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Notes to Accounts of Astec Lifesciences Ltd.

Mar 31, 2022

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

The Company has not received any funds from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

4. Rights, preferences and restrictions attached to equity shares

Equity Shares: The Company has one class of Equity shares having a par value of ^ 10 per share. Each Shareholder is eligible for one vote per share held. All Equity Shareholders are eligible to receive dividends in proportion to their shareholdings. The dividends proposed by the Board of Directors are subject to the approval of the Shareholders in the ensuing Annual General Meeting. 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.

Capital redemption reserve

Capital redemption reserve was created for buy back of shares. The company may issue fully paid-up bonus shares out of the capital redemption reserve.

Employee stock options outstanding

The employee stock options outstanding is used to recognise the grant date fair value of options issued to employees under the Company''s stock option plan.

Securities Premium

Securities Premium is used to record the premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

Note 18.1: Term Loan from Bank during the previous year carries interest rate at 3 month T Bill 175 bps and is repayable on 15^thApril, 2022. During the current year the same (previous year ^16.81 Lakh) has been disclosed under current maturity of Long term Borrowing.

The Company does not have any continuing default as on the Balance Sheet date in repayment of loans and interest.

Note 23.1: Cash Credit from banks are repayable on demand and carries interest at MCLR 0.25% (Previous year - MCLR 0.25%).

Note 23.2: Working capital loan from Bank carries interest rate at 4.70% (Previous year 4.75%) and is repayable within 3 months.

Note 23.3: Working capital loan (Rupee) from banks carries interest rate at 6.10% (Previous year - 3.41% to 4.53%). These loans are repayable on different dates within 6 months.

Note 23.4: Commercial Paper carries interest rate of 4.16% to 4.78% (Previous year - 3.77% to 4.25%) and are repayable on different dates within 3 months.

Note 25.2: Micro and small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) have been identified by the Company on the basis of the information available with the Company and the auditors have relied on the same. Accordingly, ^ Nil is overdue as on March 31, 2022 (Previous year R Nil) to Micro, Small and Medium Enterprises on account of principal or interest.

Note 38.1: Current ratio: Current assets / Current liabilities Note 38.2: Debt Equity ratio: Total Debt / Shareholder''s Equity

Note 38.3: Debt Service Coverage Ratio: (Net Profit after taxes Non-cash operating expenses like depreciation and other amortizations Interest other adjustments like loss on sale of Fixed assets/lnvestment etc.) / (Interest & Lease Payments Principal Repayments)

Note 38.4: Return on Equity Ratio: Net Profits after taxes - Preference Dividend (if any) / Average Shareholder''s Equity

Note 38.5: Inventory turnover: Cost of goods sold / Average Inventory

Note 38.6: Trade Receivables turnover ratio: Net Credit Sales / Average Trade Receivable

Note 38.7: Trade payables turnover ratio: Net Credit Purchases / Average Trade Payables

The average Trade payable for the current financial year is lesser than that of previous financial year. With the increase in Purchases, this has caused increasing the Trade payable turnover ratio from previous year.

Note 38.8 Net capital turnover ratio: Net Sales / Working Capital

During the current financial year, the working Capital were increased significantly due to increase in Inventory and Trade receivable. This has caused reducing the Net Capital turnover Ratio from previous year.

Note 38.9 Net profit ratio: Net Profit / Net Sales

Note 38.10: Return on Capital employed: Earnings before interest and taxes / (Tangible Net Worth Total Debt Deferred Tax Liability)

Note 39: Employee benefits

The Company contributes to the following post-employment plans in India.

Defined Contribution Plan:

The Company pays provident fund contributions to publicly administered provident funds as per local regulations and are recognised as expense in the Statement of Profit and Loss during the period in which the employee renders the related service. There are no further obligations other than the contributions payable to the appropriate authorities.

The Company recognised T 163.36 lakh for the year ended March 31, 2022 (Previous Year ^ 136.81 lakh) towards provident fund contribution in the Statement of Profit and Loss.

Defined Benefit Plan:

The Company''s gratuity scheme is defined benefit plan. The Company''s liability for the defined benefit scheme is actuarially determined based on the projected unit credit method. The Company''s net obligations in respect of such plans is calculated by estimating the amount of future benefit that the employees have earned in return for their services and the current and prior periods that benefit is discounted to determine its present value and the fair value of the plan asset is deducted. Actuarial gains and losses are recognised in Other Comprehensive Income.

Liabilities in respect of the gratuity plan are determined by an actuarial valuation, based upon which the Company makes annual contributions to the Group Gratuity cum Life Assurance Schemes administered by the LIC of India, a funded defined benefit plan for qualifying employees. Trustees administer the contributions made by the Company to the gratuity scheme.

The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at March 31, 2022. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

Other long-term employee benefits:

Compensated absences are payable to employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement. The charge towards compensated absences for the year ended March 31, 2022 based on actuarial valuation using the projected accrued benefit method is ^ 1.45 lakh (Previous year: ^ 24.21 lakh).

Terminal Benefits: All terminal benefits including voluntary retirement compensation are fully written off to the Statement of Profit & Loss.

Note 40: Financial instruments - Fair values and risk management Note 40.1: Accounting classification and fair values

Carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy, are presented below. It does not include the 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.

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include :

â¢ the fair value of the forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.

â¢ the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

All of the resulting fair value estimates are included in level 2 where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

â¢ Credit risk;

â¢ Liquidity risk;

â¢ Market risk;

â¢ Currency 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 adhoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

Note 40.2: Credit risk

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

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

Trade receivables and loans and advances

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s export sales are backed by letters of credit and Trade Credit Insurance policy from Export Credit Guarantee Corporation of India (ECGC).

The company individually monitors the sanctioned credit limits as against the outstanding balances. Accordingly, the Company makes specific provisions against such trade receivables wherever required and monitors the same at periodic intervals.

The Company monitors each loans and advances given and makes any specific provision wherever required.

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

Other financial assets

This comprises mainly of balances with banks, deposits with Government authorities and other receivables. Credit risk arising from these financial assets is limited and there is no collateral held against these because the counterparties are banks and government organizations. The Company considers that its balances with banks have low credit risk based on the external credit ratings of the counterparties. The Company has created the loss allowance for other receivables on specific identification basis.

Cash and cash equivalents

The Company held cash and cash equivalents of 3; 54.46 lakh at March 31, 2022 (previous year 3 32.94 lakh). The cash and cash equivalents are held with bank and financial institution counterparties with good credit rating.

Note 40.3: Liquidity risk

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

Exposure to liquidity risk

The company has sufficient current assets to manage the liquidity risk, if any in relation to current financial liabilities.

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.

The gross 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.

Note 40.4: Currency RiskMarket 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. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Company uses derivatives to manage market risks. Generally, the Company hedge the financial instruments to manage volatility in profit or loss.

Currency risk

The company operates internationally and portion of the business is transacted in USD, EURO and GBP currencies and consequently the company is exposed to foreign exchange risk through its sales in overseas market and purchases from overseas suppliers in various foreign currencies. Foreign currency exchange rate exposure is partly balanced by purchasing of goods and services in the respective currencies and through derivative instruments.

The company evaluates exchange rate exposure arising from foreign currency transactions and the company follows established risk management policies, including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.

Interest rate risk can either be 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 financial assets or borrowings because of fluctuations in the interest rates, if such assets/borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing borrowings will fluctuate because of fluctuations in the interest rates.

The risk estimates provided assume a change of 100 basis points interest rate for the interest rate benchmark as applicable to the borrowings summarized above. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The year end balances are not necessarily representative of the average debt outstanding during the year.

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. The primary objective of the Company''s Capital Management is to maximise shareholder value. The Company manages its capital structure and makes adjustments in the light of changes in the economic environment and the requirements of the financial covenants, if any.

The Company monitors capital using a ratio of ''adjusted net debt'' to ''equity''. For this purpose, adjusted net debt is defined as total borrowings, comprising interest-bearing loans and borrowings less cash and cash equivalents. Equity comprises all components of equity.

Note 44: Operating Segment

In accordance with Ind AS 108 "Operating Segments", segment information has been given in the consolidated financial statements of Astec LifeSciences Limited and therefore no separate disclosure on segment information is given in these financial statements.

(a) Employee stock option scheme (ESOP, 2012 as amended by the Shareholders by way of a Special Resolution)

The Company had set up the Employees Stock Option Plan 2012 which was amended by the Shareholders by way of a Special Resolution obtained by way of Postal Ballot, whose results have been declared on September 27, 2021.

The Scheme applies to the Eligible Employees who are in whole time employment of the Company or its Subsidiary Companies. The entitlement of each employee would be decided by the Nomination and Remuneration Committee of the respective Company based on the employee''s performance, level, grade, etc.

The total number of Stock Option to be awarded under the ESOP Scheme are restricted to 1% of the issued equity share capital at the time of awarding the Stock Option, can be awarded to any one employee in any one year.

The Stock Options shall vest in the Eligible Employees pursuant to the ESOP Scheme in the proportion of l/3rd at the end of each year from the date on which the Stock Options are awarded for a period of three consecutive years, or as may be determined by the Nomination and Remuneration Committee, subject to the condition that the Eligible Employee continues to be in employment of the Company or the Subsidiary company as the case may be.

The Eligible Employee shall exercise her / his right to acquire the shares vested in her / him all at one time within 1 month from the date on which the shares vested in her / him or such other period as may be determined by the Nomination and Remuneration Committee.

