Details Of Other Entity-s--280116.pdf

INI FARMS DMCC FINANCIAL STATEMENTS 31 MARCH 2015

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INI FARMS DMCC Dubai · United Arab Emirates Financial statements for the period ended March 31, 2015

Table of contents

Independent auditors report

Page Number

1-2

Statement of financial position

3

Statement of comprehensive income

4

Statement of cash flows

5

Statement of changes in equity

6

Notes to the financial statements

7-16

~AKER TILLY Auditors • Accountants • Advisors

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INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF INI FARMS DMCC Report on the financial statements We have audited the accompanying financial statements of INI Farms DMCC which comprise the statement of financial position as of March 31, 2015 and the related statement of comprehensive income, statement of cash flows and statement of changes in equity for the period then ended and a summary of significant accounting policies and other explanatory notes. Management responsibility for the financial statements Management is responsible for preparation and fair presentation of financial statements in accordance with International financial reporting standards. This includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error, selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor's responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International standards on auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance, whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal controls 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 but not for the purpose of expressing an opinion on the effectiveness of the company's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of 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 our audit opinion. Opinion In our opinion, the financial statements present fairly in all material respects, the financial position of INI Farms DMCC as of March 31, 2015 and its financial performance and its cash flows for the period then ended in accordance with International Financial Reporting Standards (IFRS).

Baker Tilly is t he Trading Name of Baker Tilly JFC. An I ndependent m ember of Baker Tilly I ntern at ional

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INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDER OF INI FARMS DMCC (continued)

Report on other regulatory requirements As required by the provisions of the Dubai Multi Commodities Centre DMCC Company Regulations 2003 (as amended), we further confirm that, we have obtained all the information and explanation necessary for our audit and proper books of accounts have been maintained by the company. Further, we are not aware of any contravention during the period of the provisions of the Dubai Multi Commodities Centre DMCC Regulations or of the UAE Federal Commercial Companies Law No. 8 of 1984 (as amended) as may be applicable to the Free Zone Companies or the memorandum and articles of association of the company which might have materially affected the financial position of the company or the results of its operations.

~')Q/1 61tt] Baker Tilly

Dubai , United Arab E irates June 10, 2015

2

Baker Tilly is the Trading Name of Baker Tilly JFC. An Independent member of Baker Tilly I nternational.

INI FARMS DMCC Dubai - United Arab Emirates Statement of financial position As at March 31, 2015

Note ASSETS Current Assets Inventories

2015 USD 33,256

Trade and Other Receivables Cash and Cash Equivalents

4

509,428

5

127,689 670,373 670,373

2

27,230 (30,506) (3,276)

6 7 8

401 ,688

Total Assets EQUITY AND LIABILITIES Equity Attributable to Equity Holders Share Capital Accumulated Losses Current Liabilities Due to related parties Trade and Other Payables Interest Bearing Borrowings

29,575 242,386 673,649 670,373

Total Equity and Liabilities The accounting notes on 1 to 16 an integral part of the Financial Statements. The financial statements were authorised for issue on June 10, 2015 by,

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Director Mr. Pankaj Khandelwal

3

INI FARMS DMCC Dubai - United Arab Emirates Statement of comprehensive income for the period ended March 31 , 2015 Note

2015 USD (16 months)

Revenue

9

3,021,225

Cost of Sales

10

(2, 938,827) 82,398

Gross Profit

11

Administrative Expenses

(51 ,768) (7,662)

Selling and Distribution Costs

12

Finance Cost

(53,474) (30,506)

Loss for the period Other comprehensive income

(30,506)

Comprehensive (Loss) for the period The accounting notes on 1 to 16 an integral part of the Financial Statements.

