1.1 CORPORATE INFORMATION

Raja Bahadur International Limited (“the Company”) is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 1956. The registered office of the Company is located at Hamam House, 3rd Floor, Ambalal Doshi Marg, Fort, Mumbai - 400001. The Company is principally engaged in Construction and Real Estate Development.

1.2 Basis of preparation of financial statements Compliance with Ind AS

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (“Ind AS”) as notified by Ministry of Corporate affairs pursuant to section 133 of the Companies Act, 2013 read with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and as amended thereafter until 31 March 2018.

The financial statements for the year ended 31 March 2018 are the first financial statements that the Company has prepared in accordance with Ind AS. For all periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (“Previous GAAP”) used for its statutory reporting requirement in India immediately before applying Ind AS as mentioned above. The financial statements for the year ended 31 March 2017 and the opening balance sheet as at 1 April 2016 have been restated in accordance with Ind AS for comparative information. Detailed explanation, reconciliation and information on effect on transition from Previous GAAP to Ind AS on the Company’s balance sheet, statement of profit and loss and statement of cash flow are provided in note no 2.1.

The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements including the preparation of the opening Ind AS balance sheet as at 1 April 2016 being the date oftransition to Ind AS.

Basis of Measurement

The financial statements have been prepared on a historical cost basis, except for certain financial instruments that require measurement at fair values in accordance with Ind AS.

Fair value is the price that would be received to sell or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Quoted(unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financials statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

Use of Estimates

The preparation of financial statements requires the management of the company to make estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements, disclosure of contingent liabilities as at the date of the financial statements, and the reported amounts of income and expenses during the reported period.

Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Accounting estimates could change from period to period. Any revision to accounting estimates is recognized prospectively in the current and future periods, and if material, their effects are disclosed in the financial statements. Actual results could differ from the estimates. Any difference between the actual results and estimates are recognized in the period in which the results are known/materialize.

Cash Flow Statement

The Cash Flow statement is prepared by indirect method set out in Ind AS 7- “Cash Flow Statements” and present cash flows by operating, investing and financing activities of the Company.

2.1 First time adoption of lnd AS

The Company has adopted Ind AS with effect from 01 April 2017 with comparatives being restated. Accordingly the impact oftransition has been provided in the opening reserves as at 01 April 2016 and as at 31 March 2017. This note explains the principal adjustments made by the Company on first time adoption of Ind AS.

First-time adoption - mandatory exceptions, optional exemptions

The Company has prepared the opening balance sheet as per Ind AS as of 1 April 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions availed by the Company as detailed below.

Mandatory exception on first time adoption

1. Estimates

The estimates at 1 April 2016 and 31 March 2017 are consistent with those made for the same dates in accordance with previous GAAP after adjustments to reflect any differences in accounting policies.

2. De-recognition of financial assets and financial liabilities

The Company has applied the de-recognition principles of financial assets and financials liabilities prospectively for transactions occurring on or after 1 April 2016.

3. Classification and measurement of financial assets/financial liabilities

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS. The company has availed the exemption of not applying the day one gain/loss in respect of financial assets and liability. This election has been applied consistently to all classes of financial assets and liabilities.

Exemptions availed on first time adoption of Ind AS 101

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions :

1. Business Combinations

Ind AS 103 Business Combinations has not been applied to business acquisition that occurred before April 01, 2015. Use of this exemptions means that the Previous GAAP carrying amounts of assets and liabilities that are required under Ind AS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with Ind AS. Assets and liabilities that do not qualify for recognition under Ind AS are excluded from the Opening Ind AS balance sheet. The Company did not recognise or exclude any previously recognised amounts as a result of Ind AS recognition requirements.

2. Deemed Cost

The Company has elected to continue with the carrying value of all its Property, Plant and Equipment and Intangible assets recognised as of 01 April 2016 (transition date) measured as per previous GAAP and use that carrying value as its deemed cost as of the transition date.

3. Lease

The Company has applied Appendix C of Ind AS 17 Determining whether an Arrangement contains a Lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date.

Footnotes to the reconciliation of equity and total comprehensive income:

i. Excess depreciation charged in the previous GAAP has been reversed on during the year from the retained earnings.

ii. Deffered tax impact on the depreciation reversed on the de recognition of the asset earlier.

iii. As per the previous GAAP books there is error in recognition of gratuity liability which is adjusted under the Ind AS balance sheet.

iv. Under Previous GAAR transaction costs incurred in connection with interest bearing loans and borrowings are amortized upfront and charged to profit or loss for the period. Under Ind AS, such expenditure are considered for calculating effective interest rate. The impact for the periods up-to the date of transition is adjusted with the retained earnings and further the same has been reversed during the year.

v. The company recognises Revenue from construction contracts based on the “Percentage of Completion” method. Percentage of completion is determined based on the costs incurred in related to total costs estimated. On transition to Ind AS, revenue recognised has undergone a change due to effects of the adjustments made and further the same has been reversed during the year.

vi. Under Previous GAAR there is short provision of gratuity created which is now rectified during the current year as per the requirements ofthe Ind AS 19 based on actuarial valuation.

vii. Excess depreciation charged on the de recognised asset pertaining to the current year has been reversed.

viii. Deferred tax recognised on the above adjustments.

ix. Under the Previous GAAR the same has been recognised through profit and loss but as per the Ind AS the same has been recognised through other comprehensive Income.

x. Income tax effect for the above has been recognised.

