1. Corporate information

Oricon Enterprises Limited (formerly known as Oriental Containers Limited) was incorporated on December 7, 1968. The Company is engaged in the business of manufacturing petrochemical products, trading, liquid colorants and real estate.

The registered office of the company is located at 1076, Dr E Moses Road, Parijat House, Worli, Mumbai 400018 and the Company’s manufacturing units are situated at Village Savroli, District Raigad and MIDC Murbad District Thane in the state of Maharashtra.

The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE)

The financial statements are approved for issue by the Company’s Board of Directors on May 30, 2018.

2. Application of new and revised Ind -AS

All the Indian Accounting Standards issued and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) read with Section 133 of the Companies Act, 2013 to the extent applicable have been considered in preparing these financial statements.

Recent accounting pronouncements:-

Standards issued but not yet effective

Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the new Standard Ind AS 115 “Revenue from Contracts with Customers” and amendment to Ind AS 21 “The Effect of Changes in Foreign Exchange Rates”. These amendments shall be applicable to the Company from April 01, 2018.

(a) Ind AS 115 - Revenue from Contracts with Customers

The core principle of Ind AS 115 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:

- Step 1: Identify the contract(s) with a customer

- Step 2: Identify the performance obligation in contract

- Step 3: Determine the transaction price

- Step 4: Allocate the transaction price to the performance obligations in the contract

- Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligation is transferred to the customer.

The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors.

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach).

The Company will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The Company is evaluating the impact of this amendment on its financial statements.

(b) Ind AS 21 -The Effect of Changes in Foreign Exchange Rates

The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Company is evaluating the impact of this amendment on its financial statements.

(c) In case of Limited Liability Partnership Firm, liability of the partner is limited to the extent of his contribution and the partners are not liable on account of any independent or unauthorized action of the other partners. Accordingly, w.e.f. FY 2016-17, the Company has recognised losses in respect of Limited Liability Partnership Firm Claridge Energy LLP to the extent of his contribution made in the said LLP.

(d) The amount of Rs.42.67 lakhs (previous year Rs.29.67 lakhs) shown as deemed equity investments denotes the fair value of fees towards financial guarantee given for Shinrai Auto Services Limited without any consideration.

* During the year ended March 31, 2018, the Company had received approval from its shareholders for sale / transfer of the business of its subsidiary Shinrai Auto Services Limited to Madhuban Motors Private Limited and accordingly w.e.f. September 1, 2017, the subsidiary company, Shinrai Auto Services Limited, has transferred / sold its Toyota Dealership Business to Madhuban Motors Private Limited as a “Going Concern” on Slump Sale basis, for a total consideration, without values being assigned to individual assets and liabilities, of Rs.2,835 lakhs in cash subject to adjustment for (i) net working capital; and (ii) assumption of credit facilities and loans, on such terms & conditions as may be required in this regard under the Business Slump Sale Agreement.

** During the year ended March 31, 2017, one of the Subsidiary Companies, United Shippers Limited has bought back 410,473 Equity shares of Rs.10 each from the existing minority shareholders. As a consequence, the paid up equity share capital of the Subsidiary Company has been reduced to 4,618,745 equity shares of Rs.10 each, resulting in increase in the percentage of holding of the Company from 59.05% to 64.29% w.e.f. March 28, 2017. Accordingly, the financial statements for the year ended March 31, 2017 includes 59.05% upto March 27, 2017 and 64.29% w.e.f. March 28, 2017.

During the year ended March 31, 2016, one of the Subsidiary Companies, United Shippers Limited had bought back 887,510 Equity shares of Rs.10 each from the existing minority shareholders. As a consequence, the paid up equity share capital of the Subsidiary Company has been reduced to 5,029,218 equity shares of Rs.10 each, resulting in increase in the percentage of holding of the Company from 50.19% to 59.05% w.e.f. July 30, 2015. Accordingly, the financial results for the Year ended March 31, 2016 includes 50.19% upto July 30, 2015 and 59.05% w.e.f July 31, 2015.

(a) Fixed deposits amounting to NIL (Previous Year: April 1, 2016 Rs.108.38 lakhs) has been kept as a Term Deposit with a bank and a lien is created in the favour of a NBFC for loan amounting to NIL (Previous Year: April 1, 2016 Rs.3,000 lakhs).

