1. Corporate Information

Mindteck (India) Limited (‘Mindteck’ or ‘the Company’), a public limited company incorporated in the year 1991 and is engaged in the business of rendering engineering and IT services to customers across various industry verticals in specific service horizontals. Mindteck’s core offerings are in Product Engineering, Application Software, Electronic Design, Testing and Enterprise Business services.

In the Product Engineering space, Mindteck renders Electronic Design, Firmware and Software in key vertical areas of Life Sciences and Analytical Instruments, Semiconductor Fab Equipment, Medical Instruments and in the high-end Storage Products segment. The Enterprise Business services line provides services in the areas of support and maintenance of enterprise-wide applications. Application Software services are centered around providing solutions to independent software vendors in the Banking and Financial Services Industry (BFSI) space and a broad range of services for custom Application Development, Application Management, Re-engineering, Validation and Verification across the spectrum.

The Company also provides offshore-based employee resourcing, marketing and pre-sales support and other services to its subsidiaries.

Mindteck has its registered office in Bengaluru, India and is headquartered in Bengaluru with a branch office in Kolkata and Mumbai. The software development centres in Bengaluru and Kolkata are 100% Export Oriented Units (‘EOU’) set up under the Software Technology Parks of India (STPI) Scheme of the Government of India.

Mindteck has subsidiaries (including step-down subsidiaries) in the United States of America, Singapore, Philippines, Malaysia, Bahrain, United Kingdom, Netherlands, Germany and India. Mindteck is listed in India on the Bombay Stock Exchange and National Stock Exchange.

These standalone financial statements for the year ended March 31, 2018 are approved by the Board of Directors on May 29, 2018.

2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES:

2.1. Basis of preparation:

In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (“Ind AS”) notified under The Companies (Indian Accounting Standards) Rules, 2015 (amended from time to time). For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended March 31, 2018 are the first the Company has prepared in accordance with Ind AS. Refer to note no. 46 for information on how the Company adopted Ind AS.

In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standards, the Company has presented a reconciliation from the presentation of standalone financial statements under Accounting Standards notified under section 133 of the Companies Act, 2013 read with the Companies (Accounting Standards) Rules, 2014 (“Previous GAAP”) to Ind AS in respect of Shareholders’ equity as at March 31, 2017 and April 01, 2016 and in respect of comprehensive net income for the year ended March 31, 2017 (refer note no. 46 for reconciliations and effects of transition).

These standalone financial statements have been prepared on a historical cost basis, except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained further in the accounting policies below.

- certain financial assets and liabilities that is measured at fair value/amortized cost,

- defined benefit plans - plan assets measured at fair value

- Employee stock option contracts - measured at grant date fair value, and

- Investment property - fair value for disclosure purpose

The standalone financial statements are presented in Rs. (‘f’) and all the values are rounded off to the nearest lakhs (Rs. 00,000) except when otherwise indicated.

Notes:

a. Deconsolidation of the Mindteck Employees Welfare Trust (‘Trust’)

Effective January 01, 2015, the Trust was deconsolidated subsequent to the SEBI (Share Based Employee Benefits) Regulations, issued on October 28, 2014.

b. On April 01, 2008, the Company acquired 100% equity in its fellow subsidiary Chendle Holdings Limited, BVI (‘Chendle Holdings’) including its wholly owned subsidiary Primetech Solutions Inc., USA at an agreed valuation of USD 6,600,000 (approximately Rs 264,664,741) and the purchase consideration was agreed to be settled by a fresh issue of the equity shares of the Company to the shareholders of Chendle Holdings. The issue of equity shares to discharge the purchase consideration has been recorded at a price of Rs 73.54 per equity share, being the fair value of the equity shares issued as per the valuation carried out by the independent valuer.

