SAIBA Industries Private Limited Financials – FY -2016-17 · 2017-11-13 · Companies Act, 2013...

SAIBA Industries Private Limited Financials – FY -2016-17

Independent Auditor’s Report To the Members of Saiba Industries Private Limited Report on the Standalone Ind AS Financial Statements We have audited the accompanying standalone Ind AS financial statements of Saiba Industries Private Limited(‘the Company’), which comprise the balance sheet as at 31 March 2017, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as “standalone Ind AS financial statements”). Management’s Responsibility for the Standalone Financial Statements The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued there under. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion In our opinion and to the best of our information and according to the explanations given to us, the afore said standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31 March, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date. Report on Other Legal and Regulatory Requirements 1 As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central

Government of India in terms of section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the order.

2 As required by Section 143(3) of the Act, we report that: (a) we have sought and obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purposes of our audit. (b) in our opinion proper books of account as required by law have been kept by the Company so

far as it appears from our examination of those books; (c) the balance sheet, the statement of profit and loss, the statement of cash flows and the statement

of changes in equity dealt with by this Report are in agreement with the books of account; (d) in our opinion, the aforesaid standalone Ind AS financial statements comply with the

Accounting Standards specified under Section 133 of the Act read with relevant rule issued there under;

(e) on the basis of the written representations received from the directors as on 31 March 2017

taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the

Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule

11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company does not have any pending litigations which would impact its financial

position; ii. the Company did not have any long-term contracts including derivative contracts for

which there were any material foreseeable losses; iii. there were no amounts which were required to be transferred to the Investor Education and

Protection Fund by the Company.

iv. the Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period

from 8 November, 2016 to 30 December, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Notes to the standalone Ind AS financial statements.

for BATLIBOI & PUROHIT Chartered Accountants Firm Reg. No.: 101048W Kaushal Mehta Partner Membership No: 111749 Place : Mumbai Date : May 11, 2017

Annexure - A to the Auditors’ Report The Annexure referred to in Independent Auditors’ Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31 March 2017, we report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management during the previous year under a program of verification of fixed assets once in every 3 years, which in our opinion, is reasonable having regard to the size of the company and nature of its assets. No material discrepancies were identified on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

(ii) The management has conducted physical verification of inventory at reasonable intervals during the year. Discrepancies noted on physical verification of inventories were not material, and have been properly dealt with in the books of account.

(iii) The Company has not granted any loans, secured or unsecured to Companies, Firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act. Accordingly, paragraph 3(iii) (a), (b) and (c) of the Order are not applicable to the Company.

(iv) According to the information and explanations given to us, the Company has not granted any loans, made investments, given guarantees and security. Accordingly, the paragraph 3(iv) of the Order is not applicable to the Company.

(v) The Company has not accepted any deposits from the public. (vi) To the best of our knowledge and as explained, the Central Government has not specified

the maintenance of cost records under clause 148(1) of the Companies Act, 2013 for the Company. Accordingly, paragraph 3 (vi) of the Order are not applicable to the Company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, income-tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of employees’ state insurance and duty of excise.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues were in arrears as at 31 March 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, outstanding dues of sales tax that have not been deposited by the Company on account of disputes:

Name of the

Statute Nature of

Dues Amount in (Rs.)

Period to which the amount relates

Forum where dispute is pending

Sales Tax Act Sales Tax 13,50,063 1989-90 High Court, Mumbai



Sales Tax Act Sales Tax 11,42,060 2005-06 Joint commissioner of Sales Tax (Appeals)

Sales Tax Act Sales Tax 87,90,872 2010-11 Commissioner of Sales Tax (Appeals)

(viii) Based on our audit procedures and as per information and explanation given by the

management, the Company did not have any outstanding dues in respect of loans or borrowings from any financial institution, bank, government or debenture holders.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) The Company has not paid any remuneration to managerial personnel. Accordingly, the paragraph 3(xi) of the Order is not applicable.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.


Annexure - B to the Auditors’ Report Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Saiba Industries Private Limited (“the Company”) as of 31 March 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimely preparation of reliable financial information, as required under the Companies Act,2013. Auditors’ Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company'sinternalfinancialcontroloverfinancialreportingincludesthosepoliciesandproceduresthat (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) providereasonableassuranceregardingpreventionortimelydetectionofunauthorisedacquisition,use, or disposition of the company's assets that could have a material effect on the financialstatements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. for BATLIBOI & PUROHIT Chartered Accountants Firm Reg. No.: 101048W Kaushal Mehta Partner Membership No:111749 Place : Mumbai Date : May 11, 2017

Saiba Industries Private Limited

Balance sheet as at 31 March 2017 In INR

Note As at 31 March 2017

As at 31 March 2016 As at 1 April 2015

I. ASSETS(1) Non-current assetsProperty, Plant and Equipment 2 49,54,938 6,73,21,438 7,08,97,818 Investment property 3 14,76,92,186 - - Other Intangible assets 4 40,938 52,615 - Intangible assets under development 4 - - 13,002 Financial Assets

Loans 5 15,38,379 15,38,379 10,38,379 Others 6 35,98,867 33,60,754 31,19,311

Income tax assets (net) 32,27,476 8,75,706 8,75,706 Total non current assets 16,10,52,784 7,31,48,892 7,59,44,216

(2) Current AssetsInventories 7 34,46,776 36,66,302 55,75,145 Financial Assets

Trade receivables 8 1,39,31,948 1,26,61,692 1,08,78,822 Cash and cash equivalents 9 40,17,887 50,69,816 15,60,191 Loans 10 25,000 25,000 5,25,000 Others 11 23,60,938 48,838 93,842

Other current assets 12 6,16,991 8,28,705 7,20,552 Total current assets 2,43,99,540 2,23,00,353 1,93,53,552

TOTAL ASSETS 18,54,52,324 9,54,49,245 9,52,97,768 II. EQUITY AND LIABILITIES(1) Equity Equity share capital 13 21,98,000 21,98,000 21,98,000 Other equity 14 7,72,89,911 6,79,19,804 6,02,60,846 Total equity 7,94,87,911 7,01,17,804 6,24,58,846

(2) Non current liabilitiesLong term provisions 15 1,52,937 1,09,814 85,000 Deferred tax liabilities (net) 21 1,10,69,802 85,41,891 70,76,177 Total non current liabilities 1,12,22,739 86,51,705 71,61,177

(3) Current liabilitiesFinancial liabilities

Borrowings 16 8,50,00,000 - - Trade payables 17 33,61,409 27,40,052 66,57,900 Other financial liabilities 18 45,12,511 1,16,52,373 1,26,27,915

Other current liabilities 19 1,66,583 2,69,828 42,06,995 Short term provisions 20 10,14,293 10,11,854 10,09,000 Current tax liability (net) 6,86,878 10,05,630 11,75,936 Total Current liabilities 9,47,41,674 1,66,79,737 2,56,77,746 Total liabilities 10,59,64,413 2,53,31,442 3,28,38,923

TOTAL EQUITY AND LIABILITIES 18,54,52,324 9,54,49,245 9,52,97,768

As per our report of even dateFor Batliboi & Purohit

Chartered AccountantsICAI Firm Regn. no. 101048W

Kaushal Mehta Ramesh VazePartner Director Membership No: 111749 DIN: 00509751

Place: Mumbai Date: May 11, 2017 Date: May 11, 2017

For and on behalf of the Board of Directors of

Saiba Industries Private Limited CIN: U15495MH1960PTC011658

Prabha VazeDirector

DIN: 00509817


Statement of profit and loss for the year ended 31 March 2017Year ended Year ended

Note 31 March 2017 31 March 2016 Revenue I. Revenue from Operations (Gross) 22 4,98,92,842 4,30,06,904 II. Other income 23 43,55,837 4,04,952 III. Total Income (I+II) 5,42,48,679 4,34,11,856 IV. Expenses

Cost of materials consumed 24 1,38,42,273 1,13,03,329 Changes in inventories of finished goods, work-in-progress and stock-in-trade 25 6,20,966 15,82,241 Employee Benefits Expenses 26 35,71,611 36,23,085 Excise Duty 28,42,113 24,33,496 Depreciation and Amortization Expenses 27 22,62,498 36,04,359 Finance costs 28 47,19,091 - Other Expenses 29 1,08,38,658 94,38,672

Total Expenses (IV) 3,86,97,210 3,19,85,182 V. Profit/(loss) before Exceptional Items and Tax 1,55,51,469 1,14,26,674 VI. Exceptional Items - - VII. Profit/(loss) before Tax 1,55,51,469 1,14,26,674 VIII. Tax expense:

1. Current Tax 21 52,68,260 38,80,000 2. Deferred Tax 21 (4,48,755) (79,484) 3. Adjustment for tax of earlier years 10,45,259 -

IX. Profit/(Loss) for the year 96,86,705 76,26,158

X. Other comprehensive income Items that will not be reclassified into profit or loss:

Remeasurements of defined benefit liability/asset (4,72,979) 48,999 Income tax related to items that will not be reclassified to profit or loss 1,56,381 (16,201)

(3,16,598) 32,798

XI. Total comprehensive income for the year 93,70,107 76,58,957

XII. Earnings per equity share 30 1. Basic earnings per share 4,407 3,470 2. Diluted earnings per share 4,407 3,470


Chartered AccountantsICAI Firm Regn. no. 101048W CIN: U15495MH1960PTC011658

Kaushal Mehta Ramesh Vaze Prabha VazePartner Director DirectorMembership No: 111749 DIN: 00509751 DIN: 00509817

Place: Mumbai Mumbai Date: May 11, 2017 Date: May 11, 2017



In INR


Statement of Changes in Equity (SOCIE)Amount in INR

(a) Equity share capitalNo. of Shares Amount No. of Shares Amount

Balance at the beginning of the reporting period 2,198 21,98,000 2,198 21,98,000 Changes in equity share capital during the year - - - - Balance at the end of the reporting period 2,198 21,98,000 2,198 21,98,000

(b) Other equity

Particulars General Reserve

Retained earnings

Balance at 1 April 2015 45,55,629 5,57,05,217 6,02,60,846 6,02,60,846 - Profit for the year - 76,26,158 76,26,158 76,26,158

Other comprehensive income for the year - 32,798 32,798 32,798 Total comprehensive income for the year - 76,58,957 76,58,957 76,58,957

- Balance as at 31 March 2016 45,55,629 6,33,64,174 6,79,19,803 6,79,19,803 - Profit for the year - 96,86,705 96,86,705 96,86,705

Other comprehensive income for the year - (3,16,598) (3,16,598) (3,16,598) Total comprehensive income for the year - 93,70,107 93,70,107 93,70,107

- - Balance at 31 March 2017 45,55,629 7,27,34,281 7,72,89,910 7,72,89,910




Place: Mumbai Date: May 11, 2017 Date: May 11, 2017

Prabha VazeDirector

DIN: 00509817



As at 31 March 2017

Reserves & Surplus

Total Equity

As at 31 March 2016

Attributable to owners of the Company

Total


Statement of cash flows for the year ended 31 March 2017 In INR Year ended 31

March 2017 Year ended 31

March 2016

1,55,51,469 1,14,26,674

Depreciation and amortisation 22,62,498 36,04,359 Sundry balances written back - (82,423) Actuarial gain/loss on defined benefit obligations (4,72,979) 48,999 Provision for doubtful debts 4,34,863 2,73,106 Interest income (2,64,572) (3,22,529) Rental income from investment property (40,37,000) Balances written off - 13,002 Interest on loan 47,19,091 -

26,41,901 35,34,514

(Increase) / decrease in inventories 2,19,527 19,08,843 (increase) / decrease in trade receivables (17,05,119) (20,55,976) (increase) / decrease in loans (21,00,386) (63,153) Increase / (decrease) in trade payables 6,21,357 (38,35,425) Increase / (decrease) in financial liabilities and provisions 4,37,767 (48,85,042)

(25,26,855) (89,30,753) (58,50,992) (25,21,306) 98,15,524 35,09,129

(1,34,79,256) (80,594) Payment for purchase of investment property (8,34,57,531) Decrease / (increase) in margin deposits and other bank balances (1,08,323) (2,59,649) Interest received 1,34,782 3,40,739 Rent received from investment property 40,37,000 -

(9,28,73,328) 496

Interest paid (29,94,124) - Loan received 8,80,00,000 - Loan repaid (30,00,000) -

8,20,05,876 - (10,51,929) 35,09,625 50,69,816 15,60,191 40,17,887 50,69,816

(b) Refer note 9 for break up of cash and cash equivalents.




Place:Mumbai Date: May 11, 2017 Date: May 11, 2017

DIN: 00509817



Prabha VazeDirector

(a) The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Indian Accounting Standard(Ind AS-7) - Statement of Cash Flow.

Cash and cash equivalents at the beginning of the yearCash and cash equivalents at the end of the year

Cash flow from operating activitiesProfit before taxAdjustments for:

Working capital adjustments

Cash flow from financing activities

Net cash flows from financing activitiesNet increase / (decrease) in cash and cash equivalents

Income Tax paid

Cash flow from investing activitiesPayment for purchase and construction of property, plant and equipment

Net cash flows from operating activities

Net cash flows from investing activities


Notes to the financial statementsAs at 31 March 2017

In INRParticulars

31 March 2017 31 March 2016 1 April 2015

Note 5Loans

Unsecured, considered goodSecurity Deposits 15,38,379 15,38,379 10,38,379

15,38,379 15,38,379 10,38,379

Note 6Others

Interest accrued on deposits 2,38,113 1,08,323 1,26,529 Fixed Deposit with Banks* 33,60,754 32,52,431 29,92,782

35,98,867 33,60,754 31,19,311 * Lodged with SBI Bank as guarantee for payment of sales tax.

Note 7Inventories

Raw Materials 4,78,754 1,06,452 4,05,275 Packing Materials 90,589 61,451 89,230 Work-in-Progress 28,77,433 34,98,399 50,80,640

34,46,776 36,66,302 55,75,145

Note 8Trade receivables

Unsecured, considered good From related parties* 51,17,482 37,10,862 - Others 95,28,759 92,30,260 1,08,85,146

Loss allowance (7,14,293) (2,79,430) (6,324) 1,39,31,948 1,26,61,692 1,08,78,822

*Pertains to Keva Flavours Private Limited, in which, Directors of the Company are Directors

Note 9Cash and cash equivalents

Balance with banks :In current account 40,10,730 48,86,147 14,35,882

Cash on hand 7,157 1,83,669 1,24,309 40,17,887 50,69,816 15,60,191

Other bank balances

Deposit with original maturity of more than 3 months but less than 12 months 33,60,754 32,52,431 29,92,782 Less: Shown under other non-current financial assets 33,60,754 32,52,431 29,92,782

- - -

Note 10LoansUnsecured, Considered GoodSecurity deposits - Sales tax - - 5,00,000 Security deposits - Rent 25,000 25,000 25,000

25,000 25,000 5,25,000

Note 11Others

Rent receivable * 23,12,100 - - Loans and advances to employees - - 45,000 Interest Receivable on GSPC deposit 48,838 48,838 48,842

23,60,938 48,838 93,842 * Rent receivable from S.H. Kelkar Company Limited of INR 2,312,100 (31 March 2016: Rs. Nil; 1 April 2015: Rs. Nil)

Note 12Other current assets

Prepaid Expenses 40,798 29,997 11,718 Balance with statutory/government authorities 2,90,774 46,537 10,350 Prepaid Gratuity asset 2,85,419 7,52,171 6,98,484

6,16,991 8,28,705 7,20,552


Notes to the financial statements (Continued)As at 31 March 2017

Note 14 Other Reserves Retained earnings 7,27,34,282 6,32,60,470 5,57,09,352 General reserve 45,55,629 45,55,629 45,55,629

7,72,89,911 6,78,16,099 6,02,64,981

General Reserve is a free reserve which is created by transferring funds from retained earnings to meet future obligations or purposes.

Note 15Long term provisionsProvision for employee benefits

Compensated Absences 1,52,937 1,09,814 85,000 1,52,937 1,09,814 85,000

Note 16BorrowingsLoans repayable on demand (from related parties)Borrowing from S H Kelkar and Company Limited 8,50,00,000

8,50,00,000 The loan taken from S H Kelkar and Company Limited is repayable on demand and bears an interest rate of 9% to 9.5%%

Note 17Trade payables

Trade payables - Others 33,61,409 27,40,052 66,57,900 33,61,409 27,40,052 66,57,900

Note 18Other financial liabilitiesOther payables

Related party 17,35,020 29,810 14,35,208 Others 24,51,925 19,24,856 16,95,022

Employee Dues 3,25,566 3,37,428 1,37,406 Liability towards purchase of Fixed Asset (related party) - 93,60,279 93,60,279

45,12,511 1,16,52,373 1,26,27,915

Note 19Other current liabilitiesAdvances from customers

Related party - - 40,15,662 Others 4,642 19,470 6,820

Statutory Dues Payables* (includes VAT, Excise Duty, Provident Fund, Withholding Taxes, etc.) 1,61,941 2,50,358 1,84,513 1,66,583 2,69,828 42,06,995

* There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

Note 20Short term provisions

Provision for employee benefitsCompensated Absences 14,293 11,854 9,000

Other provision :For Litigations * 10,00,000 10,00,000 10,00,000

10,14,293 10,11,854 10,09,000 * Pertains to sales tax matters

* The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 ("the Act"), hence disclosures required to be made under the Act has not been given.


Notes to the financial statementsFor the year ended 31 March 2017

Particulars Year ended Year ended31 March 2017 31 March 2016

Note 22Revenue from Operations

A. Sales of products and ServicesSale of products (including Excise duty) 4,98,69,268 4,29,91,816

4,98,69,268 4,29,91,816

B. Other operating revenueScrap sales 23,574 15,088

23,574 15,088

Total 4,98,92,842 4,30,06,904

Note 23Other Income

Interest on Deposits with Banks measuered at amortised cost 2,64,572 2,68,264 Interest on GSPC deposits measuered at amortised cost 54,265 54,265 Sundry Balances Written Back - 82,423 Rental income from investment property 40,37,000 - Total Other income 43,55,837 4,04,952

Note 24Cost of materials consumed

Inventory at the beginning of the year 1,67,903 4,94,504 Add: Purchases 1,42,43,713 1,09,76,728 Less: Inventory at the end of the year 5,69,343 1,67,903 Total Cost of Raw Material Consumed 1,38,42,273 1,13,03,329

Note 25Changes in inventories of finished goods, work-in-progress and stock-in-trade

Opening Stock :Work-in-Progress 34,98,399 50,80,640 Less:Closing Stock:Work-in-Progress 28,77,433 34,98,399

Changes In Inventories:Work-in-Progress 6,20,966 15,82,241 Changes in inventories of work in progress 6,20,966 15,82,241

Note 26Employee benefits expense

Salaries and Wages 32,02,277 31,94,928 Contribution to Provident and Other Funds 2,64,333 2,94,877 Staff Welfare Expenses 1,05,001 1,33,280 Employee benefits expense 35,71,611 36,23,085

Note 27Depreciation and amortisation expenseDepreciation of property, plant and equipment 5,31,934 35,94,974 Depreciation of investment property 17,18,887 - Amortisation of intangible asset 11,677 9,385

22,62,498 36,04,359 Note 28Finance costs Interest on loan measured at amortised cost 47,19,091 -

47,19,091 -

In INR


Notes to the financial statements (Continued)For the year ended 31 March 2017

Note 29Other Expenses

Repairs and Maintenance: - Buildings 4,75,056 2,84,820 - Plant and Machinery 1,46,598 66,433 - Others 34,455 1,14,852 Rates and Taxes 3,04,671 6,55,370 Power and Fuel 49,00,700 40,90,448 Commission and Brokerage 16,50,241 22,74,399 Freight and Forwarding 2,79,463 3,70,641

Postage and Telephone Expenses 92,674 1,00,851 Travelling and Conveyance 1,10,375 49,673 Security Charges 3,72,815 2,86,274 Legal and Professional Charges 4,30,586 3,22,157 Stationery & Printing Expenses 1,26,558 1,37,365 Provision for Doubtful Trade Receivables / Advances / Deposits 4,34,863 2,73,106 Payment to Auditors (refer below) 95,289 1,56,525 Bank Charges 3,636 12,734 Miscellaneous Expenses 1,92,296 2,30,022 Contract Labour 11,88,382 - Sundry Balances written off - 13,002

1,08,38,658 94,38,672

Payment to auditors

As auditorAudit fee 73,289 62,975 Tax audit fee 22,000 25,190 Other services - 68,360

95,289 1,56,525


Notes to the financial statements

1) General information

Saiba Industries Private Limited (‘Saiba’ or ‘the Company’) was incorporated under the provisions of the Companies Act, 1913 (‘the Act’) and the registeredaddress of the company is Devkaran Mansion, 36, Mangaldas Road, Mumbai – 400002. The Company is engaged in flavours ingredients business.

2) Basis of accounting

The accompanying financial statements have been prepared in accordance with the accounting principles generally accepted in India, including the IndianAccounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards)(Ammendment) Rules, 2016 notified under section 133 of the Companies Act, 2013, (the 'Act') and other relevant provisions of the Act.The Company's financial statements up to and for the year ended 31 March 2016 were prepared in accordance with the Companies (Accounting Standards)Rules, 2006 notified under the section 133 of the Act and other relevant provisions of the Act. As these are the Company’s first financial statements prepared in accordance with Ind AS, Ind AS 101, First-time adoption of Indian Accounting Standards hasbeen applied. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of theCompany is provided in Note 38.The standalone financial statements for the year ended 31 March 2017 have been reviewed and subsequently approved by the Board of Directors at its meetingheld on 11 May 2017.

3) Functional and presentation currencyThese financial statements are presented in Indian rupees, which is the Company’s functional currency.

4) Basis of measurementThe financial statements have been prepared on a historical cost basis, except for the following:• certain financial assets and liabilities( including derivative instruments) that are measured at fair value; and• net defined benefit (asset)/ liability that are measured at fair value of plan assets less present value of defined benefit obligations.

5) Historical cost conventionThe financial statements have been prepared on a historical cost basis, except for the following: • certain financial assets and liabilities( including derivative instrument) that are measured at fair value; • defined benefit plans – plan assets measured at fair value

6) Key estimates and assumptions

The preparation of the financial statements in accordance with Ind AS requires use of judgements, estimates and assumptions, that affect the application ofaccounting policies and the reported amounts of assets, liabilities, income and expenses. The actual results may differ from these estimates.Estimates and underlying assumptions are reviews on an ongoing bais. Revision to accounting estimates are recongnised prospectively.

Assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 31 March 2018 are as follows:

Property, plant and equipment

Determination of the estimated useful lives of tangible assets and the assessment as to which components of the cost may be capitalised. Useful lives of tangibleassets are based on the life prescribed in Schedule II of the Companies Act, 2013. In cases, where the useful lives are different from that prescribed in ScheduleII, they are based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, pasthistory of replacement, anticipated technological changes, manufacturers’ warranties and maintenance support.

Recognition and measurement of defined benefit obligations

The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate, trends insalary escalation, actuarial rates and life expectancy. The discount rate is determined by reference to market yields at the end of the reporting period ongovernment bonds. The period to maturity of the underlying bonds correspond to the probable maturity of the post-employment benefit obligations.

Recognition of deferred tax assets

Deferred tax assets are recognized for the future tax consequences of temporary differences between the carrying values of assets and liabilities and theirrespective tax bases, and unutilised business loss and depreciation carry-forwards and tax credits. Deferred tax assets are recognised to the extent that it isprobable that future taxable income will be available against which the deductible temporary differences, unused tax losses, depreciation carry-forwards andunused tax credits could be utilized.

Discounting of long-term financial assets / liabilities

All financial assets / liabilities are required to be measured at fair value on initial recognition. In case of financial liabilities/assets which are subsequentlymeasured at amortised cost, interest is accrued using the effective interest method. The ‘effective interest rate’ is the rate that exactly discounts estimated futurecash payments or receipts through the expected life of the financial instrument to the gross carrying amount of the financial asset or the amortised cost of thefinancial liability.

Discounts and sales incentivesDiscounts are generally provided to distributors or customers as an incentive to sell the Company’s products. Rebates are based on purchases made during theperiod by distributor / customer. The company determines the estimates of rebate accruals primarily based on the contracts entered into with their distributors /customers and the information received for sales made by them.

7) Measurement of fair valuesThe Company’s accounting policies and disclosures require the measurement of fair values for financial instruments.

The Company has an established control framework with respect to the measurement of fair values. The management regularly reviews significant unobservableinputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the managementassesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of Ind AS, including the level in thefair value hierarchy in which such valuations should be classified.

When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as far as possible. Fair values arecategorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived fromprices).Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement iscategorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Current / non-current classification

An entity shall classify an asset as current when-

(a) it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;(b) it holds the asset primarily for the purpose of trading;(c) it expects to realise the asset within twelve months after the reporting period; or(d) the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liabilityfor at least twelve months after the reporting period.

An entity shall classify all other assets as non-current.

An entity shall classify a liability as current when-

(a) it expects to settle the liability in its normal operating cycle;(b) it holds the liability primarily for the purpose of trading;(c) the liability is due to be settled within twelve months after the reporting period; or(d) it does not have an unconditional right to defer settlement of the liability for at least twelve months after thereporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by theissue of equity instruments do not affect its classification.

An entity shall classify all other liabilities as non-current.

Operating cycleAn operating cycle is the time between the acquisition of assets for processing and their realization in Cash or cash equivalents.

Based on the nature of services and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Companyhas ascertained its operating cycle as 12 months for the purpose of current – non-current classification of assets and liabilities.

8) Significant accounting policies

A) RevenueSale of goods

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns andallowances, trade discounts and volume rebates. Revenue is recognised when significant risks and rewards of ownership in the goods are transferred to thebuyer, collectability of the resulting receivable is reasonably assured, the associated costs and possible return of goods can be estimated reliably, there is nocontinuing effective control over, or managerial involvement with, the goods, and the amount of revenue can be measured reliably.

B) Foreign currencyForeign currency transactions

Transactions in foreign currencies are translated into the Company's functional currency.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fairvalue was determined. Non-monetary asstes and liabilities that are measured based on historical cost in a foreign currency are not translated. Foreign currencyexchange differences are generally recognised in profit or loss.

C) Employee benefitsi. Short term employee benefits

Short-term employee benefit obligation are measured on an undiscounted basis and are expensed as the related service is provided. These benefits includebonus and compensated absences. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of pastservice provided by the employee and the amunt of obligation can be estimated reliably.

ii. Defined contribution plansThe Company's provident fund scheme is a defined contribution plan.The Company's contribution paid/payable under the schemes is recognised as expense in the Profit and Loss account during the period in which the employeerenders the related service. The Company makes specified monthly contributions towards employee provident fund. The contribution towards Provident Fund isdeposited with the Regional Provident Fund Commissioner .

iii. Defined benefit plansThe present value of the obligation under such defined benefit plan is determined based on actuarial valuation by an independent actuary at each balance sheetdate using the Projected Unit Credit Method.

The Company presents the above liabilities as current and non-current in the balance sheet as per actuarial valuations and certificate issued by the independentactuary.

iv. Other long-term employee benefitsThe Company’s net obligation in respect of long-term employment benefits, other than gratuity, is the amount of future benefit that employees have earned inreturn for their service in the current and prior periods. The obligation is calculated using the projected unit credit method, as at the date of the Balance Sheet.Actuarial gains or losses comprising of experience adjustments and the effects of changes in actuarial assumptions are immediately recognised in the statementof profit and loss.

D. Recognition of dividend income, interest income or expense

Interest income or expense is recognised using the effective interest rate method. The ‘effective interest rate’ is the rate that exactly discounts estimated futurecash payments or receipts through the expected life of the financial instrument to:- the gross carrying amount of the financial asset; or- the amortised cost of the financial liability.Dividend income is recognised in profit or loss on the date on which the Company’s right to receive payment is established.

E. Income TaxIncome tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination, or itemsrecognised directly in equity or in Other Comprehensive Income (OCI).

i. i. Current taxCurrent tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable inrespect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering theuncertainty, if any, related to income taxes. It is measured using tax rates enacted or substantively enacted by the reporting date. Current tax also includes anytax arising from dividends.Current tax assets and curent tax liabilities are offset only if, the Company:a) has a legally enforceable right to set off the recognised amounts; andb) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

ii. ii. Deferred TaxDeferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and thecorresponding amounts used for taxation purposes. Deferred tax is not recognised for:- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neitheraccounting nor taxable profit or loss at the time of the transaction;- temporary differences related to investments in subsidiaries to the extent that the Company is able to control the timing of the reversal of the temporarydifferences and it is probable that they will not reverse in the foreseeable future; and- taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that futuretaxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is nolonger probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.Unrecognized deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits willbe available against which they can be used.Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantivelyenacted by the reporting date.The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, torecover or settle the carrying amount of its assets and liabilities.Deferred tax assets and liabilities are offset only if:a) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable Company.

F. Inventories

Inventories which comprise raw materials, packing materials, work-in-progress and finished goods are carried at the lower of cost and net realisable value.The cost of inventories is based on weighted average formula and includes expenditure incurred in acquiring the inventories, costs of production or conversionand other costs incurred in bringing the inventories to their present location and condition. In the case of manufactured inventories and work in progress, costincludes an appropriate share of fixed production overheads based normal operating capacity of production facilities.Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary tomake the sale.

The net realisable value of work-in-progress is determined with reference to the selling prices of related finished products. Raw materials and other supplies heldfor use in the production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that thecost of the finished products will exceed their net realisable value.The comparison of cost and net realisable value is made on an item-by-item basis.

With effect from 1 April, 2016, the Company has changed its policy for valuation of inventory from 'First-in first-out' method to 'Weighted average cost' method.

G. Property, plant and equipment

i. Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

The cost of an item of property, plant and equipment comprises:a) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended bymanagement.c) the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs eitherwhen the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during thatperiod.

Income and expenses related to the incidental operations, not necessary to bring the item to the location and condition necessary for it to be capable of operatingin the manner intended by management, are recognised in profit or loss.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted and depreciated for as separate items (majorcomponents) of property, plant and equipment.

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

ii. Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

iii. Depreciation

Depreciation is calculated using the straight-line method on cost of items of property, plant and equipment less their estimated residual values over the estimateduseful lives prescribed under Schedule II of the Act, except for certain assets in ‘Plant and Machinery’, where based on internal assessment and technicalevaluation carried out, management believes that the useful life is 20 years, which is higher and different from the useful life of 15 years as prescribed under PartC of Schedule II of the Companies Act, 2013.Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Companywill obtain ownership by the end of the lease term, in which case the depreciation rates applicable for similar assets owned by the Company are applied.Leasehold improvements are depreciated over the shorter of the lease term and their useful lives. Freehold land is not depreciated.

The estimated useful lives of items of property, plant and equipment for the current and comparative periods are as follows:

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

With effect from 1 April 2016, the Company has changed its method for charging depreciation on tangible assets from diminishing balance method to straight-linemethod, based on the expected pattern of consumption of the future economic benefits embodied in the asset.

iv. Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1 April 2015,measured as per the previous GAAP, and use that carrying value as the deemed cost of such property, plant and equipment. (Refer note 2)

H. Borrowing costs

Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as anadjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs that are directly attributable to the acquisition or construction ofan asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of that asset till the date it is readyfor its intended use or sale. Other borrowing costs are recognised as an expense in the period in which they are incurred.

I. Intangible assets

ii. Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated usefullives, and is generally recognised in profit or loss.

The intangible assets are amortised over the estimated useful lives as given below: - Computer Software 5 years

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

iii. Transition to Ind AS

On transition to Ind AS, the company has elected to continue with the carrying value of all of its intangible assets recognised as at 1 April 2015, measured as perthe previous GAAP, and use that carrying value as the deemed cost of such intangible assets. (Refer note 4)

J. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financialinstruments also include derivative contracts such as foreign currency foreign exchange forward contracts, interest rate swaps and currency options; andembedded derivatives in the host contract.

Financial instruments also covers contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument, or by exchangingfinancial instruments, as if the contracts were financial instruments, with the exception of contracts that were entered into and continue to be held for the purposeof the receipt or delivery of a non-financial item in accordance with the entity’s expected purchase, sale or usage requirements.

Tangible assets Life definedBuildings 30-60 yearsComputers 3 yearsPlant and machinery 15 yearsFurniture and fixtures 10 years

i. Financial assets

Classification

The Company shall classify financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value throughprofit or loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs thatare attributable to the acquisition of the financial asset.

Debt instruments at amortised cost

A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met: a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amountoutstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost iscalculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included infinance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and otherreceivables.

Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all otherequity instruments, the Company decides to classify the same either as at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrumentbasis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as FVOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI.There is no recycling of the amounts from OCI to profit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or losswithin equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed fromthe Company’s balance sheet) when:The rights to receive cash flows from the asset have expired, or

The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without materialdelay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b)the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to whatextent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nortransferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company’s continuing involvement. In that case,the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights andobligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset andthe maximum amount of consideration that the Company could be required to repay.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the followingfinancial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, and bank balance. b) Trade receivables - The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment lossallowance based on lifetime ECLs at each reporting date, right from its initial recognition. Trade receivables are tested for impairment on a specific basis afterconsidering the sanctioned credit limits, security like letters of credit, security deposit collected etc. and expectations about future cash flows.

ii. Financial liabilities ClassificationThe Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit or loss. Suchliabilities, including derivatives that are liabilities, shall be subsequently measured at fair value.

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable and incrementaltransaction cost.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIRamortisation is included as finance costs in the statement of profit and loss.

The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts.

Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs becausethe specified debtor fails to make a payment when due in accordance with the terms of a debt instrument.

Guarantees given on behalf of subsidiaries by parent company without charging any fee is recognised at a value which represents a fee which would have beencharged by a bank for issuing a similar guarantee to the subsidiary. Such determined value is considered as an investment in group companies and the liabilityrecognised is to be amortised to the profit and loss account over the term of the guarantee.

Guarantees taken without charging any fee is recognised at a value which represents a fee which would have been charged by a bank for issuing a similarguarantee to the company. Such determined value is considered as a deemed dividend from group companies and the asset recognised is to be amortised to theprofit and loss account over the term of the guarantee.

Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced byanother from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification istreated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in thestatement of profit or loss.

Offsetting of financial instruments

.

K. Provisions and contingent liabilities

Provisions are determined by discounting the expected future cash flows specific to the liability. The unwinding of the discount is recognised as finance cost. Aprovision for onerous contracts is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost ofcontinuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but will probably not, require an outflow ofresources. When there is a possible obligation of a present obligation in respect of which the likelihood of outflow of resources is remote, no provision disclosureis made.

L. Leasesi. Lease payments

Payments made under operating leases are recognised in profit or loss on a straight line basis over the term of the lease unless such payments are structured toincrease in line with expected general inflation to compensate for the lessor’s expected inflationary cost increase. Lease incentives received are recognised as anintegral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The financeexpense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

ii. Leased assetsAssets held by the Company under leases that transfer to the Company substantially all of the risks and rewards of ownership are classified as finance leases.The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Subsequent toinitial recognition, the assets are accounted for in accordance with the accounting policy applicable to that asset.

Assets held under other leases are classified as operating leases and are not recognised in the Company’s balance sheet.

M. Impairment of non-financial assetsThe carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment if any indication of impairment exists. If the carryingamount of the assets exceed the estimated recoverable amount, an impairment is recognised for such excess amount.

The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their presentvalue based on an appropriate discount factor.

When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlier accounting periods which no longer exists or mayhave decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, to the extent the amount was previously charged to theStatement of Profit and Loss. In case of revalued assets, such reversal is not recognised.

N. Cash and cash equivalentsCash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less,which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bankoverdrafts as they are considered an integral part of the Company’s cash management.

O. Earnings per share (EPS)Basic EPS is computed using the weighted average number of equity shares outstanding during the year. Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year except where the resultswould be antidilutive.

P Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to IndAS 7, ‘Statement of cash flows’. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB)to IAS 7, ‘Statement of cash flows’. The amendments are applicable to the Company from April 1, 2017. The amendment to Ind AS 7 requires the entities toprovide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising fromcash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arisingfrom financing activities, to meet the disclosure requirement.

The Company is currently evaluating the effect of the above amendments.

Saiba Industries Private Limited2Notes to the financial statements (Continued)

Note-2 Property, plant and equipmentIn INR

Particulars Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at31 March 31 March 31 March 31 March 31 March 31 March

2016 2017 2016 2017 2017 2016Factory Building 1,50,667 - - 1,50,667 11,082 4,189 - 15,271 1,35,396 1,39,585 Office Building 6,93,37,941 - (6,93,37,941) - 33,84,398 - (33,84,398) - - 6,59,53,543 Plant and Machinery 12,08,943 12,722 - 12,21,665 1,57,534 67,603 - 2,25,137 9,96,528 10,51,409 Computers 33,959 23,23,663 - 23,57,622 5,605 3,60,565 - 3,66,170 19,91,452 28,354 Furniture and Fixtures 1,84,902 17,82,592 - 19,67,494 36,355 99,577 - 1,35,932 18,31,562 1,48,547

TOTAL 7,09,16,412 41,18,977 (6,93,37,941) 56,97,448 35,94,974 5,31,934 (33,84,398) 7,42,510 49,54,938 6,73,21,438

In INR

P A R T I C U L A R S Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at 1 April 31 March 1 April 31 March 31 March 1 April2015 2016 2015 2016 2016 2015

Factory Building 1,50,667 - - 1,50,667 - 11,082 - 11,082 1,39,585 1,50,667 Office Building 6,93,37,941 - - 6,93,37,941 - 33,84,398 - 33,84,398 6,59,53,543 6,93,37,941 Plant and Machinery 11,94,949 13,994 - 12,08,943 - 1,57,534 - 1,57,534 10,51,409 11,94,949 Computers 29,359 4,600 - 33,959 - 5,605 - 5,605 28,354 29,359 Furniture and Fixtures 1,84,902 - - 1,84,902 - 36,355 - 36,355 1,48,547 1,84,902

TOTAL 7,08,97,818 18,594 - 7,09,16,412 - 35,94,974 - 35,94,974 6,73,21,438 7,08,97,818

Factory Building Office Building Plant and Machinery Computers

Furniture and Fixtures Total

Gross Block 6,55,851 7,30,05,800 62,16,411 5,05,753 9,06,902 8,12,90,717 Less: Accumulated Depreciation 5,05,184 36,67,859 50,21,462 4,76,394 7,22,000 1,03,92,899 Net Block 1,50,667 6,93,37,941 11,94,949 29,359 1,84,902 7,08,97,818

Charge for the year Additions

Note: The Company has availed the deemed cost exemption in relation to the property plant and equipment on the date of transition and hence the net block carrying amount has been considered as the gross block carrying amount on that date. Refer note below for the gross block value and the accumulated depreciation on April 1, 2015 under the previous GAAP.

NET BLOCK

NET BLOCKACCUMULATED DEPRECIATION

ACCUMULATED DEPRECIATION

Transfers

TransfersAdditions

GROSS BLOCK

GROSS BLOCK

Charge for the year

On transfers

On Transfers


Note-3 Investment Property

In INR

P A R T I C U L A R SInvestment properties - 8,34,57,531 6,93,37,941 - 15,27,95,472 - 17,18,887 33,84,398 - 51,03,285 14,76,92,186 -

TOTAL - 8,34,57,531 6,93,37,941 - 15,27,95,472 - 17,18,887 33,84,398 - 51,03,285 14,76,92,186 -

Information regarding income and expenditure of Investment property

Particulars 31-Mar-17 31-Mar-16Rental income derived from investment properties 40,37,000 - Less Depreciation relating to investment properties 51,03,285 - Net profit from investment properties (10,66,285) -

Notes

c. The fair value of investment property is categorised as level 3 in the fair valuation hierarchy.

Ind AS adjustments

Particulars CY PY OBS CY PY OBS

As at March 31, 2017 As at March 31,

2016 As at April 1,

2015 As at March 31,


2016 As at April 1,

2015 Freehold Land -

Buildings -

TOTAL - - - - - - Previous Year's-Total



2016 As at April 1,



2016 As at April 1,

2015 Freehold Land

Buildings -


Reclassification - Ind AS Measurement - Ind AS Accumulated depreciation

Gross block

During the year ended 31 March 2017, an office building was reclassified as investment property because it was no longer used by the Company and it was decided that the building would be rented out to a related party

a. Investment property comprises of office buildings. Fair value of investment property is INR 123,400,000 as on March 31, 2017.b. These valuations are performed by the management based on external valuation model.

Reclassification - Ind AS Measurement - Ind AS

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK

Balance as at 31 March 2016





Balance as at 31 March 2016 Disposals Disposals Additions Charge for the

year Transfers Transfers


Note-4 IntangiblesINR

P A R T I C U L A R S Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at31 March 31 March 31 March 31 March 31 March 31 March

2016 2017 2016 2017 2017 2016OthersComputer Software 62,000 - - 62,000 9,385 11,677 21,062 40,938 52,615

TOTAL 62,000 - - 62,000 9,385 11,677 21,062 40,938 52,615

Intangible Assets Under Development - - - - - - - - -

INR

P A R T I C U L A R S Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at1 April 31 March 1 April 31 March 31 March 1 April2015 2016 2015 2016 2016 2015

OthersComputer Software - 62,000 - 62,000 - 9,385 9,385 52,615 -

TOTAL - 62,000 - 62,000 - 9,385 9,385 52,615 -

Intangible Assets Under Development 13,002 - (13,002) - - - - - -

Disposals

GROSS BLOCK ACCUMULATED AMORTISATION NET BLOCK

Additions Charge for the yearDisposals

Intangible Assets Under Development include software purchased and planned for development.

NET BLOCK

Additions

ACCUMULATED AMORTISATIONGROSS BLOCK

Charge for the year


Notes to the financial statements (Continued)In INR

Particulars As at As at31 March 2017 31 March 2016

Note 13Share Capital

Authorised :Equity Shares of Rs. 1,000 each 25,00,000 25,00,000

2,500 (2016: 2,500; 2015: 2,500) Equity sharesTOTAL 25,00,000 25,00,000

Issued and Subscribed and Paid up:2,198 (2016: 2,198; 2015: 2,198) Equity shares fully paid up 21,98,000 21,98,000

TOTAL 21,98,000 21,98,000

Reconciliation of number of shares outstanding at the beginning and end of the year :Equity share :

2,198 2,198 Add: Shares issued during the year - - Less: Shares bought back during the year - - Outstanding at the end of the year 2,198 2,198

Terms / Rights attached to each classes of shares

1. Terms / Rights attached to Equity shares

Equity share

No. of Shares Amount in INR No. of Shares Amount in INR No. of Shares Amount in INRS H Kelkar and Company Limited (Holding Company) 2,198 21,98,000 2,198 21,98,000 2,198 21,98,000

Shareholders holding more than 5% shares in the company is set out below:Equity share

No. of Shares No of shares No. of Shares No of shares No. of Shares No of shares% % %

S H Kelkar and Company Limited (Holding Company) 2,198 100% 2,198 100% 2,198 100%

Outstanding at the beginning of the year

Shares in respect of each class in the company held by its holding company or its ultimate holding company including shares held by

The Company has only one class of Equity shares having a par value Rs. 1000 per share. Each holder of equity shares is entitled to one vote per share with a right to receive per share dividend declared by the Company. In the event of liquidation, the equity shareholders are entitled to receive remaining assets of the Company (after distribution of all preferential amounts) in the proportion of equity shares held by the shareholders. During the period ended 31 March 2017, the Company has recorded per share dividend of Rs.Nil (previous year: Rs.Nil; 2015: Rs. Nil) to equity shareholders.

31 March 2017

As at As at31 March 2017 31 March 2016 1 April 2015

As at

subsidiaries or associates of the holding company or the ultimate holding company in aggregate

As at As at As at31 March 2016 1 April 2015


Notes to the financial statements (Continued)

Note 30: Earnings per share (EPS)

i. Profit attributable to owners of the Company In INR31 March 2017 31 March 2016

Profit attributable to owners of the Company 96,86,705 76,26,158 Profit attributable to owners of the Company for basic earnings 96,86,705 76,26,158 Dilution - - Profit attributable to owners of the Company adjusted for the effect ofdilution

96,86,705 76,26,158

ii. Weighted average number of ordinary shares31 March 2017 31 March 2016

Issued ordinary shares at 1 April 2,198 2,198 Weighted average number of shares at March 31 for basic EPS 2,198 2,198 Effect of dilution: - -

2,198 2,198

Basic and Diluted earnings per share In INR March 31, 2017 March 31, 2016

Basic earnings per share 4,407 3,470

Diluted earnings per share 4,407 3,470

Basic EPS amounts are calculated by dividing the profit for the year attributable to the owners of the Company by the weightedaverage number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to the owners of the Company by the weighted averagenumber of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued onconversion of all the dilutive potential equity shares into equity shares.



Note 21Tax expense(a) Amounts recognised in profit and loss In INR

Year ended 31 March 2017


Current income tax 52,68,260 38,80,000 Deferred tax expense (4,48,755) (79,484)Adjustment for tax of earlier years 10,45,259 - Tax expense for the year 58,64,764 38,00,516

(b) Amounts recognised in other comprehensive income In INR

Before tax Tax (expense) benefit

Net of tax Before tax Tax (expense) benefit

Net of tax

Items that will not be reclassified to profit or lossRemeasurements of the defined benefit plans (4,72,979) 1,56,381 (3,16,598) 48,999 (16,201) 32,798

(4,72,979) 1,56,381 (3,16,598) 48,999 (16,201) 32,798

(c) Reconciliation of effective tax rate In INR Year ended 31

March 2017 Year ended 31

March 2016 Profit before tax 1,55,51,469 1,14,26,674 Tax using the Company’s domestic tax rate (Current year 33.06% and Previous Year 33.06%) 51,41,782 37,78,001 Tax effect of:Non-deductible tax expenses 2,35,527 22,514 Incremental deduction allowed pertaining to house property (3,59,667) - Changes in estimates related to prior years 10,45,259 - Others (1,98,138) -

58,64,764 38,00,516

Year ended 31 March 2017 Year ended 31 March 2016



Note 21

Net balance1 April 2016

Recognised in profit or loss

Recognisedin OCI

Recogniseddirectly in

equity

Other Net Deferred tax asset Deferred tax liability

INR INR INR INR INR INR INR INR

Property, plant and equipment (1,15,17,055) (6,01,416) (1,21,18,471) (1,21,18,471)Employee benefits 40,227 (1,41,317) 1,56,381 55,291 55,291 Trade receivables 89,938 1,46,229 2,36,167 2,36,167 MAT Credit 28,45,000 (20,87,789) 7,57,211 7,57,211 Net deferred tax asset (liability) (85,41,890) (5,96,504) 1,56,381 - (20,87,789) (1,10,69,802) 10,48,669 (1,21,18,471)

0.00 - -



Recognised in OCI

Recognised directly in

equity


INR INR INR INR INR INR INR INR

Property, plant and equipment (1,14,83,444) (33,611) (1,15,17,055) (1,15,17,055)Employee benefits 31,079 25,348 (16,201) 40,227 40,227 Trade receivables 2,188 87,749 89,938 89,938 MAT Credit 43,74,000 (15,29,000) 28,45,000 28,45,000 Net deferred tax asset (liability) (70,76,177) 79,486 (16,201) - (15,29,000) (85,41,890) 29,75,165 (1,15,17,055)

(0.73) 1.93 - 0.20 Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income by each jurisdiction in which the relevant entity operates and the period over which deferred income tax assets will be recovered

(d) Movement in deferred tax balances31 March 2017

Deferred tax asset (liability)

(e) Movement in deferred tax balances31 March 2016

Deferred tax asset (liability)


Note 32

A. Accounting classification and fair values

March 31, 2017INR

FVTPL Amortised Cost Total

Financial assets Cash and cash equivalents - 40,17,887 40,17,887 Loans - Non-current - 15,38,379 15,38,379 Loans - current - 25,000 25,000 Trade and other receivables - 1,39,31,948 1,39,31,948 Other Non-current financial asset - 35,98,867 35,98,867 Other Current financial asset - 23,60,938 23,60,938

- 2,54,73,019 2,54,73,019

Financial liabilities Borrowings - 8,50,00,000 8,50,00,000 Trade and other payables - 33,61,409 33,61,409 Other Current financial liabilities - 45,12,511 45,12,511

- 9,28,73,920 9,28,73,920

March 31, 2016INR


Financial assets Cash and cash equivalents - 50,69,816 50,69,816 Loans - Non-current - 15,38,379 15,38,379 Loans - current - 25,000 25,000 Trade and other receivables - 1,26,61,692 1,26,61,692 Other Non-current financial asset - 33,60,754 33,60,754 Other Current financial asset - 48,838 48,838

- 2,27,04,479 2,27,04,479

Financial liabilities Trade and other payables - 27,40,052 27,40,052 Other Current financial liabilities - 1,16,52,373 1,16,52,373

- 1,43,92,425 1,43,92,425

April 1, 2015INR


Financial assets Cash and cash equivalents - 15,60,191 15,60,191 Loans - Non-current - 10,38,379 10,38,379 Loans - current - 5,25,000 5,25,000 Trade and other receivables - 1,08,78,822 1,08,78,822 Other Non-current financial asset - 31,19,311 31,19,311 Other Current financial asset - 93,842 93,842

- 1,72,15,545 1,72,15,545

Financial liabilities Trade and other payables 66,57,900 66,57,900 Other Current financial liabilities 1,26,27,915 1,26,27,915

- 1,92,85,815 1,92,85,815

Note to the financial statements (Continued)

1. Financial instruments – Fair values and risk management

Carrying amount

Carrying amount

Carrying amount

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.


Note 32

B. Financial risk managementThe Company has exposure to the following risks arising from financial instruments: Credit risk ; Liquidity risk ; and Market risk

i. Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The Committee reports regularly to the board of directors on its activities.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The audit committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

Note to the financial statements (Continued)




Note 32 (continued)Financial instruments – Fair values and risk management (continued)

ii. Credit risk

Trade and other receivables

Impairment

Carrying Amount Weighted Average Loss Rate Loss Allowance

Neither past due nor impaired 64,76,329 0.61% 39,692 Past due not impairedPast due 0-180 days 23,78,341 0.72% 17,172 Past due 181-360 days 4,172 13.28% 554 Past due 361-540 days 12,000 50.29% 6,035 Past due 541-730 days 26,049 72.83% 18,971 More than 730 days 6,31,868 100.00% 6,31,868

95,28,759 7,14,293

At 31 March 2017, the Company’s most significant customer, a manufacturer, accounted for INR 54,49,748 of the trade and other receivables carrying amount (31 March 2016: INR 65,63,295).

The following table provides information about the exposure to credit risk and expected credit loss for trade

31 March 2017

At 31 March 2017, the Company is involved only in domestic sales and has no export sales. Hence, there is no credit risk exposure outside India.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and investments in debt securities.

The carrying amount of following financial assets represents the maximum credit exposure:

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables.





Neither past due nor impaired 47,42,022 0.25% 12,074 Past due not impairedPast due 0-180 days 37,56,416 0.30% 11,445 Past due 181-360 days 47,788 5.28% 2,523 Past due 361-540 days 2,18,822 18.46% 40,386 Past due 541-730 days 3,77,615 33.21% 1,25,405 More than 730 days 87,597 100.00% 87,597

92,30,260 2,79,430


Neither past due nor impaired 46,37,986 0.01% 375 Past due not impairedPast due 0-180 days 56,46,262 0.01% 753 Past due 181-360 days 4,86,097 0.15% 725 Past due 361-540 days 1,12,003 1.49% 1,671 Past due 541-730 days - 0.00% - More than 730 days 2,798 100.00% 2,798

1,08,85,146 6,323

INR ImpairmentBalance as at April 1, 2015 6,324 Impairment loss recognised 2,73,106 Amounts written off - Balance as at March 31, 2016 2,79,430 Impairment loss recognised 4,34,863 Amounts written off - Balance as at March 31, 2017 7,14,293

Cash and cash equivalents The cash and cash equivalents are held with banks with good credit ratings and financial institution counterparties

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full,

31 March 2016

1 April 2015

The movement in the allowance for impairment in respect of trade and other receivables during the year was as




iii. Liquidity risk

Exposure to liquidity risk

31 March 2017 Carrying amount Total Upto 1 year 1-5 years More than

5 yearsINRNon-derivative financial liabilitiesTrade payables 33,61,409 33,61,409 33,61,409 - - Other financial liabilities 45,12,511 45,12,511 45,12,511 - - Short term borrowings* 8,50,00,000 8,50,00,000 8,50,00,000 - -

*repayable on demand

31 March 2016 Carrying amount Total Upto 1 year 1-5 years More than

5 yearsINRNon-derivative financial liabilitiesTrade payables 27,40,052 27,40,052 27,40,052 - - Other financial liabilities 1,16,52,373 1,16,52,373 1,16,52,373 - -

1 April 2015 Carrying amount Total Upto 1 year 1-5 years More than

5 yearsINRNon-derivative financial liabilitiesTrade payables 66,57,900 66,57,900 66,57,900 - - Other financial liabilities 1,26,27,915 1,26,27,915 1,26,27,915 - -

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments.

Contractual cash flows


Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.





iv. Market risk

The Company is not exposed to currency risk on account of its borrowings and other payables in foreign currency. The functional currency of the Company is Indian Rupees.

The Company does not use derivative financial instruments for trading or speculative purposes.

v. Currency 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.Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of our investments. Thus, our exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.




vi. Interest rate risk

Exposure to 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 fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The company has no borrowings from banks and financial institutions.

Since the Company does not have any financial assets or financial liabilities bearing floating interest rates, a change in interest rates at the reporting date would not have any significant impact on the financial statements of the Company.



Note 33Capital Management


Current Borrowings 8,50,00,000 - - Gross Debt 8,50,00,000 - - Less - Cash and Cash Equivalents 40,17,887 - - Adjusted Net debt 8,09,82,113 - -

Total equity 7,94,87,911 7,01,17,804 6,24,58,846 Adjusted Net debt to equity ratio 1.02 - -

For the purpose of the Company's capital management, capital includes issued capital and other equity reserves. The primary objective of the Company’s Capital Management is to maximise shareholders value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

The Company monitors capital using adjusted net debt to equity ratio. For this purpose, adjusted net debt is defined as total debt less cash and bank balances.



