Notes to Accounts of Kesar Terminals & Infrastructure Ltd.

Mar 31, 2018

1 Background

The Company was incorporated on 21st January 2008. On 12th March 2010, the Hon''ble High Court of Bombay had passed an order pursuant to Section 391 to 394 of the Companies Act 1956, sanctioning the Scheme of Arrangement by way of Demerger for transfer of the Storage Division of Kesar Enterprises Limited (KEL) into the Company as a going concern with effect from 1st January 2009 (Appointed Date).

Pursuant to the Scheme of Demerger, in consideration of the transfer of Storage Undertaking into the Company, 4,753,1 13 Equity Shares of Rs. 10 each, fully paid up are issued and allotted on 1st June 2010 by the Company to the shareholders of Kesar Enterprises Limited (KEL) in the ratio of 10:7 i.e. for every 10 shares in KEL, 7 shares in the company.

The Company is mainly engaged in the business of renting of liquid storage tanks at Kandla and is in process of commencing its operation at Pipavav and Kakinada Port.

a) The Company has invested in 0% Cumulative Redeemable Preference Shares for 15 years. Under Ind-AS, preference shares are classified as Invesment based on the nature and terms of the contract. Interest on the said investment is recognised using the effective interest method with interest rate of 10.50%. Thus the said preference share investment is reduced by Rs.74,535,600 as on 01.04.2016 and Rs. 203,326,480 as on 31.03.2017 with a corresponding increase in Investment in Equity Capital of Subsidiary under the head Non Current Financial Investments.

b) Interest free Loan given to subsidiary has been recognised at fair value as per INDAS by taking effective rate of Interest @10.50%.Accordingly Interest amount of Rs.14,766,516 as on 01.04.2016 (Rs. 14,766,516 as on 31.03.2017) included in the said loan is reduced from Loan and added to Investment in Equity Capital of Subsidiary under the head Non Current Financial Investments.

c) Fair value of the corporate guarantee given to subsidiary is taken at 0.50% per annum on outstanding loan exposure in respect of which such guarantee is given. Accordingly Rs.9,321,060 as on 01.04.2016 and Rs.14,186,149 is adjusted in retained earnings and added to Investment in Equity Capital of Subsidiary under the head Non Current Financial Investments.

d) Deferred Tax Asset is recognised due to timing differences arising in Income Tax out of fair Valuation of investment in Preference Shares of Subsidiary and Loan given to subsidiary. Accordingly Rs.30,905,677 as on 01.04.2016 and Rs.73,966,913 as on 31.3.2017 has been added to Differed Tax Assets as well as retained earnings.

e) Under Ind-AS, impairment allowance has been determined based on Expected Credit Loss model (ECL). Accordingly, trade receivables have been reduced by Rs.870,157 as on 01.04.2016 and Rs.974,980 as on 31.3.2017 which is 2% of Trade Receivable with a corresponding decrease in retained earnings.

f) Provision for proposed dividend made as per GAAP as on 31.03.2016 is written back since it is no longer an adjusting event.

a. Other Income

Other Income Includes Implied Interest on Investment in preference shares of subsidiary company arising out of fair valuation amounting Rs.4,050,515 at interest rate of 10.50%, Implied interest of Rs.14,766,516 arising out of fair valuation of loan given to KMLL at 10.50% and Implied guarantee commission of Rs.4,865,089 on corporate guarantee given to KMLL.

b. Provision for Expected Credit Loss

As per Ind-AS 109, the Company is required to apply expected credit loss model for recognising the allowance for doubtful debts. As a result, the allowance for doubtful debts is increased by Rs.104,526 and the same is recognised in "Other Expenses" during the financial year 2016-17.

c. Other comprehensive income (OCI)

Concept of other comprehensive income did not exist under Indian GAAP. Under Ind-AS, all items of income and expenses recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income or expenses that are not recognised in profit or loss but are shown in the statement of profit and loss as ''Other comprehensive income'' includes remeasurement of defined employee benefits plans. The amount related to remeasurement of defined employee benefit plan of Rs.2,277,335 is presented as part of OCI during the financial year 2016-17.Deferred Tax liability arising consequent to the same is also presented under OCI.

d. Deferred Tax

Deferred Tax Asset is recognised due to timing differences arising in Income Tax out of fair Valuation of investment in Preference Shares of Subsidiary. Accordingly net deferred Tax assets of Rs.43,061,237 is created for 2016-17.Also deferred Tax liability amounting to Rs.788,140 created on Rs.2,277,335 which is shown under other comprehensive income due to remeasurement of employee benefit expenses as per the requirement of IND-AS.

C. Adjustments to the statement of Cash Flows.

The transition from Indian GAAP to Ind-AS had no significant impact on cash flows generated by the Company

(b) Terms / rights attached to Equity Shares

i) The Company has only one class of equity shares having a par value of Rs.5 per share (March 31, 2017 : Rs.5 per share and April 1,2016 : Rs.10 per share). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim Dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion of their holdings.

ii) During the current year , the amount of Final dividend Rs.1 (previous year Rs.0.50) per Equity Share has been declared and paid .

* Hon''ble High Court of Gujarat has set aside demand of Gujarat Electricity Board; contrarily Gujarat Electricity Board has filed Special Leave Petition in Supreme Court. Order is awaited

** The total outstanding loans as at 31.03.2018 is Rs.1,012,040,149 (Previous Year Rs.946,301,322) against Corporate Guarantee.