Of the total purchase consideration payable, 38,579 equity shares (March 31, 2017: 102,878 equity shares; April 01, 2016: 102,878 equity shares) have been reserved for allotment to certain shareholders of Chendle Holdings, subject to the furnishing of Permanent Account Number (‘PAN’) and other requirements by these shareholders. The submission of PAN is a pre-requisite to complete the allotment of shares. The Company is in the process of following up with the shareholders of Chendle Holdings to obtain the PAN and upon receiving the PAN, the Company would allot the remaining shares to these shareholders.

d. Terms/rights attached to equity and preference shares

The Company has two class of shares referred to as equity shares having a par value of Rs 10 and cumulative, non-convertible, redeemable preference shares having a par value of Rs 100. Each holder of the equity share, as reflected in the records of the Company as of the date of the shareholders meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholders meeting.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

g. The Company has not allotted any fully paid up equity shares by way of bonus shares nor has bought back any class of equity shares during the period of five years immediately preceding the balance sheet date.

h. Shares reserved for issue

Terms attached to stock options granted to employees are described in Note no. 41 regarding share based payments. Also, refer Note no. 17(b) above.

Notes:

i. Capital reserve

The Company has in the past created capital reserve in accordance with the provisions of the Act.

ii. Securities premium

Security premium is used to record the premium received on issue of shares. It is utilized in accordance with the provisions of the Companies Act, 2013.

iii. Employee stock option reserve account

The Company has established various equity settled share based payment plans for certain categories of employees of the Company and subsidiaries. Refer Note no. 41 for further details on these plans.

3. Employee benefits

A. Gratuity

The Company offers Gratuity benefits to employees, a defined benefit plan, Gratuity plan is governed by the Payment of Gratuity Act, 1972. Under gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure @15 days of last drawn salary for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

The following tables set out the funded status of the gratuity plan and the amount recognized in the Company’s financial statements as at and for the year ended March 31, 2018 and March 31, 2017:

The Company’s Gratuity Fund is managed by Life Insurance Corporation of India (LIC). The plan assets under the fund are deposited under approved securities.

The expected rate of return on assets is based on the expectation of the average long term rate of return on investment of the fund, during the estimated term of obligation.

The expected contribution in next year is Rs. Nil (March 31, 2017: Rs. Nil).

The obligations are measured at the present value of estimated future cash flows by using a discount rate that is determined with reference to the market yields at the Balance Sheet date on Government Bonds which is consistent with the estimated terms of the obligation.

The estimate of future salary increase, considered in the actuarial valuation, takes account of inflation, security, promotion and other relevant factors such as supply and demand in the employment market.

B. Contribution to provident fund

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund, which is a defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognized as an expense towards contribution to Provident Fund for the year aggregated to Rs. 240.93 lakhs (year ended March 31, 2017: Rs. 231.23 lakhs).

4. Related party disclosures

(i) Names of related parties and description of relationship:

A. Enterprises who exercise Control

Transcompany Ltd., British Virgin Islands (BVI) - Ultimate holding company Embtech Holdings Ltd., Mauritius - Holding company

B. Enterprises where control exists - Subsidiaries (including step down subsidiaries)

Mindteck, Inc., USA (formerly Infotech Consulting, Inc.)

Mindteck Software Malaysia SDN. BHD, Malaysia Mindteck Middle East Limited SPC, Kingdom of Bahrain Mindteck (UK) Limited, United Kingdom Mindteck Singapore Pte. Limited, Singapore Mindteck Solutions Philippines, Inc.

Mindteck Netherlands BV, Netherlands Mindteck Germany GmbH, Germany Chendle Holdings Ltd, BVI

Hitech Parking Solutions Private Limited w.e.f. March 14, 2018

C. Enterprises where control exists - Other than subsidiaries

Mindteck Employees Welfare Trust

D. Key management personnel

* The remuneration to the key managerial personnel does not include the provision/ accruals made on best estimate basis as they are determined for the Company as a whole.

e. In respect of ceiling on managerial remuneration prescribed under section 197 of the Companies Act, 2013, read with Schedule V of the Act, the Company has relied on opinion obtained from external legal counsel for non-inclusion of perquisite value of Employee Stock Options exercised during the year by non-executive director in managerial remuneration computation.

f. Refer to Note no. 41 (h) for grant of stock options to employees of the subsidiary companies.

5. Segment information

In accordance with Ind AS 108, Operating segments, segment information has been provided in the consolidated financial results of the Company and therefore no separate disclosure on segment information is given in these standalone financial results.