(b) Fixed deposits amounting to NIL (Previous Year: Apirl 1, 2016 Rs.10.84 lakhs) are pledged with the bank as a margin money against the guarantees given by the bank.

(3a) Stock in Trade - Real Estate

During the year ended March 31, 2017, on May 29, 2016, the erstwhile Subsidiary Company, Oricon Properties Private Limited, had considered and decided to enter into Real Estate business of development, purchase and sale of Real Estate and decided to redevelop its Land situated at Worli, Mumbai with its full potential of FSI available as per Development Control Regulations (DCR) No. 33(7).

Accordingly, the erstwhile Subsidiary Company had converted development potentitial of Free sale FSI area of 15664.87 square meters on its land admeasuring 7810 sq meters situated at worli into stock in trade at fair market value of free sale FSI.

The erstwhile Subsidiary Company had entered into a Joint Development Agreement (JDA) with Indiabulls Infraestate Limited, a majority owned subsidiary of Indiabulls Real Estate Limited for development the same as per the terms and conditions contained in the said JDA.

(b) Term / Right attached to equity share

The Company has only one class of equity shares having a par value of Rs.2/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in the proportion to the number of equity shares held by the shareholders.

(c) Share held by holding/ultimate holding company and/or their subsidiary/associates

None of the shares of the Company are hold by the Subsidiaries, Associates or Joint Ventures of the Company

(d) Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

As per records of Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

(f) Shares reserved for issue under options

None of the shares are reserved for issue under options.

* During the year ended March 31, 2017, the Board of Directors, at its meeting held on May 30, 2017, had proposed a final dividend of 23% (Re. 0.46 per equity share of par value of Rs.2 each) for the year ended March 31, 2017. Accordingly, the total dividend declared and paid for the year ended March 31, 2017 amounted to Rs.722.42 lakhs excluding dividend distribution tax.

a) Indian Rupee Loan from banks (Unsecured) includes Term Loan amounting to NIL (Previous year:- March 31, 2017 NIL , April 1, 2016 Rs.615.42 lakhs) taken from Bank and carried interest @ Base Rate 2.65% TP (applicable rate of interest was 12.75%). The Loan was repayable in 82 monthly installments (including interest) starting from September 2011 to June 2018. Further, the said loan was guaranteed by the personal guarantee of three directors of the Company. During the year ended March 31, 2017, the said loan was fully repaid by the Company.

b) Indian Rupee Loan from banks (Unsecured) includes Term Loan amounting to NIL (Previous year: March 31, 2017 Rs.121.99 lakhs) taken from Bank and carried interest @ Base Rate 3.15% (current applicable rate of interest is 12.40%). The Loan was repayable in 120 monthly installments of Rs.11,52 lakhs each (including interest) starting from September 2012, fully repayable by December 2017 and Rs. 2.84 lakhs each (including interest) starting from October 2012, fully repayable by December 2017. During the year ended March 31, 2017, the said loan was fully repaid by the Company.

c) Indian Rupee Loan from banks (Unsecured) includes Term Loan amounting to NIL (Previous year:- March 31, 2017 NIL, April 1, 2016 Rs.281.87 lakhs) taken from Bank and carried interest @ Base Rate 2.50% (applicable rate of interest is 12%). The Loan was repayable in 60 equated monthly installments of Rs.7.65 lakhs each (including interest) starting from March 2015, fully repayable by February 2020. Further, the loan was secured against extension of mortgage over 1st Floor, Parijat House, Apte Industrial Estate, Dr. E Moses Road, Worli, Mumbai - 400018 owned by another Company and Corporate Guarantee of other Company. During the year ended March 31, 2017, the said loan was fully repaid by the Company.

d) Indian Rupee Loan from banks (Secured) includes Working Capital Term Loan amounting to NIL (Previous Year:- March 31, 2017:-NIL, April 1, 2016:- Rs.1,000 lakhs and Rs.500 lakhs) taken from Bank and carried interest @ Base Rate 1.65% (applicable rate of interest is 12.30%). The tenor of the loan was 60 months including moratorium period of 12 months. The principal amount was repayable by way of 48 monthly installments of Rs.20.83 lakhs each starting from April 2016, fully repayable by March 2020 and Rs.10.42 lakhs each starting from August 2016, fully repayable by July 2020 respectively. The interest was payable monthly starting from April 2015 and July 2015 respectively. Further, the loan was to be secured against exclusive charge by way of equitable mortgage of commercial office on 2nd Floor, Apte Industrial Estate, Parijat House, 1076, off. Dr. E . Moses Road, Worli, Mumbai - 400018 owned by the Company, pledge of Promoters shares of Oricon Enterprises Limited and personal guarantee of three directors of the Company. During the year ended March 31, 2017, the said loan was fully repaid by the Company.

