Notes to Accounts of AksharChem (India) Ltd.

Mar 31, 2018

1. Company Information

AksharChem (India) Limited (the ''Company'') is a public limited Company domiciled in India with its registered office at 166/169, Village Indrad, Kadi Kalol Road, Dist. Mehsana, Gujarat -382 715 (India).. The equity shares of the Company are listed on BSE Limited and National Stock Exchange of India Limited and Ahmedabad Stock Exchange Ltd. (ASE).

The Company is principally engaged in the business of manufacturing & export of Dyes and Pigments.

The financial statements as at March 31, 2018 present the financial position of the Company.

The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorized for issue on May 30, 2018.

2. Terms/rights attached to Equity Shares

The Company has issued only one class of equity shares having a par value of H10 per share. Each holder of Equity Shares are entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the realised value of the assets of the Company, remaining after the payment of all preferential dues. The distribution will be in proportion to the number of equity __shares held by the shareholders.

18.5 Shares Reserved for Issued under options & contracts or commitments for the sale of shares or disinvestment, including terms of amounts : NIL

18.6

a. Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash: NIL

b. Aggregate number and class of shares allotted as fully paid by way of Bonus Shares : NIL

c. Aggregate number and class of shares bought back : NIL

18.7 Securities which are convertible into Equity Shares : NIL

18.8 Aggregate Value of Calls unpaid by directors and officers : NIL

Description of nature and purpose of each reserve :

Securities Premium Reserve: The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve. The reserve is utilised in accordance with the specific provision of the Companies Act, 2013.

Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained Earnings is a free reserve available to the Company.

Primary Security:

State Bank of India Term Loan: First charge in favour of State Bank of India By way of Equitable Mortgage over entire factory land & building and Hypothecation of Plant & Machinery (created out of bank finance) and situated at survey nos. 167 and 168 Mouje- Indrad Village Kadi-kalol Road, Chhatral, Taluka-kadi, Dist. Mehsana Gujarat State Bank of India Corporate Loan: First charge over P&M/fixed assets created out of praposed corporate loan.

Collateral Security:

State Bank of India Term Loan and Corporate Loan: First charge in favour of State Bank of India, by way of Equitable Mortgage and Hypothecation over land, building, plant & Machinery and other fixed assets situated at Survey Nos. 166 & 169, of Mouje Indrad Village, Kadi-Kalol Road, Chhatral, Taluka Kadi, Dist. Mehsana, Gujarat. Extension of First Charge by way of Equitable Mortgage and Hypothecation over land, building, plant & machinery and other fixed assets situated at Survey Nos. 167 & 168, Mouje Indrad Village, Kadi-Kalol Road, Chhatral, Taluka Kadi, Dist. Mehsana, Gujarat.

- Lien of TDR worth of Rs. 25 Lakhs.

Term of Repayment.

Corporate Loan from State Bank of India amounting to Rs. Nil (Previous Year Rs. 625 Lakhs is repayable by 4 quarterly instalments of Rs.50 Lakhs, 4 quarterly instalments of Rs.75 Lakhs, 2 quarterly instalments of Rs.100 Lakhs and last 1 quarterly instalment of Rs.125 Lakhs.)

There was no default in repayment of loan or interest.

Primary Security:

First charge by way of hypothecation over entire present and future current assets of the company.

Collateral Security:

State Bank of India Working Capital Loan: First charge in favour of State Bank of India, by way of Equitable Mortgage and Hypothecation over land, building, plant & Machinery and other fixed assets situated at Survey Nos. 166 & 169, of Mouje Indrad Village, Kadi-Kalol Road, Chhatral, Talika Kadi, Dist. Mehsana, Gujarat. Extension of First Charge by way of Equitable Mortgage and Hypothecation over land, building, plant & machinery and other fixed assets situated at Survey Nos. 167 & 168, Mouje Indrad Village, Kadi-Kalol Road, Chhatral, Taluka Kadi, Dist. Mehsana, Gujarat.

Lien of TDR worth of Rs. 25 Lakhs.

3. The depreciation on Fixed Assets is to be provided on the basis of useful life of the Assets as per schedule - II of the Companies Act, 2013. During the year, the Company has credited Rs. 214.90 Lakhs to the Retained Earnings Account & Rs. 69.98 Lakhs to the Statement of Profit & Loss of 2016-17, being the excess Depreciation as worked out on the basis of the useful life of the Assets and other requirements of Schedule-II of the Act.

4. Proposed Dividend

The Board of Directors at its meeting held on May 30, 2018 have recommended a payment of final dividend of Rs.3.50 per equity shares of face value of Rs.10/- each for the financial year ended March 31, 2018. The same amounts to Rs.346.10 Lakhs including dividend distribution tax of Rs.59.01 Lakhs .