Footnotes to the reconciliation of equity:

i. Excess depreciation charged in the previous GAAP has been reversed on transition to Ind AS.

ii. Under Previous GAAR transaction costs incurred in connection with interest bearing loans and borrowings availed for the purpose of Qualifying assets were added to the cost of inventories during the period incurred. Under Ind AS, borrowing costs are accounted using the effective interest rate method and are added to the cost of inventories over the tenure of loan.

Hi. Under Previous GAAR transaction costs incurred in connection with interest bearing loans and borrowings are amortized upfront and charged to profit or loss for the period. Under Ind AS, such expenditure are considered for calculating effective interest rate. The impact for the periods up-to the date of transition is adjusted with the retained earnings.

iv. The company recognises Revenue from construction contracts based on the “Percentage of Completion” method. Percentage of completion is determined based on the costs incurred in related to total costs estimated. On transition to Ind AS, Revenue recognised has undergone a change due to effects of the adjustments made.

v. Deferred taxes recognised on above adjustments.

2.2 Changes in Cash Flow Statement for the year ended 31 March 2017

The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended 31st March, 2018 as compared with the previous GAAP

Terms/ rights attached to equity shares

Equity shares having a par value of par value Rs.100

- As to dividend

The Company has only one class of equity shares. The shareholders are entitled to receive dividend in proportion to amount of paid-up share capital held by them. The dividend proposed by the Board of Directors is subject to an approval of the shareholders in the ensuing Annual General Meeting, except in case of an interim dividend.

- As to voting

Each shareholder is entitled to vote in proportion to his share of paid up equity share capital of the Company, except in case of voting by show of hands where each shareholder present in person shall have one vote only. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

- As to repayment of capital

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to paid up capital.

Shares held by holding/Ultimate holding company and/or their subsidaries: The company does not have any holding Company.

Note: Information related to issue of shares in last five years

i) There are no shares reserved for issue under options or contracts/commitments for the sale of shares or disinvestment as at 31 March 2018 and 31 March2017.

ii) The Company has neither allotted any shares as fully paid-up pursuant to contracts without being received in cash or by way of bonus shares nor bought back any shares for the period of five years immediately preceding 31 March 2018 or 31 March 2017.

iii) The Company do not have any securities convertible into equity or redeemable preference shares as at 31 March 2018 and 31 March 2017.

Details of terms of repayment and securities provided in respect of secured term loans are as under Term Loans from Financial Institutions:

a) DHFL project Term loan - Karadi, Pune (Sanctioned : Rs. 2500 lakhs) : 31 March 2018 - Nil (31 March 2017 - Nil ) (01 April 2016 - Rs. 257.32 lakhs)

Primary Security:

Mortgage of the project land admeasuring 42900 sq.mtrs located at Sy.No. 30/1, Kharadi, Pune, owned by Raja Bahadur International Ltd, along with present and future construction thereon.

Effective Rate of interest: 29.12% p.a.

During the Financial Year 2016-17, the term loan has been repaid.

b) L& T Housing Finance Limited. (Sanctioned : Rs.3000 lakhs) : 31 March 2018 - Nil (31 March 2017 - Nil) (01 April 2016 - Rs.1959.64 lakhs)

Primary Security:

Mortgage ofthe project land admeasuring 1,02,021.21 sq. mtrs. located at Plot No 100 101 of T.RS. Sangamwadi, Kennedy Road, Pune owned by Raja Bahadur International Ltd., along with present and future construction thereon, excluding (a) Portion of land admeasuring 7,930.93 sq. mtrs. along with construction thereon to M/s Bramha Bajaj Hotels Ltd. (b) Portion of land adm. 18,587.31 sq mtrs. sold out to M/s Sai Constructions Pvt Ltd.

Effective Rate of interest: 24.73% p.a.

During the Financial Year 2016-17, the term loan has been repaid.

Term Loans from Bank:

c) Kotak Mahindra Bank Term Loan II (Sanctioned : Rs.234 lakhs) : 31 March 2018 - Rs.234 Lakhs (31 March 2017 - Nil) (01 April 2016 -NIL)

Primary Security:

Hypothecation of receivables from Amazon Transportation Services Pvt. Ltd and Ola Fleets Technologies Pvt Ltd.

Collateral Security:

Flat No. 501, Anand Colony, Prabhat Road, Pune - 411004 in the name of Raja Bahadur International Limited.

