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Company Information

Home » Market » Company Information

Vikas Ecotech Ltd.

Oct 15, 02:05
2.82 -0.27 ( -8.74 %)
 
VOLUME : 133867
Prev. Close 3.09
Open Price 3.38
TODAY'S LOW / HIGH
2.79
 
 
 
3.38
Bid PRICE (QTY.) 2.82 (5703)
Offer PRICE (Qty.) 2.86 (13283)
52 WK LOW / HIGH
3.07
 
 
 
16.44
Oct 15, 01:59
2.80 -0.30 ( -9.68 %)
 
VOLUME : 694888
Prev. Close 3.10
Open Price 3.10
TODAY'S LOW / HIGH
2.80
 
 
 
3.25
Bid PRICE (QTY.) 2.80 (13914)
Offer PRICE (Qty.) 2.85 (20000)
52 WK LOW / HIGH
3.10
 
 
 
16.50
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Market Cap. ( ₹ ) 78.37 Cr. P/BV 0.55 Book Value ( ₹ ) 5.12
52 Week High/Low ( ₹ ) 17/3 FV/ML 1/1 P/E(X) 4.79
Bookclosure 30/09/2019 TTM EPS ( ₹ ) 0.44 Div Yield (%) 1.79
NOTES TO ACCOUNTS
You can view the entire text of Notes to accounts of the company for the latest year
Year End :2018-03 

1. Corporate information

Vikas Ecotech Limited (‘the Company’) is a Delhi based professionally managed Company incorporated on 30th November, 1984 under the Companies Act, 1956, having its registered office at Vikas Apartments, 34/1, East Punjabi Bagh, New Delhi - 110 026 and is listed on National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE).

The Company is an emerging player in the global arena engaged in the business of high-end specialty chemicals. It is an integrated, multi-specialty product solutions company, producing a wide variety of superior quality, eco-friendly additives and rubber-plastic compounds. Its additives and rubber-plastic compounds are process-critical and value-enabling ingredients used to manufacture a varied cross-section of high-performance, environment-friendly and safety-critical products. From agriculture to automotive, cables to electrical, hygiene to healthcare, polymers to packaging, textiles to footwear, the Company’s products serve a diverse range of global industry needs. The Company has its manufacturing plants in the state of Rajasthan, Noida SEZ (UP) & Kandla SEZ (Gujrat). Also, the Company has planned for construction of a new State-of-the-art Plant & Innovation Centre at Dahej in Gujarat to cater to Export and Western Indian markets.

2. Basis of preparation

a) Statement of compliance:

The Company has adopted Indian Accounting Standards (Ind AS) with effect from 1st April 2017 with transition date of 1st April 2016, pursuant to notification issued by Ministry of Corporate Affairs dated 16th February 2015, notifying the Companies (Indian Accounting Standards) Rules, 2015. Accordingly, these financial statements have been prepared to comply in all material aspects with the Indian Accounting Standard (Ind AS) notified under section 133 of the Companies Act, 2013 (‘the Act’), read together with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, as amended and other accounting principles generally accepted in India.

These financial statements are covered by Ind AS 101: First time adoption of Indian Accounting Standards (Ind AS) being first Ind AS annual financial statements for the year ended 31st March 2018 and are prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended. The Ind AS accounting policies are compared to most recent annual financial statements prepared under Indian GAAP (“Previous GAAP”). Accounting policies have been consistently applied to all periods presented in the financial statements.

For all periods up to and including the year ended 31st March, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). The transition was carried out from the accounting principles generally accepted in India (Indian GAAP) which is considered as previous GAAP, as defined in Ind AS 101. An explanation of how the transition to Ind AS has impacted the Company’s equity and profits is provided in Note 41.

The financial statements were authorised for issue by the Company’s Board of Directors on 31.05.2018.

b) Basis of measurement:

The financial statements have been prepared on accrual and going concern basis and historical cost convention, except for certain financial assets and liabilities which have been measured at fair value or amortised cost, as required under relevant Ind AS.

c) Significant accounting judgements, estimates and assumptions:

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgments

Information about significant areas of estimation/ uncertainty and judgements in applying the Company’s accounting policies that have the most significant effect on the amounts recognised in the financial statements are as follows:

There are no assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year.

