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Doing business in india

There are various models for starting a Business/Company in India, some of them useful for a foreign entity.

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Doing business in india

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  1. DOING BUSINESS IN INDIA

  2. DOING BUSINESS IN INDIA COMPANY FORMATION IN INDIA MAIN FORMS OF COMPANY/BUSINESS IN INDIA There are various models for starting a Business/Company in India, some of them useful for a foreign entity are as follows: Liaison Offices (LO) Foreign Investors willing to look into the Indian market and promote their business before start of commercial operations can establish a liaison office. The liaison office acts as channel of communication with head office. A liaison office is permitted to do promotional activities and networking in India. A liaison office is not allowed to do any business activity or earn income in India. Branch Office/Project Office Entities engaged in manufacturing/trading activities outside India can set up a branch office/ project office in India. A project office is a place to represent the interest of the foreign company executing a project in India for export/import of goods and rendering of services. Profits of a branch office are permitted to be remitted outside India subject to taxation in India. However, a branch office cannot engage itself in manufacturing/ processing activities in India. Subsidiary/Joint Venture in form of Private Limited/Limited Companies/Partnership Firms Foreign entities which are starting operations in India, including setting up production processes, can set- up wholly owned subsidiaries or JV with Indian or Foreign partners with the maximum flexibility to conduct business in India. Permitted Sources of funding could be Equity or Equity with Debt. SPECIFIC TAX CONCERNS RELATED TO ESTABLISHING A COMPANY Of the major tax laws applicable in India, those that impact a foreign entity are as follows: Central (Federal) 1. Income Tax [including withholding taxes, dividend distribution tax] 2. Excise Duty 3. Service Tax 4. Customs Duty State 1. VAT 2. Profession Tax LEGAL ISSUES RELATED TO ESTABLISHING A COMPANY Liaison Office: Prior approval of the Reserve Bank of India (RBI) is required and Intimation to Director General of Police of the State within 5 working days of entity becoming operational is required to be submitted. Branch Office: Prior approval of RBI required (other than activities in Special Economic Zones, or SEZs), Intimation to Director General of Police of the State within 5 working days of entity becoming Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  3. DOING BUSINESS IN INDIA Subsidiary / Joint Venture: No Prior approval required, Only post facto filings with RBI if comes under Automatic Route, Any other case Government of India (GOI)/Foreign Investment Promotion Board (FIPB) approval is required. CULTURAL CONCERNS RELATED TO ESTABLISHING A COMPANY 1. India is a land of different cultures – too aggressive or forceful or confronting behavior should be avoided 2. Both strongly held traditional values and emerging modern business practices are prevalent 3. Greet with a handshake or namaste 4. Always use formal titles (Mr., Dr., Sir, Madam) when greeting for first time 5. Punctuality – be prepared for delays in appointments, particularly in Government offices 6. Most Indians are reluctant to say no directly - try to understand the message behind the words 7. Get to know your counterpart as a person and gain his trust 8. Be willing to share a cup of tea/coffee and indulge in small talk before getting down to the main business 9. Do not be offended at personal questions OTHER COUNTRY-SPECIFIC ISSUES RELATED TO ESTABLISHING A COMPANY 1. Prohibited Sectors Certain sectors are prohibited for investment by a Non resident Entity including: Retail Trading (except single brand and online trading for food products), Atomic Energy, Lottery Business, Gambling & Betting; Real estate business or construction etc.; chit fund, Agriculture (excluding floriculture, horticulture, seed development, animal husbandry, pisciculture, cultivation of vegetables & mushrooms under controlled conditions, services related to agro and allied sectors) and plantations (other than tea plantations) 2. Foreign Direct Investment (FDI) approval is required For sectors like - Petroleum sector (except refining), LNG/Gas pipelines, Commodity Exchange Infrastructure Companies in the Securities Market, Credit Information companies, Investment companies in infrastructure & services, Defence & Strategic Industries, Atomic Minerals etc. 3. Automatic Approval 100% or below investment is permitted under automatic route for sectors not covered in 2 above. 4. Other Legal Requirements If you want to set up a business in India, you will be required to obtain registration with various authorities and obtain various permits like construction permits, Personal Account Number (PAN), Tax Deduction and Collection Account Number (TAN), registration under shop and establishment Act, Social Security registration, etc. 5. Recent Policy Measure a. 100% FDI under automatic route permitted in Brownfield Airport projects b. FDI limit for Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Service raised to 100%, with FDI upto 49% permitted under automatic route and FDI beyond 49% through Government approval c. 100% FDI under Government route for retail trading, including through e-commerce, has been permitted in respect of food products manufactured and/or produced in India d. 100% FDI allowed in Asset Reconstruction Companies under the automatic route e. For establishment of branch office, liaison office or project office or any other place of business in India if the principal business of the applicant is Defence, Telecom, Private Security or Information and Broadcasting, approval of Reserve Bank of India would not be required in cases where FIPB approval or license/permission by the concerned Ministry/Regulator has already been granted Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  4. DOING BUSINESS IN INDIA PERMANENT ESTABLISHMENT IN INDIA: BRANCH OR SUBSIDIARY? DEFINITION OF A PERMANENT ESTABLISHMENT The Indian Income Tax Act defines permanent establishment as follows: A permanent establishment includes a fixed place of business through which the business of the enterprise is wholly or partly carried on and does not include liaison office. DEFINITION AND MAIN DIFFERENCES BETWEEN A BRANCH AND A SUBSIDIARY Definition of Subsidiary An incorporated entity formed and registered under the Companies Act, 2013. It is a distinct legal entity, apart from its shareholders. Distinguishing features of a Subsidiary: 1. Company form of organization and separate legal entity. 2. The liability of the Parent company is limited to the extent of its shareholding in the Wholly Owned Subsidiary (WOS). The assets of the foreign company are not subject to any attachments 3. Minimum two directors are required, one of them being Indian. 4. Quarterly board meeting & annual meeting of shareholder is compulsory in every year. 5. Subsidiary is not treated as permanent establishment of foreign company, its income is taxed based on residential status. 6. Transfer of shares is restricted, and deposits may not be accepted from the public. 7. Only activities covered and approved in the Memorandum of Association are permitted. Definition of Branch Office Companies incorporate outside India and engaged in manufacturing or trading activities are allowed to setup Branch Offices with specific approval of the Indian Central Regulatory Bank (RBI). Distinguishing features of a Branch: 1. It is an extension of Head Office with right to accrue income in India and has no separate legal standing of its own. 2. It can export/import goods, render professional/consultancy and information technology services, carry out research work in line with parent activities, promote technical & financial collaboration, represent the parent company in India, act as buying/selling agent, and render technical support for the products of the parent company. 3. The liability of the Branch is unlimited. The assets of the parent company are at risk of attachment in case the liabilities of the branch exceeds its assets. 