Illustrative financial statements for the year ended 31...

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Based on accounting standards and the revised Schedule VI applicable for the financial year ending 31 March 2012 Indian GAAP Illustrative financial statements for the year ended 31 March 2012 Good Company (India) Limited

Transcript of Illustrative financial statements for the year ended 31...

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Based on accounting standards and the revised Schedule VI applicable for the financial year ending 31 March 2012

Indian GAAPIllustrative financial statements for the year ended 31 March 2012

Good Company (India) Limited

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Dear reader,

I am delighted to share with you our new publication Good Company (India) Limited, an illustrative set of Indian GAAP financial statements for the year ending 31 March 2012.

The revised Schedule VI, applicable for financial years beginning on or after 1 April 2011, is likely to have significant impact on financial statements of most companies. It introduces many new concepts regarding presentation and disclosure of financial statements; the most significant being the classification of asset and liabilities into current and non-current. Though these financial statements prepared under Indian GAAP and revised Schedule VI will not be IFRS

compliant, they will more closely resemble IFRS financial statements in terms of the presentation and the styling. This is a good first step, in the process of converging to IFRS.

Our publication, Good Company (India) Limited, contains an illustrative set of financial statements for a fictitious company prepared in accordance with revised Schedule VI and accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended). This publication is updated for all developments till 14 February 2012. I trust that these illustrative financial statements will act as a practical working model to help you in preparing your own annual financial statements prepared in accordance with Indian GAAP and revised Schedule VI. You can also download a soft copy at www.ey.com/india.

I hope you will find this publication useful. I would be eager to receive your feedback.

Best regards,

Dolphy D’SouzaPartner, Head of Technical Directorate and National Leader, IFRS ServicesErnst & Young Pvt. Ltd., India

Foreword

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Good Company (India) Limited 1

Abbreviation .......................................................................................................................................................3

Introduction ........................................................................................................................................................4

Independent auditors’ report ................................................................................................................................6

Balance sheet ....................................................................................................................................................10

Statement of profit & loss ..................................................................................................................................12

Cash flow statement ..........................................................................................................................................14

Notes to financial statements .............................................................................................................................16

1. Corporation information ................................................................................................................16

2. Basis of preparation .......................................................................................................................16

2.1 Summary of significant accounting policies .....................................................................................16

3. Share capital .................................................................................................................................28

4. Reserves and surplus .....................................................................................................................30

5. Long-term borrowings ...................................................................................................................31

6. Other long term liabilities ...............................................................................................................33

7. Provisions .....................................................................................................................................33

8. Short-term borrowings ..................................................................................................................34

9. Other current liabilities ..................................................................................................................35

10. Tangible assets ..............................................................................................................................35

11. Intangible assets ............................................................................................................................37

12. Non-current investments ...............................................................................................................38

13. Deferred tax assets (net) ................................................................................................................39

14. Loans and advances ......................................................................................................................40

15. Trade receivables and other assets .................................................................................................41

15.1 Trade receivables ..........................................................................................................................41

15.2 Other assets ..................................................................................................................................42

16. Current investments ......................................................................................................................43

17. Inventories ....................................................................................................................................44

18. Cash and bank balances .................................................................................................................44

19. Revenue from operations ...............................................................................................................45

20. Other income ................................................................................................................................46

21. Cost of raw material and components consumed .............................................................................46

22. (Increase)/decrease in inventories ..................................................................................................47

23. Employee benefit expense .............................................................................................................48

24. Other expenses .............................................................................................................................48

Contents

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Indian GAAP Illustrative financial statements for the year ended 31 March 20122

25. Exceptional items ..........................................................................................................................50

26. Depreciation and amortization expense ..........................................................................................50

27. Finance costs ................................................................................................................................50

28. Discontinuing operation .................................................................................................................50

29. Earnings per share (EPS)................................................................................................................51

30. Gratuity and other post-employment benefit plans ..........................................................................52

31. Employee stock option plans ..........................................................................................................55

32. Leases ..........................................................................................................................................57

33. Capitalization of expenditure ..........................................................................................................58

34. Interest in a joint venture ...............................................................................................................58

35. Accounting for amalgamation ........................................................................................................59

36. Segment information .....................................................................................................................59

37. Related party disclosures ...............................................................................................................62

38. Capital and other commitments ......................................................................................................65

39. Contingent liabilities ......................................................................................................................65

40. Utilization of money raised through public issue ..............................................................................66

41. Derivative instruments and unhedged foreign currency exposure ....................................................66

42. Deferral/capitalization of exchange differences ...............................................................................66

43. Subsequent events ........................................................................................................................67

44. Loans and advances in the nature of loans given to subsidiaries and associates and firms/ companies in which directors are interested ....................................................................................67

45. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006 .....................67

46. Value of imports calculated on CIF basis .........................................................................................68

47. Expenditure in foreign currency (accrual basis) ...............................................................................68

48. Imported and indigenous raw materials, components and spare parts consumed ..............................68

49. Net dividend remitted in foreign exchange ......................................................................................69

50. Earnings in foreign currency (accrual basis) ....................................................................................69

51. Previous year figures .....................................................................................................................69

Appendix 1: Exemptions/relaxations for SMCs ....................................................................................................73

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Good Company (India) Limited 3

AbbreviationsThe following styles of abbreviation are used in this set of illustrative financial statements:

AS Accounting standards or notified AS

AS 19.20 Accounting standard 19, paragraph 20

Notified AS Accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended)

CA Companies Act, 1956

CA 211 Section 211 of the Companies Act, 1956

ICAI Institute of Chartered Accountants of India

ICAI Ann Announcement on accounting aspect issued by the ICAI

NACAS National Advisory Committee on Accounting Standards

MCA Ministry of Corporate Affairs

MSMED Micro, Small and Medium Enterprises Development Act, 2006

LA Listing Agreement

SMC Small and medium sized company

Non-SMC Company which is not a small and medium sized company

RVI Revised Schedule VI notified under the Companies Act, 1956 and applicable from financial years commencing on or after 1 April 2011

SVI Pre-revised Schedule VI

GN Guidance Note issued by the ICAI

GN.Dep. Guidance Note on Accounting for Depreciation in Companies.

GN.ESOP Guidance Note on Accounting for Employee Share-based Payments

GN.MAT Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under Income Tax Act, 1961

GN.RVI Guidance Note on the revised Schedule VI to the Companies Act, 1956

GIBS General Instructions for preparation of balance sheet prescribed in the revised Schedule VI

GIPL General Instructions for preparation of statement of profit and loss prescribed in the revised Schedule VI

ICAI Ann.Der ICAI Announcement on “Accounting for Derivatives”

ICAI Ann.DerD ICAI Announcement on “Disclosures regarding Derivative Instruments”

ICAI Ann.DT ICAI Announcement on “Tax effect of expenses/income adjusted directly against the reserves and/or Securities Premium Account”

RVI.BS Form of balance sheet prescribed in the revised Schedule VI

RVI. PL Form of statement of profit and loss prescribed in the revised Schedule VI

SEBI.ESOP SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999

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Indian GAAP Illustrative financial statements for the year ended 31 March 20124

IntroductionThis publication contains an illustrative set of standalone financial statements for Good Company (India) Limited (the company), as of and for the year ended 31 March 2012. These illustrative financial statements have been prepared in accordance with Indian GAAP, particularly notified AS and revised Schedule VI, applicable for financial years ended 31 March 2012. The company is a fictitious public company incorporated under the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is engaged in the manufacturing and selling a reputed brand of refrigerators, washing machines, air conditioners, microwave ovens and other small electronic appliances. The company caters to both domestic and international markets. The company operates electronic stores in India wherein all major brands of fast moving consumer goods (FMCG) are available. The company also provides annual maintenance service for FMCG products.

ObjectiveThis set of illustrative financial statements is prepared by Ernst & Young to assist you in preparing your own financial statements. The illustration intends to reflect transactions and disclosures that we consider to be most common and most likely for a broad range of companies. Users of this publication are encouraged to select disclosures relevant to their circumstances and adjust appropriately. Users should also keep in mind that other transactions are likely to require additional disclosures.

This set of illustrative financial statements should not be relied upon as a substitute for either detailed professional advice concerning specific individual situations or for reference to the relevant standards, particularly when uncertainty exists. A company should also complete updated accounting standards, revised Schedule VI and other disclosure checklists. This set of illustrative financial statements is intended as an illustrative guide rather than a definitive statement, and should be used in conjunction with the relevant statutory and stock exchange requirements.

Applicable Indian GAAPThis set of illustrative financial statements is prepared in accordance with Indian GAAP, including notified AS and the revised Schedule VI, existing as on 14 February 2012 and expected to be applicable for financial years ended 31 March 2012. Companies may note the following key assumptions used in preparation of illustrative financial statements:

1. This set of illustrative financial statements does not deal with the following notified AS:

• AS 7 Construction Contracts

• AS 21 Consolidated Financial Statements

• AS 23 Accounting for Investments in Associates in Consolidated Financial Statements

• AS 25 Interim Financial Reporting

• AS 27 Financial Reporting of Interests in Joint Ventures (to the extent relevant for consolidated financial statements)

2. This set of illustrative financial statements is prepared based on the requirements of notified AS applicable to non-SMC. Notified AS contain exemptions/relaxations for SMCs. The criteria for identifying SMC and key exemptions/ relaxations available to them are listed in Appendix 1.

3. The ICAI has issued AS 30 Financial Instruments: Recognition and Measurement, AS 31 Financial Instruments: Presentation and AS 32 Financial Instruments: Disclosures, which are not notified under the Companies Act. In accordance with the ICAI clarification, the applicability of these standards is as below:

a. To the extent of accounting treatments covered by the notified AS, e.g., AS 11 and AS 13, the notified AS will continue to prevail over AS 30.

b. In cases where a regulatory authority, e.g., RBI for NBFCs, has prescribed specific regulatory requirements, the prescribed requirements will prevail over AS 30.

c. Subject to (a) and (b) above, a company is encouraged to follow AS 30, AS 31 and AS 32.

Good Company (India) Limited has not adopted AS 30, AS 31 and AS 32.

4. The requirements of pronouncements issued by specific regulatory bodies, e.g., RBI for NBFCs, are not considered in this set of illustrative financial statements.

5. To a company having turnover of less than `1,000 million (`100 crores), the revised Schedule VI allows rounding to the nearest hundreds, thousands, lakhs or millions, or decimals thereof. To a company having turnover of more than `1,000 million (`100 crores), the revised Schedule VI allows rounding off to the nearest lakhs, millions or crores, or decimals thereof. The company has opted to round off its financial information to the nearest millions.

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Good Company (India) Limited 5

Good Company (India) LimitedIndian GAAPIllustrative financial statements for the year ended 31 March 2012

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Indian GAAP Illustrative financial statements for the year ended 31 March 20126

Independent auditors’ report to the members of Good Company (India) Limited

Report on the financial statements

We have audited the accompanying financial statements of Good Company (India) Limited (the company), which comprise the balance sheet as at 31 March 2012, and the statement of profit and loss and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In the case of the balance sheet, of the state of affairs of the company as at 31 March 2012

b. In the case of the statement of profit and loss, of the profit/loss for the year ended on that date, and

c. In the case of the cash flow statement, of the cash flows for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

b. In our opinion proper books of account as required by law have been kept by the company so far as appears from our examination of those books.

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Good Company (India) Limited 7

Independent auditors’ report to the members of Good Company (India) Limited

c. The balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account.

d. In our opinion, the balance sheet, statement of profit and loss, and cash flow statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e. On the basis of written representations received from the directors as on 31 March 2012, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2012, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For Professional Accountants & AssociatesFirm registration number: ABCXYZChartered Accountants

per DST SinghPartnerMembership no.: AMNO1234

Place: MumbaiDate: 28 April 2012

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Indian GAAP Illustrative financial statements for the year ended 31 March 20128

Independent auditors’ report to the members of Good Company (India) Limited

Annexure referred to in paragraph 1 under the heading “Report on other legal and regulatory requirements” of our report of even dateRe: Good Company (India) Limited (the company)

i. a. The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c. There was no disposal of a substantial part of fixed assets during the year.

ii. a. The management has conducted physical verification of inventory at reasonable intervals during the year.

b. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. The company is maintaining proper records of inventory. Discrepancies noted on physical verification of inventories were not material and have been properly dealt with in the books of account.

iii. a. According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the company and hence not commented upon.

b. According to information and explanations given to us, the company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(e) to (g) of the Order are not applicable to the company and hence not commented upon.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas.

v. a. According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of `500,000 have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956, and the rules framed there under, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vii. In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

viii. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

ix. a. The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees’ state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

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Good Company (India) Limited 9

Independent auditors’ report to the members of Good Company (India) Limited

c. According to the records of the company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

x. The company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

xii. According to the information and explanations given to us and based on the documents and records produced before us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the company.

xiv. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the company.

xv. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi. Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii. The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix. In respect of secured bonds issued by the company and outstanding during the year, the company has duly created security or charge. The company also has unsecured debentures outstanding during the year. In respect of these unsecured debentures, no security or charge is required to be created.

xx. We have verified that the end use of money raised by public issue is as disclosed in the notes to the financial statements.

xxi. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For Professional Accountants & AssociatesFirm registration number: ABCXYZChartered Accountants

per DST SinghPartnerMembership no.: AMNO1234

Place: MumbaiDate: 28 April 2012

Name of the statute

Nature of dues Amount (` million)

Period to which the amount relate

Forum where dispute is pending

The Central Excise Act, 1944

Demand toward differential excise duty on valuation of products

250 2006-07 Mumbai High Court

The Income-tax Act, 1961

Additional tax demand 1,500 2005-06 and 2006- 07

Commissioner of Income tax (Appeals)

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Indian GAAP Illustrative financial statements for the year ended 31 March 201210

Good Company (India) Limited Balance sheet as at 31 March 2012

Notes 31 March 2012 ` millions

31 March 2011 ` millions

Equity and liabilities RVI.BS.IShareholders’ funds RVI.BS.I(1)Share capital 3 6,200 5,700Reserves and surplus 4 16,230 10,978

22,430 16,678Non-current liabilities RVI.BS.I(3)Long-term borrowings 5 5,336 4,691Trade payables 6 1,565 1,623Other long-term liabilities 6 326 308Long-term provisions 7 2,524 1,843

9,751 8,465Current liabilities RVI.BS.I(4)

Short-term borrowings 8 2,115 2,690Trade payables 9 6,756 6,542Other current liabilities 9 1,761 1,549Short-term provisions 7 2,052 1,758

12,684 12,539TOTAL 44,865 37,682

Assets RVI.BS.IINon-current assets RVI.BS.II(1)Fixed assets

Tangible assets 10 7,661 7,675Intangible assets 11 315 332Capital work-in-progress 535 1,012Intangible assets under development 12 19Fixed assets pertaining to discontinuing operations and held for sale

283 353

Non-current investments 12 564 627Deferred tax assets (net) 13 10 351 AS 22.30Long-term loans and advances 14 4,747 3,894Trade receivables 15.1 1,037 757Other non-current assets 15.2 321 322

15,485 15,342Current assets RVI.BS.II(2)Current investments 16 432 181Inventories 17 13,198 10,772Trade receivables 15.1 12,788 7,846Cash and bank balances 18 2,125 2,591Short-term loans and advances 14 800 895Other current assets 15.2 37 55

29,380 22,340Total 44,865 37,682Summary of significant accounting policies 2.1

The accompanying notes are an integral part of the financial statements.

As per our report of even dateFor Professional Accountants & AssociatesFirm registration number: ABCXYZChartered Accountants

per DST SinghPartnerMembership no.: AMNO1234

Place: MumbaiDate: 28 April 2012

For and on behalf of the board of directors of Good Company (India) Limited

ADC Sharma[Managing Director]

MNT Kumar[Director]

TSL Singh[Company Secretary]

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Good Company (India) Limited 11

Good Company (India) Limited Balance sheet as at 31 March 2012

Commentary

The revised Schedule VI allows line items, sub-line items and sub-totals to be presented as an addition or substitution on the face of the financial statements when such presentation is relevant to an understanding of the company’s financial position or performance or to cater to industry/sector-specific disclosure requirements. Accordingly, the company has elected to present non-current trade receivables and non-current trade payables separately on the face of the balance sheet.

The revised Schedule VI requires “Share application money pending allotment” to be disclosed as a separate line-item on the face of the balance sheet between the heads “Shareholders’ funds” and “Non-current liabilities.” Non-refundable portion of share application money is disclosed under this line-item. Refundable portion of the share application money, i.e., the amount in excess of subscription or if minimum subscription requirement is not met, is disclosed under the head “Other current liabilities.” A company, which has received share application money pending allotment, whether refundable or otherwise, needs to disclose, among other matters, its terms and conditions, the number of shares proposed to be issued, the amount of premium ,if any, and the period before which shares will be allotted.

If a company has net deferred tax liability, i.e., after offsetting deferred tax assets in accordance with AS 22, then it will disclose the same as “non-current asset,” after the line item “long-term borrowings.”

