1. NATURE OF PRINCIPAL ACTIVITIES

SORIL Holdings and Ventures Limited (formerly known as Indiabulls Wholesale Services Limited) “the Company”, was incorporated on July 24, 2007 with the main objects of carrying on the business of real estate projects on land situated in Ahmedabad (Gujarat) and Hyderabad (Andhra Pradesh).

During the year ended March 31, 2017, the name of the Company stood changed from ‘Indiabulls Wholesale Services Limited’ to ‘SORIL Holdings and Ventures Limited’ vide fresh Certificate of Incorporation dated March 27, 2017, issued by Registrar of Companies, NCT of Delhi & Haryana.

The company is domiciled in India and its registered office is situated at M-62 and 63, First Floor, Connaught Place, New Delhi - 110001.

2. GENERAL INFORMATION & STATEMENT OF COMPLIANCE WITH IND AS

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards as notified under section 133 of the Companies Act 2013 (‘the Act’) (to the extent notified) and guidelines issued by Securities Exchange Board of India (SEBI), read with the Companies (Indian Accounting Standards) Rules 2015 (by Ministry of Corporate Affairs (‘MCA’)) and relevant amendments rules issued thereafter. The Company has uniformly applied the accounting policies during the periods presented.

For all periods up to and including the year ended 31 March 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 31 March 2018 are the first which the Company has prepared in accordance with Ind AS. For the purpose of comparatives, financial statements for the year ended 31 March 2017 and opening balance sheet as at 1 April 2016 are also prepared under Ind AS.

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

3. BASIS OF PREPARATION

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 measure at fair values as explained in relevant accounting policies. Fair valuations related to financial assets and financial liabilities are categorized into level 1, level 2 and level 3 based on the degree to which the inputs to the fair value measurements are observable.

4. 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 1 April, 2018.

Ind AS 115 ‘Revenue from Contracts with Customers’ (Ind AS 115)

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

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

Amendment to Ind AS 21

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 recognizing related expense/income on the settlement of said asset/liability. The Company is evaluating the requirements of the amendment and its impact on the financial statements.

i During the year ended 31 March 2018, the Board being authorised by shareholders at the general meeting held on 22 November 2017, and in accordance with the provisions of section 42 and 62 of the Companies Act, 2013 and requirement contained in SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009, approved the preferential issue of upto 3,50,00,000 (Three crores fifty lakhs) Warrants, convertible into equivalent no. of equity shares of face value Rs.2/- each of the Company at the conversion price of Rs.132/- (including premium of Rs.130/-) per equity share to M/s Powerscreen Media Private Limited, M/s Calleis Real Estate Private Limited, M/s Calleis Constructions Private Limited and M/s Calleis Properties Private Limited, the promoter group entities, in accordance with applicable provisions of Chapter VII of Securities & Exchange Board of India (Issue of Capital & Disclosure requirement) Regulations 2009, (“SEBI ICDR Regulations”). During the current year, the Company has, upon conversion of 41,00,000 share warrants, alloted 41,00,000 equity shares of face value of Rs.2 each at the issue price of Rs.132 (including premium of Rs.130) per equity share held by promoter group entities.

ii Rights, preferences and restrictions attached to equity shares

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, all preferential amounts, if any, shall be dicharged by 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.

2,517,700, 9% Non-Covertible non- cumulative redeemable preference shares were issued as full paid with a par value of Rs.10 (securities premium Rs.990) during the financial year 2011-12 and are classified as financial liabilities, see note 19.

NOTE - 5 (i) 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 recognized the expenses related to stock option issued to employees under Holding Company’s employee stock option plans.

Capital reserve

The Company has issued share warrants in the earlier years. This reserve is created on account of forfeiture of share application money received on account of issuance of share warrants as share warrants holders did not exercise their rights.

General reserve

The Company is required to create a general reserve out of the profits when the Company declares dividend to shareholders.

A search was conducted by the competent authority under section 132(1) of the Income Tax Act, 1961 (‘the Act’) at premises of the Company in the previous year ended 31 March 2017. Pursuant to the search, the Assessing Officer has issued notices under relevant sections of the Act to the Company for some of the earlier financial years. Consequently, in order to avoid protracted tax litigation, the Company has filed application under Section 245C (1) of the Act before the Hon’ble Income Tax Settlement Commission (‘ITSC’) on 03 October 2017 and accordingly deposited Rs.22,490.10 thousands as tax and Rs.12,509.90 thousands as interest towards the proposed settlement which has been provided for in the books of accounts. The said application has since been admitted by ITSC vide its Order dated 10 October 2017 passed u/s 245D (1) of the Act and allowed to be proceeded with vide Order dated 4 December 2017 passed u/s 245D (2C) of the Act. The matter is now pending before the Hon’ble ITSC for final determination.

The major components of income tax expense and the reconciliation of expected tax expense based on the domestic effective tax rate of the Company at 27.553% (31 March 2017: 34.608%) and the reported tax expense in statement of profit and loss are as follows:

NOTE - 6

EARNINGS PER SHARE (EPS)

The Company’s 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 using the weighted average number of common and dilutive common equivalent shares outstanding during the year including share options, except where the result would be anti-dilutive.

