1. Corporate information

MIRC Electronics Limited ("the Company") is a listed entity incorporated in India. The address of registered office and principal place of business is Onida House, G-1, MIDC, Mahakali Caves Road, Andheri (East), Mumbai - 400093. The Company is principally engaged in manufacturing and trading of electronic items.

The Ordinary (Equity) shares of the company are listed on the National Stock Exchange ("NSE") and the Bombay Stock Exchange ("BSE").

The Company has only one class of equity shares having par value of Rs. 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend, if any on the equity shares is recommended by the Board and approved by the shareholders at the 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. The distribution will be in proportion to the number of equity shares held by the shareholders.

In the current year the Company has allotted 1,92,00,000 Equity Shares and 1,92,00,000 Convertible Share Warrants (Convertible into 1 Equity Share each) at a issue price of Rs.37.53 per equity share (including a premium of Rs.36.53 per equity share) to the non-promoters on preferential basis. Consequent to the issue of equity shares, the paid up equity share capital of the Company has increased from Rs.2,119.39 lacs to Rs.2,311.39 lacs. The Company has received an amount of Rs.1,801.44 lacs being 25% of the value of warrants as per provisions of SEBI (ICDR) Regulations, 2009.

The company has not issued any equity shares as bonus or for consideration other than cash and has not bought back any shares during the period of five years immediately preceding 31st March, 2018.

NOTE 16 - OTHER EQUITY Nature and purpose of Reserves

Capital Reserve : The amount is largely on account of reduction in share capital.

Capital Redemption Reserve : The capital redemption reserve was created for buyback/redemption of shares.

Securities Premium Account : Securities Premium Reserve is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013.

General Reserve : The general reserves comprises of transfer of profits from retained earnings for appropriation purposes. The reserves can be distributed/utilised by the Company in accordance with the Companies Act, 2013.

Since the Company has been incurring losses in recent past period in addition to the carried forward losses, the company has not recognized Deferred Tax Asset as it is probable that sufficient future taxable profit will be not be available against which unused tax losses can be utilised.

Deferred tax assets are recognised only to the extent it is probable that either future taxable profits or reversal of deferred tax liabilities will be available, against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.

The Company has impact of expenditure charged to the statement of Profit and loss but allowed for tax purposes on payment basis of Rs.181.62 lacs on which the deferred tax asset is not recognised. Further, the Company also has tax losses and unabsorbed depreciation of Rs.17,217.45 lacs on which deferred tax asset is not recognised. Out of these losses, Rs.5,044.12 lacs does not have any expiry and Rs.12,173.33 lacs will expire by the year 2026.

Security and rate of interest

Cash Credit Facility, Loan from bank and Buyers credit from banks is secured by pari passu charge in favour of the bankers by mortgage/ hypothecation of Company's immovable and movable properties at Wada and Onida House and immovable properties at Vasai. The interest on cash credit ranges from 12.00% to 16.00% , loan from banks is at 4.5% 6 month Libor and the interest on Buyers credit is libor plus spread.

2 The Board of Directors of the Company on 13th February, 2016 had approved a scheme of amalgamation between the Company and its wholly owned subsidiary Akasaka Electronics Limited ("the transferor Company") with effect from 1st April, 2015 (the appointed date). Akasaka Electronics Limited was a wholly owned subsidiary of MIRC Electronics Limited and was engaged in the business of manufacture of printed circuit boards. The Company had filed a petition in the High Court / NCLT for amalgamating the business of the subsidiary company w.e.f. 1 April 2015 to gain synergies of operations and to take benefits of economies in cost. NCLT vide its order dated 23rd March 2017 had issued an order approving the scheme of amalgamation between the subsidiary and the Company.