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Indian GAAP Illustrative financial statements for the year ended 31 March 201212

Good Company (India) Limited Statement of profit and loss for the year ended 31 March 2012

Notes 31 March 2012 ` millions

31 March 2011 ` millions

Continuing operationsIncomeRevenue from operations (gross) 19 82,052 74,366 RVI.PL.I

Less: excise duty 4,530 4,136 AS 9.10

Revenue from operations (net) 77,522 70,230 AS 9.10

Other income 20 594 491 RVI.PL.II

Total revenue (I) 78,116 70,721 RVI.PL.III

Expenses RVI.PL.IV

Cost of raw material and components consumed 21 44,904 43,474Purchase of traded goods 22 7,718 5,648(Increase)/ decrease in inventories of finished goods, work-in-progress and traded goods

22 (2,068) (2,558)

Employee benefits expense 23 12,486 10,695Other expenses 24 8,616 7,569Exceptional items 25 – 340 RVI.PL.VI

Share of (profit)/loss from investment in partnership firm (1) (2)Total (II) 71,655 65,166 GN.RVI

Earnings before interest, tax, depreciation and amortization (EBITDA) (I) – (II)

6,461 5,555

Depreciation and amortization expense 26 615 543Less: recoupment from revaluation reserve (2) (2) GN.Dep.

Net depreciation and amortization expense 613 541Finance costs 27 663 480Profit/(loss) before tax 5,185 4,534 RVI.PL.IX

Tax expenses RVI.PL.X

Current tax 1,343 1,223Deferred tax 341 266Total tax expense 1,684 1,489Profit/(loss) for the year from continuing operations (A)

3,501 3,045 RVI.PL.XI

Discontinuing operations 28 AS 24.32

Profit/(loss) before tax from discontinuing operations 6 63 RVI.PL.XII

Tax expense of discontinuing operations 2 22 RVI.PL.XIII

Profit/(loss) after tax from discontinuing operations (B) 4 41 RVI.PL.XIV

Profit/(loss) for the year (A+B) 3,505 3,086 RVI.PL.XV

Earnings per equity share [nominal value of share `10 (31 March 2011: `10]

29 RVI.PL.XVI & AS 20.48

Basic AS 20.8

Computed on the basis of profit from continuing operations `6.60 `5.78Computed on the basis of total profit for the year `6.61 `5.86Diluted AS 20.8

Computed on the basis of profit from continuing operations

`4.31 `3.90

Computed on the basis of total profit for the year `4.32 `3.95 Summary of significant accounting policies 2.1

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Good Company (India) Limited 13

Good Company (India) Limited Statement of profit and loss for the year ended 31 March 2012

As per our report of even dateFor Professional Accountants & AssociatesFirm registration number: ABCXYZChartered Accountants

For and on behalf of the board of directors of Good Company (India) Limited

per DST SinghPartnerMembership no.: AMNO1234

Place: MumbaiDate: 28 April 2012

ADC Sharma[Managing Director]

MNT Kumar[Director]

TSL Singh[Company Secretary]

The accompanying notes are an integral part of the financial statements.

Commentary

The revised Schedule VI allows line items, sub-line items and sub-totals to be presented as an addition or substitution on the face of the financial statements when such presentation is relevant to an understanding of the company’s financial position or performance or to cater to industry/sector-specific disclosure requirements. Accordingly, the company has elected to present EBITDA as a separate line item on the face of the statement of profit and loss.

AS 5 requires that the nature and amount of prior period items should be separately disclosed in the statement of profit and loss in a manner that their impact on the current profit or loss can be perceived. Accordingly, a company may disclose prior period items, if any, as a separate line item on the face of the statement of profit and loss. Alternatively, it may include the same in other line items of the statement of profit and loss with a relevant disclosure, e.g., employee benefit expense (including prior period `XX).

AS 20.50 allows a company to present basic and diluted EPS computed using a reported component of net profit/ (loss), other than the net profit/ (loss) for the year, as an additional information. The company has elected to present additional EPS information for profit/ (loss) from continuing operations.

If a company pays current tax under Section 115JB of Income-tax Act, 1961 and recognizes MAT credit entitlement in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under Income Tax Act, 1961, it makes the following disclosure in the year of MAT payment:

Current tax (MAT payable) XX

Less: MAT credit entitlement (XX)

Net current tax expense XX

MAT credit entitlement is disclosed under the head “loans and advances.”

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Indian GAAP Illustrative financial statements for the year ended 31 March 201214

Good Company (India) Limited Cash flow statement for the year ended 31 March 2012

31 March 2012 ` millions

31 March 2011 ` millions

Cash flow from operating activities AS 3.8 AS 3.18(b)

Profit before tax from continuing operations 5,185 4,534Profit before tax from discontinuing operations 6 63Profit before tax 5,191 4,597Non-cash adjustment to reconcile profit before tax to net cash flows AS 3.20(b)

Share of (profit)/loss from investment in partnership firm (1) (2)Depreciation/amortization on continuing operation 613 541Depreciation/amortization on discontinuing operation 20 20Impairment/other write off on tangible/intangible assets pertaining to continuing operation 350 —Impairment/other write off on tangible/intangible assets pertaining to discontinuing operation 50 —Loss/(profit) on sale of fixed assets 2 1Provision for diminution in value of investments in subsidiary company 15 —Provision for diminution in value of investments (current plus other long term) 17 9Employee stock compensation expense 2,369 1,907Unrealized foreign exchange loss 38 29Premium on forward exchange contract amortized 4 4Amortization of ancillary cost 2 2Net gain on sale of current investments (250) (121)

Interest expense 589 411 AS 3.20(c)

Interest income (113) (104) AS 3.20(c)

Dividend income (86) (90) AS 3.20(c)

Operating profit before working capital changes 8,810 7,204Movements in working capital : AS 3.20(a)

Increase/(decrease) in trade payables 96 160Increase / (decrease) in long-term provisions 681 906Increase / (decrease) in short-term provisions 182 342Increase/(decrease) in other current liabilities 112 616 Increase/ (decrease) in other long-term liabilities 18 25Decrease/(increase) in trade receivables (5,155) (4,688)Decrease/(increase) in inventories (2,426) (2,248)Decrease / (increase) in long-term loans and advances (906) (1,072)Decrease / (increase) in short-term loans and advances 84 185Decrease/(increase) in other current assets 19 180Decrease / (increase) in other non-current assets 2 4Cash generated from /(used in) operations 1,517 1,614Direct taxes paid (net of refunds) (1,334) (1,163) AS 3.34

Net cash flow from/ (used in) operating activities (A) 183 451

Cash flows from investing activities AS 3.8

Purchase of fixed assets, including intangible assets, CWIP and capital advances (96) (159) AS 3.15(a)Proceeds from sale of fixed assets 4 9 AS 3.15(b)

Proceeds of non-current investments — 6 AS 3.15(c)

Purchase of non-current investments (3) —

Purchase of current investments (377) (6) AS 3.15(c)

Proceeds from sale/maturity of current investments 410 366 AS 3.15(d)

Investments in bank deposits (having original maturity of more than three months)

(832) (537) AS 3.15(c)

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Good Company (India) Limited 15

Good Company (India) Limited Cash flow statement for the year ended 31 March 2012

31 March 2012 ` millions

31 March 2011 ` millions

Redemption/maturity of bank deposits (having original maturity of more than three months) 767 565

AS 3.15(d)

Purchase consideration for amalgamation (note 35) (267) — AS 3.38

Interest received 71 104 AS 3.30

Dividends received from subsidiary company 20 — AS 3.30

Dividends received 86 90 AS 3.30

Net cash flow from/(used in) investing activities (B) (217) 438

Cash flows from financing activities AS 3.8

Proceeds from issuance of share capital 1,250 — AS 3.17(a)

Proceeds from issuance of preference share capital — 2,500 AS 3.17(a)

Proceeds from long-term borrowings 1,025 35 AS 3.17(b)

Repayment of long-term borrowings (311) (186) AS 3.17(c)

Proceeds from short-term borrowings 658 718 AS 3.17(b)

Repayment of short-term borrowings (1,233) (620) AS 3.17(c)

Interest paid (640) (494) AS 3.30

Dividends paid on equity shares (1,040) (940) AS 3.30

Dividends paid on preference shares (35) — AS 3.30

Tax on equity dividend paid (177) (160) AS 3.30

Tax on preference dividend paid (6) — AS 3.30

Net cash flow from/(used in) in financing activities (C) (509) 853

Net increase/(decrease) in cash and cash equivalents (A + B + C) (543) 1,742Effect of exchange differences on cash & cash equivalents held in foreign currency

(2) — AS 3.25

Cash and cash equivalents at the beginning of the year 2,362 620Cash and cash equivalents at the end of the year 1,817 2,362

Components of cash and cash equivalents AS 3.42

Cash on hand 29 1Cheques/ drafts on hand 3 2With banks- on current account 1,424 2,174

− on deposit account 350 174 − unpaid dividend accounts* 7 6 − unpaid matured deposits* 4 3 − unpaid matured debentures* — 2

Total cash and cash equivalents (note 18) 1,817 2,362 Summary of significant accounting policies 2.1

As per our report of even dateFor Professional Accountants & AssociatesFirm registration number: ABCXYZChartered Accountants

For and on behalf of the board of directors of Good Company (India) Limited

per DST SinghPartnerMembership no.: AMNO1234

Place: MumbaiDate: 28 April 2012

ADC Sharma[Managing Director]

MNT Kumar[Director]

TSL Singh[Company Secretary]

* The company can utilize these balances only toward settlement of the respective unpaid dividend, unpaid matured deposits and unpaid matured debenture liabilities.

AS 3.45

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Indian GAAP Illustrative financial statements for the year ended 31 March 201216

Good Company (India) Limited Notes to financial statements for the year ended 31 March 2012

1. Corporate information

Good Company (India) Limited (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is engaged in the manufacturing and selling a reputed brand of refrigerators, washing machines, air conditioners, microwave ovens and other small electronic appliances. The company caters to both domestic and international markets. The company also operates electronic stores in India wherein all major brands of fast moving consumer goods (FMCG) are available. The company also provides annual maintenance service for FMCG products.

2. Basis of preparation CA 211

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for land and building acquired before 1 April 2007 which are carried at revalued amounts.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

2.1 Summary of significant accounting policies AS 1.24

a. Change in accounting policy

Presentation and disclosure of financial statements

During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. Except accounting for dividend on investments in subsidiary companies (see below), the adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year. For further details, refer note 51.

Dividend on investment in subsidiary companies

Till the year ended 31 March 2011, the company, in accordance with the pre-revised Schedule VI requirement, was recognizing dividend declared by subsidiary companies after the reporting date in the current year’s statement of profit and loss if such dividend pertained to the period ending on or before the reporting date. The revised Schedule VI, applicable for financial years commencing on or after 1 April 2011, does not contain this requirement. Hence, to comply with AS 9 Revenue Recognition, the company has changed its accounting policy for recognition of dividend income from subsidiary companies. In accordance with the revised policy, the company recognizes dividend as income only when the right to receive the same is established by the reporting date.

Had the company continued to use the earlier policy of recognizing dividend, the credit to the statement of profit and loss after tax for the current period would have been higher by `20 million and the current assets would correspondingly have been higher by `20 million.

Accounting for amalgamation in the nature of purchase

The company accounts for all amalgamations in the nature of purchase using the purchase method as prescribed in AS 14 Accounting for Amalgamations. Till the previous year, the company followed the policy of recognizing assets and liabilities acquired in an amalgamation in the nature of purchase at their existing carrying amounts in the financial statements of transferor company. In the current year, the company changed its accounting policy from the carrying value method to the fair value method, i.e., fair value of the assets and liabilities acquired. The management believes that such change better reflects the allocation consideration paid for the acquisition and resultant goodwill/capital reserve. The management has decided to apply the revised accounting policy to all acquisitions made on or after 1 April 2011.

AS 1.26 AS 5.32

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Good Company (India) Limited 17

Good Company (India) Limited Notes to financial statements for the year ended 31 March 2012 (cont’d.)

Had the company continued to use the earlier basis of accounting for amalgamations in the nature of purchase, its fixed and other assets on the amalgamation date would have been lower by the following amounts:

Consequently, its goodwill arising on amalgamation would have been higher by `93 million. This change in the value of the assets and goodwill arising on amalgamation will consequently impact depreciation/amortization expense for the current and subsequent years.

b. Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

c. Tangible fixed assets

Fixed assets, except land and buildings acquired before 1 April 2007, are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

On 1 April 2007, the company revalued all its land and buildings existing as on that date. These land and buildings are measured at fair value less accumulated depreciation and impairment losses, if any, recognized after the date of the revaluation. In case of revaluation of fixed assets, any revaluation surplus is credited to the revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognized in the statement of profit and loss, in which case the increase is recognized in the statement of profit and loss. A revaluation deficit is recognized in the statement of profit and loss, except to the extent that it offsets an existing surplus on the same asset recognized in the asset revaluation reserve.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are changed to the statement of profit and loss for the period during which such expenses are incurred.

From accounting periods commencing on or after 7 December 2006, the company adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

Assets ` millionsLand 18Buildings 4Patents 20Brands/trademarks 35Technical knowhow 16Total 93

AS 10.19 AS 10.20

AS 10.19 AS 10.30

AS 10.26

AS 11.46

AS 10.23

AS 10.32

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Indian GAAP Illustrative financial statements for the year ended 31 March 201218

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

d. Depreciation on tangible fixed assets

Depreciation on fixed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule XIV to the Companies Act, 1956, whichever is higher. The company has used the following rates to provide depreciation on its fixed assets.

e. Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in an amalgamation in the nature of purchase is their fair value as at the date of amalgamation. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred.

Intangible assets are amortized on a straight line basis over the estimated useful economic life. The company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use. If the persuasive evidence exists to the affect that useful life of an intangible asset exceeds ten years, the company amortizes the intangible asset over the best estimate of its useful life. Such intangible assets and intangible assets not yet available for use are tested for impairment annually, either individually or at the cash-generating unit level. All other intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to reflect the changed pattern. Such changes are accounted for in accordance with AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

Research and development costs

Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognized as an intangible asset when the company can demonstrate all the following:

• The technical feasibility of completing the intangible asset so that it will be available for use or sale

• Its intention to complete the asset

• Its ability to use or sell the asset

• How the asset will generate future economic benefits

• The availability of adequate resources to complete the development and to use or sell the asset

• The ability to measure reliably the expenditure attributable to the intangible asset during development.

Following the initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized on a straight line basis over the period of expected future benefit from the related project, i.e., the estimated useful life of ten years. Amortization is recognized in the statement of profit and loss. During the period of development, the asset is tested for impairment annually.

Rates (SLM)Factory buildings 3.34%Other buildings 1.63%Plant and equipment 5%Furniture and fixtures 12.5%Vehicles 20%Leasehold improvements 25% or the rate based on lease

period, whcihever is higher

AS 26.23 AS 26.27

AS 6.20

AS 6.29

AS 26.63 AS 26.83

AS 26.41 AS 26.44

AS 26.78

AS 26.88

AS 26.90

Leasehold land is amortized on a straight line basis over the period of lease, i.e., 80 years.

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Good Company (India) Limited 19

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

A summary of amortization policies applied to the company’s intangible assets is as below:

f. Leases

Where the company is lessee

Finance leases, which effectively transfer to the company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized as finance costs in the statement of profit and loss. Lease management fees, legal charges and other initial direct costs of lease are capitalized.

A leased asset is depreciated on a straight-line basis over the useful life of the asset or the useful life envisaged in Schedule XIV to the Companies Act, 1956, whichever is lower. However, if there is no reasonable certainty that the company will obtain the ownership by the end of the lease term, the capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset, the lease term or the useful life envisaged in Schedule XIV to the Companies Act, 1956.

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.

Where the company is the lessor

Leases in which the company transfers substantially all the risks and benefits of ownership of the asset are classified as finance leases. Assets given under finance lease are recognized as a receivable at an amount equal to the net investment in the lease. After initial recognition, the company apportions lease rentals between the principal repayment and interest income so as to achieve a constant periodic rate of return on the net investment outstanding in respect of the finance lease. The interest income is recognized in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss.

Leases in which the company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income on an operating lease is recognized in the statement of profit and loss on a straight-line basis over the lease term. Costs, including depreciation, are recognized as an expense in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss.

g. Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

Rates (SLM)Goodwill 20%Brands/trademarks 10%Patents and intellectual property rights (IPR) 10%Technical know now 20%Computer software 25%

AS 19.11 AS 19.16

AS 26.90

AS 19.26 AS 19.31

AS 19.39 AS 19.40 AS.19.41 AS.19.42

AS 16.6

AS 19.18

AS 19.23

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Indian GAAP Illustrative financial statements for the year ended 31 March 201220

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

h. Impairment of tangible and intangible assets

The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the company’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognized in the revaluation reserve up to the amount of any previous revaluation.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.

i. Government grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset.