3. Recent accounting pronouncement issued but not yet effective upto the date of issuance of financial statements

a) Amendment to Ind AS 21:

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018, MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind-AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. This amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.

b) Introduction to Ind AS 115:

Ind-AS 115- Revenue from Contracts with Customers: On 28 March 2018, Ministry of Corporate Affairs (“MCA”) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligation is transferred to the customer.

Moreover, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The standard permits two possible methods of transition:

- Retrospective approach-Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8-Accounting Policies, Changes in Accounting Estimates and Errors

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach). The effective date for adoption of Ind AS 115 is financial periods beginning on or after 1 April 2018.

The Company will adopt the standard on 1 April 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended 31st March 2018 will not be retrospectively adjusted.

While, the Company is in the process of implementing Ind AS 115 on financial statement, it is of the view that the accounting policy for certain streams of revenue and related expenses may undergo a change primarily on account of estimating and recognizing extended warranty and unspecified free upgrades in certain contracts, adjusting cost of acquisition of customer, etc.

7,93,000 Equity Shares of Vikas Surya Buildwell Pvt. Ltd. purchased at cost of Rs. 4,76,98,950/- (including stamp duty of Rs. 1,18,950/-). The fair value of shares as on 31st March, 2018 is Rs. 4,76,98,950/7. Taxes

a) Amounts recognised in Statement of profit and loss comprises:

The major component of income tax expense:

Deferred tax assets and deferred tax liabilities have been offset wherever the Company has a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes levied by same taxation authority.

(Valued and certified by the company’s management, Independent Cost Accountant and Relied upon by Auditors)

The Company is in the business of High End additives and rubber-plastic compounds and accordingly deals in numerous items such as Tin Alloy / Ingots, 2EthylhexylThiogycolate, Tinmate, Hydrogen Peroxide, PVC Resin, Styrene Butadiene Copolymer, Styrene Butadiene Styrene, Methyl Chloride (Gas) etc. Keeping in view the nature of industry and vast number of items, it is not practical for the Company to give item wise break up of different type of products.

(Trade receivables are subject to confirmation / reconciliation, consequential adjustment if any and verification from Bank realisation certificates)

The carrying amount of trade receivables approximates their fair value, is included in note 37.

The Company’s exposure to credit risk and impairment allowances related to trade receivables is disclosed in note 42.

* The shareholders’ at the EGM/ AGM of the Company held on 23rd November, 2016 approved increase in the authorised share capital of the Company from Rs. 260,000,000 comprising of 260,000,000 equity shares of Re 1 each to Rs. 320,000,000 comprising 320,000,000 equity shares of Re. 1 each.

** During the year ended 31st March, 2017, the Company has issued 25,660,000 equity shares of face value of Re. 1 each to its existing shareholders in proportion of their existing shareholding on preferential allotment basis for issue price of Rs. 17 per share. The new shares shall rank pari-passu with the existing equity shares of the Company in all respects.

c) Terms / rights attached to equity shares

The Company has only one class of equity shares having par value of Re 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. 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 in proportion to the number of equity shares held by the shareholders, after distribution of all preferential amounts.

On 31st May, 2018, the Board of Directors have proposed a dividend of Rs. 0.05 per equity share (FY 2017-18 - Rs. 0.05 per equity share) to all equity shareholders for the year ended 31st March, 2018. The dividend proposed by the Board of Directors is subject to approval of the shareholders of the Company in the ensuring general meeting.

e) Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

The Company has not issued any shared for consideration other than cash during the period of five year immediately preceding 31st March 2018.

* Proposed dividend on equity shares are subject to approval at the annual general meeting and are not recognised as a liability as at 31st March, 2018.

Information about the Company’s exposure to interest rate, foreign currency and liquidity risks is included in Note 42.

* Current portion of secured term loan from banks is disclosed under note 20, ‘Other financial liabilities’.

* Based on the information presently available with the management, there are no dues outstanding to mirco and small enterprises covered under the ‘Micro, Small and Medium Enterprises Development Act, 2006’.

The Company exposure to liquidity risk related to the above financial liabilities is disclosed in Note 42.

