Enter the first few characters of Company and click 'Go'

Notes to Accounts of S H Kelkar & Company Ltd.

Mar 31, 2022

1 The Company has adopted Ind AS 116 effective 01 April 2019. Consequently, the motor cars acquired under finance lease agreements has been reclassified from ''Property, Plant & Equipment'' to ''Right of Use assets''.

2. As at 31 March 2022, property, plant and equipment have been hypothecated against corporate guarantee issued by the Company towards loan availed by its subsidiary Keva Europe B. V.

5B Operating leases Leases as lessor

The Company leases out its investment property on operating lease basis, as they do not transfer substantially all of the risk and rewards incidental to the ownership of the assets. Rental income recognised by the Company during FY 21-22 was '' 5.00 crores (previous year '' 4.47 crores) of which '' 3.59 crores relating to sub lease (previous year '' 3.29 crores). The following table sets out maturity analysis of lease payments to be received after the reporting date.

Fair Value

The fair value of investment property has been determined using external property rates available in the market. The fair value measurement for all of the investment property has been categoried as a level 3 fair value based on the inputs to the valuation techniques used. The fair valuation is carried out by independent registered valuer.

Description of Valuation Technique used:

The fair value of the investment property have been derived using the Direct Comparison Method. The direct comparison approach involves a comparison of the investment property to similar properties that have actually been sold in arms-length distance from investment property or are offered for sale in the same region. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market, and is particularly useful in estimating the value of the land and properties that are typically traded on a unit basis. This approach leads to a reasonable estimation of the prevailing price. Given that the comparable instances are located in close proximity to the investment property; these instances have been assessed for their locational comparative advantages and disadvantages while arriving at the indicative price assessment for investment property.

Notes:

1. Buildings is classified as Investment property by the Company in accordance with IND AS-40 "Investment Property''''.

2. The property rental income earned by the Company from its investment property all of which is leased out under operating leased amount to '' 0.75 Crore ( previous year '' 0.53 Crore). Direct operating expenses arising on the investment property all of which generated rental income in the year amounted to '' 0.11 Crore (previous year '' 0.11 Crore).

3. Fair value of Investment Property is '' 22.88 crores (31 March 2021 '' 21.22 crores).

The recoverable amount of a CGU is based on value in use. Value in use has been determined based on future cash flows, after considering current economic conditions and trends, estimated future operating results, growth rates and anticipated future economic conditions. Value in use for CGU Saiba Industries Private Limited also factors the fair value of underlying Investment Property (refer note 6).

Operating margins and growth rates for the 5 year cash flow projections have been estimated based on past experience and after considering the financial budgets/forecasts provided by the management. Cash flows beyond 5 years is estimated by capitalising the future maintainable cash flows by an appropriate capitalisation rate and then discounted using appropriate discount rate. Other key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key assumptions represent management''s assessment of future trends in the relevant industries and have been based on historical data from both external and internal sources.

With regard to assessment of recoverable value, no reasonalably possible change in any of the above key assumptions would cost the carrying amount of the CGU''s to exceed their recoverable amount.

The Company has also performed sensitivity analysis calculations on the projections used and discount rate applied. Company has concluded that, given the significant headroom that exists, and the results of the sensitivity analysis performed, there is no significant risk that reasonable changes in any key assumptions would cause the carrying value of goodwill to exceed its value in use.

a. The Company through its wholly owned subsidiary had acquired balance 49% stake in Creative Flavors & Fragrances SpA (CFF) following which, it had been classified as subsidiary. The entity was Joint venture until 31 July 2020. As on 31 March 2022, CFF is the step down subsidiary of the Company considering the rights issue done by CFF.

b. I nvestment in Creative Flavours and Fragrances SpA have been hypothecated against corporate guarantee issued by the Company towards loan availed by its subsidiary Keva Europe B. V

Terms of / Rights attached to each classes of shares Terms of/Rights attached to Equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

Failure to pay any amount called up on shares may lead to forfeiture of the shares.

On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

B. Notes to Reserves Capital redemption reserve

Capital redemption reserve is created by transferring funds from free reserves in accordance with the provisions of the Companies Act, 2013 (the ''Act'') and its utilisation is also governed by the Act.

Securities premium

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Act.

General reserve

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

Treasury shares

a) Loan from Keva Fragrances Private Limited, a subsidiary is repayable on demand and carry interest at 7% p.a. (wef from 7^th December 2020) until 07 December 2020 interest was 9% p.a.

b) The Company has sanctioned working capital loans from banks which are repayable on demand with interest computed on a monthly basis on the actual amount utilised. Working capital loans from banks (including the sanctioned limits) are secured by way of hypothecation of inventories both on hand and in transit and book debts, and other receivables both present and future. The Company has filed / submitted the statements comprising (stock statements, book debt statements, statements on ageing analysis of the debtors/other receivables, and other stipulated financial information) with such banks and these statements are in agreement with the unaudited books of account of the Company of the respective quarters ended on 30^th June 2021, 30^th September, 2021, 31^st December 2021, and 31^st March, 2022.

The Company has formed S H Kelkar Employee Benefit Trust (EBT) for implementation of the shcemes that are notified or may be notified from time to time by the Company under the plan providing share based payments to its employees. EBT purchases shares of the Company out of funds borrowed from the Company. The Company treats EBT as its extension and shares held by EBT are treated as treasury shares.

STARs reserves

The profit/loss on sale of treasury shares and dividend earned on the same by the trust is recognised in STARs reserves.

Other reserves

The Company had received a private equity investment in the form of equity shares and preference shares. Such amounts received were classified as financial liability with reference to the terms and conditions attached with such investment. On completion of the initial public offering, the private equity investor''s rights were contractually extinguished and consequently, the liability was derecognised on such date, with corresponding credit to equity share capital and other relevant components of equity (including related gain on extinguishment).

Retained earnings

Retained earnings are the profits that the Company has earned till date, less any INDAS transition adjustments, transfers to general reserve, dividends or other distributions paid to shareholders.

34 Earnings per share (EPS)

Basic EPS is calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted EPS is calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year, after considering adjustment for the effects of all dilutive potential equity shares.

37 Employee benefits

(i) Defined Contribution Plans

The Company makes contributions towards superannuation fund and other retirement benefits to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits.

(ii) Defined Benefit Plans Gratuity:

The contribution to the fund is made by the Company based on the actuarial valuation using the "Projected Unit Credit" Method. Gratuity is payable to all eligible employees of the Company on superannuation, death, and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972.

These plans typically expose the Company to actuarial risk such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create plan deficit.

Interest risk:

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the plan''s assets.

Longevity Risk:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary Risk:

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

The Company expects to pay '' 1.17 crore (previous year '' 0.97 crore) in contributions to its defined benefit plans in 2022-23.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Company''s standalone financial statements as at balance sheet date:

A. Reconciliation of the net defined benefit (asset) liability

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

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

Provident fund (Managed by the Trust set up by the Company)

The Company manages the Provident Fund plan through a Provident Fund Trust setup by the Company, for its employees which is permitted under The Employees'' Provident Fund and Miscellaneous Provisions Act, 1952 and is actuarially valued. The plan envisages contribution by the employer and employees and guarantees interest at the rate notified by the Provident Fund authority. The contribution by employer and employee, together with interest, are payable at the time of separation from service or retirement, whichever is earlier.

