as current and noncurrent.

3.2. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, like provision for employee benefits, provision for doubtful trade receivables / advances / contingencies, provision for warranties, allowance for slow / non-moving inventories, useful life of Property, Plant and Equipment, provision for retrospective price revisions, provision for taxation, etc., during and at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

3.3. Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of change in value.

3.4. Cash Flow Statement

3.5. Property, Plant and Equipment (PPE)

Property, Plant and Equipment are stated at historical cost less accumulated depreciation and impairment losses, if any. Cost includes related taxes, duties, freight, insurance, etc. attributable to the acquisition, installation of the Property, Plant and Equipment and borrowing cost if capitalization criteria are met but excludes duties and taxes that are recoverable from tax authorities. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful life.

All machinery spare parts, stand-by and servicing equipment qualify as Property, Plant and Equipment if they meet the definition of PPE i.e. if the company intends to use these during more than a period of 12 months. The spare parts capitalized in this manner are depreciated as per AS 10 (Revised). Subsequent expenditure relating to Property, Plant and Equipment is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance

Property, Plant and Equipment retired from active use and held for sale are stated at the lower of their net book value and net realizable value and are disclosed separately in the Balance Sheet.

The Company identifies and determines cost of each component/part of the asset separately, if the component/part has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset.

Capital Work-in-Progress: Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and attributable interest.

3.6. Impairment of Assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, 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) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of 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 net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Company''s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of three years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the third year.

Impairment including impairment on inventories, are recognized in the statement of profit and loss.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset''s or cash-generating unit''s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.

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

3.7. Investments

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

3.8. Inventories

Raw materials, stores & spare parts and stock-in-trade are valued at lower of weighted average cost and estimated net realizable value.

Work-in-progress and finished goods are valued at lower of weighted average cost and estimated net realizable value. Cost includes all direct costs and appropriate proportion of overheads to bring the goods to the present location and condition. Cost of finished goods includes Excise Duty.

Due allowance is made for slow/non-moving items. Materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be used are expected to be sold at or above cost.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

3.9. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Revenue from sale of goods are recognized on transfer of significant risk and rewards of ownership to the buyer which generally coincides with shipment and comprise amounts invoiced for the goods, including excise duty, but excluding Sales Tax/Value Added Tax, Quantity Discounts and Sale Returns.

Service revenues are recognized on completion of services.

Dividend income is accounted when right to receive such dividend is established. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Profit / loss on sale of investments is recognized at the time of sale.

3.10.Government Grants

Government grants and subsidies are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants/subsidy will be received.

When the grant or subsidy from the Government relates to revenue, it is recognized as income on a systematic basis in the statement of profit or loss over the period necessary to match them with the related costs, which they are intended to compensate.

Where the Company receives non-monetary grants, the asset is accounted for on the basis of its acquisition cost. In case a non-monetary asset is given free of cost, it is recognized at a nominal value.

When the grant or subsidy from the Government is in the nature of promoters'' contribution, and where no repayment is ordinarily expected, it is credited to Capital Reserve and treated as a part of the Shareholders'' funds.

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

3.11. Employee Benefits

I. Defined Contribution Plan

a. Superannuation

The Company contributes a sum equivalent to 15% of the eligible employees salary to a Superannuation Fund administered by trustees and the Contributions are invested in a Scheme with Life Insurance Corporation of India, as permitted by Indian Law. The Company has no liability for future Superannuation Fund benefits other than its annual contribution and recognizes such contributions as an expense in the year in which the services are rendered.

b. Provident Fund

Contributions in respect of Employees who are not covered by Company''s Employees Provident Fund Trust are made to the Regional Provident Fund. These Contributions are recognized as expense in the year in which the services are rendered. The Company has no obligation other than the contribution payable to the Regional Provident fund.

c. Employee State Insurance

Contributions to Employees State Insurance Scheme are recognized as expense in the year in which the services are rendered.

II. Defined Benefit Plan

a. Gratuity

The Company makes annual contribution to a Gratuity Fund administered by trustees and

the Contributions are invested in a Scheme with Life Insurance Corporation of India, as permitted by Indian Law. The Company accounts its liability for future gratuity benefits based on actuarial valuation, as at the Balance Sheet date, determined every year using the Projected Unit Credit method. Actuarial gains / losses are immediately recognized in the Statement of Profit and Loss. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortized on a straight-line basis over the average period until the benefits become vested. The defined benefit obligation recognized in the balance sheet represents the present value of the Defined Benefit Obligation less the Fair Value of Plan Assets out of which the obligations are expected to be settled and adjusted for unrecognized past service cost, if any. Any asset arising out of this calculation is limited to the past service cost plus the present value of available refunds and reduction in future contributions.

b. Provident Fund

In respect of the employees not covered in Point I b above, contributions to the Company''s Employees Provident Fund Trust are made in accordance with the fund rules. The interest rate payable to the beneficiaries every year is being notified by the Government.

In the case of contribution to the Trust, the Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate and recognizes such obligation, if any, determined based on an actuarial valuation as at the balance sheet date, as an expense.

III. Long Term Compensated Absences

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Where Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.

IV. Short Term Employee Benefits

Short term employee benefits includes short term compensated absences which is recognized based on the eligible leave at credit on the Balance Sheet date, and the estimated cost is based on the terms of the employment contract.

V. Voluntary Retirement Scheme

Compensation to employees under Voluntary Retirement Schemes is expensed in the period in which the liability arises. The Company recognizes termination benefit as a liability and an expense when the Company has a present obligation as a result of 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.

3.12.Operating Leases

Leases where the less or effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight line basis over the lease term.

3.13.Foreign Currency Transactions Initial recognition

Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at the average rates that closely approximate the rate at the date of the transaction.

Measurement as at Balance Sheet date

Foreign currency monetary items (other than derivative contracts) of the Company outstanding at the Balance Sheet date are restated at year end exchange rates. Non-monetary items are carried at historical cost. Treatment of Exchange Differences Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the Statement of Profit and Loss.

Accounting of Forward Contracts

The Company enters into forward exchange contracts and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising at the inception of a forward exchange contract (other than for a firm commitment or a highly probable forecast transaction) or similar instrument is amortized as expense or income over the life of the contract. Exchange differences on such a contract are recognized in the Statement of Profit and Loss in the year in which the exchange rates change. Any profit or loss arising on cancellation of such a contract is recognized as income or expense for the year.

3.14.Derivative Instruments and Hedge Accounting

The Company uses Cash Flow Hedges (forward contracts and currency swaps) to hedge its risks associated with foreign currency fluctuations relating to firm commitment or highly probable forecast transactions. Till 31^st March 2016, the Company designated these in a hedging relationship by applying the hedge accounting principles set out in Accounting Standard 30 - "Financial Instruments - Recognition and Measurement". From 1^st April 2016, the Company accounts for Derivative Instruments based on Guidance note issued by ICAI on accounting for Derivative contracts.

The use of Derivative Contracts is governed by the Company''s policies on the use of such financial derivatives consistent with the Company''s risk management strategy. The Company does not use derivative financial instruments for speculative purposes.

Derivative Contracts are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in the fair value of these Derivative Contracts that are designated and effective as hedges of future cash flows are recognized directly in "Hedge Reserve Account" under Shareholders'' Funds and the ineffective portion is recognized immediately in the Statement of Profit and Loss.

Changes in the fair value of Derivative Contracts that do not qualify for hedge accounting are recognized in the Statement of Profit and Loss as they arise.

The amounts recognized in the Hedge reserve are transferred to the Statement of Profit and loss when the hedged transactions crystalizes.

If the forecast transaction is no longer expected to occur, the cumulative gain or loss previously recognized

in hedge reserve is transferred to Statement of Profit and loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. If any of these events occur or if a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized under Shareholders'' Funds is transferred to the Statement of Profit and Loss for the year.

Leasehold Land / Improvements are depreciated over the primary lease period as the right to use these assets ceases on expiry of the lease period. Depreciation is provided pro-rata from the month of Capitalization.

Certain Property, Plant and Equipment are treated as Continuous Process Plants based on technical evaluation done by the Management and are depreciated on the straight-line method based on the useful life as prescribed in Schedule II to the Companies Act, 2013.

The Company also has a system of providing additional depreciation, where, in the opinion of the Management, the recovery of the Property, Plant and Equipment is likely to be affected by the variation in demand and / or its condition / usability.

3.16.Research and Development

Revenue expenditure on research and development is expensed when incurred. Capital expenditure on research and development is capitalized under Property, Plant and Equipment and depreciated in accordance with Note 3.15 above.

3.17.Taxes on Income

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company. The carrying amount of MAT is reviewed at each reporting date and the asset is written down to the extent the Company does not have convincing evidence that it will pay normal income tax during the specified period.

Deferred Tax is recognized on timing differences, being the differences between taxable income and 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 tax laws enacted or substantively enacted as at the reporting date.

In the situations where the Company is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of timing differences which reverse during the tax holiday period, to the extent the Company''s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of timing differences which reverse after the tax holiday period is recognized in the year in which the timing differences originate.

Deferred tax assets are recognized if there is reasonable certainty that there will be sufficient future taxable income available to realize such assets. However, if there are unabsorbed depreciation and carry forward of losses, all 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 such assets. The carrying amount of deferred tax assets are reviewed at each reporting date.

Current Tax and Deferred Tax relating to items directly recognized in Reserves are recognized in Reserves and not in the Statement of Profit and Loss.

3.18.Provisions and Contingencies

Provisions for warranty-related costs are recognized when the product is sold or service provided. Provision is estimated based on historical experience and technical estimates. The estimate of such warranty-related costs is reviewed annually.

3.19.Borrowing Costs

Borrowing Costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the borrowing costs. Discount on Commercial papers is amortized over the tenor of the underlying instrument. Borrowing Costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date the asset is ready for its intended use is added to the cost of the assets. Capitalization of Borrowing Costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted. All other borrowing costs are expensed in the period they occur.

