HAVMOR ICE CREAM PRIVATE LIMITED...Ahmedabad - 380015 Name HAVMOR ICE CREAM PRIVATE LIMITED 2nd...

HAVMOR ICE CREAM PRIVATE LIMITED

14 ANNUAL REPORTth

FOR THE YEAR ENDING ON 31 MARCH, 2020st

B S R & Associates LLPAhmedabad - 380015

Name HAVMOR ICE CREAM PRIVATE LIMITED

2nd Floor, Commerce House - 4, Beside Shell Petrol Pump,100 Ft Road, Prahaladnagar, Ahmedabad- 380 015 Gujarat - India

Plot no. 185/A, phase-1, Nr. State Bank of India, Naroda, GIDC, Ahmedabad-382 330

Mann Frozen Foods Private Limited, Faridabad

Sonam Jain

Sanjay R. Patni

Ernst & Young LLPAhmedabad, Gujarat 380059

HDFC Bank LimitedYes Bank LimitedShinhan BankMizuho Bank LimitedState Bank of India

Registered Office

Plant Address

Outsourcing Plants

Board of Directors

Company Secretary

Auditors

Tax Advisors

Bankers

Chief Financial Officer

Jung Yun Kang ChairmanAnindya Sundar Du�a Managing Director (Till 19�� November 2020)Park Byung Chan Whole Time DirectorDuraiswamy Gunaseela Rajan Non-Execu�ve DirectorMyeongrim Choi Non-Execu�ve Director (w.e.f 4�� September 2020)Youngdong Jin Execu�ve Director (w.e.f 24�� November 2020)

Index

No�ce

Director’s Report

Annexure to Director’s Report

01 - 05

06 - 17

18 - 37

Independent Auditor’s Report

Financial Statement

Map

38 - 46

47 - 118

119

1

NOTICE

SHORTER NOTICE is hereby given that the 14thAnnual General Mee�ng of the Members of HAVMOR ICE

CREAM PRIVATE LIMITED will be held on Tuesday 24thNovember 2020 at 11.15 a.m.at the Signature roomof the registered office of the Company situated at 2nd Floor, Commerce House - 4, Besides Shell Petrol

Pump, Anandnagar Road, Prahladnagar, Ahmedabad – 380015 to transact the following business:

ORDINARY BUSINESS:

(1) To receive, consider and adopt the Audited Financial Statements including Balance Sheet, Statement

of Profit and Loss and Cash Flow Statement for the year ended on March 31, 2020 and the Report

of the Directors and Auditors thereon.

(2) To appoint Price Waterhouse Chartered Accountants LLP (FRN 012754N/N500016) as statutory auditor

of the Company to fill the casual vacancy from the conclusion of this Annual General Mee�ng un�l

the conclusion of the Fi�eenth Annual General Mee�ng and to fix their remunera�on:

“RESOLVED THAT pursuant to the provisions of Sec�on 139(8) and other applicable provisions, if any,of the Companies Act, 2013 as amended from �me to �me or any other law for the �me beingin force (including any statutory modifica�on or amendment thereto or re-enactment thereof for the�me being in force), M/s., Price Waterhouse Chartered Accountants LLP (FRN 012754N /N500016)is

be and are herebyappointed as Statutory Auditors of the Company for the period of 1 year for theFinancial Year 2020-21 to fill the casual vacancy caused by the resigna�on of M/s. B S R & AssociatesLLP, Chartered Accountants (Firm Registra�on Number 116231W/W-100024)

RESOLVED FURTHER THAT Price Waterhouse Chartered Accountants LLP (FRN 012754N /N500016),will hold office from the conclusion of this mee�ng un�l the conclusion of the 15th Annual GeneralMee�ng and they shall conduct the Statutory Audit for the financial year ended 31st March, 2021on such remunera�on and reimbursement of out of pocket expenses for the purpose of audit asmay be mutually decided by them and the Company.”

SPECIAL BUSINESS:

(3) To consider and if thought fit, to pass with or without modifica�on, the following resolu�on asORDINARY RESOLUTION:

“RESOLVED THAT pursuant to provision of Sec�on 161 the Companies Act, 2013 and any other

applicable provisionsof the Companies Act, 2013 (the “Act”) and the Companies (Appointment andQualifica�on of Directors) Rules, 2014 (including any statutory modifica�on(s) or re-enactment thereof

for the �me being in force),Mr.Myeongrim Choi [DIN:08820793], who was appointed as an addi�onal

director with effect from 4thSeptember2020 on the Board of the Company in terms of Sec�on 161of Companies Act, 2013 and who hold office upto the date of this General Mee�ng, be and is hereby

appointed as a Non-Execu�ve Director of the Company.”

RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to do all such actsand take all such steps as may be necessary, proper or expedient to give effect to this resolu�on.”

“RESOLVED FURTHER THAT any Director or Company Secretary or Chief Financial Officer of the

Company be and is hereby authorized to file necessary Form with the Registrar of Companies in thisregard.”

2

(4) To consider and if thought fit, to pass with or without modifica�on, the following resolu�on asORDINARY RESOLUTION:

“RESOLVED THAT pursuant to provision of Sec�on 161 the Companies Act, 2013, Mr. Youngdong Jin

(DIN - 08948380), who was appointed as an Addi�onal Director with effect from 24th November 2020on the Board of the Company, be and is hereby appointed as an Execu�ve Director of the Company

be paid a remunera�on of 1,76,330 /- p.m. with the range of Rs. 1,50,000/- p.m. to Rs. 10,00,000/- p.m.

1. Salary: Monthly remunera�on of Rs. 1,76,330 /- p.m. (Rupees One Lakh Seventy-Six Thousand

Three Hundred Thirty only) per month, subject to a range of Rs. 1,50,000 to Rs. 10,00,000/-pm.

2. Perquisites and Benefits: Perquisites as men�oned hereunder may be allowed in addi�on to salary.

a) Medical Reimbursement: Expenses incurred for self and family subject to ceiling of onemonth’s salary in a year or three months’ salary over a period of three years.

b) Leave Travel Concession: For self and family, once in a year in accordance with the rulesof company.

c) Personal Accident Insurance: Premium not to exceed Rs. 100,000 per annum.

d) Contribu�on to Provident Fund, Superannua�on fund, Annuity Fund will not be included incomputa�on of the ceiling on perquisites to the extent these either singly or put together

are not taxable under The Income Tax Act. Gratuity payable should not exceed half a monthsalary for each completed year of service.

e) Encashment of leave at the end of tenure will not be included in the computa�on of the

ceiling of the perquisites.

f) Bonus to be paid as per policy of the company or as per Bonus Act which will be part ofCTC.

g) Provision of car including driver and petrol expenses for use on company’s business and

telephone as well as mobile and internet. Personal long-distance call and use of the carfor the private purpose shall be billed by the company to the individual appointee concerned.

RESOLVED FURTHER THAT any Director or Company Secretary or Chief Financial Officer of the Company

be and is hereby authorized to file necessary Form with the Registrar of Companies in this regard.

RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to do all such acts

and take all such steps as may be necessary, proper or expedient to give effect to this resolu�on.”

NOTE:

(1) A Member en�tled to a�end and vote at the mee�ng is en�tled to appoint a proxy to a�endand vote instead of himself and the proxy need not be a member of the Company.

(2) Explanatory Statementpursuant to Sec�on 102 of the Companies Act, 2013 is annexed hereto.

3

(3) The Mee�ng is being convened at a shorter no�ce, a�er obtaining the consent, in wri�ng, ofmore than 95% of the Members of the Company, pursuant to the provisions of Sec�on 101 of

the Act.

By Order of the BoardFor Havmor Ice Cream Private Limited

Date : 17/11/2020 Sonam Jain

Place : Ahmedabad Company Secretary

Membership No. : A37095

4

EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESSES PURSUANT TO

SECTION 102 OF THE COMPANIES ACT, 2013

ITEM NO.: 3 REGULARIZATION OF ADDITIONAL DIRECTOR MR.MYEONGRIM CHOI

The Board of Directors at their mee�ng held on 4thSeptember2020, appointed Mr. Myeongrim Choi, [DIN:

08820793] as an Addi�onal Director under Sec�on 161(1) of the Companies Act, 2013 of the Company.

As per Sec�on 161 of the Companies Act, 2013 Mr. Myeongrim Choi holds office upto the date of this

General Mee�ng.

The Company has received requisite no�ce in wri�ng under Sec�on 160 of the Companies Act, 2013 fromthe member for proposing candidature of Mr. Myeongrim Choi to be appointed as Non-Execu�ve Director

at the ensuing General Mee�ng.

Mr. Myeongrim Choi bearing the:

Age – 56 years approx

Qualifica�on – bachelor’s degree in industrial engineering from Kyeong Nam University, Korea

He is currently serving in Lo�e Confec�onery Co.Ltd, Korea as Senior Vice President

Experience terms – 30 years

Shareholding – Nil

Rela�on with other Directors – N.A.

Date of First appointment in the Company – 4th September 2020

Number of mee�ngs a�ended – None

Directorship - Lo�e Food Holding Co., Ltd

Lo�e Confec�onery RUS

Lo�e China Investment

Lo�e Confec�onery (S.E.A) Pte.Ltd

Rakhat JSC

I&MMayson Company Ltd

Mr. Myeongrim Choi has consented to the proposed appointment and declared qualified. Mr. MyeongrimChoi possesses requisite knowledge, experience, and skill for the posi�on of the Director.

The Board on receipt of the said no�ce from a member and subject to approval at the ensuing General

Mee�ng has accorded its consent, to appoint Mr. Myeongrim Choi as a Non-Execu�ve Director.

Except Mr. Myeongrim Choi, being an appointee, none of the Directors and Key Managerial Personnel

of the Company and their rela�ves is concerned or interested, financial or otherwise, in the resolu�on

set out at Item No. 3 of this no�ce.

ITEM NO.: 4 REGULARIZATION OF ADDITIONAL DIRECTOR MR. YOUNGDONG JIN

The Board of Directors at their mee�ng held on 24th November2020, appointed Mr. Youngdong Jin, [DIN:

08948380] as an Addi�onal Director under Sec�on 161(1) of the Companies Act, 2013 of the Company.

As per Sec�on 161 of the Companies Act, 2013 Mr. Youngdong Jin holds office upto the date of this GeneralMee�ng.

5

The Company has received requisite no�ce in wri�ng under Sec�on 160 of the Companies Act, 2013 fromthe member for proposing candidature of Mr. Youngdong Jinto be appointed as an Execu�ve Director at

the ensuing General Mee�ng.

Mr. Youngdong Jin bearing the:

Age – 41 years approx

Qualifica�on – Strategy, Marke�ng, Procurement manager at lo�e group

Experience terms – 15 years

Shareholding – Nil

Rela�on with other Directors – N.A.

Date of First appointment in the Company – 24thNovember 2020

Number of mee�ngs a�ended – None

Directorship - None

Mr. Youngdong Jinhas consented to the proposed appointment and declared qualified. Mr. Youngdong

Jinpossesses requisite knowledge, experience, and skill for the posi�on of the Director.

The Board on receipt of the said no�ce from a member and subject to approval at the ensuing GeneralMee�ng has accorded its consent, to appoint Mr. Youngdong Jinas an Execu�ve Director.

Except Mr. Youngdong Jin, being an appointee, none of the Directors and Key Managerial Personnel ofthe Company and their rela�ves is concerned or interested, financial or otherwise, in the resolu�on setout at Item No. 4 of this no�ce.

By Order of the BoardFor Havmor Ice Cream Private Limited

Date : 17/11/2020 Sonam Jain

Place : Ahmedabad Company Secretary

Membership No.: A37095

6

Directors’ Report 2019 - 20

To,

THE MEMBERS

Your Directors present the 14th ANNUAL REPORT together with the Audited Financial Statements and

Auditors’ report thereon for the year ended March 31, 2020.

CORPORATE OVERVIEW:

Havmor is one of the India’s fastest growing ice cream brand. Havmor has established a name for itself

in the Ice Cream segment. Havmor has grown into a delicious facet of the daily life of a large part of

Western India. It is available through 40000 + outlets across Gujarat, Maharashtra, Rajasthan, MadhyaPradesh, Punjab, Chandigarh, Goa, Telangana, Delhi, UP, Cha�sgarh, Karnataka, Andhra Pradesh, Haryana,

Tamil Nadu and West Bengal. Havmor has more than 200 products, possibly the most extensive rangein India.

COVID PANDEMIC, EMPLOYEES SAFETY & WELL-BEING

2019-20 has been a challenging year with the COVID-19 outbreak and its terrible impact on lives andlivelihoods. The human impact of the virus and the containment efforts have resulted in supply and demanddisrup�ons, resul�ng in a sharper growth decelera�on. The situa�on remains vola�le with the trajectory

of the virus undetermined, evolving hot spot geographies, the success of containment measures uncertain,the severity and dura�on of resul�ng economic crisis and the extent of structural damage unknown. Thereare many unknowns today and hence, the near-term outlook is extremely uncertain. We stand unitedwith the na�on in the fight against COVID-19 as we navigate our way through these dynamic uncertain�mes together. Our focus remains on safety of our people, protec�ng supply lines, serving demand,

contribu�ng to the society, and op�mizing cost and cash.

The following measures were put in place to protect our employees’ health and their safety a�er thepandemic:

• Special ‘Work from Home’ guidelines were dra�ed offering simple �ps in being highly produc�vewhile working from home.

• We put in place a regular communica�on channel with all employees, wherein the seniormanagement interacted with them on a regular basis, informing them about various health andsafety updates, developments within Havmor and our efforts to manage the COVID-related crisis.

• All managers were encouraged to maintain daily contact with their teams, not just for work butalso to enquire about their health and well-being

• Employees were also provided computer hardware and necessary IT support to ensure businessas usual even during the lockdown

• Reinforced safe behavior across our loca�ons by limi�ng the size of gatherings/mee�ngs andavoiding external visitors to the premises, besides asking employees to avoid in-person mee�ngsand encouraging video conference

• Temperature monitoring booth at recep�on area and ensuring temperature is taken for all theemployees on their arrival and repeat the same process at regular interval.

• High contact areas like elevator bu�ons, door handles, handrails, bathroom taps etc. weresani�zed at regular intervals

7

• Regularly sani�zed the head office and factories

• Use of face mark, face shield compulsory at Factory and office.

• Implementa�on of various guidelines issued by the local authority from �me to �me.

• At present Company is being operated with limited staff in the office to ensure social distancing.

• Social Distance marking in the func�onal area and canteen to ensure safe distance between twoemployees.

E-COMMERCE

Digital was, in fact, the big playground to create deeper engagement with consumers on Social Media

and targe�ng their specific needs during the lockdown. With our brand, we joined hands with various

influencers and popular Gujara� celebrity to run the campaign of #Havmor Unlock Challenge post lockdown.The Brand associated with over 150 ar�sts and influencers pan-India. The campaign reached across 5 million

viewers on Instagram. The key mo�ve behind this campaign was to spread happiness and posi�vity amongpeople, replica�ng what the brand has been doing for years now.

Havmor also increased visibility and scaled up presence on e-Commerce business.

Havmor has developed its online portal www.havmoronline.com to accept the orders and delivery of IceCream through its own delivery channel and outsourced partner.

STATEMENT OF AFFAIRS/ FINANCIAL RESULTS:

The Financial Results of the Company for the financial year ended March 31, 2020 are as follows: -

(`. in Lakhs)

Par�culars 31 March 2020 31 March 2019

Income

Revenue from opera�ons 59,326.90 57,155.25

Other income 580.60 295.43

Total income 59,907.50 57,450.68

Expenses

Cost of materials consumed 29,552.98 26,436.89

Purchase of stock-in-trade 295.04 525.52

Changes in inventories of finished goods,

L semi finished goods and stock-in-trade (525.25) 95.83

Employee benefits expense 5,759.05 5,469.84

Finance costs 675.28 338.49

Deprecia�on and amor�sa�on expense 4,480.69 3,421.91

Other expenses 15,263.82 14,296.34

Total expenses 55,501.61 50,584.82

Profit before tax 4,405.89 6,865.86

Tax expense:

Current tax 1,405.36 1,881.32

Excess provision of tax rela�ng to earlier years (210.25) -

Deferred tax credit (353.11) (312.96)

842.00 1,568.36

Profit for the year 3,563.89 5,297.50

8

OPERATIONS & PERFORMANCE:

While most part of FY 2019-20 progressed smoothly, the end of the financial year saw the emergenceof a global pandemic that changed the way people lived and did business, all over the globe. The world

around us changed with the emergence of the COVID-19 pandemic and the resultant lockdowns imposed

by governments across the globe to arrest its spread, leaving markets and economies in shambles. Despiterepor�ng steady growth through the first 11 months of the year, our annual performance for FY 2019-

20 was severely impacted by the COVID outbreak as the na�onwide lockdown brought sales to a virtualstands�ll in the second fortnight of March 2020.

During the year Company reported revenue growth for FY 2019-20. This was made possible throughheightened innova�ons, expansion in distribu�on and cost efficiency programs. The Company has registered

total revenue of Rs. 59,907.50 Lakh as compared to the previous year total revenue of Rs. 57,450.68 Lakh.

The Company has made profit before tax of Rs. 4,405.89 Lakh compared to previous year Rs. 6,865.87Lakh. Company has delivered yet another year of consistent, compe��ve, and profitable growth aidedby strong marke�ng and trade investments. Company with a strong focus on innova�on has con�nued

to delight consumers with a wide range of products. The investment in television and digital media wassignificantly stepped up during the year.

Havmor’s Promise to delight consumers has been the driving force behind its success. The commitment

to provide fresh, exci�ng, pure, and innova�ve flavors of over the highest quality con�nues to be at thecore of your Company’s beliefs.

The ini�a�ves being taken towards introducing new flavors, establishing state-of-the-art R&D andmanufacturing facili�es and increasing outreach to new markets through the strategic expansion plan basedon the principle of ‘one new market a year’ are enabling your Company to deliver on its promise of being

a most likeable Ice Cream in the market.

During the year under review due to financial crises at Vaishno Devi Food Products Private Limited, Solapur,Maharashtra plant become non opera�onal and the Company has given termina�on no�ce and also issued

demand no�ce for recovery of advance, given to them for plant and machinery. However, the dispatchedis con�nue from GIDC plant and Faridabad outsourced plant without effec�ng the supply.

Due to outbreak of Recent economic condi�ons have caused a significant downturn in sales, necessita�ngimplemen�ng strict measures of cost reduc�on including but not limited to workforce reduc�on in the

Company. In the prevailing adverse situa�on, the Company agreed to take quick and necessary ac�onsfor cost reduc�ons by reducing manpower cost, by reducing head count and changing terms of employment

and reduc�on in fixed salaries.

DIVIDEND:

In order to conserve the resources, Directors do not recommend any payment of dividend for the yearunder review.

TRANSFER TO RESERVES:

The Company has not transferred any amount to the reserves as required under the provisions of Sec�on134(3) (j) of the Companies Act, 2013 and relevant rules made there under.

9

MATERIAL CHANGES AFFECTING FINANCIAL POSITION OF THE COMPANY:

Due to outbreak of COVID-19 pandemic globally and in India On March 24, 2020, the Government ofIndia ordered a na�onwide lockdown for 21 days which further got extended �ll May 3, 2020 to prevent

community spread of COVID-19 in India resul�ng in significant reduc�on in economic ac�vi�es. Measures

were taken for preven�on of this pandemic including travel bans, social distancing, and closure of non-essen�al services, resul�ng in material impact on the financial posi�on of the Company. Strict lockdown,

closure of sale of ice creams, interrup�on in produc�on, supply chain disrup�on, unavailability of personnel,closure / lockdown of produc�on facili�es for few months have impacted the posi�on of the Company

dras�cally.

Post lockdown the Company has taken quick and necessary ac�ons for cost reduc�ons by reducing

manpower cost, by reducing head count and changing terms of employment and reduc�on in fixed salaries.

CHANGE IN SHARE CAPITAL

There is no change in share capital of the Company.

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company.

However, during the year under review Company imported some Ice Cream from Lo�e Confec�onery Co.Ltd, South Korea for sale in the Indian Market. Company has also started online portal for acceptanceof Ice Cream orders and delivery through own resources and / or through outsource partner.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, the Company did not transfer any unclaimed dividend and shares to Investors

Educa�on and Protec�on Fund.

DIRECTORS’ RESPONSIBILITY STATEMENT:

It is hereby stated that:

(a) In the prepara�on of Ind AS Financial Statements, the applicable accoun�ng standards have beenfollowed along with proper explana�on rela�ng to material departures.

(b) The Directors have selected such accoun�ng policies and applied them consistently and madejudgments and es�mates that are reasonable and prudent so as to give a true and fair view

of the state of affairs of the company at the end of the financial year and of the Profit of theCompany for that period.

(c) The Directors have taken proper and sufficient care for the maintenance of adequate accoun�ng

records in accordance with the provisions of this Act for safeguarding the assets of the companyand for preven�ng and detec�ng fraud and other irregulari�es.

(d) The Directors have prepared the Ind AS Financial Statement ongoing concern basis.

(e) The Directors have devised proper systems to ensure compliance with the provisions of all

applicable laws and that such systems were adequate and opera�ng effec�vely.

10

NUMBER OF BOARD & COMMITTEE MEETINGS:

The Board of Directors, during the year 2019-2020 duly met 5 �mes tabulated hereunder in respect ofwhich mee�ngs, proper no�ces were given, and signed in the Minutes Book maintained for the purpose.

Sr. Date of Board Mee�ng Total no. of Directors Directors A�endedNo.

1. 9th April 2019 5 5

2. 1st August 2019 5 5

3. 30th September 2019 6 6

4. 27th December 2019 6 5

5. 11th March 2020 4 4

Mee�ngs of the Commi�ee members during the year 2019-2020 tabulated hereunder in respect of whichmee�ngs, proper no�ces were given, and signed in the Minutes Book maintained for the purpose.

Type of Commi�ee Date of Mee�ng Total no. of Directors Directors A�ended

Nomina�on andRemunera�on 11th March 2020 4 4Commi�ee

CSR Commi�ee 9th April 2019 3 3

REGISTRAR & TRANSFER AGENT:

During the year, no shares of Company were transferred. All the related ac�vi�es like transfers, and issue

of new share cer�ficates were con�nued to be handled by the Bigshare Services Pvt. Ltd., Ahmedabadby our RTA.

DIRECTORS:

Appointments & Re-Appointments

• Mr. Kyunghun Kim was appointed as an Addi�onal Director of the Company on 1st August 2019to be designated as an Execu�ve Director of the Company.

• Mr. Jung Yun Kang was re-designated as a Chairman in the Board Mee�ng held on 11th March

2020.

• Mr. Myeongrim Choi was appointed as an Addi�onal Director of the Company on 4th September

2020 to be designated as a Non-Execu�ve Director of the Company.

• Mr. Youndong Jin was appointed as an Addi�onal Director of the Company on 24th November2020 to be designated as an Execu�ve Director of the Company.

None of the Directors of the Company has been debarred or disqualified from being appointed or con�nuing

as a Director by Ministry of Corporate Affairs / Statutory Authori�es.

11

Cessa�ons

In the Board Mee�ng held on 11th March 2020 following Directors resigned:

• Mr. Kyunghun Kim - Director

• Mr. Mang Ko Noh – Chairman & Director

Mr. Anindya Sundar Du�a designated as Managing Director resigned from the company vide his resigna�on

le�er dated 19th November 2020

Consent from all the resigned Directors were taken and was placed before the Board in their mee�ng.

KEY MANAGERIAL PERSONNEL

At present the Key Managerial Personnel of the Company are:

• Mr. Park Byung Chan (DIN - 08046421) - Whole Time Director

• Mr. Sanjay Patni - Chief Financial Officer and

• Mrs. Sonam Jain - Company Secretary.

