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Notes to Accounts of Hindustan Foods Ltd.

Mar 31, 2023

* The Shareholders of the Company, through Postal Ballot on July 01, 2022, approved the sub-division of one equity share of face value Rs 10 each (fully paid-up ) into 5 equity share of face value Rs 2 each. The record date for the said sub-division was set at July 22, 2022. The basic and diluted Earnings Per Share (EPS) numbers for the year ended March 31, 2022 have been restated to give effect of the share split.

(b) Rights, preferences and restrictions attached to shares

Equity Shares: The Company has only one class of equity shares having par value of Rs.2 per share. Each shareholder is entitled to one vote per share held. Dividend if any declared is payable in Indian Rupees.

During the year ended March 31, 2023, the amount of per share dividend recognised as distributions to equity shareholders was Nil (March 31, 2022: Nil).

I n 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 proportion to the number of equity shares held by the shareholders.

(e) Information regarding issue of Equity Shares during last five years

(i) No shares have been issued as bonus shares by the Company during the period of five years immediately preceding the current year end.

(ii) No shares have been bought back by the Company during the period of five years immediately preceding the current year end.

(f) Shares issued for consideration other than cash: In consideration of the business combination, in the previous year Company has allotted 13,49,283 equity shares of Rs 10/- each credited as fully paid up shares of Company to the shareholders of Avalon Cosmetics Private Limited (ACPL) on March 14, 2022 in the ratio of 1.325 Ordinary (Equity) Share of face value of Rs. 10 each fully paid-up in the capital of the Company for each equity share held in ACPL. [Refer note 35 (a)]

(g) Shares issued for consideration other than cash: In consideration of the business combination, in the previous year Company has allotted 1,177 equity shares of Rs 10/- each credited as fully paid up shares of Company to the shareholders of ATC Beverages Private Limited (ATC) on March 14, 2022 in the ratio of 1 Ordinary (Equity) Share of face value of Rs. 10 each fully paid-up in the capital of the Company for every 15,075 fully paid-up Equity Shares for each equity share held in ATC. [Refer note 35 (b)]

B) Nature of security :For term loan from banks

i. Term loan from SVC bank has been secured by exclusive charge on the land and building and Plant and machinery of Masat and Piparia factory of the Company.

ii. Term loan from HDFC bank has been secured by charge on the current and future land and building and Plant and machinery of Hyderabad factory of the Company and first pari passu charge on stock and book debt along with yes bank.

iii. Term loan from Yes bank has been secured by exclusive charge on the movable fixed assets and land and building of the Coimbatore and Jammu and Goa factory of the Company and Pari passu charge over the entire current assets of the Company with HDFC and SVC bank.

For term loan from others

i. Term loan from Bajaj Finance Limited has been secured by charge on the entire movable and immovable fixed assets of the Reckitt Benckiser Scholl India Private Limited and Company and current assets of the Reckitt Benckiser Scholl India Private Limited.

For vehicle loan

i. Vehicle loan from HDFC bank has been secured by charge on the vehicle.

C) Period and amount of default:

The Company has made no defaults in the payment of principal or interest during the year ended March 31, 2023.

D) The Bank loans contain certain debt covenants relating to limitation on indebtedness, debt-equity ratio, net Borrowings to EBITDA ratio and debt service coverage ratio. The limitation on indebtedness covenant gets suspended if the Company meets certain prescribed criteria. The debt covenant related to limitation on indebtedness remained suspended as of the date of the authorisation of the financial statements.

The Company has also satisfied all other debt covenants prescribed in the terms of bank loan.

B) Nature of security :

i. Cash credit from Yes Bank has been secured by exclusive charge on the movable fixed assets of the Jammu & Goa factory of the Company, pari passu charge over the entire current assets of the Company with HDFC, exclusive charge on land and building of Jammu factory and pari passu charge on the land and building of Goa plant along with HDFC bank.

ii. Cash credit from HDFC Bank has been secured by first pari passu charge on the stock and book debt of the Company along with Yes bank, exclusive charge on current and future plant and machinery of the Hyderabad factory, first pari passu charge on the land and building of Goa factory and exclusive charge on current and future land and building of Hyderabad factory.

C) Period and amount of default:

The Company has made no defaults in the payment of principal or interest.

D) The statements of current assets and stocks submitted by the Company with banks are materially in agreement with the books of accounts.

C. Transaction price allocated to the remaining performance obligation

There are no unsatisfied long-term contracts / performance obligation that have impact on financial statements.

The Company applies the practical expedient in paragraph 121 of Ind AS 115 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

(C) Other long term employee benefit obligation Leave entitlement

The liability for leave entitlement is recognised in the same manner as gratuity aggregating Rs.78.86 lakhs as at March 31, 2023 (March 31, 2022: Rs. 31.47 lakhs).

35 (A) Business combinations during current year

The Company on 1 July 2022, has acquired 100% equity share capital of Reckitt Benckiser Scholl India Private Limited ("RBSIPL") for a cash consideration of Rs.7,349.02 lakhs (Adjusted for contingent consideration amounting to Rs.140.26 lakhs in year ended March 31, 2023) as per the terms and conditions of the Share Purchase Agreement dated January 24, 2022 including amendments thereof (if any) entered between the Company and RBSIPL.

35 (B) Business combinations during previous year35 (a) Merger Information - Coimbatore Manufacturing Unit of Avalon Cosmetics Private Limited

(i) The Scheme of Arrangement (''the Scheme''), presented under Section 230 to 232 and other applicable provisions of the Companies Act, 2013 read with the rules prescribed thereunder, for the business combination of Coimbatore Manufacturing Unit of Avalon Cosmetics Private Limited (''Avalon Cosmetics'') with the Company was approved by the Hon''ble National Law Tribunal (Mumbai Bench) vide its order dated December 21, 2021 ("the NCLT Order"). The Certified copy of the NCLT Order was filed with Registrar of Companies on February 18, 2022. Consequently, the Scheme become operative from February 18, 2022 and effective from April 1, 2020 i.e. appointed date.

All the assets and liabilities of the Coimbatore Manufacturing Unit of Avalon Cosmetics have been transferred to and vested in the Company at it''s carrying value w.e.f. April 1, 2020 and the amount of Rs. 263.67 lakhs is recorded as capital reserve on account of the Scheme. In consideration of the business combination, the Company has allotted 1,349,283 equity shares of Rs 10 each credited as fully paid up shares of Company to the shareholders of Avalon Cosmetics for each equity share held in Avalon Cosmetics. The same is presented as "Share Pending Issuance" under "Other Equity" as at April 1, 2021.

(iii) On business combination of the Coimbatore Manufacturing Unit of Avalon Cosmetics Private Limited, ACPL was following the written down value method for accounting of depreciation however the method has been changed to the Straight line method leading to a change in the accounting policy. The above mentioned change in accounting policy resulted into creation of capital reserve amounting to Rs 724.13 lakhs and a deferred tax liability amounting to Rs. 325.52 lakhs.

