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Notes to Accounts of Emergent Industrial Solutions Ltd.

Mar 31, 2018

1. Company Information

Emergent Global Edu & Services Limited (the Company) is a domestic public limited Company with registered office situated at 8B, Sagar, 6, Tilak Marg, New Delhi -11001 and is listed on the Bombay Stock Exchange Limited (BSE).

Terms/rights attached to equity shares

Class of Equity Shares, Par Value, Vote per Share, dividend proposed. Distribution at the time of liquidation of co.

The company has only one class of equity shares having a par value of Rs.10 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 remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders..

NOTE NO. 2 : - PRINCIPAL DIFFERNECES BETWEEN IND AS AND INDIAN GAAP

THE FOLLOWING RECONCILATIONS PROVIDE A QUANTIFICATION OF THE EFFECT OF SIGNIFICANT DIIFERENCE5 ARISING AS A RESULT OF TRANSITION FROM PREVIOUS YEAR TO IND AS IN ACCORDANCE WITH IND AS 101:

A. OTHER EQUITY AS AT APRIL 01, 2016

B. OTHER EQUITY AS AT MARCH 31, 2017

C. PROFIT/(LOSS) FOR THE YEAR ENDED MARCH 31, 201?

D. BALANCE SHEET AS AT APRIL 01, 2016

E. BALANCE SHEET AS AT MARCH 31, 2017

References:-

a) Under Indian GAAP, Financial Assets and Financial Liabilities were measured at transaction cost less allowances for impairment, if any. Under Ind AS, these financial assets and liabilities are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for impairment, if any. The resulting finance charge or income is included in finance expenses or finance income in the statement of profit and Loss for Financial liabilities and financial assets respectively. Under Ind AS 109 - Financial Instruments are required to be value at fair value and difference between cost and fair value is to be amortised and consequently interest income or interest expenses to be booked effective interest method in the statement of Profit & Loss.

b) Under Previous GAAP, actuarial gains and losses on employees defined benefits obligations (i.e. gratuity) were recognised in profit or loss. Under Ind AS, the actuarial gains and losses on re-measurement of net defined benefit obligations are recognised in other comprehensive income & corresponding tax impact on the same. This resulted in a reclassification between profit or loss and other comprehensive income. Due to this, actuarial gains and Losses Rs. 17,360/- & deferred tax Rs. 5,185 i- for the period ended March 31, 2017 shown in OCI and reversal in statement of profit and Loss.

c) Fair valuation of investments: Under the Previous GAAP, current investments were measured at lower of cost or fair value and long term investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, investments are measured at fair value and the mark-to-market gains/losses are recognized either through profit or loss (FVTPL) or through other comprehensive income (FVTOCI) based on the business model test. Effect of ind AS adoption on total, comprehensive income represents the mark-to-market gains/ losses on investment.

d) Under previous GAAP, discounting of provisions was not permitted and provisions were measured at best estimate of the expenditure required to settle the obligation at the balance sheet date without considering the effect of discounting. Under Ind AS, provisions are measured at discounted amounts. The effects of these are reflected in total equity and profit or loss.

e) Under Ind AS, deferred taxes are recognised relating to Ind AS adjustments including deferred taxes measured using balance sheet approach. The effects of these are reflected in total equity and profit or loss.

f) Under previous GAAP, the fixed assets of the Company were revalued and a revaluation reserve was created. Under Ind AS, the Company has adopted previous GAAP carrying value as deemed cost for PPE as on transition date and accordingly revaluation reserve has been transferred to retained earnings.

g) Under previous GAAP, there was no separate record in the financial statements for Other Comprehensive Income (OCI). Under Ind AS, specified items of income, expense, gains and losses are presented under OCI.

B. NOTES ON ACCOUNTS.

3. Sundry Debtors, 1,03113 & Advances are subject to confirmation.

4. Previous year figures have been re-grouped and recast wherever necessary to make them comparable with those of the current year.

5. Disclosure under Micro, small and Medium Enterprises Development (MSMED) Act, 2006:

As per the information available with the Company and as certified by the management, there are no dues outstanding including interest as on 31st March,2018 to Micro, Small and Medium Enterprises as defined under the Micro, small and Medium Enterprises Development (MSMED) Act, 2006.

