Notes to the Financial Statements for the year ended 31st March 2018

a. Effect of Ind AS Adoption on balance sheet as at March 31, 2017 and April 1, 2016:

BALANCE SHEET As at 1st April, 2016

Note: Previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purpose of this note.

b. Reconciliation of total equity as at March 31, 2017 and April 1, 2016:

c. Effect of Ind AS adoption on the statement of profit and loss for the year ended March 31, 2017:

STATEMENT OF PROFIT AND LOSS For the year ended 31st March 2017

d. Effect of Ind AS adoption on the total Comprehensive income for the year ended March 31, 2017.

Notes:

1. Reclassification of lease

Under Indian GAAP, there is no specific guidance for contracts that involve leases of Land. Under Ind AS, leases of land is recognized as operating or finance lease as per definition and classification criteria. Where the land lease is for several decades, generally it qualifies as a finance lease even though the right of ownership of the land may not transfer at the end of the lease term. Land lease for relatively shorter periods are treated as operating leases. In such cases lease rentals paid in advance are recorded as prepaid lease rentals as part of other Current / Non-Current assets. Prepaid lease classified under Non-Current Assets and Current assets as at 31st March, 2017 is Rs. 0.44 and Rs. 0.01 (in lakhs) respectively.

2. Trade receivables:

Under Indian GAAP, provision for doubtful debts was recognized based on the estimates of the outcome and of the financial effect of contingencies determined by the management of the Company. This judgement was based on consideration of information available up to the date on which the financial statements were approved and included a review of events occurring after the balance sheet date.

Refer table (d) as disclosed above for impact of Expected Credit Loss (ECL) for the year ended 31st March, 2017.

3. Proposed dividend and tax on dividend

As per Ind AS, provision of dividend needs to be accounted in the year when the dividend is approved by the shareholders and paid. Under previous GAAP, proposed dividend was provided for in the year to which it related. As per requirement of Ind AS, the dividend (including tax) of Financial Year 2015-16 has been adjusted from Other Equity.

4. Re-measurements of defined benefit obligations:

Under the previous GAAP, actuarial gains and losses were recognised in the statement of profit or loss. Under Ind AS, the actuarial gains and losses form a part of re-measurement of the net defined benefit liability / assets which is recognised in other comprehensive income. As the impact of above re-measurement for the Financial Year 2016-17 is negligible, the same is not recognized in Other Comprehensive Income.

5. Sales of goods:

Under the previous GAAP, revenue from operations was presented net of excise duty. Under Ind AS, revenue from operations is shown inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expense. Excise Duty for the Financial Year 2016-17 and 2017-18 is Rs.764.38 lakhs and Rs. 120.75 lakhs respectively.

6. Deferred Tax

Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS approach has resulted in recognition of deferred tax on new temporary differences which was not required under Previous GAAP.

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity.

7. Overdraft repayable on demand

Under Ind AS, bank overdrafts which are repayable on demand and form an integral part of an entity's cash management system are included in Cash and Cash Equivalents for the purpose of presentation of statement of cash flows. Whereas under previous GAAP there was no similar guidance and hence, bank overdrafts were considered similar to other borrowings and the movements therein were reflected in cash flows from Financing activities. The effect of this is that bank overdrafts of Rs. 998.20 lakhs as at 31st March 2017 and Rs. 560.45 Lakhs as at 1st April 2016 have been considered as part of Cash and Cash equivalents.

8. Investments in equity instruments and mutual funds

Under previous GAAP, investments in mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated as at FVTOCI) have been recognized in retained earnings as at date of transition and subsequently in the Statement of Profit and Loss for the year ended 31st March 2017. This increased the retained earnings by Rs. 0.01 lakhs as at 31st March 2017. (1st April 2016 - Rs. 0.02 lakhs)

48 MOVEMENT IN DEFERRED TAX ASSETS AND LIABILITIES.

48 MOVEMENT IN DEFERRED TAX ASSETS AND LIABILITIES.

49 Previous year figures have been regrouped/re-arranged wherever necessary.