Where the company receives non-monetary grants, the asset is accounted for on the basis of its acquisition cost. In case a non-monetary asset is given free of cost, it is recognized at a nominal value.

Government grants of the nature of promoters’ contribution are credited to capital reserve and treated as a part of the shareholders’ funds.

j. Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

AS 28.98AS 28.101

AS 28.61

AS 28.4AS 28.6

AS 28.25AS 28.47AS 28.57AS 28.64

AS 12.13

AS 12.14

AS 12.17

AS 12.16

AS 13.3

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Good Company (India) Limited 21

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

Investment property

An investment in land or buildings, which is not intended to be occupied substantially for use by, or in the operations of, the company, is classified as investment property. Investment properties are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the investment property to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Depreciation on building component of investment property is calculated on a straight-line basis using the rate arrived at based on the useful life estimated by the management, or that prescribed under the Schedule XIV to the Companies Act, 1956, whichever is higher. The company has used the depreciation rate of 2.5%.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

k. Inventories

Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components and stores and spares is determined on a weighted average basis.

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty and is determined on a weighted average basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

l. Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:

Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The company collects sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

Income from services

Revenues from maintenance contracts are recognized pro-rata over the period of the contract as and when services are rendered. The company collects service tax on behalf of the government and, therefore, it is not an economic benefit flowing to the company. Hence, it is excluded from revenue.

AS 13.31 AS.13.32

AS 13.34

AS 13.3

AS 2.5 AS 2.16 AS 2.24

AS 9.11

AS 2.5

AS 2.3

AS 9.12

AS 13.28 AS.13.29

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Indian GAAP Illustrative financial statements for the year ended 31 March 201222

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Interest

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the statement of profit and loss.

Dividends

Dividend income is recognized when the company’s right to receive dividend is established by the reporting date.

m. Foreign currency translation

Foreign currency transactions and balances

Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Exchange differences

From accounting periods commencing on or after 7 December 2006, the company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

1. Exchange differences arising on a monetary item that, in substance, forms part of the company’s net investment in a non-integral foreign operation is accumulated in the foreign currency translation reserve until the disposal of the net investment. On the disposal of such net investment, the cumulative amount of the exchange differences which have been deferred and which relate to that investment is recognized as income or as expenses in the same period in which the gain or loss on disposal is recognized.

2. Exchange differences arising on long-term foreign currency monetary items related to acquisition of a fixed asset are capitalized and depreciated over the remaining useful life of the asset. For this purpose, the company treats a foreign monetary item as “long-term foreign currency monetary item”, if it has a term of 12 months or more at the date of its origination.

3. Exchange differences arising on other long-term foreign currency monetary items are accumulated in the “Foreign Currency Monetary Item Translation Difference Account” and amortized over the remaining life of the concerned monetary item.

4. All other exchange differences are recognized as income or as expenses in the period in which they arise.

Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/liability

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the period. Any gain/ loss arising on forward contracts which are long-term foreign currency monetary items is recognized in accordance with paragraph 2 and 3.

AS 11.11

AS 11.15AS 11.46

AS 11.13

AS 11.36 AS 11.38

AS 9.13

AS 11.9

AS 9.13

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Good Company (India) Limited 23

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Translation of integral and non-integral foreign operation

The company classifies all its foreign operations as either “integral foreign operations” or “non-integral foreign operations.”

The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the company itself.

The assets and liabilities of a non-integral foreign operation are translated into the reporting currency at the exchange rate prevailing at the reporting date and their statement of profit and loss are translated at exchange rates prevailing at the dates of transactions or weighted average weekly rates, where such rates approximate the exchange rate at the date of transaction. The exchange differences arising on translation are accumulated in the foreign currency translation reserve. On disposal of a non-integral foreign operation, the accumulated foreign currency translation reserve relating to that foreign operation is recognized in the statement of profit and loss.

When there is a change in the classification of a foreign operation, the translation procedures applicable to the revised classification are applied from the date of the change in the classification.

n. Retirement and other employee benefits

Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to the provident fund are charged to the statement of profit and loss for the year when the contributions are due. The company has no obligation, other than the contribution payable to the provident fund.

The company operates two defined benefit plans for its employees, viz., gratuity and post employment medical benefit liability. The costs of providing benefits under these plans are determined on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Actuarial gains and losses for both defined benefit plans are recognized in full in the period in which they occur in the statement of profit and loss.

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The company presents the entire leave as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

Expenses incurred towards voluntary retirement scheme are charged to the statement of profit and loss immediately.

o. Income taxes

Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company

AS 11.31

AS 11.33

AS 15.120(a)

AS 22.9 AS 22.20

AS 22.9 AS 22.21

AS 22.15 AS 22.17

ICAI Ann DT

ICAI Ann DT

AS 11.21

AS 11.24

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Indian GAAP Illustrative financial statements for the year ended 31 March 201224

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

In the situations where the company is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of timing differences which reverse during the tax holiday period, to the extent the company’s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of timing differences which reverse after the tax holiday period is recognized in the year in which the timing differences originate. However, the company restricts recognition of deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the timing differences which originate first are considered to reverse first.

At each reporting date, the company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as “MAT Credit Entitlement.” The company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

p. Employee stock compensation cost

Employees (including senior executives) of the company receive remuneration in the form of share based payment transactions, whereby employees render services as consideration for equity instruments (equity- settled transactions).

In accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, the cost of equity-settled transactions is measured using the intrinsic value method and recognized, together with a corresponding increase in the “Stock options outstanding account” in reserves. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the company’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit recognized in the statement of profit and loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and is recognized in employee benefits expense.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total intrinsic value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.

AS 17.19

AS 22.26

AS 22.29

GN.MAT

SEBI.ESOP GN.ESOP

AS 22.13

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Good Company (India) Limited 25

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

q. Segment reporting

Identification of segments

The company’s operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the company operate.

Inter-segment transfers

The company generally accounts for intersegment sales and transfers at cost plus appropriate margins.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated items

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

Segment accounting policies

The company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole.

r. Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

s. Provisions

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Where the company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

Warranty provisions

Provisions for warranty-related costs are recognized when the product is sold or service provided. Provision is based on historical experience. The estimate of such warranty-related costs is revised annually.

AS 17.37

AS 17.37

AS 20.10

AS 20.11 AS 20.19 AS 20.22 AS 20.23 AS 20.26

AS 29.14 AS 29.35 AS 29.52

AS 17.19

AS 17.53

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Indian GAAP Illustrative financial statements for the year ended 31 March 201226

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

t. Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

u. Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

v. Derivative instruments

In accordance with the ICAI announcement, derivative contracts, other than foreign currency forward contracts covered under AS 11, are marked to market on a portfolio basis, and the net loss, if any, after considering the offsetting effect of gain on the underlying hedged item, is charged to the statement of profit and loss. Net gain, if any, after considering the offsetting effect of loss on the underlying hedged item, is ignored.

w. Amalgamation accounting

The company treats an amalgamation in the nature of merger if it satisfies all the following criteria:

i. All the assets and liabilities of the transferor company become, after amalgamation, the assets and liabilities of the transferee company.

ii. Shareholders holding not less than 90% of the face value of the equity shares of the transferor company (other than the equity shares already held therein, immediately before the amalgamation, by the transferee company or its subsidiaries or their nominees) become equity shareholders of the transferee company.

iii. The consideration for amalgamation receivable by those equity shareholders of the transferor company who agree to become shareholders of the transferee company is discharged by the transferee company wholly by the issue of equity shares, except that cash may be paid in respect of any fractional shares.

iv. The business of the transferor company is intended to be carried on, after the amalgamation, by the transferee company.

v. The transferee company does not intend to make any adjustment to the book values of the assets and liabilities of the transferor company, except to ensure uniformity of accounting policies.

All other amalgamations are in the nature of purchase.

The company accounts for all amalgamations in the nature of merger using the pooling of interest method. The application of this method requires the company to recognize any non-cash element of the consideration at fair value. The company recognizes assets, liabilities and reserves, whether capital or revenue, of the transferor company at their existing carrying amounts and in the same form as at the date of the amalgamation. The balance in the statement of profit and loss of the transferor company is transferred to the general reserve. The difference between the amount recorded as share capital issued, plus any additional consideration in the form of cash or other assets, and the amount of share capital of the transferor company is adjusted in reserves.

An amalgamation in the nature of purchase is accounted for using the purchase method. The cost of an acquisition/ amalgamation is measured as the aggregate of the consideration transferred, measured at fair value. Other aspects of accounting are as below:

AS 14.29

AS 14.12

AS 29.10

AS 3.5 AS 3.6

ICAI Ann.Der

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Good Company (India) Limited 27

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

i. The assets and liabilities of the transferor company are recognized at their fair values at the date of amalgamation. The reserves, whether capital or revenue, of the transferor company, except statutory reserves, are not recognized.

ii. Any excess consideration over the value of the net assets of the transferor company acquired is recognized as goodwill. If the amount of the consideration is lower than the value of the net assets acquired, the difference is treated as capital reserve.

iii. The goodwill arising on amalgamation is amortized to the statement of profit and loss on a systematic basis over its useful life not exceeding five years.

x. Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance costs and tax expense.

AS 14.36

AS 14.37

AS 14.38

GN.RVI

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Indian GAAP Illustrative financial statements for the year ended 31 March 201228

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

3. Share capital31 March 2012

` millions31 March 2011

` millions

Authorized shares (No. millions)

2,000 (31 March 2011: 2,000) equity shares of `10/- each 20,000 20,000100 (31 March 2011: 100) 7% cumulative convertible preference shares (CCPS) of `10/- each

1,000 1,000

Issued, subscribed and fully paid-up shares (No. millions)

570 (31 March 2011: 520) equity shares of `10/- each 5,700 5,20050 (31 March 2011: 50) 7% CCPS of `10/- each 500 500Total issued, subscribed and fully paid-up share capital 6,200 5,700

a. Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

b. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of `10 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 proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2012, the amount of per share dividend recognized as distributions to equity shareholders was `2 (31 March 2011: `2).

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.

c. Terms of conversion/redemption of CCPS

During the year ended 31 March 2011, the company issued 50 million CCPS of `10 each fully paid-up at a premium of `40 per share. CCPS carry cumulative dividend @ 7% p.a. 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. Each holder of CCPS is entitled to one vote per share only on resolutions placed before the company which directly affect the rights attached to CCPS.

Each holder of CCPS can opt to convert its preference shares into equity share after the end of 3rd year from the date of Issue, viz., 3 April 2010, till the end of 7th year from the date of issue. If the holder exercises its conversion option, the company will issue 1 equity shares for each preference share held.

Eqity shares

Preference shares

31 March 2012 31 March 2011No. millions ` millions No. millions ` millions

At the beginning of the period 520 5,200 470 4,700Issued during the period – Bonus issue — — 50 500Issued during the period – ESOP 50 500 — —Outstanding at the end of the period 570 5,700 520 5,200

31 March 2012 31 March 2011No. millions ` millions No. millions ` millions

At the beginning of the period 50 500 — —Issued during the period — — 50 500Outstanding at the end of the period 50 500 50 500

GIBS.6A.a

GIBS.6A.b

GIBS.6A.d

GIBS.6A.e

GIBS.6A.j

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Good Company (India) Limited 29

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

31 March 2012 ` millions

31 March 2011 ` millions

All nos. in millions

Holding Limited, the holding company310 (31 March 2011: 310) equity shares of `10 each fully paid35 (31 March 2011: 35) 7% CCPS of `10 each fully paid

3,100

3503,100

350

Father Limited, the ultimate holding company50 (31 March 2011: 50) equity shares of `10 each fully paid15 (31 March 2011: 15) 7% CCPS of `10 each fully paid

500

150

500

150DEF Private Limited, associate of Father Limited10 (31 March 2011: 10) equity shares of `10 each fully paid

100

100

31 March 2012 No. millions

31 March 2011 No. millions

Equity shares allotted as fully paid bonus shares by capitalization of securities premium

50 50

Equity shares allotted as fully paid-up pursuant to contracts for consideration other than cash.

10 10

Equity shares bought back by the company 50 50

In addition, the company has issued total 50 shares (31 March 2011: nil) during the period of five years immediately preceding the reporting date on exercise of options granted under the employee stock option plan (ESOP) wherein part consideration was received in form of employee services.

d. Shares held by holding/ultimate holding company and/or their subsidiaries/associates

Out of equity and preference shares issued by the company, shares held by its holding company, ultimate holding company and their subsidiaries/ associates are as below:

e. Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

f. Details of shareholders holding more than 5% shares in the company

31 March 2012 31 March 2011No. millions % holding in

the classNo. millions % holding in

the classEquity shares of `10 each fully paidHolding Limited, holding company 310 54.39% 310 59.62%Father Limited, ultimate holding company

50 8.77% 50 9.61%

ABC Limited 40 7.01% 40 7.69%

GIBS.6A.f

GIBS.6A.i

GIBS.6A.g

If CCPS holders do not exercise conversion option, all preference shares are redeemable at par at the end of 7th year from the date of issue. In the event of liquidation of the company before conversion/ redemption of CCPS, the holders of CCPS will have priority over equity shares in the payment of dividend and repayment of capital.

Commentary

In accordance with the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the terms, such as, subsidiary, holding company and associate, will have the same meaning as defined under AS 21 Consolidated Financial Statements and AS 18 Related Party Disclosures. Based on these definitions, shares held by the entire chain of subsidiaries and associates starting from the holding company and ending right up to the ultimate holding company needs to be disclosed. This disclosure needs to be made separately for each class of shares, both within equity and preference shares. However, a company may aggregate shares held under each class by category of relationship, such as holding company, ultimate holding company, subsidiaries of holding company, subsidiaries of ultimate holding company, associates of holding company and associates of ultimate holding company.

GIBS.6A.h

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Indian GAAP Illustrative financial statements for the year ended 31 March 201230

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

4. Reserves and surplus31 March 2012

` millions31 March 2011

` millionsCapital reserve 11 11

Capital redemption reserve 50 50

Securities premium accountBalance as per the last financial statements 2,052 552Add: premium on Issue of CCPS — 2,000Add: additions on ESOPs exercised 750 —Add: transferred from stock options outstanding 650 —Less: amounts utilized toward issue of fully paid bonus shares — (500)Closing Balance 3,452 2,052

Debenture redemption reserveBalance as per the last financial statements 250 125Add: amount transferred from surplus balance in the statement of

profit and loss125 125

Closing Balance 375 250

Revaluation reserveBalance as per the last financial statements 104 106Less: amount transferred to the statement of profit and loss as reduction

from depreciation(2) (2)

Closing Balance 102 104

Employee stock options outstandingGross employee stock compensation for options granted in earlier years 5,720 5,720Add: gross compensation for options granted during the year 2,240 —Less: deferred employee stock compensation (1,618) (1,747)Less: transferred to securities premium on exercise of stock options (650) —Closing Balance 5,692 3,973

General reserveBalance as per the last financial statements 1,188 482

GIBS.6.B

g. Shares reserved for issue under optionsFor details of shares reserved for issue under the employee stock option (ESOP) plan of the company, please refer note 31.

For details of shares reserved for issue on conversion of CCPS, please refer note 3(c) regarding terms of conversion/redemption of preference shares.

For details of shares reserved for issue on conversion of bonds/debentures, please refer note 5.1 regarding terms of conversion/redemption of bonds/debentures.

GIBS.6A.h

31 March 2012 31 March 2011No. millions % holding in

the classNo. millions % holding in

the classCCPS of `10 each fully paidHolding Limited, holding company 35 70.00% 35 70.00%Father Limited, ultimate holding company

15 30.00% 15 30.00%

As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

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Good Company (India) Limited 31

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

5. Long-term borrowings

31 March 2012 ` millions

31 March 2011 ` millions

Add: amount transferred from surplus balance in the statement of profit and loss

1,107 706

Closing Balance 2,295 1,188

Surplus/(deficit) in the statement of profit and lossBalance as per last financial statements 3,350 2,353Profit for the year 3,505 3,086Less: Appropriations

Proposed final equity dividend (amount per share `2 (31 March 2011: `2))

(1,140) (1,040)

Tax on proposed equity dividend (189) (177)Dividend on preference shares (amount per share ` 0.7 (March 2011: ` 0.7))

(35) (35)

Tax on preference dividend (6) (6)Transfer to debenture redemption reserve (125) (125)Transfer to general reserve (1,107) (706)Total appropriations (2,602) (2,089)

Net surplus in the statement of profit and loss 4,253 3,350

Total reserves and surplus 16,230 10,978

Commentary

The revised Schedule VI requires that debit balance in the statement of profit and loss, if any, will be shown as a negative figure under the head “reserves and surplus.” Similarly, any negative balance of total “reserves and surplus,” after adjusting negative balance of the surplus, will be shown under the head “reserves and surplus,” and not on the asset side.