Strategic Debt restructuring (SDR) was invoked and approved by the Banks of the Kesar Mulitmodal Logistics Ltd (KMLL) on 20.11.2017. However, upon withdrawal of the SDR scheme by RBI vide its circular no RBI/2017-18/131 DBR.No.BP.BC.101/21.04.048/2017-18 dated 12.02.2018, Bankers have invoked the Corporate Guarantee given by the Company. The company''s subsidiary KMLL is contesting at appropriate legal forum, the applicability of RBI''s aforesaid circular and its consequential invocation of Corporate Guarantee.

2. Pursuant to Scheme of Demerger, the Company has requested Deendayal Port Trust (DPT) (formerly known as Kandla Port Trust(KPT)) for transfer of leasehold land situated at Kandla in its name which is presently in the name of Kesar Enterprises Ltd. However, DPT has raised a demand of Rs.208,354,295/- on account of such transfer/ upfront fee for change in the name. The Company has filed a writ petition in High Court of Gujarat, against the demand raised by the DPT. In the Current year the Company has deposited Rs.50,000,000/- with DPT as per Court directives towards above demands and is of the view that the demand raised is likely to be deleted or substantially reduced and hence no provision in required to be made. However, for certain portion of leasehold land, where the lease period is expired, the same is pending for renewal by DPT, although the Company has filed writ petition/ application for the renewal of the said lease and is of the view that Lease shall be renewed by DPT. Pending outcome of the writ petition filed in High Court of Gujarat, depreciation on Assets constructed at lease hold land has been charged as per the rates prescribed in Schedule II of the Companies Act 2013.

3. The Non Current Investments amounting to Rs.35,000,000/- (Previous Year Rs.35,000,000/-) is placed as a security against borrowings.

4. Employee Benefit

Defined Benefit Plan (Gratuity Fund) - Funded

In accordance with Indian Accounting Standard 19 "Employee Benefits", actuarial valuation was performed by independent actuaries in respect of the aforesaid defined benefit plan.

The expected rate of return on plan assets is based on the expectations of the average long term rate of return expected on investments of the fund during the estimated term of the obligation.

The estimates of future salary increases are considered taking into account inflation, seniority promotion and other relevant factors.

Defined Contribution Plans

Amount recognized as expense in respect of Compensated Leave Absence is Rs. (321,496) (Previous Year Rs.2,230,872).

Amount recognized as an expense in respect of "Contribution to Provident and other Funds" is Rs.5,318,007 (Previous Year Rs.5,396,415)

The Company has a defined benefit gratuity plan in India (funded). The company''s defined benefit gratuity plan is a final salary plan for employees, which requires contributions to be made to a separately administered fund. The fund is managed by a trust which is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy.

Risks associated with defined benefit plan

Gratuity is a defined benefit plan and company is exposed to the Following Risks:

Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

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 a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities, comprises borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company''s operations and to support its operations directly or indirectly. The Company''s principal financial assets include loans, trade and other receivables, cash and cash equivalents that derive directly from its operations.

The Company is exposed to credit risk and liquidity risk. Market risk is applicable to variable rate borrowing. Equity risk is not applicable since company does not have equity investments. Foreign exchange risk is not applicable since the company does not have long term imports. The below note explains the sources of risk which the entity is exposed to and how the entity manages the risk :

Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and other financial instruments.

Trade receivables

Outstanding customer receivables are regularly monitored and any further services to major customers are approved by the senior management.

On account of adoption of Ind-AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors and the Company''s historical experience for customers.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s finance department. Liquidity Risk

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans, preference shares and unsecured loans.

Interest rate risk

The Company has MCLR based borrowing and depending on the interest rate scenario, the company decides on the mix of fixed rate versus variable rate borrowing.

6. Capital Management

For the purpose of the Company''s capital management, capital includes issued equity share capital, securities premium and all other reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the value of the share and to reduce the cost of capital.

The Company monitors capital using a gearing ratio, which is net debt divided by total equity. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

7. Segment Reporting

The Company is mainly engaged in Liquid Storage Business in India and there is no other reportable business and geographical segment as required by Indian Accounting Standard 108.

8. Loans and advances in the nature of loans given to Subsidiary Company/Guarantees given on behalf of Subsidiary in accordance with schedule V of SEBI(Listing Obligations & Disclosure Requirements) Regulations, 2015 & Section 186 of the Companies Act, 2013.

9. Disclosure of amounts payable to vendors as defined under the "Micro, Small and Medium Enterprise Development Act, 2006" is based on the information available with the Company regarding the status of registration of such vendors under the said Act. There are no overdue principal amounts/ interest payable for delayed payments to such vendors as at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payments made during the year or brought forward from previous years.

10. The common corporate expenses incurred at Corporate Head Office at Mumbai for the year have been allocated as per the Sharing Agreement between Kesar Enterprises Ltd. and the Company. The amount allocated to the Company is Rs.9,440,472 (Previous Year Rs.15,757,344). Addition to fixed assets includes Rs. Nil (Previous Year Rs. Nil) (net of depreciation), transferred from Kesar Enterprises Ltd.

11. Derivative instruments and unhedged foreign currency exposure Nil (previous year Nil).

12. Ministry of Corporate Affairs ("MCA") through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the new Standard Ind-AS 115 "Revenue from Contracts with Customers" which is effective from April 1, 2018.