The following reflects the income and share data used in the basic and diluted EPS computation

NOTE - 7

FAIR VALUE MEASUREMENTS

(i) Fair value hierarchy

Financial assets and financial liabilities measured at fair value in the financial statements are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

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

Level 3: unobservable inputs for the asset or liability.

(ii) Financial assets measured at fair value

(iii) Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include -

(i) Investments in equity insttuments of subsidiaries are stated at cost as per IND AS 27, separate financial statements.

(ii) Use of net asset value for mutual funds on the basis of the statement received from investee party.

NOTE - 8

FINANCIAL RISK MANAGEMENT

i) Financial instruments by category

ii) Financial instruments measured at amortised cost

For amortised cost instruments, carrying value represents the best estimate of fair value except for long-term financial assets.

iii) Risk Management

The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

(A) Credit risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

a) Credit risk management

i) Credit risk rating

The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A: Low credit risk

B: Moderate credit risk

C: High credit risk

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.

ii) Concentration of financial assets

The Company’s principal business activities are real estate project advisory, construction and development of real estate projects and all other related activities. The Company’s outstanding receivables are for real estate project advisory business. Loans and other financial assets majorly represents loans to subsidiaries and deposits given for business purposes.

b) Credit risk exposure

Provision for expected credit losses

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

Expected credit loss for trade receivables under simplified approach

The Company’s outstanding trade receivables are less than six months old and the Company expects that money will be received in due course.

(B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due.

Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

(C) Market risk

(i) In terest rate risk

The Company’s fixed rate borrowings are not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

The Company’s variable rate borrowing is subject to interest rate. Below is the overall exposure of the borrowing:

C First time adoption of Ind AS

These are the Company’s first financial statements prepared in accordance with Ind AS.

The accounting policies set out have been applied consistently in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the Company’s date of transition). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

D Ind AS optional exemptions

1 Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments.

2 Share based payments

Ind AS 102 Share based payments requires an entity to record the options on their fair value instead of intrinsic value. Ind AS 101 permits a first time adopter to ignore such requirement for the options already vested as on transition date that is 1 April 2016. The Company has elected to apply this exemptions for such vested options.

E Ind AS mandatory exemptions

1 Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made 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 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

a) Investment in equity instruments carried at FVTPL or FVOCI

b) Impairment of financial assets based on expected credit loss model.

2 Classification and measurement of financial assets and liabilities

The classification and measurement of financial assets will be made considering whether the conditions as per Ind AS 109 are met based on facts and circumstances existing at the date of transition. Financial assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstances existing at the date of transition and if it is impracticable to assess elements of modified time value of money i.e. the use of effective interest method, fair value of financial asset at the date of transition shall be the new carrying amount of that asset. The Company has availed the exemption for intercorporate loans. All the other financial assets and financial liabilities have been restated retrospectively.

F 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.

1 Reconciliation of total equity as at 31 March 2017 and 1 April 2016

2 Reconciliation of total comprehensive income for the year ended 31 March 2017

NOTES TO FIRST TIME ADOPTION

NOTE - 1 BORROWINGS

Ind AS 109 requires transaction costs incurred towards 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 borrowing as part of the interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to statement of profit and loss over the period of loan basis on straight lining basis.

NOTE - 2

AMORTISED COST INSTRUMENT

A Under previous GAAP, long-term inter-corporate loans to subsidiaries and investments in debt instruments are shown at transaction value. Under Ind AS, such loans and debt instruments are to be evaluated under Ind AS 109 which requires the Company to account for such instruments amortised cost.

B Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be initially recognised at fair value. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposits has been recognised as prepaid rent.

NOTE - 3

FAIR VALUE INSTRUMENTS

Under previous GAAP, investments in long-term equity instrument are shown at cost and tested for provision other than temporary diminution. Under Ind AS, such investments are evaluated under Ind AS 109 which requires the Company to account for such instruments at fair value through profit and loss (FVTPL) or fair value through other comprehensive income (FVOCI) (except for investment in subsidiaries, associates and joint venture).

NOTE -4

EMPLOYEE STOCK OPTION EXPENSE

Under the previous GAAP, the cost of equity-settled employee share-based plan were recognised using the intrinsic value method. Under Ind AS, the cost of equity settled share-based plan is recognised based on the fair value of the options as at the grant date.

NOTE - 5 DEFERRED TAX

Retained earnings/statement of profit and loss has been adjusted consequent to the Ind AS transition adjustments with corresponding impact to deferred tax, wherever applicable.

NOTE - 6

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 as ‘other comprehensive income’ includes re-measurements of defined benefit plans, FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP.

NOTE - 9

CAPITAL MANAGEMENT

The Company’s objectives when managing capital are:

- To ensure Company’s ability to continue as a going concern, and

- To provide adequate return to shareholders

Management assesses the capital requirements in order to maintain an efficient overall financing structure. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. The Company manages its capital requirements by overseeing the following ratio -

* Net debt includes long term borrowings short term borrowings current maturity of long term borrowings net of cash and cash equivalents (Including fixed deposits and other liquid securities).

