CHAROSA WINERIES LIMITED

Transcription

1 CHAROSA WINERIES LIMITED BOARD OF DIRECTORS Mr. Ajit Gulabchand Ms. Shalaka Gulabchand Dhawan Mr. Arun Karambelkar Mr. Rajgopal Nogja (upto August 5, 2014) Mr. Pralhad Parvatikar (w.e.f. December 22, 2014) Mr. Hamshire Rodriguez (w.e.f. March 27, 2015) Ms. Amruta Bam (w.e.f. March 27, 2015) CHIEF EXECUTIVE OFFICER Mr. Parag Kamat COMPANY SECRETARY Ms. Smita Kelkar AUDITORS M/s. K.S. Aiyar & Co. Chartered Accountants BANKERS YES Bank Ltd. IDBI Bank Ltd. REGISTRAR & SHARE TRANSFER AGENTS TSR Darashaw Limited 6-10, Haji Moosa Patrawala Industrial Estate, 20, Dr. E Moses Road, Mahalaxmi, Mumbai REGISTERED OFFICE Hincon House, 11 th Floor, 247Park, Lal Bahadur Shastri Marg, Vikhroli (West), Mumbai

2 DIRECTORS REPORT To, The Members of Charosa Wineries Limited 1. Report Your Directors present the Eighth Annual Report together with the Audited Accounts for the year ended March 31, Financial Results During the year the Company s Financial performance was as follows :- (Amount in Rs.) Particulars FY FY Total Income Profit/ (Loss) before Depreciation and Exceptional Items (763.98) (714.68) Less : Depreciation Less : Exceptional items - - Profit/ (Loss) : Before Tax (1,217.55) (1,207.47) Tax - - Profit / (Loss) : After Tax (1,217.55) (1,207.47) Add: Balance brought forward from last year (4,446.66) ( ) Balance carried to Balance Sheet (5,664.21) (4,446.66) 3. Dividend Your Directors do not recommend any dividend for the financial year ended March 31, Operations During the year, Company continued the production of wine from its Vineyards which are developed as per the international standards. Company crushed nearly 205 metric tons of grapes produced in its own Vineyards and in addition procured grapes from the market to meet its target of having stock of nearly 5 lakh litres. During the year, Company continued the sale of wines in selected markets in India. Presently, Company has its products in Maharashtra, Goa, Karnataka and Kerala. During the year company commenced the sale in Telangana, Puducherry. Daman & Gujarat markets in addition to above markets. The response from the market is quite positive and Company plans to expand within above markets along with addition of Punjab, Chandigarh and Delhi during the financial year , so as to ensure

3 proper reach in given market The wine varietals are marketed in different price ranges depending on the ageing and quality of each wine. They are mainly in Super Premium, Premium & Semi Premium range 5. Material changes and commitments There are no significant material changes and commitments occurred during the financial year of the company to which the financial statements relate and the date of the report, affecting the financial position of the company. 6. Capital Structure The paid up Share Capital as on March 31, 2015 is Rs. 7,00,00,000 divided into 70,00,000 Equity Shares of Rs. 10 each. 7. Holding company HCC Real Estate Limited owns the entire paid-up share capital of your Company aggregating to Rs. 7,00,00,000 and therefore is your Company s holding company. 8. Directors Mr. Ajit Gulabchand, Chairman of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Mr. Rajgopal Nogja had resigned from his Directorship of the Company with effect from 13 th August, The Board of Directors wishes to place on record its appreciation for the contribution and services rendered by him during his tenure as Director of the Company. Mr. Pralhad Parvatikar who was appointed as an Additional Director of the Company by the Board of Directors at its Board Meeting held on December 22, 2014 under the provisions of Section 161 of the Companies Act, 2013, hold office upto the date of the ensuing Annual General Meeting. The Company has received notice in writing under Section 160 of the Companies Act, 2013 from a corporate member along with the requisite deposit signifying its intention to propose Mr. Pralhad Parvatikar as Director of the Company. Mr. Hamshire Rodriguez and Ms. Amruta Bam were appointed as Additional Directors in the category of Independent Directors of the Company with effect from 27 th March, Thereafter, at the Extraordinary General Meeting (EGM) of the Company held on 27 th March, 2015, the Members of the Company appointed Mr. Hamshire Rodriguez and Ms. Amruta Bam as Independent Directors under the Companies Act, 2013 for a term of 5 (five) consecutive years till 26 th March, Both Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, Nomination and Remuneration Policy The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior

4 Management and their remuneration. The same is also attached to this report as Annexure A. 10. Board Meetings During the year eight Board Meetings were convened and held. 11. Key Managerial Personnel The Company has appointed Key Managerial Personnel i.e. Chief Executive Officer and Company Secretary as per the provisions of Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, Mr. Parag Kamat has been appointed as Chief Executive Officer of the Company with effect from 28 th April, 2014 Ms. Smita Kelkar was appointed as a Company Secretary under the provisions of the Companies Act, Further the Board of Directors at their Meeting held on 28 th April, 2014 noted the terms and conditions of the said appointment. The details of the remuneration paid to Key Managerial Personnel are stated in extract of the Annual Return in Form MGT-9 as Annexure B. 12. Directors Responsibility Statement To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: (a) that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2015 and of the loss of the company for that period; (c) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) that the directors had prepared the annual financial statements on a going concern basis; and (e) that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

5 13. Fixed Deposits The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, Particulars of Loans, Guarantees and Investments Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 15. Related Party Transactions During the year there were no contracts or arrangements with related parties as referred to in sub-section (1) of section 188 of Companies Act, Particulars of Employees and other additional information Your Company has no employees requiring disclosure under the provisions of Section 197, read with Rule, 5 of The Companies (Appointment and remuneration of Managerial Personnel) Rules, Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo. The information as required under Section 134(3)(m) of the Companies Act, 2013 read with the Rule, 8 of The Companies (Accounts) Rules, 2014, is not applicable to your Company. Details of Foreign Exchange Earnings and Outgo are as follows: Income in Foreign Exchange: NIL Expenditure in Foreign Exchange: Rs. 3,32,966/- 18. Auditors The Company s Auditors, M/s. K. S. Aiyar & Co., Chartered Accountants, Mumbai, who retire at the ensuing Annual General Meeting of the Company are eligible for reappointment. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors of the Company 19. Auditors Report The Auditors Report to the shareholders does not contain any qualifications. 20. Risk Management policy The Board has framed a policy to ensure establishment and implementation of effective risk management framework within the Company.

6 21. Corporate Social Responsibility The Company has not formulated the policy on Corporate Social Responsibility, as the same is not applicable to the Company. 22. Vigil Mechanism The Company has established Vigil Mechanism for directors and employees to report genuine concerns or grievances. 23. Extract of annual Return The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure B. 24. Sexual Harassment During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace(Prevention, Prohibition and Redressal) Act, Acknowledgements Your Directors place on record their appreciation for the co-operation and assistance received from the bankers, Central and State Government authorities and members during the year under review. By Order of the Board For Charosa Wineries Limited Ajit Gulabchand Chairman Registered Office: Hincon House, 11 th Floor, 247Park Lal Bahadur Shastri Marg Vikhroli (West) Mumbai Place : Mumbai Date : April 27, 2015

7 Annexure A NOMINATION AND REMUNERATION POLICY In accordance with the provisions of Section 178 of the Companies Act, 2013 and the rules made thereunder, the Board of Directors of the Company at their meeting held on March 30, 2015 had constituted the Nomination and Remuneration Committee ( Committee ) of Charosa Wineries Limited ( the Company ). 1. OBJECTIVE This Policy has been formulated in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto. 2. EFFECTIVE DATE This policy is effective from April 27, SCOPE This policy is applicable to Directors and Senior Management of the Company including Key Managerial Personnel. 4. DEFINITIONS 4.1. Act means the Companies Act, 2013 and Rules framed thereunder, as amended from time to time Board means Board of Directors of the Company Directors mean Directors of the Company Key Managerial Personnel means Managing Director / Manager / Whole Time Director President & CEO Company Secretary and