(iv) Acquisition related cost

The Company has incurred an aggregate of Rs. 29.27 lakhs during the year ended March 31, 2022 towards merger of Coimbatore Manufacturing Unit of Avalon Cosmetics and ATC Beverages Private Limited with the Company, which are included in other expenses in profit or loss and in operating cash flows in statement of cash flows.

35 (b) Merger Information - ATC Beverages Private Limited

(i) The Company was holding 44.43% stake in ATC Beverages Private Limited (''ATC''). On February 18, 2022, the Company completed the merger of ATC via an all-equity merger under which one share of the Company were allotted for every 16,228 shares of ATC as a consideration for acquiring remaining 55.57% stake. The scheme of merger("Scheme") submitted by the Company was approved by Hon''ble National Company Law Tribunal by its order dated December 21, 2022 (Mumbai bench). The Scheme was filed with Registrar of Companies on February 18, 2022, and effective from April 1, 2020 i.e. appointed date. Accordingly, February 18, 2022, is considered as the acquisition date, i.e., the date on which control is transferred to the Company. The business combination has been accounted for using the acquisition accounting method under ''Ind AS 103 - Business Combinations''. All identified assets acquired, and liabilities assumed on the date of merger were recorded at their fair value. This amalgamation resulted in a Goodwill amounting to Rs. 157.70 lakhs.

Further, in terms of the Scheme, during the previous year, 1,177 Ordinary (Equity) shares of Rs 10 each in the Company has been issued and allotted, valued based on the share price of the Company on the completion date (Rs. 2,028) to the shareholders of ATC other than the Company in the ratio of 1 Ordinary (Equity) Share of face value of Rs. 10 each fully paid-up in the capital of the Company for every 15,075 fully paid-up Equity Shares of Rs. 10 each held in ATC.

(iii) On business combination of the ATC Beverages Private Limited CATC''), ATC was having Income tax losses of Rs. 2,531.81 lakhs on which Deferred tax asset was created of Rs. 895.41 lakhs which was adjusted against Goodwill accounted as per note 35 (b)(ii) as per para 66 of Ind AS 12. Further, deferred tax asset of Rs. 47.78 lakhs was created on gain on fair valuation of Building of Rs. 136.72 lakhs which was adjusted against goodwill accounted as per note 35 (b)(ii).

35 (c) Acquisition of Aero Care Personal Products LLP (''ACPPL'')

On February 11, 2022, the Company had entered into an agreement with designated partners of ACPPL and acquired an entire contribution in ACPPL with effect from January 01, 2022. As a result of this acquisition, ACPPL has been determined as subsidiary of the Company.

(D) Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free except for borrowings and settlement occurs in cash. The Company, during the year ended March 31, 2023, has provided corporate guarantee to the bank of subsidiary amounting upto Rs. 7,260 lakhs (March 31, 2022: 9,000 lakhs). The Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2022: Nil). This assessment is undertaken each financial year through examining the financial position of the related parties and the market in which the related parties operates.

38 SEGMENT REPORTING

The Company''s operations predominantly relate to contract manufacturing. The Chief Operating Decision Maker (CODM) reviews the operations of the Company as contract manufacturing. Consequently, no separate segment information has been furnished herewith.

The Company has disclosed in the consolidated financial statement, the revenue contribution from major external customer.

39 FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

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 amortised cost using effective interest rate (EIR) of non-current financial assets/liabilities are not significantly different from the carrying amount and therefore the impact of fair value is not considered for above disclosure.

Financial assets that are neither past due nor impaired include cash and cash equivalents, security deposits, term deposits, and other financial assets.

40 FAIR VALUE HIERARCHY

The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

• Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

No financial assets/liabilities have been valued using level 1 fair value measurements.

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a different currency from the Company''s functional currency).

Management has assessed that Cash and cash equivalents, Other balances with banks, Loans, Trade receivables, Other financial assets, Short term Borrowings, Trade payables and Other financial liabilities carried at amortised cost approximate their carrying amounts largely due to the short-term maturities of these instruments.

41 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company is exposed to various financial risks. These risks are categorised into market risk, credit risk and liquidity risk. The Company''s risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.

(A) 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 and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.

(i) Interest rate risk

I nterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

(B) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises principally from the Company''s receivables from deposits with landlords and other statutory deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

The Company measures the expected credit loss of trade receivables from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.

During the year ended March 31, 2023, the Company has spent Rs 91.45 lakhs on activities for eradicating hunger, poverty and malnutrition, preservation of monuments and icons, promoting preventive health care, promoting education, supporting homeless young womens.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Processes and policies related to such risks are overseen by senior management who monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

The table below summarises the maturity profile of the Company''s financial liabilities:

During the year ended March 31, 2023, the Company has not made any CSR Expenditure incurred with Related Parties / contribution made to related party.

43 CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, equity component of redeemable non cumulative non convertible preference shares, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value and to ensure the Company''s ability to continue as a going concern.

The Company has not distributed any dividend to its shareholders. The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt comprises of non-current borrowing, current borrowings and lease liabilities which represents borrowings from bank and others, lease liabilities and liability component of redeemable non cumulative non convertible preference shares. 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.

42 CORPORATE SOCIAL RESPONSIBILITY

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are in the field of promoting healthcare and education. A CSR committee has been formed by the Company as per the Act. The funds are utilised through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

(C) Details of benami property held

No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(D) Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(E) Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956

The Company does not have any transactions or balance outstanding with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

(F) Registration of charges or satisfaction with Registrar of Companies

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(G) Compliance with number of layers of companies

The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017 (as amended).

(H) Undisclosed income

The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

(I) Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31, 2023.

(J) Utilisation of Borrowed funds and share premium

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(K) Compliance with approved scheme(s) of arrangements

During the year the Company has not entered into scheme of arrangement and amalgamation having an accounting impact. However, during the previous year the Company has entered into scheme of arrangement and amalgamation having an accounting impact [Refer note 35 (B)].

(L) Valuation of Property plant and equipment

The Company has not revalued its property, plant and equipment during the year ended March 31, 2023 and March 31, 2022.

(M) Loans and advances to promoters and directors

The Company has not given loans and advances to promoters and directors.

47 The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on 28 September 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on 13 November 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the standalone financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

48 The Company has executed a Business Transfer Agreement ("BTA") on 15 December 2022, with Reckitt Benckiser Healthcare India Private Limited ("Reckitt") for acquisition of manufacturing facility of Reckitt situated at Baddi, Himachal Pradesh that is engaged in manufacturing of pharmaceutical and non-pharmaceutical products on a slump sale and going concern basis. This transaction will be effected once the Company receives required statutory approvals for acquisition.

49 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

50 These financial statements were authorised for issue by the Board of Directors on 18 May 2023.


Mar 31, 2022

(b) Rights, preferences and restrictions attached to shares

Equity Shares: The Company has only one class of equity shares having par value of Rs. 10 per share. Each shareholder is entitled to one vote per share held. Dividend if any declared is payable in Indian Rupees.

