NOTE- 1: FIRST TIME IND AS ADOPTION RECONCILIATION

The Company has transitioned the basis of accounting from Indian generally accepted accounting principles ("IGAAP") to Ind AS. The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the "transition date").

In preparing the opening Ind AS balance sheet, amounts reported in financial statements prepared in accordance with IGAAP have been adjusted. An explanation of how the transition from IGAAP to Ind AS has affected the financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables.

Footnotes:

Non-current investments:

Under previous GAAP the Company accounted for current investments in quoted equity shares at cost less provision for other than temporary diminution in the value of investments. Under Ind-AS, the investments are required to be classified and measured subsequently at fair value through profit or loss. At the date of transition to Ind-AS, difference between the fair value and GAAP carrying amount of Rs. (0.87) Lacs has been recognized in the retained earnings. The impact of Rs. 1.24 Lakhs as at 31st March, 2017 has been recognized in the Statement of Profit and Loss.

Proposed dividend :

Under previous GAAP proposed dividend including dividend distribution tax are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind-AS, dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting).

Accordingly, the liability of Rs. 181.36 Lakhs for the year ended on 31st March, 2016 recorded for proposed dividend has been derecognized against retained earnings on 1st April, 2016.

Revenue from sale of products:

In the financial statements prepared under previous GAAP revenue from sale of products was presented net of excise duty. However, under Ind AS, revenue from sale of products includes excise duty. Excise duty expense amounting to Rs 4,394.55 lacs is presented separately on the face of the Statement of Profit and Loss for the year ended 31st March, 2017.

Under Ind AS, revenue is recognized at the fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government such as sales tax, value added tax and goods and service tax except excise duty. Discounts given include rebates and incentives given to customers which have been reclassified from other expenses under previous GAAP and netted from revenue under Ind AS.

The above changes do not affect equity as at date of transition to Ind AS, profit after tax for the year ended 31st March, 2017 and Equity as at 31st March, 2017

Remeasurement Benefits of defined benefit plan :

Both under previous GAAP and Ind-AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP the entire cost, including actuarial gains and losses, are charged to Statement of Profit and Loss. Under Ind-AS, remeasurements comprising of actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions, the effect of change in asset ceiling (if applicable) and the return on plan assets (excluding net interest) are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income (OCI). Thus, the employee benefit cost is reduced by Rs. 386.79 Lakhs (Net of Tax of Rs. 252.93 Lakhs) for 2016-17 and re-measurement losses on defined benefit plans has been recognized in the Other Comprehensive Incomes (net of tax).

Other Ind AS adjustments (non current financial assets / liabilities and provisions) :

Under previous GAAP the Company accounted for non-current financial assets / liabilities and provisions at undiscounted values. In contrast, the Ind AS requires that where the effect of time value of money is material, the amount of non current financial assets / liabilities and provisions should be the present value of expenditure / income expected to be required to settle the obligations / received upon maturity. This impact is recognized as an interest income or as other borrowing cost.

NOTE- 2: CAPITAL MANAGEMENT

For the purpose of the Company's capital management, capital includes issued capital and other equity reserves, long term funds attributable to the Equity holders. The primary objective of the Company's capital management is to maximize shareholders value and keep the debt equity ratio within acceptable range. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

NOTE- 3: FINANCIAL RISK MANAGEMENT

The Company’s activities expose it to various financial risks, including market risk, credit risk and liquidity risk. The Company's risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company by setting appropriate limits and controls and monitoring such risks. The policies and processes are reviewed regularly to reflect changes in market conditions and the Company's activities.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations The Company is exposed to credit risks from its operating activities, primarily trade receivables, investments and loans. Credit risk is managed through credit approvals, establishing credit limits and monitoring the credit worthiness of the counterparty to which the Company grants credit limits in the normal course of business.

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet the financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both, normal and stressed conditions, without incurring unacceptable losses or risk to the Company's reputation.

Market risks

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 risks: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk includes investments, trade payables, trade receivables and loans.

Interest rate risks

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. Since the Company has insignificant interest bearing borrowings, the exposure to risk of changes in market interest rates is minimal. Foreign currency risks

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company does enters into forward exchange contracts to hedge its foreign currency exposures.

Other price risks

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments and bonds.

The company dose not have significant investments in quoted shares . Hence the 10% price sensitivity upward /downward will not have any material impact on the profitability of the company.

Notes:4

1 The above loan advanced prior to 1st April, 2014 for the purpose of working capital carries an interest @ 8% p.a. (PY @ 8% p.a.)

2 Refer Note 4 for investments.

3 Previous year figures are in brackets.

A. In the opinion of the Board, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course of the business.

B. The Company has taken various premises under operating leases. These are generally not non-cancellable, range between 11 months to 3 years and above, and are renewable by mutual consent on mutually agreeable terms. Lease payments are recognized in the Statement of Profit and Loss under the head "Rent".

C. The Company has investment in Grauer & Weil (Thailand) Co. Limited (G&W Thailand) of Rs. 83.83 lakh (PY Rs. 83.83 lakh). The networth of that company has been fully eroded. The management worked with the management of G&W Thailand to take some effective steps during the year including disposal of some of the assets owned by G&W Thailand, which resulted in improvement in its net-worth. G&W Thailand was also able to repay a part of the loan advanced by the Company. Based on the expected additional restructuring steps and projected future earning, the management is of the opinion that the diminution in value of investment is temporary and that no provision is required, upon which, the auditors being unable to make an informed judgment, have placed their reliance.

D. Segment reporting

The following tables present revenue and profit/(loss) information regarding business/ geographical segments for the year ended 31st March, 2018 and certain assets and liabilities information regarding business and geographical segments as at 31st March, 2018

Note:5

1. The detailed disclosure of the investments in subsidiaries / associates is given in Note No. 4 forming part of the Balance Sheet.

2. The Company has during the year written off bad debts/advances amounting to Rs. 164.56 Lacs (PY Rs. 76.38 Lacs), comprising of Grauer & Weil (Thailand) Co. Limited

3. - includes interest of Rs. 3.79 Lacs (PY Rs 4.00 Lacs)

4. #Managerial remuneration does not include provision for gratuity and leave encashment, which is determined for the Company as a whole.

E. The Board of Directors has recommended a final dividend of 60 paise on a Re. 1/- face value subject to approval from the shareholders. On approval, the total dividend payment is expected to be Rs. 1,360.24 lacs and the payment of dividend distribution tax is expected to be Rs. 276.94 lacs.

F. Previous years figures have been regrouped and reclassified wherever required.