DECLARATION OF INDEPENDENT DIRECTORS:

The provisions of Sec�on 149 pertaining to the appointment of Independent Directors is not applicablefor our Company.

SECRETARIAL STANDARDS:

The Ins�tute of Company Secretaries of India had revised the Secretarial Standards on Mee�ngs of theBoard of Directors (SS-1) and Secretarial Standards on General Mee�ngs (SS-2) with effect from October

1, 2017. The Company has devised proper systems to ensure compliance with its provisions and is in

compliance with the same.

DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES:

The Company does not have any Subsidiary, Joint venture or Associate Company in terms of Companies

Act, 2013.

DEPOSITS:

The Company has not accepted any deposit within the meaning of Sec�on 73 of the Companies Act, 2013

during the period under review. While the Company is adhering with the MCA no�fica�on for filing ofForm DPT-3 i.e. Return of deposits or return for disclosures of money or loan received by a Company

but not considered as deposit in terms of rule 2 (1) (c) of the Companies (Acceptance of Deposits) Rules,2014.

12

EXTRACTS OF ANNUAL RETURN:

As required by the provisions of Sec�on 134(3)(a) of the Companies Act, 2013 and relevant rules madethereunder, the extract of the annual return as provided under sub-sec�on (3) of sec�on 92 has been

placed on the Company’s website as Annexure I of the Annual Report www.havmor.com .

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

During the year Company has related party transac�on with its fellow subsidiary Company, M/s Lo�e India

Corpora�on Limited, Chennai, India details of which is a�ached below in the Annexure II of this Board

report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186:

The Company has not advanced loan, given any guarantee and provided security and has not made anyinvestment under Sec�on 186 of the Companies Act, 2013 during the year under review.

LOANS FROM DIRECTOR/RELATIVE OF DIRECTOR

The balances of monies accepted by the Company from Directors / rela�ves of Directors at the beginningof the year were NIL and at the close of year was NIL.

PARTICULARS OF EMPLOYEES:

Sec�on 197 read with Rule 5 of The Companies (Appointment and Remunera�on of Managerial Personnel)Rules, 2014, is not applicable to Company.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The current policy is to have an appropriate mix of execu�ve and Non-execu�ve directors to maintain

the independence of the Board and separate its func�ons of governance and management. At present,the Board consists of 5 Directors, out of which 3 of them are execu�ve directors and 2 are non-execu�ve

director. The Board periodically evaluates the need for change in its composi�on and size.

The Company has also made the Nomina�on & Remunera�on policy for the appointment, resigna�on &

re�rements of an employee designated as General Manager or above level.

INSURANCE:

All Insurable interests of the Company including Buildings, Plant & Machinery, Furniture & Fixtures,

Inventories, and other insurable interests are adequately insured.

13

COMMITEES OF THE BOARD:

Nomina�on and Remunera�on Commi�ee:

As per the provisions of sec�on 178 of the Companies Act, 2013 read with Companies (Mee�ngs of Boardand its Powers) Rules, 2014 Company has recons�tuted its “Nomina�on and Remunera�on Commi�eein the Board Mee�ng held on 11th March, 2020 comprising of following members:

1. Mr. D.G. Rajan as Chairman

2. Mr. Anindya Sundar Du�a as Member

3. Mr. Jung Yun Kang as Member

4. Mr. Park Byung Chan as Member

The Commi�ee met once on 11th March 2020 during the year 2019-20.

Further, Mr. Anindya Sundar Du�a resigned from the Company vide his le�er dated 19th November 2020due to which he ceased to be the member of the Commi�ee. Therefore, at present the commi�ee compriseof following members:



3. Mr. Park Byung Chan as Member

The Commi�ee is authorized to formulate the criteria for determining qualifica�ons, posi�ve a�ributesand independence of GM and above level and recommended to the Board a policy, rela�ng to theremunera�on for the GM and above level.

Corporate Social Responsibility Commi�ee:

As per the provisions of sec�on 135 of the Companies Act, 2013 read with Companies (Corporate SocialResponsibility Policy) Rules, 2014 Company has recons�tuted its Corporate Social Responsibility Commi�eein the Board Mee�ng held on 9th April 2019 comprising of following members:



3. Mr. Mang Ko Noh as Member of the Commi�ee

The Commi�ee met once on 9th April 2019 during the year 2019-20.

Further, Mr. Mang Ko Noh resigned from the Board on 11th March 2020 due to which he ceased to bethe member of the Commi�ee. Therefore, at present the commi�ee comprise of following members asrecons�tuted in the mee�ng of the Board of Directors of the Company held on 4th September 2020:



3. Mr. Myeongrim Choi as Member of the commi�ee

Company has formulated a Corporate Social Responsibility (CSR) policy for endeavoring various CSR ac�vi�esin different avenues as prescribed in the CSR Rules.

14

In addi�on to the above members, Mr. Park Byung Chan, Mr. Sanjay Patni and Mr. Suresh Srinivasan werealso appointed as Co-opted members of the CSR commi�ee of the Company. The Co-opted members shallpar�cipate and interact with CSR Training and Corporate seminars to gain knowledge and will work and

may undertake the CSR projects in consulta�on and under the direc�ons of the CSR Commi�ee. Duringthe year under review also company has given dona�on to various trusts.

The details about the ini�a�ves taken by the Company on CSR during the year as per the Companies(Corporate Social Responsibility Policy) Rules, 2014 have been disclosed in Annexure-III to this Report.

POLICIES AND FRAMEWORK

There are the following policies/ process notes:

a. An�-fraud policy

b. Budgetary Process policy

c. Code of Conduct policy

d. Delega�on of Authority policy

e. ERM policy

f. Whistle Blower policy

g. Policy for preven�on of Sexual Harassment

WHISTLE BLOWER POLICY:

The provisions of Sec�on 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Mee�ngs

of the Board and its Powers) Rules, 2014 is not applicable to the Company s�ll the Company is havingits Whistle Blower / Vigil Mechanism policy.

Mr. Suresh Srinivasan being the Chief Human Resource Officer was appointed as Vigilance Officer to hearthe grievances of the employees with any person in the company and take steps to resolve the issues

amicably and report the same to the Managing Director or to the Chairman of the Company. The offencesof serious nature may be brought to the a�en�on to the Managing Director or to the Chairman of the

Company who shall a�er hearing the concerned person award appropriate punishment to the offender.

Our Vigil Mechanism provides a formal mechanism for all Directors, employees and vendors to approach

the Chairman and make protec�ve disclosures about the unethical behavior, actual or suspected fraudor viola�on of the Havmor Code of Conduct.

POLICY FOR PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

As per the requirement of the Sexual Harassment of Women at Workplace (Preven�on, Prohibi�on &Redressal) Act, 2013 (‘POSH Act’) and Rules made thereunder, Company has cons�tuted Internal Commi�ees

(IC). While maintaining the highest governance norms, the Company has appointed external member from

NGO or associa�ons commi�ed to the cause of woman named Ms. Telma Varghese who has worked inthis area and has the requisite experience in handling such ma�ers. To build awareness in this area, the

Company has been conduc�ng induc�on / refresher programs in the organiza�on on a con�nuous basis.

15

The policy for Preven�on of Sexual Harassment was implemented w.e.f. 01.07.2017 for the term of threeyears:

The list of present Commi�ee members of POSHA are as under:

Role Names

Presiding Officer Ms. Pooja Mulani

Commi�ee Members Mr. Suresh Srinivasan

Commi�ee Members Ms. Meenakshi Kapoor

NGO Ms. Telma Varghese

Havmor Internal Complaints Commi�ee (HICC) has been set up to redress the complaints received regardingsexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this

policy. No compliant has been received in this regard.

AUDITORS:

I) STATUTORY AUDITORS:

At the 12th Annual General Mee�ng held on 26th September, 2018, M/s. B S R & Associates LLP,Chartered Accountants (Firm Registra�on Number 116231W/W-100024) were appointed as Statutory

Auditor of the Company from the conclusion of the ensuing annual general mee�ng un�l the

conclusion of the 17th annual general mee�ng of the Company i.e. 2018-19 to 2022-23.

The Report given by the Auditors on the financial statement of the Company is part of this Report.

There has been no qualifica�on, reserva�on, adverse remark or disclaimer given by the Auditorsin their Report.

Further, M/s. B S R & Associates LLP, Chartered Accountants (Firm Registra�on Number 116231W/

W-100024) has given resigna�on before the expiry of their term as they have been appointedby Lo�e Confec�onery Co. Ltd., Korea, our holding Company as SOX auditor, therefore, they can’t

be the statutory auditor in the Subsidiary Company. The Company has received resigna�on le�er

from M/s. B S R & Associates LLP, Chartered Accountants.

Also the Company has received a consent le�er along with the cer�ficate from the M/s. PriceWaterhouse Chartered Accountants LLP (Firm Registra�on Number 012754N/ N500016), Chartered

Accountants Auditors under the provisions of the Companies Act, 2013, to be appointed at this

ensuing Annual General Mee�ng un�l the conclusion of 15thAnnual General Mee�ng to effecttheir appointment, Also, there appointment is within the prescribed limits, and they are not

disqualified for appointment and further they are independent of management.

II) SECRETARIAL AUDITOR:

The Company has voluntarily appointed M/s. G R SHAH & ASSOCIATES, Company Secretaries,Ahmedabad, as Secretarial Auditor of the Company for the FY 2019-20 even though the Secretarial

Audit is not applicable to the Company.

Secretarial Audit Report for FY 2019-20 is annexed in Annexure-IV to this report as Form

MR -3 herewith as Annexure B to this Report. The said report does not contain any qualifica�on,

reserva�on, or adverse remark.

16

III) COST AUDITOR:

The provisions of Sec�on 148 of the Companies Act, 2013 read with Companies (Cost Records

and Audit) Rules, 2014 is not applicable to the Company.

IV) INTERNAL AUDITOR:

M/s., Ernst & Young LLP, Chartered Accountants, Ahmedabad were appointed as internal auditor

to conduct the audit of the Accounts / Records maintained by the Company for F.Y. 2018-19

& 2019-20

DETAILS OF FRAUD REPORTING BY AUDITOR

During the year under review, there were no frauds reported by the auditors to the Board under sec�on143(12) of the Companies Act, 2013.

EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSEREMARK OR DISCLAIMER MADE BY AUDITORS:

There is no adverse remarks or comments by the auditors in their report.

INTERNAL CONTROL SYSTEM:

The Company has an Internal Control System which commensurate with the size, scale and complexity

of its opera�ons. The scope and authority of the Internal Audit (IA) func�on is well defined. The frameworkhas been designed to provide reasonable assurance with respect to recording and providing reliable financial

and opera�onal informa�on, complying with applicable laws, safeguarding assets from unauthorized use,execu�ng transac�ons with proper authoriza�on and ensuring compliance with corporate policies.

The controls based on the prevailing business condi�ons and processes have been tested during the year

and no reportable material weakness in the design or effec�veness was observed. The framework onInternal Financial Controls Over Financial Repor�ng has been reviewed by the internal and external auditors.

The Internal Audit team monitors and evaluates the efficacy and adequacy of internal control systems

in the Company, its compliance with opera�ng systems, accoun�ng procedures and policies at all loca�onsof the Company. Based on the report of internal audit func�on, process owners undertake correc�ve

ac�on(s) in their respec�ve area(s) and thereby strengthen the controls. Significant audit observa�ons and

correc�ve ac�on(s) thereon are presented to the Audit Commi�ee.

RISK MANAGEMENT POLICY:

The Management regularly reviewed the risk and take appropriate steps to mi�gate the risk. The company

has in place the Risk Management policy. The Company has a robust Business Risk Management (BRM)frame work to iden�fy, evaluate business risks and opportuni�es. This framework seeks to create

transparency, minimize adverse impact on the business objec�ves and enhance the Company’s compe��ve

advantage.

INDUSTRIAL RELATIONS:

The Directors are pleased to report that the rela�ons between the workmen and the management con�nuedto remain cordial during the year under review.

17

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNING ANDOUTGO:

Being concerned about the environment in and around our industrial facili�es, your Company has

maintained the Cleanliness inside the factory premises.

The informa�on on conserva�on of energy, technology absorp�on and foreign exchange earnings and outgo

as s�pulated under Sec�on 134(3)(m) of the Companies Act, 2013 is given in the Annexure - V.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant material orders passed by the Regulators or Courts or Tribunal, which would impact

the going concern status of the Company and its future opera�on. However, Members a�en�on is drawnto the Statement on Con�ngent Liabili�es and Commitments in the Notes forming part of the Financial

Statement.

ACKNOWLEDGMENT:

We thank our Shareholders, customers, vendors, investors, bankers, Government and Regulatory authori�esfor their con�nued support during the year. We place on record our apprecia�on of the contribu�on madeby our employees at all levels. The enthusiasm and uns�n�ng efforts of the employees have enabled the

Company to remain an industry leader, inspite of being a challenging year with an outbreak of Covid-

19. The Company is trying its best to cope up with the economic impact by the uncertain pandemic.The en�re Havmor team deserves the apprecia�on for their sincere efforts and determina�on in this crucial�me. This has enabled the Company to provide higher levels of consumer delight through con�nuousimprovement in exis�ng products, and introduc�on of new products.

Directors would also like to acknowledge the excellent contribu�on by the Company in providing the latestinnova�ons, technological improvements, and marke�ng inputs in which it operates. This has enabled the

Company to provide higher levels of consumer delight through con�nuous improvement in exis�ng products

and introduc�on of new products.

Our consistent growth was made possible by their hard work, solidarity, coopera�on, and support. TheCompany looks forward to further strengthening the synergies.

Date: 24.11.2020 For Havmor Ice Cream Private Limited

Place: Ahmedabad

Regd Office:2nd Floor, Commerce Hosue-4 Jung Yun Kang Park Byung ChanBesides Shell Petrol Pump Chairman Whole Time DirectorPrahaladnagar, Ahmedabad-380015 DIN no. 08025252 DIN no. 08046421

18

Annexure - I

FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN

as on financial year ended on 31st March, 2020

Pursuant to Sec�on 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company

(Management & Administra�on) Rules, 2014.

I REGISTRATION & OTHER DETAILS:

i CIN U15200GJ2006PTC048016

ii Registra�on Date 27th March, 2006

iii Name of the Company HAVMOR ICE CREAM PRIVATE LIMITED

iv Category/Sub-category of the Company Company Limited by shares / India NonGovernment Company

v Address of the Registered office and 2nd Floor,Commerce House 4,Beside Shellcontact details Petrol Pump, 100Ft. Road, Prahaladnagar,

Ahmedabad - 380015

vi Whether listed company N.A.

vii Name , Address & contact details of Bigshare Services Pvt. Ltd.the Registrar & Transfer Agent, if any. A/802, Samudra complex,

Near Klassic Gold, Girish cold drink,C.G Road, Ahmedabad,Gujrat - 380009

Email - [email protected]

II PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business ac�vi�es contribu�ng 10% or more of the total turnover of the company shall bestated

Sr. No. Name & Descrip�on of main NIC Code of the % to total turnoverproducts/services product/service of the company

1 Sale of Ice Cream 15205 98

III PARTICULARS OF HOLDING , SUBSIDIARY & ASSOCIATE COMPANIES

Sr.No. Name & Address of CIN/GLN HOLDING/ % OF APPLICABLE

the Company SUBSIDIARY/ SHARES SECTION

ASSOCIATE HELD

1 Lo�ee Confec�onery 110111-6536781 Holding 99.99998% 2(46)

Co. Ltd., Korea

10 Yangpyeong, RO 21-Cril,Yeongdeungpo - Cru, Seoul

19

IV SHAREHOLDING PATTERN (Equity Share Capital Breakup as % to Total Equity)

(i) Category - wise share holding

Category of No. of Shares held at the No. of Shares held at the % changeShareholders beginning of the year end of the year during the year

Demat Physical Total % of Demat Physical Total % ofTotal Total

Shares Shares

A. Promoters

(1) Indian - - - - - - - - - -

a) Individual/HUF - - - - - - - - - -

b) Central Govt.orState Govt. - - - - - - - - - -

c) BodiesCorporates - - - - - - - - - -

d) Bank/FI - - - - - - - - - -

e) Any other - - - - - - - - - -

SUB TOTAL(A) (1) - - - - - - - - - -

(2) Foreign

a) NRI-Individuals - 2 2 0.00002 - 2 2 0.00002 - -

b) OtherIndividuals - - - - - - - - - -

c) Bodies Corp. - 9,999,998 9,999,998 99.99998 - 9,999,998 9,999,998 99.99998 - -

d) Banks/FI - - - - - - - - - -

e) Any other… - - - - - - - - - -

SUB TOTAL(A) (2) - 10,000,000 10,000,000 100 - 10,000,000 10,000,000 100 - -

Total Shareholdingof Promoter(A)= (A)(1)+(A)(2) - 10,000,000 10,000,000 100 - 10,000,000 10,000,000 100 - -

B. PUBLICSHARE-HOLDING

(1) Ins�tu�ons

a) Mutual Funds - - - - - - - - - -

b) Banks/FI - - - - - - - - - -

c) Cenntral govt - - - - - - - - - -

d) State Govt. - - - - - - - - - -

e) VentureCapital Fund - - - - - - - - - -

20

Category of No. of Shares held at the No. of Shares held at the % changeShareholders beginning of the year end of the year during the year

Demat Physical Total % of Demat Physical Total % ofTotal Total

Shares Shares

f) InsuranceCompanies - - - - - - - - - -

g) FIIS - - - - - - - - - -

h) ForeignVentureCapital Funds - - - - - - - - - -

i) Others(specify) - - - - - - - - - -

SUB TOTAL (B)(1): - - - - - - - - - -

(2) NonIns�tu�ons

a) Bodiescorporates - - - - - - - - - -

i) Indian - - - - - - - - - -

ii) Overseas - - - - - - - - - -

b) Individuals - - - - - - - - - -

i) Individualshare-holdersholdingnominal sharecapital uptoRs.1 lakhs - - - - - - - - - -

ii) Individualsshare-holdersholdingnominal sharecapital inexcessof Rs. 1 lakhs - - - - - - - - - -

c) Others (specify) - - - - - - - - - -

SUB TOTAL (B)(2): - - - - - - - - - -

Total PublicShareholding(B)=(B)(1)+(B)(2) - - - - - - - - - -

C. Shares held byCustodian forGDRs & ADRs - - - - - - - - - -

Grand Total(A+B+C) - 10,000,000 10,000,000 100 - 10,000,000 10,000,000 100 - -

21

(ii) SHARE HOLDING OF PROMOTERS

Sr. Shareholders Name Shareholding at the Shareholding at theNo. beginning of the year end of the year

No. of % of total % of shares No. of % of total % of shares % changeshares shares of pledged shares shares of pledged in share

the encumbered the encumbered holdingcompany to total company to total during

shares shares the year

1 M/s. Lo�eConfec�onery Co. Ltd. 9,999,998 99.99998 - 9,999,998 99.99998 - -

4 Mr. Jung Yun Kang 1 0.00001 - 1 0.00001 - -

7 Mr. Park Byung Chan 1 0.00001 - 1 0.00001 - -

Total 10,000,000 100 - 10,000,000 100 - -

(iii) CHANGE IN PROMOTERS’ SHAREHOLDING (SPECIFY IF THERE IS NO CHANGE)

Sr. Shareholders Name Shareholding at the Cumula�ve ShareholdingNo. beginning of the year during the year

No. of % of total No. of % of totalshares shares of shares shares of

the company the company

1 M/s. Lo�e Confec�onery Co. Ltd.

At the beginning of the year 9,999,998 99.99998 9,999,998 99.99998

Date wise increase/decrease in Shareholding during the year : No Change - - - -during the year

At the end of the year 9,999,998 99.99998 9,999,998 99.99998

22

(iv) Shareholding Pa�ern of top ten Shareholders (other than Direcors, Promoters & Holders of GDRs& ADRs)


For Each of the Top 10 Shareholders No. of % of total No. of % of totalshares shares of shares shares of

the company the company

At the beginning of the year - - - -

Date wise increase/decrease inShare holding during the year - - - -

At the end of the year - - - -

(v) Shareholding of Directors & KMP


For Each of the Top 10 Shareholders No. of % of total shares No. of % of total sharesshares of the company shares of the company

1 Mang Ko Noh - Director


Date wise increase/decrease in Share

holding during the year: - - - -


2 Anindya Sundar Du�a - Director





3 Jung Yun Kang - Director

At the beginning of the year 1 0.00001 1 0.00001



At the end of the year 1 0.00001 1 0.00001

4 Park Byung Chan - Director

At the beginning of the year 1 0.00001 1.00 0.00001

Date wise increase/decrease in

Share holding

during the year: NIL - - - -

At the end of the year 1 0.00001 1 0.00001

23


For Each of the Top 10 Shareholders No. of % of total shares No. of % of total sharesshares of the company shares of the company

5 Kim Kyunghun - Director





6 Duraiswamy Gunaseela Rajan - Director



holding during the year: NIL - - - -


7 Myeongrim Choi - Director





8 Youngdong Jin - Director





9 Sanjay Rajmal Patni (CFO) - KMP





10 Sonam Jain (CS) - KMP


Date wise increase/decrease in

Share holding during the year: - - - -


24

V INDEBTEDNESS

(`. in Lakhs)

Indebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loans Unsecured Loans Deposits Totalexcluding (Leased Liability) Indebtednessdeposits

Indebtness at the beginning of thefinancial year

i) Principal Amount 2,613.85 3,119.91 - 5,733.76

ii) Interest due but not paid - - - -

iii) Interest accrued but not due - - - -

Total (i+ii+iii) 2,613.85 3,119.91 - 5,733.76

Change in Indebtedness during thefinancial year

Addi�ons - 2,960.41 - 2,960.41

Reduc�on 2,613.85 - - 2,613.85

Net Change (2,613.85) 2,960.41 - 346.56

Indebtedness at the end of thefinancial year

i) Principal Amount - 6,080.32 - 6,080.32

ii) Interest due but not paid - - -

iii) Interest accrued but not due - - - -

Total (i+ii+iii) - 6,080.32 - 6,080.32

25

VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remunera�on to Managing Director, Whole �me director and/or Manager:

(`. in Lakhs)

Sl. Par�culars of Remunera�on Name of the MD/WTD/Manager Total Amount

No. Jung Yun Kang - Park Byung Chan - Anindya Sundar Du�a - Total Chairman Whole Time Director Managing Director

1 Gross salary

(a) Salary as perprovisions contained insec�on 17(1) ofthe Income Tax. 1961. 22.66 33.26 146.51 202.43

(b) Value of perquisitesu/s 17(2) of theIncome tax Act, 1961 0.10 1.62 2.35 4.07

(c ) Profits in lieu ofsalary undersec�on 17(3) of theIncome Tax Act, 1961 0.04 0.17 - 0.21

2 Stock op�on - - - -

3 Sweat Equity - - - -

4 Commission - - - -

as % of profit - - - -

others (specify) - - - -

5 Others, please specify - - - -

Total (A) 22.81 35.05 148.86 206.72

Ceiling as per the Act

26

B. Remunera�on to other directors:

Sl.No. Par�culars of Remunera�on Name of the Directors Total Amount

1 Independent Directors D.G. Rajan

(a) Fee for a�ending board commi�ee mee�ngs 0.40 0.40

(b) Commission - -

(c ) Others, please specify - -

Total (1) 0.40 0.40

2 Other Non Execu�ve Directors Mang Ko Noh -Non-Execu�ve Chairman

(a) Fee for a�ending board commi�ee mee�ngs - -

(b) Commission - -

(c ) Others, please specify. - -

Total (2) - -

Total (B)=(1+2) 0.40 0.40

Total Managerial Remunera�on

Overall Cieling as per the Act.

