1. CORPORATE OVERVIEW

SORIL Infra Resources Limited (formerly known as Store One Retail India Limited) (“the Company”) is a Public Limited Company incorporated in India with its registered office in Delhi, India. The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

SORIL Infra Resources Limited was incorporated as Pyramid Retail Limited on March 18, 2005. The name of the company was subsequently changed to Indiabulls Retail Services Limited on May 22, 2008 and then changed to Store One Retail India Limited on September 30, 2009 and now further changed to SORIL Infra Resources Limited on December 21, 2016. The company received fresh certificate of incorporation consequent upon the change of name, from the Registrar of Companies, National Capital Territory of Delhi and Haryana.

The Company is in the main business of Equipment renting services, Management and maintenance services, LED Lighting and Construction, advisory and other related activities.

SORIL Holding and Ventures Limited (formerly known as Indiabulls Wholesale Services Limited), Holding Company of the Company, erstwhile Subsidiary of Indiabulls Real Estate Limited, completed the acquisition of 63.92% of the outstanding Equity Share Capital of the Company from the then existing promoters in terms of the Share Purchase Agreement dated December 08, 2007 and Public Announcement dated December 09, 2007. In the open offer, which concluded on April 10, 2008, IBWSL purchased 310 shares from the general public.

The Company had invested Rs. 5 Lakhs in Store One Infra Resources Limited, a wholly owned subsidiary on November 20, 2015.

2. BASIS OF PREPARATION OF FINANCIAL STATEMENT

a) General information and statement of compliance with Ind AS

These financial statements (‘financial statements’) of the Company have been prepared and presented in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended by the Companies (Indian Accounting Standards)(Amendment) Rules, 2016, notified under Section 133 of the Companies Act, 2013, the relevant provisions of the Companies Act, 2013 (“the Act”) The Company has uniformly applied the accounting policies during the periods presented.

For all periods up to and including the year ended March 31, 2017, the Company has prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP). These financial statements for the year ended March 31, 2018 are the first which the Company has prepared in accordance with Ind AS. For the purpose of corresponding figures, set of financial statements for the year ended March 31, 2017 and opening balance sheet as at April 01, 2016 are also prepared under Ind AS.

As these are the first financial statements prepared in accordance with Indian Accounting Standards (Ind AS), Ind AS 101, First-time Adoption of Indian Accounting Standards has been applied. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is provided in Note 35.

The financial statements for the year ended March 31, 2018 were authorized and approved for issue by the Board of Directors on May 02, 2018.

b) Basis of accounting

The financial statements have been prepared on going concern basis in accordance with accounting principles generally accepted in India. Further, the financial statements have been prepared on historical cost basis except for certain financial assets and financial liabilities and share based payments which are measured at fair values as explained in relevant accounting policies. Fair valuations related to financial assets and financial liabilities are categorised into level 1, level 2 and level 3 based on the degree to which the inputs to the fair value measurements are observable.

c) Recent accounting pronouncement

In March, 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying amendments to Ind AS 12 ‘Income taxes’, Ind AS 21 ‘The effects of changes in foreign exchange rates’ and also introduced new revenue recognition standard Ind AS 115 ‘Revenue from contracts with customers’. These amendments rules are applicable to the Company from April 01, 2018.

Ind AS 115 ‘Revenue from contracts with customers’

Ministry of Corporate Affairs (‘MCA’) has notified new standard for revenue recognition which overhauls the existing revenue recognition standards including Ind AS 18 - Revenue and Ind AS 11 - Construction contracts. The new standard provides a control-based revenue recognition model and provides a five step application principle to be followed for revenue recognition:

1. Identification of the contracts with the customer

2. Identification of the performance obligations in the contract

3. Determination of the transaction price

4. Allocation of transaction price to the performance obligations in the contract (as identified in step 2)

5. Recognition of revenue when performance obligation is satisfied.

Amendment to Ind AS 12 ‘Income taxes’

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

Amendment to Ind AS 21 ‘The effects of changes in foreign exchange rates’

The amendment to Ind AS 21 requires the entities to consider exchange rate on the date of initial recognition of advance consideration (asset/liability), for recognising related expense/income on the settlement of said asset/ liability.

The Company is evaluating the requirements of the amendments and their impact on the financial statements.