Note 34Contingent liabilities and commitments (to the extent not provided for)

In INR

31 March 2017 31 March 2016 1 April 2015Contingent liabilities not provided for on account of

1,26,94,337 39,03,465 39,03,465Sales Tax



Note 36Segment reportingAs at 31 March 2017, the Company has only one reportable segment involved in the manufacturing of flavour ingredients.

At 31 March 2017, the Company is only involved in domestic sales and has no export sales. Hence, revenue for the Company is generated only within India.

Revenues from two major customers represented approximately INR 2,54,32,993 (previous year - INR 2,35,02,067) of the Company's total revenues.



Note 37Related party relationships, transactions and balances

Holding CompanyS H Kelkar and Company Limited

Fellow subsidary companies (with whom there are transactions)Keva Flavours Private LimitedKeva Fragrances Private Limited

Key Management PersonnelMr. R.V.Vaze (Non Executice Director)Mr. K.R.Vaze (Non Executice Director)

Company Under Common ControlKeva Construction Private Limited

INR

2017 2016Sale

Keva Flavours Private Limited 98,33,500 71,46,250

Rent Income - S H Kelkar and Company Limited 40,37,000 -

Expenses

S H Kelkar and Company Limited (interest)47,15,097 30,486

S H Kelkar and Company Limited (insurance expenses) 10,053

PurchasesKeva Construction Private Limited (Fixed Assets) 8,40,49,665 -

Security Deposit Received - Keva Fragrances Private Limited - -

- Security Deposit Repaid

Keva Fragrances Private Limited - 14,25,000

Receivable (Payable) at year endKeva Flavours Private Limited

Trade receivable 51,17,482 37,10,862 Keva Fragrances Private Limited

Security Deposit - - S H Kelkar and Company Limited

Rent Receivable 23,12,100 -

Short term borrowings (Unsecured Loans) (8,50,00,000) - Current Liability for purchase of Fixed Assets - (93,60,279) Current Liability for reimbursement of expenses (17,35,020) (29,810)

The note provides the information about the Company’s structure including the details of the subsidiaries and the holding company.

ParticularsTransaction values for the year

ended 31 March

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:



Note 38A. Transition to Ind AS:

B. Exemptions and exceptions availedB.1 Ind AS mandatory exceptionsB.1.1 De-recognition of financial assets and liabilities

B.1.2 Classification and measurement of financial assets

B.2 Ind AS optional exemptionsB.2.1 Deemed cost

Reconciliation of equity as at 1 April 2015 In INR

Footnote ref.Revised amount as per IGAAP *

Adjustments on transition to Ind AS

Amount as per Ind AS

EQUITY AND LIABILITIESEquity Equity share capital 21,98,000 - 21,98,000 Other equity - -

Retained earnings 1 & 2 5,57,09,352 (4,135) 5,57,05,217 Other reserves 45,55,629 - 45,55,629

Equity attributable to equity holders ofthe parent 6,24,62,981 (4,135) 6,24,58,846 Total equity 6,24,62,981 (4,135) 6,24,58,846

Non current liabilitiesLong term provisions 85,000 - 85,000 Deferred tax liabilities(net) 2 70,78,365 (2,188) 70,76,177 Total non current liabilities 71,63,365 (2,188) 71,61,177

Current liabilitiesFinancial liabilities

Trade payables 66,57,900 - 66,57,900 Other financial liabilities 1,26,27,915 - 1,26,27,915

Other current liabilities 42,06,995 - 42,06,995 Provisions 10,09,000 - 10,09,000 Current tax liability (net) 11,75,936 - 11,75,936 Total current liabilities 2,56,77,746 - 2,56,77,746

Total liabilities 3,28,41,111 (2,188) 3,28,38,923

Total Equity and Liabilities 9,53,04,092 (6,324) 9,52,97,768

Reconciliation of equity as at 1 April 2015

Footnote ref. Effects of transition to Ind AS


INR INRASSETSNon-current assetsProperty, Plant and Equipment 7,08,97,818 - 7,08,97,818 Investment property - - - Other Intangible assets - - - Intangible assets under development 13,002 - 13,002 Financial Assets - -

Loans 10,38,379 - 10,38,379 Others 31,19,311 - 31,19,311

Income tax assets (net) 8,75,706 - 8,75,706 Other non-current assets - - - Total non current assets 7,59,44,216 - 7,59,44,216

Current AssetsInventories 55,75,145 - 55,75,145 Financial Assets - - -

Trade receivables 1 1,08,85,146 (6,324) 1,08,78,822 Cash and cash equivalents 15,60,191 - 15,60,191 Loans 5,25,000 - 5,25,000 Others 93,842 - 93,842

Other current assets 7,20,552 - 7,20,552 Total current assets 1,93,59,876 (6,324) 1,93,53,552

TOTAL ASSETS 9,53,04,092 (6,324) 9,52,97,768 - - -

For the purposes of reporting as set out in Note 1, the Company has transitioned its basis of accounting from Indian generally accepted accounting principles (“IGAAP”) to Ind AS. The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS balance sheet at 1 April 2015 (the “transition date”).In preparing the opening Ind AS balance sheet, the Company has adjusted amounts reported in financial statements prepared in accordance with IGAAP. An explanation of how the transition from IGAAP to Ind AS has affected the Company's financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. On transition, the Company did not revise estimates previously made under IGAAP except where required by Ind AS.

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has classified and measured the financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

The Company has elected to continue with the carrying value for all of its property, plant and equipment, intangible assets and investment property as recognised in the financial statements as the deemed cost at the date of transition to Ind AS, measured as per the previous GAAP.



Note 38 (continued)

Reconciliation of equity as at 31 March 2016 In INRFootnote ref. Amount as per IGAAP * Effects of transition

to Ind AS Amount as per

Ind AS

EQUITY AND LIABILITIESEquity Equity share capital 21,98,000 - 21,98,000 Other equity -

Retained earnings 1 & 2 6,32,60,470 1,03,705 6,33,64,175 Other reserves 45,55,629 - 45,55,629

Equity attributable to owners of the Company 7,00,14,099 1,03,705 7,01,17,804 Total equity 7,00,14,099 1,03,705 7,01,17,804

Non current liabilitiesProvisions 1,09,814 1,09,814 Deferred tax liabilities(net) 2 84,87,006 54,885 85,41,891 Total non current liabilities 85,96,820 54,885 86,51,705


Trade payables 27,40,052 - 27,40,052 Other financial liabilities 1,16,52,373 1,16,52,373

Other current liabilities 2,69,828 2,69,828 Provisions 10,11,854 - 10,11,854 Current tax liability (net) 10,05,630 - 10,05,630 Total current liabilities 1,66,79,737 - 1,66,79,737

Total liabilities 2,52,76,557 54,885 2,53,31,442

Total Equity and Liabilities 9,52,90,656 1,58,589 9,54,49,245

Reconciliation of equity as at 31 March 2016 In INRFootnote ref. Amount as per IGAAP * Effects of transition


Ind AS

ASSETSNon-current assetsProperty, Plant and Equipment 6,73,21,438 - 6,73,21,438 Investment property - - - Other Intangible assets 52,615 - 52,615 Intangible assets under development - - - Financial Assets - - -

Loans 15,38,379 - 15,38,379 Others 33,60,754 - 33,60,754

Income tax assets (net) 8,75,706 - 8,75,706 Other non-current assets - - - Total non current assets 7,31,48,892 - 7,31,48,892

Current AssetsInventories 36,66,302 - 36,66,302 Financial Assets - -

Trade receivables 1 1,25,03,103 1,58,589 1,26,61,692 Cash and cash equivalents 50,69,816 - 50,69,816 Loans 25,000 - 25,000 Others 48,838 - 48,838

Other current assets 8,28,705 - 8,28,705 Total current assets 2,21,41,764 1,58,589 2,23,00,353

TOTAL ASSETS 9,52,90,656 1,58,589 9,54,49,245 - - -



Note 38 (continued)

Reconciliation of profit or loss for the year ended 31 March 2016 In INRFootnote ref. Effects of transition


Ind AS

RevenueI. Revenue from Operations 4,05,73,408 24,33,496 4,30,06,904 II. Other income 4,04,952 - 4,04,952 III. Total Income (I+II) 4,09,78,360 24,33,496 4,34,11,856 IV. Expenses

Cost of materials consumed 1,13,03,329 - 1,13,03,329 Changes in inventories of finished goods, work-in-progress and stock-in-trade

15,82,241 - 15,82,241

Excise duty 3 - 24,33,496 24,33,496 Employee Benefits Expenses 4 35,74,086 48,999 36,23,085 Depreciation and Amortization Expenses 36,04,359 - 36,04,359 Other Expenses 1& 3 96,03,585 (1,64,913) 94,38,672

Total Expenses (IV) 2,96,67,600 23,17,582 3,19,85,182 V. Profit/(loss) before Exceptional Items and Tax 1,13,10,760 1,15,914 1,14,26,674 VI. Exceptional Items - VII. Profit/(loss) before Tax 1,13,10,760 1,15,914 1,14,26,674 VIII. Tax expense:

1. Current Tax 38,80,000 - 38,80,000 2. Deferred Tax 2 (1,20,357) 40,873 (79,484)

IX. Profit/(Loss) for the year 75,51,117 75,041 76,26,158

X. Other comprehensive income

(i) Items that will not be reclassified to profit or loss4 - 48,999 48,999

(ii) Income tax related to items that will not be reclassified to profit or loss

2 - (16,201) (16,201)

XI. Total comprehensive income for the period 75,51,117 1,07,840 76,58,957

Amount as per IGAAP*

* The Previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purpose of this note.

Rasiklal Hemani Agencies Private Limited Financials – FY 2016-17

Page 1

Independent Auditor’s Report to the Members of Rasiklal Hemani Agencies Pvt. Limited

Report on the Ind AS Financial Statements

We have audited the accompanying Ind-AS financial statements of Rasiklal Hemani Agencies Pvt. Ltd. (‘the Company’), which comprise the balance sheet as at 31 March 2017, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the State of affairs(financial position), Profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the Ind-AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Page 2

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the State of affairs (financial position) of the Company as at 31 March, 2017, and Statement of profit and loss(financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central


2. Asrequired by Section 143(3) of the Act, we report that:

(a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The balance sheet, the statement of profit and loss, the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards prescribed under Section 133 of the Act read with relevant rule issued thereunder;

(e) On the basis of the written representations received from the directors as on 31 March 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and

(g) with respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements – Refer Note 31 to the Ind AS financial statements;

ii. The Company didn’t have any long term contracts including derivatives contracts for

which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and

Page 3

iv. The Company has provided requisite disclosures in its Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 30 to the Ind AS financial statements.

for K.G. Somani & Co. Chartered Accountants Firm’s registration number: 06591N Anuj Somani Partner Membership number: 511267 Place:-New Delhi Dated:- May 11, 2017

Page 4

Annexure - A to the Auditors’ Report

The Annexure referred to in Independent Auditors’ Report to the members of the Company on the Ind AS financial statements for the year ended 31 March 2017, we report that:


(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified by the management at reasonable intervals. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.


(ii) The Company is a service company, primarily rendering Intermediary services. Accordingly, it does not hold any physical inventories. Thus, paragraph 3(ii) of the Order is not applicable to the Company.

(iii) The Company has not granted secured or unsecured loans to any company, firms, Limited Liability Partnership or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’). Therefore, requirement under clause iii (a) to (c) doesn’t applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, the Company has not given any loan &has not made any investment, Therefore the provisions of section 185 and 186 of the Act,are not applicable to the company.

(v) The Company has not accepted any deposits from the public.

(vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company.



(b)According to the information and explanations given to us, there are no dues of duty of customs which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of income tax, sales tax, duty of excise, service tax and value added tax have not been deposited by the Company on account of disputes:

Page 5

Name of the statute

Name of dues Amount (in Rs) Period to which the amount relates


Income tax Act,1961

Disallowance of Liability

5,62,000 Assessment year 2013-2014

CIT (Appeals)

(viii) The Company does not have any loans or borrowings from any financial institution, banks, government or debenture holders during the year. Accordingly, paragraph 3(viii) of the Order is not applicable.


(x) According to the information and explanations given to us, nomaterialfraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not paid/provided for managerial remuneration during the year. Therefore the provisions of section 197 read with Schedule V to the Act shall not be applicable to the company

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections188 of the Act where applicable and details of such transactions have been disclosed in the Ind AS financial statements as required by the applicable accounting standards. The section 177 of the Companies Act 2013 does not applicable to the company.



(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

for K.G. Somani & Co. Chartered Accountants Firm’s registration number:06591N

Anuj Somani Partner Membership number: 511267

Place:-New Delhi Dated:- May 11, 2017

Page 6

Annexure - B to the Auditors’ Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of Rasiklal Hemani Agencies Pvt. Ltd. (“the Company”) as of 31 March 2017 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS 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 for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the

Page 7

transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

for K.G. Somani & Co. Chartered Accountants Firm’s Registration Number: 06591N Anuj Somani Partner Membership Number: 511267

Place:-New Delhi Dated:- May 11, 2017

Rasiklal Hemani Agencies Pvt. Ltd.

Balance sheet as at 31 March 2017

In INR Note 31 March 2017 31 March 2016 Assets(1) Non-current assets(a) Property, plant and equipment 2 12,50,578 5,68,002 (b) Financial assets

(i) Investments 3 - 6,22,998 (ii) Loans 4 23,00,35,690 35,690

(c) Deferred tax assets (net) 10,80,202 - (d) Income tax assets (net) 37,80,617 53,63,091 Total non current assets 23,61,47,087 65,89,781

(2) Current assets(a) Financial assets

(i) Trade receivables 5 8,28,27,315 3,63,94,725 (ii) Cash and cash equivalents 6 5,47,376 23,98,30,372 (iii) Others 7 1,96,64,996 -

(b) Other current assets 8 30,929 64,828 Total current assets 10,30,70,616 27,62,89,925

Total assets 33,92,17,703 28,28,79,706 As at March 31,


2016 Notes INR INR

Equity and liabilities(1) Equity (a) Equity share capital 9 25,00,000 25,00,000 (b) Other equity

(i) Retained earnings 22,51,73,988 17,20,92,315 (ii) Other reserves 10,74,50,241 10,74,50,241

Total equity 33,51,24,229 28,20,42,556

(2) Non-current liabilities(a) Provision for gratuity 10 8,98,685 -

8,98,685 - (3) Current liabilities(a) Financial liabilities

(i) Others 11 1,76,643 4,88,858 (b) Other current liabilities 12 9,87,484 2,91,212 (c) Provisions 13 25,842 - (d) Current tax liability 20,04,820 - (e) Deferred tax liability (net) - 57,079 Total current liabilities 31,94,789 8,37,149 Total liabilities 31,94,789 8,37,149

Total Equity and liabilities 33,92,17,703 28,28,79,706

The accompanying notes form an integral part of the financial statements.As per our report of even date attached

Anuj SomaniPartnerMembership No. : 511267

Place: New DelhiDate: May 11, 2017

Ramesh Vaze Director

DIN 00509751

Prabha Vaze DirectorDIN 00509817

For K.G.SOMANI & CO. For and on behalf of the Board of Directors of Chartered Accountants Rasiklal Hemani Agencies Pvt LimitedFirm Regn.No.06591N


Statement of profit and loss for the year ended March 31, 2017For the Year Ending For the Year Ending

Notes March 31, 2017 March 31, 2016 Revenue I. Revenue from Operations (Gross) 14 7,21,09,851 7,28,39,913 II. Other income 15 2,23,44,897 1,78,46,615 III. Total Income (I+II) 9,44,54,748 9,06,86,528 IV. Expenses

Employee Benefits Expenses 16 84,23,583 1,27,61,636 Depreciation and Amortization Expenses 2 1,48,653 11,07,737 Other Expenses 17 38,39,944 86,00,386

Total Expenses (IV) 1,24,12,180 2,24,69,759 V. Profit/(loss) before Exceptional Items and Tax 8,20,42,568 6,82,16,769 VI. Exceptional Items 7,451 - VII. Profit/(loss) before Tax 8,20,50,020 6,82,16,769 VIII. Tax expense: 20

1. Current Tax 2,78,00,000 2,13,00,000 2. Deferred Tax (11,31,939) 57,079 3. Adjustment of tax for earlier years 19,52,469 11,88,812

IX. Profit/(Loss) for the year 5,34,29,489 4,56,70,877

X. Other comprehensive income (i) Remeasurements of defined benefit obligations 18 (16,159) - (ii) Income tax related to items that will not be reclassified to profit or loss 5,343 -

(10,816) -

XI. Total comprehensive income for the year 5,34,18,673 4,56,70,877

XII. Earnings per equity share 19 1. Basic 2,137 1,827 2. Diluted 2,137 1,827

Anuj Somani Prabha Ramesh Vaze Partner DirectorMembership No. : 511267 DIN 00509817


Page 9

Ramesh Vinayak Vaze Director

DIN 00509751

For K.G.SOMANI & CO. Chartered Accountants Firm Regn.No.06591N

For and on behalf of the Board of Directors of Rasiklal Hemani Agencies Pvt Limited

INR


Statement of Changes in Equity (SOCIE)INR


Balance at the beginning of the reporting period Balance 25,000 25,00,000 25,000 25,00,000 Changes in equity share capital during the year - - Balance at the end of the reporting period 25,000 25,00,000 25,000 25,00,000

(b) Other equity

Particulars General

Reserve [Note 11]

Retained earnings

Balance at April 1, 2015 10,74,50,241 12,64,21,438 23,38,71,679 23,38,71,679 Proposed dividend 1,00,00,000 1,00,00,000 1,00,00,000 Corporate dividend Tax 16,99,500 16,99,500 16,99,500 Restated balance at the beginning of the reporting period 10,74,50,241 13,81,20,938 24,55,71,179 24,55,71,179

- Profit for the year - 4,56,70,877 4,56,70,877 4,56,70,877 Other comprehensive income for the year - - - - Total comprehensive income for the year - 4,56,70,877 4,56,70,877 4,56,70,877

- Dividend paid during the year - (1,00,00,000) (1,00,00,000) (1,00,00,000)Corporate dividend Tax During the Year (16,99,500) (16,99,500) (16,99,500)Balance at March 31, 2016 10,74,50,241 17,20,92,315 27,95,42,556 27,95,42,556

Restated balance at the beginning of the reporting period 10,74,50,241 17,20,92,315 27,95,42,556 27,95,42,556 - Profit for the year 5,34,29,489 5,34,29,489 5,34,29,489

Other comprehensive income for the year - (10,816) (10,816) (10,816)Total comprehensive income for the year 10,74,50,241 22,55,10,988 33,29,61,229 33,29,61,229 Corporate Dividend Tax (CDT) (3,37,000) (3,37,000) (3,37,000) Balance at March 31, 2017 10,74,50,241 22,51,73,988 33,26,24,229 33,26,24,229

Anuj Somani PartnerMembership No. : 511267


Ramesh Vaze Director

DIN 00509751

Prabha Vaze Director

DIN 00509817


As at March 31, 2016 As at March 31, 2017

Total Total Equity

Reserves & Surplus

Attributable to the equity holders of the parent



For the year ended March 31, 2017

For the year ended March 31, 2016

INR INR

8,20,50,020 6,82,16,769

Depreciation and impairment of property, plant and equipment 1,48,653 11,07,737 (Gain) on sale of property, plant and equipment (7,451) - Provision for gratuity 9,00,714 (Gain) on sale of investment (1,23,851) (1,72,638) Income tax relating to items that will not be reclassified to profit or loss (5,343) - Finance income (including fair value change in financial instruments) (2,18,49,997) (1,76,73,977)

(2,09,37,275) (1,67,38,878)

(Increase)/Decrease in trade receivables (4,64,32,590) (2,28,13,539) (Increase)/Decrease in short term loans and advances - 53,389 (Increase)/Decrease in Other financial assets(Increase)/Decrease in other current asset 33,899 22,91,006 (Increase)/Decrease in long term loans and advances (23,00,00,000) 5,25,00,000 Increase/(Decrease) in Provision 12,997 Increase/(Decrease) in short term borrowings - Increase/(Decrease) in other current liabilities 3,84,057 4,75,594

(27,60,01,637) 3,25,06,450 (2,95,98,979) (2,31,00,378)

30,96,804 43,59,164 (24,13,91,067) 6,52,43,127

(8,88,778) (31,700)

Sale of investment 7,46,849 - - (4,50,360)

Sale of fixed asset (car) 65,000 - Interest income 21,85,001 1,64,91,042

21,08,071 1,60,08,982

Dividend Paid - (1,00,00,000) (16,99,500)

- (1,16,99,500) (23,92,82,996) 6,95,52,609 23,98,30,372 17,02,77,763

- - 5,47,376 23,98,30,372

5,47,376 23,98,30,372

5,47,376 23,98,30,372

Anuj Somani PRABHA VAZE Partner DirectorMembership No. : 511267 DIN 00509817


Page 11

Ramesh Vaze

DIN 00509751 Director



Cash comprises cash on hand, Current Accounts and deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

Cash and Cash equivalents as restated as at the year end

Reconciliation of Cash and Cash equivalents with the Balance Sheet

The above Cash Flow Statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard (IND AS) 7 - "Cash Flow Statements".

Cash and Bank Balances as per Balance Sheet [Note 7]

Statement of cash flows for the year ended March 31, 2017

Cash flow from operating activitiesProfit before taxAdjustments to reconcile profit before tax to net cash used in operatingactivities

Purchase of investment

Net cash flows from investing activitiesCash flow from financing activities


Income Tax Refund

Cash flow from investing activitiesPayment for purchase and construction of property, plant and equipment


Direct Taxes Paid

Cash and cash equivalents at the end of the year

Corporate Dividend TaxNet cash flows from financing activities

Net increase / (decrease) in cash and cash equivalents

Effect of exchanges rate changes on cash and cash equivalentsCash and cash equivalents at the beginning of the year

1 Notes to the Financial statements for the year ended March 31, 2017Corporate overview & Significant accounting policies:Company overview:Rasiklal hemani agencies private limited in incorporated under The Companies act,1956 on February 13, 1975. Itis involved in interemediary services for trade of flavours, fragrances & essential Oils.

1.1 Basis of Accounting:The financial statements of the company have been prepared in accordance with Indian Accounting Standards(Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

For all periods up to and including the year ended 31 March 2015, the Company prepared its financialstatements in accordance accounting standards notified under the section 133 of the Companies Act 2013, readtogether with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statementsfor the year ended 01 April 2015 are the first the Company has prepared in accordance with Ind AS. Refer tonote 22 to 24 for information on how the Company adopted Ind AS.The financial statements have been prepared on a historical cost basis, except certain financial assets andliabilities measured at fair value (refer accounting policy regarding financial instruments).

Current-non-current classification:The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

a. An asset is classified as current when it satisfies any of the following criteria:i) it is expected to be realized in, or is intended for sale or consumption in, the company’s normal operating cycle;ii) it is held primarily for the purpose of being traded;iii) it is expected to be realized within twelve months after the reporting date; oriv) it is Cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at leasttwelve months after the reporting date.Current assets include the current portion of non-current financial assets.

b. All assets other than current assets is classified as non-current.

c. A liability is classified as current when it satisfies any of the following criteria:i) it is expected to be settled in the company’s normal operating cycle;ii) it is held primarily for the purpose of being traded;iii) it is due to be settled within twelve months after the reporting date; oriv) the company does not have an unconditional right to defer settlement of the liability for at least twelve monthsafter the reporting date.Current liabilities include the current portion of non-current financial liabilities.

Functional and presentation currencyFunctional currency of the company is INR. The financial statements are presented in INR. All amounts have been rounded to the nearest Rupee, unlessotherwise indicated.

1.2 Key estimates and assumptionsThe preparation of financial statements in accordance with Ind AS requires use of estimates and assumptions forsome items, which might have an effect on their recognition and measurement in the balance sheet andstatement of profit and loss. The actual amounts realised may differ from these estimates.

Estimates and assumptions are required in particular for:

a) Property, plant and equipment :Determination of the estimated useful lives of tangible assets and the assessment as to which components of thecost may be capitalized. Useful lives of tangible assets are based on the life prescribed in Schedule II of theCompanies Act, 2013. In cases, where the useful lives are different from that prescribed in Schedule II, they arebased on technical advice, taking into account the nature of the asset, the estimated usage of the asset, theoperating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers’warranties and maintenance support. Assumptions also need to be made, when the Company assesses,whether an asset may be capitalised and which components of the cost of the asset may be capitalised.

Page 12

b) Recognition and measurement of defined benefit obligations : The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Keyactuarial assumptions include discount rate, trends in salary escalation and vested future benefits and lifeexpectancy. The discount rate is determined by reference to market yields at the end of the reporting period ongovernment bonds. The period to maturity of the underlying bonds correspond to the probable maturity of thepost-employment benefit obligations.

c) Recognition of deferred tax assets : A deferred tax asset is recognised for all the deductible temporary differences to the extent that it is probable that

taxable profit will be available against which the deductible temporary difference can be utilised. The

management assumes that taxable profits will be available while recognising deferred tax assets.

d) Recognition and measurement of other provisions : The recognition and measurement of other provisions are based on the assessment of the probability of an

outflow of resources, and on past experience and circumstances known at the balance sheet date. The actual

outflow of resources at a future date may therefore vary from the figure included in other provisions.

e) Discounting of long-term financial instruments :All financial instruments are required to be measured at fair value on initial recognition. In case of financialinstruments which are required to subsequently measured at amortised cost, interest is accrued using theeffective interest method.

1.3 Statement of significant accounting policies

Foreign currency

Foreign currency transactionsTransactions in foreign currencies are initially recorded functional currency spot rates at the date the transactionfirst qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spotrates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetaryitems are recognised in profit or loss.Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using theexchange rates at the dates of the initial transactions.

Measurement of fair values]

Page 13

Revenue Recognition

Revenue is recognized when amount of the same can be measured reliabily. Commission income is recongnizedon accrual basis as per the terms of the agreement with the customer.Interest income is recognized on a time proportion basis taking into account the amount outstanding and theeffective rate of interest.Dividend income is recognised in profit or loss on the date on which the company’s right to receive payment isestablished.

Taxes

The tax expense comprises of current and deferred income tax. Income tax is recognised in net profit in theStatement of Comprehensive Income, except to the extent that it relates to items recognised in othercomprehensive income or directly in equity. In that case, the income tax is also recognised in othercomprehensive income or directly in equity, respectively.The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at theStatement of Financial Position date. Deferred income tax is recognised, using the liability method, on temporary differences arising between the taxbases of assets and liabilities and their carrying values in the Financial Statements. Deferred income tax isdetermined using tax rates (and laws) that have been enacted or substantively enacted by the Statement ofFinancial Position date and are expected to apply when the related deferred income tax asset is realised or thedeferred income tax liability is settled.Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will beavailable against which the temporary differences can be utilised.Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset currentincome tax assets against current income tax liabilities and when the deferred income tax assets and liabilitiesrelate to income tax levied by the same taxation authority on either the same taxable entity or different taxableentities where there is an intention to settle the balances on a net or simultaneous basis.The effect on deferred income tax assets and liabilities of a change in tax rates is recognised in net profit in theStatement of Comprehensive Income in the year of change.

Property, Plant and Equipment

Items of Property, Plant and Equipment are stated at cost less accumulated depreciation, amortisation andimpairment loss, if any. Cost of an item of PPE comprises its purchase price, including import duties and nonrefundable purchase taxes after deducting trade discounts and rebates, any directly attributable cost of bringingthe item to its working condition for its intended use and estimated costs of dismantling and removing the itemand restoring the site on which it is located. Cost also includes the cost of replacing part of the plant and equipment and borrowing costs for long-termconstruction projects if the recognition criteria are met.If significant parts of an item of PPE have different useful lives, then they are accounted as separate componentsof PPE.Expenses directly attributable to project, prior to commencement of commercial operation, are considered asproject development expenditure and shown under Capital Work-in-Progress.An item of property, plant and equipment and any significant part initially recognised is derecognised upondisposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising onderecognition of the asset (calculated as the difference between the net disposal proceeds and the carryingamount of the asset) is included in the income statement when the asset is derecognised.The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed ateach financial year end and adjusted prospectively, if appropriate.Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,only when it is probable that future economic benefits associated with the item will flow and the cost of the itemcan be measured reliably.

Depreciation is provided on Straight Line Method based on useful life of the assets prescribed in Schedule II tothe Companies Act, 2013 except in case of the following assets where useful life is different than those prescibedin Schedule II are used :

Page 14

Provisions and Contingent Liabilities and Contingent AssetsProvisions are recognised when the Company has a present obligation (legal or constructive) as a result of apast event, itis probable that an outflow of resources embodying economic benefits will be required to settle theobligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate thatreflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in theprovision due to the passage of time is recognised as a finance cost.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may,but probably will not, require an outflow of resources. When there is a possible obligation or a present obligationin respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.Contingent Assets are neither recognised nor disclosed in the financial statements.

Employee BenefitsShort-term employee benefitsAll employee benefits payable wholly within twelve months of rendering the service are classified as short-term

employee benefits. These benefits include compensated absences such as paid annual leave and sickness

leave. The undiscounted amount of short-term employee benefits expected to be paid in exchange for the

services rendered by employees is recognized as an expense during the period.Long term employee benefits(i) Defined contribution planThe Company’s contribution paid/payable to the provident fund managed by the trust set up by the Company isrecognised as expense in the statement of profit and loss during the period in which the employee renders therelated service. The interest rate payable to the members of the trust shall not be lower than the statutory rate ofinterest declared by the Central Government under the Employees Provident Funds and MiscellaneousProvisions Act, 1952 and shortfall if any shall be made good by the Company.Company also makes specified monthly contribution towards employee provident fund in India. Company’s suchcontribution is recognised as expenses in the Statement of Profit and Loss during the year.Company’scontributions to Employee State Insurance and Labour Welfare Fund are recognized in the Statement of Profitand Loss on an accrual basis.Contribution to Superannuation Fund, a defined contribution scheme, is made at pre-determined rates to theSuperannuation Fund Trust and is charged to the Statement of Profit and Loss. There are no other obligationsother than the contribution payable to the Superannuation Fund Trust.(ii) Defined benefit plansGratuity Plan: The Company’s gratuity benefit scheme is a defined benefit plan. The Company’s net obligation inrespect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employeeshave earned in return for their service in the current and prior periods; that benefit is discounted to determine itspresent value, and the fair value of any plan assets is deducted. The present value of the obligation under suchdefined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method. Theobligation is measured at the present value of the estimated future cash flows. The discount rates used fordetermining the present value of the obligation under defined benefit plan, are based on the market yields onGovernment securities as at the balance sheet date.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amountsincluded in net interest on the net defined benefit liability and the return on plan assets (excluding amountsincluded in net interest on the net defined benefit liability), are recognised immediately in the balance sheet witha corresponding debit or credit to retained earnings through OCI in the period in which they occur.Remeasurements are not reclassified to profit or loss in subsequent periods.

(iii) Other Long term employment benefitsCompensated absences which are not expected to occur within twelve months after the end of the period inwhich the employee renders the related services are recognized as a liability at the present value of the definedbenefit obligation at the Balance Sheet date, determined based on actuarial valuation using Projected Unit CreditMethod. The discount rates used for determining the present value of the obligation under defined benefit plan,are based on the market yields on Government securities as at the balance sheet date.

Page 15

Financial instrumentsA financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability orequity instrument of another entity. Financial instruments also include derivative contracts such as foreigncurrency foreign exchange forward contracts.

(i) Financial assetsInitial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair

value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.Subsequent measurementDebt instruments: Subsequent measurement of debt instruments depends on the business model for managingthe asset and the cash flow characteristics of the asset. There are three measurement categories into which theCompany classifies its debt instruments:At amortised costA ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cashflows, and b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principaland interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effectiveinterest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium onacquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in financeincome in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This categorygenerally applies to trade and other receivables. Fair value through other comprehensive income (FVOCI): A ‘debt instrument’ is classified as at the FVTOCI ifboth of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling thefinancial assets, andb) The asset’s contractual cash flows represent SPPI: Debt instruments included within the FVTOCI categoryare measured initially as well as at each reporting date at fair value. Fair value movements are recognized in theother comprehensive income (OCI). However, the company recognizes interest income, impairment losses &reversals and foreign exchange gain or loss in the P&L. On derecognition of the asset, cumulative gain or losspreviously recognised in OCI is reclassified from the equity to P&L. Interest earned whilst holding FVTOCI debtinstrument is reported as interest income using the EIR method.

Fair value through profit or loss (FVTPL):

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria forcategorization as at amortized cost or as FVTOCI, is classified as at FVTPL. In addition, company may elect todesignate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However,such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency(referred to as ‘accounting mismatch’). Company has not designated any debt instrument as at FVTPL. Debtinstruments included within the FVTPL category are measured at fair value with all changes recognized in theP&L.

Equity investments :All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held fortrading are classified as at FVTPL. For all other equity instruments, the company decides to classify the sameeither as at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. Theclassification is made on initial recognition and is irrevocable.

If the company decides to classify an equity instrument as at FVOCI, then all fair value changes on theinstrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI toprofit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or losswithin equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized inthe profit and loss.

Page 16

Derecognition:A financial asset is primarily derecognised when:I) The rights to receive cash flows from the asset have expired, orII)The has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay thereceived cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; andeither(a) the company has transferred substantially all the risks and rewards of the asset, or (b) company hasneither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control ofthe asset.

Impairment:The Company assesses on a forward looking basis the expected credit losses associated with its assets carriedat amortised cost. The impairment methodology applied depends on whether there has been a significantincrease in the credit risk. As a practical expedient, the uses a provision matrix to determine impairment loss allowance on portfolio of itstrade receivables, as permitted by Ind AS 109. The provision matrix is based on its historically observed defaultrates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At everyreporting date, the historical observed default rates are updated and changes in the forward-looking estimatesare analysed.(ii) Financial liabilitiesInitial recognition and measurementAll financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables,net of directly attributable transaction costs.Subsequent measurementThe measurement of financial liabilities depends on their classification, as described below:Financial liabilities at fair value through profit or loss: Financial liabilities at fair value through profit or loss includefinancial liabilities held for trading and financial liabilities designated upon initial recognition as at fair valuethrough profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose ofrepurchasing in the near term. This category also includes derivative financial instruments entered into by thecompany that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Gainsor losses on liabilities held for trading are recognised in the profit or loss.Loans and borrowings: After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised costusing the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised aswell as through the EIR amortisation process.Amortised cost is calculated by taking into account any discount orpremium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included asfinance costs in the statement of profit and loss.

Derecognition:A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.When an existing financial liability is replaced by another from the same lender on substantially different terms,or the terms of an existing liability are substantially modified, such an exchange or modification is treated as thederecognition of the original liability and the recognition of a new liability. The difference in the respectivecarrying amounts is recognised in the statement of profit or loss.

(iii) Offsetting of financial instrumentsFinancial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is acurrently enforceable legal right to offset the recognised amounts and there is an intention to settle on a netbasis, to realise the assets and settle the liabilities simultaneously.

Cash and cash equivalentsCash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term depositswith an original maturity of three months or less, which are subject to an insignificant risk of changes in value.For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-termdeposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of theCompany’s cash management.

Dividend distribution to equity holders of the parentThe Company recognises a liability to make cash or non-cash distributions to equity holders when the distributionis authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws inIndia, a distribution is authorised when it is approved by the shareholders. A corresponding amount isrecognised directly in equity.

Rasiklal Hemani Agencies Pvt. Ltd.Note-2 Property, plant and equipment

INR

Particulars Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at31st March 31st March 31st March 31st March 31st March 31st March

2016 2017 2016 2017 2017 2016Buildings 4,57,086 - - - 4,57,086 - - 26,460 - 26,460 4,30,626 4,57,086

Car 75,798 - 7,27,711 57,548 7,45,961 - - 79,598 - 79,598 6,66,363 75,798

Computer 13,730 - 93,700 - 1,07,430 - - 25,638 - 25,638 81,792 13,730

Furniture and Fixtures 7,840 - 4,000 - 11,840 - - 4,945 - 4,945 6,895 7,840

Office Equipment 13,548 - 63,367 1 76,914 - - 12,012 - 12,012 64,902 13,548

TOTAL 5,68,002 - 8,88,778 57,549 13,99,231 - - 1,48,653 - 1,48,653 12,50,578 5,68,002 65,000 6,82,576 (7,451)

INR

P A R T I C U L A R S Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at 1st April 31st March 1st April 31st March 31st March 1st April

2015 2016 2015 2016 2016 2015Buildings 9,33,980 - - 9,33,980 - - 4,76,894 4,76,894 4,57,086 9,33,980

Car 6,49,287 - - 6,49,287 - - 5,73,489 5,73,489 75,798 6,49,287

Computer 35,778 - 13,500 49,278 - - 35,548 35,548 13,730 35,778

Furniture and Fixtures 6,351 - 7,000 13,351 - - 5,511 5,511 7,840 6,351

Office Equipment 18,643 - 11,200 29,843 - - 16,295 16,295 13,548 18,643

TOTAL 16,44,039 - 31,700 - 16,75,739 - - 11,07,737 - 11,07,737 5,68,002 16,44,039

Buildings Car Computer Furniture and

Fixtures Office Equipment TotalGross Block 59,54,646 17,12,425 3,10,152 13,96,159 8,10,566 1,01,83,948 Less: Accumulated Depreciation 50,20,666 10,63,138 2,74,374 13,89,808 7,91,923 85,39,909 Net Block 9,33,980 6,49,287 35,778 6,351 18,643 16,44,039

Impact for current year SLM Method WDV Method Change Due to MethodDepreciation During the Year 1,48,653.00 8,82,988.00 7,34,335.00

Additions

Disposals

ACCUMULATED DEPRECIATIONGROSS BLOCK

Ind AS adjustments

Eliminated on disposal of

assets


Ind AS adjustments Disposals Ind AS adjustments

Ind AS adjustments

Note: The Company has availed the deemed cost exemption in relation to the property, plant and equipment on the date of transition and hence the net block carrying amount has been considered as the gross block carrying amount on that date. Refer note below for the gross block value and the accumulated depreciation on April 1, 2015 under the previous GAAP.

NET BLOCK

Effective 1 April 2016, the company has changed Its method of depreciation on property, plant and equipment from WDV to SLM, which is in the nature of change in estimates. Therefore, change in depreciation has been applied prospectively i.e., current financial year. Had the company followed the WDV method of depreciation, profit for the current financial year would have been lower by INR 7,34,335/-. The detail is as follows:

Eliminated on disposal of

assets

Charge for the year



Particulars As at As at31 March 2017 31 March 2016

Note 3Non-current InvestmentsQuoted equity shares

Equity shares at FVTPL Investment in equity shares of SHK (Includes security deposits to Holding company, Refer note [27] for details) - 6,22,998 (2502 shares of face value of Rs 10 each)

- 6,22,998

Aggregate amount of quoted investments 4,50,360 Aggregate market value of listed and quoted investments 6,22,998

Note 4Financial assets - Long term loans and advances(Unsecured and considered good)

Security deposits (Includes security deposits to Holding company, Refer note 27 for details) 23,00,35,690 35,690 23,00,35,690 35,690

Note 5Trade receivables

Trade receivables (includes amount receivable from Holding company, refer note 27 for details) - Unsecured, considered good 8,28,27,315 3,63,94,725 - Doubtful - -

8,28,27,315 3,63,94,725

Note 6Cash and cash equivalentsBalance with scheduled banks :In current account 5,06,560 23,97,73,892 In fixed deposit accounts - - Cash on hand 40,431 56,405 Postage Imprest 385 75 Petty Cash - -

5,47,376 23,98,30,372

Note 7Other current financial assets*

Interest accrued* (includes amount receivable of interest accrued on security deposit for FYE 2017 & 2016) 1,96,64,996 - 1,96,64,996 -

* Includes amount receivable from Holding company, refer note [27] for details

Note 8Other current assetsPrepaid Expenses 15,704 64,828 Interest Accrued on Fixed Deposits - - Service Tax receivable 15,225 - Service Tax Advance - -

30,929 64,828

Note 10ProvisionProvision for Gratutity 8,98,685 -

8,98,685 - Note 11Current - Other financial liabilitiesExpenses payable 1,76,643 4,88,858

1,76,643 4,88,858

Note 12Other current liabilitiesService tax payable 60,925 2,81,170 Swachh Bharat Cess Payable 2,270 10,042 Sundry Creditor 8,58,896 - Sab House Maintenance Agency (1,054) - Other Statutory Liabilities 66,447 -

9,87,484 2,91,212 * There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

Note 13Short term provisionsOther provision :Provision for expenses 12,997 - Provision for Gratuity 12,845 -

25,842 -


INRParticulars As at As at As at

March 31, 2017 March 31, 2016 April 1, 2015

Note 9Share Capital

Authorised :Equity Shares of Rs. 100 each at par 50,00,000 50,00,000 50,00,000 50,000 (2016: 50,000 2015: 50,000) Equity shares

TOTAL 50,00,000 50,00,000 50,00,000

Issued and Subscribed and Paid up:25,000 (2016: 25,000 2015: 25,000) Equity shares fully paid up 25,00,000 25,00,000 25,00,000

TOTAL 25,00,000 25,00,000 25,00,000

Reconciliation of number of shares outstanding at the beginning and end of the year :

Equity share March 31, 2017 March 31, 201625,000 25,000

- -

Outstanding at the end of the year 25,000 25,000


Rights, preference and restrictions attached to shares

Equity share

No. of Shares Amount in INR S H Kelkar Company Limited, the Holding company 24,999 24,99,900


No. of Shares No of shares No. of Shares No of shares No. of Shares No of shares% % %

S.H. Kelkar Company Limited 24,999 99.996% - 0.00% - 0.00%Ramesh Vaze 1 0.004%Sh. Rasiklal Hemani 12,700 50.80% 12,700 50.80%Smt. Panna Hemani 8,450 33.80% 8,450 33.80%Sh. Kishore Hemani 1,300 5.20% 1,300 5.20%

As at As at

Outstanding at the beginning of the year

31 March 2016 April 1, 2015

Equity Shares issued during the year in consideration for cash

Shares in respect of each class in the company held by its holding company or its ultimate holding company including shares held by

The company has one class of issued Equity Shares having a par value of Rs.100/- per share. Each Shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

March 31, 2017

As at As atMarch 31, 2017 31 March 2016 April 1, 2015

As at

subsidiaries or associates of the holding company or the ultimate holding company in aggregate

As at

Rasiklal Hemani Agencies Pvt. Ltd. INR

For the year ended For the year endedMarch 31, 2017 March 31, 2016


A. Sales of products and ServicesRepresentation Fee-Domestic 7,21,09,851 7,15,18,707 -Overseas *Earning In Foreign Currency - 13,21,206 Total 7,21,09,851 7,28,39,913


Note 15Other IncomeOther Interest (including interest on income tax refunds) 3,68,049 11,82,935

Interest income on security deposits (includes security deposits to Holding company, Refer note [27] for details) 2,18,49,997 - Sale of investment 1,23,851 - Sale of scrap 3,000 - Interest income from others - 1,64,87,289 Interim Dividend - 3,753 Fair valuation of investment - 1,72,638 Total Other income 2,23,44,897 1,78,46,615


Note 16Employee benefit expenseSalaries and Wages 64,09,454 1,01,04,880 Bonus 1,84,800 21,18,950 Contribution to Provident and Other Funds 4,97,538 2,54,928 Gratuity 11,78,094 1,69,516 Leave wages 49,057 57,987 Staff Welfare Expenses 1,04,640 55,375 Employee benefit expense 84,23,583 1,27,61,636


Note 17Other ExpensesOther Expenses 13,63,998 17,29,091 Repairs and Maintenance 2,63,809 3,31,213 Commission, Brokerage and Discount - 9,04,088

Postage & Courier Expenses 3,04,062 3,49,375 Telephone Expenses 2,01,857 2,90,005 Travelling Expenses 3,23,757 2,68,510 Travelling Expenses - Director's - 1,95,894 Medical Expense - Director's - 90,649 Donations - 17,66,000 Electricity & Water Expenses 3,87,041 3,53,339 Subscription 2,675 8,355 Statutory Audit Fees (refer below) 1,00,500 1,14,500 Golden Jubilee Expenses - 21,99,367 Corporate Social Responsibilities Expenses Refer Note No. 29 8,92,245 -

38,39,944 86,00,386 Details of Auditor RemunerationStatutory Audit Fees 1,00,500 1,14,500

Total 1,00,500 1,14,500


Note 18Statement of other comprehensive income(i) Items that will not be reclassified to profit or loss

(16,159) - (16,159) -

(ii) Income tax relating to items that will not be reclassified to profit or loss 5,343 - (10,816) -

-

Remeasurements of defined benefit asset/liability

Ind AS

Particulars

Particulars

Particulars

Particulars

Particulars


Note 19 : Earnings per share (EPS)

i. Profit attributable to Equity holders of parentMarch 31, 2017 March 31, 2016

INR INRProfit attributable to equity holders of the Company 5,34,18,673 4,56,70,877

ii. Weighted average number of ordinary sharesMarch 31, 2017 March 31, 2016

INR INRIssued ordinary shares at April 1 25,000 25,000 Weighted average number of shares at March 31 for basic and diluted EPS 25,000 25,000

Basic and Diluted earnings per shareMarch 31, 2017 March 31, 2016

INR INRBasic earnings per share 2,137 1,827


Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weightedaverage number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent (after adjusting for intereston the convertible preference shares) by the weighted average number of Equity shares outstanding during the year plus theweighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares intoEquity shares.

Rasiklal Hemani Agencies Pvt. Ltd.Note 20Tax expense(a) Amounts recognised in profit and loss

For the year ended March

31, 2017


31, 2016 INR INR

Current income tax 2,78,00,000 2,13,00,000 Adjustment for tax of earlier years 19,52,469 11,88,812 Deferred income tax liability / (asset), net

Origination and reversal of temporary differences (11,31,939.00) 57,079.00 Deferred tax expense (11,31,939.00) 57,079.00 Tax expense for the year 2,86,20,530 2,25,45,891

(b) Reconciliation of effective tax rateFor the year ended March

31, 2017


31, 2016 INR INR

Profit before tax 8,20,50,020 6,82,16,769 Tax using the Company’s domestic tax rate (Current year 33.06% and Previous Year 32.45%) 2,71,25,736 2,21,36,341 Tax effect of:Non-deductible tax expenses 4,41,276 1,43,510 Others 10,53,518 2,66,034

2,86,20,530 2,25,45,886

The Company’s consolidated weighted average tax rates for the years ended March 31, 2017 and 2016 were 33.06% and 32.45%, respectively. Income tax expense was Rs.2,78,00,000 for the year ended March 31, 2017, as compared to income tax expense of Rs 2,13,00,000 for the year ended March 31, 2016. The effective tax rate for the year ended March 31, 2017 was higher primarily as a result of a adjustment for tax of earlier years.

Rasiklal Hemani Agencies Pvt. Ltd.Note 21

In INR Net balanceApril 1, 2016


Recognisedin OCI


equity

Acquired in business

combinations

Other Net Deferred tax asset

Deferred tax liability

Deferred tax assetProperty, plant and equipment - 7,78,822 7,78,822 7,78,822 Investments (57,079) 57,079 - Employee benefits - 2,96,037 5,343 3,01,379 3,01,379 Tax assets (Liabilities) (57,079) 11,31,939 5,343 - - - 10,80,202 10,80,202 - Set off taxNet tax assets (57,079) 11,31,939 5,343 - - - 10,80,202 10,80,202 -

In INR Net balanceApril 1, 2015


Recognisedin OCI


equity

Acquired in business

combinations

Other Net Deferred tax asset


Investments - (57,079) (57,079)Tax assets (Liabilities) - (57,079) - - - - (57,079) - - Set off taxNet tax assets - (57,079) - - - - (57,079) - -

The company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income by each jurisdiction in which the relevant entity operates and the period over which deferred income tax assets will be recovered.

(a) Movement in deferred tax balancesMarch 31, 2017

Deferred tax asset

(e) Movement in deferred tax balancesMarch 31, 2016

Rasiklal Hemani Agencies Pvt. Ltd.Note 22Transition to Ind AS:

Reconciliation of equity as at April 1, 2015 Footnote ref. Amount as per

IGAAPEffects of transition to

Ind ASAmount as per Ind AS

INR INR INREQUITY AND LIABILITIESEquity (a) Equity share capital 25,00,000 - 25,00,000 (b) Other equity

Retained earnings a 12,64,21,438 1,16,99,500 13,81,20,938 Other reserves 10,74,50,241 - 10,74,50,241

Total equity 23,63,71,679 1,16,99,500 24,80,71,179


Others b - 3,04,476 3,04,476 Other current liabilities b 3,04,476 (3,04,476) - Short term provisions a 1,16,99,500 (1,16,99,500) - Current tax liability - - - Deferrex tax liability (net) - - - Total current liabilities 1,20,03,976 (1,16,99,500) 3,04,476

Total liabilities 1,20,03,976 (1,16,99,500) 3,04,476

Total Equity and Liabilities 24,83,75,655 - 24,83,75,655

Reconciliation of equity as at April 1, 2015 Footnote ref. Amount as per

IGAAP Effects of transition

to Ind AS Amount as per Ind AS

INR INR INRASSETSNon-current assetsProperty, Plant and Equipment 16,44,039 - 16,44,039 Financial Assets

Non-current investments - - - Long-term loans and advances c 6,04,63,444 (79,27,754) 5,25,35,690

Deferred tax assets (net) - - - Income tax assets (net) c - 79,27,754 79,27,754 Total non current assets 6,21,07,483 - 6,21,07,483

Current AssetsFinancial Assets

Trade and other receivables 1,35,81,186 - 1,35,81,186 Cash and cash equivalents 17,02,77,763 - 17,02,77,763 Others d 53,389 (53,389) -

Other current assets d 23,55,834 53,389 24,09,223 Total current assets 18,62,68,172 - 18,62,68,172

TOTAL ASSETS 24,83,75,655 - 24,83,75,655

Notes:

b. Reclassification as Financial Liability.

b. Reclassification as other current assets.

For the purposes of reporting as set out in Note 1, we have transitioned our basis of accounting from Indian generally accepted accounting principles (“IGAAP”) to Ind AS. The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS balance sheet at 1 April 2015 (the “transition date”).In preparing our opening Ind AS balance sheet, we have adjusted amounts reported in financial statements prepared in accordance with IGAAP. An explanation of how the transition from IGAAP to Ind AS has affected our financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates previously made under IGAAP except where required by Ind AS.

a. Under previous GAAP, dividend proposed by the board of directors after balance sheet data but before the approvals of financial statements wereconsidered as adjusting events. Accordingly, the liability for proposed dividend of INR 1,00,00,000 & Corporate dividend tax for Rs. 16,99,500 as at 01stApril 2015 included under provision have been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased byan equal amount.

c. Income tax advances reclassified as Income Tax (assets)

Rasiklal Hemani Agencies Pvt. Ltd.Note 23Reconciliation of equity as at March 31, 2016

Footnote ref. Amount as per IGAAP

Effects of transition to Ind AS


INR INR INREQUITY AND LIABILITIESEquity (a) Equity share capital 25,00,000 - 25,00,000 (b) Other equity

Retained earnings 17,19,76,757 1,15,559 17,20,92,315 Other reserves 10,74,50,241 - 10,74,50,241

Total equity 28,19,26,998 1,15,559 28,20,42,556 Current liabilitiesFinancial liabilities

Others a - 4,88,858 4,88,858 Other current liabilities a 7,80,070 (4,88,858) 2,91,212 Short term provisions - - - Current tax liability - - - Deferred Tax liability (net) b - 57,079 57,079 Total current liabilities 7,80,070 57,079 8,37,149

Total liabilities 7,80,070 57,079 8,37,149

Total Equity and Liabilities 28,27,07,068 1,72,638 28,28,79,706

Reconciliation of equity as at March 31, 2016 Footnote ref. Amount as per



Ind AS INR INR INR

ASSETSNon-current assetsProperty, Plant and Equipment 5,68,002 - 5,68,002 Financial Assets

Non-current investments c 4,50,360 1,72,638 6,22,998 Long-term loans and advances d 53,98,781 (53,63,091) 35,690

Deferred tax assets (net) - - - Income tax assets (net) d - 53,63,091 53,63,091 Total non current assets 64,17,143 1,72,638 65,89,781

Current AssetsFinancial Assets

Trade and other receivables 3,63,94,725 - 3,63,94,725 Cash and cash equivalents 23,98,30,372 - 23,98,30,372 Others - - -

Other current assets 64,828 - 64,828 Total current assets 27,62,89,925 - 27,62,89,925

TOTAL ASSETS 28,27,07,068 1,72,638 28,28,79,706

Reconciliation of profit or loss for the year ended 31 March 2016 Footnote ref. Amount as per



Ind AS INR INR INRRevenueI. Revenue from Operations (Gross) 7,28,39,913 - 7,28,39,913 II. Other income c 1,76,73,977 1,72,638 1,78,46,615 III. Total Income (I+II) 9,05,13,890 1,72,638 9,06,86,528 IV. Expenses

Employee Benefits Expenses 1,27,61,636 - 1,27,61,636 Depreciation and Amortization Expenses 11,07,737 - 11,07,737 Other Expenses 86,00,386 - 86,00,386

Total Expenses (IV) 2,24,69,759 - 2,24,69,759

V. Profit/(loss) before Exceptional Items and Tax6,80,44,131 1,72,638 6,82,16,769

VI. Exceptional Items - - VII. Profit/(loss) before Tax 6,80,44,131 1,72,638 6,82,16,769 VIII. Tax expense:

1. Current Tax 2,13,00,000 - 2,13,00,000 2. Deferred Tax b - 57,079 57,079 3. Adjustment of tax for earlier years 11,88,812 - 11,88,812

IX. Profit/(Loss) for the year 4,55,55,319 1,15,559 4,56,70,877

X. Other comprehensive income(i) Items that will not be reclassified to profit or loss

- - -

(ii) Income tax related to items that will not be reclassified to profit or loss

- - -

XI. Total comprehensive income for the year - - -

Notes:a.

b & c. Fair valuation of investment

d

Reclassification of expenses payable as financial liability

Under the previous GAAP, Long term investments were carried at cost less provision for other than temporary decline in the value of such investments. Under Ind AS, these investments are required to be measured at Fair-value. The resulting fair value changes of these investments have been recognized in Profit and Loss account for the year ended 31st March 2016.