The core principle of Ind-AS 115 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:

- Step 1: Identify the contract(s) with a customer

- Step 2: Identify the performance obligation in contract

- Step 3: Determine the transaction price

- Step 4: Allocate the transaction price to the performance obligations in the contract

- Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Under Ind-AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ''control'' of the goods or services underlying the particular performance obligation is transferred to the customer.

The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind-AS 8- Accounting Policies, Changes in Accounting Estimates and Errors.

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)

The Company will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of Ind-AS 115 is expected to be insignificant.

13. The previous year figures have been regrouped and reclassified wherever necessary to correspond with the current year classification/disclosure.

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Mar 31, 2016

(b) Terms / rights attached to Equity Shares

i) The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim Dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion of their holdings.

ii) During the year ended 31st March 2016, the amount of Final dividend recognized Rs. 1.00 (31st March 2015: Rs.3.50) per Equity Share.

1. Pursuant to Scheme of Demerger, the Company has requested Kandla Port Trust (KPT) for transfer of leasehold land situated at Kandla in its name which is presently in the name of Kesar Enterprises Ltd. However, KPT has raised a demand of Rs. 208,354,295/- on account of such transfer/ upfront fee for change in the name. The Company has filed a writ petition in High Court of Gujarat, against the demand raised by the KPT. The Company is of the view that the demand raised is likely to be deleted or substantially reduced and hence no provision in required to be made. However, for certain portion of leasehold land, where the lease period is expired, the same is pending for renewal by KPT, although the Company has filed writ petition/application for the renewal of the said lease and is of the view that Lease shall be renewed by KPT. Pending outcome of the writ petition filed in High Court of Gujarat, depreciation on Assets constructed at lease hold land has been charged as per the rates prescribed in Schedule II of the Companies Act2013.

2. The Non Current Investments amounting to Rs. 35,000,000/- (Previous Year '' 35,000,000/-) is placed as a security against borrowings.

3. Employee Benefit

Defined Benefit Plan (Gratuity Fund)

In accordance with Accounting Standard (AS 15) (Revised 2005), actuarial valuation was performed by independent actuaries in respect of the aforesaid defined benefit plan.

4. The Company carries excess income tax provision amounting to Rs. 39,241,247 (Previous Year Rs. 26,699,860) pending assessments.

5. The Company has received order dated March 25, 2016 under Section 143(3) of the Income Tax Act, 1961, raising a demand of Rs. 39,607,430. While raising a demand the Assessing Officer has erroneously not given the credit for Advance Tax and Self Assessment Tax of Rs. 26,650,000 and Rs. 5,000,000 respectively. The Company has filed application on 4^th April, 2016 for the rectification under Section 154 of the Income Tax Act, 1961. Upon giving effect to the said application the demand raised by Income Tax Department shall stand deleted and refund is due to the Company.

6. Derivative instruments and unhedged foreign currency exposure Nil (previous year Nil)

7. The previous year figures have been regrouped and reclassified wherever necessary to correspond with the current year classification/disclosure.

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Mar 31, 2015

1 BACKGROUND

The Company was incorporated on 21st January 2008. On 12th March 2010, the Hon'ble High Court of Bombay had passed an order pursuant to Section 391 to 394 of the Companies Act 1956, sanctioning the Scheme of Arrangement by way of Demerger for transfer of the Storage Division of Kesar Enterprises Limited (KEL) into the Company as a going concern with effect from 1st January 2009 (Appointed Date).

Pursuant to the Scheme of Demerger, in consideration of the transfer of Storage Undertaking into the Company, 4,753,1 13 Equity Shares of Rs. 10 each, fully paid up are issued and allotted on 1st June 2010 by the Company to the shareholders of Kesar Enterprises Limited (KEL) in the ratio of 10:7 i.e. for every 10 shares in KEL, 7 shares in the company.

The Company is mainly engaged in the business of renting of liquid storage tanks at Kandla and is in process of commencing its operation at Pipavav and Kakinda Port.

2. Terms / rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim Dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion of their holdings.

During the year ended 31st March 2015, the amount of per equity share Final dividend recognised Rs. 3.50 (31st March 2014: interim dividend of Rs.1.50 & final dividend of Rs.1.50 totalling to Rs. 3.00).

3. CONTINGENT LIABILITIES

Nature of claim/Demands As at As at 31st March 2015 31st March 2014 (Rs.) (Rs.) (a) Claims against the Company not acknowledged as debts:

i) Additional demand of Electricity Charges under dispute Nil 5,342,469

ii) Additional demand on account of revision in rates of Lease 37,199,818 Nil Rent

iii) Additional demand on account of Transfer fee/upfront rent for 208,354,295 Nil change in name

b) Guarantee: * 1,081,100,000 1,081,100,000

Corporate Guarantee given in favour of Banker's, towards credit facilities granted to Kesar Multimodal Logistics Limited (Subsidiary Company) (KMLL) to set up a "Composite Logistics Hub" at Powarkheda in Madhya Pradesh.

Total 1,326,654,1131 1,086,442,469

* The total outstanding loans as at 31.03.2015 is Rs.790,764,933 (Previous Year Rs.464,226,683) against Corporate Guarantee.