Note:-

Discarded fixed assets:-

During the year ended March 31, 2018, the Company has discarded unusable fixed assets at gross book value of Rs. 1,587.12 Lakhs. Property, plant and equipment pledge as security:-

Property, plant and equipment and other intangible assets has been pledge as security for bank borrowings.

Capitalisation of borrowing cost:-

No borrowing cost has been capitalised in property, plant and equipment and other intangible assets.

v Rights, preferences and restrictions attached to equity

The holders of equity shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company. In the event of liquidation of the Company, the remaining assets of the Company shall be distributed to the holders of equity shares in proportion to the number of shares held to the total equity shares outstanding as on that date. All shares rank equally with regard to the Company’s residual assets, except that holders of preference shares participate only to the extent of the face value of the shares.

vi 9% Redeemable non -cumulative, non-convertible preference share of face value of Rs. 10 each fully paid up issued at premium of Rs. 870 each is presented as unsecured borrowings.

vii Dividend on preference share @ 9% per annum has to be accrued and paid on approval by the Board of Directors. Preference dividend is presented as finance cost in congruence with the presentation of preference share as unsecured borrowings.

Nature and purpose of other reserves Securities premium reserve

Security premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of Companies Act, 2013

Deferred employee compensation reserve

The reserve is used to recognize the expenses related to stock options issued to employees under the Company’s employee stock option scheme.

ii Rights, preferences and restrictions attached to preference shares

All shares rank equally with regard to the Company’s residual assets, except that holders of preference shares participate only to the extent of the face value of the shares.

iv 9% Redeemable non-cumulative, non-convertible preference share presented as unsecured borrowings as per Ind AS accounting standard.

v The Company has working capital facility with RBL Bank Limited. Cash Credit Facility of Rs. 1,083.71 (March 31, 2017: Rs. 1,996.09, April 01, 2016: Nil) Lakhs having an interest rate of 9.6% (March 31, 2017: 10%) per annum and foreign currency term loan of Rs. 1,000.00 (March 31, 2017: Nil, April 01, 2016: Nil) Lakhs at interest rate of 8.45% per annum. The cash credit facility is of Rs. 3,000.00 lakhs and is secured against (i) first charge on all current assets includes book debts, inventory and others assets (both present and future) of the Company other than those assets exclusively charged to other lenders. (ii) Further Secured by corporate guarantee given by holding company SORIL Holding and Ventures Limited (formerly known as Indiabulls Wholesale Services Limited).

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.

(ii) Corporate social responsibility expenses

(a) Gross amount required to be spent by the company during the year ended March 31, 2018 : Rs. 74.25 lakhs (March 31, 2017 : Rs. 79.36 lakhs).

(b) Amount spent during the year on:

NOTE - 3

Earnings per equity share

Earnings per share (‘EPS’) is determined based on the net profit attributable to the shareholders’ of the Company. Basic earnings per share is computed using the weighted average number of shares outstanding during the year. Diluted earnings per share is computed by using the weighted average number of dilutive common equivalent shares outstanding during the year including share options, except where the result would be anti-dilutive.

Option granted to employees under the Schemes, SORIL Infra ESOS-2009 and SORIL Infra ESOS-2009(II), are considered to be potential equity shares. They have been included in the determination of diluted earning per share to the extent they are dilutive. Details relating to the option are set out in Note -41.

B Fair value hierarchy of financial assets and liabilities measured at fair value:

The fair values of the financial assets and liabilities are included at the amount, at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments based on the input that is significant to the fair value measurement as a whole:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The fair value of all Equity Shares which are traded on the stock exchanges, is valued using the closing price at the reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

The management assessed that cash and bank balances, trade receivables, loans, trade payables, borrowings (cash credits, foreign currency loans, working capital loans) and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

During the reporting period ending March 31, 2018 and March 31, 2017, there was no transfer between level 1 and level 2 fair value measurement.

NOTE - 4

Financial risk management objectives

The Company’s principal financial liabilities comprise of borrowings, trade and other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include loans, trade receivables, investments, cash and cash equivalents, other bank balances and other financial assets that arise directly from its operations.

The Company’s activities expose it to market risk, liquidity risk and credit risk.

A Credit risk:

Credit risk arises when a customer or counterparty does not meet its obligations under a customer contract or financial instrument, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables and from its financing/investing activities, including deposits with banks, mutual fund investments and foreign exchange transactions. The Company has no significant concentration of credit risk with any counterparty.