Consequent to the above, deferred tax liabiity has been created on such income.Income tax advances have been reclassified as Income Tax (assets)

Rasiklal Hemani Agencies Pvt. Ltd.Note 24Transition to Ind AS:

Reconciliation of net worth as at April 1, 2015 As on 1 April

2015 As on 31 March

2016 INR (Net of

deferred tax)INR (Net of

deferred tax)Net worth under IGAAP 23,63,71,679 28,19,26,998

Summary of Ind AS adjustmentsReversal of proposed dividend as per Ind AS 101 1,00,00,000 Corporate Dividend Tax 16,99,500 1,72,638 Deferred tax on above - (57,079)

Total Ind AS adjustments 1,16,99,500 1,15,559

Net worth under Ind AS 24,80,71,179 28,20,42,556

Reconciliation of Comprehensive income for the year ended on 31 March 2016 As on 31 March

2016 INR (Net of deferred tax)

Comprehensive income under IGAAP 4,55,55,319

Summary of Ind AS adjustmentsImpairment of debtors based on expected credit model under Ind AS 109For EIR of processing fees paid on NCD 1,72,638 DT impact on the above (57,079)

Total Ind AS adjustments 1,15,559

Comprehensive income under Ind AS 4,56,70,877

Particulars

For the purposes of reporting as set out in Note 1, we have transitioned our basis of accounting from Indian generally accepted accounting principles (“IGAAP”) to Ind AS. The accounting policies set out in note no. 01 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS balance sheet at 1 April 2015 (the “transition date”).In preparing our opening Ind AS balance sheet, we have adjusted amounts reported in financial statements prepared in accordance with IGAAP. An explanation of how the transition from IGAAP to Ind AS has affected our financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates previously made under IGAAP except where required by Ind AS.

Footnote ref. Particulars

Footnote ref.

Rasiklal Hemani Agencies Pvt. Ltd.Note 25Employee Benefits

Defined Contribution Plan

4,97,538 2,54,928

4,97,538.00 2,54,928.00

Defined Benefit Plan - Gratuity

Present value of unfunded obligations 9,11,530 Present value of plan asset 2,52,090 Net deficit/ (assets) are analysed as: Liabilities 11,63,620 Assets Of the above net deficit:Current 12,845 Non-current 11,50,775

Fair value of the plan assets and present value of the defined benefit liabilities

Particulars 31 March 2017 31 March 2016

Movement in defined benefit obligations:At the beginning of the year - Current service cost 1,25,888 Past service cost 10,75,793 Interest cost - Contribution paid to the Fund (40,106)Remeasurements 16,519 Benefits paid (2,66,564)Liabilities assumed / (settled)At the end of the year 9,11,530 -


Movement in fair value of plan assets:At the beginning of the year 8,73,057 - Actual return on plan assets 47,651 Employer contributions 40,106 Benefits paid (7,08,724)At the end of the year 2,52,090 -

The components of defined benefit plan cost are as follows:Particulars 31 March 2017 31 March 2016

Recognised in Profit or LossCurrent service cost 1,25,888 Interest cost / (income) (net) (23,587)Past service cost 10,75,793 Expected return on plan assets - Curtailment/settlementExpected return on plan assetsTotal 11,78,094 - Recognised in Other Comprehensive IncomeRemeasurement of net defined benefit liability/(asset) (16,519)

Analysis of plan assets is as follows:

Equities (%) - Bonds (%) - Property (%) - Insurer managed funds (%) 100%Others (%) - Total 100% 0%

Page 30

Rate of increase in salaries 10%Discount rate 7.35%Rate of Employee Turnover 0Mortality Rate During Employment 0

Sensitivity of the defined benefit obligation :

Increase Decrease Increase Decrease

Discount rate (0.50% movement) (74,988) 82,650 Rate of increase in salaries (0.50% movement) 80,180 (73,582)Rate of employee turnover (0.50% movement)

Defined benefit liability and employer contribution

Particulars Less than a year Between 1-2 years Between 2-5 years Over 5 years Total

- 31 March 2017Defined benefit obligations (Gratuity) 12,845 17,267 1,18,827 10,14,681 11,63,620 Post employment medical benefits - Total 12,845 17,267 1,18,827 10,14,681 11,63,620

31 March 2016Defined benefit obligations (Gratuity)Post employment medical benefitsTotal

The Company’s provident fund scheme is a defined contribution plan. The Company’s contribution paid/payable under the schemes is recognised as expense in the Profit and Loss account during the period in which the employee renders the related service. The Company makes specified monthly contributions towards employee provident fund.The contribution towards Provident Fund is deposited with the Regional Provident Fund Commissioner .

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner.

The following table sets out funded status of the gratuity plan and the amounts recognised in the statement of profit and loss for the year ended 31 March 2017

An analysis of net (deficit)/assets is provided below for the Company’s principal defined benefit gratuity scheme.


Contribution to defined contribution plan, recognised are charged off for the year us under

The above sensitivity analyses have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the reporting date. In practice, generally it does not occur. When we change one variable, it affects to others. In calculating the sensitivity, project unit credit method at the end of the reporting period has been applied.

The Company makes payment of liabilities from its cash and cash equivalent balances whenever liability arises.

Particulars 31 March 2017 31 March 2016 1 April 2015

31 March 2017 31 March 2016

The amount included in the Balance sheet arising from the Company's obligations and plan assets in respect of its defined benefit schemes is as follows:


The schemes have no direct investments in the Company’s equity securities or in property currently used by the Company.

The principal actuarial assumptions used for estimating the Company’s benefit obligations are set out below (on a weighted average basis):

Description 31 March 2017 31 March 2016

Employer's contribution to Provident Fund


Notes 26Segment reporting

A. General InformationThe Company has only business segment and It is involved only in interemediary services for trade of flavours, fragrances & essential Oils.

B. Geographic informationThe business segment of the Company is primarily involved in domestic operations.

C. Information about major customers

Revenues from one customer of the flavours segment represented approximately INR 7,21,09,851 (previous year - INR 7,00,46,648) of the Company's total revenues.


Notes 27Related party relationships, transactions and balances

a) Enterprises owned, controlled or significantly influenced by key management personnel or their relatives

b) Fellow subsidiaries (with whome there were transaction during the reporting periods):-

· Keva Flavours Private Limited· Keva Fragrance Industries Pte Limited· PT SHK Keva Indonesia· Saiba Industries Private Limited· PFW Aroma Ingredients B.V

c) Enterprises owned or controlled or significantly influenced by key management personnel or their relatives (with whom there were transaction during the reporting periods)

· Purandar Fine Chemicals Private Limited

d)

* Rasik lal Hemani * Panna Hemani * Kishore Hemani

INR

2017 2016 2017 2016Sale of good and services 7,21,09,851 - 8,28,27,315 - Holding company

Security Deposits For Business Performance To Holding Company 23,00,00,000 - 23,00,00,000 - Interest On Security Deposits To Holding Company 2,18,49,997 - 1,96,64,997 -

Compensation paid to key Managerial personnelRemuneration (KMPs)Rasik Lal Hemani - 31,00,000 Panna Hemani - 18,00,000 Kishore Hemani - 34,00,000

Compensation paid to key Managerial personnelShort term employee benefitsPost employee gratuity and medical benefitsTermination benefitsShare based payments

Terms and conditions of transactions with related partiesThe sale of services to related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end in respect of trade are unsecured and interest free and settlement occurs in cash. However, Security deposits is interest bearing. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2017, company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2016: INR Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Particulars

a) Holding Company:-


Transaction values for the year ended 31 March

Balances outstanding as at 31 March

* S H Kelkar and Company Limited (w.e.f. 02.04.2016)

Key Managerial Personnel (Till 02.04.2016)



March 31, 2017INR

FVTPL Amortised Cost Total Level 1 Level 2 Total

Financial assets Cash and cash equivalents - 5,47,376 5,47,376 - Non-current investments - - - - Long-term loans and advances - 23,00,35,690 23,00,35,690 - Short-term loans and advances - 1,96,64,996 1,96,64,996 - Trade and other receivables 8,28,27,315 8,28,27,315 -

- 33,30,75,377 33,30,75,377 - - -

Financial liabilities Other Current financial liabilities 1,76,643 1,76,643 -

- 1,76,643 1,76,643 - - -

March 31, 2016INR


Financial assets Cash and cash equivalents - 23,98,30,372 23,98,30,372 - Non-current investments 6,22,998 6,22,998 6,22,998 6,22,998 Long-term loans and advances - 35,690 35,690 - Trade receivables 3,63,94,725 3,63,94,725 -

6,22,998 27,62,60,787 27,68,83,785 6,22,998 - 6,22,998


- 2,91,212 2,91,212 - - -

April 1, 2015INR


Financial assets Cash and cash equivalents - 17,02,77,763 17,02,77,763 - Long-term loans and advances 5,25,35,690 5,25,35,690 - Short-term loans and advances - - - Trade receivables 1,35,81,186 1,35,81,186 -

- 23,63,94,639 23,63,94,639 - - -


- 3,04,476 3,04,476 - - -

C. Financial risk managementThe Company has exposure to the following risks arising from financial instruments: Credit risk ; Liquidity risk ; and Market risk


(1) Assets that are not financial assets (such as receivables from statutory authorities, export benefit receivables, prepaid expenses, advances paid and certain other receivables) amounting to Rs. 2,47,19,614, Rs. 59,95,921 and Rs. 1,19,27,627 as of March 31, 2017, March 31, 2016 and April 1, 2015, respectively, are not included.(2) Other liabilities that are not financial liabilities (such as statutory dues payable, deferred revenue, advances from customers and certain other accruals) amounting to Rs. 18,03,291, Rs. 2,91,212 and Rs. 1,16,99,500 as of March 31, 2017, March 31, 2016 and April 1, 2015, respectively, are not included.(3) The Company has not disclosed the fair values for financial instruments such as cash and cash equivalents, loans and advances and trade receivables, because their carrying amounts are a reasonable approximation of fair value.

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The committee reports regularly to the board of directors on its activitiesThe Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.



Carrying amount Fair value




Financial instruments – Fair values and risk management (continued)

ii. Credit risk


March 31, 2017 March 31, 2016India 8,28,27,315 3,58,41,090.00 Other regions - 5,53,635.00

8,28,27,315 3,63,94,725.00

Impairment

March 31, 2017 March 31, 2016Neither past due nor impaired - - Past due 0-90 days 95,10,476 3,13,29,004.00 Past due 90-180 days 1,81,11,069 50,65,721.00 Past due 180-270 days 2,35,09,653 - Past due 270–360 days - - Past due 360-450 days 3,16,96,118 - Past due 450-540 days - - Past due 540-630 days - - Past due 630-720 days - - More than 730 days - -

8,28,27,315 3,63,94,725.00

The movement in the allowance for impairment in respect of trade and other receivables during the year was as follows.

Individual impairments

Collective impairments

Balance as at April 1, 2015 - Impairment loss recognisedAmounts written offBalance as at March 31, 2016 - - Impairment loss recognisedAmounts written offBalance as at March 31, 2017 - -


At March 31, 2017, the ageing of trade and other receivables that were not impaired was as follows.

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk, including underlying customers’ credit ratings if they are available.

Carrying amount (in INR)

INR

At March 31, 2017, the maximum exposure to credit risk for trade and other receivables by geographic region was as follows.


Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and investments in debt securities.


The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables.



iii. Liquidity risk


March 31, 2017 Carrying amount Total Upto 1 year 1-3 years 3-5 years More than

5 yearsINRNon-derivative financial liabilitiesExpenses payable 1,76,643 1,76,643 1,76,643

March 31, 2016 Carrying amount Total Upto 1 year 1-3 years 3-5 years More than

5 yearsINRNon-derivative financial liabilitiesExpenses payable 4,88,858 4,88,858 4,88,858


The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity. The disclosure shows net cash flow amounts for derivatives that are net cash-settled and gross cash inflow and outflow amounts for derivatives that have simultaneous gross cash settlement

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.



Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.



iv. 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 fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The company has no borrowings from banks and financial institutions.

Since the Company does not have any financial assets or financial liabilities bearing floating interest rates, a change in interest rates at the reporting date would not have any significant impact on the financial statements of the Company.


V. Capital Management

As at March 31, 2017

As at March 31, 2016

Total liabilities 31,94,789 8,37,149 Less : Cash and cash equivalent 5,47,376 23,98,30,372 Adjusted net debt 26,47,413 (23,89,93,223)Total equity 33,51,24,229 28,20,42,556 Less : Hedging reserve - - Adjusted equity 33,51,24,229 28,20,42,556 Adjusted net debt to adjusted equity ratio 0 (1)


INR

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.

The board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. In the current financial year, The Company’s target is to achieve higher return on capital employed in comparision with the March, 2017. The return on Capital employed in March 31, 2017 was 24.42% (March 31, 2016: 24.19%). The weighted-average interest expense on interest-bearing borrowings (excluding liabilities with imputed interest) was 0% (March 31, 2016: 0%).

29 CORPORATE SOCIAL RESPONSIBILITY

a) Gross amount required to be spent by the company during the year is Rs. 11,42,170/-b) Amount spent during the year on:Sl. No. Particulars Incurred During the Financial Year Yet to be incurred Totali) Construction/ Acquisition of any asset - - - ii) On purpose of othere than (i) above 8,67,233 2,74,937 11,42,170

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately precedingthree financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art andculture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by thecompany as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified in Schedule VII of the Companies Act,2013.

30 Disclosure on Specified Bank Notes (SBNs)

in Rs.Particulars SBNs* Other Denomination notes TotalClosing Cash in hand as on November 8, 2016 70,000 23,427 93,427 (+) Permitted Receipts - 1,54,000 1,54,000 (-) Permitted Payments - 1,21,664 1,21,664 (-) Amount deposited in Banks 70,000 - 70,000 Closing Cash in hand as on December 30, 2016 - 55,763 55,763

31

Ramesh Vaze Prabha Vaze Director Director

DIN 00509751 DIN 00509817

During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R.308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period fromNovember 8, 2016 to December, 30 2016, the denomination wise SBNs and other notes as per the notification is given below:

* For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification ofthe Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8thNovember, 2016.

The income tax assessment has been completed for the year 2013-14. The additional liability of Rs. 5,62,000 has not been provided, since the company is confident that the appeal of the company, against the disallowance, is maintainable and in view of this, no provision is necessary


Keva Flavours Private Limited

Financials – FY 2016- 17

Independent Auditor’s Report To the Members of Keva Flavours Private Limited Report on the Standalone Ind AS Financial Statements We have audited the accompanying standalone Ind AS financial statements of Keva Flavours Private Limited(‘the Company’), which comprise the balance sheet as at 31 March 2017, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as “standalone Ind AS financial statements”). Management’s Responsibility for the Standalone Financial Statements The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued there under. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.


Opinion In our opinion and to the best of our information and according to the explanations given to us, the afore said standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31 March, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date. Report on Other Legal and Regulatory Requirements 1 As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central


2 As required by Section 143(3) of the Act, we report that: (a) we have sought and obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purposes of our audit. (b) in our opinion proper books of account as required by law have been kept by the Company so

far as it appears from our examination of those books; (c) The balance sheet, the statement of profit and loss, the statement of cash flows and the

statement of changes in equity dealt with by this Report are in agreement with the books of account;

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

Accounting Standards specified under Section 133 of the Act read with relevant rule issued there under;

(e) on the basis of the written representations received from the directors as on 31 March 2017

taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the

Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule

11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company does not have any pending litigations which would impact its financial

position; ii. the Company did not have any long-term contracts including derivative contracts for

which there were any material foreseeable losses; iii. there were no amounts which were required to be transferred to the Investor Education and

Protection Fund by the Company.

iv. the Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016 and these are in accordance with the books

of accounts maintained by the Company. Refer Notes to the standalone Ind AS financial statements.


Annexure - A to the Auditors’ Report The Annexure referred to in Independent Auditors’ Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31 March 2017, we report that:


(b) The fixed assets have been physically verified by the management during the previous year under a program of verification of fixed assets once in every 3 years, which in our opinion, is reasonable having regard to the size of the company and nature of its assets. No material discrepancies were identified on such verification.


(ii) The management has conducted physical verification of inventory at the year end. Discrepancies noted on physical verification of inventories were not material, and have been properly dealt with in the books of account.

(iii) The Company has not granted any loans, secured or unsecured to Companies, Firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act. Accordingly, paragraph 3(iii) (a), (b) and (c) of the Order are not applicable to the Company.

(iv) According to the information and explanations given to us, the Company has not granted any loans, made investments, given guarantees and security. Accordingly, the paragraph 3(iv) of the Order is not applicable to the Company.

(v) The Company has not accepted any deposits from the public. (vi) To the best of our knowledge and as explained, the Central Government has not specified

the maintenance of cost records under clause 148(1) of the Companies Act, 2013 for the Company. Accordingly, paragraph 3 (vi) of the Order are not applicable to the Company.



(b) According to the information and explanations given to us, outstanding dues of sales tax that have not been deposited by the Company on account of disputes:

Name of the statute Nature of dues

Amount (Rs.)

Period to which the amount relates (Financial Year)


Central Excise Act

Excise Duty and

Penalty

11,44,045 2005-2006 CESTAT

Central Sales Tax Act and MVAT Act

Sales Tax,

Interest and

Penalty

2,99,924 2005-2006 Deputy

Commissioner of Sales Tax (Appeals)


Sales Tax,

Interest and

Penalty

29,97,260 2008-2009 Deputy

Commissioner of Sales Tax (Appeals)


Sales Tax and

Interest 736,195 2009-2010

Deputy Commissioner of

Sales Tax (Appeals)

(viii) Based on our audit procedures and as per information and explanation given by the

management, the Company did not have any outstanding dues in respect of loans or borrowings from any financial institution, bank, government or debenture holders.


(x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) The Company has not paid any remuneration to managerial personnel. Accordingly, the paragraph 3(xi) of the Order is not applicable.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.



(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of

India Act 1934. for BATLIBOI & PUROHIT Chartered Accountants Firm Reg. No.: 101048W Kaushal Mehta Partner Membership No: 111749 Place : Mumbai Date : May 11, 2017

Annexure - B to the Auditors’ Report Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Keva Flavours Private Limited (“the Company”) as of 31 March 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimely preparation of reliable financial information, as required under the Companies Act,2013. Auditors’ Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The proceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterial misstatement of the standalone Ind AS financial statements, whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company'sinternalfinancialcontroloverfinancialreportingincludesthosepoliciesandproceduresthat (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) providereasonableassuranceregardingpreventionortimelydetectionofunauthorisedacquisition,use,or disposition of the company's assets that could have a material effect on the financialstatements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. for BATLIBOI & PUROHIT Chartered Accountants Firm Reg. No.: 101048W Kaushal Mehta Partner Membership No:111749 Place : Mumbai Date : May 11, 2017


Balance sheet as at 31 March 2017

(Currency : Indian Rupees)

Note 31 March 2017 31 March 2016 1 April 2015

Assets(1) Non current assets(a) Property, Plant and Equipment 4 2,79,56,220 1,26,23,826 1,55,32,143 (b) Capital work-in-progress - 30,79,568 - (c) Goodwill 13,45,09,880 - - (d) Other Intangible assets 5 23,21,41,073 25,80,113 35,92,654 (e) Financial Assets - - -

(i) Loans 6 47,204 13,868 47,180 (ii) Others 7 1,38,44,897 80,83,438 75,71,410

(f) Deferred tax assets (net) 31 - 23,26,134 20,97,566 (g) Income tax assets (net) 1,78,78,193 89,13,550 71,76,176 (h) Other non-current assets 8 1,51,03,557 57,77,979 46,84,612 Total non current assets 44,14,81,024 4,33,98,476 4,07,01,741

(2) Current Assets(a) Inventories 9 14,88,61,087 7,92,05,887 9,77,88,142 (b) Financial Assets

(i) Trade receivables 10 20,85,33,841 10,63,36,845 5,12,07,819 (ii) Cash and cash equivalents 11a 1,61,09,813 44,71,252 3,38,01,709 (iii) Bank balances other than (ii) above 11b 7,00,00,000 - - (iii) Loans 12 33,336 1,58,622 1,97,321

(c) Other current assets 13 3,95,80,898 40,36,384 65,87,757 Total current assets 48,31,18,975 19,42,08,990 18,95,82,748

TOTAL ASSETS 92,45,99,999 23,76,07,466 23,02,84,489 Equity and Liabilities(1) Equity (a) Equity share capital 14 10,00,000 10,00,000 10,00,000 (b) Other equity

(i) Retained earnings 19,36,78,784 13,33,88,699 10,87,90,674 (ii) Other Reserves 15 4,26,90,000 4,26,90,000 4,26,90,000

Equity attributable to owners of the Company 23,73,68,784 17,70,78,699 15,24,80,674 Total equity 23,73,68,784 17,70,78,699 15,24,80,674

(2) Non current liabilities(a) Provisions 16 16,69,520 16,83,862 35,04,000 (b) Deferred tax liabilities (net) 31 90,61,196 - - Total non current liabilities 1,07,30,716 16,83,862 35,04,000

(3) Current liabilities(a) Financial liabilities

(i) Trade payables 17 20,98,09,876 4,95,29,407 6,40,99,822 (ii) Borrowings 18 29,70,00,000 - - (iii) Other financial liabilities 19 14,74,02,593 57,36,582 74,03,760

(b) Other current liabilities 20 2,02,37,787 18,88,881 12,59,369 (c) Current tax liabilities (net) 7,12,588 3,41,204 2,87,865 (d) Provisions 21 13,37,655 13,48,831 12,49,000 Total current liabilities 67,65,00,499 5,88,44,905 7,42,99,816 Total liabilities 68,72,31,215 6,05,28,767 7,78,03,816

Total equity and liabilities 92,45,99,999 23,76,07,466 23,02,84,490

Significant accounting policies 1-3The notes referred to above and other notes form an integral part of the financial statements. 4-43



Partner Director Membership No: 111749 DIN: 00509751

Place:Mumbai Place: Mumbai


Keva Flavours Private Limited CIN: U15134MH1980PTC023361

Prabha Vaze Director

DIN: 00509817

Kaushal Mehta Ramesh Vaze

Date: May 11, 2017 Date:May 11, 2017


Statement of profit and lossfor the year ended 31 March 2017

(Currency : Indian Rupees)Year ended Year ended

Note 31 March 2017 31 March 2016 Revenue I. Revenue from Operations (Gross) 22 75,13,08,615 30,58,16,318 II. Other income 23 66,51,261 10,01,564 III. Total Income (I+II) 75,79,59,876 30,68,17,882 IV. Expenses

Cost of materials consumed 24 39,72,02,656 15,87,86,323 Changes in inventories of finished goods, work-in-progress and stock-in-trade 25 (74,55,601) 1,19,14,607 Employee Benefits Expenses 26 3,75,98,304 3,00,81,055 Finance costs 27 3,10,64,588 - Excise duty 7,62,07,488 2,60,10,737 Depreciation and Amortization Expenses 28 4,47,19,664 51,10,634 Other Expenses 29 8,85,32,936 3,88,03,157

Total Expenses (IV) 66,78,70,035 27,07,06,513 V. Profit/(loss) before Exceptional Items and Tax 9,00,89,841 3,61,11,369 VI. Exceptional Items - - VII. Profit/(loss) before Tax 9,00,89,841 3,61,11,369 VIII. Tax expense:

1. Current Tax 1,81,78,000 1,23,81,000 2. Deferred Tax 1,15,52,664 (4,49,744) 3. Adjustment for tax of earlier years (2,43,308) -

IX. Profit/(Loss) for the year 6,06,02,485 2,41,80,113

X. Other comprehensive income Items that will not be reclassified to profit or loss

Remeasurements of defined benefit liability (asset) (4,77,735) 6,39,087 Income tax related to items that will not be reclassified to profit or loss 1,65,335 (2,21,175)

(3,12,400) 4,17,912

XI. Total comprehensive income for the year 6,02,90,085 2,45,98,025

XII. Earnings per equity share 30 1. Basic 6,060 2,418 2. Diluted 6,060 2,418

Significant accounting policies 1-3The notes referred to above and other notes form an integral part of the financial statements. 4-43




Place: Mumbai Place:MumbaiDate: May 11, 2017 Date: May 11, 2017

CIN: U15134MH1980PTC023361




Statement of changes in equity (SOCIE)In INR


Balance at the beginning of the reporting period 10,000 10,00,000 10,000 10,00,000 Changes in equity share capital during the yearBalance at the end of the reporting period 10,000 10,00,000 10,000 10,00,000

(b) Other equity

Particulars General Reserve

Retained earnings

Balance at 1 April 2015 4,26,90,000 10,87,90,674 15,14,80,674 15,14,80,674 -

Profit for the year - 2,41,80,113 2,41,80,113 2,41,80,113 Other comprehensive income for the year - 4,17,912 4,17,912 4,17,912 Total comprehensive income for the year - 2,45,98,025 2,45,98,025 2,45,98,025

Balance at 31 March 2016 4,26,90,000 13,33,88,699 17,60,78,699 17,60,78,699

Profit for the year - 6,06,02,485 6,06,02,485 6,06,02,485 Other comprehensive income for the year - (3,12,400) (3,12,400) (3,12,400)Total comprehensive income for the year - 6,02,90,085 6,02,90,085 6,02,90,085

Balance at 31 March 2017 4,26,90,000 19,36,78,784 23,63,68,784 23,63,68,784




Place: Mumbai Place: MumbaiDate: May 11, 2017 Date: May 11, 2017


Keva Flavours Private LimitedCIN: U15134MH1980PTC023361

31 March 2017

Attributable to owners of the Company

TotalReserves & Surplus Total Other

Equity

31 March 2016


Cash flow statement

(Currency : Indian Rupees)



Profit before tax 9,00,89,841 3,61,11,369 9,00,89,841 3,61,11,369

Profit on sale of assets (net) - (3,763) Finance Cost 3,10,64,588 - Interest income (57,86,923) (6,41,960) Provision/Write off for Doubtful debts 2,13,537 3,31,916 Balances written back (4,78,601) (5,906) Unrealised Exchange Difference - 1,365 Depreciation and amortisation 4,47,19,664 51,10,634

15,98,22,106 4,09,03,655

(Increase) / decrease in inventories (5,97,30,150) 1,85,82,255 (increase) / decrease in trade receivables (4,10,46,122) (5,54,55,034) (increase) / decrease in loans (3,49,79,960) 15,20,019 Increase / (decrease) in trade payables 10,75,85,658 (1,45,71,781) Increase / (decrease) in financial liabilities and provisions 3,47,08,405 (21,18,886)

16,63,59,937 (1,11,39,772) (2,65,27,951) (1,40,65,035) 13,98,31,986 (2,52,04,807)

(1,33,01,964) (45,99,678)

- 3,34,098 (30,61,00,000) -

55,464 1,39,932 Investment in other bank balances (7,00,00,000) -

(38,93,46,500) (41,25,648)

43,75,00,000 - Repayment of borrowing to Holding Company (14,05,00,000) Repayment of borrowing on acquisition of business (3,00,00,000)

(58,46,926) - 26,11,53,074 -

1,16,38,560 (2,93,30,455) 44,71,252 3,38,01,709

1,61,09,812 44,71,254




Place: Mumbai Place:MumbaiDate: May 11, 2017 Date: May 11, 2017

(a) The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Indian Accounting Standard (Ind AS-7) - Statement of Cash Flow.

Net cash flows from financing activitiesNet increase / (decrease) in cash and cash equivalentsCash and cash equivalents at the beginning of the year

Proceeds from sale of property, plant and equipment

Cash and cash equivalents at the end of the year

Net cash flows from investing activitiesCash flow from financing activities

Interest receivedPurchase consideration paid for acquisition of business

Borrowings (current) from Holding Company

Interest paid


Keva Flavours Private LimitedCIN: U15134MH1980PTC023361

for the year ended 31 March 2017

Cash flow from operating activities

Profit before taxAdjustments for:


Income Tax paid

Cash flow from investing activitiesPurchase of property, plant and equipment (including Capital Work in Progress)


(b) Refer note 11 for break up of cash and cash equivalents.


Notes to the financial statementsas at 31 March 2017

In INR Particulars


Note 6Financial assets - Loans (non current)

Loans to Employees 47,204 13,868 47,180 47,204 13,868 47,180

Note 7Other non current financial assetsSecurity Deposits 40,000 10,000 - Interest accrued on deposits 63,04,196 5,72,737 70,709 Bank deposits with more than 12 months maturity 75,00,701 75,00,701 75,00,701

1,38,44,897 80,83,438 75,71,410

Note 8Other non-current assetsPrepaid Expenses 75,662 7,56,890 78,161 Balances with Government Authorities (Drawback / Customs and Excise duties receivable) 51,99,713 50,21,089 46,06,451 Capital Advance 98,28,182 - -

1,51,03,557 57,77,979 46,84,612

Note 9Inventories

Raw Materials* 11,33,79,230 5,13,10,710 6,00,46,178 Packing Materials 50,27,753 48,96,675 28,28,855 Work-in-Progress 2,64,64,483 2,15,12,980 3,09,22,711 Finished goods 39,89,621 14,85,522 39,90,398

14,88,61,087 7,92,05,887 9,77,88,142 * Includes goods in transit Rs. 2,68,62,351 (2016: Rs. 1,08,97,957; 2015: Rs. 1,93,485)

Note 10Trade ReceivablesTrade receivables

Unsecured, considered good - From related parties 6,32,14,719 5,50,48,397 55,74,300 - From others 14,53,19,122 5,12,88,448 4,56,33,519

Doubtful 9,03,902 13,61,675 10,34,941

Loss allowance Doubtful 9,03,902 13,61,675 10,34,941

20,85,33,841 10,63,36,845 5,12,07,819

Trade Receivable stated above include debts due by:Private Company in which the Company's directors are directorsKeva Fragrances Private Limited 6,32,14,720 4,84,06,090 55,62,960

6,32,14,720 4,84,06,090 55,62,960

Note 11aCash and cash equivalents

Balance with banks :In current account 1,60,86,605 44,56,359 3,37,39,106 Cash on hand 23,208 14,893 62,603

1,61,09,813 44,71,252 3,38,01,709

Note 11bOther bank balances

Deposits For Margin Money With Banks 75,00,000 75,00,701 75,00,701 Less: Shown under non current assets 75,00,000 75,00,701 75,00,701 Term Deposit with Banks - Original maturity 3 months to 12 months 7,00,00,000 - -

7,00,00,000 - -

Inventories which comprises raw materials, packing materials, work-in-progress and finished goods are carried at the lower of cost and net realisable value


Notes to the financial statementsas at 31 March 2017

In INR


Note 12Loans (current)

Loan to Employees 33,336 1,58,622 1,97,321 33,336 1,58,622 1,97,321

Note 13Other current assetsPrepaid expenses 1,48,173 1,21,984 1,21,984 Advance to suppliers 92,62,743 13,29,045 43,64,964

Balance with statutory/government authoritiesDeposits with Central Excise 40,56,560 2,12,152 10,32,372 Input Credit Service Tax\VAT Receivable 2,61,13,422 19,38,708 7,59,853

Advances recoverable in cash or in kind or for value to be received --Unsecured, considered good - 4,34,495 3,08,584

3,95,80,898 40,36,384 65,87,757

Advance to suppliers includes:Related parties - - 40,27,578 Others 92,62,743 13,29,045 3,37,386

92,62,743 13,29,045 43,64,964

Note 15 Other Reserves General reserve 4,26,90,000 4,26,90,000 4,26,90,000

4,26,90,000 4,26,90,000 4,26,90,000

Note 16Provisions (non-current)Provision for employee benefits

Gratuity [Refer note 34] - - 19,67,000 Compensated Absences 16,69,520 16,83,862 15,37,000

16,69,520 16,83,862 35,04,000

Note 17Trade and other payablesRelated Parties [Refer note 40] 16,54,06,331 1,53,07,590 2,71,32,692 Others 4,44,03,545 3,42,21,817 3,69,67,130

20,98,09,876 4,95,29,407 6,40,99,822

Note 18Short term borrowingsUnsecured LoanLoan from Holding Company [Refer note 40] 29,70,00,000 - -

29,70,00,000 - -

Note 19Current - Other financial liabilitiesEmployee benefits payable 58,51,207 37,96,138 42,61,973 Payable for expenses 52,28,128 7,18,364 12,78,639 Other Payables - Related Party [Refer note 40] 1,15,20,000 12,22,080 18,63,148 Purchase consideration for acquisition of flavours business [Refer note 41] 11,02,69,451 - - Interest accrued due to holding company [Refer note 40] 1,45,33,807 - -

14,74,02,593 57,36,582 74,03,760

Note 20Other current liabilitiesAdvances from customers- Others 6,13,246 5,21,108 4,41,519 - Related party 6,12,575 - - Statutory Dues Payables* (includes VAT, Excise Duty, Provident Fund, Withholding Taxes, etc.) 1,90,11,966 13,67,773 8,17,850

2,02,37,787 18,88,881 12,59,369 * There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

Note 21Provisions (current)Provision for employee benefits

Gratuity [Refer note 34] - - 40,000 Compensated Absences 13,37,655 13,48,831 12,09,000

13,37,655 13,48,831 12,49,000

Particulars

A loan of INR 29,70,00,000 is taken from S H Kelkar and Company Limited as a part of intercorporate deposits. This loan is repayable on demand and interest charged ranges from 9-9.50% p.a. The amount of interest cost incurred during the year 2016-17 is INR 20,380,733 (2015-16: INR Nil)


Notes to the financial statementsfor the year ended 31 March 2017

In INR

Particulars Year ended Year ended31 March 2017 31 March 2016


Sales of productsSale of products 75,13,08,615 30,58,16,318

75,13,08,615 30,58,16,318

Total 75,13,08,615 30,58,16,318

Note 23Other IncomeInterest on Deposits with Banks measured at amortised cost 57,86,923 6,41,960 Profit on sale of fixed assets - 3,763 Balances written back 4,78,601 5,906 Miscellaneous income 3,85,737 3,49,935 Total Other income 66,51,261 10,01,564

Note 24Cost of materials consumedRaw Material ConsumedInventory at the beginning of the year 5,13,10,710 6,00,46,178 Add: Purchases* 44,31,55,736 14,53,70,378 Less: Inventory at the end of the year 11,33,79,230 5,13,10,710

Packing Material ConsumedInventory at the beginning of the year 48,96,675 28,28,855 Add: Purchases 1,62,46,518 67,48,297 Less: Inventory at the end of the year 50,27,753 48,96,675 Total Cost of Raw Material Consumed 39,72,02,656 15,87,86,323

* Includes inventory acquired from business acquisition of INR 99,25,049/-

Note 25Changes in inventories of finished goods and work in progressOpening Stock :Finished Goods 14,85,522 39,90,398 Work-in-Process 2,15,12,980 3,09,22,711 Less:Closing Stock:Finished Goods 39,89,621 14,85,522 Work-in-Process 2,64,64,483 2,15,12,980

Changes In Inventories:Finished goods (25,04,099) 25,04,876 Work-in-progress (49,51,503) 94,09,731 Changes in inventories of finished goods and work in progress (74,55,602) 1,19,14,607


Notes to the financial statementsfor the year ended 31 March 2017

In INRParticulars Year ended Year ended

31 March 2017 31 March 2016Note 26Employee benefit expenseSalaries and Wages 3,32,56,005 2,64,51,833 Contribution to Provident and Other Funds 30,05,003 25,15,414 Staff Welfare Expenses 13,37,296 11,13,808 Employee benefit expense 3,75,98,304 3,00,81,055

Note 27Finance costsInterest on unsecured Loan from Holding company 2,03,80,733 - Unwinding of Discount 1,06,83,855 -

3,10,64,588 -

Note 28Depreciation and amortisationDepreciation of property, plant and equipment 23,16,626 40,98,093 Amortisation of intangible assets 4,24,03,038 10,12,541

4,47,19,664 51,10,634

Note 29Other ExpensesRepairs and Maintenance: - Plant and Machinery 6,30,288 1,49,576 - Others 20,77,731 10,06,504 Rent [Refer note 37] 30,80,184 30,37,491 Rates and Taxes 6,45,158 2,17,400 Insurance 1,69,786 2,14,590 Power and Fuel 11,42,000 10,38,180 Water charges 2,63,540 2,39,580 Selling and Promotion Expenses 73,41,826 58,90,169 Commission and Brokerage 34,46,631 52,39,649 Freight and Forwarding 1,12,44,702 39,67,829

Postage and Telephone Expenses 3,68,507 2,98,789 Research and Development Expenses 1,53,157 1,31,832 Travelling and Conveyance 1,41,99,073 70,39,550 Legal and Professional Charges 1,44,06,676 68,91,113 Stationery & Printing Expenses 7,34,009 5,25,011 Bad Trade Receivables / Advances / Deposits written off 6,71,311 5,181 Payment to Auditors (Refer details below) 1,22,828 1,24,810 Provision for Doubtful Trade Receivables / Advances / Deposits (4,57,774) 3,26,735 Bank Charges 82,981 1,31,613 Job Work Expenses 60,78,998 4,57,659 Royalty Expenses [Refer note 36] 1,28,00,000 - Net Loss on Foreign Currency Transactions 1,84,039 4,15,445 Miscellaneous Expenses 91,47,285 14,54,452

8,85,32,936 3,88,03,157

Payment to auditors:Audit fees 65,000 55,000 Tax audit fees 28,000 28,000 Other service 29,828 41,810

1,22,828 1,24,810


Notes to the financial statements (continued)

(Currency: Indian Rupees)

Note 4 - Property, plant & equipmentIn INR

Particulars Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at

1 April 31 March 1 April 31 March 31 March 31 March2016 2017 2016 2017 2017 2016

Plant and Machinery 74,45,084 16,32,808 11,32,374 - 1,02,10,266 13,86,298 6,39,010 - 20,25,308 81,84,958 60,58,786 Computers 67,537 4,47,778 - - 5,15,315 20,986 27,670 - 48,656 4,66,659 46,551 Office Equipment and Appliances 11,03,947 - - - 11,03,947 4,39,772 1,68,112 - 6,07,884 4,96,063 6,64,175 Furniture and Fixtures 43,18,374 5,23,072 - - 48,41,446 12,18,515 4,82,235 - 17,00,750 31,40,696 30,99,859 Motor Car 1,90,133 - - - 1,90,133 71,103 38,679 - 1,09,782 80,351 1,19,030 Electrical Fittings 12,62,716 36,861 - - 12,99,577 3,73,663 1,41,543 - 5,15,206 7,84,371 8,89,053 Leasehold Building Improvement 6,12,282 31,49,721 - - 37,62,003 3,21,620 2,86,462 - 6,08,082 31,53,921 2,90,662 Factory buildings - - 99,84,000 - 99,84,000 - 3,16,160 - 3,16,160 96,67,840 - Lab Equipments 17,21,846 7,42,406 - - 24,64,252 2,66,136 2,16,755 - 4,82,891 19,81,361 14,55,710

TOTAL 1,67,21,919 65,32,646 1,11,16,374 - 3,43,70,939 40,98,093 23,16,626 - 64,14,719 2,79,56,220 1,26,23,826

P A R T I C U L A R S Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at

1 April 31 March 1 April 31 March 31 March 1 April2015 2016 2015 2016 2016 2015

Plant and Machinery 77,75,418 - - 3,30,334 74,45,084 - 13,86,298 - 13,86,298 60,58,786 77,75,418 Computers 39,691 27,846 - - 67,537 - 20,986 - 20,986 46,551 39,691 Office Equipment and Appliances 3,70,592 7,33,355 - - 11,03,947 - 4,39,772 - 4,39,772 6,64,175 3,70,592 Furniture and Fixtures 43,18,374 - - - 43,18,374 - 12,18,515 - 12,18,515 30,99,859 43,18,374 Motor Car 1,90,133 - - - 1,90,133 - 71,103 - 71,103 1,19,030 1,90,133 Electrical Fittings 12,62,716 - - - 12,62,716 - 3,73,663 - 3,73,663 8,89,053 12,62,716 Leasehold Building Improvement 6,12,282 - - - 6,12,282 - 3,21,620 - 3,21,620 2,90,662 6,12,282 Lab Equipments 9,62,937 7,58,909 - - 17,21,846 - 2,66,136 - 2,66,136 14,55,710 9,62,937

TOTAL 1,55,32,143 15,20,110 - 3,30,334 1,67,21,919 - 40,98,093 - 40,98,093 1,26,23,826 1,55,32,143



Additions

DisposalsAcquired

through business combinations

Eliminated on disposal of assets

NET BLOCKACCUMULATED DEPRECIATIONGROSS BLOCK

Disposals Eliminated on disposal of assets

Charge for the year

Acquired through business

combinations

Plant and Machinery Computers Office Equipment

and Appliances Furniture and

Fixtures Motor Car Electrical Fittings

Lease Hold Building

improvement Lab Equipments TotalGross Block 1,60,90,544 4,51,596 12,89,495 89,58,557 11,00,491 25,98,186 16,08,100 16,56,516 3,37,53,485 Less: Accumulated Depreciation 83,15,126 4,11,905 9,18,903 46,40,183 9,10,358 13,35,470 9,95,818 6,93,579 1,82,21,342 Net Block 77,75,418 39,691 3,70,592 43,18,374 1,90,133 12,62,716 6,12,282 9,62,937 1,55,32,143

Ind AS adjustments



2016 As at April 1,

2015 As at March

31, 2017 As at March 31,

2016 As at April 1,

2015 Freehold Land - - - - - -

Leasehold Land - - - - - -

Buildings - - - - - -

Leasehold Improvements - - - - - -

Plant and Equipment - - - - - -

Furniture and Fixtures - - - - - -

Vehicles - - - - - -

Office Equipment - - - - - -

Assets under Lease:- Plant and Equipment - - - - - -

- Vehicles - - - - - -


Gross block

Note: The Company has availed the deemed cost exemption in relation to the property plant and equipment on the date of transition and hence the net block carrying amount has been considered as the gross block carrying amount on that date. Refer note below for the gross block value and the accumulated depreciation on 1 April 2015 under the previous GAAP.




2016 As at April 1,

2015 As at March

31, 2017 As at March 31,

2016 As at April 1,










- Vehicles - - - - - -


Accumulated depreciation Reclassification - Ind AS Measurement - Ind AS




Note 4 - Property, plant & equipmentIn INR

Particulars Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at

1 April 31 March 1 April 31 March 31 March 31 March2016 2017 2016 2017 2017 2016

Plant and Machinery 74,45,084 16,32,808 11,32,374 - 1,02,10,266 13,86,298 6,39,010 - 20,25,308 81,84,958 60,58,786 Computers 67,537 4,47,778 - - 5,15,315 20,986 27,670 - 48,656 4,66,659 46,551 Office Equipment and Appliances 11,03,947 - - - 11,03,947 4,39,772 1,68,112 - 6,07,884 4,96,063 6,64,175 Furniture and Fixtures 43,18,374 5,23,072 - - 48,41,446 12,18,515 4,82,235 - 17,00,750 31,40,696 30,99,859 Motor Car 1,90,133 - - - 1,90,133 71,103 38,679 - 1,09,782 80,351 1,19,030 Electrical Fittings 12,62,716 36,861 - - 12,99,577 3,73,663 1,41,543 - 5,15,206 7,84,371 8,89,053 Leasehold Building Improvement 6,12,282 31,49,721 - - 37,62,003 3,21,620 2,86,462 - 6,08,082 31,53,921 2,90,662 Factory buildings - - 99,84,000 - 99,84,000 - 3,16,160 - 3,16,160 96,67,840 - Lab Equipments 17,21,846 7,42,406 - - 24,64,252 2,66,136 2,16,755 - 4,82,891 19,81,361 14,55,710

TOTAL 1,67,21,919 65,32,646 1,11,16,374 - 3,43,70,939 40,98,093 23,16,626 - 64,14,719 2,79,56,220 1,26,23,826

P A R T I C U L A R S Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at

1 April 31 March 1 April 31 March 31 March 1 April2015 2016 2015 2016 2016 2015

Plant and Machinery 77,75,418 - - 3,30,334 74,45,084 - 13,86,298 - 13,86,298 60,58,786 77,75,418 Computers 39,691 27,846 - - 67,537 - 20,986 - 20,986 46,551 39,691 Office Equipment and Appliances 3,70,592 7,33,355 - - 11,03,947 - 4,39,772 - 4,39,772 6,64,175 3,70,592 Furniture and Fixtures 43,18,374 - - - 43,18,374 - 12,18,515 - 12,18,515 30,99,859 43,18,374 Motor Car 1,90,133 - - - 1,90,133 - 71,103 - 71,103 1,19,030 1,90,133 Electrical Fittings 12,62,716 - - - 12,62,716 - 3,73,663 - 3,73,663 8,89,053 12,62,716 Leasehold Building Improvement 6,12,282 - - - 6,12,282 - 3,21,620 - 3,21,620 2,90,662 6,12,282 Lab Equipments 9,62,937 7,58,909 - - 17,21,846 - 2,66,136 - 2,66,136 14,55,710 9,62,937

TOTAL 1,55,32,143 15,20,110 - 3,30,334 1,67,21,919 - 40,98,093 - 40,98,093 1,26,23,826 1,55,32,143

Plant and Machinery Computers Office Equipment

and Appliances Furniture and

Fixtures Motor Car Electrical Fittings

Lease Hold Building

improvement Lab Equipments TotalGross Block 1,60,90,544 4,51,596 12,89,495 89,58,557 11,00,491 25,98,186 16,08,100 16,56,516 3,37,53,485 Less: Accumulated Depreciation 83,15,126 4,11,905 9,18,903 46,40,183 9,10,358 13,35,470 9,95,818 6,93,579 1,82,21,342 Net Block 77,75,418 39,691 3,70,592 43,18,374 1,90,133 12,62,716 6,12,282 9,62,937 1,55,32,143

Ind AS adjustments



2016 As at April 1,

2015 As at March

31, 2017 As at March 31,

2016 As at April 1,










- Vehicles - - - - - -




2016 As at April 1,

2015 As at March

31, 2017 As at March 31,

2016 As at April 1,










- Vehicles - - - - - -


Gross block

Note: The Company has availed the deemed cost exemption in relation to the property plant and equipment on the date of transition and hence the net block carrying amount has been considered as the gross block carrying amount on that date. Refer note below for the gross block value and the accumulated depreciation on 1 April 2015 under the previous GAAP.

Accumulated depreciation Reclassification - Ind AS Measurement - Ind AS




Additions

DisposalsAcquired

through business combinations


NET BLOCKACCUMULATED DEPRECIATIONGROSS BLOCK


Charge for the year


combinations




Note 5 - Intangible assetsIn INR

P A R T I C U L A R S Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at1 April 31 March 1 April 31 March 31 March 31 March

2016 2017 2016 2017 2017 2016Goodwill (A)Goodwill - - 13,45,09,880 - 13,45,09,880 - - - - 13,45,09,880 -

Other intangible assets (B)Software 35,92,654 20,704 - - 36,13,358 10,12,541 10,13,074 - 20,25,615 15,87,743 25,80,113 Formulations - - 21,32,61,490 - 21,32,61,490 - 3,43,46,307 - 3,43,46,307 17,89,15,184 - Customer Relationship - - 2,76,52,156 - 2,76,52,156 - 55,30,431 - 55,30,431 2,21,21,725 - Non Compete - - 1,10,29,647 - 1,10,29,647 - 5,37,884 - 5,37,884 1,04,91,763 - Brand - - 2,00,00,000 - 2,00,00,000 - 9,75,342 - 9,75,342 1,90,24,658 -

Total (B) 35,92,654 20,704 27,19,43,293 - 27,55,56,651 10,12,541 4,24,03,038 - 4,34,15,579 23,21,41,073 25,80,113 Total intangible assets (A+B) 35,92,654 20,704 40,64,53,173 - 41,00,66,531 10,12,541 4,24,03,038 - 4,34,15,579 36,66,50,953 25,80,113

In INR

P A R T I C U L A R S Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at1 April 31 March 1 April 31 March 31 March 1 April

2015 2016 2015 2016 2016 2015

Software 35,92,654 - - - 35,92,654 - 10,12,541 - 10,12,541 25,80,113 35,92,654

Total other intangible assets 35,92,654 - - - 35,92,654 - 10,12,541 - 10,12,541 25,80,113 35,92,654 Total intangible assets 35,92,654 - - - 35,92,654 - 10,12,541 - 10,12,541 25,80,113 35,92,654

Computer Software TotalGross Block 50,62,704 50,62,704 Less: Accumulated Amortisation 14,70,050 14,70,050 Net Block 35,92,654 35,92,654

Additions on acquisition of

Subsidiary

Note: The Company has availed the deemed cost exemption in relation to the intangible asset on the date of transition and hence the net block carrying amount has been considered as the gross block carrying amount on that date. Refer note below for the gross block value and the accumulated amortisation on 1 April 2015 under the previous GAAP.

Additions Disposals Charge for the year


NET BLOCKACCUMULATED AMORTISATIONGROSS BLOCK


Charge for the year


combinations

Eliminated on disposal of assetsAdditions Disposals



(Currency: Indian Rupees)-

Particulars31 March 2017 31 March 2016 1 April 2015 31 March 2017 31 March 2016 1 April 2015


Authorised :Equity Shares of Rs 100 each 10,000 10,000 10,000 10,00,000 10,00,000 10,00,000

10,000 10,000 10,000 10,00,000 10,00,000 10,00,000

Issued and Subscribed and Paid up:Equity shares of Rs 100 each, fully paid up 10,000 10,000 10,000 10,00,000 10,00,000 10,00,000

10,000 10,000 10,000 10,00,000 10,00,000 10,00,000


10,000 10,000 10,000 - - - - - -

Outstanding at the end of the year 10,000 10,000 10,000



2. Terms / Rights attached to Preference shares

Equity share

No. of Shares Amount in INR No. of Shares Amount in INR No. of Shares Amount in INRS H Kelkar and Company Limited, Holding Company 9,900 9,90,000 9,900 9,90,000 9,900 9,90,000 Keva Fragrances Private Limited, Subsidary Company of S H Kelkar and Company Limited 100 10,000 100 10,000 50 5,000 K. V. Arochem Private Limited, Subsidary Company of S H Kelkar and Company Limited - - - - 50 5,000


No. of Shares No. of shares No. of Shares No. of shares No. of Shares No. of shares% % %

S.H.Kelkar and Company Limited, Holding Company 9,900 99.00% 9,900 99.00% 9,900 99.00%Keva Fragrances Private Limited, Subsidary company of S H Kelkar and Company Limited 100 1.00% 100 1.00% 50 0.50%K. V. Arochem Private Limited, Subsidary company of S H Kelkar and Company Limited - 0.00% - 0.00% 50 0.50%

AmountNumber of shares

Outstanding at the beginning of the yearAdd: Shares issued during the yearLess: Shares bought back during the year

Shares in respect of each class in the company held by its holding company or its ultimate holding company including shares held by subsidiaries or associates of the holding company or the ultimate holding company in aggregate

The Company has only one class of Equity shares having a face value Rs. 100 per share. Each holder of equity shares is entitled to one vote per share with a right to receive per share dividend declared by the Company. In the event of liquidation, the equity shareholders are entitled to receive remaining assets of the Company (after distribution of all preferential amounts) in the proportion of equity shares held by the shareholders. During the period ended 31 March 2017, the Company has recorded per share dividend of Rs.Nil (2016: Rs. Nil 2015: Rs. Nil) to equity shareholders.

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

31 March 2016 1 April 201531 March 2017





Note 30 - Earnings per Share (EPS)

i. Profit attributable to owners of the Company31 March 2017 31 March 2016

Profit attributable to owners of the Company 6,06,02,485 2,41,80,113 Profit attributable to owners of the Company for basic earnings 6,06,02,485 2,41,80,113

Profit attributable to owners of the Company adjusted for the effectof dilution 6,06,02,485 2,41,80,113


Issued ordinary shares at April 1 10,000 10,000 Effect of shares issued as Bonus shares - - Weighted average number of shares at 31 March for basic EPS 10,000 10,000

Effect of dilution: - - 10,000 10,000

Basic and Diluted earnings per share31 March 2017 31 March 2016



Basic EPS amounts are calculated by dividing the profit for the year attributable to owners of the Company by the weightedaverage number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to owners of the Company (after adjusting for intereston the convertible preference shares) by the weighted average number of equity shares outstanding during the year plus theweighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares intoequity shares.




Note 31 (i) - Tax expense(a) Amounts recognised in profit and loss In INR

Year ended Year ended31 March 2017 31 March 2016

Current income tax 1,81,78,000 1,23,81,000 Adjustment of tax for earlier years (2,43,308) - Deferred income tax liability / (asset), net

Origination and reversal of temporary differences 1,15,52,664 (4,49,744)Deferred tax expense 1,15,52,664 (4,49,744)Tax expense for the year 2,94,87,356 1,19,31,256




Net of tax

Items that will not be reclassified to profit or lossRemeasurements of the defined benefit plans (4,77,735) 1,65,335 (3,12,400) 6,39,087 (2,21,175) 4,17,912

(4,77,735) 1,65,335 (3,12,400) 6,39,087 (2,21,175) 4,17,912

(b) Reconciliation of effective tax rate In INRYear ended Year ended

31 March 2017 31 March 2016

Profit before tax 9,00,89,841 3,61,11,369 Tax using the Company’s domestic tax rate (Current year 33.06% and Previous Year 33.06%) 2,97,86,404 1,19,39,502 Tax effect of:Prior period tax expenses (2,43,308) - Others (55,740) (8,246)

2,94,87,356 1,19,31,256





Note 31 (ii) - Deferred tax

(d) Movement in deferred tax balances In INR



Recognised in OCI


Deferred tax assetProperty, plant and equipment 8,66,803 (1,47,67,117) - - (1,39,00,314) - (1,39,00,314)Employee benefits 10,02,700 (1,73,773) 1,65,335 - 9,94,262 9,94,262 - Trade receivables 4,56,632 (1,57,774) - - 2,98,858 2,98,858 - MAT credit entitlement - 35,46,000 - - 35,46,000 35,46,000 - Tax assets (Liabilities) 23,26,135 (1,15,52,664) 1,65,335 - (90,61,195) 48,39,119 (1,39,00,314)

Net tax assets (liabilities) 23,26,135 (1,15,52,664) 1,65,335 - (90,61,195) 48,39,119 (1,39,00,314)

(e) Movement in deferred tax balances In INR



Recognised in OCI


Property, plant and equipment 1,76,366 6,90,437 - - 8,66,803 8,66,803 - Employee benefits 15,71,484 (3,47,609) (2,21,175) - 10,02,700 10,02,700 - Trade receivables 3,49,716 1,06,916 - - 4,56,632 4,56,632 - Tax assets (Liabilities) 20,97,566 4,49,744 (2,21,175) - 23,26,135 23,26,135 - Set off taxNet tax assets 20,97,566 4,49,744 (2,21,175) - 23,26,135 23,26,135 -

Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income by each jurisdiction in which the relevant entity operates and the period over which deferred income tax assets will be recovered.