Trade Payables are subject to confirmation / reconciliation, consequential adjustment if any

Secured term loans from banks

a) HDFC-Vehicle Loan Agreement No 38982281 was taken during 2016 year and carries interest @ 9.4% per annum. The loan is repayable in 36 instalments ofRs. 207,805 each along with interest from the date of Loan. The loan is secured by hypothecation of car of the Company.

b) HDFC-Vehicle Loan Agreement No 24353585 was taken during 2013 year and carries interest @ 15.65% per annum. The loan is repayable in 36 instalments ofRs. 22,837 each along with interest from the date of Loan .The loan is secured by hypothecation of car of the Company. This loan has been discharged completely in F.Y. 2016-17.

c) ICICI Loan No-LADEL00026874591 was taken during 2013 year and carries interest @ 9.09% per annum. The loan is repayable in 36 instalments ofRs. 1,11,450 each along with interest from the date of loan. The loan is secured by hypothecation of car of the Company. This loan has been discharged completely in F.Y. 2016-17.

d) ICICI Loan No-LADEL00035146099 was taken during 2016 year and carries interest @ 9.10% per annum. The loan is repayable in 36 instalments ofRs. 201,906 each along with interest from the date of Loan. The loan is secured by hypothecation of car of the Company.

e) Toyota Financial Services India Ltd - NDEL1085441 was taken during 2016 year and carries interest @ 9.24% per annum. The loan is repayable in 60 instalments of Rs. 35,496 each along with interest from the date of loan. The loan is secured by hypothecation of car of the Company.

f) Term Loan 111-11167015000461 (Oriental Bank of Commerce). The Term Loan is secured on the Plant and Machinery and Land and Building located at G-24-29 & 30, RIICO Industrial Area, Vigyan Nagar, Shahjahanpur, Dist. Alwar, Rajasthan owned by Vikas Ecotech Limited. The rate of interest shall be MCLR 2%. This loan has been discharged completely during the year under consideration.

g) Term Loan IV-8767025001865 (Oriental Bank of Commerce). The Term Loan is secured on the 1 st exclusive charge by way of hypothecation on plant & machinery financed by OBC. The rate of interest shall be MCLR 2%. The period of maturity from the balance sheet date is 24 months.

h) Term Loan V-8767025002281 (Oriental Bank of Commerce). The Term Loan is secured on the 1 st exclusive charge by way of hypothecation on plant & machinery and construction of Building financed by OBC. The rate of interest shall be MCLR 2%. The period of maturity from the balance sheet date is 30 months.

Secured cash credit and PCFC limits from banks

The Company is availing working capital limits under consortium of Oriental Bank of Commerce, Bank of Baroda, Punjab National Bank, Development bank of Singapore and The Hongkong Shanghai Banking Corporation Ltd with Oriental Bank of commerce as lead banker in consortium and others banks are member bank.

The Company is availing a cash credit (Hypothetical) limit of Rs. 6,120 Lacs which include PCFC Limit of RS 2,880 Lacs from Oriental Bank of Commerce against Hypothecation of stock, receivable, and advance to suppliers and other current assets on pari-passu basis with consortium members. No DP against stock and Book debts exceeding 180 days to be allowed. Margin 20% and the rate of interest are Bank MCLR 1.5%. Further the Company is also availing LC / DA / DP basis non Fund Based Limit ofRs. 2,760 Lacs (which includes both side inter change ability LCto CC forRs. 1,000 Lacs) for procurement of Raw Material and spares. Cash Margins is 15% in the shape of FDR on LC limits.

The Company is also availing Cash Credit limit ofRs. 1,550 Lacs from Bank of Baroda with a sublimit of PC / PCFC / FBP / FBD ofRs. 575 Lacs under the same Cash Credit limit. The limit is secured by way of hypothecation of stock, receivables & other current assets on pari-passu basis with consortium members. DP shall be permitted against receivable upto180 days. Margin is 20% & Rate of interest is MCLR SP 1.85%. Further the Company is availing Non Fund Based LC (Import /Inland / DP / DA/ BG, Buyers Credit) limits ofRs. 650 Lacs (which includes both side inter change ability LCto CC forRs. 300 Lacs) for procurement of raw material and spares. Cash Margin isl 5% in the shape of FDR on LC limits.