The customer profile largely includes renowned private corporates and industries houses, accordingly company’s customer credit risk is very low. In case of equipment renting business the project cycle is around 9 to 24 Months. General payment terms provide for mobilisation advance, security deposit with a credit period of 30-90 days; for LED lighting business the company collects earnest money deposits and has a credit rating mechanism.

The Company has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation. The Company has credit evaluation policy for each customer and, based on the evaluation, credit limit of each customer is defined.

As per simplified approach, the Company will makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default in payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

Provision for expected credit losses

The Company provides for 12 month expected credit losses for following financial assets:-

B Liquidity risk

The Company manages liquidity risk by maintaining sufficient cash and investment in mutual funds and loan given to fellow subsidiaries and by having access to funding through an adequate amount of committed credit line. Given the need to fund diverse businesses, the Company maintains flexibility in funding by maintaining availability under committed credit line to meet obligations when due. Management regularly monitors the position of cash and cash equivalents vis-a-vis projections. Assessment of maturity profiles of financial assets and financial liabilities including debt financing plans and maintenance of Balance Sheet liquidity ratios are considered while reviewing the liquidity position.

Maturities of financial liabilities

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities.

C Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments.

(i) Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in prevailing market interest rates. The Company’s exposure to changes in interest rates relates primarily to the Company’s outstanding floating rate debt. Equipment loans are on fixed rate basis and hence not subject to interest rate risk. The cash credit facility is on floating rate basis.

(ii) Equity price risk:

The Company is not exposed to equity price risk arising from Equity Investments (other than Subsidiary, carried at cost).

(iii) Foreign exchange risk:

Foreign exchange risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates to import of LED leghiting, capital equipment and spare parts.

The Company regularly evaluates exchange rate exposure arising from foreign currency transactions. The Company follows the established risk management policies and standard operating procedures.

NOTE - 5

First time adoption of Ind AS:

The Company has prepared financial statements for the year ended March 31, 2018, in accordance with Ind AS for the first time. For the periods upto and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with the accounting standards notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP).

The accounting policies set out in Note 2 have been applied in preparing these financial statements for the year ended March 31, 2018 including the comparative information for the year ended March 31, 2017 and the opening Ind AS balance sheet on the date of transition i.e. April 01, 2016.

In preparing its Ind AS balance sheet as at April 01, 2016 and in presenting the comparative information for the year ended March 31, 2017, the Company has adjusted amounts reported previously in the financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows.

Optional exemptions availed and mandatory exceptions

In preparing these financial statements, the Company has applied below mentioned optional exemptions and mandatory exceptions:

A. Optional exemptions availed Property, plant and equipments

As per Ind AS 101 an entity may elect to:

(i) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed cost at that date.

(ii) use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to (a) fair value or (b) cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price index.

(iii) use carrying values of property, plant and equipment as on the date of transition to Ind AS (which are measured in accordance with previous GAAP and after making adjustments relating to decommissioning liabilities prescribed under Ind AS 101) if there has been no change in its functional currency on the date of transition.

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment.

Classification and measurement of financial assets

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

B. Mandatory exceptions Estimates

As per Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the comparative period presented in the entity’s first Ind AS financial statements, as the case may be, should be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies. As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

The Company’s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the financial statements that were not required under the previous GAAP are listed below:

- Impairment of financial assets based on expected credit loss model.

* The previous GAAP figures have been reclassified to confirm to Ind AS presentation requirements for the purpose of this note.

E Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

** Actuarial gain and loss

Under Ind AS, all actuarial gains and losses are recognised in other comprehensive income. Under previous GAAP the Company recognised actuarial gains and losses in profit or loss. Accordingly, actuarial loss of Rs. 13.42 lakhs recognised in the Statement of profit and loss has been recognised under other comprehensive income under Ind AS. However, this has no impact on total comprehensive income and total equity as on April 01, 2016 and as on March 31, 2017.

3 There is no Impact of Ind AS adoption on the statements of cash flows for the year ended March 31, 2017.

NOTE - 6 Capital management

The Company’s objectives when managing capital are to (a) maximise shareholder value and provide benefits to other stakeholders and (b) maintain an optimal capital structure to reduce the cost of capital. For the purposes of the Company’s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

Net debt includes interest bearing borrowings less cash and cash equivalents, other bank balances (including non-current earmarked balances) and current investments.