(b) Employee stock option scheme (ESOS, 2015)

The Company has implemented Employees under Employee stock option scheme (ESOS, 2015) which was approved by the Shareholders at the 21st Annual General Meeting. The employee stock option scheme is designed to provide incentives to all the permanent employees to deliver long-term returns. Under the plan, participants are granted options which will vest in 4 years (40% in 1st year, 30% in 2nd year, 20% in 3rd year and 10% in 4th year) from the date of grant. Participation in the plan is at the discretion of the Compensation Committee / Board of Directors of the Company.

Once vested, the options remains exercisable for a period of three years.

Options are granted at the market price on which the options are granted to the employees under ESOS 2015. When exercisable, each option is convertible into one equity share.

The Company has implemented Employee Stock Option Plan (ESOP 2012) which was approved by the Shareholders at the Extra-Ordinary General Meeting of the Company in the Year 2012. The employee stock option plan is designed to provide incentives to all the permanent employees to deliver long-term returns. Under the plan, participants are granted options which will vest in 4 years (40% in 1st year, 30% in 2nd year, 20% in 3rd year and 10% in 4th year) from the grant date. Participation in the plan is at the discretion of the Compensation Committee / Board of Directors of the Company.

Note 46.1: Contingent liabilities represents estimates made mainly for probable claims arising out of litigation/ disputes pending with authorities under various statutes (Excise duty, Customs duty, Income tax, etc).The probability and timing of outflow with regard to these matters depend on the final outcome of litigations/ disputes. Hence, the Company is not able to reasonably ascertain the timing of the outflow.

Note 47:The Hon''ble Supreme Court of India ("SC") by their order dated February 28, 2019, in the case of Surya Roshani Limited & others v/s EPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. The company has started complying with this prospectively from the month of March 2019. In respect of the past period there are significant implementation and interpretative challenges that the management is facing and is awaiting for clarity to emerge in this regard, pending which, this matter has been disclosed under the Contingent liability section in the financial statements. The impact of the same is not ascertainable.

Note 51: Related Party Disclosures

In compliance with Ind AS 24 - "Related Party Disclosures" as notified under Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, as amended, the required disclosures are given below:

1. Relationships:I. Holding Companies:

Godrej Agrovet Limited (GAVL) holds 63.29% Equity Shareholding in Astec LifeSciences Limited. GAVL is the subsidiary of Godrej Industries Limited (GIL). GIL is the Ultimate Holding Company of the Company.

II. Subsidiary Companies:

1. Behram Chemicals Private Limited

2. Astec Europe Sprl (ceased to be a subsidiary w.e.f. 31st August, 2020)

3. Comercializadora Agricola Agroastrachem Cia Ltda

Note 52: Assessment of impact of Covid-19 pandemic

The management has considered internal and certain external sources of information including economic forecasts and industry reports up to the date of approval of the financial statements in determining the impact on various elements of its financial statements. The management has used the principles of prudence in applying judgments, estimates and assumptions including sensitivity analysis and based on the current estimates, the management expects that it will fully recover the carrying amount of inventories, trade receivables, intangible assets and investments. The eventual outcome of impact of the global health pandemic may be different from those estimated as on the date of approval of these financial statements.

Note 53:

The figures for the previous year have been regrouped / reclassified to correspond with current year''s classification/ disclosure that include changes consequent to the issuance of "Guidance Note on Division II -Ind AS Schedule III to the Companies Act, 2013.

Mar 31, 2019

A. General Information

Astec LifeSciences Ltd. (âthe Companyâ) is a public limited company, which is domiciled and incorporated in the Republic of India with its registered office situated at Godrej One, 3rd Floor, Pirojshanagar, Eastern Express Highway, Vikhroli (East), Mumbai - 400 079. The Company was incorporated under the Companies Act, 1956 on January 25, 1994. The Company manufactures a wide range of Agrochemical active ingredients and pharmaceutical intermediates.

B. Basis of preparation

(1) Statement of compliance with Ind AS

The accompanying financial statements have been prepared in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015, as amended and notified under section 133 of the Companies Act, 2013, (the âActâ) and other relevant provisions of the Act.

The financial statements for the year ended 31 March 2019 have been reviewed by the Audit Committee and subsequently approved by the Board of Directors at its meeting held on April 30, 2019.

(2) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the following:

- certain financial assets and liabilities (including derivative instruments) that is measured at fair value (refer- Accounting policy regarding financials instruments); defined benefit plans - plan assets measured at fair value less present value of defined benefit obligation; and

- share-based payments - measured at fair value

(3) Functional and presentation 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 (âthe functional currencyâ) The Indian Rupee (INR) is the functional and presentation currency of the company. All amounts have been rounded off to the nearest lakh, unless otherwise indicated.

C. Key estimates and assumptions

While preparing financial statements in conformity with Ind AS, the management has made certain estimates and assumptions that require subjective and complex judgments. These judgments affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses, disclosure of contingent liabilities at the statement of financial position date and the reported amount of income and expenses for the reporting period. Future events rarely develop exactly as forecasted and the best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively.

Judgement, estimates and assumptions are required in particular for:

(1) Determination of the estimated useful lives

Useful lives of property, plant and equipment 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 Schedule II and in case of intangible assets, 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, past history of replacement, anticipated technological changes, manufacturersâ warranties and maintenance support.

(2) 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 in salary escalation, actuarial rates and life expectancy. The discount rate is determined by reference to market yields at the end of the reporting period on government bonds. The period to maturity of the underlying bonds correspond to the probable maturity of the post-employment benefit obligations. Due to complexities involved in the valuation and its long term nature, defined benefit obligation is sensitive to changes in these assumptions. All assumptions are reviewed at each reporting period.

(3) Recognition of deferred tax assets

Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying values of assets and liabilities and their respective tax bases, and unutilized business loss and depreciation carry-forwards and tax credits. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, unused tax losses, depreciation carryforwards and unused tax credits could be utilized.

(4) 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 amount included in other provisions.

(5) 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 required to subsequently be measured at amortised cost, interest is accrued using the effective interest method.

(6) Fair valuation of employee share options

The fair valuation of the employee share options is based on the Black-Scholes model used for valuation of options. Key assumptions made with respect to expected volatility includes share price, expected dividends and discount rate, under this option pricing model.

(7) Determining whether an arrangement contains a lease

At inception of an arrangement, the Company determines whether the arrangement is or contains a lease.

At inception or on reassessment of an arrangement that contains a lease, the Company separates payments and other consideration required by the arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Company concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset; subsequently, the liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the Companyâs incremental borrowing rate. And in case of operating lease, treat all payments under the arrangement as lease payments.

(8) Fair value of financial instruments

Derivatives are carried at fair value. Derivatives includes foreign currency forward contracts. Fair value of foreign currency forward contracts are determined using the fair value reports provided by respective bankers.

(9) Liability for Sales Return

Accruals for estimated product returns, which are based on historical experience of actual sales returns and adjustment on account of current market scenario is considered by Company to be reliable estimate of future sales returns.

D. Measurement of fair values

The Companyâs accounting policies and disclosures require the measurement of fair values for, both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. The management regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the management assesses the evidence obtained from the third parties to support the conclusion that such valuations 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. Fair values 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) or indirectly (i.e. derived from prices).

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

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 is categorised 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.

1 Rights, preferences and restrictions attached to equity shares

Equity Shares: The Company has one class of Equity shares having a par value of Rs. 10 per share. Each Shareholder is eligible for one vote per share held. All Equity Shareholders are eligible to receive dividends in proportion to their shareholdings. The dividends proposed by the Board of Directors are subject to the approval of the Shareholders in the ensuing Annual General Meeting. 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.

Capital redemption reserve

Capital redemption reserve was created for buy back of shares. The company may issue fully paid-up bonus shares out of the capital redemption reserve.

Employee stock options outstanding

The employee stock options outstanding is used to recognise the grant date fair value of options issued to employees under the Companyâs stock option plan.

Securities Premium

Securities Premium is used to record the premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

Cash flow hedge reserve

The Company uses hedging instruments as part of its management of foreign currency risk associated with foreign currency borrowings. For hedging foreign currency risk, the Company used foreign currency forward contracts which are designated as cash flow hedges. To the extent these hedges are effective, the change in fair value of the hedging instrument is recognised in the cash flow hedge reserve. Amounts recognised in the cash flow hedge reserve is reclassified to statement of profit and loss when the hedged item affects the profit and loss.

Note 2.1 : Cash Credit from banks are repayable on demand and carries interest at MCLR 0.25% (Previous year MCLR 1.10%). Note 20.2 : Foreign currency loans from Banks are at an interest rate of LIBOR 65 bps (Previous year LIBOR 75 bps) and are repayable in 180 days (Previous year - 30 days).

Note 2.2 : Buyers credit are at an interest rate of 3 to 6 month LIBOR 40 to 120 bps and are repayable within 6 months.

Note 2.3 : Cash Credit from banks are repayable on demand and carries interest at MCLR 0.55%.

Note 2.4 : Working capital loan (Rupee) from banks carries interest rate of 7.45% to 8.45% (Previous year - 7.50% to 7.85%). These loans are repayable on different dates within 3 months.

Note 2.5 : Commercial Paper carries interest rate of 6.95% to 8.49% and repayable within 3 months (Previous year 7.08% to 7.25%).