e) Indian Rupee Loan from others (Secured) includes Term Loan amounting to NIL (Previous year:- March 31, 2017:- NIL, April 1, 2016:- Rs.3,000 lakhs) taken from NBFC and carried interest @ Base Rate 4.45% (applicable rate of interest is 14.45%). The tenor of the loan was 60 months including moratorium of 12 months. The principal amount was repaid by way of 16 quarterly installments of Rs.187.5 lakhs each starting from June 2016, fully repayable by March 2020 whereas the interest was payable monthly. Further, the loan was secured against mortgage of land admeasuring 3511 sq.mt along with building constructed / to be constructed at Worli, Mumbai owned by the Company, hypothecation & Escrow of dividend income from Investments in group / related companies and personal guarantee of three directors of the Company. During the year ended March 31, 2017, the said loan was fully repaid by the Company

f) Indian Rupee Loan from others (Secured) includes Term Loan amounting to NIL (Previous year:- March 31, 2017:- NIL, April 1, 2016:- Rs.96.28 lakhs) taken from NBFC and carried rate of interest @ 13.50%. The tenor of the loan was 39 months. The principal amount was repayable in 36 Equated Monthly Installment of Rs. 5.94 lakhs each (including interest) starting from October 2014, fully repayable by September 2017 whereas the interest was payable monthly. The term loan is secured by way of exclusive charge / hypothecation on the asset funded and personal gaurantee of one of the director of the Company. During the year ended March 31, 2017, the said loan was fully repaid by the Company.

g) The Company has taken loan of Rs. 300 Crores for development of residential project and general corporate purpose from Indiabulls Housing Finance Ltd (IHFL). The said loan will be secured by way of first ranking & exclusive charge by way of hypothecation on 100 % of the receivables arising from the development of the Company’s land situated at Worli, Mumbai-400018.The tenure of the loan is 60 month from the date of disbursement of the said loan. The principal amount is repayable in 14 quarterly installments of Rs. 2,142.86 lakhs starting from March 2018 to May 2021. The said loan carries interest @ IHFL LFRR -375 basis point (Current applicable rate of interest is 10.50% p.a) and payable quarterly by Indiabulls Infraestate Ltd. in terms of arrangement entered into with them.

h) Vehicle loan taken from bank carries interest @ 10.25% and is payable in 60 equal monthly instalments. This loan is secured against the vehicle.

i) Vehicle loan taken from others carries interest @ 9.60% and is payable in 36 equal monthly instalments. This loan is secured against the vehicle.

j) Loan from Directors grouped under Loans from related parties (Unsecured) are repayable after March 31, 2018 on demand.

k) Deferred sales tax represents the Certificate of Entitlement issued by the Joint Director of Industries, Konkan Division, Thane on the basis of section 89 of the Maharashtra Value Added Tax Act 2002 (“M V A T Act”) read with rule 81 of the M.V.A.T. Rules 2005 in respect of the manufacturing unit located at Savroli, Post- Khopoli to defer the sales tax liability as per the returns / assessment pertaining to the period from 01-July-2010 to 30-June-2012.

Cash Credit from Bank (Secured) carries interest @ One year MCLR 0.35% p.a. (current applicable rate of interest is 9.80%). The said facility is repayable on demand. The facility is secured by first Pari-Passu charge on current assets (present and future) and a collateral security of first Pari-Passu charge on Plant & Machinery and Land & Building at Khopoli & Murbad.

During the year, the company does not have any outstanding dilutive potential equity shares. Consequently, the basic and diluted earning per share of the company remains the same.