The table below summarises the capital, net debt and net debt to equity ratio of the Company.

In addition, the Company has financial covenants relating to the borrowing facilities that it has taken from the lenders like interest coverage service ratio, Debt to EBITDA, etc. which is maintained by the Company.

NOTE - 7 Operating lease

The Company has taken premises on operating leases and lease rent of Rs. 679.92 Lakhs (March 31, 2017: Rs. 419.30 Lakhs) in respect of the same has been charged to statement of profit and loss for the year ended March 31, 2018. The minimum lease rentals payable in respect of such operating leases, are as under:

NOTE - 8

Contingent liabilities and commitment

Contingent liabilities, not acknowledged as debt, include:

a) Bank Guarantees*:

Bank Guarantees of Rs. 21.93 lakhs (March 31, 2017: Rs. 1.25 lakhs, April 01, 2016: Rs. 1.25 lakhs) issued in favour of VAT Authorities.

b) Claims (excluding interest) against the Company not acknowledged as debts: Rs. 2,780.00 lakhs (March 31, 2017: Rs. 1,406.03 lakhs, April 01, 2016: Rs. 148.03 lakhs).

c) Open status of letter of credit issued is of Rs. 382.62 lakhs (March 31, 2017: Rs. Nil, April 01, 2016: Rs. Nil).

d) Contingent liabilities in respect of income-tax demands for which appeals have been filed Rs. Nil (March 31, 2017: Rs. 16.89 lakhs, April 01, 2016: Rs. 165.15 lakhs) and of VAT for which appeals have been filed Rs. Nil (March 31, 2017: Rs. Nil, April 01, 2016: Rs. 111.64 lakhs).

e) There are certain others claims and legal cases against the Company in the ordinary course of business. Management has evaluated the same and depending upon the facts and after due evaluation of legal aspects of each case, no amount has been provided in respect of the claims made against the Company under these cases. Company does not expect any liability and these litigations/lawsuits and claims may, individually or in aggregate, will not have any material adverse effect on the financial position of the Company.

Commitments

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 1,292.57 lakhs (March 31, 2017: Rs. 107.69 lakhs, April 01, 2016: Rs. 79.82 lakhs).

NOTE - 9

Share Based Payments

Employees’ Stock Option Schemes of the Company:

1. SORIL Infra Resources Limited Employee Stock Option Scheme - 2009

The Shareholders vide postal ballot passed a special resolution on February 9, 2009 for issue of 15,00,000 (fifteen lakhs) shares towards issue of Employee Stock Option Scheme -2009 in supersession of resolution passed on May 12, 2008 for ESOP -2008.

The Compensation Committee, constituted by the Board of Directors of the Company, at its meeting held on November 03, 2017, granted, under the SORIL Infra Resources Limited Employee Stock Option Scheme - 2009 (“SORIL Infra ESOS-2009” or “Scheme”), 15,00,000 (fifteen lakhs) stock options representing an equal number of Equity shares of face value Rs. 10 each in the Company, to the eligible employees, at an exercise price of Rs. 168.30 per option, being the latest available closing market price on the National Stock Exchange of India Limited, on the date of grant. The stock options so granted, shall vest in the eligible employees within 5 years beginning from first vesting date. The stock options granted under each of the slabs, can be exercised by the grantees within a period of 5 years from the relevant vesting date.

The Scheme had earlier granted option at Rs. 30.45 per option and no option were exercised and allotted till March 31, 2017.

The title of the Scheme was changed from Store One Retail India Limited Employees Stock Option Scheme - 2009 to SORIL Infra Resources Limited Employee Stock Option Scheme - 2009 as per the revised certificate of incorporation dated December 21, 2016.

Following is a summary of options granted under the Scheme:

Weighted average share price of exercised option on the date of exercise was for the year ended March 31, 2018: Rs. Nil (March 31 2017: Rs. Nil).

The fair value of the option under Scheme using the black scholes model, based on the following parameters is Rs. 18.77 per option, as certified by an independent valuer.

The expected volatility was determined based on historical volatility data of the Company’s shares listed on the National Stock Exchange of India Limited.