The adjustment due to ESOP cancelled during the year is nil (31 March 2011: nil), since actual forfeitures are in line with the expected forfeitures estimated at the grant date. However, if the actual forfeitures are not in line with the expected forfeitures, “compensation on ESOP cancelled during the year” will be disclosed as a separate line item under the head “Employee stock option outstandings.”

Non-current portion Current maturities31 March 2012

` millions31 March 2011

` millions31 March 2012

` millions31 March 2011

` millionsBonds/ debentures0.25 million (31 March 2011: 0.25 million) 8% Optionally convertible bonds (OCB) of `1,000 each (secured)

250 250 — —

75 million (31 March 2011: 75 million) 10% redeemable debentures of `10 each (unsecured)

750 750 — —

40 million (31 March 2011: 40 million), 9% redeemable bonds of `10 each (secured)

300 400 100 —

Term loansIndian rupee loan from banks (secured)

1,250 1,375 125 125

Foreign currency loan from banks (secured)

475 445 — —

GIBS.6.U

GIBS.6.U

GIBS.6.B.iii

GIBS.6.C

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Indian GAAP Illustrative financial statements for the year ended 31 March 201232

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

a. The OCB holders have an option to convert their bonds into equity shares within ten years from the date of allotment viz., 1 June 2009. The holder can also opt to convert these bonds into equity shares earlier; however, no conversion will take place before the end of fifth year from the date of allotment. Each bond is convertible into 20 equity shares of `10 each fully paid. The bonds not converted by the end of tenth year will be redeemed at par. These bonds are secured by mortgage/charge on the machinery at Tarapore plant, except the machinery acquired under finance lease on which the bondholders have the second charge.

b. 10% Debentures are redeemable at par at the end of nine years from the date of allotment, viz., 1 June 2008. The company has an option to redeem these debentures earlier; however, no redemption will take place before the end of 5th year from the date of allotment.

c. 9% bonds are redeemable at par in four installments of 25% each beginning the end of fourth year from the date of allotment, viz., 1 June 2008. These bonds are secured by mortgage/ charge on the plant and machinery at Hazira plant, except the machinery acquired under finance lease on which the bondholders have the second charge.

d. Indian rupee loan from bank carries interest @ 9% p.a. The loan is repayable in 12 yearly installments of `125 million each along with interest, from the date of loan, viz., 1 February 2011. The loan is secured by hypothecation of inventory and trade receivables of the company pertaining to manufacturing division. Further, the loan has been guaranteed by the personal guarantee of the managing director of the company.

e. Foreign currency loan carries interest @ LIBOR plus 1%. The loan is repayable after 6 years from the date of its origination, viz., 1 April 2009. The loan is secured against the plant and machinery at Golkunda plant, except the machinery acquired under finance lease on which the lender has the second charge. Further, the loan has been guaranteed by the personal guarantee of non-executive director of Father Limited, the ultimate holding company.

f. Term loan from financial institutions was taken during the financial year 2009–10 and carries interest @ 8% to 10% p.a. The loan is repayable in 20 half yearly installments of `50 million each along with interest, from the date of loan. The loan is secured by hypothecation of inventory and trade receivables of the company pertaining to trading business. Further, the loan has been guaranteed by the corporate guarantee of Father Limited, the ultimate holding company.

g. Finance lease obligation is secured by hypothecation of plant and machinery taken on lease.

h. Deferred sales tax loan is interest free and payable in 48 quarterly installments of `18.75 million each, starting from 30 June 2007.

i. Deposits from shareholders carry interest @10% p.a. and are repayable after 3 years from the respective dates of deposit.

j. Deposits from public carry interest @ 10% p.a. and are repayable after 3 years from the date of deposit, viz., 1 September 2010.

GIBS.6.C.iv

GIBS.6.C.iv

GIBS.6.C.iv

GIBS.6.C.vi

GIBS.6.C.vi

GIBS.6.C.vi

GIBS.6.C.vi

GIBS.6.C.vi

GIBS.6.C.vi

GIBS.6.C.vi

Non-current portion Current maturities31 March 2012

` millions31 March 2011

` millions31 March 2012

` millions31 March 2011

` millionsFrom financial institutions (secured)

700 800 100 100

Other loans and advancesFinance lease obligation (secured) 31 41 10 11Deferred sales tax loan (unsecured)

450 525 75 75

Deposits (unsecured)Deposits from shareholders 130 105 — —Deposits from public 1,000 — — —

5,336 4,691 410 311The above amount includesSecured borrowings 3,006 3,311 335 236Unsecured borrowings 2,330 1,380 75 75Amount disclosed under the head “other current liabilities” (note 9)

(410) (311)

Net amount 5,336 4,691 — —

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Good Company (India) Limited 33

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Commentary

The revised Schedule VI, among other matters, requires that borrowings will be further sub-classified as secured and unsecured. It also requires that bond / debentures will be stated in the descending order of maturity or conversion starting from the furthest date of redemption or conversion date, as the case may be.

The revised Schedule VI requires that the period and amount of continuing default as on the balance sheet date in repayment of loans and interest will be specified separately in each case. The company does not have any continuing defaults in repayment of loans and interest as at the reporting date.

The Guidance Note on the Revised Schedule VI to the Companies Act, 1956 clarifies that the nature of security will be specified separately in each case. A blanket disclosure of different securities covering all loans classified under the same head such as “all term loans from banks” is not sufficient compliance with the disclosure requirements of the revised Schedule VI. However, where one security is given for multiple loans, the same may be clubbed together for disclosure purposes with adequate details or cross referencing. The company has only one loan in each line item. Hence, security disclosure made is in compliance with the revised Schedule VI.

Long-term Short-term31 March 2012

` millions31 March 2011

` millions31 March 2012

` millions31 March 2011

` millionsProvision for employee benefitsProvision for post-employment medical benefits (note 30)

339 197 — —

Provision for gratuity (note 30) 1,919 1,433 — —Provision for leave benefits — — 93 89

2,258 1,630 93 89

Other provisionsProvision for warranties 266 213 341 310Provision for litigations — — 175Provision for mark-to-market losses on derivative contracts

— — 73 101

Proposed equity dividend — — 1,140 1,040Provision for tax on proposed equity dividend

— — 189 177

Proposed preference dividend — — 35 35Provision for tax on proposed preference dividend

— — 6 6

266 213 1,959 1,6692,524 1,843 2,052 1,758

6. Other long-term liabilities GIBS.6.D

7. Provisions GIBS.6.E GIBS.6.H

31 March 2012 ` millions

31 March 2011 ` millions

Trade payables (including acceptances) (refer note 45 for details of dues to micro and small enterprises)

1,565 1,623

Others

Advance from customers 228 208

Unearned revenue 98 100

326 308

1,891 1,931

GIBS.6.C.(iv) GIBS.6.C.(iv)

GIBS.6.C.(vii)

GN.RVI

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Indian GAAP Illustrative financial statements for the year ended 31 March 201234

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Provision for warranties

A provision is recognized for expected warranty claims on products sold during the last two years, based on past experience of the level of repairs and returns. It is expected that significant portion of these costs will be incurred in the next financial year and all will have been incurred within two years after the reporting date. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about returns based on the two-year warranty period for all products sold. The table below gives information about movement in warranty provisions.

Provision for litigations

During the year ended 31 March 2011, the Central Excise Department raised a demand for `250 million toward differential excise duty on valuation of products from the Tarapore plant. The company has been contesting this claim and was of the view that the demand raised by the excise department was not tenable. To support its view, the company had also obtained legal opinion. Hence, it had not created provision toward this liability in the year ended 31 March 2011. The Excise Tribunal heard the matter during the current year and decided the case against the company. Although the company continues to contest the case in the high court, the management now believes that outflow of resources embodying economic benefits is probable and the estimated amount of outflow is `175 million. Hence, the company has created a provision of `175 million toward the obligation.

Cash credit from banks is secured against margin money deposits, investment property, intangible assets except goodwill and second charge on all trade receivables. The cash credit is repayable on demand and carries interest @9% to 11% p.a.

31 March 2012 ` millions

31 March 2011 ` millions

At the beginning of the year 523 522Arising during the year 393 341Utilized during the year (287) (325)Unused amounts reversed (22) (15)At the end of the year 607 523Current portion 341 310

Non-current portion 266 213

31 March 2012 ` millions

31 March 2011 ` millions

Cash credit from banks (secured) 1,495 1,890

10% loan from ABZ Finance Private Limited repayable on demand (unsecured)

250 300

Interest free loan and advances from related parties repayable on demand (unsecured) (refer note 37)

220 350

Deposits (unsecured)10% Inter-corporate deposit repayable on demand 150 150

2,115 2,690The above amount includes

Secured borrowings 1,495 1,890Unsecured borrowings 620 800

8. Short-term borrowings

AS 29.67

AS 29.66

AS 29.67 AS 29.66

GBIS.6.F

GBIS.6.F.ii

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Good Company (India) Limited 35

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

31 March 2012 ` millions

31 March 2011 ` millions

Trade payables (including acceptances) (refer note 44 for details of dues to micro and small enterprises)

6,756 6,542

Other liabilitiesCurrent maturities of long-term borrowings (note 5) (Includes current maturity of finance lease obligation `10 million (31 March 2011: `11 million))

410 311

Interest accrued but not due on borrowings 8 7Interest accrued and due on borrowings 1 1Unearned revenue on AMC services 176 164Investor Education and Protection Fund will be credited by following amounts (as and when due)

Unpaid dividend 7 6Unpaid matured deposits 4 3Unpaid matured debentures — 2

OthersInterest free deposits from customers* 96 103Service tax payable 73 62TDS payable 986 890

1,761 1,5498,517 8,091

9. Other current liabilities GIBS.6.G

10. Tangible assets (` millions) GIBS.6.I AS 10.37

Land Buildings Plant and equipment

Furniture and

fixtures

Vehicles Leasehold improvements

Total

Cost or valuation

At 1 April 2010 2,318 1,944 4,690 614 71 175 9,812Additions 80 280 564 86 — 27 1,037Disposals — — — — (50) — (50)Transfer to assets held for sale (discontinuing operation)

— — (534) (75) — — (609)

Other adjustments − Exchange differences — — 4 — — — 4 − Borrowing costs — 40 33 — — — 73

At 31 March 2011 2,398 2,264 4,757 625 21 202 10,267Additions — — 550 20 45 2 617Acquisitions through amalgamation (note35)

42 28 58 5 — — 133

Disposals — — (36) — — — (36)Other adjustments

− Exchange differences — — 6 — — — 6 − Borrowing costs — — 60 — — — 60

At 31 March 2012 2,440 2,292 5,395 650 66 204 11,047

* Customer deposits are repayable within 6 – 9 months from the reporting date on completion of supply contracts.

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Indian GAAP Illustrative financial statements for the year ended 31 March 201236

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Land Buildings Plant and equipment

Furniture and

fixtures

Vehicles Leasehold improvements

Total

DepreciationAt 1 April 2010 20 434 1,819 100 37 42 2,452Charge for the year 1 53 242 79 14 47 436Disposals — — — — (40) — (40)Transfer to assets held for sale (discontinuing operation)

— — (214) (42) — — (256)

At 31 March 2011 21 487 1,847 137 11 89 2,592Charge for the year 1 57 271 81 13 51 474Disposals — — (30) — — — (30)

At 31 March 2012 22 544 2,088 218 24 140 3,036

Impairment lossAt 1 April 2010 — — — — — — —At 31 March 2011 — — — — — — —Charge for the year — — 350 — — — 350

At 31 March 2012 — — 350 — — — 350

Net BlockAt 31 March 2011 2,377 1,777 2,910 488 10 113 7,675At 31 March 2012 2,418 1,748 2,957 432 42 64 7,661

(` millions)a. Building includes `150 (31 March 2011: `150) representing cost of unquoted fully paid shares held in various

co-operative housing societies.

b. Revaluations

The company has revalued all its land and buildings on 1 April 2007, at the fair values determined by an independent external valuer. The valuer determined the fair value by reference to market-based evidence. This means that valuations performed by the valuer were based on active market prices, adjusted for any difference in the nature, location or condition of the specific property.

The historical cost of freehold land and building fair valued by the company was `800 and `1,100 respectively and their fair value were `852 and `1,160 respectively. Hence, the revaluation resulted in an increase in the value of freehold land and building by `52 and `60, respectively. The revaluation of the building results an additional depreciation charge of `2 every year. In accordance with the option given in the Guidance Note on Accounting for Depreciation in Companies, the company recoups such additional depreciation out of revaluation reserve.

c. Capitalized borrowing costs

The borrowing cost capitalized during the year ended 31 March 2012 was `52 (31 March 2011: `81). The company capitalized this borrowing cost in the capital work-in-progress (CWIP). The amount of borrowing cost shown as other adjustments in the above note reflects the amount of borrowing cost transferred from CWIP.

d. Land includes land held on leasehold basis:Gross block `80 (31 March 2011: `80)Depreciation charge for the year `1 (31 March 2011: `1)Accumulated depreciation `22 (31 March 2011: `21)Net book value `58 (31 March 2011: `59)

Building includes those constructed on leasehold land:Gross block `30 (31 March 2011: `30)Depreciation charge for the year `0.5 (31 March 2011: `0.5)Accumulated depreciation `11 (31 March 2011: `10.5)Net book value `19 (31 March 2011: `19.5)

As 10.37(iii)

GIBS.6.I.iv

As 16.23

As 19.22 GIBS.6.I.ii

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Good Company (India) Limited 37

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

11. Intangible assets (` millions)

e. Plant and equipment includes plant taken on finance lease:Gross block `226 (31 March 2011: `226)Depreciation charge for the year `11.3 (31 March 2011: `11.3)Accumulated depreciation `50.7 (31 March 2011: `39.4)Net book value `175.3 (31 March 2011: `186.6)

f. Plant and equipment includes plant given on operating lease:Gross block `40 (31 March 2011: `40)Depreciation charge for the year `2 (31 March 2011: `2)Accumulated depreciation `9 (31 March 2011: `7)Net book value `31 (31 March 2011: `33)

g. In the current year, the impairment loss of `350 represents the write-down of certain plant and equipment in the home appliance segment to the recoverable amount. The availability of modern technology triggered this impairment loss. The loss has been recognized in the statement of profit and loss under the head “other expenses.” The recoverable amount was based on value in use and was determined at the level of the cash-generating unit. The cash-generating unit consisted of the refrigerator manufacturing unit at Hazira. In determining value in use for the cash-generating unit, the cash flows were discounted at a rate of 15.4% on a pre-tax basis.

Goodwill Brands/ trademarks

Patents and IPR

Technical know now

Computer software

Total

Gross blockAt 1 April 2010 248 — — 90 38 376Purchase — — — — 134 134Internal development — — — — 40 40At 31 March 2011 248 — — 90 212 550Purchase — — — — 8 8Acquisitions through amalgamation (note35)

44 35 20 16 — 115

At 31 March 2012 292 35 20 106 220 673

AmortizationAt 1 April 2010 75 — — 18 19 112Charge for the year 50 — — 18 38 106At 31 March 2011 125 — — 36 57 218Charge for the year 58 4 2 21 55 140At 31 March 2012 183 4 2 57 112 358

Net block

At 31 March 2011 123 — — 54 155 332At 31 March 2012 109 31 18 49 108 315

AS 19.22 GIBS.6.I.ii

AS 28.117 AS 28.121

AS 19.46 GIBS.6.I.ii

GIBS.6.J AS 26.90

Intangible assets given as securityIntangible assets, except goodwill, with a carrying amount of `206 million (31 March 2011: `209 million) are subject to first charge to secure the company’s cash credit loans.

AS 26.94(c)

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Indian GAAP Illustrative financial statements for the year ended 31 March 201238

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

31 March 2012 ` millions

31 March 2011 ` millions

Investment property (at cost less accumulated depreciation) GIBS.6.K

Cost of land and building given on operating lease 90 90Less: accumulated depreciation (12) (11)

Net block 78 79

Trade investments (valued at cost unless stated otherwise)Unquoted equity instrumentsInvestment in subsidiaries

1 million (31 March 2011: 1 million) Equity shares of `100 each fully paid-up in C Limited

100 100

7.5 million (31 March 2011: 7.5 million) equity shares of `10 each fully paid-up in Rofil Investments Limited

(At cost less provision for other than temporary diminution in value `15million (31 March 2011: nil))

60 75

Investment in joint ventures35 million (31 March 2011: 3.5 million) equity shares of `10 each fully paid-up in E-age Ltd

35 35

Investment in associates45 million (31 March 2011: 45 million) shares of `2 each partly paid-up @ `1per share in Brother Ltd

45 45

25% (31 March 2011: 25%) share in the partnership firm ASQ [Includes accumulated share of profit `6 million (31 March 2011: `5 million)]

11 10

251 265

Non-trade investments (valued at cost unless stated otherwise)Investment in equity instruments (quoted)

2 million (31 March 2011: 2 million) equity shares of `5 each fully paid-up in Rox Limited

(At cost less provision for other than temporary diminution `3 million (31 March 2011:`2 million))

7 8

Preference shares (unquoted)

Nil (31 March 2011: 4 million) 13.5% Preference shares of ` 10 each fully paid-up in Mark Capital Limited.