Details of security:

All the secured current borrowings (Note 20 above) have first pari passu charge on the current assets and movable assets of the Company, including inventory and receivables both present & future.

The company does not have any default as on the Balance Sheet date in repayment of any loan or interest.

Note 3.1: Micro and small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) have been identified by the Company on the basis of the information available with the Company and the auditors have relied on the same. Accordingly, Rs. 102.64 lakh is overdue as on March 31, 2019 to Micro, Small and Medium Enterprises on account of principal or interest.

Note 4.1 : The Company makes a provision on estimated sales return based on historical experience. The Sales returns are generally expected within a year.

Note 5.1 :- Consequent to clarifications published by The Institute of Chartered Accountants of India (ICAI), the amount of Export Incentives has been recognised as âOther Incomeâ with effect from 1st April, 2018. In earlier periods, these export incentives were reported under âRevenue from Operations - Other Operating Revenueâ in the Statement of Profit & Loss. This has no impact on reported Profit Before Tax (PBT).

Note 6 (a) : Corporate social responsibility expenditure

Total expenditure incurred on Corporate social responsibility activities during the current year is Rs. 57.53 lakh (previous year Rs. 34.44 lakh)

Note 7.1

The calculation of diluted earnings per share is based on profit attributed to equity shareholders and weighted average number of equity shares outstanding after adjustments for the effects of all dilutive potential equity shares.

Note 8 : Employee benefits

The Company contributes to the following post-employment plans in India.

Defined Contribution Plan:

The Company recognised Rs. 68.05 lakh for the year ended March 31, 2019 (Previous Year Rs. 56.08 lakh) towards provident fund contribution in the Statement of Profit and Loss.

Defined Benefit Plan:

The Companyâs gratuity and leave encashment/long-term compensated absences schemes are defined benefit plans. The Companyâs liability for the defined benefit schemes is actuarially determined based on the projected unit credit method. The Companyâs net obligations in respect of such plans is calculated by estimating the amount of future benefit that the employees have earned in return for their services and the current and prior periods that benefit is discounted to determine its present value and the fair value of the plan asset is deducted. Actuarial gains and losses are recognised in Other Comprehensive Income.

The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at March 31, 2019. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

Based on the actuarial valuation obtained in this respect, the following table sets out the details of the employee benefit obligation and the plan assets as at balance sheet date:

Other long-term employee benefits:

Compensated absences are payable to employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement. The charge towards compensated absences for the year ended March 31, 2019 based on actuarial valuation using the projected accrued benefit method is Rs. 11.28 lakh (Previous year : Rs. 11.71 lakh).

Terminal Benefits: All terminal benefits including voluntary retirement compensation are fully written off to the Statement of Profit & Loss

Note 9: Financial instruments - Fair values and risk management Note 36.1 : Accounting classification and fair values

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include :

- the fair value of the forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk ;

- Liquidity risk;

- Market risk;

- Currency risk;

i. Risk management framework

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

The Companyâs 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 Companyâs 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 companyâs 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 adhoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

Note 10.1 : Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and loans and advances.

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

Trade receivables and loans and advances

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the Companyâs standard payment and delivery terms and conditions are offered. The Companyâs sales are backed by letters of credit and commercial general liability insurance policy from Reliance General Insurance.

The maximum exposure to credit risk for trade and other receivables by type of counterparty was as follows.

Cash and cash equivalents

The Company held cash and cash equivalents of Rs. 16.44 lakh at March 31, 2019 (previous year Rs. 24.37 lakh) . The cash and cash equivalents are held with bank and financial institution counterparties with good credit rating.

Note 10.2 : Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs 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 Companyâs reputation.

Note 10.3 : Currency Risk Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Company uses derivatives to manage market risks. Generally, the Company hedge the financial instruments to manage volatility in profit or loss.

Currency risk

Exposure to currency risk

The summary quantitative data about the Companyâs exposure to currency risk as reported to the management of the Company is as follows. 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.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against all other currencies at March 31, 2019 would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

Note 10.4 : Interest rate risk

Exposure to interest rate risk

The interest rate profile of the Companyâs interest-bearing financial instruments as reported to the management of the Company is as follows.

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased / (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

Note 11 : Hedge accounting

The Companyâs risk management policy is to hedge its foreign currency exposure in accordance with the exposure limits advised from time to time. The Company uses forward exchange contracts to hedge its currency risk. Such contracts are generally designated as cash flow hedges.

The forward exchange contracts are denominated in the same currency as the highly probable future transaction value, therefore the hedge ratio is 1:1. The Companyâs policy is for the critical terms of the forward exchange contracts to align with the hedged item.

The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows. The Company assesses whether the derivative designated in each hedging relationship is expected to be and has been effective in offsetting changes in the cash flows of the hedged item using the hypothetical derivative method.

In these hedge relationships, changes in timing of the hedged transactions is the main source of hedge ineffectivenes

The Companyâs weighted average tax rates for the year ended March 31, 2019 and March 31, 2018 were 36.00% and 37.19%, respectively.

The effective tax rate for the year ended March 31, 2019 is higher than the companyâs domestic tax rate primarily as a result of prior year tax adjustments of Rs. 39.63 lakh and non-deductible tax expenses.

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 taxes levied by the same tax authority. 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.

Given that the Company does not have any intention to dispose investments in subsidiaries in the forseeable future, deferred tax asset on indexation benefit in relation to such investments has not been recognised.

Note 12 : Capital Management

The Companyâs 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. The primary objective of the Companyâs Capital Management is to maximise shareholder value. The Company manages its capital structure and makes adjustments in the light of changes in the economic environment and the requirements of the financial covenants, if any.

The Company monitors capital using a ratio of âadjusted net debtâ to âequityâ. For this purpose, adjusted net debt is defined as total borrowings, comprising interest-bearing loans and borrowings less cash and cash equivalents. Equity comprises all components of equity.

Note 13: Operating Segment

In accordance with Ind AS 108 âOperating Segmentsâ, segment information has been given in the consolidated financial statements of Astec LifeSciences Limited and therefore no separate disclosure on segment information is given in these financial statements.

Note 14 : Share based payments

(a) Employee stock option scheme (ESOS,2015)

Once vested, the options remains exercisable for a period of three years.

Options are granted at the market price on which the options are granted to the employees under ESOS 2015. When exercisable, each option is convertible into one equity share.

(b) Employee stock option plan (ESOP,2012)

Once vested, the options remains exercisable for a period of seven years.

Options are granted under ESOP 2012 at an exercise price of Rs. 34/- each. When exercisable, each option is convertible into one equity share.

(i) Fair value of options granted

The fair value of grant date of options granted during the year ended March 31, 2019 is mentioned in the table below. The fair value at grant date is determined using the Black Scholes model which takes into account the exercise price, the term of option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

The model inputs for options granted includes:

ESOS, 2015 granted on 26 July 2016

Options are granted for a consideration as mentioned in the below table and 40% of options vest after 1 year, 30% of options after 2 years, 20% of options after 3 years and 10% of options after 4 years. Vested options are exercisable for a period of 3 years after vesting.

The model inputs for options granted includes:

ESOP, 2012- Option B granted on 16 May 2015

The model inputs for options granted includes:

ESOP, 2012- Option A granted on 31 January 2013

Options are granted for a consideration as mentioned below in the table and vest 40% of options after 1 year, 30% of options after 2 years, 20% of options after 3 years and 10% of options after 4 years. Vested options are exercisable for a period of 7 years after vesting.

Note 15

The Honâble Supreme Court of India (âSCâ) by their order dated February 28, 2019, in the case of Surya Roshani Limited & others v/s EPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Subsequently, a review petition against this decision has been filed and is pending before the SC for disposal.

Pending decision on the subject review petition and directions from the EPFO, the management has a view that the applicability of the decision is prospective and accordingly provided the liability for March 2019.

The impact for the past period, will depend upon the outcome of subject review petition and directions from the EPFO and hence disclosed as a Contingent liability in the financial statements. The impact of the same is not ascertainable.

Note 16 : Lease taken by the Company

Operating Lease:

The Companyâs leasing arrangements are in respect of operating leases for premises occupied by the Company. These leasing arrangements are non cancellable, and are renewable on a periodic basis by mutual consent on mutually acceptable terms. a. The total of future minimum lease payments under non-cancellable operating leases for each of the following periods :

Note 17

The Government of India introduced the Goods and Services Tax (GST) with effect from July 1, 2017, consequently revenue from operations for the year ended March 31, 2018 is net of GST, however revenue for quarter ended June 30, 2017 is inclusive of excise duty and hence, total income from operations for year ended March 31, 2018 and year ended March 31, 2019 are not comparable.

Note 18 : Specified Bank Notes

The disclosures regarding holdings as well as dealings in specified bank notes during the period from November 8, 2016 to December 30, 2016 have not been made in these financial statements since they do not pertain to the financial year ended March 31, 2019.

Note 19 : Related Party Disclosures

In compliance with Ind AS 24 - âRelated Party Disclosuresâ as notified under Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, as amended, the required disclosures are given below:

1. Relationships:

(i) Holding Companies:

Godrej Agrovet Limited (GAVL) holds 57.67% Equity Shareholding in Astec LifeSciences Limited. GAVL is the subsidiary of Godrej Industries Limited (GIL) and GIL is a subsidiary of Vora Soaps Limited (VSL) (upto December 23, 2018). Consequently, GIL is the Ultimate Holding Company of the Company w.e.f. December 24, 2018.