2. SORIL Infra Resources Limited Employee Stock Option Scheme - 2009(II)

Shareholder’s of the Company in their Annual General Meeting held on September 30, 2009 have approved by way of special resolution the SORIL Infra Resources Limited Employee Stock Option Scheme - 2009(II) (“SORIL Infra ESOS-2009(II)” or “Scheme-II”), covering 30,00,000 (thirty lakhs) equity settled options for eligible employees of the Company, its subsidiaries, its fellow subsidiaries and the holding company.

The Compensation Committee, constituted by the Board of Directors of the Company, at its meeting held on November 03, 2017, granted, under the SORIL Infra Resources Limited Employee Stock Option Scheme - 2009(II) (“SORIL Infra ESOS-2009(II)” or “Scheme-II”), 30,00,000 (thirty lakhs) stock options representing an equal number of Equity shares of face value Rs. 10 each in the Company, to the eligible employees, at an exercise price of Rs. 168.30 per option, being the latest available closing market price on the National Stock Exchange of India Limited, on the date of grant. The stock options so granted, shall vest in the eligible employees within 5 years beginning from first vesting date. The stock options granted under each of the slabs, can be exercised by the grantees within a period of 5 years from the relevant vesting date.

The title of the Scheme-II was changed from Store One Retail India Limited Employees Stock Option Scheme - 2009(II) to SORIL Infra Resources Limited Employee Stock Option Scheme - 2009(II) as per the revised certificate of incorporation dated December 21, 2016.

Following is a summary of options granted under the Scheme-II

Weighted average share price of exercised option on the date of exercise was for the year ended March 31, 2018: Rs. Nil (March 31, 2017: Rs. Nil).

The fair value of the option under Scheme-II using the black scholes model, based on the following parameters is Rs. 18.77 per option, as certified by an independent valuer.

The expected volatility was determined based on historical volatility data of the Company’s shares listed on the National Stock Exchange of India Limited.

During the year, the Company has recognised Share based payment expenses of Rs. 191.36 Lakhs (March 31, 2017: Rs. Nil).

NOTE - 10 Employee benefits

Defined contribution plan

The Company has made Rs. 4.84 lakhs (March 31, 2017 - Rs. 2.41 lakhs) contribution in respect of provident fund. Defined benefit plan

The Company has the following Defined Benefit Plans:

- Gratuity (Unfunded)

- Compensated absences (Unfunded)

Compensated absences

The leave obligations cover the Company’s liability for permitted leaves. The amount of provision of Rs. 78.73 lakhs (March 31, 2017 - Rs. 44.84 lakhs, April 01, 2016 - Rs. 31.84 lakhs) is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months, therefore based on the independent actuarial report, only a certain amount of provision has been presented as current and remaining as non-current. The weighted average duration of the defined benefit obligation is 18.96 years (March 31, 2017: 19.13 years).

As the Company does not have any plan assets, the movement of present value of defined benefit obligation and fair value of plan assets has not been presented.

These assumptions were developed by management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year-end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management’s historical experience.

Sensitivities due to mortality and withdrawal are not material and hence impact of change not calculated.

Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employee’s last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Gratuity plan is a non-funded plan. The weighted average duration of the defined benefit obligation is 19.13 years (March 31, 2017: 18.96 years).

As the Company does not have any plan assets, the movement of present value of defined benefit obligation and fair value of plan assets has not been presented.

These assumptions were developed by management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year-end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management’s historical experience

Sensitivities due to mortality and withdrawal are not material and hence impact of change not calculated.

NOTE - 11

Dividend on preference shares

Under Indian GAAP, Till March 31, 2016, proposed dividends including dividend distribution tax (DDT) are recognised as a liability in the period to which they relate, irrespective of when they are declared. In accordance with the amendment in Accounting Standard 4 vide notification dated March 30, 2016, applicable to accounting period beginning from April 01, 2016, the proposed dividend is recognised as a liability in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting) or paid.

Accordingly, preference dividend for Rs. 26.76 lakhs which was declared and approved on May 26, 2017 and dividend distribution tax of Rs. 5.45 lakhs, have been recognised in FY 2017-18.

NOTE - 12 Other information

a) There are no dues payable under section 125 of Companies Act, 2013 as at March 31, 2018.

b) In the opinion of the Board of Directors, all current and non-current assets including non-current loans, appearing in the balance sheet as at March 31, 2018, have a value on realization, in the ordinary course of the Company’s business, at least equal to the amount at which they are stated in the financial statements and no provision is required to be made against the recoverability of these balances.