C. Remunera�on to Key Managerial Personnel other than MD/MANAGER/WTD

Sl.No. Par�culars of Remunera�on Key Managerial Personnel

*Youngdong Jin Sonam Jain Sanjay Patni Total- Execu�ve Director - Company - CFO

& COO Secretary

1 Gross Salary

(a) Salary as per provisions containedin sec�on 17(1) of theIncome Tax Act, 1961. - 3.38 52.64 56.02

(b) Value of perquisites u/s 17(2) ofthe Income Tax Act, 1961 - - 0.18 0.18

(c ) Profits in lieu of salary undersec�on 17(3) of theIncome Tax Act, 1961 - - - -

2 Stock Op�on - - - -

3 Sweat Equity - - - -

4 Commission - - - -

as % of profit - - - -

others, specify - - - -

5 Others, please specify - - - -

Total - 3.38 52.82 56.20

* Mr. Youngdong Jin has joined as a Director on 24th November 2020, therefore remunera�on has not yet been paidto him

(`. in Lakhs)

(`. in Lakhs)

27

Authority(RD / NCLT /

Court)

Sec�on ofthe

CompaniesAct

BriefDescrip�on

Details of Penalty/Punishment/

Compounding feesimposed

Appeall madeif any

(give details)

VII PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES

Type

A. COMPANY

Penalty

Punishment NONE

Compounding

B. DIRECTORS

Penalty

Punishment NONE

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

Punishment NONE

Compounding

Date: 24.11.2020 For Havmor Ice Cream Private LimitedPlace: Ahmedabad


(`. in Lakhs)

28

Annexure – II

FORM NO. AOC - 2

(Pursuant to clause (h) of sub-sec�on (3) of sec�on 134 of the Act and Rule 8(2) of theCompanies (Accounts) Rules, 2014.

Form for Disclosure of par�culars of contracts/arrangements entered into by the company with relatedpar�es referred to in sub sec�on (1) of sec�on 188 of the Companies Act, 2013 including certain arm’slength transac�on under third proviso thereto.

Details of contracts or arrangements or transac�ons not at Arm’s length basis.

Sr. No. Par�culars Details

(a) Name (s) of the related party & nature of rela�onship N.A.

(b) Nature of contracts/arrangements/transac�on N.A.

(c) Dura�on of the contracts/arrangements/transac�on N.A.

(d) Salient terms of the contracts or arrangements or transac�onincluding the value, if any N.A.

(e) Jus�fica�on for entering into such contracts or arrangementsor transac�ons’ N.A.

(f) Date of approval by the Board N.A.

(g) Amount paid as advances, if any N.A.

(h) Date on which the special resolu�on was passed inGeneral mee�ng as required under first proviso to sec�on 188 N.A.

Details of contracts or arrangements or transac�ons at Arm’s length basis.

Sr. No. Par�culars Details

(a) Name (s) of the related party & nature of rela�onship

(b) Nature of contracts/arrangements/transac�on As per

(c) Dura�on of the contracts/arrangements/transac�on below

(d) Salient terms of the contracts or arrangements or a�achmenttransac�on including the value, if any

(e) Date of approval by the Board

(f) Amount paid as advances, if any

Name ofRelated Party

Lo�e IndiaCorpora�on

Ltd., Chennai

Nature oftransac�on

Purchase of Material,Rent payment and

Reimbursement of exp

Dura�on ofcontract

As per the PO & as perthe rent agreement upto

2.3.2020

Salientterms

-

Advance paidRs.

Security depositof Rs. 2 Lakhs



29

Annexure III

The Company has its CSR Policy within broad scope laid down in Schedule VII to the Act, as projects

/ programs / ac�vi�es, excluding ac�vi�es in its normal course of business.

Details of the CSR policy is available on website of the company and web link is www.havmor.com

Composi�on of CSR Commi�ee.

The present members in the commi�ee include:

1. Mr. Jung Yun Kang,

2. Mr. D.G. Rajan,

3. Mr. Myeongrim Choi

In addi�on to the above members, Mr. Park Byung Chan, Mr. Sanjay Patni and Mr. Suresh Srinivasan willalso be Co-opted members of the CSR commi�ee of the Company. The Co-opted members shall par�cipateand interact with CSR Training and Corporate seminars to gain knowledge and will work and may undertakethe CSR projects in consulta�on and under the direc�ons of the CSR Commi�ee.

Average net profit of the Company for the past three years:

The average net profits as detailed below:

Par�culars (Rs.)

Average net profits for last three financial years Rs. 3,398.02 Lakhs

Prescribed CSR expenditure:

Prescribed CSR expenditure is as detailed below:

Par�culars (Rs.)

Prescribed CSR expenditure Rs. 67.96 Lakhs

Details of CSR spent during the year:

Par�culars (Rs.)

(a) Total amount spent during the year Rs. 4.00 Lakhs

(b) Amount unspent if any Rs. 63.96 Lakhs

(`. in Lakhs)

(`. in Lakhs)

(`. in Lakhs)

30

(c) Manner in which the amount is spent during the financial year is detailed below:

In case the Company has failed to spend the two percent of the average net profit of the last threefinancial years or any part thereof, the Company shall provide the reasons for not spending the amount

in its Board Report:

Unspent amount of CSR was planned to spend on various CSR ac�vi�es including Educa�on, Social, HealthSector etc. The balance unspent amount of CSR is under considera�on and will be spent appropriatelyand judiciously.

A responsibility statement of the CSR commi�ee that the implementa�on and monitoring of CSR policy

is in compliance with CSR objec�ves and policy of the Company:

Pursuant to the provisions of sec�on 135 of the Companies Act, 2013 read with Companies Rules (Corporate

Social Responsibility Policy) Rules, 2014, CSR Commi�ee members, do confirm that the implementa�onand monitoring of CSR policy, is in compliance with the CSR objec�ves and policy of the Company



Amountspent: Direct

or through

implemen�ngagency*

Cumula�ve

expenditureupto the

repor�ngperiod

Amount spenton the projects

or programs

sub-heads:

1) (Direct

Expenditureon projectsor

programs

2) Overheads

Amountoutlay

(Budget)

project orprograms

wise

Projects orprograms:

1) Local Area

or other

2) Specify

the stateand

district

where the

project orprogramwas

undertaken

Sector in

whichthe

project iscovered

Sr. CSR

No. projector

ac�vityiden�fied

1. YUVA/ Educa�onal Local 4.00 Lakh 4.00 Lakh 4.00 Lakh DirectUnstoppable charitable area

(NGO) trust

31

Annexure IV

Form No. MR-3

Secretarial Audit Report

(For the financial year ended on March 31, 2020)

[Pursuant to Sec�on 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies(Appointment and Remunera�on of Managerial Personnel) Rules, 2014]

To,The Members,

HAVMOR ICE CREAM PRIVATE LIMITED2nd Floor, Commerce House 4,

B/S Shell Petrol Pump, 100Ft. Road,

Prahaladnagar, Ahmedabad 380 015

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions andthe adherence to good corporate prac� ces by HAVMOR ICE CREAM PRIVATE LIMITED(CIN: U15200GJ2006PTC048016) (hereina�er called “the Company”). Secretarial Audit was conducted ina manner that provided me a reasonable basis for evalua�ng the corporate conducts/ statutory compliancesand expressing my opinion thereon.

Based on my verifica�on of the books, papers, minute books, forms and returns filed and other recordsmaintained by the Company and also the informa�on provided by the Company, its officers, agents and

authorized representa�ves during the conduct of secretarial audit, I hereby report that in my opinion, theCompany has, during the audit period ended on March 31, 2020, complied with the statutory provisionslisted hereunder and also that the Company has proper Board processes and compliance mechanism inplace to the extent, in the manner and subject to the repor�ng made hereina�er:

I have examined the books, papers, minute books, forms and returns filed and other records (as perAnnexure A) maintained by the Company for the period ended on March 31, 2020 according to the

provisions of:

I. The Companies Act, 2013 (the Act) and the Rules made thereunder;

II. The Securi�es Contracts (Regula�on) Act, 1956 (‘SCRA’) and the Rules made thereunder;

III. The Depositories Act, 1996 and the Regula�ons and Bye-laws framed thereunder;

IV. Foreign Exchange Management Act, 1999 and the Rules and Regula�ons made thereunder tothe extent of Foreign Direct Investment, Overseas Direct Investment, and External Commercial

Borrowings;

V. The following Regula�ons and Guidelines prescribed under the Securi�es and Exchange Board

of India Act, 1992 (‘SEBI Act’) to the extent applicable to the Company:

(a) The Securi�es and Exchange Board of India (Substan�al Acquisi�on of Shares and Takeovers)Regula�ons, 2011;

(b) Securi�es and Exchange Board of India (Prohibi�on of Insider Trading) Regula�ons, 2015;

(c) The Securi�es and Exchange Board of India (Share based Employee Benefits) Regula�ons,

2014;

32

(d) The Securi�es and Exchange Board of India (Issue of Capital and Disclosure Requirements)Regula�ons, 2018;

(e) The Securi�es and Exchange Board of India (Issue and Lis�ng of Debt Securi�es) Regula�ons,

2008;

(f) The Securi�es and Exchange Board of India (Registrars to an Issue and Share Transfer Agents)Regula�ons, 1993 regarding the Companies Act and dealing with client;

(g) The Securi�es and Exchange Board of India (Delis�ng of Equity Shares) Regula�ons, 2009;

(h) The Securi�es and Exchange Board of India (Buyback of Securi�es) Regula�ons, 1998.

VI. I further report that having regard to the Compliance System Prevailing in the Company and onexamina�on of the relevant documents and records pursuant to them of the Company has

generally comply with the provision of following laws:

• Food Safety and Standards Act, 2006, rules and regula�ons therender;

It has been found that the Company being an unlisted en�ty was not required to comply with the provision

of the laws indicated in para (III) to (V) above except Para (IV).

I have also examined compliance with the applicable clauses of the following:

(a) Secretarial Standards with regard to Mee�ng of Board of Directors (SS-1) and General

Mee�ngs (SS-2) issued by the Ins�tute of Company Secretaries of India;

(b) The Lis�ng Agreements entered into by the Company with BSE Limited pursuant to Securi�esand Exchange Board of India (Lis�ng Obliga�ons & Disclosure Requirements) Regula�ons,2015;

However, the en�ty being an unlisted en�ty not mandated to follow the Lis�ng Agreements. Hence clause

b) is not applicable to the Company.

I further report that

The Board of Directors of the Company is duly cons�tuted with proper balance of Execu�ve Directorsand Non-Execu�ve Directors. The changes in the composi�on of the Board of Directors that took place

during the period under review were carried out in compliance with the provisions of the Act.

Adequate no�ce is given to all directors to schedule the Board Mee�ngs, agenda and detailed notes on

agenda were sent at least seven days in advance, and a system exists for seeking and obtaining furtherinforma�on and clarifica�ons on the agenda items before the mee�ng and for meaningful par�cipa�on

at the mee�ng.

I have relied on the representa�ons made by the Company and its officers for systems and mechanisms

formed by the Company for compliance under other laws and regula�ons applicable to the company.

Majority decisions were carried out unanimously and where it was not so, the dissen�ng members’ views

were captured and recorded as part of the minutes.

33

I further report that there are adequate systems and processes in the company commensurate with thesize and opera�ons of the company to monitor and ensure compliance with applicable laws, rules,

regula�ons, and guidelines.

I further report that the compliance by the company of the direct and indirect tax laws has not been

reviewed during this audit as the same has been subject to review by statutory financial auditor and otherdesignated professionals.

Place: Ahmedabad For, G R Shah and Associates

Date: 27 / 08 / 2020 (Company Secretaries)

Gaurang Shah

Proprietor

COP No. 14446

UDIN: A038703B000624343

Note: This report is to be read with our le�er of even date which is annexed as Annexure B and formsan integral part of this report.

34

Annexure A

List of documents verified

1. Memorandum and Ar�cles of Associa�on of the Company.

2. Minutes of the mee�ngs of the Board of Directors, Audit Commi�ee, Nomina�on andRemunera�on Commi�ee, Share Transfer Commi�ee, Stakeholders Rela�onship Commi�ee,CSR Commi�ee and Independent Directors Mee�ng along with a�endance register held during

the period under report.

3. Minutes of General Body mee�ngs held during the period under report.

4. Statutory registers records under the Companies Act, 2013 and Rules made there under

namely:

• Register of the Directors and the Key Managerial Personnel

• Register of the Directors’ shareholding

• Register of loans, guarantees and security and acquisi�on made by the Company

• Register of Members.

5. Declara�ons received from the Directors of the Company in Form MBP-1 pursuant to theprovisions of Sec�on 184 of the Companies Act, 2013.

6. E-Forms filed by the Company, from �me-to-�me, under applicable provisions of theCompanies Act, 2013 and a�achments thereof during the period under report.

7. Communica�ons/ Le�ers issued to and acknowledgements received from the IndependentDirectors for their appointment.

8. Various policies framed by the Company from �me to �me as required under the Companies

Act, 2013.

35

Annexure B

To,

The Members

HAVMOR ICE CREAM PRIVATE LIMITED2nd Floor, Commerce House 4,

B/S Shell Petrol Pump, 100Ft. Road,Prahaladnagar, Ahmedabad 380 015

Our Secretarial Audit Report of even date is to be read along with this le�er.

Management’s Responsibility

It is the responsibility of the management of the Company to maintain secretarial records, devise propersystems to ensure compliance with the provisions of all applicable laws and regula�ons and to ensurethat the systems are adequate and operate effec�vely.

Auditor’s Responsibility

My responsibility is to express an opinion on these secretarial records, systems, standards and proceduresbased on my audit.

Wherever required, I have obtained the management’s representa�on about the compliance of laws, rulesand regula�ons and happening of events etc.

Disclaimer

The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the

efficacy or effec�veness with which the management has conducted the affairs of the Company.

Place: Ahmedabad For, G R Shah and Associates

Date: 27 / 08 / 2020 (Company Secretaries)

Gaurang Shah

Proprietor

COP No. 14446

UDIN: A038703B000624343

36

Annexure - V

Details of Conserva�on of Energy, Technology Absorp�on, Foreign Exchange Earning and Outgo:

Conserva�on of energy-

(i) the steps taken or impact on conserva�on of

energy;

(ii) the steps taken by the company for u�lizingalternate sources of energy;

(iii) the capital investment on energy conserva�onequipment’s

Technology absorp�on-

(i) the efforts made towards technology absorp�on;

(ii) the benefits derived like product improvement,

cost reduc�on, product development or importsubs�tu�on

(iii) in case of imported technology (imported during

the last three years reckoned from the beginningof the financial year:

(a) the details of technology imported;

(b) the year of import

(c) whether the technology been fully absorbed

(d) if not fully absorbed, areas where absorp�on

has not taken place, and the reasons thereof;

(iv) the expenditure incurred on Research and

Development

1. (a) We have done agreement withexternal agency for Wind power

purchase and we will get approx.Rs.24 Lacs/Year from Jan.2020.

2. (b) Memco plant we reduced ourcontract demand of Electricity &

save fix charge Rs. 11000/month &Rs. 1.32 lac/year.

3. (c) Installed Air compressor with VFD

to reduce power consump�on inCompressed Air system.

Company is genera�ng the Bio Gas from ETPplant and using the same in the boiler.

(a) NIL(b) NIL(c) Rs. 18 lakh

NIL

1. Installa�on of fully auto HTST system forthe Mix process area. It saves Fuel &

increase produc�vity & quality.

2. Installa�on of Fully auto 4circuit CIP

system. It saves Fuel & improve microbiological coliform result.

NIL

Company is doing con�nuous in-house R&Dac�vi�es, but the expenditure spent on such

ac�vi�es is insignificant.

(`. in Lakhs)

37

Foreign Exchange Earning and Outgo:

(i) Foreign Exchange Earning Rs. 0.28 Lakhs

(ii) Foreign Exchange Outgo Rs. 504.67 Lakhs

Date: 24.11.2020 For Havmor Ice Cream Private Limited

Place: Ahmedabad

Regd Office:

2nd Floor, Commerce Hosue-4 Jung Yun Kang Park Byung Chan

Besides Shell Petrol Pump Chairman Whole Time Director

Prahaladnagar, Ahmedabad-380015 DIN no. 08025252 DIN no. 08046421

38

Independent Auditors’ Report

To the Members of

Havmor Ice Cream Private Limited

Report on the Audit of the Ind AS Financial Statements

Opinion

We have audited the financial statements of Havmor Ice Cream Private Limited (“the Company”), whichcomprise the Balance Sheet as at 31 March 2020, and the Statement of Profit and Loss (including othercomprehensive income), Statement of Changes in Equity and Cash Flow Statement for the year then ended,and notes to the financial statements, including a summary of the significant accoun�ng policies and otherexplanatory informa�on (hereina�er referred to as “AS financial statements”).

In our opinion and to the best of our informa�on and according to the explana�ons given to us, theaforesaid financial statements give the informa�on required by the Companies Act, 2013 (“the Act”) inthe manner so required and give a true and fair view in conformity with the accoun�ng principles generallyaccepted in India, of the state of affairs of the Company as at 31 March 2020, and profit and othercomprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for opinion

We conducted our audit in accordance with the Standards on Audi�ng (SAs) specified under sec�on 143(10)of the Act. Our responsibili�es under those SAs are further described in the Auditor’s Responsibili�es forthe Audit of the Ind AS Financial Statements sec�on. We are independent of the Company in accordancewith the Code of Ethics issued by the Ins�tute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder, and we have fulfilled our other ethical responsibili�es in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.

Informa�on Other than the Ind AS Financial Statements and Auditors’ Report Thereon

The Company’s management and Board of Directors are responsible for the other informa�on. The otherinforma�on comprises the informa�on included in the Company’s annual report, but does not include thefinancial statements and our auditors’ report thereon.

Our opinion on the financial statements does not cover the other informa�on and we do not expressany form of assurance conclusion thereon.

In connec�on with our audit of the financial statements, our responsibility is to read the other informa�onand, in doing so, consider whether the other informa�on is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If,based on the work we have performed, we conclude that there is a material misstatement of this otherinforma�on, we are required to report that fact. We have nothing to report in this regard.

39

Independent Auditors’ Report on financial statements (Con�nued)

Management’s Responsibility for the Financial Statements

The Company’s management and Board of Directors are responsible for the ma�ers stated in sec�on 134(5)

of the Act with respect to the prepara�on of these financial statements that give a true and fair viewof the state of affairs, profit and other comprehensive income, changes in equity and cash flows of the

Company in accordance with the accoun�ng principles generally accepted in India, including the Indian

Accoun�ng Standards (Ind AS) specified under sec�on 133 of the Act. This responsibility also includesmaintenance of adequate accoun�ng records in accordance with the provisions of the Act for safeguarding

of the assets of the Company and for preven�ng and detec�ng frauds and other irregulari�es; selec�onand applica�on of appropriate accoun�ng policies; making judgments and es�mates that are reasonable

and prudent; and design, implementa�on and maintenance of adequate internal financial controls that

were opera�ng effec�vely for ensuring the accuracy and completeness of the accoun�ng records, relevantto the prepara�on and presenta�on of the financial statements that give a true and fair view and are

free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management and Board of Directors are responsible for assessingthe Company’s ability to con�nue as a going concern, disclosing, as applicable, ma�ers related to goingconcern and using the going concern basis of accoun�ng unless management either intends to liquidate

the Company or to cease opera�ons, or has no realis�c alterna�ve but to do so.

Board of Directors is also responsible for overseeing the Company’s financial repor�ng process.

Auditor’s Responsibili�es for the Audit of the Financial Statements

Our objec�ves are to obtain reasonable assurance about whether the financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that

includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that anaudit conducted in accordance with SAs will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,they could reasonably be expected to influence the economic decisions of users taken on the basis of

these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional

skep�cism throughout the audit. We also:

• Iden�fy and assess the risks of material misstatement of the financial statements, whether due

to fraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not

detec�ng a material misstatement resul�ng from fraud is higher than for one resul�ng from error,as fraud may involve collusion, forgery, inten�onal omissions, misrepresenta�ons, or the override

of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances. Under sec�on 143(3)(i) of the Act, we arealso responsible for expressing our opinion on whether the company has adequate internal

financial controls with reference to Ind AS financial statements in place and the opera�ngeffec�veness of such controls.

40


Auditor’s Responsibili�es for the Audit of the Financial Statements (Con�nued)

• Evaluate the appropriateness of accoun�ng policies used and the reasonableness of accoun�nges�mates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accoun�ng

and, based on the audit evidence obtained, whether a material uncertainty exists related to events

or condi�ons that may cast significant doubt on the Company’s ability to con�nue as a goingconcern. If we conclude that a material uncertainty exists, we are required to draw a�en�on

in our auditor’s report to the related disclosures in the financial statements or, if such disclosuresare inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained

up to the date of our auditor’s report. However, future events or condi�ons may cause the

Company to cease to con�nue as a going concern.

• Evaluate the overall presenta�on, structure and content of the financial statements, includingthe disclosures, and whether the financial statements represent the underlying transac�ons andevents in a manner that achieves fair presenta�on.

We communicate with those charged with governance regarding, among other ma�ers, the planned scope

and �ming of the audit and significant audit findings, including any significant deficiencies in internal controlthat we iden�fy during our audit.

We also provide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence, and to communicate with them all rela�onships and other

ma�ers that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) Order, 2016 (“the Order”) issued by the CentralGovernment in terms of sec�on 143 (11) of the Act, we give in the “Annexure A” a statement

on the ma�ers specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(A) As required by Sec�on 143(3) of the Act, we report that:

(a) we have sought and obtained all the informa�on and explana�ons which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) proper books of account as required by law have been kept by the Company so faras it appears from our examina�on of those books.

(c) the Balance Sheet, the Statement of Profit and Loss (including other comprehensiveincome), the Statement of Changes in Equity and the Cash Flow Statement dealt with

by this Report are in agreement with the books of account.

(d) in our opinion, the aforesaid financial statements comply with the Ind AS specified

under sec�on 133 of the Act.

41


Report on Other Legal and Regulatory Requirements (Con�nued)

(e) on the basis of the wri�en representa�ons received from the directors as on 31 March2020 taken on record by the Board of Directors, none of the directors is disqualified

as on 31 March 2020 from being appointed as a director in terms of Sec�on 164(2)of the Act.

(f) with respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the opera�ng effec�veness of such controls,

refer to our separate Report in “Annexure B”.

(B) With respect to the other ma�ers to be included in the Auditors’ Report in accordance

with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to

the best of our informa�on and according to the explana�ons given to us:

(i) The Company has disclosed the impact of pending li�ga�ons as at 31 March 2020on its financial posi�on in its financial statements - Refer Note 32(i) to the financialstatements.

(ii) The Company did not have any long-term contracts including deriva�ve contracts forwhich there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred to the InvestorEduca�on and Protec�on Fund by the Company.

(iv) The disclosures in the financial statements regarding holdings as well as dealings inspecified bank notes during the period from 8 November 2016 to 30 December 2016

have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2020.

(C) With respect to the ma�er to be included in the Auditors’ Report under sec�on 197(16):

In our opinion and according to the informa�on and explana�on given to us, the provisions

mandated under sec�on 197 of the Companies Act, 2013 are not applicable to Companyas the Company is not a public company.