8 Chief Financial Officer 4.5. Senior Management means personnel of the company who are members of its core management team excluding the Board of Directors. This would also include all members of management one level below the executive directors including all functional heads. Senior Management in the Company means and includes the following positions:- 1. Key Managerial Personnel (KMP) under Clause Chief Operating Officer 3. Such other officer as may be prescribed 5. ROLE OF THE COMMITTEE a) To formulate criteria for identifying Directors and Senior Management employees of the Company. b) To recommend the Board in relation to appointment and removal of Directors and Senior Management. c) To formulate criteria for evaluation of Independent Directors and the Board. d) To carry out evaluation of the performance of the Directors on the Board. e) To formulate and recommend to the Board a policy relating to the remuneration payable to Directors, Key managerial personnel and Senior Management employees covered under Clause 4.5 f) To ensure that level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the company successfully; g) To ensure that the relationship of remuneration to performance is clear and meets appropriate performance benchmarks ; and h) Also to ensure that remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and variable performance linked payout (PLP) reflecting short and long term performance objectives appropriate to the working of the Company and its goals.

9 6. POLICY RELATING TO THE REMUNERATION FOR DIRECTORS, KEY MANAGERIAL PERSONNEL (KMP) AND SENIOR MANAGEMENT EMPLOYEES 6.1 General: a) The Committee shall while formulating this policy, ensure that the level and composition of remuneration is reasonable and sufficient to attract retain and motivate Directors of the quality required to run the Company successfully; b) Moreover it shall also ensure that the relationship of remuneration to performance is clear and meets appropriate performance benchmarks; c) Remuneration policy for Directors, Key Managerial Personnel and Senior Management should involve a balance between fixed and variable pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals. d) The remuneration payable to the Directors of a Company including Managing Director/ Whole-time Directors shall be recommended by the Committee to the Board for approval. Such remuneration payment including Commission if any shall be in accordance with and subject to the provisions of the Act and approval of the shareholders of the Company and Central Government, wherever required, as per the provisions of the Act. e) In respect of Key Managerial Personnel, the remuneration as approved by the Board of Directors shall be payable to such KMPs. The annual increment to the KMP and Senior Management shall be based on the annual appraisal and shall be determined by the Chief Executive Officer. f) Professional indemnity and liability insurance for Directors, Key Managerial Personnel and Senior Management not to be treated as remuneration. Provided that if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration.

10 6.2 Remuneration to Managing Director/Whole-time Directors : The remuneration for the Managing Director/Whole-time Directors will be governed as per the provisions of the Companies Act, 2013 and the rules framed thereunder from time to time 6.3 Remuneration to Non- Executive & Independent Directors: a) The remuneration payable to Directors who are neither Managing Director nor Whole-time Directors will be governed as per the provisions of the Companies Act, 2013 and the rules framed thereunder from time to time. b) Sitting Fees: These Directors may receive remuneration by way of fees for attending meetings of Board or Committee thereof. Provided that the amount of such fees shall not exceed Rs. 1 lac (One Lac) per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time. c) Remuneration: Remuneration may be paid by way of commission within the monetary limit approved by shareholders, subject to the limit as per the applicable provisions of the Companies Act, Independent Directors shall not be entitled to any stock options of the Company under the new Companies Act, Remuneration to KMP and Senior Management employees : As mentioned earlier, the remuneration as approved by the Board of Directors shall be payable to KMPs. The annual increment to the KMP and Senior Management shall be based on the annual appraisal and shall be determined by the Chief Executive Officer.