During the year ended March 31, 2022, the amount of per share dividend recognised as distributions to equity shareholders was Nil (March 31, 2021: Nil).

I n 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 proportion to the number of equity shares held by the shareholders.

(e) Information regarding issue of Equity Shares during last five years

(i) No bonus shares have been issued

(ii) No shares have been bought back

(f) Shares issued for consideration other than cash: In consideration of the business combination, Company has allotted 13,49,283 equity shares of Rs. 10/- each credited as fully paid up shares of Company to the shareholders of Avalon Cosmetics Private Limited (ACPL) on March 14, 2022 in the ratio of 1.325 Ordinary (Equity) Share of face value of Rs. 10 each fully paid-up in the capital of the Company for each equity share held in ACPL. [Refer note 37 (a)]

(g) Shares issued for consideration other than cash: In consideration of the business combination, Company has allotted 1,177 equity shares of Rs. 10/- each credited as fully paid up shares of Company to the shareholders of ATC Beverages Private Limited (ATC) on March 14, 2022 in the ratio of 1 Ordinary (Equity) Share of face value of Rs. 10 each fully paid-up in the capital of the Company for every 15,075 fully paid-up Equity Shares for each equity share held in ATC. [Refer note 37 (b)]

B) Nature of security :

i. Term Loan from SVC Bank has been secured by charge on the current and future Property, plant and equipment of Hyderabad, Piparia and Masat factory of the Company.

ii. Term Loan from HDFC Bank has been secured by charge on the current and future Property, plant and equipment of Hyderabad factory of the Company.

iii. Term Loan from Yes Bank has been secured by charge on the current and future Property, plant and equipment of the Company.

C) Period and amount of default:

The Company has made no defaults in the payment of principal or interest during the year ended March 31, 2022.

D) The Bank loans contain certain debt covenants relating to limitation on indebtedness, debt-equity ratio, net Borrowings to EBITDA ratio and debt service coverage ratio. The limitation on indebtedness covenant gets suspended if the Company meets certain prescribed criteria. The debt covenant related to limitation on indebtedness remained suspended as of the date of the authorisation of the financial statements.

The Company has also satisfied all other debt covenants prescribed in the terms of bank loan.

B) Nature of security :

i. Cash credit from SVC Bank has been secured by charge on the current and future Property, plant and equipment of the Hyderabad unit of the Company.

ii. Cash credit from Yes Bank has been secured by charge on the current and future Property, plant and equipment of the Company.

ii. Cash credit from HDFC Bank has been secured by charge on the stock and book debt and current and future land and building and plant and machinery of the Hyderabad unit of the Company.

C) Period and amount of default:

The Company has made no defaults in the payment of principal or interest.

D) The statements of current assets and stocks submitted by the Company with banks are materially in agreement with the

books of accounts.

C. Transaction price allocated to the remaining performance obligation

There are no unsatisfied long-term contracts / performance obligation that have impact on financial statements.

The Company applies the practical expedient in paragraph 121 of Ind AS 115 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

35. Contingent liabilities

Amounts in Rs. Lakhs, unless otherwise stated)

Particulars

As at March 31, 2022

As at March 31, 2021

[refer note 37(a)]

Claim for expired goods

7.13

7.13

Letter of Credit issued

4.59

59.26

Bank Guarantees

69.91

7645

Financial Guarantee issued on behalf of subsidiary

9,000.00

-

9,081.63

142.84

Capital commitments

856.57

662.11

36 Employee benefits

The Company has the following employee benefit plans:

(A) Defined contribution plans

Employers'' Contribution to Provident Fund and Employee State Insurance (refer note 28)

37. Business combinations during current year37(a) Merger Information - Coimbatore Manufacturing Unit of Avalon Cosmetics Private Limited

(i) The Scheme of Arrangement (''the Scheme''), presented under Section 230 to 232 and other applicable provisions of the Companies Act, 2013 read with the rules prescribed thereunder, for the business combination of Coimbatore Manufacturing Unit of Avalon Cosmetics Private Limited (''Avalon Cosmetics'') with the Company was approved by the Hon''ble National Law Tribunal (Mumbai Bench) vide its order dated December 21, 2021 (""the NCLT Order""). The Certified copy of the NCLT Order was filed with Registrar of Companies on February 18, 2022. Consequently, the Scheme become operative from February 18, 2022 and effective from April 1, 2020 i.e. appointed date.

The said business combination has been accounted under the ''pooling of interests'' method in accordance with Appendix C of Ind AS 103 ''Business Combination'' and the prior year financial statements of the Company for the year ended March 31, 2021 have been restated to give effect to the Scheme. All the assets and liabilities of the Coimbatore Manufacturing Unit of Avalon Cosmetics have been transferred to and vested in the Company at it''s carrying value w.e.f. April 1, 2020 and the amount of Rs. 263.67 Lakhs is recorded as capital reserve on account of the Scheme. In consideration of the business combination, the Company has allotted 1,349,283 equity shares of Rs. 10 each credited as fully paid up shares of Company to the shareholders of Avalon Cosmetics for each equity share held in Avalon Cosmetics. The same is presented as "Share Pending Issuance" under "Other Equity" as at April 1, 2020 and March 31, 2021.

Pursuant to the business combination between Coimbatore Manufacturing Unit of Avalon Cosmetics and the Company with effect from April 1, 2020, the profit attributable to the equity shareholders for the previous year has been restated to include the figures of Coimbatore Manufacturing Unit of Avalon Cosmetics. Accordingly, as per the requirement of the Ind AS 33 ''Earnings per Share'', the Basic and Diluted earnings per share of the comparative periods have been restated taking into consideration the equity shares issued to the shareholders of Avalon Cosmetics. Further, the current tax and deferred tax amounts in the comparative year have been restated owing to the said business combination.

Pursuant to the business combination between Coimbatore Manufacturing Unit of Avalon Cosmetics and the Holding Company with effect from April 1, 2020, the profit attributable to the equity shareholders for the comparative year have been restated to include the figures of Coimbatore Manufacturing Unit of Avalon Cosmetics. Accordingly, as per the requirement of the Ind AS 33 ''Earnings per Share'', the Basic and Diluted earnings per share of the comparative year have been restated taking into consideration the equity shares issued to the shareholders of Avalon Cosmetics. Further, the current tax and deferred tax amounts in the comparative year have been restated owing to the said business combination.

(iii) On business combination of the Coimbatore Manufacturing Unit of Avalon Cosmetics Private Limited, ACPL was following the written down value method for accounting of depreciation however the method has been changed to the Straight line method leading to a change in the accounting policy. The abovementioned change in accounting policy resulted into creation of capital reserve amounting to Rs. 724.13 Lakhs and a deferred tax liability amounting to Rs. 325.53 Lakhs.

(iv) Acquisition related cost

The Company has incurred an aggregate of of Rs. 29.27 Lakhs (March 31, 2021 - Rs. Nil ) towards merger of Coimbatore Manufacturing Unit of Avalon Cosmetics and ATC Beverages Private Limited with the Company, which are included in other expenses in profit or loss and in operating cash flows in statement of cash flows.