The Company has contributed '' 4.68 crores (2020-21: '' 4.33 crores) to the Provident Fund Trust. The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the guaranteed interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual returned earned by the Company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumptions the shortfall has been recorded in the financial statement:

C. Risk management framework

In the course of its business, the Company is exposed primarily to credit risk, liquidity risk and market risk like fluctuations in foreign currency exchange rates, interest rates and equity prices, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which covers the credit risk and other risks associated with the financial assets and liabilities such as interest rate risks. The risk management policy is approved by the board of directors. 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.

i. 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 others and investments in securities made.

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

Trade and other receivables

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

The Company uses an allowance matrix to measure the expected credit loss of trade receivables. Loss rates are based on actual credit loss experience over the past 3 years. Trade receivables are in default (credit impaired), if the payment are more than 730 days past due.

Cash and cash equivalents

The Company held cash and cash equivalents of '' 9.91 crores at 31 March 2022 (31 March 2021: '' 30.59 crores). The cash and cash equivalents are held with banks with good credit rating.

Other bank balances

The Company held other balance of '' 1.79 crores at 31 March 2022 (31 March 2021: '' 0.80 crores).

Investments

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.

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

ii. 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. The Company has access to fund from debt market through loans from banks and other debt instruments.

(a) Currency risk

The Company is exposed to currency risk in respect of transaction in foreign currency. The functional currency of the Company is primarily the local currency in which it operates.The currencies in which these transaction are primarily denominated are Indian Rupee. The Company uses forward exchange contracts to hedge its foreign currency risk.

Sensitivity analysis

The company is mainly exposed to changes in USD and Euro. A reasonably possible strengthening (weakening) of the Indian Rupee against USD and Euro at 31 March 2022 and 2021 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.

The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to non derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity.

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 exposure with in acceptable parameters, while optimising the return. Martket risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of our investments. Thus, our exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currency.

(b) Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk

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

Fair value sensitivity analysis for fixed-rate instruments

The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

Cash flow sensitivity analysis for variable-rate instruments

The Company does not have any financial assets or financial liabilities bearing floating interest rates. Therefore a change in interest rates at the reporting date would not affect profit or loss.

39 Capital Management

For the purpose of the Company''s capital management, capital includes issued capital and other equity reserves. The primary objective of the Company''s capital management is to safequard its ability to continue as going concern and to maintain and optimal capital structure so as to maximise shareholders value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

As at 31 March 2022, the Company has only one class of equity shares, short term debts and finance lease obligations. Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

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

42 Segment reporting

A. Basis for segmentation

The Company is operating in the manufacture of fragrances. The Company has only one reportable business segment which is manufacture of fragrances.

B. Geographical information

As the Company mainly caters to the needs of domestic market and the total export turnover is not significant i.e. 3.19% (previous year 2.69%), hence separate geographical segment information has not been given in the standalone financial statements.

Terms and conditions of transactions with related parties

All the transactions with the related parties were made on normal commercial terms and conditions and at market rates. The interest rate on loans given to subsidiaries is 7% p.a. (wef 07 December 2020) until 07 December 2020 is 9% p.a.

All the outstanding balances are unsecured and repayable in cash and on demand.

**Excludes provision for encashable leave and gratuity for certain key management personnel as a seperate acturial valuation is not available.

45 Corporate social responsibility

As per Section 135 of the Act, a CSR committee has been formed by the Company. The funds are utilised during the year on the activities which are specified in Schedule VII of the Companies Act 2013. The utilisation is done by way of direct contribution towards various activities. Gross amount required to be spent by the Company during the year: '' 1.24 crores (previous year: '' 1.36 crores).

48 Consolidation of Trust

The Company had formed S H Kelkar Employee Benefit Trust (Trust) through its trustees Barclays Wealth Trustees(India) Private Limited.

The Trust has been formed for administering and implementing S H Kelkar Stock Appreciation Rights Scheme 2017 (''the Scheme'') of the Company which was adopted by the Board on 10 August 2017 and approved by shareholders of the Company on 01 November 2017

For the purpose of the Scheme, the Trust will purchase Shares out of funds borrowed from the Company which will be sold on the secondary market. The appreciation amount received by the Trustee on sale of shares be transferred to the Beneficiaries upon fulfilment of certain terms and conditions of the Scheme.

The Company treats the Trust as its extension and the shares held by the Trust are treated as treasury shares.

The Consolidation of the Trust financials statements with that of the Company does not in any manner affect the independence of the trustees where the rights and obligations are regulated by the trust deed.

Own equity instruments (treasury shares) are recognised at cost and deducted from equity.

Other items adjusted owing to the Trust consolidation include:

(a) Treasury shares

Upon consolidation, the investment in the Company''s equity shares made by Trust is debited to the Company''s Equity as treasury shares amounting to '' 71.09 crores as at 31 March 2022 ( previous year '' 72.95 crores). Further, the Trust during year participated in the Company''s buy-back of equity shares and consequently, sold 60,661 equity shares, aggregating to '' 1.87 crores. Accrodingly, the adjustment pertaining to participation in buy-back, including the corresponding profit/ loss on the sale of equity shares has been recorded in the Company''s equity.

(b) Other Non Current Financial Assets and other Income

Loans advanced to the Trust have been eliminated on consolidation amounting to '' 75.00 crores as at 31 March, 2022 (previous year '' 75.00 crores) and interest income of '' 5.25 crores (previous year '' 5.25 crores) on the above loan is also eliminated.

(c) Other Current Financial Assets

Interest on loans receivable from Trust eliminated on consolidation amounting to '' 18.59 crores as at 31 March 2022 (previous year '' 13.87 crores).

49 The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made there under.

50 The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.

51 The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

52 Utilisation of borrowed funds and share premium :

1. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

b. Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

2. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a. 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

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

53 There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961 (such as search or survey), that has not been recorded in the books of account.

54 The Company has not traded or invested in crypto currency or virtual currency during the year.

55 The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.

56 There are no transactions during the year, by the Company with struck off Companies.

Mar 31, 2018

**The loss allowance on trade receivables has been computed on the basis of Ind AS 109, Financial Instruments, which requires such allowance to be made even for trade receivables considered good on the basis that credit risk exists even though it may be very low.

The Company''s exposure to credit and currency risks, and loss allowances related to trade receivables are disclosed in note 38.

Borrowings are secured by way of hypothecation of book debts and other receivables (refer note 19).

b Terms / Rights attached to each classes of shares Terms / Rights attached to Equity shares

Failure to pay any amount called up on shares may lead to forfeiture of the shares.

d Shares issued for a consideration other than cash

(i) On September 18, 2014, the Company has allotted 119,043,900 bonus equity shares of Rs, 10 each to the existing equity shareholders of the Company in ratio of 9 bonus equity shares for every 1 equity share held.

(ii) 0.10% Redeemable Preference Shares (RPS): Pursuant to the scheme of the Amalgamation & Arrangement between Kelkar Investment Company Private Limited (KICPL) and S H Kelkar and Company Limited and Keva Aromatics Private Limited and Keva Constructions Private Limited and their respective shareholders and creditors under Section 391 to 394 read with Sections 78, 80 & 100 to 103 of the Companies Act ,1956 vide order dated December 10, 2013 issued by the Hon''ble High court of judicature of Bombay, S H Kelkar and Company Limited has issued and alloted 100 fully paid up 0.10% Redemable Preference shares (RPS) of Rs,10 each at par on March 28, 2014, on proportionate basis, to the shareholders of KICPL (other than S H Kelkar and Company Limited) whose names appeared in the Register of Members of KICPL as on effective date of merger viz February 12,2014.

(iii) On October 17, 2014, the Company has allotted 8,275,500 bonus preference shares of Rs, 10 each to the existing preference shareholders of the Company in ratio of 9 bonus preference shares for every 1 peference share held.