For B S R & Associates LLP

Chartered Accountants

Firm’s Registra�on No. 116231W/W-100024

Jeyur Shah

Partner

Place: Ahmedabad Membership No. 045754

Date: 24th November 2020 ICAI UDIN: ________________________

42

Annexure A to the Independent Auditors’ Report - 31 March 2020

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ sec�on of ourreport of even date)

(i) (a) The Company has maintained proper records showing full par�culars including quan�ta�vedetails and situa�on of fixed assets (“Property, plant and equipment”). However, details withrespect to loca�on needs to be updated.

(b) The Company has a regular programme of physical verifica�on of its fixed assets (“Property,plant and equipment”) by which all items of fixed assets (“Property, plant and equipment”)are verified once in three years. In our opinion, this periodicity of physical verifica�on isreasonable having regard to the size of the Company and the nature of its assets. The Companyhas carried out physical verifica�on of all the assets during the year except for the certain Deepfreezers and Push carts (gross block: Rs 9065.82 lakhs and net block: Rs 3874.98 lakhs) whichhave not been physically verified by the management during previous three years. We areinformed that the Company is in the process of reconciling the records with the books inaccordance with the physical verifica�on report. Accordingly, if any discrepancies found will bedealt with appropriately in the books of accounts on comple�on of such reconcilia�on. Further,any discrepancies on physical verifica�on of remaining Deep Freezers and Push carts, will beaccounted for on their subsequent verifica�on.

(c) According to the informa�on and explana�ons given to us and on the basis of our examina�onof the records of the Company, the �tle deeds of immovable proper�es are held in the nameof the Company except in respect of building (gross block: Rs 23.63 lakhs and net block: Rs19.33 lakhs) which are in the erstwhile name of the Company.

(ii) The inventory, except material in transit, has been physically verified by the management during theyear. In our opinion, the frequency of such verifica�on is reasonable. The discrepancies no�ced onverifica�on between the physical stocks and the book records were not material and have beenproperly dealt with in the books of account.

(iii) According to informa�on and explana�ons given to us, the Company has not granted any loans,secured or unsecured, to companies, firms, Limited Liability Partnerships or other par�es coveredin the register required to be maintained under Sec�on 189 of the Companies Act, 2013 (“the Act”)and accordingly paragraph 3 (iii) (a), (b) and (c) of the Order are not applicable to the Company.

(iv) In our opinion and according to the informa�on and explana�ons given to us, the Company hasnot given any loan, made any investment, given any guarantee, or provided any security under Sec�on185 and 186 of the Act. Accordingly paragraph 3 (iv) of the Order is not applicable to the Company.

(v) In our opinion and according to the informa�on and explana�ons given to us, the Company hasnot accepted deposits from public in accordance with the provisions of Sec�ons 73 to 76 or anyother relevant provisions of the Act and the rules framed thereunder. Accordingly, paragraph 3 (v)of the Order is not applicable to the Company.

(vi) The Central Government has not prescribed the maintenance of cost records Sec�on 148(1) of the

Act for any of the products manufactured by the Company. Accordingly, paragraph 3(vi) of the Orderis not applicable.

43

Annexure A to the Independent Auditors’ Report – 31 March 2020 (Con�nued)

(vii) (a) According to the informa�on and explana�ons given to us and on the basis of our examina�onof the records of the Company, amounts deducted/accrued in the books of account in respect

of undisputed statutory dues including, Provident fund, Income tax, duty of customs, Goods

and Service tax, Employees state insurance contribu�on, Professional tax, Cess and othermaterial statutory dues have generally been regularly deposited during the year by the Company

with the appropriate authori�es though there have been few delays in case of Tax deductedat Source.

According to the informa�on and explana�ons given to us, no undisputed amounts payablein respect of Professional tax, Employee state insurance contribu�on, Service tax, Customs duty,

duty of excise, Income tax, Sales tax, Value added tax, Cess and other material statutory dueswere in arrears as at 3l March 2020 for a period of more than six months from the date they

became payable.

Further, pending clarity on the ma�er as explained in Note 32 to the Ind AS financial statements

in respect of Provident Fund, the Company is currently unable to determine the extent of arrearsof such provident fund due as at 31 March 2020 outstanding for a period of more than sixmonths from the date they become payable.

(b) According to the informa�on and explana�ons given to us, there are no dues of Income-tax,

Sales-tax, Service tax, duty of customs, duty of excise, Goods and Service tax and Value addedtax which have not been deposited with the appropriate authori�es on account of any disputeexcept the following:

(`. in Lakhs)

(viii) In our opinion and according to the informa�on and explana�ons given to us, the Company

has not defaulted in repayment of dues to its bankers. The Company does not have any loans

or borrowings from financial ins�tu�ons and Government or dues to debenture holders.

Name of thestatute

Rajasthan VATAct, 2003

Telangana VATAct, 2005

Income taxAct,1961

Nature of dues

Demand in respectof reversal of inputtax credit

Value Added Tax

Income tax

Amountdemanded

(Rs. in lakhs)

44.00

38.50

206.44

Forum wheredispute

is pending

Dy. CommissionerAppeals,

Jaipur

The AppellateDeputy

Commissioner

Commissioner ofIncome Tax(Appeals)

Period towhich the

amountrelates

Year

2009-10 to

2012-13

Year

2015-16 to

2017-18

AY 2017-18

Amountunder

dispute notdeposited

(Rs. in lakhs)

44.00

38.50

206.44

44

Annexure A to the Independent Auditors’ Report – 31 March 2020 (Con�nued)

(ix) The Company did not raise any money by way of ini�al public offer or further public offer (includingdebt instruments) or term loans. Accordingly, repor�ng under paragraph 3(ix) of the Order is not

applicable to the Company.

(x) During the course of our examina�on of the books and records of the Company, carried out in

accordance with the generally accepted audi�ng prac�ces in India, and according to the informa�on

and explana�ons given to us, we have neither come across any instance of fraud by the Companyor on the Company by its officers or employees, no�ced or reported during the year, nor have we

been informed of any such case by the management.

(xi) The provisions of Sec�on 197 of the Act read with Schedule V to the Act are not applicable to the

Company since the Company is not a public company as defined under Sec�on 2(71) of the Act.Accordingly, provisions of clause 3(xi) of the Order are not applicable the Company.

(xii) In our opinion and according to the informa�on and explana�ons given to us, the Company is nota Nidhi company as prescribed under Sec�on 406 of the Act. Accordingly, paragraph 3(xii) of theOrder is not applicable.

(xiii) According to the informa�on and explana�ons given to us and based on our examina�on of therecords of the Company, transac�ons with the related par�es are in compliance with Sec�ons 188of the Act where applicable and details of such transac�ons have been disclosed in the financialstatements as required by the applicable accoun�ng standards. Sec�on 177 of the Act is not applicable

to the Company.

(xiv) According to the informa�on and explana�ons given to us and based on our examina�on of the

records of the Company, the Company has not made any preferen�al allotment or private placementof shares or fully or partly conver�ble debentures during the year. Accordingly, paragraph 3 (xiv)of the Order is not applicable to the Company.

(xv) According to the informa�on and explana�ons given to us and based on our examina�on of the

records of the Company, the Company has not entered into non-cash transac�ons, within the meaning

of Sec�on 192 of the Act, with directors or persons connected with him. Accordingly, paragraph 3(xv)of the Order is not applicable.

(xvi) According to the informa�on and explana�ons given to us, the Company is not required to beregistered under Sec�on 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi)

of the Order is not applicable.



Firm’s registra�on number: 116231W/W-100024

Jeyur Shah

Partner

Place : Ahmedabad Membership No. 045754

Date: 24th November 2020 ICAI UDIN: _____________________

45

Annexure B to the Independent Auditors’ report on the financial statements of

Havmor Ice Cream Private Limited for the year ended 31 March 2020

Report on the internal financial controls with reference to the aforesaid financial statements under Clause(i) of Sub-sec�on 3 of Sec�on 143 of the Companies Act, 2013

(Referred to in paragraph 1(A)(f) under ‘Report on Other Legal and Regulatory Requirements’ sec�on of

our report of even date)

Opinion

We have audited the internal financial controls with reference to financial statements of Havmor Ice Cream

Private Limited (Formerly, Havmor Ice Cream Limited) (“the Company”) as of 31 March 2020 in conjunc�onwith our audit of the financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with referenceto financial statements and such internal financial controls were opera�ng effec�vely as at 31 March 2020,

based on the internal financial controls with reference to financial statements criteria established by theCompany considering the essen�al components of internal control stated in the Guidance Note on Auditof Internal Financial Controls Over Financial Repor�ng issued by the Ins�tute of Chartered Accountantsof India (the “Guidance Note”).

Management’s Responsibility for Internal Financial Controls

The Company’s management and the Board of Directors are responsible for establishing and maintaininginternal financial controls based on the internal financial controls with reference to financial statementscriteria established by the Company considering the essen�al components of internal control stated inthe Guidance Note. These responsibili�es include the design, implementa�on and maintenance of adequate

internal financial controls that were opera�ng effec�vely for ensuring the orderly and efficient conduct

of its business, including adherence to company’s policies, the safeguarding of its assets, the preven�onand detec�on of frauds and errors, the accuracy and completeness of the accoun�ng records, and the�mely prepara�on of reliable financial informa�on, as required under the Companies Act, 2013 (hereina�er

referred to as “the Act”).

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls with reference

to financial statements based on our audit. We conducted our audit in accordance with the Guidance

Note and the Standards on Audi�ng, prescribed under sec�on 143(10) of the Act, to the extent applicable

to an audit of internal financial controls with reference to financial statements. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform the audit to obtain

reasonable assurance about whether adequate internal financial controls with reference to financialstatements were established and maintained and whether such controls operated effec�vely in all material

respects.

46

Annexure B to the Independent Auditors’ Report – 31 March 2020 (Con�nued)

Meaning of Internal Financial controls with Reference to Financial Statements

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal

financial controls with reference to financial statements and their opera�ng effec�veness. Our audit ofinternal financial controls with reference to financial statements included obtaining an understanding of

such internal financial controls, assessing the risk that a material weakness exists, and tes�ng and evalua�ngthe design and opera�ng effec�veness of internal control based on the assessed risk. The procedures

selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement

of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion on the Company’s internal financial controls with reference to financial statements.

A company’s internal financial controls with reference to financial statements is a process designed toprovide reasonable assurance regarding the reliability of financial repor�ng and the prepara�on of financial

statements for external purposes in accordance with generally accepted accoun�ng principles. A company’sinternal financial controls with reference to financial statements include those policies and procedures that(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransac�ons and disposi�ons of the assets of the company; (2) provide reasonable assurance thattransac�ons are recorded as necessary to permit prepara�on of financial statements in accordance with

generally accepted accoun�ng principles, and that receipts and expenditures of the company are beingmade only in accordance with authorisa�ons of management and directors of the company; and (3) providereasonable assurance regarding preven�on or �mely detec�on of unauthorised acquisi�on, use, ordisposi�on of the company’s assets that could have a material effect on the financial statements.

Inherent Limita�ons of Internal Financial controls with Reference to Financial Statements

Because of the inherent limita�ons of internal financial controls with reference to financial statements,

including the possibility of collusion or improper management override of controls, material misstatementsdue to error or fraud may occur and not be detected. Also, projec�ons of any evalua�on of the internal

financial controls with reference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequate because of

changes in condi�ons, or that the degree of compliance with the policies or procedures may deteriorate.



Firm’s registra�on number: 116231W/W-100024

Jeyur Shah

Partner

Place : Ahmedabad Membership No. 045754

Date: 24th November 2020 ICAI UDIN: ___________________

47

Financial StatementsBalance Sheet

as at 31st March 2020

(`. in Lakhs)

Par�culars Note 31 March 2020 31 March 2019

Assets

Non-current assets

(a) Property, plant and equipment 4 12,881.66 15,334.23

(b) Right of use assets 5 6,104.31 -

(c) Capital work-in-progress 6 223.76 382.20

(d) Goodwill 7 421.40

(e) Other intangible assets 8 370.35 201.63

(f) Intangible assets under development 8.52 122.20

(g) Financial assets

(i) Loans 9 293.57 307.18

(ii) Other financial assets 10 0.18 -

(h) Current tax assets (Net) 55.70 48.83 -

(i) Deferred tax assets (Net) 20 22.73 -

(j) Other non-current assets 11 327.35 975.27

20,709.53 17,371.54

Current assets

(a) Inventories 12 6,893.55 8,075.84

(b) Financial assets

(i) Trade receivables 13 1,090.33 1,332.71

(ii) Cash and cash equivalents 14A 4,952.11 2,128.32

(iii) Other bank balances 14B 47.28 164.64

(iv) Loans 9 98.78 59.45

(c) Other current assets 11 721.53 681.87

13,803.58 12,442.83

Total assets 34,513.11 29,814.37

Equity and liabili�es

Equity

(a) Equity share capital 15 1,000.00 1,000.00

(b) Other equity 16 16,501.62 12,975.22

17,501.62 13,975.22

Liabili�es

Non-current liabili�es

(a) Financial liabili�es

(i) Borrowings 17 5,107.98 2,833.28

(b) Provisions 19 144.11 70.92

(c) Deferred tax liabili�es (Net) 20 - 342.99

(d) Other non-current liabili�es 21 33.27 68.10

5,285.36 3,315.29

48


Current liabili�es

(a) Financial liabili�es

(i) Borrowings 17 - 2,613.85

(ii) Trade payables - total outstanding dues of 22

(a) micro enterprises and small enterprises 370.14 245.98

(b) creditors other than micro enterprisesand small enterprises 2,484.97 2,545.37

(iii) Other financial liabili�es 18 8,221.69 6,013.98

(b) Other current liabili�es 21 394.78 783.44

(c) Provisions 19 252.30 196.72

(d) Current tax liabili�es (net) 23 2.25 124.52

11,726.13 12,523.86

17,011.49 15,839.15

Total equity and liabili�es 34,513.11 29,814.37

Significant accoun�ng policies 3

The notes referred above are an integral part of these financial statements.

As per our report of even date a�ached

For B S R & Associates LLP For and on behalf of the Board of Directors of

Chartered Accountants Havmor Ice Cream Private Limited

Firm’s Registra�on No: 116231W/W-100024 CIN : U15200GJ2006PTC048016

Jeyur Shah Jung Yun Kang Park Byung Chan

Partner Chairman Whole Time Director

Membership No: 045754 DIN: 08025252 DIN: 08046421

Sanjay R. Patni Sonam Jain

Chief Financial Officer Company Secretary

Ahmedabad ICAI Memb. No. 073330 ICSI Memb. No.: A37095

24th November 2020 Ahmedabad,24th November 2020

(`. in Lakhs)

49

Statements of Profit and Lossfor the year ended 31st March 2020

(`. in Lakhs)


Income

Revenue from opera�ons 24 59,326.90 57,155.25

Other income 25 580.60 295.43

Total income 59,907.50 57,450.68

Expenses

Cost of materials consumed 26 29,552.98 26,436.89

Purchase of stock-in-trade 295.04 525.52

Changes in inventories of finished goods, semifinished goods and stock-in-trade 27 (525.25) 95.83

Employee benefits expense 28 5,759.05 5,469.84

Finance costs 29 675.28 338.49

Deprecia�on and amor�sa�on expense 30 4,480.69 3,421.91

Other expenses 31 15,263.82 14,296.34

Total expenses 55,501.61 50,584.82


Tax expense:

Current tax 20 1,405.36 1,881.32

Excess provision of tax rela�ng to earlier years (210.25) -

Deferred tax credit 20 (353.11) (312.96)

842.00 1,568.36

Profit for the year 3,563.89 5,297.50

Other comprehensive income

Items that will not be reclassified subsequentlyto profit or loss

Re-measurements of defined benefit plan 16 (50.10) (28.49)

Income tax rela�ng to above 16 12.61 9.96

Other comprehensive income for the year, net of tax (37.49) (18.53)

Total comprehensive income for the year 3,526.40 5,278.97

Earnings per share (Face Value Rs. 10) 35

Basic and Diluted (Rs.) 35.64 52.97

Significant accoun�ng policies 3


50












51

Statements of Changes in Equityfor the year ended 31st March 2020

(`. in Lakhs)

[A] Equity share capital Note Number of shares Amount

Issued, Subscribed and Paid up capital 15

Equity shares of Rs. 10/- each fully paid up

Balance as at 1 April 2018 10,000,000 1,000.00

Changes in equity share capital during the year - -

Balance as at 31 March 2019 10,000,000 1,000.00

Changes in equity share capital during the year - -

Balance as at 31 March 2020 10,000,000 1,000.00

[B] Other equity Reserves and surplus Total

General reserve Retained earnings

Balance as at 1 April 2018 73.47 7,622.78 7,696.25

Total comprehensive income for the year ended31 March 2019

Profit for the year - 5,297.50 5,297.50

Items of other comprehensive income forthe year , net of taxes

Re-measurements of defined benefit plans - (18.53) (18.53)

Total comprehensive income for the year - 5,278.97 5,278.97

Balance at 31 March 2019 73.47 12,901.75 12,975.22

Total comprehensive income for the year ended31 March 2020


Items of other comprehensive income forthe year, net of taxes



Balance at 31 March 2020 73.47 16,428.15 16,501.62

General reserve:

General reserve is created from �me to �me by way of transfer profits from retained earnings for appropria�onpurposes. General reserve is created by a transfer from one component of equity to another and is not anitem of other comprehensive income.

Retained earnings :

The amount that can be distributed by the Company as dividends to its equity shareholders out of accumulatedreserves is determined considering the requirements of the Companies Act, 2013. Thus, the closing balanceamounts reported above are not distributable in en�rety.

(`. in Lakhs)

52













53

Cash Flow Statementfor the year ended 31st March 2020

(`. in Lakhs)


Cash flows from opera�ng ac�vi�es


Adjustments for :

Deprecia�on and amor�sa�on expense 4,480.69 3,421.91

Finance costs 675.28 338.49

Provision for expected credit loss 393.22 14.42

Interest income (565.25) (248.36)

Profit on sale of property, plant and equipment (Net) - (22.45)

Loss on sale of property, plant and equipment (Net) 33.82 -

Loss on re�rement of property, plant and equipment 54.88 -

Liabili�es no longer payable wri�en back (10.07) (2.83)

Unrealised foreign exchange loss (net) 20.03 -

9,488.49 10,367.04

Working capital adjustments :

Increase/ (decrease) in trade payables 63.76 (6.25)

Increase in financial and other liabili�es 458.91 1,022.54

Increase in provisions 78.67 47.94

(Increase) / decrease in trade receivables 208.24 (187.76)

(Increase) / decrease in inventories 1,182.29 (1,216.75)

(Increase) in loans (19.02) (119.23)

(Increase) in other assets (503.90) (8.21)

Cash generated from opera�ons 10,957.44 9,899.32

Income taxes paid (Net) (1,324.25) (1,591.25)

Net cash generated from opera�ng ac�vi�es (A) 9,633.19 8,308.07

Cash flows from inves�ng ac�vi�es

Payments for purchase of items of property, plant andequipment and other intangible assets (3,288.24) (4,858.76)

Proceeds from sale of items of property, plant andequipment and other intangible assets 69.74 57.30

Proceeds from redemp�on /(payments for purchase)of term deposits (net) 108.11 (102.60)

Interest received 567.40 232.72

Net cash (used in) inves�ng ac�vi�es (B) (2,542.99) (4,671.34)

54

(`. in Lakhs)


Cash flows from financing ac�vi�es

Repayment of non-current borrowings - (1,799.56)

Repayment of current borrowings (net) (2,600.00) (300.00)

Repayment of finance lease liability (977.28) (336.53)

Interest paid (689.13) (328.94)

Net cash (used in) financing ac�vi�es (C) (4,266.41) (2,765.03)

Net increase in cash and cash equivalents (A + B + C) 2,823.79 871.70

Cash and cash equivalents at the beginning of the year 2,128.32 1,256.62

Cash and cash equivalents at the end of the year 4,952.11 2,128.32

Notes :1. The above Cash flow statement has been prepared under the “Indirect Method” set out in Indian Accoun�ng

Standard 7 - Statement of Cash Flows.

As at As at

31 March 2020 31 March 2019

2. Cash and cash equivalents include:

Cash on Hand 11.12 18.21

Balances with banks:

In current accounts 204.99 308.20

Demand Deposit (Less than 3 months maturity) 4,736.00 1,801.91

4,952.11 2,128.32

3. Reconcilia�on of movements of cash flows arising from financing ac�vi�es (`. in Lakhs)

Liabili�es Total

Non-current Currentborrowings borrowings

Balance as at 1 April 2018 3,150.45 2,904.30 6,054.75

Cash Flow from financing ac�vi�es

Repayment of borrowings (1,799.56) (300.00) (2,099.56)

Repayment of finance lease liability (336.53) - (336.53)

Interest paid (293.43) (35.51) (328.94)

Total cash flow from financing ac�vi�es (2,429.52) (335.51) (2,765.03)

Liability related other changes 2,105.55 - 2,105.55

Interest expense 293.43 45.06 338.49 Balance as at 31 March 2019 3,119.91 2,613.85 5,733.76

Repayment of borrowings - (2,600.00) (2,600.00)

Repayment of finance lease liability (977.28) - (977.28)

Interest paid (654.37) (34.76) (689.13)

Total cash flow from financing ac�vi�es (1,631.65) (2,634.76) (4,266.41)

Liability related other changes 2,965.35 972.34 3,937.69

Interest expense 654.37 20.91 675.28

Balance as at 31 March 2020 5,107.98 972.34 6,080.32

(`. in Lakhs)

55













56

Accoun�ng Policies

(Notes to the Ind AS Financial Statements for the years ended 31st March)

1. Repor�ng en�ty

Havmor Ice Cream Private Limited (Formerly, Havmor Ice Cream Limited) (‘the Company’) is a privatelyheld limited Company domiciled in India, with its registered office situated at 2nd floor, Commerce

House 4, besides shell petrol pump, Prahladnagar Anandnagar road, Ahmedabad-380051. The Companyhas been incorporated under the provisions of the Companies Act, 1956 (earlier Act of 2013). The

Company manufactures various flavors of ice creams sold in different forms of consumer packs like

bulk packs, party packs, family packs, sundaes, cups, cones, candies, bars, roll cut slices, etc.

With effect from 18 September 2018, on conversion of public limited company to private limitedcompany, the name of the Company has been changed from Havmor Ice Cream Limited to Havmor

Ice Cream Private Limited.

2. Basis of prepara�on

(a) Statement of compliance

These financial statements have been prepared in accordance with Indian Accoun�ng Standards(Ind AS) as per the Companies (Indian Accoun�ng Standards) Rules, 2015 no�fied under Sec�on

133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act.

The financial statements were authorized for issue by the Company’s Board of Directors on 4

September 2020.

Details of the Company’s accoun�ng policies are included in Note 3.

(b) Func�onal and presenta�on currency

These financial statements are presented in Indian Rupees (Rs.), which is also the Company’sfunc�onal currency. All amounts have been rounded-off to the nearest lakhs, unless otherwiseindicated.

(c) Basis of measurement

The Financial statements have been prepared on the historical cost basis except for the followingitems:

Items Measurement basis

Net defined benefit (asset)/ liability Fair value of plan assets less present value of

defined benefit obliga�ons

57

Notes to the Ind AS Financial (Con�nued)

for the years ended 31st March 2020

2. Basis of prepara�on (Con�nued)

(d) Use of es�mates and judgments

In preparing these financial statements, management has made judgments, es�mates and

assump�ons that affect the applica�on of accoun�ng policies and the reported amounts of assets,liabili�es, income and expenses. Actual results may differ from these es�mates.

Es�mates and underlying assump�ons are reviewed on an ongoing basis. Revisions to accoun�nges�mates are recognised prospec�vely.