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognized as a liability.

vii) Sensitivity Analysis

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and employee turnover. The sensitivity analysis below, have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The result of sensitivity analysis on defined benefit obligation is given below :

5. Disclosure on Corporate Social Responsibility ( CSR ) activities u/s 135 of the Companies Act, 2013 is as under:

a. Gross amount required to be spent by the Company during the year: Rs.47.71 Lakhs (Previous year Rs.60.93 Lakhs.)

b. Amount spent and utilized during the year on:

6. Financial Risk Management - Objectives and Policies

The Company''s financial liabilities comprise other than derivatives mainly of borrowings, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets, other than derivatives, include trade and other receivables, other balances with banks, loans, investments and cash and cash equivalents that arise directly from its operations.

The Company''s activities are exposed to Credit risk, Liquidity Risk and Market risk.

The Board of directors of the Company are overall responsible for the establishment and oversight of the company''s risk management framework. The Company''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 company''s activities.

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

6.1 Credit Risk Management

Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the company''s receivables from customers and loans. The carrying amounts of financial assets represent the maximum credit risk exposure.

Trade receivables and loans

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. The company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the company''s standard payment and delivery terms and conditions are offered. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the management of the company.

The company limits its exposure to credit risk from trade receivables by establishing a maximum payment period of 120 days for customers. More than 85% of the company''s customers have been transacting with the company for over four years, and none of these customers'' balances are credit-impaired at the reporting date.

Confirmation of balances from Debtors & Loans and Advances have been received and the same is being reconciled.

Cash and cash equivalents

The company holds cash and cash equivalents of Rs.393.19 Lakhs at March 31, 2018 (March 31, 2017: Rs.364.09 Lakhs). The cash and cash equivalents are held with bank and cash on hand.

6.2 Liquidity Risk

Liquidity risk is the risk that the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The 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 uses process costing to cost its products, which assists it in monitoring cash flow requirements and optimizing its cash return on investments.

6.3 Market risk

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

6.4 Interest rate risk

Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the company''s position with regards to the interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in it total portfolio.

The company is not exposed to significant interest rate risk as at the specified reporting date.

6.5 Foreign currency risk

The company operates internationally and is exposed to currency risk on account of its receivables 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.

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

6.6 Price Risk

Investment Price Risk

The company''s exposure to price risk arises from investments in equity and mutual fund held by the company and classified in the balance sheet at fair value through profit or loss. To manage its price risk arising from investments, the company diversifies its portfolio.

Sensitivity Analysis

The table below summarises the impact of increase/decrease of the index on the company''s equity and profit for the period. The analysis is based on the assumption that the price of the instrument has increased by 3% or decreased by 3% with all other variables held constant.

Commodity Price Risk

Principal Raw Material for company''s products is Acetanilide, CPC Blue & Ethylene Oxide. Company sources its raw material requirements from domestic markets. Company effectively manages availability of material as well as price volatility through well planned procurement and inventory strategy and also through appropriate contracts and commitments.

Sensitivity Analysis

The table below summarises the impact of increase/decrease in prices of Acetanilide, CPC Blue & Ethylene Oxide by Rs.1 per kg on profit for the period.

7. Capital management

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

The company monitors capital using gearing ratio, which is net debt divided by total equity plus debt.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest bearing loans and borrowing in the current period.

As at March 31, 2018, the Company has only one class of equity shares. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

8. In the opinion of the Board, the current assets, loans and advances are approximately of the value stated in the balance sheet, if realised in the ordinary course of the business. Provision for depreciation and all known liabilities have been made in accounts.

9. In terms of Ind As 36 - Impairment of Assets issued by ICAI, the management has reviewed its fixed assets and arrived at the conclusion that impairment loss which is difference between the carrying amount and recoverable value of assets, was not material and hence no provision is required to be made.

10. Financial Instruments - Fair Values & Risk Management

10.1 Accounting Classifications & Fair Value Measurements

The fair values of the financial assets and liabilities are measured at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

All financial instruments are initially recognized and subsequently re-measured at fair value as described below :

1. The fair value of investment in quoted equity shares and mutual funds is measured at quoted price or NAV.

2. Fair values of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short-term maturities of these instruments.

3. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on the evaluation, allowances are taken to account for the expected losses of these receivables.

4. The fair value of forward foreign exchange contracts and currency swaps is determined using forward exchange rates and yield curves at the balance sheet date.

5. The company uses the following hierarchy for determining and disclosing the fair values of financial instruments by valuation technique:

Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 : Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

11. First time adoption of IND AS

The Company has prepared financial statements for the year ended March 31, 2018 are the first financial statements prepared by the company in accordance with Ind AS. For periods up to and including the year ended March 31, 2017, the company prepared its financial statements in accordance with accounting standards notified notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of he Companies (Accounts) Rules, 2014 (Previous GAAP).

Accordingly, the company has prepared financial statements which comply with Ind AS applicable for periods ending on or after March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at April 1, 2016, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 1, 2017 and the financial statements as at and for the year ended March 31, 2017. The transition to Ind-AS has resulted in changes in the presentation of the financial statements, disclosures in the notes, accounting policies and principles.

