36. Related Party Disclosures as per Indian Accounting Standard 24

Names of related parties and nature of related party relationships:

a) Key Management Personnel and their relatives:

Mr. H R Kilachand Chairman & Managing Director

Relatives of Key Management Personnel:

Mrs. M H Kilachand Wife of Chairman & Managing Director

Mr. Rohan H Kilachand Son

Mrs. Nidhi R Kilachand Daughter in Law

Ms. Rohita H Kilachand Daughter

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

Kesar Terminals & Infrastructure Limited Kesar Multimodal Logistics Limited Kesar Corporation Pvt. Ltd.

Kilachand Devchand & Co. Pvt. Ltd.

Indian Commercial Co. Pvt. Ltd.

India Carat Pvt. Ltd.

Seel Investments Pvt. Ltd.

c) Others

Mr. M A Kuwadia Non-Executive Director

Mr. P N Dubey Non-Executive Director (upto 30.4.2018)

Mr. D J Shah Director & Company Secretary (Director upto 30.4.2018)

Key management personnel compensation in total and for each of the following categories:

Employee Benefits

Short Term Employee Benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognized as an expense during the period when the employees render the services.

Post-Employment Benefits

Defined Contribution Plans

A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund, Superannuation Fund and Pension Scheme. The Company's contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

Defined Benefit Plans

The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/superannuation. The gratuity is paid @15 days salary for every completed year of service as per the Payment of Gratuity Act 1972.

The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees' services.

Re-measurement of defined benefit plans in respect of post-employment are charged to the Other Comprehensive Income.

1. 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 for equity shares and variable borrowing. 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. Equity price risk

The Company's equity securities are held at Fair Value through Other Comprehensive Income and depending on the market opportunity, the company shall sell such investments.

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.

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.

The table below provides details regarding the maturities of significant financial liabilities as of March 31, 2018, March 31, 2017 and March 31, 2016

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.

2. Company has unabsorbed depreciation and carry forward losses under tax laws, on the consideration of prudence and in the absence of reasonable certainty supported by convincing evidence of sufficient future taxable income, deferred tax asset is not recognized by the Company

3. Some of the credit facilities have been classified as Non-Performing Assets (NPA) by certain banks. However, the company has provided interest on accrual basis. Any difference on account of interest and penal interest shall be accounted for as and when the same is settled with the respective banks.

4. Sugar cane purchase price for the season 2017-2018 is accounted at State Advisory Price (SAP) ' 325/- per quintal for early, ' 315/- per quintal for general and ' 310/- per quintal for rejected varieties vide Press Note No. 2489/463-1 7-3(48)/98-99 dated 26-10-2017 by the State Government of Uttar Pradesh.

5. The Company has incurred huge cash loss due to mismatch between high Sugar Cane Price and low Sugar Sales realization. The net worth of the Company is eroded completely. The U.P. Sugar Industry has made representations to the U.P. State Government and the Company is hopeful for the revival of the Sugar Industry in near future and hence these financial statements have been prepared on a going concern basis, despite accumulated losses resulting in erosion of its net worth.

The Government of India has recently announced a package for improving the financial health of the Sugar Industry.

6. According to the requirements of Schedule III of the Companies Act, 2013, sales for the period up to June 30, 2017, and the earlier periods presented in these financial results are inclusive of excise duty. Consequent to the applicability of Goods and Service Tax (GST) w.e.f. July 1, 2017, sales are shown net of GST in accordance with requirements of Ind-AS - 18 'Revenue'

7. INCOME TAX

Since there is loss as per Books and as per Income Tax Act, no tax reconciliation between Tax on profit as per Books and Tax profit as per Income Tax Act.

8. FIRST TIME ADOPTION OF IND-AS

For all periods up to March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP) Indian GAAP ("IGAAP"). These financial statements of Kesar Enterprises Limited for the year ended March 31, 2018 have been prepared in accordance with Ind-AS. This is the first set of Financial Statements in accordance with Ind-AS. For the purpose of transition from the GAAP to Ind-AS, the Company has followed guidance provided in Ind-AS 101 - First Time Adoption of Indian Accounting Standards, w.e.f. April 01, 2015 as the transition date.

The transition to Ind-AS has resulted in changes in the presentation of the financial statements, disclosures in the notes, accounting policies and principles. The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended on March 31, 2018 as well as for March 31, 2017 for comparative information. In preparing these financial statements, opening balance sheet was prepared as at 1 April 2016. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2017 and the financial statements as at and for the year ended March 31, 2017.