4. Branch offices are managed by an Authorized Representative, resident in India (Country Manager). 5. From a taxation perspective, a branch of a foreign company is deemed to be a ‘business connection’ of its parent, and thereby constitutes a taxable permanent establishment of the foreign enterprise. 6. The entire expenses in India will be met either out of the funds received from head office through normal banking channels or through income generated by it in India. 7. It can not expand its activities or undertake any new trading, commercial, or industrial activity other than that is expressly approved by the RBI. Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  5. DOING BUSINESS IN INDIA TAX AND ACCOUNTING OBLIGATIONS 1. A Subsidiary Company incorporated in India is subject to minimum base rate of tax @ 30.9% (In case of turnover below 5 Crore base rate will be 29.87%), , whereas a Branch office is liable to pay minimum base rate of tax @ 41.2% 2. Dividends can be paid after payment of Dividend Distribution Tax @ 18.176% by a subsidiary, whereas dividend distribution is free for a branch office. 3. Tax Obligations applicable are: Income Tax, withholding taxes, Service Tax, Professional Tax, custom duty etc. for branches as well as subsidiaries. 4. Provisions of Transfer pricing are applicable for branches as well as subsidiaries. 5. Annual Accounts of Branches as well as subsidiaries are required to be audited by a Chartered Accountant of India. REGISTRATION FORMALITIES Branch Office (i) Parent company must have a profit making track record during the immediately preceding five years and net worth of not less than USD $100,000 or its equivalent. (ii) Required to Obtain PAN/TAN, Service tax code, Shops and Establishment Act Registration, Importer Export Code, VAT, Registrar of Companies (ROC) Registration. (iii) Normally registration is allowed for a period of three years. Subsidiary (i) A private company is required to be incorporated with a minimum authorized & paid up capital as may be prescribed and minimum two subscribers. No requirement of track record of parent company as shareholder. (ii) Required to Obtain PAN/TAN, Service tax code, Shops and Establishment Act Registration, Importer Export Code, VAT. (iii) Once registration is granted it can do business, until the company decides to close down its operations. STANDARD LEGAL OBLIGATIONS AND FORMALITIES FOR A BRANCH BRANCH OFFICE A. Filings: 1. Yearly filings include the filing of audited accounts of Branch Office, World Accounts with Registrar of Companies 2. Yearly submission of Activity Certificate with RBI and AD Bank 3. Annual return with the Income Tax Department 4. Filing of Quarterly/ Monthly TDS returns, VAT, Service Tax Returns B. Other Legal Obligations/Provisions: 1. The Branch Office will not accept any deposits in India 2. The commission earned by the Branch Office from parties abroad for any agency business will be repatriated to India through normal banking channels. 3. The Branch office shall not undertake any retail trading activity 4. A Branch Office is not allowed to carry out manufacturing or processing activities in India, directly or indirectly. 5. The Branch Office is not allowed to borrow locally unless the prior approval of RBI is given. Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  6. DOING BUSINESS IN INDIA HOW TO HIRE MY FIRST EMPLOYEE IN INDIA India has around 487 million workers, the second largest after China. Indian young workforce is growing rapidly and increasing energy in Indian Markets. Despite having second largest workforce in India manpower is economical. MAIN LEGAL STEPS TO FOLLOW TO HIRE A FIRST EMPLOYEE Hiring first employee in India is an easy task in India. A. For domestic employee, an entity is required to take care of two aspects only, which are as follow: 1. Compliance with Minimum Wages, which is at present around USD $3,000 Per Annum. 2. Compliance with provisions of withholding taxes applicable in India. B. Hiring a Foreign resident is subject to fulfillment of certain conditions. Some of them are as follows: 1. Employee is required to obtain an employment visa. 2. Employment visas will not be granted for jobs for which qualified Indians are available. Employment visas will also not be granted for routine, ordinary, or secretarial/clerical jobs. 3. Minimum Wages prescribed are USD $25,000 Per Annum. Other Statutory Compliances In India, labour laws related to social security of employees becomes effective when there are at least 10 employees in the entity. Some of the Labour laws applicable in India are as follows: 1. Provident Fund (Social Security) 2. Gratuity 3. Employees State Insurance 4. Professional Tax and 5. Contribution to Labour Welfare funds etc. DESIGN AND CONTENTS OF AN EMPLOYMENT CONTRACT The Employment contract is generally quite flexible and is made to cover the needs of an entity. It will generally cover the following salient features: 1. Period of employment 2. Areas of work and reporting responsibility 3. Work location and working hours per week 4. Compensation 5. Vacation and leaves 6. Compliance with Company Policies and Laws 7. Confidentiality 8. Non compete clause 9. Termination and Notice period Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  7. DOING BUSINESS IN INDIA CAN SOMEBODY DO BUSINESS FOR ME AND NOT BE AN EMPLOYEE? Yes, it is permitted in India for a person to work an entity and not being employee. These are the ways a person can be hired to work: 1. Consultant/Contractual Worker: A person can be engaged directly act as a consultant or contractual worker for an organization without being an employee. Here liability for withholding taxes shall trigger above a particular threshold. 2. As an Agent to Foreign Entity: A person can work as an agent of foreign entity. An agent does all acts on behalf of the principal, and the principal is bound by the acts of agent for which an authority is granted to the agent. 3. Outsourced Workers: An entity can hire a manpower supply agency, which in turn will select workers based on requirement of entity and engage them with the business entity. These workers work under control and supervision of the business entity. Normally all the statutory compliances in this regard are taken care by the manpower supply agency; failing that, the entity shall be liable. Here the entity is responsible for the supervision and direction of such workers. 4. Outsourcing of Services: Many services can be outsourced or done by freelancers. This work may include accounting, manufacturing, website design, marketing ,and public relations. Here the work responsibility also lies with the outsourced agency. Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  8. DOING BUSINESS IN INDIA HOW TO READ FINANCIAL STATEMENTS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Balance sheet as at 31st March, 2015 Rs. in million Particulars 31st March, 2015 Note No. 31st March, 2014 Equity and A Liabilities 1 - - - - - 3 4 Shareholders' - funds (a) Share capital (b)Reserves and surplus 2 - - - - - 5 6 - 3 Non-Current Liabilities (a) Other long-term liabilities (b)Long-term provisions - - - - - - - 7 8 9 - Current Liabilities (a) Trade payables (b)Other current liabilities (c) Short term provisions - - B 1 TOTAL - - - - - - - - - - - - - - - 10A 10B Assets Non-current assets (a) Fixed assets (i) Tangible assets (ii) Intangible assets (iii) Capital work-in-progress 11 12 13 - 2 - - - - - - - - - - - - - 14 15 16 17 18 19 (b)Non-current investments (c) Deferred tax assets (net) (d) Long-term loans and advances Current Assets (a) Current Investments (b)Inventories (c) Trade receivables (d) Cash and cash equivalents (e)Short-term loans and advances (f)Other current assets - - - C - TOTAL See accompanying notes forming part of thefinancial statements In terms of our report attached For XYZ Chartered Accountants For and on behalf of the Board of Directors Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided. Name of Partner Partner Name of Chairman Chairman Name of MD & CEO Managing Director and CEO Name of Director Director Name of Independent Director Independent Director Independent Director Name of Independent Director Name of CS Company Secretary Place: Place:

  9. ILLUSTRATIVE FINANCIALS LIMITED Balance sheet as at 31st March, 2015 Rs. in million Particulars 31st March, 2015 Note No. 31st March, 2014 Equity and A Liabilities 1 - - - - - 3 4 Shareholders' - funds (a) Share capital (b)Reserves and surplus 2 - - - - - 5 6 - 3 Non-Current Liabilities (a) Other long-term liabilities (b)Long-term provisions - - - - - - - 7 8 9 - Current Liabilities (a) Trade payables (b)Other current liabilities (c) Short term provisions - - B 1 TOTAL - - - - - - - - - - - - - - - 10A 10B Assets Non-current assets (a) Fixed assets (i) Tangible assets (ii) Intangible assets (iii) Capital work-in-progress 11 12 13 - 2 - - - - - - - - - - - - - 14 15 16 17 18 19 (b)Non-current investments (c) Deferred tax assets (net) (d) Long-term loans and advances Current Assets (a) Current Investments (b)Inventories (c) Trade receivables (d) Cash and cash equivalents (e)Short-term loans and advances (f)Other current assets - - - C - DOING BUSINESS IN INDIA TOTAL See accompanying notes forming part of thefinancial statements In terms of our report attached For XYZ Chartered Accountants For and on behalf of the Board of Directors Name of Partner Partner Name of Chairman Chairman Name of MD & CEO Managing Director and CEO Name of Director Director Name of Independent Director Independent Director Independent Director Name of Independent Director Name of CS Company Secretary Place: Date: dd/mm/yyyy Place: Date: dd/mm/yyyy Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  10. DOING BUSINESS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Statement of Profit and Loss for the year ended 31st March, 2015 Rs. in million except Earnings per Share For the year ended 31st March, 2015 Particulars Note No. For the year ended 31st March, 2014 Revenue from operations Other income Total revenue (I+II) 20 21 - - - - - I. II. III. 0 Expenses (a) Employee benefits expense (b) Subcontracting cost (c) Finance costs (d) Depreciation and Amortization expense (e) Other expenses Total expenses IV. 22 - - 23 10 24 - - - - - Profit before tax V. Tax expenses: (a) Current tax (b) Deferred tax VI. - - - - VII. Profit for the year Earnings per Equity share (Face value of Rs. yy/- each) (a) Basic (b) Diluted VIII. See accompanying notes forming part of the financial statements IX In terms of our report attached For XYZ LLP Chartered Accountants For and on behalf of the Board of Directors Name of Partner Partner Name of Chairman Chairman Name of MD & CEO Managing Director and CEO Name of Director Director Name of Independent Director Independent Director Name of Independent Director Independent Director Name of Company Secretary Company Secretary Place: Date: dd/mm/yyyy Place: Date: dd/mm/yyyy Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  11. DOING BUSINESS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Rs. in million For the year ended 31st For the year ended 31st A] CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax - - Adjustments for: Depreciation and amortization (Profit)/loss on sale of fixed assets Interest Expense Interest income Dividend income Unrealized foreign exchange difference (net) Employee stock compensation cost Reversal of provision no longer required Profit on sale of Current Investment - Operating Profit before working capital changes Adjustments for changes in working capital: Increase/ (Decrease) in Trade payable, other liabilities and provisions Increase / (Decrease) in Trade receivables Increase / (Decrease) in Other assets and loan advances Cash generated from operations Direct Taxes Paid Net cash flows from operating activities (A) B] CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Fixed Assets Interest Received Dividend Received Purchase of Investments Sale of Investments Sale of Fixed Assets Loan given to Subsidiary Net Cash flows from/(used in) investing activities (B) C] CASH FLOWS FROM FINANCING ACTIVITIES Repayment of borrowings Interest Paid Net cash flows from/(used in) financing activities (C) - - D] Exchange differences on translation of foreign currency cash and cash equivalents Net Increase / (decrease ) in cash and cash equivalents (A + B+ C + D) Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  12. DOING BUSINESS IN INDIA Repayment of borrowings Interest Paid Net cash flows from/(used in) financing activities (C) C] CASH FLOWS FROM FINANCING ACTIVITIES D] Exchange differences on translation of foreign currency cash and cash equivalents Net Increase / (decrease ) in cash and cash equivalents (A + B+ C + D) Cash & cash equivalents at the end of year (refer note 1 below) Cash & cash equivalents at the beginning of the year Net Increase / (decrease ) in cash and cash equivalents Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  13. DOING BUSINESS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Rs. in million For the year ended 31 For the year ended Particulars Note 1: Cash and cash equivalents include: Cash on hand Remittances in transit Balance with banks -In current accounts -In deposit accounts - - Total Cash and cash equivalents - Refer Note 17 In terms of our report attached For XYZ LLP Chartered Accountants For and on behalf of the Board of Directors Name of Partner Partner Name of MD & CEO Managing Director and CEO Director Name of Director Name of Chairman Chairman Name of Independent Director Name of Independent Director Independent Director Name of Company Secretary Company Secretary Independent Director Place: Date: dd/mm/yyyy Place: Date: dd/mm/yyyy Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  14. DOING BUSINESS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Notes to the financial statements 1 General Information-(Company information to be disclosed i.e. Date of Incorporation & Business profile ) 2Summary of significant accounting policies- 2.1 Basis of preparation- These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India on accrual basis under the historical cost convention, except for certain financial instruments which are measured at fair value. These financial statements have been prepared in accordance with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act")/ Companies Act, 1956 ("the 1956 Act"), as applicable in accordance with the accounting principles generally accepted in India. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year. Accounting policy is to be given in respect of the followings given below-: Tangible Assets Intangible Assets Borrowing Costs Impairment of Assets Investments Inventories Foreign currency translation Revenue Recognition Other Income Employee Benefits Employee Share-based Payments Current and deferred tax Provisions and Contingent Liabilities Leases Segment Reporting Cash and Cash Equivalents Earnings per Share Amalgamation in the nature of merger Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  15. DOING BUSINESS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial StatementsNote 3 - Share capital: As at 31st March, 2015 Number 31st March, 2014 Number Particulars Rs. in million Rs. in million (a) Authorized : Equity shares of Rs. yy each Series A X % fully convertible non-cumulative preference shares of Rs. y each xx yy - - xx yy - - (b) Issued, subscribed and fully paid up : Equity shares of Rs. y each fully paid up - - - - Total - - - - Notes: (i) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the year: Particulars As at 31st March, 2015 Number 31st March, 2014 Number Rs. in million Rs. in million Equity Shares Closing Balance - - - - (ii) Terms, rights and restrictions attached to: Equity Shares: The Company has equity shares having par value of Rs. y per share. Each holder of equity shares is entitled to one vote per share. The Company declares and paysdividends in Indian Rupees. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company,after distribution of all preferential amount. The distribution will be in proportion to the equity shares held by the shareholders. Series A X % fully convertible non-cumulative preference shares: The Company has class of fully convertible non-cumulative redeemable preference shares having a par value of Rs. y per share. Non-cumulative redeemablepreference shares carry cumulative dividend @ X % per annum. (iii) Details of shares held by the holding company Particulars Number of Shares As at 31st March, 2015 As at 31st March, 2014 - - ABC Limited (iv) Details of equity shares held by shareholder holding more than 5%: Name of shareholder As at 31st March, 2015 No of Shares As at 31st March, 2014 No of Shares % of Holding % of Holding ABC Limited PQR Limited SPR Private Limited xxx xx xx xxx xx xx 70.00% 20.00% 6.00% 70.00% 20.00% 6.00% (v)Shares reserved for issue under options Equity shares reserved for issue under the employees stock option plan (ESOP) of the Company Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  16. DOING BUSINESS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements Note 4 - Reserves and surplus: Rs. in million As at Particulars 31st March, 2015 31st March, 2014 Securities premium - - account Hedging - - - - Reserve Opening balance On initial adoption of AS-30 Less: Transferred to Statement of Profit and Loss on occurrence of forecasted hedge transactions Add/(less): change in fair value of forward contracts (net) Closing balance - - - - - - - - - - Share options outstanding account Opening balance Add: amortized amount of stock compensation cost (net) Less: transfer to surplus in the statement of Profit and Loss on account of cancellation/forfeiture of options Closing balance - - - - - - - - - - - - Surplus in the statement of profit and loss Opening balance Add: transfer on account of ESOP unexercised Add: profit for the year Less: on initial adoption of AS-30 Closing balance - - - - Total Note 5 - Other long-term liabilities: Rs. in million As at Particulars 31st March, 2015 31st March, 2014 Unearned revenue - - - - - - - - Total Note 6 - Long-term provisions: Rs. in million Particulars As at 31st March, 2015 31st March, 2014 Provision for employee benefits -Provision for gratuity (Refer Note 25) -Provision for compensated absences - - - - Total Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  17. DOING BUSINESS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements Note 7 - Trade payables: Rs. in million As at Particulars 31st March, 2015 0 Trade payables other than Accrued Salaries and Benefits - - Accrued Salaries and Benefits - - Total - - Note 8 - Other current liabilities: Rs. in million As at Particulars 31st March, 2015 31st March, 2014 Current maturities of long-term debt (Refer note 5) Interest accrued and due on borrowings Income received in advance Unpaid dividends [Refer note (a) below] Application money received for allotment of securities and due for refund (including interest due) Advances from customers Employee benefits payable Statutory dues including provident fund and tax deducted at source Unamortized premium on forward contract - - - - - - - - - - - - - - - - - - - - Total Note 9 - Short term provisions: Rs. in million Particulars As at 31st March, 2015 31st March, 2014 Provision for employee benefits -Provision for gratuity -Provision for compensated absences - - Provision for income tax (net of taxes paid) Provision for warranties Total - - Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  18. DOING BUSINESS IN INDIA B. Intangible Assets A. Tangible Assets Note 10 - Fixed assets Notes forming part of the Financial Statements ILLUSTRATIVE FINANCIALS LIMITED (Previous year) Intellectual property rights (Previous year) Computer software (Previous year) Improvement to leased premises (Previous year) Office equipments (Previous year) Furniture and fixtures (Previous year) Plant and equipments (Other than internally generated) Particulars Previous Year Previous year Total Total 1st April, 2014 As at - - - during the Additions year - - - Gross Block during the year Disposals - - - 31st March, 2015 As at - - - 1st April, 2014 As at - - - Accumulated Depreciation / Amortization For the year - - - for the year On disposal - - - 31st March, 2015 As at - - - 31st March, 2015 As at - - - Net Block 31st March, 2014 Rs. in million As at - - Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  19. DOING BUSINESS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements Note 11 - Non-current investments: Rs. in million As at Particulars 31st March, 2015 0 TRADE (UNQUOTED/QUOTED) Investments in Instruments (At Cost) ABC Limited A wholly owned subsidiary incorporated in --- Country xx (Previous year: x) Common Stock of USD x each, fully paid up - - Total - - - - - - Gross amount of unquoted investments Note 12 - Deferred tax assets (net): Rs. in million As at Particulars 31st March, 2015 31st March, 2014 Break up of deferred tax assets Nature of timing differences - Impact of expenditure charged to the Statement of profit & loss but allowed for tax purposes on payment basis - Provision for gratuity and compensated absences - Provision for doubtful debts and advances - Provision for depreciation - Provision for incentives - - - - - - - - - - - - Total Note 13 - Long-term loans and advances: Rs. in million Particulars As at 31st March, 2015 31st March, 2014 (Unsecured, considered good unless otherwise stated) Loans and advances to related parties (Refer Note 28) Dues from subsidiary companies Loan to subsidiary Capital advances Considered good Considered doubtful Provision for doubtful advances Security deposits Considered good Considered doubtful Provision for doubtful security deposits Advance income taxes (net of provisions) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Prepaid expenses Total Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided. UCC & ASSOCIATES LLP (INDIA) March2015 11