Exemptions availed on first time adoption of Ind-AS 101:

Ind-AS 101 allows certain optional exemptions and mandatory exemptions on first time adoption of Ind-AS from the retrospective application of certain provisions of Ind-AS. The Company has accordingly applied the following exemptions:

A. Ind AS optional exemptions:

Deemed Cost for Property, Plant and Equipment and Intangible Assets

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

B. Ind AS mandatory exceptions:

Estimates

An entity''s estimates in accordance with Ind-AS at the date of transition to Ind-AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is an objective evidence that those estimates were in error. Ind-AS estimates at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP.

Classification and measurement of financial assets

Ind-AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind-AS.

12. Previous year''s figures have been regrouped/re-arranged/recasted, wherever necessary, so as to make them comparable with current year''s figures.

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Mar 31, 2017

b. Terms / rights attached to Equity Shares

The Company has issued only one class of equity shares having a par value of Rs.10 each. Each holder of Equity Shares are entitled to one vote per share. The Company declares and pay dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the realized value of the assets of the Company, remaining after the payment of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the company, including its register of members and other declarations received from them regarding beneficial interest, the above shareholding represent both legal and beneficial ownership of the shares.

e. 1. Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash: NIL

2. Aggregate number and class of shares allotted as fully paid up by way of Bonus Shares : NIL

3. Aggregate number and class of shares bought back: NIL

Note I:

1. Term Loan is repayable by 4 quarterly equal installments of Rs. 25,09,641.

2. Corporate Loan is repayable by 4 quarterly installments of Rs. 50,00,000, 4 quarterly installments of Rs. 75,00,000, 2 quarterly installments of Rs. 1,00,00,000 and last 1 quarterly installment of Rs. 1,25,00,000.

b. Vehicle loans are secured by hypothecation of concerned vehicles.

Repayment terms of Vehicle Loan

Vehicle loans are repayable in equal monthly installment over the terms of loan ranging from 1 to 3 years.

There was no default in repayment of loan or interest.

(2) There are no Micro, Small & Medium Enterprises to whom the company over dues, which are outstanding for more than 45 days as at 31st March, 2017. This information is disclosed under the Micro, Small & Medium Enterprises Development Act, 2006 which has been determined to the extent such parties have been identified on the basis of the information available with the company.

*There is no amount due and outstanding to be transferred to the Investors Education and Protection Fund (IEPF) as on March 31, 2017, Unclaimed Dividend if any shall be transferred to IEPF as and when they become due.

4. SEGMENT REPORTING

The Company is principally engaged in a single segment of Dyes and Pigments.

5. RELATED PARTY DISCLOSURES

Related Party Disclosures as required by Accounting Standard 18 issued by Institute of Chartered Accountants of India are given below:

1. Related Parties and Nature of Relationship

a) The Enterprises in which Key Managerial Personnel (KMP) and their relatives have significant influence:

Asahi Songwon Colors Ltd.

Skyjet Aviation Pvt. Ltd.

Skyways

Asahi Energy Pvt. Ltd.

Asahi Powertech Pvt. Ltd.

Flyover Communication Pvt. Ltd.

Akshar Silica Pvt. Ltd.

Vapi Enviro Management System Private Limited

b) Key Managerial Personnel:

Mrs. Paru M. Jaykrishna Mr. Munjal M. Jaykrishna Mr. Meet Joshi

c) Relative of Key Managerial Personnel Mr. Mrugesh Jaykrishna

d) Subsidiary Company*

Akshar Pigments Pvt. Ltd

6. IMPAIRMENT OF ASSETS

No material impairment of Assets has been identified by the Company and as such no provision is required as per Accounting Standard 28 issued by The Institute of Chartered Accountants of India.

* For the purpose of this clause "Specified Bank Notes": shall have the same meaning provided in the notification of the Government of the India, in the Ministry of Finance. Department of Economic Affairs number S.O. 3407{E}, dated the 8th November, 2016.

7. Previous year''s figures have been regrouped / reclassified, wherever necessary to make them comparable with the figures of the current year financial statements.

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Mar 31, 2016

Note I:

1. Term Loan is repayable by 7 quarterly equal installments of Rs. 25,09,641 and 8th for Rs. 25,09,643.

2. Corporate Loan is repayable by first 3 quarterly installments of Rs. 25,00,000, thereafter 5 quarterly installments of Rs. 50,00,000, 4 quarterly installments of Rs. 75,00,000, 2 quarterly installments of Rs. 1,00,00,000 and last 1 quarterly installment of Rs. 1,25,00,000. Repayment schedule starts from June, 2016.

b. Vehicle loans are secured by hypothecation of concerned vehicles.

Repayment terms of Vehicle Loan

Vehicle loans are repayable in equal monthly installment over the terms of loan ranging from 1 to 3 years.