(ii) Subsidiary Companies:

1 Behram Chemicals Private Limited

2 Astec Europe Sprl

3 Comercializadora Agricola Agroastrachem Cia Ltda

(iii) Fellow Subsidiaries:

1 Creamline Dairy Products Limited

2 Godrej Tyson Foods Limited (w.e.f. 27th March, 2019)

3 Godrej Maxximilk Private Limited (w.e.f. 27th March, 2019)

4 Godrej One Premises Management Private Limited

(iv) Associates / Joint Ventures of Godrej Agrovet Limited (GAVL) :

1 Godrej Consumer Products Limited

2 Godrej Tyson Foods Limited (upto 26th March, 2019)

3 Godrej Maxximilk Private Limited (upto 26th March, 2019)

(v) Associates / Joint Ventures of Godrej Industries Limited (GIL) :

Godrej Consumer Products Limited

(vi) Entities which is controlled/jointly controlled/has significant influence of KMPâs of Astec LifeSciences Limited :

Astec Crop Care Private Limited

(vii) Entities which has significant influence of Directorâs of Astec LifeSciences Limited :

Nichem Solutions

(viii) Other related parties

Godrej & Boyce Manufacturing Company Limited

(ix) Key Managerial Personnel

1 Mr. Nadir B. Godrej, Chairman and Non-Executive Director

2 Mr. B. S. Yadav, Non-Executive Director

3 Mr. Rakesh Dogra, Non-Executive Director

4 Mr. Ashok V.Hiremath, Managing Director

5 Mr. Arijit Mukherjee, Whole Time Director

6 Mr. Saurav Bhala, Chief Financial Officer (w.e.f. 25^th October, 2017)

7 Mr. P. P. Manoj, Chief Financial Officer (upto 17^th October, 2017)

8 Ms. Tejal Jariwala, Company Secretary (upto 31^st October, 2018)

9 Ms. Tejashree Pradhan, Company Secretary (w.e.f. 1^st November, 2018)

Note 20 : The figures for the previous year have been regrouped / reclassified to correspond with current yearâs classfication/ disclosure that include changes consequent to the issuance of âGuidance Note on Division II - Ind AS Schedule III to the Companies Act, 2013.â

Mar 31, 2018

1 Rights, preferences and restrictions attached to Equity Shares

Equity Shares: The Company has one class of Equity Shares having a par value of Rs.10 per share. Each Shareholder is eligible for one vote per share held. All Equity Shareholders are eligible to receive dividends in proportion to their shareholdings. The dividends proposed by the Board of Directors are subject to the approval of the Shareholders in the ensuing Annual General Meeting. 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.

Capital redemption reserve

Capital redemption reserve was created for buy back of shares. The Company may issue fully paid-up bonus shares out of the capital redemption reserve.

Employee stock options outstanding

The employee stock options outstanding account is used to recognise the grant date fair value of options issued to employees under the Companyâs stock option plan.

Securities Premium Account

Securities Premium Account is used to record the premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

Cash flow hedge reserve

Details of security:

Vehicle loans are secured by first charge on the vehicle specifically financed out of loan.

The Company does not have any continuing default as on the Balance Sheet date in repayment of loans and interest.

Note no. 2.1 : Cash Credit from banks are repayable on demand and carries interest at MCLR 1.10%.

Note no. 2.2 : Foreign currency loans from Banks are at an interest rate of LIBOR 75 bps and are repayable in 30 days.

Note no. 2.3 : Buyers credit are at an interest rate of 3 month LIBOR 40 to 100 bps and are repayable within 6 months.

Note no. 2.4 : Cash Credit from banks are repayable on demand and carries interest at MCLR 0.55%.

Note no. 2.5 : Working capital loan (Rupee) from banks carries interest rate of 7.50% to 7.85%. These loans are repayable on different dates within 3 months.

Details of security:

All the secured current borrowings (Note 22 above) have first pari passu charge on the current assets of the Company, including inventory and receivables both present & future and second charge on Fixed Assets of the Company present & future (including Equitable Mortgage/Hypothecation of Factory Land & Building / Plant & Machinery).

The Company does not have any default as on the Balance Sheet date in repayment of any loan or interest.

Note no. 3.1: Micro and small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) have been identified by the Company on the basis of the information available with the Company and the auditors have relied on the same. Accordingly, there is no undisputed amount overdue as on March 31, 2018, to Micro, Small and Medium Enterprises on account of principal or interest.

Note no. 4.1 : The Company makes a provision on estimated sales return based on historical experience. The Sales returns are generally expected within a year.

Note 5 (b) : Corporate social responsibility expenditure

Total expenditure incurred on Corporate social responsibility activities during the current year is Rs.34.44 Lakh (previous year Rs.17.86 Lakh)

Note no. 6.1

The calculation of diluted earnings per share is based on profit attributed to equity shareholders and weighted average number of Equity Shares outstanding after adjustments for the effects of all dilutive potential Equity Shares.

Note 7 : Employee benefits

The Company contributes to the following post-employment plans in India.

Defined Contribution Plans:

The Company recognised Rs.56.08 Lakh for the year ended March 31, 2018 (Previous Year Rs.56.67 Lakh ) towards provident fund contribution in the Statement of Profit and Loss.

Defined Benefit Plan:

In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company has a defined benefit plan which provides for gratuity payments. The plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amounts are based on the respective employeeâs last drawn salary and the years of employment with the Company. Liabilities in respect of the gratuity plan are determined by an actuarial valuation, based upon which the Company makes annual contributions to the Group Gratuity cum Life Assurance Schemes administered by the LIC of India, a funded defined benefit plan for qualifying employees. Trustees administer the contributions made by the Company to the gratuity scheme.

The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at March 31, 2018. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

Based on the actuarial valuation obtained in this respect, the following table sets out the details of the employee benefit obligation and the plan assets as at Balance Sheet date:

i. Movement in net defined benefit (asset) liability

The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset) liability and its components

iii. Actuarial assumptions

The following were the principal actuarial assumptions at the reporting date (expressed as weighted averages).

Assumptions regarding future mortality have been based on published statistics and mortality tables.

iv. Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occuring at the end of the reporting period.

v. Expected future cash flows

The expected future cash flows in respect of gratuity as at March 31, 2018 were as follows Expected contribution

The expected contributions for defined benefit plan for the next financial year will be in line with the contribution for the year ended March 31, 2018, i.e. Rs.12.57 Lakh.

Other long-term employee benefits:

Compensated absences are payable to employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement. The charge towards compensated absences for the year ended March 31, 2018 based on actuarial valuation using the projected accrued benefit method is Rs.11.71 Lakh (Previous year : Rs.11.17 Lakh).

Terminal Benefits: All terminal benefits including voluntary retirement compensation are fully written off to the Statement of Profit & Loss

Note 8: Financial instruments - Fair values and risk management

Note no. 8.1: Accounting classification and fair values

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include :

- the fair value of the forward foreign exchange contracts is determined using forward exchange rates at the Balance Sheet date.

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk;

- Market risk;

- Currency risk;

i. Risk management framework

The Companyâs Board of Directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The Board of Directors has established the Risk Management Committee, which is responsible for developing and monitoring the Companyâs risk management policies. The committee reports regularly to the Board of Directors on its activities.

The Audit Committee oversees how management monitors compliance with the companyâs 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 adhoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

Note no. 8.2: Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and loans and advances.

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

Trade receivables and loans and advances.

The Company individually monitors the sanctioned credit limits as against the outstanding balances. Accordingly, the Company makes specific provisions against such trade receivables wherever required and monitors the same at periodic intervals.

The Company monitors each loans and advances given and makes any specific provision wherever required.

The maximum exposure to credit risk for trade and other receivables by type of counterparty was as follows.

Cash and cash equivalents

The Company held cash and cash equivalents of Rs.24.37 Lakh at March 31, 2018 (previous year Rs.273.86 Lakh) . The cash and cash equivalents are held with bank and financial institution counterparties with good credit rating.

Note 8.3: Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs 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 Companyâs reputation.

Exposure to liquidity risk

Note no. 8.4 : Currency Risk Market risk

Currency risk

The Company operates internationally and portion of the business is transacted in USD & EURO currencies and consequently the Company is exposed to foreign exchange risk through its sales in overseas market and purchases from overseas suppliers in various foreign currencies. Foreign currency exchange rate exposure is partly balanced by purchasing of goods and services in the respective currencies and through derivative instruments.

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies, including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.

Exposure to currency risk

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against all other currencies at March 31, 2018 would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

Note: Sensitivity has been calculated using standard Deviation % of USD rate movement.

Note no. 8.5: 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 financial assets or borrowings because of fluctuations in the interest rates, if such assets/borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing borrowings will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk

The interest rate profile of the Companyâs interest-bearing financial instruments as reported to the management of the Company is as follows.

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

Note 9 : Hedge accounting

In these hedge relationships, changes in timing of the hedged transactions is the main source of hedge ineffectiveness.

The Companyâs weighted average tax rates for the year ended March 31, 2018 and March 31, 2017 were 37.19% and 33.30%, respectively. The effective tax rate for the year ended March 31, 2018 is higher primarily as a result of prior year tax adjustments of Rs.126.58 Lakh and nondeductible tax expenses as compared to previous year.

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 taxes levied by the same tax authority.