3.20.Earnings Per Share

3.21.Employees Stock Option

Stock options granted to the employees under the stock option scheme are evaluated as per the accounting treatment prescribed by Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the Guidance Note on Accounting for Employee Share-based Payments. The Company follows the intrinsic value method of accounting for the options and accordingly, the excess of market value of the stock options as on date of grant, if any, over the exercise price of the options is recognized as deferred employee compensation and is charged to the Statement of Profit and Loss on graded vesting basis over the vesting period of the options.

* Pursuant to the scheme of Arrangement as mentioned in Note 44, the face value of the shares of the Company shall be reduced from Rs,2 to Rs,1 each. Accordingly, the revised Authorized Share Capital of the company is Rs,43 Cr. divided into 43,00,00,000 shares of Rs,1 each. The Issued, Subscribed and Paid up capital has also been reduced from Rs,2/- each to Rs,1/- each for 18,73,46,537 shares as at the appointed date and the difference has been credited to Capital Reserve. Any shares allotted between the appointed date and effective date has also been reduced from Rs,2/- each to Rs,1/- each as per the Scheme.

b) Terms / Rights attached to class of shares

The Company has only one class of shares referred to as Equity Shares having a par value of Rs,1/- each (Previous Year Rs,2/- each). The holders of Equity Shares are entitled to one vote per share. Dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting. Repayment of capital will be in proportion to the number of Equity Shares held.

During the past 5 years, the Company has allotted 11,32,554 (Previous Year 16,79,606) Shares of Rs,2 each to employees, pursuant to the exercise of their option under the Employees Stock Option Scheme.

The total number of such Options outstanding as at 31^st March 2017 is 1,74,213 (Previous Year 2,75,547) and each Option is exercisable into one equity share of Rs,1 face value within three/six years from the date of vesting.

a) Represents the amount pertaining to cancellation of Share capital and cancellation of investments in resulting company, pursuant to the scheme of arrangement (Refer Note 44).

b) Represents the amount transferred, for a sum equal to the face value of the Equity Shares, at the time of Buy-back of shares.

c) As per Section 45 IC of the Reserve Bank of India Act, 1934, the Company is required to create a minimum Reserve fund at the rate of 20% of the profit after tax. Accordingly, the Company has transferred an amount of Rs,7.30 Cr. out of the profit after tax for the year ended 31^st March 2017 as Reserve Fund.

d) Represent amount written back on account of set-off of Dividend Distribution Tax paid by Subsidiaries on dividend distributed to the Company, against Dividend Distribution Tax payable by the Company on Dividend declared and paid during the year.

A provision is recognized for expected warranty claims on products sold during the last one year (2 years in respect of certain components), based on past experience of the level of returns. It is expected that most of these costs will be incurred within one year after the reporting date. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about returns based on the applicable warranty period for all products sold.

The above Provision represents expected future outflows relating to various tax related matters, timing of which cannot be ascertained. The assumptions used to calculate the provisions are based on past experience of similar matters and professional consultations.

(b) Commission and Sitting Fees to Non Whole Time Directors

Pursuant to the Scheme of Arrangement (Refer Note 44), the Commission and sitting fees aggregating to Rs,1.62 Cr. has been transferred to Resulting Company.

i. Gross amount required to be spent during the year is Rs,2.03 Cr (Previous Year - Rs,2.11 Cr).

ii. Amount spent during the year is Rs,2.57 Cr (Previous Year - Rs,2.73 Cr) towards

- Education - Rs,1.46 Cr (Previous Year - Rs,1.76 Cr)

- Others - Rs,1.11 Cr (Previous Year - Rs,0.97 Cr)

a. Pursuant to the approval of the Board of Directors of the Company, the Company sold 4,18,32,798 Equity Shares of face value Rs,10/- each representing 14% shareholding in M/s Cholamandalam MS General Insurance Company Limited (CMSGICL) to its joint venture partner, M/s Mitsui Sumitomo Insurance Company Limited, Japan (MS) for a consideration of Rs,882.67 Cr. on 31^st March 2016. The excess of the sale consideration over the average carrying amount of the Company''s investment in CMSGICL aggregating ''820.78 Cr. was recognized as a gain during the year ended 31^st March 2016.

b. The Company sold certain non-operating Property, Plant and Equipment and earned profit of Rs,1.25 Cr. This has been recognized as a gain during the year ended 31^st March 2016.

a) Draft Assessment Orders received from Income Tax Authorities and Show Cause Notices received from various other Government Authorities, pending adjudication, have not been considered as Contingent Liabilities.

b) The uncertainties and possible reimbursement in respect of the above mentioned contingent liabilities are dependent on the outcome of various legal proceedings and therefore, cannot be predicted accurately.

c) The Company considers the Cash flow in each of the cases to be uncertain and hence considered as Contingent liabilities.

d) As per the Scheme of Arrangement, all taxes, duties, cess payable by the Company relating to the Manufacturing Business Undertaking including all advance tax payments, tax deducted at source or any refunds / credit / claims relating thereto shall, for all purposes, be treated as advance tax payments, tax deducted at source or refunds / credit / claims, as the case may be, of the Resulting Company, provided however that any direct and indirect taxes that cannot specifically be earmarked as the liability or refunds / credit / claims relating to the Manufacturing Business Undertaking shall continue to be borne by the Company. The Scheme further provides that if the Company or their successor(s) receives any refunds / credit / claims or incurs any liability in respect of the Manufacturing Business Undertaking, the same shall be on behalf of and as a trustee of the Resulting Company and the same shall be refunded to / paid by the Resulting Company.

Mar 31, 2015

1. Significant Accounting Policies

1.1. Accounting Convention

The Financial Statements of the Company are prepared under the historical cost convention, on an accrual basis, in accordance with the Generally Accepted Accounting Principles in India to comply with the Accounting Standards specified under Section 133 of the Companies Act 2013 read with Rule 7 of Companies (Accounts) Rules, 2014. The accounting policies adopted in the preparation of the Financial Statements are consistent with those followed in the previous year.

1.2. Presentation and Disclosure of Financial Statements

An asset has been classified as current when it satisfies any of the following criteria;

a) It is expected to be realized in, or is intended for sale or consumption in, the Company''s normal operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is expected to be realized within twelve months after the reporting date; or

d) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

A liability has been classified as current when it satisfies any of the following criteria;

a) It is expected to be settled in the Company''s normal operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is due to be settled within twelve months after the reporting date; or

d) The Company does not have an unconditional right to defer settlements of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other assets and liabilities have been classified as non-current.

Based on the nature of products/activities, the Company has determined its operating cycle as twelve months for the above purpose of classification as current and non-current.

1.3. 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) as of the date of the Financial Statements and the reported income and expenses like provision for employee benefits, provision for doubtful trade receivables/ advances/contingencies, provision for warranties, allowance for slow/non-moving inventories, useful life of fixed assets, provision for retrospective price revisions, provision for taxation, etc., during the reporting year. The Management believes that the estimates used in the preparation of the Financial Statements are prudent and reasonable. Future results may vary from these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known/materialise.

1.4. Cash and Cash Equivalents (for the purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short- term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of change in value.

1.5. 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.

1.6. Tangible Fixed Assets

Fixed Assets are stated at historical cost less accumulated depreciation and impairment losses, if any. Cost includes related taxes, duties, freight, insurance, etc. attributable to the acquisition and installation of the fixed assets but excludes duties and taxes that are recoverable from tax authorities.

Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalised and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realisable value and are disclosed separately in the Balance Sheet.

Capital Work-in-Progress: Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and attributable interest.

1.7. Impairment of Assets

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

1.8. Investments

a) Current investments are carried at lower of cost and fair value.

b) Non-Current investments are carried at cost. Diminution in the value of such investments, other than temporary, is provided for.

c) Cost of investments includes acquisition charges such as brokerage, fees and duties.

1.9. Inventories

a) Raw materials, stores & spare parts and stock-in-trade are valued at lower of weighted average cost and estimated net realisable value (net of allowances). Cost includes freight, taxes and duties and is net of credit under VAT and CENVAT scheme, where applicable.

b) Work-in-progress and finished goods are valued at lower of weighted average cost

and estimated net realisable value (net of allowances). Cost includes all direct costs and appropriate proportion of overheads to bring the goods to the present location and condition.

c) Due allowance is made for slow/non-moving items.

1.10. Revenue and Other Income

a) Sales are recognised on transfer of significant risk and rewards of ownership to the buyer which generally coincides with shipment or on unconditional appropriation of goods and comprise amounts invoiced for the goods, including excise duty, but excluding Sales Tax/ Value Added Tax, Quantity Discounts and Sale Returns.

b) Service revenues are recognised when services are rendered.

c) Dividend income is accounted for when the right to receive it is established.

d) Interest Income is recognised on time proportion basis.

1.11. Government Grants, Subsidies and Export Benefits

Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants/subsidy will be received.

When the grant or subsidy from the Government relates to revenue, it is recognised as income on a systematic basis in the Statement of Profit or Loss over the period necessary to match them with the related costs, which they are intended to compensate.

When the grant or subsidy from the Government is in the nature of promoters'' contribution, and where no repayment is ordinarily expected, it is credited to Capital Reserve and treated as a part of the Shareholders'' funds on receipt basis.

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

1.12. Employee Benefits

I. Defined Contribution Plan

a. Superannuation

The Company contributes a sum equivalent to 15% of the eligible employees salary to a Superannuation Fund administered by

trustees and managed by Life Insurance Corporation of India (LIC). The Company has no liability for future Superannuation Fund benefits other than its annual contribution and recognizes such contributions as an expense in the year in which the services are rendered.

b. Provident Fund

Contributions in respect of Employees who are not covered by Company''s Employees Provident Fund Trust are made to the Regional Provident Fund. These Contributions are recognised as expense in the year in which the services are rendered.

c. Employee State Insurance

Contributions to Employees State Insurance Scheme are recognised as expense in the year in which the services are rendered.