There was no default in repayment of loan or interest.

“Secured loans are secured by hypothecation of raw materials, finished goods, stock in process book debts and other current assets of the Company.

(2) There are no Micro, Small & Medium Enterprises to whom the company over dues, which are outstanding for more than 45 days as at 31st March, 2016. This information is disclosed under the Micro, Small & Medium Enterprises Development Act, 2006 which has been determined to the extent such parties have been identified on the basis of the information available with the company.

3. SEGMENT REPORTING

The Company has reorganized the system of operation and internal business reporting and accordingly identified the business segment based on the nature of products, risks, returns and the internal business reporting system as per the Accounting Standard -17. Accordingly, The Company is principally engaged in a single segment of Dyes and Pigments.

4. RELATED PARTY DISCLOSURES

Related Party Disclosures as required by Accounting Standard 18 issued by Institute of Chartered Accountants of India are given below:

5.Related Parties and Nature of Relationship

a) The Enterprises in which Key Managerial Personnel (KMP) and their relatives have significant influence:

Asahi Songwon Colors Ltd.

Skyjet Aviation Pvt. Ltd.

Skyways

Asahi Energy Pvt. Ltd.

Asahi Powertech Pvt. Ltd.

Flyover Communication Pvt. Ltd.

Akshar Silica Pvt. Ltd.

b) Key Managerial Personnel:

Mrs. Paru M. Jaykrishna Mr. Munjal M. Jaykrishna Mr. Meet J. Joshi

c) Relative of Key Managerial Personnel

Mr. Mrugesh Jaykrishna Mr. Gokul M. Jaykrishna #

d) Subsidiary Company

Akshar Pigments Pvt. Ltd

6.. IMPAIRMENT OF ASSETS

No material impairment of Assets has been identified by the Company and as such no provision is required as per Accounting Standard 28 issued by The Institute of Chartered Accountants of India.

7. In the previous financial year i.e. 2014-15 Prior Period Adjustments of Rs. 11,565,000/- shown in the Statement of Profit and Loss.

8. SCHEME OF ARRANGEMENT

Pursuant to the Scheme of Arrangement ("the Scheme") under Section 391 to 394 and other applicable provisions of the Companies Act, 1956 between AksharChem (India) Limited ("the Company"), Asahi Songwon Colors Limited ("ASCL") and their respective shareholders and creditors as approved by the Hon’ble High Court of Gujarat vide its certified order dated November 29, 2014, which became effective from December 2, 2014 on filing with Registrar of Companies, Gujarat and accordingly all assets and liabilities of the CPC Green Division (i.e. business and interests in manufacture of CPC Green Division) of Asahi Song won Colors Limited has been transferred by way of demerger to the Company at their respective book values on a going concern basis with effect from the appointed date (i.e. April 1, 2014). Accordingly the same has been reflected in the previous year’s figures.

9. Previous year’s figures have been regrouped / reclassified, wherever necessary to make them comparable with the figures of the current year financial statements.

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Mar 31, 2015

1. Previous year figures have been regrouped wherever necessary, to confirm to this year's classification.

2. The cash flow statement has been prepared under the 'Indirect Method' set out in Accounting Standard 3 'Cash Flow Statement' issued by Institute of Chartered Accountants of India.

3. The figures of current year are not comparable with the previous years figures, pursuant to the Scheme of Arrangement sanctioned by the Hon'ble High Court of Gujarat in the nature of demerger and transfer of CPC Green Division of Asahi Songwon Colors Limited to the Company on the appointed date i.e. April 01,2014. All the Assets and liabilities are transferred the Company on that date. (Refer Note-42).

4. Corporate Information

The Company is a Public Limited Company incorporated under the Companies Act, 1956. The Company is currently engaged in the business of manufacturing, marketing, trading and export of Dyes Intermediates and Pigments.The company's equity shares are listed at BSE Limited and Ahmedabad Stock Exchange Limited.

5. Terms / rights attached to Equity Shares

The Company has issued only one class of equity shares having a par value of Rs.10 each. Each holder of Equity Shares are entitled to one vote per share. The Company declares and pay dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the realised value of the assets of the Company, remaining after the payment of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

6. Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash:

2,360,050 Equity Shares of Rs.10 each have been issued to Shareholders of Asahi Songwon Colors Limited in terms of Scheme of Arrangement in the nature of demerger and transfer of CPC Green Division of Asahi Songwon Colors Limited into the Company sanctioned by the Hon'ble High Court of Gujarat at Ahmedabad vide order dated 17.10.2014.

7. Aggregate number and class of shares allotted as fully paid up by way of Bonus shares : NIL

8. Aggregate number and class of shares bought back: NIL

a. Secured loans are covered by:

Term Loans from State Bank of India (SBI) are secured by Equitable Mortgage of Land and Buildings and a first charge by way of hypothecation of the whole of the movable properties of the company including its movable plant & machinery, stores, tools & accessories, present & future and other movables save & except book debts & current assets.

b. Vehicle loans are secured by hypothecation of concerned vehicles.

