Notes to Accounts of Multibase India Ltd.

Mar 31, 2018

1 Deferred Tax

Under Previous GAAP deferred taxes are recognized for the tax effect of timing differences between accounting profit and taxable profit for the year using the income statement approach. Under Ind AS, deferred taxes are recognized using the balance sheet approach for future tax consequences of temporary differences between the carrying value of assets and liabilities and their respective tax bases.”

2 Excise Duty

Under Previous GAAP sale of goods was presented as net of excise duty. However, under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss as an expense. Thus sale of goods under Ind AS has increased with a corresponding increase in expense.

3 Provision for employee benefits expenses

Both under Previous GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Previous GAAP the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurement gain and loss (actuarial gains and losses on defined benefit obligation and the plan assets) are recognized immediately in the balance sheet with a corresponding debit or credit

Actuarial gains and losses accounted through OCI

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under Previous GAAP these remeasurements were forming part of the profit or loss for the year. Accordingly, Rs. 150,552 (net off tax) has been reclassified from the statement of profit and loss to statement of comprehensive income in 2016-17. However, this adjustment has no impact on the total equity on the transition date as well as 31^st March 2017.

b) Rights, preferences and restrictions attached to equity shares

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

Note 4 Segment reporting

A. Factors used to identify the entity’s reportable segments, including the basis of organization

The Company is exclusively engaged in the business of manufacturing, trading and selling of Thermoplastic Elastomers, Silicone Masterbatch and related products. As per Ind AS 108 ‘Operating Segment'' specified under Section 133 o realised f the Companies Act 2013, there are not reporatble segments applicable to the Compnay.

B. Geographic information

The geographic information an alyses the Company''s revenue and non-current assets by the Company''s country of domicile and other countries. In presenting the geographic information, segment revenue has been based on the geographic location of customers and segments assets were based on the geographic location of the respective non-current assets.

All the non-current assets of Company are located within India.

C. Information about major customers

Revenues from three major customers represented approximately RS, 218,063,094 (31^st March 2017: RS, 6,84,42,476), RS, 85,526,661 (31^st March 2017: 48,062,143) and RS, 83,546,812 (31^st March 2017: RS, 53,146,834) of the Company''s total revenues.

Note 5Employee benefits

(A) Defined contribution plans:

The Company recognized RS, 1,418,754 for the year ended 31^st March 2018 (31^st March 2017: RS, 1,455,137) towards provident fund contribution in the Statement of Profit and Loss.

(B) Defined Benefit Plan:

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

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

Note 33 Related party disclosures

a) List of related parties

Related parties where control exists:

Ultimate Holding Company

Dow Corning Corporation (Upto 31^st August 2017)**

Dow Dupont Inc. (Effective 1^st September 2017)

Holding Company Multibase S.A, France

Directors and Key Management Personnel (KMP)

Mr. Deepak Dhanak- Managing Director

Ms. Sunaina Goraksh- Company Secretary

Mr. VS Nagesh- Chief Financial Officer

Mr. Harish Narendra Motiwalla- Independent Director

Mr. Ashok Chhabra- Independent Director

Ms. Maithilee Kaizad Mistry- Non Executive Director

Ms. Suely Ono Mori- Non Executive Director

Mr. Vipulkumar Babu- Non Executive Director

Other related parties

Dow Corning (Zhangjiagang) Holding Company Limited

Dow Chemical International Private Limited

Dow Corning Limited-Barry

Dow Corning Korea Limited

Dow Corning Europe S.A.

Dow Corning Taiwan Inc.

Dow Corning India Private Limited Dow Corning India Private Limited Dow Corning India Private Limited DC New Zealand (Auckland) Limited Dow Corning Toray Company Limited Dow Corning Singapore Pte. Limited Dow Corning (Thailand) Limited Dow Europe GMBH Dow Silicones Corporation Hampshire Chemical Corporation Multibase, Inc.

H N Motiwalla & Co

** The name for Dow Corning Corporation has changed its name to Dow Silicones Corporation since 1^st February 2018.

B. Calculation of fair values

(i) The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent with those used for the year ended 31^stMarch 2017.

(ii) Cash and cash equivalents, trade receivables, other financial assets trade payables, and other financial liabilities have fair values that approximate to their carrying amounts due to their short-term nature.

Note 6 Financial risk management

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

a) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations.

The carrying amount of financial assets represent the maximum credit exposure.

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behavior and extensive analysis of customer credit risk and the current provision for the bad debts represents the impacted credit loss it foresees in its receivables.