B. Nature and purpose of reserves Capital redemption reserve

Capital redemption reserve is created by transferring funds from free reserves in accordance with the provisions of the Companies Act, 2013 (the''Act'') and its utilisation is also governed by the Act.

Securities premium account

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Act.

General reserve

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

Treasury shares

Treasury shares are the shares acquired from the market by the S H Kelkar Employee BenefitTrust, setup by the Company under the approved Stock Appreciation Rights Scheme (refer note 53).

Other reserves

C. Dividends

The following dividends were declared and paid by the Company during the years ended:

After the reporting dates the following dividend was proposed by the directors subject to the approval at the Annual General Meeting. This dividend and tax thereon has not been recognised as liability in the year to it pertains to and will be recorded in the year in which would be approved by the shareholders in Annual General Meeting. Dividend would attract dividend distribution tax when it declared or paid:

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 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 foreseeable future, deferred tax asset on indexation benefit in relation to such investments has not been recognised.

1. EMPLOYEE BENEFITS (i) Defined Contribution Plans

Note:The Company has formed its own trustfor managing superannuation fund of its employees as perthe permission granted by the respective authority.

* Amount less than Rs, 0.01 crore

(ii) Defined Benefit Plans

Gratuity:

The Employees Gratuity Fund Scheme is managed by "S.H. Kelkar and Co. Ltd. Employee''s Gratuity Fund". The fund has the form of trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets including investment of the funds in accordance with the norms prescribed by the Government of India. The contribution to the fund is made by the Company based on the actuarial valuation using the "Projected Unit Credit" Method. Gratuity is payable to all eligible employees of the Company on superannuation, death, and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972.

These plans typically expose the Company to actuarial risk such as: investment risk, interest rate risk, longevity risk and salary risk. Investment risk:

Interest risk:

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the plan''s assets.

Longevity Risk:

Salary Risk

A. Reconciliation of the net defined benefit (asset) liability

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

Provident fund (Managed by the Trust set up by the Company)

The Company manages the Provident Fund plan through a Provident Fund Trust setup by the Company, for its employees which is permitted under The Employees âProvident Fund and Miscellaneous Provisions Act, 1952 and is actuarially valued. The plan envisages contribution by the employer and employees and guarantees interest at the rate notified by the Provident Fund authority. The contribution by employer and employee, together with interest, are payable at the time of separation from service or retirement, whichever is earlier.

The Company has contributed Rs, 3.79 crores (2016-17: Rs, 3.41 crores) to the Provident Fund Trust. The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the guaranteed interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual returned earned by the Company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumptions there is no shortfall:

Other long term employee benefit plans Compensated absences:

The obligation for leave encashment is recognised in the same manner as gratuity. The Company''s liability on account of compensated absences is not funded and hence the disclosures relating to the planned assets are not applicable. Amount ofRs, 0.86 crores (previous yearRs, 1.50 crores) towards compensated absences is recognised as an expense and included in "Employee benefits expense" in the Statement of profit and loss during the year.

Long-term incentive plan:

The obligation for long-term incentive plan is recognised arithmetically as percentage of fixed salary, based on certain vesting conditions. An amount of Rs, 2.60 Crores (previous yearRs, 1.10 crores) towards long-term incentive plan is recognised as an expense and included in the"Employee benefits expense"in the Statement of profit and loss during the year.

C. 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 Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework.

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

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

ii. Credit risk

Cash and cash equivalents

The Company held cash and cash equivalents ofRs, 1.49 crores at March 31, 2018 (March 31, 2017: Rs, 17.25 crores). The cash and cash equivalents are held with banks and financial institution counterparties with good credit rating.

Other bank balances

The Company held other balance ofRs, 3.23 crores at March 31,2018 (March 31,2017: Rs, 0.03 crores).

Investments

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

iii. Liquidity risk

Exposure to liquidity risk

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.

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 exposure within acceptable parameters, while optimising the return. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of our investments. Thus, our exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currency.

Currency risk

The Company is exposed to currency risk in respect of transaction in foreign currency. The functional currency of the Company is primarily the local currency in which it operates. The currencies in which these transaction are primarily denominated are Indian Rupee. The Company uses forward exchange contracts to hedge its currency risk.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against all other currencies at March 31, 2018 and

2017 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.

iv. Interest rate risk

Exposure to interest rate risk

Fair value sensitivity analysis for fixed-rate instruments

Cash flow sensitivity analysis for variable-rate instruments

The Company does not have any financial assets or financial liabilities bearing floating interest rates. Therefore a change in interest rates at the reporting date would not affect profit or loss.

2. CAPITAL MANAGEMENT

Forth purpose of the Company''s capital management, capital includes issued capital and other equity reserves. The primary objective of the Company''s capital management is to safeguard its ability to continue as going concern and to maintain and optimal capital structure so as to maximise shareholders value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

As at March 31, 2018, the Company has only one class of equity shares, short term debts and finance lease obligations. Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

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

Contingent liabilities above represent estimates made mainly for probable claims arising out of litigation / disputes pending with authorities under various statutes (Income tax, excise duty and service tax). 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.

In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liability, where applicable in its standalone financial statements. The Company''s management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect of the Company''s results of operations or financial condition.

3. SPECIFIED BANK NOTES DISCLOSURE

Schedule III of the Companies Act, 2013 was amended by Ministry of Corporate Affairs vide Notification G.S.R. 308(E) dated March 30, 2017. The said amendment requires the Company to disclose the details of Specified Bank Notes held and transacted during the period from November 8,2016 to December 30,2016. For the purpose of this clause, the term âSpecific Bank Notes âshall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407 (E), dated the November 8,2016.

A. Basis for segmentation

The Company is operating in the manufacture of fragrances. The Company has only one reportable business segment which is manufacture of fragrances.

B. Geographical information

As the Company mainly caters to the needs of domestic market and the total export turnover is not significant 1.95% (previous year 2.68 %), separate geographical segment information has not been given in the standalone financial statements.

C. Information about major customers

Revenue from one customer as on March 31, 2018 is Rs, 75.36 crores (March 31, 2017 Rs, Nil) which is more than 10% of the total revenue of S H Kelkar and Company Limited.

4 RELATED PARTY DISCLOSURES

The note provides the information about the Group''s structure including the details of the subsidiaries and the holding company. The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:

Other related parties

a) Key Management Personnel (KMP) Executive Directors Ramesh V. Vaze, Managing Director

Kedar R. Vaze, Director & Chief Executive Officer Tapas Majumdar (Chief financial officer) upto May 31,2017 Ratul Bhaduri (Chief financial officer) from November 15,2017 Deepti Chandratre (Company Secretary)

b) Enterprises owned or controlled or significantly ASN Investment Advisors Private Limited influenced by key management personnel or their Evolutis India Private Limited relatives Keva Constructions Private Limited

KNP Industries Pte. Limited Purandar Fine Chemicals Private Limited SKK Industries Private Limited

c) Relatives of Key Management Personnel Anagha Nene

Sumedha Karmarkar Prabha R Vaze Nandan KVaze Parth KVaze

d) Non-executive directors Dalip Sehgal

Alpana Parida Jairaj Purandare Sangeeta Singh

_Nitin Potdar (resigned wef February 28,2018)_

* Amount less than Rs, 0.01 crore

Terms and conditions of transactions with related parties

All the transactions with the related parties were made on normal commercial terms and conditions and at market rates.

The interest rate on loans given to subsidiaries are in the range of 9% to 9.50%.