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.

Note 10 : Capital Management

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. The primary objective of the Companyâs Capital Management is to maximise shareholder value. The Company manages its capital structure and makes adjustments in the light of changes in the economic environment and the requirements of the financial covenants, if any.

Note 11: Operating Segment

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (âCODMâ) of the Company. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Managing Director (MD) and Chief Operating Officer (COO) of the Company. The Company has identified only one segment i.e. Agrochemicals as reporting segment based on the information reviewed by CODM. The Company while presenting the consolidated financial statements has disclosed the segment information as required under Indian Accounting Standard 108 âOperating Segmentsâ.

Note No. 12: Related Party Disclosures

Related Party Disclosures as required by IND AS - 24, âRelated Party Disclosuresâ, are given below:-

1 Relationships:

(i) Holding Companies:

Godrej Agrovet Limited (GAVL) holds 57.44% Equity Shareholding in Astec LifeSciences Limited. GAVL is the subsidiary of Godrej Industries Limited (GIL) and GIL is a subsidiary of Vora Soaps Limited (VSL) w.e.f. March 30, 2017. Consequently, VSL is the Ultimate Holding Company of the Company w.e.f. March 30, 2017.

(ii) Subsidiary Companies:

1 Behram Chemicals Private Limited

2 Astec Europe Sprl

3 Comercializadora Agricola Agroastrachem Cia Ltda

(iii) Fellow Subsidiaries:

A. Subsidiaries of Godrej Agrovet Ltd.

1 Creamline Dairy Products Limited

B. Subsidiaries of Godrej Industries Ltd. (GIL) :

1 Godrej Agrovet Limited (GAVL)

2 Natures Basket Limited

3 Godrej One Premises Management Private Limited

C. Associates / Joint Ventures of Godrej Industries Limited (GIL) :

1 Godrej Consumer Products Limited

D. Entities which is controlled/jointly controlled/has significant influence of KMPâs of Astec LifeSciences Limited :

1 Astec Crop Care Private Limited

2 Hikal Limited

3 Opus Chemicals Private Limited

4 Altimax Financial Services Private Limited

E. Entities which has significant influence of Directorâs of Astec LifeSciences Limited :

Nichem Solutions

F. Other related parties

Godrej & Boyce Manufacturing Company Limited

(iv) Key Managerial Personnel

1 Mr. Nadir B. Godrej, Chairman and Non-Executive Director

2 Mr. Ashok V.Hiremath, Managing Director

3 Mr. B. S. Yadav, Non-Executive Director

4 Mr. Rakesh Dogra, Non-Executive Director

5 Mr. Arijit Mukherjee, Whole Time Director

6 Mr. P. P. Manoj, Chief Financial Officer (upto 17th October, 2017)

7 Mr. Saurav Bhala, Chief Financial Officer (w.e.f. 25th October, 2017)

8 Ms. Tejal Jariwala, Company Secretary and Compliance Officer

Note 13 : Lease taken by the Company Operating Lease:

The Companyâs leasing arrangements are in respect of operating leases for premises occupied by the Company. These leasing arrangements are non-cancellable, and are renewable on a periodic basis by mutual consent on mutually acceptable terms.

a. The total of future minimum lease payments under non-cancellable operating leases for each of the following periods :

b. Lease payments recognised in the Statement of Profit & Loss for the year :

Note 14 : Share based payments

(a) Employee Stock Option Scheme (ESOS 2015)

The Company has implemented Employees under Employee Stock Option Scheme (ESOS, 2015) which was approved by the Shareholders at the 21st Annual General Meeting. The employee Stock Option Scheme is designed to provide incentives to all the permanent employees to deliver long-term returns. Under the plan, participants are granted options which will vest in 4 years (40% in 1st year, 30% in 2nd year, 20% in 3rd year and 10% in 4th year) from the date of grant. Participation in the plan is at the discretion of the Compensation Committee / Board of Directors of the Company.

Once vested, the options remains exercisable for a period of three years.

Options are granted at the market price on which the options are granted to the employees under ESOS 2015. When exercisable, each option is convertible into one equity share.

(b) Employee Stock Option Plan (ESOP 2012)

The Company has implemented Employee Stock Option Plan (ESOP 2012) which was approved by the Shareholders at the Extra-Ordinary General Meeting of the Company in the Year 2012. The Employee Stock Option Plan is designed to provide incentives to all the permanent employees to deliver long-term returns. Under the plan, participants are granted options which will vest in 4 years (40% in 1st year, 30% in 2nd year, 20% in 3rd year and 10% in 4th year) from the grant date. Participation in the plan is at the discretion of the Compensation Committee / Board of Directors of the Company.

Once vested, the options remains exercisable for a period of seven years.

Options are granted under ESOP 2012 at an exercise price of Rs.34/- each. When exercisable, each option is convertible into one equity share.

(i) Fair value of options granted

The fair value of grant date of options granted during the year ended March 31, 2018 is mentioned in the table below. The fair value at grant date is determined using the Black Scholes model which takes into account the exercise price, the term of option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

ESOS 2015 granted on 26th July, 2016

The model inputs for options granted during the year ended March 31, 2016 included:

ESOP 2012- Option B granted on 16th May, 2015

The model inputs for options granted during the year ended March 31, 2015 included:

ESOP 2012- Option A granted on 31st January, 2015

The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information.

b) Expense arising from share based payment transactions

Total expenses arising from share-based payment transactions recognised in profit or loss as part of employee benefit expense were as follows:

Mar 31, 2017

Note 1 : Financial instruments - Fair values and risk management

A. Accounting classification and fair values

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.

The carrying amount of trade receivables, loans, trade payables, capital creditors, cash & cash equivalents and bank balances other than cash and cash equivalents are considered to be the same as their fair values, due to their short term nature.

The carrying amount of security deposits are considered to be reasonable approximation of fair value.

During the reporting period ending March 31, 2016 and March 31, 2015, there were no transfers between levels 1 and 2 fair value measurements

The Company''s policy is to recognize transfers into and transfers out of fair value hierarchy level as at the end of reporting period. Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include :

- the fair value of the forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

B. Financial risk management

The 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 business activities expose it to a variety of financial risks, namely credit risk, liquidity risk and market risks. The Company''s senior management has the overall responsibility for the establishment and oversight of the Company''s risk management framework and is responsible for developing and monitoring the Company''s risk management policies. These 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.

ii Credit risk

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

Trade receivables and loans and advances

The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s sales are backed by letters of credit and commercial general liability insurance policy from Reliance General insurance. Accordingly no provision has been made on the same.

Management believes that the unimpaired amounts which are past due are collectible in full.

Cash and cash equivalents

The Company''s held cash and cash equivalents (Excluding Bank balances other than cash & cash equivalents) of Rs, 273.86 Lakh at March 31, 2017 (March 31, 2016: Rs, 220.99 Lakh, April 1, 2015: Rs, 1.15 Lakh). The cash and cash equivalents are held with bank and financial institution counterparties with good credit rating.

Other than trade and other receivables, the Company has no other financial assets that is past due but not impaired.

iii. Liquidity risk

iv. Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Company uses derivatives to manage market risks. Generally, the Company hedge the financial instruments to manage volatility in profit or loss.

Currency risk

The company operates internationally and portion of the business is transacted in USD & EURO currencies and consequently the company is exposed to foreign exchange risk through its sales in overseas market and purchases from overseas suppliers in various foreign currencies. Foreign currency exchange rate exposure is partly balanced by purchasing of goods and services in the respective currencies and through derivative instruments.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against all other currencies at March 31 would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales, purchases and borrowings.

The Company''s hedging policy only allows for effective hedge relationships to be established. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The company enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item, and so a qualitative assessment of effectiveness is performed.

There were no ineffectiveness recognized in the statement of profit and loss during March 31, 2017 and March 31, 2016.

Note 2: Leases

Operating leases A. Leases as lessee

The Company leased a number of office premises under operating leases. The leases typically run for a period of 3 to 8 years, with an option to renew the lease after that date. Lease payments are renegotiated at the time of renewal to reflect market rentals. For certain operating leases, the Company is restricted from entering into any sub-lease arrangements.

Finance leases

A. Leases as less or

The company assessed one of its arrangements as an embedded lease transaction and determined the same as finance lease. Accordingly, Property, plant and equipment have been derecognized and finance lease receivable have been accounted at present value of minimum lease payments and resultant difference have been charged to retained earnings. Revenue elements identified as fixed charges towards leasing as per the agreement which are covered under minimum lease receivable definition for finance lease accounting is adjusted partly against finance lease receivable to the extent of principal amount and partly recognized as finance income.

Note 3: Capital Management

a) Risk Management

The Company monitors capital using a ratio of ''adjusted net debt'' to ''adjusted equity''. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings less cash and cash equivalents. Adjusted equity comprises of all components of equity other than amounts accumulated in the effective portion of cash flow hedges and cost of hedging.

Note 4: Operating Segment

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM") of the Company. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Managing Director (MD) and Chief Operating Officer (COO) of the Company. The Company has identified only one segment i.e. Agrochemicals as reporting segment based on the information reviewed by CODM.

The company while presenting the consolidated financial statements has disclosed the segment information as required under Indian Accounting Standard 108 "Operating Segments".