Financial assets other than trade receivables are not impaired and further, there are no amounts that are past due. Management believes that the amounts are collectible in full, based on historical payment behavior.

b) Liquidity risk

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

Exposure to liquidity risk:

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.

Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 establishes a single comprehensive standard for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition standard Ind AS 18 Revenue, Ind AS11 Construction Contracts when it becomes effective.

The core principles of Ind AS 115 is that an entity should recognize revenue to depict the transfer to 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. Specially, 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 : Recognize revenue when (or as) the entity satisfies a performance obligation

Under Ind AS 115, an entity recognizes 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 Company is in the process of evaluating the impact of these standards on the financial statements. These amendments will come into force from 1 ^st April 2018.

Ind AS 21 - The effect of changes in Foreign Exchange rates

The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt.

* For the purpose of this clause, the term ‘Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8 November 2016.

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Mar 31, 2017

1. Discount rate is determined by reference to market yields at the Balance Sheet date on Govt. Bonds, where the currency and terms of the Govt. Bonds are consistent with the currency and estimated terms for the benefit obligation.

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

3. The expected contributions for defined plans for the next financial year will in line with FY 2016-17 B Defined Contribution Plan Contribution to Defined Contribution Plan, recognized in Statement of Profit and Loss for the year is as under:

4. The Company has not taken/entered into any derivative instrument during the year and there is no derivative instrument outstanding as at the year end. The foreign currency exposures that are not hedged by a derivative instrument or otherwise are as follows.

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Mar 31, 2016

1. Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.NIL (Previous Year Rs.719,398).

2. ‘Employee Advances'' includes due from Managing Director (against expenses) Rs NIL (Previous Year Rs NIL). Maximum amount outstanding there against at any time during the year is Rs.33,100/- (Previous Year Rs.47,909/-)

3. Segment reporting

a) Business Segment

The Company has considered business segment as the primary segment for disclosure. The Company is primarily engaged in manufacturing and trading of Thermoplastic Compounds, which in the context of Accounting Standard 17 “Segment Reporting” is considered the only business segment.

b) Geographical Segment

The Company sells its products mainly within India where the conditions prevailing are uniform. Since the sales outside India are below the threshold limit, no separate geographical segment disclosure is considered necessary.

4. (i) Defined benefit plan being Gratuity (Unfunded)

As per Actuarial valuations as on 31^st March, 2016 and in accordance with the Accounting Standard 15 (Revised) ‘Employee Benefits'' specified under Section 133 of the Companies Act, 2013:

Notes:

(i) Discount rate is determined by reference to market yields at the Balance Sheet date on Govt. Bonds, where the currency and terms of the Govt. Bonds are consistent with the currency and estimated terms for the benefit obligation.

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

5. Previous Year Comparatives

The previous year figures have been accordingly regrouped / re-classified to conform to the current year''s classification.

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Mar 31, 2015

1. Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 719,398 (Previous Year Rs. 209,999).

2. Employee Advances' includes due from Managing Director (against expenses) Rs. NIL (Previous Year Rs. 47,909). Maximum amount outstanding there against at any time during the year is Rs. 47,909/- (Previous Year Rs. 50,375/-)

3. Segment reporting

The Company operates in a single business segment of "Thermoplastic Compounds". Hence, being a single segment company, no additional reporting requirements under Accounting Standard-17 issued by the Companies (Accounting Standards) Rules, 2006 "(as amended)" are attracted.

4. Related party disclosure

(i) As per Accounting Standard-18 on 'Related Party Disclosures', issued by the Companies (Accounting Standards) Rules,2006 "(as amended)"; the nature of relationship and nature of transactions with related parties are as below

Note:

01. Discount rate is determined by reference to market yields at the Balance Sheet date on Govt. Bonds, where the currency and terms of the Govt. Bonds are consistent with the currency and estimated terms for the benefit obligation.

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

5. The Company has not taken/entered into any derivative instrument during the year and there is no derivative instrument outstanding as at the year end. The foreign currency exposures that are not hedged by a derivative instrument or otherwise are as follows.

6. Previous Year Comparatives

The previous year figures have been accordingly regrouped / re-classified to conform to the current year's classification.

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Mar 31, 2014

Notes

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

(2) Out of the above equity shares 9,464,994 shares i.e. 75% (Previous year 9,464,994 shares i.e. 75%) are held by M/s. Multibase S.A, France, the Holding Company (of which Dow Corning Corporation, USA is the ultimate Holding Company).

(3) Except for above, no other shareholder holds more than 5% of the equity shares of the Company.