31 March 2017

Deferred tax asset

31 March 2016




Note 32


31 March 2017INR


Financial assets Cash and cash equivalents - 1,61,09,813 1,61,09,813 Loans - non-current - 47,204 47,204 Loans - current - 33,336 33,336 Trade receivables - 20,85,33,841 20,85,33,841 Other financial assets - non-current - 1,38,44,897 1,38,44,897

- 23,85,69,091 23,85,69,091

Financial liabilities Trade payables 20,98,09,876 20,98,09,876 Short term borrowings 29,70,00,000 29,70,00,000 Other financial liabilities - current 14,74,02,593 14,74,02,593

- 65,42,12,469 65,42,12,469

31 March 2016INR


Financial assets Cash and cash equivalents - 44,71,252 44,71,252 Loans - non-current - 13,868 13,868 Loans - current - 1,58,622 1,58,622 Trade receivables - 10,63,36,845 10,63,36,845 Other financial assets - non-current - 80,83,438 80,83,438

- 11,90,64,025 11,90,64,025

Financial liabilities Trade payables - 4,95,29,407 4,95,29,407 Other financial liabilities - current - 18,88,881 18,88,881

- 5,14,18,288 5,14,18,288

1 April 2015INR


Financial assets Cash and cash equivalents - 3,38,01,709 3,38,01,709 Loans - non-current - 47,180 47,180 Loans - current - 1,97,321 1,97,321 Trade receivables - 5,12,07,819 5,12,07,819 Other financial assets - non-current - 75,71,410 75,71,410

- 9,28,25,439 9,28,25,439


- 7,15,03,582 7,15,03,582

The Company has not disclosed the fair values for financial instruments carried at amortised cost becausetheir carrying amounts are a reasonable approximation of fair value.

Financial instruments – Fair values and risk management

Carrying amount

Carrying amount

Carrying amount




Note 32

Credit risk ; Liquidity risk ; and Market risk



The Company’s board of directors has overall responsibility for the establishment and oversight of theCompany’s risk management framework.

The Company’s risk management policies are established to identify and analyse the risks faced by theCompany, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Riskmanagement policies and systems are reviewed regularly to reflect changes in market conditions and theCompany’s activities. The Company, through its training and management standards and procedures, aimsto maintain a disciplined and constructive control environment in which all employees understand theirroles and obligations.




Note 5 - Intangible assetsIn INR

P A R T I C U L A R S Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at1 April 31 March 1 April 31 March 31 March 31 March

2016 2017 2016 2017 2017 2016Goodwill (A)Goodwill - - 13,45,09,880 - 13,45,09,880 - - - - 13,45,09,880 -

Other intangible assets (B)Software 35,92,654 20,704 - - 36,13,358 10,12,541 10,13,074 - 20,25,615 15,87,743 25,80,113 Formulations - - 21,32,61,490 - 21,32,61,490 - 3,43,46,307 - 3,43,46,307 17,89,15,184 - Customer Relationship - - 2,76,52,156 - 2,76,52,156 - 55,30,431 - 55,30,431 2,21,21,725 - Non Compete - - 1,10,29,647 - 1,10,29,647 - 5,37,884 - 5,37,884 1,04,91,763 - Brand - - 2,00,00,000 - 2,00,00,000 - 9,75,342 - 9,75,342 1,90,24,658 -

Total (B) 35,92,654 20,704 27,19,43,293 - 27,55,56,651 10,12,541 4,24,03,038 - 4,34,15,579 23,21,41,073 25,80,113 Total intangible assets (A+B) 35,92,654 20,704 40,64,53,173 - 41,00,66,531 10,12,541 4,24,03,038 - 4,34,15,579 36,66,50,953 25,80,113

In INR

P A R T I C U L A R S Balance as at Balance as at Balance as at Balance as at Balance as at Balance as at1 April 31 March 1 April 31 March 31 March 1 April

2015 2016 2015 2016 2016 2015

Software 35,92,654 - - - 35,92,654 - 10,12,541 - 10,12,541 25,80,113 35,92,654

Total other intangible assets 35,92,654 - - - 35,92,654 - 10,12,541 - 10,12,541 25,80,113 35,92,654 Total intangible assets 35,92,654 - - - 35,92,654 - 10,12,541 - 10,12,541 25,80,113 35,92,654

Computer Software TotalGross Block 50,62,704 50,62,704 Less: Accumulated Amortisation 14,70,050 14,70,050 Net Block 35,92,654 35,92,654

Additions on acquisition of

Subsidiary

Note: The Company has availed the deemed cost exemption in relation to the intangible asset on the date of transition and hence the net block carrying amount has been considered as the gross block carrying amount on that date. Refer note below for the gross block value and the accumulated amortisation on 1 April 2015 under the previous GAAP.

Additions Disposals Charge for the year


NET BLOCKACCUMULATED AMORTISATIONGROSS BLOCK


Charge for the year


combinations

Eliminated on disposal of assetsAdditions Disposals



(Currency: Indian Rupees)-

Particulars31 March 2017 31 March 2016 1 April 2015 31 March 2017 31 March 2016 1 April 2015


Authorised :Equity Shares of Rs 100 each 10,000 10,000 10,000 10,00,000 10,00,000 10,00,000

10,000 10,000 10,000 10,00,000 10,00,000 10,00,000

Issued and Subscribed and Paid up:Equity shares of Rs 100 each, fully paid up 10,000 10,000 10,000 10,00,000 10,00,000 10,00,000

10,000 10,000 10,000 10,00,000 10,00,000 10,00,000


10,000 10,000 10,000 - - - - - -

Outstanding at the end of the year 10,000 10,000 10,000



2. Terms / Rights attached to Preference shares

Equity share

No. of Shares Amount in INR No. of Shares Amount in INR No. of Shares Amount in INRS H Kelkar and Company Limited, Holding Company 9,900 9,90,000 9,900 9,90,000 9,900 9,90,000 Keva Fragrances Private Limited, Subsidary Company of S H Kelkar and Company Limited 100 10,000 100 10,000 50 5,000 K. V. Arochem Private Limited, Subsidary Company of S H Kelkar and Company Limited - - - - 50 5,000


No. of Shares No. of shares No. of Shares No. of shares No. of Shares No. of shares% % %

S.H.Kelkar and Company Limited, Holding Company 9,900 99.00% 9,900 99.00% 9,900 99.00%Keva Fragrances Private Limited, Subsidary company of S H Kelkar and Company Limited 100 1.00% 100 1.00% 50 0.50%K. V. Arochem Private Limited, Subsidary company of S H Kelkar and Company Limited - 0.00% - 0.00% 50 0.50%


Outstanding at the beginning of the yearAdd: Shares issued during the yearLess: Shares bought back during the year

Shares in respect of each class in the company held by its holding company or its ultimate holding company including shares held by subsidiaries or associates of the holding company or the ultimate holding company in aggregate

The Company has only one class of Equity shares having a face value Rs. 100 per share. Each holder of equity shares is entitled to one vote per share with a right to receive per share dividend declared by the Company. In the event of liquidation, the equity shareholders are entitled to receive remaining assets of the Company (after distribution of all preferential amounts) in the proportion of equity shares held by the shareholders. During the period ended 31 March 2017, the Company has recorded per share dividend of Rs.Nil (2016: Rs. Nil 2015: Rs. Nil) to equity shareholders.


31 March 2016 1 April 201531 March 2017





Note 30 - Earnings per Share (EPS)

i. Profit attributable to owners of the Company31 March 2017 31 March 2016

Profit attributable to owners of the Company 6,06,02,485 2,41,80,113 Profit attributable to owners of the Company for basic earnings 6,06,02,485 2,41,80,113

Profit attributable to owners of the Company adjusted for the effectof dilution 6,06,02,485 2,41,80,113


Issued ordinary shares at April 1 10,000 10,000 Effect of shares issued as Bonus shares - - Weighted average number of shares at 31 March for basic EPS 10,000 10,000

Effect of dilution: - - 10,000 10,000

Basic and Diluted earnings per share31 March 2017 31 March 2016



Basic EPS amounts are calculated by dividing the profit for the year attributable to owners of the Company by the weightedaverage number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to owners of the Company (after adjusting for intereston the convertible preference shares) by the weighted average number of equity shares outstanding during the year plus theweighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares intoequity shares.




Note 31 (i) - Tax expense(a) Amounts recognised in profit and loss In INR


Current income tax 1,81,78,000 1,23,81,000 Adjustment of tax for earlier years (2,43,308) - Deferred income tax liability / (asset), net

Origination and reversal of temporary differences 1,15,52,664 (4,49,744)Deferred tax expense 1,15,52,664 (4,49,744)Tax expense for the year 2,94,87,356 1,19,31,256




Net of tax

Items that will not be reclassified to profit or lossRemeasurements of the defined benefit plans (4,77,735) 1,65,335 (3,12,400) 6,39,087 (2,21,175) 4,17,912

(4,77,735) 1,65,335 (3,12,400) 6,39,087 (2,21,175) 4,17,912

(b) Reconciliation of effective tax rate In INRYear ended Year ended

31 March 2017 31 March 2016

Profit before tax 9,00,89,841 3,61,11,369 Tax using the Company’s domestic tax rate (Current year 33.06% and Previous Year 33.06%) 2,97,86,404 1,19,39,502 Tax effect of:Prior period tax expenses (2,43,308) - Others (55,740) (8,246)

2,94,87,356 1,19,31,256





Note 31 (ii) - Deferred tax

(d) Movement in deferred tax balances In INR



Recognised in OCI


Deferred tax assetProperty, plant and equipment 8,66,803 (1,47,67,117) - - (1,39,00,314) - (1,39,00,314)Employee benefits 10,02,700 (1,73,773) 1,65,335 - 9,94,262 9,94,262 - Trade receivables 4,56,632 (1,57,774) - - 2,98,858 2,98,858 - MAT credit entitlement - 35,46,000 - - 35,46,000 35,46,000 - Tax assets (Liabilities) 23,26,135 (1,15,52,664) 1,65,335 - (90,61,195) 48,39,119 (1,39,00,314)

Net tax assets (liabilities) 23,26,135 (1,15,52,664) 1,65,335 - (90,61,195) 48,39,119 (1,39,00,314)

(e) Movement in deferred tax balances In INR



Recognised in OCI


Property, plant and equipment 1,76,366 6,90,437 - - 8,66,803 8,66,803 - Employee benefits 15,71,484 (3,47,609) (2,21,175) - 10,02,700 10,02,700 - Trade receivables 3,49,716 1,06,916 - - 4,56,632 4,56,632 - Tax assets (Liabilities) 20,97,566 4,49,744 (2,21,175) - 23,26,135 23,26,135 - Set off taxNet tax assets 20,97,566 4,49,744 (2,21,175) - 23,26,135 23,26,135 -

Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income by each jurisdiction in which the relevant entity operates and the period over which deferred income tax assets will be recovered.

31 March 2017

Deferred tax asset

31 March 2016




Note 32


31 March 2017INR


Financial assets Cash and cash equivalents - 1,61,09,813 1,61,09,813 Loans - non-current - 47,204 47,204 Loans - current - 33,336 33,336 Trade receivables - 20,85,33,841 20,85,33,841 Other financial assets - non-current - 1,38,44,897 1,38,44,897

- 23,85,69,091 23,85,69,091

Financial liabilities Trade payables 20,98,09,876 20,98,09,876 Short term borrowings 29,70,00,000 29,70,00,000 Other financial liabilities - current 14,74,02,593 14,74,02,593

- 65,42,12,469 65,42,12,469

31 March 2016INR


Financial assets Cash and cash equivalents - 44,71,252 44,71,252 Loans - non-current - 13,868 13,868 Loans - current - 1,58,622 1,58,622 Trade receivables - 10,63,36,845 10,63,36,845 Other financial assets - non-current - 80,83,438 80,83,438

- 11,90,64,025 11,90,64,025


- 5,14,18,288 5,14,18,288

1 April 2015INR


Financial assets Cash and cash equivalents - 3,38,01,709 3,38,01,709 Loans - non-current - 47,180 47,180 Loans - current - 1,97,321 1,97,321 Trade receivables - 5,12,07,819 5,12,07,819 Other financial assets - non-current - 75,71,410 75,71,410

- 9,28,25,439 9,28,25,439


- 7,15,03,582 7,15,03,582

The Company has not disclosed the fair values for financial instruments carried at amortised cost becausetheir carrying amounts are a reasonable approximation of fair value.

Financial instruments – Fair values and risk management

Carrying amount

Carrying amount

Carrying amount




Note 32




The Company’s board of directors has overall responsibility for the establishment and oversight of theCompany’s risk management framework.

The Company’s risk management policies are established to identify and analyse the risks faced by theCompany, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Riskmanagement policies and systems are reviewed regularly to reflect changes in market conditions and theCompany’s activities. The Company, through its training and management standards and procedures, aimsto maintain a disciplined and constructive control environment in which all employees understand theirroles and obligations.




Note 32 - Financial instruments – Fair values and risk management (continued)

ii. Credit risk


31 March 2017 31 March 2016India 17,99,20,918 10,63,36,845 Other regions 2,86,12,923 -

20,85,33,841 10,63,36,845

Impairment

31 March 2017Gross carrying amount Weighted-average loss

rateLoss allowance

Neither past due nor impaired 11,71,57,620 0.08% 88,080 Past due 0-180 days 2,68,28,462 0.57% 1,52,094 Past due 181–360 days 6,74,538 14.39% 97,048 Past due 361-540 days 1,21,143 25.45% 30,837 Past due 541-720 days 33,355 95.46% 31,840 More than 730 days 5,04,003 100.00% 5,04,003

14,53,19,121 9,03,902

31 March 2016Gross carrying amount Weighted-average loss

rateLoss allowance

Neither past due nor impaired 4,09,21,322 0.26% 1,07,502 Past due 0-180 days 91,89,115 1.38% 1,26,781 Past due 181–360 days 28,190 52.02% 14,664 Past due 361-540 days 1,44,882 78.24% 1,13,359 Past due 541-720 days 2,72,626 96.65% 2,63,479 More than 730 days 7,32,313 100.00% 7,32,313

5,12,88,448 13,58,098

At 31 March 2017, the Company’s most significant customer, a manufacturer, accounted for INR 5.04 crores of the trade andother receivables carrying amount (31 March 2016 : INR 4.36 crores).

The following table provides information about the exposure to credit risk and expected credit loss for trade receivables(excluding related parties).

At 31 March 2017, the maximum exposure to credit risk for trade and other receivables by geographic region was as follows.


Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet itscontractual obligations, and arises principally from the Company's receivables from customers and investments in debt securities.


The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,management also considers the factors that may influence the credit risk of its customer base, including the default risk of theindustry and country in which customers operate.

The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and otherreceivables.





1 April 2015Gross carrying amount Weighted-average loss

rateLoss allowance

Neither past due nor impaired 4,05,82,520 0.40% 1,62,427 Past due 0-180 days 38,83,597 2.72% 1,05,806 Past due 181–360 days 3,81,750 42.76% 1,63,248 Past due 361-540 days 4,79,528 68.07% 3,26,400 Past due 541-720 days 2,18,211 86.68% 1,89,147 More than 730 days 87,913 100.00% 87,913

4,56,33,519 10,34,941

ImpairmentBalance as at 1 April 2015 10,34,941 Impairment loss recognised 3,26,735 Balance as at 31 March 2016 13,61,676 Impairment loss recognised (4,57,774) Balance as at 31 March 2017 9,03,902

Cash and cash equivalentsThe Company held cash and cash equivalents of INR 1,61,09,812 at 31 March 2017 (31 March 2016: INR 44,71,254). The cashand cash equivalents are held with banks with good credit ratings and financial institution counterparties with good marketstanding.

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based onhistorical payment behaviour and extensive analysis of customer credit risk, including underlying customers’ credit ratings if theyare available.






iii. Liquidity risk


31 March 2017 Carrying amount Total Upto 1 year 1-3 years 3-5 years More than

5 years

INRNon-derivative financial liabilitiesTrade payables 20,98,09,876 20,98,09,876 20,98,09,876 - - - Short term borrowings 29,70,00,000 29,70,00,000 29,70,00,000 - - - Other financial liabilities - current 14,74,02,593 14,74,02,593 14,74,02,593 - - -

31 March 2016 Carrying amount Total Upto 1 year 1-3 years 3-5 years More than

5 years

INRNon-derivative financial liabilitiesTrade payables 4,95,29,407 4,95,29,407 4,95,29,407 - - - Other financial liabilities - current 57,36,582 57,36,582 57,36,582 - - -

1 April 2015 Carrying amount Total Upto 1 year 1-3 years 3-5 years More than

5 years

INRNon-derivative financial liabilitiesTrade payables 6,40,99,822 6,40,99,822 6,40,99,822 - - - Other financial liabilities - current 74,03,760 74,03,760 74,03,760 - - -

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, andinclude estimated interest payments.



Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that aresettled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it willhave sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptablelosses or risking damage to the Company’s reputation.






iv. Market risk

Exposure to currency risk

31 March 2017 USD GBP EURFinancial assets Loans - current 1,83,347 - - Trade receivables 6,41,902 - -

8,25,249 - -

Financial liabilities Trade payables 4,82,909 18,30,712 10,70,087

4,82,909 18,30,712 10,70,087

Net Exposure 3,42,340 (18,30,712) (10,70,087)

31 March 2016 USD GBP EUR

Financial liabilities Trade payables 6,65,674 60,381 5,59,227

6,65,674 60,381 5,59,227

Net Exposure (6,65,674) (60,381) (5,59,227)

1 April 2015 USD GBP EUR

Financial liabilities Trade payables 10,07,566 2,12,685 58,712

10,07,566 2,12,685 58,712

Net Exposure (10,07,566) (2,12,685) (58,712)

Year-end spot INR 31 March 2017 31 March 2016 1 April 2015USD /INR 64.84 66.33 62.59 GBP/INR 80.88 95.09 92.46 EUR/INR 69.25 75.10 67.51

The Company is exposed to currency risk on account of its receivables and payables in foreign currency. The functional currency ofthe Company is Indian Rupee.

Currency risk

Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and equity prices – will affect theCompany’s income or the value of its holdings of financial instruments.Market risk is attributable to all market risk sensitive financialinstruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related toforeign exchange rate risk, interest rate risk and the market value of our investments. Thus, our exposure to market risk is a function ofinvesting and borrowing activities and revenue generating and operating activities in foreign currency. The objective of market riskmanagement is to avoid excessive exposure in our foreign currency revenues and costs.

The currency profile of financial assets and financial liabilities as at 31 March 2017, 31 March 2016 and 1 April 2015 are as below:

The following significant exchange rates have been applied during the year.



Sensitivity analysis

Effect in INR Strengthening Weakening31 March 201710% movement USD 34,234 (34,234)GBP 1,83,071 (1,83,071)EUR 1,07,009 (1,07,009)

3,24,314 (3,24,314)

Effect in INR Strengthening Weakening31 March 201610% movement USD (66,567) 66,567 GBP 6,038 (6,038)EUR 55,923 (55,923)

(4,606) 4,606

Profit or loss

Profit or loss

A reasonably possible strengthening (weakening) of the Indian Rupee against US dollars and Great Britian pounds and Euros at 31March would have affected the measurement of financial instruments denominated in US dollars and affected equity and profit or lossby the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores anyimpact of forecast sales and purchases.







v. 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 ofchanges in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate riskis the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interestrates. The company has no borrowings from banks and financial institutions.

Since the Company does not have any financial assets or financial liabilities bearing floating interest rates, a change in interestrates at the reporting date would not have any significant impact on the financial statements of the Company.




Note 33Capital Management

31 March 2017Non-current borrowings - Current borrowings 29,70,00,000 Current maturity of long term debt - Gross debt 29,70,00,000 Less - Cash and cash equivalents 1,61,09,813 Less - Other bank deposits - Less - Current investments - Adjusted net debt 28,08,90,187

Total equity 23,73,68,784 Adjusted net debt to equity ratio 1.18

The Company monitors capital using adjusted net debt to equity ratio. For this purpose, adjusted netdebt is defined as total debt less cash and bank balances. The Company did not have any borrowingsas at 31 March 2016 and 1 April 2015.

For the purpose of the Company's capital management, capital includes issued capital and other equityreserves. The primary objective of the Company’s capital management is to maximise shareholdersvalue. The Company manages its capital structure and makes adjustments in the light of changes ineconomic environment and the requirements of the financial covenants.




Note 34Employee Benefits


22,60,388 12,57,358 Employer's contribution to Employee State Insurance Corporation 41,320 - Employer's Contribution to Maharashtra Labour Welfare Fund 648 -

23,02,356 12,57,358

Defined Benefit Plan - Gratuity

Present value of unfunded obligations 31,60,389 20,10,925 Present value of plan asset 32,95,129 - Net deficit/ (assets) are analysed as: Liabilities - 20,10,925 Assets (1,34,740) - Of the above net deficit:Current - - Non-current - -

An analysis of net (deficit)/assets is provided below for the Company’s principal defined benefit gratuity scheme.


The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner.

The following table sets out funded status of the gratuity plan and the amounts recognised in the statement of profit and loss for the year ended 31 March 2017

The Company’s provident fund scheme is a defined contribution plan. The Company’s contribution paid/payable under the schemes is recognised as expense in the Profit and Loss account during the period in whichthe employee renders the related service. The Company makes specified monthly contributions towards employee provident fund.The contribution towards Provident Fund is deposited with the Regional Provident FundCommissioner .Contribution to defined contribution plan, recognised are charged off for the year us under

Description


31 March 201631 March 2017




1Note 34Employee Benefits (continued)

Fair value of the plan assets and present value of the defined benefit liabilities


Movement in defined benefit obligations:At the beginning of the year 20,10,925 20,07,000 Current service cost 3,94,452 4,82,051 Interest cost 1,66,303 1,60,961 Remeasurements :

(Gain)/loss from change in financial assumptions 3,50,060 (64,542)(Gain)/loss from change in demographic assumptions - - Experience (gains)/losses 3,09,633 (5,74,545)

Benefits paid by the employer (30,918) - Benefits paid from the Fund (40,066) - Liabilities assumed / (settled)At the end of the year 31,60,389 20,10,925


Movement in fair value of plan assets:At the beginning of the year - - Employer contributions 31,60,389 - Benefits paid from the Fund (40,066) - Actual Return on plan assets 1,74,806 - At the end of the year 32,95,129 -

The amount included in the Balance sheet arising from the Company's obligations and plan assets in respect of its defined benefit schemes is as follows:




1Note 34Employee Benefits (continued)The components of defined benefit plan cost are as follows:Particulars 31 March 2017 31 March 2016

Recognised in Profit or LossCurrent service cost 3,94,452 4,82,051 Interest cost / (income) (net) 1,66,303 1,60,961 Expected return on plan assetsCurtailment/settlementExpected return on plan assetsTotal 5,60,755 6,43,012 Recognised in Other Comprehensive IncomeRemeasurement of net defined benefit liability/(asset) 4,84,887 (6,39,087)

Analysis of plan assets is as follows:

Equities (%) - - Bonds (%) - - Property (%) - - Insurer managed funds (%) - - Others (%) - - Total 0% 0%

Rate of increase in salaries 6.00% 6.00% 6.00%Discount rate 7.32% 8.27% 8.02%Rate of Employee Turnover 2.00% 2.00% 2.00%

Mortality Rate During Employment Indian Assured Lives Mortality (2006-08)

Indian Assured Lives Mortality

(2006-08)

Indian Assured Lives Mortality (2006-08)

1 April 2015

The schemes have no direct investments in the Company’s equity securities or in property currently used by the Company.







1Note 34Employee Benefits (continued)

Sensitivity of the defined benefit obligation :


Discount rate (1% movement) (3,66,847) 4,42,669 (2,75,425) 2,31,639 Rate of increase in salaries (1% movement) 4,44,125 (3,74,217) 2,35,250 (2,81,947)Rate of employee turnover (1% movement) 41,086 (49,232) 4,579 (1,04,556)

Defined benefit liability and employer contribution

Particulars Less than a year Between 1-2 years Between 2-5 years Over 5 years Total

- 31 March 2017Defined benefit obligations (Gratuity) 1,38,652 77,985 4,08,332 9,91,139 16,16,108 Total 1,38,652 77,985 4,08,332 9,91,139 16,16,108

31 March 2016Defined benefit obligations (Gratuity) 4,49,688 56,916 3,01,450 7,28,929 15,36,983 Total 4,49,688 56,916 3,01,450 7,28,929 15,36,983

31 March 2017 31 March 2016

The above sensitivity analyses have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the reporting date. In practice, generally it does not occur. When we change one variable, it affects to others. In calculating the sensitivity, project unit credit method at the end of the reporting period has been applied.

The Company makes payment of liabilities from its cash and cash equivalent balances whenever liability arises.




Note 35Contingent liabilities and commitments (to the extent not provided for)

31 March 2017 31 March 2016 1 April 2015Contingent liabilities not provided for on account of

11,44,046 11,44,046 1,10,14,783 40,86,719 40,33,379 32,97,184

INR

Central Excise (Bank Guarantees given to Central Excise for Excise duty)VAT / CST




Note 36Royalty expensesThe Tradename "Keva", which is used by the Company and S H Kelkar and Company Limited ('SHK'), parent of the Company is registered in the name of Keva Fragrances Private Limited (“KFG”) another wholly owned subsidiary of SHK. The Company and SHK have entered into an agreement with KFG for use of brand name, pursuant to a board resolution passed on 27 March 2017. As per the agreement, the Company has accrued for a royalty charge of Rs 1.28 crores for the financial year 2016-17.




Note 37

A. Leases as lesseeOperating leases

The company has taken commercial premises under cancellable operating lease. Lease rental expenses included in the statement of profit and loss for the period is Rs 30,80,184 (Previous Year Rs 30,37,491) for Premises. The agreement does not contain any escalation clause or contingent rent. In the rent agreement there is no term for purchase option or any restriction such as those concerning dividend and additional debts.




Note 38Specified Bank Notes

Particulars Specified Bank Notes

Other Denomination Notes

Total

Closing cash in hand as on 08.11.2016 91,000 3,300 94,300 (+) Permitted receipts - 2,000 2,000 (-) Permitted payments - 4,000 4,000 (-) Amount deposited in Banks 91,000 - 91,000 Closing cash in hand as on 30.12.2016 - 1,300 1,300

Schedule III of the Companies Act, 2013 was amended by Ministry of Corporate Affairs vide Notification G.S.R.308(E) dated 30 March 2017. The said amendment requires the Company to disclose the details of Specified BankNotes (SBN) held and transacted during the period from 8 November 2016 to 30 December 2016. For the purposeof this clause, the term ‘Specific Bank Notes’ shall have the same meaning provided in the notification of theGovernment of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407 (E), datedthe 8th November, 2016.

Details of Specified Bank Notes (SBN) held and transacted during the period from 8 November 2016 to 30 December 2016 are as below:-




Note 39Segment reporting

A. General InformationThe Company has only one business segment and that is involved in manufacturing of flavours.

B. Geographic informationThe business segment of the Company is only involved in domestic sales and does not export outside India.

C. Information about major customers

Revenues from no single external customer represented more than 10% of the




Note 40Related party relationships, transactions and balances

List of Related Parties

Holding CompanyS H Kelkar and Company Limited

Fellow Subsidiary Companies (with whom transactions have taken place during the year)Keva Fragrances Private LimitedSaiba Industries Private Limited

Key Managerial PersonnelsShri R.V.Vaze (Non executive Director)Shri K.R.Vaze (Non executive Director)Smt. P.R.Vaze (Non executive Director)

2017 2016IncomeSale of Goods

S H Kelkar and Company Limited 15,28,193 0.00 Keva Fragrances Private Limited 5,90,27,882 4,80,68,995

ExpensesPurchases of Goods

S H Kelkar and Company Limited 7,93,19,613 3,27,50,503 Keva Fragrances Private Limited 9,31,21,827 22,87,828 Saiba Industries Private Limited 98,33,500 71,46,250 Keva Aromatics Pvt Ltd 2,49,54,250 -

Rent PaidS H Kelkar and Company Limited 30,00,000 30,00,000

Water ChargesS H Kelkar and Company Limited 2,63,540 2,39,580

Electricity ChargesS H Kelkar and Company Limited 11,42,000 10,38,180

Interest ExpenseS H Kelkar and Company Limited 2,03,80,733 -

Reimbursement (for expenses incurred by related parties on behalf of Company) S H Kelkar and Company Limited 8,70,290 -

Royalty ExpenseKeva Fragrances Private Limited 1,28,00,000 -

Remuneration to Key Managerial Personnel Ramesh V. Vaze - - Kedar R. Vaze - -

Particulars



Enterprise owned or controlled or significantly influenced by key management personnel or their relatives (with whom transactions have taken place during the year)




1Note 40Related party relationships, transactions and balances

2017 2016 2015

Balances at year endTrade Receivables

S H Kelkar and Company Limited - 66,42,307 11,340 Keva Fragrances Private Limited 6,32,14,719 4,84,06,090 55,62,960

Trade PayablesS H Kelkar and Company Limited 6,35,01,071 59,59,253 2,24,15,780 Keva Fragrances Private Limited 9,43,93,236 7,86,686 5,843 Keva Aromatics Private Limited 23,94,540 48,50,790 47,11,100 Saiba Industries Private Limited 51,17,482 37,10,861 -

Advance GivenSaiba Industries Private Limited - - 40,27,578

Advance ReceivedS H Kelkar and Company Limited 6,12,575 - -

Interest AccruedS H Kelkar and Company Limited 1,15,20,000 - -

Other PayablesS H Kelkar and Company Limited - 12,22,080 18,63,148 Keva Fragrances Private Limited 1,15,20,000 - -

Loan ReceivedS H Kelkar and Company Limited 29,70,00,000 - -

Loans from subsidiary

Terms and conditions of transactions with related partiesAll the transactions with the related parties were made on normal commercial terms and conditions and at market rates.

All the outstanding balances are unsecured and repayable in cash.

A loan of INR 29,70,00,000 is taken from S H Kelkar and Company Limited as a part of intercorporate deposits. This loan is repayable on demand and interest charged ranges from 9-9.50% p.a. The amount of interest cost paid during the year 2016-17 is INR 20,380,733 (2015-16: INR Nil)

ParticularsOutstanding balances as at 31 March




41 (A) Acquisition of High-Tech Technologies

A. Consideration transferred

AmountCash (including deferred consideration) 17,75,42,027 Contingent consideration (present value) 6,37,84,301 Total consideration for business combination 24,13,26,328

Deferred payment consideration

Contingent consideration (present value)

B. Acquisition-related costs

C. Identifiable assets acquired and liabilities assumed

AmountProperty, plant and equipment 1,02,98,303 Formulations 15,83,39,626 Customer relationship 2,76,52,156 Net current assets (3,99,20,927) Total net identifiable assets aquired 15,63,69,158

D. Goodwill

Goodwill arising from the acquisition has been determined as follows:Note Amount

Consideration transferred A 24,13,26,328 Fair value of net identifiable assets C 15,63,69,158 Goodwill 8,49,57,170

The Company incurred acquisition related cost of Rs 14,15,500 on legal fees and due diligence costs. These costs have been included in legal and professional fees and travelling and conveyance under other expenses.

The following table summaries the recognised amounts of assets acquired and liabilities assumed at fair value at the date of acquisition.

On 2 April 2016, the Company had acquired, the business undertaking of High-Tech Technologies comprising of the flavours division. High-Tech Technolgies is engaged in the business of manufacturing, selling and trading of flavours. The acquisition is in-line with the Company’s plan to pursue strategic tuck-in acquisitions to grow the flavours business.

The following table summarises the acquisition date fair value of major class of consideration transferred:

As per the business purchase agreement, upon payment of initial consideration of INR 11,27,00,000 an amount of INR 6,84,00,000 was to be paid by the Company to High-Tech Technologies on a quarterly basis in equal instalments of INR 1,71,00,000 within one year from 15 June 2016 to 15 March 2017.

An amount of Rs 7,00,00,000 would be paid as contingent consideration to High-Tech Technologies subject to the continuing its business arrangements and achieving a stipulated turnover as per the agreement.




41 (B) Acquisition of Gujarat Flavours Private Limited

A. Consideration transferred

AmountCash (including deferred consideration) 15,06,29,291 Contingent consideration 1,37,29,977 Total consideration for business combination 16,43,59,268

Deferred and contingent consideration

B. Acquisition-related costs

C. Identifiable assets acquired and liabilities assumed

AmountProperty, plant and equipment 8,18,071 Formulations 5,49,21,865 Brands 2,00,00,000 Non-compete 1,10,29,647 Net current assets 2,80,36,975 Total net identifiable assets aquired 11,48,06,558

D. Goodwill

Goodwill arising from the acquisition has been determined as follows:Note Amount

Consideration transferred A 16,43,59,268 Fair value of net identifiable assets C 11,48,06,558 Goodwill 4,95,52,710

The following table summaries the recognised amounts of assets acquired and liabilities assumed at fair value at the date of acquisition.

On 2 January 2017, the Company had acquired the flavour business of Gujarat Flavours Private Limited (GFPL) along with related brands for Rs 16.80 crores. GFPL was in the business of flavours, food colours, saccharin and fine chemicals since 34 years. This acquisition would enable broadening of the Company's flavours business.

The following table summarises the acquisition date fair value of major class of consideration transferred:

An amount of Rs 4,30,00,000 out of the total purchase consideration shall be paid within a period of one year from the closing date. Of the said amount, Rs 1,50,00,000 shall be paid on fulfillment of certain stipulated conditions as per the agreement.

The Company incurred acquisition related cost of Rs 16,97,436 on legal fees and due diligence costs. These costs have been included in legal and professional fees under other expenses.




42 Goodwill and other intangibles

High-Tech Technolgies and Gujarat Flavours Private Limited

Particulars 31 March 2017 31 March 2016 1 April 2015Discount rate 11.89% NA NATerminal value growth rate 5.00% NA NASales growth rate 15.00% NA NA

These businesses were taken over by the Company. The recoverable amount of this CGU was based on fair value less costs of disposal, estimated using discounted cash flows.The fair value measurement was categorised as a Level 3 fair value based on inputs in the valuation technique used.

The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key assumptions represent management's assessment of future trends in the relevant industries and have been based on historical data from both external and internal sources.

The discount rate for 2016-17 was post tax measure estimated based on the weighted-average cost of capital, with the possible debt leveraging of 30% at a market interest rate of 6.5%The cash flow projections include specific estimates for five years and a terminal growth rate thereafter. The terminal growth rate has been determined based on management’s estimate of the long-term business growth rate, consistent with the assumptions that a market participant would make.

Sales growth rate has been considered based on past performance duly adjusted with future growth as envisaged by the management.

With regard to assessment of value in use, no reasonably possible change in any of the above key assumptions would cause the carrying amount of the CGU's to exceed their recoverable amount.




Note 43Transition to Ind AS:

B. Exemptions and exceptions availedB.1 Ind AS mandatory exceptions

B.2 Ind AS optional exemptionsB.2.1 Deemed cost

Reconciliation of net worth as at 1 April 2015 In INRNote Previous

IGAAP*Adjustment on

transition to Ind ASInd AS

EQUITY AND LIABILITIESEquity (a) Equity share capital 10,00,000 - 10,00,000 (b) Other equity

Retained earnings 10,91,09,519 (3,18,845) 10,87,90,674 Other reserves 4,26,90,000 - 4,26,90,000

Equity attributable to equity holders ofthe parent 15,27,99,519 (3,18,845) 15,24,80,674 Total equity 15,27,99,519 (3,18,845) 15,24,80,674

Non current liabilitiesProvisions 35,04,000 - 35,04,000 Total non current liabilities 35,04,000 - 35,04,000


Trade payables 6,40,99,822 - 6,40,99,822 Other financial liabilities 74,03,760 - 74,03,760

Other current liabilities 12,59,369 - 12,59,369 Current tax liabilities (net) 2,87,865 - 2,87,865 Provisions 12,49,000 - 12,49,000 Total current liabilities 7,42,99,816 - 7,42,99,816

Total liabilities 7,78,03,816 - 7,78,03,816

Total Equity and Liabilities 23,06,03,335 (3,18,845) 23,02,84,490

For the purposes of reporting as set out in Note 1, the Company has transitioned its basis of accounting from Indian generally acceptedaccounting principles (“IGAAP”) to Ind AS. The accounting policies set out in note 3 have been applied in preparing the financial statementsfor the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 andin the preparation of an opening Ind AS balance sheet at 1 April 2015 (the “transition date”).In preparing the opening Ind AS balance sheet, the Company has adjusted amounts reported in financial statements prepared in accordancewith IGAAP. An explanation of how the transition from IGAAP to Ind AS has affected the Company's financial performance, cash flows andfinancial position is set out in the following tables and the notes that accompany the tables. On transition, the Company did not reviseestimates previously made under IGAAP except where required by Ind AS.

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on orafter the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets andfinancial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has classified and measured the financial assets on the basis of the facts and circumstances that exist at the date of transitionto Ind AS.

The Company has elected to continue with the carrying value for all of its property, plant and equipment, intangible assets and investmentproperty as recognised in the financial statements as the deemed cost at the date of transition to Ind AS, measured as per the previous GAAP.

B.1.2 Classification and measurement of financial assets

B.1.1 De-recognition of financial assets and liabilities

ASSETSNon-current assetsProperty, Plant and Equipment 1,55,32,143 - 1,55,32,143 Capital work-in-progress - - - Other Intangible assets 35,92,654 - 35,92,654 Financial Assets - -

Loans 47,180 - 47,180 Others 75,71,410 - 75,71,410

Deferred tax assets (net) 3 19,28,820 1,68,746 20,97,566 Income tax assets 71,76,176 - 71,76,176 Other non-current assets 46,84,612 - 46,84,612 Total non current assets 4,05,32,995 1,68,746 4,07,01,741

Current AssetsInventories 9,77,88,142 - 9,77,88,142 Financial Assets

Trade receivables 1 5,16,95,411 (4,87,591) 5,12,07,820 Cash and cash equivalents 3,38,01,709 - 3,38,01,709 Loans 1,97,321 - 1,97,321

Other current assets 65,87,757 - 65,87,757 Total current assets 19,00,70,340 (4,87,591) 18,95,82,749

TOTAL ASSETS 23,06,03,335 (3,18,845) 23,02,84,490 - - -

*The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purpose of this note.




Note 43- Transition to Ind As (continued)

Reconciliation of net worth as at 31 March 2016 In INRNote Previous

IGAAP*Adjustment on


EQUITY AND LIABILITIESEquity (a) Equity share capital 10,00,000 - 10,00,000 (b) Other equity

Retained earnings 13,36,60,473 (2,71,773) 13,33,88,700 Other reserves 4,26,90,000 - 4,26,90,000

Equity attributable to owners of the Company 17,73,50,473 (2,71,773) 17,70,78,700 Total equity 17,73,50,473 (2,71,773) 17,70,78,700

Non current liabilitiesProvisions 16,83,862 - 16,83,862 Total non current liabilities 16,83,862 - 16,83,862


Trade payables 4,95,29,407 - 4,95,29,407 Other financial liabilities 57,36,582 - 57,36,582

Other current liabilities 18,88,881 - 18,88,881 Current tax liabilities (net) 3,41,204 - 3,41,204 Provisions 13,48,831 - 13,48,831 Total current liabilities 5,88,44,905 - 5,88,44,905

Total liabilities 6,05,28,767 - 6,05,28,767

Total Equity and Liabilities 23,78,79,240 (2,71,773) 23,76,07,467

ASSETSNon-current assetsProperty, Plant and Equipment 1,26,23,826 - 1,26,23,826 Capital work-in-progress 30,79,568 - 30,79,568 Other Intangible assets 25,80,113 - 25,80,113 Financial Assets - -

Loans 13,868 - 13,868 Others 80,83,438 - 80,83,438

Deferred tax assets (net) 3 21,82,300 1,43,834 23,26,134 Income tax assets 89,13,550 - 89,13,550 Other non-current assets 57,77,979 - 57,77,979 Total non current assets 4,32,54,642 1,43,834 4,33,98,476

Current AssetsInventories 7,92,05,887 - 7,92,05,887 Financial Assets

Trade receivables 1 10,67,52,452 (4,15,607) 10,63,36,845 Cash and cash equivalents 44,71,252 - 44,71,252 Loans 1,58,622 - 1,58,622

Other current assets 40,36,384 - 40,36,384 Total current assets 19,46,24,597 (4,15,607) 19,42,08,990

TOTAL ASSETS 23,78,79,239 (2,71,773) 23,76,07,466

Reconciliation of profit or loss for the year ended 31 March 2016Note Amount as per

IGAAP Effects of transition to

Ind AS Amount as per

Ind AS INR INR INRRevenueI. Revenue from Operations (Gross) 30,58,16,318 - 30,58,16,318 II. Other income 10,01,564 - 10,01,564 III. Total Income (I+II) 30,68,17,882 - 30,68,17,882 IV. Expenses

Cost of materials consumed 15,87,86,323 - 15,87,86,323 Changes in inventories of finished goods, work-in-progress and stock-in-trade

1,19,14,607 - 1,19,14,607

Employee Benefits Expenses 2 3,00,81,054 - 3,00,81,054 Finance costs - - - Excise duty 4 2,60,10,737 - 2,60,10,737 Depreciation and Amortization Expenses 51,10,634 - 51,10,634 Other Expenses 3,88,75,140 (71,984) 3,88,03,157

Total Expenses (IV) 27,07,78,496 (71,984) 27,07,06,512 V. Profit/(loss) before Exceptional Items and Tax 3,60,39,386 71,984 3,61,11,370 VI. Exceptional Items - - VII. Profit/(loss) before Tax 3,60,39,386 71,984 3,61,11,370 VIII. Tax expense:

1. Current Tax 1,23,81,000 - 1,23,81,000 2. Deferred Tax (4,74,656) 24,912 (4,49,744)

IX. Profit/(Loss) for the period from continuing operations2,41,33,042 47,072 2,41,80,114

X. Profit/(Loss) for the period 2,41,33,042 47,072 2,41,80,114

XIV. Other comprehensive income

Remeasurements of defined benefit liability (asset)- 6,39,087 6,39,087

Income tax related to items that will not be reclassified to profit or loss

- (2,21,175) (2,21,175)

XV. Total comprehensive income for the period 2,41,33,042 4,64,983 2,45,98,025


Notes to the reconciliation:1

2

3 Deferred tax assets (net) :

4 Excise duty on sales:

Trade and other receivablesUnder Indian GAAP, the Company has created provision for impairment of receivables consists only in respect of specific amount for incurred losses. Under Ind-AS, impairment allowance has been determined based on Expected Loss model (ECL).

Employee benefits :Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements [comprisingof actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind-AS 12 approach has resulted in recognition of deferred tax on new temprorary differences which was not required under Indian GAAP.

Under previous GAAP, revenue from sale of goods was presented net of the excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as an expense.





Reconciliation of net worth as at 1 April 2015 In INR Year ended 1 April

2015 Year ended 31

March 2016

Net worth under IGAAP 15,27,99,519 17,73,50,473

Summary of Ind AS adjustmentsImpairment of debtors based on expected credit model under Ind AS 109 1 (4,87,591) (4,15,607) Deferred Tax on Ind AS adjustments 2 1,68,746 1,43,834

Total Ind AS adjustments (3,18,845) (2,71,774)

Net worth under Ind AS 15,24,80,674 17,70,78,699

Reconciliation of Total comprehensive income for the year ended on 31 March 2016 In INR Year ended 31

March 2016

Total comprehensive income under IGAAP 2,45,50,954

Summary of Ind AS adjustmentsImpairment of debtors based on expected credit model under Ind AS 109 1 71,984 Deferred Tax impact on the above 2 (24,912)

Total Ind AS adjustments 47,072

Total comprehensive income under Ind AS 2,45,98,025

Note Particulars

Note Particulars





Notes to the reconciliation:

1

2 Deferred tax assets (net) :

Reconciliation of statement of cash flows:




Place:MumbaiDate: May 11, 2017 Date: May 11, 2017

Place:Mumbai

CIN: U15134MH1980PTC023361



There are no material adjustments to the statement of cash flows as reported under the previous GAAP.

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind-AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind-AS 12 approach has resulted in recognition of deferred tax on new temprorary differences which was not required under Indian GAAP.

Trade and other receivablesUnder Indian GAAP, the Group has created provision for impairment of receivables consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL).

Keva Fragrances Private Limited (Formerly Known as K V Arochem Private Limited)

Financials – FY – 2016-17

Independent Auditors’ Report

To the Members of Keva Fragrances Private Limited (formerly, K. V. Arochem Private Limited)

Report on the Ind AS financial statements

We have audited the accompanying Ind AS financial statements of Keva Fragrances Private Limited (formerly, K. V. Arochem Private Limited) (‘the Company’), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “ Ind AS financial statements”).

Management’s responsibility for the Ind AS financial statements

The Company’s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with the relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.

Independent Auditors’ Report (Continued)

Keva Fragrances Private Limited (formerly, K. V. Arochem Private Limited)

Auditors’ responsibility (Continued)

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS, of the financial position of the Company as at 31 March 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of matter

We draw attention to note 42 of these Ind AS financial statements, relating to the accounting treatment adopted by the Company pursuant to a Scheme of Arrangement approved by the Honorable High Court of Bombay (‘the Court’) and other relevant regulatory authorities, whereby the assets and liabilities of the amalgamated Company ‘Keva Fragrances Private Limited’ (“KFPL”) have been recognised at their fair values and the excess of consideration paid to the shareholders of KFPL over the net asset value of KFPL on the appointed date has been treated as Goodwill aggregating to Rs 236.28 crores. Such Goodwill will be amortised over a period of 5 years from the appointed date as per the Court order. This accounting of recording assets and liabilities at fair value and the resultant goodwill (including amortisation) arising from merger of entities which are under common control, although different from that prescribed under the Indian Accounting Standards, is in conformity with the accounting principles generally accepted in India, as the same has been approved by the Court. Our opinion is not qualified in respect of this matter.

Other matters

The comparative financial information of the Company for the year ended 31 March 2016 and the transition date opening Balance Sheet as at 1st April, 2015 included in these Ind AS financial statements, are based on the statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by M/s Batliboi & Purohit, Chartered Accountants, whose report for the year ended 31 March 2016 and 31 March 2015 dated 26 May 2016 and 22 June 2015 respectively expressed an unmodified opinion on those financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS and the effect of the Scheme of Arrangement referred to in note 42 of these Ind AS financial statements, which have been audited by us.



Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order‘), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the said Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

(a) we have sought and obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the balance sheet, the statement of profit and loss, the statement of cash flow and the statement of changes in equity dealt with by this report are in agreement with the books of account;

(d) in our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act, read with relevant rules thereunder, except for compliance with Ind AS 103 ‘Business Combinations’ due to the overriding effect of the Scheme of Arrangement as approved by the Court under Sections 391-394 of the Companies Act 1956, and as explained in the Emphasis of matter paragraph above;

(e) on the basis of written representations received from the directors as on 31 March 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017, from being appointed as a director in terms of Section 164(2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B"; and

(g) with respect to the other matters 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 information and according to the explanations given to us :

i. the Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements – Refer Note 39 to the Ind AS financial statements;

ii. the Company did not have any long-term contracts, including derivative contracts, for which there were any material foreseeable losses;

iii. there are no amounts required to be transferred to the Investor Education and Protection Fund by the Company; and



Report on other legal and regulatory requirements (Continued)

iv. the Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016 and these are in accordance with the books of accounts maintained by the Company. Refer note 38 to the Ind AS financial statements.

For B S R & Co. LLP

Chartered Accountants Firm’s Registration No : 101248W/W-100022 Mumbai 12 May 2017

Aniruddha Godbole Partner

Membership No: 105149


Annexure A to the Independent Auditors’ Report – 31 March 2017 (Referred to in our report of even date)


(b) The Company has a regular programme of physical verification of its fixed assets, by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the above programme, the Company has verified certain fixed assets during the year and the discrepancies noticed were not material and have been dealt with in books of accounts.


(ii) The inventory, except for goods-in-transit has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been dealt with in books of account.

(iii) According to the information and explanation given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnership or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 (‘the Act’). Accordingly, paragraphs 3 (iii) (a), (b) and (c) of the Order are not applicable to the Company. In our opinion and according to the information and explanations given to us, the Company does not consider the reimbursement of cost charged and outstanding to fall under purview of loans.

(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loans or provided any guarantees or security to the parties covered under Section 185 of the Act. The Company has complied with the provisions of Section 186 of the Act in respect of the investments made.

(v) In our opinion, and according to the information and explanations given to us, the Company has not accepted deposits as per the directives issued by the Reserve Bank of India under the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3 (v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 148 (1) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.


Annexure A to the Independent Auditors’ Report – 31 March 2017 (Continued)

(vii) (a) According to the information and explanations given to us and on the basis of our examination of records of the Company, amounts deducted/ accrued in the books of account in respect of Provident fund, Employees’ State Insurance, Income tax, Service tax, Sales tax, Value added tax, Professional tax, Duty of customs, Duty of excise, Cess and other material statutory dues have been regularly deposited with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees’ State Insurance, Income tax, Service tax, Sales tax, Value added tax, Professional tax, Duty of customs, Duty of excise, Cess and other material statutory dues were in arrears as at 31 March 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Service tax, Sales tax, Value added tax, Duty of customs and Duty of Excise which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income-tax has not been deposited as on 31 March 2017 by the Company on account of disputes:

Name of the statute

Nature of the dues

Demand in Rupees crores

Amount not deposited on account of demand Rupees in crores

Period to which the amount relates


Income tax Act, 1961

Income-tax *0.00 *0.00 2009-10 The Commissioner of Income-tax (appeals)

Income tax Act, 1961

Income-tax *0.01 *0.01 2012-13 The Commissioner of Income-tax (appeals)

*Amount in less than Rs 0.01 crore

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks. The Company does not have any loans or borrowings from government or financial institutions or dues to debenture holders during the year.

(ix) In our opinion and according to the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instrument) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable to the Company.

(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the management.


Annexure A to the Independent Auditors’ Report – 31 March 2017 (Continued)

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not paid remuneration to key managerial personnel. Accordingly, paragraph 3 (xi) of the Order is not applicable to the Company.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it. Accordingly, paragraph 3 (xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Ind AS financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3 (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) According to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP

Chartered Accountants Firm’s Registration No : 101248W/W-100022 Mumbai 12 May 2017

Aniruddha Godbole Partner

Membership No: 105149


Annexure B to the Independent Auditors’ Report – 31 March 2017 (Referred to in our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Keva Fragrances Private Limited (formerly, K. V. Arochem Private Limited) (“the Company”) as of 31 March 2017 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Act.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness 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.



Annexure B to the Independent Auditors’ Report – 31 March 2017 (Continued)

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For B S R & Co. LLP Chartered Accountants Firm’s Registration No: 101248W/W-100022 Aniruddha Godbole Mumbai Partner 12 May 2017 Membership No: 105149


Balance sheetas at 31 March 2017

(Currency : Indian Rupees in crores)

Note 31 March 2017 31 March 2016 1 April 2015

ASSETSNon-current assetsProperty, plant and equipment 2 53.05 42.61 46.49 Capital work-in-progress 2 0.29 12.74 1.78 Goodwill on amalgamation 42 145.71 192.96 - Other intangible assets 3 0.57 0.82 0.68 Intangible assets under development 44 0.44 - - Financial assets

Investments 4 11.64 11.64 0.00 Loans 5 1.98 1.42 0.25

Deferred tax assets (net) 31 - 1.25 7.14 Current tax assets (net) 3.82 5.74 0.40 Other non-current assets 6 39.78 26.79 0.79 Total non-current assets 257.28 295.97 57.53

Current AssetsInventories 7 98.25 87.09 20.65 Financial assets

Trade receivables 8 116.73 96.89 4.32 Cash and cash equivalents 9A 12.50 11.57 1.71 Bank balances other than above 9B 13.42 22.76 0.08 Loans 10 0.45 0.48 0.05 Derivatives 11 2.07 0.65 - Others 12 3.28 4.31 0.22

Other current assets 6 6.84 7.56 10.10 Total current assets 253.54 231.31 37.13

TOTAL ASSETS 510.82 527.28 94.66

EQUITY AND LIABILITIESEquityEquity share capital 13 7.43 1.22 0.71 Other equity 14

Retained earnings (62.15) (43.47) (13.34) Other reserves 439.34 63.69 31.99 Purchase consideration pending allotment 42 - 381.72 -

377.19 401.94 18.65

Total equity 384.62 403.15 19.36

Liabilities

Non-current liabilitiesFinancial liabilities

Borrowings 15 6.29 18.24 26.60 Deferred tax liabilities (net) 31 1.71 - - Provisions 16 1.27 1.12 0.82 Total non-current liabilities 9.27 19.36 27.42


Borrowings 15 7.78 11.32 11.31 Trade payables 17 81.63 55.18 21.23 Derivatives 18 - 0.19 0.32 Others 19 15.12 29.54 11.74

Current tax liabilities (net) 10.37 0.75 - Other current liabilities 20 1.15 6.88 2.85 Provisions 16 0.88 0.91 0.43 Total current liabilities 116.93 104.77 47.88

Total liabilities 126.20 124.13 75.30

TOTAL EQUITY AND LIABILITIES 510.82 527.28 94.66


Balance sheet (Continued)as at 31 March 2017


Significant accounting policies 1The notes referred to above and other notes form an integral part of the financial statements. 2-48

As per our report of even date attached.