  20. DOING BUSINESS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements Note 14 - Current Investments: Rs. in million Particulars As at 31st March, 2014 31st March, 2015 Investments in Mutual Funds (unquoted) (Non-trade) (at Cost or NRV whichever is lower) x (Previous year: xx ) units of Rs.xy (Previous year: xx) - UTI- Treasuryadvantage fund-institutional plan-Growth x (Previous year: xx ) units of Rs. xy (Previous year: xx) - Baroda PioneerLiquid Fund plan A-Daily Dividend-Reinvestment Total Note 15 - Inventories: Rs. in million As at Particulars 31st March, 2014 31st March, 2015 (Valued at lower of cost and net realizable value)Stores and spares Loose tools Packing material Raw materials (includes in transit: Rs.x, March 31, 2014: Rs. y)Work-in progress Finished goods Traded goods Total Note 16 - Trade receivables: Rs. in million As at Particulars 31st March, 2015 31st March, 2014 Trade Receivables (Unsecured)Over Six Months - Considered good* - Considered doubtful Others - Considered good** - Considered doubtful - - - - Total - - - - Less: Provision for doubtful trade receivables - - Total - - Note 17 - Cash and cash equivalents: Rs. in million Particulars As at 31st March, 2014 31st March, 2015 Cash on hand Remittances in transitBalances Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided. with banks: - In current accounts - In deposit accounts Of the above, the balances that meet the definition of Cash and cash equivalents asper AS 3 Cash Flow Statements is ---- UCC & ASSOCIATES LLP (INDIA) March2015 12

