The Company Information

Century Extrusions Limited (‘the Company’) is one of India’s large pure play aluminium extrusion manufacturers. The Company enjoys a number of first mover advantages comprising a comprehensive understanding of the aluminium and aluminium extrusions market, reputed brand, low historical asset cost and a strong customer base, among others. The Company possesses in-house facilities for die manufacturing, melting and casting of billets and the extrusions manufacturing facility with three press lines. The Company manufacturers extrusions for varied applications (architectural, hardware, road transport - vehicles, railways, electrical and electronic applications, engineering applications, automotive sector, consumer durables, Defence applications and irrigation, among others).

The company is a public limited company incorporated and domiciled in India and has its registered office at Kolkata (West Bengal) with regional marketing offices in Bangalore, Chennai, Coimbatore, Delhi, Hyderabad, Kanpur, Kolkata & Mumbai. The Company’s production facility is located at Kharagpur (West Bengal) in eastern part of India, close to leading primary aluminium manufacturers in India. Its shares are listed on National Stock Exchange & Bombay Stock Exchange.

The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorised for issue on 28th May 2018.

a) The Company has neither issued nor bought back any shares during the financial year under review, hence there is no change in number of shares outstanding at the beginning and end of the year.

b) The Company does not have any Holding/ Ultimate Holding Company. As such, no shares are held by them or their Subsidiaries/Associates.

c) There are NIL (Previous year NIL) shares reserved for issue under option and contracts / commitment for the sale of shares/disinvestment.

d) During the period of five years immediately preceding the reporting date:

i. No shares were issued for consideration other than cash.

ii. No bonus shares were issued.

iii. No shares were bought back.

e) There are NIL (Previous year NIL) securities convertible into Equity/ Preference Shares.

f) There are NIL (Previous year NIL) calls unpaid including calls unpaid by Directors and Officers as on the balance sheet date.

g) Rights/Preferences/Restrictions attached to Equity Shares

The Company has only one class of equity shares having a par value of ^ 1 per share. Each holder of equity shares is entitled to one vote per share and the dividend, if proposed by the Board of Directors and approved by the Shareholder in the ensuring Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

No loans have been guaranteed by the directors and others. There are no bonds which are redeemed during the year. There is no default as on the balance sheet date in the repayment of borrowings and interest thereon.

Term loans from banks are secured, in respect of respective facilities by way of :

(i) Nature of security for Secured Borrowings

a. Rs. 146 lacs includes Rs.20 lacs shown in Current maturities of Long Term Borrowings (refer note no.20) from State Bank of India is secured by first charge on entire fixed assets of the Company on Pari passu basis along with Punjab & Sind Bank and Second charge on the entire current assets both present and future of the Company on Pari passu basis with other Corporate Loan lenders. Futher, the loan has been guaranteed by the personal gurantee of the Chairman & Managing Director and one other Director of the Company.

b. Rs. 42.40 Lacs (out of sanctioned amount of Rs. 635 lacs) from Punjab & Sind Bank is secured by First Charge on entire fixed assets of the Company on Pari Paru Basis along with State Bank of India, Punjab & Sind Bank and second charge on the entire current assets both present and future of the company on Pari Pasu basis with the other lenders.

Vehicle loans from banks are secured, in respect of respective facilities by way of :

a. Rs. 1.70 lacs shown in Current maturities of Long Term Borrowings (refer note no.20) from Axis Bank and State Bank of India are secured by hypothecation of vehicles purchased out of the said loan.

Rate of interest- The Company’s total borrowings from banks and others have a effective weighted average rate of 12.45% per annum calculated using the interest rate effective as on 31 March 2018.

Term loans from banks are secured, in respect of respective facilities by way of :

(i) Nature of security for Secured Borrowings

a. Rs. 166 lacs includes Rs.20 lacs shown in Current maturities of Long Term Borrowings (refer note no.7) from State Bank of India is secured by first charge on entire fixed assets of the Company on Pari passu basis along with Government of West Bengal and Second charge on the entire current assets both present and future of the Company on Pari passu basis with other Corporate Loan lenders. Futher, the loan has been guaranteed by the personal gurantee of the Chairman & Managing Director and one other Director of the Company.

b. Rs. 0.40 Lacs (out of sanctioned amount of Rs. 635 lacs) from Punjab & Sind Bank is secured by First Charge on entire fixed assets of the Company on Pari Paru Basis along with Axis, State Bank of India and Government of West Bengal and second charge on the entire current assets both present and future of the company on Pari Pasu basis with the other lenders.