All assets aggregating Rs.1,807.63 lacs and liabilities aggregating Rs.771 lacs of the subsidiary have been taken over at book values. Capital Reserve Rs.207.55 lacs, Capital Redemption reserve Rs.99.23 lacs and Surplus in the statement of profit and loss account of Rs. (85.90) lacs of the subsidiary have been taken over at book values. Excess of investment over the share capital of the transferor Company, amounting to Rs.1,810.05 lacs has been adjusted in General Reserves of the Company.

For IND AS, the transition date for the company is 1st April 2016 and accordingly the impact of merger for IND AS financials has been given in the transition accounting.

3 Exceptional items -

The compensation has been paid as follows:-

The company has recognised total expenses of Rs.2,373.11 lacs for the year ended 31st March 2017 as exceptional items on account of the following reasons:

a) During September 2016, the Company had entered into a settlement agreement dated 13th September 2016 with workers of Wada factory to shift the worker's to other locations as per the business requirements of the Company or pay compensation to workers who are willing to voluntarily retire from the services of the Company. The above agreement has been entered considering reduction in operations of the Company over the years. Out of total workers at Wada factory 166 workers had agreed to voluntarily retire from the services of the Company and accordingly the Company has recognized an expense of Rs.963.28 lacs in the Statement of Profit and Loss.

b) During the year, 2,648 preference shares have been allotted to the Company w.e.f. 1st December, 2016 against outstanding receivable of Rs.2,648 lacs as per the scheme of the arrangement filed by one of the party and approved by NCLT vide its order dated 24th August, 2017.

The Company has recognised preference shares and de-recognised outstanding receivables as on 1st December, 2016 in accordance with the terms of the approved scheme and recognised a loss of Rs.1,507 lacs in the Statement of Profit and Loss, arising on account of fair valuation of preference shares vis-a-vis carrying value of outstanding receivables.

c) Profit (net) on sale of land and building of Rs.97.17 lacs.

4 During the financial year 2015-16, the Company had allotted 1 (One) Warrant to Bennett Coleman & Co. Ltd. ( BCCL ) exercisable for equity shares aggregating to Rs.2,275.00 lacs. The company had received an amount of Rs.568.75 lacs being 25% of the value of Warrant from BCCL and had been disclosed as "Money received against share warrants" below Reserves and Surplus, with such warrant carrying an option / entitlement to the warrant holder to subscribe to equity shares of the face value of Re. 1/- each for cash at a minimum price of Rs.14.66/- each (including premium of Rs.13.66/- each) per share, as arrived in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as on the Relevant Date i.e. 27th May, 2015 or such higher price per share equal to the average of the weekly high and low of the closing prices of the equity share of the company as quoted on the National Stock Exchange of India Ltd. during the 26 (twenty six) weeks preceding the last date of 17th (seventeenth) month from the date of allotment of warrant i.e. 10th July, 2015 after making adjustment for any bonus issue / split / consolidation.

During the financial year 2016-17, the Company received balance 75% allotment money amounting Rs.1,706.25 lacs against exercise of warrants by BCCL. The Company has issued 1,55,18,417 equity shares of face value of Rs.1 per equity share to BCCL @ Rs.14.66 (including securities premium of Rs.13.66 per equity share).

As of March 31, 2017 the share capital has been increased by Rs.155.19 lacs and securities premium account by Rs. 2,119.82 lacs respectively.

In the current year the Company has allotted 1,92,00,000 Equity Shares and 1,92,00,000 Convertible Share Warrants (Convertible into 1 Equity Share each) at an issue price of Rs.37.53 per equity share (including a premium of Rs.36.53 per equity share) to the non-promoters on preferential basis in accordance with the provision of chapter VII of SEBI ICDR regulations. Consequent to the issue of equity shares, the paid up equity share capital of the Company has increased from Rs.2,119.39 lacs to Rs.2,311.39 lacs and securities premium account has increased from Rs.4,734.88 lacs to Rs.11,748.64 lacs as on 31st March, 2018. The Company has received an amount of '1,801.44 lacs being 25% of the value of warrants as per provisions of SEBI (ICDR) Regulations, 2009 and remaining balance shall be paid before exchange of warrants for equity shares.. If the option to acquire equity shares is not excercised within 18 months from the date of issue of warrants, the amount paid shall be forfeited by the Company.