37 (b) Merger Information - ATC Beverages Private Limited

(i) The Company was holding 44.43% stake in ATC Beverages Private Limited (''ATC''). On February 18, 2022, the Company completed the merger of ATC via an all-equity merger under which one share of the Company were allotted for every 16,228 shares of ATC as a consideration for acquiring remaining 55.57% stake. The scheme of merger("Scheme") submitted by the Company was approved by Hon''ble National Company Law Tribunal by its order dated December 21, 2021 (Mumbai bench). The Scheme was filed with Registrar of Companies on February 18, 2022, and effective from April 1, 2020 i.e. appointed date. Accordingly, February 18, 2022, is considered as the acquisition date, i.e., the date on which control is transferred to the Company. The business combination has been accounted for using the acquisition accounting method under ''Ind AS 103 - Business Combinations''. All identified assets acquired, and liabilities assumed on the date of merger were recorded at their fair value. This amalgamation resulted in a Goodwill amounting to Rs. 157.70 Lakhs.

Further, in terms of the Scheme, during the year, 1,177 Ordinary (Equity) shares in the Company has been issued and allotted, valued based on the share price of the Company on the completion date (Rs. 2,028) to the shareholders of ATC other than the Company in the ratio of 1 Ordinary (Equity) Share of face value of Rs. 10 each fully paid-up in the capital of the Company for every 15,075 fully paid-up Equity Shares of Rs. 10 each held in ATC.

(iii) On business combination of the ATC Beverages Private Limited (''ATC''), ATC was having Income tax losses of Rs. 2,531.81 Lakhs on which deferred tax asset was created of Rs. 895.41 Lakhs which was adjusted against Goodwill accounted as per note 37 (b)(II) as per para 66 of Ind AS 12. Further, deferred tax asset of Rs. 47.78 Lakhs was created on gain on fair valuation of Building of Rs. 136.72 Lakhs which was adjusted against Goodwill accounted as per note 37 (b)(II).

37 (c) Acquisition of Aero Care Personal Products LLP (''ACPPL'')

On February 11, 2022, the Company had entered into an agreement with designated partners of ACPPL and acquired an entire contribution in ACPPL with effect from January 1, 2022. As a result of this acquisition, ACPPL has been determined as subsidiary of the Company.

(D) Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free except for borrowings and settlement occurs in cash. The Company, during the year, has provided corporate guarantee to the bank of subsidiary amounting upto Rs. 9,000 Lakhs. The Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2021: Nil). This assessment is undertaken each financial year through examining the financial position of the related parties and the market in which the related parties operates.

40 Segment reporting

The Company''s operations predominantly relate to contract manufacturing and other manufacturing for sale under the Company''s own brand name. The Chief Operating Decision Maker (CODM) reviews the operations of the Company as contract manufacturing and other manufacturing for sale under the Company''s own brand name. Since, the quantitative threshold as per para 13 of Ind AS 108 on Segment Reporting are not met for "other manufacturing for sale under Company''s own brand name", no separate segment information has been furnished herewith.

The Company has disclosed in the consolidated financial statement, the revenue contribution from major external customers.

41 Fair values of financial assets and financial liabilities

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 amortised cost using effective interest rate (EIR) of non-current financial assets/liabilities are not significantly different from the carrying amount and therefore the impact of fair value is not considered for above disclosure.

Financial assets that are neither past due nor impaired include cash and cash equivalents, security deposits, term deposits, and other financial assets.

42 Fair value hierarchy

The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

• Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

No financial assets/liabilities have been valued using level 1 fair value measurements.

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:

43 Financial risk management objectives and policies

The Company is exposed to various financial risks. These risks are categorised into market risk, credit risk and liquidity risk. The Company''s risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.

(A) 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 and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.

(i) Interest rate risk

I nterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a different currency from the Company''s functional currency).

(B) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises principally from the Company''s receivables from deposits with landlords and other statutory deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

The Company measures the expected credit loss of trade receivables from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.

(C) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Processes and policies related to such risks are overseen by senior management who monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

During the year ended March 31, 2022, the Company has not made any CSR expenditure incurred with related parties/ contribution made to related party. Further, there was no shortfall in CSR spent.

45 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, equity component of redeemable non cumulative non convertible preference shares, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value and to ensure the Company''s ability to continue as a going concern.

The Company has not distributed any dividend to its shareholders. The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt comprises of non-current borrowing which represents borrowings from bank & others and liability component of redeemable non cumulative non convertible preference shares. 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 does not hold any immovable property (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) whose title deeds are not held in the name of the Company, at anytime during the year ended March 31, 2021.

(C) Details of benami property held

No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(D) Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(E) Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956

The Company does not have any transactions or balance outstanding with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

(F) Registration of charges or satisfaction with Registrar of Companies

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(G) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

(H) Undisclosed income

The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

(I) Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31, 2022.

(J) Utilisation of Borrowed funds and share premium\

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(K) Compliance with approved scheme(s) of arrangements

The Company has entered into scheme of arrangement and amalgamation having an accounting impact (refer note 37).

(L) Valuation of Property plant and equipment

The Company has not revalued its property, plant and equipment during the year ended March 31, 2022 and March 31, 2021.

(M) Loans and advances to promoters and directors

The Company has not given loans and advances to promoters and directors.

49. The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and postemployment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the standalone financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

50. On January 24, 2022, the Company has signed a Share Purchase Purchase Agreement ("Agreement") with Reckitt Benckiser (India) Private Limited to acquire 100% equity shares of Reckitt Benckiser Scholl India Private Limited. The further execution of the Agreement is under process as few approvals essential for execution are yet to be received.

51. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

52. These financial statements were authorised for issue by the Board of Directors on May 20, 2022.


Mar 31, 2018

1. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future years.

2. Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the yearend date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(a) Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

(b) Defined benefit plans and other long term benefits (gratuity benefits and leave encashment)

The cost of the defined benefit plans such as gratuity and leave encashment are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These

include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each year end.

The principal assumptions are the discount and salary growth rate. The discount rate is based upon the market yields available on government bonds at the accounting date with a term that matches that of liabilities. Salary increase rate takes into account of inflation, seniority, promotion and other relevant factors on long term basis. For details refer Note 27.

3. STANDARDS (INCLUDING AMENDMENTS) ISSUED BUT NOT YET EFFECTIVE

The standards and interpretations that are issued, but not yet effective up to the date of issuance of the financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

Amendments to Ind AS 7, Statement of Cash Flows and Ind AS 102, Share-based Payment

On 17th March 2017, MCA has notified amendments to Companies (Indian Accounting Standards) Rules, 2015 to keep Ind AS consistent with the amendments made to International Financial Reporting Standards (IFRS) in order to maintain convergence. The amendment relates to Ind AS 7, Statement of Cash Flows, and Ind AS 102, Share-based Payment and are effective from 1 April 2017. Key amendments are as follows

(a) Appendix B to Ind AS 21, Foreign currency transactions and advance consideration

On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company is currently evaluating the requirements of amendments. The Company believe that the adoption of this amendment will not have a material effect on its financial statements.

