1 Corporate Information

RTS Power Corporation Limited (the company') is a public limited company incorporated and domiciled in India having its registered office in Kolkata in the State of West Bengal. The company is engaged in the business of manufacturing and selling of Power and Distribution Transformers, Cables, indispensible equipment for generation, transmission and distribution of electricity in the country etc. and generation, supply and sales of Wind Power. The Company's shares are listed on Bombay Stock Exchange Limited.

2 Statement of Compliance and Recent Pronouncements

2.1 Statement of Compliance

The Company has adopted Indian Accounting Standards (referred to as “Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) read with Section 133 of the Companies Act, 2013 (“the Act”) with effect from April 1, 2017 and therefore Ind ASs issued, notified and made effective till the financial statements are authorized have been considered for the purpose of preparation of these financial statements.

These are the Company's first Ind AS Financial Statements and the date of transition to Ind AS as required has been considered to be April 1, 2016.

The financial statement up to the year ended March 31, 2017, were prepared under the historical cost convention on accrual basis in accordance with the Generally Accepted Accounting Principles and Accounting Standards as prescribed under the provisions of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 then applicable (Previous GAAP) to the Company. Previous period figures in the Financial Statements have been recasted/restated to make it comparable with current year's figure.

In accordance with Ind AS 101-“First Time adoption of Indian Accounting Standards” (Ind AS 101), the Company has presented in Note No 49, a reconciliation of Shareholders' equity as given earlier under Previous GAAP and those considered in these accounts as per Ind AS as at March 31, 2017, and April 1, 2016 and also the Net Profit as per Previous GAAP and that arrived including Other Comprehensive Income under Ind AS for the year ended March 31, 2017. The mandatory exceptions and optional exemptions availed by the Company on First-time adoption have been detailed in Note No 49 of the financial statement.

2.2 Recent Pronouncements

Standards issued but not yet effective:

The Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards/ Ind AS) Amendment Rules, 2018 on March 28, 2018, whereby Ind AS-115 relating to “Revenue from Contracts with Customers” and Appendix B to Ind AS 21 relating to “Foreign Currency Transactions and advance considerations” has been made applicable from financial year 2018-19 (i.e. April 1, 2018 onwards).

Ind AS-115 - Revenue from Contracts with Customers

The Standard replaces the existing Ind AS 18 “Revenue” and Ind AS 11 “Construction Contracts”. Ind AS 115 establishes the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.

Ind AS 21 - Appendix B - Foreign currency transactions and advance consideration This Appendix applies to a foreign currency transaction (or part of it) when an entity recognises a non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration before the entity recognises the related asset, expense or income (or part of it).

The Company is evaluating the requirements of the same and its effect on the Financial Statements.

(ii) Estimation of fair value :

The fair valuation of the Investment Property of Rs. 61,20,000 . The Company estimates the fair value of its Investment Properties based on current prices in market for similar properties.

3.1 There is no change in the fair value of the Property as at the beginning and end of the reporting period.

Note:

4.1 The Gross block as on the transition date i.e. April 1, 2016 given hereinabove represents previous GAAP written down value of Intangible Asset considered as "Deemed Costs" as per the provision of Ind AS 101 "First Time Adoption of Indian Accounting Standards"- Refer note no. 49 (c) (i) (c).

4.2 Refer Note No. 21.1 and 25.1 in respect of charge created against borrowings.

5.1 The major customers are Public Sector Undertakings which are engaged in power generation and distribution.

5.2 Refer Note No. 21.1 and 25.1 in respect of charge created against borrowings.

5.3 Refer Note No. 46.4 in respect of major customers

Note:

6.1 Refer Note No. 21 for Preference Share Capital

6.2 Equity Shares

The Company has only one class of Equity Shares having par value of '10/- each. Each holder of Equity Shares is entitled to one vote per share and equal right for dividend. The dividend proposed if any by the Board of Directors is subject to the approval of shareholders in the Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.

6.3 There is no change in the number of equity shares outstanding at the beginning and at the end of the reporting periods.