All the outstanding balances are unsecured and repayable in cash and on demand.

5 TRANSFER PRICING

The Company''s management is of the opinion that its international transactions and specified domestic transactions are at arm''s length as per the independent accountants report for the year ended March 31,2017. Management continues to believe that its international transactions post March 31, 2017 and the specified domestic transactions covered by the new regulations are at arm''s length and that the transfer pricing legislation will not have any impact on these standalone financial statements, particularly on amount of tax expense and that of provision of taxation.

6. ROYALTY EXPENSES

The Tradename "Keva", which is used by the Company and Keva Flavours Private Limited ("KFL"), wholly owned subsidiary of the Company is registered in the name of Keva Fragrances Private Limited ("KFG") - another wholly owned subsidiary of the Company. The Company and KFL have entered into an agreement with KFG for use of brand name, pursuant to a board resolution passed on March 27,2017. As per the agreement, the Company has recognised expenses.

7. AMALGAMATION OF KEVA FRAGRANCES PRIVATE LIMITED WITH K. V. AROCHEM PRIVATE LIMITED

Pursuant to the Scheme of Arrangement (the Scheme) under relevant provisions of the Companies Act 2013 for amalgamation of wholly-owned subsidiaries of the Company, Keva Fragrances Private Limited ("KFG") with K.V. Arochem Private Limited as sanctioned by the Hon''ble High Court of Bombay on September 22, 2015 and filed with Registrar of Companies on November 15, 2016 (the Effective Date), the whole of the business, all assets, liabilities and reserves of KFG were transferred at fair values to and vested in the Company with effect from May 1, 2015 (the Appointed Date) and the name of K. V. Arochem Private Limited stood changed to''Keva Fragrances Private Limited âwith effect from December 14,2016.

8. With effect from April 1, 2016, the Company has changed its policy for accounting for research and development expenses. The Company has decided to capitalise development costs on intangible assets as per the requirements of Ind AS 38 - Intangible assets. The development costs capitalised during the year ended March 31,2017 on eligible projects under development aggregated toRs, 4.57 crores. Had the Company continued with the old policy of charging development costs to the Statement of profit and loss, the profit after tax for the year ended March 31,2017 would have been lower by Rs, 2.97 crores respectively.

9. CONSOLIDATION OF TRUST

During the current year. Company has formed SH Kelkar Employee Benefit Trust (Trust) through its trustees Barclays Wealth Trustees (India) Pvt. Ltd.

The Trust has been formed for administering and implementing SH Kelkar Stock Appreciation Rights Scheme 2017 (''the scheme'') of the Company which was adopted by the Board on August 10,2017 and approved by shareholders of the Company on November 01,2017

The Company treats the Trust as its extension and the shares held by the Trust are treated as treasury shares.

Own equity instruments (treasury shares) are recognised at cost and deducted from equity.

* Amount less than Rs, 0.01 crore

Other items adjusted owing to the Trust consolidation include:

(a) Treasury shares

Upon consolidation, the investment in the Company''s equity shares made by Trust is debited to the Company''s Equity as treasury shares amounting to Rs, 29.80 crores as at March 31,2018.

(b) Other Non-Current Financial Assets and other Income

Loans advanced to the Trust have been eliminated on consolidation amounting to Rs, 33 crores as at March 31, 2018 and interest ofRs, 0.40 crores on the above loan is also eliminated.

(c) Other Current Financial Assets

Interest on loans receivable from Trust eliminated on consolidation amounting to Rs, 0.40 crores as at March 31,2018.

10. The Government of India introduced the Goods &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 the period April 1,2017 to June 30,2017 is inclusive of excise duty and hence, total income from operations for the year ended March 31,2017 are not comparable.

11. Consequent to the issuance of "Guidance Note on Division II -Ind AS Schedule III to the Companies Act ,2013", certain items of financial statements have been regrouped/reclassified.

Mar 31, 2017

1. Terms / Rights attached to each classes of shares

2. Terms / Rights attached to Equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend was declared from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

Failure to pay any amount called up on shares may lead to forfeiture of the shares.

3. Shares issued for a consideration other than cash

4. On 28 June 2012, the Company issued 13,955 equity shares of Rs. 1,000 each as Bonus shares to the existing equity shareholders of the Company in ratio of 7 bonus equity shares for every 26 equity shares held.

5. Pursuant to the Composite Scheme of Arrangement ("the Scheme") under section 391 to 394 read with Section 78 and Sections 100 to 103 of the Act filed with the Hon''ble High Court of Judicature at Bombay, Mumbai ("High Court") for the merger of two companies viz. Tridhaatu Estates Private Limited ("Tridhaatu") and Amerigo Holdings & Investment Private Limited ("Amerigo") with the Company and for financial restructuring within the Company in July, 2011, the Company has issued and allotted the following:

6. 15,500 fully paid-up Redeemable Preference Shares, carrying 8% coupon rate, of face value Rs. 10 each

7. 20,817 fully paid-up 0.1% Cumulative Compulsorily Convertible Preference Shares of Series C (CCPS - C) having face value of Rs. 1,000 each at a premium of Rs. 29,000 per CCPS - C.

The Scheme was approved by the High Court vide order passed on 21 October 2011.

8. On 18 September 2014, the Company has allotted 119,043,900 bonus equity shares of Rs. 10 each to the existing equity shareholders of the Company in ratio of 9 bonus equity shares for every 1 equity share held.

9. 0.10% Redeemable Preference Shares (RPS): Pursuant to the scheme of the Amalgamation & Arrangement between Kelkar Investment Company Private Limited (KICPL) and S H Kelkar and Company Limited and Keva Aromatics Private Limited and Keva Constructions Private Limited and their respective shareholders and creditors under Section 391 to 394 read with Sections 78, 80 & 100 to 103 of the Companies Act ,1956 vide order dated December 10, 2013 issued by the Hon''ble High court of judicature of Bombay, S H Kelkar and Company Limited has issued and alloted 100 fully paid up 0.10% Redemable Preference shares (RPS) of Rs.10 each at par on 28 March 2014, on proportionate basis, to the shareholders of KICPL (other than S H Kelkar and Company Limited) whose names appeared in the Register of Members of KICPL as on effective date of merger viz 12 February 2014.

10. On 17 October 2014, the Company has allotted 8,275,500 bonus preference shares of Rs. 10 each to the existing preference shareholders of the Company in ratio of 9 bonus preference shares for every 1 preference share held.

11. Shares reserved for issue under options and contracts/ commitments for sale of shares/ disinvestment:

For 0.01% Cumulative Compulsorily Convertible Preference Shares of Series D(CCPS D):

The CCPS Dare to be compulsorily converted into Equity shares, at the option of the shareholder, at any time prior to 8 August 2022 (''the Completion date''). Up to 4 October 2015, the conversion ratio was 1 equity share for 1 CCPS D. With effect from 5 October 2015, the conversion ratio stood changed to 1 equity share for 13.46 CCPS D, pursuant to the approval by the Board of Directors of the Company of the amendment to the Shareholder''s Agreement dated 1 October 2015. Accordingly, 9,195,000 CCPS D shares of Rs.10 each, have been converted to 683,135 equity shares ofRs. 10 each, on 5 October 2015.

