financial statements and auditors^ report 31 march 2018 · % c? % &' ^ a c^ g * s k ^ ^...

Financial Statements and Auditors^ Report

31 March 2018

H & B Stores Liniited

Walker Chandiok&.Co LLP

Walker Chandiok & Co LLP(Formerly Walker, Chandiok&Co)21st Floor, DLF SquareJacaranda Marg, DLF Phase IIGurgaon 122002India

T+91 1244628000F +91 1244628001

Independent Auditor's Report

To the Members ofH&B Stores Limited

Report on the Financial Statements

1. We have audited die accompanying financial statements of H & B Stoces Limited ('Ac Company'), whichcomprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (Including OtherComprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity foe the yearthen ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. The Company's Board of Directocs Is responsible for the matters stated in Section l34(5) of theCompanies Act, 2013 ('the Act') with respect to the preparation of these financial statements that give atrue and fair view of the state of affairs (financial position), profit or loss (fmancial performance includingother comprehensive income), cash flows and changes in equity of the Company tn accordance with theaccounting principles generally accepted in India, including the Indian Accoundng Standards ('Ind AS')specified under Section 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accocdance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecdng frauds and other kregularities; selecdon and application ofappropriate accounting policies; making judgments and estimates that are reasonable and prudent; anddesign, implementadon and maintenance of adequate internal fuiandal controls, that were opecadngeffecdvely for ensuring the accuracy and completeness of the accounting records, relevant to thepreparadon and presentadon of the financial statements that give a u-ue and fair view and are free frommaterial misstatement, whetlier due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We have taken into account die. provisions of the Act, the accounting and auditing standards and matterswhich are required to be included In the audit report under the provisions of the Act and the Rules madethereunder.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) ofthe Act. Those Standards require that we comply with ethical requirements and plan and pecform theaudit to obtain reasonable assurance about whether diese financial statements are free from materialmis statement.

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Chartered Accountants

Offices in Bengalum, Chandigarh, Chennai, Gurgaon. Hyderabad, Kolkata, Mumbai, New Delhi, Noida and Pune

Walker Chandiok & Co Uf is registered with limited liabilwith identification number AAC-2085 and its registeredoffice at L41 Connaueht Circus. New Delhi. 110001. Ind

WaikerChandiok&.CoLLPIndependent Auditor's Report of even date to the members of H & B Stores Limited, on thefinancial statements for the year ended 31 March 2018 (Cont'd)

6. An audit involves performing pcocedures to obtain audit evidence about the amounts and the disclosuresin the tinancial statements. The procedures selected depend on the auditor's judgment, including theassessment of die risks of material rrusstatement of the fmandal statements, whether due to fraud or

error. In making those risk assessments, the auditor considecs internal fmancial controls celevant to dieCompany's preparadon of the financial statements that gi.ve a true and fair view In order to design auditprocedures that are appropriate in the circumstances. An audit also Includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accounting estimates madeby the Company's Directocs, as well as evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on these financial statements.

Opinion

8. In our opinion and to the best of our informadon and accocding to the explanarions given to us, dieaforesaid financial statements give the informadon required by the Act in the manner so required and givea true and fair view in conformity with the accounting principles generally accepted in tndia includingInd AS specified under Secdon 133 of the Act, of the state of affairs (financial position) of the Companyas at 31 March 2018, and its profit (financial performance tncluding other compt-ehensive income), itscash flows and the changes In equity foe the year ended on that date.

Other Matter

9: The financial statements of the Company for the year ended 31 March 2017 were audited by anotherauditor who had expressed an unmodified opinion on those financial statements vide their auditreport dated 27 Apttl 2017. Our opinion is not modified in respect of this matter-

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor's Report) Order, 2016 ('the Order') issued by the CentralGovernment of India In terms of Secdon 143(11) of the Act, we give in the Annexure A a statement onthe matters specified in paragraphs 3 and 4 of the Order.

11. Further to our comments i.n Annexure A, as required by Secdon l43(3) of the Act, we report that:

a) we have sought and obtained all the informadon and explanadons which to die best of ourknowledge and belief were necessary for the puq^ose of our audit;

b) in our opinion, proper books of account as required by law have been kept by the Company so far asit appears from our examinadon of those books;

c) the financial statements dealt with by this cepoct are in agreement with the books of account;

d) in our opinion, the aforesaid financial statements comply with Ind AS speci&ed under Secdon 133 ofthe Act;

e) on the basis of the written representations received from the directors and taken on record by theBoard of Directors, none of the directors is disqualified as on 31 March 2018 from being appointedas a director in terms ofSecdon l64(2) of the Act;


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Walker Chandiok&,CoLLPIndependent Auditor's Report of even date to the members of H & B Stores Limited, on thefinancial statements for the year ended 31 March 2018 (Cont'd)

f) we have also audited the internal financial controls over financial reporting (IFCoFT^.) of theCompany as on 31 March 2018 in conjuncdon \vith our audit of the financial statements of theCompany- for tKe year ended on that date and our report dated 30 April 2018 as per Annexure Bexpressed unqualified opinion; and

g) \.vith respect to the other matters to be included In die Auditor's Report in accocdance with Rule 11of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best ofour infocmadon and according to the explana.tions given to us:

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the Company, as detailed in Note 32 to the financial statements, has disclosed the impact ofpending litigations on Its financial posidon;

the Company did not have any long-term contracts including derivative contracts for wliichthere were any material foreseeable losses;

there were no amounts wlzlch wece required to be transferred to the Investor Educadon andProtection Fund by the Cocnpany; and

the disclosure requirements celadng to holdings as well as dealings In specified bank notes wereapplicable foe the period from 8 November 2016 to 30 December 2016 which are not relevantto these financial statements. Hence, reporting under this clause is not applicable.

I'vA/lta-^ C-i^UA ^ C-^ ^UFor Walker Chandiok & Co LLPChartered Accountants

Firm's Registradon No.: 001076N/N5000L3

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J\^>lupam Kumar

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Membership No.: 501531

Place: New Delhi

Date: 30 April 2018

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Walker Chandiok &Co LLPAnnexure A to the Independent Auditor's Report of even date to the members of H & B StoresLimited, on the financial statements for the year ended 31 March 2018

Annexure A

Based on the audit procedures performed for the purpose of repotdng a true and fair view on theEinancial statements of the Company and taking into considecadon the infonnarion and explanationsgiven to us and the books ot account and other records examined by us in the normal course of audit,and to the best of our knowledge and belief, we repoct that:

(1) (a) The Company- has maintained proper records showing full particulars, includingquantitative details and situation of Fixed assets comprising of property, plant andequipment, capital wock-in-progress and other intangible assets.

(b) The fixed assets comprising of property, plant and equipment and capital work-in-pcogresshave been physically verified by the management during the year and no materialdiscrepancies were noticed on such verification. In our opinion, the frequency ofverification of the fixed assets is reasonable having regard to the size of the Company andthe nature of Its assets.

(c) The Company does not hold any tmmovable property (in the nature of 'property, plant andequipment and capital wock-in-progress). Accordingly, the provisions of clause 3(1) (c) ofthe Order are not applicable.

(ii) [n our opinion, the management has conducted physical verification of Inventory atreasonable intervals during the year and no material discrepancies between physicalinventory and book cecot-ds were noticed on physical vetificadon.

(iii) The Company has not granted any loan, secured oc unsecured to companies, firms. LimitedLiability Partnerships-(LLPs) or other pardes covered in the registermaintained underSecdon 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a), 3(iii)(b) and 3(iii)(c)of the Order are not applicable.

(tv) [n our opinion, the Company has not entered into any transacdon covered under Sections 185and 186 of the Act. Accordingly, the provisions of clause 3(iv) of the Order are not applicable.

(v) In our opinion, the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (asamended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) The Central Government has not specified maintenance of cost records under sub-section(1) of Section 148 of the Act, in respect of Company's products/servlces. Accordingly,the provisions of clause 3(vi.) of the Order are not applicable.

(vii) (a) Undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, goods andservice tax, cess and other material statutory dues, as applicable, have generally beenregularly deposited to the appropriate authocities, though there has been a slight delay in afew cases. Further, no undisputed amounts payable in respect thereof were outstanding atthe year-end for a period of more than six months from the date they became payable.

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:oLLPAnnexure A to the Independent Auditor's Report of even date to the members ofH&B StoresLimited, on the financial statements for the year ended 31 March 2018

(b) The dues outstanding in respect of Income-tax, sales-tax, service-tax, duty of customs, dutyof excise, value added tax and goods and service tax on account of any dispute, are asfollows:

Statement of Disputed DuesName of the

statute

Nature of

dues

Amount in

lakh (?)

Uttar PradeshValue Added

tax x\ct, 2008

Input taxcredit

0.64

Amount

paidunder

protestin lakh

_SL

Period to

which the

amount

relates

Forum where

dispute ispending

2011-12 AddldonalCommissi.oner

Grade-2

(Appeal)CommercialTax,Ghaziabad

Uttar PradeshValue Addedtax Act, 2008

Inputcredit

tax 0.99 2012-13 AddidonalCommissionerGcade-2

(Appeal)Co rn.me ccial

Tax,Ghaziabad

TheMaharashtra

Value AddedTax Act, 2002

Demandunder

secdon 32

l.34 0.26 . 2013-14 DeputyCommissionec

of Sales tax

(Appeal).Mumbal

West BengalValue Added

Tax Act, 2003

Demand

undersecdon 43

5.4t 0.82 I 2014-15 AddlrionalCommissionecof Sales tax,

West Bengal

(viii) The Company has not defaulted in repayment of loans or borrowings to any bank orfinancial institution or government during the year. The Company did not have anyoutstanding debentures during the year.

(ix) The Company did not raise moneys by way of Lnidal public offer or further public offer(including debt instruments) and did not have any term loans outstanding duriiig the year.Accordingly, the provisions of clause 3(ix) of the Order are not applicable.

(x) No fraud by the Company or on the company by its officers or employees has been noticed orreported during the period covered by our audit.

(xl) The Company has not paid or provided for any managerial cemuneration. Accordingly, theprovisions of Clause 3(xi) of Ac Order are not appUcable.

(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) ofthe Order are not applicable.

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Walker Chandiok^CoLLP , . „Annexuce A to the Incfependent Auditor's Report of even date to the members of H & B StoresLimited, on the financial statements for the year ended 31 March 2018

(xiii) In our opinion all transactions with the related pardes are in compliance \vith Secdons 177 and 188of Act, where applicable, and the requisite details have been disclosed in the fmancial statementsetc., as cequu-ed by the applicable [nd AS.

(riv) During the year, the Company has not made any prefecentiai allotment oc private placement ofshares Ot fully oc pactly convecuble debentures.

(xv) In our opinion, the Company has not entered into any non-cash transactions with the directors ocpersons connected with them covered under Secdon 192 of the Act.