Repayment terms of Vehicle Loan

Vehicle loans are repayable in equal monthly installment over the terms of loan ranging from 1 to 3 years. There was no default in repayment of loan or interest.

9. CONTINGENT LIABILITIES & COMMITMENTS

(Amount in Rupees)

Particulars 31/03/2015 31/03/2014

1 Income Tax: order U/s 154 Passed by ACIT Circle -1 Ahmedabad for Asst Year. 669,293 669,293

2001-02.

2 Sales Tax: Appellate order passed by Dy. Commissioner of Commercial Taxes, 1,803,341 1,803,341

Appeals-3 at Gandhinagar for the year 2004-05, and Subsequently applied for

Appeal at Commercial tax Commissioner Ahmedabad. (VAT Tribunal).

3 The Commissioner of Income Tax -1Ahmedabad has filed an appeal in the High 4,427,236 4,427,236

Court of Gujarat, Ahmedabad for the Asst. Year 2003-04

4 The Commissioner of Income Tax -1 Ahmedabad has filed an appeal for the 293,669 293,669

Asst. Year 2004-05

5 Income Tax: order U/s 263 Passed by ITO (Tech-I) Pr. Commissioner of Income 261,960 -

tax-1 Ahmedabad for Asst Year. 2010-11 has filed an appeal to the Appellate Tribunal

6 Estimated amount of Contracts / purchase orders remaining to be executed 43,234,100 -

and not provided for Capital goods.

7 Bills discounted against Letter of Credit but not realized and credited to the 68,002,255 - parties accounts

10. sundry debtors, sundry creditors and loans and advances

The Company has received balance confirmations from major parties and for few exceptions, the management is in the opinion that the current assets, loans and advances have a value on realization in ordinary course of business at least equal to the amount at which they are stated.

11. SEGMENT REPORTING

The Company has two reportable primary segments "Dyes and Intermediate" and "Pigments" for the year ended 31.03.2015 (Previous year up to 31/03/2014 had one segment "Dyes and Intermediates" as they do not include figures of CPC Green Division, which has been since demerged into the Company from Asahi Songwon Colors Limited with appointed date April 01,2014) as per Accounting Standard-17. (Refer Note-42)

12. RELATED PARTY DISCLOSURES

Pursuant to the Accounting Standard on "Related Party Disclosure" (AS 18) notified by Companies (Accounting Standards) Rules, 2006, the following persons will be considered as related persons for the period ended on March 31,2015.

1 Related Parties and Nature of Relationship

a) The Enterprises in which Key Managerial Personnel (KMP) and their relatives have significant influence:

Asahi Songwon Colors Ltd.

Skyjet Aviation Pvt. Ltd.

Skyways

Asahi Energy Pvt. Ltd.

Asahi Powertech Pvt. Ltd.

Flyover Communication Pvt. Ltd.

Akshar Silica Pvt. Ltd.

b) Key Managerial Personnel:

Mrs. Paru M. Jaykrishna

Mr. Gokul M. Jaykrishna

Mr. Munjal M. Jaykrishna

c) Relative of Key Managerial Personnel

Mr. Mrugesh Jaykrishna

13. ACCOUNTING FOR TAX ON INCOME

Provision for current tax is made under normal computation. Provision of Income Tax has been made in the accounts taking into consideration various concessions available and depreciation under the Income Tax Act 1961. MAT Credit entitlement has been treated as advance payment of Tax.

14. IMPAIRMENT OF ASSETS

No material impairment of Assets has been identified by the Company and as such no provision is required as per Accounting Standard 28 issued by The Institute of Chartered Accountants of India.

15. The Prior Period Adjustments of Rs.11,565,000/- shown in Statement of Profit and Loss represents the recovery of excess payment of Remuneration paid to the Managing Directors of the Company during the Financial Year 2013-2014.

16. The extraordinary Item shown in the Statement of Profit and Loss represents unrealised export incentives written off for Rs. Nil (Previous year Rs. 15,979,288/-)

17. Consequant to the Approval of the Scheme of Arrangement ("Scheme") under section 391 to 394 and other applicable provisions of the Companies Act, 1956 between AksharChem (India) Limited ("the Company"), Asahi Songwon Colors Limited ("ASCL") and their respective shareholders and creditors, CPC Green division of Asahi Songwon Colors Limited ("demerged Undertaking), including all assets and liabilities thereof, (i.e. business and interests in manufacture of CPC Green Division) as sanctioned by Hon'ble High Court of Gujarat vide its Certified order dated November 29, 2014, and thereunder filed with the Registrar of Companies on December 2, 2014, has been transferred by way of demerger to the Company at their respective book values on a going concern basis with effect from the appointed date of the Scheme, i.e. April 1,2014. Accordingly, these financial statements includes the figures of the said CPC Green Division of ASCL ("demerged undertaking") for the period from 01.04.2014 to 31.03.2015.