12. Initial Public Offering:

The Company had made an Initial public issue of 28,231,827 equity shares of face value Rs. 10 each fully paid up for cash at a price of Rs. 180 per equity share (including a share premium of Rs. 170 per equity share) aggregating Rs. 508.17 crore consisting of a fresh issue of 11,666,666 equity shares by the Company and an offer for sale of 13,141,000 equity shares, 86,575 equity shares and 3,337,586 equity shares by Blackstone Capital Partners (Singapore) VI FDITwo Pte. Ltd., Blackstone Family Investment Partnership (Singapore) VI-ESC FDI Two Pte. Ltd. and Mrs. Prabha Vaze respectively aggregating Rs. 298.17 crore. Aforementioned 11,666,666 equity shares were allotted on 09 November 2015. The shares of the Company got listed on the BSE Limited (BSE) and National Stock Exchange of India Limited (NSE)on 16 November 2015.

13. Nature and purpose of reserves

14. Capital reserve

Capital reserve is mainly arising on account of conversion of a subsidiary to associate.

15. Capital redemption reserve

Capital redemption reserve is created by transferring funds from free reserves in accordance with the provisions of the Companies Act, 2013 (the âAct'') and its utilization is also governed by the Act.

16. Securities premium account

Securities premium is used to record the premium received on issue of shares. It is utilized in accordance with the provisions of the Act.

17. Other reserves

The Company had received a private equity investment in the form of equity shares and preference shares. Such amounts received were classified as financial liability with reference to the terms and conditions attached with such investment. On completion of the initial public offering, the private equity investor''s rights were contractually extinguished and consequently, the liability was derecognized on such date, with corresponding credit to equity share capital and other relevant components of equity (including related gain on extinguishment).

18. General reserve

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

19. Foreign currency translation reserve

Foreign currency translation reserve comprises of all exchange differences arising from translation of financial statements of foreign operations.

Terms of repayment and security

20. Loan from banks represented term loan from Standard Chartered Bank (''SCB'') in foreign currency, USD Nil equivalent to INR Nil (2016: Nil equivalent to Nil; 2015: USD 3,037,500/- equivalent to Rs. 19.01 crores) and was secured by a first mortgage on the Company''s immovable properties both present and future ranking pari passu inter se and a first charge by way of hypothecation of all the Company''s assets (save and except book debts and inventories) including movable machinery (save and except spares tools and accessories) both present and future subject to charges created in favour of the Company''s bankers for inventories, book debts and other specified movable properties for securing the borrowings of working capital and by way of personal guarantees of Directors and their relatives. The loan was repaid during the previous year.

21. The term loan in foreign currency from SCB was taken during the financial year 2010-2011 which carries interest at applicable LIBOR plus 250 basis points. The loan was repaid during the previous year.

22. Loan from banks taken by a subsidiary company include term loans from ABN Amro Bank in foreign currency EUR Nil (2016: EUR 1,250,850 equivalent to Rs. 9.40 crores; 2015 - Rs. 9.78 crores). It is a long-term loan of originally EUR 1,900,000 to finance land and buildings. This loan will be repaid from 01 September 2012 every month with EUR 15,833. The interest rate is 3.8% and is fixed for 5 years. The part with a maturity of over 5 years is EUR 491,000. The loan is secured by (i) A mortgage for land and buildings on Nijverheidsweg 60, Barneveld,The Netherlands for EUR 3,500,000. (ii) Plegde on debtors, inventories and equipment. The loan was repaid during the current year.

23. Loan from banks taken by a subsidiary company include term loan from Standard Chartered Bank (''SCB'') being, loan taken over from Commonwealth Bank of Australia, in foreign currency GBP 2,500,000 equivalent to Rs. 17.31 crores (Commonwealth Bank of Australia 2016: USD 4,350,000 equivalent to Rs. 28.19 crores; 2015 - Rs. 34.42 crores). The loan carries interest rate at EURIBOR 1.7% p.a. (2016: LIBOR Rate 2.3% p.a.). Interest is payable on quarterly basis. This loan is secured by way of - (i) Equitable Mortgage of Factory Land and Building at Plot 170 to 175 GIDC, Industrial Estate, Vapi, Gujarat State, (ii) hypothecation of entire movable fixed assets of the Borrower on exclusive first charge basis. The loan is also secured by personal guarantees of Promoters / Directors and corporate guarantee of S FI Kelkar And Company Ltd., holding company and fellow Indian subsidiaries. The Loan is repayable by 15 April 2018 in 3 installments starting from 15 April 2017.

The said subsidiary company had also entered into an interest rate swap agreement with FIDFC Bank on 1 September 2014, under which the interest payable is fixed at 3.60% per annum payable on quarterly basis. The said interest rate swap was cancelled during the current year.

24. Finance lease obligation are towards certain vehicles, office equipments and plant and machinery obtained on finance lease basis. The legal title to these items vests with their lessors until all lease payments have been paid. The lease term for such vehicles ranges between 36-96 months with equated monthly payments beginning from the month subsequent to the commencement of the lease. The total future minimum lease payments at the balance sheet date, element of interest included in such payments, and present value of these minimum lease payments are as follows:

25. Working capital loans and bank overdraft from banks of Rs.. Nil (previous year: Rs. 99.21 crores) carry interest ranging between 9.50% p.a. (previous year: 10%-10.4% p.a.), computed on a monthly basis on the actual amount utilized, and are repayable on demand. Working capital loans from banks are secured by way of hypothecation of inventories both on hand and in transit and book debts and other receivables both present and future and also secured by way of second charge on fixed assets and personal guarantees of Directors and their relatives.

26. Debt with ABN AMRO Bank taken by a subsidiary company is a credit facility of EUR 30,93,515.07 equivalent to Rs. 23.23 Crores to finance working capital. The interest rate for this is the 1-month Euribor average. The individual storage is 1.1% and this is increased by the supplement market (04.01.2015:0.25%). The loan is secured by (i) A mortgage for land and buildings on Nijverheidsweg 60, Barneveld,The Netherlands for EURO 3,500,000.(ii) Plegde on debtors, inventories and equipment.

27. Working capital demand loan from bank by a subsidiary company Rs. 8.00 crores (previous year: Rs. 11.31 crores) carries interest @ Base rate 270 basis points and is secured by hypothecation of stock in trade, primary charge on book debts and plant and machinery of the company, second pari passu charge on Immovable assets by the way of Equitable mortgage of the property located at Plot No 170 to 175, GIDC, Industrial Estate, Vapi, Guj''rat State. The loan is also secured by personal guarantees of Promoters / Directors and corporate guarantee of S H Kelkar and Company Limited., holding company.

28. Loan from HDFC Bank (India) taken by a subsidiary is of EUR 1,200,000 equivalent to Rs.. 9.01 crores to finance working capital. The interest is based on the 6-month Libor (0.14286%), with an individual storage of 2.5%. The loan is secured by Letter of credit from holding company S H Kelkar and Company Limited.

29. In the current year, the loans repayable on demand for working capital loans includes -

30. the debt at ABN Amro Bank is a credit facility of EUR 4,000,000 to finance the working capital. From 01 April 2015, the Bank lowers the limit of EUR 125000 per quarter. The reduction continues to EUR 3,000,000. For the current facility, the following securities were provided First mortgage on land and buildings on Nijverheisdsweg 60, Barneveld of EUR 3.5 million, plus 40% interest and costs. Pledge receivables and inventory The interest rate for the above is the 1-month Euribor average.

31. Loan from HSBC Bank is a working capital loan with an interest rate of 1.8% per annum.

32. Loan from Citibank is a working capital loan with an interest rate of EURIBOR 1 % per annum.

33. Buyers credit from banks carry interest ranging between 0.83% - 1.13% p.a. (P.Y. 0.7%-3.96% p.a.), and are secured by way of hypothecation of inventories both on hand and in transit and book debts and other receivables both present and future and also secured by way of second charge on fixed assets and personal guarantees of Directors and their relatives. The loans have been repaid during the year.