For B S R & Co. LLPChartered Accountants of Keva Fragrances Private LimitedFirm’s Registration No: 101248W/W-100022 (formerly, K. V. Arochem Private Limited)

Aniruddha Godbole Ramesh Vaze Prabha VazePartner Director DirectorMembership No: 105149 DIN: 00509751 DIN: 00509817

Mumbai Mumbai Mumbai12 May 2017 12 May 2017 12 May 2017

For and on behalf of the Board of Directors

CIN: U24110MH1978PTC020545


Statement of profit and lossfor the year ended 31 March 2017

(Currency : Indian Rupees in crores)Year ended Year ended

Note 31 March 2017 31 March 2016RevenueRevenue from operations 21 278.46 261.16 Other income 22 12.56 8.51 Total income 291.02 269.67

ExpensesCost of materials consumed 23 135.42 135.30 Purchase of traded goods 16.73 17.92 Changes in inventories of finished goods, work-in-progress and stock-in-trade 24 7.63 14.21 Excise duty 5.77 10.32 Employee benefits expense 25 10.65 8.86 Finance costs 26 2.63 4.55 Depreciation and amortisation expenses 27 50.59 50.55 Other expenses 28 62.99 42.90 Total expenses 292.42 284.61

(Loss) before income tax (1.39) (14.94)

Income tax expenseCurrent tax 13.91 7.29 Deferred tax 3.11 7.13 Adjustment of tax for earlier years - 0.67 (Loss) for the year (18.41) (30.03)

Other comprehensive incomeItems that will not be reclassified subsequently to profit or lossRemeasurements of defined benefit liability (asset) (0.42) (0.16) Income tax related to items that will not be reclassified to profit or loss 0.15 0.06 Other comprehensive income for the year, net of income tax (0.27) (0.10)

Total comprehensive income for the year (18.68) (30.13)

Earnings per equity share (Nominal value of Rs 100 each, fully paid-up) 29Basic earnings per share (Rs) (579.00) (3,516.11)Diluted earnings per share (Rs) (579.00) (425.11)

Significant accounting policies 1The notes referred to above and other notes form an integral part of the financial statements.

2-48

As per our report of even date attached.For and on behalf of the Board of Directors

For B S R & Co. LLP of Keva Fragrances Private LimitedChartered Accountants (formerly, K. V. Arochem Private Limited)Firm’s Registration No: 101248W/W-100022 CIN: U24110MH1978PTC020545




Statement of changes in equityfor the year ended 31 March 2017


Equity share capital 31 March 2017 31 March 2016 1 April 2015

Opening balance as at 1.22 0.71 0.71 Changes in equity share capital during the year 6.21 0.51 - Closing balance as at 7.43 1.22 0.71

Other equity

Particulars Purchase consideration pending

allotment

Capital Reserve Securities Premium Account

General Reserve Deemed equity contribution

received from parent

Retained earnings

Balance at 1 April 2015 - 0.33 22.62 8.10 0.94 (13.34) 18.67 Total comprehensive income for the year ended 31 March 2016

(Loss) for the year - - - - - (30.03) (30.03)Items of OCI for the year, net of taxRemeasurements of defined benefit liability - - - - - (0.10) (0.10) Total comprehensive income - - - - - (30.13) (30.13)

Transaction with owners in their capacity as owners,recorded directly in equity

Issue of equity shares during the year (refer note 13) - - 31.49 - - - 31.49 Issue of share capital pursuant to Scheme of Amalgamation [refer note 42]

381.72 - - - - - 381.72

Deemed investment by parent company - - - 0.23 - 0.23 381.72 - 31.49 - 0.23 - 413.44

Balance at 31 March 2016 381.72 0.33 54.10 8.10 1.16 (43.47) 401.97

Total comprehensive income for the year ended 31 March 2017

(Loss) for the year - - - - - (18.41) (18.41)Items of OCI for the year, net of taxRemeasurements of defined benefit liability - - - - - (0.27) (0.27) Total comprehensive income - - - - - (18.68) (18.68) Transaction with owners in their capacity as owners,recorded directly in equityDeemed investment by parent company - - - 0.14 - 0.14 Issue of equity shares pursuant to Scheme of Amalgamation (refer note 42)

(381.72) 375.51 - - - (6.21)

Balance at 31 March 2017 - 0.33 429.61 8.10 1.30 (62.15) 377.19

As per our report of even date attached.For and on behalf of the Board of Directors

For B S R & Co. LLP of Keva Fragrances Private LimitedChartered Accountants (formerly, K. V. Arochem Private Limited)Firm’s Registration No: 101248W/W-100022 CIN: U24110MH1978PTC020545



Total EquityAttributable to the owners of the CompanyReserves and Surplus


Notes to the financial statements (continued)for the year ended 31 March 2017


14 Other equity

Other ReservesNote 31 March 2017 31 March 2016 1 April 2015

Capital reserve i. 0.33 0.33 0.33 Securities premium reserve ii. 429.61 54.10 22.62 General reserve iii. 8.10 8.10 8.10 Deemed equity contribution received from parent iv. 1.30 1.16 0.94 Purchase consideration pending allotment v. - 381.72 -

439.34 445.41 31.99

i. Capital reserve 31 March 2017 31 March 2016

Opening balance 0.33 0.33 Addition during the year - - Closing balance 0.33 0.33

ii. Securities premium reserve

Opening balance 54.10 22.62 Share premium on shares issued to parent company - 31.49 Issue of share capital pursuant to Scheme of Amalgamation (refer note 42) 375.51 - Closing balance 429.61 54.10

iii. General reserve

Opening balance 8.10 8.10 Addition during the year - - Closing balance 8.10 8.10

iv. Deemed equity contribution received from parent

Opening balance 1.16 0.94 Addition during the year 0.14 0.23 Closing balance 1.30 1.16

v. Purchased consideration pending allotment

Opening balance 381.72 - Pursuant to scheme of amalgamation (refer note 42) (381.72) 381.72 Closing balance - 381.72


Notes to the financial statements (continued)for the year ended 31 March 2017


14 Other equity (Continued)

Nature and purpose of reserves

i. Capital reserve

ii. Securities premium reserve

iii. General reserve

iv. Deemed equity contribution received from parent

v. Purchase consideration pending allotment

Purchase consideration issued in the form of equity shares, on account of scheme of amalgamation.

General reserve is a free reserve which is created by transferring funds from retained earnings to meet future obligations or purposes.

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Act.

Capital reserve is created on account of cash subsidy received by the Company in earlier years.

Financial guarantees given or issued on behalf of group companies without charging any fee is recognised at a value which represents a fee which would have been charged by a bank for issuing a similar guarantee to the subsidiary.


Cash flow statementfor the year ended 31 March 2017

(Currency : Indian Rupees in crores)Year ended Year ended

31 March 2017 31 March 2016Cash flows from operating activities

(1.39) (14.94)

Depreciation and amortisation 50.59 50.55 (Profit) on sale of fixed assets - (0.83) Remeasurements of defined benefit liability (0.42) (0.16) Unrealised exchanged fluctuation loss (net) 1.02 0.34 Gain on derivative contracts - (0.42) Reversal of provision for mark-to-market loss (1.42) (0.24) Finance income (including fair value change in financial instruments) (1.29) (0.55) Finance costs 2.03 2.47 Excess provision written back (0.76) (1.28) Guarantee commission 0.60 0.33 Financial assets measured at FVTPL - net change in fair value (0.39) (0.13) Reversal of provision for doubtful debts (3.07) - Bad debts written off 7.20 - Provision for doubtful debts - 5.20

52.69 40.35

(Increase)/decrease in inventories (11.03) 10.54 (Increase) in trade receivables (11.23) (19.57) (Increase) in other current assets 0.21 0.41 (Increase) in loans and advances (27.00) (7.96) Increase in trade payables 26.97 18.01 (Decrease)/increase in provisions (21.32) 10.57 Net change in working capital (43.40) 12.00

Cash flows generated from operating activities 9.29 52.35

(1.94) (16.30)

Net cash flows generated from operating activities 7.35 36.04 Cash flows from investing activities

(1.87) (5.37) 0.04 1.07 0.84 0.05

Decrease/(increase) in other bank balances 9.35 (22.41) Net cash flows from/(used in) investing activities 8.36 (26.65) Cash flows from financing activities

(3.54) (9.72) (10.04) (9.73)

- 32.00 - (18.05)

Guarantee Commission Paid (0.60) (0.33) (1.95) (2.41)

Net cash flows (used in) financing activities (16.13) (8.25)

Net increase in cash and cash equivalents (0.42) 1.14

11.57 1.71 Effect of exchange rate changes on cash and bank balances 1.36 1.58

- 7.14 Cash and cash equivalents at the end of the year 12.50 11.57

Profit before taxAdjustments for

Dividend paid


Income tax paid (net)

Proceeds from sale of property, plant and equipments

Increase / (decrease) in working capital term loanRepayment of term loanShare issue

Interest received

Cash and cash equivalents at the beginning of the year

Purchase of property, plant and equipments (including intangible assets)

Interest paid

Add : pursuant to the scheme of amalgamation (refer note 42)


Cash flow statement (Continued)for the year ended 31 March 2017



Notes :Cash and cash equivalents - Balances with Banks in: - current accounts 2.54 2.52 - exchange earners foreign currency account 9.94 8.95 Cash on hand 0.02 0.09

12.50 11.57

3. Cash comprises cash on hand, current accounts and foreign currency accounts.


For B S R & Co. LLP For and on behalf of the Board of DirectorsChartered Accountants of Keva Fragrances Private LimitedFirm’s Registration No: 101248W/W-100022 (formerly, K. V. Arochem Private Limited)

CIN: U24110MH1978PTC020545

Aniruddha Godbole Ramesh Vaze Prabha Vaze Partner Director Director Membership No: 105149 DIN: 00509751 DIN: 00509817

Mumbai Mumbai Mumbai 12 May 2017 12 May 2017 12 May 2017

2. The above Cash Flow Statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard (Ind AS) 7 - "Cash Flow Statements".


Notes to the financial statements for the year ended 31 March 2017


1.1 General information

Keva Fragrances Private Limited (formerly, K. V. Arochem Private Limited) (‘KFG’ or ‘the Company’) was incorporated under theprovisions of the Companies Act, 1956 and the registered address of the company is Devkaran Mansion, 36, Mangaldas Road, Mumbai –400002. The Company is engaged in the manufacture, supply and exports of fragrances and aroma ingredients. During the year, pursuant to the Scheme of Arrangement (the Scheme) under relevant provisions of the Companies Act 2013 foramalgamation of Keva Fragrances Private Limited (“KFPL”) with the Company as sanctioned by the Hon’ble High Court of Bombay on22nd September, 2015 and filed with Registrar of Companies on 15th November, 2016 (the Effective Date), the whole of the business, allassets, liabilities and reserves of KFG are transferred at fair values to and vested in the Company with effect from 1 May 2015 (theAppointed Date) and the name of K. V. Arochem Private Limited shall stand changed to ‘Keva Fragrances Private Limited’.

1.2 Basis of accounting

The financial statements have been prepared in accordance with the accounting principles generally accepted in India, including theIndian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 and Companies (IndianAccounting Standards) (Amendment) Rules, 2016 notified under section 133 of the Companies Act, 2013, (the 'Act') and other relevantprovisions of the Act.As these are the Company’s first financial statements prepared in accordance with Ind AS, Ind AS 101, First-time adoption of IndianAccounting Standards has been applied. An explanation of how the transition to Ind AS has affected the previously reported financialposition, financial performance and cash flows of the Company is provided in Note 48.The financial statements for the year ended 31 March 2017 have been reviewed and subsequently approved by the Board of Directors atits meeting held on 12 May 2017.

1.3 Functional and presentation currency

These financial statements are presented in Indian rupees, which is the Company’s functional currency. All amounts have been roundedoff to two decimal places to the nearest crore, unless otherwise indicated.

1.4 Basis of measurement

The financial statements have been prepared on a historical cost basis, except for the following:

• certain financial assets and liabilities (including derivative instrument) that are measured at fair value and• net defined benefit (asset)/ liability that are measured at fair value of plan assets less present value of defined benefit obligations.

1.5 Use of estimates and judgements

The preparation of financial statements in accordance with Ind AS requires use of estimates and assumptions for some items, whch mighthave an effect on their recognition and measurement in the balance sheet and statement of profit and loss. The actual amounts realisedmay differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognised prospectively.

Assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ended 31 March2017 are as follows:

a. Property, plant and equipment

Determination of the estimated useful lives of tangible assets and the assessment as to which components of the cost may be capitalised.Useful lives of tangible assets are based on the life prescribed in Schedule II of the Companies Act, 2013. In cases, where the useful livesare different from that prescribed in Schedule II, they are based on technical advice, taking into account the nature of the asset, theestimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes,manufacturers’ warranties and maintenance support.


Notes to the financial statements (Continued)for the year ended 31 March 2017


1.3 Functional and presentation currency (Continued)

b. Recognition and measurement of defined benefit obligations

The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions includediscount rate, trends in salary escalation, actuarial rates and life expectancy. The discount rate is determined by reference to market yieldsat the end of the reporting period on government bonds. The period to maturity of the underlying bonds correspond to the probablematurity of the post-employment benefit obligations.

c. Recognition of deferred tax assets

Deferred tax assets are recognised for the future tax consequences of temporary differences between the carrying values of assets andliabilities and their respective tax bases, and unutilised business loss and depreciation carry-forwards and tax credits. Deferred tax assetsare recognised to the extent that it is probable that future taxable income will be available against which the deductible temporarydifferences, unused tax losses, depreciation carry-forwards and unused tax credits could be utilised.

1.6 Measurement of fair values

The Company’s accounting policies and disclosures require the measurement of fair values for financial instruments.

The Company has an established control framework with respect to the measurement of fair values. The management regularly reviewssignificant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used tomeasure fair values, then the management assesses the evidence obtained from the third parties to support the conclusion that suchvaluations meet the requirements of Ind AS, including the level in the fair value hierarchy in which such valuations should be classified.

When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as far as possible. Fairvalues are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) orindirectly (i.e. derived from prices).Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair valuemeasurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to theentire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the changehas occurred.

1.7 Current / non-current classification

An entity shall classify an asset as current when-

(a) it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;(b) it holds the asset primarily for the purpose of trading;(c) it expects to realise the asset within twelve months after the reporting period; or(d) the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liabilityfor at least twelve months after the reporting period.

An entity shall classify all other assets as non-current.




1.7 Current / non-current classification (Continued)

An entity shall classify a liability as current when-

(a) it expects to settle the liability in its normal operating cycle;(b) it holds the liability primarily for the purpose of trading;(c) the liability is due to be settled within twelve months after the reporting period; or(d) it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.

Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect itsclassification.

An entity shall classify all other liabilities as non-current.

Operating cycle

An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

Based on the nature of services and the time between the acquisition of assets for processing and their realisation in cash and cashequivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current – non-current classification of assetsand liabilities.

1.8 Significant accounting policies

A. Revenue

Sale of goods

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received orreceivable, net of returns and allowances, trade discounts, volume rebates, Sales tax / VAT, Octroi, freight and insurance. Revenue isrecognised when significant risks and rewards of ownership in the goods are transferred to the buyer, collectability of the resultingreceivable is reasonably assured, the associated costs and possible return of goods can be estimated reliably, there is no continuingeffective control over, or managerial involvement with, the goods, and the amount of revenue can be measured reliably.

Royalty Income

Royalty income is recognised in Other income on an accrual basis in accordance with the substance of the relevant agreements.

B. Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates at thedates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at thereporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functionalcurrency at the exchange rate when the fair value was determined. Foreign currency differences are generally recognised in the statementof profit and loss. Non-monetary items that are measured based on historical cost in a foreign currency are not translated.




1.8 Significant accounting policies (Contnued)

C. Employee benefits

i. Short term employee benefits

Short-term employee benefits are expensed as the related service is provided. These benefits include compensated absences such asannual leave, paid sickness leave and bonus. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay thisamount as a result of past service provided by the employee and the obligation can be estimated reliably.

ii. Post employment employee benefits

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity andwill have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions to Employee State Insurance and Labour Welfare Fund and are recognised as anemployee benefit expense in the statement of profit and loss on an accrual basis. Contribution to Superannuation Fund, a defined contribution scheme, is made at pre-determined rates to the Superannuation Fund Trustset-up and managed by holding company 'S H Kelkar and Company Limtied' and is charged to the statement of profit and loss. There areno other obligations other than the contribution payable to the Superannuation Fund Trust.

Defined benefit plans

A defined benefit plan is a post-employee benefit plan other than a defined contribution plan. The Company’s net obligation in respect ofdefined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in thecurrent and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. Whenthe calculation results in a potential 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 reductions in future contributions to the plan. To calculate the present value ofeconomic benefits, consideration is given to any applicable minimum funding requirements.

Re-measurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excludinginterest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income (OCI).Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the definedbenefit obligation at the beginning of the annual period to the then-net defined liability (asset) after taking into account any changes as aresult of contribution and benefit payments during the year. Net interest expense and other expenses related to gratuity benefit scheme arerecognised in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gainor loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a definedbenefit plan when the settlement occurs.

Gratuity

The Company has an obligation towards gratuity, a defined benefit scheme covering eligible employees. The Company accounts forgratuity benefits payable in future based on an independent actuarial valuation method as stated above. Also, the Company's contributionpaid/ payable to the Gratuity fund managed by the trust set up by the holding Company for certain employees and to LIC for others isrecognised as expense in the statement of profit and loss during the period in which the employee renders the related service.





C. Employee benefits (Continued)

ii. Post employment employee benefits (Continued)

Provident fund trust

Eligible employees receive benefits from a provident fund which is a defined benefit plan and managed by the trust set up by the HoldingCompany. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage ofthe covered employee’s salary. The rate at which the annual interest is payable to the beneficiaries of the trust shall not be lower than thestatutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act,1952. Accordingly, the Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trustand the notified interest rate. And an obligation in this respect is measured and accounted on the basis of independent actuarial valuationas stated above.

The Company's provident fund is managed by the trust set up by the Holding Company. The interest rate payable to the members of thetrust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds andMiscellaneous Provisions Act, 1952 and shortfall if any shall be made good by the Company. The Company makes specified monthlycontributions towards employee provident fund.

Other long-term employee benefits

The Company’s net obligation in respect of compensated absences such as paid annual leave, is the amount of future benefit thatemployees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unitcredit method, as at the date of the Balance Sheet. Actuarial gains or losses comprising of experience adjustments and the effects ofchanges in actuarial assumptions are immediately recognised in the statement of profit and loss.Other long-term employee benefits also include long-term incentive plan provided to eligible employees. Vesting of the long-termincentive would be contingent on achievement of certain performance conditions. The obligation for the long-term incentive plan iscalculated arithmetically as a parentage of fixed salary.

D. Recognition of interest income or expense

Interest income or expense is recognised using the effective interest rate method. The ‘effective interest rate’ is the rate that exactlydiscounts estimated future cash payments or receipts through the expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or- the amortised cost of the financial liability.

E. Income tax

Income tax expense comprises current and deferred tax. It is recognised in the statement of profit and loss except to the extent that itrelates to a business combination, or items recognised directly in equity or in other comprehensive income (OCI).

i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the taxpayable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date.Current tax also includes any tax arising from dividends.

Current tax assets and liabilities are offset only if, the Company:

a) has a legally enforceable right to set off the recognised amounts; andb) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.





E. Income tax (Continued)

ii. Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financialreporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

- temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affectsneither accounting nor taxable profit or loss;

- temporary differences related to investments in subsidiaries and associates to the extent that the Company is able to control the timing ofthe reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

- taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it isprobable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reportingdate and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversedwhen the probability of future taxable profits improves.

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that futuretaxable profits will be available against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax ratesenacted or substantively enacted at the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at thereporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if:

a) the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and

b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxableentity.

F. Inventories

Inventories which comprise raw materials, packing materials, work-in-progress and finished goods are carried at the lower of cost and netrealisable value.

The cost of inventories is based on weighted average formula and includes expenditure incurred in acquiring the inventories, costs ofproduction or conversion and other costs incurred in bringing the inventories to their present location and condition. In the case ofmanufactured inventories and work in progress, cost includes an appropriate share of fixed production overheads based normal operatingcapacity of production facilities.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and theestimated costs necessary to make the sale.

The net realisable value of work-in-progress is determined with reference to the selling prices of related finished products. Raw materialsand other supplies held for use in the production of finished products are not written down below cost except in cases where materialprices have declined and it is estimated that the cost of the finished products will exceed their net realisable value.The comparison of cost and net realisable value is made on an item-by-item basis.

With effect from 1 April, 2016, the Company has changed its policy for valuation of inventory from 'First-in first-out' method to'Weighted average cost' method. The impact of the change in valuation of inventory as at 1 April 2016 is not material.





G. Property, plant and equipment


Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any.

The cost of an item of property, plant and equipment comprises:

a) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.b) any directly attributable cost of bringing the asset to its location and condition necessary for it to be capable of operating in the mannerintended by management.c) the estimated costs of dismantling and removing the item and restoring the site on which it is located.

Income and expenses related to the incidental operations, not necessary to bring the item to the location and condition necessary for it tobe capable of operating in the manner intended by management, are recognised in profit or loss.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted and depreciated for asseparate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in the statement of profit and loss.


Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow tothe Company.

iii. Depreciation

Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over the estimated usefullives prescribed under Schedule II of the Act, using the straight-line method and is generally recognised in the statement of profit and loss.

Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certainthat the Company will obtain ownership by the end of the lease term, in which case the depreciation rates applicable for similar assetsowned by the Company are applied. Freehold land is not depreciated.

The estimated useful lives of items of property, plant and equipment are as follows:

Leasehold Improvements Over lease period

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

With effect from 1 April 2016, the Company has changed its method for charging depreciation on tangible assets from diminishingbalance method to straight-line method, based on the expected pattern of consumption of the future economic benefits embodied in theasset. Consequently, the depreciation charge for the year ended 31 March 2017 is lower by Rs 4.36 crores. Accordingly, the loss for theyear ended 31 March 2017 is lower by Rs 2.85 crores.

Tangible assets Life definedUseful life as per Schedule II

Buildings 30-60 years 30-60 yearsResearch and development - equipments 10-15 years 10-15 yearsComputers 3 years 3 yearsOffice equipments 5 years 5 yearsPlant and machinery 15-20 years 8-15 yearsElectrical installation 10 years 10 yearsMotor cars and vehicles 8 years 8 years





G. Property, plant and equipment (Continued)


On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipmentrecognised as at 1 April 2015, measured as per the previous GAAP, and use that carrying value as the deemed cost of such property, plantand equipment. (refer note 2)

H. Borrowing costs

Borrowing costs that are directly attributable to the acquisition or construction of an asset that necessarily takes a substantial period oftime to get ready for its intended use are capitalised as part of the cost of that asset till the date it is ready for its intended use or sale.Other borrowing costs are recognised as an expense in the period in which they are incurred.

I. Intangible assets


Internally generated: Research and development

Expenditure on research activities is recognised in the statement of profit and loss as incurred.

Development expenditure is capitalised as part of the cost of the research and development, only if the expenditure can be measuredreliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intendsto and has sufficient resources to complete development and sell the asset. Otherwise, it is recognised in the statement of profit and loss asincurred. Subsequent to initial recognition, the asset is measured at cost less accumulated amortisation and any accumulated impairmentlosses.

Other intangible assets comprises of computer software, which is acquired by the Company is initially measured at cost. It is subsequentlymeasured at cost less accumulated amortisation and any accumulated impairment losses.


Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which itrelates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in the statement of profitand loss as incurred.

iii. Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method overtheir estimated useful lives, and is included in depreciation and amortisation in the statement of profit and loss.

Research and development expenditure capitalised will be amortised over 36 months, its the life over which management assumes, theCompany will receive its benefits.

The intangible assets are amortised over the estimated useful lives as given below: - Computer Software 5 years

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.


On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as at 1 April2015, measured as per the previous GAAP, and use that carrying value as the deemed cost of such intangible assets. (refer note 3)





J. Financial Instruments

a. Financial assets

i. Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets are initiallyrecognised when the Company becomes a party to the contractual provisions of the instrument.

A financial asset is initially measured at fair value. In the case of financial assets which are recognised at fair value through profit and loss(FVTPL), the transaction costs are recognised in the statement of profit and loss. In other cases, the transaction costs are attributed to theacquisition value of the financial asset.

ii. Classification

On initial recognition, a financial asset is classified as measured at

- amortised cost; or- fair value through profit or loss (FVTPL); or- fair value through other comprehensive income (FVOCI) - debt investment or equity investment

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its businessmodel for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

− the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and− the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest onthe principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:− the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financialassets; and− the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest onthe principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequentchanges in the investment’s fair value in OCI (designated as FVOCI – equity investment). This election is made on an investment‑ by‑investment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes allderivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets therequirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accountingmismatch that would otherwise arise.

iii. Subsequent measurement and gains and losses

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised inthe statement of profit and loss.

Financial assets at amortised cost

These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced byimpairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss onderecognition is recognised in the statement of profit and loss.





J. Financial Instruments (Continued)

a. Financial assets (Continued)

Debt investments at FVOCI

These assets are subsequently measured at fair value. Interest income under the effective interest method, foreign exchange gains andlosses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains andlosses accumulated in OCI are reclassified to the statement of profit and loss.

Equity investments at FVOCI

These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearlyrepresents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to thestatement of profit and loss.

iv. Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfersthe rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of thefinancial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownershipand does not retain control of the financial asset.If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially allof the risks and rewards of the transferred assets, the transferred assets are not derecognised.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairmentloss on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, and bank balance.

b) Trade receivables - The application of simplified approach does not require the Company to track changes in credit risk. Rather, itrecognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. Trade receivablesare tested for impairment on a specific basis after considering the sanctioned credit limits, security like letters of credit, security depositcollected etc. and expectations about future cash flows.

b. Financial liabilities

i. Recognition and initial measurement

All financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

A financial liability is initially measured at fair value. In the case of financial liabilities which are recognised at fair value through profitand loss (FVTPL), the transaction costs are recognised in the statement of profit and loss. In other cases, the transaction costs areattributed to the acquisition value of the financial asset.

ii. Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classifiedas held‑for‑trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured atfair value and net gains and losses, including any interest expense, are recognised in the statement of profit and loss. Other financialliabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gainsand losses are recognised in the statement of profit and loss. Any gain or loss on derecognition is also recognised in the statement of profitand loss.





J. Financial Instruments (Continued)

b. Financial liabilities (Continued)

iii. Derecognition

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms aresubstantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The differencebetween the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in thestatement of profit and loss.

iv. Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Companycurrently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset andsettle the liability simultaneously.

c. Derivative financial instruments

The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps, to hedge its foreigncurrency risks and interest rate risks respectively. Such derivative financial instruments are initially recognised at fair value on the date onwhich a derivative contract is entered into and are subsequently re-measured at fair value at each reporting period. Any changes thereinare generally recognised in the statement of profit and loss.

K. Provisions and contingent liabilities

Provisions are determined by discounting the expected future cash flows specific to the liability. The unwinding of the discount isrecognised as finance cost. A provision for onerous contracts is measured at the present value of the lower of the expected cost ofterminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Companyrecognises any impairment loss on the assets associated with that contract.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but will probably not,require an outflow of resources. When there is a possible obligation of a present obligation in respect of which the likelihood of outflowof resources is remote, no provision disclosure is made.

L. Export incentives

Export incentives principally comprises of Focus Market Scheme, and other export incentive schemes. The benefits under these incentiveschemes are available based on the guidelines formulated for respective schemes by the government authorities. These incentives arerecognised as revenue on accrual basis to the extent it is probable that realisation is certain.

M. Leases

i. Lease payments

Payments made under operating leases are recognised in the statement of profit and loss on a straight line basis over the term of the leaseunless such payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationarycost increase. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstandingliability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on theremaining balance of the liability.





M. Leases (Continued)

ii. Leased assets

Assets held by the Company under leases that transfer to the Company substantially all of the risks and rewards of ownership areclassified as finance leases. The leased assets are measured initially at an amount equal to the lower of their fair value and the presentvalue of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accountingpolicy applicable to that asset.

Assets held under other leases are classified as operating leases and are not recognised in the Company’s statement of financial position.

N. Impairment of non-financial assets

The carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment if any indication of impairmentexists. If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised for such excess amount.

The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the futurecash flows to their present value based on an appropriate discount factor.

When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlier accounting periods whichno longer exists or may have decreased, such reversal of impairment loss is recognised in the statement of profit and loss, to the extent theamount was previously charged to the statement of profit and loss. In case of revalued assets, such reversal is not recognised.

O. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity ofthree months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net ofoutstanding bank overdrafts as they are considered an integral part of the Company’s cash management.

P. Earnings per share (EPS)

Basic EPS is computed using the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the yearexcept where the results would be antidilutive.




1.9 Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017,notifying amendments to Ind AS 7, ‘Statement of cash flows’. These amendments are in accordance with the recent amendments made byInternational Accounting Standards Board (IASB) to IAS 7, ‘Statement of cash flows’. The amendments are applicable to the Companyfrom April 1, 2017. The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements toevaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes,suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising fromfinancing activities, to meet the disclosure requirement.

The Company is currently evaluating the effect of the above amendments.

1.10 Amalgamation of Keva Fragrances Private Limited with K. V. Arochem Private Limited and amortisation ofGoodwill

Business Combination in respect of amalgamation of Keva Fragrances Pvt. Ltd. with the Company has been accounted for as per theprovision of the scheme of amalgamation approved by Hon'ble High court, including accounting for the resultant Goodwill. Refer Note 42for details.




2

Block of asset

Freehold land - - - - - - - - - - - -

Leasehold land 0.08 - - - 0.08 - 0.00 - - 0.00 0.08 0.08

Leasehold improvements 0.41 0.20 - - 0.61 0.17 0.11 - - 0.29 0.32 0.24

Factory building and sheds 18.10 0.51 - - 18.61 1.68 0.57 - - 2.25 16.36 16.42

Residential flats 0.10 - - - 0.10 0.01 0.00 - - 0.01 0.09 0.09

Plant and equipments 33.54 11.00 - 0.32 44.22 9.69 2.02 - 0.28 11.43 32.79 23.85

Electrical installation 1.59 0.80 - - 2.39 0.36 0.19 - - 0.55 1.84 1.23

Furniture and fixtures 1.47 1.05 - - 2.52 0.76 0.19 - - 0.95 1.57 0.71

Motar Cars and vehicles 0.00 - - - 0.00 - - - - - 0.00 0.00

Total 55.29 13.56 - 0.32 68.53 12.67 3.08 0.28 15.48 53.05 42.61

Capital Work-in-Progress 12.74 0.23 - 12.69 0.29 - - - - - 0.29 12.74

Property, plant and equipment and capital work-in-progress

Gross Block Accumulated Depreciation

As at 1 April 2016 Additions Pursuant to Scheme of

Amalgamation (Note 42)

Net Block


Charge for the year

Pursuant to Scheme of


As at 31 March 2017

As at 1 April 2016 As at 31 March 2017

As at 31 March 2017

As at 31 March 2016




2 Property, plant and equipment and capital work-in-progress (previous year)

Block of asset

Freehold land 0.01 - - 0.01 - - - - - - - 0.01

Leasehold land 0.08 - - - 0.08 - - - - - 0.08 0.08

Leasehold improvements - - 0.41 - 0.41 - 0.11 0.07 - 0.17 0.24 -

Factory building and sheds 18.10 - - - 18.10 - 1.68 - - 1.68 16.42 18.10

Residential flats 0.25 - - 0.15 0.10 - 0.01 - - 0.01 0.09 0.25

Plant and equipments 25.82 0.10 7.69 0.08 33.53 - 4.20 5.48 - 9.69 23.84 25.82

Electrical installation 1.59 - - - 1.59 - 0.36 - - 0.36 1.23 1.59

Furniture and fixtures 0.64 - 0.83 - 1.47 - 0.42 0.34 - 0.76 0.71 0.64

Motar Cars and vehicles 0.00 - - - 0.00 - - - - - 0.00 0.00

46.49 0.10 8.93 0.24 55.28 - 6.78 5.89 - 12.67 42.61 46.49

Capital Work-in-Progress 1.78 1.19 9.77 - 12.74 - - - - - 12.74 1.78



As at 31 March 2016

As at 1 April 2015 Balance as at 1 April 2015

As at 31 March 2016

As at 31 March 2016

As at 1 April 2015 Eliminated on disposal of assets

Charge for the year

Disposals Pursuant to Scheme of


Additions

Accumulated Depreciation Net BlockGross Block




2 Property, plant and equipment and capital work-in-progress (Continued)

Notes:(a) The Capital Work-in-Progress represents the construction of plant and machinery.

Freehold Land Leasehold Land Factory Building &

Sheds

Residential Flats

Plant & Equipments

Electrical Installation

Furniture & Fixtures

Motar Cars & Vehicles

Total

Gross Block 0.01 0.12 23.09 0.53 46.74 2.82 1.08 0.08 74.46 Less: Accumulated Depreciation - 0.05 4.98 0.28 20.91 1.22 0.44 0.08 27.96

Net Block 0.01 0.08 18.10 0.25 25.82 1.59 0.64 0.00 46.50

(d) Plant & machinery has been pledged against the long term borrowings. Refer note 15 for details on charge created.

(e) Nil amount of borrowing costs are capitalised during the current and comparative periods.

(b) The Company has availed the deemed cost exemption in relation to the property plant and equipment on the date of transition and hence the net block carrying amount has been considered as the gross block carrying amount on thatdate. Refer note below for the gross block value and the accumulated depreciation on 1 April 2015 under the previous GAAP.

(c) With effect from 1 April 2016, the Company has changed its method for charging depreciation on tangible assets from diminishing balance method to straight-line method, based on the expected pattern of consumption of the futureeconomic benefits embodied in the asset. Consequently, the depreciation charge for the year ended 31 March 2017 is lower by Rs 4.36 crores.




3 Intangible assets

Block of asset

Software 1.43 - - - 1.43 0.61 0.25 0.86 0.57 0.82

1.43 - - - 1.43 0.61 0.25 - - 0.86 0.57 0.82

Goodwill on Amalgamation 236.28 - - - 236.28 43.32 47.26 - - 90.57 145.71 192.96

Technical know-how - 0.44 - - 0.44 - - - - - 0.44 -

237.71 0.44 - - 238.15 43.93 47.51 - - 91.43 146.72 193.78

Intangible assets (previous year)

Block of asset

Software 0.68 - 0.74 - 1.43 - 0.45 0.16 - 0.61 0.82 0.68

0.68 - 0.74 - 1.43 - 0.45 0.16 - 0.61 0.82 0.68

Goodwill on Amalgamation - 236.28 236.28 - 43.32 43.32 192.96 -

0.68 - 237.02 - 237.70 - 43.77 0.16 - 43.93 193.78 0.68

Goodwill Software TotalGross Block - 1.04 1.04 Less: Accumulated Depreciation - 0.35 0.35 Net Block - 0.68 0.68

As at 1 April 2015

Charge for the year



Disposals Eliminated on disposal of assetsAdditions



As at 1 April 2016

As at 31 March 2017

As at 31 March 2017

As at 31 March 2017

As at 31 March 2016

As at 1 April 2016

As at 1 April 2015

Note: The Company has availed the deemed cost exemption in relation to the intangible assets on the date of transition and hence the net block carrying amount has been considered as the gross block carrying amount on that date.Refer note below for the gross block value and the accumulated depreciation on 1 April 2015 under the previous GAAP.

As at 31 March 2016

As at 31 March 2016

As at 31 March 2016 Additions Disposals Charge for the

yearEliminated on

disposal of assets





As at 1 April 2015

Gross Block Accumulated Amortisation Net Block

Net BlockAccumulated AmortisationGross Block


Notes to the financial statements (Continued)as at 31 March 2017


4 Non-current investments

31 March 2017 31 March 2016 1 April 2015 31 March 2017 31 March 2016 1 April 2015Unquoted equity shares at cost

Keva Flavours Private Limited* 100 100 50 0.15 0.15 0.00 Keva UK Limited 1,52,250 1,52,250 1,52,250 11.49 11.49 -

Quoted equity shares at FVTPL

Reliance Industries Limited* 16 16 16 0.00 0.00 0.00

11.64 11.64 0.00


Aggregate book value of quoted investments* 0.00 0.00 0.00 Market value of quoted investments* 0.00 0.00 0.00 Aggregate book value of unquoted investments 11.64 11.64 0.00 Aggregate amount of impairment in value of investments - - -


5 Loans(unsecured, considered good)

To parties other than related partiesSecurity deposits 1.98 1.42 0.25

1.98 1.42 0.25

6 Other assets(unsecured, considered good)

31 March 2017 31 March 2016 1 April 2015 31 March 2017 31 March 2016 1 April 2015

To parties other than related partiesPrepaid expenses 0.01 0.19 0.31 0.37 0.47 0.25 Balances with government authorities* 39.76 26.55 0.00 6.19 6.63 9.28 Capital advances 0.02 0.05 0.48 0.09 - -

To related partiesUnamortised guarantee commission** - - - 0.19 0.46 0.57

39.78 26.79 0.79 6.84 7.56 10.10 *Amount in less than Rs 0.01 crore

S H Kelkar and Company Limited 0.19 0.46 0.57 0.19 0.46 0.57

Non-current Current

Number of shares Amount

** Unamortised guarantee commission (unsecured, considered good) as at 31 March 2017 of Rs 0.19 crores (31st March 2016: Rs 0.46 crores and 1st April 2015: Rs 0.57 crores) from firms, body corporates or private companies in which a director is a partner or a director or member.





7 Inventories

68.65 50.18 5.45 Packing materials 2.58 1.79 0.06 Work-in-progress 9.62 11.50 6.67 Finished goods 14.87 20.09 5.46

2.53 3.06 2.62 Fuel, stores and spares - 0.47 0.39

98.25 87.09 20.65


8 Trade receivables

Trade receivablesUnsecured, considered good 121.54 104.78 4.41 Doubtful 3.05 3.04 0.01

124.59 107.82 4.42

Loss allowanceUnsecured, considered good (4.80) (7.88) (0.09) Doubtful (3.06) (3.05) (0.01)

(7.86) (10.93) (0.10)

Net trade receivables 116.73 96.89 4.32

S H Kelkar and Company Limited 19.17 14.86 - Keva Flavours Private Limited* 10.59 0.09 0.00 PFW Aroma Chemicals B.V. 4.27 1.97 - Purandar Fine Chemicals Private Limited. 0.02 - - PT SHKKeva Indonesia 13.78 8.94 -

47.83 25.86 0.00 *Amount in less than Rs 0.01 croreFor receivables secured against borrowings, refer note 15The Company’s exposure to credit and currency risks, and loss allowances related to trade receivables are disclosed in Note 34 (iii).

Raw materials (including raw material in transit amounting to INR 3.17 crores; 31 March 2016: INR 1.82 crores; 1 April 2015: INR 0.52 crores)

Stock-in-trade (including stock in transit amounting to INR Nil; 31 March 2016: INR 1.40 crores; 1 April 2015: INR 0.52 crores)

* Trade receivables (unsecured, considered good) as at 31 March 2017 include Rs 31.38 crores (31st March 2016: Rs 25.86 crores and 1st April 2015: Rs 0.00 crores) due from firms, body corporates or private companies in which a director is a partner or a director or member.

Inventories which comprise raw materials, packing materials, work-in-progress, finished goods, stock-in-trade and fuel, stores and spares are carried at thelower of cost and net realisable value.

The write-down of inventories to net realisable value during the year amounted to Rs 1.10 crores ( Rs. 0.14 crores - March 2016, Rs 0.40 crores - March2015). The write down of inventories are included in cost of materials consumed or changes in inventories of finished goods and work-in-progress in thestatement of profit and loss.





9A Cash and cash equivalents

Balance with banks :- in current account 2.54 2.53 1.69 - in exchange earners' foreign currency account 9.94 8.95 - Cash on hand 0.02 0.09 0.02

12.50 11.57 1.71

9B Other bank balances

Deposit with original maturity more than 3 months up to 12 months 13.42 22.76 0.08 13.42 22.76 0.08

10 Loans(unsecured, considered good)

To parties other than related partiesLoans to employees 0.23 0.14 0.05 Other loans 0.22 0.34 -

0.45 0.48 0.05

11 Derivatives - Assets

Foreign currency forward exchange contracts 2.07 0.65 - 2.07 0.65 -

12 Other current financial assets(unsecured, considered good)

To related partiesOther receivables* 1.44 2.03 -

To parties other than related partiesInterest accrued on deposits and loans and advances 0.97 0.52 0.02 Other receivables 0.87 1.76 -

3.28 4.31 0.02

S H Kelkar and Company Limited 0.05 - - Keva Fragrance Industries Pte Ltd 1.39 2.03 -

1.44 2.03 -

* Other receivables (unsecured, considered good) as at 31 March 2017 include Rs 17.89 crores (31st March 2016: Rs 2.03 crores and 1st April 2015: Rs 0.00 crores) due from firms, body corporates or private companies in which a director is a partner or a director or member.







15 Borrowings

31 March 2017 31 March 2016 1 April 2015 31 March 2017 31 March 2016 1 April 2015SecuredTerm loans from banks External commercial borrowing (ECB) 17.31 28.19 34.42 - - - Loans repayable on demand from banks

Pre-shipment loans - - - 7.78 3.32 - Working capital loans - - - - 8.00 11.31

17.31 28.19 34.42 7.78 11.32 11.31 Less: Amount included under 'Other current financial liabilities' (refer note 19) (11.02) (9.95) (7.82) - - -

6.29 18.24 26.60 7.78 11.32 11.31

16 Provisions

Provision for employee benefits 31 March 2017 31 March 2016 1 April 2015 31 March 2017 31 March 2016 1 April 2015Gratuity (refer note 32) 0.44 0.33 0.52 0.11 0.11 0.13 Compensated absences 0.83 0.79 0.30 0.77 0.80 0.30

1.27 1.12 0.82 0.88 0.91 0.43


17 Trade payables

Dues to Micro and Small Enterprises (refer note 36)* 2.17 0.81 - Others 79.46 54.37 21.23

81.63 55.18 21.23

18 Derivatives - Liabilities

Interest rate swaps - 0.19 0.32 - 0.19 0.32

Pre-shipment loans from bank carry interest at LIBOR + 0.9% and are secured by first charge on all current assets of the Company. The loans arerepayable within a period of 90 to 180 days from the date of disbursement.

Working capital demand loan from bank carries interest at 9.50% and is secured by first and exclusive hypothecation charge on all exisiting and futurecurrent assets of the company. The loan is also secured by corporate guarantee of S H Kelkar and Company Limited, the holding company.

Long-term

Long-term Short-term

The loan carries interest rate at LIBOR Rate + 2.3% p.a. Interest is payable on quarterly basis. This loan is secured by way of - (i) Equitable Mortgage of Factory Land and Building at Plot 170 to 175 GIDC, Industrial Estate, Vapi, Gujarat State, (ii) hypothecation of entire movable fixed assets of the Borrower on exclusive first charge basis. The loan is also secured by personal guarantees ofPromoters / Directors and corporate guarantee of S H Kelkar And Company Ltd., holding company and fellow indian subsidiaries. The Loan is repayableby 15 April 2018 in 8 installments starting from 15 October 2014.

Short-term

* Details are given to the extent information with respect to their status provided by the vendors to the Company.

The Company had entered into an Interest Rate Swap agreement with HDFC bank on 1st Sept, 2014, under which the interest payable is fixed at 3.60%per annum payable on quarterly basis. The said interest rate swap was cancelled during the current year.





19 Current - Other financial liabilities

Current maturities of long-term debt (refer note 15) 11.02 9.95 7.82 Creditors for capital expenditure 0.14 0.44 1.00 Interest accrued but not due on borrowings 0.14 0.22 0.28 Interest accrued under MSMED Act, 2005 0.12 0.04 - Commission payable - 10.87 0.00 Employee benefits payable 1.85 1.21 0.26 Other payables

For expenses 1.85 6.81 2.38 15.12 29.54 11.74

20 Other current liabilities

Advances received from customers 0.53 5.13 2.07 Statutory liabilities 0.63 1.75 0.78

1.15 6.88 2.85




13 Share capital

Authorised 31 March 2017 31 March 2016 31 March 2017 31 March 2016

Equity shares of Rs 100 each 7,50,000 2,40,000 7.50 2.40

7.50 2.40

Issued, subscribed and paid-up

Equity shares of Rs 100 each, fully paid up 7,43,251 1,22,222 7.43 1.22

7.43 1.22

Reconciliation of number of shares outstanding at the beginning and end of the year

Number Amount Number Amount

Equity shares

At the commencement of the year 1,22,222 1.22 70,800 0.71

Shares issued during the year - - 51,422 0.51

Shares issued pursuant to Scheme of Amalgamation (refer note 42) 6,21,029 6.21 - - At the end of the year 7,43,251 7.43 1,22,222 1.22

Rights, preferences and restrictions attached to equity shares

Number Amount Number Amount

Equity shares of Rs 100 each fully paid-up held by-

7,43,251 7.43 1,22,222 1.22 - S H Kelkar and Company Limited (holding company as at 31 March 2017)


31 March 201631 March 2017

The Company has only one class of Equity shares having a par value 100 per share. Each holder of equity shares is entitled to one vote pershare with a right to receive per share dividend declared by the Company. In the event of liquidation, the equity shareholders are entitled toreceive remaining assets of the Company (after distribution of all preferential amounts) in the proportion of equity shares held by theshareholders. During the year ended 31 March 2017, the Company has recorded per share dividend of Rs Nil (31 March 2016: Rs Nil) toequity shareholders.

743,251 (31 March 2016: 122,222) equity shares of Rs 100 each fully paid are held by S H Kelkar and Company Ltd., holding company byitself and through its nominee. This contributes to 100% (previous year 100%) of equity shares outstanding as at year end.

There is no other party holding more than 5% of equity shares outstanding as at year end.

Shares in respect of each class in the company held by its holding company or its ultimate holding company including shares heldby subsidiaries or associates of the holding company or the ultimate holding company in aggregate

31 March 201631 March 2017




13 Share capital (Continued)

Particulars of shareholders holding more than 5% shares of a class of shares

Number % of total shares in class

Number % of total shares in class

Equity shares of Rs 100 each fully paid-up held by-

7,43,251 100 1,22,222 100

31 March 2017 31 March 2016

Equity shares alloted pursuant to the Scheme of amalgamation (refer note 42) 6,21,029 -

Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding thereporting date:

- S H Kelkar and Company Limited (holding company as at 31 March 2017)

31 March 201631 March 2017





21 Revenue from operations

Sale of productsFinished goods 234.44 233.01 Traded goods 24.61 27.74 Total sale of products (A) 259.05 260.75 Sale of servicesContract job charges 0.69 - Total sale of services (B) 0.69 - Other operating revenueRoyalty income (refer note 46) 18.28 - Sale of packing material 0.15 0.20 Scrap sales 0.29 0.21 Total other operating revenue (C) 18.72 0.42

Total revenue from operations (A+B+C) 278.46 261.16

22 Other income

Interest on deposits with banks measured at amortised cost 1.12 0.52 Other interest (including interest on income tax refunds) 0.15 0.03 Net gain on foreign currency transactions 2.93 2.47 Gain on derivative contracts - 0.42 Liabilities no longer required written back 0.76 1.24 Reversal of provision for doubtful debts 3.07 - Financial assets measured at FVTPL-net change in fair value 0.39 0.13 Export incentives 4.12 2.30 Profit on sale of fixed assets - 0.83 Miscellaneous income 0.02 0.58 Total other income 12.56 8.51

23 Cost of materials consumed

Inventory at the beginning of the year - Raw Materials 50.17 5.45 - Packing Materials 1.80 0.07 Add : Pursuant to scheme of amalgamation (refer note 42) - Raw Materials - 41.99 - Packing Materials - 0.88 Add : Purchases - Raw Materials 150.89 134.85 - Packing Materials 3.79 4.03 Less : Inventory at the end of the year - Raw Materials 68.66 50.17 - Packing Materials 2.57 1.80 Cost of raw material consumed 135.42 135.30





24

Opening stock:Finished goods 20.09 5.46 Stock in trade 3.06 2.62 Work-in-progress 11.50 6.67 Add: Pursuant to scheme of amalgamation (refer note 42) - 34.11

Closing stock:Finished goods 14.87 20.09 Stock in trade 2.53 3.06 Work-in-progress 9.62 11.50

Changes in inventories:Finished goods 5.22 19.48 Stock in trade 0.53 (0.44) Work-in-progress 1.88 (4.83)

7.63 14.21

25 Employee benefits expense

Salaries, wages and bonus 9.41 7.43 Compensated absences (refer note 32) 0.08 0.33 Contribution to provident and other funds (refer note 32) 0.93 0.83 Staff welfare expenses 0.29 0.27

10.72 8.86 Less: Transferred to intangible assets under development (refer note 44) (0.07) -

10.65 8.86

26 Finance costs

Interest on term loans 0.72 1.23 Interest on working capital loan 0.97 1.09 Foreign exchange translation - 1.75 Other finance costs 0.34 0.15 Guarantee commisssion 0.60 0.33

2.63 4.55

27 Depreciation and amortisation

Depreciation of property, plant and equipment 3.08 6.78 Amortisation of intangible assets 0.25 0.45 Amortisation of goodwill on amalgamation (refer note 42) 47.26 43.32

50.59 50.55

Changes in inventories of finished goods, work in progress and stock in trade





28 Other expenses

Labour charges 1.19 1.27 Stores and spares consumed 4.78 3.97 Repairs and maintenance: - Buildings 0.28 0.51 - Plant and machinery 0.41 0.32 - Others 0.68 0.67 Rent (refer note 33) 6.88 4.98 Rates and taxes 4.24 1.25 Insurance 0.43 0.47 Power and electricity 4.16 4.07 Water charges 0.25 0.22 Selling and promotion expenses 1.07 0.92 Commission and brokerage 8.39 6.85 Freight and forwarding 3.40 2.85

Postage and telephone expenses 0.11 0.07 Travelling and conveyance 1.21 0.78 Security charges 0.47 0.47 Legal and professional charges 2.04 1.40 Payment to auditors (refer below) 0.16 0.07 Stationery & printing expenses 0.12 0.12 Sales support services 3.75 2.81 Bank charges 0.65 0.61 Provision for doubtful debts - 5.20 Bad debts written off 7.20 - Corporate social responsibility expenditure (refer note 37) - 0.72 Other establishment expenses 2.64 2.29 Director sitting fees 0.01 - Membership and susbscription 0.03 - Business support services - Indonesia 6.00 - Service fees 2.83 -

63.36 42.90 Less: Transferred to intangible assets under development (refer note 44) (0.37) -

62.99 42.90

Payment to auditorsStatutory audit 0.13 0.06 Tax audit* 0.03 0.00 Out of pocket expenses* 0.00 0.00 Other matters* - 0.00

0.16 0.07 *Amount in less than Rs 0.01 crore




29 Earnings per share (EPS)

31 March 2017 31 March 2016

(Loss) attributable to equity shareholders (basic and diluted)

(Loss) for the year attributable to equity shareholders (A) (18.41) (30.03)

Weighted average number of equity shares for basic earnings per share

Number of equity shares at beginning of the year 1,22,222 70,800 Equity shares issued during the year - 51,422 Equity shares issued pursuant to scheme of amalgamation (refer note 42) 6,21,029 - Number of equity shares outstanding at the end of the year 7,43,251 1,22,222

Weighted average number of equity shares for the year (B) 3,17,889 85,412

Basic earnings per share of face value of Rs 100 each (A) / (B) (579.00) (3,516.11)

Weighted average number of equity shares for diluted earnings per shareWeighted average number of equity shares for the year 3,17,889 85,412

Effect of dilutive potential equity sharesPurchase consideration pending allotment pursuant to scheme of amalgamation (refer note 42)

- 6,21,029

Weighted average number of equity shares used to compute diluted earnings pershare

(C) 3,17,889 7,06,441

Diluted earnings per share of face value of Rs 100 each (A) / (C) (579.00) (425.11)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted averagenumber of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent (after adjusting for interest on theconvertible preference shares) by the weighted average number of equity shares outstanding during the year plus the weighted averagenumber of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.