Note 5 : Related Party

1 Holding Company

Godrej Agrovet Limited (GAVL) holds 55.64% Equity Shareholding in Astec Life Sciences Limited. GAVL is the subsidiary of Godrej Industries Limited (GIL) and GIL was a subsidiary of Godrej & Boyce Manufacturing Company Limited (G&B) till March 29, 2017. Consequently, G&B was also the Ultimate Holding Company of the company till March 29, 2017 and ceased to be so w.e.f. March 30, 2017.

GIL became a subsidiary of Vora Soaps Limited (VSL) w.e.f. March 30, 2017. Consequently, VSL is the Ultimate Holding Company of the company w.e.f. March 30, 2017.

2 Fellow subsidiaries

A. Subsidiaries of Astec LifeSciences Limited:

1. Behram Chemicals Private Limited

2. Astec Europe Sprl

3. Commercializadora Agricola Agroastrachem Cia Ltda

B. Subsidiaries of Godrej Agrovet Limited (GAVL):

1. Godvet Agrochem Limited

2. Godrej Seeds & Genetics Limited (upto March 18, 2017)

3. Creamline Dairy Products Limited

4. Nagavalli Milkline Pvt. Ltd. (a subsidiary of Creamline Dairy Products Ltd.)

C. Subsidiaries of Godrej & Boyce Mfg. Co. Ltd. (Fellow subsidiaries upto March 29, 2017):

1. Godrej Infotech Ltd.

2. Godrej (Singapore) Pte. Ltd. (incorporated in Singapore)

3. Veromatic International BV (incorporated in the Netherlands)

4. Busbar Systems (India) Ltd (a wholly-owned subsidiary)

5. Mercury Mfg. Co. Ltd. (a wholly-owned subsidiary)

6. Godrej Americas Inc. (a wholly-owned subsidiary incorporated in the USA)

7. India Circus Retail Pvt. Ltd.

D. Subsidiaries of Godrej Industries Ltd.(GIL) :

1. Godrej Agrovet Ltd. (GAVL)

2. Godrej Properties Ltd. (GPL)

3. Ensemble Holdings & Finance Ltd.

4. Godrej International Ltd. (incorporated in the Isle of Man)

5. Natures Basket Ltd.

6. Godrej International Trading & Investments Pte Ltd. (Incorporated in Singapore)

7. Godrej International Ltd. (Labuan Malaysia)

E. Subsidiaries of Godrej Properties Limited (GPL):

1. City Infraprojects Limited

2. Godrej Realty Pvt. Ltd.

3. Godrej Real Estate Pvt. Ltd.

4. Godrej Buildcon Pvt. Ltd.

5. Godrej Projects Development Pvt. Ltd. (GPDPL)

6. Godrej Redevelopers (Mumbai) Pvt. Ltd. (a subsidiary of GPDPL)

7. Godrej Garden City Properties Pvt. Ltd.

8. Godrej Landmark Redevelopers Pvt. Ltd.

9. Godrej Green Homes Ltd.

10. Godrej Home Developers Pvt. Ltd.

11. Godrej Hillside Properties Pvt. Ltd.

12. Godrej Prakriti Facilities Private Limited (a subsidiary of Happy Highrises Ltd.)

13. Godrej Investment Advisers Private Limited

14. Godrej Highrises Properties Private Limited

15. Godrej Genesis Facilities Management Private Limited (a subsidiary of Happy Highrises Ltd.)

16. Godrej Residency Private Limited

17. Godrej Skyline Developers Private Limited

18. Godrej Vikhroli Properties India Limited (Godrej Vikhroli Properties LLP converted into a Public Limited Company)

19. Prakritiplaza Facilities Management Private Limited

F. Subsidiaries of Godrej Infotech Ltd. (Fellow subsidiaries upto March 29, 2017):

1. Godrej Infotech Americas Inc. (a wholly-owned subsidiary incorporated in North Carolina, USA)

2. Godrej Infotech (Singapore) Pte. Ltd. (a wholly-owned subsidiary incorporated in Singapore)

3. LVD Godrej Infotech NV (a subsidiary incorporated in Belgium)

G. Subsidiaries of Godrej (Singapore) Pte. Ltd.(Fellow subsidiaries upto March 29, 2017):

1. JT Dragon Pte. Ltd. (Incorporated in Singapore)

2. Godrej (Vietnam) Co. Ltd. (Incorporated in Vietnam) (a wholly owned subsidiary of JT Dragon Pte. Ltd.)

H. Subsidiaries of Veromatic International BV:

1. Veromatic Services BV (incorporated in the Netherlands)

2. Prowama Trading BV (incorporated in the Netherlands) (formerly Water Wonder Benelux BV) liquidated on 28th December 2015

I. Other Subsidiaries (where Godrej & Boyce Mfg. Co. Ltd. owns directly and/or indirectly through one or more subsidiaries, more than one-half of the equity share capital) (Fellow subsidiaries upto March 29, 2017):

1. Godrej Consumer Products Ltd. (GCPL)

2. Godrej One Premises Management Private Limited

J. Subsidiaries and Sub-subsidiaries of Godrej Consumer Products Limited (GCPL) (Fellow subsidiaries upto March 29, 2017):

1. Godrej South Africa (Proprietary) Ltd. (formerly, Rapidol (Pty) Ltd.) (incorporated in South Africa)

2. Godrej Netherlands BV (incorporated in the Netherlands)

3. Godrej UK Ltd. (a subsidiary of Godrej Netherlands BV)

4. Godrej Global Mid East FZE (incorporated in Sharjah, U.A.E.) (a subsidiary of Godrej Consumer Products Holding (Mauritius) Ltd.)

5. Godrej Consumer Products Mauritius Ltd.

6. Godrej Consumer Products Holding (Mauritius) Ltd. (incorporated in Mauritius)

7. Godrej Household Products Lanka (Private) Ltd. (incorporated in Sri Lanka)

8. Godrej Household Products Bangladesh Pvt. Ltd. (incorporated in Bangladesh)

9. Godrej Consumer Products Bangladesh Ltd. (incorporated in Bangladesh)

10. Godrej Mauritius Africa Holdings Ltd. (incorporated in Mauritius)

11. Godrej West Africa Holdings Ltd. (incorporated in Mauritius) (a subsidiary of Godrej Mauritius Africa Holdings Ltd.)

12. Godrej Consumer Products (UK) Ltd. (a subsidiary of Godrej UK Ltd.)

13. Godrej Consumer Investments (Chile) Spa, (incorporated in Chile) (a subsidiary of Godrej Netherlands BV)

14. Godrej Mideast Holdings Limited (Incorporated in Dubai) (a 100 % subsidiary of Godrej Indonesia IP Holdings Limited) (w.e.f. July 28, 2015)

15. Godrej Holdings (Chile) Limitada, (incorporated in Chile) (a subsidiary of Godrej Consumer Investments (Chile) Spa)

16. Cosmetica Nacional, (incorporated in Chile) (a subsidiary of Godrej Holdings (Chile) Limitada)

17. Plasticos Nacional, (incorporated in Chile) (a subsidiary of Cosmetica National)

18. Kinky Group (Proprietary) Ltd. (a subsidiary of Godrej Mauritius Africa Holdings Ltd.)

19. Godrej Nigeria Ltd. (incorporated in Nigeria) (a subsidiary of Godrej Consumer Products Mauritius Ltd.)

20. Indovest Capital Ltd. (incorporated in Malaysia) (a subsidiary of Godrej Consumer Products Holding (Mauritius) Ltd.)

21. Godrej Consumer Products Dutch Cooperatief UA, (incorporated in the Netherlands) (a subsidiary of Godrej Consumer Products Holding (Mauritius) Ltd.)

22. Godrej Consumer Products (Netherlands) BV (incorporated in the Netherlands) (a subsidiary of Godrej Consumer Products Dutch Cooperatief UA)

23. Godrej Consumer Holdings (Netherlands) BV (incorporated in the Netherlands) (a subsidiary of Godrej Consumer Products Dutch Cooperatief UA)

24. PT Megasari Makmur (incorporated in Indonesia) (a subsidiary of Godrej Consumer Holdings (Netherlands) BV)

25. PT Intrasari Raya (incorporated in Indonesia) (a subsidiary of Godrej Consumer Holdings (Netherlands) BV)

26. PT Ekamas Sarijaya (incorporated in Indonesia) (a subsidiary of Godrej Consumer Holdings (Netherlands) BV)

27. PT Indomas Susemi Jaya (incorporated in Indonesia) (a subsidiary of Godrej Consumer Holdings (Netherlands) BV)

28. PT Sarico Indah (incorporated in Indonesia) (a subsidiary of Godrej Consumer Holdings (Netherlands) BV)

29. Panamar Produccioness S.A (incorporated in Argentina) (a subsidiary of Godrej Netherlands Argentina BV)

30. Argencos S.A. (incorporated in Argentina) (a subsidiary of Godrej Netherlands Argentina BV)

31. Laboratoria Cuenca S.A. (incorporated in Argentina) (a subsidiary of Godrej Netherlands Argentina BV)

32. Deciral S.A. (incorporated in Uruguay) (a subsidiary of Laboratoria Cuenca S.A.)

33. Issue Group Brazil Ltda. (incorporated in Brazil) (a subsidiary of Godrej Netherlands Argentina BV)

34. Consell S.A . (incorporated in Argentina) (a subsidiary of Laboratoria Cuenca S.A.)

35. Subinite Pty Ltd. (incorporated in South Africa) (a subsidiary of Godrej West Africa Holdings Ltd.)

36. Lorna Nigeria Ltd (incorporated in Nigeria) (a subsidiary of Godrej Mauritius Africa Holdings Ltd.)

37. Weave IP Holding Mauritius Pvt. Ltd. (incorporated in Mauritius) (a subsidiary of Godrej West Africa Holdings Ltd.)

38. Weave Trading Mauritius Pvt. Ltd. (incorporated in Mauritius) (a subsidiary of Godrej Mauritius Africa Holdings Ltd.)