4. Pursuant to Scheme of Demerger, the Company has requested Kandla Port Trust (KPT) for transfer of leasehold land situated at Kandla in its name which is presently in the name of Kesar Enterprises Ltd. However, KPT has raised a demand of Rs.208,354,295/- on account of such transfer/ upfront fee for change in the name. The Company has filed a writ petition in High Court of Ahmedabad, against the demand raised by the KPT. The Company is of the view that the demand raised is likely to be deleted or substantially reduced and hence no provision made. The Depreciation on Assets constructed at lease hold land of KPT has been charged as per the rates prescribed in Schedule II of the Companies Act 2013. However for certain portion of leasehold land, where the lease period has been expired, the same is pending for renewal, although the Company has filed an application for the renewal of the said lease. The Company is of the view that Lease shall be renewed on the outcome of the writ petition filed in High Court of Ahmedabad.

5. The Non Current Investments amounting to Rs.35,000,000/-is placed as a security against borrowings.

6. EMPLOYEE BENEFIT

Defined Benefit Plan (Gratuity Fund)

In accordance with Accounting Standard (AS 15) (Revised 2005), actuarial valuation was performed by independent actuaries in respect of the aforesaid defined benefit plan.

The expected rate of return on plan assets is based on the expectations of the average long term rate of return expected on investments of the fund during the estimated term of the obligation.

The estimates of future salary increases are considered taking into account inflation, seniority promotion and other relevant factors.

7. SEGMENT REPORTING

The Company is mainly engaged in Liquid Storage Business and there is no other reportable business and geographical segment as required by Accounting Standard - 17 "Segment Reporting".

8. RELATED PARTY DISCLOSURES UNDER ACCOUNTING STANDARD 18:

Names of related parties and nature of related party relationships:

Name of Related Parties

a) Key Management Personnel and their relatives:

Key Management Personnel:

Mr. H R Kilachand Executive Chairman

Mrs. M H Kilachand Promoter Director

Relatives of Key Management Personnel:

Mr. Rohan H Kilachand Son of Executive Chairman

Ms. Rohita H Kilachand Daughter of Executive Chairman

b) Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence

Kesar Enterprises Limited

Kesar Corporation Pvt. Ltd.

Indian Commercial Co. Pvt. Ltd.

Kilachand Devchand & Co. Pvt. Ltd.

Kilachand Devchand Commercial Pvt. Ltd.

India Carat Pvt Ltd

9. Based on the information available with the Company regarding the status of the suppliers as defined under the Micro Small and Medium Enterprise Development Act 2006 (the 'MSMED'), no suppliers are outstanding for more than 45 days as per the terms & conditions of the order.

10. The common corporate expenses incurred at Corporate Head Office at Mumbai for the year have been allocated as per the Sharing Agreement between Kesar Enterprises Ltd. and the Company. The amount allocated to the Company is Rs. 14,644,271 (Previous Year Rs. 14,000,724). Addition to fixed assets includes Rs. 4,243,807 (Previous Year Rs. 3,560,102) (net of depreciation), transferred from Kesar Enterprises Ltd.

11. The Company has aligned the useful life of its fixed assets in line with Part C of Schedule II of the Companies Act, 2013 ('the Act') w.e.f. April 1, 2014 . In respect of the assets where the remaining useful life is 'Nil', their carrying amount after retaining the residual value as on April 1,2014 aggregating to Rs. 1,443,645 (net of deferred tax of Rs.743,364) has been adjusted against the opening balance of retained earnings as on that date.

12. The Company carries excess income tax provision amounting to Rs. 26,699,860 pending assessments.

13. The previous year figures have been regrouped and reclassified wherever necessary to correspond with the current year classification/disclosure.

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Mar 31, 2014

1. CONTINGENT LIABILITIES

Nature of claim/Demands As at 31st March As at 31st March 2014 (Rs) 2013(Rs)

(a) Claims against the Company not acknowledged as debts: Additional demand of Electricity Charges under dispute 53''42''469 53''42''469

(b) Guarantee:

Corporate Guarantee given in favour of Banker''s'' 1''08''11''00''000* 1''08''11''00''00 towards credit facilities granted to Kesar Multimodal Logistics Limited (Subsidiary Company) (KMLL) to set up a "Composite Logistics Hub" at Powarkheda in Madhya Pradesh.

Total 1''08''64''42''469 1''08''64''42''469

* The total outstanding loans as at 31.3.2014 is Rs 46''42''26''683 against Corporate Guarantee ofRs 1''08''11''00''000.

2. EMPLOYEE BENEFIT

Defined Benefit Plan (Gratuity Fund)

In accordance with Accounting Standard (AS 15) (Revised 2005)'' actuarial valuation was performed by independent actuaries in respect of the aforesaid defined benefit plan.

3. SEGMENT REPORTING

The Company is mainly engaged in Liquid Storage Business and there is no other reportable business and geographical segment as required in accordance with AS 1 7.

4. Pursuant to Scheme of Demerger'' Leasehold land situated at Kandla Port Trust'' presently in the name of Kesar Enterprises Ltd.'' is in the process of being transferred in the name of the Company.

5. RELATED PARTY DISCLOSURES UNDER ACCOUNTING STANDARD 18:

Names of related parties and nature of related party relationships: Name of Related Parties

a) Key Management Personnel and their relatives:

Key Management Personnel

Mr. H R Kilachand Executive Chairman

Mrs. M H Kilachand Promoter Director

Relatives of Key Management Personnel

Mr. Rohan H Kilachand Son of Executive Chairman

Ms. Rohita H Kilachand Daughter of Executive Chairman

b) Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence

Kesar Enterprises Limited

Kesar Corporation Pvt. Ltd.