4 Critical accounting estimates and judgments

The preparation of restated financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. This note provides an overview of the areas that involves a higher degree of judgment or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

The areas involving critical estimates or judgments are:

1. Estimation of useful life of tangible asset and intangible asset (Note 4 & 7)

2. Recognition of deferred tax asset (Note 25(c))

3. Estimation of defined benefit obligation (Note 45)

4. Estimation of contingent liabilities and commitments (Note 47)

5. Impairment of assets

6. Recoverability of Trade Receivables (Note 62(d))

Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

5 Disclosure under Indian Accounting Standard 19 (Ind AS 19) on Employee Benefit as notified under Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 (as amended)

a) Defined Contribution Plan

Contribution to Provident Fund, Superannuation Scheme (with LIC), Employee State Insurance Scheme , Government Welfare fund & Employee’s Deposit Linked Insurance etc.

Contribution to Defined Contribution Plan, recognised are charged off for the year as under :

The Company makes contribution in respect of qualifying employees towards Provident Fund and Superannuation Fund, which is defined contribution plan. The Company has no obligation other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue.

* includes amount of NIL (PreviousYear Rs.0.53 lakhs) pertaining to Discontinuing Operation Pet Bottle

b) Defined Benefit Plan

The Company operates defined benefit plans that provide gratuity. Liability is computed on the basis of Gratuity payable on retirement, death and other withdrawals as per the Act and already accrued for past service, with the qualifying wages / salaries appropriately projected, as per the Projected Unit Credit Method.

Note: The above information and that given in Note No. 28 ‘ Trade Payables’ regarding Micro, Small and Medium Enterprises has been determined on the basis of information available with the Company and has been relied upon by the auditors.

6 The Board of Directors, in its meeting held on February 14, 2017, has decided to set up a manufacturing unit to manufacture new packaging products in the State of Odisha with the expected investment of about Rs.10,000 lakhs in two phases.

7 Some of the balances of Trade Receivables, Deposits, Loans & Advances, Trade Payables, Liability for Expenses and Capital Assets are subject to confirmation from the respective parties and consequential reconciliation / adjustment arising there from, if any. The management, however, does not expect any material variation.

8 (i) For Continuing Operations

Sundry Debit Balance written off (Net) amounting to Rs.10.32 lakhs are net of sundry credit balance written back amounting to Rs.3.04 lakhs (Previous Year Sundry Debit Balance written off (Net) amounting to Rs.56.03 lakhs are net of sundry credit balance written back amounting to Rs.6.78 lakhs).

(ii) For Discontinuing Operations

Sundry Debit Balance written off (Net) amounting to NIL are net of sundry credit balance written back amounting to NIL (Previous Year Sundry Credit Balance written back (Net) amounting to Rs.19.28 lakhs are net of sundry debit balance written off amounting to NIL).

9 During the year ended March 31, 2017, the Company has discontinued the operations of Pet Bottle Segment. Details relating to Discontinuing Operation are as under:

Information about major customers

Revenue from one major customers under ‘Trading’ segment is Rs 2,279.37 lakhs and under ‘Petrochemical’ segment is Rs 546.70 Lakhs (March 31, 2017: one major customer under ‘Trading’ segment is Rs 867.07 Lakhs and under ‘Petrochemical’ segment is Rs 466.55 Lakhs) which is more than 10% of the Group’s total revenues.

10 Corporate social responsibility expenses:

The Company has constituted a Corporate Social Responsibility (CSR) Committee as per Section 135 and Schedule VII of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014. The CSR activities of the Company will be undertaken either through a Registered Trust or in collaboration with other Group Companies.

11 Business Combination

During the year ended March 31, 2018, the National Company Law Tribunal (NCLT), vide order dated October 18, 2017, has approved the Scheme of amalgamation of Oricon Properties Private Limited (‘OPPL’ or ‘Transferor Company’), a Wholly Owned Subsidiary of the Company, with Oricon Enterprises Limited (‘OEL’ or ‘Transferee Company’) (‘the Scheme”) and the certified copy of the Order approving the said Scheme has been filed with the Registrar of Companies on November 15, 2017. The Company has given the effect to the aforesaid Scheme in the financial statemens for the year ended March 31, 2018. The appointed date of the said Scheme was July 1, 2016.

Pursuant to the Scheme and Appendix C to the Ind AS 103 Business Combination, the said merger has been accounted using the pooling of interest method and accordingly the Company has recorded all assets, liabilities and reserves (including negative balance reserves, if any) pertaining to the Transferor Company at their respective book values. Further as required by the Scheme, the difference between the investment in the financial statements of the Transferee Company in the Transferor Company and the amount of paid-up share capital of the Transferor Company respectively, has been adjusted against the Capital Reserves of the Transferee Company. Since the control was existing as on the date of transition, the effect of the merger has been given in the opening balance sheet as at April 1, 2016 for accounting purpose.

