COMPANY OVERVIEW

Sula Vineyards Private Limited (the "Company") is a brmium wine producer and supplier of wines. The Company is also engaged in the business of providing hospitality services.

From FY 2015-16, Artisan Spirits Pvt. Ltd. has become the 100% subsidiary of the Company. Artisan Spirits Pvt. Ltd. is principally engaged in the business of grape based brandies. The Company also diversified its business into trading of imported brands of wines & spirits.

a) brPARATION OF FINANCIAL STATEMENTS

The consolidated financial statements (CFS) are brpared to comply with the requirements of section 129(3) of the Companies Act, 2013 (the Act). CFS are brpared under the historical cost convention, on an accrual basis and are in accordance the generally accepted accounting principles in India, the provision of the Act, and the applicable Accounting Standards (AS) notified under section 133 of the Act read with relevant rules framed thereunder.

b) PRINCIPLES OF CONSOLIDATION

The CFS consist of Sula Vineyards Pvt. Ltd  (the Company) and its subsidiary company "Artisan Spirits Pvt Ltd" ( collectively referred to as " the Group "), the said subsidiary company is incorporated in India and the company holds 100% shares of the subsidiary company on the balance sheet date. The CFS have been brpared on the following basis:

The financial statements of the Company and its subsidiary company have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealised profits or losses as per Accounting Standard 21 "Consolidated Financial Statements" notified under section 133 of the company Act, 2013 ( the "Act") with relevant rules framed thereunder.

The difference between the cost of investment in the subsidary , and the Group's share of net assets at the time of acquisition of shares in the subsidiary is recognised in the financial statements as Goodwill or Capital Reserve as the case may be.

The financial statements of the subsidary used in the consolidation are drawn up to the same reporting date as that of the Company i.e. 31st March, 2017.

SIGNIFICANT ACCOUNTING POLICIES

CHANGE IN ACCOUNTING POLICIES

 Accounting for Proposed Dividend

As per the requirements of br-revised AS 4, the Company used to create a liability for dividend proposed/ declared after the balance sheet date if dividend related to periods covered by the financial statements. Going forward, as per AS 4(R), the company cannot create provision for dividend proposed/ declared after the balance sheet date unless a statute requires otherwise. Rather, company will need to disclose the same in notes to the financial statements.

Had the company continued with creation of provision for proposed dividend, its surplus in the statement of profit and loss account would have been lower by Rs 353.51 Lakhs and current provision would have been higher by Rs 353.51 Lakhs( including dividend distribution tax of Rs 59.79 Lakhs).

Valuation of Traded Goods

During the year, The method of valuing inventory of Traded Goods has been changed from First In First Out (FIFO) method to Specific Identification Method. Had the Company continued to use the earlier method of valuation the Inventories and Profit Before Tax  would have been lower by Rs 11.59 Lakhs.

This change in accounting policy did not have any material impact on the financial statements of the Company.

USE OF ESTIMATES

The brparation of financial statements is in conformity with generally accepted accounting principles. This requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period.  Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.

REVENUE RECOGNITION

Sales income has been accounted for when significant risk and reward has been transferred to the buyers, which normally coincides with dispatch of goods. In respect of sales to state government corporations, though the contract provides that sales of goods shall take place only when the corporation has made subsequent resale to third parties, such sales are also recorded on dispatch in absence of relevant information from the corporations. Sales are accounted for net of sales tax, sales returns and trade discount.

Revenue from hospitality business is recongnised when the services is rendered to the final customer.

Interest Income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend Income is recognized when right to receive the same is established.

In respect of other heads of income the Company accounts the same on accrual basis.

GOVERNMENT GRANT AND 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. When the grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset.

PROPERTY, PLANT & EQUIPMENT (PPE)

PPE are stated at cost, less accumulated debrciation and impairment losses if any. Cost  comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquision of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready for use.