6. The disclosures as required as per the Ind AS 19 “Employee Benefits” notified in the Companies (Accounting Standards) Rules, 2006 are as given below:

(a) The company has long-time retirement benefit plan of gratuity at the year end no shortfall remains un provided for. As advised by an independent actuary valuation.

7. The Loan instrument (Financial Assets) have been initially measured at fair value by discounting the cash inflow from financial instruments with discount rate of 11% p.a.

The difference between the initial inflows and fair value of the financial instruments issued to Indo Education Pvt Ltd are treated as “deemed equity investment”. This Deemed Equity Investment is amortized through profit & loss account over the period of loan receivable repayment schedule, (Refer below)

8. Financial risk management objectives and Policies

The Company''s activities are exposed to a variety of financial risks from its operations. The key financial risks include market risk, credit risk and liquidity risk. The company’s overall risk management policy seeks to minimize potential adverse effects on company’s financial performance.

(i) Market Risk: Market risk is the risk that the fair value of future cash flow of financial instruments will fluctuate because of change in market prices. Market risk comprises mainly three types of risk: interest rate, currency risk and other price risk such as equity price risk and commodity price risk.

(a) Foreign Currency Risk: The Company’s transactions do not expose the company to exchange rate fluctuations. The operations of the Company are INR based. INR is its functional currency.

Interest rate risk-Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Any change in the interest rates environment may impact future rates of borrowing. The company mitigates this risk by regularly assessing the market scenario, finding appropriate financial instruments, interest rate negotiation with the lenders for ensuring the cost effective method of financing.

(b) Interest Rate Sensitivity: Interest rate risk is the risk that, the fair value of future cash flow of financial instruments will fluctuate because of change in market interest rates. The Company has not taken any loan from bank & financial instructions; hence there is not any interest rate risk.

(c) Equity Price Risk: The Company has not equity investment except investment in Subsidiary Company. The Subsidiary company investment to be shown at Carrying value as at the date of transition to IND AS, measured as per previous GAAP are treated as their deemed costs as at the date of transition.

(ii) Credit Risk:

Credit risk refers to risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, Inter Corporate deposit, derivative financial instruments, other balances with banks, loans and other receivables.

Credit risk arising from investment derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counter parties are banks and recognised financial institutions with high credit ratings.

The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:

i. Trade receivables

ii. Balance with banks & fixed Deposits

ii. Financial assets measured at amortized cost (other than trade receivables)

iii. Others

Trade Receivables: Customer credit risk is managed through the company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on the security held in his account. Outstanding customer receivables are regularly monitored. At the year end. the company does not have any outstanding trade receivable.

Balance & fixed Deposits with banks: Credit Risk from balances & Fixed Deposits with banks is managed by the Company’s Finance Department in accordance with the company’s policy. Investments of surplus funds are made only with banks as fixed deposits.

The Company’s maximum exposure to credit risk for the components of the balance sheet at 31.03.2018 & 31.03.2017 is the carrying amounts as summarized in Note No. 4 & 5.

Other Assets: The Company determines if there has been a significant increase in credit risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL is measured and recognized as loss allowance. Subsequently, if credit risk, has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance. Subsequently, if the credit quality of the financial asset improves such that there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial asset. 12-month ECL are a portion of the lifetime ECL which result from default events that are possible within 12 months from the reporting date.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in. the Statement of Profit and Loss under the head ‘Other expenses’. The balance sheet presentation for financial instruments is described below:

Financial assets measured as at amortized cost: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the company does not reduce impairment allowance from the gross carrying amount.

(iii) Liquidity Risk; Liquidity risk is the risk, where the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company monitors its risk of a shortage of funds using future cash flow projections. The Company manages its liquidity needs by continuously monitoring cash flows from customers and by maintaining adequate cash & cash equivalent. The Company’s objective is to maintain a balance between continuity of funding and flexibility through shareholder funds or borrowings from the holding company or sister concerns.

9. Fair Valuation Techniques

The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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

1) Fair value of cash and deposits, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

2) Fair value of borrowings from banks and other non-current financial liabilities, are estimated by discounting future cash, flows using rates currently available for debt on similar terms and remaining maturities.

