Mar 31, 2018
Note 1 - Corporate Information
Vakrangee Limited (hereinafter referred to as ââthe Companyââ) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act applicable in India. The registered office of the Company is located at âVakrangee Corporate Houseâ, Plot No. 93, Road No. 16, M.I.D.C., Andheri (East), Mumbai - 400 093, Maharashtra, India. The Companyâs shares are listed on two stock exchanges in India- the Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE).
The Company is engaged in providing diverse solutions, activities in e-governance and e-commerce sector, including bullion and jewellery, through its Vakrangee Kendra (on B2B and B2C basis) with special competencies in handling massive, multi-state, and e-governance enrollment projects, data digitization.
The financial statements were authorized for issue by the Companyâs Board of Directors on June 14, 2018.
Note 2 - Significant Accounting Policies
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements. These accounting policies have been consistently applied to all the years presented by the Company unless otherwise stated.
A. Basis of preparation
i. Statement of compliance
These financial statements are prepared in accordance with Indian Accounting Standards (hereinafter referred to as âInd ASâ) under the provisions of the Companies Act, 2013 (hereinafter referred to as âthe Actâ) (to the extent notified). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
The Company has adopted the Ind AS standards in accordance with Ind AS 101 First time adoption of Indian Accounting Standards during the year ended March 31, 2017.
The accounting policies have been consistently applied by the Company unless otherwise stated or where a newly issued accounting standard is initially adopted.
ii. Basis of Preparation
The financial statements have been prepared on historical cost basis except the following assets and liabilities which have been measured at fair value amount:
- certain financial assets and liabilities (including derivative instruments)
- defined benefit plans- plan assets ; and
- Equity-settled Share Based Payments
The Financial statements of the Company are presented in Indian Rupees (â),which is also its functional currency and all values are rounded off to Lakhs , except when otherwise indicated.
Note 3 (a) - Critical Accounting Judgements and Estimates
The preparation of financial statements in conformity with Ind AS requires judgements, estimates and assumptions to be made by the management of the Company that affect the reported amount of assets, liabilities, revenue, expenses, accompanying disclosures and the disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of income and expense for the periodds presented.
The estimates and associates assumptions are based on historical experience and other factors that are considered to be relevant. Actual results could differ from those estimates. These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future period.
Application of accounting policies that require critical accounting estimates and the use of assumptions in the financial statements are as follows:
- Share-based payments
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 45.
- Defined benefit plans
The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.
Further details about gratuity obligations are given in Note 44.
- Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 47 for further disclosures.
- Depreciation and useful lives of Property, Plant and Equipment
Property, Plant and Equipment are depreciated over the estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful lives and residual values are based on the Companyâs historical experience with similar assets and taken into account anticipated technological changes. The depreciation for future periods is revised if there are significant changes from previous estimates.
- Provision and Contingent Liabilities
A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. Contingent assets are neither recognised nor disclosed in the financial statements.
Note 3 (b) : Indian Accounting Standards issued but not effective
Ministry of Corporate Affairs (âMCAâ) through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new and amendments to Ind ASs which the Company has not applied as they are effective for annual periods beginning on or after April 1, 2018:
Ind AS 115 - Revenue from Contracts with Customers
Ind AS 115 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition standard Ind AS 18 - Revenue, Ind AS 11 - Construction Contracts when it becomes effective.
Ind AS 21 - The Effect of Changes in Foreign Exchange Rates
The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Company is evaluating the impact of this amendment on its financial statements.
(c) Details of charges
The above assets were given as first pari-passu charge security for working capital facilities availed from banks. There are no working capital facilities outstanding as at March 31, 2018.
(d) Fair Value
As at March 31, 2018 and March 31, 2017, the fair value of property is Rs.173.88 lakhs and Rs.179.59 lakhs respectively.
Investment at fair value through profit and loss reflect investment in quoted and unquoted equity securities and quoted mutual fund units.
The strategic investments in subsidiaries have been taken at cost.
The fair value of the unquoted equity shares have been estimated using valuation techniques for which the lowest level input that is significant to the fair value measurement is directly observable.
The fair value of quoted mutual fund units are based on quoted net asset value at the reporting date.
(iv) Detailed note on the terms of the rights, preferences and restrictions relating to each class of shares including restrictions on the distribution of dividends and repayment of capital.
The Company has only one class of Equity Shares having a par value of Rs.1/- per share. Each holder of Equity Share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. During the year ended March 31, 2018, the amount of per share dividend recognised as distributions to Equity Shareholders is Rs.2/- per share of Rs.1/each for the year ended March 31, 2017.
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.