6. Employee stock options

As at March 31, 2018, the Company has the following share-based payment arrangements:

a. Employee Share Incentive Scheme 2000

The Company has an Employee Share Incentive Scheme 2000 (‘ESIS 2000’) for the benefit of its employees administered through the Mindteck Employees Welfare Trust (‘The Trust’). The Trust, which was constituted for this purpose, subscribed to 416,000 equity shares renounced in its favour by the Company’s promoters/directors in the Company’s earlier rights issue. These shares are to be distributed amongst the employees, based on the recommendations made by the Company’s Nomination & Remuneration Committee. No equity shares have been distributed under the ESIS 2000 and therefore, no stock compensation expense has been recorded.

b. Mindteck Employees Stock Option Scheme 2005 (ESOP 2005)

During the year ended March 31, 2006, the Company introduced the ‘Mindteck Employees Option Scheme 2005’ (‘the Option Scheme 2005’) for the benefit of the employees of the Company and its subsidiaries, as approved by the Board of Directors in its meeting held on July 04, 2005 and the shareholders meeting held on July 29, 2005. The Option Scheme 2005 provides for the creation and issue of 500,000 options that would eventually convert into equity shares of Rs 10 each in the hands of the employees. The options are to be granted to the eligible employees at the discretion of and at the exercise price determined by the Compensation Committee of the Board of Directors. The options vest annually in a graded manner over a three year period and are exercisable during a maximum period of 5 years from the date of vesting.

During the year ended March 31, 2018, the Company has granted 9,600 options on May 22, 2017 at an exercise price of Rs. 81.55 per share and 30,900 options on August 08, 2017 at an exercise price of Rs. 71.85 per share.

During the year ended March 31, 2017, the Company has granted 14,400 options on November 11, 2016 at an exercise price of Rs. 85.05 per share and 14,400 options on February 10, 2017 at an exercise price of Rs. 92.10 per share.

c. Mindteck Employees Stock Option Scheme 2008 (ESOP 2008)

During the year ended March 31, 2009, the Company introduced ‘Mindteck Employees Stock Option Scheme 2008’ (‘the Option Scheme 2008’) for the benefit of the employees of the Company and its subsidiaries, as approved by the Board of Directors in its meeting held on May 27, 2008 and the shareholders meeting held on July 30, 2008. The Option Scheme 2008 provides for the creation and issue of 1,200,000 options that would eventually convert into equity shares of Rs. 10 each in the hands of the employees. The options are to be granted to the eligible employees at the discretion of and at the exercise price determined by the Nomination & Remuneration Committee of the Board of Directors. The options will vest after the expiry of a period of twelve months from the date on which the options are granted. The vesting term and the period over which the options are exercisable is to be decided by the Nomination & Remuneration Committee.

During the year ended March 31, 2018, the Company has granted 118.600 options on November 08, 2017 at an exercise price of Rs. 79.65 per share and 193,400 options on February 13, 2018 at an exercise price of Rs.73.60 per share.

During the year ended March 31, 2017, the Company has granted 69.600 options on May 20, 2016 at an exercise price of Rs. 103.90 per share and 239,000 options on August 10, 2016 at an exercise price of Rs. 90.75 per share.

d. Mindteck Employees Stock Option Scheme 2014 (ESOP 2014)

During the year ended March 31, 2015, the Company introduced ‘Mindteck Employees Stock Option Scheme 2014’ (‘the Option Scheme 2014’) for the benefit of the employees of the Company and its subsidiaries, as approved by the Board of Directors in its meeting held on May 29, 2014 and the shareholders meeting held on August 14, 2014. The Option Scheme 2014 provides for the creation and issue of 2,500,000 options that would eventually convert into equity shares of Rs. 10 each in the hands of the employees. The options are to be granted to the eligible employees at the discretion of and at the exercise price determined by the Nomination and Remuneration Committee of the Board of Directors. The options will vest after the expiry of a period of twelve months from the date on which the options are granted. The vesting term and the period over which the options are exercisable is to be decided by the Nomination and Remuneration Committee.

During the year ended March 31, 2018, the Company has granted 250.000 options on April 10, 2017 at an exercise price of Rs. 81.30 per share.