4

INI FARMS DMCC Dubai · United Arab Emirates Statement of cash flows for the period ended March 31, 2015 Note Cash flows from I (used in) operating activities

2015 USD (30,506)

(loss) for the period

(509,428) (33,256)

(Increase) in trade and other receivables (Increase) in inventories

29,575

Increase in trade and other payables Increase in due to related party

401,688 (141,927)

Net cash (used in) operating activities Cash flows from I (used in) financing activities

27,230

Introduction of the share capital Net movement in interest bearing borrowings

8

242,386

Net Cash flows generated from investing activities

269,616

Net Increase in Cash and Cash Equivalents

127,689

Cash and Cash Equivalents at the beginning of the period Cash and Cash Equivalents at the end of the period The accounting notes on 1 to 16 an integral part of the Financial Statements.

5

5

127,689

INI FARMS DMCC Dubai · United Arab Emirates Statement of changes in equity for the period ended March 31, 2015 Share Capital USD

Accumulated Losses USD

Total USD

As at 3 December 2013 Issued during the period

27,230

27,230

Loss for the period

27,230

As at 31 March 2015

The accounting notes on 1 to 16 an integral part of the Financial Statements.

6

(30,506)

(30,506)

(30,506)

(3,276)

INI FARMS DMCC Dubai - United Arab Emirates Notes to the financial statements for the period ended March 31, 2015

1- Legal status and business activities

2.

a)

INI FARMS DMCC ("the Company") was incorporated on 3'd December, 2013 as a Limited Liability Company in United Arab Emirates under the trade License issued by the Dubai Multi Commodity Centre, Dubai- United Arab Emirates.

b)

The Company is engaged in the business of trading in Food & Beverages and agriculture commodities .

c)

The registered office of the Company is Unit No: 30·01-174, Jewellery & Gemplex 3, Plot No: DMCCPH2· J & GPiexS Jewellery & Gemplex Dubai, United Arab Emirates.

d)

The management and control of the day-to·day operations of the Company is vested with Mr. PinakinKumar Vasantbhai Patel (Indian National), the Authorised Manager.

e)

These financial statements incorporate the operating results of the Company for its trading license No DMCC-33501 for the period from 03 December 2013 to 31 March 2015.

Share capita l Authorised, issued and paid up capital of the Company is AED 100,000 (USD 27230) divided into 100 shares of AED 1,000 each and was held by the INI Farms Private Limited as at March 31, 2015.

3. Summary of significant account ing policies a) Basi s of preparation The financial statements have been prepared in accordance with International financial reporting standards (IFRS) issued by the International accounting standards Board (IASB), interpretations issued by the International financial reporting interpretations committee (IFRIC) and U.A.E Law. A summary of the significant accounting policies, which have been applied, are set out below: b) Accounting convent i on These financial statements have been prepared in accordance with historical cost basis. c)

Functional and presentation currency

These financial statements are presented in United State Dollars (USD) which is the Company's presentation currency and functional currency. d) Changes in accounting policies and disclosures The following new standards and amendments to IFRS that are mandatorily effective for accounting periods beginning on or after 01 January 2014, except as indicated otherwise: • •

Offsetting Financial Assets and Financial liabilities (Amendments to lAS 32) Impairment of assets: Recoverable amount disclosures for non-financial assets (Amendments to lAS

• •

Investment Entities (Amendments to IFRS 10, IFRS 12 and lAS 27) IFRIC Interpretation 21 Levies

36)

7

INI FARMS DMCC Dubai · United Arab Emirates Notes to the financial statements for the period ended March 31, 2015

3.

Summary of significant accounting policies (Continued) d) Changes in accounting policies • • •

Novation of Derivatives and Continuation of Hedge Accounting (Amendments to lAS 39) Annual Improvements to IFRS 2010·2012 cycle Annual Improvements to IFRS 2011-2013 cycle

The adoption of the above standards and interpretations did not have any material impact on the accounting policies and disclosures of the Company. Standards, amendments and Interpretations in issue but not effective The following new and revised IFRSs are not mandatorily effective for the period ended 31 March 2015. However, they are available for early application. Paragraph 30 of lAS 8 requires entities to consider and disclose the potential impact of new and revised IFRSs that have been issued but are not yet effective. • • • •