Assump�ons and es�ma�on uncertain�es

Informa�on about assump�ons and es�ma�on uncertain�es that have a significant risk of resul�ngin a material adjustment within the next financial year are included in the following notes:

Note 4, 5 and 8 Es�mates of useful lives and residual value of Property, plant andequipment and other intangible assets along with assessment of whetheran arrangement contains an element of lease

Note 13 Allowance for doub�ul debts / expected credit losses

Note 20 Current / Deferred tax expense and recogni�on of MAT Credit and

evalua�on of recoverability of deferred tax assets

Note 36 Measurement of employee defined benefit obliga�ons; key actuarialassump�ons

Note 19 Provisions and con�ngencies

(e) Measurement of fair values

Fair value is the price that would be received to sell an asset or paid to transfer a liability in

an orderly transac�on between market par�cipants at the measurement date. The fair valuemeasurement is based on the presump�on that the transac�on to sell the asset or transfer the

liability takes place either:

(i) In the principal market for the asset or liability, or

(ii) In the absence of a principal market, in the most advantageous market for the asset or

liability.

The fair value of an asset or a liability is measured using the assump�ons that market par�cipantswould use when pricing the asset or liability, assuming that market par�cipants act in their best

economic interest.

The Company uses valua�on techniques that are appropriate in the circumstances and for which

sufficient data are available to measure fair value, maximizing the use of relevant observable

inputs and minimizing the use of unobservable inputs.

58



2. Basis of prepara�on (Con�nued)

(e) Measurement of fair values (Con�nued)

Fair values are categorized into different levels in a fair value hierarchy based on the inputs usedin the valua�on techniques as follows:

• Level 1: quoted prices (unadjusted) in ac�ve markets for iden�cal assets or liabili�es.

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the assetor liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3: inputs for the asset or liability that are not based on observable market data(unobservable inputs).

Further informa�on about the assump�ons made in measuring fair values is included in thefollowing notes:

Note 36 Employee benefits

Note 38 Financial instruments

(f) Opera�ng cycle

All the assets and liabili�es have been classified as current or non-current as per the Company’snormal opera�ng cycle and other criteria set out in the Schedule III to the Companies Act, 2013.Based on the nature of the products and the �me between the acquisi�on of assets for processingand their realiza�on in cash and cash equivalents, the Company has ascertained its opera�ngcycle as 12 months for the purpose of current and non-current classifica�on of assets and liabili�es.

3. Significant accoun�ng polices

(a) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one en�ty and afinancial liability or equity instrument of another en�ty.

(i) Recogni�on and ini�al measurement

A financial asset is recognised in the balance sheet when the Company becomes party tothe contractual provisions of the instrument. At ini�al recogni�on, the Company measuresa financial asset at its fair value plus or minus, in the case of a financial asset not at fairvalue through profit or loss, transac�on costs that are directly a�ributable to the acquisi�onor issue of the financial asset. These includes trade and other receivables, loans, cash andcash equivalents and bank balances.

Financial liabili�es are classified, at ini�al recogni�on, as financial liabili�es measured at

fair value through profit or loss and financial liabili�es measured at amor�zed cost asappropriate.

59



3. Significant accoun�ng polices (Con�nued)

(a) Financial instruments (Con�nued)

All financial liabili�es are recognised ini�ally at fair value and, in case of loans and borrowingsand payables, net of directly a�ributable transac�on costs.

The Company’s financial liabili�es include trade and other payables and loan and borrowings

including bank overdra�s.

(ii) Classifica�on and subsequent measurement

Financial assets: classifica�on

On ini�al recogni�on, a financial asset is classified as measured at

• Amor�zed cost;

• FVTPL (fair value through profit or loss); and

• FVOCI (fair value through other comprehensive income).

Financial assets are not reclassified subsequent to their ini�al recogni�on, except if andin the period the Company changes its business model for managing financial assets.

A financial asset is measured at amor�zed cost if it meets both of the following condi�onsand is not designated as at FVTPL:

• the asset is held within a business model whose objec�ve is to hold assets to collectcontractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flowsthat are solely payments of principal and interest (SPPI) on the principal amount

outstanding.

A financial asset is measured at fair value through other comprehensive income if both

of the following condi�ons are met:

• The financial asset is held within a business model whose objec�ve is achieved by bothcollec�ng the contractual cash flows and selling financial assets; and

• The asset’s contractual cash flows represent SPPI.

On ini�al recogni�on of an equity investment that is not held for trading, the Companymay irrevocably elect to present subsequent changes in the investment’s fair value in Other

Comprehensive Income (OCI) (designated as FVOCI – equity investment). This elec�on is

made on an investment-by-investment basis.

60





All financial assets not classified as measured at amor�zed cost or FVOCI as described aboveare measured at FVTPL. On ini�al recogni�on, the Company may irrevocably designate afinancial asset that otherwise meets the requirements to be measured at amor�zed costor at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accoun�ng mismatchthat would otherwise arise.

At present, the Company does not have any financial asset accounted at FVTPL or FVOCI.

Financial assets: Business model assessment

The Company makes an assessment of the objec�ve of the business model in which afinancial asset is held at a por�olio level because this best reflects the way the businessis managed and informa�on is provided to management. The informa�on consideredincludes:

• the stated policies and objec�ves for the por�olio and the opera�on of those policiesin prac�ce. These include whether management’s strategy focuses on earning contractualinterest income, maintaining a par�cular interest rate profile, matching the dura�on ofthe financial assets to the dura�on of any related liabili�es or expected cash ou�lowsor realizing cash flows through the sale of the assets;

• how the performance of the por�olio is evaluated and reported to the Company’smanagement;

• the risks that affect the performance of the business model (and the financial assetsheld within that business model) and how those risks are managed;

• how managers of the business are compensated – e.g. whether compensa�on is basedon the fair value of the assets managed or the contractual cash flows collected; and

• the frequency, volume and �ming of sales of financial assets in prior periods, the reasonsfor such sales and expecta�ons about future sales ac�vity.

Transfers of financial assets to third par�es in transac�ons that do not qualify forderecogni�on are not considered sales for this purpose, consistent with the Company’scon�nuing recogni�on of the assets.

Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial

asset on ini�al recogni�on. ‘Interest’ is defined as considera�on for the �me value of money

and for the credit risk associated with the principal amount outstanding during a par�cularperiod of �me and for other basic lending risks and costs (e.g. liquidity risk and administra�ve

costs), as well as a profit margin.

61





Financial assets: Business model assessment (Con�nued)

In assessing whether the contractual cash flows are solely payments of principal and interest,

the Company considers the contractual terms of the instrument. This includes assessing

whether the financial asset contains a contractual term that could change the �ming oramount of contractual cash flows such that it would not meet this condi�on. In making

this assessment, the Company considers:

• con�ngent events that would change the amount or �ming of cash flows;

• terms that may adjust the contractual coupon rate, including variable interest rate

features;

• prepayment and extension features; and

• terms that limit the Company’s claim to cash flows from specified assets (e.g. nonrecourse features).

A prepayment feature is consistent with the solely payments of principal and interestcriterion if the prepayment amount substan�ally represents unpaid amounts of principaland interest on the principal amount outstanding, which may include reasonable addi�onalcompensa�on for early termina�on of the contract. Addi�onally, for a financial asset acquiredat a significant discount or premium to its contractual paramount, a feature that permits

or requires prepayment at an amount that substan�ally represents the contractual par

amount plus accrued (but unpaid) contractual interest (which may also include reasonableaddi�onal compensa�on for early termina�on) is treated as consistent with this criterionif the fair value of the prepayment feature is insignificant at ini�al recogni�on.

Financial assets: Subsequent measurement and gains and losses

Financial assets These assets are subsequently measured at fair value. Net gains and

at FVTPL losses, including any interest or dividend income, are recognised in

profit or loss.

Financial assets These assets are subsequently measured at amor�zed cost usingat amor�zed cost the effec�ve interest method. The amor�zed cost is reduced by

impairment losses. Interest income, foreign exchange gains and

losses and impairment are recognised in profit or loss. Any gain orloss on derecogni�on is recognised in profit or loss.

62





Financial assets: Subsequent measurement and gains and losses (Con�nued)

Financial liabili�es are classified as measured at amor�zed cost or FVTPL. A financial liabilityis classified as at FVTPL if it is classified as held-for-trading, or it is a deriva�ve or it isdesignated as such on ini�al recogni�on. Financial liabili�es at FVTPL are measured at fairvalue and net gains and losses, including any interest expense, are recognised in profit orloss. Other financial liabili�es are subsequently measured at amor�zed cost using theeffec�ve interest method. Interest expense and foreign exchange gains and losses arerecognised in profit or loss. Any gain or loss on derecogni�on is also recognised in profitor loss.

(iii) Derecogni�on

Financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flowsfrom the financial asset expire, or it transfers the rights to receive the contractual cashflows in a transac�on in which substan�ally all of the risks and rewards of ownership ofthe financial asset are transferred or in which the Company neither transfers nor retainssubstan�ally all of the risks and rewards of ownership and does not retain control of thefinancial asset.

If the Company enters into transac�ons whereby it transfers assets recognised on its BalanceSheet but retains either all or substan�ally all of the risks and rewards of the transferredassets, the transferred assets are not derecognized.

Financial liabili�es

The Company derecognizes a financial liability when its contractual obliga�ons are dischargedor cancelled, or expire.

The Company also derecognizes a financial liability when its terms are modified and thecash flows under the modified terms are substan�ally different. In this case, a new financialliability based on the modified terms is recognised at fair value. The difference betweenthe carrying amount of the financial liability ex�nguished and the new financial liability withmodified terms is recognised in profit or loss.

(iv) Offse�ng

Financial assets and financial liabili�es are offset and the net amount presented in theBalance Sheet when, and only when, the Company currently has a legally enforceable rightto set off the amounts and it intends either to se�le them on a net basis or to realizethe asset and se�le the liability simultaneously.

63




(b) Property, plant and equipment

(i) Recogni�on and measurement

Items of property, plant and equipment (including capital spares mee�ng the defini�on of

property, plant and equipment) are measured at cost, which includes capitalized borrowingcosts, less accumulated deprecia�on and accumulated impairment losses, if any.

Cost of an item of property, plant and equipment comprises its purchase price, including

import du�es and non-refundable purchase taxes, any directly a�ributable cost of bringingthe item to its working condi�on for its intended use and es�mated costs of dismantlingand removing the item and restoring the site on which it is located but a�er deduc�ngtrade discounts and rebates.

The cost of a self-constructed item of property, plant and equipment comprises the costof materials and direct labour, any other costs directly a�ributable to bringing the itemto working condi�on for its intended use, and es�mated costs of dismantling and removing

the item and restoring the site on which it is located.

If significant parts of an item of property, plant and equipment have different useful lives,

then they are accounted for as separate items (major components) of property, plant andequipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognisedin profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits

associated with the expenditure will flow to the Company.

(iii) Deprecia�on

Deprecia�on is provided on a pro rata basis on the straight line method over the useful

life of the assets based on technical evalua�on done by management’s expert which aredifferent than those prescribed by Schedule II of the Companies Act, 2013, in order to reflect

the actual usage of assets. An item of PPE obtained under finance lease is depreciated

over the shorter of the lease term and its useful life.

The useful life, residual value and the deprecia�on method are reviewed at least at each

financial year end. If the expecta�on differs from previous es�mates, the changes are

accounted for prospec�vely as a change in accoun�ng es�mate.

64




(b) Property, plant and equipment (Con�nued)

(iii) Deprecia�on (Con�nued)

The es�mated useful lives of items of property, plant and equipment are as follows:

Class of assets Management es�mate of useful life

Buildings (Freehold) 30 to 50 years

Plant and machinery (Freehold) 5 to 10 years

Office equipment 5 years

Furniture and fixtures 4 years

Vehicles 4 to 5 years

Computers 3 years

The useful life of following class of property, plant and equipment is based on internaltechnical reassessment from 1 January 2018:

Descrip�on of the asset Es�mated life

Office building 50

Furniture 4

Plant and machineries 10

Cars 4

Leasehold land is amor�zed over the period of lease.

All directly a�ributable expenditure during the project construc�on period are accumulatedand shown as capital work-in-progress un�l the assets are ready for use.

(iv) Derecogni�on

The carrying amount of an item of property, plant and equipment is derecognized on disposalor when no future economic benefits are expected from its use or disposal. The

consequen�al gain or loss is measured as the difference between the net disposal proceeds

and the carrying amount of the item and is recognised in the Statement of Profit and Loss.

(b) Capital work in progress

Cost of assets not ready for intended use, as on Balance Sheet date is shown as capital workin progress. Advances given towards acquisi�on of property, plant and equipment outstandingat each Balance Sheet date are disclosed as other non-current assets.

65




(d) Intangible assets

(i) Recogni�on and measurement

Intangible assets including those acquired by the Company are ini�ally measured at cost.

Such intangible assets are subsequently measured at cost less accumulated amor�za�onand any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefitsembodied in the specific asset to which it relates. All other expenditure is recognised in

profit or loss as incurred.

(iii) Amor�za�on

Intangible assets are amor�zed over their es�mated useful life as follows:

Asset Management es�mate of useful life

Patent and trademark 10 years

So�ware 5 years

The useful life of computer so�ware have been reassessed from 1 January 2018 as 5 yearsfrom 10 years.

Amor�za�on method, useful lives and residual values are reviewed at the end of each

financial year and adjusted if appropriate.

(iv) Derecogni�on

The carrying amount of an intangible asset is derecognized on disposal or when no future

economic benefits are expected from its use or disposal. The gain or loss arising from the

Derecogni�on of an intangible asset is measured as the difference between the net disposalproceeds and the carrying amount of the intangible asset and is recognised in the Statement

of Profit and Loss when the asset is derecognized.

(e) Goodwill

Goodwill represents the cost of the acquired businesses in excess of the fair value of iden�fiabletangible and intangible net assets purchased. Goodwill is not amor�sed; however it is testedannually for impairment and carried at cost less accumulated impairment losses, if any.

66




(f) Foreign currency

Ini�al recogni�on

Ini�al recogni�on of foreign currency transac�ons are recorded by applying to the foreign currencyamount at the exchange rate between the repor�ng currency and the foreign currency at the

date of the transac�on.

Subsequent recogni�on

As at the repor�ng date, non-monetary items which are carried in terms of historical costdenominated in a foreign currency are reported using the exchange rate at the date of thetransac�on. All non-monetary items which are carried at fair value or other similar valua�ondenominated in a foreign currency are reported using the exchange rates that existed when the

values were determined.

Exchange differences on restatement of all monetary items are recognised in the Statement of

Profit and Loss.

(f) Inventories

Inventories which comprise raw materials, packing material, semi-finished goods, finished goods,stock-in-trade and Store, spares and consumables are carried at the lower of cost and net realizablevalue.

Cost of inventories comprises all costs of purchase, costs of conversion and other costs incurredin bringing the inventories to their present loca�on and condi�on.

For determining cost, weighted average cost method is used. Cost of raw materials comprisescost of purchases. The cost of finished goods and work in progress includes raw materials, directlabour, other direct costs and appropriate por�on of variable and fixed overhead expenditurecomputed on normal capacity.

(h) Impairment

(i) Impairment of financial instruments

The Company recognizes loss allowances for expected credit losses on financial assets

measured at amor�zed cost.

At each repor�ng date, the Company assesses whether financial assets carried at amor�zed

cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events thathave a detrimental impact on the es�mated future cash flows of the financial asset have

occurred.

67




(h) Impairment (Con�nued)

Evidence that a financial asset is credit-impaired includes the following observable data:

• significant financial difficulty of the borrower or issuer;

• a breach of contract such as a default or being past due for 90 days or more;

• the restructuring of a loan or advance by the Company on terms that the Company

would not consider otherwise;

• it is probable that the borrower will enter bankruptcy or other financial re-organisa�on.

The Company measures loss allowances at an amount equal to life�me expected creditlosses, except for bank balances for which credit risk (i.e. the risk of default occurring overthe expected life of the financial instrument) has not increased significantly since ini�alrecogni�on, which are measured as 12 month expected credit losses.

The Company follows ‘simplified approach’ for recogni�on of impairment loss allowanceon trade receivables or contract revenue receivables. Under the simplified approach, theCompany is not required to track changes in credit risk. Rather, it recognizes impairmentloss allowance based on life�me ECLs together with appropriate management es�mates for

credit loss at each repor�ng date, right from its ini�al recogni�on.

The Company uses a provision matrix to determine impairment loss allowance of tradereceivables. The provision matrix is based on its historically observed default rates over the

expected life of the trade receivable and is adjusted for forward looking es�mates. At every

repor�ng date, the historical observed default rates are updated and changes in the forward-looking es�mates are analyzed.

Presenta�on of allowance for expected credit losses in the Balance Sheet

Loss allowances for financial assets measured at amor�zed cost are deducted from the grosscarrying amount of the assets.

(ii) Impairment of non-financial assets

Non-financial assets of the Company, other than inventories and deferred tax assets, arereviewed at each repor�ng date to determine whether there is any indica�on of impairment.

If any such indica�on exists, then the asset’s recoverable amount is es�mated.

For impairment tes�ng, assets that do not generate independent cash inflows are groupedtogether into cash-genera�ng units (CGUs). Each CGU represents the smallest group of assets

that generates cash inflows that are largely independent of the cash inflows of other assets

or CGUs.

68




(h) Impairment (Con�nued)

The recoverable amount of a CGU (or an individual asset) is the higher of its value in use

and its fair value less costs to sell. Value in use is based on the es�mated future cash flows,discounted to their present value using a pre-tax discount rate that reflects current market

assessments of the �me value of money and the risks specific to the CGU (or the asset).

The Company’s corporate assets (e.g., central office building for providing support to various

CGUs) do not generate independent cash inflows. To determine impairment of a corporate

asset, recoverable amount is determined for the CGUs to which the corporate asset belongs.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds itses�mated recoverable amount. Impairment losses are recognised in the Statement of Profitand Loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the

carrying amount of any goodwill allocated to the CGU, and then to reduce the carryingamounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.

In respect of other assets for which impairment loss has been recognised in prior periods,the Company reviews at each repor�ng date whether there is any indica�on that the losshas decreased or no longer exists. An impairment loss is reversed if there has been a changein the es�mates used to determine the recoverable amount. Such a reversal is made onlyto the extent that the asset’s carrying amount does not exceed the carrying amount that

would have been determined, net of deprecia�on or amor�za�on, if no impairment losshad been recognised.

(iii) Goodwill:

Goodwill is tested for impairment, at least annually and whenever circumstances indicate

that it may be impaired. For the purpose of impairment tes�ng, the Goodwill is allocatedto a CGU or group of CGUs, which are expected to benefit from the synergies arising from

the business combina�on in which the said Goodwill arose. If the es�mated recoverable

amount of the CGU including the Goodwill is less than its carrying amount, the impairmentloss is allocated first to reduce the carrying amount of any goodwill allocated to the CGU

and then to the other assets of the CGU on a pro-rata basis of the carrying amount ofeach asset in the unit.

(i) Employee benefits

(i) Short-term employee benefits

Short-term employee benefit obliga�ons are measured on an undiscounted basis and areexpensed as the related service is provided. A liability is recognised for the amount expected

to be paid, if the Company has a present legal or construc�ve obliga�on to pay this amount

as a result of past service provided by the employee, and the amount of obliga�on canbe es�mated reliably.

69




(i) Employee benefits (Con�nued)

(ii) Defined contribu�on plans

The Company has defined contribu�on plans for post-employment benefits namely Provident

Fund. Under the Provident Fund Plan, the Company contributes to a Government administeredprovident fund on behalf of its employees and has no further obliga�on beyond making

its contribu�on.

The Company’s contribu�ons to the above funds are charged to Statement of Profit and

Loss every year.

(iii) Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribu�onplan. The Company’s net obliga�on in respect of defined benefit plans is calculated separatelyfor each plan by es�ma�ng the amount of future benefit that employees have earned inthe current and prior periods, discoun�ng that amount and deduc�ng the fair value of anyplan assets.

The calcula�on of defined benefit obliga�on is performed annually by a qualified actuaryusing the projected unit credit method. When the calcula�on results in a poten�al asset

for the Company, the recognised asset is limited to the present value of economic benefitsavailable in the form of any future refunds from the plan or reduc�ons in future contribu�onsto the plan (‘the asset ceiling’). In order to calculate the present value of economic benefits,

considera�on is given to any minimum funding requirements.

Re-measurements of the net defined benefit liability (asset), which comprise actuarial gains

and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling

(if any, excluding interest), are recognised in OCI. The Company determines the net interestexpense (income) on the net defined benefit liability (asset) for the period by applying the

discount rate used to measure the defined benefit obliga�on at the beginning of the annualperiod to the then-net defined benefit liability (asset), taking into account any changes in

the net defined benefit liability (asset) during the period as a result of contribu�ons and

benefit payments. Net interest expense and other expenses related to defined benefit plansare recognised in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resul�ng change

in benefit that relates to past service (‘past service cost’ or ‘past service gain’) or the gainor loss on curtailment is recognised immediately in profit or loss. The Company recognizes

gains and losses on the se�lement of a defined benefit plan when the se�lement occurs.

70




(i) Employee benefits (Con�nued)

(iv) Other long-term employee benefits

The Company’s net obliga�on in respect of long-term employee benefits other than post-employment benefits such as sick leave and leave encashment is the amount of future

benefit that employees have earned in return for their service in the current and priorperiods; that benefit is discounted to determine its present value, and the fair value of

any related assets is deducted. The obliga�on is measured on the basis of an annual

independent actuarial valua�on using the projected unit credit method. Re-measurementsgains or losses are recognised in profit or loss in the period in which they arise.

(j) Provisions and con�ngencies (other than for employee benefits)

A provision is recognised if, as a result of a past event, the Company has a present legal orconstruc�ve obliga�on that can be es�mated reliably, and it is probable that an ou�low of

economic benefits will be required to se�le the obliga�on. Provisions are determined bydiscoun�ng the expected future cash flows (represen�ng the best es�mate of the expenditurerequired to se�le the present obliga�on at the Balance Sheet date) at a pre-tax rate that reflectscurrent market assessments of the �me value of money and the risks specific to the liability.

The unwinding of the discount is recognised as finance cost. Expected future opera�ng losses

are not provided for.

Con�ngencies

Disclosure for a con�ngent liability is made when there is a possible obliga�on or a present

obliga�on that may, but probably will not require an ou�low of resources embodying economic

benefits or the amount of such obliga�on cannot be measured reliably. When there is a possibleobliga�on or a present obliga�on in respect of which likelihood of ou�low of resources embodyingeconomic benefits is remote, no provision or disclosure is made.

Con�ngent asset

Con�ngent assets are not recognized in Financial statements. However, the same is disclosed,

where an inflow of economic benefit is probable.

(k) Revenue

Revenue from contracts with customers is recognised when control of the goods or services are

transferred to the customer. The Company assesses promises in the contract to iden�fy separate

performance obliga�ons to which a por�on of transac�on price is allocated.

71




(k) Revenue (Con�nued)

Revenue from the sale of products is recognised at the point in �me when control is transferredto the customer i.e. generally on the delivery of the goods. Revenue from franchise arrangement

where the franchisee obtains a “right to access” the Company’s intellectual property rights is

recognised over the access period i.e. period of franchise agreement.

Revenue for sale of services is recognised when the services are rendered and there are no

uncertain�es involved to its ul�mate realiza�on.

Revenue is measured based on the transac�on price, which is the considera�on, adjusted forcustomer discounts and incen�ves, if any, as specified in the contract with the customer. Indetermining the transac�on price, the Company es�mates the variable considera�on to the extent

that it is highly probable that a significant reversal in the amount of cumula�ve revenue recognisedwill not occur when the uncertainty associated with the variable considera�on is subsequentlyresolved.