  21. ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements Note 14 - Current Investments: Rs. in million Particulars As at 31st March, 2014 31st March, 2015 Investments in Mutual Funds (unquoted) (Non-trade) (at Cost or NRV whichever is lower) x (Previous year: xx ) units of Rs.xy (Previous year: xx) - UTI- Treasuryadvantage fund-institutional plan-Growth x (Previous year: xx ) units of Rs. xy (Previous year: xx) - Baroda PioneerLiquid Fund plan A-Daily Dividend-Reinvestment Total Note 15 - Inventories: Rs. in million As at Particulars 31st March, 2014 31st March, 2015 (Valued at lower of cost and net realizable value)Stores and spares Loose tools Packing material Raw materials (includes in transit: Rs.x, March 31, 2014: Rs. y)Work-in progress Finished goods Traded goods Total Note 16 - Trade receivables: Rs. in million As at Particulars 31st March, 2015 31st March, 2014 Trade Receivables (Unsecured)Over Six Months - Considered good* - Considered doubtful Others - Considered good** - Considered doubtful - - DOING BUSINESS IN INDIA - - Total - - - - Less: Provision for doubtful trade receivables - - Total ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements - - Note 17 - Cash and cash equivalents: Note 18 - Short-term loans and advances: Rs. in million Rs. in million Particulars Particulars As at As at 31st March, 2014 31st March, 2014 31st March, 2015 31st March, 2015 (Unsecured, considered good unless otherwise stated) Cash on hand Remittances in transitBalances with banks: - In current accounts - In deposit accounts Of the above, the balances that meet the definition of Cash and cash equivalents asper AS 3 Cash Flow Statements is ---- Notes forming part of the Financial Statements Considered doubtful Loans and advances to related parties Due from subsidiary company Other Loans and advances - Loans and advances to employees - Considered good - - - - Note 18 - Short-term loans and advances: Provision for doubtful advances Rs. in million UCC & ASSOCIATES LLP (INDIA) - Prepaid expenses March2015 31st March, 2014 12 Particulars As at 31st March, 2015 - Advance to suppliers (Unsecured, considered good unless otherwise stated) - Considered good - Considered doubtful - 0 - - - Loans and advances to related parties Due from subsidiary company Provision for doubtful advances Other Loans and advances - Loans and advances to employees - Considered good Considered doubtful - Balance with Government authorities - Others Total - - - - Provision for doubtful advances - - - Prepaid expenses Note 19 - Other current assets: - Advance to suppliers - Considered good - Considered doubtful Rs. in million Particulars As at 31st March, 2015 31st March, 2014 - 0 - - - Provision for doubtful advances Unbilled Revenue (Net of Provision of Rs. xx million (Previous year: Rs. Interest accrued Fair values of foreign exchange forward contracts - - - - - - Balance with Government authorities - Others - Total - - Total - - Note 20 - Revenue from operations: Note 19 - Other current assets: Rs. in million Rs. in million For the year ended 31st March 2014 Particulars For the year ended 31st March 2015 Particulars As at 31st March, 2015 31st March, 2014 Unbilled Revenue (Net of Provision of Rs. xx million (Previous year: Rs. Interest accrued Fair values of foreign exchange forward contracts Traded goods Sale of Services Other Operating Revenue Scrap Sales Less: Excise Duty - - - - - Sale of products Finished goods - - - Total - - - Note 20 - Revenue from operations: - - Rs. in million For the year ended 31st March 2014 For the year ended 31st March, 2014 Total Particulars For the year ended 31st March 2015 For the year ended 31st March, 2015 Note 21 - Other income: Particulars Sale of products Finished goods Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided. Traded goods Sale of Services Other Operating Revenue Scrap Sales Less: Excise Duty Net profit on sale of fixed assets Claims received from Insurance company Share of profits from partnership firm Lease rentals Liabilities written back to the extent no longer required Miscellaneous Income Interest Income Dividend income From Subsidiaries - - - - - Total - - - Note 21 - Other income: - - Particulars For the year ended 31st March, 2015 For the year ended 31st March, 2014 - - - Total - Interest Income Dividend income From Subsidiaries Net profit on sale of fixed assets Claims received from Insurance company Share of profits from partnership firm Lease rentals Liabilities written back to the extent no longer required Miscellaneous Income - - - - - - - - Total -