(v) Aggregate details for five immediately previous reporting periods for each class of shares
(vi) Capital Management
The Companyâs objectives when managing capital are to :
(i) Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
(ii) Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio:
Net debt (total borrowings net of cash and cash equivalents) divided by total âequityâ (as shown in the balance sheet, including non-controlling interests).
The Companyâs strategy is to maintain a gearing ration within 1:1. The gearing ratios were as follows :
Nature of reserves
(a) Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of Companies Act, 2013.
(b) General Reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.
As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, Items included in the general reserve will not be reclassified subsequently to statement of profit and loss.
Nature of security of each type of secured loans.
a) Loans repayable on demand from Banks (March 31, 2017) :
The Company had entered into a Security Trustee Agreement for availing the working capital facilities under the consortium banking arrangement and the limit sanctioned is aggregating to Rs.75,000.00 lakhs vide agreement dated June 5, 2015. The Lead Bank vide their letter dated March 27, 2017 had approved the assessment of working capital requirements at the reduced level of Rs.33,200.00 lakhs.
These facilities are secured against the following charge on various assets of the Company :
1. Primary : First pari-passu charge on the entire current assets of the Company, both present & future.
2. Collateral :
First pari-passu charge on the entire movable fixed assets of the Company, both present & future.
- First pari-passu charge on all the immovable assets of the company acquired after 31.03.2011, both present and future.
First pari-passu charge on entire lands & office premises of the company, situated at Marol Co-Operative Industrial Estate & Hind Saurashtra Industries Co-Operative Society Limited, Marol, Andheri (East), Mumbai.
First pari-passu charge on office premises, situated at Marol Co-Operative Industrial Estate, Marol, Andheri (E), Mumbai of Vakrangee Technologies Limited
First Pari-passu charge on residential house at Chandigarh.
3. Corporate Guarantee of Company, Vakrangee Technologies Limited to the extent of value of property.
4. Personal Guarantee of Mr. Dinesh Nandwana, Managing Director & CEO of the Company.
b) Details of the aggregate of each loan guaranteed by directors or others, each head-wise.
All the loans repayable on demand from banks amounting to â Nil (March 31, 2017 : Rs.14,401.89 lakhs) guaranteed by Mr. Dinesh Nandwana, Managing Director & CEO of the Company.
c) Details of continuing default in the repayment of loans and interest, specifying the period and amount separately in each case.
There has been no default in the repayment of loans or interest thereon as on date.
Note (i) :
The Board of Directors in its meeting held on November 13, 2017 had recommended issue of Bonus shares in the ratio of one Equity share of Rs.1 each for one existing equity share of Rs.1 each held. The issue of Bonus share approved by the Shareholder on December 16, 2017 and accordingly the Company allotted 52,94,01,545 number of fully paid equity shares on December 26, 2017. The Earnings Per Share (both basic and diluted) for the year ended March 31, 2017 have been restated to give effect to the aforesaid bonus shares as per Ind AS-33.
Note 4 - Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by the Company as per the Act.
a) Gross amount required to be spent by the company during the year is Rs.1,269.34 lakhs.
Note 5 - Segment Reporting
The Companyâs activities predominantly revolve around providing the e-governance related activities of Mission Mode Projects covered under âNational e-Governance Planâ (NeGP). Considering the nature of Companyâs business and operations, there is only one reportable segment (business and / or geographical) in accordance with the requirements of the Indian Accounting Standard 108 - âOperating Segmentsâ. However, on the basis of delivery modes, the Companyâs business operations has been classified into two business segments, viz. e-Governance Projects and Vakrangee Kendra.
Revenue and identifiable operating expenses in relation to these segments are categorised based on items that are individually identifiable to those segments. Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying assets are used interchangeably to utilise the resources optimally. The management believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as âunallocatedâ and adjusted against the total income of the Company. Fixed assets or liabilities contracted have not been identified to any of the segments as the fixed assets and services are used interchangeably between segments.
The company identifies operating segments based on the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board of directors committee that makes strategic decisions.
The accounting policies adopted for segment reporting are in line with the accounting policies of the company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.