These shares are redeemable on 1 June 2012 at a premium of `2.5 per share.

— 50

Government and trust securities (unquoted)Investment in government securities 28 25

12. Non-current investments

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Good Company (India) Limited 39

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Investment property given as security AS 13.35(d)

Investment property with a carrying amount of `78 million (31 March 2011: `79 million) are subject to first charge to secure the company’s cash credit loans.

Details of investments in partnership firm GIBS 6.K.i

Investment in ASQ

31 March 2012 ` millions

31 March 2011 ` millions

Debentures (quoted)

2 million (31 March 2011: 2 million) 12% Secured redeemable non-convertible debentures of `100 each partly paid-up in Amol Limited.

200 200

235 283564 627

Aggregate amount of quoted investments (Market value: `212 million (31 March 2011: `220 million))

207 208 GIBS.6.K.iii AS13.35(e)

Aggregate amount of unquoted investments 279 340Value of investment property 78 79Aggregate provision for diminution in value of investments 18 2

Name of the partner and share in profits (%) 31 March 2012 31 March 2011Good Company (India) Limited 25 25Mr. Q 50 50Mr. R 25 25

Total capital of the firm ( ` million) 44 40

13. Deferred tax assets (net)

31 March 2012 ` millions

31 March 2011 ` millions

Deferred tax liabilityFixed assets: Impact of difference between tax depreciation and depreciation/ amortization charged for the financial reporting

1,284 832

Others 149 156Gross deferred tax liability 1,433 988

Deferred tax assetImpact of expenditure charged to the statement of profit and loss in the current year but allowed for tax purposes on payment basis

234 218

Provision for diminution in the value of investments 11 3Provision for doubtful debts and advances 620 534Provision for warranties 196 169Provision for litigations 52 —Others 330 415Gross deferred tax asset 1,443 1,339Net deferred tax asset 10 351

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Indian GAAP Illustrative financial statements for the year ended 31 March 201240

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Non-current Current31 March 2012

` millions31 March 2011

` millions31 March 2012

` millions31 March 2011

` millionsCapital advancesSecured, considered good 81 125 — — GIBS.6.L.ii

Unsecured, considered good 30 39 — —(A) 111 164 — —

Security depositSecured, considered good 49 117 20 22Unsecured, considered good 237 334 25 73Doubtful 5 6 — —

291 457 45 95Provision for doubtful security deposit

(5) (6) — — GIBS.6.L.iii

(B) 286 451 45 95

Loan and advances to related parties (note 37(b))

GIBS.6.L.i.c GIBS.6.R.i.a

Unsecured, considered good — — 107 102(C) — — 107 102

Advances recoverable in cash or kindSecured considered good 2,403 1,412 212 293Unsecured considered good 1,680 1,628 150 107Doubtful 20 19 3 4

4,103 3,059 365 404Provision for doubtful advances (20) (19) (3) (4)

(D) 4,083 3,040 362 400

Other loans and advances GIBS.6.L.i.d GIBS.6.R.i.b

Advance income-tax (net of provision for taxation)

— — 228 239

Prepaid expenses — — 1 14Loans to employees 38 28 57 45Balances with statutory/government authorities

229 211 — —

(E) 267 239 286 298Total (A+ B + C + D + E) 4,747 3,894 800 895

14. Loans and advances GIBS.6.L GIBS.6.R

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Good Company (India) Limited 41

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Non-current Current31 March 2012

` millions31 March 2011

` millions31 March 2012

` millions31 March 2011

` millionsLoans to employees includeDues from non-executive directors 16 12 23 19Dues from officers 9 4 5 6Dues from non-executive and officers jointly with other persons

6 4 6 5

Loans and advances to related parties includeDues from the partnership firm (ADC) in which the company’s executive director is a partner

— — 18 29

Dues from AXD Pvt. Ltd. in which the company’s managing director is a member

— — 33 39

Advances recoverable in cash or kind includeDues from the partnership firm (RST) in which the company’s non-executive director is a partner

— — 8 9

Non-current Current GIBS.6P

31 March 2012 ` millions

31 March 2011 ` millions

31 March 2012 ` millions

31 March 2011 ` millions

Unsecured, considered good unless stated otherwiseOutstanding for a period exceeding six months from the date they are due for payment

Secured, considered good 12 23 242 765Unsecured, considered good 65 73 723 932Doubtful 442 364 233 342

519 460 1,198 2,039

Provision for doubtful receivables

(442) (364) (233) (342)

(A) 77 96 965 1,697

Other receivables

Secured, considered good 362 327 3,725 1,322

Unsecured, considered good 598 334 8,098 4,827

Doubtful 1,167 918 50 2

2,127 1,579 11,873 6,151

Provision for doubtful receivables

(1,167) (918) (50) (2)

(B) 960 661 11,823 6,149

Total (A + B) 1,037 757 12,788 7,846

15. Trade receivables and other assets15.1 Trade receivables

GIBS.6.M GIBS.6.S

Loans and advances due by directors or other officers, etc. GIBS.6.L.iv GIBS.6.R.iv

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Indian GAAP Illustrative financial statements for the year ended 31 March 201242

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Non-current Current GIBS.6.P.iv

31 March 2012 ` millions

31 March 2011 ` millions

31 March 2012 ` millions

31 March 2011 ` millions

Due from non-executive directors 2 2 5 5Due from officers 1 1 3 4Due from non-executive directors and officers jointly with other persons

4 2 8 5

Dues from partnership firm (PQR) in which the company’s non-executive director is a partner

8 6 20 15

Dues from XYZ Pvt. Ltd. in which the company’s non-executive director is a director

12 11 21 16

Non-current Current31 March 2012

` millions31 March 2011

` millions31 March 2012

` millions31 March 2011

` millionsUnsecured, considered good unless stated otherwiseNon-current bank balances (note18)

169 183 — — GIBS.6.M.ii

(A) 169 183 — —Unamortized expenditureUnamortized premium on forward contract

8 12 4 4

Ancillary cost of arranging the borrowings

7 8 2 3

(B) 15 20 6 7

Others GIBS.6.M.ii

Interest accrued on fixed deposits 34 16 10 5

Interest accrued on investments 40 21 — —

Dividend receivable on investment in subsidiaries - long term

— — — 20

Others 63 82 21 23

(C) 137 119 31 48

Total (A + B + C) 321 322 37 55

Trade receivables include: GIBS.6.M.iii.iii

15.2 Other assets

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Good Company (India) Limited 43

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

16. Current investments GIBS.6.N

31 March 2012 ` millions

31 March 2011 ` millions

Current portion of long-term investments (valued at cost) GIBS.6.N.i

Preference shares (unquoted)4 million (31 March 2011: nil) 13.5% preference shares of `10 each fully paid in Mark Capital Limited

These shares are redeemable on 1 June 2012 at a premium of `2.5 per share. **

50

Current investments (valued at lower of cost and fair value, unless stated otherwise)

GIBS.6.N.i

Quoted equity instruments2 million (31 March 2011: 3 million) shares of `10 each fully paid-up in KFC Investments Limited

27 37

Unquoted government or trust securities7.25% 6 months government securities 225 —

Unquoted bondsNil (31 March 2011: 12 million) short-term bonds of `10 each fully paid #

— 126

13 million (31 March 2011: Nil) short-term infra bonds of `10 each fully paid ##

110 —

Unquoted mutual funds2 million (31 March 2011: 1.8 million) units of `10 each fully paid-up of AXZ Mutual Fund

20 18

432 181GIBS.6.N.ii

AS 13.35(e)Aggregate amount of quoted investments (Market value `44 million (31 March 2011: `42 million))

27 37

Aggregate amount of unquoted investments 405 144# Aggregate provision for diminution in value of investments — 8## Aggregate provision for diminution in value of investments 16 —

** in earlier years, the company had invested in 40 million preference shares of Mark Capital Limited with an intention of holding the same for more than one year from the date on which such investments was made. Accordingly, it classified the same as long-term investment under AS 13 Accounting for Investments. Since the shares are redeemable on 1 June 2012, the company does not have an intention to hold the investment for more than 12 months as at 31 March 2012. Hence, the company has presented its investment in preference shares as “current investment” in the financial statements for the year ended 31 March 2012. However, for measurement purposes, the investment continues to be treated as long-term investment.

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Indian GAAP Illustrative financial statements for the year ended 31 March 201244

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

17. Inventories (valued at lower of cost and net realizable value) GIBS.6.O

18. Cash and bank balances GIBS.6.Q

31 March 2012 ` millions

31 March 2011 ` millions

Raw materials and components (includes in transit `450 millions (31 March 2011: `472 millions)) (refer note 21)

2,660 2,318

Work-in-progress (refer note 22) 1,550 1,108Finished goods (refer note 22) 6,890 6,126Traded goods (including stock-in-transit `252 millions (31 March 2011: `128 millions)) (refer note 22)

1,854 992

Stores and spares 202 196Loose tools 42 32

13,198 10,772

Non-current Current31 March 2012

` millions31 March 2011

` millions31 March 2012

` millions31 March 2011

` millionsCash and cash equivalents GIBS.6.Q.i

Balances with banks:On current accounts 1,424 2,174Deposits with original maturity of less than three months

350 174

On unpaid dividend account 7 6 GIBS.6.Q.ii

Cheques/drafts on hand 3 2

Unpaid matured deposits 4 3

Unpaid matured debentures - 2

Cash on hand 29 1

1,817 2,362

Other bank balances GIBS.6.Q.i.d

Deposits with original maturity for more than 12 months

37 29 5 8 GIBS.6.Q.v

Deposits with original maturity for more than 3 months but less than 12 months

— — 303 221

Margin money deposit 132 154 — — GIBS.6.Q.iii

169 183 308 229

Amount disclosed under non-current assets (note 15.2)

(169) (183) — —

— — 2,125 2,591

Margin money deposits given as security

Margin money deposits with a carrying amount of `132 million (31 March 2011: `154 million) are subject to first charge to secure the company’s cash credit loans.

GIBS.6.Q.iii AS 3.45

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Good Company (India) Limited 45

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

19. Revenue from operations GIPL.2.A

31 March 2012 ` millions

31 March 2011 ` millions

Revenue from operationsSale of products

Finished goods 68,524 61,223Traded goods 9,522 8,703

Sale of services 3,774 4,236Other operating revenue

Scrap sales 96 77 Other 136 127

Revenue from operations (gross) 82,052 74,366 AS 9.10

Less: Excise duty # 4,530 4,136 AS 9.10

Revenue from operations (net) 77,522 70,230 AS 9.10

# Excise duty on sales amounting to `4,530 million (31 March 2011: `4,136 million) has been reduced from sales in profit & loss account and excise duty on increase/decrease in stock amounting to `61 million (31 March 2011: `209 million) has been considered as (income)/expense in note 24 of financial statements.

31 March 2012 ` millions

31 March 2011 ` millions

Finished goods soldRefrigerator 23,983 20,203Washing machine 13,705 14,081Air conditioner 14,390 12,857Microwave oven 10,279 7,347Other electronic appliances 6,167 6,735

68,524 61,223

Traded goods soldTelevision 3,523 3,046Refrigerator 2,000 1,741Washing machine 1,619 1,828Spare parts 1,333 1,305Other electronic appliances 1,047 783

9,522 8,70378,046 69,926

Details of products sold GIPL.5.ii.d

31 March 2012 ` millions

31 March 2011 ` millions

AMC services 3,774 4,2363,774 4,236

Details of services rendered GIPL.5.ii.d

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Indian GAAP Illustrative financial statements for the year ended 31 March 201246

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Commentary

The revised Schedule VI does not define the term “other operating revenue.” In accordance with the ICAI Guidance Note on revised Schedule VI, this item includes revenue arising from a company’s operating activities, either principal or ancillary; however, which is not revenue arising from the sale of products or rendering of services. Whether a particular income constitutes “other operating revenue” or “other income” is decided based on the facts of each case and detailed understanding of the company’s activities. The classification of income also depends on the purpose for which the particular asset is acquired or held. Based on this guidance, the company has classified scrap and revenue arising from other ancillary activities as “other operating revenue.”

GN.RVI

20. Other income RVI.PL.II

21. Cost of raw material and components consumed RVI.PL.IV

31 March 2012 ` millions

31 March 2011 ` millions

Interest income on GIPL.4.a

Bank deposits 64 54Long-term investments 26 26Current investments 10 9Others 13 15

Dividend income on GIPL.4.b

Investment in subsidiaries — 20Current investments 22 31Long-term investments 64 59

Net gain on sale of current investments 250 121 GIPL.4.c

Government grant # 12 —Commission income 38 48 GIPL.4.d

Other non-operating income (net of expenses directly attributable to such income of `30 millions (31 March 2011: `70 millions))

95 108 GIPL.4.d

594 491

# The company obtained and recognized as income a government grant of `12 million (31 March 2011: `nil), for generating employment opportunities in the backward area. The company is obliged not to reduce its average number of employees in the backward area over the next two years under the terms of this government grant.

31 March 2012 ` millions

31 March 2011 ` millions

Inventory at the beginning of the year 2,318 2,255Add: Purchases 45,246 43,537

47,564 45,792Less: inventory at the end of the year 2,660 2,318Cost of raw material and components consumed 44,904 43,474

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Good Company (India) Limited 47

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

22. (Increase)/decrease in inventories RVI.PL.IV

31 March 2012 ` millions

31 March 2011 ` millions

(Increase)/decrease ` millions

Inventories at the end of the year 31 March 2012Traded goods 1,854 992 (862)Work-in-progress 1,550 1,108 (442)Finished goods 6,890 6,126 (764)

10,294 8,226 (2,068)

Inventories at the beginning of the year 31March2011Traded goods 992 1,523 531Work-in-progress 1,108 634 (474)Finished goods 6,126 3,511 (2,615)

8,226 5,668 (2,558)(2,068) (2,558)

Details of raw material and components consumed GIPL.5.ii.d

Details of inventory

31 March 2012 ` millions

31 March 2011 ` millions

CRCA coils and steel sheets 15,718 15,652Compressors 11,226 9,564Fan motors 5,388 6,086Copper 3,143 2,608Air Handling Unit 4,041 3,478Others 5,388 6,086

44,904 43,474

31 March 2012 ` millions

31 March 2011 ` millions

Raw materials and componentsCRCA coils and steel sheets 932 834Compressors 665 510Fan motors 319 325Copper 186 139Air Handling Unit 239 185Others 319 325

2,660 2,318

Details of purchase of traded goods GIPL.5.ii.b

31 March 2012 ` millions

31 March 2011 ` millions

Television 2,855 1,977Refrigerator 1,621 1,130Washing machine 1,312 1,186Spare parts 1,081 847Other electronic appliances 849 508

7,718 5,648

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Indian GAAP Illustrative financial statements for the year ended 31 March 201248

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

23. Employee benefit expense GIPL.5.i

24. Other expenses GIPL.5.vi

31 March 2012 ` millions

31 March 2011 ` millions

Salaries, wages and bonus 7,231 6,626Contribution to provident and other fund 452 435Employee stock option scheme 2,369 1,907Gratuity expense (note 30) 1,995 1,433Post employment medical benefits (note 30) 194 90Staff welfare expenses 245 204

12,486 10,695

31 March 2012 ` millions

31 March 2011 ` millions

Consumption of stores and spares 1,021 923Consumption of loose tools 77 116Sub-contracting expenses 24 64(Increase)/decrease of excise duty on inventory 61 209Customer service expenditure 149 53Power and fuel 272 239Water charges 3 4Freight and forwarding charges 688 598Rent 233 213

31 March 2012 ` millions

31 March 2011 ` millions

Traded goodsTelevision 556 327Refrigerator 408 248Washing machine 222 208Spare parts 464 110Other electronic appliances 204 99

1,854 992

Work-in-progressRefrigerator 512 388Washing machine 357 222Air conditioner 326 233Microwave oven 186 166Other electronic appliances 169 99

1,550 1,108

Finished goodsRefrigerator 2,480 2,022Washing machine 1,516 1,532Air conditioner 965 1,286Microwave oven 413 674Other electronic appliances 1,516 612

6,890 6,126

Details of inventory

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Good Company (India) Limited 49

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

31 March 2012 ` millions

31 March 2011 ` millions

Rates and taxes 372 248Insurance 120 92Repairs and maintenance

Plant and machinery 162 131Buildings 91 19Others 36 20

Advertising and sales promotion 2,170 1,792Brokerage and discounts 129 100Sales commission 92 59Travelling and conveyance 272 233Communication costs 90 92Printing and stationery 57 63Legal and professional fees 197 179Directors’ sitting fees 10 6Payment to auditor (Refer details below) 32 25Provision for diminution in value of investment in subsidiary company 15 — GIPL.5.vii.bProvision for other than temporary decline in the carrying amount of other long-term investments 1 1 AS 13.35(c)Adjustments to the carrying amount of current investments 16 8 AS 13.35(c)

Provision for warranties (net of reversals) 371 326Provision for litigations (net of reversals) 175 —Exchange differences (net) 94 111Loss on derivative contracts (including provisions for mark-to-market loss) 6 22Bad debts/advances written off 80 175Impairment loss on fixed assets 350 —Provision for doubtful debts and advances 345 810Loss on sale of fixed assets (net) 2 1Premium on forward exchange contract amortized 4 4Miscellaneous expenses 799 633

8,616 7,569Above expenses include research and development expenses 160 135

Payment to auditor GIPL.5.i.j

31 March 2012 ` millions

31 March 2011 ` millions

As auditor:Audit fee 22 20Tax audit fee 2 1Limited review 3 2

In other capacity:Taxation matters 1 —Company law matters — 1Management services 1 —Other services (certification fees) 1

Reimbursement of expenses 2 132 25

Commentary

The revised Schedule VI, among other matters, requires separate disclosure for item of income/expense which exceed 1% of revenue from operations or `100,000, whichever is higher

GIPL.5

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Indian GAAP Illustrative financial statements for the year ended 31 March 201250

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

28. Discontinuing operation AS 24.20

26. Depreciation and amortization expense GI.PL.5.i.b

31 March 2012 ` millions

31 March 2011 ` millions

Depreciation of tangible assets 474 436Amortization of intangible assets 140 106Depreciation of investment property 1 1

615 543Less: recoupment from revaluation reserve 2 2

613 541

27. Finance costs GIPL.3

31 March 2012 ` millions

31 March 2011 ` millions

Interest 589 411Bank charges 27 44Amortization of ancillary borrowing costs 2 2Exchange difference to the extent considered as an adjustment to borrowing costs

45 23

663 480

On 12 November 2011, the company publicly announced the decision of its board of directors to discontinue the Furniture Division, which is also a separate segment as per AS 17 Segment Reporting. The proposed discontinuation is consistent with the company’s long-term strategy to focus its activities in the areas of home appliances and related services, and to divest unrelated activities. On 15 March 2012, the company signed a contract to sell the Furniture Division to XYZ Limited for `60 million.

