NOTES TO THE FINANCIAL STATEMENTS

1. Company Overview:

Xpro India Limited ("the Company") is a public company incorporated as "Biax Films Limited" on November 26, 1997 under the Companies Act, 1956; the brsent name was adopted w.e.f. September 22, 1998. Equity shares of the Company are listed on National Stock Exchange and are admitted for trading on Bombay Stock Exchange. Organized into operating divisions for operational convenience, the Company is engaged mainly in the business of Polymers Processing at multiple locations and is the leading manufacturer in India of Coextruded Plastic Sheets, Thermoformed Liners and Specialty Films (including Dielectric Films and special purpose BOPP Films).

2. Significant Accounting Policies

2.1 Basis of Preparation of Financial Statements

The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 ("the Act").

The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of then financial statements are consistent with those followed in the brvious year.

2.2 Use of Estimates

The brparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates as are recognised in the periods in which the results are known / materialise.

2.3 Fixed Assets

Fixed Assets are stated at cost less accumulated debrciation/amortization and impairment losses, if any. Cost comprises of freight, duties, taxes, interest and other incidental expenses related to acquisition and installation.

Fixed assets acquired and put to use for project purposes are capitalized when the project is ready for intended use and all costs and revenues till then are capitalized with the project cost. Projects under which tangible fixed assets are not yet ready for their intended use are carried as capital-work-in-progress at cost comprising direct cost, related incidental expenses and attributable interest.

The Company has opted for accounting the exchange differences arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules 2009 relating to Accounting Standard 11 (AS-11) notified by Government of India on 31st March, 2009. Accordingly the effect of exchange differences on foreign currency loans of the Company is accounted by addition or deduction to the cost of the assets so far it relates to debrciable capital assets and in other cases accumulated in a "Foreign Currency Monetary Item Translation Difference Account" in the enterprise's financial statements and amortised over the balance period of such long term asset or liability, by the recognition as income or expense in each of such periods.

2.4 Debrciation/Amortization

Debrciation on tangible fixed assets has been provided on the Straight Line Method as per the useful life brscribed in Schedule II to the Companies Act, 2013. Certain Plant & Machinery are considered as continuous process plants based on technical evaluation. Debrciation on addition/disposal is provided pro-rata with reference to date of addition/disposal. Leasehold lands and development expenses thereof are amortized over the period of lease. Software is amortized over a period of six years. Technical know-how fees are amortized over the life of the plant from the date of commencement of commercial production using such know-how.

2.5 Impairment

The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset/cash generating unit exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selli ng price and value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value based on an appropriate discounting factor.

2.6 Investments

Long term Investments are stated at cost less provision for diminution in value other than temporary, if any.

2.7 Inventories

Inventories include stock-in-transit/bonded warehouses and with others for manufacturing / processing / replacement. Inventories are valued at lower of cost and net realizable value. Cost is determined on the weighted average method. Finished goods and process stock include cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition, and excise duty, as applicable.

2.8 Revenue Recognition

i. 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.

ii. Sale of goods: Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the customer (on despatch to the customer). Excise Duty deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount of liability that arose during the year. Sales are recognised net of sales tax.

iii. Income from Services: Revenue (including sales commission) is recognized on accrual basis (proportionate completion method).

iv. Interest: Time pro-rated revenue is recognized taking into account the amount outstanding and rate applicable.

v. Others: Wherever it is not possible to determine the quantum of accrual with reasonable certainty, e.g. Insurance & other claims, refund of Customs Duty and export incentives these continue to be accounted for on cash basis.

2.9 Borrowing Cost

Borrowing costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalization of such asset are is added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

2.10 Foreign Currency Transactions

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate brvailing at time of transaction. Monetary items denominated in foreign currencies and outstanding at the year-end are translated at year-end rates. Exchange differences arising on settlement of short-term monetary items at rates different from those at which they were initially recorded are recognized as income or as expenses in the year in which they arise.

The Company has opted for accounting the exchange differences arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules 2009 relating to Accounting Standard 11 (AS-11) notified by Government of India on 31st March, 2009. Accordingly the effect of exchange differences on foreign currency loans of the Company is accounted by addition or deduction to the cost of the assets so far it relates to debrciable capital assets and in other cases accumulated in a "Foreign Currency Monetary Item Translation Difference Account" in the enterprise's financial statements and amortised over the balance period of such long term asset or liability, by the recognition as income or expense in each of such periods.