(b) Ind AS 115- Revenue from Contract with Customers

On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize 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. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.

The standard permits two possible methods of transition:

(i) 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

(ii) Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach) The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.

The Company is currently evaluating the requirements of amendments. The Company believe that the adoption of this amendment will not have a material effect on its financial statements.

4 FIRST-TIME ADOPTION OF IND-AS

These financial statements are the first set of Ind AS financial statements prepared by the Company. Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for year ending on 31 March 2018, together with the comparative year data as at and for the year ended 31 March 2017, as described in the significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1 April 2015, being the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017.

5. Exemptions availed on first time adoption of Ind AS

Ind AS 101, First-time Adoption of Indian Accounting Standards, allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has accordingly applied the following exemptions.

(a) Deemed Cost

The Group has opted para D7 AA and accordingly considered the carrying value of property, plant and equipment''s and Intangible assets as deemed cost as at transition date.

6. Mandatory Exemption on first-time adoption of Ind AS

(a) Estimates

An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Indian 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 and 31 March 2017 are consistent with the estimates as at the same date made in conformity with Indian GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under Indian GAAP:

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

(ii) Fair valuation of compound instrument.

(b) Derecognition of financial assets and financial liabilities

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after 1 April, 2016 (the transition date).

(c) Classification and measurement of financial assets

Ind AS 101, First-time Adoption of Indian Accounting Standards, requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

7. Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS required under Ind AS 101:

(a) Reconciliation of Equity as at 1 April 2016 and as at 31 March 2017

(b) Reconciliation of total comprehensive income for the year ended 31 March 2017

The presentation requirements under previous GAAP differs from Ind AS, and hence, previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The regrouped previous GAAP/ Indian GAAP information is derived from the Financial Statements of the Company prepared in accordance with previous GAAP.

(c) Notes to first-time adoption

(i) 9% Redeemable non-cumulative non-convertible preference shares at mortised cost

The Company has issued 9% redeemable non-cumulative non-convertible preference shares, redeemable 19 years after the date of issue. Under Indian GAAP, the preference shares are considered as a part of Share Capital under Shareholder''s equity.

In accordance with Ind AS, the redeemable non-cumulative non-convertible preference shares are recognized as compound financial instrument and split method of accounting is adopted to measure it as equity component (representing dividend which is payable at discretion, since non-cumulative) and liability component (redemption of principal at maturity). On initial recognition, the equity component is Rs. 86.29 lakhs (net of deferred tax). Liability component is initially measured at fair value and subsequently measured at mortised cost.

Subsequent interest accretion will be recognized as interest expense as part of finance cost in Statement of Profit or loss at effective interest rate (EIR). Dividend actually paid in respect of non-cumulative preference shares will be considered as dividend toward equity portion and routed through statement of equity. The Company has not declared any dividend on redeemable non-cumulative non-convertible preference shares till 31 March, 2017.

Correspondingly, there has an increase in borrowings and consequent reduction in share capital.

(ii) Product launch expenses

Under Indian GAAP product launch expenditure incurred for new products that are yet to be launched are capitalized and amortized over a period of 5 years by the Company.

Under Ind AS, costs of introducing a new product or service (including costs of advertising and promotional activities) does not meet the recognition criteria specified under Ind AS 38 " Intangible assets", hence these expenditures are expensed out as and when incurred.

(iii) Share issue expenses

Under Indian GAAP, share issue expense incurred toward allotment of equity shares are deferred and amortized over a period of 5 years. Under Ind AS, transaction cost (i.e. share issue expense) incurred for equity transaction shall be accounted for as a deduction from equity. Accordingly the share issue expenses incurred have been charged to the security premium reserve for the equity shares issued during the year ended 31 March 2017.

(iv) Defined benefit liabilities

Under Ind AS, cost of providing defined benefit plan (i.e. gratuity) is determined using actuarial valuation. Remeasurement gain and losses are recognized immediately in other comprehensive income.

Consequent to this under Ind AS employee benefit cost has been increased by Rs. 5.33 lakhs and other comprehensive income is decreased by 26.20 lakhs for the year ended 31 March 2017. Retained earnings as on 31 March 2017 has decreased by Rs. 31.53 lakhs

(v) Deferred tax

In accordance with Ind AS 12, "Income Taxes", the Company on transition to Ind AS has recognized deferred tax on temporary differences, i.e. based on balance sheet approach as compared to the earlier approach of recognizing deferred taxes on timing differences , i.e. profit and loss approach. The tax impacts as above primarily represent deferred tax consequences arising out of Ind AS re-measurement changes.

(vi) Retained earnings

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

(vii) Statement of cash flows

No material impact on transition from Indian GAAP to Ind AS on the statement of cash flows.

(b) Rights, preferences and restrictions attached to shares

Equity Shares: The Company has only one class of equity shares having par value of Rs.10 per share. Each shareholder is entitled to one vote per share held. Dividend if any declared is payable 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.

During the year ended March 31, 2018, the amount of per share dividend recognized as distributions to equity shareholders was Nil (March 31, 2017: Nil).

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 proportion to the number of equity shares held by the shareholders.

(d) No class of shares have been issued as bonus shares or for consideration other than cash by the Company during the period of five years immediately preceding the current year end.

(e) No class of shares have been bought back by the Company during the period of five years immediately preceding the current year end.

Capital reserve The Company recognizes profit or loss on purchase, sale, issue or cancellation of the Company''s own equity instruments to capital reserve.

Securities premium reserve Securities premium reserve is used to record the premium on issue of shares. These reserve is utilized in accordance with the provisions of the Act.

Equity component of redeemable non-cumulative non convert- Equity component represents difference between consideration able preference shares received and present value of liability component on initial rec

cognition (net of deferred tax).

Profit/(loss) in the Statement of Profit and Loss All other net gains, losses and transactions with owners (e.g.:

dividends) not recognized elsewhere.

* The Company has authorized redeemable non-cumulative non-convertible preference shares of Rs. 200 lakhs, of which the Company has issued preference shares amounting to Rs. 160 lakhs to V.S. Dempo Holdings Pvt Ltd

b. Nature of security :

i. Loan from M/s. V S Dempo Holdings Private Limited is secured by charge on Fixed Assets of the Company.

ii. Term Loan from Yes Bank has been secured by charge on the current and future Fixed Assets of the Company

iii. Cash Credit Rs. 20 Lacs from Bank of Maharashtra is secured by hypothecation of stock and book debts and Cash Credit of Rs. 50 Lacs from Bank of Maharashtra is secured by pledge of fixed deposits of M/s. V S Dempo Holdings Private Limited.

iv. Packing credit loan from Yes Bank is secured against charge on the fixed assets of the Company

c. Period and amount of default:

The Company has made no defaults in the payment of principal or interest in the current period

8. ACQUISITION DURING THE YEAR

On 27 December 2017 the Company has acquired a plant located at Jammu manufacturing Pest control products on Slump sales basis from Reckitt Benckiser India Pvt Ltd. This facility is capable of manufacturing diverse range of pest control products such as mosquito coils, vaporizers, aerosols etc.