Indian Commercial Co. Pvt. Ltd.

Kilachand Devchand & Co. Pvt. Ltd.

Kilachand Devchand Commercial Pvt. Ltd.

India Carat Pvt Ltd

Duracell Investments & Finance Pvt. Ltd.

Seel Investment Pvt. Ltd.

c) Subsidiary Company:

Kesar Multimodal Logistics Limited

6. Based on the information available with the Company regarding the status of the suppliers as defined under the Micro Small and Medium Enterprise Development Act 2006 (the ''MSMED'')'' no suppliers are outstanding for more than 45 days as per the terms & conditions of the order.

7. The common corporate expenses incurred at Corporate Head Office at Mumbai for the year have been allocated as per the Sharing Agreement between Kesar Enterprises Ltd. and the Company. The amount allocated to the Company is Rs 1''40''00''724 (Previous Year Rs 1''60''29''092). Addition to fixed assets includes Rs 35''60''102 (net of depreciation)'' transferred from Kesar Enterprises Ltd.

8. The Depreciation on Assets constructed at Lease hold land of Kandla Port Trust (KPT) has been charged as per the rates prescribed Schedule XIV as the management expects that the lease will be renewed by the KPT'' as had been approved in past.

9. The previous year figures have been regrouped and re-casted wherever necessary.

Dear Shareholder''

Sub: "GO GREEN" initiative of the Ministry of Corporate Affairs ("MCA")'' Government of India

The Ministry of Corporate Affairs ("MCA")'' Government of India'' has taken a "Green Initiative in the Corporate Governance" by allowing paperless compliances by companies if services of documents have been made through electronic mode. The companies are now permitted to send various notices /documents to its shareholders through electronic mode to the registered e-mail addresses of shareholders.

This move by the Ministry is welcome since it will benefit the society at large through reduction in paper consumption and contribution towards a Greener Environment. The Company thus proposes to send all documents to the Shareholders like General Meeting Notices (including AGM)'' Audited Financial Statements'' Directors'' Report'' Auditors'' Report'' etc. henceforth to the shareholders in electronic form in lieu of the physical form.

Shareholders holding shares in Physical form are requested to furnish your email id for the purpose of serving of documents by the Company in the electronic mode in the form attached on the next page at the address of our (RTA) M/s SHAREX DYNAMIC (INDIA) PVT LTD. Unit-1'' Luthra Ind Premises'' Safed Pool'' Andheri Kurla Road'' Andheri East'' Mumbai 400072.

Shareholders holding shares of the Company in electronic form and do not have any email id registered in your Demat Account with the Depository. You are requested to furnish your email id in your Demat Account with your Depository-Participant (DP) for the purpose of serving of documents by the Company in the electronic mode.

Shareholders holding shares of the Company in electronic form and have registered your email-id'' in the records of the Depositories viz NSDL/CDSL and which has been made available to us as per the records maintained at the depository. Please inform any changes in your email-id to your depository participant (DP) only'' for the purpose of serving of documents by the Company in the electronic mode.

As a member of the company'' In case you desire to receive documents stated above in physical form'' you will be entitled to be furnished'' free of cost'' a printed copy of the Annual Report of the Company'' upon receipt of a requisition from you'' at any time. Please write to us'' quoting your Registered Folio Number at Registered Office of the Company or email to [email protected] or to our Registrar & Share Transfer Agents M/s Sharex Dynamic (India) Pvt. Ltd.

The Annual Report of the Company would also be made available on the Company''s website at www.kesarinfra. com.

In case you desire to receive the documents stated above in physical form

We are sure that you will welcome the "Green Initiative" taken by the MCA and your company''s desire to participate in the same.

We look forward to your support in this initiative.

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Mar 31, 2013

1. BACKGROUND

The Company was incorporated on 21st January, 2008. On 12th March, 2010, the Hon''ble High Court of Bombay had passed an order pursuant to Section 391 to 394 of the Companies Act 1956, sanctioning the Scheme of Arrangement by way of Demerger for transfer of the Storage Division of Kesar Enterprises Limited (KEL) into the Company as a going concern with effect from 1st January, 2009 (Appointed Date).

Pursuant to the Scheme of Demerger, in consideration of the transfer of Storage Undertaking into the Company, 4,753,113 Equity Shares of Rs. 10 each, fully paid up are issued and allotted on 1st June, 2010 by the Company to the shareholders of Kesar Enterprises Limited (KEL) in the ratio of 10:7 i.e. for every 10 shares in KEL, 7 shares in the company.

(a) Terms / rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March, 2013, the amount of per equity share dividend recognized as distributions to equity shareholders was Rs. 3.00 (31st March, 2012: Rs. 2.50).

2. SEGMENT REPORTING

The Company is mainly engaged in Liquid Storage Business and there is no other reportable business and geographical segment as required in accordance with AS 17.

3. Pursuant to Scheme of Demerger, Leasehold land situated at Kandla Port Trust, presently in the name of Kesar Enterprises Ltd., is in the process of being transferred in the name of the Company.

