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Notes to Accounts of Kaya Ltd.

Mar 31, 2016

Notes:

1. The above cash flow statement has been prepared under the ''Indirect
Method'' as set out in the Accounting Standard – 3 on Cash Flow
Statements.

2. For non-cash transactions relating to investing and financing
activities pursuant to the Scheme - refer Note 1B.

3. Previous year figures have been regrouped where necessary.

4. The notes are an integral part of these standalone financial
statements.


(a) Rights, preferences and restrictions attached to equity shares -

The Company has only one class of equity shares having a par value of
Rs. 10 per share. Each shareholder is eligible for one vote per share
held. The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting,
except in case of interim dividend. In the event of liquidation, the
equity shareholders are eligible to receive the remaining assets of the
Company after distribution of all preferential amounts, in proportion
to their shareholding.

(b) Shares held by the holding company: Refer Note 1(B)

# reflects number of shares that were issued pursuant to the scheme.

(c) Shares reserved for issue under options :

The Board of Directors of the Company had granted 135,771 stock options
to certain eligible employees pursuant to the Kaya Limited Employee
Stock Option Scheme 2014 and Kaya Limited Employee Stock Option Scheme
2014 (Kaya Middle East FZE) (together referred as ''Kaya ESOP''). One
stock option is represented by one equity share of Kaya Limited. The
vesting date for Kaya Limited Employee Stock Option Scheme 2014 and
Kaya Limited Employee Stock Option Scheme 2014 (Kaya Middle East FZE)
is March 31, 2016 and March 31, 2017, respectively. The Exercise Period
is of one year from the vesting date. The Scheme is administered by the
Board of Kaya Limited.

The Company has applied the intrinsic value based method of accounting
for determining compensation cost for its stock based compensation plan
and has accordingly accounted Rs. 6,173,409 (Previous Year Rs.
3,265,515) as compensation cost under the ''intrinsic value'' method
(Refer note 25). Had the Company
The Company uses various leased premises. A provision for site
restoration cost is recognized for the estimates made for probable
liability towards the restoration of these premises at the end of lease
period. Provision written back during the year represents site
restoration cost written back due to revision in estimated probable
liability towards restoration of leased premises.
In respect of above, future cash outflows is determinable only on
receipt of judgments pending at various forums / authorities.

19 (b) The Company has been sanctioned cash credit and letter of credit
facilities of Rs. 200,000,000 (Rs. 150,000,000) by a bank. This
facility is secured by first and exclusive charge on all existing and
future receivable and current assets and second pari passu charge on
moveable fixed assets of the Company. Amount outstanding towards these
facilities on account of letter of credit as at year end is Rs. 743,712
(Previous year Rs. 1,257,692).


1. DISCLOSURE PURSUANT TO ACCOUNTING STANDARD 15 - EMPLOYEE BENEFITS

a) Brief descriptions of the plans:

The Company has various schemes for long-term Benefits such as
provident fund and gratuity. The Company''s contribution to provident
fund is defined contribution plan, as the Company has no further
obligation beyond making the contributions. The Company''s defined
benefit plans include gratuity. The employees of the Company are also
entitled to leave entitlement as per the Company''s policy.

b) Defined contribution plan:

The Company has recognized following amount as expenses (Refer Note 25)


2. SEGMENT REPORTING:

Primary Segment:

In accordance with Accounting Standard 17 - "Segment Reporting", the
Company has determined its business segment as ''Skin Care''. Since, 100%
of the Company''s business is from providing specialized skin care
services and other related products, there are no other primary
reportable segments. Thus, the segment revenue, segment results, total
carrying amount of segment assets, total carrying amount of segment
liabilities, total cost incurred to acquire segment assets, total
amount of charge for depreciation during the year is reflected in the
Financial Statements.

Secondary Segment:

The Company''s operations are such that all activities are confined only
to India and hence, there is no secondary reportable segment relating
to the Company''s business.

3. DISCLOSURES AS PER AS - 18 ''RELATED PARTY DISCLOSURES'' a) Names of
the related parties and nature of relationship:

(i) Subsidiaries: KME Holding Pte Ltd.

DIPL Singapore Pte Limited (Erstwhile known as DRx Investments

Pte. Ltd.) (up to January 19, 2016)

Kaya Middle East FZE

Kaya Middle East DMCC (with effect from May 9, 2015)

Iris Medical Centre LLC (with effect from January 18, 2016)

(ii) Joint Venture of a subsidiary: Kaya - Al Beda JV (with effect from
January 28, 2016)

(iii) Key managerial personnel: Mr. Harsh Mariwala - Chairman and
Managing Director

(iv) Enterprises over which KMP or their Marico Limited relative have
significant influence Soap Opera and transactions have taken place:


4. OPERATING LEASES:

The Company has entered into several operating lease arrangements for
its Office premises and Skin clinics for a period ranging from 3 to 9
years and, is renewable on a periodic basis at the option of the less
or and / or lessee. Under these arrangements, generally refundable
interest free deposits have been given.

* Since the earnings/ (loss) per share computation based on diluted
weighted average number of shares is anti- dilutive, the basic and
diluted earnings/(loss) per share is the same.