(Currency: Indian Rupees in crores)

30 Tax expense

(a) Amounts recognised in balance sheet


3.82 5.74 0.40

10.37 0.75 -

(b) Amounts recognised in profit and loss

31 March 2017 31 March 2016

Current income tax 13.91 7.29 13.91 7.29

Deferred income tax liability / (asset), net

Origination and reversal of temporary differences 3.11 7.13

Recognition of previously unrecognised tax losses - 0.67 Deferred tax expense 3.11 7.80

Tax expense for the year 17.02 15.09

(c) Amounts recognised in other comprehensive income



Net of tax

Items that will not be reclassified to profit or loss

Remeasurements of defined benefit plans (0.42) 0.15 (0.27) (0.16) 0.06 (0.11) (0.42) 0.15 (0.27) (0.16) 0.06 (0.11)

(d) Reconciliation of effective tax rate

31 March 2017 31 March 2016

Profit before tax (1.39) (14.94)Tax using the Company’s domestic tax rate (Current year 34.61% and Previous year 34.61%) (0.48) (5.17)Tax effect of:Non-deductible tax expenses 17.49 19.27 Recognition of tax effect of previously unrecognised tax losses - 1.10 Others - (0.10)Tax expense for the year 17.01 15.10

For the year ended 31 March 2017 For the year ended 31 March 2016

Note: The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current taxliabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

Current tax assets (net of provision Rs 19.35 crores (31 March 2016 : Rs 39.38 crores and 31 March 2015 : Rs 40.08 crores))

Current tax liabilities (net of advance tax Rs 12.20 crores (31 March 2016 : Rs 18.77 crores and 31 March 2015 : Rs 19.0 crores))




31 Deferred tax

(a) Recognised deferred tax assets and liabilities

31 March 2017 31 March 2016 31 March 2017 31 March 2016 31 March 2017 31 March 2016

Property, plant and equipment - - (3.66) (2.75) (3.66) (2.75)Investments 0.29 0.29 - - 0.29 0.29 Employee benefits 0.90 0.74 - - 0.90 0.74 Voluntary Retirement Scheme disallowance 0.16 0.16 - - 0.16 0.16 Trade receivables 1.93 2.99 - - 1.93 2.99 Derivatives - - (0.72) (0.16) (0.72) (0.16)Inventories - - (0.59) - (0.59) -

3.27 4.17 (4.97) (2.91) (1.71) 1.25

(b)

Net balance31 March 2016


amalgamation


Recognisedin OCI

Net Deferred tax asset


Deferred tax asset (liability)Property, plant and equipment (2.76) - (0.91) - (3.66) - (3.66)Investments 0.29 - - - 0.29 0.29 - Employee benefits 0.74 - 0.02 0.15 0.90 0.90 - Voluntary Retirement Scheme disallowance

0.16 - - - 0.16 0.16 -

Trade receivables 2.99 - (1.06) - 1.93 1.93 - Derivatives (0.16) - (0.56) - (0.72) - (0.72)Inventories - - (0.59) - (0.59) - (0.59)Net tax assets (liabilities) 1.25 - (3.11) 0.15 (1.70) 3.27 (4.97)



amalgamation


Recognisedin OCI

Net Deferred tax asset


Deferred tax asset (liability)Property, plant and equipment 6.40 (0.16) (9.00) - (2.75) - (2.75)Investments - - 0.29 - 0.29 0.29 - Employee benefits 0.41 0.30 (0.03) 0.06 0.74 0.74 - Voluntary Retirement Scheme disallowance

0.30 - (0.14) - 0.16 0.16 -

Trade receivables 0.03 1.86 1.10 - 2.99 2.99 - Unrealised foreign exchange gain under section 43A of the Income Tax Act, 1961

- (0.61) 0.61 - - - -

Derivatives - - (0.16) - (0.16) - (0.16)Inventories - - - - - - - Net tax assets (liabilities) 7.14 1.40 (7.34) 0.06 1.25 4.17 (2.91)

Deferred tax assets Deferred tax (liabilities) Net deferred tax asset (liabilities)

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current taxliabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities andrecoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income byeach jurisdiction in which the relevant entity operates and the period over which deferred income tax assets will be recovered.

Movement in deferred tax balances

31 March 2017

31 March 2016

Net deferred tax asset/ (liabilities)




32 Employee benefits


Contribution to Defined contribution plan, recognized are charged off for the year as under:


0.58 0.51 0.22 Employer's contribution to Superannuation Fund 0.17 0.05 -

Gratuity

A.

31 March 2017 31 March 2016 1 April 2015Reconciliation of present value of defined benefit obligation

Balance at the beginning of the year 1.47 0.69 0.88Pursuant to the scheme of amalgamation (refer note 42) - 0.70 - Current service cost 0.17 0.12 0.06Interest cost 0.12 0.11 0.04Actuarial losses/ (gains) recognised in other comprehensive income - financial assumptions 0.15 (0.02) - - experience adjustments 0.28 0.18 0.01 Benefit paid (0.13) (0.31) (0.30) Balance at the end of the year 2.06 1.47 0.69

The Company contributes to the following post-employment defined benefit plans in India.

Particulars


(i) Defined Contribution Plans:

The Company makes contributions towards provident fund, superannuation fund and other retirement benefits to a defined contributionretirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payrollcost to the retirement benefit plan to fund the benefits.

(ii) Defined Benefit Plan:

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amountsrecognised in the Company’s standalone financial statements as at balance sheet date:

Reconciliation of the net defined benefit (asset) liability

The employees gratuity fund scheme for the Company is managed by "LIC" for certain employees and by “S.H. Kelkar and Co. Ltd.Employee’s Gratuity Fund” for others. The contribution to the fund is made based on the actuarial valuation using the “Projected UnitCredit” Method. Gratuity is payable to all eligible employees of the Company on superannuation, death, and permanent disablement, interms of the provisions of the Payment of Gratuity Act, 1972.

The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit (asset) liability andits components

Note: The Company contributes to the trust set up by its holding company S H Kelkar and Company Limited, for managing superannuationfund of its employees as per the permission granted by the respective authority.




32 Employee benefits (Continued)

A.

31 March 2017 31 March 2016 1 April 2015Reconciliation of present value of plan assets

Balance at the beginning of the year 1.03 0.04 0.03 Pursuant to the scheme of amalgamation (refer note 42) - 0.65 - Interest income 0.06 0.05 - Remeasurements :Return on plan assets, excluding amount included in interest (expense)/income

0.02 0.01 0.00 Employer contributions 0.53 0.58 0.31 Benefit paid (0.13) (0.31) (0.30)Balance at the end of the year 1.51 1.03 0.04

Net defined benefit (asset)/ liability 0.55 0.44 0.65

C. Plan assets

Plan assets comprise the following

Particulars 31 March 2017 31 March 2016 1 April 2015

Investment in Government Securities 8% 12% N.A.Bank Special Deposit 3% 4% N.A.Investment in other securities 57% 36% N.A.Corporate Bonds 2% 21% N.A.State Government Bonds 30% 27% N.A.Insurer managed funds* 0% 0% 100%Total 100% 100% 100%

* The employee gratuity fund scheme for the Company before amalgamation was managed by LIC.

D. The components of defined benefit plan cost are as follows:

31 March 2017 31 March 2016Recognised in income statementCurrent service cost 0.12 0.12 Interest cost 0.06 0.06 Expected return on plan assets - (0.00)Total 0.18 0.18

0.37 0.35 Recognised in Other Comprehensive IncomeRemeasurement of net defined benefit liability/(asset) 0.43 0.16 Return on Plan Assets, Excluding Interest Income (0.01)Total 0.43 0.15

Reconciliation of the net defined benefit (asset) liability (Continued)

* The employees gratuity fund scheme was managed by LIC upto 31 August 2015 and S H Kelkar and Company Limited group fund thereafter.





E. Defined benefit obligations

i. Actuarial assumptions


Rate of increase in salaries 6.00% 6.00% 6.00%Discount rate 7.32% 8.27% 8.02%Rate of employee turnover 2.00% 2.00% 2.00%Mortality rate during employment Indian Assured

Lives Mortality (2006-08)


(2006-08)


(2006-08)

Mortality Rate After Employment N.A. N.A. N.A.

ii. Sensitivity analysis


Discount rate (1% movement) (0.15) 0.18 (0.08) 0.08 Rate of increase in salaries (1% movement) 0.18 (0.16) 0.08 (0.09)Rate of employee turnover (1% movement) 0.02 (0.02) 0.01 (0.02)

Maturity profile of the defined benefit obligation

Particulars Up to 1 year Between 1-2 years

Between 2-6 years

6 to 10 years Total

31 March 2017Defined benefit obligations (Gratuity) 0.25 0.10 0.41 0.89 1.66 Total 0.25 0.10 0.41 0.89 1.66

31 March 2016Defined benefit obligations (Gratuity) 0.02 0.02 0.15 0.46 0.65 Total 0.02 0.02 0.15 0.46 0.65


Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, wouldhave affected the defined benefit obligation by the amounts shown below.

31 March 2017 31 March 2016

The estimates for rate of escalation in salary considered in the actuarial valuation takes into account the present salary suitable projected forfuture taking into consideration the general trend in salary raise and inflation rates. The above information is certified by the actuary.

The above sensitivity analyses have been calculated to show the movement in defined benefit obligation in isolation and assuming there areno other changes in market conditions at the reporting date. In practice, generally it does not occur. When we change one variable, it affectsto others. In calculating the sensitivity, project unit credit method at the end of the reporting period has been applied.





Provident fund (Managed by the Trust set up by the Parent Company)

The detail of fund and plan assets position are given below:

Particulars As at 31 March 2017

As at 31 March 2016

As at 1 April 2015

Plan assets at the period end, at fair value 41.65 34.38 28.56 Present value of benefit obligation at period end 40.02 32.83 27.02 Asset recognized in balance sheet Nil Nil Nil

The plan assets have been primarily invested in government and debt securities. Assumptions used in determining the present value obligation of the interest rate guarantee under the Deterministic Approach:

Particulars As at 31 March 2017

As at 31 March 2016

As at 1 April 2015

Discount rate (%) 7.32% 8.27% 8.02%Guaranteed Interest Rate (%) 8.65% 8.80% 8.75%Expected average remaining working lives of employees (Years) 16 16 17

Other long term employee benefit plans

Compensated absences:

The Company has contributed Rs 0.51 crores (2015-16: Rs 0.22 crores) to the Provident Fund Trust. The Company has an obligation to fundany shortfall on the yield of the trust's investments over the guaranteed interest rates on an annual basis. These administered rates aredetermined annually predominantly considering the social rather than economic factors and in most cases the actual returned earned by theCompany has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidanceissued by Actuarial Society of India and based on the below provided assumptions there is no shortfall:

The obligation for leave encashment is recognised in the same manner as gratuity. The Company’s liability on account of compensated absences is not funded and hence the disclosures relating to the planned assets are not applicable. Amount of Rs 0.08 crores (previous year Rs 0.33 crores) towards compensated absences is recognised as an expense and included in “Employee benefits expense” in the Statement of profit and loss during the year.




33 Operating lease

A. Leases as lessee

B.

31 March 2017 31 March 2016

Less than one year 7.85 3.43 Between one and five years 10.46 10.27 More than five years - -

18.31 13.70

C.Year ended Year ended

31 March 2017 31 March 2016

Lease expense - minimum lease payments 6.88 4.98 6.88 4.98

The Company has taken a factory premises under cancellable and non-cancellable operating leases. The agreement for non-cancellablelease is executed for the period of 60 months with a non-cancellable period upto 36 months and having a renewable clause which can beexercised by both the parties. Lease rentals debited to the statement of profit and loss aggregates INR 3.43 crores (31 March 2016: INR 3.1crores; 31 March 2015: INR Nil) for non-cancellable lease and INR 3.45 crores (31 March 2016: INR 3.50 crores; 31 March 2015: INRNil) for cancellable leases. The additional details for non-cancellable leases are below:

At 31 March, the future minimum lease payments under non-cancellable leases were receivable as follows.

Future minimum lease payments

Amount recognised in profit or loss




34 i. Financial instruments – Fair values and risk management


31 March 2017 FVTPL Amortised Cost

Total Level 1 Level 2 Level 3 Total

Financial assets Cash and cash equivalents - 12.50 12.50 - - - - Other bank balances - 13.42 13.42 - - - - Non-current investments* 0.00 11.64 11.64 0.00 - - 0.00 Loans - non-current - 1.98 1.98 - - - - Loans - current - 0.45 0.45 - - - - Derivative asset 2.07 - 2.07 - 2.07 - 2.07 Trade receivables - 116.73 116.73 - - - - Other financial assets - current - 3.28 3.28 - - - -

2.07 160.00 162.07 0.00 2.07 - 2.07

Financial liabilities Term loans from bank - 17.31 17.31 - 17.31 - 17.31 Short term borrowings - 7.78 7.78 - - - - Trade payables - 81.63 81.63 - - - - Other financial liabilities - current - 4.10 4.10 - - - -

- 110.83 110.83 - 17.31 - 17.31

31 March 2016 FVTPL Amortised Cost


Financial assets Cash and cash equivalents - 11.57 11.57 - - - - Other bank balances - 22.76 22.76 - - - - Non-current investments* 0.00 11.64 11.64 0.00 - - Loans - non-current - 1.42 1.42 - - - - Loans - current - 0.48 0.48 - - - - Trade receivables - 96.89 96.89 - - - - Derivative 0.65 - 0.65 - 0.65 - 0.65 Other financial assets - current - 4.31 4.31 - - - -

0.65 149.05 149.71 0.00 0.65 - 0.65

Financial liabilities Term loans from bank - 28.19 28.19 - 28.19 - 28.19 Short term borrowings - 11.32 11.32 - - - - Trade payables - 55.18 55.18 - - - - Derivative 0.19 - 0.19 - 0.19 - 0.19 Other financial liabilities - current - 19.59 19.59 - - - -

0.19 114.27 114.47 - 28.39 - 28.39

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value heirarchy.






34 i. Financial instruments – Fair values and risk management (Continued)

A. Accounting classification and fair values (Continued)

1 April 2015 FVTPL Amortised Cost


Financial assets Cash and cash equivalents - 1.71 1.71 - - - - Other bank balances - 0.08 0.08 - - - - Non-current investments* - 0.00 0.00 0.00 - - 0.00 Loans - non-current - 0.25 0.25 - - - - Loans - current - 0.05 0.05 - - - - Trade receivables - 4.32 4.32 - - - - Other financial assets - current - 0.22 0.22 - - - -

- 6.64 6.64 0.00 - - 0.00

Financial liabilities Term loans from bank - 34.42 34.42 - 34.42 - 34.42 Short term borrowings - 11.31 11.31 - - - - Trade payables - 21.23 21.23 - - - - Derivative 0.32 - 0.32 - 0.32 - 0.32 Other financial liabilities - current - 3.92 3.92 - - - -

0.32 70.88 71.21 - 34.75 - 34.75

*Amount in less than INR 0.01 crores

B. Measurement of fair values

Valuation techniques and significant unobservable inputs

Financial instruments measured at fair value

Type

Forward exchange contracts Not applicable.

Interest rate swaps Not applicable.

Significantunobservable inputs

Not applicable.

Valuation technique

Forward pricing: The fair value is determined using quoted forward exchange rates at the reporting date and present value calculations based on high credit quality yield curves in the respective currency.

Swap models: The fair value is calculated as the present value of the estimated future cash flows. Estimates of future floating-rate cash flows are based on quoted swap rates, futures prices and interbank borrowing rates.

Inter-relationship between significant unobservable inputs and

fair value measurement

Not applicable.


The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.





C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:



The management monitors compliance with the company’s risk management policies and procedures, and reviews the adequacy of the riskmanagement framework in relation to the risks faced by the Company.

The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk managementframework.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risklimits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflectchanges in market conditions and the Company’s activities. The Company, through its training and management standards and procedures,aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.





ii. Credit risk


31 March 2017 31 March 2016

India 35.92 25.83 Other regions 72.22 78.95

108.14 104.78

Impairment

31 March 2017Gross carrying

amountWeighted-average

loss rateLoss allowance

Neither past due nor impaired (Group companies) 31.38 0.00% - Neither past due nor impaired 50.83 2.06% 1.05 Past due 0-90 days 13.38 4.26% 0.57 Past due 90-180 days 2.06 9.07% 0.19 Past due 180-270 days 1.63 19.11% 0.31 Past due 270–360 days 2.53 37.41% 0.95 Past due 360-450 days 2.01 44.22% 0.89 Past due 450-540 days 0.55 55.55% 0.31 Past due 540-630 days 0.69 74.99% 0.52 Past due 630-720 days 0.02 100.00% 0.02 More than 730 days 3.06 100.00% 3.06

108.14 7.86

At 31 March 2017, the Company’s most significant customer, a manufacturer, accounted for INR 25.21 crores of the trade and other receivables carrying amount (31 March 2016: INR 16.56 crores).

The following table provides information about the exposure to credit risk and expected credit loss for trade receivables.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractualobligations, and arises principally from the Company's receivables from customers and investments in debt securities.


The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management alsoconsiders the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in whichcustomers operate.

Goods are sold subject to retention of title clauses, so that in the event of non-payment the Company may have a secured claim. TheCompany does not otherwise require collateral in respect of trade and other receivables.

At 31 March 2017, the maximum exposure to credit risk for trade and other receivables by geographic region was as follows.

Carrying amount

The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and otherreceivables.





ii. Credit risk (Continued)

Impairment

31 March 2016Gross carrying



Neither past due nor impaired (Group companies) 25.86 0.00% - Neither past due nor impaired 45.27 1.80% 0.81 Past due 0-90 days 16.32 3.20% 0.52 Past due 90-180 days 5.53 6.67% 0.37 Past due 180-270 days 3.92 15.15% 0.59 Past due 270–360 days 0.81 26.97% 0.22 Past due 360-450 days 1.31 38.06% 0.50 Past due 450-540 days 0.73 49.91% 0.37 Past due 540-630 days 1.14 74.81% 0.85 Past due 630-720 days 2.42 90.91% 2.20 More than 730 days 4.50 100.00% 4.50

107.82 10.93

1 April 2015Gross carrying



Neither past due nor impaired (Group companies)* 0.00 0.00% - Neither past due nor impaired* 3.62 0.10% 0.00 Past due 0-90 days 0.70 0.15% 0.00 Past due 90-180 days - 0.00% - Past due 180-270 days - 0.00% - Past due 270–360 days - 0.00% - Past due 360-450 days 0.01 30.09% 0.00 Past due 450-540 days* 0.00 40.48% 0.00 Past due 540-630 days* 0.00 66.65% 0.00 Past due 630-720 days 0.05 100.00% 0.05 More than 730 days 0.03 100.00% 0.03

4.42 0.09



ImpairmentBalance as at 1 April 2015 0.10 Impairment loss recognised 5.20 Pursuant to scheme of amalgamation (refer note 42) 5.64 Balance as at 31 March 2016 10.94

Impairment loss recognised - Provision utilised against write off (7.20) Impairment loss recognised 4.13 Balance as at 31 March 2017 7.87

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historicalpayment behaviour and extensive analysis of customer credit risk, including underlying customers’ credit ratings if they are available.





ii. Credit risk (Continued)

Cash and cash equivalents

Investments

Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired.

The Company held cash and cash equivalents of INR 12.50 crores at 31 March 2017 (31 March 2016: INR 11.57 crores). The cash andcash equivalents are held with banks with good credit ratings and financial institution counterparties with good market standing.

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a goodcredit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significantconcentration of exposures to specific industry sectors or specific country risks.




34 Financial instruments – Fair values and risk management (Continued)

iii. Liquidity risk


31 March 2017 Carrying amount Total Upto 1 year 1-5 years More than 5

years

Non-derivative financial liabilitiesTerm loans from banks 17.31 17.31 11.02 6.29 - Interest on term loans* - 0.24 0.24 0.00 - Pre-shipment loans 7.78 7.78 7.78 - - Interest on pre-shipment loans - 0.04 0.04 - - Other financial liabilities - current 4.10 4.10 4.10 - - Trade payables 81.63 81.63 81.63 - -

110.83 111.10 104.80 6.29 -

*Amount in less than INR 0.01 crore

31 March 2016 Carrying amount Total Upto 1 year 1-5 years More than 5

years

Non-derivative financial liabilitiesTerm loans from banks 28.19 28.19 9.95 18.24 - Interest on term loans - 2.17 1.05 1.12 - Pre-shipment loans 3.32 3.32 3.32 - - Interest on pre-shipment loans - 0.03 0.03 - - Working capital loans from banks 8.00 8.00 8.00 - - Interest on working capital loans - 0.06 0.06 - - Current - Other financial liabilities 19.59 19.59 19.59 - - Trade payables 55.18 55.18 55.18 - -

114.27 116.54 97.18 19.36 - Derivative financial liabilitiesInterest rate swaps

- Outflow 0.19 (1.71) (0.88) (0.83) - - Inflow - 1.46 0.73 0.73 -

0.19 (0.25) (0.15) (0.10) -

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities thatare settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible,that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurringunacceptable losses or risking damage to the Company’s reputation.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross andundiscounted, and include estimated interest payments and exclude the impact of netting agreements.







iii. Liquidity risk (Continued)

Exposure to liquidity risk (Continued)

1 April 2015 Carrying amount Total Upto 1 year 1-5 years More than 5

years

Non-derivative financial liabilitiesTerm loans from banks 34.42 34.42 7.82 26.60 - Interest on term loans - 5.73 1.54 4.19 - Working capital loans from banks 11.31 11.31 11.31 - - Interest on working capital loans - 0.09 0.09 - - Current - Other financial liabilities 3.92 3.92 3.92 - - Trade payables 21.23 21.23 21.23 - -

70.88 76.71 45.91 30.80 - Derivative financial liabilitiesInterest rate swaps

- Outflow 0.32 (2.87) (1.16) (1.71) - - Inflow - 2.30 0.84 1.47 -

0.32 (0.57) (0.33) (0.24) -

The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to derivative financialliabilities held for risk management purposes and which are not usually closed out before contractual maturity. The disclosure shows netcash flow amounts for derivatives that are net cash-settled and gross cash inflow and outflow amounts for derivatives that havesimultaneous gross cash settlement.






iv. Market risk

Exposure to currency risk

31 March 2017 USD EUR CHF

Financial assets 98.85 4.62 - Financial liabilities (18.95) (21.65) (0.02)Derivatives (net settled) (34.04) - -

Net exposure in respect of recognised assets and liabilities 45.86 (17.03) (0.02)

31 March 2016 USD EUR CHF

Financial assets 77.52 2.39 - Financial liabilities (45.48) (6.62) (0.65)Derivatives (net settled) (39.42) - -

Net exposure in respect of recognised assets and liabilities (7.38) (4.23) (0.65)

1 April 2015 USD EUR CHF

Financial assets 84.63 0.06 - Financial liabilities (43.21) (0.05) (0.12)

Net exposure in respect of recognised assets and liabilities 41.42 0.02 (0.12)

a. The forward contracts booked also includes the future purchase transaction exposure.

b. Hedged foreign currency exposure31 March 2017

Foreign Currency INR Foreign exchange forward contracts (To hedgetrade receivables) USD 52,50,000 34.04

31 March 2016 Foreign Currency INR

Foreign exchange forward contracts (To hedgetrade receivables) USD 57,50,000 39.42

Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and equity prices – will affect theCompany’s income or the value of its holdings of financial instruments.Market risk is attributable to all market risk sensitive financialinstruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related toforeign exchange rate risk, interest rate risk and the market value of our investments. Thus, our exposure to market risk is a function ofinvesting and borrowing activities and revenue generating and operating activities in foreign currency. The objective of market riskmanagement is to avoid excessive exposure in our foreign currency revenues and costs.

v. Currency risk

The currency profile of financial assets and financial liabilities as at 31 March 2017, 31 March 2016 and 1 April 2015 are as below:

The Company is exposed to currency risk on account of its borrowings and other payables in foreign currency. The functional currency ofthe Company is Indian Rupee. The Company uses forward exchange contracts to hedge its currency risk, most with a maturity of less thanone year from the reporting date.

Company do not use derivative financial instruments for trading or speculative purposes.





Sensitivity analysis

Effect in INR (3% movement) Strengthening Weakening31 March 2017

USD (1.38) 1.38 EUR 0.51 (0.51)

(0.86) 0.86

Effect in INR (3% movement) Strengthening Weakening31 March 2016

USD 0.22 (0.22)EUR 0.13 (0.13)

0.35 (0.35)

Profit or loss

Profit or loss

A reasonably possible strengthening (weakening) of the Indian Rupee against US Dollars and Euros at 31 March would have affected themeasurement of financial instruments denominated in US dollars and affected equity and profit or loss by the amounts shown below. Thisanalysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.




34 Financial instruments – Fair values and risk management (continued)

vi. Interest rate risk


31 March 2017 31 March 2016Fixed-rate instrumentsWorking capital loans - 8.00

- 8.00 Effect of interest rate swaps - 28.19 Total - 36.19

Variable-rate instrumentsExternal commercial borrowing (ECB) 17.31 28.19 Pre-shipment loans 7.78 3.32

25.09 31.51 Effect of interest rate swaps - (28.19)Total 25.09 3.32

Fair value sensitivity analysis for fixed-rate instruments

Cash flow sensitivity analysis for variable-rate instruments

100 bp increase

100 bpdecrease

31 March 2017Variable-rate instruments (0.25) 0.25 Cash flow sensitivity (net) (0.25) 0.25

31 March 2016Variable-rate instruments (0.03) 0.03 Cash flow sensitivity (net) (0.03) 0.03

A change of 100 basis points in interest rates would have increased or decreased equity by INR 3.85 crores after tax (31 March 2016 : INR4.03 crores).

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit orloss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remainconstant.

Profit or loss

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 infair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that thefuture cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

Nominal amount

Company’s interest rate risk arises from borrowings. Borrowings issued at fixed rates exposes to fair value interest rate risk. The interestrate profile of the Company’s interest-bearing financial instruments as reported to the management of the Company is as follows.

Working capital demand loan from bank carried interest at 9.50% and was secured by first and exclusive hypothecation charge on allexisiting and future current assets of the company. The loan was also secured by corporate guarantee of S H Kelkar and Company Ltd., theholding company. This has been fully repaid in the current year.




35 Contingent liabilities and commitments (to the extent not provided for)

31 March 2017 31 March 2016 1 April 2015Contingent liabilities

0.12 0.12 0.13 0.12 0.08 -

Income tax 0.02 - -

Commitments

- 0.01 -

36 Dues to micro and small suppliers


Principal 2.17 0.81 - Interest 0.12 0.04 -

- - -

2.03 3.41 -

- - -

0.12 0.04 -

0.12 0.04 -

Estimated amount of contracts remaining to be executed on capital account and notprovided for net of advances, tangible assets

Claims against the Company not acknowledged as debtsGuarantees given for Octroi

The amounts remaining unpaid to micro and small suppliers as at the end of the year

Pending Litigation

The amount of interest accrued and remaining unpaid at the end of each accounting year

The amount of interest due and payable for the period of delay in making payment (whichhave been paid but beyond the appointed day during the year) but without adding theinterest specified under MSMED Act, 2006

The amount of interest paid by the buyer as per the Micro Small and Medium EnterprisesDevelopment Act, 2006 (MSMED Act, 2006)

The amounts of the payments made to micro and small suppliers beyond the appointed dayduring each accounting year

The Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Company has reviewedall its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingentliability, where applicable in its standalone financial statements.

The Company’s management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have amaterial and adverse effect of the Company’s results of operations or financial condition.

The amount of further interest remaining due and payable even in the succeeding years, untilsuch date when the interest dues as above are actually paid to the small enterprise for thepurpose of disallowance as a deductible expenditure under the MSMED Act, 2006




37 Corporate Social Responsibility

In crores of INRParticulars 31 March 2017 31 March 2016Contribution to Clean Ganga Fund

- 0.37

Promotion of education - 0.26 Others - 0.09 Total - 0.72

38 Specified Bank Notes

Particulars Specified Bank Notes

Other Denomination

Notes

Total

Closing cash in hand as on 08.11.2016

1,90,000 2,78,162 4,68,162

(+) Permitted receipts - 1,97,671 1,97,671

(-) Permitted payments - 3,80,318 3,80,318 (-) Amount deposited in Banks 1,90,000 - 1,90,000

Closing cash in hand as on 30.12.2016

- 95,515 95,515

The details of Specified Bank Notes (SBN) held and transacted during the period 08/11/2016 to 30/12/2016 are provided in the table below:-

Schedule III of the Companies Act, 2013 was amended by Ministry of Corporate Affairs vide Notification G.S.R. 308(E) dated 30 March2017. The said amendment requires the Company to disclose the details of Specified Bank Notes (SBN) held and transacted during theperiod from 8 November 2016 to 30 December 2016. For the purpose of this clause, the term ‘Specific Bank Notes’ shall have the samemeaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O.3407 (E), dated the 8th November, 2016.

The aggregate amount of expenditure incurred during the year on Corporate Social Responsibility and shown in the respective heads ofaccount is INR Nil because the Company after merger effective 1 May 2015, has incurred losses for the year ended 31 March 2017 hence,CSR expenditure is not applicable to the Company in the current financial year.




39 Segment reporting

A. General Information

(a) Factors used to identify the entity’s reportable segments, including the basis of organisation

(b) Following are reportable segments

Reportable segmentFragrancesFlavours

B. Information about reportable segments

Year ended 31 March 2017Particulars Fragrances FlavoursA. Segment Revenue

Total sales 200.92 59.26 260.18 Unallocable income 18.28 Total Revenue 200.92 59.26 278.46

B. Segment Results 8.31 18.20 26.50

C. Specified amounts included in segment resultsDepreciation and amortisation 2.93 0.40 3.33 Provision for doubtful debts (3.07) (3.07) Bad-debts written off 7.20 7.20

D Reconciliation of segment result with proft after taxSegment Results 8.31 18.20 26.50 Add/ (Less):Royalty Income 18.28 Interest expense (0.31) Depreciation and amortization (47.26) Other expenses (0.66) Income tax expense (15.24)

Loss after tax as per statement of profit and loss - - (18.68)

Segment assets 279.53 33.09 312.62 Unallocable assets 198.22 Total assets 510.84

Segment liabilities 97.70 8.69 106.39 Unallocable liabilities 19.82 Total liabilities 126.21 Capital Employed (Segment assets - Segment liabilities) 181.83 24.40 384.63

For management purposes, the Group is organised into business units based on its products and services and has two reportablesegments, as follows:• Fragrances, segment manufactures/trade in Fragrances and aroma ingredients for Fragrances• Flavours, segment manufactures/ trade in Flavours

Reportable segmentsTotal Segments




39 Segment reporting (Continued)

B. Information about reportable segments (Continued)

Year ended 31 March 2016Particulars Fragrances FlavoursA Revenue

Total Sales 227.63 33.53 261.16 Unallocable income - - - Total Revenue 227.63 33.53 261.16

B Segment Results 27.34 7.16 34.50

C Specified amounts included in segment results

Depreciation and amortization 6.03 0.82 6.85 Provision for Doubtful Debts 5.20 - 5.20

D Reconciliation of segment result with proft after taxInterest expense (4.56) Depreciation and amortization (44.43) Income tax expense or income (15.64) Unallocable expenses (net of unallocable income) -

Loss after tax as per statement of profit and loss (30.14)

Segment assets 281.25 19.77 301.02 Unallocable corporate assets 229.54 Total assets 530.57 Segment liabilities 116.24 7.62 123.85 Unallocable corporate liabilities 3.57 Total liabilities 127.42 Capital Employed (Segment assets - Segment liabilities) 165.01 12.16 403.15

C. Geographic information

Geography Year ended 31 March 2017


I RevenueDomestic 93.88 88.36 Overseas 184.57 172.80

Total Revenue 278.46 261.16

II Non-current Assets *Domestic 157.90 195.37 Overseas 81.50 80.54

Total Non-current Assets 239.40 275.92

D. Information about major customers

Revenues from no single external customer represented more than 10% of the Company's total revenues.

Reportable segmentsTotal Segments

The geographic information analyses the Company's revenue and non-current assets by the Company's country of domicile and other countries. In presenting the geographical information, segment revenue has been based on the geographic location of customers and segments assets were based on the geographic location of the respective non-current assets.

*non-current assets other than financial instruments, deferred tax assets, post-employment benefit assets and rights arising from insurance contracts




40 Related party relationships, transactions and balances

Enterprises owned, controlled or significantly influenced by key management personnel or their relatives:

Holding company:S H Kelkar and Company Limited

Fellow subsidiaries (with whom there were transactions during the reporting periods):Keva Flavours Private LimitedKeva Fragrance Industries Pte LimitedPT SHK Keva IndonesiaSaiba Industries Private LimitedPFW Aroma Ingredients B.VRasiklal Hemani Agencies Private LimitedKeva UK Limited

Purandar Fine Chemicals Private Limited

Key Managerial Personnel:Ramesh V. Vaze, Managing DirectorKedar R. Vaze, Director & Chief Executive Officer (from 11 October 2014)Prabha R. Vaze, Director (upto 11 March 2015)

Non-executive directors:Nitin PotdarSangeeta Singh

2017 2016Sale of goodsS H Kelkar and Company Limited 30.73 34.99 PT SHKKeva Indonesia 6.42 5.76 Keva Flavours Private Limited 9.31 0.23 PFW Aroma Chemicals B.V. 16.80 12.48 Keva Fragrances Private Limited (upto 30th April 2015) - 0.13

Royalty IncomeS H Kelkar and Company Limited 17.00 - Keva Flavours Private Limited 1.28 -

Purchase of goodsS H Kelkar and Company Limited 24.16 29.19 Keva Flavours Private Limited 5.90 4.54 Keva Aromatics Private Limited 0.06 - PFW Aroma Chemicals B.V. 16.77 15.53 Purandar Fine Chemicals Private Limited* 0.56 0.00

Rent expenseS H Kelkar and Company Limited 3.42 -

Enterprises owned or controlled or significantly influenced by key management personnel or their relatives (with whom there weretransactions during the reporting periods):


Particulars





40 Related party relationships, transactions and balances (Continued)

2017 2016Job WorkS H Kelkar and Company Limited 0.69 -

Reimbursment of ExpensesKeva Fragrance Industries Pte Ltd 2.20 PT SHKKeva Indonesia (Transfer Pricing) 8.82

Other servicesS H Kelkar and Company Limited- Rent - 3.14 - Electricity and water (Reimbursement paid) 1.17 1.33

Sales support serviceKeva Fragrance Industries Pte Limited - 2.69

Reimbursement on expenses incurredS H Kelkar and Company Limited - 0.08

Remuneration paid to Key Managerial PersonnelRamesh V. Vaze - - Kedar R. Vaze - - Prabha R. Vaze - -

Particulars Transaction values for the year ended 31 March

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year(Continued) :




40 Related party relationships, transactions and balances (Continued)

31 March 2017 31 March 2016 1 April 2015 Trade receivablesS H Kelkar and Company Limited 19.17 14.86 - Keva Flavours Private Limited 10.59 0.09 *0.00PFW Aroma Chemicals B.V. 4.27 1.97 - Purandar Fine Chemicals Private Limited. 0.02 - - PT SHKKeva Indonesia 13.78 8.94 -

Trade payablesS H Kelkar and Company Limited 19.08 17.90 3.49 Keva Flavours Private Limited 6.32 4.84 - PFW Aroma Chemicals B.V. 6.51 8.43 11.57 Keva Aromatics Private Limited 0.07 - -

Other payablesS H Kelkar and Company Limited- Rent - 3.53 - - Advance received - - 1.45 PT SHKKeva Indonesia- Commission 0.16 0.16 - - Transfer pricing 8.82 - - Keva Flavours Private Limited - 0.01 - Keva Fragrances Private Limited (upto 30th April 2015) - - 0.44

Loans and advancesS H Kelkar and Company Limited (Donation Paid on Behalf of S H Kelkar and Company Limited)

0.05 - -

Keva Fragrance Industries Pte Ltd 1.39 2.03 -

*Amount in less than INR 0.01 crore

Terms and conditions of transactions with related parties

All the transactions with the related parties were made on normal commercial terms and conditions and at market rates.

The interest rate on loans given to subsidiaries are in the range of 9% to 9.50%.

All the outstanding balances are unsecured and repayable in cash.

Particulars Balances outstanding




41 Capital Management


Non-current borrowings 6.29 18.24 26.60 Current borrowings 7.78 11.32 11.31 Current maturity of long term debt 11.02 9.95 7.82 Gross debt 25.09 39.51 45.73 Less - Cash and cash equivalents 12.50 11.57 1.71 Less - Other bank deposits 13.42 22.76 0.08 Less - Current investments - - - Adjusted net debt (0.83) 5.19 43.94

Total equity 384.62 403.15 19.36 Adjusted net debt to equity ratio (0.00) 0.01 2.27

For the purpose of the Company's capital management, capital includes issued capital and other equity reserves. The primary objective of theCompany’s capital management is to maximise shareholders value. The Company manages its capital structure and makes adjustments in thelight of changes in economic environment and the requirements of the financial covenants.

The Company monitors capital using adjusted net debt to equity ratio. For this purpose, adjusted net debt is defined as total debt less cashand bank balances.




42 Amalgamation of Keva Fragrances Private Limited with K. V. Arochem Private Limited

Particulars Amount Investments 11.65 Net current assets, loans and advances 135.25 Fixed assets, intangible assets and capital work-in-progress 8.71 Inter-company balances cancelled (0.31)Total debt takenover (9.86)Net assets takenover (A) 145.44

Number of equity shares issued 6,21,029 Value per share 6,146.50

Total consideration (B) 381.72

Goodwill 236.28

43 Transfer pricing

Pursuant to the Scheme of Arrangement (the Scheme) under relevant provisions of the Companies Act 2013 for amalgamation of KevaFragrances Private Limited (“KFPL”) with the Company as sanctioned by the Hon’ble High Court of Bombay on 22nd September, 2015 andfiled with Registrar of Companies on 15th November, 2016 (the Effective Date), the whole of the business, all assets, liabilities and reservesof KFG are transferred at fair values to and vested in the Company with effect from 1 May 2015 (the Appointed Date) and the name of K. V.Arochem Private Limited shall stand changed to ‘Keva Fragrances Private Limited’.

KFPL is a company incorporated under the provisions of the Companies Act, 1956 and having registered office at 36, Devkaran Mansion,Mangaldas Road, Kalbadevi, Lal Bahadur Shastri Marg, Near Balrajeshwar Temple, Kalbadevi, Mumbai – 400 002. KFPL is an exportoriented unit and is engaged in the business of manufacture and export of fragrances and flavor and is a wholly owned subsidiary of S HKelkar and Company Limited.

The Company has accounted for the merger in accordance with the provisions of the Scheme as approved by the Hon'ble High Court wherebythe assets and liabilities of KFPL have been recognised at their fair values. The excess of consideration to the shareholders of KFPL over thenet asset value of KFPL on the Appointed date has been treated as Goodwill. Such Goodwill shall be amortised over a period of 5 years fromthe Appointed date as per the Court order.

As a result of the amalgamation, the comparative numbers for the year ended 31 March 2016 incorporate the operations of KFPL with effectfrom the appointed date i.e. 1 May 2015. And the Balance sheet as at 31 March 2016 and the Statement of profit and loss, Statement ofchanges in equity and Statement of cash flows for the year ended 31 March 2017 along with their related notes have been recast to reflect theimpact of merger (refer note 46).

Details of fair value of assets and liabilities of KFPL amalgamated into the Company as on the appointed date i.e. 1 May 2015 are as follows:

The Company’s management is of the opinion that its international transactions and specified domestic transactions are at arm’s length as perthe independent accountants report for the year ended 31 March 2016. Management continues to believe that its international transactionspost March 2016 and the specified domestic transactions covered by the new regulations are at arm's length and that the transfer pricinglegislation will not have any impact on these financial statements, particularly on amount of tax expense and that of provision of taxation.




44 Expenses incurred on research and development during the year

45 Royalty income

The Tradename "Keva" is registered in the name of the Company, a wholly owned subsidiary of S H Kelkar and Company Limited ('SHK').SHK and another wholly owned subsidiary of SHK, Keva Flavours Private Limited ('KFL') have entered into an agreement with the Companyfor use of brand name, pursuant to a board resolution passed on 27 March 2017. As per the agreement, the Company has received a royaltyincome of Rs 18.28 crores for the financial year 2016-17.

With effect from 1 April 2016, the Company has changed its policy for accounting for research and development expenses. The Company hasdecided to capitalise development costs on intangible assets as per the requirements of Ind AS 38 – Intangible assets. Had the Companycontinued with the old policy of charging development costs to the Statement of profit and loss, the profit after tax for the year ended 31March 2017 would have been lower by Rs 0.44 crores respectively.




46 Explanation of transition to Ind AS (Continued)

Reconciliation of equity as at 1 April 2015

Note Previous IGAAP* Adjustment on


AssetsNon-current assetsProperty, plant and equipment 46.51 - 46.49 Capital work-in-progress 1.78 - 1.78 Other intangible assets 0.68 - 0.68 Financial assets

Investments 0.00 - 0.00 Loans 0.23 - 0.25

Deferred tax assets (net) 4 7.14 - 7.14 Income tax assets (net) 0.40 - 0.40 Other non-current assets 0.78 - 0.79 Total non-current assets 57.53 - 57.55

Current assetsInventories 20.65 - 20.65 Financial assets -

Trade receivables 1 4.34 (0.01) 4.32 Cash and cash equivalents 1.71 - 1.71 Bank balances other than above 0.08 - 0.08 Loans 0.05 - 0.05 Derivatives 2 - - - Others 0.22 - 0.22

Other current assets 3 9.53 0.57 10.10 Total current assets 36.59 0.56 37.13

Total assets 94.12 0.56 94.67 Equity and liabilitiesEquity Equity share capital 0.71 - 0.71 Other equity

Retained earnings (12.94) (0.38) (13.34) Other reserves 31.05 0.94 31.99

Purchase consideration pending allotment - - - Total equity 18.82 0.56 19.36

Non-current liabilitiesFinancial liabilities

Borrowings 26.60 - 26.60 Provisions 6 0.81 - 0.81 Total non-current liabilities 27.41 - 27.41


Borrowings 11.31 - 11.31 Trade payables 21.23 - 21.23 Derivatives 2 0.32 - 0.32 Other 11.75 - 11.74

Other current liabilities 2.85 - 2.85 Provisions 6 0.43 - 0.43 Total current liabilities 47.89 - 47.88

Total liabilities 75.30 - 75.29

Total equity and liabilities 94.12 0.56 94.66





46 Explanation of transition to Ind AS

Optional exemptions availed and mandatory exceptions

A. Optional exemptions availed

B. Mandatory exceptions

For the purposes of reporting as set out in Note 1, we have transitioned our basis of accounting from Indian generally accepted accountingprinciples (“IGAAP”) to Ind AS. The accounting policies set out in note 1.3 have been applied in preparing the financial statements for theyear ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and inthe preparation of an opening Ind AS balance sheet at 1 April 2015 (the “transition date”).In preparing our opening Ind AS balance sheet, we have adjusted amounts reported in financial statements prepared in accordance withIGAAP. An explanation of how the transition from IGAAP to Ind AS has affected our financial performance, cash flows and financialposition is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates previouslymade under IGAAP except where required by Ind AS.

In preparing these financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.

1. Property plant and equipment and intangible assets

As per Ind AS 101 an entity may elect to:

(i) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed cost atthat date

(ii) use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed cost at thedate of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to:− fair value;− or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price index.

The elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind AS 38, IntangibleAssets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation (including the existence of an activemarket).

1. Estimates As per Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the comparative periodpresented in the entity’s first Ind AS financial statements, as the case may be, should be consistent with estimates made for the same datein accordance with the previous GAAP unless there is objective evidence that those estimates were in error.

However, the estimates should be adjusted to reflect any differences in accounting policies.

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP,those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or atthe end of the comparative period (for presenting comparative information as per Ind AS).

(iii) use carrying values of property, plant and equipment, intangible assets and investment properties as on the date of transition to Ind AS (which are measured in accordance with previous GAAP and after making adjustments relating to decommissioning liabilities prescribed under Ind AS 101) if there has been no change in its functional currency on the date of transition.

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of intangible assets.

The Company’s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the financial statements that were not required under the previous GAAP are listed below:

- Fair valuation of financial instruments carried at FVTPL.- Impairment of financial assets based on the expected credit loss model.- Determination of the discounted value for financial instruments carried at amortised cost.- Fair valuation of financial guarantee contracts.





3. Retrospective application

As per Ind AS 8, when retrospective application is required by an entity, a change in accounting policy shall be applied retrospectivelyexcept to the extent that it is impracticable to determine either the period-specific effects or the cumulative effect of the change. An entityshall account for a change in accounting policy resulting from the initial application of an Ind AS in accordance with the specifictransitional provisions, if any, in that Ind AS; and when an entity changes an accounting policy upon initial application of an Ind AS thatdoes not include specific transitional provisions applying to that change, or changes an accounting policy voluntarily, it shall apply thechange retrospectively.

2. Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date oftransition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstancesexisting at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date oftransition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same isimpracticable.





Reconciliation of equity as at 31 March 2016

Note Previous IGAAP*

Adjustments pursuant to scheme of Merger

(refer note 42)

Adjustment on transition to Ind

AS

Ind AS

AssetsNon-current assetsProperty, plant and equipment 40.41 2.22 - 42.62 Capital work-in-progress 2.98 9.77 - 12.74 Goodwill on amalgamation - 192.96 - 192.96 Other intangible assets 0.37 0.45 - 0.82 Intangible assets under development - - - Financial assetsInvestments 0.00 11.65 - 11.65 Loans 1.42 - 1.42 Deferred tax assets (net) 4 7.84 (6.98) 0.39 1.25 Income tax assets (net) 5.74 - 5.74 Other non-current assets 0.37 26.42 - 26.79

Total non-current assets 59.11 236.47 0.39 295.98

Current AssetsInventories 8 26.14 62.65 (1.70) 87.09 Financial assetsTrade receivables 1 8.12 91.82 (3.05) 96.89 Cash and cash equivalents 1.24 10.34 - 11.58 Bank balances other than above 22.47 0.30 - 22.77 Loans 0.48 - 0.48 Derivatives 2 - 0.65 0.65 Others 1.52 2.80 - 4.31 Other current assets 3 0.53 6.57 0.46 7.56

Total current assets 60.50 174.48 (3.64) 231.32

Total assets 119.60 410.95 (3.24) 527.30 Equity and LiabilitiesEquity Equity share capital 1.22 - 1.22 Other equityRetained earnings (15.02) (23.84) (4.62) (43.47) Other reserves 62.53 1.16 63.69 Purchase consideration pending allotment (0.00) 381.72 - 381.72 Total equity 48.73 357.88 (3.45) 403.16

LiabilitiesNon-current liabilitiesFinancial liabilitiesBorrowings 18.24 - 18.24 Provisions 6 0.71 0.41 - 1.12 Total non-current liabilities 18.95 0.41 - 19.36





Reconciliation of equity as at 31 March 2016 (Continued)

Note Previous IGAAP*

Adjustments pursuant to scheme of Merger

(refer note 42)

Adjustment on transition to Ind

AS

Ind AS

Current liabilitiesFinancial liabilitiesBorrowings 8.00 3.32 - 11.32 Trade payables 26.75 28.43 - 55.18 Derivatives 2 - 0.19 0.19 Other 9.81 19.72 - 29.54 Current tax liabilities (net) 0.00 0.75 - 0.75 Other current liabilities 6.90 - 6.88 Provisions 6 0.46 0.46 - 0.92 Total current liabilities 51.93 52.67 0.19 104.77

Total liabilities 70.88 53.08 0.19 124.14

Total equity and liabilities 119.60 410.96 (3.26) 527.29

Reconciliation of profit or loss for the year ended 31 March 2016

In crores of INR Note Adjustmentspusuant to scheme of

merger (refer note 42)RevenueRevenue from Operations (Gross) 95.84 165.32 - 261.16 Other income 2 1.02 7.05 0.43 8.51 Total income 96.86 172.37 0.43 269.67 ExpensesCost of materials consumed 50.71 84.59 - 135.30 Purchase of traded goods 17.93 - 17.92 Changes in inventories of finished goods, work-in-progress and stock-in-trade

(2.43) 16.64 - 14.21

Employee benefits expense 4.04 4.82 - 8.86 Finance costs 3 3.73 0.30 0.53 4.55 Excise duty 5 8.80 1.51 - 10.32 Depreciation and amortisation expenses 6.24 44.31 - 50.55 Other expenses 1 12.32 27.54 3.04 42.90 Total expenses 101.34 179.71 3.57 284.61 Profit/(loss) before exceptional items and tax (4.48) (7.34) (3.13) (14.94) Exceptional items (0.00) - - Profit/(loss) before income tax (4.48) (7.34) (3.13) (14.94) Tax expenseCurrent tax 0.00 7.29 - 7.29 Deferred tax 4 (0.70) 8.44 (0.61) 7.13 Adjustment of tax for earlier years 0.00 0.67 - 0.67 Profit/(Loss) for the year (3.78) (23.74) (2.52) (30.04)

Other comprehensive income 6Remeasurements of defined benefit liability (asset) (0.00) (0.16) - (0.16) Income tax related to items that will not be reclassified to profit or loss

(0.00) 0.06 - 0.06

Total comprehensive income for the year (3.78) (23.85) (2.52) (30.15)


Amount as per IGAAP*

Effects of transition to Ind

AS






Reconciliation of net worth

Particulars Note Year ended 1 April 2015


Net worth under IGAAP 18.81 406.61

Summary of Ind AS adjustmentsImpairment of debtors based on expected credit model under Ind AS 109 1 (0.01) (3.05) Error in valuation of inventory 8 - (1.71) MTM of Derivative contracts 2 - 0.65 Guarantee Commission 3 0.57 0.33 Deferred tax on above Ind AS adjustments 4 0.00 0.33

Total Ind AS adjustments 0.57 (3.45)

Net worth under Ind AS 19.38 403.16

Reconciliation of comprehensive income for the year ended 31 March 2016

Particulars Note Year ended 31 March 2016

Comprehensive income under IGAAP (27.62)

Summary of Ind AS adjustmentsImpairment of debtors based on expected credit model under Ind AS 109 1 (3.04) MTM of Derivative contracts 2 0.46 Guarantee Commission 3 (0.33) Deferred tax on above Ind AS adjustments 4 0.39

Total Ind AS adjustments (2.53)

Comprehensive income under Ind AS (30.15)

Notes to the reconciliations

1

2

3

Trade receivables

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

Derivative assets/liabilities

Under Ind AS, all derivative contracts are required to be marked to market at each period end with mark to market gains and lossesrecognised in the statement of profit and loss.

Guarantee commission

Under Indian GAAP, the Company issued financial guarantees in respect of loans taken by its Indian subsidiaries without chargingany fee or commission. Under Ind AS, Financial guarantees given or issued on behalf of group companies without charging any feeis recognised at a value which represents a fee which would have been charged by a bank for issuing a similar guarantee to thesubsidiary.





Notes to the reconciliations (Continued)

4

5

6

7 Reconciliation of statement of cash flows:

There are no material adjustments to the statement of cash flows as reported under the previous GAAP.

8

47 Comparatives

Pursuant to the Scheme of Arrangement (the Scheme) under relevant provisions of the Companies Act 2013 for amalgamation of KevaFragrances Private Limited (“KFPL”) with the Company as sanctioned by the Hon’ble High Court of Bombay on 22nd September, 2015and filed with Registrar of Companies on 15th November, 2016 (the Effective Date), the whole of the business, all assets, liabilities andreserves of KFG are transferred at fair values to and vested in the Company with effect from 1 May 2015 (the Appointed Date).Accordingly the figures as at 1 April 2015 and as at and for the year ended 31 March 2016 and 31 March 2017 are strictly not comparable.

Inventories

The Company had recognised certain revenue from sale of goods on transfer of risk and rewards to the buyer in the previous yearended 31 March 2016. However, the corresponding cost of material consumed of Rs 1.71 crores pertaining to such revenue was notaccounted for in the year ended 31 March 2016. Such an accounting error needs to adjusted in the financial statements of the year inwhich the error has taken place in accordance with Ind AS -8 " Accounting Policies, Changes in Accounting Estimates and Errors".Accordingly, impact of such revision in inventory and cost of material consumed has been accounted in the financial statementsfor the year ended 31 March 2016.

Excise duty

Under previous GAAP, revenue from sale of goods was presented net of the excise duty on sales. Under Ind AS, revenue from saleof goods is presented inclusive of excise duty. Excise duty is presented in the statement of profit and loss as an expense.

Deferred tax (net)

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxableprofits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheetapproach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and itstax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temprorary differences whichwas not required under Indian GAAP.

Employee benefits

Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on anactuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS,remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net intereston the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefitliability] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.




48


For B S R & Co. LLP For and on behalf of the Board of DirectorsChartered Accountants Keva Fragrances Private LimitedFirm’s Registration No: 101248W/W-100022 (formerly, K. V. Arochem Private Limited)

CIN: U24110MH1978PTC020545


Mumbai Mumbai Mumbai12 May 2017 12 May 201712 May 2017

The figures as at 1 April 2015 and as at and for the year ended 31 March 2016 have been audited by a firm of Chartered Accountants other than B S R & Co. LLP.

Keva Chemicals Private Limited Financials FY- 2016-17

KAVERI VENKATARAMAN & ASSOCIATES 501, Flora Avenue, 10th Road, Near Sandu Garden, Chembur, Mumbai - 400071

Independent Auditors’ Report

To the Members of

KEVA CHEMICALS PRIVATE LIMITED

Report on the standalone Ind AS financial statements

We have audited the accompanying standalone Ind AS financial statements of KEVA CHEMICALS PRIVATE LIMITED (‘the Company’), which comprise the Balance Sheet as at 31 March 2017 and the Statement of Profit and Loss, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s responsibility for the standalone Ind AS financial statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. 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. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.





Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Comparative Standalone Ind AS financial statements for the year ended 31st March 2017 (including opening balance sheet as at 1st April 2016), are prepared, in all material respects, in accordance with the basis of accounting described in Notes to the financial statements.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order‘), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the said Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

(a) we have sought and obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014;

(e) on the basis of written representations received from the directors as on 31 March 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017, from being appointed as a director in terms of Section 164(2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B"; and

(g) with respect to the other matters 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 information and according to the explanations given to us :

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements – No Litigation pending;

ii. the Company did not have any long-term contracts, including derivative contracts, for which there were any material foreseeable losses; and

iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

For Kaveri Venkataraman & Associates

(Chartered Accountants)

FIRM REGISTRATION NO: 128670W

CA Kaveri Venkataraman Proprietor Membership No: 109059

Place: Mumbai Date : 11 May, 2017




(i) The Company has not granted interest free loans to a body corporate covered in the register maintained under Section 189 of the Companies Act, 2013 (‘the Act’). The Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act.

(ii) In our opinion and according to the information and explanations given to us, no loans have been given to a body corporate.

(iii) In our opinion, and according to the information and explanations given to us, the Company has not accepted deposits as per the directives issued by the Reserve Bank of India under the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3 (v) of the Order is not applicable to the Company.

(iv) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 148 (1) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(v) (a) According to the information and explanations given to us and on the basis of our examination of records of the Company, amounts deducted/ accrued in the books of account in respect of Provident fund, Employees’ State Insurance, Service tax, Sales tax, Value added tax, Professional tax, Duty of customs, Duty of excise, Cess and other material statutory dues have been regularly deposited with the appropriate authorities. According to the information and explanations given to us and on the basis of our examination of records of the Company, amounts deducted/ accrued in the books of account in respect of Income tax have generally been regularly deposited with the appropriate authorities, though there have been slight delay in a few cases

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees’ State Insurance, Income tax, Service tax, Sales tax, Value added tax, Professional tax, Duty of customs, Duty of excise, Cess and other material statutory dues were in arrears as at 31 March 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Service tax, Sales tax, Value added tax and Duty of customs which have not been deposited with the appropriate authorities on account of any dispute.