4. RELATED PARTY DISCLOSURES UNDER ACCOUNTING STANDARD 18:

Names of related parties and nature of related party relationships:

Name of Related Parties

(a) Key Management Personnel and their relatives:

Key Management Personnel

Mr. H R Kilachand Executive Chairman

Mrs. M H Kilachand Promoter Director

Relatives of Key Management Personnel

Mr. Rohan H Kilachand Son of Executive Chairman

Ms. Rohita H Kilachand Daughter of Executive Chairman

(b) Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence

Kesar Enterprises Limited Kesar Corporation Pvt. Ltd.

Indian Commercial Co. Pvt. Ltd.

Kilachand Devchand & Co. Pvt. Ltd.

Kilachand Devchand Commercial Pvt. Ltd.

India Carat Pvt Ltd

Duracell Investments & Finance Pvt. Ltd.

Seel Investment Pvt. Ltd.

(c) Subsidiary Company:

Kesar Multimodal Logistics Limited

5. Based on the information available with the Company regarding the status of the suppliers as defined under the Micro Small and Medium Enterprise Development Act 2006 (the ''MSMED''), no suppliers are outstanding for more than 45 days as per the terms & conditions of the order.

6. The common corporate expenses incurred at Corporate Head Office at Mumbai for the year have been allocated as per the Sharing Agreement between Kesar Enterprises Ltd. and the Company. The amount allocated to the Company is Rs. 16,029,092 (Previous Year Rs. 14,679,756)

7. The Depreciation on Assets constructed at Lease hold land of Kandla Port Trust (KPT) has been charged as per the rates prescribed Schedule XIV as the management expects that the lease will be renewed by the KPT, as had been approved in past.

8. The previous year figures have been regrouped and re-casted wherever necessary.

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Mar 31, 2012

1. Background

The Company was incorporated on 21st January 2008. On 12th March 2010, the Hon’ble High Court of Bombay had passed an order pursuant to Section 391 to 394 of the Companies Act 1956, sanctioning the Scheme of Arrangement by way of Demerger for transfer of the Storage Division of Kesar Enterprises Limited (KEL) into the Company as a going concern with effect from 1st January 2009 (Appointed Date).

Pursuant to the Scheme of Demerger, in consideration of the transfer of Storage Undertaking into the Company, 4,753,113 Equity Shares of Rs. 10 each, fully paid up are issued and allotted on 1st June 2010 by the Company to the shareholders of Kesar Enterprises Limited (KEL) in the ratio of 10:7 i.e. for every 10 shares in KEL, 7 shares in the company.

2. Contingent Liabilities

Nature of claim/Demands As at As at 31st March 2012 31st March 2011 (Rs.)
(a) Claims against the Company not acknowledged as debts:

Arrears due for Electricity Charges 5,342,469 5,342,469

(b) Guarantee:

Bank Guarantee given to Madhya Pradesh State Agricultural Marketing Board (Mandi Board) on behalf of Kesar Multimodal Logistics Limited (Special purpose company) to set up a "Composite Logistics Hub" at Powarkheda in Madhya Pradesh. 70,000,000 Nil

Total 75,342,469 5,342,469

3. Employee Benefit

Defined Benefit Plan (Gratuity Fund)

In accordance with Accounting Standard (AS 15) (Revised 2005), actuarial valuation was performed by independent actuaries in respect of the aforesaid defined benefit plan.

4. Segment Reporting

The Company is mainly engaged in Storage Business. Further, the Company’s major operations are at Kandla and there is no other reportable business and geographical segment as required in accordance with AS 17.

5. Pursuant to Scheme of Demerger, Leasehold land situated at Kandla Port Trust is presently in the name of Kesar Enterprises Ltd., is in the process of being transferred in the name of the Company.

6. Related party disclosures under Accounting Standard 18:

Names of related parties and nature of related party relationships: Name of Related Parties

a) Key Management Personnel and their relatives: Key Management Personnel

Mr. H. R. Kilachand Executive Chairman

Mrs. M. H. Kilachand Promoter Director

Relatives of Key Management Personnel

Mr. Rohan H. Kilachand Son of Executive Chairman

Ms. Rohita H. Kilachand Daughter of Executive Chairman

b) Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence Kesar Enterprises Limited Kesar Corporation Pvt. Ltd. Indian Commercial Co. Pvt. Ltd. Kilachand Devchand & Co. Pvt. Ltd. Kilachand Devchand Commercial Pvt. Ltd. India Carat Pvt Ltd

Duracell Investments & Finance Pvt. Ltd. Seel Investment Pvt. Ltd.

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Mar 31, 2011

Background

Company was incorporated on 21st January 2008, and on 12th March 2010, the Honble High Court of Bombay had passed an order pursuant to Section 391 to 394 of the Companies Act 1956, sanctioning the Scheme of Arrangement by way of Demerger for transfer of the Storage Division of the Kesar Enterprises Limited (KEL) into the Company as a going concern with effect from 1st January 2009 (Appointed Date).

Pursuant to the Scheme of Demerger, in consideration of the transfer of the Storage Undertaking into the Company, 47,53,113 Equity Shares of Rs. 10/- each, fully paid up are issued and allotted on 1st June 2010 by the Company to the shareholders of KEL in the ratio of 10:7 i.e. for every 10 shares in KEL , 7 shares in the company.

1. Capital Commitments

Estimated amounts of contracts remaining to be executed on capital account and not provided for Rs.9,07,328 (Previous Year : Rs. 15,60,958).