3) Other non-current receivables are evaluated by the Company, based on parameters such as interest rates, individual creditworthiness of the counterparty etc. Based on this evaluation, allowances are taken to account for the expected losses of these receivables,

4) Fair value of Investments in quoted non-current Equity Shares are based on quoted market . price at the reporting date,

5) The fair values of derivatives are calculated using the RBI reference rate as on the reporting date as well as other variable parameters.

Fair Value hierarchy

AH financial assets and liabilities for which fair value is measured in the financial statements are categorized within the fair value hierarchy, described as follows: -

Level 1 - Quoted prices in active markets.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.

Level 3 - Inputs that are not based on observable market data.

The following table presents the fair value measurement hierarchy of financial assets and liabilities, which have been measured subsequent to initial recognition at fair value as at 31st March, 2018, 31st March 2017 and 1st April 2016;

During the year ended March 31, 2017 and March 31, 201.6, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfer into and out of Level 3 fair value measurements. There is no transaction / balance under level 3.

10. Notes 1 to 20 form an integral part of the Balance Sheet and Profit & Loss Statement of the Company.


Mar 31, 2016

(a) The Company has, with effect from 1st April, 2013 adopted Accounting Standard 15, Employee Benefits (revised 2005), issued by the Institute of Chartered Accountants of India (the ‘revised AS 15’)

(b) The company has long-time retirement benefit plan of gratuity at the yearend no shortfall remains un provided for. As advised by an independent actuary valuation.

(c) Defined benefit plan

In accordance with Accounting Standards 15, actuarial valuation was performed in respect of the aforesaid defined benefit plans based on the followings assumptions:

16.18 Related Parties Disclosure as required by Accounting Standards- 18 issued by ICAI.:-1. Related Parties

a) Subsidiary : Indo Education Private Limited

b) Associate Companies

- Uni Coke Pvt. Ltd.

- Indo Power tech Limited.

c) Group Companies where Common control exist

- Indo German International Pvt. Ltd.

- Somani Kuttner India Private Ltd.

- Northern Exim Pvt Ltd.

- Somani Housing Pvt. Ltd

- Northern Trading Pvt Ltd.

- Indoit Real Estates Ltd.

- Indo Investment Pvt. Ltd.

- Prudent Apartments Pvt. Ltd.

- Meena Properties Pvt. Ltd.

- Indo Russian International Pvt. Ltd.

- Indo Mercuria International Pvt Ltd.

- Indo Macquarie Education Service Ltd.

- Northern Realtors Pvt. Ltd

- Saatvik Housing Pvt. Ltd.

- Mechel Somani Carbon Pvt. Ltd.

d) Key Management Personnel

- Mr. T. K. Somani

- Mr. R.C. Khanduri

- Mrs. Sabina Nagpal

b) Company made Loan of Rs. 12,99,67,000 to its wholly owned subsidiary company, which is utilized for business purposes.

16.20 Notes 1 to 16 form an integral part of the Balance Sheet and Profit & Loss Statement of the Company.


Mar 31, 2015

1. Terms/rights attached to equity shares

Class of Equity Shares, Par Value, Vote per Share, dividend proposed, Distribution at the time of liquidation of co.

2. The company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees.

3. 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 amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

4. Related Parties Disclosure as required by Accounting Standards- 18 issued by ICAI.:- 1. Related Parties

a) Subsidiary : Indo Education Private Limited

b) Associate Companies

* Uni Coke Pvt. Ltd.

* Indo Powertech Limited.

c) Group Companies where Common control exist

* Indo German International Pvt. Ltd.

* Somani Kuttner India Private Ltd.

* Northern Exim Pvt Ltd.

* Somani Housing Pvt. Ltd

* Northern Trading Pvt Ltd.

* Indoit Real Estates Ltd.

* Indo Investment Pvt. Ltd.

* Prudent Apartments Pvt. Ltd.

* Meena Properties Pvt. Ltd.

* Indo Russian International Pvt. Ltd.

* Indo Mercuria International Pvt Ltd.

* Indo Macquarie Education Service Ltd.

* Northern Realtors Pvt. Ltd

* Saatvik Housing Pvt. Ltd.

* Mechel Somani Carbon Pvt. Ltd.

d) Key Management Personnel

* Mr. T. K. Somani

b) Company made Loan of Rs. 12,93,17,000 to its wholly owned subsidiary company, which utilised for business purposes.