Debrciation is provided on the "straight line method" based on the estimated useful life of assets which are equal to  those suggested in Part C of schedule II of the Act except for assets stated below, for which debrciation is calculated on following basis based on management estimate:

Assets	Estimated Useful Life	Useful life as per the limits brscribed in Schedule II of the Act	Basis and justification of selection of Useful Life
Lease hold Land	95 Years	N.A.	Amortized over the lease period
Lease Hold Building	5 Years	N.A.	Amortized over the lease period
Oak Barrels*	4 Years	15 Years	Past experience /Industry Standard
Furniture & Fixtures of leased brmises	5 Years	8 Years/10 Years	Period of lease or useful life brscribed under Schedule II of the Act, whichever are lower.
Mobile*	3 Years	5 Years	Past experience
All assets costing Rs.5000/- or less each	1 Year	N.A.	Past experience /Materiality

* However debrciation provided by subsidary company on Mobiles is 5 years, Oak barrels is 15 years and Furniture & fixtures of leased brmises is 3 years

The management has estimated, supported by independent assessment by professional, the useful lifes of the assets acquired under slump sale as follows :

Assets	Estimated Useful Life
Plant & Equipments	10 Years
Storage Tanks	20 Years
Building	25 Years

The management believes that debrciation rates currently used fairly reflect its estimate of the useful lives and residual value of PPE.

Debrciation on additions is provided pro-rata from the last day of the month in which addition is made, however in case of subsidary, company provides debrciation on addition from the date of acquisition and deletions is provided on pro-rata basis up to the date of deletion.

INTANGIBLE ASSETS

Intangible assets are recorded at acquisition cost and are amortized over the estimated useful life on straight line basis. Estimated useful life of Intangible Assets is as mentioned below:

Assets	Estimated Useful Life
SAP Software	5 years
Computer Software	3 years
Other Computer Software	3 years
Brand	10 years
Goodwill on acquisition	5 years
Goodwill on consolidation	Goodwill on consolidation acquired by the company is amortised over the year of 5 years on SLM basis from PY 2015-16 onwards

IMPAIRMENT OF ASSETS

The Company assesses at each Balance Sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such asset is reduced to its recoverable amount and the impairment loss is charged to statement of profit and loss. If at the Balance Sheet date, there is any evaluation that a brviously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.

CAPITAL WORK IN PROGRESS

These are stated at cost to date relating to items or projects in progress incurred during construction / br-operative period.

INVESTMENTS

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as non-current investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Non-current investments are carried at cost. However, provision if any for diminution in value is made to recognize a decline other than temporary in the value of non-current investments.

CASH & CASH EQUIVALENTS

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

INVENTORIES

Raw Material are valued at Specific Identification method except for stock of spirit which is arrived at First In First (FIFO) Basis.

Semi finished goods are valued at raw materials cost and allocable manufacturing overheads or net realizable value whichever is lower.

Finished Goods are valued at lower of standard cost of manufacturing or net realizable value.

Bye-Products are valued at net realizable value.

Packing Materials and Consumables are valued at cost arrived on Specific Identification Method. In cases where the market value is lower than cost, it is still valued at cost, if the sales price of final product is higher than the cost.

Traded Goods are valued at cost arrived on Specific Identification Method or net realizable value whichever is lower. Refer Note No. 3 (i)(b) for changes in accounting policies.
Chargeability of Custom duty on Traded Goods could be asertained only at the time of despatch based on location of sale. Accordingly for the purpose of valuation of traded goods, Custom duty is added in the value of Traded Goods based on management estimate of expected location of sale and applicable rates.

Slow / non-moving inventories are duly provided for.

Cost comprises of cost of Purchase, Cost of Conversion and other costs incurred in bringing the inventory to brsent location and condition.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale.

According to the existing legal status, the company's finished goods are not liable to be charged "Central Excise Duty". However, a few states are empowered to levy "State Excise Duty" which is payable in the States where these goods are sold. Hence it is not possible to ascertain liabilities against the stocks held in the warehouse and wineries. As per the practice consistently followed by the Company, the excise duties on such stocks has neither been provided nor included in the value of finished goods except for excise duty which is already paid at the time of transfer of finished goods from winery to warehouse. This treatment has however no impact for the profits/losses for the year under audit.