5 The Company at its extraordinary general meeting dated 29th March, 2017 have approved an Employee Stock option Scheme 2017. However the scheme is not yet offered to employees as on date and hence no effect is considered in the financial statements for the year ended 31st March, 2018.

6 There was a fire accident in February, 2012 at Roorkee Plant of the Company. The Company had made a claim of Rs.4,995.50 lacs in respect of loss and damages covered by the insurance policy. Against the total claim, on account payment of Rs.1,632.45 lacs had been realised from the Insurance company in the financial year 2013-14. Based on the communication received from surveyors appointed by the Insurance company, management had reassessed the recoverability of claim and consequently a further loss of Rs.623 lacs was charged to the statement of Profit and Loss during the year ended 31st March, 2015. During the year ended 31st March, 2016, the Company received an amount of Rs.2,474.70 lacs from the Insurance Company as full and final settlement against insurance claim receivable. For the balance amount of Rs.265.35 lacs the Company had gone for arbitration along with interest and other claims. In the current year the company has received the outstanding amount of Rs.265.35 lacs along with interest of Rs.153.91 lacs which is disclosed as interest received under other income.

Operating lease commitments - Company as lessee

The Company has entered into operating leases for office premises, godowns and residential accommodation, with lease terms between 11 months to six years. The company has the option, under some of its leases, to lease the assets for additional terms between 11 months to three years. The Company has paid '625.16 lacs (31st March 2017 '685.51 lacs) during the year towards minimum lease payment

In relation to above contingent liabilities, the Company has been advised by its legal counsel that it is possible, but not probable, that the action will succeed and accordingly no provision for liability has been recognised in the financial statements.

Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/ authorities.

7 Employee Benefits :

a) Defined contribution plans

The Company has recognised an expense of Rs.223.84 Lacs ( previous year Rs.248.56 Lacs) towards defined contribution plans, in respect of Provident Fund.

b) Defined benefit plans Gratuity

The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided depends on the member's length of service and salary at the retirement date. Company has covered its gratuity liability by a Group Gratuity Policy named 'Employee Group Gratuity Assurance Scheme' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit which will be equal to 15 days' salary for each completed year of service.

The above sensitivity analysis are based on a change and assumption while holding all other assumptions constant. In practice this is unlikely to occur and changes in some of the assumptions may be co-related. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumption used in preparing the sensitivity analysis did not change compared to prior period.

The weighted average duration of the projected benefit obligation is approximately 3 years (31st March, 2017 - 4 years). The contribution expected to be made by the Company during the financial year 2018-19 is Rs.231.71 lacs.

Risk exposure:

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility:

The plan liabilities are calculated using a discount rate set with reference to government bond yield. If plan assets underperform this yield, it will result in deficit. These are subject to interest rate risk. To offset the risk, the plan assets have been deployed in high grade insurer managed funds.

Inflation rate risk:

Higher than expected increase in salary and medical cost will increase the defined benefit obligation.

Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not straight forward and depends upon the combination of salary increase, discount rate and vesting criterion.

8 First time adoption of Ind AS - Mandatory exceptions and optional exemption

The Company has adopted Ind AS with effect from 1st April, 2017 with comparatives being restated. Accordingly the impact of transition has been provided in the Opening Reserves as at 1st April 2016. The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule III.

Exemptions from retrospective application

Fair value as deemed cost exemption

The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying value at the date of transition.

Refer reconciliation of equity as per previous GAAP to Ind AS (Refer Note 41).

Note b

Long term borrowing difference of Rs.49.74 lacs is due to netting off of upfront fees paid on borrowing.

Note c

The increase is on account of merger of Akasaka Electronics Limited balances as of 1st April 2016.