The Company has signed a long term agreement with Reckitt Benckiser India Pvt. Ltd. to supply pest control products under the brand of Mortein. This expansion not only helped company to enlarge its operations but also enabled the Company to enter into entirely new product category and acquire a new customer.

(b) Fair valuation of Property, plant and equipment''s:

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

This valuation is based
on valuations performed by an accredited independent valuer. Fair valuation is based on replacement cost method. The fair value measurement is categorized in level 2 fair value hierarchy."

(c) Revenue and profit contribution:

The acquired business contributed for the revenue and profit for the year ended 31 March 2018 as follows: Revenue: Rs. 3,549.90 lakhs and Loss : Rs. 123.37 lakhs"

If the acquisition had occurred on 1 April 2017, proforma revenue and profit for the year ended 31 March 2018 would have approximately been within the range of Rs. 13,000 to 14,000 lakhs and Rs. 300 to 400 lakhs respectively .

There were no acquisition in the year ending March 31, 2017

(e) Acquisition related cost

Acquisition cost of Rs. 56 lakhs are included in other expenses in profit or loss and in operating cash flows in statement of cash flows.

37 LEASES (A) Operating leases where Company is a lessee:

The Company does not have any non-cancellable operating lease agreements for period ended 31 March 2018, 31 March 2017 and 1 April 2016.

The lease agreement for the land includes fixed lease payments for 90 year lease term. The agreement is non-cancellable and does not contain any further restrictions.

38 RELATED PARTY DISCLOSURES:

(A) Names of related parties and description of relationship as identified and certified by the Company: Holding company

M/s. Vanity Case (India) Pvt. Ltd.

Entity under common control

V.S. Dempo Holdings Pvt. Ltd.

Avalon Cosmetics Pvt Limited Motown Trading Pvt Limited

Employee Benefit Trust

Hindustan Foods Management staff superannuation fund trust

Key Management Personnel (KMP)

Shrinivas Dempo Chairman

Sameer Kothari Managing Director

Ganesh Argekar Executive Director

Kedar Swain Chief Financial Officer

Beena Mahambrey Company Secretary

Nikhil Vora Non-executive Director

Rajesh Dempo Non-executive Director

Honey Vazirani Independent Woman Director

Sudin M S Usgaonkar Independent Director

Shashi Kalathil Independent Director

(D) Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free except for borrowings and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2017: Nil, 1 April 2016: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

9 SEGMENT REPORTING

The Company''s operations predominantly relate to providing third party manufacturing services. The Chief Operating Decision Maker (CODM) reviews the operations of the Company as one operating segment. Hence no separate segment information has been furnished herewith.

(B) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk is primarily attributable to the Company''s trade and other receivables. The amounts presented in this standalone statement of financial position are net of allowances for doubtful receivables, estimated by management based on prior experience and their assessment of the current economic environment.

The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.

(C) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Processes and policies related to such risks are overseen by senior management who monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

10. CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, equity component of redeemable non-cumulative non-convertible preference shares, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value and to ensure the Company''s ability to continue as a going concern.

The Company has not distributed any dividend to its shareholders. The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt comprises of non-current borrowing which represents borrowings from bank & others and liability component of redeemable non-cumulative non-convertible preference shares. 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.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018, 31 March 2017 and 1 April 2016.

11. SUBSEQUENT EVENTS

The Company has propose to increase the Authorized Share Capital of the Company from Rs 15 Crores to Rs 21.50 Crores and consequent amendments to Memorandum of Association and Articles of Association of the Company. The Company has proposed preferential issue of a maximum of 5,00,000 Equity Shares of face value of Rs. 10/- each to Promoter/Promoter Group at a price being not lower than the minimum price calculated in accordance with Regulation 76A of SEBI (ICDR) Regulations.

The Company to consider and approve the scheme of arrangement under Section 230-232 of the Companies Act 2013 (''Scheme'') for demerger of Contract Manufacturing (Hyderabad) Business of Avalon Cosmetics Private Limited, having its registered office at Mumbai into Hindustan Foods Limited. The Scheme is subject to necessary statutory and regulatory approvals including the approval of National Company Law Tribunal.

12. PREVIOUS YEAR FIGURES HAVE BEEN REGROUPED/ RECLASSIFIED TO CONFIRM PRESENTATION AS PER IND AS AS REQUIRED BY SCHEDULE III OF THE ACT.


Mar 31, 2016

ii) Terms and Rights attached to Shares

The Company has two class of shares. The Equity Shares have a par value of Rs. 10/- per share. Each holder of Equity Share is entitled to one vote per share. The Preference Shares have par value of Rs. 100/- per share and carry dividend of 9% per annum from the date of allotment. The dividend shall be payable at the time of declaration of dividend on Equity Shares. The Preference Shares shall be redeemed not later than 19 years from the date of issue.

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

iii) Disclosure of more than 5% shareholding

OTHER NOTES :

1. Contingent Liabilities

Claims against the Company by Excise Department, disputed and not accepted - Rs. 27,15,489/-(Previous Year - Rs. 27,15,489/-).

Bank Guarantees issued by bankers on behalf of the Company Rs.38,85,000/-(Previous Year-Rs. 28,35,000/-). Bank Guarantees for Rs. 25,00,000/- are secured by pledge of fixed deposits of M/s. V S Dempo Holdings Private Limited of equivalent amount.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) is Nil (Previous Year - Rs. 25 lacs).

3. Loan from M/s. V S Dempo Holdings Private Limited is secured by charge on Fixed Assets of the Company.

4. Cash Credit Rs. 20 Lacs from Bank of Maharashtra is secured by hypothecation of stock and book debts.

Cash Credit of Rs. 50 Lacs from Bank of Maharashtra is secured by pledge of fixed deposits of M/s. V S Dempo Holdings Private Limited.

5. Deposit with Banks includes Rs.12,98,789/- under lien towards guarantees given on behalf of the Company (Previous Year - Rs.6,98,789/-).

6. To comply with the requirement of the Micro, Small And Medium Enterprises Development Act 2006, which became effective from 2nd October, 2006, the Company requested its suppliers to confirm whether they are covered as Micro , Small or Medium enterprise as is defined in the said Act. As the Company did not receive any communication from its suppliers informing their coverage as such enterprise, it is considered that none of them are covered as such enterprise under the said Act.

7. No provision for Income Tax (current) has been made in the absence of taxable income for the year.

8. The Company manufactures intermediates/finished cereal based foods for itself and for third parties which constitutes single business segment. Accordingly there are no business/ geographical segments to be reported under Accounting standard (AS) 17 issued by the Institute of Chartered Accountants of India.

9. Expenditure in Foreign Currency Rs.7,58,078/- Rs.7,49,257/-

10. Earning per Equity Share

11. Previous year’s figures have been regrouped wherever necessary, to confirm with current year’s disclosures.


Mar 31, 2015

1. CORPORATE INFORMATION

Hindustan Foods Ltd ('the Company") was incorporated in the year 1984 and is engaged in the business of manufacturing Cereal Based Foods with its domicile presence in Goa.