In case of subsidiary company, According to the existing legal status, the company's finished goods are not liable to be charged "Central Excise Duty". However,  states are empowered to levy "State Excise Duty" which is payable in the States where these goods are sold. In the absence of details regarding  wherethis stocks would be sold in future and as per the practice consistently followed by the Company, the excise duties on such stocks has neither been provided nor included in the value of finished goods except for excise duty which is already paid at the time of tranfer of finished goods from bottling unit to warehouse. This treatment has however no impact on the profits/losses for the year under audit.

LEASES

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

BORROWING COSTS

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currency are recognized in the books at the rate of exchange brvailing on the date of the transaction or nearer thereto, while the outstanding transactions as at the year end is converted at the exchange rate brvailing on the Balance Sheet date and resultant gain or loss is charged off to Statement of Profit and Loss.

Forward exchange contracts entered into to hedge foreign currency risk of an existing assets or liability:

The brmium or discount arising at the inception of the forward exchange contract is amortized and recognised as an expense or income over the life of the contract. Exchange difference on such contract, except the contracts which are long term foreign currency monetary item are recongnised in the statement of the profit & loss in the period in which the exchange rate change.

PROVISIONS & CONTINGENT LIABILITIES

A provision is recognized when an enterprise has a brsent obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its brsent value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Where no reliable estimate can be made, a disclosure is made as a contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources.

EMPLOYEE BENEFITS

Contributions to defined contribution scheme such as Provident Fund are charged to the Statement of Profit & Loss as incurred.  The Company also provides for retirement/post-retirement benefits in the form of gratuity and compensated absences.  Such defined benefits are charged to the Statement of Profit and Loss based on valuations as at the balance sheet date, made by independent actuary. The Actuarial valuation is done as per projected unit credit method.

INCOME TAX

Tax expense comprises of current and deferred tax. Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred Income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities, as measured by the enacted / substantively enacted tax rates. Deferred tax Expense / Income is the result of changes in the net deferred tax assets and liabilities.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed debrciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realization of the assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.

Income tax is accounted as per the Accounting Standard 22 (AS-22) (Accounting for taxes on Income) issued by ICAI which includes current tax as well as deferred tax.

Deferred tax reflects the impact of timing difference between book and taxable profit for the year and reversal of timing difference of earlier years. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available.

EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares, outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earning per share the net profit or loss for the  period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

CONTINGENT LIABILITIES

Bank guarantees issued by banks to excise & various other authorities is Rs 851.87 Lakhs (brvious year Rs 766.86 Lakhs).

Outstanding export obligation under EPCG scheme is Rs 252.03 Lakhs (brvious year Rs 687.78 Lakhs).

Corporate guarantee provided to bank for contractual obligation of grape farmers amounting to Rs 315 Lakhs (brvious year Rs 315 Lakhs).

Disputed liability is in respect of Provident fund at Nashik of Rs NIL (P.Y. Rs 92.21 Lakhs). The Company has made a provision for the said liability during the year.

Additional bonus liability for the financial year 2014-15 is Rs 10.05 Lakhs (Previous Year Rs 10.05 Lakhs).

The Maharashtra State Excise Department had issued a show cause / demand notice dated 21st February, 2009 for Rs 1999.61 Lakhs (brvious year Rs 1999.61 Lakhs) for the excise duty allegedly collected by the Company from its customers after the remission of excise duty by the State Government i.e. during the period 2001-02 to 2007-08, but which was not remitted to the Government. On a Special Leave Petition (SLP) being filed by the various affected parties the Subrme Court vide its order dated 11th September, 2013 directed wine manufacturers to file a detailed reply to the demand notices issued by the State Excise Department along with documentary proof evidencing the fact that no excise duty has been collected from customers during such period.

As per the directions of the Subrme Courts (vide its order dated 11th September 2013), written statements were filed before the Collector (Dept. of State Excise), Nashik on 16th December, 2014 and on 23rd February, 2015 .

In such SLP the Government of Maharashtra and the State Excise Department have submitted their respective affidavits stating that no excise duty has been recovered from the consumers and therefore the question of refunding excise duty to the State Government does not arise. The Company has also obtained a legal opinion in this matter and which strongly supports the Company's contentions that no liability is expected on this account.

