1. Financial Risk Management

The Company's activities expose it to market risk, liquidity risk and credit risk. Market risk is the risk of loss of future earnings, fair value or future cash flows that may result from a change in the price of financial instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market sensitive financial instruments including investments and deposits, foreign currency receivable and payables and loans and borrowings.

If the risk exposure is significant then management reviews the position and takes decision regarding hedging / other risk strategies to mitigate such risk exposures.

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 the market interest rate.

Foreign Currency Risk

The Company is exposed to foreign exchange risk through its purchases from overseas suppliers in various foreign currencies. These exposures are unhedged.

However, the Company did not have any outstanding dues as on 31st March, 2018 Credit Risk

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occuring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

(i) Actual or expected significant adverse change in business

(ii) Actual or expected significant change in the operating results of the counterparty

(iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligation.

A default on a financial asset is when the counterparty fails to make contractual payments within 30-60 days of when they fall due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.

Financial assets are written off when there is no reasonable expectation of recovery. Where loans or receivables have been written off, the Company may engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

The carrying amounts of financial assets represent the maximum credit risk exposure

There are no specific forward looking information estimated by the management.

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 a reasonable price. The Company's treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Manage men t monitors the company's net liquidity position through rolling forecasts on the basis of expected cash flows.

2. Capital Management

For the purposes of the Company's capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company's Capital Management is to maximize shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial statements

The company monitors capital using gearing ratio, which is total de bt divided by total capital plus d ebt.

Notes to first time adoption

1 Fair valuation as deemed cost for Intangible Assets:

The Company has considered net block as on 01-Apr-2016 as the fair value for intangible assets, except brand of Rs. 100.28 lakhs, in accordance with stipulations of Ind AS 101 with the resultant impact being accounted for in the reserves. The Company has written off brand since it is not probable that the expected future economic benefits that are attributable to the asset will flow to the entity.

2 Fair valuation for Financial Assets:

The Company has valued financial assets (other than Investment in subsidiary which is accounted at cost), at fair value. Impact of fair value changes as on the date of transition, is recognized in opening reserves and changes thereafter are recognized in Statement of Profit and Loss or Other Comprehensive Income, as the case may be.

3 ECL Model

Under Ind AS, impairment allowance has been determined based on ECL model. Due to this model, the company impaired its trade receivable by Rs.414.86 lakhs as on the date of transition which is recognized in retained earnings. The impairment of Rs. 414.86 lacs for the year ended 31st March, 2017 is recognized in profit or loss.

4 Loan from SICOM (Nagpur)

As per Ind AS 8, an entity shall correct material prior period errors retrospectively in the first set of financial statements approved for issue after their discovery by:

(a) restating the comparative amounts for the prior period(s) presented in which the error occurred; or

(b) if the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and equity for the earliest prior period presented.

Under Indian GAAP, prior period error relating to payable to SICOM was accounted in borrowing for the year ended 31-Mar-16 of INR 20.64 lakhs. This is adjusted in the opening balance sheet as it related to earlier years resulting in increase in retained earnings and reduction in Borrowings of Rs. 20.64 lakhs on the date of transition.

5 Deferred Tax:

The impact of transition adjustments together with Ind AS mandate of using balance sheet approach (against profit and loss approach in the previous GAAP) for computation of deferred taxes has resulted in charge to the Reserves, on the date of transition, with consequential impact to the Statement of Profit and Loss for the subsequent periods.

6 Prior Period Error

"As per Ind AS 8, an entity shall correct material prior period errors retrospectively in the first set of financial statements approved for issue after their discovery by:

(a) restating the comparative amounts for the prior period(s) presented in which the error occurred; or

(b) if the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and equity for the earliest prior period presented.

Under Indian GAAP, prior period error relating to expenses were recognized in the statement of profit or loss for the year ended 31 March 2016 of Rs. 9.17 lakhs. This is adjusted in the opening balance sheet as it related to earlier years resulting in reduction in retained earnings and increase in Trade Payables of Rs. 9.17 lakhs on the date of transition.

7 Change in accounting policy for recognition of costs relating to Post Employment Benefit Plan:

Both under Indian GAAP and Ind AS, the company recognized costs related to its post-employment defined benefit plan on actuarial basis. Under Indian GAAP, the entire cost, including actuarial gain and loss, are charged to profit or loss. Under Ind AS, measurements (comprising of actuarial gains and losses, the effects of asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on the plan assets excluding the amount included in net interest on the net defined benefit liability) are recognized in balance sheet through other comprehensive income. Thus, employee benefits expense is reduced by Rs. 16.86 lacs and is recognized in other comprehensive income during the year ended 31 March 2017.

40 Previous year figures have been re-grouped/re-classified wherever considered necessary to compare with current year figures.