Furniture Division’s assets are written down by `50 million (31 March 2011: `nil) before income tax saving of `16.25 million (31 March 2011: `nil) to their recoverable amount.

The company has recognized provision for termination benefits of `30 million (31 March 2011: `nil) before income-tax saving of `9.75 million (31 March 2011: `nil) to be paid by 30 September 2012 to certain employees of the Furniture Division whose jobs will be terminated as a result of the sale.

At 31 March 2012, the carrying amount of assets of the Furniture Division was `419 million (31 March 2011: `491 million) and its liabilities were `389 million (31 March 2011: `470 million), including the provision for expected termination cost. The process of selling the Furniture Division is likely to be completed by 31 May 2012.

25. Exceptional items GIPL.5.i.k

31 March 2012 ` millions

31 March 2011 ` millions

VRS expenses — 340 AS 5.12

With a view to downsize and rationalize the workforce at Hazira plant, the company had announced a voluntary retirement scheme (VRS) on 19 May 2010 for the workmen of its Hazira plant. The scheme was open till 25 August 2010. In response to the VRS, 331 workmen opted for the same. Expenditure of `340 million on VRS is charged to the statement profit and loss for the year ended 31 March 2011.

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Good Company (India) Limited 51

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

The following statement shows the revenue and expenses of discontinuing operations:

The carrying amounts of the total assets and liabilities to be disposed of at 31 March are as follows. Comparative information for Furniture Division is included in accordance with AS 24 Discontinuing Operations.

AS 24.20(e)

Total assets include fixed assets for which binding sale agreements have been entered into as of 31 March 2012 and are likely to be settled on 30 June 2012. The company written-down these assets to the net realizable value (net selling price) of `283 million and recognized an impairment loss of `50 million (31 March 2011: nil). The company has disclosed these fixed assets separately on the face of the balance sheet.

AS 24.20(d)

The net cash flows attributable to the Furniture Division are as below: AS 24.20(h)

29. Earnings per share (EPS) AS 20.48(ii)

31 March 2012 ` millions

31 March 2011 ` millions

Revenue 543 632Expenses (432) (544)Provision for employee termination (30) —Profit/(loss) from operating activities 81 88Finance costs (5) (5)Depreciation/amortization (20) (20)Impairment loss (50) —Profit/(loss) before tax 6 63 AS 24.20(g)

Income-tax expense (2) (22) AS 24.20(g)

Profit/(loss) after tax 4 41

31 March 2012 ` millions

31 March 2011 ` millions

Total assets 419 491Total liabilities 389 470Net assets 30 21

31 March 2012 ` millions

31 March 2011 ` millions

Operating activities 63 75Investing activities — (6)Financing activities (12) (25)Net cash inflows/(outflows) 51 44

31 March 2012 ` millions

31 March 2011 ` millions

Total operations for the year Profit/(loss) after tax 3,505 3,086Less : Dividends on convertible preference shares & tax thereon 41 41Net profit/(loss) for calculation of basic EPS 3,464 3,045

Net profit as above 3,464 3,045Add : dividends on convertible preference shares & tax thereon 41 41Add : interest on bonds convertible into equity shares (net of tax) 13 13Net profit/(loss) for calculation of diluted EPS 3,518 3,099

The following reflects the profit and share data used in the basic and diluted EPS computations:

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Indian GAAP Illustrative financial statements for the year ended 31 March 201252

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

31 March 2012 ` millions

31 March 2011 ` millions

Continuing operationsProfit/(loss) after tax 3,501 3,045Less : dividends on convertible preference shares & tax thereon 41 41Net profit for calculation of basic EPS 3,460 3,004

Net profit as above 3,460 3,004Add : dividends on convertible preference shares & tax thereon 41 41Add : interest on bonds convertible into equity shares (net of tax) 13 13Net profit/(loss) for calculation of diluted EPS 3,514 3,058

No. millions No. millionsWeighted average number of equity shares in calculating basic EPS 524 520Effect of dilution:Convertible preference shares 50 50Convertible bonds 5 5Stock options granted under ESOP 236 209Weighted average number of equity shares in calculating diluted EPS

815 784

30. Gratuity and other post-employment benefit plans AS 15.120

The company operates two defined plans, viz., gratuity and post employment medical benefits, for its employees. Under the gratuity plan, every employee who has completed atleast 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.

Under the post employment medical benefit plan, the company provides medical benefit to those employees who leave the services on the company on retirement and have completed atleast 7 years of service with the company. The plan is not funded by the company.The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

Statement of profit and loss

Net employee benefit expense recognized in the employee cost AS15.120 (g)

Gratuity Post-employment medical benefits

31 March 2012 ` millions

31 March 2011 ` millions

31 March 2012 ` millions

31 March 2011 ` millions

Current service cost 1,778 1,499 180 86Interest cost on benefit obligation 1,419 1,278 25 8Expected return on plan assets (1,340) (1,266) — —Net actuarial( gain)/loss recognized in the year

138 (78) (11) (4)

Net benefit expense 1,995 1,433 194 90Actual return on plan assets 1,281 1,213

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Good Company (India) Limited 53

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Balance sheet

Benefit asset/liability AS15.120(f)

Changes in the present value of the defined benefit obligation are as follows: AS 15.120(c)

Changes in the fair value of plan assets are as follows: AS15.120(e)

The company expects to contribute `1950 millions to gratuity in the next year (31 March 2011: `1550 millions). AS15.120(o)

Gratuity Post-employment medical benefits

31 March 2012 ` millions

31 March 2011 ` millions

31 March 2012 ` millions

31 March 2011 ` millions

Present value of defined benefit obligation

(19,838) (17,731) (339) (197)

Fair value of plan assets 17,919 16,298 — —

Plan asset/(liability) (1,919) (1,433) (339) (197)

Gratuity Post-employment medical benefits

31 March 2012 ` millions

31 March 2011 ` millions

31 March 2012 ` millions

31 March 2011 ` millions

Opening defined benefit obligation 17,731 15,978 197 107

Current service cost 1,778 1,499 180 86

Interest cost 1,419 1,278 25 8

Benefits paid (2,419) (969) (52) —

Actuarial (gains)/losses on obligation

1,329 (55) (11) (4)

Closing defined benefit obligation

19,838 17,731 339 197

31 March 2012 ` millions

31 March 2011 ` millions

Opening fair value of plan assets 16,298 14,780Expected return 1,340 1,266Contributions by employer 1,509 1,198Benefits paid (2,419) (969)Actuarial gains/(losses) 1,191 23Closing fair value of plan assets 17,919 16,298

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Indian GAAP Illustrative financial statements for the year ended 31 March 201254

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows: AS15.120(h)

Assumed healthcare cost trend rates have a significant effect on the amounts recognized in the statement of profit and loss. One percentage point change in assumed healthcare cost trend rates would have the following effects on the aggregate of the service cost and interest cost and defined benefit obligation:

AS 15.120(m)

The principal assumptions used in determining gratuity and post-employment medical benefit obligations for the company’s plans are shown below:

AS15.120(l)

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. There has been significant change in expected rate of return on assets due to change in the market scenario.

AS15.120(j)

Gratuity

31 March 2012 31 March 2011

Investments with insurer 100% 100%

Post-employment medical benefits

31 March 2012 ` millions

31 March 2011 ` millions

IncreaseEffect on the aggregate of the service cost and interest cost 6 4Effect on defined benefit obligation 12 7DecreaseEffect on the aggregate of the service cost and interest cost (2) (2)Effect on defined benefit obligation (8) (5)

Gratuity Post-employment medical benefits

31 March 2012 31 March 2011 31 March 2012 31 March 2011Discount rate 8.25% 8.00% 8.25% 8.00%Expected rate of return on assets 8.50% 8.00% — —Employee turnover 10% at younger

ages and reducing to 1%

at older age according to

graduated scale

10% at younger ages and

reducing to 1.25% at older

age according to graduated scale

10% at younger ages and

reducing to 1% at older age according to

graduated scale

10% at younger ages and

reducing to 1.25% at older age according to graduated

scaleHealthcare cost increase rate — — 5% 4.50%

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Good Company (India) Limited 55

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Amounts for the current and previous four periods are as follows: AS 15.120(n)

31 Mar 2012 ` millions

31 Mar 2011 ` millions

31 Mar 2010 ` millions

31 Mar 2009 ` millions

31 Mar 2008 ` millions

GratuityDefined benefit obligation 19,838 17,731 15,978 13,850 12,950Plan assets 17,919 16,298 14,780 12,100 10,050Surplus/(deficit) (1,919) (1,433) (1,198) (1,750) (2,900)Experience adjustments on plan liabilities

(578) (127) (80) (90) (40)

Experience adjustments on plan assets

59 (21) 50 30 50

Post employment medical benefitDefined benefit obligation 339 197 88 80 78Experience adjustments on plan liabilities

(8) (3) (22) 15 20

31. Employee stock option plans GN.ESOP

The company provides share-based payment schemes to its employees. During the year ended 31 March 2012, an employee stock option plan (ESOP) was in existence. The relevant details of the scheme and the grant are as below.

On 1 March 2009, the board of directors approved the Equity Settled ESOP Scheme 2009 (Scheme 2009) for issue of stock options to the key employees and directors of the company. According to the Scheme 2009, the employee selected by the remuneration committee from time to time will be entitled to 10 to 100 options, subject to satisfaction of the prescribed vesting conditions, viz., continuing employment of 3 years. The contractual life (comprising the vesting period and the exercise period) of options granted is 6 years. The other relevant terms of the grant are as below:

GN.ESOP. 50(a)

Vesting period 3 yearsExercise period 3 yearsExpected life 3 yearsExercise price `22 to `29Market price at 1 March 2009 `38

The details of activity under the Scheme 2009 are summarized below: GN.ESOP. 50(b)

31 March 2012 31 March 2011No. of options WAEP (`) No. of options WAEP (`)

Outstanding at the beginning of the year 460 25 480 25Granted during the year 90 25 — —Forfeited during the year 30 25 20 25Exercised during the year 50 25 — —Outstanding at the end of the year 470 25 460 25Exercisable at the end of the year 380 NIL — —

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Indian GAAP Illustrative financial statements for the year ended 31 March 201256

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

For options exercised during the period, the weighted average share price at the exercise date was `59 per share (31 March 2011: not applicable since no option exercised).

GN.ESOP. 50(c)

The weighted average remaining contractual life for the stock options outstanding as at 31 March 2012 is 2.94 years (31 March 2011: 2.60 years). The range of exercise prices for options outstanding at the end of the year was `22 to `29 (31 March 2011: `22 to `29).

GN.ESOP. 50(d)

The weighted average fair value of stock options granted during the year was `40.36 (31 March 2011: nil). The Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:

GN.ESOP. 51

31 March 2012 31 March 2011*Dividend yield (%) 20% *Expected volatility 53% *Risk-free interest rate 7% *Weighted average share price (`) 57 *Exercise price (`) 25 *Expected life of options granted in years 5 ** Not applicable since no ESOP’s were granted during the year.

The expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

GN.ESOP.51

The company measures the cost of ESOP using the intrinsic value method. Had the company used the fair value model to determine compensation, its profit after tax and earnings per share as reported would have changed to the amounts indicated below:

GN.ESOP. 48

31 March 2012 ` millions

31 March 2011 ` millions

Profit after tax as reported 3,505 3,086Add: ESOP cost using the intrinsic value method 2,369 1,907Less: ESOP cost using the fair value method (3,871) (3,366)Proforma profit after tax 2,003 1,627

Earnings Per ShareBasic

− As reported ` 6.61 ` 5.86 − Proforma ` 3.74 ` 3.05

Diluted − As reported ` 4.32 ` 3.95 − Proforma ` 2.50 ` 2.17

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Good Company (India) Limited 57

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Operating lease: company as lessee AS 19.25

The company has entered into commercial leases on certain motor vehicles and items of machinery. These leases have an average life of between three and five years with no renewal option included in the contracts. There are no restrictions placed upon the company by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases are as follows:

Operating lease commitments – Group as lessor AS 19.46

The company has entered into commercial property leases on its investment property portfolio, consisting of the company’s surplus office and manufacturing buildings. These non-cancellable leases have remaining terms of between five and 20 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions.

Future minimum rentals receivable under non-cancellable operating leases are as follows:

31 March 2012 ` millions

31 March 2011 ` millions

Within one year 248 233After one year but not more than five years 412 345More than five years — —

660 578

31 March 2012 ` millions

31 March 2011 ` millions

Within one year 14 14After one year but not more than five years 56 56More than five years 63 77

133 147

32. LeasesFinance lease: company as lessee

The company has finance leases and hire purchase contracts for various items of plant and machinery. These leases involve significant upfront lease payment, have terms of renewal and bargain purchase option. However, there is no escalation clause. Each renewal is at the option of lessee. Future minimum lease payments (MLP) under finance leases together with the present value of the net MLP are as follows:

AS 19.22

31 March 2012 31 March 2011Minimum

payments ` millions

Present value of MLP

` millions

Minimum payments ` millions

Present value of MLP

` millionsWithin one year 11 10 13 11

After one year but not more than five years

38 31 49 41

More than five years — — — —

Total minimum lease payments 49 41 62 52

Less: amounts representing finance charges

(8) — (10) —

Present value of minimum lease payments

41 41 52 52

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Indian GAAP Illustrative financial statements for the year ended 31 March 201258

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

31 March 2012 ` millions

31 March 2011 ` millions

Salaries, wages and bonus 346 616Consumption of stores and spares 47 239Power and fuel 54 47Finance costs 52 81

499 983

34. Interest in a joint ventureThe company holds 50% interest in E-Age & Co Limited, a joint controlled entity which is involved in manufacture of television and DVD players.

AS 27.52

The company’s share of the assets, liabilities, income and expenses of the jointly controlled entity for the year ended 31 March are as follows:

AS 27.53

31 March 2012 ` millions

31 March 2011 ` millions

Current assets 140 132Non-current assets 228 216Current liabilities (87) (70)Non-current liabilities (126) (147)Equity 155 131

Revenue 391 326Cost of material consumed (301) (257)Depreciation of plant and machinery (12) (13)Employee benefit expense (32) (21)Other expenses (12) (10)Profit before tax 34 25Income-tax expense (10) (8)Profit after tax 24 17 Commitments and contingent liabilities of the jointly controlled entity are disclosed in note 38 and 39 respectively.

33. Capitalization of expenditureDuring the year, the company has capitalized the following expenses of revenue nature to the cost of fixed asset/ capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

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Good Company (India) Limited 59

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

36. Segment information

35. Accounting for amalgamationThe Honorable High Court of Delhi, on 16 August 2011, sanctioned a scheme of amalgamation (the scheme) under sections 391 to 394 of the Companies Act, 1956. In accordance with the scheme, Peter Limited (transferor company) merges with the company with effect from 1 April 2011. The transferor company was engaged in the business of refrigerators. The amalgamation is expected to channelize synergies and lead to better utilization of available resources and result in greater economies of scale.