39. Hair Trading (Offshore) S. A. L. (incorporated in Lebanon) (a subsidiary of Weave Trading Mauritius Pvt Ltd.)

40. Weave Mozambique Limitada (incorporated in Mozambique) (a subsidiary of Godrej West Africa Holdings Ltd.)

41. Godrej East Africa Holdings Ltd. (incorporated in Mauritius) (a subsidiary of Godrej Consumer Products Ltd.)

42. Style Industries Ltd. (incorporated in Kenya) (a subsidiary of DGH Phase Two Mauritius Pvt. Ltd.)

43. DGH Phase Two Mauritius (incorporated in Mauritius) (a subsidiary Godrej East Africa Holdings Ltd.)

44. Godrej Tanzania Holdings Ltd. (incorporated in Mauritius) (a subsidiary of Godrej Consumer Products Ltd.)

45. DGH Tanzania Ltd (incorporated in Tanzania) (a subsidiary of Godrej Tanzania Holdings Ltd.)

46. Sigma Hair Ind Ltd. (incorporated in Tanzania) (a subsidiary of DGH Tanzania Ltd.)

47. Weave Ghana Ltd. (incorporated in Ghana) (a subsidiary of Godrej Mauritius Africa Holdings Ltd.)

48. Godrej Consumer Products US Holding Limited (Incorporated in Mauritius)

49. Darling Trading Company Mauritius Ltd. (incorporated in Mauritius) (a subsidiary of Godrej Mauritius Africa Holdings Ltd.)

50 Godrej Africa Holdings Ltd. (incorporated in Mauritius) (a subsidiary of Godrej Mauritius Africa Holdings Ltd.)

51. Godrej Indonesia IP Holdings Ltd. (incorporated in Mauritius) (a subsidiary of Godrej Consumer Products Holding (Mauritius) Ltd.)

52. Frika Weave (Pty) Ltd. (incorporated in South Africa) (a subsidiary of Godrej Mauritius Africa Holdings Ltd.)

53. Belaza Mozambique LDA (w.e.f April 30, 2015)

54. Charm Industries Ltd. (w.e.f. August 14, 2015)

55. Canon Chemicals Ltd.

56. Godrej Hair Weave Nigeria Ltd.

57. Godrej International Trading Company, Sharjah

58. DGH Angola (name changed from ''Godrej Megasari Holdings'')

59. Godrej Hair Care Nigeria Limited

60. Godrej Household Insecticide Nigeria Ltd.

61. Hair Credentials Zambia Limited

62. Godrej SON Holdings Inc., USA

63. Old Pro International Inc

64. Strength of Nature LLC, USA

65. Strength of Nature South Africa Proprietary Limited

66. Style Industries Uganda Limited

67. Weave Senegal Ltd.

3 Key Managerial Personnel

Mr. Nadir Burjor Godrej, Chairman (appointed w.e.f October 12, 2015)

Mr. Ashok V. Hiremath, Managing Director

Mr. Arijit Mukherjee, Whole Time Director (appointed w.e.f November 06, 2015)

Mr. Janak Rawal, Whole Time Director (resigned from directorship w.e.f. November 06, 2015) Mr. Laxmikant Kabra, Director (resigned w.e.f. October 12, 2015)

Dr. P. L. Tiwari, Director (resigned w.e.f. October 12, 2015)

4 Entities under common control

1. Opus Chemicals Pvt Ltd

2. Greenguard Technologies Pvt Ltd

3. Altimax Financial Services Pvt Ltd

4. Sahbhagi Financial Services Pvt Ltd

5. Astec Crop Care Private Limited (ceased to be a subsidiary w.e.f. February 17, 2016)

6. Godrej Investments Private Limited

7. NBG Enterprise LLP

8. Annamudi Real Estate LLP

9. Hikal Ltd

10. Kilpest India Ltd

11. Nichem Solutions

12. Cabernet Trading and Advisors LLP

Note 6 - Share based payments

(a) Employee stock option scheme (ESOS 2015)

The Company has implemented Employees under Employee stock option scheme (ESOS, 2015) which was approved by the Shareholders at the 21st Annual General Meeting. The employee stock option scheme is designed to provide incentives to all the permanent employees to deliver long-term returns. Under the plan, participants are granted options which will vest in 4 years (40% in 1 year, 30% in 2nd year, 20% in 3rd year and 10% in 4th year) from the date of grant. Participation in the plan is at the discretion of the Compensation Committee / Board of Directors of the Company.

Once vested, the options remains exercisable for a period of three years.

Options are granted at the market price on which the options are granted to the employees under ESOS 2015. When exercisable, each option is convertible into one equity share.

(b) Employee stock option plan (ESOP 2012)

The Company has implemented Employee Stock Option Plan (ESOP 2012) which was approved by the Shareholders at the Extraordinary General Meeting of the Company in the Year 2012. The employee stock option plan is designed to provide incentives to all the permanent employees to deliver long-term returns. Under the plan, participants are granted options which will vest in 4 years (40% in 1 year, 30% in 2nd year, 20% in 3rd year and 10% in 4th year) from the grant date. Participation in the plan is at the discretion of the Compensation Committee / Board of Directors of the Company.

Once vested, the options remains exercisable for a period of seven years.

Options are granted under ESOP 2012 at an exercise price of ''34/- each. When exercisable, each option is convertible into one equity share.

Note 7 : First time adoption of Ind AS

Transition to Ind AS

These are the company''s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet at April 1, 2015 (the company''s date of transition). In preparing its opening Ind AS balance sheet, the company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the company''s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A.1 Ind AS optional exemptions

A.1.1 Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties.

Accordingly, the company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

A.1.2 Designation of previously recognized financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments (other than equity investments in subsidiaries, associates & joint arrangements) at FVPL on the basis of the facts and circumstances at the date of transition to Ind AS.

The company has elected to apply this exemption for its investment in equity investments.

C. Notes to first-time adoption

1 Revenue in case of export sales on CIF terms:

Under previous GAAP, in case of export sales on CIF terms, the company recognized revenue on receipt of bill of lading. As per Ind AS, Revenue is recognized only when the significant risk and rewards for the goods are passed on to the customer and the company retains neither continuing management involvement to the degree usually associated with ownership nor effective control over goods sold which is usually on delivery of goods to the customer.

Accordingly the company has reversed the sales booked on CIF terms which not yet delivered to the customer as at the reporting date and recognized the corresponding impact in inventory.

8 Sales return provision

Under previous GAAP, the company did not have a policy for creating a provision for sales return. Under Ind AS, the revenue should not be recognized for goods expected to be returned and a liability to be recognized for such expected returns as well as the corresponding adjustment to the cost of sales.

For the period ending March 31, 2016, Revenue is adjusted for the expected value of the returns and cost of sales are adjusted for the value of the corresponding goods to be returned.

9 Linked transaction

Under Ind AS, two or more transactions are considered as a single arrangement when they are linked in such a way that the commercial effect cannot be understood without reference to the series of transactions as a whole. When such a sale and repurchase agreement is entered into, the agreement''s terms needs to be analyzed to ascertain whether, in substance, the seller has transferred the significant risks and rewards of ownership to the buyer and whether revenue should, therefore, be recognized. There is no such similar requirement under the previous GAAP. The company has assessed its revenue arrangement with one of the customer as a linked transaction i.e. in substance a tolling arrangement.

Accordingly as on the transition date, the company derecognized the corresponding sales and purchase of inventory of this arrangement.

10 Embedded Lease/ Arrangement accounted as finance Lease

Under previous GAAP, sub-contracting arrangements were recognized in accordance with nature of expenses since there was no specific guidance. Hence related assets were recognized as fixed assets and production charges were recognized as revenue from operations from Sale of goods. Under Ind AS, the arrangement that do not take the legal form of a lease but which convey rights to use assets in return for a payment or series of payments are assessed under Appendix C of Ind AS17 if it satisfies the criteria of a leasing arrangement. Since the arrangement is assessed as a leasing arrangement it is further assessed for classification as a finance lease or operating lease.

Accordingly, the company, as on the date of transition, has de-recognized the fixed asset in its books of accounts and recognition of the present value of minimum lease payments value as a "Finance lease receivable" which will be further bifurcated into current and noncurrent portion.

11 Prior Period items

Under Previous GAAP changes in accounting policies, correction of errors and omissions will be recorded through the current period income statements. Under Ind AS, changes in accounting policies and correction of errors and omissions are accounted retrospectively by restating the comparative period. Consequent to the above, items related to the prior period are adjusted in the statement of profit and loss and other equity and their respective Balance Sheet heads.

12 Reversal of Proposed dividend

Under the Previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend including dividend distribution tax was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend including dividend distribution tax included under provisions has been reversed with corresponding adjustment in other equity.