(xvi) The Company is not requiced to be registered under Section 45-L\ of the Reserve Bank of IndiaAct, 1934.

t^(7dlUA^ C^sÂ^L ^ Co ^For Walker Chandiok & Co LLPChartered Accountants

Firm's Registradon No.: 001076N/N500013

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Place: New Delhi

Date: 30 April 2018

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Walker Chandiok&.CoLLPAnnexure B to the Independent Auditor's Report of even date to the members of PI & B StoresLimited on the financial statements for the year ended 31 March 2018

AnneKure B

Independent Auditor's Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ('the Act')

1. In conjuncdon udth our audit of the financial statements of H & B Stores Limited ('the Company') asat and foe the year ended 31 March 2018, we have audited die internal Slnancial controls ovec financialrepocting ('IFCoE7R') of the Company as at that date.

Management's Responsibility for Internal Financial Controls

2. The Company's Board of Directors is responsible for establishing and maintalaing Internal tlnanci.alcontrols based on the internal control over financial cepordng criteria established by the Companyconsidering the essendal components of .internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Repotting (the "Guidance Note") issued by the Institute ofChartered Accountants of India ("ICAI"). These responsibilities include the design, implementadonand maintenance of adequate internal tmancial controls that were operating effecdvely for ensuring theOt-derly and efficient conduct of the ' Company's business, including adherence to the Company'spolicies, the safeguarding of its assets, the pcevendon and detecdon of frauds and errors, the accuracyand completeness of the accoundng records, and the dmely pceparadon of reliable &nancialinfocmadon, as cequLced under the Act.

3.

4.

A.uditor's Responsibility

Our responsibility is to express an opinion on the Company's IFCoFR based on our audit. Weconducted our audit in accordance with the Standards on Audidng issued by the [CAI and deemed tobe prescribed under Secdon 143(10) of the Act, to the extent applicable to an audit of IFCoF7R, andthe Guidance Note issued by the ICAI. Those Standards and the Guidance Note cequire that wecomply with ethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate [FCoE7R were established and maintained and if such controls operated effecdvely inall material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the [FCoFRa.nd their operadng effecdveness. Our audit of IFCoFR included obtaining an understanding of[FCoFR, assessing the risk that a material weakness exists, and tesdng and evaluating the design andoperating effecdveness. of internal control based on the. assessed risk. The procedures selected depend

the auditor's judgement. Including the assessment of the risks of material misstatement of the

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financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's IFCoFR.

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Walker Chandiok &Co LLPAnnexure B to the Independent Auditor's Report of even date to the members ofH&B StoresLimited on the financial statements for the year ended 31 March 2018

Meaning of Internal Financial Controls over Financial Reporting

6. A Company's IFCoFR is a process designed to provide reasonable assurance regarding the reliability offmancial repoctmg and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company's IFCoFR include those policies and proceducesthat (1) pertain to the maintenance of records that, in ceasonable detail, accurately and fairly ceflect thetransacdons and dispositions of the assets of the Company; (2) provide reasonable assurance thattransacdons are recorded as necessaq.' to permit pceparadon of fmancial statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are beingmade only in accocdance \vith authorisations of management and dkectocs of the Company; and (3)provide reasonable assurance cegacding prevention or timely detection of unauthorised acquisidon, use,or disposition of the Company s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporring

7. Because of the inherent limitations of IFCoFR, including the possibility of collusLon or impropermanagement override of controls, material misstatements due to error or fraud may occur and not bedetected. Also, projecdons of any evaluadon of the [FCoFR to future periods are subject to the riskthat the [FCoFR may become inadequate because of changes in condidons, oc that the degree ofcompliance wid-i the policies or procedures may deteriotate.

Opinion

8. Ln our opinion, die Company has. In all material respects, adequate internal financial controls overfinancial reporting and such controls were operadng effecdvely as at 31 March 2018, based on theinternal control over financial repordng criteria established by the Company considering the essendalcomponents of internal contcol stated in the Guidance Note issued by the [CAI.

t\3^[!u^ C-lvi'v4^ fc ^ ^/For Walker Chandiok & Co LLPChattered Accountants

Firm's Registradon No.: 001076N/N500013

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Membecsl-up No.: 501531

Place: New Delhi

Date: 30 April 2018

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H & B Stores LimitedB.tl.incc Slieut :is at Jl M.irch 2018

ASSETSNon-ciirrcnt assets

a) Pt-opeiTy, plant and equipmentb) Capital work-in-progressc) Other intangible assetsd) Financial assets

Q Loans(i0 OtheK

e) Non-current nx assets (net)() Other non-curreni assets

Current assets

a) Inventoriesb) Financial assets

(i) Trade receivables(ii) Cash and cash equivalents^ui) Bank balances oiher tKan (li) above(iv) Loans

c) Other current assets

EQUITY AND LIABILITIESEquiq-

a) Equity share capitalb) Other equity

Current liabilities

a) Financial liabiliries(i) Borrowings(ii) Trade payables(iii) Other financial liabilities

b) Other current liabilitiesc) Provisiorud) Cunent ux liabilities (net)

Total non-currcnt assets

Note 31 March 201S

2A 551.382B 3.692C

3 ^ 353.204 l.885 5.146 89.11

1,004.40

Total current assets

Total assets

7 3,540.55

S 330.309 72.2910 2.S811 43.7012 597.46

4,587.185,391.58

Total equity

l.1 2,964.9314_(87.18)

2,877.75

151617IS1920

Total current liabilities

Total liabilities

Total equity and liabilities

Significant accounting policies

The accompanying notes arc an integral part of the financial statcinents

This is the Balance Sheet referred to in our report of even date.

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pef^nu

€

293.S92,087.68

191.8648.3680.1511.91

2,7U.832JU.835,591.58

(? in Lakli)31 M.ircli 2017

577.9170.63

294.193.18

2.S492.39

1,041.14

3,353.82

408.5640-02l.04

45.38178.79

4,027.615,068.73

2,964.93(259.43)

2,705.50

653.651,424.73

102.8697.53

. 84.48

2,3fi3.252^63.255,068.75

Board ofDirectore

lain Kumar

tner

For and on behalf of t

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{^'S un il Duggal

DirectorDIN: 00041825

DirectorDIN: 00021581

Place: New Delhi

Date: 30 April 2018Vijay Shankcr

Chief Executive Officer

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Company Secretary(M. No. - A 15503)

Sukhpal Singh ScthiOuef Financial Officer

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H & B Stores Limited

Stateincnt of Profit aiid Loss for (tie year ended 31 Marcli 2018

Income

Revenue from operationsOther income

ExpensesPurchases of Stock-in-trade

Changes in Inventories of stock-in-tradeEmployee benefic expenseFinance costs

Depreciation and ainoitisatlon expenseOther expenses

Profit/(loss) before taxTax expense

Current rax

Net profit/(loss) for the year

Note

2122

Total income

2324252627

28

Total expenses

29

Total tax expense

Other comprehensive incoine(i) Items that will not be reclassified to profit or loss(ii) Income tax relating to items that will not be reclassified to profit or loss

Total other comprehensive incotnc

Total conciprehensive income for the year

Earnings per equity shareBasic in ?

Diluted in ?

Significant accounting policies

The accompanying notes arc an integral part of the financial statements

This is the Statement of Profit and Loss referred to In oiir report of even date.

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Place: New Delhi

Date: 30 April 2018

\^^>Vijay Shanker

Chief Execuuve Officer

31 Marcli 2018

11,819.6637-89

ll,857.:i5

8,473.51(200.16)819.26104.26143.10

2^08^711,648.24

209.31

42.6742.67

166.64

7.05

(1-+4)5.61

172.25

0.060.06

(? in Lakh)31 March 2017

12,704.35

39.84

12,744.19

9,135.54

160.34

780.95

136.15145.47

2,482.38t2,840.83

(96.64)

(96.64)

8.30

8.30

(88.34)

(0.03)(0.03)

Poland on behalf of the Board of Directors

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>-^Sunil Duggal

Direaor

DBM: 00041825

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Company Secretary(M. No. - A 15503)

Pritam Das tig-irector

DIN: 00021581

/^Sukhpat-SIngh SethiChief Financial Officer

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H & B Stores Liinitcd

Cash Flow St-itcincnt for the year ended 31 M;irch 2018

A CASH FLOW FROM OPERATING ACTFVITIES

Profit/(loss) before taxAdjustments for:

Depreciation and amorcisaiiion expenseLoss on disposal of Property, plant a.nd equipmem/ capital work in progress (net)Property, plant and equipment written offLi.lb iliry wriaen backFinance costsInterest income

Operating profit before working capital chaagcs and other ad|ustnicnts

Adjustment for:(Incp;ase)/decrease in inventoriesDecrcase/(incfease) in irade receivables(Increase)/decrease m current and non-curTsnt financial assets(Increase) In other current and non-currcnt assecsIncrease/(decre.ue) in trade payiblesIncrease/(decrease) in other current financial liabilities(Decrease) / increase m other current liabilities and provisionsCash flow from/(uscd in) opcradng activities post working capiul changes and other adjustments

Taxes paid (net of refund)Net cash flow from/(uscd ia) operating activities (A)

B CASH FLOWS FROM INVESTING ACT^^^T[ES

Acquisition of property, plant and equipment/ capital work-in-progress

Proceeds from disposal of property, plant and equipment^ capital work-in-progressInterest injcome

Net cash used in investing acdvitics (B)

C CASH FLOWS FROM FINANCING ACTWITIES

(Rfipaymeni of)/Proceed from current borrowings (net)Finance costs paidNet cash (used ia)/flow from financing activities (C)

Increase in cash and cash equivalents (A+B+C)Cash and cash equivalents at the beginning of the yearCash aad cash equivalents at the cad of the year (refer aotc 9)

31M!irch201S

209.31

143.1079.9725.03

(5.22)104.26

(26.92)329.33

(IS6.73)78.26

(31.52)(415.J9)i 662.95

94.22

(47.91)683.4133.06

650.35

(158.54)3.92

0.56(154.06)

(359.76)(104.26)(4(i4.02)

32.27

40.0272.29

(? in Lakh)31 M.1rch2017

(96.6-1)

145.47

16.40

136.15

(27.94)173.44

178.74(56.26)30.11

(57.00)(220.48)(217.54)

6.63

(162.36)

(162.36)

(77.68)

0^3(77.45)

380.39(136.15)244.24

4.4335.5940.02

Note: The above Standalone Statement of Cish Flows has been prepared under the 'Indirect Method' as set out in Ind AS 7, 'Statement of Cish Flows'.

The accoinpanying notes are an integral pa-rt of the ftnaacial statcmcats

This is ihc Cash Flow Statement referred to in our report of even date.

