1. Corporate Information

Hindustan Tin Works Limited ("the Company") is a public company incorporated on 11th December, 1958; equity shares of the company are listed on Bombay Stock Exchange, Calcutta Stock Exchange and Delhi Stock Exchange. The company is engaged mainly in the business of Manufacturing of Tin Cans, Printed/Lacquered Sheets, Components and trading in Tin Plates.

Notes:

1. Trade receivables are non-interest bearing and are generally on terms of 30 to 180 days.

2. No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Trade receivables include due from firms or private companies respectively in which any director is a partner, a director or a member to Rs. 19.40 Lakhs (31 March 2017: Rs. Nil, 1 April 2016: Rs 3.03 Lakhs)

(b) Terms/rights attached to equity shares

The company has issued only one class of equity shares having par value of INR 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting,

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

Notes:

a. Vehicle loans

1. Vehicle loans carry varies interest rate from 8.70% to 11.30% and repayable within 3 years. These loans are secured by hypothecation of vehicles purchased for which loan is received.

b. Foreign currency Term loan

1. Foreign currency term loans from Kotak Bank Limited

The loan taken in FCTL carrying interest link to the LIBOR (hedged at) 1.60% 4.00%

i. Rs.597.98 Lakhs loan is repayable monthly installments upto October, 2020. The loan is secured by pari-passu first charge on movable Fixed Assets of the company both present and future and Equitable Mortgage of immovable Murthal Property in addition by second charge on current assets of the company and guaranteed by Directors namely S/Sh. Vijay Bhatia, Ashok Bhatia and Sanjay Bhatia.

ii. Rs. 204.58 Lakhs loan is repayable monthly installments upto March, 2020. The loan is secured by first and exclusive Equitable Mortgage Charge on immovable Fixed Assets of the company being JA-0818 and JA- 0819 Jasola Office premises New Delhi and guaranteed by Directors namely S/Sh. Vijay Bhatia, Ashok Bhatia and Sanjay Bhatia.

2. ECB from Standard Chartered bank - Rs. 958.53 Lakhs loan carries interest rate LIBOR 3.00% rate. The loan is secured by pari-passu first charge on movable Fixed Assets of the company both present and future and Equitable Mortgage of immovable Murthal Property in addition by second charge on current assets of the company and guaranteed by Directors namely S/Sh. Vijay Bhatia, Ashok Bhatia and Sanjay Bhatia.

c. Term Loan From Banks

Term loan from Yes bank - The loan carries interest rate @ 0.95% spread over and above one year MCLR, repayable as - One Year Moratorium period for principle and thereafter monthly installment of principle. The term loan is secured by pari-passu first charge on movable Fixed Assets of the company both present and future and Equitable Mortgage of immovable Murthal Property in addition by second charge on current assets of the company and guaranteed by Directors namely S/Sh. Vijay Bhatia, Ashok Bhatia and Sanjay Bhatia.

Notes:

1. Short-term loan from bank is repayable within 180 days due in April 2018 and is guaranteed by Directors namely S/Sh. Vijay Bhatia, Ashok Bhatia and Sanjay Bhatia.

2. The loan is secured against subservient charge on the current asset and moveable fixed assets of the Company both present and future and guaranteed by Sh. Sanjay Bhatia.

3. Working Capital limits are secured by pari-passu first charge on Current Assets of the company both present and future and in addition by second charge on moveable fixed assets and Equitable Mortgage of immoveable Murthal property of the company The above working capital limits are guaranteed by Directors namely S/ Sh. Vijay Bhatia, Ashok Bhatia, and Sanjay Bhatia.

4. The above loan is against bill discounting of suppliers qauranteed by Directors namely S/ Sh. Vijay Kumar Bhatia, Ashok Kumar Bhatia, and Sanjay Bhatia.

Details of dues to micro, small and medium enterprises as defined under MSMED Act, 2006.

There are no micro, small and medium enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at March 31, 2018. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company,

2. Post employment benefit plans: Gratuity and Leave encashment

The Company has a funded defined benefit gratuity and leave encashment plan.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit.

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

Due to its defined benefit plans, the Company is exposed to the following significant risks:

Changes in return on plan assets - A decrease in return on plan assets will increase plan liability.

Salary risk - The present value of the defined benefit plans liability is calculated by reference to the future salaries of the plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability,

3. Segment reporting

The primary segment reporting format is determined to be business segments as the company's risks and rates of return are affected predominantly by differences in the nature of services rendered. Secondary information is reported geographically. The operating businesses are organized and managed separately according to the nature of the services provided, with each segment representing a strategic business unit that offers different services and serves different markets.

4. Significant accounting judgements, estimates and assumptions

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

Judgements

In the process of applying the Company's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

Taxes

Significant judgements are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.

The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. The policy for the same is explained in Note 2.2.14

Useful life of property, plant and equipment

The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.

Provisions and contingent liabilities

A provision is recognised when the Company has a present obligation as a result of past event if it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits and leave encashment) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance sheet date. These are reviewed at each Balance sheet date and adjusted to reflect the current best esitmates. Contingent liabilities are not recognised in financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.

Further details about gratuity obligations are given in Note 28.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Carrying value and approximate fair values of financial instruments are same.