The Company is also availing Cash Credit limit of Rs. 1,530 Lacs from Punjab National Bank with a sub limit of PC / PCFC/ FBP / FBD of Rs. 720 Lacs under the same Cash Credit limit. The limit is secured byway of hypothecation of stock, receivables & other current assets on pari-passu basis with consortium members. DP shall be permitted against receivable upto 180 days. Margin is 20% & Rate of interest is MCLR 2.65%. Furtherthe Company is availing Non-Fund Based LC (Import /Inland /DP /DA /BG, Buyers Credit) limits ofRs. 690 Lacs (which includes both side inter change ability LC to CC forRs. 170 Lacs) for procurement of raw material and spares. Cash Margin is 15% in the shape of FDR.

The Company is also availing Cash Credit limit ofRs. 1,000 Lacs from Development Bank of Singapore with a sub limit of PC / PCFC / FBP / FBD ofRs. 500 Lacs under the same Cash Credit limit. The limit is secured by way of hypothecation of stock, receivables & other current assets on pari-passu basis with consortium members. DP shall be permitted against receivable upto 180 days. Margin is 20% & Rate of interest is 3 months MCLR 1.35%. Further the Company is availing Non Fund Based LC (Import /Inland /DP/ DA/ BG, Buyers Credit) limits ofRs. 500 (which includes both side inter change ability LCto CC forRs. 500 Lacs) for procurement of raw material and spares .Cash Margin is 15% in the shape of FDR.

The Company is also availing Cash Credit limit ofRs. 1,500 Lacs from The Hongkong Shanghai Banking Corporation Ltd with a sub limit of PC / PCFC / FBP / FBD of Rs. 1,500 Lacs under the same Cash Credit limit. The limit is secured by way of hypothecation of stock, receivables & other current assets on pari-passu basis with consortium members. DP shall be permitted against receivable upto 180 days. Margin is 20% & Rate of interest is 3 months MCLR 1.05%. Further the Company is availing Non Fund Based LC (Import /Inland /DP/ DA/ BG, Buyers Credit) limits of Rs. 700 for procurement of raw material and spares .Cash Margin is 15% in the shape of FDR.

Further, the limit is secured on following collateral properties:

a) Property bearing Khasra No.14/5/2 6min, 15/1/2, 9/2 &10 min Vill Ghevra, Near Mundka Railway Crossing, Delhi owned by Ms. Seema Garg and Ms. Namita Garg.

b) Roof right of Property 34/1, Vikas Apartments, East Punjabi Bagh, New Delhi owned by Company.

c) Industrial property at Industrial Growth Centre, Phasel, Dist. Samba, J&K owned by Company.

d) Land & building situated at Industrial Growth Centre, Phase-1, Dist. Samba, J&K owned by Company.

e) F-5, Vikas Apartment, 34/1,1st Floor, East Punjabi Bagh, New Delhi owned by Ms. Seema Garg.

f) Industrial property at G-30 RIICO Industrial Area, Vigyan Nagar, Shahjahanpur Dist. Alwar, Rajasthan.

g) Property situated at Khasra no. 710/201 in Village Rithala, Delhi owned by Mr. Vivek Garg.

h) A-28 Khasra No.12/10 and 13/6 Village Kamrudin Nagar Nangloi owned by Ms. Seema Garg and Ms. Usha Garg.

i) 770, Khasra No.142/770, situated at Village Khanjawala, New Delhi owned by Ms. Usha Garg j) B-1, 34/1, Vikas Apartment, Punjabi Bagh, New Delhi owned by Ms. Usha Garg.

k) Land situated village Sultanpur Dabas, New Delhi owned by Company.