Note 6 - Related Party Details
(a) Key Management Personnel and Directors
Mr. Dinesh Nandwana Managing Director & Chief Executive Officer
Dr. Nishikant Hayatnagarkar Whole-Time Director
Mr. Ramesh Joshi Director
Mr. Sunil Agarwal Director
Mr. Babulal Meena Director
Mrs. Sujata Chattopadhyay Director
Mr. Avinash Chandra Vyas Director
Mr. Thangavelu Sitharthan Nominee Director (upto February 12, 2018)
Mr. Ranbir Datt Nominee Director (w.e.f. February 12, 2018)
Mr. Subhash Singhania Chief Financial Officer (w.e.f. May 11, 2016)
Ms. Darshi Shah Company Secretary and Compliance Officer (upto September 21, 2017)
Mr. Mehul Rawal Company Secretary and Compliance Officer (w.e.f. September 21, 2017)
(b) Relative of key management personnel and Name of the enterprises having same key management personnel and/ or their relatives as the reporting enterprises with whom the Company has entered into transactions during the year
- Vakrangee Technologies Limited Significant Influence of Mr. Dinesh Nandwana and through Vakrangee Holding Private Limited
- Mr. Manoj Nandwana Nephew of Director
- Mr. Shelendra Nandwana Nephew of Director
- Ms. Divya Nandwana (w.e.f. August 29, 2016) Daughter of Director
- Mr. Vedant Nandwana (w.e.f. February 12, 2018) Son of Director
(c) Subsidiary Companies with whom the Company has entered into transactions during the year
Note : Corporate Guarantee given by Vakrangee Technologies Limited for working capital facilities availed by the Company :
There are no working capital facilities outstanding as at March 31, 2018. March 31, 2017: Guarantee given to the extent of value of property, situated at Vakrangee House Bldg. No. 124, Marol Co-Op. Industrial Estate Ltd., Marol, Andheri (E), Mumbai.
Note 7 - Employee Benefit Obligations
(i) Leave obligations
The leave obligations cover the Companyâs liability for earned leave.
The amount of provision of Rs.131.49 lakhs (March 31, 2017 - Rs.101.06 lakhs) is presented as current and non-current, since the Company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the Company does not expect all employee to take the full amount of accrued leave or require payment within the next 12 months. The Company has accounted for provision of leave encashment as per Ind-AS 19 based on acturial valuation undertaken by a registered valuer.
(ii) Gratuity (post-employment benefits)
The Company provides for gratuity to employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to recognised/ approved funds in India. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments. The Company has accounted for provision of gratuity as per Ind-AS 19 based on acturial valuation undertaken by a registered valuer.
(iii) Defined contribution plans
The Company also has ceratin defined benefit obligations. Contributions are made to provident fund in India for employees at the specified rate of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligations of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan is Rs.160.12 lakhs (March 31, 2017 - Rs.134.78 lakhs).
Gratuity
The following table sets out the amount recognised in the balance sheet and the movements in the net defined benefit obligations over the year are as follows:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
*The Company contributes all the ascertained liabilities towards gratuity to Life Insurance Corporation of India (LIC) which is the insurer- managed fund. Since the investments in the plan assets is managed by LIC the detailed breakup of the investments is not made available to the Company.
Maturity profile of gratuity liability and Employer contribution
Expected contributions to post-employment benefit plans for the year ending March 31, 2019 are Rs.103.88 lakhs (as at March 31, 2018 : Rs.81.32 lakhs).
The weighted average duration (based on discounted cash flows) of the defined benefit obligation is 21 years (Year ended March 31, 2017- 21 years). The expected maturity analysis of undiscounted gratuity is as follows :
Note 8 - Share based payments
The company has formulated Employee Stock Option Scheme, 2008 (ESOP Scheme) which was approved by the members/ shareholders of the Company at their annual general meeting held on September 23, 2008, as modified on January 10, 2011 and June 01, 2012 annual report general meeting. Further the company has formulated the new âESOP Scheme 2014â approved by the members of the company through postal ballot on May 23, 2014. The Employee Option Plan is designed to provide incentives to all the existing employees serving with the Company. Under the plan, employees are granted options which vest proportionately from 2 - 6 years from the grant date which includes lock in period.
Once vested, the options remain exercisable for a period of 4 years.
Options are granted under the plan for no consideration and carry no dividend or voting rights. When exercisable, each option is convertible into one equity share. The exercise price of the options is a price which is determined at 50% of market price of the scrip of the company (on the highest traded Stock Exchange) or at any other price as decided by the Nomination and Remuneration and Compensation Committee.
The weighted average share price at the date of exercise of options exercised during the year ended March 31, 2018 was Rs.46.50 (March 31, 2017 : Rs.243.95).
No options expired during the periods in the above tables.
Share options outstanding at the end of the year have the following expiry date and exercise prices:
Fair value of options granted
The fair value at grant date of options granted during the year ended March 31, 2018 was Rs.284.58, Rs.362.48 and Rs.260.00 per option respectively for the three grants issued during the year (March 31, 2017 : â Nil). The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The model inputs for options granted during the year ended March 31, 2018 included:
a) Options are granted for consideration and vest upon completion of service for a period of one / two years. Vested options are exercisable for a period of one / two years after vesting.