12 Financial risk management objectives and policies

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

The Company’s business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company’s senior management has the overall responsibility for the establishment and oversight of the Company’s risk management framework.

(A) Management of Liquidity Risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company’s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.

The following table shows the maturity analysis of the Company’s financial liabilities based on contractually agreed undiscounted cash flows as at the Balance Sheet date.

(B) Commodity Rate Risk

The Company’s operating activities involve purchase of raw materials such as Mix Pentane and Base Colour whose prices are exposed to the risk of fluctuation over short periods of time. Commodity price risk exposure is evaluated and managed through procurement and other related operating policies. As of March 31, 2018, March 31, 2017 and April 1, 2016, the Company had not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.

(C) Management of Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTOCI investments.

The sensitivity analyses in the following sections relate to the position as at March 31, 2018, March 31, 2017 & April 1, 2016.

(D) Management of Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or 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 and other financial instruments.

(i) Trade Receivables :

The Company provides for expected credit loss on trade receivables based on a provision matrix. This matrix is a simpified basis of recognition of expected credit losses in case of trade receivables. The model uses historical credit loss experience for trade receivables.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the management in accordance with the Company’s policy. Counterparty credit limits are reviewed by the management on an annual basis, and may be updated throughout the year. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

(E) Capital management

The Company’s objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to its various stakeholders but keep associated costs under control. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.

In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments.

Apart from internal accrual, sourcing of capital is done through borrowing, both short term and long term. The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.

The Company monitors capital using a ratio of ‘adjusted net debt’ to ‘total equity’. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings, less cash and cash equivalents, other bank bank balances and current investments.

The fair value of financial instruments referred above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market for identical assets or liabilities (level 1 measurements) and lowest priority to unobservable inputs (level 3 measurements). The categories used are as follows :

Level 1 hierarchy includes financial instruments measured using quoted prices. This includes equity instruments and mutual funds that have a quoted price. The mutual funds are valued using the closing NAV and equity instruments are valued at share price as at reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. There were no transfers between levels 1 and 2 during the year ended March 31, 2018 and March 31, 2017.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities which are included in level.

13 Overall Principles:

The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2016 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying certain items from Previous GAAP to Ind AS as required under the Ind AS, and applying Ind AS in the measurement of recognized assets and liabilities. However, this principle is subject to certain mandatory exceptions and certain optional exemptions availed by the Company as detailed below.

First time adoption of Ind AS

The accounting policies set out in Note 3 have been applied in preparing the Financial statements for the year ended March 31, 2018, March 31, 2017 and April 1, 2016

Exemptions and exceptions availed :

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS as at the transition date, i.e. April 1, 2016.

A.1 Ind- AS optional exemptions A.1.1 Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the Previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and Investment Property covered by Ind AS 40 Investment Properties. Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their Previous GAAP carrying value.

A.1.2 Leases

Appendix C 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. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material.The Company has elected to apply this exemption for such contracts/arrangements.

A.1.3 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 recognized 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 ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.

A.2 Ind AS mandatory exceptions A.2.1 Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made in for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP

A.2.2 Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS. Accordingly, classification and measurement of financial asset has been based on the facts and circumstances that exist at the date of transition to Ind AS.

The following reconciliations provide the explanations and quantification of the differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101:

I. Reconciliation of Equity as at April 1, 2016

II. A. Reconciliation of Equity as at March 31, 2017

B. Reconciliation of Total Comprehensive Income for the year ended March 31, 2017

III. Adjustments to Statement of Cash Flows for the year ended March 31, 2016

* The adustments are either non cash Ind AS adjustments or are regrouping among the cash flows from operating, investng and financing activities. However, for the purpose of the Statement of Cash Flows, cash and cash equivalent comprise of cash at banks and on hand and short-term deposits with an original maturity of three months or less and is net of outstanding bank overdrafts / cash credit facilities as they are considered an integral part of the Company’s cash management.

Notes to reconciliations

1. Prior Period Items

Under Indian GAAP changes in accounting policies, correction of errors and omissions will be recorded through the current period income statement. Under Ind AS, changes in accounting policies and correction of errors and omissions will be accounted retrospectively by restating the comparative period.