(vi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. The Company does not have any loans or borrowings from government or dues to debenture holders during the year.

(vii) The Company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year.

(viii) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(ix) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

(x) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177




and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

(xii) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3 (xiv) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

(xiv) According to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

For Kaveri Venkataraman & Associates




Place: Mumbai Date : 11 May, 2017



Annexure B to the Independent Auditors’ Report – 31 March 2017 (Referred to in our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of the Company as of 31 March 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Act.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness 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.




Annexure B to the Independent Auditors’ Report – 31 March 2017 (Continued)

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For Kaveri Venkataraman & Associates




Place: Mumbai

Date : May 11, 2017

ParticularsNote No

31st March 2017 31st March 2016

I. EQUITY AND LIABILITIES

(1) Shareholders' Funds(a) Share Capital 2 3,00,000 3,00,000 (b) Reserves and Surplus 3 (4,30,993) (4,15,993) (c) Money received against share warrants

(2) Share application money pending allotment

(3) Non-Current Liabilities(a) Long-term borrowings 4 - - (b) Deferred tax liabilities (Net)(c) Other Long term liabilities 5 - - (d) Long-term provisions 6 - -

(4) Current Liabilities(a) Short-term borrowings 7 - - (b) Trade payables(c) Other current liabilities 8 1,54,000 1,39,000 (d) Short-term provisions 9 - -

Total 23,007 23,007 II.Assets(1) Non-current assets

(a) Fixed assets (i) Tangible assets 10 - - (ii) Intangible assets 11 - - (iii) Capital work-in-progress (iv) Intangible assets under development(b) Non-current investments 12 - - (c) Deferred tax assets (net)(d) Long term loans and advances 13 - - (e) Other non-current assets 14 - -

(2) Current assets(a) Current investments 15 - - (b) Inventories 16 - - (c) Trade receivables 17 - - (d) Cash and cash equivalents 18 23,007 23,007 (e) Short-term loans and advances 19 - - (f) Other current assets

Total 23,007 23,007 Significant Accounting Policies and Notes to Accounts 1

As per our Report of even date Annexed For & on behalf of Board of DirectorsFOR KAVERI VENKATARAMAN AND ASSOCIATESCHARTERED ACCOUNTANTSFIRM REGISTRATION NO : 128670W

Ramesh Vaze Kedar Vaze DIN:00509751 DIN:00511325

MEMBERSHIP NO :109059Place : MumbaiDate : May 11, 2017 Date : May 11, 2017

Balance Sheet as at 31st March, 2017

DIRECTORS


ParticularsNote No

31st March 2017 31st March 2016

I. Revenue from operations 20 - - II. Other Income 23 - - III. Total Revenue (I +II) - - IV. Expenses:

Cost of materials consumedPurchase of Stock-in-TradeChanges in inventories of finished goods, work-in-progress and Stock-in-TradeEmployee benefit expense 24 - - Financial costs 22 - - Depreciation and amortization expenseOther expenses 25 15,000 15,000

Total Expenses 15,000 15,000

V. Profit before exceptional and extraordinary items and tax (III - IV) (15,000) (15,000)

VI. Exceptional Items

VII. Profit before extraordinary items and tax (V - VI) (15,000) (15,000)

VIII. Extraordinary Items

IX. Profit before tax (VII - VIII) (15,000) (15,000)

X. Tax expense:(1) Current tax(2) Deferred tax

XI. Profit/(Loss) from the perid from continuing operations (VII - VIII) (15,000) (15,000)

XII. Profit/(Loss) from discontinuing operations

XIII. Tax expense of discounting operations

XIV. Profit/(Loss) from Discontinuing operations (XII - XIII) - -

XV. Profit/(Loss) for the period (XI + XIV) (15,000) (15,000)

XVI. Earning per equity share:(1) Basic - - (2) Diluted

Significant Accounting Policies and Notes to Accounts 1

As per our Report of even date Annexed For & on behalf of Board of Directors FOR KAVERI VENKATARAMAN AND ASSOCIATES

CHARTERED ACCOUNTANTSFIRM REGISTRATION NO : 128670W

Ramesh Vaze Kedar VazeDIN:00509751 DIN:00511325

MEMBERSHIP NO :109059Place : Mumbai

Date : May 11, 2017 Date : May 11, 2017

DIRECTORS


Profit and Loss statement for the year ended 31st March, 2017

CASH FLOW FROM OPERATING ACTIVITIES Amt

Net Profit Before Tax (15,000)

Adjustments for:Income Tax paidDepreciationDividend Income

Operating Profit before Working Capital Changes (15,000) Adjustments for:

(Increase) / Decrease in Debtors(Increase) / Decrease in DepositsIncrease / (Decrease) in CreditorsIncrease / (Decrease) in Staff Liability(Increase) / Decrease in Loans & AdvancesIncrease / (Decrease) in Taxes PayableIncrease / (Decrease) in Doubtful Provision

Net Cash flow from Operating activities

CASH FLOW FROM INVESTING ACTIVITIES (15,000)

(Purchase) of Tangible Assets(Purchase) of Mutual FundsSale of Mutual Funds

Net Cash used in Investing activities

CASH FLOW FROM FINANCING ACTIVITIES 15,000

Net Cash used in financing activitiesNet increase in cash & Cash Equivalents - Cash and Cash equivalents as at 31.03.2014 23,007 Cash and Cash equivalents as at 31.03.2015 23,007

Cash & Cash Equivalents Comprise of

Cash in HandCash - Cash ImprestCash at Bank 23,007 - Cash & Cash equivalents as stated 23,007

As per our Report of even date Annexed For & on behalf of Board of DirectorsFOR KAVERI VENKATARAMAN AND ASSOCIATESCHARTERED ACCOUNTANTSFIRM REGISTRATION NO : 128670W

Ramesh Vaze Kedar VazeDIN: 00509751 DIN: 00511325

MEMBERSHIP NO :109059 DIRECTORSPlace : MumbaiDate : May 11, 2017 Date :May 11, 2017

Notes to and Forming Part of Balance Sheet as at 31st March 2017

2 Share Capital

ParticularsNumber Amount Number Amount

AuthorizedEquity Shares, Rs 10/- par value 5,00,000 50,00,000 5,00,000 50,00,000

Issued Subscribed and Paid-UpEquity Shares, Rs 10/- par value 30,000 3,00,000 30,000 3,00,000

30,000 3,00,000 30,000 3,00,000

The reconciliation of the number of shares outstanding and the amount of share capital as at March 31, 2017 and March 31, 2016 is set out below:

ParticularsNumber Amount Number Amount

Shares outstanding at the beginning of the year 30,000 3,00,000 30,000 3,00,000 Add: Shares issued during the year - - - - Less : Shares Bought back during the year - - - - Shares outstanding at the end of the year 30,000 3,00,000 30,000 3,00,000

Particulars of shareholders holding more than 5% shares of a class of shares:

Name of Share HolderNumber % of Holding Number % of Holding

K. V. Arochem Pvt. Ltd. 12000* 100% 12000* 100%

12,000 100% 12,000 100%* 1 Equity share is held by Mr. Ramesh Vaze as nominee of K. V. Arochem Pvt. Ltd.

(a)

(b)


As at 31 March 2017 As at 31 March 2016

The Company has only one class of Equity shares having a face value Rs. 10 per share. Each holder of equity shares is entitled to one vote per share with a right to receiveper share dividend declared by the Company. In the event of liquidation, the equity shareholders are entitled to receive remaining assets of the Company (afterdistribution of all preferential amounts) in the proportion of equity shares held by the shareholders. During the year ended 31 March 2016, the Company has recorded pershare dividend of Rs.Nil (previous year: Rs.Nil) to equity shareholders.




Note No

AS AT 31 ST MARCH 2017

(RS.)

AS AT 31ST MARCH 2016

(RS.) 1 2 3 4

3 Reserves and SurplusCapital ReservesCapital Redemption ReservesSecurities Premium Reserves 38,00,000.00 38,00,000.00 Debenture Redemption ReservesRevaluation Reserves (42,30,993.00) (42,15,993.00) Other Reserve / fundSurplus

Total (4,30,993.00) (4,15,993.00)

4 Long-term borrowingsSecured

Bonds/DebenturesTerm LoansDeferred payment liabilitiesDeposits

UnsecuredBonds/DebenturesTerm LoansDeferred payment liabilitiesDeposits

Total - -

5 Other long term liabilitiesTrade payablesOthers

Total - -

6 Long-term provisionsProvision for employee benefitsOthers

Total - -


Notes to and Forming Part of Balance Sheet as at 31st March, 2017

Note No


(RS.)


(RS.) 1 2 3 4

7 Short-tems borrowingsSecured

Loans repayable on demandLoans and advances from related partiesDepositsOther loans and advances

UnsecuredLoans repayable on demand - - Loans and advances from related partiesDepositsOther loand and advances

Total - -

8 Other current liabilitiesCurrent maturities of long term debtCurrent maturities of finance lease obligationInterest accrued but not due on borrowingsInterest accrued and due on borrowingsIncome received in advanceUnpaid dividendsRefundable share application moneyUnpaid matured deposits and interest accrued thereonUnpaid matured debentures and interest accrued thereonAudit Fees Payable 60,000.00 45,000.00 S.H.Kelkar & Co. 1,000.00 1,000.00 Other payables 93,000.00 93,000.00

Total 1,54,000.00 1,39,000.00

9 Short-term provisionsProvision for employee benefitsOthers

Total - -

10 Tangible AssetsLand/ Building/ Plant & Equipment/ Furniture & fixtures/ Vehicles/ Office Equipment/Others (individually)Opening BalanceAdd: acquisition through business combinationOther Adjustments

Sub total - - Less: DisposalsGross Block at year end (a) - - Less: Depreciation

Opening DepreciationDepreciation for the yearTotal accumulated depreciation (b)

Net carrying value (a) - (b) - - Total - -

Note No


(RS.)


(RS.) 1 2 3 4

11 Intangible AssetsGoodwillBrands/ Trademarks/ Computer Software/ Mastheads and publishing titles/ Mining rights/ Copyrights/ Patents/ Licenses, etc (individually)

Opening BalanceAdd: acquisition through business combinationOther Adjustments

Sub total - - Less: DisposalsGross Block at year end (a) - - Less: Depreciation

Opening AmortizationAmortization for the yearTotal accumulated Amortization (b)

Net carrying value (a) - (b) - - Total - -

12 Non-current investmentsTrade InvestmentsInvestment propertyInvestments in Equity instrumentsInvestments in Peference sharesInvestments in Government and Trust securitiesInvestments in Debentures or bondsInvestments in Mutual fundsInvestments in Partnership firmsOther non-current investments

Total - -

13 Long Term Loans and AdvancesSecured considered good

Capital AdvancesSecurity DepositsLoans and advances to related partiesOther loans and advances

Sub Total - - Unsecured considered good


Sub Total - - Doubtful


Sub Total - - Total - -

Note No


(RS.)


(RS.) 1 2 3 4

14 Other non-current assetsLong term trade receivables

Secured considered goodUnsecured considered goodDoubtful

OthersTotal - -

15 Current InvestmentsInvestments in Equity instrumentsInvestments in Peference sharesInvestments in Government and Trust securitiesInvestments in Debentures or bondsInvestments in Mutual fundsInvestments in Partnership firmsOther current investments

Total - -

16 InventoriesRaw materialsWork in progressFinished goodsStock in tradeStores and sparesLoose ToolsOthers

Total - -

17 Trade receivablesSecured/ Unsecured/ DoubtfulLess: Allowance for Bad debts

Total - -

18 Cash and cash equivalentsBalances with banks 23,006.81 23,006.81 Cheques, drafts on handsCash on hand - Othes

Total 23,006.81 23,006.81

19 Short term loans and advancesLoans and advances to related parties(Secured/ Unsecured/ Doubtful)Others

Total - -

Note No


(RS.)


(RS.) 1 2 3 4

20 Revenue from Operations (for companies other than a finance company)Revenue from - Share of products

Sale of servicesOther operating revenuesLess: Excise Duty

Total - -

21 Revenue from Operations (for finance companies)InterestOther financial services

Total - -

22 Finance CostsInterest expensesOther borrowing costsApplicable net gain/ loss on foreign currency transactions/ traslation

Total - -

23 Othe IncomeInteres incomeDivident incomeNet gain/ loss on sale of investmentsOther non-operating income (net of expenses directly attributable to such income)

Total - -

Notes to and Forming Part of Statement of Profit and Loss for the year ended 31st March 2017

Note No


(RS.)


(RS.) 1 2 3 4

24 Employee Benefits ExpenseSalaries and wagesContribution to provident and other fundsExpense on Employees stock option scheme (ESOP) and Employee stock purchase plan (ESPP)Staff welfare expenses

Total - -

25 Other ExpensesConsumption of stores and spare partsPower and fuelRentRepairs to buildingsRepairs to machineryInsuranceRates and Taxes, excluding taxes on incomeTravelling ExpAudit Fees 15,000.00 15,000.00 ROC FeesMiscellaneous expenses

Total 15,000.00 15,000.00

1 SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation of Financial statement

(i) Basis of Accounting

(ii) Uses of Estimates

(b)

All assets and liabilities are classified into current and non-currentAssets

(a) it is expected to be realised in, or is intended for sale or consumption in, the company’s normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is expected to be realised within 12 months after the reporting date; or

Current assets include the current portion of non-current financial assetsAll other assets are classified as non-current.Liabilities

A liability is classified as current when it satisfies any of the following criteria:(a) it is expected to be settled in the company’s normal operating cycle;(b) it is held primarily for the purpose of being traded(c) it is due to be settled within 12 months after the reporting date; or

Current liabilities include current portion of non-current financial liabilitiesAll other liabilities are classified as non-current.

(c) Fixed Assets

Leasehold improvements are depreciated over the primary period of lease

The financial statements have been prepared and presented under the historical costconvention, on the accrual basis of accounting and in accordance with the provisions of theCompanies Act, 1956 and the accounting principles generally accepted in India and complywith the accounting standards prescribed in the Companies (Accounting Standards) Rules,2006' by Central Government in consultation with the National Advisory Committee onAccounting Standards, to the extent applicable.

The preparation of the financial statements in conformity with generally accepted accountingprinciples (GAAP) in India requires management to make estimates and assumptions thataffect the reported amount of assets, liabilities and the disclosure of contingent liabilities on thedate of the financial statements. Actual results could differ from those estimates. Any revisionto the accounting estimates is recognised prospectively in current and future periods.

Current and non-current classification

An asset is classified as current when it satisfies any of the following criteria:

(d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

(d) the company does not have an unconditional right to defer settlement of the liability for atleast 12 months after the reporting date. Terms of a liability that could, at the option of thecounterparty, result in its settlement by the issue of equity instruments do not affect itsclassification

Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment.The cost includes purchase price (excluding refundable taxes, wherever such taxes are takencredit of) and other attributable expenses related to the acquisition and installation of the asset.

Depreciation on fixed assets is being provided on written down value method (WDV) at the rates specified in Schedule XIV of the Companies Act, 1956 pro-rata to the period of use, which is opinion of the company’s management reflect the best estimate of the economic life of the asset.

(d) Investments

(e) Inventories

(f) Revenue Recognition

Interest income is recognised on time proportionate basis

(g) Foreign Currency

(h) Employee Benefit

(i) Short term employee benefits:

(ii) Post employment benefits:

a) Defined Contribution Plans:

b) Defined Benefit Plans:

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date oftransaction. Gains and losses resulting from the settlement of such transactions and fromtranslation of monetary assets and liabilities denominated in foreign currencies, which areoutstanding as at the year end at closing exchange rate, are recognised in the profit and lossaccount.

All employee benefits payable wholly within twelve months of rendering the service areclassified as short-term employee benefits. These benefits include compensated absencessuch as paid annual leave and sickness leave. The undiscounted amount of short-termemployee benefits expected to be paid in exchange for the services rendered by employees isrecognized during the year.

The Company’s provident fund scheme is a defined contribution plan.

The Company’s contribution paid/payable under the schemes is recognised as expense in theProfit and Loss account during the period in which the employee renders the related service.The Company makes specified monthly contributions towards employee provident fund.Thecontribution towards Provident Fund is deposited with the Regional Provident FundCommissioner .

The Company’s gratuity benefit scheme is a defined benefit plan. The Company’s netobligation in respect of the gratuity benefit scheme is calculated by estimating the amount offuture 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 planassets is deducted.

The present value of the obligation under such defined benefit plan is determined based onactuarial valuation by an independent actuary at each balance sheet date using the ProjectedUnit Credit Method, which recognises each period of service as giving rise to additional unit ofemployee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. Thediscount rates used for determining the present value of the obligation under defined benefitplans, are based on the market yields on Government securities as at the balance sheet date.

Actuarial gains and losses are recognized immediately in the Profit and Loss Account

The Company presents the above liabilities as current and non-current in the balance sheet asper actuarial valuations and certificate issued by the independent actuary.

Revenue from sale of goods is recognized when the risk and reward of the ownership of the

Current investments, if any, are carried at the lower of costs and quoted / fair value,computed categorywise. Long term investments are carried at costs. Provision fordiminution in the value of long term investments is made only if such decline is nottemporary in the opinion of the management.

Raw materials, Packing materials and Stores and spares are valued at cost or net realisablevalue, whichever is lower by using First In First Out (FIFO) method of valuation.

Finished goods and Work in process are valued at cost which is arrived by a consistent

c) Other Long term employment benefits:

(i) Taxation

(j) Provisions, Contingent Liabilities and Contingent Assets

(K) Earnings per share

Income tax expense comprises of current tax (i.e. amount of tax for the year determined inaccordance with the income tax law) and deferred tax charge or credit (reflecting the taxeffects of timing differences between accounting income and taxable income for the year).

The deferred tax charge or credits and the corresponding deferred tax liabilities or assets arerecognised using the tax rates and tax laws that have been enacted or substantively enacted atthe balance sheet date. Deferred tax assets are recognised only to the extent that there is areasonable certainty that the assets can be realised in future; however, where there isunabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets arerecognised only if there is a virtual certainty of realisation of such assets. Deferred tax assetsare reviewed as at each balance sheet date and written down or written up to reflect theamount that is virtually/reasonably (as the case may be) certain to be realised.

In accordance with the guidance note issued by the Institute of Chartered Accountants of India(‘ICAI’) on accounting for credit available in respect of Minimum Alternate Tax (MAT) under theIncome-tax Act, 1961, the Company recognises MAT credit as an asset only when and to theextent there is convincing evidence that the Company will be liable to pay normal income taxduring the specified period

Provision involving substantial degree of estimation in measurement are recognised whenthere is a present obligation as a result of past events and it is probable that there will be anoutflow of resources. Contingent liabilities are not recognised but are disclosed in the notes.Contingent assets are neither recognised nor disclosed in the financial statements.

Basic earnings per share are calculated by dividing the net profit or loss for the periodattributable to equity share holders by the weighted average number of equity sharesoutstanding during the period.

The Company presents the above liabilities as current and non-current in the balance sheet asper actuarial valuations and certificate issued by the independent actuary.

Company’s liabilities towards Compensated Absences to employees are determined on thebasis of valuations, as at balance sheet date, carried out by an independent actuary usingProjected Unit Credit Method. Actuarial gains and losses comprise experience adjustmentsand the effects of changes in actuarial assumptions and are recognized immediately in theProfit and Loss Account.

Keva Fragrance Industries Pte. Ltd. Financials- FY 2016-17

ValAcc Assurance 89 Short Street, #02-07 Golden Wall Centre, Singapore 188216

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Independent auditor’s report For the financial year ended 31 March 2017 Independent auditor’s report to the member of Keva Fragrance Industries Pte. Ltd. Opinion We have audited the financial statements of Keva Fragrance Industries Pte. Ltd. (the “Company”), which comprise the statement of financial position of the Company as at 31 March 2017, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements are properly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (the Act) and Financial Reporting Standards in Singapore (FRSs) so as to give a true and fair view of the financial position of the Company as at 31 March 2017 and of the financial performance, changes in equity and cash flows of the Company for the year ended on that date.

Basis for opinion

We conducted our audit in accordance with Singapore Standards on Auditing (SSAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Accounting and Corporate Regulatory Authority (ACRA) Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (ACRA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other information

Management is responsible for the other information. The other information comprises the Directors’ Statement, set out on pages 1 to 2.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements 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 other information, we are required to report that fact. We have nothing to report in this regard.


- 4 -

Independent auditor’s report (continued) For the financial year ended 31 March 2017 Responsibilities of management and directors for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The directors’ responsibilities include overseeing the Company’s financial reporting process. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are 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 assurance, but is not a guarantee that an audit conducted in accordance with SSAs 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 SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify 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 audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, 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, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are 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 conditions may cause the Company to cease to continue as a going concern.


- 5 -

Independent auditor’s report (continued) For the financial year ended 31 March 2017

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on other legal and regulatory requirements In our opinion, the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act. ValAcc Assurance Public Accountants and Chartered Accountants Singapore

Keva Fragrance Industries Pte. Ltd.

(Registration no: 200602853E)

Statement of financial position as at 31 March 2017

Note 2017 2016

S$ S$

Assets

Non-current assets

Plant & equipment 4 4,588 5,819

Investment in subsidiary 5 1,599,429 1,599,429

1,604,017 1,605,248

Current assets

Trade receivables 6 - 21,775

Other receivables 7 24,672 22,046

Prepayments 900 900

Amount due from subsidiary 10 370,507 370,507

Tax recoverable 117 -

Cash and cash equivalents 8 12,321 90,017

408,517 505,245

Total assets 2,012,534 2,110,493

Equity and liabilities

Current liabilities

Other payables 9 321,133 30,301

Amount due to related party 10 299,139 437,913

Amount due to holding company 11 - 1,321,245

Provision for taxation - 2,796

620,272 1,792,255

Total liabilities 620,272 1,792,255

Net assets 1,392,262 318,238

Attributable to the equity holders of the

Company

Share capital 12 1,632,926 450,000

Accumulated loss (240,664) (131,762)

Total equity 1,392,262 318,238

Total equity and liabilities 2,012,534 2,110,493

The accounting policies and explanatory notes form an integral part of the financial statements.

- 6 -



Statement of comprehensive income for the financial year ended 31 March 2017

Note 2017 2016

S$ S$

Revenue 715,853 638,871

Other income 13 746 -

Employee benefits expense 15 (419,329) (310,993)

Other expenses (313,941) (321,485)

Depreciation (1,231) (4,333)

Finance cost 16 (91,000) (126,511)

Loss before tax 14 (108,902) (124,451)

Income tax expense - -

Loss after tax, representing total

comprehensive income for the period (108,902) (124,451)


- 7 -



Statement of changes in equity for the financial year ended 31 March 2017

Note 2017 2016

S$ S$

Share capital

Balance at beginning of the year 450,000 450,000

Issuance of new shares 1,182,926 -

Balance at end of the year 12 1,632,926 450,000

Accumulated loss

Balance at beginning of the year (131,762) (7,311)

Loss for the year, representing total

comprehensive income for the period (108,902) (124,451)

Balance at end of the year (240,664) (131,762)

Total equity 1,392,262 318,238


- 8 -



Statement of cash flow for the financial year ended 31 March 2017

2017 2016

S$ S$

Cash flows from operating activities

Loss before taxation (108,902) (124,451)

Adjustments for non-cash item:

Interest expense 91,000 126,511

Depreciation of plant & equipments 1,231 4,333

Operating loss before working capital changes (16,671) 6,393

Decrease/(Increase) in trade receivables 21,775 (21,775)

(Increase)/Decrease in other receivables and prepayments (2,626) 4,266

Increase in other payables 290,832 21,356

Cash flow generated from operating activities 293,310 10,240

Tax paid (2,913) -

Net cash flow generated from operating activities 290,397 10,240

Cash flows from investing activities

Acquisition of new shares in subsidiary - (1,217,133)

Decrease in amount due from subsidiary - 1,017,133

Purchase of plant & equipment - (3,257)

Net cash used in financing activities - (203,257)

Cash flows from financing activities

Interest paid (91,000) -

Decrease in amount due to holding company (138,319) 271,670

Decrease in amount due to related party (138,774) -

Net cash generated from financing activities (368,093) 271,670

Net (decrease)/increase in cash and cash equivalents (77,696) 78,653

Cash and cash equivalents at beginning of period 90,017 11,364

Cash and cash equivalents at end of year (Note 8) 12,321 90,017


- 9 -

Keva Fragrance Industries Pte. Ltd. (Registration no: 200602853E) Notes to the Financial Statements – 31 March 2017

- 10 -

These notes form an integral part and should be read in conjunction with the accompanying financial statements.

1. Corporate information

The Company is a private limited company incorporated in Singapore. The immediate and ultimate holding company is S H Kelkar and Company Limited (formerly known as S.H. Kelkar & Co. Pvt. Ltd.). The address of the Company's registered office and principal place of business is 540 Sims Avenue, #03-05 Sims Avenue Centre, Singapore 387603.

The principal activities of the Company are those of wholesale of chemicals & chemical products, fragrance, perfumes, aromatics, essential oils, toiletries, etc and general importer and exporters. There have been no significant changes in the nature of these activities during the financial year. The principal activity of the subsidiary is disclosed in Note 5 to the financial statements. The financial statements were authorised for issue in accordance with the director’s resolution as dated on this report.

2. Summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”) as required by the Singapore Companies Act, Cap. 50. The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.

The financial statements are presented in Singapore Dollars (SGD or S$), which is the Company’s functional currency. All financial information is presented in Singapore Dollars unless otherwise stated.

The Company did not present consolidated financial statements as it is a wholly-owned subsidiary and all its owners have been informed about, and do not object to, the Company not presenting consolidated financial statements and its holding company produces consolidated financial statements that are available for public use.

2.2 Adoption of new and revised standards

The accounting policies adopted are consistent with those of the previous financial year except in the current financial year, the Company has adopted all the new and revised standards which are relevant to the Company and are effective for annual financial periods beginning on or after 1 April 2016. The adoption of these standards did not have any material effect on the financial statements.

2.3 Standards issued but not yet effective A number of new standards, amendments to standards and interpretations are issued but effective for annual periods beginning after 1 April 2017, and have not been applied in preparing these financial statements. The Company does not plan to early adopt these standards.


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2. Summary of significant accounting policies (cont’d)

2.3 Standards issued but not yet effective (cont’d) Description Effective for annual

periods beginning on or after

Amendments to FRS 7: Disclosure Initiative 1 Jan 2017 Amendments to FRS 12: Recognition of Deferred Tax Assets

for Unrealised Losses 1 Jan 2017

FRS 109: Financial Instruments 1 Jan 2018 FRS 115: Revenue from Contracts with Customers 1 Jan 2018 Amendments to FRS 115: Clarifications to FRS 115 Revenue

from Contracts with Customers 1 Jan 2018

FRS 116: Leases 1 Jan 2019 The directors expect that the adoption of the standards above will have no material impact on the financial statements in the period of initial application

2.4 Functional currency Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements of the Company are presented in Singapore dollars, which is also the presentation currency of the Company.

2.5 Foreign currency

Transactions in foreign currencies are measured in the functional currency of the Company and are recorded on initial recognition in the functional currency at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the end of the reporting period are recognised in the profit or loss.


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2. Summary of significant accounting policies (cont’d) 2.6 Plant and equipment

All items of plant and equipment are initially recorded at cost. Subsequent to recognition, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. The cost of plant and equipment includes its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Dismantlement, removal or restoration costs are included as part of the cost of plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the plant and equipment. Depreciation is calculated using the straight-line method to allocate depreciable amounts over their estimated useful lives. The estimated useful lives are as follows: - Computers: 3 years - Office equipment: 3 years - Furniture and fittings: 3 years The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The useful lives, residual values and depreciation method are reviewed at the end of each reporting period, and adjusted prospectively, if appropriate. An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or loss in the year the asset is derecognised.

2.7 Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when an annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses are recognised in profit or loss. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss.


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2. Summary of significant accounting policies (cont’d) 2.8 Financial assets

Initial recognition and measurement Financial assets are recognised in the statement of financial position when, and only when, the Company becomes a party to the contractual provisions of the financial instrument. The Company determines the classification of its financial assets at initial recognition. When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. Subsequent measurement Loans and receivables Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables comprise of trade receivables, other receivables, amount due from subsidiary and cash and cash equivalents.

Cash and cash equivalents comprise of cash at banks.

De-recognition A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On de-recognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that has been recognised in other comprehensive income is recognised in profit or loss.

2.9 Impairment of financial assets

The Company assesses at each end of the reporting period whether there is any objective evidence that a financial asset is impaired.

Financial assets carried at amortised cost For financial assets carried at amortised cost, the Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognised are not included in a collective assessment of impairment.


- 14 -

2. Summary of significant accounting policies (cont’d) 2.9 Impairment of financial assets (cont’d)

If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The impairment loss is recognised in profit or loss.

When the asset becomes uncollectible, the carrying amount of impaired financial asset is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written off against the carrying amount of the financial asset. To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Company considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

2.10 Cash and cash equivalents

Cash and cash equivalents comprise cash at banks, which are subject to an insignificant risk of changes in value.

2.11 Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of the obligation can be estimated reliably. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reverse.

2.12 Financial liabilities

Initial recognition and measurement Financial liabilities are recognised when, and only when, the Company becomes a party to the contractual provisions of the financial instrument. The Company determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs.


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2. Summary of significant accounting policies (cont’d)

2.12 Financial liabilities (cont’d)

Subsequent measurement After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process. De-recognition A financial liability is de-recognised when the obligation under the liability is discharged, cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.13 Employee benefits

a) Defined contribution plans

The Company makes contributions to the Central Provident Fund scheme in Singapore, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

b) Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed 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 constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

2.14 Leases

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

2.15 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the fair value of consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty.

Revenue is recognised when the services are rendered.


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2. Summary of significant accounting policies (cont’d) 2.16 Income taxes

(a) Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the end of the reporting period.

Current income taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions take in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriates.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all temporary differences, except where the deferred tax liability arises from the initial recognition of an asset or liability, where at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability, where at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of each reporting period. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities.


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2. Summary of significant accounting policies (cont’d) 2.17 Share capital and share issuance expenses

Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributable to the issuance of ordinary shares are deducted against share capital.

2.18 Contingencies

A contingent liability is: (a) a possible obligation that arises from past events and whose existence will be

confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or

(b) a present obligation that arises from past events but is not recognised because:

(i) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(ii) The amount of the obligation cannot be measured with sufficient reliability. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent liabilities and assets are not recognised on the statement of financial position of the Company.


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3. Significant accounting estimates and judgements

The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of each reporting period. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the statement of financial position, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. (i) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in an arm’s length transaction of similar assets or observable market prices less incremental costs for disposing the asset. The value in use calculation is based on a discounted cash flow model. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows and the growth rate used for extrapolation purposes.

(ii) Impairment of loans and receivables The Company assess at the end of each reporting period whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Company considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Company’s loan and receivables at the end of the reporting period is disclosed in Note 20 to the financial statements.


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4. Plant and equipment

Computers Office

equipment Furniture &

fixtures Total

S$ S$ S$ S$ Cost

As at 1 April 2015 13,902 5,843 200 19,945

Additions - 3,258 - 3,258

As at 31 March 2016 / 1 April 2016

13,902 9,101 200 23,203

Additions - - - -

As at 31 March 2017 13,902 9,101 200 23,203

Accumulated depreciation

As at 1 April 2015 10,347 2,681 23 13,051

Depreciation for the year 3,027 1,278 28 4,333

As at at 31 March 2016 / 1 April 2016

13,374 3,959 51 17,384

Depreciation for the year 262 948 21 1,231

As at at 31 March 2017 13,636 4,907 72 18,615

Carrying amount As at at 31 March 2017 266 4,194 128 4,588

As at at 31 March 2016 528 5,142 149 5,819

5. Investment in subsidiary

2017 2016 S$ S$ Shares, at cost 1,599,429 1,599,429

Name Principal activities Proportion of ownership

interest (%)

2017 2016 PT SHK Keva Indonesia (Indonesia)

Importer, distributor and wholesalers of basic chemical ingredients

99 99

6. Trade receivables

2017 2016 S$ S$

Trade Receivable – related party - 21,775

Trade receivables are non-interest bearing and are generally on 30 days terms.


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6. Trade receivables (cont’d) Receivables that are past due but not impaired

The Company has trade receivables amounting to NIL (2016: S$21,775) that are past due at the end of the reporting period but not impaired. These receivables are unsecured and the analysis of their aging at the end of the reporting period is as follows: 2017 2016 S$ S$ 30 to 60 days - 21,775 61 to 90 days - - More than 90 days - -

Total - 21,775

7. Other receivables 2017 2016 S$ S$ Sundry receivables 4,570 6,029 Deposits 20,102 16,017

Total 24,672 22,046

8. Cash and cash equivalents

Cash and cash equivalents are denominated in the following currencies: 2017 2016

S$ S$ Singapore dollars 5,243 88,351 United States dollars 6,135 272 Euro 943 1,394

12,321 90,017

9. Other payables

2017 2016 S$ S$ Sundry payables 2,261 2,236 Accruals 89,552 28,065 Interest payable to holding company 229,320 -

Total 321,133 30,301

Sundry payables have an average term of 1 month.

10. Amount due from / to related parties Amount due from subsidiary is non-trade, unsecured, non-interest bearing and repayable on demand. Amount due to related party is non-trade, unsecured, non-interest bearing and repayable on demand.


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11. Amount due to holding company

Amount due to holding company is non-trade, unsecured, bears interest at 11% per annum and repayable on demand.

Amount due to holding company is denominated in the following currencies:

2017 2016 S$ S$ Singapore dollars - 454,367 United States dollars - 866,878

- 1,321,245

12. Share capital

No. of ordinary shares

Amount

S$ Issued and fully paid: 2017 Beginning of financial year 450,000 450,000 Shares issued during the year 1,182,926 1,182,926

End of financial year 1,632,926 1,632,926

2016 Beginning of financial year 450,000 450,000 Shares issued during the year - -

End of financial year 450,000 450,000

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction. The ordinary shares have no par value.

13. Other income

2017 2016

S$ S$

Bank interest received 6 - Temporary employment credit 740 -

746 -

14. Loss before tax

This is determined after charging the following: 2017 2016

S$ S$ Rental expenses 67,549 43,404 Professional fee 145,432 105,000 Employment expenses (note 15) 419,329 310,993 Depreciation 1,231 4,333 Lodging and boarding 6,561 25,701


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14. Loss before tax (cont’d)

This is determined after charging the following: 2017 2016

S$ S$ Samples given out 61,991 42,005 Telephone 4,026 12,983 Lease of office equipment 1,541 - Foreign exchange loss 1,318 -

15. Employee benefits expense

2017 2016

S$ S$ Staff salaries & performance bonus 392,238 274,865 Central provident fund contribution, skill development levy & SINDA 27,091 36,128

419,329 310,993

16. Finance cost 2017 2016

S$ S$ Interest expense from amount due to holding

company 91,000 126,511

17. Income tax expenses

Reconciliation between the tax expense and the product of accounting profit multiplied by the applicable tax rate for the years ended 31 March 2017 and 2016 is as follows: 2017 2016 S$ S$ Loss before taxation (108,902) (124,451)

Tax expense on loss before tax at 17% (2016: 17%) (18,513) (21,157) Adjustments: Non-deductible expenses 226 - Tax exemption and tax rebate - - Deferred tax asset not recognised 18,287 21,157 Others - -

Income tax expense - -

The Company has tax losses carried forward amounting to S$318,000 (2016: S$218,000). Deferred tax assets have not been recognised due to uncertainty of its realisation. The tax losses of the Company are available for set-off against any future profits provided that the Company complies with provisions of the Singapore Income Tax Act, in that there is no substantial change in the composition of the shareholders and their shareholdings at the relevant dates when the tax losses are utilised. The tax losses of the Company are also subject to agreement with the relevant authority.


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18. Commitments

Operating lease commitments

At the end of the reporting period, the Company has commitments for future minimum lease payments in respect of office premises under non-cancellable operating lease as follows:

2017 2016

S$ S$ Due not later than 1 year 47,359 12,000 Due later than 1 year but less than 5 years 24,305 -

71,664 12,000

The lease for office premises are for a 2 and 3 -year period.

Minimum lease payments recognised as an expense in profit or loss for the financial year ended 31 March 2017 amounted to S$46,741.

19. Related party transactions

a) Sales and purchases of goods and services

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Company and related parties took place at terms agreed between the parties during the financial year:

2017 2016

S$ S$ With holding company Interest expense (91,000) (126,511) With related company Revenue 715,853 638,871

b) Compensation of key management personnel

2017 2016

S$ S$ Consultancy fee paid to a director 6,000 12,000


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20. Fair value of financial instruments

The fair value of a financial instrument is the amount at which the instrument could be exchanged or settled between knowledgeable and willing parties in an arm’s length transaction. The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value. Cash and cash equivalents, other receivables, other payables, amount due from subsidiaries, amount due to related party, and amount due to holding company The carrying amounts of these balances approximate their fair values due to the short-term nature of these balances.

Trade receivables The carrying amounts of these receivables approximate their fair values as they are subject to normal trade credit terms.

21. Financial risk management objectives and policies

The Company’s activities expose it to a variety of financial risks from its operation. The key financial risks include credit risk, liquidity risk and foreign currency risk. The directors review and agree policies and procedures for the management of these risks. It is, and has been throughout the current and previous financial year, the Company’s policy that no trading in derivatives for speculative purposes shall be undertaken. The following sections provide details regarding the Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks. There has been no change to the Company’s exposure to these financial risks or the manner in which it manages and measures the risks.


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21. Financial risk management objectives and policies (cont’d)

(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Company’s exposure to credit risk arises primarily from amount due from subsidiary and other receivables. For other financial assets, the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Company’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. Receivable balances are monitored on an ongoing basis. Exposure to credit risk

At the end of the reporting period, the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position.

The Company does not have significant concentration risk.

Financial assets that are neither past due nor impaired

Other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Company. Cash and cash equivalents that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

There are no financial assets that are either past due or impaired.

(b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Company’s objective is to maintain a balance between continuity of funding and flexibility through available funding from shareholder. The Company’s financial liabilities are due within one year.

(c) Foreign currency risk

The Company’s operational activities are carried out in Singapore dollars which is its functional currency. All transactions are paid mainly in local currency. Exposure to any risk arising from movements in foreign currencies exchange rates is minimal.


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22. Classification of financial instruments

Loans and receivables

S$

Liabilities at amortised cost

S$

2017

Financial Assets

Trade receivables -

Other receivables 24,672 -

Amount due from subsidiary 370,507

Cash and cash equivalents 12,321 -

Total 407,500 -

Financial Liabilities

Other payables - 321,133

Amount due to related party - 299,139

Total - 620,272

2016

Financial Assets

Trade receivables 21,775

Other receivables 22,046 -

Amount due from subsidiary 370,507

Cash and cash equivalents 90,017 -

Total 504,345 -

Financial Liabilities

Other payables - 30,301

Amount due to related party - 437,913

Amount due to holding company - 1,321,245

Total - 1,789,459

23. Capital management

The primary objective of the Company’s capital management is to safeguard the Company’s ability to continue as a going concern and to provide adequate cash flow to meets its operating requirements.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, issue new shares or obtain borrowings externally and /or from related parties. No changes were made to the objectives, policies or processes during the years ended 31 March 2017 and 2016 respectively. The Company is not subject to any externally imposed capital requirement and the capital of the Company comprises all components of shareholders’ equity. The Company’s management monitors capital based on a gearing ratio. The gearing ratio is calculated as debt divided by total capital. Net debt is the summation of other payables, amount due to related party, amount due to holding company less cash and cash equivalent. Total capital is calculated as total equity plus debt.


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23. Capital management (cont’d) 2017 2016 S$ S$ Debt 620,272 1,789,459 Less: cash and cash equivalents (Note 8) (12,321) (90,017)

Net debt 607,951 1,699,442

Equity attributable to owners 1,392,262 318,238

Capital and net debt 2,000,213 2,017,680

Gearing ratio 30% 84%

KEVA UK Limited Financials – FY 2016-17

KEVA UK LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KEVA UK LIMITED

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We have audited the financial statements of Keva UK Limited for the year ended 31 March 2017 set out on pages 4 to 11. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor As explained more fully in the Directors' Responsibilities Statement set out on page 1, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements In our opinion the financial statements: • give a true and fair view of the state of the company's affairs as at 31 March 2017 and of its profit for the

year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;

and • have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of our audit, the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements , and the Directors' Report has been prepared in accordance with applicable legal requirements.

KEVA UK LIMITED

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF KEVA UK LIMITED

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Matters on which we are required to report by exception In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie d material misstatements in the Directors' Report .

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or • certain disclosures of directors' remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit; or • the directors were not entitled to prepare the financial statements in accordance with the small companies

regime and take advantage of the small companies' exemption in preparing the Directors' Report and take advantage of the small companies exemption from the requirement to prepare a Strategic Report.

Rajendrakumar Patel (Senior Statutory Auditor) for and on behalf of Ashley King Ltd 5 May 2017

Chartered Accountants Statutory Auditor 68 St. Margarets Road

Edgware Middlesex HA8 9UU

KEVA UK LIMITED

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2017

- 4 -

2017 2016 Notes £ £

Turnover 66,533 111,757 Administrative expenses (7,847) (39,673)

Profit before taxation 58,686 72,084

Taxation 3 (1,740) -

Profit for the financial year 56,946 72,084

KEVA UK LIMITED

BALANCE SHEET AS AT 31 MARCH 2017

- 5 -

2017 2016 Notes £ £ £ £

Fixed assets Tangible assets 4 90 186 Investments 5 2,779,672 2,779,672

2,779,762 2,779,858 Current assets Debtors 6 136,871 111,366 Cash at bank and in hand 107,845 67,006

244,716 178,372 Creditors: amounts falling due within one year

7 (16,872) (7,570)

Net current assets 227,844 170,802

Total assets less current liabilities 3,007,606 2,950,660

Capital and reserves Called up share capital 8 985,600 985,600 Profit and loss reserves 2,022,006 1,965,060

Total equity 3,007,606 2,950,660

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies' regime.

The financial statements were approved by the board of directors and authorised for issue on 5 May 2017 and are signed on its behalf by:

K Vaze D Bindra Director Director

Company Registration No. 06208218

KEVA UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2017

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1 Accounting policies

Company information Keva UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 44 Wendover Court, Finchley Road, London, NW2 2PH.

1.1 Accounting convention These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling , which is the functional currency of the company. Monetary a mounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group .

Keva UK Limited is a wholly owned subsidiary of S H Kelkar and Company Limited and the results of Keva UK Limited are included in the consolidated financial statements of S H Kelkar and Company Limited which are available from LBS Marg, Mulund, West Mumbai, India (400080).

1.2 Turnover Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business , and is shown net of VAT and other sales related taxes . The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

1.3 Tangible fixed assets Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures, fittings & equipment 25% reducing balance method

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss .

KEVA UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2017

1 Accounting policies (Continued)

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1.4 Fixed asset investments Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company . Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.5 Impairment of fixed assets At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

1.6 Cash and cash equivalents Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.7 Financial instruments The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset , with the net amounts presented in the financial statements , when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

KEVA UK LIMITED



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Classification of financial liabilities Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future paymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. A m ounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

1.8 Equity instruments Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.9 Taxation The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

KEVA UK LIMITED



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1.10 Foreign exchange Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the profit and loss account for the period.

1.11 Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible (with a maturity of one month or less) to a known amount of cash and are subject to an insignificant risk of changes in value.

1.12 Investments in subsidiary undertakings Investments by the Company in subsidiary undertakings are included at cost less any provision for impairment where circumstances indicate that the carrying value may not be recoverable. In the opinion of the Directors, the aggregate value of the subsidiary undertakings is not less than the aggregate amount at which the assets are included in the Company's balance sheet.

2 Operating profit 2017 2016

Operating profit for the year is stated after charging/(crediting): £ £

Fees payable to the company's auditor for the audit of the company's financial statements 8,040 8,520

3 Taxation 2017 2016

£ £ Current tax UK corporation tax on profits for the current period 1,740 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2017 2016 £ £

Profit before taxation 58,686 72,084

Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2016: 20.00%) 11,737 14,417 Tax effect of expenses that are not deductible in determining taxable profit 20 12 Unutilised tax losses carried forward (10,017) (14,429)

Taxation charge for the year 1,740 -

KEVA UK LIMITED


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4 Tangible fixed assets Plant and machinery etc

£ Cost At 1 April 2016 and 31 March 2017 1,451

Depreciation and impairment At 1 April 2016 1,265 Depreciation charged in the year 96

At 31 March 2017 1,361

Carrying amount At 31 March 2017 90

At 31 March 2016 186

5 Fixed asset investments 2017 2016

£ £

Investments 2,779,672 2,779,672

The investment comprises of investment in a wholly owned subsidiary PFW Aroma Ingredients B.V which is incorporated in the Netherlands, and whose main activity is the manufacture chemicals.

PFW Aroma Ingredients B.V has a loss for the year of £123,182, and had Capital and reserves of £6,103,507 at the period end.

Movements in fixed asset investments Shares in

group undertakings

£ Cost or valuation At 1 April 2016 & 31 March 2017 2,779,672

Carrying amount At 31 March 2017 2,779,672

At 31 March 2016 2,779,672

KEVA UK LIMITED


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6 Debtors 2017 2016

Amounts falling due within one year: £ £

Trade debtors 136,871 111,366

7 Creditors: amounts falling due within one year 2017 2016

£ £

Corporation tax 1,740 - Other creditors 15,132 7,570

16,872 7,570

8 Called up share capital 2017 2016

£ £ Ordinary share capital Issued and fully paid 985,600 Ordinary Shares of £1 each 985,600 985,600

9 Related party transactions

During the period company provide managerial and other support services to its subsidiary PFW Aroma Ingredients B.V, Netherlands. The amount charged during the period was £ 66,532 (201 6 : £ 111,757 )

At the balance sheet date there was a balance due from PFW Aroma Ingredients B.V, to the company of £ 136,869 equivalent to Euros 16 0,000 (2016 : £ 111,366 ).

The company was charged £ 25,000 (201 6 : £ 25 ,000) for general administrative and advisory services by a company, in which one of the director also holds the position of director. At the balance sheet date there remained an outstanding balance £6,250 (2016 - £nil) in respect of this charge.

At the balance sheet date there was a balance outstanding of £1,862 (2016 - £670) due to a director for expenses incurred but not reimbursed.

10 Parent company

The company is under the control of S H Kelkar and Company Limited of LBS Marg, Mulund,West Mumbai,lndia(400080)

for the year ended 31 March 2017

Financial statements 2016 / 2017PFW Aroma Ingrediënts B.V.

Balance Sheet at March 31, 2017(after appropriation)(amounts in EUR * 1,000)

ASSETS 31 March 2017 31 March 2016FIXED ASSETSIntangible fixed assets note 1) 236 270Tangible fixed assets note 1) 7.217 6.668

7.453 6.938CURRENT ASSETSInventories note 2) 7.328 5.076ReceivablesTrade Receivables 2.315 4.506Affiliated Companies 2.878 1.445Other Receivables 140 59Accruals 392 236Corporation Tax note 10) 112 68Taxes and social insurance 190 206

6.027 6.520Cash note 3) 5 5Total 20.813 18.539

- 4 -

Balance Sheet at March 31, 2017 (continued)(after appropriation)(amounts in EUR * 1,000)

LIABILITIES 31 March 2017 31 March 2016EQUITYPaid in share capital note 4) 18 18Other reserves note 5) 7.117 7.261

7.135 7.279PROVISIONSDeferred taxes note 6) 518 502

518 502 LONG-TERM LIABILITIESBank loan / lease note 7)8) 358 2.710

358 2.710CURRENT LIABILITIESCurrent portion Bank loan / lease note 9) 94 274Current accounts payable banks note 9) 6.558 3.094Trade creditors 1.599 2.987Affiliated companies 919 362Taxes and social insurance 215 148Pension contributions 489 211Corporation tax note 10) 0 0Other liabilities 323 178Accrued liabilities 2.605 794

12.802 8.048Total 20.813 18.539check: 0 0

- 5 -

Profit and loss account(amounts in EUR * 1,000)

April 2016 - April 2015 -March 2017 March 2016

Net turnover note 12) 19.517 24.551Cost of sales -19.231 -21.736Gross margin 286 2.815Miscellanous Income 2.150

Selling expenses -837 -841General and administrative expenses -1.461 -1.733Total expenses -2.298 -2.574Operating profit 138 241Interest income 0 0Interest expense -240 -178Other financial income and expenses -31 -92Net financial income and expenses -271 -270Result from ordinary activities -133 -29before taxationTaxation on profit on ordinary activities note 16) -11 0

Result from ordinary activities after taxation -144 -29Extraordinary result 0 0Taxation on extraordinary result 0 0Extraordinary result after taxation 0 0Profit after tax -144 -29

- 6 -

CASH FLOW STATEMENT(amounts in EUR * 1,000)

April 2016 - April 2015 -March 2017 March 2016

Cash flow from operating activities Operating profit 138 241 Depreciation of tangible fixed assets 833 770 Change in provisions 16 0 Change in pension system reforms 0 0 (Increase) / decrease in receivables 493 -316 (Increase) / decrease in inventories -2.252 -656 (Increase) / decrease in operating liabilities 1.290 616 Changes in working capital -469 -356 Cash flow from business activities 517 655

Interest received 0 0 Other financial income and (expenses) -31 -92 Income tax paid -11 0

-42 -92Cash flows from operating activities: 475 563Cash flow from investing activities Net investment in (in) tangible fixed assets -1.348 -691 Goodwill 0 0

Cash flow from investing activities: -1.348 -691Cash flow from financing activities Share issue 0 0 Recording loans and bank loans

Repayments of long-term loans -3.552 -1.475 Recording loan or lease 1.200 1.200 Movement from current accounts payable banks 3.464 115 Interest paid -240 -178 Dividends paid 0 0Cash flows from financing activities: 872 -338Net cash -0 -466The effects of exchange rate differences on cash 0 0Increase / (decrease) in cash and cash equivalents -0 -466

- 7 -

Notes to the Financial Statements 2016-17GENERALActivitiesPFW Aroma Ingredients BV ("the Company") headquartered in Barneveld Veemweg 29-31, Netherlands, onDecember 6, 1996 and set up a 100% subsidiary of KEVA UK Limited.The company's activities were acquired on the date of formation of a third, which the activities from1914 unfolded. The main activities are the development, production and sale of chemical fragrances.The financial statements have been prepared in accordance with the requirements of Chapter 9, Book 2 of the Dutch Civil Code.All amounts are in EUR * 1,000.GENERAL PRINCIPLES FOR THE FINANCIAL STATEMENTS OF PREPARATIONThe financial statements have been prepared according to the stipulations of Chapter 9, Book 2.The valuation of assets and liabilities and determination of financial results are based on historical costs.Unless otherwise stated in the notes on specific balance sheet items, the assets andliabilities are valued according to the cost model.Income and expenses are accounted for on accrual basis. Profit is only included when realized on thebalance sheet date. Losses originating before the end of the financial year are taken into account if they have become known before the preparation of financial statements.Foreign currencyTransactions in foreign currencies are translated at the rates prevailing at the transaction date.Assets and liabilities at the year end are translated at the exchange rate prevailing at the balance sheet date, unless they are hedgedby means of a forward contract. In that case, the value is converted at the rate determined in the contract.PRINCIPLES FOR THE VALUATION OF ASSETS AND LIABILITIESIntangible fixed assets

Intangible fixed assets are presented at cost less accumulated amortisation and, if applicable, less impairments in value. Amortisation is charged as a fixed percentage of cost, as specified below.

The useful life and the amortisation method are reassessed at the end of each financial year.The economic life is estimated to be:intangible fixed assets 10 yearsTangible assetsTangible fixed assets are stated at cost, less accumulated depreciation andif applicable, impairment losses. Depreciation is based on the estimatedeconomic life and are calculated based on a fixed percentage of the acquisition price, takinginto account any residual value. Assets are depreciated from the time of commissioning.Land is not depreciated.The economic life is estimated to be:buildings 10-50 yearsPlant and equipment 10-50 yearslaboratory equipment 10 yearsinventory 10 yearscomputer hardware 5-10 yearscomputer software 10 yearsPassenger and commercial vehicles 10 yearsCommercial vehicles 5 yearsInventoriesStocks of raw materials and finished goods are stated at the lower of cost or netrealizable value. This lower net realizable value is determined by individual assessment of stocks.Finished goods are valued at production cost or net realizable value. This lowernet realizable value is determined by individual assessment of stocks. Production cost includes thedirect material consumption, direct labor and machinery costs, other costs directly to productioncan be attributed, and a surcharge for indirect manufacturing costs.Net realizable value is based on an expected selling price, less costs to be incurred forcompletion and sales.The work in progress is valued at production cost on the balance sheet date already foreseeablelosses. Production cost includes direct material consumption, direct labor and machinery costs, othercosts that can be attributed directly to the manufacture and storage for indirect manufacturing costs.