The management is of the view that above matters are not likely to have any impact on the financial position of the company.

Estimated amount of contracts pending to be executed on capital account and not provided for (Net of Advances) is Rs 124.05 Lakhs (brvious year Rs 191.97 Lakhs)

EMPLOYEES STOCK OPTION SCHEME (ESOS)

The company has adopted intrinsic value method of accounting employee compensation cost in respect of ESOS. The intrinsic value of shares is excess of market price of the shares under ESOS over the exercise price. Employee compensation cost is accounted for by amortizing the intrinsic value on the straight line basis over vesting the period. The total amount to be amortized as on 31st March 2017 over the balance vesting period is Nil.

The company provides share-based payment scheme to its employees. During the year ended 31 March 2017, employee stock option scheme (ESOS 2008) was in existence. The relevant details of the scheme, grant and activity under ESOS scheme are summarized below:

Particulars	Options granted in 2014-15
Relevant Terms of the Scheme
Grant Date	19th August, 2014
Vesting Period	Expiry of 3 years from date of grant or IPO / QIPO, whichever is earlier
Exercise Period	expiry of 3 years from date of grant or IPO / QIPO, whichever is earlier
Exercise Price	Rs 508.71 per shares
Fair Value of Options	Rs 158.29 per shares
Activity Under the Scheme
Grant Date	19th August, 2014
	No. of options
	March 31, 2017	March 31, 2016
Outstanding at the beginning of the year	1,34,500	1,63,500
Granted during the year	-	-
Exercised during the year	-	6,000
Forfeited during the year	-	23,000
Lapsed during the year
Outstanding at the end of the year	1,34,500	1,34,500
Exercisable at the end of the year	-	-

Fair Value Methodology:

The fair value of options have been estimated on the date of grant using Black-Scholes method as under

The key assumption used in Black-Scholes model for calculating fair value under ESOS 2008 as on the date of grant viz; 19 August 2014 are as follows:

Particularts	ESOS 2008
Risk free interest rate	8.50%
Expected volatility of share price	26.40%
The weighted average price of Equity share as on grant date	508.71

Particularts	As at 31st March 2017
Net Profit (as reported)	885.42
Less: Stock based compensation expenses determine under fair value (net of tax)	46.41
Net Profit considered for computing EPS (pro-forma)	839.01
Basic earning per share (as reported)	6.03
Basic earning per share (pro-forma)	5.71
Diluted earnings per share (as reported)	6.03
Diluted earnings per share (pro-forma)	5.71

SEGMENT REPORTING

The Group deals in one business segment only, manufacture and sale of alcoholic beverages, mainly in India.

DISCLOSURE OF EMPLOYEE BENEFITS IN ACCORDANCE WITH ACCOUNTING STANDARD 15 (REVISED)

The Company has classified various benefits provided to employees as under:

                Defined Contribution Plans

The Company has recognized the following amounts in Statement of Profit and Loss

	Year Ended March 31, 2017	Year Ended March 31, 2016
	(Rs in Lakhs)	(Rs in Lakhs)
Employers contribution to Provident Fund	227.67	140.63
Employers contribution to ESIC	10.55	2.26

Defined Benefit Plans

Contribution to Gratuity Fund (Funded Scheme)
Leave Encashment (NonFunded Scheme)
In accordance with the Accounting Standard 15 (Revised 2005), actuarial valuation was performed in respect of the aforesaid defined benefit plans based on the following assumptions:
Particulars					March 31, 2017		March 31, 2016
Discount Rate (per annum)					7.45%		8.05%
Rate of increase in compensation levels (per annum)					8%-9%		9.00%
Rate of return on Plan Assets (for Gratuity)					7.50%		7.50%
Employee turnover  Age :				21-44	8% p.a		4% p.a
				45-61	1% - 5% p.a		1% p.a