OTHER NOTES :

2. Contingent Liabilities

Claims against the Company by Excise Department, disputed and not accepted - Rs. 27,15,489/- (Previous Year - Rs. 14,67,117/-).

Bank Guarantees issued by bankers on behalf of the Company Rs.28,35,000/-(Previous Year- Rs. 28,35,000/-). Bank Guarantees for Rs. 25,00,000/- are secured by pledge of fixed deposits of M/s. V S Dempo Holdings Private Limited of equivalent amount.

3. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) is Rs. 25 lacs (previous year Rs. 50 lacs).

4. Loan from M/s. V S Dempo Holdings Private Limited is secured by charge on Fixed Assets of the Company.

5. Cash Credit Rs. 20 Lacs from Bank of Maharashtra is secured by hypothecation of stock and book debts.

Cash Credit of Rs. 50 Lacs from Bank of Maharashtra is secured by pledge of fixed deposits of M/s. V S Dempo Holdings Private Limited.

6. Deposit with Banks includes Rs.6,98,789/- under lien towards guarantees given on behalf of the Company (Previous Year Rs.2,48,789/-).

7. To comply with the requirement of the Micro, Small And Medium Enterprises Development Act 2006, which became effective from 2nd October, 2006, the Company requested its suppliers to confirm whether they are covered as Micro , Small or Medium enterprise as is defined in the said Act. As the Company did not receive any communication from its suppliers informing their coverage as such enterprise, it is considered that none of them are covered as such enterprise under the said Act.

8. The Company has written back loans of value - Rs. 11,05,88,178/- based on the consent received from Lenders and the same is reflected under 'Other Income'.

9. The carrying amount of fixed assets as on 01.04.2014 that have exceeded the useful life as provided under Part 'C' of Schedule II to the Companies Act, 2013 aggregating Rs. 1,88,944/- has been charged off to Retained Earnings.

10. No provision for Income tax (Current) has been made in the absence of taxable income for the year.

11. The Accounting Standard 22, Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India has become applicable to the Company from 01.04.2001 and to comply with the same the Company reviewed its Deferred Tax Assets and Liabilities. The timing differences mainly arising on account of Un-absorbed Business Loss and Depreciation relating to earlier years have given rise to net Deferred Tax Asset as on 31.03.2014 as well as for the year. As a prudent policy the said net Deferred Tax Asset has not been recognized in the Accounts.

12. The Company manufactures intermediates/finished cereal based foods for itself and for third parties which constitutes single business segment. Accordingly there are no business/ geographical segments to be reported under Accounting standards (AS) 17 issued by the Institute of Chartered Accountants of India.

13. Related Party Disclosures as per Accounting Standard 18 issued by the Institute of Chartered Accountants of India :

14. Previous year's figures have been recast & regrouped wherever necessary.


Mar 31, 2014

1. CORPORATE INFORMATION

Hindustan Foods Ltd ("the Company") was incorporated in the year 1984 and is engaged in the business of manufacturing Cereal Based Foods with its domicile presence in Goa.

2. i) Terms and Rights attached to Shares

The Company has two class of shares. The Equity Shares have a par value of Rs. 10/- per share. Each holder of Equity Share is entitled to one vote per share. The Preference Shares have par value of Rs. 1001- per share and carry dividend of 9% per annum from the date of allotment. The dividend shall be payable at the time of declaration of dividend on Equity Shares. The Preference Shares shall be redeemed not later than 19 years from the date of issue.

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

3. Contingent Liabilities

Claims against the Company by Excise Department, disputed and not accepted - Rs. 14,64,117/-.

Bank Guarantees issued by bankers on behalf of the Company Rs.28,35,000/- (Previous Year- Rs. 28,35,000/-). Bank Guarantees for Rs. 25,00,000/- are secured by pledge of fixed deposits of M/s. V S Dempo Holdings Private Limited of equivalent amount.

4. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) is Rs. 50 lacs (previous year Rs. 150 lacs).

5. Loan from M/s. V S Dempo Holdings Private Limited is secured by charge on Fixed Assets of the Company.

6. Cash Credit Rs. 20 Lacs from Bank of Maharashtra is secured by hypothecation of stock and book debts. Cash Credit of Rs. 50 Lacs from Bank of Maharashtra is secured by pledge of fixed deposits of M/s. V S Dempo Holdings Private Limited.

7. Deposit with Banks includes Rs.2,48,789/- under lien towards guarantees given on behalf of the Company (Previous Year Rs.2,48,789/-).

8. To comply with the requirement of the Micro, Small And Medium Enterprises Development Act 2006, which became effective from 2nd October, 2006, the Company requested its suppliers to confirm whether they are covered as Micro, Small or Medium enterprise as is defined in the said Act. As the Company did not receive any communication from its suppliers informing their coverage as such enterprise, it is considered that none of them are covered as such enterprise under the said Act.

9. Depreciation on Plant & Machinery and Electrical Installation does not include an amount of Rs.67,37,828/- not provided for in previous years, when the factory was not in operation.

10. No provision for Income tax (Current) has been made in the absence of taxable income for the year.

11. The Accounting Standard 22, Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India has become applicable to the Company from 01.04.2001 and to comply with the same the Company reviewed its Deferred Tax Assets and Liabilities. The timing differences mainly arising on account of Un-absorbed Business Loss and Depreciation relating to earlier years have given rise to net Deferred Tax Asset as on 31.03.2014 as well as for the year. As a prudent policy the said net Deferred Tax Asset has not been recognized in the Accounts.

12. The Company manufactures intermediates/finished weaning food for itself and for third parties which constitutes single business segment. Accordingly there are no business/geographical segments to be reported under Accounting standards (AS) 17 issued by the Institute of Chartered Accountants of India.

13. Previous year''s figures have been recast & regrouped wherever necessary.


Sep 30, 2013

1. CORPORATE INFORMATION

Hindustan Foods Ltd (''the Company") was incorporated in the year 1984 and is engaged in the business of manufacturing Cereal Based Nutritional Foods with its domicile presence in Goa.

2. Contingent Liabilities

Bank Guarantees issued by bankers on behalf of the Company Rs.28,35,000/-(Previous Year- Rs. 3,35,000). Bank Guarantees for Rs. 25,00,000/- are secured by pledge of fixed deposits of V

S Dempo Holdings Private Limited of equivalent amount.

3. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) is Rs. 150 lacs (previous year Rs. 5 lacs).

4. Loan from Holding Company is secured by charge on Fixed Assets of the Company.

5. Cash Credit Rs. 20 Lacs from Bank of Maharashtra is secured by hypothecation of stock and book debts.

Cash Credit of Rs. 50 Lacs from Bank of Maharashtra is secured by pledge of fixed deposits of Holding Company

6. Deposit with Banks includes Rs.2,48,789/- under lean towards guarantees given on behalf of the Company (Previous Year Rs.2,48,789/-).