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Place: New Delhi

Dale: 30 April 2018

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For and on behalf of thc»Board of Directors

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Director

DIN: 00041825

Vijay Shankcr tAlgk Sctli

Chief Executive Officer Comggjiy-Sfictslary(M. No. - A 15503)

—Eutam-Bas-NirangDirector

DIN: OP021581

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^'^'Sukhpal Smgh Scthi

Chief Financial Officer


Statcnicnt ofCliangcs in Eqiiity for tlic year ended 31 Msirch 2018

A. Equity sliarc ciipital *Piirticulars

Baliincc as at 01 April 201(iChanges in equirysliarc capital dunng [he yearBaliince as a-t 31 Marcli 2017

Balance as at 01 April 2017Changes in equity sliarr capiul during the yearBalance as .it 31 Marcli 2018

Niinibcr of shArcs

296,493,165

296,493,165

(?in Lakh)AmoUUt

296,493,165

296,493,163

B. Other equity **

2,964.93

2,964.93

2,964.93

2,964.93

(? in Lakh

Particulars Reserves and surplus

Retained earningsTotal

Balance as at 01 April 2016 (171.09) (171.09Additions during the year:Nd loss for the yearOther comprehensive income for the year

R£-measurements gains on defined benefit plan (net of tax of ? nil)

(96.64)

8.30

(96.64

8.30Balance as at 31 March, 2017 (259.43) (259.43Additions during the yearNet profit for the yearOther comprehensive income for the year

Re-measurements gains on defined benefit plan (net of tax of.? l.44 Lakh)

166.64

5.61

166.64

5.61Balance as at 31 March 2018 \ (87.18) (87.18* refer note 13

** refer note 14

The accompanying notes arc an integral part of the financial statements

This is (he Statement of Changes in Equity referred to in our report of even date.

^fi&^aaIot^A?^ ^ ^ '/[;/Chanered Accountants

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iM^fuii.am Kumar

-/ EdSxner

Place: New DelhiDate: 30 April 2018

y-\^^$Vijay'Shanker

Chief Operating Officer

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Jl ^*

lunil DuggalDirector

DIN: 00041825

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DIN: 000215S

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I-I & B Stores Limited

Summun' of significant accounting policies and other cxpl.inaton' iiiformation for tlic year ended 31 March 2018

3 Non-current loans

(Uii.wcrreil. coiisitt':iuli good)Secruity deposiuDeposits with government authorities

31 March 2018

352.210.99

353.20

(? b L-ildi.)31 March 2017

293.200.99

294.19

4 Others non-ciirrcnt financial assets

Banls: deposit mth more than 12 months maturity #

if Pledged as security with. statutory authorities

1.881.88

3.183.18

5 Non-currcnt tax assets (net)Tax deducted at source 5.14

5.142.84

2.84

6 Other iion-currcat assets

{{J nsecTfred, considered good)Prepaid rent 89.11

89. U

92.39

92.39

7 Inventories"

(l/ra/.ved at hirer of cost or act. iialisahle valiie)Stock-m-trade (acquired for trading)Packing material and accessories

A Inventories have been hypothecated with banks against working capital limits, refer note 15 for details.

3^33.576.98

3,540.55

3,333.4120.41

3,353.82

8 Trade receivables

Unsecured, considered good*

*Refer note 35 for related party details

330.30330.30

408.56408.56

9 Cash and cash equivalentsBalances with banks in current accounts

Cheques, drafts on handCish on hand

31.25 19.550.21

41.04 20.2672.29 40.02

10 Bank balances other than cash and cash equivalentsOther bank balances

Term deposit with maturity for more than 3 months but less than 12 inoaths *#

* Includes interest accrued but not due

# Pledged as security with statutory authorides

A)'.

/î^.^y^%.^

î\''\

^•d

v^.....-.ÎS

2.882.88

0.03

1.04

1.04


Summar\r ofsignific.inc accounting policies and d the r cxplanator}7 information for the year ended 31 March 2018

tl Current loans

(I issci::ttVii, i'lsi^'kit'ii yXffi j///.'i'.*".'' ')i'li?r:v'-c s'tikd)Secunty deposits wth others

Unsecured, considered goodUnsecured, considered doubdul

Less: Provision For doiibrful baldlcinces

31 March 2018

43.736.505B.20

(6.5Q)-IJ.70

(? in Lakli)31 March 2017

45-386.5051.88(6.50)43.J8

12 Orhcr carrcnt assets

(1. •n.^':!iri:.'f. i'lnyt^fvi yfnd )

Advances co siipplicraPrepaid expensesAdvance to employeesExcess of pl.inned assets lowmis gratuity oblig.itions (refer noie 38)Balance wch. si<iiutory/government aurhoriuesOdier assess

61.SO

32.5514.072.49

+S4212.34

597.46

9.8229.8512.09

1 U.9513.08

178.79

13 Equin' share capitalAuthorised

500,000,000 (31 March 2017: 500,000,000): equity shares of ; 1 each

Issued, siibscnbcd .uid fully paid up296,493,1&5 (31 Much 2017:296,493,165): equity shares of ? 1 each fully paid up

a) Reconciliation of equity shares outstanding at the beginning and at the end of the year

5,000.00

2,964.93

5,000.00

2,964.93

Particulars 31 March 2018 31 March 2017Number of shares

Balance as at the beginning of the yearB.-ilance as at die end of the ycsi

2%,493,165296,493,165

Amount in Lakli Number of shares

2,964.932,964.93

2%,493,165296,493,165

Amount in Lakh

2,964.932,964.93

b) Rights, preference and restrictions attached to equity shares

The Company has only one. class of equity shares having a p.u-value of ? 1 per share. Each shareholder is enuiled for one vote per share held. The dividend pi^posed by the Board ofDirccro? is subject to the approval of the shareholde? in the ensuing Annual General Meeting except in the case of interim dividend- In the event of Equidation of the Gampany, ihe equityshareholde? arc enuded to receive die rcm.umng assets of Lhe Company, afier dismbuiion of all pceferenual amounts, in proponion of their shareholding.

c) List of shareholders holding more than 5% of the equity share capital of the Coinpanyand shares held by holding companyft

Particulars

31 March 2018

No. of equity shares •/• of shareholding

31 March 2017

No. of equity shares | '/o of shareholding

Dabur India Limited (Holding Company* 296,493,165 100.00% 296,493,165 ioo.oo%|

# As per the records of the Comp*my including its register of member.* Including equity share held by nominee of the holding company

d) No sliarcs were issued for consideration other than cash and shares bought back during the period of five years immedtatcly preceding the balance slicci dale.

14 Other equityReserves and surplus

Retained earnings

Description of nature and purpose ofcacli rcscnrc

Retained earningsRetained earnings arc created from the profit; / loss of the Company, as adjusted for distributions to owners, transfers ro Other reserves, eec.

(87.18)(87.18)

(239.43)(259.43)

^^>:

.ff i'%^/


Sumniary of significant accounting policies iincl other cxplunalon,' inforniulion for the year ended 31 Mitrcti 2018

15 Current borrowings *#(Swreii J'lm'i U'liik)i) (^ish credits

li) Working ca.pit.il term loan

* There is no default in repayment of principal boiToning or interest thereon.# No guarantee bond has been furnished against any borrowing.

11 March 2018

295.89293.89

293.89

(? in UA)31 March 2017

. 353.65353.65

300.00300.00653.65

15.1 Repayment terms and security disclosure for the outstanding current borrowings as at 31 March 2018 and 31 March 2017:Cash credit facility froni banks:i) Facility of ? 293-89 Lakh (31 March 2017: ? 353.65 Lakh) from HDFC Bank Limited.

The aforesaid cash credit facility is secured by way of hypothecation of book debts and inventories.

15.2 Security disclosure for the outstanding current borrowings as at 31 March 2018 and 31 March 2017:Working Capital Term Loan from banks:9 Facility of ? Nd (31 iVIarch 2017: ? 300 Lakh) from HDFC Bank Limited.u) Term Loan rate of interest is 8.5 % p.a. and repayable on demand.

The aforesaid working capital term loan is secured by way of hypothecation of book debts and inventories.

16 Trade payablcsDue ro micro and small enterprises #Due TO others 2,087.68

2,087.681,424.731,424.73

# Disclosure under the Micro, Small and Medium Enterprises Dcvclopmeat Act, 2006 ("MSMED Act, 2006")

ParticularsAs at

31 March 2018As at

31 March 2017

the principal amount and the interest due thereon remaining unpaid to any suppUer as at the end ofeach accounting year,ii) the amount of interest paid byihe buyer in tertns of section 16, along wirh the amounts of thepayment made to the supplier beyond the appointed day during each accounting year;ili) the amount of interest due and payable for the period of delay in making payment (which have beenpaid but beyond the appointed day during the year) but without adding the interest specified under thisActi

iv) the amount of interest accrued and remaining unpaid at the end of each accounung yeaT,'andv) the amount of further interest remaining due and payable even in the succeeding ^ears, until such datewhen the interest dues as above are actually paid to the small emeqirise, for the purpose of disallowanceas a deducrible expendiure under section 23.The information has been given in respect of such vendois to the extent Aey could be identified as "Micro and Small Enterprises" enterprises on thebasis ofinformadon available with the Company.

17 Other finaiicial liabilities- Current

Security depositsCreditois for capital goodsEmployee dues payable

88.508.52

94.84

24.161.43

77^7191.86 102.86

18 Other ciirrent liabilities

Advances from customers

Statutory dues payible

/;^$>--4^~'^%,I. i%. • .s

te^r

22.6725.69 97.5348.36 97.53


Summars.- of significant accouiiting policies and other explanatow information for the year elided 31 March 2018

19 Current provisionsProvision for employee benefits (refer note 38)

Provision for compensated absencesProvision for gratiiity

Others

Provision for disputed liabilities (refer note 32)

31 March 2018

7.06

73.07

80.13

(? m Laldi)31 March 2017

8.173.24

73.0784.48

19.1 Disclosure relating to provisions recorded in the these financial statements pursuant to the [nd AS 37 - Provisions, ContingentLiabilities and Contingent Assets

Opening balanceAdditions

UtilisationsReversals

Closing balance

20 Current tax liability (net)Provision for income tax (net)

31 March 2018 31 March 2017

73.07 73.07

73.07 73.07

11.9111.91

ii'..il.

%\r\B

jr

H & B Stores

Suminan- ofsigniHcant accounung policies and orhtir explanatory Hifunnation for tlic yc;ir ended 31 M.ircli 20 IS

21. Rcveiiuc froin opcriiiions

Sale olpruducL-i

Other operating revenuesInconie from siore displays and sponsorshipScrap sale

j I March 20 IS

1I.428..S411,428.84

390.82

j<)0.82ll,Sl9.6(i

(? in Likli)31 March 2017

12,306.33l2,30(i.33

397.130.89

3<)8.0212,704.35

22 Otht:r income

Bank interssr incomeEnteresc income on otlier financial assets carried ac amortised cost

Lidbillty ^/Tiuen backMiscellaneous

0.3926J35.225.75

37.89

OJ327.71

11.90.S9.S4

23 Purchase ofsiock-in-iradc

Purchase of Stock in trade 8,473518,47.i.5l

9,135.549,U5.3.l

24 Cliangcs in inventories ofstock-in-traclcOpening inventories

Stock-in-u-ade (acquired for u-ading)Closing inventories

Stock-in-trade (acquired for trading)

3J33.41

3333.57(200.16)

3,493.75

3^33.41160..M

25 Einploycc benefits expensesSalary and wagesContribuuon to provident and other funds (refer note 38)Gratuity (refer noie 38)Siaff welfarr expensesShare based payncnt to empk>>ecs

709.9641.61113}50.01635

677.7035.04U.I839.6716.36

819.26 780.95

26 Finance cost

Interest on torn from b.mks

Bank charges and odier borrowing costIS. 1686.10

104.26

44.6191.54UC.15

27 Depreciation and amortisation expenseDepreciation on property, plant and equipment (rcfcr note 2A) 143.10

143.10145.47145.47

/^*•^

s"i.••-•;/

^ /i


Siiminan' of significant accoiinting policies and otlter c-\pl;in..itor\' informalion for the year ended 31 March 2018

28 Other expensesAdvenisement and publicityPower and fuel

Consumption of stores, spai-es sind consumablesRepau-s

^hchineryOihers

Rates and taxes

Rent (refer note 34)Insurance

Freight and forwai-dingCommission

Travel and coaveyance.Contractor service - manpowerLegal and professionalSecurity expensesDirecior's sitting feesPayment ro auditors (refer note 33)Loss on disposal of Property, plant and equipment/ capital work in progress (net)Propeny, plant and equipment nTiaen offTelephone expensesMiscellaneous expenses

31 M.1rcli 2018

75.0075-47

50.34

L.27

2272720.9t

1,116.7914.4 L

65.3135.14

30.6732L.52

52.7010.43

3.75

l.7579.97

25.0323.6976.85

2,308.27

(? in Lakh)31 March 2017

103.87

71.8264.37

221.59

17.511,182.42

13.6564.54

187.5424.03

322.5652.96

19.69

4.282.13

16.4026.3286.70

2,482.38

/';' ^~..'

