FINANCIAL POLICY OF NESTLE

INDIA

CORPORATE INFORMATION
Nestle India Limited is a company domiciled in India, with its registered office
situated at 100/101, World Trade Centre, Barakhamba Lane, New Delhi - 110
001. The Company has been incorporated under the provisions of Indian
Companies Act and its equity shares are listed on the BSE Limited in India. The
Company is primarily involved in Food business which incorporates product
groups viz. Milk Products and Nutrition, Prepared dishes and Cooking aids,
Powdered and Liquid Beverages and Confectionery.

SIGNIFICANT FINANCIAL POLICIES BASIS OF:

PREPARATION AND MEASUREMENT
Statement of compliance The financial statements of the Company have been
prepared in accordance with and to comply in all material aspects with the
Indian Accounting Standards (Ind AS) as notified under Section 133 of the
Companies Act, 2013 read with Companies (Indian Accounting Standards)
Rules, 2015 and the relevant provisions of the Act, as applicable.

REVENUE RECOGNITION
Revenue from sale of goods is recognized on transfer of significant risks &
rewards of ownership and effective control to the buyer. Revenue is measured at
the price charged to the customer and are recorded net of returns (if any), trade
discounts, rebates, other pricing allowances to trade/consumer, when it is
probable that the associated economic benefits will flow to the company. Sales
are presented gross of excise duty and net of Goods and Services Tax (GST),
Value Added Tax (VAT)/ Sales Tax, wherever applicable.

EMPLOYEE BENEFITS
Employee benefit plans The Company makes contributions to Provident Fund,
Employee State Insurance, National Pension System etc. for eligible employees
and these contributions are charged to statement of profit and loss on accrual
basis. Liability for defined benefit plans i.e. gratuity and unfunded pension is
determined based on the actuarial valuation carried out by an independent
actuary as at the year-end.

DEPRECIATION / AMORTISATION
The Company has assessed the useful lives of fixed assets as per Schedule II to
the Companies Act, 2013. Accordingly, depreciation has been computed on
useful lives based on technical evaluation of relevant class of assets including
components
IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT
At each balance sheet date, items of property, plant and equipment are reviewed
to determine whether there is any indication of impairment. For the purpose of
assessing impairment, assets are grouped at the levels for which there are
separately identifiable cash flows (cash generating unit). If any impairment
indicator exists, estimate of the recoverable amount of the property, plant and
equipment /cash generating unit to which the asset belongs is made.

INCOME TAX
Income tax expense comprises of current tax and deferred tax. Income tax
expense is recognized in the statement of profit and loss, except when it relates
to items recognized in the other comprehensive income or items recognized
directly in the equity.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents for the purpose of Statement of Cash Flows include
bank balances, cheques and drafts on hand including remittances in transit,
demand deposits with banks where the original maturity is three months or less
and other short term highly liquid investments that are readily convertible into
cash and which are subject to an insignificant risk of changes in value. Bank
overdrafts are included as a component of cash and cash equivalents for the
purpose of Statement of Cash flows.

EVENTS OCCURING AFTER THE BALANCE SHEET DATE

All material events occurring after the balance sheet date up to the date of
approval of financial statements by the board of directors on 14 February 2018,
have been considered, disclosed and adjusted, wherever applicable, as per the
requirements of Ind AS 10 - Events after the Reporting Period.
LEASES
Lease rentals for operating leases are charged to statement of profit and loss on
accrual basis in accordance with the respective lease agreements.
FOREIGN EXCHANGE TRANSACTIONS
Transactions in foreign currency are recorded on initial recognition at the
exchange rate prevailing on the date of the transaction.
Monetary items (i.e. receivables, payables, loans etc.) denominated in foreign
currency are reported using the closing exchange rate on each balance sheet
date.
BORROWING COSTS
Borrowing costs directly attributable to acquisition or construction of fixed
assets which take substantial period of time to get ready for their intended use
are treated as addition/ reduction to capital expenditure in accordance with
Accounting Standard 16 on “Borrowing Costs” and notification no. G.S.R.
225(E) dated March 31, 2009 and subsequent clarification via circular no.
25/2012 dated August 09, 2012 issued by Ministry of Corporate Affairs,
Government of India.
GOVERNMENT GRANTS
Government grant in relation to fixed asset is treated as deferred income and is
recognized in the statement of profit and loss on a systematic basis over the
useful life of the asset.