When the level of discount varies with increases in levels of revenue transac�ons, the Companyrecognizes the liability based on its es�mate of the customer’s future purchases. If it is probablethat the criteria for the discount will not be met, or if the amount thereof cannot be es�matedreliably, then discount is not recognised un�l the payment is probable and the amount can be

es�mated reliably. The Company recognizes changes in the es�mated amount of obliga�ons fordiscounts in the period in which the change occurs.

Contract balances

Contract assets

A contract asset is the right to considera�on in exchange for goods or services transferred tothe customer e.g. unbilled revenue. If the Company performs by transferring goods or services

to a customer before the customer pays considera�on or before payment is due, a contract asseti.e. unbilled revenue is recognised for the earned considera�on that is condi�onal. The contract

assets are transferred to receivables when the rights become uncondi�onal. This usually occurs

when the Company issues an invoice to the Customer.

Trade receivables

A receivable represents the Company’s right to an amount of considera�on that is uncondi�onal

i.e. only the passage of �me is required before payment of considera�on is due.

Contract liabili�es

A contract liability is the obliga�on to transfer goods or services to a customer for which theCompany has received considera�on (or an amount of considera�on is due) from the customer.

Contract liabili�es are recognised as revenue when the Company performs under the contract.

72




(l) Government grants

Government grants are recognised where there is reasonable assurance that the grant will be

received and all a�ached condi�ons will be complied with. When the grant relates to revenue,

it is recognised in the Statement of Profit and Loss on a systema�c basis over the periods towhich they relate. When the grant relates to an asset, its value is deducted from the gross carrying

amount of the asset which it relates to and the asset is shown net of the value of the grant.

(m) Leases

(a) The accoun�ng policy pursuant to adop�on of Ind AS 116 applicable for the year endedMarch 31, 2020 is as follows:

Company as a lessee:

Ind AS 116 Leases replaces exis�ng lease accoun�ng guidance i.e. Ind AS 17 Leases. Effec�vefrom 1st April, 2019, the Company adopted Ind AS 116 – Leases and applied the standardto all lease contracts exis�ng as on 1st April, 2019 using the modified retrospec�ve methodon the date of ini�al applica�on i.e. 1st April, 2019. At incep�on of a contract, the Company

assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease ifthe contract conveys the right to control the use of an iden�fied asset for a period of �mein exchange for considera�on. It sets out principles for the recogni�on, measurement,

presenta�on and disclosure of leases and requires lessees to account for all leases, exceptshort-term leases and leases for low-value items, under a single on-balance sheet lease

accoun�ng model. A lessee recognises a right-of-use asset represen�ng its right to use theunderlying asset and a lease liability represen�ng its obliga�on to make lease payments.

Lease term is a non-cancellable period together with periods covered by an op�on to extend

the lease if the Company is reasonably certain to exercise that op�on; and periods covered

by an op�on to terminate the lease if the Company is reasonably certain not to exercise

that op�on.

The Company recognizes a right-of-use asset and a lease liability at the lease commencementdate. The right-of-use asset is ini�ally measured at cost, which comprises the ini�al amount

of the lease liability adjusted for any lease payments made at or before the commencementdate, plus any ini�al direct costs incurred and an es�mate of costs to dismantle and remove

the underlying asset or to restore the site on which it is located, less any lease incen�ves

received. Certain lease arrangements include the op�on to extend or terminate the leasebefore the end of the lease term.

73




(m) Leases (Con�nued)

The right-of-use asset is subsequently depreciated using the straight-line method from thecommencement date to the earlier of the end of the useful life of the right-of-use asset

or the end of the lease term. The es�mated useful lives of right-of-use assets are determined

on the same basis as those of property, plant and equipment. In addi�on, the right-of-useasset is periodically reduced by impairment losses, if any, and adjusted for certain re-

measurements of the lease liability.

The lease liability is ini�ally measured at the present value of the lease payments that arenot paid at the commencement date, discounted using incremental borrowing rate. For

leases with reasonably similar characteris�cs, the Company, on a lease by lease basis, mayadopt either the incremental borrowing rate specific to the lease or the incrementalborrowing rate for the por�olio as a whole.

Lease payments included in the measurement of the lease liability comprises of fixed

payments, including in-substance fixed payments, amounts expected to be payable undera residual value guarantee and the exercise price under a purchase op�on that the Companyis reasonably certain to exercise, lease payments in an op�onal renewal period if theCompany is reasonably certain to exercise an extension op�on.

The lease liability is subsequently remeasured at amor�zed cost using the effec�ve interestmethod. It is remeasured when there is a change in future lease payments arising froma change in an index or rate, if there is a change in the Company’s es�mate of the amount

expected to be payable under a residual value guarantee, or if Company changes itsassessment of whether it will exercise a purchase, extension or termina�on op�on.

When the lease liability is remeasured in this way, a corresponding adjustment is made

to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying

amount of the right-of-use asset has been reduced to zero.

Lease liability and the right of use asset have been separately presented in the balancesheet and lease payments have been classified as financing ac�vi�es.

The Company has elected not to recognize right-of-use assets and lease liabili�es for shortterm leases that have a lease term of less than or equal to 12 months with no purchase

op�on and assets with low value leases. The Company recognizes the lease paymentsassociated with these leases as an expense in statement of profit and loss over the lease

term. The related cash flows are classified as opera�ng ac�vi�es.

74




(m) Leases (Con�nued)

Company as a lessor:

Leases for which the Company is a lessor is classified as a finance or opera�ng lease.Whenever the terms of the lease transfer substan�ally all the risks and rewards of ownership

to the lessee, the contract is classified as a finance lease. All other leases are classifiedas opera�ng leases. Lease income from opera�ng leases where the Company is a lessor

is recognised as income on a straight-line basis over the lease term. The respec�ve leased

assets are included in the Balance Sheet based on their nature.

Transi�on to New Standards

Effec�ve April 1, 2019, the Company has adopted Indian Accoun�ng Standard (Ind AS) 116

“Leases” upon which Right of Use (ROU) assets are recognised on April 1, 2019 for leasespreviously classified as an opera�ng lease. ROU assets are measured at an amount equalto the lease liability, adjusted by the amount of prepaid or accrued lease paymentsrecognised in the balance sheet as at March 31, 2019.

On transi�on, for leases classified as opera�ng leases under Ind AS 17, the lease liabili�esare measured at the present value of the remaining lease payments, discounted at theweighted average incremental borrowing rate of 8.33%.

(b) The accoun�ng policy as per Ind AS 17 – Leases applicable for the compara�ve year endedMarch 31, 2019 is as follows:

Company as a lessee:

Leases in which a significant por�on of the risks and rewards of ownership are not transferredto the Company as lessee are classified as opera�ng leases. Payments made under opera�ng

leases (net of any incen�ves received from the lessor) are charged to profit or loss on a

straight-line basis over the period of the lease unless the payments are structured to increase

in line with expected general infla�on to compensate expected infla�onary cost increasesfor the lessor.

Company as a lessor:

Lease income from opera�ng leases where the Company is a lessor is recognised as income

on a straight-line basis over the lease term unless the receipts are structured to increasein line with expected general infla�on to compensate for the expected infla�onary costincreases. The respec�ve leased assets are included in the Balance Sheet based on their

nature.

75




(n) Recogni�on of interest income or expense

Interest income or expense is recognised using the effec�ve interest method.

The ‘effec�ve interest rate’ is the rate that exactly discounts es�mated future cash payments

or receipts through the expected life of the financial instrument to:

• the gross carrying amount of the financial asset; or

• the amor�zed cost of the financial liability.

(o) Income tax

Income tax comprises of current and deferred tax. It is recognised in the Statement of Profitand Loss except to the extent that it relates to an item recognised directly in equity or in OCI.

(i) Current tax

Current tax comprises of the expected tax payable or receivable on the taxable income orloss for the year and any adjustment to the tax payable or receivable in respect of previousyears. The amount of current tax reflects the best es�mate of the tax amount expected to

be paid or received a�er considering the uncertainty, if any, related to income taxes. It ismeasured using tax rates (and tax laws) enacted or substan�vely enacted by the repor�ngdate.

Current tax assets and current tax liabili�es are offset only if there is a legally enforceableright to set off the recognised amounts, and it is intended to realize the asset and se�le

the liability on a net basis or simultaneously.

For units which enjoy tax holiday benefit, deferred tax assets and liabili�es have been provided

for the tax consequences of those temporary differences between the carrying values of assetsand liabili�es and their respec�ve tax bases that reverse a�er the tax holiday ends.

(ii) Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts

of assets and liabili�es for financial repor�ng purposes and the corresponding amounts usedfor taxa�on purposes. Deferred tax is also recognised in respect of carried forward tax losses

and tax credits.

Minimum Alternate Tax (MAT) eligible for set-off in subsequent years (as per tax laws), is

recognised as an asset by way of credit to the Statement of Profit and Loss only if thereis convincing evidence that sufficient taxable profit will be available against which the unused

tax losses or unused tax credits can be u�lised by the Company. At each Balance Sheet date,

the carrying amount of deferred tax in rela�on to MAT Credit En�tlement receivable isreviewed to reassess realiza�on.

76




(o) Income tax (Con�nued)

Deferred tax assets are recognised to the extent that it is probable that future taxable profitswill be available against which they can be used. The existence of unused tax losses is strong

evidence that future taxable profit may not be available. Therefore, in case of a history of

recent losses, the Company recognizes a deferred tax asset only to the extent that it hassufficient taxable temporary differences or there is convincing other evidence that sufficient

taxable profit will be available against which such deferred tax asset can be realized. Deferredtax assets are reviewed at each repor�ng date and are recognised/ reduced to the extent

that it is probable/ no longer probable respec�vely that the related tax benefit will be realized.

Deferred tax is measured at the tax rates that are expected to apply to the period whenthe asset is realized or the liability is se�led, based on the laws that have been enactedor substan�vely enacted by the repor�ng date.

The measurement of deferred tax reflects the tax consequences that would follow from themanner in which the Company expects, at the repor�ng date, to recover or se�le the carryingamount of its assets and liabili�es.

Deferred tax assets and liabili�es are offset if there is a legally enforceable right to offsetcurrent tax liabili�es and assets, and they relate to income taxes levied by the same tax

authority on the same taxable en�ty, or on different tax en��es, but they intend to se�lecurrent tax liabili�es and assets on a net basis or their tax assets and liabili�es will be realizedsimultaneously.

(iii) Presenta�on of current and deferred tax:

Current and deferred tax are recognised as income or an expense in the Statement of Profitand Loss, except when they relate to items that are recognised in OCI, in which case, the

current and deferred tax income/expense are recognised in OCI.

(p) Borrowing cost

Borrowing costs are interest and other costs incurred in connec�on with the borrowing of funds.Borrowing costs directly a�ributable to acquisi�on or construc�on of an asset which necessarily

take a substan�al period of �me to get ready for their intended use are capitalized as part ofthe cost of that asset. Other borrowing costs are recognised as an expense in the Statement

of Profit and Loss in the period in which they are incurred.

(q) Earnings per share

Basic EPS is computed by dividing net profit a�er taxes for the year by weighted average numberof equity shares outstanding during the financial year, adjusted for bonus share elements in equity

shares issued during the year and excluding treasure shares, if any.

77




(q) Earnings per share (Con�nued)

Diluted earnings per share adjusts the figures used in the determina�on of basic earnings pershare to take into account the a�er income tax effect of interest and other financing costs

associated with dilu�ve poten�al equity shares and the weighted average number of addi�onal

equity shares that would have been outstanding assuming the conversion of all dilu�ve poten�alequity shares.

(r) Segments repor�ng

Opera�ng segments are reported in a manner consistent with the internal repor�ng providedto the Chief Opera�ng Decision Maker (CODM) of the Company. The CODM is responsible foralloca�ng resources and assessing performance of the opera�ng segments of the Company.

(s) Cash and cash equivalents

Cash and Cash equivalents for the purpose of Cash Flow Statement comprise of cash, dra�s andcheques in hand, bank balances, unencumbered demand deposits with banks where the original

maturity is three months or less. Bank overdra�s that are repayable on demand and form anintegral part of the Company’s cash management are included as a component of cash and cashequivalent for the purpose of Cash Flow Statement.

Adjus�ng events (that provides evidence of condi�on that existed at the Balance Sheet date)occurring a�er the Balance Sheet date are recognized in the Financial statements. Material nonadjus�ng events (that are induc�ve of condi�ons that arose subsequent to the Balance Sheet

date) occurring a�er the Balance Sheet date that represents material change and commitmentaffec�ng the financial posi�on are disclosed in the Directors’ Report.

78

Notes to the financial statements (Con�nued)for the year ended 31st March 2020

4. Property, plant and equipment (Con�nued)

A. Reconcilia�on of carrying amount

Leas

eh

old

Bu

ild

ing

Pla

nt

and

Mac

hin

ery

Offi

ceFu

rnit

ure

Ve

hic

les

Co

mp

u-

Tota

lEq

uip

me

nt

and

ters

Fixt

ure

Lan

dLe

ase

ho

ldFr

ee

ho

ldLe

ase

ho

ldFr

ee

ho

ld

N

ote

(i)

No

te (

ii)N

ote

(ii)

No

te (

iv)

bel

ow

bel

ow

bel

ow

bel

ow

Gro

ss B

lock

(A

t co

st)

Bal

ance

as

at 1

Ap

ril

20

18

13

0.2

24

24

.80

1,4

23

.04

1,0

18

.57

11

,03

4.5

01

77

.78

28

6.8

29

46

.61

15

5.5

81

5,5

97.9

2

Ad

di�

on

s-

--

1,9

94.2

03

,015

.25

10

1.2

91

35

.47

33

3.2

56

4.9

25

,644

.38

Ded

uc�

on

s-

--

-(2

0.9

4)

(7.6

9)

(2.0

1)

(31

.90

)(7

.78

)(7

0.3

2)

Ad

just

men

ts [

No

tes

(iii)

bel

ow

]-

-6

5.3

7-

--

--

-6

5.3

7

Bal

ance

as

at 3

1 M

arch

20

19

13

0.2

24

24

.80

1,4

88

.41

3,0

12

.77

14

,02

8.8

127

1.3

84

20

.28

1,2

47.9

62

12

.72

21

,237

.35

Bal

ance

as

at 1

Ap

ril

20

19

13

0.2

24

24

.80

1,4

88.4

13

,01

2.7

71

4,0

28

.81

271.

38

42

0.2

81

,247

.96

21

2.7

22

1,2

37.3

5

Ad

di�

on

s-

--

-3

,602

.57

51.

53

54

.24

22

5.9

41

10

.89

4,0

45.1

7

Ded

uc�

on

s-

-(0

.11

)-

(28

5.6

5)

(5.2

7)

(1.6

1)

(34

.22

)(1

5.3

3)

(34

2.1

9)

Ad

just

men

t o

n a

cco

un

t o

f a

do

p�

on

of

Ind

AS

11

6 [

No

te 3

4]

(13

0.2

2)

(42

4.8

0)

-(3

,01

2.7

7)

--

--

-(3

,567

.79

)

Bal

ance

as

at 3

1 M

arch

20

20

--

1,4

88

.30

-1

7,3

45

.73

31

7.6

447

2.9

11

,43

9.6

83

08

.28

21

,37

2.5

4

Acc

um

ula

ted

de

pre

cia�

on

Bal

ance

as

at 1

Ap

ril

20

18

2.3

34

2.4

85

5.3

51

01

.86

1,9

63.5

35

2.0

11

02.

35

19

2.5

870

.91

2,5

83

.40

Dep

reci

a�o

n f

or

the

year

2.3

34

2.4

85

6.0

427

2.7

92

,457

.55

57.1

81

72.8

72

35

.37

56

.43

3,3

53.0

4

Ded

uc�

on

s-

--

-(1

0.1

8)

(2.5

2)

(0.7

6)

(22

.34

)(3

.92

)(3

9.7

2)

Ad

just

men

ts [

No

tes

(iii)

bel

ow

]-

-6

.40

--

--

--

6.4

0

Bal

ance

as

at 3

1 M

arch

20

19

4.6

68

4.9

61

17

.79

374

.65

4,4

10

.90

10

6.6

727

4.4

64

05

.61

12

3.4

25

,90

3.1

2

Bal

ance

as

at 1

Ap

ril

20

19

4.6

68

4.9

61

17.

79

374

.65

4,4

10.9

01

06.

67

274

.46

40

5.6

11

23

.42

5,9

03.1

2

Dep

reci

a�o

n f

or

the

year

--

59

.34

2,7

24

.45

65

.05

66

.06

273

.23

65

.58

3,2

53.7

1

Ded

uc�

on

s-

-(0

.02

)-

(16

7.8

5)

(4.0

5)

(1.0

9)

(19.

92

)(8

.75

)(2

01.

68

)

Ad

just

men

t o

n a

cco

un

t o

f

ado

p�

on

of

Ind

AS

11

6 [

No

te 3

4]

(4.6

6)

(84

.96

)-

(374

.65

)-

--

--

(46

4.2

7)

Bal

ance

as

at 3

1 M

arch

20

20

--

17

7.1

1-

6,9

67

.50

167

.67

33

9.4

36

58

.92

18

0.2

58

,49

0.8

8

Car

ryin

g am

ou

nts

(n

et)

Bal

ance

as

at 3

1 M

arch

20

19

12

5.5

63

39

.84

1,3

70.6

22

,638

.12

9,6

17.9

11

64.

71

14

5.8

28

42

.35

89

.30

15

,33

4.2

3

Bal

ance

as

at 3

1 M

arch

20

20

--

1,3

11.1

9-

10

,37

8.2

31

49

.97

13

3.4

87

80

.76

12

8.0

31

2,8

81

.66

(`.

in L

akh

s)

79


4. Property, plant and equipment (Con�nued)

Note :

(i) The land is obtained on finance lease and the lease term in respect of the same is 99 years.

(ii) The Company entered into an arrangement whereby the supplier built a plant (including building),which will be used to manufacture ice cream products for the Company under a take or pay agreementfor the contracted period of 10 years. Based on requirements of Ind AS 17, Leases read with AppendixC to the Standard, the arrangement has been assessed to contain a finance lease. Consequently, theunderlying assets have been capitalised (details provided in a table below) with a correspondingfinancial liability represen�ng the discounted value of minimum lease rentals.

The Company has adopted Ind AS 116 “Leases” with effect from April 1, 2019 i.e. date of transi�onwith modified retrospec�ve approach. In respect of leases that were classified as finance leasesapplying Ind AS 17, an amount of Rs 3103.52 Lacs has been reclassified from property, plant andequipment to right-of-use lease assets.(details provided in Note 34).

(iii) During the year 2018-19, the Company has transferred the block of Investment property to Property,plant and equipment as the building previously leased for rental earnings is now used for businesspurposes.

(iv) Vehicles block includes 3 motor cars which were registered in the name of erstwhile Directors havingaggregate gross carrying value Rs. 180.13 lakhs and net carrying value of Rs. 79.88 lakhs as at 31March 2018. During the previous year, the said vehicles have been sold to respec�ve directors.

B. Commitments

For capital commitments made by the Company as at Balance sheet date, see Note 32.

80


5. Right of use assets

A. Reconcilia�on of carrying amount (`. in Lakhs)

Leasehold Building Plant and TotalLand Machinery

Gross Block (At cost)

Balance as at 1 April 2019 - - -

Transi�on impact of Ind AS 116 [Note 34] 3,776.90 117.88 3,894.78

Addi�ons - 1,607.43 1,607.43

Transferred from property, plant and equipment [Note 34] 130.22 424.80 3,012.77 3,567.79

Transferred from prepaid expense 22.89 - 22.89

(Deduc�ons) / Adjustments 438.33 (2,043.04) (1,604.71)

Balance as at 31 March 2020 130.22 4,662.92 2,695.04 7,488.18

Accumulated deprecia�on

Balance as at 1 April 2019 - - - -

Deprecia�on for the year 2.33 622.25 485.92 1,110.50

Transferred from property, plant and equipment 4.66 84.96 374.65 464.27

(Deduc�ons) / Adjustments 37.31 (228.21) (190.90)

Balance as at 31 March 2020 6.99 744.52 632.36 1,383.87

Carrying amounts (net)

Balance as at 31 March 2020 123.23 3,918.40 2,062.68 6,104.31

6. Capital work-in-progress

Reconcilia�on of carrying amount (`. in Lakhs)

Amount

Cost (gross carrying amount)Balance as at 1 April 2018 149.88

Addi�ons 5,751.41Assets capitalised during the year (5,519.09)Balance as at 31 March 2019 382.20

Balance as at 1 April 2019 382.20Addi�ons 4,348.08Assets capitalised during the year (4,506.52)

Balance as at 31 March 2020 223.76

Carrying amounts (net)Balance as at 31 March 2019 382.20Balance as at 31 March 2020 223.76

81


7. Goodwill


Goodwill

Balance as at 1 April 2018 -

Addi�ons -

Deduc�ons -

Balance as at 31 March 2019 -

Balance as at 1 April 2019 -

Addi�ons 421.40

Deduc�ons -

Balance as at 31 March 2020 421.40

Note : The transac�on to acquire the parlour business of M/s Havmor Restaurants Private Limited on a slumpsale and going concern basis was consummated through a Business Transfer Agreement (‘BTA’) on February10, 2020.

The considera�on of Rs 500.97 lacs is towards property, plant and equipment, other assets and net workingcapital.Iden�fiable assets acquired and liabili�es recognised on the date of acquisi�on are based on their fairvalues as presented below :

(`. in Lakhs)

Par�culars Amount

Property, plant and Equipment 80.77

Inventory 21.58

Fixed Deposits 12.87

Deposits 14.83

Pe�y Cash Balance 1.38

Accounts Payable (51.86)

Total iden�fiable net assetsat fair value 79.57

The resultant goodwill amounts to Rs.421.40 lacs. Goodwill paid reflects the premium for gaining immediateentry to parlour market.

82


8. Other Intangible assets


Patents and So�ware Totaltrademark

Gross Block (At cost)

Balance as at 1 April 2018 5.72 261.79 267.51

Addi�ons - 107.03 107.03

Deduc�ons - (7.45) (7.45)

Balance as at 31 March 2019 5.72 361.37 367.09


Addi�ons - 302.91 302.91

Deduc�ons - (20.62) (20.62)


Accumulated amor�sa�on


Deprecia�on for the year 0.77 64.80 65.57

Deduc�ons - (3.20) (3.20)



Deprecia�on for the year 0.67 115.81 116.48

Deduc�ons - (2.91) (2.91)


Carrying amounts (net)



83


9. Loans*

(Unsecured considered good) (`. in Lakhs)


Non-current

Loans and advances to employees 2.75 6.27

Security deposits to vendors 290.82 300.91

293.57 307.18

Current

Loans and advances to employees 30.30 52.39

Security deposits to vendors 54.72 -

Interest accrued on deposits 13.76 7.06

98.78 59.45

Total 392.35 366.63

* No loans are credit impaired and there is no significant increase in credit risk of loans.

10. Other financial assets #


Non-current

Fixed deposits with banks having maturity more than12 months from the repor�ng date * 0.18 -

0.18 -

Total 0.18 -

* Pledged with bank as security against non fund based facili�es obtained from Bankers.