18. Upon the scheme being effective the Authorised Share Capital of Asahi Songwon Colors Limited amounting to Rs. 35,000,000/-has been transferred to the Company and accordingly the Authorised Share Capital of the Company is increased to the said extent as on the effective date without any further act or deed.

19. The transaction pertaining to the CPC Green Division ASCL from the appointed date up to the effective date of the Scheme of Arrangement has been deemed to be made by the Company.

20. The employees of demerged undertaking have been transferred to the Company on their existing terms of employment with ASCL.

21. All contingent liabilities relating to demerged undertaking has been transfereed to the Company on the appointed date.

22. All loans, advances and other facilities sanctioned to the ASCL in relation to the CPC Green Division by State Bank of India prior to the Appointed Date, which are partly drawn or utilized is transferred to the Company. Further, such loans, advance and other facilities utilized either partly or fully by the ASCL from the appointed date till the effective date of the CPC Green Division (within the overall limits sanctioned by State Bank of India) is on the effective date treated as loans, advances and other facilities made available by the Company without any further act or deed.

23. Figures for the period prior to the appointed date i.e. April 1,2014 are not comparable since they do not include figures of CPC Green division which has been since demerged into the company from Asahi Songwon Colors Limited as per the Scheme of Arrangement approved by the Hon'ble High Court of Gujarat.

24. Earning per Share (EPS) for the period ended 31/3/2015 has been calculated in accordance with Accounting Standard 20 after considering the effect of shares issued to the shareholders of Asahi Songwon Colors Limited pursuant to the Scheme of Arrangement in the nature of demerger and transfer of CPC Green division of Asahi Songwon Colors Limited. Since the scheme of demerger is with effect from appointed date i.e. April 01, 2014, consequently the figures in respect of EPS for current period are not comparable with figures for the period prior to the appointed date.

25. Previous year's figures have been regrouped / reclassified, wherever necessary to make them comparable with the figures of the current year financial statements.

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Mar 31, 2014

1. Terms / rights attached to Equity Shares

The company has issued only one class of equity shares having a par value of Rs. 10 per share. Each holder of Equity Shares are entitled to one vote per share. The company declares and pay dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting, except in case of interim dividend. In the event of liquidation of the company, the holders of equity shares will be entitled to receive the realised value of the assets of the company, remaining after the payment of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. I. Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash: NIL

II. Aggregate number and class of shares allotted as fully paid up by way of Bonus Shares : NIL

III. Aggregate number and class of shares bought back: NIL

3. ''There are no Micro, Small & Medium Enterprises to whom the company over dues, which are outstanding for more than 45 days as at 31st March, 2014. This information is disclosed under the Micro, Small & Medium Enterprises Development Act, 2006 which has been determined to the extent such parties have been identified on the basis of the information available with the company.

4. CONTINGENT LIABILITIES & COMMITMENTS NOT PROVIDED FOR

(Amount in Rupees)

31/03/2014 31/03/2013

1. Income Tax: order U/s 154 passed 669,293 669,293 by ACIT Circle -1 Ahmedabad for Asst Year. 2001-02. 2. Sales Tax: Appellate order passed 1,803,341 1,803,341 by Dy. commissioner of commercial Taxes, Appeals-3 at Gandhinagar for the year 2004-05, and Subsequently applied for Appeal at commercial tax commissioner Ahmedabad. (VAT Tri- bunal).

3. The commissioner of Income Tax -1 4,427,236 4,427,236 Ahmedabad has filed an appeal in the High court of Gujarat, Ahmedabad for the Asst. Year 2003-04

4. The commissioner of Income Tax -1 Ahmedabad has filed an appeal for the 293,669 293,669 Asst. Year 2004-05

5. Estimated value of contracts - - remaining to be executed on capital account & not provided for

6. Bills discounted against Letter of - 5,636,505 credit but not realized and credited to the parties accounts

5. SUNDRY DEBTORS, SUNDRY CREDITORS AND LOANS AND ADVANCES

The company has received balance confirmations from major parties and for few exceptions, the management is in the opinion that the current assets, loans and advances have a value on realization in ordinary course of business at least equal to the amount at which they are stated.

6. SEGMENT REPORTING

The company has only one identified reportable business segment namely "Dyes & Intermediates" and does not fall under secondary segment for the purpose of Accounting Standard on "Segment Reporting" (AS 17) notified by companies (Accounting Standards) Rules, 2006.

7. The extraordinary item shown in the Statement of profit and Loss represents unrealised export incentives written off for Rs. 15,979,288/- (previous year - Nil)

8. ACCOUNTING FOR TAX ON INCOME

Provision for current tax is made under normal computation. Provision of Income Tax has been made in the accounts taking into consideration various concessions available and depreciation under the Income Tax Act 1961. MAT credit entitlement has been treated as advance payment of Tax.