•:;'.'—>ff

!?1%

^'t\^i

s^^r

H & B Stores Liiuilcd

Silinni.in- ofsigniHcunt .iccauiiting policies .intl other cxpl.in;it»r\- iiifomiarioii far tlic year cntlcd 31 M.1rch 2018

29 T.'ixationThe key components of income tiix expense for the year ended 31 March 2018 and 31 M*uch 2017 arc:

A Statement of Profit and Loss:

(i) ProHt and Loss sectionCurrent tax

Income tax expense reported in the Sta.tcmcnt of Profit and Loss

(ii) Other Cotuprehcnsivc [nciimc (OCf) sectionRe-me.isuremem gains on defmed bcaefa plans

[acoiuc tsix cimrgcd to OCI

B Reconciliation of tax expeasc bct\vcen accounting profit at appliciible Ux rate and effective tax rate:Accounting profit/(loss) before taxSututory income tax rateTax (cxpcnse)/crcdit at statutory income tax rateTax on taxable profits torthe cuirent ycai adjusted (mm earlier years losses on which no deferred ux wss createdDeferred tax not rccognised on lossesMAT cpsdit not recognisedOtbeni[acome tax expense at effccdve fcix rate reported in the Statement of Profit and Loss

31 March 201S

42.6742.C7

l.44l.44

44.11

209.3127.82%

(58.23)106.2S

42.67(48-05)42.67

(? in Lakli)31 M.irch 2017

(96.64)34.61%33.45

1677

(50.22)

29.1 a) Details of unused tax losses for which no deferred tax is recognised in the financial statements

As as 31 March 2018 As as 31 March 2017

Tax losses

Assesment Year 2010-11

Assesmenl Year 2011-12

Asses mcnt Year 2012-13

Asses ment Year 2013-14

Assesment Yesu'201'1-15

Total

Expiry Datelasc Amouut DcfetTcd Tax (Assessment Base Amount Deferred Tax

Year)

665.40844.62543-12204.94

2,258.18

Not applicable185.11 3 [March 2020

3 (March 202131 March 202231 March 2023

234.97151.1257.01

628.23

589.79665.40844.62543.22204.94

2,847.97

204.13230-29292.32188.0170.93

Expiry Date(Assessment

Year)

31 March 201931 March 202031 March 202131 March 202231 March 2023

985.68

b) Details of unrecognised deferred tax oa uaabsorbcd depreciation in financial statcinents

Particulars

Assesmem Year 2008-09

Assesmem Year 2009-10Asses mcnt Year 2010-11

Asses mem Year 2011-12Assesmem Year 2012-13

Assesment Year 2013-14

Assesment Year 2014-15Asses mcni Year 2015-16

Asses mcnt Year 2017-18Total

As as 31 March 2018

Expiry DateBase Amount Deferred Tax (Assessment

Year)

249.81 69.50 Not applicable454.18 126.35 Not applicable206.62 57.48 Not applicable139.84 38.90 Not applicable130.92 36.42 Not applicable115.55 32.15 Not applicable54-28 15.10 Not applicable97.83 27^2 Not applicable48.61 13.52 Not applicable

As as 31 March 2017

Base Amount Deferred Tax

249.81454.18206.62139.84130.92115.5554-2897.8348.61

1,497.64 416.64 1,497.64

Expiry Date(Assessment

Year)

86.46 Not applicable157.19 Not applicable71.51 Not applicable48.40 Not applicable45.31 Not applicable39.99 Not applicable18.79 Not applicable33.86 Not applicable16.82 Noi applicable

518.33

29.2 There ue unused minimum alternate tax credits amounting to ? 42.67 Lakh as at 31 March 2018 (31 March 2017 : ? Nil) wtuch has not been recognized as the Company believe:that there is no convincing evidence that normal income tax will be paid during ihe specified allowable penod.

'^''^'"f/f

1^^s^

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"1


Sumnuir^' of sigiufic.int accounting policies and other explanatory' infonn.ilion for tlic yc.tr ended 31 March 2018

30 Other coinprchcnsivc income (OCI)Items that will not be reclassificd to profit or lossRe-measurements gains on defined benefit plansIncome tax relating to items thai will not be reclassified to profit or loss

31 -March 2018

7.05

(1.44)

(? in L-lkh)31 March 2017

8JO

5.61 8.30

31 Eiirning per share

Net pro(it/(loss) attributable to equity' shareholdersProfii/(loss) for the ys.-u- (? in Lakh)Weighted average number of equity shares for calcuLiting basic earning per share (nos.)Weighted average number of equiry shares for calculating diluted earning per share (nos.)

Noininal value per equity share (Rs)Basic earning per share (Rs)Diluted earning per share (Rs)

166.64296,493,165296,493,165

1.000-060.06

(96.64)296,493,165296,493,165

1.00

(0.03)(0.03)

32 Contingent liabilities

Qaims against the Company not acknowledged as debtSales lax matters *

Others (net of provision) (refer note 19) *S.40

114.95123-35

1.64114.95116.59

* based on discussions with the solicitors / favourable decisions in similar cases / legal opinions taken bythe Company, the management believes that the Companyhas a good chance of success in above-mentioned cases and hence, no further provision is considered necessary.

33 Payincnt to auditors *Sauitory audit feesCenification fee and other services

* excluding service tax / gcxxls and service tax and out of pocket expenses, as applicable

l.75 1.44

0.69.l.75 2.U

34 lafomiation oil lease transactions pursiiant to Ind AS 17 - LeasesAssets takcu oa operating leaseThe Company has executed certain non-cancellable operaiing leases expiring within period not exceeding three years. The leases have varying terms, escaladonclauses and renewal rights. On renewal, the terms of the leases are renegotiated.

Building31 March 2018 31 March 2017

Not later than 1 year 83.72 42.02Later than 1 year not later than 5 year 24.34 3.84Later than 5 year

Gross rental expenses debited to the Statement of Profit and Loss is Rs 1,116.79 Lakh (31 March 2017 : Rs 1,182.42 Lakh)

108.06 45.86

-,.' 1V-1'1it

^1

•<,^^r


Suinmary of sigiiificsint accounting policies and other cxplan.itor)' infonTtation for the year ended 31 M.ircli 2018

35 Infannatioii on related party transnctioiis pursuant to [nd AS 24 - Related Party DisclosiircsFollowing are the relared panics and transactions entered with related parties for the relevant financi.il year

A) List of related parties and relationshipsi) Holdins;/Fellow subsidi.irics

s.No.

Nainc of entity Principal place ofbusiness

Nature

1 I Dabur India Limited ndin Holding Company2 iDermovia Sl<in Essentials tNC United States of America Fellow Subsidiary3 iDabur [niem.it'ional Limited sle Of Man Fellow Subsidiary4 Naturelle LLC Emirate of RAS Al K.haimah. United Arab Emirates Fellow Subsidia.]•ry5 Dabur Egypt Limited Eg)-pi Fellow Subsidiary6 I African Consumer Csu-e Limited Nigeria Fellow Subsidiary7 Dabur Nepal Private Limited Nepal Fellow Subsidiary8 I Asian Consumer Care Pakistan Private Limited Pakistan Fellow Subsidiary9 Asian Consumer Care Private Limited Bangladesh Fellow Subsidiary10 I t-bbi Kozmeiik Turkey Fellow Subsidiary11 iRAPazarlaim Turkey Fellow Subsidiary12 I Dabur Lanka Private Limited Sri Lanka Fellow Subsidiary13 iNamasie Laboraiories LLC United States of America Fellow Subsidiary14 I Urban'Laboratories International LLC United Stales of America Fellow Subsidiary[5 Hair Rejuvenarion & Revitalization Nigeria Limited Nigeria Fellow Subsidiary16 Healing Hair Laboratories Intemaaonal LLC United States of America Fellow Subsidiary17 | Dabur (UK) Limited British Virgin Island, United Kingdom Fellow Subsidiary18 iDabur Consumer Care Private Limited Sri Lanka Fellow Subsidiary19 I Dabur Tunisie * Tunisie Fellow Subsidiary20 I Dabur Pakistan Private Limited Pakistan Fellow Subsidiary21 IDaburPars Iran Fellow Subsidiary22 | Dabur South Africa (PTiQ Limited South Africa FeUow Subsidiary

* The liquidation of Dabur Tunisie, is under process and is likely to be completed by 31 March 2019. The Uquidaiion was earlier expected to be completed by31 March 2018, but due to certain legal and regulatory compliances under the laws of Tunisia, the completion date was extended.

ii) Key management personnel Mr. VijayShanker, Chief Executive Officer (CEO)Mr. Sukhpal Singh Sethi, Chief Financial Officer (CFO)Mr. AlokSeth, Company Secretary

iii) Directors Dr. Anand Chand Burman, Director

Mr. Amit Bumun, DirectorMr. Mohit Burman, DirectorMr. Sunil Duggal, DirectorMr. Prium Das Narang, DirectorMr. Pattamadai Natraja Sarma Vijay, Independent DuectorMr. SanjayKumar Bhaitacharyya, Independent Director

iv) Entities in which a director or his/herrelative is a inembcr or director #

Jerways Travels Private L'uniiedLite Bile Foods Private Limited

v) Entities nThich arc post crnploymentbenefits plans

H&B Employees Gratuity Trust

# With whom the Company had transactions during the current year or previous year

^

VA-.•^s^y


Siimniar\r ofsigniftcant accounting policies and otlicrcxplanator\r infonnation for the year ended 31. March 2018

35 Iiifomi.llion on related party transactioiis pursuant to [nd AS 24 - Itclatcd Puny Disclosures (Contd.)

B) Transactions urith related parties

The following transactions were carried out witti related parties in the ordinary' course of business:

Transactions during the year

31 March 2018 31 March 2017

Pin Lakh)Balances outstanding at the end of

the year, net

51 Marcli 2018 31 March 2017

A Key management personnel / directorsI) Remuneration/pension paidii) Reimbursement of expensesiii) Shares issued pursuint to exercise of ESOPiv) Director siuing fees paid

130.089JO

3.75143.04

132.513.794.534J8

US.ll

B Holding /fellow subsidiariesi) Purchase of goods/services

Dabur India Limited

Jetways Travels Private Limited8.055.62

35-Z23.14

28.70l.56

32.100.48

ii) Sale of goodsDabur India Limited

Lite Bites Foods Private Limited6.19

Q28

27.79

028

iu) Reimbursement of expensesDabur India Limited 8.88

29.0318.97

85.12 30.54 32.58

36 Reconciliation of liabilities arising from financing activities pursuant to Ind AS 7 - Cask flowsThe changes in the Company's Liabilities arising from financing activities can be classified as follows:

Non-current

borrowings

Net debt as at 01 April 2016Proceeds from current borrowings (net)Net debt as at 31 March 2017

Net debt as at 01 April 2017Repayment of current borrow'ings (net)Net debt as at 31 March 2018

Current

borrowings

273.26380.39653.65

653.65(359.76)293.89

Equity sharecapital

(?m Lakh)

Total

273.26380.39653.65

653.65(359.76)293.89

37 Details of Specified Bank Notes (SBN) held and transacted during the period from 8 November 2016 to 30 December 2016, pursuant to Ministr}' ofCorporate Affairs (MCA) notification GSR 308 ( E ) dated 30 March 2017

Qosing cash in hand as on 8 November 2016Add: pennitted receiptsLess: permiaed paymentsLess: amount deposited in banksQosing cash in hand as on 30 December 2016

Specified bank Other denominationnotes notes

34J9 0.90

(34^9) (0.90)

(? in Lakh)

Total

35.18

(35.18)

;;,^^-.

y%i."; ^oi; ..