6.4 The Company does not have any Holding Company

6.5 Equity Shareholders holding more than 5% equity shares:

7.1 Securities Premium Reserve represents the amount received in excess of par value of securities and is available for utilisation as specified under Section 52 of Companies Act, 2013.

7.2 The general reserve is created from time to time by appropriating profits from retained earnings. The general reserve is created by a transfer from one component of equity to another and accordingly it is not reclassified to the Statement of profit and loss.

7.3 Retained Earnings generally represent the undistributed profits/amount of accumulated earnings of the Company and includes re-measurement gains/losses on defined benefit obligation. This includes Rs. 49,49,41,517 (March 31, 2017: 49,87,73,664 and April 1, 2016: 50,28,85,881) (net of taxes) which is not available for distribution as these are represented by changes in carrying amount of freehold land and building being measured at fair value as on the date of transition as deemed cost. (Refer Note No. 49 (c)(i)). Additional Depreciation due to Fair Value Measurement to the extent provided each year becomes available for distribution as dividend.

7.4 The company has elected to recognise changes in the fair value of investments as Items that will not be reclassified to profit and loss under Other Comprehensive Income . This reserve represents the cumulative gains and losses arising on the revaluation of equity instrument s measured at fair value. The company transfers amounts from this reserve to retained earnings when the relevant equity securities are disposed.

7.5 The Company has only one class of Preference Shares which is 9% Non cumulative, non participating and redeemable at a par value of Rs. 10/- each, within a period not exceeding 20 years from the date of issue i.e. 30th June, 2015. The preference shareholders have preferential rights vis-a-vis Equity Shareholders of the Company in respect of dividend, repayment in case of winding up or repayment of capital and shall carry voting rights as per the provisions of section 47 (2) of the Companies Act, 2013.

Note

8. Secured on pari-passu basis by way of hypothecation of factory building, movable fixed assets, stock of raw materials, stock in process, finished goods, receivables and all other current assets of the company and personal guarantee by two directors.

Note:

9. Disclosure of Trade payables as required under section 22 of Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, based on the confirmation and information available with the company regarding the status of suppliers.

10.1 Goods and Service Tax ("GST") has been implemented with effect from 1st July, 2017 and therefore, revenue from operations for the period July 1, 2017 to 31st March 2018 are net of GST. Revenue from Operations and expenses for the year ended 31st March 2017 being inclusive of Excise Duty are not comparable with corresponding figures of year ended 31st March 2018.

11.1 Operating leases disclosure:

The Company has certain operating lease arrangements for office and warehouse accommodations etc. with tenure ranging from 11 months to 3 years etc.. There is no contingent rent in the Lease agreements. Income earned on account of rent during the year has been recognized in the Statement Profit and Loss amounting to Rs. 45,80,000 (March 31, 2017 : Rs.39,92,420).

12. Obligation under leases Operating Lease disclosures:

The Company has certain operating lease arrangements for office and warehouse accommodations etc. with tenure ranging from 11 months to 3 years etc. Expenditure incurred on account of rent during the year has been recognized in the Statement of Profit and Loss amounting to Rs.10,71,604 (March 31, 2017 : Rs.10,84,552).

12.1 The Company's pending litigation comprises of claim against the Company and proceedings pending tax/statutory/Government authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, and disclosed the contingent liabilities, where applicable, in its Financial Statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position. Future cash outflows in respect of above are dependent upon the outcome of judgments / decisions.

12.2 A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the entity. During the normal course of business, unresolved claims remains outstanding. The inflow of economic benefits, in respect of such claims cannot be measured due to uncertainities that surround the related events and circumstances.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year end are unsecured and settlement occurs in cash. The Company has not provided any guarantee to related parties towards their borrowing facilities. For the year ended March 31, 2018, the Company has not recorded any impairment allowances in respect of receivables relating to amounts owed by related parties (March 31, 2017 Rs.NIL and April 1, 2016 Rs.NIL). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

vi) The above related parties information is as identified by the management and relied upon by the auditor.