Vehicle loans from banks are secured, in respect of respective facilities by way of :

a. Rs. 1 lacs shown in Current maturities of Long Term Borrowings (refer note no.20) from Axis Bank are secured by hypothecation of vehicles purchased out of the said loan.

1. Security disclosure for the outstanding short-term borrowings as on 31 March 2018 :

Borrowings from banks are secured, in respect of respective facilities by way of :

a. Working Capital Loan from Banks is secured -

i) By first Hypothecation of stock and receivables and all other current assets of the Company, present and future on Pari-passu basis among consortium Bankers.

ii) By second charge on entire fixed assets of the Company on Pari-passu basis among consortium Bankers along with Government of West Bengal for Sales Tax Loan.

iii) By personal guarantees of the Chairman & Managing Director.

b. Channel Financing from Yes Bank Ltd. is secured against pledge of fixed deposit to the extent of 15% of sanctioned limit. It is further secured by personal guarantee of the Chairman & Managing Director of the Company.

c. Channel Financing from Axis Bank Ltd is secured by personal guarantee of the Chairman & Managing Director of the Company.

2. Security disclosure for the outstanding short-term borrowings as on 31 March 2017 :

Borrowings from banks are secured, in respect of respective facilities by way of :

a. Working Capital Loan from Banks and Foreign Currency Demand Loan are secured -

i) By first Hypothecation of stock and receivables and all other current assets of the Company, present and future on Pari-passu basis among consortium Bankers.

ii) By second charge on entire fixed assets of the Company on Pari-passu basis among consortium Bankers along with Government of West Bengal for Sales Tax Loan. iii) By personal guarantees of the Chairman & Managing Director.

b. Channel Financing from Yes Bank Ltd. is secured against pledge of fixed deposit to the extent of 15% of sanctioned limit. It is further secured by personal guarantee of the Chairman & Managing Director of the Company.

c. Channel Financing from Axis Bank Ltd is secured by personal guarantee of the Chairman & Managing Director of the Company.

1. Earnings Per Equity Share

The Company’s Earnings Per Share (‘EPS’) is determined based on the net profit / (loss) attributable to the shareholders’ of the . Basic earnings per share is computed using the weighted average number of shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the year including share options, except where the result would be anti-dilutive.

2. Significant Accounting Judgements, Estimates and Assumptions

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgements : In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

Fair value measurement of financial instruments When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using other valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial

Impairment of non-financial assets Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Estimated amount of contracts remaining to be executed on capital account and not provided for:

At 31st March 2018, the Company had commitments of relating to estimated amount of completion of Property, Plant & Equipment-

(a) Bank Guarantees outstanding Rs. 275 lacs (previous year Rs.233 lacs) and Letters of Credit issued by Banks on behalf of the Company Rs. 1104 Lacs (Previous year Rs. 1092 lacs) against which Rs. 164 lacs (previous year Rs. 163 lacs) have been deposited with the Banks as Margin Money.

(b) The Employees State Insurance Corporation (ESI) has raised a demand of Rs.3 lacs plus interest of ‘ Nil Lac (Rs. 108.81) per day w.e.f. 1.1.2004 for the period 1999-2000 to 2000-2001. The company has preferred an appeal against the demand at the Employees Insurance Court, West Bengal. The Honorable Court has stayed the demand till final disposal of Company’s appeal.

(c) The Divisional Bench of Hon’ble High Court, Calcutta has stayed the operation of single bench order dated 24-06-2013, which ordered levy of West Bengal Tax on Entry of Goods into Local Areas Act, 2012 as ultra vires to the Constitution of the India. The Hon’ble High Court, further directed that the assessment proceedings should go on. In view of above and as per legal opinion obtained by the Company, the Company has written back Rs. 26 Lacs unpaid amount of said tax for the financial year 2012-13 and no provision of the tax of Rs 673 lacs (Previous year 619 Lacs) inclusive of unpaid amount of Rs. 54 Lacs for current year and other consequential demand arise from assessment in considered necessary.

(d) The Company had imported machinery on subsidized rate of duty under Export Promotion Capital Goods Scheme (EPCG). Accordingly the Company is under an obligation to export to the extent of Rs. 3486 lacs, i.e. eight times of the duty saved, in eight years from the date of issue of authorization. The Company has made export for the value of Rs. 3257 lacs ( Previous year Rs. 2817 lacs) till 17th February, 2017. If the Company is unable to fulfill the full export obligation within the stipulated period, it would be liable to pay proportionate duty saved along with interest at the rate of 15% p.a. The license was valid till 17th February 2017. The company has applied for extention of time limit to fulfill the Export Obligations to the DGFT Department. Further, the Company has applied for extension of time to fullfill the Export Obligations to Policy Relaxation Cell (PRC).