1/;!^

^.... .<i/•.•:i:".;--:^^'


Suiunia.r\r ofsigiiificant accountm^ policies -ind odicr cxpl<in:itor\' inforniation for tlie year ended 31 March 2018

38 Disclosure rchitin^ to ctnploycc bcncHts pursuauc to Ind AS 19 - Employee Benefits

(a) Defined contribution phiasThe Companyh.is ceilain defined contribution phns. The contributions are made 10 provident fund in Indu forempbyees at the rate of 12% of the basis salary asper die Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The conii-ibution ire made to rcgyicred provident fund administered by thegovernment. The obligation of the Company u luniicd to the amount contributed and it has no further contractual nor any constructive obtigaiion thi; expenserecognised dunng the year to^'n.rds ilie defined contribution plan is as follo^^i

(? in Lakli)Particul.irs

Provident fund

Emplo)ee'5 slate insunnceOtiier employee benefits

31 March 20 IS

34.946.670.00

31 M:uch 201731.313.720.01

(b) Defined benefit plansGratiiity (Funded)The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity Plan provides a lump sum payments to vestedeinployees at retirement, death, uicapacitatioa or temiination of emplo>Ement, of aa amount equivalent to 15 days saliry for each completed year of service. Vestingoccurs on completion of 5 cominuous >Ean of service as per [ndian law. Hoattver, no vesting condiiun applies in c.ise of death. The Company makes contributioruto H & B Employees Gratuity Trust, wtiich is funded defined benefit plan for qualifyTng empbyees.

The following ubles summarises the compoaents of net beaefa expense recognized in (he Sutement of Profit and Loss and the funded sutus and amountstccognized in the Balance Sheet;

(? in Lakh)Gratuity

Jl March 2018 31 March 2017Funded Funded

[ Change in present value of defined benefit obligatioo during the yearPresent vilue of obligation as at the beginning of the period[nteresi cost

Service cost

Benefits paidTotal actuarial (gain) oa obligationPresent value of obligation as at the end of the period

[I Change in fair value ofplaa assets during the yearFair value of plan assets at the beginning of the periodExpected interest incomeEmployer contributionBenefiis paidActuarial (loss) for the )Caron assetFair value of plan. asscis ai the end of the penod

Ill Net asset/(liability) recognised ia the Balance SheetPresent value of obligation at (he endFair value of plan assetsUnfunded Uabiliiy/provisioa in Balance Sheet

FV Expense recognised in. the statCDacat of profit or loss during the yearService cost

Net interest cost

Toial expense recognised in the emplo)ee benefit expense

V Recognised in other comprehensive inconie for the yearNel cumulative unrecognised actuarial gain/(loss) openingAciuaml (gain)/loss for the )car on projcaed benefit obligation (PBO)Actuarial gain/(loss) for the year on assetUmccognised actuarial gain / (loss) ai the end of the >ear

VI Maturity profile of defined benefit obligationWithin the next 12 months (next annual reporting period)Between 1 10 5 yesasMore than 5 ysrs

55.664.17

11.08

(6.57)(7.41)56.94

52.423.9310.00(6.57)(0.36)59.43

56.9459.432.49

11.080.24

11.33

12^77.41

(0.36)19.32

0.903.93

52.11

50.674.05

11.43

(2.02)(8.47)55.66

41.313.30

10,00

(2.02)(0.17)52.42

55.6652.42

(3.24)

11.430.75

12.18

3.978.47

(0.17)12.27

0.803.61

51.25

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Suniman' ofsigiiificant .iccoiinting policies ;>nd Otlier cxpl.lil.ltur;' infonu.itiou for the year eiKlcd 31 M.irch 201S

(? in Lakli)Gratuity

3lM.irch20tS 31 March 2017Funded Funded

VII Quantitiitivc scnstivity analysis for siguiftciint a.ssumptions is as below

a) Impact of change in discount nitcPresenc value of obllgaiion aL the end of the period[mpict due to increase of 0.50%Impact due to decrease of 0-50%

b) Impact of change in salary increasePresent value of obHg.iuon at the end of the penodImpact due 10 increase of 0.50%Impact due to decrease of 0.50%

56.94

(3.69)4.05

56.944.03

(3.71)

55.66

(3.91)4.30

55.664.25

(3.91)

Sensitivities due to mortality and mthdrawis ire aot [tuterial, hence the impaa of change not calculated. Sensitivities as to rate of Inllaiioa, rate of increase ofpensions in payment, rate of increi.se of pensions before retircmem and life expectancy are not applicable being a lumpsiun benefit oa retiremcnL

VTIE The major categories of plan assets (as a percentage of total plan assets)Funds managed by insurer 100% 100%'0

[X Actuarial assumptionsi) Discount rateuj Future salary increaseiii) Retirement age facars)iv) Mortality rates inclusive of provision for disability

v) AgeUpto 30 yearsFrom 3110 44 years'Above 44 yciR

vi) Expected best esiimaie of expense for the next annual reporting periodService cost

Net interest cost

Net periodic benefit cost

8.00 % PA 7.50 % PA8.00 % PA 8.00 % PA

58 58100% of LMAl (2006-08)

Withdraw! rare (%) Wilhdrawi rate (%)10 102 21 1

14.53

(0^0)14.33

14J30.7515.08

Notes:

Q The actuarial valuation of plan assets and the present valuation of defmed benefa obligation nrere carried out as at 31 March 2018. The ptescm value of the definedbeaefit obligation and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

(u) Discount rate is based on the prevailing market yieUs of Indian Govemmcat Securiues as at the balance sheet date for the estimated tenn of the obligations.

(iii) The salary escalation rate is amved after talang into consideration the seniority, the proinotion and other relevant faaore, such as, demand and supply inempbymem martei.

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Si.ti"iir";iryot'sig;nificant accounting policies and otiicr exj^lanaiory infonnation for llic year eiK.lcd 5\. Marcii 201S

y) Csipual iiiai);i^C)Tictil - pfjlicicy anti procediircs* For the purpose of the Conip.iny's capii.il nu[i.igemcnt, caplul uickidcs issued equiL/share capital jiid all odicrequiryrtfservL's aaribuuble 10 the equity holdci-*; of the Company.

ITic Conipan/ s capiul nun.i genie iu objea.ives .irc:• 1:0 ensiu'e the Cjompanys abiliryto conttniic as .1 going conceni• EO provide ail adeqiLiie retum to shareholders

b)r pricing.products and services conuiiensuniiely'n.ilhll'ie level ol risk.Tlic Company nun.igcs its capiul struaure and nukes adjusEmcms ui Light of ch.inges in econoiiuc conclilions .ind ihe requiremenLs of ilie financi.il covcn.inis. To maintain or .-idJusi EhcupiuE scruaure, ihe Connp.my nuy sd}ust the dividend p.1)Tiieni to shjrehuldcrs, rcT.iim capii.il LO shnrcholders or issue new shares. Th.; Coitip^n)'- n-ionhors c.ipit.il using ,\ gearing ratio,ff/hicli is net dcbc divided by iot.li c.-ipit.-il plus nci debt. Tlie Coinp.iny tncludes mthin nei clebi, inieresi bearing toary .iiid bomin-ings, tradL- nnd other pay^ibles, less Ciish aiid cashequivj!enis, excluding discontinufd operations, tT Any.

Cum-ni borro^Tngs (reter noce L5)Trade p.iyables (refer note 16)Other financial ILibiiitiriS (rcfernoie 17)Less: Cash jnd cash equivalents (refer note 9)Net dcbi

Equity share capiul (refer note 13)Other equity (refer note 14)Total capitalCapital and net debt

Gearing rado

As at

J I March 2013

in.m2.SS7.6S

191.S6711f

(? m L-ikli)\s at

31 Much 2017

653.651,-12473

102.86

40.021,501.14

2,964.93(87.1S)

2,141.22

2,964.'33

(259.43)2,877.73 2,705.30

5,378.8') 4,846.72

4(i.50% U.(8%

In order to achieve this overall objea.ive, the Companys caprtal management, amongsi Other things, .iims to ensure thai it meets fimncial coverunts itt.iched to die interest-bearing loansand borroa/mgs thai define c.iprt.il .stnjaure rcquu-ements.No ckinges nerc made inihc objeci.ives, policies or processes for nunaging capital dunngthe years ended 31 March 2018 and 31 iVhrch 2017.

40 FioAnci.il risk man.igcmcnt - objccuvcs and policiesThe Company's Fuunciai labilldcs comprise nuinly borrowings, irade payables ind other payabfcs. The Compan/s fLnancial assets comprise mainly investments, kins. i.rade rccclvables,auh ind cash equivaients, other baLinces with banks ind other receivables.

The Company's fiiunciat risk manageiTient is an integral part of howio plan and execute its business strategies-

The Compan/s .ictivnies expose ic 10 market nsk, interest raie risk and forcign currency risk. The Board of Dircaors ("Board') oversee ihe rmnagemeni of these fuunclal risks through iuRisk Management Comniinee. The Risk Management Policy of the Company formulated by the Risk M-inagemeni Commiiiee and approved by ihc Board, suies the Cbmpan/s approachto address imcertainties in its endeavour to achieve its stated and implicit objenives. h prescribes the roles and rcsponsibiljtlcs of the Compan/s m.'irugcmcnt, the siruciurc lor marugirisks and the framework for risk man.igcment. Tlie fnnicwork seeks to identify, assess and miiigatc Financial risks in order to minimize potential adverse effects on the Compan/s financulperformance-

The following discfosurcs summarize the Compan/s exposure 10 financtal risks and inTomution rcgirding use of derivatives empfoycd to man.ige exposures to such risks. Quantitativesensiuvky analysis have been provided 10 re fleet the inipaci of reasonably possible changes m marka; raies onihe fimnclal results, cash flows and firuncial position, of die Company.