13. Segment Information

13.1 Basis for segmentation

The Chief Operating Decision Maker (CODM) evaluates the company's performance and allocates resources based on an analysis of various performance indicators by business segments. The CODM of the Company evaluates the segments based on their revenue growth, operating income and return on capital employed. No operating segments have been aggregated in ariving at the business segment of the Company.

Management has determined the operating segments based on the information reviewed by the CODM for the purposes of allocating resources and assessing performance. The Company has identified two business segments viz. Electrical Goods-Transformers, Cables etc. and Wind Energy and presented the same in the Financial Statements on a consistent basis. Revenues and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

Segment Assets and Segment Liabilities represents assets and liabilities of respective segments. Investments, Tax related assets/liabilities and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

13.2 Information about major customers

Revenue in respect of Electrical Goods-Transformers, Cables etc. include sale to a public Sector Undertaking/Company pertaining to the power distribution sector which account for more than 10% of total sales aggregating to Rs. 49,80,84,486 ( March 31, 2017 Rs. NIL) of the total revenue of the Company.

14. Post Retirement Employee Benefits

The disclosures required under Indian Accounting Standard 19 on "Employee Benefits" (Ind AS -19) are given below:

(a) Defined Contribution Scheme

The Company has certain Defined Contribution Plans. Contributions are made to Provident Fund in India at the rate of 12% of salary of the employees covered as per the regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further cotractual nor any constructive obligation.

(b) Defined Benefit Plan

The company has a defined benefit Gratuity plan. Every Employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. This is an unfunded plan.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (projected unit credit method) has been applied as when calculating the defined benefit obligation recognised within the Balance Sheet.

Fair Valuation Techniques

The fair values of the financial assets and liabilities are included at the amount 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 following methods and assumptions were used to estimate the fair values:

The fair value of cash and cash equivalents, other bank balances, current loan, current trade receivables and payables, short term borrowing, other current financial liabilities and assets approximate their carrying amount largely due to the short-term nature of these instruments. The management considers that the carrying amounts of financial assets and financial liabilities recognised at nominal cost/ amortised cost in the financial statements approximate their fair values.

A substantial portion of the company's long-term debt has been contracted at fixed rates of interest. Fair value of variable interest rate borrowings approximates their carrying value subject to adjustments made for transaction cost.

Investments in equity shares (other than Investments in Associates, Joint Venture and Subsidiaries) have been valued based on the historical net asset value as per the latest audited financial statements.

Fair value hierarchy

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as at balance sheet date:

FINANCIAL RISK FACTORS

The Company's financial liabilities comprise mainly of borrowings, trade and other payables. The Company's financial assets comprise mainly of cash and cash equivalents, other balances with banks including Fixed Deposits with Banks, Investments, loans, trade receivables and other receivables.

The Company is exposed to Market risk, Credit risk and Liquidity risk. The Company's senior management oversees the management of these risks. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

MARKET RISK

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks: interest rate risk, currency risk and other price risk such as equity price risk and commodity risk. Financial instruments affected by market risk includes borrowings, investments, loan, trade payables and trade receivables.

Interest rate risk

The company's exposure in market risk relating to change in interest rate primarily arises from floating rate borrowing with banks and financial institutions. Interest rate risks is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the company's cash flows as well as costs. Borrowings at fixed interest rate exposes the company to the fair value interest rate risk.

Further there are deposits with banks which are long term and short term period which are exposed to interest rate risk, falling due for renewal.

With all other variables held constant, the following table demonstrates the impact of the borrowing cost on the Profit or Loss with respect to floating rate portion of loans and borrowings.

A decrease in 0.50 basis point in Rupee Loan would have an equal and opposite effect on the Company’s financial statements

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's trade receivables.

CREDIT RISK

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables and other financial assets including deposits with Bank. Exposure to credit risk is monitored on an ongoing basis. The Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends and ageing of accounts receivable.

The Company's exposure of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties.