(e) The Company has received Excise duty demand of Rs. 2.43 Lacs for the years 2010-2011 against which the Company has preferred appeals before the Commissioner of Central Excise (Appeals) under section 35 of the Central Excise Act,1944.

(f) The Company has received Service tax demand Rs. 1.05 lacs for the years 2011-2012, against which the Company has preferred appeals before the Commissioner of Central Excise (Appeals) under section 35 of the Central Excise Act, 1944.

(g) The Company has received Value Added Tax and Central Sales Tax demand of Rs. 2.77 Lacs and Rs. 17.23 Lacs for the years 2014-2015 against which the Company has preferred appeals before Sr. Joint Commissioner of Sales Tax.

(c) Leases

Finance Lease Commitments

Future minimum rentals payable under non-cancellable finance leases as at 31st March are, as follows:

Leave Obligations

The leave obligations cover the Company’s liability for earned leaves. The amount of provision of INR 3 lacs (Previous year 4 lacs, 1 April 2016 - 6 lacs) is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations.

These assumptions were developed by management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year-end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management’s historical experience.

Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service.

These assumptions were developed by management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year-end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management’s historical experience.

Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2 : The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is inlcuded in Level 2.

Level 3 : If one or more of the significant inputs is not based on observable market data, the instrument is included in level

3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

(b) Fair value of financial assets and liabilities measured at amortised cost and FVTPL

The carrying amounts of trade payables and cash and cash equivalents are considered to be the same as their fair values, due to short term nature. The fair values for loans and security deposits were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk. The fair values of non-current borrowings are based on discounted cash flows using a current borrowings rate. They are classsified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

3. Financial Risk Management Objectives and Policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations and to support its operations. The Company’s financial assets include trade and other receivables, and cash & cash equivalents that derive directly from its operations

The Company is exposed to market risk, credit risk and liquidity risk. The company’s senior management oversees the management of these risks. The company’s senior management is supported by a financial risk committee that advises on financial risks and the appropriate financial risk governance framework for the Company. This financial risk committee provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by appropriate policies and procedure and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each risk, which are summarised as below:

(A) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risks. Financial instruments affected by market risk include loans and borrowings in foreign currencies.

a) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long term debt obligations with floating interest rates. The Company is carryg its borrowings primarily at variable rate. The Company expects the variable rate to decline, accordingly the Company is currently carrying its loans at variable interest rates.

Interest Rate Sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variable held constant, the Company’s profit/(loss) before tax is affected through the impact on floating rate borrowings, as follows:

b) Foreign Currency Risks

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure in foreign currency is in loans denominated in foreign currency. The Company is resricting its exposure of risk in change in exchange rates by way of Forward Contracts.

Foreign Currency Sensitivity

The following table demonstrate the sensitivity to a reasonably possible change in USD and EUR exchange rates, with all other variables held constant. The impact on the Company’s profit/(loss) before tax is due to changes in the fair value of monetary assets and liabilities.

c) Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument leading to a financial loss. The Company is exposed to credit risk from its financing activites, including deposits with banks and financial institutions and other financial instruments.

(i) Trade Receivables

Customer credit risk is managed by each business location subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed and individual credit limits are defined in accordance with the assessment both in terms of number of days and amount. Any Credit risk is curtailed with arrangements with third parties. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addtion, a large number of minor receivables are grouped into homogenous groups andd assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 10. The Company does not hold collateral as security.

(ii) Financial Instruments and Cash Deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investment of surplus funds are made only with approved counterparties . The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2017 and 31 March 2016 is the carrying amount as illustrated in Note 36.

(B) Liquidity Risk

Liquidity risk refer to the risk that the Company may not able to 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 the requirement. The Company has obtained adequate fund and non fund based working capital limits from its bankers. The Company maintains its surplus funds, if any, in deposits / balances which carry low market risk. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments -

4. Related Party Disclosure (As per Ind AS-24)

(a) Enterprise over which Key Management Personnel and their Relatives exercise Significant Influence. Name of Enterprise Century Aluminium Mfg. Co. Ltd Paramsukh Properties Pvt. Ltd Kutir Udyog Kendra ( India ) Ltd CAMCO Multi Metal Ltd.