I) Industrial property at G-24-29 RIICO Industrial Area, Vigyan Nagar, Shahjahanpur Dist. Alwar Rajasthan, owned by Company,

m) Industrial Property at Dahej -II, Industrial Estate, Dist. Bharuch Gujarat owned by Company.

n) Industrial Property No. - F-7 & 8, Vigyan Nagar RIICO Indl. Area, Shahjahanpur, Tehsil Neemrana Distt. Alwar, Rajasthan. Further limit is guaranteed by personal guarantee of the following:

a) Mr. Nand Kishore Garg

b) Mr. Vikas Garg

c) Mr. Vivek Garg

d) Ms. Seema Garg

e) Ms. Usha Garg

f) Ms. Namita Garg

The Company is in the business of High End additives and rubber-plastic compounds and accordingly deals in numerous items such as Tin Alloy / Ingots, 2EthylhexylThiogycolate, Tinmate, Hydrogen Peroxide, PVC Resin, Styrene Butadiene Copolymer, Styrene Butadiene Styrene, Methyl Chloride (Gas) etc. Keeping in view the nature of industry and vast number of items, it is not practical for the Company to give item wise break up of different type of products.

Defined benefit plan

The Company operates a defined benefit gratuity plan, wherein every employee, who has rendered at least five years of continuous service, is entitled to the gratuity benefit equivalent to 15 days of total basic salary last drawn for each completed year of service, in terms of Payments of Gratuity Act, 1972. The Company has taken Group Gratuity Scheme for the employees from the LIC of India. Gratuity liability is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of the each reporting period, as required under Ind-AS 19 - Employee Benefits.

5. Operating lease

The Company has taken various premises on operating leases. The underlying agreements are executed for a period generally ranging from one year to three years except long term leases, renewable at the option of the Company and the lessor. There are no restrictions imposed by such leases and there are no sub leases. The rent charged and minimum rental payments to be made in the future in respect of these operating leases are as under:

* The Company acquired 100% share in Sigma Plastic Industries, which was merged in the Company during financial year 2014-15. Accordingly, pending litigation of Sigma Plastic Industries has also become part of pending litigation of the Company.

**Income Tax Appeal case pending before CIT (A) pertaining to AY 2012-13 has been decided vide order dated 15.03.2018 deleting the additions of Rs. 2,10,05,398 and confirming the additions of Rs. 6,64,416. The CIT (A) has further enhanced income by Rs. 3,39,19,015. Aggrieved by this order, the company has filed an appeal before Hon’ble ITAT Delhi. The tax demand notice on this confirmed addition and enhanced addition has not been received by the company as on date.

Income Tax Appeal case pending before CIT (A) pertaining to AY 2013-14 has been decided vide order dated 17.05.2018 deleting the additions of Rs. 15,48,731 and confirming the additions of Rs. 1,88,553. The decision to file appeal further before higher authorities against this order has not been taken yet by the management of the company.

Income Tax Appeal case pending before CIT (A) pertaining to AY 2014-15 has been decided vide order dated 23.05.2018 deleting the additions of Rs. 46,17,263 and confirming the additions of Rs. 3,21,594. The decision to file appeal before higher authorities against this order has not been taken yet by the management of the company.

The Company has filed civil suit against ADM Agro Industries Kota and Akola Limited supplier of Soya Bean Oil in Saket Court Delhi (Case No-CS OS No.-198/214) amounting Rs. 9,961,516 due to poor supply of soya bean oil. The Company has suffered a loss due to such poor quality of material supplied by them and non-recovery of money from debtors and it also affect goodwill of the Company. ADM Agro Industries Kota and Akola Limited has also filed winding up petition against the Company in High Court (Case No. CO PET N. 64/2014) due to non-payment of Rs. 4,115,664 along with interest at the rate of 18% from the due date of payment. ADM Agro Industries Kota and Akola Limited has also filed a summary suit for recovery of debts in Tis Hazari Court (Summary Suit No. - C S (OS) 3077/2014).

* The Company has intended to purchase the property for Rs. 16,79,88,400 at New Rohtak Road, New Delhi. The Company has made the payment of Rs. 13,42,62,626 for the same till 31st March 2018, which is shown as per Note No. 8 under “other noncurrent assets” in the Balance Sheet. Balance payment and the registration will be done in upcoming years and the same will be registered in the name of the Company after completing all the formalities for taking over the units.