Exemptions on first time adoption of Ind-AS availed in accordance with Ind-AS 101, have been described below: 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:

IND-AS optional exemptions:

(i) 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 recognized 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 Intangible Assets and Investment properties covered by Ind-AS 40 Investment Properties.

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 except Land, Building and Plant and equipment’s which are carried at revalued amount.

Ind-AS mandatory exceptions:

(i) 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 objective evidence that those estimates were in error.

Ind-AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind-AS at the date of transition as these were not required under previous GAAP:

- Impairment of financial assets based on expected credit loss model.

(ii) Classification and measurement of financial assets

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

Accordingly, the Company has determined the classification of financial assets based on the facts and circumstances that exist on the date of transition.

The previous GAAP numbers have been reclassified to conform to Ind-AS presentation requirements for the purpose of this note.

Notes

The major reasons for adjustments in Previous GAAP numbers are as under:

1 Property, Plant & Equipment’s

On transition to Ind-AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2016 measured as per the previous GAAP as the deemed cost of the property, plant and equipment except Land, Building and Plant & Equipment’s are carried at revalued amount.

2 Investment Equity Shares

Investments under Amortized Cost category are initially measured at purchase price plus transaction cost if material. Investments under FVTOCI and FVTPL are measured at fair value being the purchase price of the security. Transaction cost which are not material are expensed out.

Subsequent measurement of Amortized Cost category is at Amortized Cost, while for FVTOCI and FVTPL, it is at fair value. The change is fair value in FVTOCI is recognized in the OCI, while the change in fair in FVTPL is recognized in Profit and Loss account.

3 Trade Receivables

Under Ind-AS, impairment allowance has been determined based on Expected Credit Loss model (ECL). Accordingly, trade receivables have been reduced by 76.10 Lakhs with a corresponding decrease in retained earnings of 6.71 Lakhs

4 Borrowings

In the financial statements prepared under previous GAAP, the carrying value of interest free loan was recognized at the principal amount payable by the Company. Under IND-AS interest free borrowing being a financial liability is required to be recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

5 Actuarial gains/losses on defined benefit obligation

The Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP, the actuarial gains and losses on gratuity are charged to the statement of profit and loss. Under Ind AS, such actuarial gains or losses are required to be recognized in other comprehensive income. Accordingly, actuarial losses for financial year 2016-17 amounting to Rs 1.34 Lakhs are re-classified from statement of profit and loss to other comprehensive income. There is no impact on total equity as a result of this adjustment.

The previous GAAP numbers have been reclassified to conform to Ind-AS presentation requirements for the purpose of this note

Notes

1 Sale of Investments

As per requirement of Ind-AS 109 profit on sale of investment of ' 1 77.99 Lakhs reduced from other income and recognized under Other Comprehensive Income

2 Actuarial gains/losses on defined benefit obligation

The Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP, the actuarial gains and losses on gratuity are charged to the statement of profit and loss. Under Ind AS, such actuarial gains or losses are required to be recognized in other comprehensive income. Accordingly, actuarial losses for financial year 2016-17 amounting to Rs 1.34 Lakhs are re-classified from statement of profit and loss to other comprehensive income. There is no impact on total equity as a result of this adjustment.

3 Finance Cost

Ind-AS required transaction cost incurred towards origination of borrowing to be deducted from the carrying amount of borrowing on initial recognition. These costs of recognized in the statement of profit or loss over the tenure of the borrowing as part of the interest expenses by applying the effective interest method

4 Provision for Expected Credit Loss

As per Ind-As 109 the company has required to apply expected credit loss model for recognizing the allowances for doubtful debts. As a result, the allowances for doubtful debts are increased by ' 6.71 and the same added and recognized in "Other Expenses"

5 Other Comprehensive Income (OCI)

Under Ind-AS, all items of income and expenses recognized in the period should be included in profit or loss statement for the period, unless a standard requires or permits otherwise. Items of Income or expenses that are not recognized in statement profit or loss, are shown in the statement of profit or loss as 'other comprehensive income' includes measurement of define employees' benefits plans. The amount related to measurement of defined employees benefit plan of Rs, 1.34 Lakhs, sale of investment Rs, 1 77.99 Lakhs and reduction in fair value of investment Rs, 0.95 Lakhs

The previous GAAP numbers have been reclassified to conform to Ind-AS presentation requirements for the purpose of this note.

9. 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 recognize 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 5step 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 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.

10. The previous period figures have been regrouped and re-casted wherever necessary.