2. Re-measurement of post-employment benefit obligations

Under Ind AS, re-measurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the Previous GAAP, these re-measurements were forming part of the profit or loss for the year.

3. Expected Credit Loss Method

Under IGAAP, the Company has created provision for impairment of receivables only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Credit Loss model (ECL).

4. Non Current Liabilities

Under Previous GAAP, non current liabilities were recognised on undiscounted basis. Ind AS requires such liabilities to be recognised at present value (discounted value) where the effect of time value of money is material. This led to a decrease in the value of non current liabilities on the date of transition which was adjusted against retained earnings. Ind AS also provides that where discounting is used, the carrying amount of the liability increases in each period to reflect the passage of time. This increase is recognised as finance cost. The interest cost on unwinding of discount is recognised in the Statement of Profit and Loss under ‘Finance costs’ for the year ended March 31, 2017.

5. Financial Guarantee

Under Ind AS, financial guarantee contracts are accounted as financial liabilities and measured initially at fair value and subsequently accounted as mentioned in note 3. Accordingly, an amount of Rs.16.67 lakhs has been recognized as deferred financial obligation as at April 1, 2016 with corresponding debit to deemed equity in the carrying amount of investment in subsidiary. Similarly, an amount of Rs.13 lakhs has been recognized as financial guarantee obligation as on March 31, 2017, the corresponding amount along with the changes in the guarantee during 2016-17, aggregating to Rs.29.67 lakhs has been taken to deemed equity

6. Fair Valuation of Investments in Equity Instruments

Under the Previous GAAP, long term investments were measured at cost less diminution in value which is other than temporary. Under the Ind AS, investments in equity instruments of companies other than Subsidiaries, Associates & Joint Ventures are measured at fair value. As at the transition date, the Company has made irrevocable choice to account for these investments at fair value through other comprehensive income (OCI).

7. Fair Valuation of Investments in Mutual Fund

Under Indian GAAP, investments in mutual funds are accounted for as short-term investments and accordingly they are carried at lower of cost and fair value. Under Ind AS, the Company has designated such investments as FVTPL investments. Ind AS requires FVTPL investments to be measured at fair value. At the date of transition to Ind AS, difference between the instruments fair value and Indian GAAP carrying amount has been recognised as a separate component of equity, in the retained earnings, net of related deferred taxes.

8. Busniess Combination

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated. The Company has applied same exemption for investment in subsidiaries and associates.

9. Discounting of security deposits for leases

Under Previous GAAP, the security deposits for leases are accounted at an undiscounted value. Under Ind AS, the security deposits for leases have been recognised at discounted value and the difference between undiscounted and discounted value has been recognised as ‘Deferred lease rent’ which has been amortised over respective lease term as rent expense under ‘other expenses’. The discounted value of the security deposits is increased over the period of lease term by recognising the notional interest income under ‘other income’.

10. Fair valuation as deemed cost for Property, Plant and Equipment

The Company have considered fair value for property, viz land, situated in India, with impact of Rs.21,545.41 lakhs in accordance with stipulations of Ind AS 101 with the resultant impact being accounted for in the opening reserves as at April 1, 2016.

11. Revenue from Operations

Under Previous GAAP, revenue from operations was presented as net of excise duty. However, under Ind AS, revenue from operations includes excise duty. Excise duty on sale of goods is included as part of sales in the face of statement of profit and loss.

12. Reclassification of Leasehold Land

Under previous GAAP, leasehold properties were presented as fixed assets and amortized over the period of the lease. Under Ind AS, such properties have been classified as prepayments within non-current assets (current portion presented as other current assets) and have been amortised over the period of the lease.

13. Deferred Tax

Under Previous GAAP, deferred taxes are recognised for the tax effect of timing differences between accounting profit and taxable profit for the year using the income statement approach. Under Ind AS, deferred taxes are recognised using the balance sheet for future tax consequences of temporary differences between the carrying value of assets and liabilities and their respective tax bases. Also deferred tax has been recognised on the adjustment made on transition to Ind AS.

14. Investment in Subsidiaries, Associates and Jointly Controlled Entity

Under previous GAAP, investment in subsidiaries, joint ventures and associates were stated at cost and provisions made to recognise the decline, other than temporary. Under Ind AS, the Company has considered their previous GAAP carrying amount as their deemed cost.

