1. Reporting Entity

Dhunseri Petrochem Limited is a company limited by shares and incorporated and domiciled in India. The Company is primarily engaged in Treasury Operations and trading of PET Resin. Equity Shares of the Company are listed on Bombay Stock Exchange Ltd and National Stock Exchange Ltd.

The Standalone Financial Statements were approved and authorised for issue with the resolution of the Board of Directors on May 21, 2018.

Note: Investment Property (Buildings) includes three properties [Gross Carrying Amount and Net Carrying Amount amounting to Rs.1049.17 lakhs (31 March 2017 - Rs.1049.17 lakhs) and Rs.993.72 lakhs (31 March 2017 - Rs.1012.22 lakhs) respectively, asat31 March 2018], located at Kolkata which are not held in the name of the Company as the conveyance deeds are yet to be executed.

(B) Measurement of Fair Values

(i) Fair value hierarchy

The fair value of investment property has been determined by an external, independent property valuer, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued

The fair value measurement for all the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used.

(ii) Valuation Technique

The fair valuation is based on current prices in the active market for similar properties. The main inputs used are quantum, area, location, demand, restrictive entry to the complex, age of building and trend of fair market rent in the area.

(D) Leasing arrangements

The Company has given certain investment properties on operating lease arrangements. These lease arrangements range for a period up to 2 years and are cancellable in nature. The leases are renewable for a further period on mutually agreeable terms.

(C) Equity shares designated at fair value through other comprehensive income

At 01 April 2017, the Company designated the investments shown below as equity shares at FVOCI because these equity shares represent investments that the Company intends to hold for long-term for strategic purposes.

(a) In March 2018, management committed to a plan to sell part of its majority stake in Tastetaria Private Limited, a subsidiary.

A Joint Venture agreement has been entered into between the Company, Choicest Enterprises Limited ("CEL") of Ambuja Neotia group and Tastetaria Private Limited ("Tastetaria") on March 29, 2018 for seffing up and operating restaurants for making and selling the well known "UNO" Brand of Chicago style deep-dish pizzas and such other business as may be decided in future. The JV Company chosen for this purpose is Tastetaria Private Limited ("JV Company" or "Tastetaria"), which was formed in 2016 and was already pursuing such business on its own as a wholly owned subsidiary of the Company. Pursuant to the said agreement, CEL will acquire 75% of the existing share capital of Tastetaria from the Company while the Company will retain 25% of the share capital in Tastetaria.

(b) At 31 March 2018, the asset has been stated at fair value less costs to sell (being lower of their carrying amount).

(b) Terms/ Rights attached to Equity Shares

The Company has one class of equity share having a par value of Rs.10/- each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in the case of interim dividend. In the event of liquidation the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts in proportion to their shareholding.

For details related to employee benefit expense, see Note 26

The Company has a defined gratuity plan in India with LICI, governed by the Payment of Gratuity Act, 1972. The plan entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen days salary/wages for every completed year of service or part thereof in excess of six months, based on the rate of salary/wages last drawn by the employee concerned.

The defined benefit plan for gratuity is administered by a single gratuity fund that is legally separate from the Company. The board of the gratuity fund is required by law to act in the best interests of the plan participants and is responsible for setting certain policies (e.g. investment and contribution policies) of the fund.

These defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.

A. Funding

The Plan is funded by the Company. The funding requirements are based on the gratuity fund's actuarial measurement framework set out in the funding policies of the plan. The funding of the Plan is based on a separate actuarial valuation for funding purposes for which the assumptions may differ from the assumptions set out in (E). Employees do not contribute to the plan.

The Company expects to pay Rs.5.99 lakhs (31 March 2017- Rs.3.54 lakhs) in contribution to its defined benefit plans in 2018-19.

B. Reconciliation of the net defined benefit (asset)/ liability

The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit (asset) liability and its components

F. Contribution to Defined Contribution Plan comprising Rs.15.17 lakhs (31 March 2017- '10.25 lakhs) on account of the Company's Contribution to Superannuation fund and ' 18.54 lakhs (31 March 2017- Rs.11.69 lakhs) on account of the Company's Provident Fund has been recognised as an expense and included in Note-26-Employee Benefit Expenses under the head "Contribution to provident and other funds" in the Statement of Profit and Loss.