A Market risk

.Market risk is the risk of loss of future earnings, fair value or future cash flows arising out of change In the pnce of a Financial instnmient. These include change as a result of changes in theinterest rates, foreign ciurcncy exchange rates, equity prices and other nurket changes that affea nurkci risk sensiuvc instnuncnis. Markei risk is attribuublc to all market risk sensitivefinancial insinmicnis including Investments and deposits, forcign currency receivables, parables and bans and borrowmgs.

The Company manages market nsk through a risk management comminee engaged in, inier alia, e\'aluation and icleniification of nsk factors with chc obJea of goveming/mitjgating ihemaccording TO Company's ob)eciives and declared policies In specific context of impaa ihcrcof oa various segnieots of fin.inca.l instruniencs. Tlie Board provides oversight and reviews theRiskaurugemeai policy on a quarterly basis.

i) Interest rate riskInicrcst nic risk is the risk that the fair value or future cash flows of a financial instrument will fliKtuaie because of changes in market intercsi raies. In order to balance the Cbmiposition with regards 10 interesi iiicome and intcrcsi expense and 10 nuaage the intcrcsi raie risk, ircasury performs a comprehensive mieresi rate risk management. The Company is notexposed to significant interest rate risk as ai the respective reporcing dates.

B Credit risk

Credit risk anses from the possibility that counter p^ny may not be able 10 scnk: ihcu- obligations as agrccdL To imtuge this, ihe company periodically assesses the fuuncul rcliabiUry ofcustonncrs, ukmg into account the financial condition, cuTrent econonuc ircnds, snd analysis of historical bad debts and ageing of account receivables. Individual risk linuts are secaccordingly.

The Company considers the probability of defauh upon inicial rccognicion of asset and aether there has been a sigrufcant incrcase in credit nsk on an ongoing basis throughout eachreporting period. To assess whether there is a significant incTCasc in credit risk the Company compares die risk of defauh; occunng on the asset as n the rcpon;ing date with ihc risk ofdefault as at ihc date of Inrtial rccogrui.ion. The Company considers reasonable and supportive forw.'ard-boking information.

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Sumin^i^ of significant accounting policies and otticr explanatory' infonniition for the year cnclciJI 31 March 20 IS

40 Fitiancial risk m.ina^ctncnl - objectives and policies (Contd.)

Tlie CoiTip*m/s receivables comprises trade receivables. DLmng tlie periods prcsenred, Ac Company rm.de no wi^re-offs of inide receivables and it does not exi.wct co receivefutui-e cash flo1n.^ or recoveries froni collection of cash flop's prcvlously n'rincn off.

(? in Lakli)Exposure to credit risks J I March Z018| 3 [March 2017

Financial assets for which loss allowance is measured using 12 montlis Expected Credit Losses(ECL)Odiers non-cumeni financi.il asseisNon-cuirent loans

Cish and cash equivalentsBank balances other dian cash and cash equivalents aboveCurrent loans

l.SS353.2072.2'?

1.S.S43.70

3.1S294.1940.02

1.0443.38

Financial assets for which loss allowance is measured using Life time Expected Credit Losses(LECL)Trade receivables 130^0 40S-56

Tlic credit risk for trade, other receivable and other financial assets is considered negligible, since the countcrpanies .ire rcpuiablf': Ot^aius.-iiions widi high quality exTcmal creditradngs. However, speciTic provision Is made. in case a particular receivable is considcrcd to be non-recoverable.

C Liquidity RiskLiquidicy risk is defned as the risk thai (he company will not be abk to seide or meet ic obligarions on rinie or at a reasonable price. The Company's treasury department isresponsible for inaimen.ince of liquidity fincluding quasi liquidiq'), continuiqr of funding as well as timely sedcmcm of debts. In addition, policies rehted 10 mitigation of risks areovereeen bysenior managcmcni. Manageiwnt nionitots the Company's net liquidity posiaon on the basis of expected cash flows vis-a-vis debt service fulfillniem oblignaon.

Maturity profile of financial liabilitiesThe table below analysis derivative and non-dririvarive financial llabilides of [he Company into oslevant maturity groupings based on the rcmainmg period from the reporting dateto ihe contracmal maturicydaie. The anwunts disclosed in [he [able arc the contractual undiscounted cash flop's:

(? in Lakh)

As at 31 March 2018Less than I

year/ ondemand

I to 5 yearsFvforc than 5

yearsTotal

Security depositsCurrent borrowingsj Trade payableslOdier financial liabilities

88.50293.89

- 2,087.6810336

88.50' 293.892,087.68

103J6

As it 31 March 2017Less than I

year/ ondemand

1 to 5 yearsMore than 5

yearsTotal

Security depositsCurrcnt borrowingsTrade payables.Other financial liabtliues

24.16653.65

1,424.7378.70

24.16653.65

1,424.7378.70

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41 Catcgon' \\'isc classificntion offin.inci.il instniincuts

Tlie fair values of the financial assets and tinancial liabilities are defined as the price that would be Feceived on sale of an asset or paid to transt'er aliability in an orderly tra-nsaction between rrurl\£t paitLcipanis at the measuTement dace. Methods and assumptions used TO estiinate the fair values areconsistent iviih those used for the fin.mci.il ^ear 2016-17. The folloning methods and assumptions u'ere used to estim.ite the fair values:

The c.-urywg amount of financial assets and financial liabilities measuiied at amonued cost in these financl.il statements are a reasonable appro.'amaiionof theu- f'alr values since the Company does not anticipate that the carrying amounts would be significantly different from the values that wouldeventually be received or settled.

FinanciAl assets and financial liabilities OTe measured at fair value in these firLincial staiemenE and are grouped into three levels of a fair value hierajch.y-The three Levels are defined based on the observability of significant inputs to the measuremem, as follo»3:

Level I: quoted prices (unadjusted) in active markets for identical assets or tiabtUties

Level 2: Inputs other than quoied prices Included within Level 1 that aie observable for the asset or tiability, either directly or uidirealy

Level 3: unobservable inputs for the asset or liability

A The carry'iag values and fair va.ltics of financial iastrumcats by categories as at 31 March 2018 arc as follows: *

Carrying valueLevel I

Fair value

Level 2

(?inUlh)

Level 3

Financial assets at fair value through profit and loss ('FVTPL )

Financial assets at fair value through other compccheasivc iacomc('FVTOCl')

Financial assets at amortised cost

Noa-currcat

(i) LoansSecurity deposits

(ii) Other financial assets

(? in Lakh)Carrying value

353^0l.88

353.08

Current

(i) LoansSecurity deposrts

(u) Trade receivables(iii) Cash and cash equivalents(iv) Bank balances other than (iii) above

43.70330.3072^92.88

449.17804.25

Financial liabilities at amortised cost

Current

(I) Borrowings(i^ Trade payables(iii) Other financial liabilities

(? in Lakh)Carrying value

293.892,087.68

191.862,373.43

* During the year, there were no iransfers between Level 1 and Level 2 fair value measurements.

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H&B Stores Limited

Suniman- of significant accounting policies and other cxpl;inaton' informafion for the year ended 31 Miircti 2018

42 The Company is primarily engaged in the business of retail trading in cosmetics and consumer care products in India, which as per [nd AS IDS - "OperatiiSegments", is considered to be the only significant reportable segment.

43 Previous )-ear amounts have been re-grouped/re-casied wherever considered necessar)', to make them comparable a-ith those of the current year. Figures are rounded-off 10 nearest Rs in Lakh

44 In the opinion of the Board of Directors, current assets have a value on realization in the ordinary coui-se of business at least equal to the ajnount at which they areStated in the balance sheet and provisions for all known / expected liabilities have been made.

The accompanying notes are an integral pan of the financial statements

As per pur report of even dace attached-N^U^LiL ti^^l.L^L (^ ^ LC;For Walker Chandiok & Co LLP


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Place: New Delhi

Date: 30 Apnl 2018Vijay Shankef

Chief Executive Officer

For and on behalfof the Board of Directors

^:^-Sunil?Sunil Duggal

*- Direaor

DfN: 00041825

Pritam Das.

Director

DIN: 00021581

A 1 ' h

^{^^CompanySecFEtary Oiief Financial Officer(M. No. - A 15503)

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Suinmary of significant accounting policies and other explanatonr information for the year ended

1A. Company information

H5d3 Stores Limited (the 'Company') is a domestic limited Company incorporated in India under the CompaniesAct, 2013 with registered office situated at 8/3, Asaf Ali Road, New Delhi - L 10002 and is a 100% subsidiary ofDabur India Limited. The Company operates Its biisiness through its brand name "NewU Stores". The Companyis one of the leading retail player dealing In cosmetics and consumer care products of different brands. TheCompany has its owned stores as well as franchise stores across India. The'Companyis also selling through onlinemarketplace aggregators as well as dirough the Conipany owned e-coiTimerce site.

IB. General information and statement of compliance with [nd AS

These financial statements ('financial statements') of the Company have been prepared in accordance with theaccounting principles generally accepted in India, including the Indian Accounting Standards ^nd AS') specifiedunder Section 133 of the Companies Act, 2013 ('the Act') and other relevant provisions of the Act. The Company

. has uniformly applied the accounting policies during the periods presented.

The financial statements are presented in Indian Rupees (''') which is also the functional currency of the Company.

The financial statements for the year ended 31 March 2018 were authorized and approved for issue byth.e Board ofDirectors on 30 April 2018. The revision to financial statements is pennitted by the Board of Directors afterobtaining necessary approvals or at the instance of regulatory authorities as per provisions of the Act.

1C. Basis of preparation

The fmancial statements have been prepared on going concern basis in accordance with accounting principlesgenerally accepted in [ndia. Further, the financial statements have been prepared on historical cost basis except forcertain financial assets and financial liabilities which are measured at fair values as explained 'in relevant accountingpolicies.

Amount in the financial statements are presented in lakhs, unless otherwise stated. Certain amounts that arc

required to be disclosed and do not appear due to rounding-off are expressed as 0.00.

tD. Recent accounting pronouncements

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards)(Amendments) Rules, 2018 via notification dated 28 March 2018 to further amend Companies (Indian AccountingStandards) Rules, 2015, notifying a new revenue recognition standard Ind AS 115, 'Revenue from Contracts withCustomer. This amendment replaces [nd AS 18, 'Revenue' and lad AS 11, 'Gonstrucdon Contracts'. Also notifyingan insertion of Appendbc B, 'Foreign currency transacuon and advance consideration' to Ind AS 21, 'The effect ofchange in foreign exchange rate', amendment to Ind AS 40, 'Investment property and amendment to Ind AS 12,'Income taxes'. The amendments arc applicable to the Company from 1 April 2018.

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Summary of significant accounting policies and other explanatory information for the year ended31 March 2018

Notification of Ind AS 115:

The new standard provides a control-based revenue recognition model and provides a five step application principleto be followed for revenue recognition:

a. Identify the contract(s) with a customer;b. Identifythe performance obligations;c. Determine the transaction price;d. Allocate the transaction price to the perfonnance obligations;e. Recognize revenue when or as an entitysatisfies performance obligation.