AS 14.43

The company discharged the purchase consideration for acquisition through bank payments. In terms of the scheme, the company has accounted for the amalgamation under the purchase method and recognized assets and liabilities acquired at fair value. The excess of purchase consideration paid by the company over the aggregate value of the net assets acquired has been treated as goodwill, to be amortized over a period of 5 years from the date of amalgamation.

AS 14.43 AS 14.45

The primary segment reporting format is determined to be business segments as the company’s risks and rates of return are affected predominantly by differences in the products and services produced. Secondary information is reported geographically. The operating businesses are organized and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

AS 17.19

The “home appliance” segment produces and sells a reputed brand of home appliances, comprising refrigerators, washing machines, air conditioners, microwave ovens and other small electronic appliances.

The “retail” segment operates electronic stores in India wherein all major brands of fast moving consumer goods (FMCG) are available.

The “services” segment provides annual maintenance service for the FMCG products.

The “furniture” segment producing plastic furniture for home and commercial purposes is being discontinued.

Transfer prices between business segments are set at cost plus appropriate margins.

Segment revenue, segment expense and segment result include transfers between business segments. Those transfers are eliminated in total revenue/expense/result.

Particulars ` millionsAssetsLand 42Buildings 28Plant and equipment 58Furniture and fixtures 5Patents 20Brands/trademarks 35Technical knowhow 16Trade receivables 79Total assets 283

LiabilitiesTrade payables 60Total liabilities 60

Net assets 223Purchase consideration 267

Goodwill 44

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Indian GAAP Illustrative financial statements for the year ended 31 March 201260

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Business segments AS 17.40

Year ended 31 March 2012

ParticularsContinuing operations

Discontinuing operations Total

operationsHome appliance

Retail Services Eliminations Total Furniture

RevenueExternal sales 64,226 9,522 3,774 — 77,522 543 78,065 AS 17.40 (a)

Inter segment sales 1,350 — 435 (1,785) — — — AS 17.40 (a)

Total revenue 65,576 9,522 4,209 (1,785) 77,522 543 78,065

ResultsSegment results 6,018 412 31 6,461 11 6,472 AS 17.40 (b)

Unallocated expenses (1,208)Operating profit 5,264Finance costs (668)Other income including finance income

594

Share of profit investment in partnership firm

1

Exceptional Items —Profit before tax 5,191Income taxes (1,686)Net profit 3,505

As at 31 March 2011Segment assets 24,339 9,543 6,628 419 40,929 AS 17.46

Unallocated assets 3,936

Total assets 24,339 9,543 6,628 419 44,865

Segment liabilities 6,733 3,753 160 389 11,035 AS 17.46

Unallocated liabilities 11,400

Total liabilities 6,733 3,753 160 389 22,435

Other segment informationCapital expenditure:Tangible assets 308 5 26 — 339* AS 17.40(e)

Intangible assets 116 — — — 116** AS 17.40(e)

Depreciation 325 95 53 20 493 AS 17.40(f)

Amortization 85 23 32 — 140 AS 17.40(f)

Impairment losses recognized

350 — — 50 400 AS 17.40(g)

Other non-cash expenses

1825 395 107 42 AS 17.40(g)

(` million)

* The amount includes tangible assets acquired through amalgamations, borrowing costs and exchange differences capitalized.

** The amount includes intangible assets acquired through amalgamations.

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Good Company (India) Limited 61

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Year ended 31 March 2011

ParticularsContinuing operations

Discontinuing operations Total

operationsHome appliance

Retail Services Eliminations Total Furniture

RevenueExternal sales 57,291 8,703 4,236 — 70,230 632 70,862 AS 17.40 (a)

Inter segment sales 1,250 — 143 (1,393) — — — AS 17.40 (a)

Total revenue 58,541 8,703 4,379 (1,393) 70,230 632 70,862

ResultsSegment results 5,093 746 28 5,867 68 5,935 AS 17.40 (b)

Unallocated expenses (1,006)Operating profit 4,929Finance costs (485)Other income including finance income

491

Share of profit investment in partnership firm

2

Exceptional Items (340)Profit before tax 4,597Income taxes (1,511)Net profit 3,086

As at 31 March 2011Segment assets 20,578 8,089 4,954 491 34,112 AS 17.46

Unallocated assets 3,570Total assets 20,578 8,089 4,954 491 37,682

Segment liabilities 5,549 3,489 262 470 9,770 AS 17.46

Unallocated liabilities 11,234

Total liabilities 5,549 3,489 262 470 21,004

Other segment informationCapital expenditure:Tangible assets 73 25 8 — 106 AS 17.40(e)

Intangible assets 134 — — — 134 AS 17.40(e)

Depreciation 311 87 37 20 455 AS 17.40(f)

Amortization 80 19 7 — 106 AS 17.40(f)

Impairment losses recognized

— — — — — AS 17.40(g)

Other non-cash expenses

1311 387 145 64 AS 17.40(g)

(` million)

* The amount includes borrowing costs and exchange differences capitalized.

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Indian GAAP Illustrative financial statements for the year ended 31 March 201262

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Geographical segments

The company’s secondary segments are the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. The following tables present revenue, expenditure and certain asset information regarding the company’s geographical segments:

Year ended 31 March 2012 India United States Others TotalRevenue AS 17.48(a)

Sales to external customers 67,242 7,586 3,237 78,065Less: sales attributable to discontinuing operations

(543) — — (543)

Revenue from continuing operations 66,699 7,586 3,237 77,522

Other segment informationSegment assets 44,823 17 25 44,865 AS 17.48(b)

Unallocated assets — — — —Total assetsCapital expenditure:

Tangible fixed assets 339 — — 339 AS 17.48(c)

Intangible assets 116 — — 116 AS 17.48(c)

(` million)

Year ended 31 March 2011 India United States Others TotalRevenue AS 17.48(a)

Sales to external customers 62,886 6,280 1,696 70,862Less: sales attributable to discontinuing operations

(632) — — (632)

Revenue from continuing operations 62,254 6,280 1,696 70,230Other segment informationSegment assets 37,623 27 32 37,682 AS 17.48(b)

Unallocated assets — — — —Total assetsCapital expenditure:

Tangible fixed assets 106 — — 106 AS 17.48(c)

Intangible assets 134 — — 134 AS 17.48(c)

(` million)

37. Related party disclosuresNames of related parties and related party relationship AS 18.21

Related parties where control existsHolding company Holding Limited

Ultimate holding company Father Limited

Subsidiaries C Limited

Rofil Investments Limited

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Good Company (India) Limited 63

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Related party transactions

a. Sale/purchase of goods and services

b. Loans given and repayment thereof

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:

AS 18.23

(` million)

(` million)

Related parties with whom transactions have taken place during the yearFellow subsidiaries Beta Private Limited

Associates Brother Ltd, M/s ASQ (partnership firm)

Jointly controlled entity E-Age Ltd.

Key management personnel Mr. A.B. Managing director

Mr. X. Y. Finance director

Relatives of key management personnel Mr. C.A. brother of Mr. A.B

Enterprises owned or significantly influenced by key management personnel or their relatives

AXD Pvt. Ltd., M/s ADC (partnership firm),

Year ended Sale of goods

Sale of services

Purchase of traded

goods

Amount owed by related

parties*

Amount owed to related

parties*

Holding and ultimate holding companies

Holding Limited 31 March 2012 200 65 — 48 —31 March 2011 180 87 — 34 —

Father Limited 31 March 2012 123 — — 14 —31 March 2011 96 12 — 6 —

Fellow subsidiariesBeta Private Limited 31 March 2012 — — 965 — 148

31 March 2011 — — 1034 — 243Associates and jointly controlled entities

Brother Limited 31 March 2012 — — 267 — 1831 March 2011 — — 189 — 24

E-Age & Co Limited 31 March 2012 — 14 — — —31 March 2011 — 9 — — —

* The amounts are classified as trade receivables and trade payables, respectively.

Year ended Loans given Repayment Interest accrued

Amount owed by related parties

Enterprises owned or significantly influenced by key management personnel or their relativesM/s ADC (partnership firm)

31 March 2012 — 12 1 18

31 March 2011 20 5 2 29AXD Pvt. Ltd 31 March 2012 10 18 2 33

31 March 2011 38 — 1 39

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Indian GAAP Illustrative financial statements for the year ended 31 March 201264

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Year ended Loans given Repayment Interest accrued

Amount owed by related parties

Relatives of key managerial personnelMr. C A 31 March 2012 29 10 3 56

31 March 2011 — 2 34

Loans given to related parties are repayable on demand. These loans carry interest @ of 6% to 10% p.a.

c. Loans taken and repayment thereof

d. Remuneration to key managerial personnel

(` million)

Year ended Loans given Repayment Interest accrued

Amount owed by related parties

Holding companyHolding Limited 31 March 2012 20 150 — 220

31 March 2011 0 50 — 350

Loans taken from related parties are interest free and repayable on demand.

31 March 2012 ` millions

31 March 2011 ` millions

Mr. A.B. Managing directorSalary, bonus and contribution to PF 25 22ESOP cost 10 10

Mr. X. Y. Finance directorSalary, bonus and contribution to PF 10 9ESOP cost 3 3

Total 48 44

Note: The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are determined on an actuarial basis for the company as a whole.

e. Other transactionsi. During the year ended 31 March 2011, the company issued 35 million and 15 million CCPS of `10 each

fully paid-up at a premium of `40 per share to Holding Limited and Father Limited, respectively. For detailed terms of the CCPS, please refer note 3(c).

ii. During the year ended 31 March 2012, the company paid a final dividend of `2 and `0.7 (year ended 31 March 2011: `2 and `nil) per share on equity and preference shares, respectively. This includes dividend on equity and preference shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates, at the beginning of respective financial years. For detail of shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates, please refer note 3(d).

iii. The company has recognized dividend income of `nil (31 March 2011: `20 million) toward divided proposed by its subsidiary, C Limited. For further details, please refer note 2.1(a).

iv. The company has recognized income of `1 million (31 March 2011: `2 million) toward its share of profit in M/s ASQ (partnership firm).

v. Indian rupee loan of `1,375 million (31 March 2011: `1,500 million) from banks is guaranteed by the personal guarantee of the managing director of the company.

vi. Term loan from of `800 million (31 March 2011: `900 million) from financial institutions is guaranteed by the corporate guarantee of Father Limited, the ultimate holding company.

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Good Company (India) Limited 65

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

38. Capital and other commitments GIBS.6.T

a. At 31 March 2012, the company has commitments of `5 million (31 March 2011: `102 million) relating to the completion of the Baramati manufacturing facility and `2 million (31 March 2011: `1 million) relating to the company’s share in the jointly controlled entity.

b. At 31 March 2012, the company has commitments of `25 million (31 March 2011: `10 million) relating to further investment in subsidiary Rofil Investments Ltd.

c. At 31 March 2012, the company has commitment to pay `45 million (31 March 2011: `45 million) toward balance amount due on investments in equity share in Brother Limited.

d. At 31 March 2012, the company has commitment for non-disposal of its investment in subsidiary Rofil Investments Ltd. Similar commitment was there in the previous year also.

e. The company has obtained and recognized a government grant of `12 million during the current year (31 March 2011: `nil), for generating employment opportunities in the backward area. The company is obliged not to reduce its average number of employees in the backward area over the next two years under the terms of this government grant.

f. For commitments relating to lease arrangements, please refer note 32.

AS 27.51

39. Contingent liabilities

31 March 2012 ` millions

31 March 2011 ` millions

AS 29.68 GIBS.6.T

Claims against the company not acknowledged as debts * 1,560 1,700Share of guarantees given by the jointly controlled entity (E-Age & Co Limited)

120 120 AS 27.50

Bills of exchange discounted with banks 1,200 1,100Income-tax demand ** 1,500 1,500

4,380 4,420* The claims against the company comprise:

An overseas customer has commenced an action against the company in respect of equipments claimed to be defective. The company has estimated that if the action is successful, estimate liability may be approx. `1,500 million (31 March 2011: `1,600 million). A trial date has not yet been set and therefore it is not practicable to state the timing of any payment. The company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for liability has been recognized in the financial statements.

`60 million (31 March 2011: `100 million) in respect of claims made by lessors for land leased under tenancy agreements in respect of claims made by the Pollution Control Board. These claims are being contested in the courts by the company. The management does not expect these claims to succeed. Accordingly, no provision for the contingent liability has been recognized in the financial statements.

** Income tax demand comprise demand from the Indian tax authorities for payment of additional tax of `1,500 million (31 March 2011: `1,500 million), upon completion of their tax review for the financial years 2005-06 and 2006-07. The tax demands are mainly on account of disallowance of a portion of the tax holiday claimed by the company under the Income tax Act. The matter is pending before the Commissioner of Income tax (Appeals).

The company is contesting the demands and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the company’s financial position and results of operations.

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Indian GAAP Illustrative financial statements for the year ended 31 March 201266

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

40. Utilization of money raised through public issue

42. Deferral/capitalization of exchange differences AS 11.46A

41. Derivative instruments and unhedged foreign currency exposure ICAI Ann.Der

During the year ended 31 March 2010, the company has raised `250 million through public issue, specifically to meet its share in the cost of setting-up a new manufacturing facility at Baramati. The balance amount needs to be met out of bank finance. Given below are the details of utilization of proceeds raised through public issue.

GIBS.6.V

The Ministry of Corporate Affairs (MCA) has issued the amendment dated 29 December 2011 to AS 11 The Effects of Changes in Foreign Exchange Rates, to allow companies deferral/capitalization of exchange differences arising on long-term foreign currency monetary items.

Details of short-term investments made from unutilized portion of public issue raised during the year ended 31 March 2010.

31 March 2012 ` millions

31 March 2011 ` millions

Unutilized amount at the beginning of the year 75 250Less: amount utilized during the yearPurchase of land at Baramati — 80Purchase of plant and machinery 75 95Unutilized amount at the end of the year — 75

31 March 2012 ` millions

31 March 2011 ` millions

Investment in fixed deposits of banks — 75

Particulars PurposeForward contract to sell US$US$ 1.5 (31 March 2011: US$ .75) (`72.15 (31 March 2011: `33.78))

Hedge of highly probable foreign currency sales

Forward contract to buy US$US$8 (31 March 2011: US$ 8) (`368 (31 March 2011: `368))

Hedge of foreign currency loan

Interest rate swapsNotional amount US$10 (31 March 2011: US$10) (`465 (31 March 2011: `465))

Hedge against exposure to variable interest outflow on loans. Swap to pay fixed interest @5% p.a. and receive a variable interest @ LIBOR on the notional amount.

Particulars Purpose

Import trade payable (Euro) Euro 0.5 million (31 March 2011: nil) (`34.2 million (31 March 2011: nil))

Export trade receivable (US$) US$ 1.25 million (31 March 2011:US$0.65 million) (`59.38 million (31 March 2011: `28.93 million))

Foreign current loan (US$) US$2 million (31 March 2011: US$2 million) (`95 million (31 March 2011: `89 million))

a. Derivatives outstanding as at the balance sheet date

b. Particulars of unhedged foreign currency exposure as at the reporting date

(` million)

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Good Company (India) Limited 67

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

45. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Sec 22 MSMED

43. Subsequent events AS 4.17

44. Loans and advances in the nature of loans given to subsidiaries and associates and firms/companies in which directors are interested

LA – Clause 32

On 14 April 2012, there was a fire in one of the distribution warehouse in Mumbai. The loss of inventory caused by the fire was limited; however, the company expects that the fire may cause some disturbance in the operations for approx. 2 months. The management expects that loss of `50 million due to loss of inventory is fully recoverable from the insurer. The financial statements have not been adjusted to give effect to this expected loss.

a. A & Co.

Balance as at 31 March 2012 `8 million (31 March 2011: `9 million)Maximum amount outstanding during the year `9 million (31 March 2011: `10 million)The repayment schedule for the above loan is of 10 years.

b. M/s ADC

Balance as at 31 March 2012 `18 million (31 March 2011: `29million)Maximum amount outstanding during the year `29 million (31 March 2011: `32 million)There is no repayment schedule in respect of this loan. It is repayable on demand.

c. AXD Private Limited

Balance as at 31 March 2012 `33 million (31 March 2011: `39 million)Maximum amount outstanding during the year `42 million (31 March 2011: `39 million)There is no repayment schedule in respect of this loan. It is repayable on demand.

31 March 2012 ` millions

31 March 2011 ` millions

The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting yearPrincipal amount due to micro and small enterprises 40 12Interest due on above 2 —

42 12The amount of interest paid by the buyer in terms of section 16 of the MSMED Act 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year

1 —

The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act 2006.

— —

In accordance with the amendment/earlier amendment to AS 11, the company has capitalized exchange loss, arising on long-term foreign currency loan, amounting to `30 million (31 March 2011: `20 million) to the cost of plant and equipments. The company has also capitalized exchange gain, arising on long-term foreign forward contract, undertaken to partially hedge the foreign current loan, amounting to `24 million (31 March 2011: `16 million) to the cost of plant and equipments. The company does not have any other long-term foreign currency monetary item. Hence, the amount of exchange loss deferred in the “Foreign Currency Monetary Item Translation Difference Account” is ` nil (31 March 2011: ` nil).