The carrying amount of respective financial assets recognised in the financial statements, (net of impairment losses), represents the Company's maximum exposure to credit risk. The concentration of credit risk is limited due to the customer base being well established, large and unrelated.

The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. Receivables from customers are reviewed/evaluated periodically by the management and appropriate impairment allowances for doubtful debts are made to the extent recovery there against has been considered to be remote.

Financial assets that are neither past due nor impaired

Cash and cash equivalents, investment and deposits with banks are neither past due nor impaired. Cash and cash equivalents with banks are held with reputed and credit worthy banking institutions.

Financial assets that are past due but not impaired

Trade receivables amounts that are past due at the end of the reporting period against which no credit losses has been expected to arise except those which are impaired.

LIQUIDITY RISK

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company has obtained fund and non-fund based working capital loans from banks. The Company invests its surplus funds in bank fixed deposit which carry no market risk. The company relies on borrowings and internal accruals to meet its fund requirement. The current committed line of credit are sufficient to meet its short to medium term fund requirement.

Liquidity table

The following tables detail the Company's contractual maturity for its non derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows as at balance sheet date:

The company has current financial assets which will be realised in ordinary course of business. The Company ensures that it has sufficient cash on demand to meet expected operational expenses.

The company relies on operating cash flows to meet its need for funds and ensures that it does not breach any financial covenants stipulated by the lender.

CAPITAL MANAGEMENT

The primary objective of the Company's capital management is to ensure that it maintains a healthy capital ratio in order to support its business and maximise shareholder value. The Company's objective when managing capital is to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and benefits for other stake holders. The Company is focused on keeping strong total equity base to ensure independence, security, as well as a high financial flexibility for potential future borrowings, if required without the risk profile of the Company.

v) Reconciliation of statement of cash flows for the year ended March 31, 2017

There were no material differences between the Statement of Cash Flows presented under Ind AS and the Previous GAAP.

b) FIRST-TIME ADOPTION - Mandatory Exceptions and optional Exemptions

These financial statements are covered by Ind AS 101, “First Time Adoption of Indian Accounting Standards”, as they are the Company's first Ind AS financial statements for the year ended March 31, 2018.

i) Overall principle:

a) The Company has prepared the opening balance sheet as per Ind AS as at April 1, 2016 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying certain items from Previous GAAP to Ind AS as required under the Ind AS, and applying Ind AS in the measurement of recognized assets and liabilities. The accounting policies that the Company used in its opening Ind-AS Balance Sheet may have differed from those that it used for its previous GAAP. The resulting adjustments arising from events and transactions occuring before the date of transition to Ind-AS has been recognized directly in retained earnings at the date of transition (i.e, April 1, 2016).

b) However, this principle is subject to certain mandatory exceptions and certain optional exemptions availed by the Company as detailed below.

i) Deemed cost for Property, Plant and Equipment

Property, plant and equipment has been carried in accordance with Previous GAAP carrying value as deemed cost at the date of transition excepting freehold land and buildings valued at Fair value at the date of transition, which has been considered as deemed cost.

ii) Deemed cost for Intangible assets

The Company has elected to continue with the carrying value of all of its intangible assets recognized as of transition date measured as per the Previous GAAP and used that carrying value as its deemed cost as of the transition date.

iii) Impairment of financial assets

Ind AS 109 “Financial Instruments” requires the impairment to be carried out retrospectively; however, as permitted by Ind AS 101, the Company, has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind AS, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.

iv) Determining whether an arrangement contains a lease

The Company as on the date of transition complied with Ind AS 17 “Leases” to determine whether an arrangement contains a Lease on the basis of facts and circumstances existing at the date of transition to Ind AS, accordingly leasehold land has been reclassified as operating lease.

v) Business Combination

In terms of Ind AS 101 "First Time Adoption of Indian Accounting Standards", the Company has elected to not to apply Ind AS 103 "Business Combination" for past combinations.

c) Explanatory Notes to reconciliation between Previous GAAP and Ind AS

(i) Property, Plant and Equipment

(a) The company has elected to measure all its Property, Plant and Equipment as per the provisions of Ind AS 101 “First Time Adoption of Indian Accounting Standard” at the previous GAAP carrying amount as on the date of transition i.e. 1st April 2016; as its “Deemed Costs” except in case of Land (both Freehold and Leasehold) and Building where fair values as valued by an independent valuer has been considered as “Deemed Costs”.