Note d

The increase of Rs.23.97 lacs is due to merger of Akasaka Electronics Limited and Rs.77.42 lacs being financial liabilities reclassified from Other current liability. These increases are compensated by reclass of warranty provision of Rs. 88.62 lacs from trade payable to warranty provision.

Note e

The increase of Rs.167.67 lacs is on account of merger of Akasaka Electronics Limited. There is a reduction of Rs.77.42 lacs being reclass of financial liabilities from other current liabilities to trade payable. Further, the reduction of Rs.75.86 lacs is due to net impact of mark to market accounting of forward contracts outstanding as at 1st April 2016. Under Indian GAAP the forward contract accounting was done as per AS-11.

Note f

The reduction of Rs.88.62 lacs is due to reclass of warranty provision from trade payable to provisions.

Note g

The increase is on account of merger of Akasaka Electronics Limited.

Note h

The reduction is due to cancellation of investment on merger of Akasaka Electronics Limited.

Note i

The increase of Rs.80.20 lacs is on merger of Akasaka Electronics Limited. The reduction of Rs.52.50 lacs is upfront fees which is adjusted against borrowing, Rs.56.20 lacs being margin money balance is reclassified from loans and advances to other bank balances and Rs.405.24 lacs is on account of impact of the discounting of security deposit.

Note j

The increase is on account of merger of Akasaka Electronics Limited.

Note k

The increase is of Rs.37.72 lacs is due to merger of Akasaka Electronics Limited. The reduction of Rs.510.89 lacs is due to discounting of trade receivable from Adonis Electronics Ltd. and Rs.316.70 lacs is due to ECL provision made.

Note l

The increase is of Rs.297.61 lacs is due to merger of Akasaka Electronics Limited. and Rs.56.20 lacs is due to reclass of margin money from other non current asset.

Note m

The increase of Rs.951.03 lacs is due to merger of Akasaka Electronics Limited. The reduction of Rs. 61.60 lacs is due to mark to market accounting of forward contracts. Under Indian GAAP the Company accounted the same as per AS-11.

Refer reconciliation of equity as per previous GAAP to Ind AS (Refer Note 41).

Note b

The reduction is due to recovery of provision during the year.

Note c

The reduction is due to reclass of warranty provision from trade payable to short term provision.

Note d

The increase is on account of reclass of financial liabilities from other current liabilities.

Note e

The reduction is due to reclass of Rs.2,162.96 lacs from other current liabilities to finance liabilities. The further reduction is on account of mark to market accounting as per Ind-AS amounting to Rs.59.73 lacs.

Note f

The increase is due to reclass of warranty provision from trade payable to short term provision.

Note g

The increase is due to investment in preference shares accounted at fair value as per scheme approved by NCLT (Refer note 35)

Note h

The reduction of Rs.227.83 lacs on account of reclass of discounted portion of deposit and reclass of Rs.10.55 lacs prepaid expenses from loans and advances to non current asset. The reduction of Rs.1,626.62 lacs on account of reclass of advance paid to vendor from loans to other non current asset. The reduction of Rs.1,741.44 lacs is on account of recognition of investment in lieu of security deposit and advances paid to Adonis Electronics Limited as per scheme approved by NCLT.

Note i

The increase of Rs.208.64 lacs is on account of reclass of discounted portion of deposit and Rs.10.55 lacs of prepaid expenses from loans and advances to other non current asset. The increase of Rs.1,626.62 lacs on account of reclass of advance paid to vendor from loans to other non current asset. The reduction of Rs.837.95 lacs is on account of recognition of investment in lieu of receivable from Adonis Electronics Limited as per scheme approved by NCLT.

Note j

The reduction is mainly on account of ECL accounting done as per Ind-AS.

Note k

The reduction is due to reclass from short term advances to other current asset.

Note l

The increase is on account of reclass of 1,540.33 lacs from short term advances to other current asset The reduction is due to reclass of Rs. 52.50 lacs from other current asset to borrowing being upfront fees paid. The balance reduction of ' 31.38 lacs is on account of mark to market accounting done as per Ind-AS.