Nature of operations

Multibase India Limited is engaged in manufacturing and selling of Polypropylene Compound, Thermoplastic Elastomer, Silicon Master Batch and Thermoplastic Master Batch.

1. Contingent liabilities against the Company not acknowledged as debt

Amount in Rupees

Claims against the Company not acknowledged as debt 2013-14 2012-13

* Towards C-forms pending collection 11,224,530 8,444,389

* The Company has made duty free imports of specific raw material under Advance 365,575 22,311,063 Licence scheme with a condition to fulfill the related export obligation. The export obligation remaining to be fulfilled in this regard as at year end is

* Income tax demand 4,520,453 4,520,453

Future cashflows in respect of the above matters are determinable only on receipts of judgement/decisions pending at various forums/authorities.

2. Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 209,999/- (Previous Year Rs. 524,995/-).

3. Employee Advances'' includes due from Managing Director (against expenses) Rs. 47,909/- (Previous Year Rs. Nil). Maximum amount outstanding there against at any time during the year is Rs. 50,375/- (Previous Year Rs. 160,000/-)

4. Segment reporting

The Company operates in a single business segment of "Thermoplastic Compounds". Hence, being a single segment Company, no additional reporting requirements under Accounting Standard-17 issued by the Companies (Accounting Standards) Rules, 2006 "(as amended)" are attracted.

5. Defined benefit plan being Gratuity (Unfunded)

As per Actuarial valuations as on 31st March 2014 and in accordance with the Accounting Standard-15 (Revised) on ''Employee Benefits'' issued under the Companies (Accounting Standards) Rules 2006 "(as amended)".

6. Note:

01. Discount rate is determined by reference to market yields at the Balance Sheet date on Govt. Bonds, where the currency and terms of the Govt. Bonds are consistent with the currency and estimated terms for the benefit obligation.

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

03. Basic & Diluted earnings per share

2013-14 2012-13

Profit after tax attributable to equity share holders (Rs) 50,788,712 44,897,522

Weighted average number of shares outstanding during the year (Nos.) 12,620,000 12,620,000

Earning per share (Basic/Diluted) (Rs) 4.02 3.56

Nominal value per share (Rs) 10 10

7. The Company has not taken/entered into any derivative instrument during the year and there is no derivative instrument outstanding as at the year end. The foreign currency exposures that are not hedged by a derivative instrument or otherwise are as follows.

8. previous Year Comparatives The previous year figures have been accordingly regrouped / re-classified to conform to the current year''s classification.

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Mar 31, 2013

1. Nature of operations

Multibase India Limited is engaged in manufacturing and selling of Polypropylene Compound, Thermoplastic Elastomer, Silicon Master Batch and Thermoplastic Master Batch.

2. Contingent liabilities and claims against the Company not acknowledged as deb

Amount in Rupees 2012-13 2011-12

a) Contingent Liabilities

Letters of credit and bank guarantee - 11,088,879

Towards C-forms pending collection 8,444,389 6,970,685

The Company has made duty free imports of specific raw material 22,311,063 2,940,401

under Advance Licence scheme with a condition to fulfill the related export obligation. The export obligation remaining to be fulfilled in this regard as at year end is

b) Claims against the Company not acknowledged as debt

Income tax demand 4,520,453 4,520,453

Central sales tax demand - 2,759,520

3. Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 524,995 (Previous YearRs. 918,300).

4. ''Employee Advances'' includes due from Managing Director (against expenses) Rs. Nil (Previous Year Rs. Nil). Maximum amount outstanding there against at any time during the year is Rs. 160,000/- (Previous Year Rs. 7000/-)

5. Segment reporting

The Company operates in a single business segment of "Thermoplastic Compounds". Hence, being a single segment Company, no additional reporting requirements under Accounting Standard-17 issued by the Companies (Accounting Standards) Rules, 2006 are attracted.

6. Related party disclosure

As per Accounting Standard-18 on ''Related Party Disclosures'', issued by the Companies (Accounting Standards) Rules, 2006; the nature of relationship and nature of transactions with related parties are as below:

7. The Company has not taken/entered into any derivative instrument during the year and there is no derivative instrument outstanding as at the year end. The foreign currency exposures that are not hedged by a derivative instrument or otherwise are as follows.

8. Previous Year Comparatives

The previous year figures have been accordingly regrouped / re-classified to conform to the current year''s classification.

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Mar 31, 2012

Notes :-

02. The Cash Flow statement has been prepared under the indirect method as set out in Accounting Standard -3 ("AS-3") on Cash flow statement notified by the Companies (Accounting Standards) Rules, 2006.