2.11 Research & Development ('R&D')

Revenue expenditure on R&D is charged to Statement of Profit and Loss account under respective heads of account and fixed assets utilized for R&D are capitalised and debrciated in accordance with the policy.

2.12 Government Grants, Subsidies and Export Incentives

Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants/subsidies will be received. Grants relating to Fixed Assets are deducted from the gross value of the Fixed Assets and those of the nature of Project Capital Subsidy are credited to Capital Subsidy Reserves & other Government grants including export incentives are credited to Statement of Profit & Loss or deducted from the related expenses. Other Government grants/subsidies are recognised as income over the period necessary to match them with the cost for which they are intended to compensate, on a systematic basis.

.13 Employee benefits

Contributions to Provident Fund and Superannuation Fund, which are defined contribution schemes, are made to government administered/approved Provident Fund(s) and an LIC administered fund respectively, and are charged to the Statement of Profit and Loss as incurred. The Company has no further obligations beyond its monthly contributions to these funds. Provision for gratuity and compensated absence, under LIC administered fund(s), which are in the nature of defined benefit plans, are provided based on valuations, as at the balance sheet date, carried out by an independent actuary. Termination benefits are recognized as expense as and when incurred.

2.14 Taxation

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed debrciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed debrciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.

Current and deferred tax relating to items directly recognised in reserves are recognised in reserves and not in the Statement of Profit and Loss.

2.15 Employees Stock Option Plan

The accounting value of stock options rebrsenting the excess of the market price on the date of grant over the exercise price of the shares granted under "Employees' Stock Option Scheme" of the Company, is amortized as "Deferred employees compensation" on a straight-line basis over the vesting period in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

2.16 Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources to settle the obligation in respect of which a reliable estimate can be made. Contingent liabilities, if any, are not recognized in the accounts but are disclosed by way of notes. Contingent assets are neither recognized nor disclosed in the financial statements.

2.17 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.18 Service tax input credit

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing / utilising the credits.

2.19 Operating Cycle

Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of classification of assets and liabilities as current and non-current.

5. Long-term Borrowings

a. Term Loan from State Bank of India, outstanding Rs.4,44,65,564 (brvious year: Rs. 5,79,65,564), carrying interest linked to the bank's Base Rate, repayable in (i) 2 quarterly installments of Rs.30.00 lacs each paid in December 2012 and March 2013; (ii) 20 quarterly installments of Rs.45.00 lacs each starting from June 2013; & (iii) 2 quarterly installments of Rs.20.00 lacs each payable in June 2018 and September 2018 is secured by pari-passu charge by way of hypothecation/mortgage of all the movable and immovable assets, brsent and future, of the Company situated at Ranjangaon & second charge on all the current assets of the Company ranking pari-passu with other term lenders;

b. Term Loan from Punjab National Bank, outstanding Rs.9,60,00,000 (brvious year: Rs. 11,40,00,000), carrying interest linked to the bank's Base Rate, repayable in 16 quarterly installments of (a) first 4 of Rs.40,00,000 each; (b) next 4 of Rs.45,00,000 each; (c) next 4 of Rs.90,00,000 each and (d) last 4 of Rs.1,50,00,000 each, commencing from April 2014, is secured by pari-passu charge by way of hypothecation/mortgage of all movable and immovable assets, brsent and future, of the Company situated at Ranjangaon & second charge on all the current assets of the Company ranking pari-passu with other term lenders;

c. ECB from Bremer Kreditbank AG ('BKB Bank') (formerly known as KBC Bank Deutschland AG), in the nature of term loan, outstanding €7,938,018.72; equivalent to Rs.60,15,43,055 (brvious year: €8,505,020.06 equivalent to Rs.58,19,13,470), carrying interest linked to Euribor, repayable in 16 semi-annual installments of €567,001.34 each, along with interest, commencing from October 2014, is secured by hypothecation of specified Dielectric Film Line and slitter to be installed at Barjora and is insured under Hermes export credit guarantee.

d. Term Loans under SBI TL Consortium comprising (i) State Bank of India: outstanding Rs.22,08,00,000 (brvious year: Rs.26,22,00,000) repayable in 20 quarterly installments of Rs.1,38,00,000, along with interest, commencing from March, 2015; (ii) State Bank of Hyderabad: outstanding Rs.17,59,50,000 (brvious year: Rs.20,70,00,000) repayable in 20 quarterly installments of Rs.1,03,50,000 each, along with interest, commencing from April, 2015; and (iii) State Bank of