•

• • • • • • • •

• •

IFRS 9 Financial Instruments (1 January 2018) IFRS 14 Regulatory Deferral Accounts (1 January 2016) Amendments to lAS 19 Defined Benefit Plans: Employee Contributions (1 July 2014) Annual Improvements 2010·2012 Cycle (1 July 2014), includes: IFRS 2 Share-based Payment IFRS 3 Business Combinations IFRS 8 Operating Segments lAS 16 Property, Plant and Equipment lAS 38 Intangible Assets lAS 24 Related Party Disclosures Annual Improvements 2011·2013 Cycle (1 July 2014), includes: IFRS 3 Business Combinations IFRS 13 Fair Value Measurement lAS 40 Investment Property IFRS 15 Revenue from Contracts with Customers (1 January 2017) Amendments to IFRS 11 Joint Arrangements (1 January 2016) Amendments to lAS 16 Property, Plant and Equipment (1 January 2016) Amendments to lAS 38 Intangible Assets (1 January 2016) Amendments to lAS 41 Agriculture (1 January 2016) Amendments to lAS 27 Separate Financial Statements (1 January 2016) Amendments to IFRS 10 and lAS 28 Consolidated financia l statements and investments in associates and joint ventures (1 January 2016) Annual improvements 2012·2014 cycle (1 July 2016) IFRS 5 Assets held for sale and discontinued operations IFRS 7 Financial Instruments lAS 9 Post Employment Benefits lAS 34 Interim Reports Amendments to lAS 1 Presentation of Financial Statements Amendments to IFRS 10, IFRS 12 and lAS 28 Investment Entities

Management anticipates that all of the above Standards and Interpretations wi ll be adopted by the Company to the extent applicable to them from their effective dates. The adoption of these Standards, amendments and i nterpretations is not expected to have any material impact on the financial statements of the Company in the period of their initial application.

8

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INI FARMS DMCC Dubai · United Arab Emirates Notes to the financial statements for the period ended March 31, 2015

3.

Summary of significant accounting policies (Continued) e) Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The Company assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. The Company has concluded that it is acting as a principal in all of its revenue arrangements. The following specific recognition criteria must also be met before revenue is recognised. Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. f)

Impairment of non-financial assets

The company assesses at each reporting date whether there is an indication that an asset may be impaired . If any such indication exists, or when annual impairment testing for an asset is required, the company makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. g) Impairment of financial assets The Company assesses at each statement of financial position date whether there is any objective evidence that a financial asset is impaired . A financial asset is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset {an incurred 'loss event') and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. h) Provisions Provisions are recognised when the Company has an obligation (legal or constructive) arising from a past event, and the costs to settle the obligation are both probable and able to be reliably measured. i)

Cash and cash equivalents

Cash and cash equivalents comprise of cash on hand , balances with bank and deposits with the banks, within a maturity date of three months or less from the date of deposit.

9

INI FARMS DMCC Dubai · United Arab Emirates Notes to the financial. statements for the period ended March 31, 2015

3.

Summary of significant accounting policies (Continued) j) Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantia l period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity inc urs in connection with the borrowing of funds. k) Financial instruments Financial instruments comprise of financial assets and financial liabilities. Financial assets and financial liabilities are recognised in the company's statement of financial position when the company has become a party to the provisions of the instrument. A financial asset is any asset that is cash, a contractual right to receive cash or other financial asset, a contractual right to exchange financial instruments under conditions that are potentially favourable or any e quity instrument excluding investments in subsidiaries, associates or joint ventures. A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset or to exchange financial instruments under conditions that are potentially unfavourable. I)

Trade receivables

Accounts receivable are stated at original invoice amount less a prov1s1on for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when there is no possibility of recovery. m)

Inventories

Inventories are stated at the lower of cost and net realisable value. Costs are those expenses incurred in bringing each product to its present location and condition on weighted average basis. Net realisable value is based on estimated selling price le ss any further costs expected to be incurred on completion and disposal. n)

