Note 1 - General information and Significant Accounting Policies

Note 1.1 - General information

Globus Spirits Limited (the Company) is a public Company domiciled in India and incorporated under the provisions of the Companies Act. The registered office of the Company is located at F-0, Ground Floor, The Mira Corporate Suites, Plot No. 1 & 2, Ishwar Nagar, Mathura Road, New Delhi - 110065. The Company is primarily engaged in the business of manufacture and sale of Indian Made Indian Liquor (IMIL), Bulk Alcohol and Franchise Bottling.

Note 1.2 - Statement of compliance

These standalone Ind AS financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) as prescribed under the Companies (Indian Accounting Standards) Rules, 2015. The financial statements up to the year ended March 31, 2017 were prepared in accordance with Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and other relevant provisions of the Act (‘Previous GAAP’). These are Company’s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016. Refer note 46 for an explanation of the transition from previous GAAP to Ind AS and the effect on the Company’s financial position, financial performance and cash flows.

(c) Market risk

“Market risk is the risk that the fair value of future cash flows of a financial instrument that will fluctuate because of changes in market prices. Market risk com prise of three types of risk i.e interest rate risk, foreign currency risk and other price risk.Financial instruments affected by market risk include trade receivables and advances.The Company enters into derivative contracts to manage its exposure to foreign currency risk.”

Foreign Currency risk management

Foreign currency risk also known as Exchange Currency Risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Foreign currency risk in the Company is attributable to Company’s operating activities.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period demoninated in Rupees are as follows:

Forward foreign exchange contracts

The Company uses derivative financial instruments exclusively for hedging financial risks that arise from its commercial business. The Company manages its foreign currency risk by hedging transactions that are expected to occur within of 2 to 3 months for hedges of forecasted sales. When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions, the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable that is denominated in the foreign currency. All identiled exposures are managed as per the policy duly approved by the Board of Directors.

Note 2 - Employee benefits plans

Sensitivity analysis of the defined benefit obligation

The significant actuarial assumption for the determination of defined benefit obligations are discount rate and expected salary increase.

(b) Defined contribution Plans

“The Company makes contribution towards employees’ provident fund for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of payroll cost, as specified in the rules of the schemes, to these defined contribution schemes.

Note 3 - Segment reporting

The Company is engaged in the business of manufacture and sale of Indian Made Indian Liquor (IMIL), Bulk Alcohol and Franchise Bottling. This is the only activity performed and is thus also the main source of risks and returns. The Company’s segments as reviewed by the Chief Operating Decision Maker (CODM) does not result in to identification of different ways/ sources into which they seethe performance of the Company. Accordingly, the Company has a single reportable segment.

Note 4 - Information about majorcustomer

Included in revenue are revenues of approximately Rs. 37,651.63 lacs (2016-17 K 27,811.54 lacs) which arose from sales to the company’s largest customer (refer note 12). No other single customer contributed 10% or more to the company’s revenue for both 2017-18 and 2016-17.

Note 5 - Related party disclosures under Ind-AS-24 “Related Party Disclosures”

a) Subsidiaries:

Unibev Limited (Formerly known as Uber Blenders & Distillers Limited)

b) Key managerial personnel and their relatives:

Key management personnel

Mr. Ajay Kumar Swarup Mr. Shekhar Swarup Dr. Bhaskar Roy Mr. Manik Lai Dutta Mr. AjayGoyal

c) Enterprises over which key managerial personnel and / or their relatives exercise significant influence: Biotech India Limited Chandbagh Investments Limited GRAS education and training Services Private Limited Himalayan Spirits Limited Globus Spirits (Jharkhand) Limited Globus Trois Freres India Limited Globus Feeds Private Limited VC technologies Private Limited Northern India Alcohol Sales Private Limited Rajasthan Distilleries Private Limited ADL Agrotech Limited (Formerly known as Assocaited Distilleries Limited)

Note 6- Fair value hierarchy

Some of the company’s financial assets are measured at fair value at the end of each reporting period.

The following table presents fair vale hierachy of financial assets measured at fair value on a recurring basis:

During the year ended March 31, 2018, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfes in to and out of Level 3 fair value measurements.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 inputs other than quoted prices included within level 1 that are observable for the assets or liability, either directly or indirectly.

Level 3 inputs are unobservable in puts for the assets or liability.

Note 7 (a) - Transition to Ind AS - principle and reconciliations

Overall principleThese are the Company’s first financial statement prepared in accordance with Ind AS, accordingly the Company has prepared the opening balance sheet as per Ind AS at of April 1, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the exception and certain optional exemptions availed by the Company as detailed below:

A. Mandatory exceptions Estimates

The estimates as at April 1,2016 and as at March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

(i) Fair value through profit or loss (FVTPL) - unquoted equity shares

(ii) Impairment of financial assets based on expected credit loss modelThe estimates used by the Company to present these amounts are in accordance with the Ind AS which reflects conditions as at April 1,2016, the date of transition to Ind AS and as at March 31,2017.

Derecognition of financial assets and financial liabilities

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after transition date.

Classification and measurement of financial instruments (I) Financial Instruments: (Security deposits)

Financial assets / liabilities like security deposits has been classified and measured at amortised cost on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

{II) Impairment of financial assets

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind AS, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.

B. Optional exemptions

Deemed cost for property, plant and equipment and intangible assets

The Company has opted to measure all of its property, plant and equipment and intangible assets at the fair value and use that fair value as its deemed cost.