9. IMPAIRMENT OF ASSETS

No material impairment of Assets has been identified by the company and as such no provision is required as per Accounting Standard 28 issued by The Institute of chartered Accountants of India.

10. Previous year''s figures have been regrouped / reclassified, wherever necessary to make them comparable with the figures of the current year financial statements.

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Mar 31, 2013

1. SUNDRY DEBTORS, SUNDRY CREDITORS AND LOANS AND ADVANCES

The Company has received balance confirmations from major parties and for few exceptions, the management is in the opinion that the current assets, loans and advances have a value on realization in ordinary course of business at least equal to the amount at which they are stated.

2. SEGMENT REPORTING

The Company has only one identified reportable business segment namely "Dyes & Intermediates" and does not fall under secondary segment for the purpose of Accounting Standard on "Segment Reporting" (AS 17) notified by Companies (Accounting Standards) Rules, 2006.

3. ACCOUNTING FOR TAX ON INCOME

Provision for current tax is made under normal computation. Provision of Income Tax has been made in the accounts taking into consideration various concessions available and depreciation under the Income Tax Act 1961. MAT Credit entitlement has been treated as advance payment of Tax.

4. IMPAIRMENT OF ASSETS

No material impairment of Assets has been identified by the Company and as such no provision is required as per Accounting Standard 28 issued by The Institute of Chartered Accountants of India.

5. Previous year''s figures have been regrouped / reclassified, wherever necessary to make them comparable with the figures of the current year financial statements.

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Mar 31, 2012

A. Terms / rights attached to Equity Shares

The Company has issued only one class of equity shares having a par value of Rs. 10 per share. Each holder of Equity Shares are entitled to one vote per share. The Company declares dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the realised value of the assets of the Company, remaining after the payment of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

b. 1. Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash: Nil

2. Aggregate number and class of shares allotted as fully paid up by way of Bonus Shares : Nil

3. Aggregate number and class of shares bought back: Nil

a. Secured loans are covered by:

1. Term Loan from State Bank of India is secured by Equitable mortgage of Land and Buildings and a first charge by way of hypothecation of the whole of the movable properties of the company including its movable plant & machinery, stores, tools & accessories, present & future and other movables save

& except book debts & current assets and further secured by personal guarantee of three Directors of the Company.

b. Repayment terms of outstanding long term borrrowings as on March 31, 2012:

1. There was no default in repayment of loan or interest.

2. Repayment terms of secured term loan:

Amount payable within 12 Months Rs. 5,013,105/- (Previous.Year. Rs. 12,000,000/-). Current year term loan outstanding is repayable by 4 monthly installments of Rs. 1,000,000/- and last installment for balance amount.

* Secured loans are secured by hypothecation of raw materials, finished goods, stock in process and book debts, and furher secured by first charge over the fixed assets of the company and personal guarantee of three Directors of the Company.

(2) There are no Micro, Small & Medium Enterprises to whom the company over dues, which are outstanding for more than 45 days as at 31st March, 2012. This information is disclosed under the Micro, Small & Medium Enterprises Development Act, 2006 which has been determined to the extent such parties have been identified on the basis of the information available with the company.

3 The Revised Schedule VI as notified under the Companies Act, 1956 has become applicable to the Company effective from April 1, 2011 for the presentation made in the financial statements. The adoption of the revised Schedule VI requirements has significantly modified the presentation and disclosures which have been complied with in these financial statements. Previous year figures have been reclassified in accordance with current year requirements.

4 Contingent Liabilities

(Amount in Rupees) 31/03/2012 31/03/2011

1. Income Tax: order U/s 250 Dated 30/12/2010 Passed 669,293 2,680,821 by CIT (A)-VI Ahmedabad for Asst Year. 2001-02.

2. Sales Tax : Assessment order passed by Sales tax officer Kadi - 110,145 for the year 1997-1998 for which Appeal filed with Assistant

Commissioner of Sales Tax Mehsana GST and CST Respectively.

3. Sales Tax: Appellate order passed by Dy. Commissioner of 1,803,341 1,803,341 Commercial Taxes, Appeals-3 at Gandhinagar for the year

2004-05, and Subsequently applied for Appeal at Commercial tax Commissioner Ahmedabad. (VAT Tribunal).

4. The Commissioner of Income Tax -1 Ahmedabad has filed an 4,427,236 4,427,236 appeal in the High Court of Gujarat, Ahmedabad for the Asst.

Year 2003-04.