7. To comply with the requirement of the Micro, Small And Medium Enterprises Development Act 2006, which became effective from 2nd October, 2006, the Company requested its suppliers to confirm whether they are covered as Micro , Small or Medium enterprise as is defined in the said Act. As the Company did not receive any communication from its suppliers informing their coverage as such enterprise, it is considered that none of them are covered as such enterprise under the said Act.

8. Depreciation on Plant & Machinery and Electrical Installation does not include an amount of Rs.67,37,828/- not provided for in previous years, when the factory was not in operation.

9. No provision for Income tax (Current) has been made in the absence of taxable income for the year.

10. The Accounting Standard 22, Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India has become applicable to the Company from 01.04.2001 and to comply with the same the Company reviewed its Deferred Tax Assets and Liabilities. The timing differences mainly arising on account of Un-absorbed Business Loss and Depreciation relating to earlier years have given rise to net Deferred Tax Asset as on 30.09.2013 as well as for the year. As a prudent policy they said net Deferred Tax Asset has not been recognized in the Accounts.

11. The Company manufactures intermediates/finished weaning food for itself and for third parties which constitutes single business segment. Accordingly there are no business/geographical segments to be reported under Accounting standards (AS) 17 issued by the Institute of Chartered Accountants of India.

12. Related Party Disclosures as per Accounting Standard 18 issued by the Institute of Chartered Accountants of India :

Relationship t

Ultimate Holding Company:

M/s. V.S.Dempo Holdings Pvt. Ltd

Associate Companies :

M/s. Marmagoa Shipping & Stevedoring Company Pvt. Ltd.

M/s. Dempo Industries Pvt. Ltd.

M/s. Dempo Travels Pvt. Ltd.

13. Previous year''s figures have been recast & regrouped wherever necessary.

14. Value of Raw Material Consumption (Rs.)


Mar 31, 2011

1. Contingent Liabilities

Bank Guarantees issued by bankers on behalf of the Company Rs.3,35,0007- (Previous Year- Rs. 3,35,000).

2. Other Notes

a. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) is Rs.11 lacs (Previous Year Rs.8 lacs).

b. Loan from Holding Company is secured by charge on Fixed Assets of the Company.

c. Cash Credit Rs.20 Lacs from Bank of Maharashtra is secured by hypothecation of stock and book debts.

Cash Credit of Rs.50 Lacs from Bank of Maharashtra is secured by pledge of fixed deposits of Holding Company.

d. Deposit with Banks includes Rs.2,48,789/- under lien towards guarantees given on behalf of the Company (Previous Year Rs.2,48,789/-).

e. To comply with the requirement of the Micro, Small and Medium Enterprises Development Act, 2006, which became effective from 2nd October, 2006, the Company requested its suppliers to confirm whether they are covered as Micro, Small or Medium enterprise as is defined in the said Act. As the Company did not receive any communication from its suppliers informing their coverage as such enterprise, it is considered that none of them are covered as such enterprise under the said Act.

f. Depreciation on Plant & Machinery and Electrical Installation does not include an amount of Rs.67,37,828/- not provided for in previous years, when the factory was not in operation.

g. Remuneration to Auditors : Audit Fees : 33,090 Tax Audit 5,515 Others : 44,120 82,721

h. No provision for Income tax (Current) has been made in the absence of taxable income for the year.

i. The Accounting Standard 22, Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India has become applicable to the Company from 01-04-2001 and to comply with the same the Company reviewed its Deferred Tax Assets and Liabilities. The timing differences mainly arising on account of Un-absorbed Business Loss and Depreciation relating to earlier years have given rise to net Deferred Tax Asset as on 31-03-2011 as well as for the year. As a prudent policy the said net Deferred Tax Asset has not been recognized in the Accounts.

j. The Company manufactures intermediates/finished weaning food for itself and for third parties which constitutes single business segment. Accordingly there are no business/ geographical segments to be reported under Accounting Standards (AS) 17 issued by the Institute of Chartered Accountants of India.

k. Related Party Disclosures as per Accounting Standard 18 issued by the Institute of Chartered Accountants of India :

1) Relationship

(a) Holding Company:

M/s. V.S.Dempo Holdings Pvt. Ltd.

(b) Fellow Subsidiary:

M/s. Marmagoa Shipping & Stevedoring Company Pvt. Ltd. M/s. Dempo Industries Pvt. Ltd. M/s. Dempo Travels Pvt. Ltd.


Mar 31, 2010

1. Contingent Liabilities :

Bank Guarantees issued by bankers on behalf of the Company Rs.3,35,000/- (Previous Year- Rs. 3,35,000).

2. Other Notes:

a. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) is Rs. 8 lacs (previous year Rs. 2 lacs).

b. Loan from Holding Company is secured by charge on Fixed Assets of the Company.

c. Cash Credit Rs. 20 Lacs from Bank of Maharashtra is secured by hypothecation of stock and book debts.

Cash Credit of Rs. 50 Lacs from Bank of Maharashtra is secured by pledge of fixed deposits of Holding Company.

d. Deposit with Banks includes Rs.2,48,789/- under lien towards guarantees given on behalf of the Company (Previous Year Rs.2,48,789/-).

e. To comply with the requirement of the Micro , Small and Medium Enterprises Development Act 2006, which became effective from 2nd October, 2006, the Company requested its suppliers to confirm whether they are covered as Micro, Small or Medium enterprise as is defined in the said Act. As the Company did not receive any communication from its suppliers informing their coverage as such enterprise, it is considered that none of them are covered as such enterprise under the said Act.

f. Depreciation on Plant & Machinery and Electrical Installation does not include an amount of Rs.67,37,828/- not provided for in previous years, when the factory was not in operation.

g. Remuneration to Auditors :

Audit Fees : 22,060

Tax Audit : 5,515

Others : 33,090

60,665

h. No provision for Income tax (Current) has been made in the absence of taxable income for the year.

i. The Accounting Standard 22, Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India has become applicable to the Company from 01-04-2001 and to comply with the same the Company reviewed its Deferred Tax Assets and Liabilities. The timing differences mainly arising on account of Un-absorbed Business Loss and Depreciation relating to earlier years have given rise to net Deferred Tax Asset as on 31-03-2009 as well as for the year. As a prudent policy the said net Deferred Tax Asset has not been recognized in the Accounts.

j. The Company manufactures intermediates/finished weaning food for itself and for third parties which constitutes single business segment. Accordingly there are no business/geographical segments to be reported under Accounting Standards (AS) 17 issued by the Institute of Chartered Accountants of India.

k. Related Party Disclosures as per Accounting Standard 18 issued by the Institute of Chartered Accountants of India : 1) Relationship

(a) Holding Company:

M/s. Esmeralda Investments Pvt. Ltd

(b) Fellow Subsidiary:

M/s. Marmagoa Shipping & Stevedoring Company Pvt. Ltd. M/s. Dempo Industries Pvt. Ltd. M/s. Dempo Travels Pvt. Ltd.

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