I nvestment i n eq u ity shares of su bsidiaries at deemed cost

The Company has opted to measure its investment in subsidiary at their previous GAAP carrying value in separate financial statement and use that carrying value as deemed cost.

Determining whether an arrangement contains a lease

Append ixC to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements based on conditions in place as at the date of transition.

Designate of previously recognised financial instrument

The Company has elected this exemption and opted to designate financial asset at FVTPL as per Ind AS 109 based on facts and circumstances that exist as on transition date.

Note: -

(a) Leasehold land

Under previous GAAP, the leasehold land was considered as part of property, plant and equipment as being long lease, accordingly in the financial year 2016-17 no amortisation was charged. As per Ind AS-17 leasehold land of Rs.1,056.48 lacs has now been classified as operating lease and the premium paid on leasehold land is amortized over the period of the lease which amounts to Rs.10.72 lacs in financial year 2016-17. The proportionate unamortized amount of Rs. 17.83 lacs upto the date of transition is adjusted against retained earnings in the opening balance sheet.

(b) Property, plant and equipment

The Company has elected to recognise its Property, plant and equipment (PPE) at fair value as on April 1, 2016 and use that as its deemed cost as of transition date. As on the transition date such fair value adjustment resulted in net increase of PPE by Rs. 40.65 lacs with corresponding increase in retained earnings. Depreciation amounting toRs. 400.66 lacs in financial year 2016-17 has been adjusted in the statement of prof it and loss. The fair value adjustment resulted in increase of freehold land by Rs.1,543.63 lacs and decrease of other PPE By Rs.1,502.98 lacs which resulted in deferred tax income of Rs. 160.55 lacs.

(c) Intangible Assets

Under previous GAAP, knowhow and new brand development was being amortised. Under the Ind AS 38, such intangible assets fair valued as at the transition date and accordingly, the intangible assets have been written down to Rs. Nil. Consequently, Rs.1 ,443.30 lacs has been charged off from Retained earnings as on the transition date and Rs. 721.64 has been adjustment has been passed for reversal of amortisation booked under Indian GAAP for the year ended March 31,2017.

(d) Investments

Under the previous GAAP, long term investments were measured at cost less diminuition which is other than temporary. Under Ind AS 40, these financial assets have been classified as FVTPL. On the transition date these financial assets have been measured at their fair value which is greater than the cost as per previous GAAP, resulting in increase in carrying amount byRs. 2.69 lacs as at transition date with resulting gain adjusted in retained earnings.

(e) Capital subsidy

Under the previous GAAP, Capital subsidy was treated as part of retained earnings treating the same in the nature of Pro motor contribution, now under Ind AS 20 the same has been deferred as subsidy received and to be amortised over the period of related property, plant and equipment. The resulting amount for the period ended March 31,2017 amounting to Rs. 181.84 lacs is treated as deferred liability

(f) Borrowings

Under previous GAAP, transaction costs incurred in connection with long term borrowings were charged off in the year of borrowing. Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the statement of profit and loss over the tenure of the borrowings as part of interest expense using effective interest rate method. The resulting net impact of Rs. 11.76 lacs is charged in the statement of profit and loss for the year ended March 31,2017.

(g) Security deposits

Under the previous GAAP, interest free security deposits given were recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Difference between the fair value and transaction value of the security deposits has been recognised as prepaid expenses and is amortised over the period of security deposit on straight line basis. Notional interest income on such deposits is recognised over the security period using effective interest method. The resulting net impact of Rs. 4.33 lacs is charged in the statement of profit and loss for the year ended March 31,2017.

(h) Actuarial gains/losses on defined benefit obligation

Under previous GAAP in respect of defined benefit plan, actuarial gains and losses were recognised in the statement of profit or loss. Under Ind AS, the actuarial gains and losses forming part of re-measurement of the net defined benefit liability / asset is recognised in other comprehensive income. The tax effect of the same has also been recognised in other comprehensive income under Ind AS instead of the statement of profit and loss. There is no impact on the total equity

(i) Excise duty

Under previous GAAP, revenue from sale of goods was presented net of excise duty under revenue from operations. Whereas, under Ind AS, revenue from sale of goods includes excise duty. The corresponding excise duty expense of Rs.33,396.24 lacs is presented separately on the face of the statement of profit and loss. The change does not affect total equity as on April 1,2016 and March 31,2017 and the profit for the year ended March 31,2017.

(j) Other comprehensive income

Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains, or losses are required to be presented in other comprehensive income.

(k) Deferred tax assets / liabilities

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on the various transitional adjustments lead to temporary differences. According to the accounting policies, the company has accounted for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings ora separate component of equity. Such adjustments amounting to Rs. 270.33 lacs as at March 31,2017 andRs. 652.24 lacs as at April 01,2016.

(I) Rebate and discount

Under previous GAAP, rebate and discount was shown under other expenses. However, under Ind AS, sale of goods is presented net of discount of Rs. 1,487.91 lacs. Thus sale of goods under Ind AS has decreased for the year ended March 31,2017 with a corresponding decrease in other expenses. The change does not affect total equity as on April 1,2016 and March 31,2017 and profit for the year ended March 31,2017.

(m) Recognition of Mark to Market (MTM) gain/loss of foreign forward exchange contracts through profit or loss. (As at April 01, 2016 : Rs. 5.25 lacs andRs. 5.65 lacs for the year ended March 31,2017)

(n) The transition from Indian GAAPtolnd-AS had no significant impact on cash flows generated by the Company

Note 8 - Approval of financial statements

The financial statements were approved for issue by the Board of Directors on May 21,2018.