II. Defined Benefit Plan

a. Gratuity

The Company makes annual contribution to a Gratuity Fund administered by trustees and managed by LIC. The Company accounts its liability for future gratuity benefits based on actuarial valuation, as at the Balance Sheet date, determined every year using the Projected Unit Credit method. Actuarial gains/ losses are immediately recognised in the Statement of Profit and Loss. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The Defined Benefit Obligation recognised in the balance sheet represents the present value of the Defined Benefit Obligation less the Fair Value of Plan Assets out of which the obligations are expected to be settled and adjusted for unrecognised past service cost, if any. Any asset arising out of this calculation is limited to the past service cost plus the present value of available refunds and reduction in future contributions.

b. Provident Fund

In respect of the employees not covered in Point I.b above, contributions to the Company''s Employees Provident Fund Trust are made in accordance with the fund rules. The interest rate payable to the beneficiaries every year is being notified by the Government.

In the case of contribution to the Trust, the Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate and recognizes such obligation, if any, determined based on an actuarial valuation as at the balance sheet date, as an expense.

III. Long Term Compensated Absences

The liability for long term compensated absences carried forward on the Balance Sheet date is provided for based on an actuarial valuation using the Projected Unit Credit method less the Fair Value of Plan Assets out of which the obligations are expected to be settled, as at the Balance Sheet date.

IV. Short Term Employee Benefits

Short term employee benefits includes short term compensated absences which is recognized based on the eligible leave at credit on the Balance Sheet date, and the estimated cost is based on the terms of the employment contract.

V. Voluntary Retirement Scheme

Compensation to employees under Voluntary Retirement Schemes is expensed in the period in which the liability arises.

1.13. Operating Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight line basis over the lease term.

1.14. Foreign Currency Transactions

Initial ecognition

Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.

Measurement as at Balance Sheet date

Foreign currency monetary items (other than derivative contracts) of the Company outstanding at the Balance Sheet date are restated at year end exchange rates.

Non-monetary items are carried at historical cost. Treatment of Exchange Differences Exchange differences arising on settlement/ restatement of foreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss.

Accounting of Forward Contracts

The Company enters into forward exchange contracts and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising at the inception of a forward exchange contract (other than for a firm commitment or a highly probable forecast transaction) or similar instrument is amortised as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the Statement of Profit and Loss in the year in which the exchange rates change. Any Profit or Loss arising on cancellation of such a contract is recognised as income or expense for the year.

1.15. Derivative Instruments and Hedge Accounting

The Company uses forward contracts and currency swaps (Derivative Contracts) to hedge its risks associated with foreign currency fluctuations relating to highly probable forecast transactions. The Company designates these as cash flow hedges.

The use of Derivative Contracts is governed by the Company''s policies on the use of such financial derivatives consistent with the Company''s risk management strategy. The Company does not use derivative financial instruments for speculative purposes.

Derivative Contracts are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in the fair value of these Derivative Contracts that are designated and effective as hedges of future cash flows are recognised directly in "Hedge Reserve Account" under Shareholders'' Funds and the ineffective portion is recognized immediately in the Statement of Profit and Loss.

Changes in the fair value of Derivative Contracts that do not qualify for hedge accounting are recognized in the Statement of Profit and Loss as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. If any of these events occur or if a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised under Shareholders'' Funds is transferred to the Statement of Profit and Loss for the year.

1.16. Depreciation and Amortisation

Depreciation has been provided on the straight- line method based on the useful life as prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets:

Useful life and basis of Description of Assets Depreciation/Amortisation

Plant and Machinery - Special tools and special purpose machines used in door 4 Years frame products

Plant and Machinery - Electrical Appliances such as A/C, Fridge, Water 5 Years Cooler, Camera, TV, Grinder etc.

Office Equipment - Data Processing 3 Years Equipment

Vehicles - Motor Vehicles 4 Years

The Assets mentioned above are depreciated based on the Company''s estimate of their useful lives taking into consideration factors such as product life cycle, durability based on use, etc. Leasehold Land/Improvements are depreciated over the primary lease period as the right to use these assets ceases on expiry of the lease period. Individual Fixed Assets whose actual cost does not exceed Rs. 5000 are fully depreciated in the year of acquisition considering the nature and usage pattern of these assets.

Depreciation is provided pro-rata from the month of Capitalisation.

Certain fixed assets are treated as Continuous Process Plants based on technical evaluation done by the Management and are depreciated on the straight-line method based on the useful life as prescribed in Schedule II to the Companies Act, 2013.

The Company also has a system of providing additional depreciation, where, in the opinion of the Management, the recovery of the fixed asset is likely to be affected by the variation in demand and/or its condition/usability.

1.17. Research and Development

Revenue expenditure on research and development is expensed when incurred. Capital expenditure on research and development is capitalised under fixed assets and depreciated in accordance with Note 1.16 above.

1.18. Taxes on Income

Current Tax is the amount of tax payable on the taxable income for the year and is determined in accordance with the provisions of the Income Tax Act, 1961. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred Tax is recognised on filming differences, being the differences between taxable income and 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 tax laws enacted or substantively enacted as at the reporting date. Deferred tax assets are recognised if there is reasonable certainty that there will be sufficient future taxable income available to realise such assets. However, if there are unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets.

Current Tax and Deferred Tax relating to items directly recognised in Reserves are recognised in Reserves and not in the Statement of Profit and Loss.

1.19. Provisions and Contingencies

Provisions are recognised when there is a present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for (i) Possible obligation which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the Financial Statements.

1.20. Segment Accounting

a. The accounting policies adopted for segment reporting are in line with the accounting policies followed by the Company.

b. Segment revenue and segment results include transfers between business segments. Such transfers are accounted for at a competitive market price and are eliminated in the consolidation of the segments.

c. Expenses that are directly identifiable to segments are considered for determining the segment results. Expenses which relate to the Company as a whole and are not allocable to segments are included under unallocated corporate expenses.

d. Segment assets and liabilities include those directly identifiable with the respective segments. Unallocated corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and are not allocable to any segment.

1.21. Borrowing Costs

Borrowing Costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the borrowing costs. Borrowing Costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction/development of the qualifying asset upto the date the asset is ready for its intended use is added to the cost of the assets. Capitalisation of Borrowing Costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

1.22. Earnings Per Share

Basic Earnings Per Share is calculated by dividing the Net Profit for the period attributable to Equity Shareholders by the weighted average number of Equity Shares outstanding during the period.

The weighted average number of Equity Shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential Equity 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 for the period attributable to Equity Share holders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential Equity Shares.

1.23. Employees Stock Option

Stock options granted to the employees under the stock option scheme are evaluated as per the accounting treatment prescribed by the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999 issued by Securities Exchange Board of India. The Company follows the intrinsic value method of accounting for the options and accordingly, the excess of market value of the stock options as on date of grant, if any, over the exercise price of the options is recognized as deferred employee compensation and is charged to the Statement of Profit and Loss on graded vesting basis over the vesting period of the options.

Mar 31, 2014

1.1. Accounting Convention

The Financial Statements of the Company are prepared under the historical cost convent on, on an accrual basis, in accordance with the Generally Accepted Account ng Principles in India (Indian GAAP) to comply with the Account ng Standards notified under sect on 211(3C) of the Companies Act, 1956 ("1956 Act") (which cont nue to be applicable in respect of sect on 133 of the Companies Act, 2013 ("2013 Act") in terms of General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs)/issued by the Inst tute of Chartered Accountants of India (ICAI), as applicable, and the relevant provisions of the "1956 Act"/"2013 Act", as applicable. The account ng policies adopted in the preparat on of the Financial Statements are consistent with those followed in the previous year.

1.2. Presentation and disclosure of Financial Statements

An asset has been classified as current when it satisfies any of the following criteria;

a) It is expected to be realized in, or is intended for sale or consumpt on in, the Company''s normal operat ng cycle;

b) It is held primarily for the purpose of being traded;

c) It is expected to be realized within twelve months after the report ng date; or

d) It is cash or cash equivalent unless it is restricted from being exchanged or used to set le a liability for at least twelve months af er the report ng date.

A liability has been classified as current when it satisfies any of the following criteria;

a) It is expected to be set led in the Company''s normal operat ng cycle;

b) It is held primarily for the purpose of being traded;

c) It is due to be set led within twelve months after the report ng date; or

d) The company does not have an uncondit onal right to defer set lements of the liability for at least twelve months after the report ng date. Terms of a liability that could, at the opt on of the counterparty, result in its set lement by the issue of equity instruments do not affect its classificat on.

All other assets and liabilit es have been classified as non-current.

Based on the nature of products/activities, the Company has determined its operat ng cycle as twelve months for the above purpose of classifi cat on as current and non-current.

1.3. Use of Estimates

The preparat on of the Financial Statements in conformity with Indian GAAP requires the Management to make est mates and assumpt ons considered in the reported amounts of assets and liabilit es (including cont ngent liabilit es) as of the date of the Financial Statements and the reported income and expenses like provision for employee benefits, provision for doubt ul trade receivables/advances/cont ngencies, provision for warrant es, allowance for slow/non-moving inventories, useful life of fixed assets, provision for retrospect ve price increases on purchases, provision for taxat on, etc., during the report ng year. The Management believes that the est mates used in the preparat on of the Financial Statements are prudent and reasonable. Future results may vary from these est mates and the diff erences between the actual results and the est mates are recognised in the periods in which the results are known/materialise.

1.4. Cash and Cash Equivalents (for the purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term (with an original maturity of three months or less from the date of acquisit on), highly liquid investments that are readily convert ble into known amounts of cash and which are subject to insignifi cant risk of change in value.

1.5. Cash Flow Statement

Cash flows are reported using the indirect method, whereby Profi t/(Loss) before extraordinary items and tax is adjusted for the eff ects of transact ons of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operat ng, invest ng and financing activities of the Company are segregated based on the available informat on.

1.6. Tangible Fixed Assets

Fixed Assets are stated at historical cost less accumulated depreciat on and impairment losses, if any. Cost includes related taxes, dut es, freight, insurance, etc. at ributable to the acquisit on and installat on of the fixed assets but excludes dut es and taxes that are recoverable from tax authorit es. Borrowing costs are capitalised as part of qualifying fixed assets.