  22. Notes forming part of the Financial Statements Note 18 - Short-term loans and advances: Rs. in million Particulars As at 31st March, 2014 31st March, 2015 (Unsecured, considered good unless otherwise stated) Loans and advances to related parties Due from subsidiary company Other Loans and advances - Loans and advances to employees - Considered good Considered doubtful - - - - Provision for doubtful advances - Prepaid expenses - Advance to suppliers - Considered good - Considered doubtful - 0 - - - Provision for doubtful advances - Balance with Government authorities - Others Total - - DOING BUSINESS IN INDIA Particulars Note 19 - Other current assets: Rs. in million As at 31st March, 2015 31st March, 2014 Unbilled Revenue (Net of Provision of Rs. xx million (Previous year: Rs. Interest accrued Fair values of foreign exchange forward contracts ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements - - - - - - - - Total Note 20 - Revenue from operations: Note 18 - Short-term loans and advances: Rs. in million For the year ended 31st March 2014 Rs. in million Particulars Particulars For the year ended 31st March 2015 As at 31st March, 2014 31st March, 2015 (Unsecured, considered good unless otherwise stated) Sale of products Finished goods Traded goods Sale of Services Other Operating Revenue Scrap Sales Less: Excise Duty - Loans and advances to employees - Considered good Considered doubtful Loans and advances to related parties Due from subsidiary company Other Loans and advances - - - - - Total Note 21 - Other income: - - - - Particulars For the year ended 31st March, 2015 For the year ended 31st March, 2014 Provision for doubtful advances - Prepaid expenses Interest Income Dividend income From Subsidiaries Net profit on sale of fixed assets Claims received from Insurance company Share of profits from partnership firm Lease rentals Liabilities written back to the extent no longer required Miscellaneous Income - Balance with Government authorities - Others ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements - Advance to suppliers - Considered good - Considered doubtful - - - - 0 - - - Provision for doubtful advances - - - - - - Total Total Note 20 - Revenue from operations: Note 22. Employee benefits expense: - - Rs. in million For the year ended 31st March 2014 Rs. in million Particulars Particulars For the year ended 31st March 2015 For the year ended 31st March, 2015 For the year ended 31st March, 2014 Note 19 - Other current assets: Rs. in million Particulars As at - - - - - Sale of products Finished goods Traded goods Sale of Services Other Operating Revenue Scrap Sales Staff welfare expenses Salaries, wages and bonus Contribution to provident and other funds Gratuity Employee stock compensation cost - - - - - 31st March, 2015 - 31st March, 2014 Unbilled Revenue (Net of Provision of Rs. xx million (Previous year: Rs. Interest accrued Fair values of foreign exchange forward contracts Less: Excise Duty - - - - - - - - - - Total - - Total - - Total Note 21 - Other income: Note 23. Finance costs: Particulars For the year ended 31st March, 2015 For the year ended 31st March, 2014 Note 20 - Revenue from operations: Rs. in million For the year ended 31st March 2014 Particulars Particulars For the year ended 31st March 2015 For the year ended 31st For the year ended 31st Interest Income Dividend income From Subsidiaries Net profit on sale of fixed assets Claims received from Insurance company Share of profits from partnership firm Lease rentals Liabilities written back to the extent no longer required Miscellaneous Income translation Commitment charges on borrowings Interest Expense: Interest on long term borrowings Interest on shortfall of advance tax Other borrowing costs Applicable net loss on foreign currency transactions and Sale of products Finished goods Traded goods Sale of Services Other Operating Revenue Scrap Sales Less: Excise Duty Others Net (gain)/loss on foreign currency transactions and translations (considered as finance costs) - - - - - - - - - - - - - - - - - - - - - - - - - - - Total - Total - Note 21 - Other income: Particulars For the year ended 31st March, 2015 For the year ended 31st March, 2014 - - Total Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided. Interest Income Dividend income From Subsidiaries Net profit on sale of fixed assets Claims received from Insurance company Share of profits from partnership firm Lease rentals Liabilities written back to the extent no longer required Miscellaneous Income Rent Repairs to buildings Repairs to machinery Repairs - others Insurance Rates and taxes Travelling Expenses Directors Fees Payment to Auditors As auditor: Audit Fee Tax Audit Fee Taxation matters Company law matters Management services Other services Reimbursement of Expenses Expenditure towards Corporate Social Responsibility activities Professional fees Printing and Stationery Communication Expenses Provision for diminution in the value of long term investments Provision for mark to market losses on derivatives Note 24. Other expenses: Rs. in million Particulars For the year ended 31st For the year ended 31st - - - Consumption of stores and spare parts Excise Duty Power and fuel - - - - - Total - - - - - - Total

  23. ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements Note 22. Employee benefits expense: Rs. in million Particulars For the year ended 31st March, 2015 For the year ended 31st March, 2014 DOING BUSINESS IN INDIA Salaries, wages and bonus Contribution to provident and other funds Gratuity Employee stock compensation cost Staff welfare expenses - - - - - - - - - - ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements - - Total Note 23. Finance costs: Note 18 - Short-term loans and advances: Rs. in million Particulars As at Particulars For the year ended 31st For the year ended 31st 31st March, 2014 31st March, 2015 (Unsecured, considered good unless otherwise stated) Interest Expense: Interest on long term borrowings Interest on shortfall of advance tax Other borrowing costs Applicable net loss on foreign currency transactions and translation Commitment charges on borrowings Others Net (gain)/loss on foreign currency transactions and translations (considered as finance costs) Provision for doubtful advances - - - - - - - - - - - - - - Loans and advances to related parties Due from subsidiary company Other Loans and advances - Loans and advances to employees - Considered good Considered doubtful - - - - - - Prepaid expenses - - Total - Advance to suppliers Note 24. Other expenses: - Considered good - Considered doubtful Rs. in million - - - - Particulars For the year ended 31st For the year ended 31st 0 Provision for doubtful advances - Balance with Government authorities - Others Consumption of stores and spare parts Excise Duty Power and fuel Rent Repairs to buildings Repairs to machinery Repairs - others Insurance Rates and taxes Travelling Expenses Directors Fees Payment to Auditors As auditor: Audit Fee Tax Audit Fee Taxation matters Company law matters Management services Other services Reimbursement of Expenses Expenditure towards Corporate Social Responsibility activities Professional fees Printing and Stationery Communication Expenses Provision for diminution in the value of long term investments Provision for mark to market losses on derivatives Traded goods Sale of Services Other Operating Revenue Scrap Sales Less: Excise Duty Total - - Note 19 - Other current assets: Rs. in million Particulars As at 31st March, 2015 31st March, 2014 Unbilled Revenue (Net of Provision of Rs. xx million (Previous year: Rs. Interest accrued Fair values of foreign exchange forward contracts - - - - - - - - Total Note 20 - Revenue from operations: Rs. in million For the year ended 31st March 2014 Particulars For the year ended 31st March 2015 - - Sale of products Finished goods - - - Total - - - - - Total Note 21 - Other income: Particulars For the year ended 31st March, 2015 For the year ended 31st March, 2014 Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided. Interest Income Dividend income From Subsidiaries Net profit on sale of fixed assets Claims received from Insurance company Share of profits from partnership firm Lease rentals Liabilities written back to the extent no longer required Miscellaneous Income - - - - - - - - Total -

  24. DOING BUSINESS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements Notes forming part of the Financial Statements ILLUSTRATIVE FINANCIALS LIMITED 25. Employee Benefits Note 18 - Short-term loans and advances: Rs. in million a) Defined Contribution Plan - Provident Fund Amounts recognized as an expense in the Statement of Profit and Loss in respect of defined contribution plan is Rs. xx million ( year ended 31st March, 2014 : Rs. yy million). Particulars As at 31st March, 2014 31st March, 2015 (Unsecured, considered good unless otherwise stated) b) Defined Benefit Plan i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Statement of Profit and Loss. ii) The Defined Benefit Plans comprise of Gratuity. Gratuity is a benefit to an employee based on 15 days last drawn salary Other Loans and advances - Loans and advances to employees - Considered good Considered doubtful Loans and advances to related parties Due from subsidiary company for each completed year of service.The defined benefit plan is funded. I] Changes in the present value of defined obligation representing reconciliation of opening and closing balances thereof are as follows: Provision for doubtful advances - - - - Rs. in million Particulars - Prepaid expenses As at 31st March,2015 As at 31st March,2014 Present Value of Defined Obligation as at the beginning of the year Current Service Cost Interest cost Benefits Paid Actuarial (gains)/ losses on obligation Actuarial gains on fair value Present Value of Defined Benefit Obligation as at the end of the year - Balance with Government authorities - Others - Advance to suppliers - Considered good - Considered doubtful - 0 - - - Provision for doubtful advances - - II] Change in the fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows: Total Rs. in million - - Particulars As at 31st March,2015 As at 31st March,2014 Note 19 - Other current assets: Rs. in million Opening fair value of plan assets Expected return on plan assets Contributions by employer Benefits Paid Actuarial Gain Closing fair value of plan assets at end of the year Interest accrued Fair values of foreign exchange forward contracts Particulars As at 31st March, 2015 31st March, 2014 Unbilled Revenue (Net of Provision of Rs. xx million (Previous year: Rs. - - - - - - - - III] Reconciliation of Present Value of Defined Benefit Obligation and fair value of plan assets showing amount recognised in the Balance Sheet:Benefit assets/ (liability) - - Total Rs. in million As at 31st March,2014 For the year ended 31st March 2015 - Note 20 - Revenue from operations: Particulars As at 31st March,2015 Rs. in million For the year ended 31st March 2014 Particulars Present value of defined benefit obligation Fair value of plan assets Funded status [Surplus/(Deficit)] Net Asset/(Liability) recognised in Balance Sheet Sale of products Finished goods Traded goods Sale of Services Other Operating Revenue Scrap Sales Less: Excise Duty - - - - - - - - - - - - Total Note 21 - Other income: Particulars For the year ended 31st March, 2015 For the year ended 31st March, 2014 Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided. Interest Income Dividend income From Subsidiaries Net profit on sale of fixed assets Claims received from Insurance company Share of profits from partnership firm Lease rentals Liabilities written back to the extent no longer required Miscellaneous Income - - - - - - - - Total -