* The Company has intended to purchase the property for Rs. 1,15,54,987/- at Dahej, Gujrat. The Company has made the payment of Rs. 57,68,686/- for the same till 31st March, 2018, which is shown under Current Capital Advances as per Note no. 14 “other current assets” in the Balance Sheet. Balance payment and the registration will be done in upcoming years and the same will be registered in the name of the Company after completing all the formalities for taking over the units.

6. Fair value measurement and financial instruments

Financial instruments - by category and fair value hierarchy

The following table shows the carrying amounts of financial assets and financial liabilities, including their levels in the fair value hierarchy:

The following methods / assumptions were used to estimate the fair values:

a) The carrying value of cash and cash equivalents, trade receivables and trade payables and liabilities approximate their fair values mainly due to short-term maturities of these instruments.

b) The fair value of investment in shares, which are acquired during the year itself only, is assessed by the management to be same as carrying value and is not expected to be significantly different.

c) The fair value of other financial assets and other financial liabilities is estimated by discounting future cash flows using rates applicable to instruments with similar terms, currency, credit risk and remaining maturities. The fair values of other financial assets and other financial liabilities are assessed by the management to be same as their carrying value and is not expected to be significantly different if estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. These are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs.

d) The Company’s borrowings have been contracted at floating rate of interest, which resets at short intervals. Accordingly, the carrying value of such borrowings (including interest accrued but not due) approximates fair value.

There are no significant unobservable inputs used in the fair value measurement.

Fair value hierarchy

All financial instrument for which fair value is recognised or disclosed 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) prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3: Inputs for assets or liabilities that are not based on observable market data (unobservable inputs)

The following table presents the financial instruments measured at fair value, by level within the fair value measurement hierarchy:

During the year ended 31st March 2018, there were no transfers between Level 1, Level 2 or Level 3 fair value measurements.

7. Related party disclosures

In accordance with the requirements of Ind-AS - 24 “Related Party Disclosures”, the names of the related parties where control exists and/ or with whom transactions have taken place during the year and description of relationships, as identified and certified by the management are as below:

A. List of related parties

1. Company with common Director

Vikas Multicorp Limited (formerly known as Moonlite Technochem Private Limited)

MM Infosystems Pvt. Ltd.

2. Key management personnel (KMP)

Vikas Garg Managing Director

Vivek Garg Whole time Director

Ashutosh Kumar Verma Chief Executive Officer and Whole time Director

Devender Kumar Garg Director (Finance)

Sumit Garg Chief Financial Officer

Anjavi Pandya Ex- Chief Financial Officer

Siddharth Agrawal Company Secretary

3. Relative of Key management personnel (KMP)

Seema Garg

Shashi Prabha Verma

4. Other related parties Vikas Polymer (India)

Related party transactions represent transactions entered into by the Company with directors, key management personnel and relatives of key management personnel. The transactions with these related parties for the year ended 31st March 2018 and balances as at 31st March 2018 are described below:

Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables.

8. Segment reporting

Factors used to identify the entity’s segments, including the basis of organisation

Operating segment is a component of the Company that engages in the business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components, and for which discrete financial information is available. All operating segments’ operating results are reviewed regularly by the Company’s Chief Executive Officer (CEO) to make decisions about resources to be allocated to the segments and assess their performance.

The Company has determined following reportable segments, which are the Company’s strategic business units. These business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the business units, the Company’s CEO reviews internal management reports on at least a quarterly basis.

a) Chemical division

i. Manufacturing division

ii. Trading division

b) Real Estate division Information about reportable segments

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit (before tax), as included in the internal management reports that are reviewed by the Company’s CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm’s length basis.

Geographical information

The geographical information analyses the Company’s revenues and non-current assets by the Company’s country of domicile (i.e. India) and other countries. In presenting the geographical information, segment revenue has been based on geographical location of customers and segment assets have been based on the geographical location of the assets.

9. Scheme of amalgamation

The scheme of amalgamation was filed under section 391 read with section 394 of the Companies Act 1956 w.e.f 1 April 2007 for the amalgamation of following three transferor companies with the transferee company, Vikas Ecotech Limited (formerly known as Vikas Globalone Limited):

a) Hulchul International Private Limited

b) Vikas Utilities Private Limited

c) South Delhi Projects Private Limited

The scheme was approved by approved by High Court vide order no. 18457/1 dated 17th October, 2008. In absence of any specific guidance under Ind AS with respect to amalgamation under court scheme, the Company has continued to apply the accounting prescribed under the scheme as applied under Indian GAAP. Accordingly, surplus of Rs. 965,934 arising on account of amalgamation is shown under “Other reserves”.