34. Packing credit loans by a subsidiary from bank carry interest at LIBOR 0.9% (P.Y.: LIBOR 1.2%) and are secured by first charge on all current assets of the Company. The loans are repayable within a period of 90 to 180 days from the date of disbursement.

35. Loans availed under bill discounting facility are secured against specific receivables, have a tenure of 30 to 90 days and carries interest ranging between 10.25% to 10.75% per annum. The loans have been repaid during the year.

36. As at 31 March 2017 and 31 March 2016, the Group has an open WCDL facility with HDFC Bank, Citibankand Standard Chartered Bank, secured by way of book debts and floating charge and also secured by way of second charge on property, plant and equipment of the Company. However there are no borrowings.

37. Unrecognized deferred tax assets/ liabilities

As at 31 March 2017, undistributed earnings of subsidiaries amounted to Rs. 130.67 crores (previous year 2016: Rs. 117.81 crores; 2015: Rs.106.86 crores). The corresponding deferred tax liability of Rs. 22.21 crores (previous year 2016: Rs. 20.02 crores; 2015: Rs. 18.16 crores), was not recognized because the Company controls the dividend policy of its subsidiaries i.e. the Company controls the timing of reversal of the related taxable temporary differences and management is satisfied that they will not reverse in the foreseeable future.

The deferred tax asset arising on account of merger of two wholly-owned subsidiaries, the merged entity being Keva Fragrances Pvt. Ltd as at 31 March 2017 of Rs.43.71 crores and 31 March 2016 of Rs. 58.28 crores, have not been recognized, pending uncertainty over the allow ability of the goodwill amortization amount, as an eligible expenditure in the tax assessment by the tax authorities.

38 Operating leases

Leases as lessee

The Group has taken factory and office premises under cancellable and non-cancellable operating lease arrangements. The agreement for non cancellable lease is executed for the period of 60 months with a non-cancellable period ranging from 36 to 60 months and having a renewable clause which can be exercised by both the parties. Lease rentals debited to the consolidated statement of profit and loss aggregates Rs. 8.44 crores (31 March 2016: Rs.8.42 crores) for non-cancellable lease and Rs. 6.59 crores (31 March 2016: Rs.8.95 crores) for cancellable leases.

39. Pending litigation

40. The Company executed a conveyance deed dated 26 April 2007 for a consideration of Rs. 4.30 crores for purchase of land and building in village Wanwate from Gorakhnath Electricals Private Limited ("GEPL"). The Company received a show cause notice dated 16 July 2008 from the Bombay High Court ("High Court") for contempt of a court order. On appearance before the High Court, the Company was informed that the property was under litigation as a part of a scheme of compromise and arrangement sanctioned by the High Court under Sections 391 and 394 of the Companies Act, 1956 between Europlast India Private Limited (previous owners of the property) ("EIPL") and its unsecured creditors. The Company contended that these facts were not evident from the due diligence carried out prior to the purchase of the property. The High Court, vide order dated 07 January 2010 ("Order"), directed EIPL and GEPL to deposit Rs.4.30 crores with the High Court, which was intended for payment to the Company. The High Court also directed that if the amount was not deposited by EIPL and GEPL, the property be auctioned off and the Company be paid from the proceeds of the auction. EIPL and GEPL failed to deposit the amount and consequently, the property came under the jurisdiction of the Commissioner of the High Court for auction. Subsequently, EIPL and an unsecured creditor filed an appeal dated 21 June 2010 against the Order before the Division Bench of the High Court. The Company filed its cross-objections before the High Court praying for protection as a bona fide purchaser of the property. While the order of the Division Bench of the High Court was pending, M/s Ashoka Buildcon, one of the major unsecured creditors, vide an assignment deed, assigned the arbitral award dated 30 November 2011 in favour of Keva Constructions Private Limited ("KCPL"). Thereafter,

KCPL filed an application before the High Court seeking to be named one of the parties in the proceedings. The High Court, vide its order dated 28 August 2015, directed the Company to deposit a sum ofRs. 1.27 crores (inclusive of interest) and Rs. 5.97 Crores (inclusive of interest) in full and final settlement of the claims of KCPL and the creditors and stated that upon making such a deposit, the Order shall be set aside and the Company''s title to property, sold under the deed of conveyance dated 26 April 2007, would stand confirmed as valid, binding and subsisting and that the Company would stand fully discharged of all its obligations. In terms of the said order, the Company deposited a sum of Rs. 7.24 crores (Rs. 1.27 crores towards the claims of Keva Constructions Private Limited and Rs. 5.97 crores towards the claims of the creditors under the scheme sanctioned by the High Court) with the Prothonotary and Senior Master of the High Court on 21 September 2015. The matter was placed for compliance before the High Court on 01 October 2015 wherein the High Court noted that the order dated 28 August 2015 stands complied with. The matter was accordingly disposed of on 05 October 2015.

41. In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liability, where applicable in its financial statements. The Company''s management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect of the Company''s results of operations or financial condition.

The unutilized amounts of the issue as at 31 March 2016 have been temporarily deployed in money market mutual funds.

The Company has incurred Rs. 33.97 crores (inclusive of Service Tax) of IPO expenses of the above IPO expenses, certain expenses (such as legal counsel cost, payment to auditors'', listing fees and stamp duty expenses) aggregating to Rs. 7.09 crores are directly attributable to the Company and have been adjusted towards the securities premium account. The remaining IPO expenses aggregating to Rs. 26.89 crores, have been allocated between the Company Rs. 11.11 crores and selling shareholders Rs. 15.78 crores in proportion to the equity shares allotted to the public as fresh issue by the Company and under offer for sale by the selling shareholders. The amount of Rs. 11.11 crores allocated to the Company has also been adjusted towards the securities premium account.

The gross share issues expenses include a sum of Rs. 0.57 crores paid to the statutory auditors, which is included in the amount adjusted towards the securities premium account.

41 Transfer pricing

The Group''s management is of the opinion that its international transactions and specified domestic transactions are at arm''s length as per the independent accountants report for the year ended 31 March 2016. Management continues to believe that its international transactions post March 2016 and the specified domestic transactions covered by the new regulations are at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expense and that of provision of taxation.

42 With effect from 1 April 2016, the Group has changed its policy for accounting for research and development expenses. The Group has decided to capitalize development costs on intangible assets as per the requirements of Ind AS 38 - Intangible assets. The development costs capitalized during the year ended 31 March 2017 on eligible projects under development aggregated to Rs.. 5.01 crores. Had the Group continued with the old policy of charging development costs to the statement of profit and loss, the profit after tax for the year ended 31 March 2017 would have been lower by Rs. 3.58 crores respectively.

43. Amalgamation of Keva Fragrances Private Limited with K. V. Arochem Private Limited

Pursuant to the Scheme of Arrangement (the Scheme) under relevant provisions of the Companies Act, 2013, for amalgamation of the wholly-owned subsidiaries of the Company, Keva Fragrances Private Limited ("KFG") with K. V. Arochem Private Limited ("KVA") as sanctioned by the Hon''ble High Court of Bombay on 22 September 2015 and filed with Registrar of Companies on 15 November 2016 (the Effective Date), the whole of the business, all assets, liabilities and reserves of KFG are transferred at fair values to and vested in KVA with effect from 1 May 2015 (the Appointed Date). The difference, if any, between the consideration and the amount of share capital of the acquired entity is transferred to Goodwill and the name of K. V. Arochem Private Limited stood changed to''Keva Fragrances Private Limited''with effect from 14 December 2016.