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Indian GAAP Illustrative financial statements for the year ended 31 March 201268

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

46. Value of imports calculated on CIF basis GIPL.5.viii.a

47. Expenditure in foreign currency (accrual basis) GIPL.5.viii.b

31 March 2012 ` millions

31 March 2011 ` millions

Raw materials 5,882 5,660Components and spare parts 226 244Capital goods 14 23

6,122 5,927

31 March 2012 ` millions

31 March 2011 ` millions

Professional fees 34 26Interest 29 27Travelling and conveyance 72 62

135 115

48. Imported and indigenous raw materials, components and spare parts consumed

GIPL.5.viii.c

Year ended 31 March 2012 % of total consumption

31 March 2012

Value (` millions)

31 March 2011

% of total consumption

31 March 2012

Value (` millions)

31 March 2011

Raw Materials

Imported 13 5,230 13 5,343

Indigenously obtained 87 36,396 87 35,942

100 41,626 100 41,285

Components

Imported 7 237 11 245

Indigenously obtained 93 3,041 89 1,944

100 3,278 100 2,189

Spare parts

Imported 11 116 11 98

Indigenously obtained 89 905 89 825

100 1,021 100 923

31 March 2012 ` millions

31 March 2011 ` millions

The amount of interest accrued and remaining unpaid at the end of each accounting year

2 —

The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the MSMED Act 2006

— —

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Good Company (India) Limited 69

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

49. Net dividend remitted in foreign exchange GIPL.5.viii.d

50. Earnings in foreign currency (accrual basis) GIPL.5.viii.e

Year of remittance (ending on) 31 March 2012 ` millions

31 March 2011 ` millions

Period to which it relates 1 April 2010 to 31 March 2011

1 April 2009 to 31 March 2010

Number of non-resident shareholders 7 5 Number of equity shares held on which dividend was due 15,000 11,000 Amount remitted (in USD) 635 498

Year of remittance (ending on) 31 March 2012 ` millions

31 March 2011 ` millions

Exports at F.O.B. Value 10,823 7,976Commission Income 25 21

10,848 7,997

51. Previous year figuresTill the year ended 31 March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. The company has reclassified previous year figures to conform to this year’s classification. Except accounting for dividend on investments in subsidiaries, the adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet. The following is a summary of the effects that revised Schedule VI had on presentation of balance sheet of the company for the year ended 31 March 2011:

Pre-revised Schedule VI Revised Schedule VI

Heading Amount Adjustment Amount Heading Nature of adjustment

Sources of funds Equity and liabilitiesShareholders’ Funds Shareholders’ FundsShare capital 5,700 — 5,700 Share capitalESOP outstanding 3,973 (3,973) — ESOP outstanding A/c

disclosed as part of reserves

Reserves and surplus 7,005 3,973 10,978

16,678 — 16,678Loan funds Non-current liabilities

(NCL)Secured loans 5,437Unsecured loans 1,656

7,093 (2,402) 4,691 Long-term borrowings Refer working note 1Deferred payment liabilities

600 (600) — Refer working note 1

1,623 1,623 Trade payables Non-current component

— 308 308 Other long-term liabilities

Refer working note 2

— 1,843 1,843 Long-term provisions Non-current component

7,693 772 8,465

(All amounts in ` million)

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Indian GAAP Illustrative financial statements for the year ended 31 March 201270

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Pre-revised Schedule VI Revised Schedule VI

Heading Amount Adjustment Amount Heading Nature of adjustment

Current liabilities and provisions

Current liabilities

— 2,690 2,690 Short-term borrowings Refer working note 1Sundry creditors 8,165 (1,623) 6,542 Trade payables Non-current

component regrouped as NCL

Current liabilities 1,545 4 1,549 Other current liabilities Refer working note 3Provisions 3,601 (1,843) 1,758 Short-term provisions Non-current

component regrouped as NCL

13,311 (772) 12,539

37,682 — 37,682

Application of funds AssetsNon-current assets (NCA)

Fixed assets Fixed assetsNet block 7,675 — 7,675 Tangible assetsCWIP including capital advances

1,176 (164) 1,012 Capital work-in-progress Capital advances disclosed as loan and advances

Intangible assets 332 — 332 Intangible assetsIntangible assets under development

19 — 19 Intangible assets under development

Fixed asset held for sale

353 — 353 Fixed asset held for sale

Investments 808 (181) 627 Non-current investments Current investment regrouped as CA

Deferred tax assets (net) 351 — 351 Deferred tax assets (net)— 3,894 3,894 Long-term loans and

advancesNon-current component of loans and advances plus capital advance

— 757 757 Trade receivables Non-current component

— 322 322 Other non-current assets Non-current component of bank balances, other debtors and interest accrued, etc.

10,714 4,628 15,342

(All amounts in ` million)

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Good Company (India) Limited 71

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

Pre-revised Schedule VI Revised Schedule VI

Heading Amount Adjustment Amount Heading Nature of adjustment

Current assets, loans and advances

(CA)

Interest accrued on investments

21 (21) — Non-current component regrouped as NCA

— 181 181 Current investments Current componentInventories 10,772 — 10,772 InventoriesSundry debtors 8,708 (862) 7,846 Trade receivables Refer working note 4Cash and bank balances 2,774 (183) 2,591 Cash and bank balances Non-current

component regrouped as NCA

Other current assets 68 (13) 55 Other current assets Non-current component of accrued interest and unamortized costs

Loans and advances 4,625 (3,730) 895 Short-term loans and advances

Refer working note 5

26,968 (4,628) 22,34037,682 — 37,682

1 Long-term borrowingsSecured and unsecured loans as per pre-revised Schedule VI 7,093

Add: deferred payment liabilities having more than 12 months maturity regrouped as long-term borrowings

600

Less: loans having original maturity of less than 12 months maturity regrouped as short-terms borrowings.

(2,690)

Less: current portion of long-term borrowings (311)Less: interest accrued and due on borrowings (1) (2,402)

4,691

2 Other long-term liabilitiesAmount as per pre-revised Schedule VI Nil

Add: advance from customers 208 Unearned revenue 100 308

308

3 Other current liabilitiesCurrent liabilities as per pre-revised Schedule VI 1,545

Add: current portion of long-term borrowings 311 Add: interest accrued and due on borrowings 1 Less: non-current component of advance from customers (208)Less: non-current component of unearned revenue (100) 4

1,549

4 Trade receivables (current)Sundry debtors as per pre-revised Schedule VI 8,708

Less: non-current component of trade receivables (757)Less: non-current component of other debtors (82)Less: current component of other debtors (23) 862

7,846

Working notes

(All amounts in ` million)

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Indian GAAP Illustrative financial statements for the year ended 31 March 201272

Good Company (India) LimitedNotes to financial statements for the year ended 31 March 2012

As per our report of even dateFor Professional Accountants & AssociatesFirm registration number: ABCXYZ

Chartered Accountants

per DST SinghPartnerMembership no.: AMNO1234

Place: MumbaiDate: 28 April 2012

For and on behalf of the board of directors of Good Company (India) Limited

ADC Sharma[Managing Director]

MNT Kumar[Director]

TSL Singh[Company Secretary]

Commentary

The revised Schedule VI does not mandate the company to present any reconciliation explaining the impact of its adoption. However, the management believes that presentation of such reconciliation will help in clarifying the restatement of previous year balances into current and non-current classification. Accordingly, the management has elected to present this reconciliation as additional information.

5 Short-term loans and advancesLoans and advances as per pre-revised Schedule VI 4,625

Less: non-current componentSecurity deposit (451)Advances recoverable in cash or kind (3,040)Loans to employees (28)Balances with statutory/government authorities (211) 3,730

895

(All amounts in ` million)

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Good Company (India) Limited 73

Appendix 1: Exemptions/relaxations for SMCs

Definition of small and medium-sized company (SMC)As per the Companies (Accounting Standards) Rules, 2006 (as amended), an SMC is a company that complies with all the following conditions:

1. Its equity or debt securities are neither listed nor are in the process of listing on any stock exchange, whether in India or outside India.

2. It is not a bank, financial institution or an insurance company.

3. Its turnover (excluding other income) does not exceed `500 million (50 crore) in the immediately preceding accounting year.

4. It does not have borrowings (including public deposits) in excess of `100 million (ten crore) at any time during the immediately preceding accounting year.

5. It is not a holding or subsidiary company of a company which is not a SMC.

Explanation: A company qualifies as an SMC, if the conditions mentioned above are satisfied as at the end of the relevant accounting period.

Instructions for providing exemptions/relaxation to SMCs1. An SMC, which does not disclose certain information pursuant to the exemptions or relaxations given, will

disclose (by way of a note in its financial statements) the fact that it is an SMC and has complied with the accounting standards insofar as they are applicable to an SMC on the following lines:

“The company is a small and medium-sized company (SMC) as defined in the General Instructions in respect of Accounting Standards notified under the Companies Act, 1956. Accordingly, the company has complied with the Accounting Standards as applicable to an SMC.”

2. Where a company, being an SMC, has qualified for any exemption or relaxation previously but no longer qualifies for the relevant exemption or relaxation in the current accounting period, the relevant standards or requirements become applicable from the current period and the figures for the corresponding period of the previous accounting period need not be revised merely by reason of its having ceased to be an SMC. However, the fact that the company was an SMC in the previous period and it had availed of the exemptions or relaxations available to SMCs should be disclosed in the notes to the financial statements.

3. No company will be qualified for exemption or relaxation available to an SMC until the company remains an SMC for two consecutive accounting periods.

4. If an SMC opts not to avail exemptions or relaxations available to an SMC in respect of any but not all of the accounting standards, it will disclose the standard(s) in respect of which it has availed the exemption or relaxation.

5. If an SMC desires to disclose the information not required to be disclosed pursuant to the exemptions or relaxations available to the SMCs, it will disclose that information in compliance with the relevant accounting standard.

6. The SMC may opt for availing certain relaxation and disclosure requirement prescribed in an accounting standard provided that such a partial relaxation and disclosure will not be permitted to mislead any person or public.

Exemptions/relaxations available1. The following accounting standards are not applicable to an SMC since the relevant regulators require

compliance with these standards only by certain non-SMCs:

• AS 21 Consolidated Financial Statements

• AS 23 Accounting for Investments in Associates in Consolidated Financial Statements

• AS 27 Financial Reporting of Interests in Joint Ventures (to the extent of requirements relating to consolidated financial statements)

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Appendix 1: Exemptions/relaxations for SMCs

2. An SMC is exempt from applying the following accounting standards in entirety. However, it is encouraged to apply the same.

• AS 3 Cash Flow Statement

• AS 17 Segment Reporting

3. Accounting standards in respect of which relaxations from certain disclosure requirements have been given to an SMC:

• AS 15 Employee Benefits

An SMC need not comply with the following requirements of AS 15:

i. An SMC is not required to apply the requirements of AS 15 regarding short-term compensated absences to the extent they deal with accumulating compensated absences which are non-vesting (i.e., which are not encashable).

ii. An SMC is not required to discount the amounts that fall due more than 12 months after the reporting date.

iii. Accounting for defined benefit plans has been simplified on the following lines:

a. An SMC should determine and provide for accrued liability by using the projected unit credit method (PUCM).

b. The discount rate used should be determined by reference to market yields at the reporting date on government bonds.

An SMC should disclose actuarial assumptions in accordance with AS 15. The other recognition, measurement, presentation and disclosure requirements of AS 15 concerning defined benefit plans are not applicable to an SMC.

iv. Accounting for other long-term employee benefits has been simplified on the following lines::

a. An SMC should determine and provide for accrued liability by using the PUCM.

a. The discount rate used should be determined by reference to market yields at the reporting date on government bonds.

The other recognition and measurement requirements of AS 15 concerning other long-term employee benefits are not applicable.

• AS 19 Leases

Relaxations from certain disclosure requirements of AS 19 have been provided to SMCs. For example, in the financial statements of a Lessee which is an SMC, the following disclosures are not required to be made for finance leases:

• Reconciliation between the total of minimum lease payments at the reporting date and their present value.

• The total of minimum lease payments at the reporting date, and their present value, for each of the following periods:

• Not later than one year

• Later than one year and not later than five years

• Later than five years.

• Total of future minimum sublease payments expected to be received under non-cancellable subleases at the reporting date

• General description of the lessee’s significant leasing arrangements including, but not limited to, the following:

• The basis on which contingent rent payments are determined.

• The existence and terms of renewal or purchase options and escalation clauses.

• Restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing.

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Good Company (India) Limited 75

Appendix 1: Exemptions/relaxations for SMCs

Similar relaxations have been provided in respect of Operating Leases and to the Lessors also.

• AS 20 Earnings Per Share

The disclosure of diluted earnings per share (both including and excluding extraordinary items) is not mandatory for SMCs. Such companies are however encouraged to make these disclosures.

• AS 28 Impairment of Assets

An SMC has been permitted to make a reasonable estimate of “value in use” for computation of impairment instead of using the present value technique. Consequently, if an SMC chooses to measure the “value in use” by not using the present value technique, the relevant provisions of AS 28, such as discount rate, would not be applicable to such an SMC. Further, such an SMC need not disclose the information regarding discount rate (s) used.

• AS 29 Provisions, Contingent Liabilities and Contingent Assets

For each class of provision, the following disclosures are not required to be made by an SMC:

i. The carrying amount at the beginning and end of the period

ii. Additional provisions made in the period, including increases to existing provisions

iii. Amounts used (i.e., incurred and charged against the provision) during the period

iv. Unused amounts reversed during the period

v. Description of the nature of the obligation and the expected timing of any resulting outflows

vi. An indication of the uncertainties about those outflows

vii. The amount of any expected reimbursement, stating the amount of any asset that has been recognized for that expected reimbursement.

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Indian GAAP Illustrative financial statements for the year ended 31 March 201276

Note:

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Good Company (India) Limited 77

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Indian GAAP Illustrative financial statements for the year ended 31 March 201278

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Ahmedabad2nd floor, Shivalik IshaanNear. C.N Vidhyalaya Ambawadi, Ahmedabad – 380 015 Tel: + 91 79 6608 3800Fax: + 91 79 6608 3900

Bengaluru12th & 13th floor “U B City” Canberra Block No.24, Vittal Mallya Road Bangaluru – 560 001 Tel: + 91 80 4027 5000 + 91 80 6727 5000Fax: + 91 80 2210 6000 (12th floor)Fax: + 91 80 2224 0695 (13th floor)

Chandigarh1st Floor SCO: 166-167Sector 9-C, Madhya MargChandigarh – 160 009 Tel: + 91 172 671 7800Fax: + 91 172 671 7888

ChennaiTidel Park, 6th & 7th Floor A Block (Module 601,701-702)No.4, Rajiv Gandhi Salai Taramani Chennai – 600 113Tel: + 91 44 6654 8100Fax: + 91 44 2254 0120

Hyderabad Oval Office 18, iLabs Centre,Hitech City, Madhapur,Hyderabad – 500 081Tel: + 91 40 6736 2000Fax: + 91 40 6736 2200

Kochi9th Floor “ABAD Nucleus”NH-49, Maradu PO, Kochi – 682 304 Tel: + 91 484 304 4000Fax: + 91 484 270 5393

Kolkata22, Camac Street 3rd Floor, Block C” Kolkata – 700 016 Tel: + 91 33 6615 3400 Fax: + 91 33 2281 7750

Mumbai 6th Floor Express Towers Nariman Point Mumbai – 400 021 Tel: + 91 22 6192 0000 Fax: + 91 22 6192 2000

14th Floor, The Ruby29 Senapati Bapat MargDadar (west)Mumbai – 400 028Tel + 91 22 6192 0000Fax + 91 22 6192 1000

5th Floor Block B-2, Nirlon Knowledge ParkOff. Western Express HighwayGoregaon (E)Mumbai – 400 063Tel: + 91 22 6192 0000 Fax: + 91 22 6192 3000

NCRGolf View Corporate Tower – BNear DLF Golf Course, Sector 42Gurgaon – 122 002Tel: + 91 124 464 4000Fax: + 91 124 464 4050

6th floor, HT House18-20 Kasturba Gandhi MargNew Delhi – 110 001Tel: + 91 11 4363 3000Fax: + 91 11 4363 3200

4th & 5th Floor, Plot No 2B,Tower 2, Sector 126,Noida – 201 304Gautam Budh Nagar, U.P. IndiaTel: + 91 120 671 7000Fax: + 91 120 671 7171

PuneC—401, 4th floorPanchshil Tech ParkYerwada (Near Don Bosco School)Pune – 411 006Tel: + 91 20 6603 6000Fax: + 91 20 6601 5900

Office

Artwork by: JG

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Ernst & Young Pvt. Ltd.Assurance | Tax | Transactions | Advisory

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