Machinery spares which can be used only in connect on with an item of fixed asset and whose use is expected to be irregular are capitalised and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Fixed assets ret red from act ve use and held for sale are stated at the lower of their net book value and net realisable value and are disclosed separately in the Balance Sheet.

Capital Work-in-Progress: Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and at ributable interest.

1.7. Impairment of Assets

The carrying values of assets/cash generat ng units are reviewed at each Balance Sheet date to determine whether there is any indicat on of impairment of the carrying amount of the Company''s assets. If any indicat on exists, an asset''s recoverable amount is est mated. An impairment loss is recognised whenever the carrying amount of the asset exceeds the recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discount ng the future cash flows to their present value based on an appropriate discount factor. When there is indicat on that an impairment loss recognised for an asset in earlier account ng periods no longer exists or may have decreased such reversal of impairment loss is recognised in the Statement of profit and Loss.

1.8. Investments

a) Current investments are carried at lower of cost and fair value.

b) Non-Current investments are carried at cost. Diminut on in the value of such investments, other than temporary, is provided for.

1.9. Inventories

a) Raw materials, stores & spare parts and stock- in-trade are valued at lower of weighted average cost and est mated net realisable value (net of allowances). Cost includes freight, taxes and dut es and is net of credit under VAT and CENVAT scheme, where applicable.

b) Work-in-progress and finished goods are valued at lower of weighted average cost (net of allowances) and est mated net realisable value. Cost includes all direct costs and appropriate proport on of overheads to bring the goods to the present locat on and condit on.

c) Due allowance is made for slow/non-moving items.

1.10. Revenue and Other Income

a) Sales are recognised on shipment or on uncondit onal appropriat on of goods and comprise amounts invoiced for the goods, including excise duty, but excluding Sales Tax/ Value Added Tax, Quant ty Discounts and Sale Returns.

b) Service revenues are recognised when services are rendered.

c) Dividend income is accounted for when the right to receive it is established.

d) Interest Income is recognised on t me proport on basis.

1.11. Government Grants, Subsidies and Export benefits

Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the condit ons at ached to them and the grants/subsidy will be received.

When the grant or subsidy from the Government relates to revenue, it is recognised as income on a systemat c basis in the Statement of profit or Loss over the period necessary to match them with the related costs, which they are intended to compensate.

When the grant or subsidy from the Government is in the nature of promoters'' contribut on, where no repayment is ordinarily expected in respect thereof, it is credited to Capital Reserve and treated as a part of the Shareholders'' funds on receipt basis.

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

1.12. Employee benefits

I. Defined Contribution Plan

a. Superannuation

The Company contributes a sum equivalent to 15% of the eligible employees salary to a Superannuat on Fund administered by trustees and managed by Life Insurance Corporat on of India (LIC). The Company has no liability for future Superannuat on Fund benefits other than its annual contribut on and recognises such contribut ons as an expense in the year incurred.

b. Provident Fund

Contribut ons in respect of Employees who are not covered by Company''s Employees Provident Fund Trust are made to the Regional Provident Fund. These Contribut ons are recognised as expense in the year in which the services are rendered.

II. Defined benefit Plan

a. Gratuity

The Company makes annual contribut on to a Gratuity Fund administered by trustees and managed by LIC. The Company accounts its liability for future gratuity benefits based on actuarial valuat on, as at the Balance Sheet date, determined every year using the Projected Unit Credit method less the Fair Value of Plan Assets out of which the obligat ons are expected to be set led. Actuarial gains/losses are immediately recognised in the Statement of profit and Loss.

b. Provident Fund

In respect of the employees not covered in Point I.b. above, contribut ons to the Company''s Employees Provident Fund Trust are made in accordance with the Fund rules. The interest rate payable to the benefi ciaries every year is being notified by the Government.

In the case of contribut on to the Trust, the Company has an obligat on to make good the short all, if any, between the return from the investments of the Trust and the notified interest rate and recognises such obligat on, determined based on an actuarial valuat on, as an expense.

III. Long Term Compensated Absences

The liability for long term compensated absences carried forward on the Balance Sheet date is provided for based on an actuarial valuat on using the Projected Unit Credit method less the Fair Value of Plan Assets out of which the obligat ons are expected to be set led, as at the Balance Sheet date.

IV. Short Term Employee benefits

Short term employee benefits includes short term compensated absences which is recognised based on the eligible leave at credit on the Balance Sheet date, and the est mated cost is based on the terms of the employment contract.

V. Voluntary Retirement Scheme

Compensat on to employees under Voluntary Ret rement Schemes is expensed in the period in which the liability arises.

1.13. Operating Leases

Leases where the lessor effectively retains substant ally all the risks and benefits of ownership of the leased assets are classified as Operat ng Leases. Operat ng lease payments are recognised as an expense in the Statement of profit and Loss on a straight line basis.

1.14. Foreign Currency Transactions

Initial recognition

Transact ons in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transact on or at rates that closely approximate the rate at the date of the transact on.

Measurement

Foreign currency monetary items (other than derivat ve contracts) of the Company outstanding at the Balance Sheet date are restated at year end exchange rates.

Non-monetary items are carried at historical cost.

Treatment of Exchange Diff erences

Exchange diff erences arising on set lement/ restatement of foreign currency monetary assets and liabilit es of the Company are recognised as income or expense in the Statement of profit and Loss.

Accounting of Forward Contracts

The Company enters into forward exchange contracts and other instruments that are in

substance a forward exchange contract to hedge its risks associated with foreign currency fl uctuat ons. The premium or discount arising at the incept on of a forward exchange contract (other than for a fi rm commitment or a highly probable forecast transact on) or similar instrument is amort sed as expense or income over the life of the contract. Exchange diff erences on such a contract are recognised in the Statement of profit and Loss in the year in which the exchange rates change. Any profit or loss arising on cancellat on of such a contract is recognised as income or expense for the year.

1.15. Derivative Instruments and Hedge Accounting

The Company uses forward contracts and currency swaps (Derivat ve Contracts) to hedge its risks associated with foreign currency fl uctuat ons relating to highly probable forecast transact ons. The Company designates these as cash flow hedges.

The use of Derivat ve Contracts is governed by the Company''s policies on the use of such financial derivat ves consistent with the Company''s risk management strategy. The Company does not use derivat ve fi nancial instruments for speculat ve purposes.

Derivat ve Contracts are init ally measured at fair value, and are re-measured at subsequent report ng dates. Changes in the fair value of these Derivat ve Contracts that are designated and eff ect ve as hedges of future cash flows are recognised directly in "Hedge Reserve Account" under Shareholders'' Funds and the ineffective port on is recognised immediately in the Statement of profit and Loss.

Changes in the fair value of Derivat ve Contracts that do not qualify for hedge account ng are recognised in the Statement of profit and Loss as they arise.

Hedge account ng is discont nued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifi es for hedge account ng. If any of these events occur or if a hedged transact on is no longer expected to occur, the net cumulat ve gain or loss recognised under Shareholders'' Funds is transferred to the Statement of profit and Loss for the year.

1.16. Depreciation and Amortisation

Depreciat on has been provided on the straight- line method as per the rates prescribed in

Schedule XIV to the Companies Act, 1956 except in respect of the following categories of assets, where depreciat on is provided based on useful life of the assets assessed as under:

Useful life

and Basis of Description of Assets .

Depreciation/

Amortisation

Special tools and special purpose 4 Years

machines used in door frame products

Furniture and Fixtures 5 Years

Motor Vehicles 4 Years

Office Equipment (including Data 3 Years

Processing Equipment)

Leasehold Land/Improvements Over the primary

lease period

Individual Fixed Assets whose actual cost does not exceed " 5000/- are fully depreciated in the year of acquisit on.

Depreciat on is provided pro-rata from the month of Capitalisat on.

Certain fixed assets are treated as Cont nuous Process Plants based on technical evaluat on done by the Management and are depreciated as per rates prescribed in Schedule XIV to the Companies Act, 1956. The Company also has a system of providing addit onal depreciat on, where, in the opinion of the Management, the recovery of the fixed asset is likely to be affected by the variat on in demand and/or its condit on/usability.

1.17. Research and Development

Revenue expenditure on research and development is expensed when incurred. Capital expenditure on research and development is capitalised under fixed assets and depreciated in accordance with Note 1.16 above.

1.18. Taxes on Income

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

Deferred Tax is recognised on t ming diff erences; being the diff erences between taxable income and account ng 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 tax laws enacted or substant vely enacted as at the report ng date.

Deferred tax assets are recognised if there is reasonable certainty that there will be suffi cient future taxable income available to realise such assets. However, if there are unabsorbed depreciat on and carry forward of losses, deferred tax assets are recognised only if there is virtual certainty that there will be suffi cient future taxable income available to realise such assets.

1.19. Provisions and Contingencies

Provisions are recognised when there is a present obligat on as a result of past events and when a reliable est mate of the amount of obligat on can be made. Cont ngent liability is disclosed for (i) Possible obligat on which will be confi rmed only by future events not wholly within the control of the Company or (ii) Present obligat ons arising from past events where it is not probable that an out low of resources will be required to set le the obligat on or a reliable est mate of the amount of the obligat on cannot be made. Cont ngent assets are not recognised in the Financial Statements .

1.20. Segment Accounting

a. The Generally Accepted Account ng Principles used in the preparat on of the Financial Statements are applied to record revenue and expenditure in individual segments.

b. Segment revenue and segment results include transfers between business segments. Such transfers are accounted for at a compet t ve market price and are eliminated in the consolidat on of the segments.

c. Expenses that are directly ident fi able to segments are considered for determining the segment results. Expenses which relate to the Company as a whole and are not allocable to segments are included under unallocated corporate expenses.

d. Segment assets and liabilit es include those directly ident fi able with the respect ve segments. Unallocated corporate assets and liabilit es represent the assets and liabilit es that relate to the Company as a whole and are not allocable to any segment.

1.21. Borrowing Costs

Borrowing Costs include interest, amort sat on of ancillary costs incurred and exchange diff erences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the borrowing costs. Borrowing Costs, allocated to and ut lised for qualifying assets, pertaining to the period from commencement of act vit es relating to construct on/development of the qualifying asset upto the date the asset is ready for its intended use is added to the cost of the assets. Capitalisat on of Borrowing Costs is suspended and charged to the Statement of profit and Loss during extended periods when act ve development activity on the qualifying assets is interrupted.