The reduction of Rs.17.16 lacs is on account of amortisation of deferred rent expenses.

Note b

The reduction of Rs.898.97 lacs is on account of fair value loss on investments in Adonis Electronics Ltd.

Note c

The increase of Rs.14.29 lacs is on account of mark to market adjustment accounted on forward contract.

Note d

The reduction of Rs.2.96 lacs is on account of amortisation of upfront fees paid on borrowing.

Note e

The reduction of Rs.316.70 lacs is on account of ECL provision .

Note f

The increase / decrease is on account of impact taken as per notes "a" to "e" above and impact disclosed in Reconciliation of Statement of Profit and Loss for the year ended 31st March 2017 from Indian GAAP to Ind-AS.

The increase is on account of interest income of Rs.132.69 lacs accounted on the security deposit discounted as per Ind-AS and Rs.9.21 lacs accounted as interest income on investment carried at amortised cost.

Note b

The reduction is on account of amount accounted in OCI.

Note c

The reduction of Rs.140.22 lacs being forex gain on buyers credit and foreign currency borrowing reclassified from forex account to finance cost and Rs.160.77 lacs being forex loss on creditors reclassified from finance cost to forex account. Further the reduction of Rs.2.95 lacs comprises of Rs.14.07 lacs on account of mark to market adjustment accounted on forward contract and the increase of Rs.11.12 lacs is on account of amortisation of upfront fees paid on borrowing.

Note d

The reduction of Rs.1,318.23 lacs is due to reclass of expenses against revenue consisting of Rs.1,417.22 lacs being finance cost relating to revenue, Rs.202 lacs being foreign tour expenses and Rs.300.99 lacs being forex on foreign currency borrowing reclassed from forex account to finance cost. The increase of Rs. 97.47 lacs is on account of Rs.134.71 lacs accounted as rent expenses by amortising the deferred rent expenses and reduction of Rs. 37.24 lacs reversal of ECL provision .

Note e

The High sea sales and purchases of mobiles amounting to Rs. 261.29 lacs is netted off. The revenue is increased due to gross up of excise duty of Rs. 3,812.21 lacs and reduced due to netting of expenses pertaining to finance cost related to revenue Rs.1,417.22 lacs and foreign tour expenses of Rs. 202 lacs .

Fair Value hierarchy

The company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:

Level 1: Fair value measurement are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2: Fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3: Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs)

There were no transfers between Level 1 and Level 2 during the year.

Fair Valuation Techiques and Inputs used

Level 2 - Derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace.

Level 3 - The fair value of unquoted equity shares is determined using income approach (discounted cash flow).

Capital Management and Gearing ratio

For the purpose of the Company's capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company's capital management is to maximize 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. From time to time, the Company reviews its policy related to dividend payment to shareholders, return capital to shareholders or fresh issue of shares. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company's policy is to keep the gearing ratio between 50% to 60%. The gearing ratio for current year is on lower side due to repayment of borrowings out of fresh capital issued during the year. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents as detailed in the notes below.

The Company's capital management is intended to create value for shareholders by facilitating the meeting of its long-term and short-term goals. Its Capital structure consists of net debt (borrowings as detailed in notes below) and total equity.

(i) Debt is defined as long-term borrowings (including current maturities) and short-term borrowings (excluding derivative and contingent considerations).

(ii) Equity is defined as Equity share capital and other equity including reserves and surplus.

In order to achieve this overall objective, the Company'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.

9. Research and development expenses consist of employee expenses and other expenses of Rs. 276.17 Lacs (previous year Rs. 258.87 Lacs), and Rs.65.96 Lacs (previous year Rs. 68.64 Lacs) respectively. Depreciation on Research and Development assets is Rs. 22.37 Lacs (previous year Rs. 22.07 Lacs) shown under Property ,Plant and Equipment's.