Atash Peoperties And Finance Limited Jeco Exports & Finance Limited Vintage Capital Market Limited

(b) Key Management Personnel:

Name of KMP Designation

i) Shri Vikram Jhunjhunwala Chairman and Managing Director

ii) Shri Madan Gopal Todi Independent Director

iii) Shri Raj Kumar Sharma Independent Director

iv) Shri Arun Kumar Hajra Independent Director

v) Smt Suhita Mukhopadhyay Independent Director

vi) Shri J. K. Malpani President

vii) Shri Rohit Kumar Company Secretary

(c) Relatives to Key Management Personnel:

Relative’s Name Relation

i) Smt Sita devi jhunjhunwala Mother of Shri Vikram Jhunjhunwala

ii) Ms. Moulshree Jhunjhunwala Wife of Shri Vikram Jhunjhunwala

iii) Shri Shivanshu Jhunjhunwala Son of Shri Vikram Jhunjhunwala

iv) Shri Rishik Jhunjhunwala Son of Shri Vikram Jhunjhunwala

v) Smt. Deepa Malpani Wife of Shri J. K. Malpani

vi) Ms. Shikha Malpani Mother of Shri Aditya Vardhan Agarwal

Disclosure of Related Party Transactions provides the information about the Company’s structure. The following tables provides the total amount of transactions that have been entered into with related parties for the relevant financial year.

Terms and Conditions of Transactions with Related Parties:

The sales and purchase from related parties are made on terms equivalent to those that prevail in arm;s length transactions. Outstanding balance at the year-end are unsecured and interest free and settlement occurs in cash. 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.

Note 5 Capital Management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade payables, less cash and cash equivalents.

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

Note 6 First Time Adoption of Ind AS

These financial statements, for the year ended 31 March 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2018, together with the comparative period data as at and for the year ended 31 March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1 April 2016, the Company’s date of transition to Ind AS. An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

Exemptions and Exceptions Availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

a) Ind AS Optional exemptions

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Disclosure required by Ind AS 101 - First time adoption of Ind AS

Reconciliation of Equity as at April 01, 2016 and March 31, 2017:

Notes to First-Time Adoption:

Note : 1 Borrowings

Under Indian GAAP, transaction costs incurred in connection with borrowings are amortised upfront and charged to profit or loss for the period. Under Ind AS, transaction cost are included in initial recognition amount of financial liability and charged to profit or loss using the effective interest method.

Note : 2 Security Deposits

Under the previous GAAP, interest free security deposits (that are refundable in cash on completion of the term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value, Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent.

Note : 3 Loans/Other Financial Assets/ Other Current Assets

As per Schedule III, Security Deposits are to be classified under Loans or Other Non-current/Current Assets respectively. Accordingly, Security Deposits which are financial in nature are classified under Loans and other deposits are classified under Non-current/ Current Assets respectively. Under IGAAP, Loans and Advances were shown together under Loans and Advances. However, as per Schedule III, Advances are classified under other Non-current/Current Assets.

Note : 4 Provison for Expected Credit Loss

Impairment for trade receivable and interest receiable is measured in Ind AS based on life time expected credit losses. Expected credit loss allowance is measured based on historical credit loss experience, defaults, bankruptcy and forward looking information where relevant adjusted for probability of recovery. Under Previous GAAP, provision for trade receivable is measured based on factors such as age of receivables, defaults etc. adjusted for probability of recovery.

Note : 5 Defined Benefit Liabilities

Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. The entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.

Note : 6 Deferred Tax

Under Previous GAAP, deferred taxes were recognised for the tax effect of timing differences between accounting profit and taxable profit for the year using the income statement approach. Under Ind AS, deferred taxes are recognised using the balance sheet for future tax consequences of temporary differences between the carrying value of assets and liabilities and their respective tax bases. The above difference, together with the consequential tax impact of the other Ind AS transitional adjustments lead to temporary differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or through other comprehensive income.

Note : 7 Finance Lease on Land

At the commencemnet of the lease term, Company has recognised finance leases as assets and liabilities in their balance sheets at amounts equal to the fair value of the leased property or if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The discount rate is used in calculating the present value of the minimum lease payments is the average borrowing rate.

Note : 8 Excise Duty

Under Previous GAAP, excise duty was netted off against sale of goods. However, under Ind AS, excise duty is included in sale of goods and is separately presented as expense on the face of Statement of Profit and Loss. Thus, sale of goods under Ind AS has increased with a corresponding increase in expenses.

Note 7. The major components of Income Tax Expense and the Reconciliation of Expense based on the Domestic Effective Tax Rate and the Reported Tax Expense in Profit or Loss are as follows :-

Note 8. Segment Reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the company’s chief operating decision maker to make decisions for which discrete financial information is available. Based on the management approach as defined in Ind AS 108, the chief operating decision maker evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments.

The accompanying notes form an integral part of these financial statements As per our report of even date attached