Effective Rate of Interest: 9.87% p.a.

d) Kotak Mahindra BankTerm Loan III (Sanctioned : Rs.203 lakhs) : 31 March 2018 -Rs.203 Lakhs (31 March 2017 - Nil) (01 April 2016

- NIL)

Primary Security:

Hypothecation of receivables from Amazon Transportation Services Pvt. Ltd and Ola Fleets Technologies Pvt Ltd.

Collateral Security:

Flat No. 501, Anand Colony, Prabhat Road, Pune - 411004 in the name of Raja Bahadur International Limited.

Effective Rate of Interest: 10.15% p.a.

e) Kotak Mahindra Prime Ltd (Sanctioned : Rs.24 lakhs) : 31 March 2018 -Rs.20.21 Lakhs (31 March 2017 - Nil) (01 April 2016 -Rs.6.27 Lakhs)

Primary Security:

Mortage against the vehicle Revolving Credit Facility

a) Anand Rathi Global Finance Ltd (Sanctioned : Rs.2800 lakhs) : 31 March 2018 - Rs. 2447.22 Lakhs (31 March 2017 - Rs. 2613.76 Lakhs) (01 April 2016 - NIL)

Primary Security:

Revolving Credit Facility is secured by exclusive charge by way of registered mortgage of the project land admeasuring 39,392.45 sq. mtrs., located at S. No. 30/1, Kharadi, Pune, along with the present & future construction thereon and hypothecation of receivables.

Effective Rate of interest: 21% p.a.

Note : The Company has provided personal guarantee of Mr. Shridhar Pittie, Managing Director of the Company for all the above mentioned borrowings.

Fair value estimation

lndAS113 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

Level 3 - inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The following table presents the Company’s assets and liabilities that are measured at fair value as at:

The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the company is the current bid price. These instruments are included in Level 1. instruments included in Level 1 comprise of investments in mutual funds.

The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. instruments included in Level 2 comprise of derivative assets taken for hedging purpose.

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

Note 3

Details of employee benefits as required by the Ind AS19 “Employee Benefits” as given below

(a) Employee benefits expense include contribution towards defined contribution plans as follow :

(b) Plan description : Gratuity and compensated absences plan

(i) Gratuity (Funded)

The Company makes annual contributions to the Gratuity Fund maintained by the trustees of the scheme, a funded defined benefit plan for qualifying employees. The scheme provides for lumpsum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 months. Vesting occurs only upon completion of 5 years of service, except in case of death or permanent disability. The present value of the defined benefit obligation and the related current service cost are measured using the projected unit credit method with actuarial valuation being carried out at balance sheet date by an independent actuary appointed by the Company.

(ii) Compensated absences (Non Funded)

The present value of the defined benefit obligation and the related current service cost are measured using the projected unit credit method with actuarial valuation being carried out at balance sheet date by an independent actuary appointed by the Company.

(c) Break down of plan assets : Gratuity

Note 4

Financial Risk Management Capital Management

The company’s capital management objective are :

- to ensure company’s ability to continue as a going concern.

- to maximise the return the capability to stakeholders through the optimization of the debt and equity balance.

Financial Risk Management Objectives

In the course of its business, the Company is exposed primarily to fluctuations in interest rates, Liquidity and credit risk which may impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

Market Risk : Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk such as equity price risk and commodity price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Future specific market movements cannot be normally predicted with reasonable accuracy.

Currency Risk : The Company does not have material foreign currency transactions. The company is not exposed to risk of change in foreign currency

Interest 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 has been monitoring the same on timely basis to mitigate the risk due to interest rate changes.

Other Price Risk : The Company is not exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes. The Company does not actively trade these investments.

Credit Risk Management

Credit risk is the risk of financial loss arising from counter party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Financial instruments that are primarily subject to concentration of credit risk principally consist of receivables, investments, cash and cash equivalents and other financial assets. None of the financial instruments of the company result in material concentration of credit risk.

Liquidity Risk

Liquidity risk refers to the risk when the company cannot meet its financial obligations. The objective of the liquidity risk is to maintain sufficient liquidity and ensure that the funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by monitoring forecast and actual cash flows, and by matching the maturity profiles offinancial assets and liabilities.

Note 5

I. NAMES OF RELATED PARTIES AND DESCRIPTION OF RELATIONSHIP

A. Key Management Personnel

1 Shri S. N. Pittie

2 Shri S. K. Jhunjhunwala

3 Shri Rohit N. Taparia

B. Where Control exists subisidary company

1 Raja Bahadurs Realty Limited

C. Where KMP exercise significant influence

1 Mukundlal Bansilal & Sons Private Limited

D. Relatives/Close Members of the family of key Management Personnel(with whom the Company had transactions)

1 Shri Manoharlal M. Pittie

2 Shri Umang S. Pittie

3 Shri Vaibhav S. Pittie

4 Smt. Malvika S. Pittie

The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to Key Managerial Personnel.

*As the liabilities for the gratuity are provided on an actuarial basis, and calculated for the Company as a whole rather than each of the individual employees, the said liabilities pertaining specifically to KMP are not known and hence, not included in the above table.