(`. in Lakhs)

84


11. Other assets (`. in Lakhs)


Non-current

Prepaid expenses 0.68 26.51

Capital advances 168.31 747.80

Balance with government authori�es 158.36 27.37

Others - 173.59

Total [A] 327.35 975.27

Current

Prepaid expenses 92.32 83.64

Total [B] 92.32 83.64

Advances to vendors

Unsecured, considered good 629.21 598.23

Unsecured, considered doub�ul 359.08 -

Total 988.29 598.23

Less : Provision for doub�ul advances (359.08) -

Total [C] 629.21 598.23

Total [D = B+C] 721.53 681.87

Total [A+D] 1048.88 1,657.14

12 Inventories(measured at lower of cost and net realisable value) (`. in Lakhs)


Raw materials 4,255.56 5,936.94

Packing materials 507.91 573.59

Semi finished goods 248.51 264.23

Finished goods 1,455.53 946.36

Stock-in-trade 31.80 -

Stores, spares and consumables 394.24 354.72

Total 6,893.55 8,075.84

Notes:

Carrying amount of inventories (included above) pledged as securi�es for borrowings (refer note 17).

85


13. Trade receivables (`. in Lakhs)


Unsecured, considered good 1,090.33 1,332.71

Unsecured, considered doub�ul 130.41 96.27

1,220.74 1,428.98

Less: Provision for expected credit losses 39 (130.41) (96.27)

Total 1,090.33 1,332.71

Notes:

(i) The Company’s exposure to credit risk and loss allowances related to trade receivables are disclosedin Note 39.

(ii) Trade Receivables are pledged against borrowings (refer note 17).

14 Cash and other bank balances (`. in Lakhs)


[A] Cash and cash equivalents

Cash on Hand 11.12 18.21

Balance with banks:

In current accounts 204.99 308.20

Fixed deposit with original maturity of less than 3 months 4,736.00 1,801.91

Total 4,952.11 2,128.32

[B] Other bank balances

Fixed deposits with remaining maturity less than 12 Months* 47.28 164.64

Total 47.28 164.64

* Pledged with bank as security against non fund based facili�es obtained from Bankers.

86


15. Equity share capital (`. in Lakhs)


Authorised Share capital

10,000,000 (31 March 2019: 10,000,000)equity shares of Rs. 10 each 1,000.00 1,000.00

Issued, Subscribed and Paid up capital

10,000,000 (31 March 2019: 10,000,000)equity shares of Rs. 10 each 1,000.00 1,000.00

All issued shares are fully paid up.

Reconcilia�on of share outstanding at the beginning and at the end of the year (`. in Lakhs)


Numbers Amount Numbers Amount

At the beginning and at the end of the year 10,000,000 1,000.00 10,000,000 1,000.00

Rights, preferences and restric�ons a�ached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holderof equity shares is en�tled to one vote per share. In the event of liquida�on of the Company, the holdersof equity shares will be en�tled to receive remaining assets of the Company, a�er distribu�on of allpreferen�al amounts. The distribu�on will be in propor�on to the number of equity shares held by theshareholders.

Details of shares held by the Holding Company (`. in Lakhs)


% holding Amount % holding Amount

99,99,998 shares (31 March 2019 : 99,99,998)held by Lo�e Confec�onery Co. Ltd.,Korea and two shares held by their Nominees 99.99% 1,000.00 99.99% 1,000.00

Details of Share holders holding more than 5% of Shares (`. in Lakhs)

Name of shareholder 31 March 2020 31 March 2019

No. of Shares % holding No. of Shares % holding

Lo�e Confec�onery Co. Ltd., Korea 9,999,998 99.99% 9,999,998 99.99%

Aggregate number of shares issued for considera�on other than cash during the period of five yearsimmediately preceding the repor�ng date

There are no shares allo�ed either as fully paid up by way of bonus shares or under any contract withoutpayment received in cash during 5 years immediately preceding 31 March 2020.

87


16. Other equity (`. in Lakhs)

Par�culars Reserves and surplus

General Retained Totalreserve earnings

Balance as at 1 April 2018 73.47 7,622.78 7,696.25

Total comprehensive income for the year ended 31 March 2019


Items of other comprehensive income for the year, net of taxes



Balance at 31 March 2019 73.47 12,901.75 12,975.22

Total comprehensive income for the year ended 31 March 2020


Items of other comprehensive income for the year, net of taxes



Balance at 31 March 2020 73.47 16,428.15 16,501.62

Analysis of Accumulated OCI (`. in Lakhs)

Remeasurement ofDefined Benefit Liability *

Balance as at 1 April 2018 (2.93)

Re-measurements of defined benefit plans (28.49)

Income tax effect 9.96

Balance as at 31 March 2019 (21.46)

Re-measurements of defined benefit plans (50.10)

Income tax effect 12.61

Balance as at 31 March 2020 (58.95)

* transferred to retained earnings

88


17. Borrowings

[A] Non-current borrowings (`. in Lakhs)


Non-current Current* Non-current Current*

Unsecured

Lease Liability (Refer note 34) 5,107.98 972.34 2,833.28 286.63

Total 5,107.98 972.34 2,833.28 286.63

* Refer “Other current financial liabili�es”.

[B] Current borrowings (`. in Lakhs)


Secured loans from banks

Working capital demand loan (Refer note below) - 2,613.85

Total - 2,613.85

Note :

Short term secured borrowings from banks are secured by first charge on hypotheca�on of stocks, bookdebts, fixed deposits and all other movables, both present and future and further secured by first chargeby way of mortgage on all immovable proper�es. These charges are ranking pari passu among workingcapital lenders. Working capital demand loan is repayable on demand. The rate of interest is 9.60% p.a.

18. Other financial liabili�es (`. in Lakhs)


Current

Current maturi�es of lease liability 17A 972.34 286.63

Deposits from customer and others 4,962.11 3,964.96

Security deposit from vendors 1.00 1.00

Capital creditors 41 1,659.57 1,009.90

Employee benefits payable 350.98 321.56

Discount payable 275.69 429.93

Total 8,221.69 6,013.98

89


19. Provisions (`. in Lakhs)


Non-current

Provision for employee benefits 36

Provision for leave en�tlement 40.40 35.61

Provision for gratuity 103.71 35.31

144.11 70.92

Current

Provision for employee benefits 36

Provision for leave en�tlement 211.57 155.99

Provision for con�ngencies (Refer note below) 40.73 40.73

252.30 196.72

Total 396.41 267.64

Note :

Movement in provision for con�ngencies : (`. in Lakhs)


As at beginning of the year 40.73 42.59

Addi�ons during the year - -

Provision wri�en back during the year - (1.86)

As at end of the year 40.73 40.73

Provision for con�ngencies represents es�mates made for probable liabili�es arising out of pendingassessment or disputes / li�ga�ons with various regulatory authori�es. The �ming of the ou�low withregard to the said ma�er depends on the exhaus�on of remedies available to the Company under relevantlaws and hence the Company is not able to reasonably ascertain the �ming of the ou�low.

90


20. Deferred tax liabili�es / (assets) (net) (`. in Lakhs)


Deferred tax liabili�es:

Difference between WDV of property, plant and equipment,investment property and intangible assets as per books andincome tax 274.10 558.30

Financial asset measured at amor�sed cost - 9.33

Deferred tax assets:

Expenses allowable for tax purpose on payment basis 101.77 95.63

Financial asset measured at amor�sed cost - 10.20

Deferred revenue 26.10 35.57

Allowance for doub�ul debts 123.19 33.64

Others 45.77 49.60

Total (22.73) 342.99

(i) Movements in deferred tax liabili�es / (assets) (net) (`. in Lakhs)

Balance Recognised Recognised Others BalancePar�culars as at in in as at

1 April 2019 profit or loss OCI 31 March 2020

Deferred tax liability

Difference between WDV ofproperty, plant and equipment,investment property andintangible assets as per booksand income tax 558.30 (284.20) - - 274.10

Financial asset measured atamor�sed cost 9.33 (9.33) - - -

Deferred tax assets

Expenses allowable for taxpurpose on payment basis 95.63 (6.47) 12.61 - 101.77

Financial asset measured atamor�sed cost 10.20 (10.20) - - -

Minimum Alternate Tax (MAT)credit en�tlement - - - - -

Deferred revenue 35.57 (9.47) - - 26.10

Allowance for doub�ul debts 33.64 89.55 - - 123.19

Others 49.60 (3.83) - - 45.77

Total 342.99 (353.11) (12.61) - (22.73)

91


20 Deferred tax liabili�es / (assets) (net) (Con�nued) (`. in Lakhs)

Balance Recognised Recognised Others BalancePar�culars as at in in as at

1 April 2018 profit or loss OCI 31 March 2019

Deferred tax liability

Difference between WDV of property,

plant and equipment, investment

property and intangible assets as

per books and income tax 769.25 (210.95) - - 558.30

Financial asset measured at

amor�sed cost 7.14 2.19 - - 9.33

Deferred tax assets

Expenses allowable for tax purpose on

payment basis 30.09 55.58 9.96 - 95.63

Financial asset measured at amor�sed

cost 7.43 2.77 - - 10.20

Minimum Alternate Tax (MAT) credit

en�tlement 263.23 - - (263.23) -

Deferred revenue 26.69 8.88 - - 35.57

Allowance for doub�ul debts 28.33 5.31 - - 33.64

Others 17.94 31.66 - - 49.60

Total 402.68 (312.96) (9.96) 263.23 342.99

The details of MAT credit available and recognised along with their expiry details are as below:

(`. in Lakhs)


MAT credit Expiry MAT credit Expiryavailable assessment year available assessment year

AY 2016-17 - - 135.31 AY 2031-32

AY 2017-18 - - 127.92 AY 2032-33

92


20 Deferred tax liabili�es / (assets) (net) (Con�nued)

(ii) Reconcilia�on of tax expenses and the accoun�ng profit mul�plied by India’s statutory tax rate:

(`. in Lakhs)



Tax using the Company’s statutory tax rate of 34.944% 1,539.59 2,399.21

Effect of

Non deduc�ble expenses 38.00 3.64

Tax holiday incen�ve (574.96) (793.48)

Change in tax rate (19.09) 4.17

Excess provisions of earlier years (210.25) -

Others 68.71 (45.18)

Tax expense at effec�ve tax rate of 19.11 % (2018-19 - 22.843%) 842.00 1,568.36

(iii) Income tax expense recognised in Statement of Profit and Loss

(`. in Lakhs)


Current tax

Current tax on profit for the year 1,405.36 1,881.32

Short provision of tax rela�ng to earlier years (210.25) -

Deferred tax

A�ributable to origina�on and reversal of temporarydifferences [refer note 18(i) above] (353.11) (312.96)

842.00 1,568.36

(iv) Income tax expense recognised in other comprehensive income

(`. in Lakhs)


Deferred tax [refer note 18(i) above]

Deferred tax benefit on remeasurements of defined benefit plan 12.61 9.96

12.61 9.96

93


21. Other liabili�es (`. in Lakhs)


Non-current


33.27 68.10

Current

Customer advances 55.84 129.25


Statutory liability 122.95 484.45

394.78 783.44

Total 428.05 851.54

22. Trade payables (`. in Lakhs)


Total outstanding dues of

Micro enterprises and small enterprises 41 370.14 245.98

Creditors other than micro enterprises and smallenterprises 2,484.97 2,545.37

Total 2,855.11 2,791.35

The Company’s exposure to currency and liquidity risks related to trade payables is disclosed in Note 39.

23. Current tax liability (Net) (`. in Lakhs)


Provision for taxa�on (Net of advance tax) 2.25 124.52

Total 2.25 124.52

24. Revenue from opera�ons (`. in Lakhs)


Revenue from contract with customers

Sale of finished goods 58,940.67 56,147.46

Sale of traded goods 142.28 698.55

Sale of services (Net) 111.02 160.95

Other opera�ng revenue

Opera�ng Income-Sale of Scrap 79.86 86.47

Others 53.07 61.82

59,326.90 57,155.25

94


25. Other income (`. in Lakhs)


Interest income:

on deposits with banks 484.01 227.46

from others 81.24 20.90

Rent income 5.28 21.79

Profit on sale of property, plant and equipment (Net) - 22.45

Liabili�es no longer payable wri�en back 10.07 2.83

580.60 295.43

26. Cost of materials consumed (`. in Lakhs)


Raw material consumed

Inventory of materials at the beginning of the year 5,936.94 4,763.16

Add: Purchases during the year 24,392.84 23,925.39

Less: Inventory of materials at the end of the year 12 4,255.56 5,936.94

26,074.22 22,751.61

Packing material consumed

Inventory of materials at the beginning of the year 573.59 485.29

Add: Purchases during the year 3,413.08 3,773.58

Less: Inventory of materials at the end of the year 12 507.91 573.59

3,478.76 3,685.28

Total 29,552.98 26,436.89

27. Changes in inventories of finished goods, semi finished goods and stock-in-trade (`. in Lakhs)


Inventory at the beginning of the year

Finished goods 946.36 883.57


Stock-in-trade - 105.87

1,210.59 1,306.42

Inventory at the end of the year 12

Finished goods 1,455.53 946.36


Stock-in-trade 31.80 -

1,735.84 1,210.59

Total (525.25) 95.83

95


28. Employee benefits expense (`. in Lakhs)


Salaries, wages and bonus 5,385.52 5,066.14

Contribu�on to gratuity, provident and other funds 36 304.46 295.33

Staff welfare expenses 69.07 108.37

5,759.05 5,469.84

29. Finance costs (`. in Lakhs)


Interest on borrowings 20.91 84.59

Interest on lease liability 632.77 229.50

Interest to others 13.12 7.06

Other borrowing costs 8.48 17.34

675.28 338.49

30. Deprecia�on and amor�sa�on expense (`. in Lakhs)


Deprecia�on on property, plant and equipment 4 3,253.71 3,353.04

Amor�sa�on on right of use assets 5 1,110.50 -

Deprecia�on on investment property - 3.30

Amor�sa�on on intangible assets 8 116.48 65.57

4,480.69 3,421.91

96


31. Other expenses (`. in Lakhs)


Consump�on of stores, spares and consumables 400.95 481.36

Power and fuel 1,438.22 1,312.43

Rent 34 273.53 383.13

Repairs - Buildings 12.97 40.72

- Plant & Machinery 258.63 127.86

- Others 694.33 440.98

Rates and taxes 37.77 22.24

Insurance 91.30 83.22

Travelling expense 821.16 708.75

Contract labour charges 1,454.15 1,513.36

Freight and handling expenses 3,397.61 3,275.33

Adver�sement expenses 3,432.71 2,983.59

Selling and distribu�on expenses 1,721.33 2,002.30

Legal and professional fees 304.39 362.43

Prin�ng, sta�onery and communica�ons expenses 91.87 87.69

Dona�on expenses 0.56 -

Auditors’ remunera�on (refer note (i) below) 17.40 17.16

Provision for expected credit loss 39 393.22 14.42

Director Si�ng Fees 2.80 3.60

Expenditure towards Corporate Social Responsibility (refer note (ii) below) 4.00 4.00

Loss on sale of property, plant and equipment (Net) 33.82 -

Loss on Re�rement of property, plant and equipment 54.88 -

Loss on foreign currency transac�on and transla�on (Net) 22.15 0.89

Miscellaneous expenses 304.07 430.88

15,263.82 14,296.34

97


31. Other expenses (Con�nued)

Note :

(i) Payment to Statutory Auditors (`. in Lakhs)


Payment to auditors (exclusive of goods and service tax)

- as auditor

- Statutory audit 10.00 10.00

- Tax audit 1.00 1.00

- Other services 6.12 6.00

- Reimbursement of expenses 0.28 0.16

Total 17.40 17.16

(ii) Expenditure towards Corporate Social Responsibility (CSR) ac�vi�es (`. in Lakhs)


A. Gross amount required to be spent by the Company 67.96 34.45

B. Amount spent during the year (in cash)

(i) Construc�on/acquisi�on of any asset - -

(ii) On purposes other than (i) above 4.00 4.00

C. Related party transac�ons in rela�on to corporate socialresponsibility - -

D. Provision movement during the year:

Opening provision - -

Addi�on during the year - -

U�lised during the year - -

Closing provision - -

32. Con�ngent liabili�es and Commitments

(i) Con�ngent liabili�es (`. in Lakhs)


Claims against the Company not acknowledged as debts:

- Income tax ma�ers in dispute 240.10 34.11

- Labour law ma�ers in dispute 6.56 5.22

- Disputed demand of Rajasthan Commercial Tax Department (VAT) 44.00 44.00

- Disputed demand of Telangana Commercial Tax Department (VAT) 38.50 -

329.17 83.33

98


32. Con�ngent liabili�es and Commitments (Con�nued)

Notes

(i) Pending resolu�on of the respec�ve proceedings, it is not prac�cable for the Company to es�mate

the �mings of cash ou�lows, if any, in respect of the above as it is determinable only on receipt

of judgments/decisions pending with various forums/authori�es. The Company has reviewed all its

pending li�ga�ons and proceedings and has adequately provided for where provisions are required

and disclosed as con�ngent liabili�es where applicable, in its Ind AS Financial Statements. The Company

does not expect the outcome of these proceedings to have a materially adverse effect on its financial

posi�on.

(ii) The Honourable Supreme Court of India vide its order dated 28th February, 2019 held that ‘Basic

Wages’ for the contribu�on towards Provident Fund (PF) should only exclude [in addi�on to specific

exclusions under Sec�on 2(b)(ii) of the Employees Provident Fund Act, 1952]:

(a) amounts that are payable to the employee for undertaking work beyond the normal work which

he/she is otherwise required to put in and

(b) allowances which are either variable or linked to any incen�ve for produc�on resul�ng in greater

output by an employee and that the allowances are not paid across the board to all employees

in a par�cular category or were being paid especially to those who avail the opportunity.

Further, the proposed Social Security Code, 2019, when promulgated, would subsume labour laws

including Employees’ Provident Funds and Miscellaneous Provisions Act and amend the defini�on of

wages on which the organisa�on and its employees are to contribute towards Provident Fund. The

Company believes that there will be no significant impact on its contribu�ons to Provident Fund due

to the proposed amendments. Addi�onally, there is uncertainty and ambiguity in interpre�ng and

giving effect to the guidelines of Hon. Supreme Court vide its ruling in February 2019, in rela�on

to the scope of compensa�on on which the organisa�on and its employees are to contribute towards

Provident Fund. The Company will evaluate its posi�on and act, as clarity emerges.

(ii) Capital commitments (`. in Lakhs)


Es�mated amount of contracts remaining to be executed oncapital account and not provided for (net of advances) 868.13 990.18

99


33. Segment repor�ng

A. Basis for segmenta�on

In accordance with the requirements of Ind AS 108, Segment Repor�ng, the Company primarilyoperates in the segment of manufacturing and sale of Ice cream and related products. The

Managing Director of the Company allocate resources and assess the performance of the Company,

thus are the Chief Opera�ng Decision Maker (CODM). The CODM monitors the opera�ng resultsof the business as a single segment, hence no separate segment needs to be disclosed.

B. Informa�on about geographical areas

As the Company operates in India only, hence no separate geographical segment is disclosed.

C. Informa�on about major customers

None of the customers account for more than 10% of the revenue of the Company.

34. Leases

Transi�on to Ind AS 116, Leases

Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accoun�ng Standards) AmendmentRules, 2019 and Companies (Indian Accoun�ng Standards) Second Amendment Rules, has no�fied theInd AS 116 Leases which replaces the exis�ng lease standard, Ind AS 17 Leases, and other

interpreta�ons. Ind AS 116 sets out the principles for the recogni�on, measurement, presenta�onand disclosure of leases for both lessees and lessors.

Effec�ve 1 April 2019, the Company adopted Ind AS 116 – Leases and applied the standard to alllease contracts exis�ng on 1 April 2019 using the modified retrospec�ve method. The Company

recorded the lease liability at the present value of the lease payments discounted at the incremental

borrowing rate at the date of ini�al applica�on and right of use asset at an amount equal to the

lease liability adjusted for any prepayments/accruals recognised in the balance sheet as on 31 March2019. There is no impact on retained earnings as on 1st April 2019.

This has resulted in recognizing a right of use lease assets (an amount equal to lease liability, adjustedby pre-paid accrued rent) of Rs 3103.52 Lacs as at 1st April 2019.

The Company has elected below prac�cal expedients on transi�on to Ind AS 116:

1. Applied a single discount rate to a por�olio of leases with reasonably similar characteris�cs.

2. Applied the exemp�on not to recognise right of use assets and lease liabili�es with less than

12 months of lease term on the date of ini�al applica�on.

3. Excluded the ini�al direct costs from the measurement of right of use asset at the date of ini�al

applica�on.

100


34. Leases (Con�nued)

4. Elected not to reassess whether a contract is, or contains a lease at the date of ini�al applica�on.

Instead, for contracts entered into before the transi�on date, the Company relied on its assessmentmade applying Ind AS 17 Leases.

A contract is, or contains, a lease if the contract conveys the right to control the use of an iden�fiedassets for a period of �me in exchange for considera�on.

Ind AS 116 introduces a single, on-balance sheet lease accoun�ng model for lessees. The Companyhas adopted Ind AS 116, effec�ve annual repor�ng period beginning 1 April 2019 and applied the

standards to its leases, prospec�vely, applying the standards on ini�al applica�on without making any

adjustment to opening balance of retained earnings.

The Company has elected not to apply the requirements of Ind AS 116 to short term leases of allthe assets that have a lease term of twelve months or less and leases for which the underlying assetis of low value. The lease payments associated with these leases are recognized as an expense ona straight line basis over the lease term.

The weighted average incremental borrowing rate applied to lease liabili�es as at 1 April 2019 is 10%.

(i) Maturity Analysis of Lease Liabili�es (`. in Lakhs)

Par�culars 31 March 2020

Maturity Analysis - Undiscounted

Less than one year 631.06

One to five years 4,148.49

More than five years 2,871.39

(`. in Lakhs)

Lease liabili�es included in Balance Sheet 31 March 2020

- Current 972.34

- Non-current 5,107.98

(ii) Movement of Lease Liability (`. in Lakhs)

Par�culars 31 March 2020

Balance as at April 1, 2019 8,645.01

Finance costs incurred during the year -107.67

Payment of lease liabili�es -1,000.37

Cancella�on of lease -1,456.64

Balance as at March 31, 2020 6,080.32

101


35. Earnings per share (`. in Lakhs)


Face value per equity share (in Rs.) 10.00 10.00

(a) Profit for the year a�ributable to equity shareholders 3,563.89 5,297.50

(b) Number of equity shares at the beginning andend of the year 10,000,000 10,000,000

(c) Weighted average number of equity shares forcalcula�ng basic and diluted earnings per share 10,000,000 10,000,000

Earnings per share (in Rs.) :

- Basic and Diluted earnings per share (a/c) 35.64 52.97

36. Employee benefits

A. Defined contribu�on plan

The Company makes defined contribu�on to provident and pension fund, employee state insurance

scheme and super annua�on fund.

Amount recognised as expense in the Statement of Profit and Loss (`. in Lakhs)


Employer’s contribu�on to Provident fund and pension scheme 184.52 165.39

Employer’s contribu�on to Employees state insurance scheme 44.63 62.81

Employer’s contribu�on to super annua�on fund - 9.84

229.15 238.04

B. Defined Benefit plan

(i) Gratuity

The Company has defined benefit plans for Gratuity to eligible employees. Valua�on in respect of

gratuity has been carried out by an independent actuary, as at Balance sheet date. The Plan Assetsare administered by Life Insurance Corpora�on of India (“LIC”) and Aditya Birla Sun Life Insurance

Company Limited as per Investment Pa�ern s�pulated for Pension and Group Schemes Fund byInsurance Regulatory and Development Authority regula�ons.