44. Employee benefits

The Group contributes to the following post-employment defined benefit plans:

45. Defined Contribution Plans:

The Group makes contributions towards provident fund, superannuation fund and other retirement benefits to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Group is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits.

46.Defined Benefit Plan:

Gratuity:

47. The employees gratuity fund scheme for the Company and certain Indian subsidiaries is managed by "S.H.Kelkar & Co. Ltd. Employee''s Gratuity Fund".

The employees gratuity fund scheme for other Indian subsidiaries is managed by "LIC

The contribution to the fund is made based on the actuarial valuation using the "Projected Unit Credit" Method. Gratuity is payable to all eligible employees of the Company and certain Indian subsidiaries on superannuation, death, and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2017. 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.

48. Reconciliation of the 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 Gratuity is payable to all eligible employees of the Group in India on superannuation, death, and permanent disablement, in terms of the provisions of the Payment of Gratuity Act,1972.

The discount rate is based on the prevailing market yields Indian Government securities as at the balance sheet date for the estimated term of the obligations.

Estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Provident fund (Managed by the Trust set up by the Company)

The Company has contributed Rs. 3.41 crores (2015-16: Rs. 2.91 crores) to the Provident Fund Trust. The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the guaranteed interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual returned earned by the Company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumptions there is no shortfall:

Other long term employee benefit plans Compensated absences:

The obligation for leave encashment is recognized in the same manner as gratuity. The Group''s liability on account of compensated absences is not funded and hence the disclosures relating to the planned assets are not applicable. Amount of Rs. 1.63 crores (previous year Rs. 1.55 crores) towards compensated absences is recognized as an expense and included in "Employee benefits expense âin the consolidated statement of profit and loss during the year.

Long-term incentive plan:

The obligation for long-term incentive plan is recognized arithmetically as percentage of fixed salary based on certain vesting conditions. An amount of Rs. 1.10 Crores (previous year Rs. Nil) towards long-term incentive plan is recognized as an expense and included in the "Employee benefits expense" in the consolidated statement of profit and loss during the year.

49. Capital Management

For the purpose of the Group''s capital management, capital includes issued capital and other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Groupsâ capital management is to safeguard its ability to continue as going concern and to maintain an optimal capital structure so as to maximize shareholders value. The Group manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

As at 31 March 2017, the Group has only one class of equity shares and has a debt. Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal structure, the Group allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

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

50. Financial risk management

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

Credit risk;

Liquidity risk; and Market risk

51. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Group''s risk management framework.

The Group''s risk management policies are established to identify and analyze 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 Group''s activities. The Group, 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 Group''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

52. Credit risk

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

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

Trade and other receivables

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

The Group has 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 Group''s review includes external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval as per authority matrix set by the Group.

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

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

Cash and cash equivalents

The Company held cash and cash equivalents of Rs. 41.91 crores at 31 March 2017 (31 March 2016: Rs. 58.56 crores). The cash and cash equivalents are held with banks with good credit ratings and financial institution counterparties with good market standing.

Derivatives

The derivatives are entered into with banks, financial institutions and other counterparties with good credit ratings.

Investments

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

53. Liquidity risk

In addition, the Company maintains the following lines of credit.

Rs. 201.81 crores (March 31, 2016: Rs. 207.00 crores; April 1, 2015: Rs. 79.00 crores) overdraft facility that is unsecured. Interest would be payable at the rate of LIBOR plus 150 basis points (March 31, 2016: LIBOR plus 160 basis points).

Exposure to liquidity risk

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.

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

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

Currency risk

The Company is exposed to currency risk on account of its borrowings and other payables in foreign currency. The functional currency of the Company is Indian Rupee. The Company uses forward exchange contracts to hedge its currency risk, most with a maturity of less than one year from the reporting date.

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

Fair value sensitivity analysis for fixed-rate instruments

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.

55.. Acquisition of High-Tech Technologies

On 2 April 2016, Keva Flavours Private Limited, a group company had acquired, the business undertaking of High-Tech Technologies comprising of the flavours division. High-Tech Technologies is engaged in the business of manufacturing, selling and trading of flavours. The acquisition is in-line with the Group''s plan to pursue strategic tuck-in acquisitions to grow the flavours business.

56. Consideration transferred

The following table summarizes the acquisition date fair value of major class of consideration transferred:

Deferred payment consideration

As per the business purchase agreement, upon payment of initial consideration of Rs. 11.27 crores, an amount of Rs. 6.84 crores was to be paid by the subsidiary to High-Tech Technologies on a quarterly basis in equal installments of INR 1.71 crores within one year from 15 June 2016 to 15 March 2017.

Contingent consideration

An amount of Rs. 7 Crores would be paid as contingent consideration to High-Tech Technologies subject to the continuing its business arrangements and achieving a stipulated turnover as per the agreement.

57. Acquisition-related costs

The Company incurred acquisition related cost of Rs. 0.14 crores on legal fees and due diligence costs. These costs have been included in legal and professional fees and travelling and conveyance under other expenses.

58. Acquisition of Gujarat Flavours Private Limited

On 2 January 2017, Keva Flavours Private Limited, a group Company had acquired the flavours business of Gujarat Flavours Private Limited (GFPL) along with related brands forRs. 16.80 crores. GFPL has been in the business of flavours, food colours, saccharin and fine chemicals since 34 years. This acquisition would enable broadening of the Group''s flavours business.

59. Consideration transferred

The following table summarizes the acquisition date fair value of major class of consideration transferred:

Deferred and contingent consideration

An amount of Rs. 4.30 crores out of the total purchase consideration shall be paid within a period of one year from the closing date. Of the said amount, Rs. 1.50 crores shall be paid on fulfillment of certain stipulated conditions as per the agreement.

60. Acquisition-related costs

The Company incurred acquisition related cost of Rs. 0.16 crores on legal fees and due diligence costs. These costs have been included in legal and professional fees under other expenses.

61. Identifiable assets acquired and liabilities assumed

The following table summarizes the recognized amounts of assets acquired and liabilities assumed at fair value at the date of acquisition.

62. Acquisition of Rasiklal Hemani Agencies Private Limited

On 2 April 2016, the Company had acquired, 100% share capital of Rasiklal Hemani Agencies Private Limited for a total consideration of Rs. 33.17 crores.

The acquisition is to help consolidate the Company''s leadership position in India as it expands the marketing and sales team to address the growing requirements of customers.

63. Consideration transferred

The following table summarizes the acquisition date fair value of major class of consideration transferred:

64. Acquisition-related costs

The Company incurred acquisition related cost of Rs. 0.14 crores on legal fees and due diligence costs. These costs have been included in legal and professional fees under other expenses.

65. Identifiable assets acquired and liabilities assumed

The following table summarizes the recognized amounts of assets acquired and liabilities assumed at the date of acquisition.

66.. Goodwill and other intangibles Impairment testing of Goodwill

For the purposes of impairment testing, goodwill is allocated to the Group''s operating divisions which represent the lowest level within the Group at which goodwill is monitored for internal management purposes, which is not higher than the Group''s

PFW Aroma Ingredients B.V.

The recoverable amount of this CGU was based on fair value less costs of disposal, estimated using discounted cash flows. The fair value measurement was categorized as a Level 3 fair value based on inputs in the valuation technique used.

The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key assumptions represent management''s assessment of future trends in the relevant industries and have been based on historical data from both external and internal sources.