During the year ended March 31, 2017, the Company has granted 250.000 options on March 30, 2017 at an exercise price of Rs. 78.10 per share.

7 Financial risk management

The Company has exposure to following risks arising from financial instruments-

- credit risk

- market risk

- interest risk

- liquidity risk

a. Risk management framework

The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.

The Company’s audit committee oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relations to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

b. Credit risk

Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and unbilled revenue) from its financing activities including deposits with banks and financial institutions.

i) Trade and other receivables:

Credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored.

The impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security.

Expected credit loss (ECL) assessment for corporate customers as at April 01, 2016, March 31, 2017 and March 31, 2018

The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (including but not limited to past payment history, security by way of deposits, external ratings, audited financial statements, management accounts and cash flow projections and available press information about customers) and applying experienced credit judgement.

ii) Other financial assets and deposits with banks:

Credit risk on cash and cash equivalent is limited as (including bank balances, fixed deposits and margin money with banks) the Company generally transacts with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.

c. Market risk

Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates, will affect the Company’s income and its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters.

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 exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in United States Dollars (‘USD’)). The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities. The Company also has exposures to Great Britain Pound (‘GBP’) and Singapore Dollar (‘SGD’).

Sensitivity analysis

Every 1% increase or decrease of the respective foreign currencies compared to functional currency of the Company would cause the profit before tax in proportion to revenue to decrease or increase respectively by 1.80% (profit before exceptional items for the year ended March 31, 2017 by 0.90%).

Interest rate risk

Interest rate risk is the risk that the 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 its short term borrowings in nature of working capital loans, which carry floating interest rates. Accordingly, the Company’s risk of changes in interest rates relates primarily to the Company’s debt obligations with floating interest rates.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant. The impact on entity’s loss before tax due to change in the interest rate/ fair value of financial liabilities are as disclosed below:

d. Liquidity risk

Liquidity is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing the liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company believes that the cash and cash equivalents is sufficient to meet its current requirements. Accordingly no liquidity risk is perceived.

Exposure to liquidity risk

The table below details the Company’s remaining contractual maturity for its financial liabilities. The contractual cash flows reflect the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay

8 Capital management

The Company’s objective is to maintain a strong capital base to ensure sustained growth in business and to maximise the shareholders value. The capital management focusses to maintain an optimal structure that balances growth and maximizes shareholder value.

9 First-time adoption of Ind AS

These financial statements, for the year ended March 31, 2018, have been prepared in accordance with Ind AS. For the periods upto and including the year ended March 31, 2017, 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’ or ‘ Previous GAAP’).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for year ending on March 31, 2018 together with the comparative period data, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at April 01, 2016, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 01, 2016 and the financial statements as at and for the year ended March 31, 2017.

A. Exemptions availed

In preparing these standalone financial statements, the Company has applied the below mentioned exemptions:

(i) Property, plant & equipment, intangible assets and investment properties

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of intangible assets and investment property also.

(ii) Leases

Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind AS 17 for determining whether an arrangement existing at the date of transition contains a lease by considering the facts and circumstances existing at the date of transition (rather than at the inception of the arrangement).

(iii) Investments in subsidiaries

The Company has chosen to avail the exemption provided by Ind AS 101 and value all its investments in subsidiaries at deemed cost being the previous GAAP carrying amount at the transition date subject to adjustments made due to adoption of other Ind AS.

(iv) Share-based payments

Ind AS 102 Share-based Payment has not been applied to equity instruments in share-based payment transactions that vested before April 01, 2016.

D. Reconciliation of Cash flow for the year ended March 31, 2017

There were no significant reconciliation items between cash flows prepared under Indian GAAP and those prepared under Ind AS.

Note 1: Investment property

Based on Ind AS 40, the Company has reclassified the leased assets office premise to investment property. Under the previous GAAP, this was disclosed as a part of property, plant and equipment.

Note 2: Security deposits and rent equalization reserve

Under Ind AS interest free security deposits are carried at amortized cost by, discounting the same using interest rates applicable to the counter party. The difference between transaction cost and fair value is recognised as prepaid lease and amortized over the period of the lease on a straight-line basis. Further, interest income is recognised on the amortized cost of the security deposits over the lease period.