5. Financial risk management objectives and policies

The Company's activities expose it to a variety of financial risks : market risk, credit risk and liquidity risk. The primary market risk to the Company is foreign exchange risk. The Company's exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers.

Market risk

The Company is exposed to foreign exchange risk through its sales and services outside India, and purchases and services from overseas suppliers in various foreign currencies. The exchange rate between the rupee and foreign currencies may fluctuate substantially in the future. Consequently, the results of the Company's operations are adversely affected as the rupee appreciates / depreciates against these currencies.

Credit risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. Trade receivables are typically unsecured and are derived from revenue earned from customers located primarily in India. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks.

Liquidity risk

The Company's principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company has no outstanding bank borrowings. The Company believes that the working capital is sufficient to meet its current requirements.

6. Commitments and contingencies

a. Leases

Operating lease commitments — Group as lessee

The Company has entered into operating leases on immovable properties and plant and machinery, with lease terms upto six years.

The Company has paid INR 38.71 Lakhs, (31 March 2017: INR 11.87 Lakhs) during the year towards minimum lease payment.

(i) Compensation suit filed under section 12B of MRTP Act by M/s Himalaya International Ltd. has been decided in favour of the complainant by the MRTP Commission (now competition appellate tribunal) vide order dated 07.07.2008. The total amount involved is Rs. 349.75 lacs. The company has filed an appeal before the Hon'ble Delhi High Court for the relief and Hon'ble High Court has remanded back the matter to Competition appellate tribunal and the tribunal has passed judgment in favour of the company, M/s Himalayan International Limited has filed an appeal before Appellate Tribunal for reviewing the decision now appellate tribunal has dismissed the case in the hearing held on 2nd September 2015 by taking cognizance of the pendency of civil suit in the Hon'ble Delhi High Court which was instituted by M/s Himalaya International Ltd. Suit filed in the Hon'ble Delhi High Court has now been transferred to Hon'ble Tis Hazari District Court Delhi by order dated 28.1 1.2015 in view of Notification No 27187/DHC/Orgl dated 24.11.2015 and the case is now being heard in Hon'ble Tis Hazari District Court Delhi.

(ii) Rs 21.34 Lakhs for the year 2008-09 to 2017-18 may be payable to Haryana Sales Tax Department towards L.A.D.T. The company has filed an appeal before the Hon'ble High Court Chandigarh for the relief and the Hon'ble High Court has granted stay against L.A.D.T. and declared L.A.D.T. unconstitutional. The department has filed Appeal before the Hon'ble Supreme Court for granting stay and the same is pending, however no demand has been raised by the Haryana Sales Tax Department.

(iii) The Company purchased 7.55 bigha land in Katha Baddi in 2006-07 for setting up a new project but due to change in Tax Policy of the Central Government, company could not set up the unit with in specified/ extended time allowed u/s 118 of Himachal Pradesh Tenancy and Land Reform Act 1972.The purchase price of the same is Rs 189.84 lac. District Collector (DC), Solan had issued show cause notice to acquire the land as per the provision of the Act. The reply of the notice was filed and the company through its legal representative has argued the case. The District Collector has given the judgment which is not in favor of the company. The company has filed appeal against the order of the District Collector with Divisional Commissioner (Appeal) and the proceeding is pending.

c. Capital commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for in the books of account as at March 31, 2018 is Rs. 53.64 Lakhs (31 March 2017: Rs. 5.45 Lakhs, 1 April 2016: Rs. 158.51 Lakhs).

7. Few export consingments are reported damaged in transit. The consignments are insured and under investigation by the insurer, the impact of which is yet to be ascertained on the Company. Since the financial implications is yet to be quantified, no provision is made in the books.

8. Reconciliation from previous GAAP

The following reconciliations provide a quantification of the effect of differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101 whereas the notes explain the significant differences thereto.

I. Balance sheet reconciliations as of April 1, 2016 and March 31, 2017.

II. Reconciliations of statement of profit and loss for the year ended March 31, 2017

II. Notes to the balance sheet and statement of profit and loss reconciliations

IV. Explanation of material adjustments to statement of cash flows

III. Notes to the balance sheet and statement of profit and loss reconciliations

1. Proposed dividend

Under previous GAAP dividend on equity shares recommended by the board of directors ('proposed dividend') was recognised as a liability in the financial statements in the period to which it relates. Under Ind As, such dividend is recognised as a liability when approved by the shareholders in the general meeting. The Company accordingly, has de-recognised the proposed dividend liability with the corresponding increase being recognised in equity.

2. Sale of goods

Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus sale of goods under Ind AS has increased by INR 2,334.97 Lakhs with a corresponding increase in other expense.

3. Remeasurement differences

Under previous GAAP there was no concept of other comprehensive income and hence, previous GAAP profit is reconciled to total comprehensive income as per Ind AS. Under previous GAAP the remeasurements of the net defined benefit liability were recognised in the statement of profit and loss. Under Ind AS, the said remeasurement differences net of the related tax impact are recognised in other comprehensive income.

IV. Explanation of material adjustments to statement of cash flows

There were no material differences between the statements of cash flows presented under Ind AS and the Previous GAAP except due to definition of Cash and cash equivalents under these two GAAPs.

9. Previous year audit was done by M/s M.L. Puri & Co., Chartered Accountants.