5. Notes 1 to 16 form an integral part of the Balance Sheet and Profit & Loss Statement of the Company.


Mar 31, 2014

1. SHARE CAPITAL

Terms/rights attached to equity shares

Class of Equity Shares, Par Value, Vote per Share, dividend proposed, Distribution at the time of liquidation of co.

The company has only one class of equity shares having a par value od Rs. 10 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 remaining assets of the company, after distribution of all prefenrential amounts. The distribution will be propertion to the number of equity shares held by the shareholders.

2. Sundry Debtors, Loans & Advances are subject to confirmation.

3. Previous year figures have been re-grouped and recast wherever necessary to make them comparable with those of the current year.

4. Disclosure under Micro, small and Medium Enterprises Development (MSMED) Act, 2006:

As per the information available with the Company and as certified by the management, there are no dues outstanding including interest as on 31st March,2014 to Micro, Small and Medium Enterprise as defined under the Micro, small and Medium Enterprises Development (MSMLD) Act, 2006.

5. The disclosurers as required as per the revised As 15 are as under:-

(a) The Company has, with effect from 1st April, 2013 adopted Accounting Standard 15, Employee Benefits (revised 2005), issued by the Institute of Chartered Accountants of India (the ''revised AS 15'').

(b) The company has long-time retirement plan of gratuity at the year end no shortfall remains un provided for. As advised by an independent actuary valuation.

6. Related Parties Disclosure as required by Accounting Standards- 18 issued by ICAI.:-

1. Related Parties

a) Subsidiary : Indo Education Private Limited

b) Associate Companies

* Uni Coke Pvt. Ltd.

* Indo Powertech Limited.

c) Group Companies where Common control exist

* Indo German International Pvt. Ltd.

* Somani Kuttner India Private Ltd.

* Northern Exim Pvt Ltd.

* Somani Housing Pvt. Ltd

* Northern Trading Pvt Ltd.

* Indoit Real Estates Ltd.

* Indo Investment Pvt. Ltd.

* Prudent Apartments Pvt. Ltd.

* Meena Properties Pvt. Ltd.

* Indo Russian International Pvt. Ltd.

* Indo Mercuria International Pvt Ltd.

* Indo Macquarie Education Service Ltd.

* Northern Realtors Pvt. Ltd

* Saatvik Housing Pvt. Ltd.

* Mechel Somani Carbon Pvt. Ltd.

d) Key Management Personnel

* Mr. T. K. Somani


Mar 31, 2013

1.1 Sundry Debtors, Loans & Advances are subject to confirmation.

1.2 Previous year figures have been re-grouped and recast wherever necessary to make them comparable with those of the current year.

1.3 with effect from 04-04-2013, the name of the company was changed from "Emergent Energy and Services Limited" to "Emergent Global Edu and Services Limited".

1.4 Disclosure under Micro, small and Medium Enterprises Development (MSMED) Act, 2006:

As per the information available with the Company and as certified by the management, there are no dues outstanding including interest as on 31st March,2013 to Micro, Small and Medium Enterprises as defined under the Micro, small and Medium Enterprises Development (MSMED) Act, 2006.

1.5 No is made as Gratuity Act 1972 is not applicable. Rl Chartered

1.6 Related Parties Disclosure as required by Accounting Standards- 18 issued by ICAI.:-

1. Related Parties

a) Subsidiary : Indo Education Private Limited

b) Associate Companies

> Uni Coke Pvt. Ltd.

> Indo Powertech Limited.

c) Group Companies where Common control exist

> Indo German International Pvt. Ltd.

> Somani Kuttner India Private Ltd.

> Northern Exim Pvt Ltd.

> Somani Housing Pvt Ltd

> Northern Trading Pvt Ltd.

> Indoit Real Estates Ltd.

> Indo Investment Pvt. Ltd.

> Prudent Apartments Pvt. Ltd.

> Meena Properties Pvt. Ltd.

> Indo Russian International Pvt Ltd.

> Indo Mercuria International Pvt Ltd.

> Indo Macquarie Education Service Ltd

> Northern Realtors Pvt. Ltd

> Saatvik Housing Pvt. Ltd.

> Mechel Somani Carbon Pvt. Ltd.

d) Key Management Personnel

Mr. D. K. Somani Mr. T. K. Somani

1.7 Notes 1 to 14 form an integral part of the Balance Sheet and Profit & Loss Statement of the Company.


Mar 31, 2012

Terms/rights attached to equity shares

Class of Equity Shares, Par Value, Vote per Share, dividend proposed, Distribution at the time of liquidation of co.