The following tables set out the funded status of the gratuity plans and the amounts recognised inthe Company’s financial statements :

102


36. Employee benefits (Con�nued)

(B) Defined Benefit plan (Con�nued)

(i) Gratuity (Con�nued) (`. in Lakhs)


Reconcilia�on of Opening and Closing Balances of defined benefit obliga�on

Benefit obliga�ons at the beginning 411.46 333.34

Current service cost 72.72 61.25

Past service cost - -

Interest cost 30.10 26.15

Benefits paid (26.74) (25.80)

Net actuarial loss / (gain) recognised 61.07 16.52

Benefit obliga�ons at the end 548.61 411.46

Reconcilia�on of Opening and Closing Balances of the Fair value of plan assets

Fair value of plan assets at the beginning 376.15 383.81

Expected return on plan assets 27.52 30.11

Contribu�ons by the employer 57.00 -

Benefit paid (26.74) (25.80)

Actuarial gain/(loss) on plan assets 10.97 (11.97)

Plan assets at the end of the Year 444.90 376.15

Reconcilia�on of fair value of assets and obliga�on

Fair value of plan assets as at the end of the year 548.61 411.46

Present value of obliga�on as at the end of the year 444.90 376.15

(Liability) recognised in balance sheet (103.71) (35.31)

Current -

Non-current (103.71) (35.31)


Expense recognised in profit or loss

Current service cost 72.72 61.25

Past service cost - -

Interest cost 30.10 26.15

Expected return on plan assets (27.52) (30.11)

75.30 57.29

Remeasurements recognised in other comprehensive income

Due to change in financial assump�ons 25.76 24.69

Due to change in demographic assump�ons 0.01 (4.57)

Due to experience adjustments 35.30 (3.60)

Return on plan assets excluding amounts included in interest income (10.97) 11.97

50.10 28.49

103




(i) Gratuity (Con�nued)

The expected rate of return on assets is based on the expecta�on of the average long term rateof return on investment of the fund, during the es�mated term of obliga�on.

The obliga�ons are measured at the present value of es�mated future cash flows by using a discount

rate that is determined with reference to the market yields at the Balance Sheet date on GovernmentBonds which is consistent with the es�mated terms of the obliga�on.

(`. in Lakhs)


Expected contribu�on during the next financial year 181.68 -

Average outstanding term of the obliga�ons (Years) 6.00 -

Funds managed by insurer 100% 100%

The es�mates of future salary increases, considered in actuarial valua�on, take into account infla�on,

seniority, promo�on and other relevant factors, such as supply and demand and the employmentmarket.

(`. in Lakhs)


Actuarial assump�ons

[A] Financial assump�ons

Discount Rate (per annum) 6.45% 7.30%

Expected rate of return on plan assets 6.45% 7.30%

Salary growth rate 7.00% 7.00%

[B] Demographic assump�ons

Withdrawal rates 13.00% 13.00%

Mortality IALM (2012-14) IALM (2006-08)Ul�mate Ul�mate

Sensi�vity analysis

Reasonably possible changes at the repor�ng date to one of the relevant actuarial assump�ons holdingother assump�ons constant, would have affected the defined benefit obliga�on / asset by the amount

shown below:(`. in Lakhs)


Increase Decrease Increase Decrease

Discount rate (1% movement) 518.58 581.96 389.77 435.46

Salary growth rate (1% movement) 580.44 519.34 434.53 390.11

A�ri�on rate (0.50% movement) 535.40 566.37 406.74 415.19

104




(i) Gratuity (Con�nued)

The sensi�vity analyses presented above may not be representa�ve of the actual change in the definedbenefit obliga�on as it is unlikely that the change in assump�ons would occur in isola�on of oneanother as some of the assump�ons may be correlated. Furthermore, in presen�ng the above

sensi�vity analysis, the present value of the defined benefit obliga�on has been calculated using the

projected unit credit method at the end of the repor�ng period, which is the same as that applied

in calcula�ng the defined benefit obliga�on liability recognised in the Balance Sheet.

(ii) Other long term employee benefits

Leave benefits

The Company has defined benefit plans for leave encashment and compensated absences to eligibleemployees. Valua�on in respect of leave encashment and compensated absences have been carried out

by an independent actuary, as at Balance sheet date. The Plan Assets are administered by Life InsuranceCorpora�on of India (“LIC”) and Aditya Birla Sun Life Insurance Company Limited as per Investment Pa�ern

s�pulated for Pension and Group Schemes Fund by Insurance Regulatory and Development Authorityregula�ons.

Amount of Rs. 91.81 lakhs (31 March 2018: Rs. 83.55 lakhs) towards leave benefits is recognised as an

expense and included in “Employee benefits expense” in the Statement of Profit and Loss.


Actuarial assump�ons

[A] Financial assump�ons

Discount Rate (per annum) 6.45% 7.30%

Expected rate of return on plan assets 6.45% 7.30%

Salary growth rate 7.00% 7.00%

[B] Demographic assump�ons

Withdrawal rates 13.00% 13.00%

Mortality IALM (2012-14) IALM (2006-08)Ul�mate Ul�mate

Leave availment rate 0% 0%

105


37. Related party transac�ons

A. List of related par�es

(i) Holding Company

Lo�e Confec�onery Co. Ltd., Korea (W.e.f 16 December 2017)

(ii) Fellow subsidiaries with whom the Company had transac�ons during the year

Lo�e India Corpora�on Limited

(iii) Key management personnel

Mr. Jung Yung Kang Managing Director (W.e.f. 16 December 2017 to 16 October 2018)

Mr. Jung Yung Kang Execu�ve Director & COO (W.e.f 16 October 2018 to 11 March 2020)

Mr. Jung Yung Kang Chairman & Execu�ve Director (W.e.f 11 March 2020 to �ll date)

Mr. Park Byung Chan Whole Time Director (W.e.f 8 January 2018 to �ll date)

Mr. Mang Ko Noh Chairman & Non Execu�ve Director (W.e.f 16 December 2017 to 11 March 2020)

Mr. Anindya Sundar Du�a Managing Director (W.e.f 16 October 2018 to �ll date)

Mr. D.G. Rajan Independent Director (W.e.f 16 December 2017 to 18 Sept 2018)

Mr. D.G. Rajan Non Execu�ve Director (W.e.f 19 Sept 2018 to �ll date)

Mr. Kim Kyunghun Director (W.e.f 1 August 2019 to 11 March 2020)

B. Transac�ons with related par�es (`. in Lakhs)

Nature of Transac�on 31 March 2020 31 March 2019

Lo�e Confec�onery Co. Ltd., Korea

Sale of products (including GST) 0.14 -

Purchase of materials 21.17 -

Management consultancy charges 100.00 -

Royalty for brand usage 14.44 -

Training charges 0.03 -

Courier charges for material sold 0.20 -

Lo�e India Corpora�on Limited

Purchase of materials (including taxes) - 101.60

Rent expense (including taxes) 2.40 2.14

Reimbursement of expenses paid - 53.92

106


37. Related party transac�ons (Con�nued)

C. Compensa�on to Key managerial personnel (`. in Lakhs)


Short term employee benefits # 222.35 217.94

Director Si�ng Fees 2.80 3.60

# Key Managerial Personnel who are under the employment of the Company are en�tled to post

employment benefits and other long term employee benefits recognised as per Ind AS 19, EmployeeBenefits in the financial statements. As these employee benefits are lump sum amounts provided on the

basis of actuarial valua�on, the same is not included above.

D. Balances with related par�es (`. in Lakhs)

31 March 2020 31 March 2019

Rent deposit receivable

Lo�e India Corpora�on Limited 2.00 2.00

Trade payables

Lo�e India Corpora�on Limited 0.55 34.08

Lo�e Confec�onery Co. Ltd., Korea 103.00 -

E. Terms and condi�ons

The terms and condi�ons of the transac�ons with related par�es were no more favourable than thoseavailable, or those which might reasonably be expected to be available, in respect of similar transac�ons

with unrelated en��es on an arm’s length basis. All outstanding balances are unsecured.

107

Notes to the financial statements (con�nued)for the year ended 31 March 2020

38. Fair Value Measurements

A. Financial instruments by category and their fair value

As at 31st March 2020 (`. in Lakhs)

Par�culars Carrying amount Fair value

FVTPL FVOCI Amor�sed Total Level 1 - Level 2 - Level 3 - TotalCost Quoted price Significant Significant

in ac�ve observable unobservablemarkets inputs inputs

Financial assets

Loans - - 392.35 392.35 - - - -

Trade receivables - - 1,090.33 1,090.33 - - - -

Cash and cashequivalents - - 4,952.11 4,952.11 - - - -

Other bankbalances - - 47.28 47.28 - - - -

Other financialassets - - 0.18 0.18 - - - -

Total financial assets - - 6,482.25 6,482.25 - - - -


Borrowings(Including currentmaturi�es) - - 6,080.32 6,080.32 - - - -

Trade payables - - 2,855.11 2,855.11 - - - -

Other financialliabili�es - - 7,249.35 7,249.35 - - - -

Total financialliabili�es - - 16,184.78 16,184.78 - - - -

108


38. Fair Value Measurements (con�nued)

A. Financial instruments by category and their fair value (con�nued)

As at 31st March 2019 (`. in Lakhs)

Par�culars Carrying amount Fair value

FVTPL FVOCI Amor�sed Total Level 1 - Level 2 - Level 3 - TotalCost Quoted price Significant Significant

in ac�ve observable unobservablemarkets inputs inputs

Financial assets

Loans - - 366.63 366.63 - - - -

Trade receivables - - 1,332.71 1,332.71 - - - -

Cash andcash equivalents - - 2,128.32 2,128.32 - - - -

Other bankbalances - - 164.64 164.64 - - - -

Other financialassets - - -....... -....... - - - -

Total financialassets - - 3,992.30 3,992.30 - - - -


Borrowings(Including currentmaturi�es) - - 5,733.76 5,733.76 - - - -

Trade payables - - 2,791.35 2,791.35 - - - -

Other financialliabili�es - - 5,727.35 5,727.35 - - - -

Total financial liabili�es - - 14,252.46 14,252.46 - - - -

# Fair value of financial assets and liabili�es measured at amor�sed cost is not materially different from the amor�sedcost. Further, impact of �me value of money is not significant for the financial instruments classified as current.

Accordingly, the fair value has not been disclosed separately.

109


38. Fair Value Measurements (con�nued)

B. Measurement of fair values

Types of inputs for determining fair value are as under:

Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2 : The fair value of financial instruments that are not traded in an ac�ve market (for example,traded bonds, over-the counter deriva�ves) is determined using valua�on techniques whichmaximise the use of observable market data and rely as li�le as possible on en�ty-specifices�mates. If all significant inputs required to fair value an instrument are observable, theinstrument is included in level 2.

Level 3 : These instruments are valued based on significant unobservable inputs whereby futurecash flows are discounted using appropriate discount rate.

Transfers between Levels 1 and 2

There have been no transfers between Level 1 and Level 2 during the repor�ng periods

Level 3 fair values

Transfer out of Level 3

There were no movement in level 3 in either direc�ons during the financial year ending on 31 March2020 and 31 March 2019.

39 Financial instruments risk management objec�ves and policies

The Company has in place a well-defined risk management policy. The management regularly reviewsthe risk and take appropriate steps to mi�gate the risk. The Company has a robust Business RiskManagement (BRM) frame work to iden�fy, evaluate business risks and opportuni�es. This frameworkseeks to create transparency, minimize adverse impact on the business objec�ves and enhance theCompany’s compe��ve advantage. The Company has exposure to the following risks arising fromfinancial instruments:

• Credit risk ;

• Liquidity risk ; and

• Market risk

110


39 Financial instruments risk management objec�ves and policies (con�nued)

(i) Credit risk

Credit risk is the risk that a customer or counterparty to a financial instrument will fail to performor fail to pay amounts due causing financial loss to the Company. The poten�al ac�vi�es where creditrisks may arise include from cash and cash equivalents, security deposits or other deposits, loansand advances to employees and customer receivables. The maximum credit exposure associated withfinancial assets is equal to the carrying amount. Details of the credit risk specific to the Companyalong with relevant mi�ga�on procedures adopted have been enumerated below:

Trade and other receivables

The Company’s exposure to credit Risk is the exposure that Company has on account of goods suppliedto a contractual counterparty or counterpar�es, whether with collateral or otherwise for which thecontracted considera�on is yet to be received. All receivables are reviewed and assessed for defaulton a quarterly basis.

The Company provides for allowance for impairment that represents its es�mate of expected lossesin respect of trade and other receivables. The Company has used a prac�cal expedient by compu�ngthe expected credit loss allowance for trade receivables based on a provision matrix.

Age of receivables (`. in Lakhs)


Not Due 670.81 783.56

0-3 Months 388.31 463.22

3-6 Months 11.64 95.89

6-9 Months 46.06 33.78

9-12 Months 16.01 3.44

> 1 year 87.91 49.09

1,220.74 1,428.98

Generally credit period is 7 Days to 90 Days. The above receivables which are past due but not impairedare assessed on case-to-case basis. Management is of the view that these financial assets are not

impaired as there has not been any adverse change in credit quality and are envisaged as recoverable

based on the historical payment behaviour and extensive analysis of customer credit risk, includingunderlying customers’ credit ra�ngs, if they are available. Consequently, no addi�onal provision has

been created on account of expected credit loss on the receivables. There are no other classes offinancial assets that are past due but not impaired. The provision for impairment of trade receivables,

movement of which has been provided below, is not significant / material. The concentra�on of credit

risk is low due to fact that the customer base is large and unrelated.

111



(i) Credit risk (con�nued)

Movements in Expected Credit Loss allowance (`. in Lakhs)


Balance at the beginning of the year 96.27 81.85

Movements in allowance 34.14 14.42

Closing balance 130.41 96.27

The maximum exposure to credit risk for financial assets by geographic region was as follows:

(`. in Lakhs)


India 1,090.33 1,332.71

1,090.33 1,332.71

Other financial assets

Other financial assets includes cash and cash equivalents, security deposits or other deposits, loansand advances to employees etc.

• Cash and cash equivalents and Bank deposits are placed with banks having good reputa�on andpast track record with adequate credit ra�ng.

• Loan and advances to employees are unsecured in nature. Based on historical ternds, the

management does not forsee any credit risk.

• The Company has given security deposits to various government authori�es and other par�es.

Based on historical ternds, the management does not forsee any credit risk.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in mee�ng the obliga�ons associated

with its financial liabili�es that are proposed to be se�led by delivering cash or other financial asset.The Company’s financial planning has ensured, as far as possible, that there is sufficient liquidity to

meet the liabili�es whenever due, under both normal and stressed condi�ons, without incurring

unacceptable losses or risking damage to the Company’s reputa�on. The Company has prac�cedfinancial diligence and syndicated adequate liquidity in all business scenarios.

112



(ii) Liquidity risk (con�nued)

Financing arrangement

The Company had access to the following undrawn borrowing facili�es at the end of the repor�ngperiod:

(`. in Lakhs)


Floa�ng rate

Expiring within one year(bank overdra� and other facili�es) 5,000.00 4,400.00

Total 5,000.00 4,400.00

Further, the Company has also �ed-up addi�onal sources of liquidity to meet the liabili�es duringthe respec�ve annual years which has ensured that the Company has a clean track record with noadverse events pertaining to liquidity risk.

Exposure to liquidity risk

The following are the remaining contractual maturi�es of financial liabili�es at the repor�ng date.

The amounts are gross and undiscounted, and include es�mated interest payments and exclude theimpact of ne�ng agreements.

(`. in Lakhs)

Carrying Contractual cash flows

As at 31st March 2020 amount Total Less than More than12 months 12 months

Non-deriva�ve financial liabili�es

Borrowings 6,080.32 6,080.32 972.34 5,107.98

Trade payables 2,855.11 2,855.11 2,855.11 -

Other financial liabili�es 7,249.35 7,249.35 7,249.35 -

Total 16,184.78 16,184.78 11,076.80 5,107.98

113



(ii) Liquidity risk (con�nued)

(`. in Lakhs)

Carrying Contractual cash flows

As at 31st March 2019 amount Total Less than More than12 months 12 months

Non-deriva�ve financial liabili�es

Borrowings 5,733.76 5,733.76 286.63 5,447.13

Trade payables 2,791.35 2,791.35 2,791.35 -

Other financial liabili�es 5,727.35 5,727.35 5,727.35 -

Total 14,252.46 14,252.46 8,805.33 5,447.13

(iii) Market risk

Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates

and equity prices – will affect the Company’s income or the value of its holdings of financial

instruments. Price risk is not applicable to the Company.

Currency risk

Transac�ons executed in foreign exchnage are not material and hence, the currency risk isinsignificant.

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value

interest rate risk is the risk of changes in fair values of fixed interest bearing investments because

of fluctua�ons in the interest rates. Cash flow interest rate risk is the risk that the future cash flowsof floa�ng interest bearing investments will fluctuate because of fluctua�ons in the interest rates.

The Company’s por�olio of borrowings comprises only floa�ng rate loans which are monitoredcon�nuously in the light of market condi�ons. The below carrying amount exclude the oblga�on under

finance lease and working capital demand loan.

114



(iii) Market risk (con�nued)

(`. in Lakhs)

Fixed-rate instruments 31 March 2020 31 March 2019

Financial assets 4,783.46 1,966.55

Financial liabili�es - -

Variable-rate instruments

Financial assets - -

Financial liabili�es - -

Sensi�vity analysis

Profit or loss is sensi�ve to higher/lower interest expense from borrowings as a result of change ininterest rates. The following table demonstrates the sensi�vity of floa�ng rate financial instrumentsto a reasonably possible change in interest rates. The risk es�mates provided assume a parallel shi�of 50 basis points interest rate across all yield curves. This calcula�on also assumes that the change

occurs at the balance sheet date and has been calculated based on risk exposures outstanding asat that date. The year end balances are not necessarily representa�ve of the average debt outstanding

during the period.

Sensi�vity analysis (`. in Lakhs)

Par�culars Impact on profit before tax

31 March 2020 31 March 2019

Interest rate

- increase by 50 basis points - -

- decrease by 50 basis points - -

40. Capital management

The Company defines capital as total equity including issued equity share capital and all other equityreserves of the Company (which is the Company’s net asset value). The primary objec�ve of theCompany’s financial framework is to support the pursuit of value growth for shareholders, whileensuring a secure financial base.

The Company monitors capital using a ra�o of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose,adjusted net debt is defined as total liabili�es, comprising interest-bearing loans and borrowings andobliga�ons under finance leases, less cash and cash equivalents. Adjusted equity comprises allcomponents of equity.

115


40. Capital management (con�nued)

The Company’s adjusted net debt to equity ra�o was as follows : (`. in Lakhs)


Total borrowings 17 6,080.32 5,733.76

Less: cash and bank balances 14 4,999.39 2,292.96

Adjusted net debt 1,080.93 3,440.80

Equity share capital 1,000.00 1,000.00

Other equity 16,501.62 12,975.22

Total equity 17,501.62 13,975.22

Adjusted net debt to adjusted equity ra�o 0.06 0.25

41 Details of Dues to Micro, Small & Medium Enterprises as defined under MSMED Act, 2006

(`. in Lakhs)


Trade Capital Trade Capitalpayables creditors payables creditors

The principal amount remaining unpaid to any supplierat the end of each accoun�ng year; 350.09 124.19 225.93 95.95

The interest due thereon remaining unpaid to anysupplier at the end of each accoun�ng year; 20.05 - 20.05 -

The amount of interest paid by the buyer in terms ofsec�on 16 of the Micro, Small and Medium EnterprisesDevelopment Act, 2006 (27 of 2006), along withthe amount of the payment made to the supplierbeyond the appointed day during each accoun�ng year; 5,224.38 156.74 1,415.07 -

The amount of interest due and payable for the periodof delay in making payment (which has been paid butbeyond the appointed day during the year) but withoutadding the interest specified under the Micro, Small andMedium Enterprises Development Act, 2006; - - 5.70 -

The amount of interest accrued and remaining unpaid atthe end of each accoun�ng year; and 20.05 - 20.05 -

The amount of further interest remaining due and payableeven in the succeeding years, un�l such date when theinterest dues above are actually paid to the smallenterprise, for the purpose of disallowance of a deduc�bleexpenditure under sec�on 23 of the Micro, Small and

Medium Enterprises Development Act, 2006. - - - -

116


41. Details of Dues to Micro, Small & Medium Enterprises as defined under MSMED Act, 2006 (con�nued)

The disclosure in respect of the amount payable to enterprises which have provided goods and servicesto the Company and which qualify under the defini�on of micro and small enterprises, as defined

under Micro, Small and Medium Enterprises Development Act, 2006 has been made in the Financialstatement as at the repor�ng date based on the informa�on received and available with the Company.

On the basis of such informa�on, no interest is payable to any micro, small and medium enterprises.

42. Impact of COVID – 19

The outbreak of Coronavirus (COVID-19) pandemic globally and in India is causing significant

disturbance and slowdown of economic ac�vity. COVID-19 is significantly impac�ng business opera�on

of the companies, by way of interrup�on in produc�on, supply chain disrup�on, unavailability ofpersonnel, closure / lock down of produc�on facili�es etc. On 24th March 2020, the Government

of India ordered a na�onwide lockdown for 21 days which further got extended on �me to �meand it is extended �ll 31st May 2020 to prevent community spread of COVID-19 in India resul�ngin significant reduc�on in economic ac�vi�es.

The Company is closely monitoring the impact of the pandemic on all aspects of its business, including

how it will impact its customers, employees, vendors and business partners. The management hasexercised due care, in concluding on significant accoun�ng judgements and es�mates, inter-alia,recoverability of receivables, assessment for impairment of assets, intangible assets, inventory, basedon the informa�on available to date, both internal and external, while preparing the financialstatements as of and for the year ended 31st March, 2020. The impact of the global health pandemic

may be different from the es�mated as at the date of approval of these financial statements andthe Company will con�nue to closely monitor any material changes to future economic condi�ons.

The Company believe that the factors considered are reasonable under the current circumstances.

43. Disclosures under Ind AS 115, Revenue from contracts with customers

(i) Reconcilia�on the amount of revenue recognised in the Statement of Profit and Loss with the

contracted price:

(`. in Lakhs)


Revenue as per contracted price 62,133.01 58,977.83

Adjustments

Discounts (2,806.11) (1,822.58)

Revenue from contract with customers 59,326.90 57,155.25

117


43. Disclosures under Ind AS 115, Revenue from contracts with customers (con�nued)

(ii) Contract balances

The following table provides informa�on about receivables, contract assets and contract liabili�es

from the contracts with customers.

(`. in Lakhs)


Trade receivables 1,090.33 1,332.71

Contract liabili�es - deferred revenue /customer advances

Non-current 33.27 68.10

Current 271.83 298.99

The contract assets primarily relate to the Company’s right to considera�on for work completed

but not billed at the repor�ng date. The contract assets are transferred to receivables when the

rights become uncondi�onal. This usually occurs when the Company issues an invoice to theCustomer. The contract liabili�es primarily relate to the advance considera�on received from thecustomers. Revenue recognised that was included in the contract liability balance at the beginningof the period are Rs. 307.89 lakhs for the year ended 31 March 2020 (31 March 2019: Rs. 249.90lakhs).

(iii) Disaggrega�on of revenue

The management is of the view that above informa�on and the segment informa�on as reportedunder Note 33 Segment repor�ng is sufficient to meet the disclosure objec�ve with respect to

disaggrega�on of revenue based on products and services under Ind AS 115, Revenue from

contract with Customers. Accordingly, no seperate disclosure is provided.

118


44. Previous year compara�ves

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year’s

classifica�on.

As per our report of even date a�ached.











HAVMOR ICE CREAM PRIVATE LIMITED...Ahmedabad - 380015 Name HAVMOR ICE CREAM PRIVATE LIMITED 2nd...

Documents

Transcript of HAVMOR ICE CREAM PRIVATE LIMITED...Ahmedabad - 380015 Name HAVMOR ICE CREAM PRIVATE LIMITED 2nd...