15. Retained Earnings

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

16. Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss includes re-measurements of defined benefit plans. The concept of other comprehensive income did not exist under Previous GAAP

14 The Board of Directors of the Company, at its meeting held on October 27, 2017, has approved a scheme of amalgamation (“the scheme”) of Oriental Containers Limited (“First Transferor Company”) and Shinrai Auto Services Limited (“Second Transferor Company”), wholly owned subsidiaries of the Company, with the Company with an appointed date of April 1, 2017 (“Effective Date”). The Equity Shareholders of the Company approved the Scheme of Amalgamation at its meeting held on February 24, 2018.Further, a Petition for sanctioning the Scheme of Amalgamation was presented before NCLT by the Company on March 15, 2018 and was admitted by the Hon’ble National Company Law Tribunal, Mumbai Bench, Mumbai, on May 11, 2018. The said Petition is fixed for hearing on June 22, 2018. Pending approval of the Scheme no effect is given in the standalone financial statements for the year ended March 31, 2018.

15 The Subsidiary Company, Oriental Containers Limited, has entered into the Business Transfer Agreement and Sale & Purchase Agreement on November 3, 2017 to sale / transfer the Closures business of the Subsidiary Company on a ‘slump exchange basis’ to Oricon Packaging Limited (OPL) (now known as Pelliconi Oriental Limited (POL)), a subsidiary of the Subsidiary Company, Oriental Containers Limited and a sub-subsidiary of the Company, for a consideration of 49,50,000 equity shares each having a face value of INR 10 (Indian Rupees Ten) to be issued by OPL to the Subsidiary Company for sale / transfer of the Closures Business and sale of 51% equity shares of OPL held by the Subsidiary Company to Pelliconi & C.S.P.A., a Company incorporated in Italy or its nominee (Pelliconi) after transfer of the Closures business of the Subsidiary Company to OPL and fulfilment of agreed conditions, at an enterprise value of OPL of Rs.41,940.00 lakhs, subject to net working capital, net financial position and other adjustments as agreed. The approval of the Shareholders was obtained pursuant to resolution passed at EGM held on December 11, 2017.

However, Pelliconi, vide its letter dated March 01, 2018, has sent notice of termination for sale and purchase agreement. The Subsidiary Company has disputed and denied the validity of the said Notice of Termination and filed Commercial Arbitration Petition before the Honourable High Court of Bombay. The said petition is admitted and an arbitrator has been appointed.

16 During the year ended March 31, 2018, the Company had received approval from its shareholders for sale / transfer of the business of its subsidiary Shinrai Auto Services Limited to Madhuban Motors Private Limited and accordingly w.e.f. September 1, 2017, the subsidiary company, Shinrai Auto Services Limited, has transferred / sold its Toyota Dealership Business to Madhuban Motors Private Limited as a “Going Concern” on Slump Sale basis, for a total consideration, without values being assigned to individual assets and liabilities, of Rs.2,835 lakhs in cash subject to adjustment for (i) net working capital; and (ii) assumption of credit facilities and loans, on such terms & conditions as may be required in this regard under the Business Slump Sale Agreement.

The Business Slump Sale Agreement was executed on August 23, 2017 and shareholders passed the resolution for sale/transfer of the business of SASL on October 01, 2017.

17 In terms of Joint development agreement (JDA) executed by and between erstwhile subsidiary Oricon Properties Pvt. Ltd. ( OPPL ) and India Bull infra estate Ltd. ( IIFL ), company is to receive on ownership basis constructed area of 3893.94 square meter against Non Cess entitlements.

18 Subsequent to the year ended March 31, 2018, the Board of Directors, at its meeting held on May 30, 2018, recommended dividend at the rate of 25% (Re.0.50 per equity share of par value of Rs.2 each) for the year ended March 31, 2018, subject to the approval of members in the Annual General Meeting. The total dividend outgo shall be Rs.785.24 lakhs excluding dividend distribution tax.

19 In the opinion of the Management, Current Assets, Loans & Advances are approximately of the value stated if realised in the ordinary course of business. The provision for all known and determined liability is adequate and not in the excess of the amount reasonably required.

20 The Company’s pending litigations comprise of claims against the Company and proceedings pending with Statutory and Tax Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, whenever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position (Refer Note 47 for details on contingent liabilities).

21 The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

22 For the year ended March 31, 2018, there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

23 Previous year comparatives

The previous year’s figures have been reclassified to conform to this year’s classification.