A.  Change in the Present Value of Obligation
					Year Ended March 31, 2017		Year Ended March 31, 2016
Gratuity	Leave Encashment	Gratuity	Leave Encashment
(Rs in Lakhs)	(Rs in Lakhs)	(Rs in Lakhs)	(Rs in Lakhs)
Present Value of Defined Benefit Obligation as at beginning of the period					410.26	229.43	345.75	194.33
Interest Cost					37.34	0.00	31.84	0.00
Current Service Cost					60.25	89.85	58.79	114.04
Benefits Paid					0.00	(75.55)	0.00	(78.94)
Actuarial (gain) / loss on Obligations					11.85	0.00	3.89	0.00
Past service cost					0.00	0.00	0.00	0.00
Benefits paid					(3.76)	(0.40)	(30.01)	0.00
Present Value of Defined Benefit Obligation as at the end of the period					515.94	243.33	410.26	229.43
B.  Changes in the Fair Value of Plan Assets (For Gratuity)
					Year Ended March 31, 2017		Year Ended March 31, 2016
(Rs in Lakhs)		(Rs in Lakhs)
Present Value of Plan Assets as at beginning of the period					184.37		155.11
Expected Return on Plan Assets					15.57		13.51
Contributions					54.75		46.60
Benefits Paid					0.00		0.00
Actuarial gains / (losses)					(0.82)		(0.85)
Assets Distributed on Settlement					0.00		0.00
Benefits paid					(3.76)		(30.01)
Fair Value of Plan Assets As at end of the period					250.12		184.37

C.  Amount recognized in the Balance Sheet

	Year Ended March 31, 2017		Year Ended March 31, 2016
Gratuity	Leave Encashment	Gratuity	Leave Encashment
(Rs in Lakhs)	(Rs in Lakhs)	(Rs in Lakhs)	(Rs in Lakhs)
Present Value of Defined Benefit Obligation as at the end of the period.	515.94	243.33	410.26	229.43
Fair Value of Plan Assets As at end of the period.	(250.12)	0.00	(184.37)	0.00
Amount not recognised as an asset	0.92	0.00	3.12	0.00
Liability / (Net Asset) recognised in the Balance Sheet.	266.74	244.33	229.02	229.43

D. Expenses recognized in Statement of Profit and Loss

	Year Ended March 31, 2017		Year Ended March 31, 2016
Gratuity	Leave Encashment	Gratuity	Leave Encashment
(Rs in Lakhs)	(Rs in Lakhs)	(Rs in Lakhs)	(Rs in Lakhs)
Current Service Cost	60.25	89.85	58.79	114.04
Past Service Cost	0.00	0.00	0.00	0.00
Interest Cost	37.34	0.00	31.84	0.00
Expected Return on Plan Assets	14.43	0.00	(13.51)	0.00
Curtailment Cost / (Credit)	0.00	0.00	0.00	0.00
Settlement Cost / (Credit)	0.00	0.00	0.00	0.00
Net Actuarial (gain) / Loss recognised in The Period	12.67	0.00	4.74	0.00
Effect of the limit in para 59 (b)	(2.20)	0.00	3.12	0.00
Total Expenses recognised in the Statement of Profit & Loss A/c	92.48	89.85	84.98	114.04

E.  Actual Return on Plan Assets (For Gratuity)

	Year Ended March 31, 2017	Year Ended March 31, 2016
(Rs in Lakhs)	(Rs in Lakhs)
Expected Return on Plan Assets	7.50%	7.50%
Actuarial gain / (losses) on Plan Assets	(0.94)	(0.86)
Actual Return on Plan Assets	14.75	12.65

This is based on average long term rate of return expected on investment of the fund during the estimated term of the obligation.

F.  Asset Information (For Gratuity)

Category of Assets (% Allocation)	Period ended
31-Mar-17	31-Mar-16	31-Mar-17	31-Mar-16
%		Rs in Lakhs
Insurer Managed Funds	100%	100%	250.12	184.37

G.  Experience Adjustments (For Gratuity)

	Period Ended
31-Mar-13	31-Mar-14	31-Mar-15	31-Mar-16	31-Mar-17
Rs in Lakhs
Defined Benefit Obligation	222.86	222.07	345.75	410.26	515.93
Plan Assets	78.02	100.94	155.11	184.37	250.12
Surplus/(Deficit)	(144.84)	(121.12)	(190.64)	(225.89)	(265.82)
Exp. Adj. on Plan Liabilities	17.52	6.80	12.60	7.00	6.53
Exp. Adj. on Plan Assets	(0.07)	0.28	3.73	(0.85)	(0.82)
Other Adjustment	(75.58)	45.06	(59.87)	3.11	(5.31)

H. Contribution expected to be paid to the plan during the next F.Y is Rs 60 Lakhs ( P.Y. Rs 60 Lakhs)

DISCLOSURE IN RESPECT OF OPERATING LEASE IN ACCORDANCE WITH ACCOUNTING STANDARD 19 ON LEASES.