2. Contingent Liabilities on account of Demands/Claims against the Company not acknowledged as debts and not provided for Rs.53,42,469 (Previous Year : Rs. NIL)

3. Employee Benefit

Defined Benefit Plan (Gratuity Fund)

In accordance with Accounting Standard (AS 15) (Revised 2005), actuarial valuation was performed by independent actuaries in respect of the aforesaid defined benefit plan.

Gratuity Fund is managed by Life Insurance Corporation of India (LIC), however, transfer of funds from KEL Gratuity Trust to KTIL Gratuity Trust pertaining to the employees of the company is in process.

4. Segment Reporting: - The Company is mainly engaged in Storage Business. Further, companys major operations are at Kandla and there is no other reportable business and geographical segment as required in accordance with AS 1 7.

6. Term Loan from Allahabad Bank for storage expansion is secured by way of first charge on all Fixed Assets and Current Assets both present & future of Storage & Handling Division at Kandla as per the security documents executed by Kesar Enterprises Ltd. However, as per the Court Order, necessary steps are being taken to create the said charge in the name of the Company. Vehicle Loan for company vehicles are secured by way of hypothecation of vehicles. However, security documents are executed by Kesar Enterprises Ltd. As per the Court Order, necessary steps are being taken to create the said charge in the name of the Company.

7. Pursuant to Scheme of De-merger as stated above, Leasehold lands presently in the name of Kesar Enterprises Ltd., are in the process of being transfered in the name of the Company.

8. Related party disclosures under Accounting Standard 18: Names of related parties and nature of related party relationships: Name of Related Parties

a) Key Management Personnel and relatives of such personnel :

Key Management Personnel

Mr. H.R.Kilachand Chairman

Mrs. M.H.Kilachand Promoter Director

Relatives of Key Management Personnel

Mr. Rohan H. Kilachand Son of Chairman

Ms. Rohita H. Kilachand Daughter of Chairman

b) Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence

Kilachand Devchand commercial Pvt. Ltd. Kesar Enterprises Limited Indian Commercial Co. Pvt. Ltd. Kesar Corporation Pvt. Ltd. Kilachand Devchand & Co. Pvt. Ltd. Duracel Investments & Finance Pvt. Ltd. Seel Investment Pvt. Ltd.

10. Based on the information available with the Company regarding the status of the suppliers as defined under the Micro Small and Medium Enterprise Development Act 2006 (the MSMED), no suppliers are outstanding for more than 45 days as per the terms & conditions of the order.

11. Quantitative details as required pursuant to the provisions of para3,4C and 4D of part II of Schedule VI of the Companies Act 1956 are not applicable as the company is not a manufacturing unit.

12. The common corporate expenses incurred at Corporate Head Office at Mumbai for the year have been allocated as per the Sharing Agreement between KEL and the company. The amount allocated to the company is Rs. 1,27,07,332/-.

13. The Depreciation on Assets constructed at Lease hold land of Kandla Port Trust (KPT) has been charged as per the rates prescribed Schedule XIV as the management expects that the lease will be renewed by the KPT based on past practice.

14. Previous year figures have been regrouped and recasted wherever necessary.

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Mar 31, 2010

1. Demerger of Storage Undertaking /Division of Kesar Enterprises Ltd. (KEL) into the Company.

a) The Board of Directors of Kesar Enterprises Limited (KEL) at their meeting held on 21-01-2009 approved the Scheme of demerger of Storage Undertaking/Division known as Distillers Trading Corporation (DTC) Division of KEL [Transferor Company] into Kesar Terminals and Infrastructure Limited (KTIL) [Resulting Company] and their respective Shareholders and Creditors U/S 391-394 of the Companies Act which was sanctioned by the Honble High Court, Bombay on 12th March 2010 and as per the Order, the Scheme of Demerger of Storage Undertaking /Division known as DTC Division of KEL into KTIL is effective from the "Appointed Date" i.e. 1st January, 2009. Accordingly, all the Assets and Liabilities of Storage Division of the Transferor Company stands transferred to and vested in the Company with Effect from the appointed date at Book Value into the Company as per the Scheme.

b) Pursuant to the Scheme of Demerger, in consideration of the transfer of the Storage Undertaking into the Company, 47,53,11 3 Equity Shares of Rs. 10/- each, fully paid up are issued and allotted by the Company to the shareholders of KEL in the ratio of 10:7 i.e. for every 10 shares in KEL , 7 shares in KTIL.

c) As per the sanctioned Scheme, against the Net Assets of the Storage Division as on 1st January, 2009 amounting to Rs.1 5,00,52,1 73/- (i.e. gross assets of Rs. 31,40,71,445/- as reduced by liabilities amounting to Rs.1 6,40,1 9,272/- ) Rs.4,75,31,1 30/- is credited to Equity Share Capital Suspense Account and the balance amount of Rs.10,25,21,043/- is transferred to General Reserve of the Company.

d) Subsequent to the balance sheet date of the Company as on 1st June, 2010 the Company has issued and allotted 47,53,113 shares to the eligible shareholders of KEL under the Scheme of Demerger.

e) In view of the above, figures in respect of the current financial year are not comparable with those of the previous year, since the current year figures include the operations of the Storage Division for 1 2 months i.e from April 2009 to March, 2010.

3. Capital Commitments

Estimated amounts of contracts remaining to be executed on capital account and not provided for Rs.1 5,60,958 (Previous Year Rs. NIL).