10. First-time adoption of Ind AS

As stated in note 2, the Company has prepared its first annual Ind AS financial statements for the year ended 31st March 2018. These financial statements for the year ended 31st March 2018 have been prepared in accordance with Ind AS. The preparation of these financial statements resulted in changes to the accounting policies as compared to most recent annual financial statements prepared under prepared under Indian GAAP (“Previous GAAP”). Accounting policies have been applied consistently to all periods presented in the financial statements. They have also been applied in preparing the Ind AS opening balance sheet as at 1 April 2016 for the purpose of transition to Ind AS and as required by Ind AS 101: First Time adoption of Indian Accounting Standards.

Exemptions applied

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 with respect to transition to Ind AS:

a) Deemed cost exemption

The Company has elected to continue with the carrying value of all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per previous GAAP and used it as its deemed cost at the date of transition.

b) Merger Accounting

The Company has continued to follow the accounting treatment pursuant to the Merger Scheme prescribed by the Hon’ble High Court under Ind AS which is in line with Previous GAAP Use of the accounting as mandated by the merger scheme means that the Indian GAAP carrying amounts of assets and liabilities, that are required to be recognised under Ind AS, is their deemed cost at the date of the acquisition. The Company did not recognise or exclude any previously recognised amounts as a result of Ind AS recognition requirements.

Mandatory exceptions availed

Ind AS 101 allows first-time adopters following mandatory exceptions:

a) Estimates

Under Ind AS 101, an entity’s estimates in accordance with Ind AS at the ‘date of transition to Ind AS’ (i.e. 1 April 2016) or ‘the end of the comparative period presented in the entity’s first Ind AS financial statements’ (i.e. 31st March, 2017), as the case may be, should be consistent with the estimates made for the same date in accordance with Previous Indian GAAP

The Company’s Ind AS estimates as at the transition date are consistent with the estimates made as at the same date made under Previous Indian GAAP Key estimates considered in preparation of the financial statements that were not required under the Previous Indian GAAP are listed below:

- Determination of the discounted value for financial instruments carried at amortised cost

b) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exists at the date of transition to Ind AS.

The Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

Reconciliations between Previous Indian GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity and total comprehensive income for the previous years. The following table and notes represents the reconciliations from Previous Indian GAAP to Ind AS.

11.1 Proposed dividend

Under Indian GAAP, proposed dividends including Dividend distribution tax (DDT) are recognised as a liability in the period to which they relate, irrespective of when they are declared.

Under Ind AS, a proposed dividend is recognised as a liability in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting) or paid.

The final dividend are declared and approved post the period to which it relates to, therefore, the liability of 15,299,890 for the year ended on 31st March, 2016 recorded for dividend including dividend distribution tax has been derecognised against retained earnings on 1 April 2016. The proposed dividend for the year ended on 31st March, 2017 of Rs. 16,923,411 recognized under Indian GAAP was reduced from Short term provisions and with a corresponding impact in the retained earnings.

11.2 Defined benefit plan on retirement benefits

Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, re-measurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is impacted by Rs. 1,299,822 and re-measurement gains/ losses on defined benefit plans has been recognized in the other comprehensive income (net of tax) for the year ended 31st March 2017.

11.3 Financial Assets at Amortised cost

This category generally applies to trade and other receivables, security deposits, interest accrued on deposits, etc. Under Indian GAAP these kind of financial assets are stated at transaction value.

Under Ind AS, financial assets which are non-derivative with fixed or determinable payments that are not quoted in an active market and recognised initially at fair value. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.

Such financial assets are classified at Amortised cost which needs to be initially recognised at Fair value under Ind AS. The corresponding fair value impact on 1 April 2016 resulting is not considered to be material, for any adjustment.

11.4 Financial Liabilities at Amortised cost

This category applies to Trade payables, security deposits received, etc. Under Indian GAAP, these kind of financial liabilities are stated at transaction value.