11 7. DISCLOSURE OF THE POLICY The Remuneration Policy and the Evaluation Criteria of the Committee shall be disclosed in the Board s Report forming a part of the Annual Report of the Company. 8. FREQUENCY OF MEETINGS The meetings of the Committee could be held at such regular intervals as may be required. 9. QUORUM Minimum two (2) members shall constitute a quorum for the Committee meeting. 10. CHAIRMAN In the absence of the Chairman, the members of the Committee present at the meeting shall choose one amongst them to act as Chairman. Chairman of the Nomination and Remuneration Committee meeting shall attend the General Meetings of the Company, to answer the shareholders queries. However it would be upto the Chairman to nominate some other member to answer the shareholders queries. 11. SECRETARY The Company Secretary of the Company shall act as Secretary of the Committee. 12. MINUTES OF THE COMMITTEE MEETING Proceedings of all meetings must be minuted and signed by the Chairman of the Committee and tabled at the subsequent Board and Committee meeting. 13. MISCELLANEOUS

12 (a) In respect of any policy matters relating to Senior Management (excluding KMPs), the Committee may delegate any of its powers to one or more Company representatives occupying Senior Management position. (b) This policy shall be updated from time to time, by the Company in accordance with the amendments, if any, to the Companies Act, 2013, rules made thereunder, or any other applicable enactment for the time being in force.

13 Annexure B Form No. MGT- 9 EXTRACT OF ANNUAL RETURN as on the financial year ended on [Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] I. REGISTRATION AND OTHER DETAILS: i) CIN U52208MH2007PLC iii) Registration Date 11 th December, 2007 iii) Name of the Company Charosa Wineries Limited iv) Category / Sub-Category of the Company v) Address of the Registered office and contact details Company having Share Capital Hincon House, 11 th Floor, 247Park, Lal Bahadur Shastri Marg, Vikhroli (West), Mumbai Tel no: vi) Whether listed company Yes / No No vii) Name, Address and Contact details of Registrar and Transfer Agent, if any TSR Darashaw Ltd 6-10, Haji Moosa Patrawala Industrial Estate, 20, Dr. E Moses Road, Mahalaxmi, Mumbai Tel no: II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company shall be stated:- Sl. No. Name and Description of main products / services NIC Code of the Product/ service 1 Winery % III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES % to total turnover of the company Sl. No. Name and address of the Company CIN Holding / Subsidiary / Associate % of shares held Applic able Sectio n 1 HCC Real Estate Ltd U70100MH2005PLC Holding 100 2(46)

14 IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) i) Category-wise Share Holding Category of Shareholders A. Promoters (1) Indian a) Individual / HUF b) Central Govt c) State Govt(s) d) Bodies Corp. e) Banks / FI f) Any Other. Sub-total (A)(1): (2) Foreign a) NRIs - Individuals b) Other Individuals c) Bodies Corp. d) Banks / FI e) Any Other. Sub-total (A) (2): Total shareholding of Promoter (A) = (A)(1)+(A)(2) B. Public Shareholding 1. Institutions a) Mutual Funds b) Banks / FI c) Central Govt. d) State Govt(s) e) Venture Capital No. of Shares held at the beginning of the year Demat Physica l Total % of Total Share s No. of Shares held at the end of the year Demat Physical Total % of Total Shares % Chan ge during the year

15 Funds f) Insurance Companies g) FIIs h) Foreign Venture Capital Funds i) Others (specify) Sub-total (B)(1): 2. Non- Institutions a) Bodies Corp. i) Indian ii) Overseas b) Individuals i) Individual shareholders holding nominal share capital upto Rs. 1 lakh ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh c) Others (specify) Sub-total (B)(2):- Total Public Shareholding (B)=(B)(1)+ (B)(2) C. Shares held by Custodian for GDRs & ADRs Grand Total (A+B+C) Nil Nil Nil Nil Nil Nil ,00, ,00, (ii) Shareholding of Promoters Sl No. Shareholder s Name Shareholding at the beginning of the year No. of Shares % of total Shares of the company %of Shares Pledged / encumber ed to total shares Share holding at the end of the year No. of Shares % of total Shares of the company %of Shares Pledged / encumbered to total shares % change in share holding during the