1.22. Earnings Per Share

Basic Earnings Per Share is calculated by dividing the net profit for the period at ributable to equity shareholders by the weighted average number of Equity Shares outstanding during the period.

The weighted average number of Equity Shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potent al Equity Shares, that have changed the number of Equity Shares outstanding, without a corresponding change in resources. For the purpose of calculat ng diluted earnings per share, the net profit for the period at ributable to Equity Share holders and the weighted average number of shares outstanding during the period is adjusted for the eff ects of all dilut ve potent al Equity Shares.

1.23. Employees Stock Option

Stock opt ons granted to the employees under the stock opt on scheme are evaluated as per the account ng treatment prescribed by the Employee Stock Opt on Scheme and Employee Stock Purchase Scheme Guidelines, 1999 issued by Securit es Exchange Board of India. The Company follows the intrinsic value method of account ng for the opt ons and accordingly, the excess of market value of the stock opt ons as on date of grant, if any, over the exercise price of the opt ons is recognised as deferred employee compensat on and is charged to the Statement of profit and Loss on graded vest ng basis over the vest ng period of the opt ons.

b) Terms/Rights at ached to class of shares:

The Company has only one class of shares referred to as Equity Shares having a par value of Rs.2 each. The holders of Equity Shares are ent tled to one vote per share. Dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meet ng, except in case of interim dividend. Repayment of capital will be in proport on to the number of Equity Shares held.

d) Status on Global Depository Receipts:

The aggregate number of Global Depository Receipts (GDRs) outstanding as at 31 March 2014 is 49,30,630 (As at 31 March 2013 52,23,460) each represent ng one Equity Share of Rs.2 face value. GDR % against total number of shares is 2.64% (As at 31 March 2013 2.80%). The GDRs carry the same terms/rights at ached to Equity Shares of the Company.

During the past 5 years, the Company has allot ed 21,12,766 (Previous Year 18,99,308) Shares of Rs.2 each to employees, pursuant to the exercise of their opt on under the Employees Stock Opt on Scheme.

The total number of such Opt ons outstanding as at 31 March 2014 is 8,11,595 (Previous Year 11,84,216) and each Opt on is exercisable into one equity share of Rs.2 face value within three/six years from the date of vest ng.

3. Reserves and Surplus

a) Represents the amount transferred, for a sum equal to the face value of the Equity Shares, at the t me of Buy- back.

b) Subsequent to the Balance Sheet date of 31 March 2013 and before the book closure date for declarat on of the final dividend for the year 2012-13, 68,636 (Previous Year 48,640) Equity Shares were allot ed under the Employee Stock Opt on Scheme to employees and dividend of Rs.0.0034 Cr. (Previous Year Rs.0.0049 Cr.) on these Shares were paid. The total amount of Rs.0.0034 Cr. (Previous Year Rs.0.0057 Cr.) including dividend distribut on tax, have been appropriated from the opening surplus in the Statement of profit and Loss.

c) Represents amount writen back on account of set-off of Dividend Distribut on Tax paid by Subsidiaries on dividend distributed to the Company, against Dividend Distribut on Tax payable by the Company.

4.1. Nature of Security

4.1.1. Secured, Listed and Rated Non-Convertible Debentures (NCDs)

(a) NCDs'' with Coupon of 10.15%, 9.99%, 9.81%, 8.80%, 9.95% and 9.90% are secured by a pari passu first charge on certain immovable propert es of the Company.

(b) NCDs'' with Coupon of 10.04% and 10.045% are raised with a pari passu first charge on certain immovable propert es of the Company. The Company is in the process of creat ng the security within the applicable t me limit.

(c) NCD with Coupon of 8.50% is secured by a pari passu first charge on all the Plant & Machinery and certain immovable propert es of the Company.

4.1.2. Rupee Term Loan

Term Loan from IDBI Bank was secured by a pari passu first charge on all the Plant & Machinery of the Company.

4.1.3. Foreign Currency Term Loans

(a) External Commercial Borrowing - USD 15 Mio. (classified as "Other Current Liabilit es" as at 31 March 2014) is secured by a pari passu fi rst charge on all the Plant & Machinery of the Company.

(b) External Commercial Borrowing - USD 9.32 Mio. (Outstanding as at 31 March 2014 - USD 3.10 Mio. classified as "Other Current Liabilit es") is secured by a pari passu first charge on all the Plant & Machinery and certain immovable propert es of the Company.

4.1.4. Long Term Buyers Credit

Long Term Buyers Credit from Bank of Tokyo is secured by a pari passu first charge on all the Plant & Machinery of the Company.

4.2.2. Rupee Term Loan

Interest at the rate of IDBI Bank''s Base Rate plus 0.50% p.a. was paid monthly t ll the date of repayment,

7. Trade Payables

Based on, and to the extent of informat on received from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), and relied upon by the auditors, the relevant part culars are furnished below:

(a) The 11.05% Debentures are secured by a pari passu first charge on certain immovable propert es of the Company. The Debentures are redeemable at par, on 26 September 2014.

(b) The 10.95% Debentures are secured by a pari passu first charge on certain immovable propert es of the Company. The Debentures are redeemable at par, on 15 December 2014.

(c) The 11.70% Debentures were secured by a pari passu first charge on all the Plant & Machinery and certain immovable propert es of the Company. The Debentures were redeemed at par on 25 February 2014.

(d) The 9.75% & 8.75% Debentures were secured by a pari passu first charge on certain immovable propert es of the Company. The Debentures were redeemed at par on 25September 2013 and 7 May 2013 respect vely.

1. Depreciat on/Amort sat on for the year includes depreciat on amount ng to Rs.5.10 Cr. (Previous Year Rs.2.25 Cr.) charged addit onally on certain assets.

2. Net Block of Buildings includes Improvement to Buildings Rs.10.22 Cr. (Previous Year Rs.10.61 Cr.) constructed on Leasehold Land.

3. Previous Year Figures are given in brackets.

Notes:

a. During the previous year, the Company acquired 22.87% stake in Financiere C10 SAS (FC10), an Overseas Subsidiary in France at an investment of Rs.16.55 Cr, pursuant to which FC10 became a Wholly Owned Overseas Subsidiary of the Company. During the year, the final considerat on of Rs.1.01 Cr based on the terms of the contract has been paid to the erstwhile Shareholders.

b. During the previous year the Company had decided to voluntarily liquidate TICI Motors (Wuxi) Company Limited, a Wholly Owned Overseas Subsidiary in China and consequently a sum of Rs.3.81 Cr. was provided towards the diminut on in the value of investment. During the year, consequent to the complet on of the liquidat on process, the Company has received an amount of Rs.0.06 Cr. towards proceeds on liquidat on of the said Wholly Owned Overseas Subsidiary. As a result, the Company has writen back the provision for diminut on in the value of the Investment of Rs.3.81 Cr. and has also writen off the net carrying value of Investment amount ng to Rs.3.75 Cr.

c. During the year, the Company subscribed to 50,45,455 Equity Shares of Rs.10 each of Cholamandalam MS General Insurance Company Limited, a Subsidiary, offered on Rights basis at Rs.110 per share amount ng to Rs.55.50 Cr.

d. During the year, the Company subscribed to 20,00,000 Equity Shares of Rs.10 each of TI Tsubamex Private Limited, a joint venture ent ty, at Rs.10 per share amount ng to Rs.2.00 Cr.

e. During the year, the Company subscribed to 3,90,562 Equity Shares of Rs.10 each of Coromandel Engineering Company Limited, offered on Rights basis at Rs.20 per share amount ng to Rs.0.78 Cr.

f. During the year, the Company purchased 24,00,000 Equity Shares of Rs.10 each of Cauvery Power Generat on Chennai Private Limited, at the cost of Rs.2.41 Cr.

During the year, the Company has invested an aggregate amount of Rs.716.00 Cr. (Previous Year Rs.985.54 Cr.) in units of various Cash Management Schemes of Mutual Funds, for the purpose of deployment of temporary cash surpluses. The total considerat on on sale of these units during the year was Rs.717.51 Cr. (Previous Year Rs.989.52 Cr.).

Draf Assessment Orders received from Income Tax Authorit es and Show Cause Not ces received from various other Government Authorit es, pending adjudicat on, have not been considered as Cont ngent Liabilit es.

Mar 31, 2013

1.1 Accounting Convention

The financial statements of the Company are prepared under the historical cost convention, on an accrual basis, in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notifi ed by the Government of India/ issued by the Institute of Chartered Accountants of India (ICAI), as applicable, and the relevant provisions of the Companies Act, 1956. The accounti ng policies adopted in the preparation of the fi nancial statements are consistent with those followed in the previous year.

1.2 Presentation and disclosure of financial statements

An asset has been classifi ed as current when it satisfies any of the following criteria;

a) It is expected to be realised in, or is intended for sale or consumpti on in, the Company''s normal operating cycle;

b) i t is held primarily for the purpose of being traded;

c) it is expected to be realised within twelve months after the reporting date; or

d) It is cash or cash equivalent unless it is restricted from being exchanged or used to sett le a liability for at least twelve months after the reporting date.

A liability has been classifi ed as current when it satisfies any of the following criteria;

a) It is expected to be settled in the Company''s normal operating cycle;

b) i t is held primarily for the purpose of being traded;

c) It is due to be settled within twelve months after the reporting date; or

d) The Company does not have an unconditional right to defer settlements of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other assets and liabilities have been classified as non-current.

Based on the nature of products/activities, the Company has determined its operating cycle as twelve months for the above purpose of classification as current and non-current.

1.3 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) as of the date of the fi nancial statements and the reported income and expenses like provision for employee benefits, provision for doubtful trade receivables/advances/contingencies, provision for warranties, allowance for slow/ non-moving inventories, useful life of fixed assets, provision for retrospective price increases on purchases, provision for taxation, etc., during the reporting year. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results may vary from these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known/materialise.