4. Employee Benefit

Defined Benefit Plan (Gratuity Fund)

In accordance with Accounting Standard (AS 1 5) (Revised 2005), actuarial valuation was performed by independent actuaries in respect of the aforesaid defined benefit plan.

Gratuity Fund is managed by Life Insurance Corporation of India (LIC), However, transfer of funds from KEL Gratuity Trust to KTIL Gratuity Trust pertaining to the employees of the company is in process.

5. Segment Reporting :- The company is mainly engaged in Storage Business at Kandla and there are no separate reportable segments as required in accordance with AS 17.

6. The Company has accounted for Deferred Tax in accordance with Accounting Standard 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India. Net Deferred Tax Liability for the

7. Term Loan from Allahabad Bank for storage expansion is secured by way of first charge on all Fixed Assets and Current Assets both present & future of Storage & Handling Division at Kandla as per the security documents executed by Kesar Enterprises Ltd. However, as per the Court Order, necessary steps will be taken to create the said charge in the name of the Company.

8. Pursuant to Scheme of De-merger as stated above, Deposit with Government & other Authorities and Leasehold lands presently in the name of Kesar Enterprises Ltd., are in the process of transfer in the name of the Company.

9. Related party disclosures under Accounting Standard 18: Name Relation

Kesar Enterprises Limited Enterprise over which Key Management Personnel are able to exercise significant influence.

Mr. H.R. Kilachand Chairman

Mrs. M.H.Kilachand Promoter Director

Indian Commercial Co. Pvt. Ltd. Enterprise over which Key Management Personnel are able to exercise significant influence

11. Based on the information available with the Company regarding the status of the suppliers as defined under the Micro Small and Medium Enterprise Development Act 2006 (the MSMED), no suppliers are outstanding for more than 45 days as per the terms & conditions of the order.

12. Quantitative details are not applicable as the company is not a manufacturing unit.

13. Figures of Storage undertaking for the period April 09 to June 09 (3 months) is already accounted in Kesar Enterprises Limited for the year ended 30th June 2009. As per the Scheme of Demerger as approved by Honourable High Court of Mumbai the Income and Expenses of Storage Division for the said period has been transferred from KEL and accounted in the Profit and Loss account of the Company for the year ended 31st March 2010.The net profit is Rs. 1,74,43,635/- for the said period of 3 months.

14. The common corporate expenses incurred at Corporate Head Office at Mumbai for the year have been allocated in the ratio of 70:30 between KEL and the company. The amount allocated to the company is Rs. 1,78,42,757.

15. Unsecured Loans, Sundry Debtors. Loans and Advances and Sundry Creditors are subject to confirmation and reconciliations, if any.

16. Debtors outstanding for a period exceeding six months amounting to Rs. 70,97,564/- are fully recoverable as perceived by the management and hence no provisions are made.

17. The Depreciation on Assets constructed at Lease hold land of Kandla Port Trust (KPT) has been charged as per the rates prescribed Schedule XIV as the management expects that the lease will be renewed by the KPT based on past practice.

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Mar 31, 2009

1. This being the first accounting year of the company, the accounts are prepared for the period from 21s1 January 2008 (Date of Incorporation) to 31-3-2009.

2. The Scheme of Arrangement for Demerger of Storage Undertaking known as Distillers Trading Corporation (DTC) Division Between Kesar Enterprises Limited - Transferor Company and Kesar Terminals and Infrastructure Limited- Resulting Company with effect from the "Appointed Date" of 1st January, 2009 is awaiting the Companys members approval under section 391 to 394 of the Companies Act, 1956 and subsequently the approval of the Honble High Court of Bombay & thus the Arrangement though effective from the "Appointed Date" i.e. 1st January, 2009 shall be operative from "Effective Date", i.e. last of the dates on which the sanctions / approvals or order as specified in the Scheme of Arrangement for Demerger are obtained and / or filed. Once the approval of the High Court is received & other legal formalities are completed, the Arrangement will be effective & all the assets, liabilities and reserves of the Storage Undertaking of Kesar Enterprises Limited (KEL) as a going concern to Kesar Terminals & Infrastructure Limited (KTIL). Pending approvals & sanction of the Scheme from the Honble High Court of Bombay, the Companys accounts have been prepared independently without giving effect of the Demerger of the Storage Undertaking. The effect of the above Arrangement will be given in the Annual Accounts of the Company, in the financial year in which all the sanctions / approvals or orders as specified in the Scheme of Arrangement for Demerger are obtained and / or filed.

3. Managerial Remuneration Managerial Remuneration is Rs. NIL:

4. Related party disclosures under Accounting Standard -18

Names of related parties and nature of related party relationships:

1. Holding Companies : Kesar Enterprises Limited (w e f 21st January 2008)

b. Associates : N.A.

c. Key Management Personnel and relatives of such personnel:

Mr. H R Kilachand Director

Mrs. M.H. Kilachand Director

Relatives of Key Management Personnel

Mr. Rohan H. Kilachand Son

Ms. Rohita H. Kilachand Daughter

d. Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence:

Kesar Corporation Pvt. Ltd.

Kilachand Devchand & Co. Pvt. Ltd.

Indian Commercial Co. Pvt. Ltd.

India Carat Pvt. Ltd.

Kilachand Devchand Commercial Pvt. Ltd.

Duracell Investments & Finance Pvt. Ltd.

Seel Investments Pvt. Ltd.

Skyline Chem-Trade Pvt. Ltd.