The discount rate for 2016-17 was post tax measure estimated based on the weighted-average cost of capital, with the possible debt leveraging of 23% at a market interest rate of 1.69%

The cash flow projections include specific estimates for five years and a terminal growth rate thereafter. The terminal growth rate has been determined based on management''s estimate of the long-term business growth rate, consistent with the assumptions that a market participant would make.

Sales growth rate has been considered based on past performance duly adjusted with new sales mix as envisaged by the management.

With regard to assessment of value in use, no reasonably possible change in any of the above key assumptions would cause the carrying amount of the CGU''s to exceed their recoverable amount,

67. Goodwill and other intangibles Saiba Industries Private Limited

Sales growth rate has been considered based on past performance duly adjusted with future growth as envisaged by the management.

With regard to assessment of value in use, no reasonably possible change in any of the above key assumptions would cause the carrying amount of the CGU''s to exceed their recoverable amount,

iii. Goodwill and other intangibles

High-Tech Technologies and Gujarat Flavours Private Limited

These businesses were taken over by Keva Flavours Private Limited. The recoverable amount of this CGU was based on fair value less costs of disposal, estimated using discounted cash flows. The fair value measurement was categorized as a Level 3 fair value based on inputs in the valuation technique used.

The discount rate for 2016-17 was post tax measure estimated based on the weighted-average cost of capital, with the possible debt leveraging of 30% at a market interest rate of 6.5%

Sales growth rate has been considered based on past performance duly adjusted with future growth as envisaged by the management.

With regard to assessment of value in use, no reasonably possible change in any of the above key assumptions would cause the carrying amount of the CGU''s to exceed their recoverable amount,

68. Goodwill and other intangibles

Rasiklal Hemani Agencies Private Limited

The discount rate was post tax measure estimated based on the weighted-average cost of capital, with the possible debt leveraging of NIL.

Revenue growth rate has been considered based on past performance duly adjusted with future growth as envisaged by the management.

With regard to assessment of value in use, no reasonalably possible change in any of the above key assumptions would cost the carrying amount of the CGU''s to exceed their recoverable amount.

69. Segment reporting

70. General Information

71.Factors used to identify the entity''s reportable segments, including the basis of organization

For management purposes, the Group is organized into business units based on its products and services and has two reportable segments, as follows:

Fragrances segment manufactures/trade in fragrances and aroma ingredients for fragrances

Flavours segment manufactures/trade in flavours

72. Following are reportable segments:

Reportable segment

- Fragrances

- Flavours

73. Explanation of transition to Ind AS:

For the purposes of reporting as set out in Note 1, we have transitioned our basis of accounting from Indian generally accepted accounting principles ("IGAAP") to Ind AS. The accounting policies set out in note 3 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS balance sheet at 1 April 2015 (the âtransition date").

In preparing our opening Ind AS balance sheet, we have adjusted amounts reported in financial statements prepared in accordance with IGAAP. An explanation of how the transition from IGAAP to Ind AS has affected our financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates previously made under IGAAP except where required by Ind AS.

Optional exemptions availed and mandatory exceptions

In preparing these consolidated financial statements, the company has applied the below mentioned optional exemptions and mandatory exceptions.

74. Optional exemptions availed

75. Business combinations

As per Ind AS 101, at the date of transition, an entity may elect not to restate business combinations that occurred before the date of transition. If the entity restates any business combinations that occurred before the date of transition, then it restates all later business combinations, and also applies Ind AS 110, Consolidated Financial Statements, from that same date.

The company has opted to restate business combinations on or after August 2010. For business combinations prior to August 2010 which have not been restated as per Ind AS 103, goodwill represents the amount recognized under the previous GAAP subject to specific adjustments as prescribed underlnd AS 101.

76. Property plant and equipment and intangible assets

As per Ind AS 101 an entity may elect to:

77. measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed cost at that date

78. use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to: fair value; or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price index.

The elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind AS 38, Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation (including the existence of an active market).

79. use carrying values of property, plant and equipment, intangible assets and investment properties as on the date of transition to Ind AS (which are measured in accordance with previous GAAP and after making adjustments relating to decommissioning liabilities prescribed under Ind AS 101) if there has been no change in its functional currency on the date of transition.

80. Mandatory exceptions

81. Estimates

As per Ind AS 101, an entity''s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the comparative period presented in the entity''s first Ind AS financial statements, as the case may be, should be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error.

However, the estimates should be adjusted to reflect any differences in accounting policies.

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

82. Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortized cost has been done retrospectively except where the same is impracticable.

83 Restatement of past business combinations:

The Company elected to apply Ind AS 103 retrospectively to business combinations that occurred on or after 11 August 2010. The adjustments arising from the only business combinations that occurred after the aforesaid date, namely acquisition of PFW Aroma Ingredients B.V. on 11 August 2010 and acquisition of Saiba Industries Private Limited on 10 February 2012 was accounted for as per Ind AS 103 and accordingly consolidated.

84. Equity to liability

The Company had received a private equity investment in the form of equity shares and preference shares. Such amounts received were classified as financial liability with reference to the terms and conditions attached with such investment and an imputed interest cost on the same was recognized in the consolidated statement of profit or loss. On completion of the initial public offering (''IPO'') on 16 November 2015, the private equity investor''s rights were contractually extinguished and consequently, the liability was derecognized on such date, with corresponding credit to equity share capital and other relevant components of equity (including related gain on extinguishment). Following table summarizes the movement:

85. Investment in mutual funds:

Under Indian GAAP, the company accounted for current investments were carried at lower of cost or market value. Under Ind AS, these investments are required to measured at fair value at the end of each reporting period and resulting fair value changes are to recognized in statement of profit or loss.

86. Trade receivables:

Under Indian GAAP, the company has created provision for impairment of receivables consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Credit Loss model (ECL).

87. Proposed dividend

Under Indian GAAP, proposed dividends are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.

In the case of the Group, the declaration of dividend occurs after period end. Therefore, the liability recorded for this dividend has been derecognized against retained earnings.

88. Upfront fees on borrowings:

Under Indian GAAP, transaction costs incurred in connection with interest bearing loans and borrowings are amortized upfront and charged to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method.

89. Deferred tax assets (net):

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

90. Excise duty on sales:

Under previous GAAP, revenue from sale of goods was presented net of the excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as an expense.

91 Sales discounts:

Under previous GAAP, sales and volume discounts were recognized as an expense. Under Ind AS, sales and volume discounts is presented under revenue from sale of goods.

92. Actuarial gain and loss

Under Ind AS, all actuarial gains and losses are recognized in other comprehensive income. Under previous GAAP the Group recognized actuarial gains and losses in profit or loss. However, this has no impact on the total comprehensive income and total equity as on 1 April 2015 or as on 31 March 2016.

93. Derivative instruments:

Under previous GAAP, the Group provides for losses in respect of such outstanding derivative contracts at the balance sheet date by marking them to market, however, net gain on derivative contracts is not recognized.

Under Ind AS, the Group has not designated such derivative contracts as hedging instruments and thus are being fair valued with resulting changes being recognized profit or loss.

94. Translation differences:

Under Ind AS, exchange differences on translation of foreign operations are recorded in other comprehensive income.

54 On 24 April 2017, the Company, through Keva Chemicals Pvt. Ltd. ("KCPL"), step-down subsidiary of the Company, has acquired Fragrance Encapsulation Technology (FET) from Tanishka Fragrance Encapsulation Technologies LLP ("TFET LLP"). As part of transaction, KCPL has contributed Rs. 2 crore to the capital of TFET LLP on the said date and thus, has become a majority capital contributing partner in TFET LLP.

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article