1.4 Tangible Fixed Assets

Fixed Assets are stated at historical cost less accumulated depreciation and impairment losses, if any. Cost includes related taxes, duties, freight, insurance, etc., attributable to the acquisition and installation of the fixed assets but excludes duti es and taxes that are recoverable from tax authorities. Borrowing costs are capitalised as part of qualifying fixed assets. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalised and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefi ts from such asset beyond its previously assessed standard of performance. Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realisable value and are disclosed separately in the Balance Sheet.

Capital Work-in-Progress: Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and attributable interest.

1.5 Impairment of Assets

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

1.6 Investments

a) Current investments are carried at lower of cost and fair value.

b) Non-Current investments are carried at cost. Diminution in the value of such investments, other than temporary, is provided for.

1.7 Inventories

a) Raw materials, stores & spare parts and stock- in-trade are valued at lower of weighted average cost and estimated net realisable value (net of allowances). Cost includes freight, taxes and duties and is net of credit under VAT and CENVAT scheme, where applicable.

b) Work-in-progress and finished goods are valued at lower of weighted average cost and estimated net realisable value (net of allowances). Cost includes all direct costs and appropriate proportion of overheads to bring the goods to the present location and condition.

c) Due allowance is made for slow/non-moving items.

1.8 Revenue and Other Income

a) Sales are recognised on shipment or on unconditional appropriation of goods and comprise amounts invoiced for the goods, including Excise Duty, but excluding Sales Tax/ Value Added Tax, Quantity Discounts and Sale Returns.

b) Service revenues are recognised when services are rendered.

c) Dividend income is accounted for when the right to receive it is established.

d) Interest income is recognised on time proportion basis.

1.9 Government grants, subsidies and export benefits

Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants/subsidy will be received.

When the grant or subsidy from the Government relates to revenue, it is recognised as income on a systematic basis in the Statement of Profit and loss over the period necessary to match them with the related costs, which they are intended to compensate.

When the grant or subsidy from the Government is in the nature of promoters'' contribution, where no repayment is ordinarily expected in respect thereof, it is credited to Capital Reserve and treated as a part of the Shareholders'' Funds on receipt basis.

Export benefi ts are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

1.10 Employee Benefits

I. Defined Contribution Plan

a. Superannuation

The Company contributes a sum equivalent to 15% of the eligible employees salary to a Superannuation Fund administered by trustees and managed by Life Insurance Corporation of India (LIC). The Company has no liability for future Superannuation Fund benefits other than its annual contribution and recognises such contributions as an expense in the year incurred.

b. Provident Fund

Contributions in respect of Employees who are not covered by Company''s Employees Provident Fund Trust are made to the Regional Provident Fund. These Contributions are recognised as expense in the year in which they are incurred.

II. Defined Benefit Plan

a. Gratuity

The Company makes annual contribution to a Gratuity Fund administered by trustees and managed by LIC. The Company accounts its liability for future gratuity benefits based on actuarial valuation, as at the Balance Sheet date, determined every year using the Projected Unit Credit method less the Fair Value of Plan Assets out of which the obligations are expected to be settled. Actuarial gains/losses are immediately recognised in the Statement of Profit and Loss.

b. Provident Fund

In respect of the employees not covered in Point I.b above, contributions to the Company''s Employees Provident Fund Trust are made in accordance with the Fund rules. The interest rate payable to the benefi ciaries every year is being notified by the Government.

In the case of contribution to the Trust, the Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate and recognises such obligation, determined based on an actuarial valuation, as an expense.

III. Long Term Compensated Absences

The liability for long term compensated absences carried forward on the Balance Sheet date is provided for based on an actuarial valuation using the Projected Unit Credit method less the Fair Value of Plan Assets out of which the obligations are expected to be settled, as at the Balance Sheet date.

IV. Short Term Employee Benefits

Short term employee benefits includes short term compensated absences which is recognised based on the eligible leave at credit on the Balance Sheet date, and the esti mated cost is based on the terms of the employment contract.

V. Voluntary Retirement Scheme Compensation to employees under Voluntary Retirement Schemes is expensed in the period in which the liability arises.

1.11 Operating Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss as per the lease terms.

1.12 Foreign Currency Transactions Initial recognition

Transacti ons in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.

Measurement

Foreign currency monetary items (other than Derivative Contracts) of the Company outstanding at the Balance Sheet date are restated at year end exchange rates.

Non-monetary items are carried at historical cost.

Treatment of Exchange Differences

Exchange differences arising on settlement/ restatement of foreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss.

Accounting of forward contracts

The Company enters into forward exchange contracts and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising at the inception of a forward exchange contract (other than for a fi rm commitment or a highly probable forecast transaction) or similar instrument is amortised as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the Statement of Profit and Loss in the year in which the exchange rates change. Any profi t or loss arising on cancellation of such a contract is recognised as income or expense for the year.

1.13 Derivative Instruments and Hedge Accounting

The Company uses forward contracts and currency swaps (Derivative Contracts) to hedge its risks associated with foreign currency fluctuations relating to highly probable forecast transactions. The Company designates these as cash flow hedges.

The use of Derivative Contracts is governed by the Company''s policies on the use of such financial derivatives consistent with the Company''s risk management strategy. The Company does not use derivative financial instruments for speculative purposes.

Derivative Contracts are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in the fair value of these Derivati ve Contracts that are designated and effective as hedges of future cash flows are recognised directly in "Hedge Reserve Account" under Shareholders'' Funds and the ineffective portion is recognised immediately in the Statement of Profit and Loss.

Changes in the fair value of Derivative Contracts that do not qualify for hedge accounting are recognised in the Statement of Profit and Loss as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. If any of these events occur or if a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised under Shareholders'' Funds is transferred to the Statement of Profit and Loss for the year.

1.14 Depreciation and Amortisation

Depreciation has been provided on the straight- line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 except in respect of the following categories of assets, where depreciation is provided based on useful life of the assets assessed as under: individual Fixed Assets whose actual cost does not exceed Rs.5000 are fully depreciated in the year of acquisition.

Depreciation is provided pro-rata from the month of Capitalisation.

Certain fi xed assets are treated as Continuous Process Plants based on technical evaluation done by the Management and are depreciated as per rates prescribed in Schedule XIV to the Companies Act, 1956. The Company also has a system of providing additional depreciation, where, in the opinion of the Management, the recovery of the fixed asset is likely to be affected by the variation in demand and/or its condition/ usability.

1.15 Research and Development

Revenue expenditure on research and development is expensed when incurred. Capital expenditure on research and development is capitalised under fixed assets and depreciated in accordance with Note 1.14 above.

1.16 Taxes on Income

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

Deferred tax is recognised on timing differences; being the differences between taxable income and 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 tax laws enacted or substantively enacted as at the reporting date. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Other deferred tax assets are recognised if there is reasonable certainty that there will be sufficient future taxable income available to realise such assets.

1.17 Provisions and Contingencies

Provisions are recognised when there is a present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Conti ngent liability is disclosed for (i) Possible obligation which will be confi rmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements.

1.18 Segment Accounting

a. The Generally Accepted Accounting Principles used in the preparation of the financial statements are applied to record revenue and expenditure in individual segments.

b. Segment revenue and segment results include transfers between business segments. Such transfers are accounted for at a competitive market price and are eliminated in the consolidation of the segments.

c. Expenses that are directly identifiable to segments are considered for determining the segment results. Expenses which relate to the Company as a whole and are not allocable to segments are included under unallocated corporate expenses.

d. Segment assets and liabiliti es include those directly identifiable with the respective segments. Unallocated corporate assets and liabiliti es represent the assets and liabilities that relate to the Company as a whole and are not allocable to any segment.

1.19 Borrowing Costs

Borrowing Costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the borrowing costs. Borrowing Costs, allocated to and uti lised for qualifying assets, pertaining to the period from commencement of activities relating to construction/development of the qualifying asset upto the date the asset is ready for its intended use is added to the cost of the assets. Capitalisation of Borrowing Costs is suspended and charged to the Statement of Profi t and Loss during extended periods when active development activity on the qualifying assets is interrupted.

1.20 Earnings Per Share

Basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of Equity Shares outstanding during the period.

The weighted average number of Equity Shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potenti al Equity 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 for the period attributable to equity share holders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential Equity Shares.

1.21 Employees Stock Option

Stock Options granted to the employees under the Stock Opti on Scheme are evaluated as per the accounting treatment prescribed by the Employee Stock Opti on Scheme and Employee Stock Purchase Scheme Guidelines, 1999 issued by the Securiti es and Exchange Board of India. The Company follows the intrinsic value method of accounti ng for the Opti ons and accordingly, the excess of market value of the Stock Options as on date of grant, if any, over the exercise price of the Opti ons is recognised as deferred employee compensati on and is charged to the Statement of Profi t and Loss on graded vesting basis over the vesting period of the Options.

Mar 31, 2012

1.1 Accounting Convention

The financial statements of the Company are prepared under the historical cost convention, on an accrual basis, in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified by the Government of India/ issued by the Institute of Chartered Accountants of India (ICAI), as applicable, and the relevant provisions of the Companies Act, 1956. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Presentation and disclosure of financial statements

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

An asset has been classified as current when it satisfies any of the following criteria;

a) It is expected to be realised in, or is intended for sale or consumption in, the Company's normal operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is expected to be realised within twelve months after the reporting date; or

d) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

A liability has been classified as current when it satisfies any of the following criteria;

a) It is expected to be settled in the Company's normal operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is due to be settled within twelve months after the reporting date; or

d) The Company does not have an unconditional right to defer settlements of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other assets and liabilities have been classified as non-current.

1.3 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) as of the date of the financial statements and the reported income and expenses like provision for employee benefits, provision for doubtful trade receivables/ advances/contingencies, provision for warranties, allowance for slow/non-moving inventories, useful life of fixed assets, provision for retrospective price increases on purchases, provision for taxation, etc., during the reporting year. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results may vary from these estimates.