Financial instruments

Financial instruments comprise of financial assets and financial liabilities. Financial assets and financial liabilities are recognised in the company's statement of financial position when the company has become a party to the provisions of the instrument. A financial asset is any asset that is cash, a contractual right to receive cash or other financial asset, a contractual right to exchange financial instruments under conditions that are potentially favourable or any equity instrument excluding investments in subsidiaries, associates or joint ventures. A financ ial liability is any liability that is a contractual obligation to deliver cash or another financial asset or to exchange financial instruments under conditions that are potentially unfavourable. o) Trade payables Liabilities are recognised for amounts to be paid in the future for goods or services received, whether billed by the supplier or not.

10

INI FARMS DMCC Dubai - United Arab Emirates Notes to the financial statements for the period ended March 31, 2015

3.

Summary of significant accounting policies (Continued) p) Significant accounting judgments, estimates and assumptions The preparation of financial statements in conformity with IFRS, requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and underlying assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

11

INI FARMS DMCC Dubai - United Arab Emirates Notes to the financial statements for the period ended March 31, 2015

4

TRADE AND OTHER RECEIVABLES

2015 USD 496,161 272 12,995 509,428

Trade Debtors (4.1, 4.2) Deposits Advances & receivables

4. 1

Trade receivables are non-interest bearing and are generally on 30 days terms. Refer note no 17 for credit risk analysis.

4. 2

As at 31 March, the ageing analysis of unimpaired trade receivables is as follows:

2015

Total USD 496, 161 496,161

Neither Past due nor impaired USD 244, 130 2441130

Past due but not impaired 30-180 181-360 > 360 days days days USD USD USD 251,795 236 251,795 236

The company's credit period is 30 days after which trade receivable s are considered to be past due. Unimpaired receivables are expected, on the basis of past experience, to be fully recoverable. It is not the practice of the company to obtain collateral over receivables. 5

5. 1

6

CASH AND CASH EQUIVALENTS IN THE CASH FLOW STATEMENT Components of Cash and Cash Equivalents Favourable Cash & Cash Equivalents balance Cash & Bank Balances Total Cash and Cash Equivalents For the Purpose of Cash Flow Statement

2015 USD 127,689 127,689

RELATED PARTY TRANSACTIONS AND BALANCES The Company enters into transactions with companies and entities that fall within the definition of a related party as contained in International Financial Reporting Standards (IFRS). Related parties comprise companies and entities under jointly control, their partners and key management personnel, subsidiaries, joint venture, parent, association and other related parties. The Company believes that the terms of such transactions are not significantly different from those that could have been obtained from third parties. The Company provides funds to related parties as and when required as working capital facilities. At the date of statement of financial position, due to related parties were as follows:

6. 1

Due to Related parties

Relationship Parent Company

INI Farms Private Limited

12

2015 USD 401,688 401 ,688

INI FARMS DMCC Dubai - United Arab Emirates Notes to the financial statements for the period ended March 31, 2015

6

RELATED PARTY TRANSACTIONS AND BALANCES

6.2

Transaction with the parent entity during the period are as follows,

2015 Nature of Transaction

USD

As at 3 December , 2013 Purchases Purchase returns Expenses born on behalf of INI Farms DMCC

(2, 961 ,289) 7,878 (14, 926) 2,566,649 (401 ,688)

Funds transfer As at 31 March, 2015

7

Included under Due to related parties

401,688 401,688

TRADE AND OTHER PAYABLE

2015 USD

Trade Payables Other Payable

8

28,833 742 29,575

INTEREST BEARING LOANS &: BORROWINGS 2015 2015 Amount Amount Repayable Repayable Within 1 Year After 1 Year USD USD 242,386 242,386

Loan from Financial Institutions (8.1)

8.1

As At 03.12.2013

Term Loans

USD Loan I Loan II

Loans Obtained USD 500,000 500,000 1,000,000

Repayment USD (500,000) (257,614) (757,614)

8.2

The above loan is secured by the following security:

(a)

Promissory Note issued by INI Farms DMCC to the extent of USD 500,000.