The company has only one class of equity shares having a par value of Rs.10 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 remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

1.1 Sundry Debtors, Loans & Advances are subject to confirmation.

1.2 Previous year figures have been re-grouped and recast wherever necessary to make them comparable with those of the current year.

1.3 Additional information as required under part II of the Schedule VI of the Companies Act, 1956:-

1.4 Disclosure under Micro, small and Medium Enterprises Development (MSMED) Act, 2006:

As per the information available with the Company and as certified by the management, there are no dues outstanding including interest as on 31st March,2012 to Micro, Small and Medium Enterprises as defined under the Micro, small and Medium Enterprises Development (MSMED) Act, 2006.

1.5 No provision for Gratuity is made as Gratuity Act 1972 is not applicable.

1.6 Related Parties Disclosure as required by Accounting Standards- 18 issued by ICAI. 1. Related Parties

a) Subsidiary : Indo Education Private Limited

b) Associate Companies

- Uni Coke Pvt. Ltd.

- Indo Powertech Limited.

c) Group Companies where Common control exist

- Indo German International Pvt. Ltd.

- Somani Kuttner India Private Ltd.

- Northern Exim Pvt Ltd.

- Somani Housing Pvt. Ltd

- Northern Trading Pvt Ltd.

- Indoit Real Estates Ltd.

- Indo Investment Pvt. Ltd.

- Prudent Apartments Pvt. Ltd.

- Meena Properties Pvt. Ltd.

- Indo Russian International Pvt. Ltd.

- Indo Mercuria International Pvt Ltd.

- Indo Macquarie Education Service Ltd.

- Northern Realtors Pvt. Ltd

- Saatvik Housing Pvt. Ltd.

- Mechel Somani Carbon Pvt. Ltd.

d) Key Management Personnel

Mr. D. K. Somani

Mr. T. K. Somani

1.7 Notes 1 to 15 form an integral part of the Balance Sheet and Profit & Loss Statement of the Company.


Mar 31, 2010

1. Previous year figures have been re-grouped and recast wherever necessary to make them comparable with those of the current year.

2. Auditors remuneration includes:

Audit fees : Rs.47,429/- (Previous year : Rs. 41,620/-)

3. Disclosure under Micro, small and Medium Enterprises Development (MSMED) Act, 2006:

As per the information available with the Company and as certified by the management, there are no dues outstanding including interest as on 31st March,2010 to Micro, Small and Medium Enterprises as defined under the Mi pro, small and Medium Enterprises Development (MSMED) Act, 2006.

4. The erstwhile promoters namely Mr.Gautam G.Mehta were holding 55,050 equity shares (22.11% paid up capital) and Mr.Jaimin G.Mehta holding 82,450 ( 33.11% paid up capital) aggregating to 1,37,500 equity shares of the face value of Rs.10/- each representing 55.52 % of the paid up equity share capital of the Company. Mr.Jaimin G.Mehta entered into Spot delivery contract with Mr. Tarun Somani dated December 10, 2009 for sale of 37,100 equity shares representing 14.90 % of the current paid up equity share capital of the Company. Further, Mr.Devendra Kumar Somani and Mr.Tarun Kumar Somani (Acquirers) entered into a Share Purchase Agreement dated December 30,2009 with Mr.Gautam Mehta and Mr.Jaimin Mehta for further acquiring 1,00,400 equity shares representing 40.32% of the paid up equity share capital of the Company. The erstwhile promoters have divested their entire equity holding in Shree Om Trades Limited in favour of the Acquirers. Pursuant to this acquisition, the acquirers made an open offer to purchase 49,800 equity shares representing 20% of the paid up equity share capital of the Company. The said open offer process was concluded on March 26, The 1,00.400 equity shares under the Share Purchase Agreement and the 46,800 equity shares tendered under the open offer were transferred in the name of the acquirers on March 31, 2010. The process of acquisition is complete and the company has complied with relevant regulations of SEBI.

5. During the year, the Company does not have any transaction with the related parties as covered by the Accounting Standard 18 issued by the ICA1.

6. Earnings per share

a) Net Profit after tax attributable to equity shareholders (Rs.)

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