  25. ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements 25. Employee Benefits a) Defined Contribution Plan - Provident Fund Amounts recognized as an expense in the Statement of Profit and Loss in respect of defined contribution plan is Rs. xx million ( year ended 31st March, 2014 : Rs. yy million). b) Defined Benefit Plan i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Statement of Profit and Loss. ii) The Defined Benefit Plans comprise of Gratuity. Gratuity is a benefit to an employee based on 15 days last drawn salary for each completed year of service.The defined benefit plan is funded. I] Changes in the present value of defined obligation representing reconciliation of opening and closing balances thereof are as follows: Rs. in million Particulars As at 31st March,2015 As at 31st March,2014 Present Value of Defined Obligation as at the beginning of the year Current Service Cost Interest cost Benefits Paid Actuarial (gains)/ losses on obligation Actuarial gains on fair value Present Value of Defined Benefit Obligation as at the end of the year - - II] Change in the fair value of plan assets representing reconciliation of opening and closing balances thereof are as follows: Rs. in million Particulars As at 31st March,2015 As at 31st March,2014 Opening fair value of plan assets Expected return on plan assets Contributions by employer Benefits Paid Actuarial Gain Closing fair value of plan assets at end of the year - - DOING BUSINESS IN INDIA III] Reconciliation of Present Value of Defined Benefit Obligation and fair value of plan assets showing amount recognised in the Balance Sheet:Benefit assets/ (liability) Rs. in million As at 31st March,2014 Particulars As at 31st March,2015 Present value of defined benefit obligation Fair value of plan assets Funded status [Surplus/(Deficit)] Net Asset/(Liability) recognised in Balance Sheet ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements - - - - - - - - IV] Components of employer expenses recognised in the Statement of Profit and Loss for year ended 31st March, 2015 Note 18 - Short-term loans and advances: Rs. in million As at 31st March,2014 31st March, 2015 Rs. in million Particulars As at 31st March,2015 Particulars As at 31st March, 2014 Current Service Cost Interest Cost Expected return on plan assets Net Actuarial (Gain)/ Loss Total expense recognised in the Statement of Profit & Loss Due from subsidiary company - - - (Unsecured, considered good unless otherwise stated) - - - - - Loans and advances to related parties - - Other Loans and advances - Loans and advances to employees - Considered good V] In respect of Funded Benefits with respect to gratuity, the fair value of Plan assets represents the amounts invested through "Insurer Managed Funds" Considered doubtful - - - - Provision for doubtful advances VI] Assumptions As at 31st March,2015 As at 31st March,2014 - Prepaid expenses Discount Rate 7.80% 8.60% - Advance to suppliers - Considered good - Considered doubtful Salary Escalation Employee separation Rate Expected Rate of Returns on Plan Assets 8.00% 8.00% 17.00% 7.50% 8.50% 17.00% - 0 - - - Provision for doubtful advances - Balance with Government authorities - Others estimated terms of the obligations. b) Expected Rate of Return on Plan Assets: This is based on the expectation of the average long-term rate of return expected on investments of the Fund during the estimated term of obligations. c) Salary Escalation Rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. a) The Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the Total - - Note 19 - Other current assets: VII] Experience History Rs. in million Rs. in million 31st Particulars As at Particulars 31st 31st 31st March, 2015 31st March, 2014 March March March 31st March, 2015 31st March, 2014 Present value of obligation as at the end of the year Fair value of the plan assets at the end of the year Surplus / (Deficit) Experience adjustment on plan Liabilities (loss) / gain Unbilled Revenue (Net of Provision of Rs. xx million (Previous year: Rs. Interest accrued Fair values of foreign exchange forward contracts Experience adjustment on plan Assets (loss) / gain Actuarial gain/(loss) due to change in assumptions - - - - - - - - Total 26. Employee Stock Option Plans Note 20 - Revenue from operations: The company provides share based payment scheme to its employees "ESOP Plan". Rs. in million For the year ended 31st March 2014 Particulars For the year ended 31st March 2015 27. Leases i) Operating Lease - As a Lessee Obligations towards non-cancellable operating Leases The Company has taken premises an operating lease for the period of x to y years. The expenses of such lease rentals recognised in the statement of Profit and loss account for the year ended March 31, 2015 is Rs. xx Million (year ended 31st March, 2014: Rs yy Million). The future lease payments of such operating lease are asfollows:- Sale of products Finished goods Traded goods Sale of Services Other Operating Revenue Scrap Sales Less: Excise Duty Minimum LeasePayments - Not later than one year - Later than one year and not later than five years - Later than five years Rs. in million As at 31st March 2014 Particulars As at - - - 31st March 2015 - - Total Note 21 - Other income: Particulars For the year ended 31st March, 2015 For the year ended 31st March, 2014 Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided. Interest Income Dividend income From Subsidiaries Net profit on sale of fixed assets Claims received from Insurance company Share of profits from partnership firm Lease rentals Liabilities written back to the extent no longer required Miscellaneous Income XYZ Limited ABC Pvt Limited. 28. Related Party Disclosure a)Name of the related party and nature of relationship:- Name of the Entity* Nature of relationship Holding company Subsidiary - - - ABC Limited PQR Limited - - Subsidiary Enterprise where the Company is in a position to exercise control - - - Total - Managing Director and Chief Executive Officer Name of Director Name of CFO Chief Financial Controller *We have disclosed only those related parties with whom company has transactions during theyear.