Terms and conditions of transactions with related parties

The transactions with 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 interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties . 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.

Loans to Related party

The loan outstanding as on 1st April, 2016 to Adino Telecom Limited is unsecured and repayable on demand, The loan was repaid by Adino Telecom Limited in the financial year 2016-17. Interest was charged at 15%

10. The Company has incurred a net loss in its immediately three preceding financial years. Thus in accordance with Section 135 (5) of the Companies Act, 2013, the Company is not required to provide / spend any amount under Corporate Social Responsibility.

11. Financial risk management objectives and policies

The Company's principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include loans, trade and other receivables and cash and cash equivalents that are derived directly from its operations.

The Company's financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company's senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company's senior management that the Company's financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarized 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 prices comprises two types of risk: currency rate risk and interest rate risk. Financial instruments affected by market risks include loans and borrowings, deposits and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at 31st March, 2018 and 31st March, 2017. The analysis exclude the impact of movements in market variables on; the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities.

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument 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 Companies operating activities that is buying of Raw Material and Finished Goods from international buyers. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies. The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12 month period for hedges of purchases . The Company hedges its exposure to fluctuations on the translation into INR of its imports operations.This foreign currency risk Is hedged by using foreign currency forward contracts.

1. /- Gain / Loss

2. The impact of depreciation / appreciation on foreign currency other than USD on profit before tax of the Company is not material.

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changes in exchange rate on foreign currency exposure. The counterparty for these contracts is generally a Bank. These derivative financial instruments are valued based on quoted prices for similar asset and liabilities in active markets or inputs that is directly or indirectly observable in the marketplace. The following table gives details in respect of outstanding foreign exchange forward and option contracts.

(ii) 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 borrowings are commercial banks to meet the working capital requirements for operation of the business. The banks generally charge the card rate to the Company based on Annual appraisal by internal and external ratings. There is no major fluctuation on those interest rates charged by the bank during the period under audit.

(b ) Credit risk management

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a fianancial loss. The Company is exposed to credit risk from its operating activities (primarly trade receivables) and from its financing activities including foreign exchange transactions. The company generally deals with parties which has worthiness based on companys internal assessment.

Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company's objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. Processes and policies related to such risks are overseen by senior management. Management monitors the Company's liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

The table below summarizes the maturity profile of the Company's financial liabilities based on contractual undiscounted payments.

12 a) 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 standards:

Ind AS 115 - Revenue from Contracts with Customers

In March 2018, the Ministry of Corporate Affairs had notified Ind AS 115 (Revenue from Contracts with Customers) which would be applicable to the Company for accounting periods beginning on or after 1st April 2018. This Standard 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. The Company is evaluating the requirements of the standard and its impact on its financial statements.

Amendments to Ind AS 12 - Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. These amendments are effective for annual periods beginning on or after 1st April, 2018. These amendments are not expected to have any material impact on the Company.

Dividend distribution to equity shareholders of the Company

The Company recognises a liability to make dividend distributions to its equity holders when the distribution is authorised and the distribution is no longer at its discretion. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity. In case of Interim Dividend, the liability is recognised on its declaration by the Board of Directors.

b) Changes in accounting policies and disclosures New and amended standards and interpretations

The Company applied for the first time certain amendments to the standards, which are effective for annual periods beginning on or after 1st April, 2017. The nature and the impact of each amendment is described below:

Amendments to Ind AS 7 Statement of Cash Flows: Disclosure Initiative

The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has provided the information for the current period.

13 The Company considers entire business under one segment i.e. Consumer Durable products. Further, there is no separately identifiable geographical segment and hence no reporting is made for segment.

14 There are no Micro and Small Enterprises, to whom the Company owes dues. This information as required to be disclosed under the Micro Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.

15 Significiant events after the reporting period

There were no significiant adjusting events that occurred subsequent to the reporting period other than the events disclosed in the relevant notes.