# For the purpose of calculating equity shares outstanding and the
weighted average number of equity shares for the year ended March 31,
2015, the equity shares issued pursuant to the Scheme (Refer note 1B)
have been considered effective April 1, 2014, being the appointed date
for the Scheme.


5. There are no deferred tax liabilities as at the year end. Deferred
tax assets has not been recognized on carried forward business loss,
unabsorbed depreciation and other item of deferred tax assets, as there
is no virtual certainty of its realization on account of the losses
incurred by the Company.


Mar 31, 2015

1a. GENERAL INFORMATION

Kaya Limited (''Kaya'' or the ''Company''), headquartered in Mumbai, India, carries on skin care business through Kaya Skin Clinics. The clinics offer skin care solutions using scientific dermatological procedures and products. (Refer note 1B below)

1b. SCHEME OF ARRANGEMENT:

a. On September 29, 2014 the Board of Directors of Marico Kaya Enterprises Limited (''MaKE''), the holding company and the company, have approved the Scheme of Arrangement (''the Scheme'') for Amalgamation of MaKE with the Company with effect from appointed date April 1, 2014. The Hon''ble High Court of Bombay has approved the Scheme vide its order dated April 18, 2015, and thereafter fled with Registrar of Companies on May 13, 2015.

b. In terms of the Scheme, all assets, liabilities and reserves of MaKE have been vested with the Company with effect from April 1, 2014 and have been recorded at their respective book values in accordance with the Scheme, under the pooling of interest method as per AS 14 – Accounting for Amalgamation.

c. All the inter-company balances between the Company and MaKE as at April 1, 2014 stand cancelled.

d. The Company will issue 12,897,100 equity shares of Rs. 10/- each, fully paid-up, of the Company to the holders of Equity shares of Marico Kaya Enterprises Limited whose names will be registered in the register of members on the record date, without payment being received in cash, in the ratio of 1 (one) fully paid-up equity shares of Rs. 10/- each of the Company for every 1 (one) fully paid-up equity shares of Rs. 1 held in Marico Kaya Enterprises Limited. Pending issue of such shares as at March 31, 2015, the face value of shares to be issued has been accounted under Share Capital Suspense Account (Refer notes 3(a) & 3(b))

e. Further, in terms of the Scheme, the existing share capital of the Company of Rs. 178,489,750 was reduced upon the Scheme becoming effective i.e. on May 13, 2015, with corresponding adjustment with securities premium.

2 (a) CONTINGENT LIABILITIES

Claims against the Company not acknowledged as debts

– Income tax matters 1,467,397,145 128,531,797

– Sales tax matters 53,034,531 28,563,023

– Service tax matters 22,138,889 172,919,306

- Other matters 3,820,000 3,750,000

Total 1,546,390,565 333,764,126

In respect of above, future cash outflows is determinable only on receipt of judgments pending at various forums / authorities.

2 (b)The Company has been sanctioned cash credit and letter of credit facilities of Rs. 150,000,000 (Rs. 80,000,000) by a bank. This facility is secured by first and exclusive charge on all existing and future receivable and current assets and second pari passu charge on moveable fixed assets of the Company. Amount outstanding towards these facilities on account of letter of credit as at year end is Rs. 1,257,692 (Previous year Rs. 1,898,903).

3. CAPITAL AND OTHER COMMITMENTS

(a) Capital Commitments

Estimated value of contracts in capital account remaining 8,425,292 1,249,188 to be executed (net of capital advances)

(b) Other Commitments

Lease termination cost – representing lock-in-period rental 109,384,484 145,106,817

under rental agreements

d) Leave Encashment:

The Company permits encashment of privileged leave (except sick leave) accumulated by its employees on retirement, separation and during the course of service. The liability for unexpired leave is determined and provided on the basis of actuarial valuation at the Balance Sheet date. The privileged leave liability is not funded.

4. SEGMENT REPORTING:

Primary Segment:

In accordance with Accounting Standard 17 – "Segment Reporting", the Company has determined its business segment as ''Skin Care''. Since, 100% of the Company''s business is from providing specialized skin care services and other related products, there are no other primary reportable segments. Thus, the segment revenue, segment results, total carrying amount of segment assets, total carrying amount of segment liabilities, total cost incurred to acquire segment assets, total amount of charge for depreciation during the year is refected in the Financials Statements.

Secondary Segment:

The Company''s operations are such that all activities are confned only to India and hence, there is no secondary reportable segment relating to the Company''s business.

5. OPERATING LEASES:

The Company has entered into several operating lease arrangements for its office premises and skin clinics for a period ranging from 3 to 9 years and, is renewable on a periodic basis at the option of the lessor and / or lessee. Under these arrangements, generally refundable interest free deposits have been given.

6. In view of significant unabsorbed depreciation and carry forward losses under tax laws, resulting in absence of virtual certainty, the Company has not recognised any deferred tax assets. The Company does not have any Deferred Tax Liabilities.

7. Research and Development expenses aggregating Rs. 3,124,090 (Previous year Rs. 2,699,358) have been included under the relevant heads in the Statement of Profit and Loss.

8. Previous year figures have been re-grouped and reclassified wherever necessary to conform to this year''s classification.

 
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