1.4 Tangible Fixed Assets

Fixed Assets are stated at historical cost less accumulated depreciation and impairment losses, if any. Cost includes related taxes, duties, freight, insurance, etc., attributable to the acquisition and installation of the fixed assets but excludes duties and taxes that are recoverable from tax authorities. Borrowing costs are capitalised as part of qualifying fixed assets. Exchange differences arising on restatement/ settlement of long term foreign currency borrowings relating to acquisition of depreciable fixed assets are recognised in the Statement of Profit and Loss.

Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalised

and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realisable value and are disclosed separately in the Balance Sheet.

Capital Work-in-Progress: Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and attributable interest.

1.5 Impairment of Assets

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

1.6 Investments

a) Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as Current Investments. All other investments are classified as Non-Current Investments.

b) Non-Current Investments are carried at cost. Diminution in the value of such investments, other than temporary, is provided for.

c) Current Investments are carried at lower of cost and fair value.

1.7 Inventories

a) Raw materials, stores & spare parts and traded goods are valued at lower of weighted average cost (net of allowances) and estimated net realisable value. Cost includes freight, taxes and duties and is net of credit under VAT and CENVAT scheme, where applicable.

b) Work-in-process and finished goods are valued at lower of weighted average cost (net of allowances) and estimated net realisable value. Cost includes all direct costs and appropriate proportion of overheads to bring the goods to the present location and condition.

c) Due allowance is made for slow/non-moving items, based on Management estimates.

1.8 Revenue and Other Income

a) Sales are recognised on shipment or on unconditional appropriation of goods and comprise amounts invoiced for the goods, including excise duty, but excluding Sales Tax/ Value Added Tax and Quantity Discounts.

b) Service revenues are recognised when services are rendered.

c) Dividend income is accounted for when the right to receive it is established as on the date of Balance Sheet.

d) Interest Income is recognised on time proportion basis.

1.9 Government grants, subsidies and export incentives

Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants/subsidy will be received.

When the grant or subsidy from the Government relates to revenue, it is recognised as income on a systematic basis in the statement of profit and loss over the period necessary to match them with the related costs, which they are intended to compensate.

When the grant or subsidy from the Government is in the nature of promoters' contribution, where no repayment is ordinarily expected in respect thereof, it is credited to Capital Reserve and treated as a part of the Shareholders' funds on receipt basis.

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

1.10 Employee Benefits

I. Defined Contribution Plan

a) Superannuation

The Company contributes a sum equivalent to 15% of the eligible employees salary to a Superannuation Fund administered by trustees and managed by Life Insurance Corporation of India (LIC). The Company has no liability for future Superannuation Fund benefits other than its annual contribution and recognises such contributions as an expense in the year incurred.

b) Provident Fund

Contributions are made to the Company's Employees Provident Fund Trust/Regional Provident Fund in accordance with the Fund rules. The interest rate payable to the beneficiaries every year is being notified by the Government.

In the case of contribution to the Trust, the Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate and recognizes such obligation as an expense.

II. Defined Benefit Plan

Gratuity

The Company makes annual contribution to a Gratuity Fund administered by trustees and managed by LIC. The Company accounts its liability for future gratuity benefits based on actuarial valuation, as at the Balance Sheet date, determined every year using the Projected Unit Credit method. Actuarial gains/ losses are immediately recognised in the Statement of Profit and Loss.

III. Long Term Compensated Absences

The liability for long term compensated absences carried forward on the Balance Sheet date is provided for based on an actuarial valuation using the Projected Unit Credit method, as at the Balance Sheet date.

IV. Short Term Employee Benefits

Short term employee benefits includes short term compensated absences which is recognised based on the eligible leave at credit on the Balance Sheet date, and the estimated cost is based on the terms of the employment contract.

V. Voluntary Retirement Scheme

Compensation to employees under Voluntary Retirement Schemes is expensed in the period in which the liability arises.

1.11 Operating Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the revenue account as per the lease terms.

1.12 Foreign Currency Transactions

a) Initial recognition

Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.

b ) Measurement

Foreign currency monetary items (other than derivative contracts) of the Company outstanding at the Balance Sheet date are restated at year end exchange rates. Non-monetary items are carried at historical cost.

c) Treatment of exchange differences

Exchange differences arising on settlement/ restatement of short-term foreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss.

d) Accounting of forward contracts

The Company enters into forward exchange contracts and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising at the inception of a forward exchange contract (other than for a firm commitment or a highly probable forecast transaction) or similar instrument is amortised as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the Statement of Profit and Loss in the year in which the exchange rates change. Any profit or loss arising on cancellation of such a contract is recognised as income or expense for the year.

1.13 Derivative Instruments and Hedge Accounting

The Company uses forward contracts and currency swaps to hedge its risks associated with foreign currency fluctuations relating to highly probable forecast transactions. The Company designates these as cash flow hedges.

The use of forward contracts is governed by the Company's policies on the use of such financial derivatives consistent with the Company's risk management strategy. The Company does not use derivative financial instruments for speculative purposes.

Forward contract derivative instruments are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in the fair value of these derivatives that are designated and effective as hedges of future cash flows are recognised directly in "Hedge Reserve Account" under Shareholders' Funds and the ineffective portion is recognised immediately in the Statement of Profit and Loss.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the Statement of Profit and Loss as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. If any of these events occur or if a

hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised under shareholders' funds is transferred to the Statement of Profit and Loss for the year.

1.14 Depreciation and Amortisation

Depreciation has been provided on the straight- line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 except in respect of the following categories of assets, where depreciation is provided based on useful life of the assets assessed as under:

Depreciation is provided pro rata from the month of Capitalisation.

Certain fixed assets are treated as Continuous Process Plants based on technical evaluation done by the Management and are depreciated at the applicable rates. The Company also has a system of providing additional depreciation, where, in the opinion of the Management, the recovery of the fixed asset is likely to be affected by the variation in demand and/or its condition/ usability.

1.15 Research and Development

Revenue expenditure on research and development is expensed when incurred. Capital expenditure on research and development is capitalised under fixed assets and depreciated in accordance with Note1.14 above.

1.16 Taxes on Income

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

Deferred tax is recognised on timing differences; being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Other deferred tax assets are recognised if there is reasonable certainty that there will be sufficient future taxable income available to realise such assets.

1.17 Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised when there is a present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for (i) Possible obligation which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the

obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised.

1.18 Segment Accounting

a) The Generally Accepted Accounting Principles used in the preparation of the financial statements are applied to record revenue and expenditure in individual segments.

b) Segment revenue and segment results include transfers between business segments. Such transfers are accounted for at a competitive market price and are eliminated in the consolidation of the segments.

c) Expenses that are directly identifiable to segments are considered for determining the segment results. Expenses which relate to the Company as a whole and are not allocable to segments are included under unallocated corporate expenses.

d) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocated corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and are not allocable to any segment.

Mar 31, 2011

1. Accounting Convention

The financial statements are prepared under the historical cost convention, on an accrual basis, in accordance with the generally accepted accounting principles in India including the Accounting Standards notified by the Government of India / issued by the Institute of Chartered Accountants of India (ICAI), as applicable, and the relevant provisions of the Companies Act, 1956.

2. Use of Estimates

The preparation of the financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses like provision for employee benefits, provision for doubtful debts/advances/contingencies, provision for warranties, allowance for slow/non-moving inventories, useful lives of fixed assets, provision for retrospective price increases on purchases, provision for taxation, etc., during the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results may vary from these estimates.

3. Fixed Assets and Depreciation

Fixed Assets are stated at historical cost less accumulated depreciation. Cost includes related taxes, duties, freight, insurance, etc. attributable to the acquisition and installation of the fixed assets but excludes duties and taxes that are recoverable from tax authorities.

Borrowing costs are capitalised as part of qualifying fixed assets. Other borrowing costs are expensed.

The Company also has a system of providing additional depreciation, where, in the opinion of the Management, the recovery of the fixed asset is likely to be affected by the variation in demand and/or its condition/usability. Depreciation is provided pro-rata from the month of Capitalisation.

Individual fixed assets whose actual cost does not exceed Rs.5,000/- are fully depreciated in the year of acquisition.

4. Investments

a. Long term investments are carried at cost. Diminution in the value of investments, other than temporary, is provided for.

b. Current investments are carried at lower of cost and fair value.

5. Inventories

a. Raw materials, stores & spare parts and traded goods are valued at lower of weighted average cost (net of allowances) and estimated net realisable value. Cost includes freight, taxes and duties and is net of credit under VAT and CENVAT scheme, where applicable.

b. Work-in-process and finished goods are valued at lower of weighted average cost (net of allowances) and estimated net realisable value. Cost includes all direct costs and applicable production overheads to bring the goods to the present location and condition.

c. Due allowance is made for slow/ non-moving items, based on Management estimates.

6. Revenue Recognition

a. Sales are recognised on shipment or on unconditional appropriation of goods and comprise amounts invoiced for the goods, including excise duty, but net of sales tax / VAT and Quantity Discounts.

b. Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

c. Dividend income on investments is accounted for when the right to receive the payment is established.

d. Interest Income is recognised on time proportion basis.

7. Employee Benefits

I. Defined Contribution Plan

a. Superannuation

The Company contributes a sum equivalent to 15% of the eligible employees salary to a Superannuation Fund administered by trustees and managed by Life Insurance Corporation of India (LIC). The Company has no liability for future Superannuation Fund benefits other than its annual contribution and recognizes such contributions as an expense in the year incurred.

II. Defined Benefit Plan

a. Gratuity

The Company makes annual contributions to a Gratuity Fund administered by trustees and managed by LIC. The Company accounts its liability for future gratuity benefits based on actuarial valuation, as at the Balance Sheet date, determined every year by LIC using the Projected Unit Credit method. Actuarial gains/losses are immediately recognised in the Profit & Loss Account.

b. Provident Fund

Contributions are made to the Companys Employees Provident Fund Trust in accordance with the fund rules. The interest rate payable by the Trust to the beneficiaries every year is being notified by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate and recognizes such obligation as an expense.

III. Long Term Compensated Absences

The liability for long term compensated absences carried forward on the Balance Sheet date is provided for based on an actuarial valuation using the Projected Unit Credit method, as at the Balance Sheet date, carried out by LIC.