Exceptional items for the year ended 31st March, 2017 comprises loss on disposal of controlling interest in "Egyptian Indian Polyester Company S.A.E", a subsidiary company and associated adjustments in carrying value of the remaining stake in Egyptian Indian Polyester Company S.A.E. aggregating to Rs.18,266.20 lakhs.

E. Unrecognised Deferred tax assets

Deferred tax assets in respect of MAT Credit Entitlement aggregating to Rs.6,761.75 lakhs have not been recognised because it is not probable that future taxable profit will be available against which the Company can use the benefits there from.

The tax credits for various years expire between the financial years 2023-24 and 2032-33.

On 29th February, 2016, the Company announced its intention to transfer the "Polyethylene Terephthalate" ("PET Resin") business of the Company in India to Dhunseri Petglobal Limited (now known as IVL Dhunseri Petrochem Industries Private Limited)

Accordingly, pursuant to the Scheme of Arrangement (the Scheme), duly sanctioned by the Hon'ble High Court at Calcutta at the hearing held on 27th July, 2016, with effect from the appointed date i.e. 1st April, 2016, the "Polyethylene Terephthalate" ("PET Resin") business of the Company in India ("Transferred Business") was transferred to Dhunseri Petglobal Limited (now known as IVL Dhunseri Petrochem Industries Private Limited). Upon filing of the certified copy of the Court Order with the Registrar of Companies on 11th August, 2016, the Scheme became operative on and from the said date.

Note 2- Merger of IVL Dhunseri Petrochem Industries Pvt Ltd and Micro Polypet Pvt Ltd

A Scheme of Amalgamation ("the Scheme") of Micro Polypet Private Limited, Eternity Infrabuild Private Limited and Sanchit Polymers Private Limited (the "Transferor Companies") with IVL Dhunseri Petrochem Industries Private Limited (formerly known as Dhunseri Petglobal Limited) (the "Transferee Company") was filed in 2016-17 before the National Company Law Tribunal ("NCLT") under section 230 to 232 of the Companies Act, 2013.

On receipt of the order dated, 4 December 2017 from NCLT sanctioning the Scheme and upon filing the same with the Registrar of Companies on 18 December 2017, the Scheme became effective and the Transferor Companies amalgamated with the Transferee Company.

The Company held 50,00,000 equity shares of Face value of Rs.10 each and 10,25,000 compulsorily convertible debentures of Rs. 1,000 each in Mircro Polypet Private Limited. Pursuant to the aforesaid scheme of amalgamtion the company recevied 10,00,000 equity shares of Face value of Rs.10 each and 2,10,000 compulsorily convertible debentures of Rs. 1,000 each in IVL Dhunseri Petrochem Industries Private Limited.

*lt represents Corporate Guarantee given by the company amounting to Rs.675.91 lakhs to Standard Chartered Bank in respect of the loan taken by its step down subsidiary, Twelve Cupcakes Pte Ltd. The guarantee is given for working capital borrowings taken by the subsidiary. Total Guarantee given outstanding as at the beginning of the year amounts to Rs. Nil lakhs, Guarantee given during the year Rs.675.91 lakhs (31 March 2017: Rs. Nil lakhs), Total Guarantee given outstanding as at the end of the year amounts to Rs.675.91 lakhs (31 March 2017: Rs. Nil lakhs). The Company does not expect any reimbursements in respect of the above contingent liabilities.

See accounting policies in note 1.8

A) Company as Lessee

The Company has taken on lease, premises at various loaction under operating leases. The lease period ranges from 5 years to 9 years, with an option to renew the lease after that period. Lease rentals are increased periodically as per the terms of the agreement.

The lease arrangements are cancellable by either of the parties after giving a notice of 3 months.

Note 3- Financial Risk Management

The Company's activities expose it to the following risks arising from financial instruments:

- Credit Risk (See 39 (ii));

- Liquidity Risk (See 39 (iii));

- Market Risk (See 39 (iv));

i. Risk Management Framework

The Company is exposed to normal business risks from changes in market interest rates and currency exchange rates and from nonperformance of contractual obligations by counterparties. The Company does not hold or issue derivative financial instruments for speculative or trading purposes.

Risk management is integral to the whole business of the Company. The Company has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Company's risk management process to ensure that an appropriate balance between risk and control is achieved.

ii. Credit risk

Credit Risk is the risk that the counterparty will not meet its obligations under a financial instrument or a customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily Trade Receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Trade Receivables

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the designated authorities of the management. The management mitigates the credit risk from some customer by accepting letter of credits from them.