(b)

Corporate guarantee to the extent of USD 600,000 issued by INI Farms Private Limited.

13

2015 Total

USD 242,386 242,386 As At 31.03.2015 USD 242,386 242,386

INI FARMS DMCC Dubai - United Arab Emirates Notes to the financial statements for the period ended March 31, 2015

9

2015

REVENUE

USD ( 16 months) 3,021,225 3,021,225

Revenue (9. 1)

9.1

Geographical Analysis of revenue is as follows:

USD 3,000,995 20,230 3,021,225

Within U.A.E Outside U.A.E

10

2015

2015

COST OF SALES

USD (16 months) Inventory· beginning of the period

11

Purchases Direct expenses Inventory- end of the period

2,953,411 18,672 (33,256) 2,938,827

ADMINISTRATIVE EXPENSES

2015 USD (16 months) 18,375

Salaries & other related benefits Managerial remuneration

5,995 17,261 269 9,656

Rent Legal, visa and professional charges Communication expenses Travelling expenses Miscellaneous expenses

212 51,768

12

2015

FINANCE COST

USD (16 months) 46,712 6,762 53,474

Interest expenses Bank charges

13

COMPARATIVE INFORMATION Current period is the first period of operations of the company, hence no comparative figures are presented in these financial statements.

14

INI FARMS DMCC Dubai - United Arab Emirates Notes to the financial statements for the period ended March 31, 2015

14

COMMITMENTS AND CONTINGENCIES

14.1 Capital Expenditure Commitments The Company does not have significant capital commitments as at the balance sheet date. 14.2 Contingent Liabilities Except for the ongoing business obligations which are under normal course of business against which no loss is expected, there has been no other known contingent liability on the Company's account as of the date of statement of financial position. 15

EVENTS AFTER THE STATEMENT OF FINANCIAL POSITION DATE There have been no material events occurring after the statement of financial position date that require adjustment to or disclosure in the financial statements.

16

RISK MANAGEMENT Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk, since interest bearing borrowings are obtained with fixed interest rates. Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is exposed to credit risk on its bank balances and receivables as follows. 2015 USD Bank balances 127,689 Trade receivables 496,161 623,850 The Company seeks to limit its credit risk with respect to banks by dealing with reputable banks only. Credit risks related to receivables are managed subject to the Company's policy, procedures and control relating to customer credit risk management. Credit limits are established for all customers based on internal rati ng criteria and the credit quality of customers is assessed by management. Outstanding customer receivables are regularly monitored. The requirement for an impairment is analysed at each reporting date on an individual basis for major customers. Additionally, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on actually incurred historical data. The Company does not hold collateral as security.

15

INI FARMS DMCC Dubai - United Arab Emirates Notes to the fin ancial statements for the period ended March 31, 2015

16

RISK MANAGEMENT (CONTINUED) Credit risk The Company's 3 largest customers account for 80 % of outstanding accounts receivable at 31 March 2015. Credit risk is limited to the carrying values of financial assets in the statement of financial position Liquidity risk The Company limits its liquidity risk by ensuring bank facilities and funds from the Parent Company are available. The Company's terms of contract require amounts to be paid within 60 days of the date of sale. Trade payables are normally settled within 60 days of the date of purchase. The table below summarises the maturities of the Company' s undiscounted financial liabilities at 31 March 2015, based on contractual payment dates and current market interest rates. At 31 March 2015

Less than 3 months USD

Accounts payable and accruals Due to related parties Total

29,575 401,688 431!263

3 to 12 months USD

Total USD 29,575 401,688 431,263

Foreign currency risk Most of the Company's transactions are carried out in AED and USD. Exposures to currency exchange rates arise from the Company's overseas sales and purchases, which are primarily denominated in US dollars (USD). However, USD are fixed with the AED, hence no risk involved balances with regard to the USD.

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