IV. Short Term Employee Benefits

Short term employee benefits includes short term compensated absences which is recognized based on the eligible leave at credit on the Balance Sheet date, and the estimated cost is based on the terms of the employment contract.

V. Voluntary Retirement Scheme

Compensation to employees under Voluntary Retirement Schemes is provided/expensed in the period in which the liability arises.

8. Deferred Compensation Cost

In respect of stock options, granted pursuant to the Companys Employee Stock Option Scheme, the Company determines the compensated cost based on the intrinsic value method and the compensation cost is amortised on a straight line basis over the vesting period.

9. Operating Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the revenue account as per the lease terms.

10. Foreign Currency Transactions

Foreign Currency Transactions are accounted at the exchange rates ruling on the date of the transactions. Foreign currency monetary items as at the Balance Sheet date are restated at the closing exchange rates. Exchange differences arising on actual payments/realisations and year-end restatements are dealt with in the profit and loss account.

The Company enters into forward exchange contracts and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising at the inception of a forward exchange contract (other than for a firm commitment or a highly probable forecast transaction) or similar instrument is amortised as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the Profit & Loss Account in the year in which the exchange rates change. Any profit or loss arising on cancellation of such a contract is recognised as income or expense for the year.

11. Derivative Instruments and Hedge Accounting

The Company uses forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company designates these as cash flow hedges.

The use of forward contracts is governed by the Companys policies on the use of such financial derivatives consistent with the Companys risk management strategy. The Company does not use derivative financial instruments for speculative purposes.

Forward contract derivative instruments are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in the fair value of these derivatives that are designated and effective as hedges of future cash flows are recognised directly in ÃHedge Reserve Account" under Shareholders Funds and the ineffective portion is recognized immediately in the Profit & Loss Account.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognized in the Profit & Loss Account as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. If any of these events occur or if a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised under shareholders funds is transferred to the Profit & Loss Account for the year.

12. Research and Development

Revenue expenditure on research and development is expensed when incurred. Capital expenditure on research and development is capitalised under fixed assets and depreciated in accordance with Item 3 above.

13. Taxes on Income

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

Deferred tax is recognised on timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses. Other deferred tax assets are recognised if there is reasonable certainty that there will be sufficient future taxable income available to realise such assets.

14. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for (i) Possible obligation which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised.

15. Segment Accounting

a. The generally accepted accounting principles used in the preparation of the financial statements are applied to record revenue and expenditure in individual segments.

b. Segment revenue and segment results include transfers between business segments. Such transfers are accounted for at a competitive market price and are eliminated in the consolidation of the segments.

c. Expenses that are directly identifiable to segments are considered for determining the segment results. Expenses which relate to the Company as a whole and are not allocable to segments are included under unallocated corporate expenses.

d. Segments assets and liabilities include those directly identifiable with the respective segments. Unallocated corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and are not allocable to any segment.

16. Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amount of the Companys assets. If any indication exists, an assets recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of the asset exceeds the recoverable amount.

Mar 31, 2010

1. Accounting Convention

The financial statements are prepared under the historical cost convention, on an accrual basis, in accordance with the generally accepted accounting principles in India including the Accounting Standards notified by the Government of India / issued by the Institute of Chartered Accountants of India (ICAI), as applicable, and the relevant provisions of the Companies Act, 1956.

2. Use of Estimates

The preparation of the financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses like provision for employee benefits, provision for doubtful debts/advances/contingencies, allowance for slow/non-moving inventories, useful lives of fixed assets, provision for retrospective price increases on purchases, provision for taxation, etc., during the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results may vary from these estimates.

3. Fixed Assets and Depreciation

a. Fixed Assets are stated at historical cost less accumulated depreciation. Cost includes related taxes, duties, freight, insurance, etc. attributable to the acquisition and installation of the fixed assets but excludes duties and taxes that are recoverable from tax authorities.

b. Borrowing costs are capitalised as part of qualifying fixed assets. Other borrowing costs are expensed.

c. Depreciation on fixed assets other than special tools and special purpose machines used in door frame projects, furniture and fixtures, motor cars and data processing equipments is provided under the Straight Line Method at the rates specified under Schedule XIV of the Companies Act, 1956. Special tools and special purpose machines used in door frame projects are depreciated over four years, furniture and fixtures are depreciated over five years, motor cars are depreciated over four years and data processing equipments are depreciated over three years on the basis of Managements evaluation of the useful life of these assets, which results in depreciation being charged at rates higher than those specified under the Companies Act, 1956.

Certain fixed assets are treated as Continuous Process Plants based on technical evaluation done by the Management and are depreciated at the applicable rates.

The Company also has a system of providing additional depreciation, where, in the opinion of the Management, the recovery of the fixed asset is likely to be affected by the variation in demand and/or its condition/usability. Depreciation is provided pro-rata from the month of Capitalisation.

d. Individual fixed assets whose actual cost does not exceed Rs. 5,000/- are fully depreciated in the year of acquisition.

e. Lease hold land is amortised over the remaining period of the lease.

4. Investments

a. Long term investments are carried at cost. Diminution in the value of investments, other than temporary, is provided for.

b. Current investments are carried at lower of cost and fair value.

5. Inventories

a. Raw materials, stores & spare parts and traded goods are valued at lower of weighted average cost (net of allowances) and estimated net realisable value. Cost includes freight, taxes and duties and is net of credit under VAT and CENVAT scheme, where applicable.

b. Work-in-process and finished goods are valued at lower of weighted average cost (net of allowances) and estimated net realisable value. Cost includes all direct costs and applicable production overheads to bring the goods to the present location and condition.

c. Due allowance is made for slow/ non-moving items, based on Management estimates.

6. Revenue Recognition

a. Sales are recognised on shipment or on unconditional appropriation of goods and comprise amounts invoiced for the goods, including excise duty, but net of sales tax / VAT and Quantity Discounts.

b. Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

c. Dividend income on investments is accounted for when the right to receive the payment is established.

d. Interest Income is recognised on time proportion basis.

7. Employee Benefits

I. Defined Contribution Plan

a. Superannuation

The Company contributes a sum equivalent to 15% of the eligible employees salary to a Superannuation Fund administered by trustees and managed by Life Insurance Corporation of India (LIC). The Company has no liability for future Superannuation Fund benefits other than its annual contribution and recognizes such contributions as an expense in the year incurred.

II. Defined Benefit Plan

a. Gratuity

The Company makes annual contribution to a Gratuity Fund administered by trustees and managed by LIC. The Company accounts its liability for future gratuity benefits based on actuarial valuation, as at the Balance Sheet date, determined every year by LIC using the Projected Unit Credit method. Actuarial gains/losses are immediately recognised in the Profit & Loss Account.

b. Provident Fund

Contributions are made to the Companys Employees Provident Fund Trust in accordance with the fund rules. The interest rate payable by the Trust to the beneficiaries every year is being notified by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate and recognizes such obligation as an expense.

III. Long Term Compensated Absences

The liability for long term compensated absences carried forward on the Balance Sheet date is provided for based on an actuarial valuation using the Projected Unit Credit method, as at the Balance Sheet date, carried out by LIC.

IV. Short Term Employee Benefits

Short term employee benefits includes short term compensated absences which is recognized based on the eligible leave at credit on the Balance Sheet date, and the estimated cost is based on the terms of the employment contract.

V. Voluntary Retirement Scheme

Compensation to employees under Voluntary Retirement Schemes is provided/ expensed in the period in which the liability arises.

8. Deferred Compensation Cost

In respect of stock options, granted pursuant to the Companys Employee Stock Option Scheme, the Company determines the compensated cost based on the intrinsic value method and the compensation cost is amortised on a straight line basis over the vesting period.

9. Foreign Currency Transactions

Foreign Currency Transactions are accounted at the exchange rates ruling on the date of the transactions. Foreign currency monetary items as at the Balance Sheet date are restated at the closing exchange rates. Exchange differences arising on actual payments/realisations and year-end restatements are dealt with in the profit and loss account.

The Company enters into forward exchange contracts and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising at the inception of a forward exchange contract (other than for a firm commitment or a highly probable forecast) or similar instrument is amortised as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the Profit & Loss Account in the year in which the exchange rates change. Any profit or loss arising on cancellation of such a contract is recognised as income or expense for the year.

10. Derivative Instruments and Hedge Accounting

The Company uses forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company designates these as cash flow hedges.

The use of forward contracts is governed by the Companys policies on the use of such financial derivatives consistent with the Companys risk management strategy. The Company does not use derivative financial instruments for speculative purposes.

Forward contract derivative instruments are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in the fair value of these derivatives that are designated and effective as hedges of future cash flows are recognised directly in "Hedge Reserve Account" under Shareholders Funds and the ineffective portion is recognized immediately in the Profit & Loss Account.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognized in the Profit & Loss Account as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. If any of these events occur or if a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised under shareholders funds is transferred to the Profit & Loss Account for the year.

11. Research and Development

Revenue expenditure on research and development is expensed when incurred. Capital expenditure on research and development is capitalised under fixed assets and depreciated in accordance with Item 3 above.

12. Taxes on Income

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

Deferred tax is recognised on timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses. Other deferred tax assets are recognised if there is reasonable certainty that there will be sufficient future taxable income available to realise such assets.

13. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for (i) Possible obligation which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised.

14. Segment Accounting

a. The generally accepted accounting principles used in the preparation of the financial statements are applied to record revenue and expenditure in individual segments.

b. Segment revenue and segment results include transfers between business segments. Such transfers are accounted for at a competitive market price and such transfers are eliminated in the consolidation of the segments.

c. Expenses that are directly identifiable to segments are considered for determining the segment results. Expenses which relate to the Company as a whole and are not allocable to segments are included under unallocated corporate expenses.

d. Segments assets and liabilities include those directly identifiable with the respective segments. Unallocated corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and are not allocable to any segment.

15. Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amount of the Companys assets. If any indication exists, an assets recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of the asset exceeds the recoverable amount.

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