5. Income Tax: order U/s 143(3) Dated 09/09/2011 Passed by 293,669 - DCIT Circle -1 Ahmedabad for Asst Year. 2004-05.

6. Estimated amount of contracts remaining to be executed - 12,287,645 on capital account & not provided for.

7. Bills discounted against Letter of Credit but not realized and 12,411,154 4,389,172 credited to the parties accounts.

8. Guarantees Issued by the banks on behalf of the Company. 837,105 837,105

9. Central Excise: - Applied for appeal at Commissioner of 462,642 462,642 Central Excise. Ahmedabad-III on December 2009 dispute against availed the cenvat credit.

5 Sundry Debtors, Sundry Creditors and Loans and Advances

The Company has received balance confirmations from major parties and for few exceptions, the management is in the opinion that the current assets, loans and advances have a value on realization in ordinary course of business at least equal to the amount at which they are stated.

6 Segment Reporting

The Company has only one identified reportable business segment namely "Dyes & Intermediates" and does not fall under secondary segment for the purpose of Accounting Standard on "Segment Reporting" (AS 17) notified by Companies (Accounting Standards) Rules, 2006.

7 Related Party Disclosures

Pursuant to the Accounting Standard on "Related Party Disclosure" (AS 18) notified by Companies (Accounting Standards) Rules, 2006, the following persons will be considered as related persons for the year ended on March 31, 2012.

8 Accounting for Tax on Income

Provision for current tax is made under normal computation. Provision of Income Tax has been made in the accounts taking into consideration various concessions available and depreciation under the Income Tax Act 1961. MAT Credit entitlement has been treated as advance payment of Tax.

9 Impairment of Assets

There are no indications which reflects that any of the assets of the Company has got impaired from its potential use and therefore no impairment loss was required to be accounted in the current year as per Accounting Standard on "Impairment of Assets" (AS 28) notified by the Companies (Accounting Standards) Rules, 2006.

10 Previous year's figures have been regrouped / reclassified, wherever necessary to make them comparable with the figures of the current year financial statements.

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Mar 31, 2010

1. Contingent Liabilities

As at As at

31/03/10 31/03/09

Rs. Rs.

a. Income Tax: Assessment order passed by Income-Tax office of Ward 1(1) Ahmedabad for A.Y. 2001-02 for which Filed an Appeal with Appellate Tribunal. 1,129,189 1,129,189

b. Sales Tax : Assessment order passed by Sales tax officer Kadi for the year 1997-1998 for which Appeal filed with Assistant Commissioner of Sales Tax Mehsana GST and CST Respectively. 110,145 110,145

c. Sales Tax: Appellate order passed by Dy. Commissioner of Commercial Taxes, Appeals-3 at Gandhinagar for the year 2004-05,. and Subsequently applied for Appeal at Commercial tax Commissioner Ahmedabad. (VAT Tribunal). 1,803,341 1,803,341

d. Income Tax : Assessment order passed by Income-Tax office of Ward 1(1) Ahmedabad for A.Y. 2003-04 for which CIT Appeal Filed on April 2006. 4,427,234 4,427,234

e. Estimated amount of contracts remaining to be executed on capital account & not provided for. 1,135,000 NIL

f. Bills discounted against Letter of Credit but not realized and credited to the parties accounts. 38,949,691 24,865,323

g. Guarantees Issued . by the banks on behalf of the Company. 837,105 NIL

h Central Excise: - Applied for appeal at Commissioner of Central Excise. Ahmedabad-III on December 2009 dispute against availed the cenvat credit. 462,642 NIL



2. Sundry Debtors, Sundry Creditors and Loans and Advances

a. The Company has received balance confirmations from major parties and for few exceptions, the management is in the opinion that the current assets, loans and advances have a value on realization in ordinary course of business at least equal to the amount at which they are stated.

b. There are no Micro, Small & Medium Enterprises to whom the company over dues, which are outstanding for more than 45 days as at 31st March, 2010. This information is disclosed under the Micro, Small & Medium Enterprises Development Act, 2006 which has been determined to the extent such parties have been identified on the basis of the information available with the Company.

3. Segment Reporting

The Company is mainly engaged in manufacturing of "Dyes & Intermediates" which is considered the Primary reportable business segment as per AS-17 "Segment Reporting" issued by Institute of Chartered Accountants of India.

4. Related Party Disclosures

1. Related Parties and Nature of Relationship

a) The Parties over which significant influence is exercised

Names Relationship

Asahi Songwon Colors Ltd. One or more directors are director

Skyjet Aviation Pvt Ltd One or more directors are director

Skyways One or more directors are trustees

Third Screen Solution Pvt Ltd One or more directors are director

Grey Cell Solution Pvt Ltd One or more directors are director

Flyover Communication Pvt Ltd One or more directors are director



b) Key Management Personal and their Relatives:

Names Relationship

Mrs. Paru M. Jaykrishna Chairperson and Managing Director

Mr. Gokul M. Jaykrishna Executive Director

Mr. Munjal M. Jaykrishna Joint Managing Director Mr. Mrugesh Jaykrishna Spouse of the Chairperson and Managing

Director and Father of Executive Director and Joint Managing Director.