Under pervious GAAP operating lease expenses were recognised in the ‘standalone statement of profit and loss’ on a straight line basis over the lease term. The difference between lease expense recognised in the ‘standalone statement of profit and loss’ and contractual lease payments was recognised as ‘rent equalization reserve’.

Note 3: Deferred taxes

Under Ind AS, deferred taxes are accounted using balance sheet approach based on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of balance sheet approach has resulted in recognition of deferred tax on new temporary differences which was not required under IGAAP. Under IGAAP, the deferred taxes are accounted using income statement approach i.e. differences between taxable profits and accounting profits for the period.

Note 4: Leased deposit

The Company receives interest free refundable lease deposit from its customer. Under previous GAAP, these deposits were recorded at the transaction value. However, in accordance with Ind AS 109, financial liabilities in the form of lease deposits are recorded initially at the fair value and subsequently discounted over the lock-in period using the effective interest rate method.

Note 5: Provision for expected credit loss

Under the previous GAAP, the Company had provided for trade receivables based on managements assessment regarding recoverability of such balances as at March 31, 2017. Under Ind AS, the Company has provided for the expected credit loss on aged trade receivables based on past history of losses and forward looking information. Provision for expected losses on trade receivables as at April 01, 2016 was charged to ‘Surplus/ (deficit) in the statement of profit and loss’ as provision for doubtful receivables (expected credit loss).

Note 6: Employee benefits

Under previous GAAP, actuarial gains and losses were recognized in the statement of profit and loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of net defined benefit liability/asset which is recognized in other comprehensive income in the respective periods.

Note 7: Employee share based payments

Under previous GAAP, employee share based payments were recognized based on intrinsic value method. Under Ind AS, the same has been recognized as per fair value method.

10. Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

(i) Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a nonmonetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or nonmonetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration.

Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognised on or after:

(i) The beginning of the reporting period in which the entity first applies the Appendix, or

(ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix.

The standard is effective for annual periods beginning on or after April 01, 2018. The Company is currently evaluating the requirements and impact of the aforesaid on its financial statements.

(ii)Ind AS 115 - Revenue from contracts with customers:

Ind AS 115 was notified on March 28, 2018 and is applicable to the Company from financial year 2018-19 beginning April 01, 2018.

The core principle of Ind AS 115 is to recognize revenues to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. Ind AS 115 establishes a five-step model to identify the contract(s) with the customers, identifying performance obligations, estimating variable consideration included in the transaction price and allocating the transaction price to each separate performance obligation and recognizing revenue when (or as) each performance obligation is satisfied. The new standard also provides guidance on recognition of incremental cost of obtaining and fulfilling a contract with a customer.

Ind AS 115 will supersede all current revenue recognition requirements under Ind AS. The standard permits two methods of transition: i) full retrospective method: retrospective application to each prior reporting period with the option to elect certain practical expedients as defined within Ind AS 115; or, ii) modified retrospective method: retrospective application with cumulative effect of initially applying Ind AS 115 recognized at the date of initial application (i.e. April 01, 2018) and providing certain additional disclosures as defined in Ind AS 115.

The Company will adopt the new standard effective April 01, 2018 using the modified retrospective method and is in the process of evaluating its contractual arrangements as per the five-step model required by Ind AS 115. The ultimate impact on revenue resulting from the application of Ind AS 115 will be subject to assessments that are dependent on many variables, including, but not limited to, the terms of the contractual arrangements and the mix of business. The Company is currently assessing the impact of adopting Ind AS 115 on the financial statements.

11. The Company has entered into ‘International transactions’ with ‘Associated Enterprises’ which are subject to Transfer Pricing regulations in India. The Company is in the process of carrying out transfer pricing study for the year ended March 31, 2018 in this regard, to comply with the requirements of the Income Tax Act, 1961. The Management of the Company, is of the opinion that such transactions with Associated Enterprises are at arm’s length and hence in compliance with the aforesaid legislation. Consequently, this will not have any impact on the standalone financial statements, particularly on account of tax expense and that of provision for taxation.