16 year 1 HCC Real Estate Ltd (iii) Change in Promoters Shareholding (please specify, if there is no change) ;- No change in Promoters Shareholding Sl. No. At the beginning of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): At the End of the year Shareholding at the beginning of the year No. of shares % of total shares of the Cumulative Shareholding during the year No. of % of total shares of shares the (iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Sl. No. Shareholding at the beginning of the year Shareholding at the end of the Year No. of shares % of total shares of the No. of shares % of total shares of the 1 Shri. Devendra Manchekar Shri. S.K. Dharmadhikari Shri. Arun Karambelkar Shri. Rajgopal Nogja Shri. V.P. Kulkarni Shri. Praveen Sood (v) Shareholding of Directors and Key Managerial Personnel: Sl. No. Shareholding at the beginning of the year No. of % of total shares shares of the Shareholding at the end of the Year No. of shares % of total shares of the Directors Key Managerial Personnel None of the Key Managerial Personnel holds shares in the Company

17 V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment Indebtedness at the beginning of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due Secured Loans excluding deposits 784,438,618 45,36, NIL Unsecured Loans 187,290, NIL NIL Deposits NIL NIL NIL Total Indebtedness 971,729, ,36, NIL Total (i+ii+iii) 788,975, ,290, NIL 976,266, Change in Indebtedness during the financial year Addition Reduction 215,000,000 45,36, ,963,780 NIL NIL NIL 235,963,780 45,36, Net Change 210,463, ,963,780 NIL 240,500, Indebtedness at the end of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due 999,438,618 19,790,254 NIL 208,254, NIL NIL NIL NIL NIL 1,207,693, ,790,254 NIL Total (i+ii+iii) 1,019,228, ,254, NIL 1,227,483, VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (c) Remuneration to Managing Director, Whole-time Directors and/or Manager: NIL Sl. No. Particulars of Remuneration 1 Gross salary (c) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 Profits in lieu of salary under section 17(3) Income-tax Act, Stock Option 3 Sweat Equity 4 Commission - as % of profit - others, specify 5 Others, please specify Total (A) Ceiling as per the Act B. Remuneration to other directors: NIL Name of MD/WTD/ Manager Total Amount Sl. No. Particulars of Remuneration Name of Directors Total Amount 3. Independent Directors Fee for attending board / committee meetings Commission

18 Others, please specify Total (1) 4. Other Non-Executive Directors Fee for attending board / committee meetings Commission Others, please specify Total (2) Total (B)=(1+2) Total Managerial Remuneration Overall Ceiling as per the Act C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD Sl. no. Particulars of Remuneration Key Managerial Personnel Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Incometax Act, 1961 Mr. Parag Kamat CEO Company Secretary CFO Total 30,30, ,30,103 Stock Option Sweat Equity Commission - as % of profit - others, specify Others, please 21, ,600 specify Total VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: NIL Type Section of the Companies Act A. COMPANY Penalty Punishment Compounding B. DIRECTORS Penalty Punishment Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment Compounding Brief Description Details of Penalty / Punishment/ Compounding fees imposed Authority [RD / NCLT/ COURT] Appeal made, if any (give Details)

19 Independent Auditor s Report To The Members of Charosa Wineries Limited Report on the Financial Statements We have audited the accompanying financial statements of Charosa Wineries Limited ( the Company ), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements The Company s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ( the Act ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143 (10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

20 An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015; (ii) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Emphasis of Matter We draw attention to note 2.37 to the financial statements. The Company has accumulated losses and its net worth has been fully eroded. The Company has incurred a net loss during the current and previous year and, the Company s liabilities exceeded its assets as at the balance sheet date. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company s ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said note. Our opinion is not modified in respect of this matter. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor s Report) Order, 2015 ( the Order ) issued by the Government of India Ministry of Corporate Affairs, in terms of sub-section (11) of section 143 of the Act, we enclose in the annexure a statement on the matters specified in paragraphs 3 and 4 of the said Order.