03. Previous year's figures have been regrouped wherever necessary to correspond with the current year's presentation.

Note

(1) Out of the above equity shares 9,464,994 shares i.e. 75% (Previous year 9,464,994 shares i.e. 75%) are held by M/s. Multibase S.A, France, the Holding Company (of which Dow Corning Corporation, USA is the ultimate Holding Company)

(2) Except for above, no other shareholder holds more than 5% of the equity shares of the Company.

Note

The amount due to Micro, small and medium enterprises is determined on the basis of intimation received by the Company from the suppliers.

Note

Rate of interest on external commercial borrowings is LIBOR 2%

Note

(1) Raw materials include goods in transit Rs. 4,194,783 (Previous year: Rs. 2,393,422).

(2) Finished goods include goods in transit (traded) Rs. 2,063,818 (Previous year: Nil) and inventory of traded goods Rs. 3,638,400 (Previous year: Rs. 2,870,333)

1. Nature of operations

Multibase India Limited is engaged in manufacturing and selling of Polypropylene Compound, Thermoplastic Elastomer, Silicon Master Batch and Thermoplastic Master Batch.

2. Contingent liabilities and claims against the Company not acknowledged as debt

Amount in Rupees

2011-12 2010-11

a) Contingent Liabilities

- Letters of credit and bank guarantee 11,088,879 1,347,100

- Towards C-forms pending collection 6,970,685 5,736,105

- The Company has made duty free imports 2,940,401 - of specific raw material under Advance Licence scheme with a condition to fulfll the related export obligation. The export obligation remaining to be fulflled in this regard as at year end is

3. Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 918,300 (Previous Year Rs. 1,082,127).

4. 'Employee Advances' includes due from Managing Director (against expenses) Rs. Nil (Previous Year Rs. Nil). Maximum amount outstanding there against at any time during the year is Rs. 7,000/- (Previous Year Rs. 14,668/-)

5. Segment reporting

The Company operates in a single business segment of "Thermoplastic Compounds". Hence, being a single segment Company, no additional reporting requirements under Accounting Standard-17 issued by the Companies (Accounting Standards) Rules, 2006 are attracted.

* Does not include provision for Leave Encashment/Gratuity, contribution to Provident fund.

6. Defend benefit plan being Gratuity (Unfunded)

As per Actuarial valuations as on 31st March 2012 and in accordance with the Accounting Standard-15 (Revised) on 'Employee Benefits' issued under the Companies (Accounting Standards) Rules 2006.

Note:

01. Discount rate is determined by reference to market yields at the Balance Sheet date on Govt. Bonds, where the currency and terms of the Govt. Bonds are consistent with the currency and estimated terms for the benefit obligation.

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

7. Previous Year Comparatives

The Company prepares and presents its financial statements as per Schedule VI to the Companies Act, 1956, as applicable to it from time to time. In view of revision to the Schedule VI as per a notification issued during the year by the Central Government, the financial statements for the financial year ended 31st March, 2012 have been prepared as per the requirements of the Revised Schedule VI to the Companies Act, 1956. The previous year figures have been accordingly regrouped / re-classified to conform to the current year's classification.

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Mar 31, 2010

1. Nature of Operations

Multibase India Limited is engaged in manufacturing and selling of Polypropylene Compound, Thermoplastic Elastomer, Silicon Master Batch and Thermoplastic Master Batch.

2. Contingent Liabilities not provided for

Amount in Rupees

2009-10 2008-09

Letters of Credit and Bank Guarantee 6,527,501 2,997,000

Income Tax & FBT Demand 3,252,577 2,148,697

C- Forms Pending Collection 6,157,556 3,568,749

3. Advance Recoverable in cash or in kind or for value to be received includes due from Managing Director (against expenses) Rs 5.47 lacs (Previous Year Rs 1.28 lacs). Maximum amount outstanding thereagainst at any time during the year is Rs 5.47 lacs (Previous Year Rs 1.28 lacs)

4. Segment Reporting :-

The Company operates in a single business segment of "Thermoplastic Compounds". Hence, being a single segment company, no additional reporting requirements under Accounting Standard-17 issued by the Companies (Accounting Standards) Rules, 2006 are attracted.

5. Gratuity and other post-employment benefit plans:

As per Actuarial valuations as on 31st March 2010 and in accordance with the Accounting Standard-15 (Revised) on Employee Benefits issued under the Companies (Accounting Standards) Rules 2006.

6. Based on information available with the Company, no supplier of the Company is registered under the Micro, Small and Medium enterprises Development Act,2006.

7. Previous Year comparatives

Previous years figures have been regrouped / reclassified wherever necessary to conform to the current years classification.