  26. VI] Assumptions As at 31st March,2015 As at 31st March,2014 Discount Rate 7.80% 8.60% Expected Rate of Returns on Plan Assets Salary Escalation Employee separation Rate 8.00% 8.00% 17.00% 7.50% 8.50% 17.00% a) The Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated terms of the obligations. b) Expected Rate of Return on Plan Assets: This is based on the expectation of the average long-term rate of return expected on investments of the Fund during the estimated term of obligations. c) Salary Escalation Rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. VII] Experience History Rs. in million 31st Particulars 31st 31st 31st March, 2015 31st March, 2014 March March March Present value of obligation as at the end of the year Fair value of the plan assets at the end of the year Surplus / (Deficit) Experience adjustment on plan Liabilities (loss) / gain Experience adjustment on plan Assets (loss) / gain Actuarial gain/(loss) due to change in assumptions DOING BUSINESS IN INDIA 26. Employee Stock Option Plans The company provides share based payment scheme to its employees "ESOP Plan". 27. Leases i) Operating Lease - As a Lessee Obligations towards non-cancellable operating Leases The Company has taken premises an operating lease for the period of x to y years. The expenses of such lease rentals recognised in the statement of Profit and loss account for the year ended March 31, 2015 is Rs. xx Million (year ended 31st March, 2014: Rs yy Million). The future lease payments of such operating lease are asfollows:- ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements Rs. in million As at 31st March 2014 Note 18 - Short-term loans and advances: Particulars As at Rs. in million 31st March 2015 Particulars As at 31st March, 2014 31st March, 2015 Minimum LeasePayments - Not later than one year - Later than one year and not later than five years - Later than five years Loans and advances to related parties Due from subsidiary company (Unsecured, considered good unless otherwise stated) 28. Related Party Disclosure Other Loans and advances - Loans and advances to employees - Considered good Considered doubtful a)Name of the related party and nature of relationship:- Name of the Entity* Nature of relationship Holding company Subsidiary - - - - ABC Limited PQR Limited Provision for doubtful advances - Prepaid expenses Subsidiary Enterprise where the Company is in a position to exercise control XYZ Limited ABC Pvt Limited. - Advance to suppliers - Considered good - Considered doubtful Managing Director and Chief Executive Officer - 0 Name of Director - - - Name of CFO Provision for doubtful advances Chief Financial Controller - Balance with Government authorities - Others Total - - Note 19 - Other current assets: Rs. in million Particulars As at 31st March, 2015 31st March, 2014 Unbilled Revenue (Net of Provision of Rs. xx million (Previous year: Rs. Interest accrued Fair values of foreign exchange forward contracts - - - - - - - - Total Note 20 - Revenue from operations: Rs. in million For the year ended 31st March 2014 Particulars For the year ended 31st March 2015 Sale of products Finished goods Traded goods Sale of Services Other Operating Revenue Scrap Sales Less: Excise Duty - - - - - Total Note 21 - Other income: Particulars For the year ended 31st March, 2015 For the year ended 31st March, 2014 Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided. Interest Income Dividend income From Subsidiaries Net profit on sale of fixed assets Claims received from Insurance company Share of profits from partnership firm Lease rentals Liabilities written back to the extent no longer required Miscellaneous Income - - - - - - - - Total -

  27. DOING BUSINESS IN INDIA Name of CFO Name of Director Key Management Personnel ABC Private Limited control position to exercise Company is in a Enterprise where the ABC Limited Holding Company XYZ Limited PQR Limited Subsidiary Companies Particulars b) ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements Transactions with Related Parties (to be given for both current and previous years): Sales Transactions for the year ended 31st March, 2015 me Inco est Inter (received)/ provided Goods/ service Cost of Sale/(Purch Inventory Assets / ase) of Fixed (net) ent of expense Reimbursem Responsibil (Corporate Donation Social ity) ion Remunerat al Manageri le Receivab Trade Rs. in million Unbilled Payables Trade Balance as at 31st March, 2015 Debit/(Credit) s Advance & Loans nt Investme Accrued Interest Customers Advance from payable benefit Accrued Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  28. DOING BUSINESS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Notes forming part of the Financial Statements 29 Contingent Liabilities and Commitments: (i) Contingent Liabilities: Rs. in million As at 31st March, As at 31st March, Sr. Particulars Bank GuaranteesIncome tax matters Other claims against the company not acknowledged as debts 1 2 (ii) Commitments : Rs. in million As at 31st March, Sr. Particulars Estimated amount of contracts remaining to be executed on capital account andnot provided for As at 31st March, 1 30. Based on the information available with the company, no creditors have been identified as "Supplier" within the meaning of Micro, Small andMedium Enterprises Development (MSMED) Act, 2006. 31 Expenditure in Foreign Currency Rs. in million 31st March, 2014 Particulaars 31st March, 2015 Travelling Expenses Software Services Charges Legal & Consultancy Charges Conference, Freight & Other Expenses Employee benefits expenses Total 0 0 32. Value of import calculated on CIF Basis Rs. in million 31st March, 2014 Particulars 31st March, 2015 Capital Goods Purchase of equipment and software licenses Total 0 - 33. Earnings in Foreign Currency Rs. in million 31st March, 2014 Particulars 31st March, 2015 Sale of equipment and software licensesRendering of services Total 0 0 34.Auditors Remuneration Particulars Rs. in million 31st March, 2014 31st March, 2015 Audit Fees (including quarterly audits) For other services For taxation matter For reimbursement of expenses Total 0 0 Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

  29. DOING BUSINESS IN INDIA ILLUSTRATIVE FINANCIALS LIMITED Notes formingpart of the Financial Statements 35 Basic and Diluted Earnings per share Rs. in million except earnings per share As at 31 March, 2015 2014 Particulars As at 31 March, Nominal value per equityshare Profit for theyear Profit attributabletoequityshareholders No. of Shares No. of Shares Weighted average number of equityshares Weightedaverage numberof dilutedequityshares 36 Detailsof provisions and movements in each class of provisions as required by the Accounting Standard on Provisions, Contingent Liabilities and Contingent assets (Accounting Standard-29) Warranty Provision: Particulars Carrying amount as at the beginning of the year Add: Additional provision made during the year Less: Provisionreversed duringtheyear Rs. inmillion As at 31 March, As at 31st March, 2015 2014 Carrying amount as at the end of the period - - Note: Provision for warranty is estimated and made based on technical estimates of the management and is expected to be settled over the period of next year 37 Other notes to balance sheet as per company based disclosure foroutsiders In terms of our report attached For XYZ LLP Chartered Accountants For and on behalf of the Board of Directors Name of Partner Partner Name of Chairman Name of MD & CEO Name of Director Chairman Managing Director and CEO Director Name of Independent Director Name of Independent Director Name of Company Secretary Company Secretary Independent Director Director Independent Place: Date: dd/mm/yyyy Place: Date: dd/mm/yyyy Documentation issued in July 2016 by UCC & Associates LLP, an independent member of PrimeGlobal. The information provided is general information. Your company should check with a professional accountant to ensure that your issue is in line with the general information provided.

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