(a) The Company has taken on lease a winery, a resort, a restaurant, various office brmises, godowns and guest house for the periods ranging from 11 months to 9 years.

(b) The total of future minimum lease payments under non-cancellable operating leases for each of the following periods:-

i) Not later than 1 year - Rs 86.29 Lakhs (P.Y. Rs 45.01 Lakhs).

ii) Later than one year and not later than 5 years - Rs 225.48 Lakhs (P.Y. Rs 76.32 Lakhs).

iii) Later than 5 years - Rs NIL (P.Y. Rs NIL).

(c) Lease payments recognized in the statement of profit and loss for the period from 1.4.2016 to 31.03.2017 - Rs 333.68 Lakhs (P.Y. Rs 495.71 Lakhs).

(d) Sub Lease payments received recognized in the statement of profit and loss for the period from 1.4.2016 to 31.03.2017 - Rs NIL (P.Y. Rs 4.72 Lakhs).

(e) Sub Lease payments expected to be received under non cancellable subleases as at 31st March, 2017 is Rs NIL (P.Y. Rs NIL).

RELATED PARTY DISCLOSURE

Disclosures required as per Accounting Standard 18 (AS-18) on Related Party Disclosures issued by the Institute of Chartered Accountants of India are given below:

a)      List of Related Parties

i)        Key Management Personnel:

Mr. Rajeev Samant, Chairman, CEO & Managing Director,

Mr. Suresh Samant, Director

ii)      Relatives of Key Management Personnel:

Mrs. Sulabha Samant,

Mr. Bharat Samant

b)      Transactions during the year and balances outstanding as at the year end with related parties are as follows:

Name of related party	Nature of transaction			Transactions		Cl. Balance
2016-17	2015-16	2016-17	2015-16
Rajeev Samant*	Purchase of raw materials			441.31	249.86	534.19	242.84
Sales of Grape Cutting			1.72	0.00	0.00	0.00
Managerial remuneration			171.80	150.50	0.00	0.00
Purchase of Land			282.49	0.00	0.00	0.00
Guest House taken on lease			0.00	0.00	0.00	0.00
Dividend Paid			0.00	67.62	0.00	0.00
Money received against share warrants			7.52	0.00	114.19	106.67
Suresh Samant*	Purchase of raw materials			125.62	97.26	177.68	92.55
Advance for purchase of land			0.00	288.00	0.00	0.00
Sales of Grape Cutting			3.83	0.00	0.73	0.00
Guest House taken on lease			2.50	0.00	0.00	0.00
Dividend Paid			0.00	6.75	0.00	0.00
Director's sitting fees			4.00	4.60	0.00	0.00
Sulabha Samant*	Purchase of raw materials			25.50	17.57	23.30	17.57
Dividend Paid			0.00	20.36	0.00	0.00
Bharat Samant	Purchase of raw materials			14.31	18.14	14.31	18.14
Dividend Paid			0.00	0.12	0.00	0.00

* The company has also provided corporate guarantee to bank for contractual obligation of Rajeev Samant Rs 60 Lakhs (P.Y.Rs 60 Lakhs), Rajeev Samant with Mohan B Samant Rs 8 Lakhs (P.Y. Rs 8 Lakhs). Suresh Samant Rs 55 Lakhs (P.Y. Rs 55 Lakhs) and Sulabha Samant Rs 20 Lakhs (P.Y. Rs 20 Lakhs).

