APPAJI & CO. CHARTERED ACCOUNTANTS Report on the Financial Statements INDEPENDENT AUDITOR S REPORT To the members of WIPRO YARDLEY FZE, DUBAI We have audited the accompanying financial statements of WIPRO YARDLEY FZE ( the Company ), which comprise the Balance Sheet as at March 31, 2016 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ( the Act ). This responsibility includes the design, implementation and maintenance of internal control 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 my audit. We conducted my audit in accordance with the standards on Auditing issued by the Institute of Chartered Accountants of India. 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. An audit involves performing procedures to obtain audit evidence about the amounts and 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 control relevant to the Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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 my audit opinion. 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: (a) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2016;
(b) (c) in the case of the profit and loss account, of the profit of the Company for the year ended on that date; and in the case of cash flow statement, of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements 1. The report does not include a statement on the matters specified on paragraph 4 of the Companies (Auditor s Report) Order, 2003, issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, since in our opinion and according to the information and explanations given to me, the said Order is not applicable to the Company. 2. As required by section 227(3) of the Act, I report that: (a) We have 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 appears from our examination of those books; (c) the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account; (d) in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; (e) the provisions of clause (g) to sub-section (1) of section 274 of the Companies Act, 1956 ( the Act ) are not applicable to the Company; and (f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company. Forming an Opinion and Reporting on Financial Statements for Appaji & Co., Chartered Accountants Firm Registration number : Sd/- Proprietor Membership No. Place: Bangalore Date:
WIPRO YARDLEY FZE (formerly known as Lornamead FZE) NOTES TO THE FINANCIAL STATEMENTS 1. Company Overview Wipro Yardley FZE (or Company ) is a Free Zone Company registered with limited liability under Law No. (2) of 1996 (as amended) and the Implementing Regulations No. 1/2000 issued thereunder by the Dubai Airport Free Zone Authority. The Company is engaged in the business of distribution & trading of home and personal care products under the name & style of Yardley & Enchanteur, the trademarks being held by the holding company Wipro Enterprises Cyprus Limited & Unza International Limited. The Company is a fully owned subsidiary of Wipro Enterprises Cyprus Limited, a Company incorporated in Cyprus. 2. Significant accounting policies i. Basis of preparation of financial statements The accompanying financial statements are prepared and presented in accordance with Generally Accepted Accounting Principles in India (GAAP) under historical cost convention on accrual basis of accounting. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act 2013 ( Act ) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of Act (to the extent notified and applicable), Accounting Standards (AS) issued by The Institute of Chartered Accountants of India (ICAI), and other generally accepted accounting principles in India, to the extent applicable. ii. Use of estimates The preparation of financial statements requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses during the period reported. Estimates and underlying assumptions are reviewed on an ongoing basis. Revision in accounting estimate is recognized in the year in which the estimates are revised and in any future year affected. iii. Fixed Assets, intangible assets and work-in-progress Fixed assets are stated at historical cost less accumulated depreciation. Costs include expenditure directly attributable to the acquisition of the asset. There are no intangible assets in the books of the Company. iv. Inventories Inventories are valued at lower of cost and net realizable value, including necessary provision for obsolescence. Cost is determined using the weighted average method. v. Provisions & Contingent liabilities The Company creates a provision when there is a present obligation as a result of an obligating event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible
obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. vi. Revenue recognition Revenue from sale of goods is recognized when significant risks & rewards associated with the ownership of goods have passed on to the buyer and the amount is measured reliably. vii. Foreign currency transactions and translation of financial statements Foreign currency transactions are recorded at the average rate for the month. On account of the company being non integral operations of Wipro Enterprises Limited, ultimate holding company, the assets and liabilities are translated at exchange rate prevailing at the date of balance sheet. The functional currency of the company is USD. The items in the profit and loss account are translated at the average exchange rate during the year. The difference arising out of the translation is transferred to translation reserve. viii. Depreciation & amortization The Company has provided for depreciation using Straight Line Method over the useful life of the assets as prescribed under part C of Schedule II of the Companies Act 2013 except in the case of the following assets which are depreciated based on useful lives estimated by the Management. Estimated Class of Asset Useful Life Plant & Machinery (Moulds) 2 Years Computers 3 Years Furniture, fixtures & Equipments 4 Years Motor Vehicles 4 Years For these classes of assets, based on internal technical assessment, the management believes that the useful lives as given above represent the period over which the management expects to use these assets. Hence, the useful lives for these assets are different from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013 ix. Impairment of assets The Company assesses at each balance sheet date whether there is any indication that an asset including goodwill may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs to is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost. In respect of goodwill the impairment loss will be reversed only when it was caused by specific external events and their effects have been reversed by subsequent external events. x. Employee Benefits - Gratuity Provision is made for employees end of service gratuities on the basis prescribed in the UAE Labor Law, for accumulated period of service as on the date of the financial statements. xi. Earnings per Share
The number of shares used in computing basic and diluted earnings per share is the weighted average number of shares outstanding during the year. xii. Cash flow statements Cash flows are reported using indirect method, whereby net profits before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the company are segregated. 3. Share Capital The details of share capital are given below: 4. Reserves & Surplus
5. Long-term provisions Summary of long-term provisions is as follows: 6. Trade payables Summary of trade payables is as follows: 7. Other current liabilities Summary of other current liabilities is as follows: 8. Short term provisions Summary of short term provisions is as follows:
9. The details of fixed assets are given below: *Furniture, fixtures & office equipment includes computer & computer software 10. Long term loans & advances (Unsecured, considered good unless otherwise stated) Summary of long term loans & advances is as follows: 11. Inventories Summary of inventories is as follows:
12. Trade receivables Summary of Trade receivables is as follows: 13. Cash & cash equivalents 14. Short term loans & advances (Unsecured, considered good unless otherwise stated) Summary of Short term loans & advances is as follows:
15. Revenue from operations 16. Other income 17. Cost of Sales 18. Employee benefits expense
19. Other expenses 20. The Company is a foreign company and is not governed by the provisions of Micro, Small and Medium Enterprises Development Act, 2006 (the Act). Hence, the disclosures under the Act are not applicable to the Company. 21. Related party relationships and transactions The following are the related parties/ entities with which the Company had entered into transactions during the year: Name Wipro Enterprises Cyprus Limited Wipro Enterprises Limited Wipro Unza Singapore Pte Limited Wipro Manufacturing Services Sdn Bhd PT. Unza Vitalis (Indonesia) Unza Vietnam Co. Ltd Wipro Unza Overseas Limited Yardley of London Limited Wipro Unza Cathay Ltd (HK) Wipro Cyprus Private Limited Unza International Limited Relationship with Company Holding Company Ultimate Parent Company
The following are the significant transactions with related parties during the year:
22. Balances with Companies under same management: 23. The Company operates in only one business segment distribution & trading of personal care products and hence segment reporting as per AS-17 is not required to be disclosed. 24. The Company s management is of the opinion that its international transactions with related parties are at arm s length and that the Company s management believes that the transfer pricing legislation will not have any impact on the financial statements for the year ended 31 March 2016. 25. Corresponding figures for previous periods presented have been rearranged or regrouped, wherever necessary to confirm to the current period classification.