13 Deferred Tax

Under Previous GAAP, deferred taxes are recognized for the tax effect of timing differences between accounting profit and taxable profit for the year using the income statement approach. Under Ind AS, deferred taxes are recognized using the balance sheet for future tax consequences of temporary differences between the carrying value of assets and liabilities and their respective tax bases. The Company has recognized a deferred tax asset on all the adjustments made on transition to Ind AS.

14 Excise duty

Under previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended March 31, 2016.

15 Revenue

Under Previous GAAP, revenue is recognized net of discounts and rebates. Under Ind AS, revenue is recognized at the fair value of the consideration received or receivable, after the deduction of cash discounts and any incentives. Discounts given to customers have been reclassified from ''other expense'' under Previous GAAP and deducted from revenue under Ind AS. This change has resulted in an decrease in total revenue and total expenses for the year ended March 31, 2016.

16 Derivatives

Under previous GAAP, unrealized gain or loss on foreign exchange forward contracts, if any, as each Balance Sheet date is provided for. Under Ind AS, foreign exchange forward contracts are mark-to-market as at each Balance Sheet date and unrealized net gain or loss is recognized. Derivative assets and derivative liabilities are presented on gross basis.

17 Re-measurement of post-employment benefit obligations

Under Ind AS, re-measurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under the Previous GAAP, these re-measurements were forming part of the profit or loss for the year.

18 Employee stock option expense

Under the previous GAAP, the cost of equity-settled employee share-based plan were recognized using the intrinsic value method. Under Ind AS, the cost of equity settled share-based plan is recognized based on the fair value of the options as at the grant date. Consequently, the amount recognized in share option outstanding account decreased by RS, 2.07 Lakh. The profit for the year ended March 31, 2016 increased by Rs, 2.07 Lakh. There is no impact on total equity.

Mar 31, 2016

Note:

Micro and Small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 ("MSMED Act") have been identified by the Company, on the basis of information available with Company and Auditor have relied on the same. Accordingly there is no undisputed amount overdue as on 31^st March, 2016 to Micro, Small and Medium Enterprises on account of principal or interest (Previous Year - Rs. Nil).

1) Related Party Disclosures

a) Names of related parties Relationship

1) Holding Companies:

Godrej Agrovet Limited (GAVL) holds 53.64% Equity Shareholding in the Company. GAVL is the subsidiary of Godrej Industries Limited and Godrej Industries Limited is a subsidiary of Godrej & Boyce Manufacturing Company Limited, the Ultimate Holding Company

2) Subsidiaries:

1. Behram Chemicals Private Limited

2. Astec Europe Sprl

3. Comercializadora Agricola Agroastrachem Cia Ltda

4. Astec Crop Care Private Limited (till 17^th February, 2016)

3) Fellow Subsidiaries:

A. Subsidiaries of Godrej Agrovet Limited (GAVL):

1. Godvet Agrochem Limited

2. Godrej Seeds & Genetics Limited

3. Creamline Dairy Products Limited (a subsidiary w.e.f. 21^st December, 2015)

4. Nagavalli Milkline Pvt. Ltd. (a subsidiary of Creamline Dairy Products Ltd.)

B. Subsidiaries of Godrej & Boyce Mfg. Co. Ltd.:

1. Godrej Infotech Ltd.

2. Godrej (Malaysia) Sdn. Bhd. (incorporated in Malaysia)

3. Godrej (Singapore) Pte. Ltd. (incorporated in Singapore)

4. Veromatic International BV (incorporated in the Netherlands)

5. Busbar Systems (India) Ltd (a wholly-owned subsidiary)

6. Mercury Mfg. Co. Ltd. (a wholly-owned subsidiary)

7. Godrej Americas Inc. (a wholly-owned subsidiary incorporated in the USA)

8. First Rock Infrastructures Pvt. Ltd. (a wholly-owned subsidiary)

9. MiracleTouch Developers Pvt. Ltd. (a wholly-owned subsidiary)

10. East View Estates Pvt. Ltd. (a wholly-owned subsidiary)

11. India Circus Retail Pvt. Ltd. (a subsidiary w.e.f. 16^th December, 2015)

C. Subsidiaries of Godrej Industries Ltd.(GIL) :

1. Godrej Properties Ltd. (GPL)

2. Ensemble Holdings & Finance Ltd.

3. Godrej International Ltd. (incorporated in the Isle of Man)

4. Natures Basket Ltd.

5. Godrej International Trading & Investments Pte Ltd. (Incorporated in Singapore)

6. Godrej International Ltd. (Labuan Malaysia)

a) Names of related parties

D. Subsidiaries of Godrej Properties Limited (GPL):

1. Godrej Realty Pvt. Ltd.

2. Godrej Real Estate Pvt. Ltd.

3. Happy Highrises Ltd.

4. Godrej Buildwell Pvt. Ltd. (merged with Godrej Properties Limited w.e.f. April 29, 2015)

5. Godrej Buildcon Pvt. Ltd.

6. Godrej Projects Development Pvt. Ltd. (GPDPL)

7. Godrej Redevelopers (Mumbai) Pvt. Ltd. (a subsidiary of GPDPL)

8. Godrej Premium Builders Pvt. Ltd. (merged with Godrej Properties Limited w.e.f. August 21, 2015)

9. Godrej Garden City Properties Pvt. Ltd.

10. Godrej Landmark Redevelopers Pvt. Ltd.

11. Godrej Green Homes Ltd.

12. Godrej Home Developers Pvt. Ltd.

13. Godrej Hillside Properties Pvt. Ltd.

14. Godrej Greenview Housing Private Limited (a subsidiary w.e.f 15^th May, 2015)

15. Godrej Prakriti Facilities Private Limited ( a subsidiary of Happy Highrises Ltd.w.e.f 9^th June, 2015)

16. Godrej Investment Advisers Private Limited ( a subsidiary w.e.f 29^th October 2015)

17. Godrej Highrises Properties Private Limited ( a subsidiary w.e.f 26^th June, 2015)

18. Wonder Projects Development Private Limited ( a subsidiary w.e.f 24^th June, 2015)

19. Godrej Genesis Facilities Management Private Limited ( a subsidiary of Happy Highrises Ltd w.e.f 19^th February, 2016)

E. Subsidiaries of Godrej Infotech Ltd. :

1. Godrej Infotech Americas Inc. (a wholly-owned subsidiary incorporated in North Carolina, USA)

2. Godrej Infotech (Singapore) Pte. Ltd. (a wholly-owned subsidiary incorporated in Singapore)

3. LVD Godrej Infotech NV (a subsidiary incorporated in Belgium)

F. Subsidiaries of Godrej (Singapore) Pte. Ltd.:

1. JT Dragon Pte. Ltd. (Incorporated in Singapore)

2. Godrej (Vietnam) Co. Ltd. (Incorporated in Vietnam) (a wholly owned subsidiary of JT Dragon Pte. Ltd.)

G. Subsidiaries of Veromatic International BV:

1. Veromatic Services BV (incorporated in the Netherlands)

2. Prowama Trading BV (incorporated in the Netherlands) (formerly Water Wonder Benelux BV) liquidated on 28^th December 2015

H. Other Subsidiaries (where Godrej & Boyce Mfg. Co. Ltd. owns directly and/or indirectly through one or more subsidiaries, more than one-half of the equity share capital):

I. Godrej Consumer Products Ltd. (GCPL)

2. Godrej One Premises Management Private Limited (w.e.f 22^nd July, 2015)

a) Names of related parties

I. Subsidiaries and Sub-subsidiaries of Godrej Consumer Products Limited (GCPL):

1. Godrej South Africa (Proprietary) Ltd. (formerly, Rapidol (Pty) Ltd.) (incorporated in South Africa)

2. Godrej Netherlands BV (incorporated in the Netherlands)

3. Godrej UK Ltd. (a subsidiary of Godrej Netherlands BV)

4. Godrej Global Mid East FZE (incorporated in Sharjah, U.A.E.) (a subsidiary of Godrej Consumer Products Holding (Mauritius) Ltd.)

5. Godrej Consumer Products Mauritius Ltd.

6. Godrej Consumer Products Holding (Mauritius) Ltd. (incorporated in Mauritius)

7. Godrej Household Products Lanka (Private) Ltd. (incorporatedin Sri Lanka)

8. Godrej Household Products Bangladesh Pvt. Ltd. (incorporated in Bangladesh)

9. Godrej Consumer Products Bangladesh Ltd. (incorporated in Bangladesh)

10. Godrej Mauritius Africa Holdings Ltd. (incorporated in Mauritius)

11. Godrej West Africa Holdings Ltd. (incorporated in Mauritius) (a subsidiary of Godrej Mauritius Africa Holdings Ltd.)

12. Godrej Consumer Products (UK) Ltd. (a subsidiary of Godrej UK Ltd.)

13. Godrej Consumer Investments (Chile) Spa, (incorporated in Chile) (a subsidiary of Godrej Netherlands

BV)

14. Godrej Mideast Holdings Limited (Incorporated in Dubai) (a 100 % subsidiary of Godrej Indonesia IP Holdings Limited) (w.e.f. 28^th July, 2015)

15. Godrej Holdings (Chile) Limitada, (incorporated in Chile) (a subsidiary of Godrej Consumer Investments (Chile) Spa)

16. Cosmetica Nacional, (incorporated in Chile) (a subsidiary of Godrej Holdings (Chile) Limitada)

17. Plasticos Nacional, (incorporated in Chile) (a subsidiary of Cosmetica Nacional)