The Company is evaluating the requirements of the amendment and its impact on the financial statements.

Insertion ofAppendb< B to Ind AS 21:

This Appendbc applies to a foreign currency transaction (or part of it) when an entity recognizes a non-monetaryasset or non-monetary liability arising from. the payment or receipt of advance consideration before the entityrecognizes the related asset, expense or income (or part of it). The amendment to Ind AS 21 requires the entities toconsider exchange rate on the date of initial recognition of advance consideration (asset/Uabilit)^, for recognisingrelated expense/income on the settlement of said asset/liabiliry.

This Appendix does not apply when an entity measures the related asset, expense or income on initial recognition:

a. At fair value; or

b. At the fair value of the consideration paid or received at a date other than the date of initial recognition of thenon- monetary asset or non- monetary liability arising from advance consideration.

An entity-is not required to apply this Appenduc to:

a. income taxes; or

b. insurance contracts (including reinsurance contracts) that it issues or reinsurance contracts that it holds.

The Coinpaxiyis evaluating the requirements of the amendment and its impact on the financial statements.

Ajmendment to Ind AS 40:

An entity shall transfer a property to, or from, investment property when, and only when, there is a change in use.Achange in use occurs when the property meets, or ceases to meet, the definition of bvestment property and there isevidence of the change in use. In isolation, a change in management's intentions for the use of a property does notprovide evidence of a change in use.

When an entity decides to dispose of an investment property without development, it continues to treat theproperty as an investment property until it is derecognized (eliminated from the balance sheet) and does notreclassify it as inventoiy. Similarly, if an entity begins to redevelop an existing investment property for continuedfunue use as investment property, the property remains an investment property and is not rcclassified as owner-occupied property during the redevelopment.'


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H&B Stores LimitedSummary' of significant accounting policies and other explanatory information for the year ended31 March 2018

Amendment to [nd AS 12

The amendment to Ind AS 12 requires the entities to consider restriction in tax laws in sources of taxable profitagainst which entity may make deductions on reversal of deductible temporary difference (may or may not havearisen from same source) and also consider probable future taxable profit.


IE. Summaty of significant accounting policies

The financial statements have been prepared using the significant accounting policies and measurement basessummarized below.

a. Current / non-current classification:

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycleand other criteria set-out in the Act

b. Revenue recognition:

Revenue is recognised when it is probable that the economic benefits will flow to the Company and the amount ofincome can be measured reliably.

Retail sale of merchandise:

Revenue from retail sales is measured at the fair value of the consideration received or receivable (net of taxes).Retail sales arc recognised on delivery of the merchandise to the customer, when the property in goods andsignificant risks and rewards arc traxisferred for a price and no effective ownership control is retained. Wherethe Company is the principal in the transaction the Sales arc recorded at their gross values. Goods and servicetax CGST), sales tax and value added tax CVAT) are not received by the Company on its own account butcollected on behalf of the Government and accordingly, are excluded from revenue.

• Other retail operating revenue:

Revenue from store displays and sponsorships are recognised based on the period for which the ppaducts orthe sponsors' advertisements are promoted / displayed.

Interest income

Interest income is recognized using effective interest method.

Others:

Other incomes have been recognized on accrual basis in the financial statements, except when there isuncertainty of collection.

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Summar}- of significant accounting policies and other explanatoty infocmation for the year ended31 March 2018

c. Property, plant and equipment:

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impaLrmentlosses, if any.

Cost comprises of purchase cost, freight, duties, taxes and other expenses directly incidental to acquisition,bringing the asset to the location and installation including site restoration up to the time when the asset isready for intended use. Such costs also include borrowing cost if the recognition criteria are met.Wlien a major inspection/repair occurs, its cost is recognized in the carrying amount of the property, plant andequipment as a replacement if the recogniuon criteria arc satisfied. Any remaining carrying amount of the costof previous inspection/repair is derecognized. All other repair and maintenance are recognized in the Statementof Profit and Loss as incurred.

Depreciadon on property, plant and equipment is provided over the useful lives of assets as specified inSchedule II to the Act except where the management, has estimated useful life of an asset supported by thetechnical assessment, external or internal i.e., higher or lower frc>m the indicative useful life given underSchedule [I. The management believes that these estimated useful lives are rcalisdc and reflect fairapproximation of the period over which the assets arc liksly to be used.

Depreciation is calculated on a straight-line basis over the estixnated useful lives of the assets as follows:

Description Useful lives(upto)Leasehold Improvements (Buildings)Plant and machinery

Over lease period15 years

Funiiturc and fLxtures

Computers

8 to 10years

3 to 5 years

The residual value and useful life is rcview^ed annually and any deviation is accounted for as a change inestimate.

•

Components relevant to property, plant and equipment, where significant, are separately depreciated on straightline basis in terms of their life span assessed by technical evaluadon in item specific context.In case of shut down of stores before the expuyof the lease period, fbced assets that are imbedded in the leasedpremises are written off as loss.During disposal of property, plant and equipment, any profit eamed/loss sustained towards excess / shortfallof sale value vis-a-vis carrying cost of assets is accounted for in Statement of Profit and Loss.

d. Capital work-in-progress and intangible assets under development:

Capital work-in-progress and intangible assets under development represents expenditure incurred in respect ofcapital projects / intangible assets under development and arc carried at cost. Cost comprises of purchase cost,related acquisition expenses, development/construction costs, borrowing costs and other direct expenditure.

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e. Intangible assets:

Intangible assets acquired separately are measured on initial recognition at cost of acquisition. Tlie costconipnses of purchase price and directly attributable costs of bringing the assets to its working condition forintended use. In case of internally generated assets, measured at development cost subject to satisfaction ofrecognition criteria (ide ntif lability, control and future economic benefit) In accordance with Ind AS 38^ntangible Assets'.Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulatedimpaui-nent loss, if any.Amortization of intangible assets such as software licenses is computed on a straight-line basis, at the ratesrepresenting estimated useful life of up to 5 years.

f. Impairment of non-financial assets:

At each reporting date, the Company assesses whether there is any indication based on internal / external factors,that an asset may be impaired. If any such Indication exists, the recoverable amount of the asset or the cashgenerating unit (CGU) is esdmated. If such recoverable amount of the asset or CGU to which the asset belongs isless than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treatedas an impairment loss and is recognized in the Standalone Statement of Profit and Loss. If, at the reporting date,there is an indication that a previously assessed Lnipairment loss no longer exists, the recoverable amount isreassessed and the asset is reflected at the recoverable amount. Impaiiment losses previously recognized areaccordingly reversed in the Standalone Statement of Profit and Loss. An a^set is deemed impairable whenrecoverable value is less than its carrying cost and the difference between the two represents provisioning exigency.

g. Impairment of financial assets:

In accordance with Ind AS 109 'Financial Instruments', the Company applies expected credit loss (TECL') model formeasurement and recognition of impairment loss for financial assets. ECL is the weighted-average of differencebetween all contractual cash flows that are due to the Company in accordance with the contract and all the cashRows that the Company expects to receive, discounted at the original effective interest rate, with the respective risksof default occurring as the weights. When estimating the cash flows, the Company is required to consider:

All contractual tenns of the financial assets (including prepayment and extension) over the expected life of theassets.

Cash flows from the sale of collateral held or other credit enhancements that arc integral to the contractualterms.

h. Trade receivables:

In respect of trade receivables, the Company applies the simplified approach of Ind AS 109 'Financial Instruments',which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetimeexpected credit losses arc the expected credit losses that nssuk from all possible default events over the expected lifeof a financial instrument.

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i. Other financial assets:

In respect of its other financial assets, the Company assesses if the credit risk on those financial assets has mcreasedsignificantly since initial recognition. If the credit risk has not increased significantly since initial recognition, theCompany measures the loss allowance at an amount equal to 12-month expected credit losses, eke at an amountequal to the lifetime expected credit losses.

When making this assessment, the Company uses the change in the risk of a default occurring over the expected lifeof the financial asset. To make that assessment, the Company compares the risk of a default occurring on thefinancial asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the date of'initial recognition and considers reasonable and supportable information, that is available without undue cost oreffort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that thecredit risk on a financial asset has not increased significantly since inidal recognition if the financial asset isdetemiined to have low credit risk at the balance sheet date.

j. Financial Instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractualprovisions of the financial instmment and are measured initially at fair value adjusted for transaction costs, exceptfor those carried at fair value through profit or loss which are measured initially at fair value. Subsequentmeasurement of fuaancial assets and financial liabilities is described below.

Non-derivative financial assets

Subsequent measurement

• Financial assets carried at amortized cost

A financial asset is measured at the axnortized cost, if both the following conditions are met

a. The asset is held within a business model whose objective is to hold assets for collecting contractual cashflows, and

b. Contractual temis of the asset give rise on specified dates to cash flows that are solely payments ofprincipal and interest ('SPPI') on the principal amount outstanding.

Alter midal measurement, such fmancial assets are subsequendy measured at amortized cost using the effectiveinterest rate ('EIR') method.

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Summary of significant accounting policies and other explanatoty information for the year ended

Non-derivative financial liabilities

Stibseqiient measiirement

Subsequent to initial recognition, all non-derivatlve flnariLcial liabilities are measured at amortised cost using theeffective interest method.

De-recogiiition offtiiancial liabilities

A Elnanclal liability is de-recognized when the obUgation under the liability s discharged or cancelled or expires.When an existing financial liability is replaced by another from the same lender on substantially different terms orthe terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respecuve can-yingamounts is recognized in the Standalone Statement of Profit and Loss.

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Financial guarantee contracts

Financial guarantee contracts are those contracts that require a payment to be made to reimburse the holderTor aloss it incurs because the specified party fails to make a payment when due in accordance with the terms of a debtunstrument. Financial guarantee contracts are recognized as a financial liability at the time the guarantee is issued atfair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently,the liability is measured at the higher of die ainount of expected loss allowance determined as per unpairmentrequirements of [nd AS 109 'Financial Instruments' and the ainount recognized less cumulative ainortization.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Standalone Balance Sheet ifthere is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on anet basis, to realize the assets and settle the liabilities simultaneously.

k. Fair Value measurement

The Company measures financial instruments, such as, derivatives at fair value at each Standalone Balance Sheetdate.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderiy transactionbetween market participants at the measurement date. The fair value measurement is based on the presumption thatthe transaction to sell the asset or transfer the liability takes place either.

In the principal market for the asset or liability, orIn the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a Liability is measured using the assumptions that market paniclpants would use whenpricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generateeconomic benefits by using the asset in its highest and best use or by selling it to another market participant thatwould use the asset in its highest and best use.

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The Company uses valuation techniques that are appropriate m the circumstances and for which siifficient data areavailable to measure fair value, maxiniizing the use of relevant observable inputs and mmlniizlng the use ofunobservable inputs.

All assets and liabilities for which fair value is measured or disclosed In the financial statements are categorizedwithin the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fairvalue measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement isdirectly or indirectly observable

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement isunobservable

For assets and liabilities that arc recognized in the financial statements on a recurring basis, the Companydetermines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based onthe lowest level input that is significant to the fair value measurement as a whole) at the end of each reportingperiod.