The Company limits its exposure to credit risk from trade receivables by establishing a maximum payment period of four months for export customers respectively. On account of adoption of Ind AS109, the Company uses expected credit loss model to assess the impairment loss or gain.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 11.

The allowance for lifetime expected credit loss on customer balances for the year ended 31 March 2018 was Nil.

Revenue from 1 customer of the Company is Rs.8,617.71 lakhs (31 March 2017- Rs. Nil lakhs) which is more than 10% of the total revenue of the Company.

Other Financial Assets

Credit Risks for balances with banks and financial institutions is managed by the Company's treasury department in accordance with the Company Policy. Investments of Surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risk and therefore mitigate financial loss through counterparties potential failure to make payments. Such limits are reviewed from time to time.

Credit risks for loans are covered through collateral securities, which are pledged / hypothecated at the time of loan disbursement.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 6(A), 6(B), 7, 8, 9, 10, 11.

iii. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, the Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of expected cash flows.

As of 31 March 2018, the Company had cash and bank balances of Rs.5,640.10 lakhs. As of 31 March 2017, the Company had cash and bank balances of Rs.1,058.46 lakhs.

Exposure to Liquidity Risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of setting agreements:

iv. Market Risk

Market risk is the risk that changes in market prices - such as prices of securities, foreign exchange rates and interest rates- will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Company uses derivatives to manage market risks.

a) Price Risk Exposure

The Company's exposure to equity securities and mutual funds price risk arises from investments held by the Company and classified in the Balance Sheet either at fair value through OCI or at fair value through profit or loss.

To manage its price risk arising from investments in equity securities and mutual funds, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

The majority of the Company's equity investments and mutual funds are publicly traded.

Sensitivity

The table below summarises the impact of increases/decreases of the index on the Company's equity and profit for the period. The analysis is based on the assumption that the equity index had increased by 5% or decreased by 5% with all other variables held constant, and that the Company's equity instruments moved in line with the index.

Profit for the period would increase/decrease as a result of gains/losses on mutual funds and equity securities classified as at fair value through profit or loss. Other Components of equity would increase/decrease as a result of gains/losses on equity securities classified as fair value through other comprehensive income.

b) Currency Risk:

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the functional currency of the Company. The currencies in which these transactions are primarily denominated are USD and EURO.

The Company uses forward exchange contracts in certain cases to hedge its currency risk, most with a maturity of less than one year from the reporting date.

Exposure to Currency Risk

The summary quantitative data about the Company's exposure to currency risk on the reporting date:

Note 4-Capital Risk Management

(a) Risk Management

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders.

The capital structure of the Company is based on management's judgement of the appropriate balance of key elements in order to meet its strategic and day to day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Company's policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

B. Measurement of Fair Values

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted/ published price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: Level 2 hierarchy includes financial instruments measured using unquoted prices. The mutual funds are valued using the closing NAV.

Level 3: Level 3 hierarchy includes financial instruments that are not based on observable market data (unobservable inputs).

(6) Terms and Conditions

Transactions relating to dividends were on the same term and conditions that applied to other shareholders. Transactions relating to acquisitions and disposal of investment are made based on independent valuation report. Transactions relating to rental and royalty income and rent and service charges are as per terms of related agreements. All other transactions are made on normal commercial terms and conditions.

All related party transaction are reviewed by the Audit Committee of the Company.

All outstanding balances are unsecured and are receivable/ repayable in cash.

The Company has presented segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 4 of Ind AS 108 "Operating Segments", no disclosure related to segments are presented in standalone financial statements.

Note 6- Disclosure of Specified Bank Notes (SBNs)*

The disclosures regarding details of specified bank notes held and transacted during 8 November 2016 to 30 December 2016 has not been made since the requirement does not pertain to financial year ended 31 March 2018. Corresponding amounts as appearing in the audited Standalone Ind AS financial statements for the period ended 31 March 2017 have been disclosed.

Note 6- Subsequent Events

The company, post 31 March 2018, has acquired majority stake in Egyptian Indian Polyester Company S.A.E. ("EIPET"), through acquisition of 65% shares of EIPET from Dhunseri Overseas Private Limited.

The company has also entered into a share purchase agreement on 20th May 2018 with Egyptian Petrochemicals Holding Company ("ECHEM") for the purchase of its 23% shares of EIPET.

Note 7-

Figures for the previous year ended 31 March 2017 have been audited by a firm of Chartered Accountants other than BSR& Co. LLP.