Patiala: outstanding Rs.17,00,00,000 (brvious year: Rs.20,00,00,000) repayable in 20 quarterly installments of  Rs.1,00,00,000 each, along with interest, commencing from April, 2015; carrying interest linked to the respective Bank's Base Rates are secured by pari-passu charge by way of hypothecation/mortgage of all movable and immovable assets, brsent and future, of the Company situated at Barjora (excluding specified Dielectric Film Line and slitter which are exclusively charged to BKB Bank) & second charge on all the current assets of the Company ranking pari-passu with other term lenders excluding BKB Bank;

e. Term Loan from Allahabad Bank, outstanding Rs.14,89,97,855 (brvious year: Rs.2,00,00,000), carrying interest linked to  the bank's Base Rate, repayable in 17 quarterly instalments of Rs.84,00,000 and last instalment of Rs.72,00,000  commencing from September 2016, is secured by pari-passu charge by way of hypothecation/mortgage of all the movable and immovable assets, brsent and future, of the Company's unit situated at Ranjangaon, & second charge on all the current assets of the Company ranking pari-passu with other term lenders;

f. Corporate Loan from Allahabad Bank, outstanding Nil (brvious year: Rs.8,25,00,000), carrying interest linked to the bank's Base Rate, is repayable in bullet payment of Rs.8,25,00,000 in June 2015 and is secured by first charge by way of hypothecation/mortgage of all the movable and immovable assets, brsent and future, of the Coex Division of the Company situated at Faridabad & second charge on all the current assets of the Company ranking pari-passu with other term lenders;

g. Corporate Loan from State Bank of India, outstanding Rs.5,79,00,000 (brvious year: Rs.7,38,00,000), carrying interest linked to the bank's Base Rate, is repayable in 16 quarterly installments of Rs.53,00,000 each and last 2 installments of Rs.52,00,000 and Rs.50,00,000 respectively commencing from June, 2014 is secured by first charge by way of hypothecation/mortgage of all the movable and immovable assets, brsent and future, of the Coex Division of the Company situated at Greater Noida & second charge on all the current assets of the Company ranking pari-passu with other term lenders;

h. Corporate Loan from State Bank of Hyderabad, outstanding Rs.15,00,00,000 (brvious year: Rs.15,00,00,000), carrying interest linked to the bank's Base Rate, is repayable in 17 quarterly installments of Rs.83,00,000 each and last installment of Rs.89,00,000 commencing from July, 2016 is secured by first charge by way of hypothecation/mortgage of all the movable and immovable assets, brsent and future, of the Biax Division of the Company situated at Pithampur & second charge on all the current assets of the Company ranking pari-passu with other term lenders;

i.  Corporate Loan from State Bank of India, outstanding Rs. 3,65,00,000 (brvious year: Rs. Nil), carrying interest linked to the bank's Base Rate, is repayable in 14 equal installments of Rs.18,25,000 each starting from December 2017 followed by 4 installments of Rs.27,37,500 each and is secured by ranking pari-passu first charge by way of hypothecation/mortgage of all the movable and immovable assets, brsent and future, of the Coex Division of the Company situated at Faridabad & on all the current assets of the Company ranking pari-passu with other working capital lenders;

Corporate Loan from Allahabad Bank, outstanding Rs. 10,00,00,000 (brvious year: Rs. Nil), carrying interest linked to the bank's Base Rate is repayable in 5 equal installments of Rs.30,00,000 each starting from March 2016, followed by 12 installments of Rs.60,00,000 each and last installment of Rs.1,30,00,000 and is secured by ranking pari passu first charge by way of hypothecation/mortgage of all the movable and immovable assets, brsent and future, of the Coex Division of the Company situated at Faridabad & second charge on all the current assets of the Company ranking pari -passu with other term lenders;

Car Loan(s) of Rs.54,40,204 (brvious year: Rs.54,67,565) carrying interest linked to the bank's Base Rate, repayable in 36 monthly installment(s) commencing from date of disbursement, are secured by hypothecation of specified vehicles.

Previous year's figures have been regrouped/reclassified as necessary.

For and on behalf of the Board

Sidharth Birla

Chairman

S. C. Jain V. K. Agarwal C. Bhaskar

Company Secretary Joint President & Managing Director Chief Financial Officer Chief Executive Officer  

Date : May 5, 2016

Place : New Delhi