1. Lease Assets:

Where the Company is the lessee

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantiallyall the risks and rewards incidental to ownership to the Company is classified as a finance lease.

Finance leases are capitalized at the commencement of the lease at the inception date's fair value of the leasedproperty or, tf lower, at the present value of the minimum lease payments. Lease payments are apportioned betweenfinance chaiges and reduction of the lease liability so as to achieve a constant rate of interest on the remainingbalance of the liability. Finance charges are recognized in finance costs in the Statement of Profit and Loss, unlessthey are directly attributable to qualifying assets, in which case they are capitalized in accordance with theCompany's general policy on the borrowing costs. Contingent rentals are recognized as expenses in the periods inwhich they are incurred.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that theCompany will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of theestimated useful life of the asset and the lease term.

Lease other than fixiance lease is treated as operating lease. Operating lease payments are recognized as an expensein the Statement of Profit and Loss on a straight-line basis over the lease term, except when the lease rentals,increase arc in line with general inflation index.

Where the Company is the lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset areclassified as operating leases. Rental income from operating lease is recognized on a stra^ht-line basis over the termof the relevant lease, except when the lease rentals, increase arc in line with general inHation index. Initial directcosts incurred in negouating and arranging an operating lease are added to the carrying amount of the leased assetand recognized over the lease tenn on the same basis as rental income. Contingent rents are recognized as revenuein the period in which they are earned.

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Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from theCompany to the lessee. Amounts due from lessees under finance leases are recorded as receivables at theCompany's net investment in the leases. Finance lease income is allocated to accounting periods so as to rcOect aconstant periodic rate of return on the net investment outstanding in respect of the lease.

m. Inventories:

Inventories arc valued as follows:

Traded goods are valued at lower cost and net realizable value. Cost of inventories comprises all costs ofpurchase and other incidental costs incurred In bringing the inventories to their present location and condition.Cost Is determined based on the moving weighted average method. Net realizable value Is the estimated sellingprice in the ordinary course of business, less estimated costs of completion and to malos the sale.

• Packing materials and accessories are valued at lower of cost and net realizable value. Cost is determined basedon the moving weighted average method.

n. Employee benefits:

Liabilities in respect of employee benefits to employees are provided for as follows:

Current employee benefits

a. Liabilities for wages and salaries, including non-monetaiy benefits that are expected to be settled whollywithin 12 months after the end of the period in which the employees render the related service arerecognized in respect of employees' services up to the end of the reporting period and arc measured at theamounts expected to be incurred when the liabilities are senled. The liabilities are presented as currentemployee benefit obligations in the Balance Sheet.

b. Employses' State Insurance ('ESI') is provided on the basis of actual liability accrued and paid toauthorities.

c. The Company has adopted a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulatir^ compensated absences is determined byactuarial valuation performed by an independent actuary at each balance sheet dale using projected unitcredit method on the additional amount expected to be paid / availed as a result of the unused entitlementthat has accumulated at the balance sheet date. Expense on non-accumulating compensated absences isrecognized in the period in which the absences occur.

d. Expense in respect of other short-tenn benefits is recognized on the basis of the amount paid or payablefor the period during which services arc rendered by the employee.

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Suminary of significant accounting policies and other explanatory' information for the year ended31 March 2018

• Post separation employee benefit plan

a. Defined benefit plan

o Gratuity liabiUty accounted for on the basis of actuarial valuation as per Ind AS 19 'Employee Benefits'.Liability recognized in the Balance Sheet in respect of gratuity is the present value of the definedbenefit obligation at the end of each reporting period less the fair value of plan assets. The definedbenefit obligation is calculated annually by an independent actuary using the pnajected unit creditmethod. The present value of defined benefit Is determined by discounting the estin^aced future cashoutflows by reference to marl<et yield at the end of each reporting period on government bonds thathave terms appnDximate to the terms of the related obligation. The net interest cost is calculated byapplying the discouni rate to the net balance of the defined benefit obligation and the fair value of planassets. This cost is included in employee benefit expense in the Statement of Profit and Loss.

o Actuarial gain / loss pertaining to gratuity are accounted for as OQ. All remaining components ofcosts are accounted for in Statement of Profit and Loss.

b. Defined contribution plans

The Company makes payments made to defined contribution plans such as provident fund and employees'state insurance. The Company has no further payment obligations once the contributions have been paid.The contributions are accounted for as defined contribuuon plans and the contributions are recognised asemployee benefit expense when they arc due. Prepaid contributions are recognised as an asset to the extentthat a cash refund or a reduction in the future payments is available.

o. Taxation:

Tax expense recognized in Statement of Profit and Loss comprises the sum of deferred tax and current tax exceptthe ones recognized in other comprehensive income or directly in equity.

Current tax is determined as the tax payable in respect of taxable income for the year and is computed inaccordance with relevant tax regulations. Current income tax relating to items recognized outside profit or loss isrecognized outside profit or loss (either in other comprehensive income or in equity).

Minimum alternate tax ("MAT) credit entitlement is recognized as an asset only when and to the extent there isconvincing evidence that normal income tax wiU be paid during the specified period. In the year in ^vhich MATcredit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the Statement ofProfit and Loss and shown as MAT credit entidement. This is reviewed at each balance sheet date and the carryingamount of MAT credit entitlement is written down to the extent it is not reasonably certain that normal income taxwill be paid during the specified period.

Deferred tax is recognized in respect of temporary differences between carrying amount of assets and Liabilities forfinancial reporting purposes and corresponding amount used fortaxauon purposes.

Deferred tax assets and liabilities are measured at the tax rates that arc expected to apply in the year when the assetis realized or the liability is sealed, based on tax rates (and tax laws) that have been enacted or substantively enactedat the reporting date. Deferred tax relating to items recognized outside Statement of Profit and Loss is recognizedoutside Statement of Profit and Loss (either in other comprehensive income or in equity.

p. Provisions, contingent liability and contingent assets:

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Provisions are recognized only when there is a present obligation, as a rcsidt of past events and when a reliableestimate of the amount of obligation can be n-iade at the reporting date. These estimates are reviewred at eachreporting date and adjusted to reflect the current best estimates. Provisions are discounted to their presentvalues, where the time value of money is niaterial.

Contingent liability is disclosed for:

a. Possible obligations which will be confirmed only by future events not whoUy within the control of theCompany or

b. Present obligations arising from past events where it is not probable that an outflow of resources will berequired to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are neither recognized nor disclosed except when realization of income is viitually certain,related asset is disclosed.

q. Foreign currency translation:

Foreign currency transactions arc recorded in the functional currency, by applying the exchange rate between thefunctional currency and the foreign currency at the date of the transaction.

Foreign currency monetary items outstanding at the balance sheet date are converted to functional currency usingthe closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost arcreported using the exchange rate at the date of the transactions.

Exchange differences arising on inonetary items on settlement, or restatement as at reporting date, at rates differentfrom those at which they were initially recorded, are recognized in the Statement of Profit and Loss in the year inwhich they arise.

r. Share based payments - Employee Stock Option Scheme ('ESOP'):

The Company is under obligation to settle share based payment transaction against services of its employees, underspecified category received by the parent company. Such share based payments arc of the nature of gt-ant ofoptions to purchase shares of parent company at concessional rates without any scope of settling the transaction incash or in any other consideration other than equity instruments. The fair value of the shares (arrived at under"Black Schole's Method") net of consideration money payable by the employee, is amortised during vesting periodunder Straight Line Method.

s. Earnings per share:

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders bythe weighted average number of equity shares outstanding during the period.

For the puqxsse of calculating diluted earnings per share, the net piafa for the period attributed to equityshareholders and the weighted average number of shares outstanding during the period is adjusted for the effects ofall potentially dilative equity shares.

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Summary of significant accounting policies and otlier explanatory information for the year ended31 March 2018

t. Borrowing cost:

Borrowing cost consists of interest and other costs incurred in coruiecdon with the borrowing of funds and alsoinclude exchange differences to the extent regarded as an adjustment to the same. Borrowing costs directlyattributable to the acquisition and / or construction of a qualifying asset are capitalized during the period of timethat Is necessary to complete and prepare the asset for its intended use or sale. A qualifying asset is one thatnecessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are chargedto the Statement of Profit and Loss as incurred.

u. Cash and cash equivalents:

For the puqx)se of the Statement of Cash Flows, cash and cash equivalents consist of cash and cheques in hand,bank balances, demand deposits with banks where the original maturity is three months or less and other short-tercnhighly liquid investments.

v. Significant management judgement in applying accounting policies and estimation uncertainty:

The preparation of the Company's financial statements requires the management to maks judgements, estimatesand assumpdons that affect the reported amounts of revenues, expenses, assets and liabilities, and theaccompanying disclosures, and the disclosure of contingent liabilities.

Evaluation of indicators for impairment of assets

The evaluation of applicability of indicators of impairment of assets requires assessment of several external andinternal factors which could result in deterioration of recoverable amount of the assets.

Classification of leases

The G3mpany enters into leasing arrangements for various assets. The classification of the leasing arrangement as afinance lease or operating lease is based on an assessment of several factors, including but not limited to, transfer ofownership of leased asset at the end of lease term, lessee's option to purchase and estimated certamtyof exercise ofsuch option, proportion of lease term to the asset's economic life, proportion of present value of minimum leasepayments to fair value of leased assets and extent of specialized nature of the leased asset.

Recoverability of advances / receivables

At each balance sheet date, based on historical default rates observed over expected life, the management assessesthe expected credit losses on outstanding receivables and advances.

Defined benefit obligation ((DBO')

Management's estimate of the DBO is based on a number of underlying assumptions such as standard rates ofinflation, mortality, discount rate and anticipation of future salary increases. Variauon in these assumptions maysignificantly impact the DBO amount and the annual defined benefit expenses.

Provisions

At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Companyassesses the requirement of provisions against the outstanding contingent liabilities. However, the actual futureoutcome maybe different from this judgement.

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Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims agaunst the Company, refernote 32. By their nature, contingencies will be resolved only when one or more uncertain future events occur or Failto occur. The assessment of the existence, and potential quantum, of contingencies inherently in valves the exerciseof significant judgments and the use of estimates regarding the outcome of future events.

Fair value measurements

A/Ianagement applies valuation techniques to determine the fair value of financial instruments (where active mari<etquotes are not available). This involves developing estimates and assumptions consistent with how marl\etparticipants would price the instrument.

Inventories

The Company estimates the net realizable values of inventories, taking into account the most reliable evidenceavailable at each reporting date. The future realization of these inventories may be affected by future demand orother markst-driven changes that may reduce future selling prices.

• Useful lives of depreciable / amortizable assets

Management reviews its estimate of the useful lives of depreciable / amortizable assets at each reporting date, basedon the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescencethat may change the utility of assets.

Income taxes

The Company's tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for thepurpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid /recovered for uncertaui tax positions (refer note 29).

Recognition of deferred tax assets

The extent to which deferred tax assets can be recognized is based on an assessment of the probabilltyof the futuretaxable income agaixist which the deferred tax assets can be utilized.

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financial statements and auditors^ report 31 march 2018 · % c? % &' ^ a c^ g * s k ^ ^...

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