- 8 -

Receivables and prepaymentsReceivables are recognized at face value, less provisions deemed necessarythe risk of bad debts. These provisions are determined based on individual assessment of thereceivables.Provisions for deferred tax liabilitiesTo pay for future tax amounts arising on differences between commercial and fiscalbalance sheet valuations is a provision equal to the sum of these differences multiplied by

the applicable rate. These provisions are reduced by amounts of taxation recoverable in the future in respect of the carry-forward of unused tax losses, to the extent that it is probable that

future tax profits will be available for settlement.Pension schemePFW Aroma Chemicals B.V. has a pension. The plans are funded by Dutchcontributions to a pension provider, namely an insurance company. The pension scheme fromare valued using the "commitment to the pension administrator approach. In this approach the toto pay the pension premium minus the contribution of the employee as an expense in the profit and loss accountResponsibility. On the basis of the administration is judged offensive and if so what commitments in addition to thepayment of the annual premium payable to the pension administrator at balance sheet date. This additionalobligations lead to charges for the company and are recognized in the balance sheet in short-term debt.PRINCIPLES FOR THE DETERMINATION OF THE RESULTNet turnoverNet sales represent the value of the goods and services supplied, net of discounts andVAT. Revenues ensuing from the sale of goods are accounted for when all major entitlements to economic benefits as well as all major risks have transferred to the buyer. The cost of thesegoods is allocated to the same period.Cost of salesThe cost of sales relates to the direct and indirect costs related to the production or purchase ofof items sold.Gross marginGains on sales are recognized in the year in which they are earned. Losses are recognized as soon as they are recognized.TaxationCorporate income tax is calculated at the applicable rate on the result of the financial year, takingtaking into account permanent differences between the profit calculated according to financial statementsand profit calculated for taxation purposes, and with which deferred taks assets are only valued insofar as theirrealisation is likely.PRINCIPLES FOR THE PREPARATION OF THE CASH FLOW STATEMENTThe cash flow statement is prepared using the indirect method.The funds in the cash flow statement comprise cash and short-term debt at thecredit institutions and shareholders. Cash flows in foreign currencies are translated at an estimatedaverage rate. Exchange rate differences on cash items are shown separately in the cash flow statement.Income taxes, issuance of share capital, interest received and dividends received are presented in theCash flow from operating activities. Interest paid and dividends paid are included in cash flowfrom financing activities. Transactions involving no exchange of funds are not presentedin the cash flow statement. The payment of the lease payments under the finance lease contractfor the part relating to the repayment regarded as an expense from financing andthe part relating to the interest as an expense from operating activities.

- 9 -

Notes on the balance sheet1) Intangible fixed assets

The changes in intangible assets are as follows:immaterial

fixed assetsPurchase pricebeginning of year 337investments 0transfers 0Divestments 0revaluations 0end of financial year 337depreciationbeginning of year 67depreciation costs 34Divestments 0others 0end of financial year 101Book valuebeginning of year 270end of financial year 236

1) Tangible assetsMovements in tangible fixed assets are as follows:

Land and Plant and Other Assets underBuilding Machinery fixed Assets construction Total

Purchase pricebeginning of year 1.862 19.175 3.437 675 25.149investments 34 1.678 0 -364 1.348Divestments 0 0 0 0 0end of financial year 1.896 20.853 3.437 311 26.497depreciationbeginning of year 718 14.842 2.921 0 18.481depreciation costs 33 684 82 0 799Divestments 0 0 0 0 0end of financial year 751 15.526 3.003 0 19.280Book valuebeginning of year 1.144 4.333 516 675 6.668end of financial year 1.145 5.327 434 311 7.217The WOZ value per 01-01-2016 of land and buildings was € 3,236,000.

2) InventoriesThe composition of inventories is as follows:

31-mrt-17 31-mrt-16Raw materials and consumables 2.226 1.541Intermediate 839 1.204Finished products and goods 4.446 2.345supply -183 -14total stock 7.328 5.076

3) CashCash and cash equivalents are freely available to the company.The balance of US dollar account at ABN AMRO is also included in the cash.The balance of the ABN AMRO US dollar account is USD 1,638,788 negative and is measured at the exchange rate of 1.0976.

- 10 -

4) Issued share capitalThe authorized share capital consists of 90,000 shares with a nominal value of EUR 1.00.18,400 shares were placed with KEVA UK Ltd and are fully paid.

5) Other reserves31-mrt-17 31-mrt-16

beginning of year 7.261 7.290dividend 0 0change 0profit for the year -144 -29

end of financial year 7.117 7.261

6) Deferred taxesDeferred corporate income taxTo pay for future tax amounts arising on differences between commercial and fiscalbalance sheet valuations, a provision equal to the sum of these differencesmultiplied by the applicable tax rate.The movements in the provision for deferred corporate income taxes is as follows:

31-mrt-17 31-mrt-16Carrying amount at beginning of year 502 502

Allocations 5Release 11 0

Book value at end of year 518 5027) Long-term liabilities

31-mrt-17 31-mrt-16ABN AMRO Bank 0 1.061ABN AMRO Lease 358 449HDFC Bank 0 1.200Total long-term liabilities 358 2.710

Long-term liabilities include loans with maturities longer than one year. The portion that in thenext year will be repaid is included under current liabilities.

8) leaseThese finance leases amounting to EUR 748 899 was provided to finance the cryogenic plant. Repayment takes place overa period of 8 years. The pay monthly annuity amounts to EUR 9,528. The annual interest rate is 5.2%. Final instalmentis July 2021. The lessor retains ownership of the machine until all lease installments have been paid.

9) current liabilitiesCurrent liabilities at the balance sheet date are:

31-mrt-17 31-mrt-16Current portion of loan ABN AMRO Bank 0 190Current portion of lease contract ABN AMRO 94 84ABN AMRO Bank (USD account) 1.493 729ABN AMRO Bank (EURO account) 1.065 2.365Loan HSBC Bank 2.000Loan Citibank 2.000Total current liabilities 6.652 3.368The debt at ABN AMRO Bank is a credit facility of EUR 4,000,000 to finance the working capital.From April 1, 2015 the Bank lowers the limit of EUR 125,000 per quarter. The reduction continues to EUR 3,000,000.For both the longterm- as the current facility, the following securities were provided:- First mortgage on land and buildings on Nijverheidsweg 60, Barneveld of EUR 3.5 million, plus 40% interest and costs

- 11 -

- Pledge receivables, inventory and inventoryThe interest rate for this is the 1-month Euribor average (04.01.2015: -0.014%), with a minimum of 0.00%.The individual storage is 1.1% and this is increased by the supplement market (04.01.2015: 0.25%).Loan HSBC Bank is a working capital loan with an interest rate of 1,8% per annumLoan Citi Bank is a working capital loan with an interest rate of Euribor +1,0% per annum

10) corporation taxThe company is independently liable. The nominal tax rate is 25%. For the first EUR 200,000the tax rate is 20%. The tax expense is accrued based on the commercial result, adjustedfor permanent and temporary differences.

11) Other commitments not included in the balance sheetrental commitmentsThe medium-long term leasing commitments (less than 5 years) totaled Euro 988K, the last of which ends inin the year 2022. The recurring installments of these liabilities amount to approximately Euro 262K.guaranteesThe guarantees granted to third parties amounted to EUR 82 K.

- 12 -

commitments entered intoThe commitments for delivery of goods totaled EUR 1,775 K

12) net salesNet sales by geographic area was as follows:

2016-17 2015-16Netherlands 1.706 3.343European Union 5.901 5.579Rest of Europe 1.481 2.581Rest of the world 10.429 13.048total 19.517 24.551

Sales to companies in the Kelkar Group amounted up to Euro 2,333K in fiscal year 2016-17. In fiscal year 2015-16 the turnoverto companies in the Kelkar Group was Euro 2,186K.Miscellaneous income of €2.1M relates to the valuation of formulations (intellectual property) sale to its parent company.

13) Salaries, social security and pension costs2016-17 2015-16

salaries 4.279 4.545social security costs 471 510pension costs 396 445total 5.146 5.500

14) Number of employees at end of year2016-17 2015-16

Directly 38 44Indirectly 13 16Sale 5 5Research and development 4 7Total 60 72

15) Executive CompensationIn accordance with article 383 Book 2 of the Civil Code, the remuneration of the Director isnot reported.

16) Taxes result from ordinary operationsTaxes on income are calculated by applying the standard rate for theresult of the year, taking into account permanent differences between theprofit for financial reporting and tax profit.The taxable amount is calculated as follows:

2016-17 2015-16Result before taxes -133 -29Commercial depreciation, higher than fiscal 0 0depreciation and other tax breaks 0 0Taxable amount -133 -29The tax payable is calculated as follows:

2016-17 2015-16Tax 0 0Avoidance of double taxation 0 0Adjustment for prior years 0 0Provision for deferred tax -11 0Tax according to the profit and loss account -11 0

Signing of Financial StatementsBarneveld, May 3, 2017

P.H. SpieringsManaging Director

- 13 -

Other dataAuditor's reportRefer to the next page.Statutory rule relating to appropriation of profitAccording to Article 14 of the Articles of Association, the profit is at the disposal of the general meeting of shareholders,to the extent that the gain should not be used as prescribed for the formation or maintenance of the lawreserves, which decides on reservation or distribution of the profits.Profit distributions may only be made up to the maximum amount which the portion of the equitythe paid-up capital plus those beyond legally required reserves.Allocation of results for the year 2015-16In anticipation of the decision to be taken by the General Meeting of Shareholders, the resultafter tax for the year 2015-2016 at the amount of -29 is deducted from other reserves.Proposed appropriation of profit for the year ended on March 31, 2017In anticipation of the decision to be taken by the General Meeting of Shareholders, the resultafter tax for the year 2016-2017 at the amount of -144 is deducted from other reserves.

- 14 -

Amsterdamseweg 3, Postbus 693 3800 AR Amersfoort

Tel.: +31 (0) 33 422 58 88 www.auren.nl

AUDIT & ASSURANCE

Auren Audit & Assurance Amersfoort B.V. – [email protected] – K.v.K. nr. 62285505

INDEPENDENT AUDITOR’S REPORT

To: The board of PFW Aroma Ingredients B.V.

A. Report on the audit of the financial statements 2016-2017 included in the annual

report

Our opinion

We have audited the financial statements for the year ended 31 march 2017 of PFW Aroma

Ingredients B.V. located in Barneveld.

In our opinion the accompanying financial statements give a true and fair view of the financial

position of PFW Aroma Ingredients B.V. as at 31 March 2017, and of its result for 2016-2017 in

accordance with Part 9 of Book 2 of the Dutch Civil Code.

The financial statements comprise:

1 the balance sheet as at 31 March 2017 (equity € 7.135.000););

2 the profit and loss account for 2016-2017 (result € 144.000 negative);; and

3 the notes comprising a summary of the accounting policies and other explanatory

information.

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on

Auditing. Our responsibilities under those standards are further described in the ‘Our

responsibilities for the audit of the financial statements’ section of our report.

We are independent of PFW Aroma Ingredients B.V. in accordance with the Verordening inzake

de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for

Professional Accountants, a regulation with respect to independence) and other relevant

independence regulations in the Netherlands. Furthermore we have complied with the

Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics).

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.

B. Report on the other information included in the annual report

In addition to the financial statements and our auditor’s report thereon, the annual report

contains other information that consists of:

• The management board’s report;

• Other information as required by Part 9 of Book 2 of the Dutch Civil Code.

Based on the following procedures performed, we conclude that the other information:

• is consistent with the financial statements and does not contain material misstatements;

• contains the information as required by Part 9 of Book 2 of the Dutch Civil Code.

We have read the other information. Based on our knowledge and understanding obtained

through our audit of the financial statements or otherwise, we have considered whether the

other information contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the

Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is

substantially less than the scope of those performed in our audit of the financial statements.

AUDIT & ASSURANCE

Management is responsible for the preparation of the management board’s report in accordance

with Part 9 of Book 2 of the Dutch Civil Code and other information as required by Part 9 of Book

2 of the Dutch Civil Code.

C. Description of responsibilities regarding the financial statements

Responsibilities of management for the financial statements

The board is responsible for the preparation and fair presentation of the financial statements in

accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is

responsible for such internal control as management determines is necessary to enable the

preparation of the financial statements that are free from material misstatement, whether due to

fraud or error.

As part of the preparation of the financial statements, management is responsible for assessing

the company’s ability to continue as a going concern. Based on the financial reporting framework

mentioned, management should prepare the financial statements using the going concern basis

of accounting unless management either intends to liquidate the company or to cease

operations, or has no realistic alternative but to do so.

The board should disclose events and circumstances that may cast significant doubt on the

company’s ability to continue as a going concern in the financial statements.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit assignment in a manner that allows us to obtain

sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we

may not detect all material errors and fraud during our audit.

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. The materiality affects the nature, timing and extent

of our audit procedures and the evaluation of the effect of identified misstatements on our

opinion.

For a further explanation of our responsibilities and the related audit, we refer to the website of

the Royal Netherlands Accountancy Organization (NBA): https://www.nba.nl/globalassets/tools-en-voorbeelden/voorbeeldteksten-en-passages/Engels_nietoob_2016.pdf

Amersfoort, 3 May 2017

Auren Audit & Assurance Amersfoort B.V.

Was signed

Drs. G.M.P. Recter RA

PT SHKKEVA Indonesia Financials – FY 2016-17

Registered Public Accountants

KANTOR AKUNTAN PUBLIK

LEONARD, MULIA & RICHARD

License No. Kep-657iKM.17l1998 Jl. Hayam Wuruk No. 3W-3V, Jakarta 10120, lndonesia0: 62-21-3458491

Fax : 62-21-3850029e-mail : [email protected]

Your Rel:our Bef . 119/C/AF.-17

Independent Auditor's Report

The DirectorsPT SHKKEVAINDONESIAlakafia

We have audited the accompanyrng financial statements of PT SHKKEVA INDONESIA, which

comprise the statement of finarciat position as of March 31,2017, and the statemerts of profit or loss and

othei comprehensive income, changes in equity, and cash flows for the year then ended, and a summary of

significant accounting policies and other explanatory information.

Management's responsibility for the financial statements

Management is responsible for the preparation and fair presentation of such financial statements in

o".orjuo", with Indonesian Financial Accounting Standards, and for such internal control as

management determines is necessary to enable the preparation of the financial statements that are free

from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on such financial statements based on our audit. We conducted

our audit in accordance with Standards on Auditing established by the Indonesian Institute of Certified

public Accountants. Those standards require that we comply with ethical requirements and plan and

perform the audit to obtain reasonable ,rs$3raace about whether zuch financial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in

the financial statements. Ihe procedures selected depend on the auditor's judgment, induding the

assessment of the risk of material misstatement of the financial statements, whether due to fraud or eror'

In making those risk assessments, the auditors consider intemal control relevant to the entity's preparation

and fair piesentation of the financial statements in order to-design audit procedures that are approprirati in

the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's

intemal control. An audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by management, as well as waluating the ovemll

presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

audit opinion.

BRANCH : Jl. Marina No. BSemarang 50144

@ 024 - 7600690 Fax. : 7601035,7600702e-mail : [email protected]

Registered Public Accountants

KANTOR AKUNTAN PUBLIK

LEONARD, MULIA & RICHARD

License No. Kep-657/KM.17l1998 Jl. Hayam Wuruk No. 3W-3V, Jakarta 10120, lndonesia0: 62-21-3458491

Fax : 62-21-3850029e-mail : [email protected]

Your Ref:Our Ref :

Opinion

In our opinion, the accompanying financial statements present fairly, in all material respects, the financialposition of PT SHKKEVA INDONESIA as of March 31, 2017, ard its financial performance and cashflows for the year then ended, in accordance with Indonesian Financial Accouating Standards.

LEONARD, MI.ILIA & RICIIARDLicense No. KEP-657 /I<NL17 / 1998

April2l,2017 BERNARD EDHI HARTONO, S.E., CPALicense No. AP. 0379

BRANCH : Jl. Marina No. ISemarang 50144

G o24 - 7600690 Fax. : 760t035, 7600702e-mail : support@ budidarmodjo.com

March 31, 2017 March 31, 2016Notes US. Dollar US. Dollar

ASSETSCURRENT ASSETS

Cash and cash equivalents 2c,3 246,154.19 44,621.12 Accounts receivable 2d,4 620,171.21 544,910.27 Other receivables 5,23 1,386,497.78 25,652.10 Advance payments 6 4,715.15 3,720.05 Inventories 2e,7 41,764.41 588,950.55 Prepaid taxes and expenses 8 88,296.74 101,654.89

Total Current Assets 2,387,599.48 1,309,508.98

NON-CURRENT ASSETSDeferred tax assets 2k,24 198,231.80 220,173.90 Fixed assets, net 2f,9 9,080.32 10,132.11 Leasehold improvement, net 2g,10 58,217.27 85,085.81 Other assets 11 14,991.33 14,978.35

Total Non-Current Assets 280,520.72 330,370.17

TOTAL ASSETS 2,668,120.20 1,639,879.15

3

PT SHKKEVA INDONESIASTATEMENTS OF FINANCIAL POSITION

MARCH 31, 2017 AND 2016

March 31, 2017 March 31, 2016Notes US. Dollar US. Dollar

LIABILITIES AND EQUITYLIABILITIESCURRENT LIABILITIES

Accounts payable 12,23 2,099,502.42 1,393,822.17 Taxes payable 13 119,708.35 13,913.82 Accrued expenses 14 158,287.29 7,161.32 Advances received 15 3,314.97 -

Total Current Liabilities 2,380,813.03 1,414,897.31

NON-CURRENT LIABILITIESLoan from stockholder 2h,16,23 272,823.95 272,823.95

Total Liabilities 2,653,636.98 1,687,721.26

EQUITY (CAPITAL DEFICIENCY)Capital stock - par value of US.$ 1 per share

Authorized capital 1,200,000 sharesIssued and fully paid 1,200,000 shares 17 1,200,000.00 1,200,000.00

Deficit (1,185,516.78) (1,247,842.11) Total Equity (Capital Deficiency) 14,483.22 (47,842.11)

TOTAL LIABILITIES AND EQUITY (CAPITAL DEFICIENCY) 2,668,120.20 1,639,879.15

4

part of these financial statementsThe accompanying notes are an integral

PT SHKKEVA INDONESIASTATEMENTS OF FINANCIAL POSITION

MARCH 31, 2017 AND 2016

March 31, 2017 March 31, 2016 Notes US. Dollar US. Dollar

REVENUES 2i,18 1,706,077.77 952,642.84

COST OF GOODS SOLD 2i,19 (1,631,831.50) (901,571.15)

GROSS PROFIT 74,246.27 51,071.69

OPERATING EXPENSESGeneral and administrative expenses 2i,20 (1,207,629.25) (936,628.62) Selling expenses 2i,21 (14,792.18) (7,223.25)

Total operating expenses (1,222,421.43) (943,851.87) Loss from operations (1,148,175.16) (892,780.18)

OTHER EXPENSESExchange loss, net 2j (11,668.95) (5,567.83) Others, net 22 1,244,111.54 13,997.05

Other income, net 1,232,442.59 8,429.22

INCOME (LOSS) BEFORE TAX 84,267.43 (884,350.96)

TAX BENEFIT (EXPENSE) 2k,24 (21,942.10) 220,173.90

INCOME (LOSS) FOR THE YEAR 62,325.33 (664,177.06)

OTHER COMPREHENSIVE INCOME - -

TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR 62,325.33 (664,177.06)

INCOME (LOSS) PER SHARE - BASIC AND DILUTED 2l,25 0,05 (2.18)

5

FOR THE YEARS ENDED MARCH 31, 2017 AND 2016

The accompanying notes are an integralpart of these financial statements

PT SHKKEVA INDONESIASTATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Paid-in Capital Deficit Net TotalUS.Dollar US.Dollar US.Dollar

Balance as at March 31, 2015 300,000.00 (583,665.05) (283,665.05)

Paid in Capital 900,000.00 - 900,000.00

Loss in current period - (664,177.06) (664,177.06)

Balance as at March 31, 2016 1,200,000.00 (1,247,842.11) (47,842.11)

Income in current period - 62,325.33 62,325.33

Balance as at March 31, 2017 1,200,000.00 (1,185,516.78) 14,483.22

6

PT SHKKEVA INDONESIA


STATEMENTS OF CHANGES IN EQUITY (CAPITAL DEFICIENCY)FOR THE YARS ENDED MARCH 31, 2017 AND 2016

March 31, 2017 March 31, 2016 US.Dollar US.DollarCASH FLOWS FROM OPERATING ACTIVITIES

Income (loss) before tax 84,267.43 (884,350.96) Adjustments to reconcile income (loss) before tax to cash provided from (used for) operating activities :

Amortization on renovation on leased building 26,868.54 26,869.20 Depreciation 2,873.64 2,065.24 Adjustment on accumulated depreciation - 2,353.33 Decrease (Increase) in :

Accounts receivable (75,260.94) (150,850.51) Other receivables (1,360,845.68) (25,533.74) Advance payments (995.10) 47,813.87Inventories 547,186.14 (72,221.69) Prepaid taxes and expenses 13,358.15 (47,560.79)

Increase (Decrease) in :Accounts payable 705,680.25 574,212.12 Taxes payable 105,794.53 3,284.71 Other payables - (34,679.84) Accrued expenses 151,125.97 (18,527.17) Advances received 3,314.97

Cash provided from (used for) operation 203,367.90 (577,126.23) Payments of tax expense - -

Net Cash Provided from (Used for) Operating Activities 203,367.90 (577,126.23)

CASH FLOWS FROM INVESTING ACTIVITIESDecrease (increase) in other assets (12.98) 2,422.64 Increase in fixed assets (1,821.85) (5,333.76)

Net Cash Used for Investing Activities (1,834.83) (2,911.12)

CASH FLOWS FROM FINANCING ACTIVITIESPaid-in capital - 900,000.00 Decrease in loan from stockholder - (752,068.94)

Net Cash Provided from Investing Activities - 147,931.06

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 201,533.07 (432,106.29)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 44,621.12 476,727.41

CASH AND CASH EQUIVALENTS AT END OF YEAR 246,154.19 44,621.12

SUPPLEMENTARY DISCLOUESActivities Not Affecting Cash

Reclassification on leasehold improvement - 138,025.22

7


PT SHKKEVA INDONESIASTATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED MARCH 31, 2017 AND 2016

1. GENERAL

Commissioner : Mr. Ramkrishnan BrindalakshmiPresident Director : Mr. Abraham George ThattungalDirector : Mr. Ramesh Vinayak VazeDirector : Mrs. Dyah Ersita Yustanti, S.H.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

b. NEW ACCOUNTING STANDARDS

- PSAK 4 (Amendments 2015) : Separate Financial Statements,- PSAK 5 (Improvement 2015) : Operating Segments,- PSAK 7 (Improvement 2015) : Related Party Disclosures,- PSAK 13 (Improvement 2015) : Investment Property,

8

PT SHKKEVA INDONESIANOTES TO FINANCIAL STATEMENTS

MARCH 31, 2017 AND 2016

PT Shkkeva Indonesia (the Company) was incorporated under foreign capital investment law as a limitedliability company in 2012 in Bekasi, West Java, Indonesia, by deed No.1 dated June 6, 2012 of Mastuti Betta,S.H., Public Notary and was legalized by the Minister of Law and Human Rights of the Republic ofIndonesia by his decision letter No.AHU-34070.AH.01.01.Tahun 2012 dated June 21, 2012.

The statement of profit or loss has been prepared using the functional expenses method by classifyingexpenses according to their function as portion of cost of goods sold, selling or administrative activities.The statement of cash flows has been prepared on indirect method using cash and cash equivalentsconcept. Receipts and disbursements are classified into operating, investing and financing activities.

The Company's articles of incorporation have been amended several times. The latest changes are stated indeed No.27 dated March 29, 2016 of Maria Gunarti, S.H.,M.Kn, Public Notary, regarding the changes infinancial year of the Company from January 1 to December 31 become April 1 to March 31, and the increaseof issued and paid-in capital by converting of loan to capital. Both changes have been reported to the Ministerof Law and Human Rights of the Republic of Indonesia (the Minister). The change of the financial year hasbeen responded by the Minister by acceptance notification No.AHU-AH.01.03-0036081 dated March 31,2016, while the change of the increase of issued and paid-in capital has been responded by the Minister byacceptance notification No.AHU-AH.01.03-0040678 dated April 15, 2016. The increase of issued and paid-incapital has also been approved by Indonesia Investment Coordinating Board by approval letter No.1243/1/IP-PB/PMA/2016 dated April 12, 2016.

The main activity of the Company is to import and distribute basic chemical ingredients which the office islocated at Antam Office Park, Tower B 9th Floor, Jl TB Simatupang No.1, Lingkar Selatan, Jakarta 12530.

The financial statements have been prepared according to the Indonesian Financial Accounting Standardsand reported in US.$ currency and have been prepared using historical cost, except for certain accountsusing other measurement as described in the accounting policies for the respective accounts. The financialstatements have been prepared using accrual basis, except statement of cash flows.

Financial Accounting Standard Board of Indonesian Institute of Accountant (DSAK-IAI) has issued newand revision of several Statements of Financial Accounting Standards (PSAK) and Interpretation onFinancial Accounting Standard (ISAK) which have been effective as at January 1, 2016 as follows :

The Company's Board Member as of March 31, 2017 and 2016, according to deed No.1 dated June 10, 2015of Esta Ririn Sandraningrum, S.H., Public Notary, and according to shareholders' meeting resolution onMarch 2, 2015, are as follows :


MARCH 31, 2017 AND 2016

- PSAK 15 (Amendments 2015) : Investment in Associates and Joint Ventures,- PSAK 16 (Improvement 2015) : Property, Plant and Equipment, - PSAK 19 (Improvement 2015) : Intangible Assets,- PSAK 22 (Improvement 2015) : Business Combination,- PSAK 24 (Amendments 2015) : Employee Benefits,- PSAK 25 (Improvement 2015) : Accounting Policies, Changes in Accounting Estimates, and Errors,- PSAK 53 (Improvement 2015) : Share Based Payment,- PSAK 65 (Amendments 2015) : Consolidated Financial Statements,- PSAK 66 (Amendments 2015) : Joint Arrangements,- PSAK 67 (Amendments 2015) : Disclosures of Interests in Other Entities,- PSAK 68 (Improvement 2015) : Fair Value Measurement,- PSAK 70 (2016) : Accounting for Tax Amnesty Assets and Liabilities,- ISAK 30 (2015) : Levies

The Company adopts PSAK and ISAK which are relevant with its business.

c. CASH AND CASH EQUIVALENTSCash and cash equivalents represent cash on hand and in banks.

d. FINANCIAL ASSETS

Financial Assets

Loans and receivables

Offsetting of Financial Instruments

Impairment of Financial Assets

9

At each statements of financial position date, the Company’s management assesses whether a financialasset or company of financial assets is impaired.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market. Loans and receivables consist of accounts receiveable, other receiveables,other current assets (due within 12 months), and other non-current assets (due after 12 months since thedate of financial position).

Financial instruments are recognized initially at fair value, which is the fair value of the considerationgiven (in case of an asset) or received (in case of a liability). The fair value of the consideration given orreceived is determined by reference to the transaction price or other market prices. If such market pricesare not reliably determinable, the fair value of the consideration is estimated as the sum of all future cashpayments or receipts, discounted using the prevailing market rates of interest for similar instruments withsimilar maturities. The initial measurement of financial instruments, except for financial instruments atfair value through profit and loss (FVTPL), includes transaction costs.

At the statement of financial position date, there are no financial assets classified as financial assets at fairvalue through profit and loss, held-to-maturity and available-for-sale financial assets. Therefore, theaccounting policies related to these classifications are not disclosed.

Financial assets and liabilities are offset and the net amount reported in the statements of financialposition if, and only if, there is a currently enforceable right to offset the recognized amounts and there isintention to settle on a net basis, or to realize the asset and settle the liability simultaneously.


MARCH 31, 2017 AND 2016

Derecognition of Financial Assets and Liabilities

Financial assets

- the rights to receive cash flows from the asset have expired;-

-

Financial liabilities

e. INVENTORIES

f. FIXED ASSETS AND DEPRECIATIONFixed assets at the time of acquisition are stated at cost.

The annual depreciation rates are as follows :Equipment : 25% and 12.5%

10

A provision for obsolete and slow moving inventory is determined on the basis of estimated future usageor sale of individual inventory items.

Net realizable value is the estimate of the selling price in the normal course of business, less the costs ofcompletion and selling expenses estimate.

Financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financialassets) is derecognized when :

If there is objective evidence that an impairment loss on loans and receivables or held to maturityinvestments carried at amortized cost has been incurred, the amount of the loss is measured as thedifference between the asset’s carrying amount and the present value of estimated future cash flows(excluding future credit losses that have not been incurred) discounted at the financial asset’s originaleffective interest rate (i.e., the effective interest rate computed at initial recognition). The carrying amountof the asset shall be reduced either directly or through the use of an allowance account. The amount of loss is charged to the statements of profit or loss.

the Company has transferred its rights to receive cash flows from the asset and either (i) has transferredsubstantially all the risks and rewards of the asset, or (ii) has neither transferred nor retainedsubstantially all the risks and rewards of the asset, but has transferred control of the asset.

Depreciation of fixed assets is computed using the straight-line method over the estimated useful lives ofthe assets.

Then, the acquisition cost should be deducted by accumulated depreciation and accumulated impairment.

the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a “pass-through” arrangement; or

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or hasexpired. Where an existing financial liability is replaced by another from the same lender on substantiallydifferent terms, or the terms of an existing liability are substantially modified, such an exchange ormodification is treated as a derecognition of the original liability. The recognition of a new liability and thedifference in the respective carrying amounts is recognized in the statements of profit or loss.

If, in a subsequent year, the amount of the impairment loss increases or decreases because of an eventoccurring after the impairment was recognized, the previously recognized impairment loss is reversed.Any subsequent reversal of an impairment loss is recognized in the statements of profit or loss, to theextent that the carrying value of the asset does not exceed its amortized cost at the reversal date.

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the firt in first outmethod.


MARCH 31, 2017 AND 2016

Depreciation is charged at the date when assets are ready for use.

g. LEASEHOLD IMPROVEMENT

h. TRANSACTIONS WITH RELATED PARTIES

i. REVENUES AND EXPENSES RECOGNITION

Expenses are recognized on accrual basis.

j. FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION

March 31, 2017 March 31, 2016US.$ US.$

IDR 13,321 13,276

The exchange gains or losses were credited or charged to statement of profit or loss for the year.

k. CORPORATE INCOME TAX

l. EARNINGS PER SHARE

11

Amendments to tax obligations are recorded when an assessment is received or, if appealed against, whenthe results of the appeal are determined.

Transactions in rupiah were recorded in US.$ at the exchange rate prevailing with the date of transactions.Monetary assets and liabilities in rupiah as of March 31, 2017 and 2016 were translated using the rate ofUS.$ 1 as follows :

As at March 31, 2017 and 2016, there were no existing financial instruments which could result in theissue of additional common shares. Therefore, income (loss) per diluted share is equivalent to income(loss) per basic share.

Sales are recognized when the Company has already transferred the significant risks and benefitownership of goods to customers.

Earnings (loss) per share is calculated by dividing income (loss) for the year by the weighted averagenumber of outstanding common shares during the year.

The current tax was stated based on taxable income for that period which has been computed based onenacted tax rates.

Tax on temporary differences arising between the tax bases of assets and liabilities and their carryingvalues for financial reporting purposes is deferred, except certain temporary differences. The deferredincome tax in these periods are determined by currently enacted tax rates.

The Company has transactions with certain parties which are related to the Company as defined inStatement on Financial Accounting Standards No.7 (Revised 2014) "Related Party Disclosures".

Gain (loss) arising from recognition disposal of asset is recorded in statement of profit or loss at the time ofrecognition disposal of asset.

Expenditures for leasehold improvement were capitalized as leasehold improvement and were amortizeduntil the end of lease periods or 60 months.

The accumulated costs of the construction of building are capitalized as building in progress. These costsare reclassified to fixed assets account when the construction is complete.

The cost of maintenance and repairs are charged as an expense as incurred. Expenditures which can becapitalized into carrying value of assets, are only the expenditures fulfilling the criteria of asset recognition.


MARCH 31, 2017 AND 2016

m. USE OF ESTIMATES

3. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of :March 31, 2017 March 31, 2016

US.$ US.$

Cash on hand 5,212.74 2,717.10 Cash in banks

Bank Mandiri, Jakarta - IDR 193,867.21 -Bank Mandiri, Jakarta - USD 45,014.53 -Citibank, Jakarta - IDR 1,849.99 37,789.84 Citibank, Jakarta - USD 209.72 4,114.18

240,941.45 41,904.02 Total 246,154.19 44,621.12

4. ACCOUNTS RECEIVABLE

Accounts receivable consist of : March 31, 2017 March 31, 2016

US.$ US.$

Mrs. Haryanti Listani, Mrs 469,082.76 -Duaroma Berlian Sejahtera 41,585.15 -Toko Minyak Wangi Yahya Hasan 38,493.75 23,637.62 PT Orson Indonesia 15,589.23 -Mr Ali Budiono 12,322.36 19,134.40 CV Agung Mandiri Lestari 11,396.20 5,940.00 PT Berkah Mitra Pangan 9,167.71 -PT Selendang Mas 4,519.75 7,920.00 PT Global Beauty Science 3,369.12 27,511.00 CV Lidah Buaya 2,722.40 39,861.80 Lisa Wangi 5,176.42 12,810.01 PT Lautan Rejeki Abadi 2,457.16 3,036.00 Rahayu Wangi 1,776.77 -PT Relindo Multi Cipta 992.30 -Uchi Parfume 589.73 3,575.00 PT Fuchs Indonesia 529.03 528.00 Mr Yunus 374.00 374.00 PT Prolimas Utama Jaya - 18,162.72 PT Anugerah Familindo Utama - 14,891.25 Collector Parfum - 810.43

Carried forward 620,143.84 178,192.23

12

According to Indonesian Financial Accounting Standards, the preparation of financial statements requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilitiesat the date of financial statements and the reported amounts of revenues and expenses during the reportingperiod. Actual results could differ from those estimates.


MARCH 31, 2017 AND 2016

March 31, 2017 March 31, 2016US.$ US.$

Brought forward 620,143.84 178,192.23PT Continental Cosmetic - 467.50 Mr Henry - 13,919.40 Ik Minh - 305,861.19 Inparfum - 5,109.50 Jayadi - 28,820.00 PN Marga - 899.80 Priskila Prima Makmur - 605.00 Seroja Fresh - 1,595.00 Sri Murwani Rejeki - 288.75 PT Sunindo Bangun Kersana - 1,900.00 PT Tanimas Soap Industries - 6,120.00 PT Triple Ace - 1,131.90 Other 27.37 -

Total 620,171.21 544,910.27

5. OTHER RECEIVABLES

Other receivables consist of :March 31, 2017 March 31, 2016

US.$ US.$

Related parties 1,386,497.78 25,544.16 Third parties

Other - 107.94 Total 1,386,497.78 25,652.10

Further information about related parties is presented in Note 23.

6. ADVANCE PAYMENTS

7. INVENTORIES

Inventories consist of :March 31, 2017 March 31, 2016

US.$ US.$

Merchandise 144,634.94 368,545.99 Goods in transit 13,212.47 220,404.56

Total 157,847.41 588,950.55 Provision for obsolescence (116,083.00) -

Net Book Value 41,764.41 588,950.55

13

Advance payments represent employee amounting to US.$.4,715.15 and US.$.3,720.05, for the years endedMarch 31, 2017 and 2016, respectively.

Inventories are purchased from Keva Fragrance, Pvt. Ltd, India, a related party.

8. PREPAID TAXES AND EXPENSES

Prepaid taxes and expenses consist of :March 31, 2017 March 31, 2016

US.$ US.$Prepaid taxes

Income tax article 22 61,425.28 30,677.65 Value added tax (incoming VAT) - 32,861.42

61,425.28 63,539.07Prepaid expenses

Rent 24,295.89 35,768.57 Insurance 2,575.57 2,347.25

Sub total 26,871.46 38,115.82 Total 88,296.74 101,654.89

9. FIXED ASSETS

Fixed assets consist of :

For Accounting PurposesMarch 31, 2016 Additions Deductions March 31, 2017

US.$ US.$ US.$ US.$Acquisition Cost

Equipment 12,833.02 1,821.85 - 14,654.87

Accumulated DepreciationEquipment 2,700.91 2,873.64 - 5,574.55

Net Book Value 10,132.11 9,080.32

March 31, 2015 Additions Deductions March 31, 2016US.$ US.$ US.$ US.$

Acquisition CostLeasehold improvement 138,025.22 - 138,025.22 -Equipment 3,820.05 9,012.97 *) - 12,833.02

Total 141,845.27 9,012.97 138,025.22 12,833.02

Accumulated DepreciationLeasehold improvement 20,455.47 - 20,455.47 ***) -Equipment 217.87 2,483.04 **) - 2,700.91

Total 20,673.34 2,483.04 20,455.47 2,700.91 Net Book Value 121,171.93 10,132.11

*) Including reclassification on leasehold improvement (to non-fixed assets) amounted to US.$ 3,679.21.**)

***) Including adjustment of accumulated depreciation amounted to US.$ 2,204.53.

14


MARCH 31, 2017 AND 2016

Including adjustment of accumulated depreciation amounted to US.$ 148.80 and reclassification onleasehold improvement amounted to US.$ 269.

The Company has not insured the inventories against the risk of loss on fire as of March 31, 2017 and 2016.


MARCH 31, 2017 AND 2016

For Income Tax PurposesTotal Category I Category IIUS.$ US.$ US.$

Rates 25% 12,5%Beginning balance 12,833.02 8,516.60 4,316.42 Additions 1,821.85 1,579.47 242.38 Depreciable balance 14,654.87 10,096.07 4,558.80 Depreciation Expenses 2,873.64 2,303.88 569.76

Temporary difference for depreciation are :Depreciation expenses for accounting 2,873.64Depreciation expenses for income tax 2,873.64

Temporary Difference -

10. LEASEHOLD IMPROVEMENT

Leasehold improvement consist of :March 31, 2017 March 31, 2016

US.$ US.$

Expenditures 134,346.01 134,346.01 Accumulated of amortization (76,128.74) (49,260.20)

Net Book Value 58,217.27 85,085.81

11. OTHER ASSETS

Other assets consist of :March 31, 2017 March 31, 2016

US.$ US.$

Deposit of office rent 14,014.53 14,002.35 Deposit of telephone 976.80 976.00

Total 14,991.33 14,978.35

15

The Company has not insured the fixed assets against the risk of losts on fire as of March 31, 2017 and 2016.

Depreciation cost amounted to US.$ 2,873.64 and US.$ 2,065.24, for the years ended March 31, 2017 and 2016,respectively, and alocated to general and administrative expenses.

12. ACCOUNTS PAYABLE

Accounts payable consist of :March 31, 2017 March 31, 2016

US.$ US.$

Related parties 2,088,666.38 1,388,542.49 Third parties

PT. Potentia HR Consulting 6,826.51 -PT FPS Indonesia 3,157.09 -Nurita Handayani 365.96 -PT Supra Prima Nusantara 330.76 -PT Birotika Semesta 155.72 308.42 Dyah Ersita & Partners - 2,102.24 Professional fee - 2,033.75 PT Nugraha Indah International Indonesia - 835.27

Total 2,099,502.42 1,393,822.17


13. TAXES PAYABLE

Taxes payable consist of :March 31, 2017 March 31, 2016

US.$ US.$

Value added tax (outcoming VAT) 103,663.67 -Income tax article 21 15,976.10 13,789.27 Income tax article 4 (2) 52.07 96.45 Income tax article 23 16.51 28.10

Total 119,708.35 13,913.82

14. ACCRUED EXPENSES

Accrued expenses consist of :March 31, 2017 March 31, 2016

US.$ US.$

Salary 147,604.30 -BPJS health 5,459.13 2,173.56 Sales commission 3,376.16 3,376.16 Professional fees 1,538.92 1,544.14 Medical claims 308.78 67.46

Total 158,287.29 7,161.32

16


MARCH 31, 2017 AND 2016


MARCH 31, 2017 AND 2016

15. ADVANCES RECEIVED

16. LOAN FROM STOCKHOLDER


17. CAPITAL STOCK

Shares Total PercentageUS.$ %

Keva Fragrance Industries, Pte., Ltd, Singapore 1,197,000 1,197,000 99,75Mohamed Jamal Bin Mohamed Hanifa 3,000 3,000 0,25

Total 1,200,000 1,200,000 100,00

18. REVENUES

17

Revenues represent sales of basic chemical ingredients of perfume to third parties amounting toUS.$.1,706,077.77 and US.$.952,642.84, for the years ended March 31, 2017 and 2016, respectively.

Shareholders

As at March 31, 2017 and 2016, according to deed No.27 dated March 29, 2016 of MariaGunarti,S.H.,M.Kn, Public Notary, the issued and fully paid capital could be summarized as follows :

The authorized capital of the Company amounted to US.$ 1,200,000 divided into 1,200,000 shares with apar value of US.$ 1 per share (equivalent to Rp 9,425 per US.$ 1), as based on deed No.1 dated June 6, 2012of Notaris Mastuti Betta, S.H., Public Notary, which has been legalized by the Minister of Law and HumanRights of the Republic of Indonesia by his decision letter No.AHU-34070.AH.01.01.Tahun 2012 dated June21, 2012.

According to deed No.27 dated March 29, 2016 of Maria Gunarti, S.H.,M.Kn, Public Notary, the Companyhas increased its fully and paid-in capital from US.$ 300,000 to US.$ 1,200,000 from loan conversion, whichhas been reported to Indonesia Investment Coordinating Board and received approval letter No. 1243/I/IP-PB/PMA/2016 dated April 12, 2016, and has been reported and received acceptance letter from the Minister of Law and Human Rights of the Republic of Indonesia by No.AHU-AH.01.03-0040678 dated April 15,

This account represents non-interest bearing loan from Keva Fragrance Industries, Pte., Ltd, Singapore. InMarch 2016, the balance of loan from stockholder amounted to US.$ 1,172,823.95. According torepresentation letter of the shareholder dated March 29, 2016, the major portion of the loan amounting toUS.$ 900,000 has been converted to issued and paid-in capital, as stated in notarial deed No.27 dated March29, 2016 of Maria Gunarti, S.H.,M.Kn, Public Notary (see Note 17), while the balance of US.$ 272,823.95 isstill recorded as loan from stockholder.

Advances received represent advances from Toko Inparfum amounting to US.$ 3,314.97 for the years endedMarch 31, 2017.


MARCH 31, 2017 AND 2016

19. COST OF GOODS SOLD

Cost of goods sold consist of :March 31, 2017 March 31, 2016

US.$ US.$

Beginning inventory 588,950.55 516,728.86 Purchase 976,257.32 876,408.45 Direct cost :

Loss of inventory written off 116,083.00 -Duty administration 81,787.37 63,287.34 Warehouse rent 12,581.76 12,098.48 Electricity 6,632.31 7,854.48 Transportation 3,926.75 5,273.79 Warehouse administration - 6,359.28

Indirect cost :Laboratorium 2,519.79 1,501.84 Maintenance 525.32 711.31 Warehouse utility 414.74 244.03 Forklift maintenance - 53.84

Ending inventory (157,847.41) (588,950.55) Cost of Goods Sold 1,631,831.50 901,571.15

20. GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses consist of :March 31, 2017 March 31, 2016

US.$ US.$

Salary 847,610.77 676,341.23 Bonus 108,161.76 -Office rent 46,196.76 40,178.75 Professional fees 40,620.14 97,306.84 Bad debt 19,766.36 -Business travel 27,014.55 18,864.43 Leasehold improvement expenses 26,868.54 26,869.20 BPJS-Health 17,950.71 13,203.68 Office-service charge 11,177.63 10,331.68 Mail and postage 9,809.89 6,506.43 Insurance expenses 9,570.80 6,007.98 Transportation 9,059.95 9,203.31 Permit 6,115.22 2,885.04 Telephone 4,085.96 5,239.34 Internet 3,867.61 3,617.38 Entertainment 3,611.49 2,107.77 Depreciation 2,873.64 2,065.24 Parking 2,756.71 2,398.19 Meals 2,619.26 680.81

Carried forward 1,199,737.75 923,807.30

18


MARCH 31, 2017 AND 2016

March 31, 2017 March 31, 2016US.$ US.$

Brought forward 1,199,737.75 923,807.30 Office eguipment 2,267.33 551.63 Donations 1,540.49 1,146.03 Bank administration 1,450.99 1,827.85 Health 1,031.07 2,132.05 Photocopy rent 546.66 533.47 Stationery 501.31 403.13 Stamp 232.58 153.90 Water 202.96 206.29 Welfare and togetherness 101.47 401.56 Maintenance 16.64 26.60 Sales promotion - 2,223.88 Training - 113.78 Others - 3,101.15

Total 1,207,629.25 936,628.62

21. SELLING EXPENSES

Selling expenses consist of :March 31, 2017 March 31, 2016

US.$ US.$

Transportation 4,634.45 7,223.25 Promotions 10,157.73 -

Total 14,792.18 7,223.25

22. OTHERS, NET

Other income (charges) net consist of :March 31, 2017 March 31, 2016

US.$ US.$

Distribution product and perfumery development service 1,237,230.56 -Interest income 3,943.48 -Tax expenses (2,191.00) -Bank administration (147.01) (244.20) Others 5,275.51 14,241.25

Total 1,244,111.54 13,997.05

19

23. RELATED PARTY INFORMATION

Related parties are as follows :

US.$ %Other receivables

Keva Fragrance, Pvt., Ltd, India 1,386,497.78 100

Accounts payableKeva Fragrance, Pvt., Ltd, India 2,088,666.38 99,48

Loan from stockholderKeva Fragrance Industries, Pte., Ltd, Singapore 272,823.95 100

US.$ %Other receivables

Keva Fragrance, Pvt., Ltd, India 25,544.16 99,58

Accounts payableKeva Fragrance, Pvt., Ltd, India 1,388,542.49 99,62

Loan from stockholderKeva Fragrance Industries, Pte., Ltd, Singapore 272,823.95 100

24. TAXATION

Income tax for the years ended March 31, 2017 and 2016 are as follows :March 31, 2017 March 31, 2016

US.$ US.$

Current tax - -Deferred tax (expense) benefit (21,942.10) 220,173.90

Tax (Expense) Benefit (21,942.10) 220,173.90

Income before tax US.$ 84,267.43 Adjustments for permanent differences :

Interest income-banks US.$ (3,943.48) Entertainment 3,611.49 Tax expenses 2,191.00 Donations 1,540.49 Welfare and togetherness 101.47

Total permanent differences 3,500.97 Fiscal income for current period (carried forward) US.$ 87,768.40

20

The compensation to the key management personnels amounted to Rp 2,632,061,944 and Rp 3,377,751,883 ,for the years ended March 31, 2017 and 2016, respectively.

The reconciliation between accounting income before income tax and estimated fiscal loss for the year endedMarch 31, 2017 is as follows :


MARCH 31, 2017 AND 2016

March 31, 2017

March 31, 2016


MARCH 31, 2017 AND 2016

Brought forward US.$ 87,768.40

Fiscal losses comprise the following :Fiscal loss - year 2014 US.$ (24,526.00) Fiscal loss - year 2015 (512,199.00) Fiscal loss - year 2016 (880,695.60)

US.$ (1,417,420.60) Total fiscal loss US.$ (1,329,652.20)

Year ended Year endedMarch 31, 2017 March 31, 2016

US.$ US.$

Income (loss) before income tax 84,267.43 (884,350.96)Tax calculated at rate of 25% 21,066.86 (221,087.74)Non taxable income (985.87) -Non deductible expenses 1,861.11 913.84

Tax Expense (Benefit) 21,942.10 (220,173.90)

Changes of deferred tax assets :Charged toStatement

March 31, 2016 of Income March 31, 2017US.$ US.$ US.$

Difference between accounting and fiscal :Fiscal loss of current period 220,173.90 (21,942.10) 198,231.80

Credited toStatement

March 31, 2015 of Income March 31, 2016US.$ US.$ US.$

Difference between accounting and fiscal :Fiscal loss of current period - 220,173.90 220,173.90

25. INCOME (LOSS) PER SHARE - BASIC

21

The reconciliation between tax benefit and the theoretical tax amount on the company's income (loss) beforetax for the year ended March 31, 2017 and 2016 are as follows :

Corporate income tax for the year ended March 31, 2017 has not been computed, since the taxable income isnegative.

The Company computed the deferred tax assets of fiscal loss from the period of financial year of April 1, 2015to March 31, 2016 and thereafter (if any), since the management assumed that the fiscal losses can be utilizedwithin 5 years in the future.

Income (loss) per share is calculated by dividing income (loss) attributable to the shareholders by the weightedaverage number of ordinary shares outstanding during the year.


MARCH 31, 2017 AND 2016

March 31, 2017 March 31, 2016US.$ US.$

Income (loss) attributable to the owners of the parent entity 62,325.33 (664,177.06) Weighted average number of outstanding ordinary shares - basic 1,200,000 shares 304,839 sharesIncome (Loss) Per Share - Basic 0.05 (2.18)

26. FINANCIAL RISK MANAGEMENT

a. Credit Risk

March 31, 2017 March 31, 2016US.$ US.$

AssetsAccounts receiveables 620,171.21 544,910.27

b. Liquidity RiskLiquidity risk is the risk that the Company is unable to meet its obligations that have matured.

22

The objective of risk management of the Company as a whole is to effectively control risk and minimize theadverse effects that may occur on their financial performance. The Directors reviewed and approved thepolicies for controlling each of these risks which are summarized below; and also monitors market price risk ofall financial instruments.

Credit risk is the risk that the Company will occur loss due to customer or counter party failed to fulfil theirobligation at the due date.The Company take control on credit risk by relating with other parties who hascredibility, stated verification policy and credit authorization, and also collectibility inspection of receivablesroutinely to reduce doubtful receivables.

The Company manages liquidity risk by maintaining cash and cash equivalents sufficient to enable it tomeet its operational requirement and its obligations when it is due.

Exposure of statement of financial position related to credit risk as of March 31, 2017 and 2016 as

Year Ended

The Company's activities are influenced by a variety of financial risk, including credit risk, and liquidity riskand market risk.

< 1 year 1 - 3 years > 3 years TotalUS.$ US.$ US.$ US.$

Financial AssetsCash and cash equivalents 246,154.19 - - 246,154.19 Accounts receivable 620,171.21 - - 620,171.21 Other receivables 1,386,497.78 - - 1,386,497.78

Total 2,252,823.18 - - 2,252,823.18

Financial LiabilitiesAccounts payable 2,099,502.42 - - 2,099,502.42 Taxes payable 119,708.35 - - 119,708.35 Accrued expenses 158,287.29 - - 158,287.29 Advances received 3,314.97 - - 3,314.97 Loan from stockholder - - 272,823.95 272,823.95

Total 2,380,813.03 - 272,823.95 2,653,636.98 Assets (Liabilities), Net (127,989.85) - (272,823.95) (400,813.80)

< 1 year 1 - 3 years > 3 years TotalUS.$ US.$ US.$ US.$

Financial AssetsCash and cash equivalents 44,621.12 - - 44,621.12 Accounts receivable 544,910.27 - - 544,910.27 Other receivables 25,652.10 - - 25,652.10

Total 615,183.49 - - 615,183.49

Financial LiabilitiesAccounts payable 1,393,822.17 - - 1,393,822.17 Taxes payable 13,913.82 - - 13,913.82 Accrued expenses 7,161.32 - - 7,161.32 Loan from stockholder - - 272,823.95 272,823.95

Total 1,414,897.31 - 272,823.95 1,687,721.26 Assets (Liabilities), Net (799,713.82) - (272,823.95) (1,072,537.77)

27. FAIR VALUE ASSETS AND FINANCIAL LIABILITIES

Recorded Value Fair ValueUS.$ US.$

Financial AssetsCash and cash equivalents 246,154.19 246,154.19 Accounts receivable 620,171.21 620,171.21 Other receivables 1,386,497.78 1,386,497.78

Total Financial Assets 2,252,823.18 2,252,823.18

23

March 31, 2016

March 31, 2017

Below are due dates of assets and liabilities according to contractual agreements which has not been discountedas of March 31, 2017 and 2016 :


MARCH 31, 2017 AND 2016

March 31, 2017

The list below shows recorded value and fair value of each Company's financial assets and liabilities which arestated on statement of financial position as of March 31, 2017 and 2016.


MARCH 31, 2017 AND 2016


Financial LiabilitiesAccounts payable 2,099,502.42 2,099,502.42 Taxes payable 119,708.35 119,708.35 Accrued expenses 158,287.29 158,287.29 Advances received 3,314.97 3,314.97 Loan from stockholder 272,823.95 272,823.95

Total Financial Liabilities 2,653,636.98 2,653,636.98


Financial AssetsCash and cash equivalents 44,621.12 44,621.12 Accounts receivable 544,910.27 544,910.27 Other receivables 25,652.10 25,652.10

Total Financial Assets 615,183.49 615,183.49

Financial LiabilitiesAccounts payable 1,393,822.17 1,393,822.17 Taxes payable 13,913.82 13,912.82 Accrued expenses 7,161.32 7,161.32 Loan from stockholder 272,823.95 272,823.95

Total Financial Liabilities 1,687,721.26 1,687,720.26

28. NEW ACCOUNTING STANDARDS WHICH WILL BE APPLICABLE

- PSAK 1 (Amendments 2015) : Presentation of Financial Statements,- ISAK 31 (2015) : Interpretation of the Scope of PSAK 13 Property Investment.

24

March 31, 2016

The fair value is the amount at which the instrument could be exchanged in a current transaction betweenknowledgeable willing parties in an arm's-length transaction, other than a forced or liquidation sale. Themethods used for determining the estimated fair value of the financial assets and liabilities are in accordancewith the accounting policies as described in Note 2d.

March 31, 2017

Financial Accounting Standard Board of Indonesian Institute of Accountant (DSAK-IAI) has also issuedrevision of the following Statement of Financial Accounting Standards (PSAK) and Interpretation on FinancialAccounting Standards which are applicable for financial statements covering periods beginning on or afterJanuary 1, 2017 as follows :

The Company is evaluating the impact of the implementation of these revised PSAK and new ISAK on thefinancial statements.


MARCH 31, 2017 AND 2016

29. EMPLOYEE BENEFITS

30. APPROVAL OF FINANCIAL STATEMENTS

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The accompanying financial statements, which are the responsibility of the Company's management, werefinalized and approved by the Company's management on April 21, 2017.

On March 25, 2003, the President of Republic of Indonesia has legalized the Law of Republic of IndonesiaNo.13 year 2003 regarding with man-power, which among others to redetermine severance pay and or gratuitypay of working period and compensation pay which should be received by employee in case of resignation. Thefinancial statements for the years ended March 31, 2017 and 2016 did not include the accrual of the certainemployee benefits, as stipulated in the Law and also in Statement of Financial Accounting Standards No.24(Amendment 2014) concerning employee benefits, since the management estimated the amount was notmaterial due to the high rank employees are non-permanent staff.

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SAIBA Industries Private Limited Financials – FY -2016-17 · 2017-11-13 · Companies Act, 2013...

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