The details regarding the fair value of Land and Building as on the transition date as above are as follows:

1. The fair value of land and building is Rs.72,43,33,214 and Rs.12,15,18,271 respectively; and

2. The aggregate adjustment to the carrying amount of Land and Building reported under previous GAAP is Rs.69,65,71,653 and Rs.7,24,61,075 respectively with corresponding impact in retained earnings

The fair value above has been determined based on the valuation carried out by external independent valuers. These were determined based on market value of similar assets, significantly adjusted for differences in the nature, location or condition of the specific items of Property, Plant and Equipment. The fair valuation involves higher degree of uncertainty and subjectivity.

Subsequent changes for the year ended March 31, 2017, due to additional depreciation as a result of fair valuation, amounting to Rs. 63,03,487 shown under Depreciation and amortisation expense has been recognised in the Statement of Profit and Loss.

(b) Under the Previous GAAP, a building purchased and given on rent was shown as a part of Property, Plant and Equipment at its carrying value and depreciation on the same was charged to the Statement of Profit and Loss. Under I nd AS, the Company has reclassified the above said building under Investment Property with corresponding depreciation being charged to Statement of Profit and Loss.

On transition date, this has resulted in increase in Investment Property by Rs. 83,613 with corresponding decrease in the value of Building under Property, Plant and Equipment.

(c) Certain identifiable non-monetary asset without physical substance shown under Property, Plant and Equipment under the Previous GAAP have been reclassified to Intangible Assets under Ind AS On transition date, this has resulted in increase in Intangible Assets by Rs.2,05,743 with corresponding decrease in the value of Property, Plant and Equipment.

(d) Under Previous GAAP, leasehold land was shown as part of Tangible f xed assets, whereas under Ind AS all leases are considered as operating leases (except perpetual leases) and therefore the said lease has been considered as operating lease and shown as prepayment and amortised over the lease period. This reclassification resulted in decrease in Property, Plant and Equipment by Rs.15,00,000, retained earnings by Rs.7,50,000 and increase in Prepayments by Rs.7,50,000.

(ii) Operating Lease

Under Previous GAAP, leasehold land was shown as part of Tangible fixed assets, whereas under Ind AS all leases are considered as operating leases (except perpetual leases) and therefore the said lease has been considered as operating lease and shown as prepayment and amortised over the lease period. This reclassification resulted in decrease in Property, Plant and Equipment by Rs.15,00,000, retained earnings by Rs.7,50,000 and increase in Prepayments by Rs.7,50,000 (Rs.75,000 being current portion of the prepayments to be amortised in 2018-2019 have been shown under Other current assets and balance Rs.6,75,000 have been shown under Other Non current assets).

Subsequent changes for the year ended March 31, 2017 amounting to Rs. 75,000 being annual amortisation/charge of the prepayment of land during the tenure of the lease have been shown under other expenses in the Statement of Profit and Loss.

(iii) Fair valuation of Financial Assets and Liabilities

(a) Preference Share Capital

Under previous GAAP, Redeemable Preference Share issued was considered as part of share capital. Under Ind AS, the above said shares issued have been considered as in the nature of borrowings and needs to be considered as debt, fair valued at the transaction date and subsequently carried at amortised costs based on Effective Interest Rate method.