21 2. As required by Section 143 (3) of the Act, we report that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. (b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. (c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. (d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, (e) The matter described under the Emphasis of Matters paragraph, above, in our opinion, may have an adverse effect on the functioning of the Company. (f) On the basis of the written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act. (g) With respect to the other matters to be included in the Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. the Company has disclosed the impact of pending litigation on its financial position in its financial statement Refer note 2.35 to the financial statements; ii. iii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. For K. S. Aiyar & Co. Chartered Accountants ICAI Firm Registration No: W Raghuvir M. Aiyar Place: Mumbai Partner Date: April 27, 2015 Membership No.: 38128

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23 Annexure to the Auditor s Report (Referred to in paragraph 1 under the heading Report on Other Legal and Regulatory Requirements of our Report of even date on the financial statements for the year ended on March 31, 2015, of Charosa Wineries Limited.) (i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of the fixed assets. (b) A substantial portion of the fixed assets have been physically verified by the management during the year and in our opinion the frequency of such verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification. (ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. (b) (c) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material. (iii) (iv) (v) (vi) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, Accordingly, sub-clause (a) and (b) of the Order are not applicable. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory. During the course of our audit, no major weakness has been noticed in the internal control system in respect of this area. The Company has not accepted any deposits from the public to which the provisions of section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the Companies (Acceptance of Deposit) Rules 2014 apply. We have been informed that the Company is not required to maintain cost records under sub-section (1) of section 148 of the Companies Act, 2013, which has been relied upon. (vii) (a) According to the records of the Company, Provident Fund, Income tax, Sales tax, Value Added tax, Wealth tax, Service tax, Custom duty, Excise duty, cess and other material statutory dues applicable to it have been generally regularly deposited during the year with the appropriate authorities. According to the information and explanations given to us, there are no undisputed dues

24 in respect of provident fund, value added tax, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other statutory dues which were outstanding, as at March 31, 2015 for a period of more than six months from the date they became payable. (b) (c) According to the records of the Company, there are no dues of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute. Based on our examination of the records maintained during the year, the Company is not liable to make any payments towards Investor Education Protection Fund. (viii) (ix) The Company has accumulated losses exceeding fifty percent of its net-worth at the end of the financial year and has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year. Based on our audit procedure and according to the information and explanations given to us by the management, we are of the opinion that the Company has defaulted in repayment of dues to banks as below: ` in lakhs Period of delay Interest days) (x) (xi) (xii) In our opinion, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interest of the Company. In our opinion the term loans have been applied for the purpose for which they were raised. According to the information and explanations furnished by the management, which have been relied upon by us, there were no frauds on or by the Company noticed or reported during the course of our audit. For K. S. Aiyar & Co, Chartered Accountants ICAI Firm Registration No: W Raghuvir M. Aiyar

25 Place: Mumbai Partner Date: April 27, 2015 Membership No.: 38128

26 Charosa Wineries Limited CIN: U52208MH2007PLC Balance Sheet as at 31st March, 2015 EQUITY AND LIABILITIES As at As at Notes Rs. in Lakhs Rs. in Lakhs Shareholder's Fund Share Capital Reserves and Surplus 2.2 (5,185.08) (3,846.66) (4,485.08) (3,146.66) Non-current Liabilities Long term Borrowing , , Long term provisions , , Current Liabilities Trade payables Other current liabilities Short-term provisions , Total 8, , ASSETS Non-current assets Fixed assets (i) Tangible assets 2.8 4, , (i) Intangible assets (iii) Capital work-in-progress , , Long-term loans and advances Other non-current assets , , Current assets Inventories , Trade receivables Cash and bank balances Short-term loans and advances , , , Total 8, , Significant Accounting Policies 1 The accompanying notes are integral part of the financial statements As per our review report of even date For and on behalf of Board of Directors For K S Aiyar & Co Ajit Gulabchand Chartered Accountants Chairman ICAI Firm Registration No W DIN: Shalaka Gulabchand Dhawan Director DIN: Raghuvir M Aiyar Arun Karambelkar Partner Director Membership No DIN: Pralhad Parvatikar Director DIN: Parag Kamat Chief Operating Officer Hamshire Rodriguez Director DIN: Place:Mumbai Date: 27th April, 2015 Smita Kelkar Company Secretary Amruta Bam Director DIN:

27 Charosa Wineries Limited CIN: U52208MH2007PLC STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED For The Year Ended For TheYear Ended Notes Rs. in Lakhs Rs. in Lakhs Income Revenue from operations Other income Total Income Expenses: Cost of Materials consumed Changes in inventories of finished goods, work-in-progress and Stock-in-Trade 2.18 (556.86) (52.60) Other Manufacturing expenses Employee benefits expense Finance costs , Depreciation and Amortization Expense Other expenses Total Expenses 1, , Profit before tax (1,363.42) (1,207.47) Tax Expenses (1)Current tax - - (2)Deferred tax - - Profit (Loss) after tax for the year (1,363.42) (1,207.47) Earnings per equity share (Nominal value Rs. 10) (Previous year Rs. 10) (1) Basic (19.48) (17.25) (2) Diluted (19.48) (17.25) As per our review report of even date For and on behalf of Board of Directors For K S Aiyar & Co Ajit Gulabchand Chartered Accountants Chairman ICAI Firm Registration No W DIN: Shalaka Gulabchand Dhawan Director DIN: Raghuvir M Aiyar Partner Membership No Arun Karambelkar Director DIN: Pralhad Parvatikar Director DIN: Parag Kamat Chief Operating Officer Hamshire Rodriguez Director DIN: Smita Kelkar Company Secretary Amruta Bam Director DIN: Place:Mumbai Date: 27th April, 2015

28 CHAROSA WINERIES LIMITED CIN: U52208MH2007PLC Cash Flow Statement For The Year Ended 31st March, 2015 For Year Ended Rs. in Lakhs For Year Ended Rs. in Lakhs A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax and extraordinary items (1,363.42) (1,207.47) Adjustments for: Depreciation Operating Profit /(Loss) before working capital changes (909.84) (714.68) Adjustments for : (Increase)/Decrease in Inventories (532.77) (132.98) (Increase)/Decrease in Trade receivables (136.91) (190.42) (Increase)/Decrease in Loans & Advances (52.74) Increase/(Decrease) in Trade payables & provisions (280.40) (311.04) NET CASH FLOW FROM OPERATING ACTIVITIES (868.71) (1,025.71) B. CASH FLOW FROM INVESTING ACTIVITIES (Addition)/ Deletion of Fixed Assets (11.17) (329.35) Receipt of Capital Subsidy from Government (Increase)/Decrease in Capital Work in Progress (18.37) (Increase)/Decrease in Other Non-current Assets (192.79) (212.79) C. CASH FLOW FROM FINANCING ACTIVITIES (197.33) (478.84) Receipt of Term Loan 1, , Short term advances to related party (1,062.57) Increase/(Decrease) Borrowings from related party (4,826.85) NET CASH USED IN FINANCING ACTIVITIES , NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) (268.70) CASH AND CASH EQUIVALENTS- OPENING BALANCE CASH AND CASH EQUIVALENTS- CLOSING BALANCE As per our review report of even date For and on behalf of Board of Directors For K S Aiyar & Co Ajit Gulabchand Chartered Accountants Chairman ICAI Firm Registration No W DIN: Shalaka Gulabchand Dhawan Director DIN: Raghuvir M Aiyar Arun Karambelkar Partner Director Membership No DIN: Pralhad Parvatikar Director DIN: Parag Kamat Chief Operating Officer Hamshire Rodriguez Director DIN: Place:Mumbai Date: 27th April, 2015 Smita Kelkar Company Secretary Amruta Bam Director DIN:

29 Charosa Wineries Limited CIN: U52208MH2007PLC Note 1: SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF FINANCIAL STATEMENT AS AT 31ST MARCH, 2015 A) Basis of Accounting and the use of Estimates : The Company maintains its accounts on accrual basis following historical cost convention to comply in all material respects with the Accounting Standards notified under section 133 of Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, Management makes estimates and technical and other assumptions regarding the amounts of income and expenses, assets and liabilities, and disclosure of contingencies, in accordance with Generally Accepted Accounting Principles in India in the preparation of the financial statements. Difference between the actual results and estimates are recognized in the period in which determined. B) a) SIGNIFICANT ACCOUNTING POLICIES FIXED ASSETS Fixed assets are stated at cost of acquisition till the date of acquisition/installation of the assets and improvement thereon. Cost of acquisition includes attributable direct and indirect expenditure incurred on development of land for cultivation, site management and administration, interest and financial costs. Indirect expenditures are allocated over fixed assets of Vineyard till the stage they are ready for first year of production. b) DEPRECIATION ON FIXED ASSETS IS PROVIDED AS UNDER: i. ii. iii. iv. v. Depreciation on tangible assets is provided on reducing balance method over the estimated useful lives of the assets on pro-rata basis. The estimated useful lives are as below, Building : years Plant & Machinery and Electrical Installations: years Office Equipments : 6-20 years Furniture & Fixtures : 15 years Motor Vehicles (including tractors & trailers) : 4 to 10 years In respect of Biological assets on straight line basis over the estimated useful life of 20 years on pro-rata basis for the period. In respect of computers on straight line basis over a period of three years on pro-rata basis. In respect of Furniture and Fixtures at leased premises on straight line basis over the period of lease. In respect of Oak Barrels on straight line basis over a period of 4 years on pro-rata basis. For the above classes of assets, based on internal assessment, Management believes that the useful life as given above represents the period over which it expects to use these assets. Hence the useful lives of these assets are different from the useful lives as prescribed under Part C of Schedule II of Companies Act, vi. In respect of intangible assets being computer software relating to Enterprise Resource System is amortized over the estimated useful life of Five years under straight line method on pro-rata basis. c) GOVERNMENT GRANTS & SUBSIDIES Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with. Capital subsidy received from the government is credited to capital reserve and treated as part of the shareholders funds. d) INVENTORIES 1. Raw Materials, Stores,Spares & Consumables Stocks are valued at cost on weighted average basis. 2. Work-in-process and Finished Goods are valued at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. 3. Borrowing cost attributable to production of inventory are capitalized as part of such inventory till the time the inventory is ready for its intended use or sale.

30 e) TAXATION Tax on Income for the current period is computed in accordance with the provisions of the Income Tax Act, 1961 applicable to the Current Financial Year. The deferred tax charge or credit is recognized using the tax rates and tax laws that have been enacted on the Balance sheet date. Where there are unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. At each balance sheet date, recognized and unrecognized deferred tax assets are reviewed. f) g) SEGMENT REPORTING The Company is operating only in one significant business segment i.e.winery, hence segment information as per Accounting Standard 17 is not required to be disclosed. The Company caters mainly to the need of the domestic market; as such there is no reportable Geographical Segments. FOREIGN CURRENCY TRANSACTIONS Foreign currency transactions are accounted at the prevailing rate on the date of transaction. Assets and liabilities are translated at the exchange rate prevailing on the last day of the year. Gains or losses arising out of remittance/translations at the year-end are charged to Statement of Profit and Loss. h) REVENUE RECOGNITION Sales are recognised on despatch of goods to customers and are recorded net of trade discounts, sales tax/value added tax. i) BORROWING COSTS Borrowing costs attributable to acquisition, construction or production of qualifying assets/inventory are capitalized as part of such asset/inventory till the time the asset/inventory is ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred. j) LEASES Lease rentals in respect of assets acquired under operating lease are charged to Statement of Profit and Loss. k) EARNINGS PER SHARE Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to the equity shareholders (after deducting preference dividends and attributable taxes, if any) by the weighted average number of shares outstanding during the year. For the purpose of calculating diluted earning per share, net profit & loss for the year attributable to equity shareholders and weighted number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. l) EMPLOYEE BENEFITS i. ii. Defined Contribution Plans Company s contributions paid/payable during the year to Provident Fund, Officer s Superannuation Fund, and Labour Welfare Fund are recognized in the statement of profit and loss. Defined Benefit Plan & other long term benefits Company s liabilities towards gratuity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognized immediately in the statement of profit and loss as income or expenses. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation. m) CONTINGENCIES/ PROVISIONS Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if i. the Company has a present obligation as a result of past event. i ii. a probable outflow of resources is expected to settle the obligation, and. i i iii. the amount of the obligation can be reliably estimated. Contingent Assets are neither recognized, nor disclosed. Contingent Liabilities are not recognized, but are disclosed in Notes to Accounts. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.