FOREIGN CURRENCY EXPOSURE AS AT THE BALANCE SHEET DATE

UNHEDGED FOREIGN CURRENCY EXPOSURE

Particulars	Year Ended March 31, 2017			Year Ended March 31, 2016
(Rs in Lakhs)	Amount in foreign currency		(Rs in Lakhs)	Amount in foreign currency
Trade Receivables	1491.05	USD	2298917.20	41.04	USD	62010.00
79.04	EUR	113915.20	30.31	EUR	40219.71
11.56	GBP	14221.47	45.20	GBP	47500.00
Trade payables	841.80	USD	1297898.92	216.38	USD	326983.00
82.02	EUR	118211.33	94.53	EUR	125431.00
0.44	SEK	6000.00	0.00	SEK	0.00
0.00	AUD	0.00	44.16	AUD	86925.00
0.00	JPY	0.00	0.26	JPY	44054.00
Foreign Currency Loan	128.81	USD	198594.14	120.17	USD	181374.00
22.37	EUR	32238.00	0.00	EUR	0.00
0.00	GBP	0.00	0.00	GBP	0.00
Advances	18.17	USD	28011.58	6.13	USD	9259.50
22.76	EUR	32806.91	28.59	EUR	37940.03

DERIVATIVE INSTRUMENTS OUTSTANDING

As at 31st March 2017, the company has forward cover on foreign currency of US $1.5 lacs (P.Y. US $Nil)

EARNINGS PER SHARE (EPS)

BASIC AND DILUTED EPS	2016-17	2015-16
Profit after tax (Rs Lakhs)	885.42	2035.12
Weighted average no. of equity shares	14685733	14683077
Nominal value of equity shares	Rs 10	Rs 10
Earnings per equity share	6.03	13.86

CSR Expenditure

As per the Section 135 of the Companies Act, 2013 every year the Company is required to spend at least 2% of its Average Net Profit made during the immediately 3 brceding financial years on the Corporate Social Responsibility (CSR) activities. Gross amount required to be spent by the Company during the year is  Rs 56.86 Lakhs (P.Y.  Rs 29.36 Lakhs) and amount actually spent during the year is  Rs 31.50 Lakhs (P.Y.  Rs 29.99 Lakhs), the details of which is as given below:

	2016-17 (Rs in Lakhs)			2015-16 (Rs in Lakhs)
	In Cash	Yet to be paid in cash	Total	In Cash	Yet to be paid in cash	Total
Construction/acquisition of any asset	16.43	-	16.43	14.39	-	14.39
On purposes other than (i) above	15.07	-	15.07	15.6	-	15.6

Proposed Dividend :
The final dividend proposed for the year is as follows :

on equity share of Rs. 10 each	Year Ended March 31, 2017	Year Ended March 31, 2016
Amount of dividend proposed (Rs. In Lakhs)	293.71	0
Dividend Distribution tax on proposed dividend	59.79	0
Dividend per equity shares in Rs.	2	0

Sula Vineyards Private Limited SVPL acquired winery unit from Heritage Grape Winery Private Limited HGWPL, which includes all the brands of Heritage and a fully functional winery on slump sale basis as a going concern.The winery is strategically located at the Bangalore-Mysore Highway. The winery has fully operational unit for still and fortified wines. Also it has other facilities like wine shop, restaurant, tasting room, grape stomping and vineyards. All winery and hospitality licenses are readily available as well.

Sula got the effective control of the winery w.e.f. February 1st, 2017. The acquisition will help Sula in expanding the market share in Karnataka, especially in Bangalore and other neighboring states. The wine tourism at the winery will also help in creating awareness about wine which will in turn boost the growth in the wine market.   

Deal Synopsis:

A Business Transfer Agreement BTA has been executed between SVPL & HGWPL on 19th May 2017 w.e.f 01st February 2017 for 3462.84 lakhs for acquiring all the assets, adjacent land and all the brands of the running business. SVPL has acquired the following brands as part of the deal:

1.       Heritage Red Wine

2.       Heritage 2000 Premium Red Wine

3.       Heritage Royal Blu

4.       Heritage 2000 Premium White Wine

5.       Heritage Twist Bubbly Wine

6.       Heritage Cabernet Red Wine

7.       Heritage Shiraz Red Wine

8.       Heritage Chennin Blanc White Wine

9.       Labrusca (Red)

SVPL has recognize revenue and income along with the expenses pertaining to the period from 01st February 2017 onwards. The company is in the process of getting the excise license transferred in the SVPLs name, which should be transferred by Q2 FY 2017-18 due to which sales made during the period 01st Feb 2017 to 31st March 2017 is continued to be in the name of HGWPL on behalf of SVPL upto the date of transfer of excise and other operating licenses. However the risk and rewards of such sales shall accrue to SVPL. SVPL has done a sales of Rs 3.4 Crs through HGWPL in two months of FY 2016-17. The transfer of excise license would be a two way process, involving renewal on license and transfer in SVPLs name. Renewal of Label registration is under process, manufacturing & bottling plant renewal has been done.

We have acquired 1.825 acres of land as part of the BTA, the same is under the process of getting transferred in SVPLs name. All necessary application pertaining to the transfer has been completed. SVPL has also acquired the below bank accounts as a part of BTA, however the change in account holders name to SVPL would be done once the excise & other operating licenses are in SVPLs name:

1. State Bank of India; Account number 31987389253

2. State Bank of Mysore - Channapatna; Account number 64049216258

3. HDFC Bank; Account number 01572320000505

4. State Bank of Mysore - N.R. Colony; Account number 64076582256

Assets and liabilities acquired pursuant to slump sale are as under :

Particulars	Amount (Rs In Lakhs)
Land and Building *	653.69
Property, Plant & Equipment *	596.09
Intangible Assets *	1,666.32
Other Current Assets	628.63
Other Current Liabilities	(81.89)

* Value is derived based on the independent certificate from the experts.

MOVEMENT IN PROVISIONS

Particulars			Opening as on 1st April 2016	Addition	Paid/Reversed	Closing as on 31st March 2017
Provision for Gratuity			231.23	93.38	54.76	269.85
Provision for Leave Encashment			229.44	89.85	75.96	243.33
Other Provisions (Provident Fund)			-	92.00	-	92.00

Note on Specified Bank Notes

Details of specified bank notes (SBN) held & transacted during the period from 08th November 2016 to 30th December 2016 are provided in the table below.
Particulars	SBNs	Other Denomination notes	Total
Closing cash in hand as on 08th november 2016	149.16	16.16	165.32
(+) Withdrawn from bank	-	26.69	26.69
(+) Permitted receipts	-	67.74	67.74
(-) Permitted payments	-	54.05	54.05
(-) Amount deposited in Bank	149.16	17.21	166.37
Closing cash in hand as on 30th December 2016	-	39.33	39.33

Note: Specified bank notes is defined as bank notes of denominations of the existing  series of the value of Rs 500 & Rs 1000

The Subsidiary Company has entered into a spirit purchase agreement with a manufacturer at Baramati. Consequently, it has advanced money to the manufacturer for procurement of grapes & for other expenses. Such advances shall be set off against the purchase of spirits from it in future. The Company has installed the required machinery & equipments in the brmises of the manufacturer for storage, distillation & bottling of spirit. The bottling of spirit shall be done by the Company in Goa through an assignment of a licence from Bluemoon distillaries

Form AOC-1
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

PART "A" : Subsidiary Company
(Amounts in Rs.)		Amount (Rs Lakhs)
Sl. No.	Particulars	Details
1	Name of the subsidiary	Artisan Spirits Pvt. Ltd.
2	The Date since which the subsidiary was acquired	07.04.2015
3	Reporting period for the subsidiary concerned, if different from the holding companys reporting period	The reporting period of the subsidary  is similar to the holding company
4	Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreignsubsidiaries	INR
5	Share capital	Authorised 3000 Paid-up Cap. - 2935
6	Reserves & surplus	-1,083.17
7	Total assets	3,591.54
8	Total Liabilities	1,739.71
9	Investments	0.00
10	Turnover	1,254.15
11	Profit before taxation	-141.62
12	Provision for taxation	0.00
13	Profit after taxation	-141.62
14	Proposed Dividend	0.00
15	% of shareholding	100%

Note: Turnover includes other income

The Figures for the Previous year have been re-grouped / re-classified wherever necessary.