The Company has issued 7500000 9% Non Cumulative, Non participating and Redeemable Preference Share Capital of Rs.10/- each on 30th June 2015 and which is redeemable after 20 years from the date of allottment Accordingly, the above issued Non Cumulative, Non participating and Redeemable Preference Share Capital have been classified from Share Capital to Borrowings and on transition date i.e. as on April 1, 2016, this has resulted into decrease in the amount of preference share capital by Rs.7,50,00,000 with corresponding increase in Borrowings by Rs.1,42,63,190, deferred income on fair valuation of such financial instrument by Rs.5,93,08,170 (including Rs.30,79,000 shown under other current liabilities) and increase in total equity by Rs.14,28,640 . Subsequent changes for the year ended March 31, 2017 amounting to Rs.30,79,300 shown under Other Income and Rs.12,83,687 shown under Finance costs has been recognised in the Statement of Profit and Loss.

(b) Investment in Equity Instrument

Under previous GAAP, Non-current Investments were stated at cost less provision, if any, for diminution in value other than temporary.

Under Ind AS, the Company has made an irrevocable decision to consider investments made in equity instruments other than Investment in Subsidiaries, Associates and Joint Ventures not held for trading to be recognized at Fair Value Through Other Comprehensive Income As at March 31, 2017, the Company has recognized a gain of Rs.1,39,46,601 (gross) in other comprehensive income in the Statement of Profit and Loss with the corresponding increase in the carrying value of such investments.

(c) Fair Valuation of Derivative Instruments

Under previous GAAP, exchange difference arising with respect to forward contracts other than those entered into to hedge foreign currency risk on unexecuted firm contracts or of highly probable forecast transactions were recognised in the period in which they arise and the difference between the forward contract and exchange rate on the date of transaction is recognised as revenue/expense over the life of the contract.

Under Ind AS, both reductions and increases to the fair value of derivative contracts that is either not designated as a hedge or is so designated but is ineffective are recognised in statement of Profi t and Loss.

The Company has fair valued the forward contract outstanding as at March 31, 2017 resulting in loss of Rs. 4,40,217 shown under other expenses recognized in the Statement of Profit and Loss.

(d) Borrowings

Under previous GAAP, transaction costs incurred in connection with borrowings are accounted upfront and charged to Statement of Profit & Loss in the year in which such costs were incurred.

Under Ind AS, financial liability consisting of long term borrowings are fair valued and designated and measured at amortised costs based on Effective Interest Rate (EIR) method. The transaction costs so incurred are required to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in Statement of Profit and Loss over the tenure of the borrowing as part of the interest expense by applying EIR.

On transition date, the Company has adjusted the unamortised portion of outstanding borrowings based on EIR resulting in reduction of its borrowings by Rs.36,921 as on April 1, 2016 respectively with corresponding increase in total equity and subsequent changes for the year ended March 31, 2017 amounting to Rs. 19,629 shown under Finance Costs has been recognised in the Statement of Profit and Loss.

(iv) Deferred Tax

Deferred tax has been recognized in respect of differences between carrying value of assets and liabilities and it tax base. These adjustments have resulted in increase in deferred tax liability and decrease in equity by Rs.26,66,54,048 as on April,1,2016 and subsequent changes for the year ended March 31, 2017 amounting to Rs.30,97,652 shown under deferred tax charges has been recognised in the Statement of Profit and Loss.

(v) Remeasurement of Defined Benefit Plan

Under previous GAAP and Ind AS, the Company recognizes cost related to its post-employment defined benefit plan on an actuarial basis and the entire cost, including re-measurement, are charged to Statement of profit and loss. Under Ind AS, the actuarial gain and losses form part of remeasurements net defined benefit liability/asset is recognised in OCI. Consequently, the tax effect on the same has also been recognised in OCI instead of statement of profit and loss.

This has resulted in reclassification of re-measurement gains on defined benefit plans (net of tax) of Rs. 3,59,925 for the year ended March 31, 2017 from Statement of profit and loss to OCI.

(vi) Previous GAAP figures have been reclassified/regrouped wherever necessary to confirm with financial statements prepared under Ind AS.

15. In the opinion of the management and to the best of their knowledge and belief, the value on realization of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet. The debit/credit balances of parties are however, subject to confirmation and adjustment, if any.

16. These financial statements have been approved by the Board of Directors of the Company on May 30, 2018 for issue to the shareholders for their adoption.