Under Ind AS Financial liabilities at amortised cost are non-derivative financial liabilities with fixed or determinable payment that are not quoted in an active market and recognised initially at fair value. After initial measurement, such liability are subsequently measured at amortised cost using the effective interest rate (EIR) method. The EIR amortisation is included in finance cost in the Statement of Profit or Loss.

Such financial assets are classified at Amortised cost which needs to be initially recognised at Fair value under Ind AS. The corresponding fair value impact on 1 April2016 is not considered to be material, for any adjustment.

11.5 Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

12. Financial risk management objectives and policies

The Company’s principal financial liabilities comprise borrowings, trade payables etc. The main purpose of these financial liabilities is to manage finances for the Company’s operations. The Company’s principal financial assets include trade and other receivables, cash and cash equivalents, security deposits, etc. that derive directly from its operations.

The Company is exposed to market risk (interest rate risk), credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance frame work for the Company are accountable to the Board Audit Committee. This process provides assurance to the Company’s senior management that the Company’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Company’s policies and Company’s risk appetite. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes shall be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below:

Market Risk - Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates related primarily to the Company’s borrowings with floating interest rates.

Exposure to interest rate risks

The Company’s interest rate risk arises majorly from the borrowings carrying floating rate of interest. These obligations exposes the Company to cash flow interest rate risk. The exposure of the Company’s borrowing to interest rate changes as reported to the management at the end of the reporting period are as follows:

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Credit risk on cash and cash equivalents and bank deposits is generally limited as the Company transacts with Banks having a high credit ratings assigned by domestic credit rating agencies.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. On adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment gain or loss. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available internal credit risk factors such as the Company’s historical experience of customers. Based on the business environment in which the Company operates, management considers that the trade receivables are not in default (credit impaired) as there is very good track record against sales realisations and further there is Zero bad debts in past, hence the Company based upon past trends determined no default risk for trade receivables and accordingly no impairment allowance for loss on trade receivables is required.

The ageing analysis of trade receivables as of the reporting date is as follows:

Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is exposed to currency risk on account of its borrowings, receivables and other payables in foreign currency. The functional currency of the company is Indian Rupee.

The foreign currency exchange management policy is to minimize economic and transactional exposures arising from currency movements against the US dollar & Euro. The Company manages the risk by netting off naturally-occurring opposite exposures wherever possible, and then dealing with any material residual foreign currency exchange risks if any.

Exposure to currency risk

The currency profile of financial assets and financial liabilities as at 31st March 2018, 31st March 2017 and 1 April 2016 are as below:

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against US dollar & Euro at reporting date would have affected the measurement of financial instruments denominated in foreign currencies and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company principal sources of liquidity are cash and cash equivalents and the cash flow generated from operations. The Company closely monitors its liquidity position and deploys a robust cash management system.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments:-

Capital management

Capital includes equity attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No major changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2018, 31st March, 2017 and 1st April, 2016.

The Company’s capital consists of equity attributable to equity holders that includes equity share capital, retained earnings and long term borrowings.

13. Note on Demerger

The Board of Directors of the Company in its meeting held on May 29th, 2017 had approved the ‘Scheme of Arrangement’ for the Demerger of High Volume ‘Recycled Compounds and Trading Division’ of Vikas EcoTech Limited (Demerged Undertaking) (having net assets of approx. book value of Rs. 29.57 Crores as on 1stApril, 2017) into Vikas Multicorp Limited (Resulting Company). An application was moved before the Hon’ble NCLT principal bench, New Delhi for obtaining necessary orders under Section 230-232 of the Companies Act, 2013, with a view of vesting of demerged undertaking, the appointed date under the Scheme for demerger is 1stApril, 2017. As on date, the said application is pending for approval before Hon’ble NCLT and the scheme shall be effective only after the final order of Hon’ble NCLT Principle Bench, Delhi. NCLT has set 1stAugust, 2018 as the final hearing date for the scheme. In view of this, the financials statements are hereby prepared without considering the effect of scheme of Demerger and treating the said division proposed to be demerged as continuing operations. The financial statements are subject to amendment to give effect to the scheme once the same becomes effective after final order of Hon’ble NCLT.