NOTE - 10

INFORMATION ABOUT SUBSIDIARIES

The information about subsidiaries of the Company is as follows. The below table includes the information about step down subsidiaries as well.

NOTE - 11

RELATED PARTY TRANSACTIONS Subsidiaries

Details in reference to subsidiaries are presented in Note - 36 Key management personnel

Surinder Singh Kadyan (Whole Time Director of the Company till 08 December 2017) Mr. M.S. Walia (Whole Time Director of the Company from 08 December 2017)

NOTE - 12

CONTINGENT LIABILITIES AND COMMITMENT

A. Summary of contingent liabilities

Contingent liabilities, not acknowledged as debt, include:

* The company has received order against this demand in its favour from Income Tax Appellate Tribunal (ITAT). The department has moved to High Court against the same.

The Company has given corporate guarantee for the secured term loans availed by the subsidiary company- SORIL Infra Resources Limited (Formerly known as Store One Retail India Limited). Outstanding amount of loans as on March 31, 2018 is Rs.429,587.18 thousands (31-March-2017: Rs.370,372.30 thousands; 01-April-2016: Rs.215,796.22 thousands).

The Company has given corporate guarantee for the secured term loans availed by the step down subsidiary company- Airmid Aviation Services Limited. Outstanding amount of loans as on March 31, 2018 is Rs.2,463,926.25 thousands (31-March-2017: Rs.2,334,189.60 thousands; 01-April-2016: Rs.2,387,984.40 thousands).

The Company has certain litigation cases pending, however, based on legal advice, the management does not expect any unfavourable outcome resulting in material adverse effect on the financial position of the Company.

As per best estimate of the management, no provision is required to be made in respect of any present obligation as a result of a past event that could lead to a probable outflow of resources, which would be required to settle the obligation.

B. Commitments

There are no commitments to be reported as on March 31, 2018, March 31, 2017 and April 01, 2016.

NOTE - 13

EMPLOYEE BENEFITS Defined contribution plan

The company has made Rs.27.61 thousands (31 March 2017 Rs.6.15 in thousands) contribution in respect of provident fund. Defined benefit plan

The Company has following defined benefit plans:

- Gratuity (unfunded)

- Compensated absences (unfunded)

Compensated absence

The leave obligations cover the Company’s liability for permitted leaves. The amount of provision of Rs.5.28 thousands (31 March 2017 - Rs.6.24 thousands, 1 April 2016 - Rs.5.06 thousands) 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 18.34 years (31 March 2017: 16.58 years).

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 18.34 years (31 March 2017: 16.58 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.

NOTE - 14

CORPORATE SOCIAL RESPONSIBILITY EXPENSES

(a) Gross amount required to be spent by the company during the year: Rs.80.00 thousands (31-March-2017: Rs.730.00 thousands; 01-April-2016: Rs.330.00 thousands).

(b) Amount spent during the year on:

NOTE - 15

SHARE BASED PAYMENTS

SORIL Holdings and Ventures Limited Employees Stock Options Scheme - 2011 The Company established the SORIL Holdings and Ventures Limited Employees Stock Options Scheme - 2011 (“SHVL ESOS”). Under the Plan, the Company granted 45,66,600 equity settled options to its eligible employees which gave them a right to subscribe up to 45,66,600 stock options representing an equal number of equity shares of face value of Rs.2 each of the Company at an exercise price of Rs.105.20 per option, subject to the requirements of vesting. A compensation committee constituted by the Board of Directors of the Company administers the Plan. The stock options so granted, shall vest in the eligible employees within 5 years beginning from 3 November 2018, the first vesting date. The stock options granted under each of the slabs are exercisable by the option holders within a period of five years from the relevant vesting date.

Weighted average share exercised price during the year ended 31 March 2018: Rs. Nil (31 March 2017: Rs. Nil)

The total expense of share based payments recognized during the year ended 31 March 2018 is Rs.15545.13 thousands (31 March 2017: Rs. Nil)

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

NOTE - 16

SEGMENT REPORTING

The Company’s primary business segment is reflected based on principal business activities carried on by the Company i.e. purchase, sale, real estate project advisory, construction and development of real estate projects and all other related activities which as per Ind AS 108 on ‘Operating Segments” is considered to be the only reportable business segment. The Company derives its major revenues from real estate project advisory business. The Company is operating in India which is considered as a single geographical segment

NOTE - 17

RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES PURSUANT TO IND AS 7 - CASH FLOWS

The changes in the Company’s liabilities arising from financing activities can be classified as follows:

NOTE - 18

OTHER MATTERS

a. The Company has not entered into any derivative instrument during the year. The Company does not have any foreign currency exposures towards receivables, payables or any other derivative instrument that have not been hedged.

b. In respect of amounts as mentioned under Section 125 of the Companies Act, 2013, there were no dues required to be credited to the Investor Education and Protection Fund as at 31 March 2018, 31 March 2017 and 1 April 2016.

c. In the opinion of the Board of Directors, all current assets and long term loans & advances, appearing in the balance sheet as at 31 March 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. In the opinion of the board of directors, no provision is required to be made against the recoverability of these balances.