The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information.
b) Expense arising from share based payment transactions
Total expenses arising from share based payment transactions recognized in profit or loss as part of employee benefit expense were as follows:
Note 9 - Financial Instruments
(i) Mehtod and assumptions used to estimate the fair value
A number of the Companyâs accounting policies and disclosures require the determination of fair value, for both financial as well as non-financial assets and liabilities. Fair value is the price 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. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal market or the most advantageous market must be accessible to the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The fair value hierarchy is described as below:
Level 1 : Unadjusted quoted prices in active markets for identical assets and liabilities.
Level 2 : Inputs other than prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 : Unobservable inputs for the asset or liability.
The carrying value and fair value by each classification as at March 31, 2018 were as follows:-
(ii) Financial Risk Management
The Board of Directors has overall responsibility for the establishment and overview of the companyâs risk management framework. The Board of Directors has established a risk management policy to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risk and adherence to limits. Risk management systems are reviewed periodically to reflect changes in market conditions and the companyâs activities. The Audit
Committee oversees how management monitors compliances with the companyâs risk management policies and procedures, and reviews the risk management framework. The Audit Committee is assisted in its role by Internal Audit. Internal Audit covers review of risk management controls and procedures, the results of which are reported to the Audit Committee.
The Companyâs activities are exposed to various risk viz. Credit Risk, Liquidity Risk and Market Risk. In order to minimise any adverse effects on the financial performance of the Company, it uses various instruments and follows policies set up by the Board of Directors / Management of the Company.
a) Credit Risk :
Credit risk is the risk of financial loss arising from counter party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.
Credit risks from balances with banks and financial institutions are managed in accordance with the Company policy. For derivative and financial instruments, the Company attempts to limit the credit risk by only dealing with reputable banks and financial institutions having high credit ratings assigned by credit rating agencies.
In addition, the Company is exposed to credit risk in relation to financial guarantees given to banks and other counter parties for the facilities availed by subsidiary. The Companyâs maximum exposure in this respect is the maximum amount the Company would have to pay if the guarantee is called upon.
Trade receivables consists of large number of customers spread across diverse industries and geographical areas with no significant concentration of credit risk. The outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables.
b) Liquidity Risk :
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach for managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to Companyâs reputation, typically the company ensures that it has sufficient cash on demand to meet expected operational expenses, servicing of financial obligations.
c) Market Risk :
Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates and other market changes that affect market risk sensitive instruments.
(i) Market Risk - Foreign Exchange
Foreign currency Risk is that risk in which fair value or future cash flows of a financial instrument will fluctuate because of changes in the foreign exchange rates. The Company operates internationally and a portion of its business is transacted in several currencies and therefore the Company is exposed to foreign exchange risk through its overseas sales and purchases in various foreign currencies. The Company hedges the receivables as well as payables by forming view after discussion with Forex consultant and as per policies by Management. The Company is also exposed to the Foreign currency loans availed from various banks to reduce the overall interest cost.
The carrying amount of the Companyâs foreign currency denominated monetary assets and liabilities as at the end of the reporting period is as follows:
Foreign Currency Sensitivity
1% increase or decrease in foreign exchange rates will have the following impact on Profit after Tax and impact on Equity
In managementâs opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.
ii) Market Risk - Interest Rate
The interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company does not have any borrowings outstanding as at March 31, 2018 and in absence of exposure to interest rates on borrowings, the impact of interest rate sensitivity analysis is not required.
Note 10 - Income Taxes
(a) A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before income taxes is summarized below:
(b) The following table provides the details of income tax liabilities and income tax assets as of March 31, 2018 and March 31, 2017 :
(c ) The gross movement in the deferred income tax account for the year ended March 31, 2018 and March 31, 2017, are as follows:
The timing differences arising as at year-end are deferred tax assets. There are no items for which there is deferred tax liability as at year-end. Hence, on the basis of reasonable certainty, such deferred tax assets have not been recognised and carried forward during the year ended on March 31, 2017.
Note 11 - Other Comprehensive Income
During the year, Company has made an irrevocable election to present the subsequent changes in the fair value of equity instruments, not held for trading, in the Other Comprehensive Income. The cumulative loss recognised on disposal of equity instruments for the year ended March 31, 2018 is Rs.3,086.34 lakhs. Dividend recognised during the year for the investment disposed off is Rs.46.96 lakhs.
Note 12 - Previous year figures
The financial statements have been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) prescribed under Section 133 of the Companies Act, 2013 and other recognised accounting practices and polices to the extent applicable. The previous yearâs figures have been regrouped / reclassified wherever necessary, to make them comparable.
Mar 31, 2017
Note 1 - Corporate Information
Vakrangee Limited (hereinafter referred to as ââthe Companyâ) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 2013 applicable in India. The registered office of the Company is located at âVakrangee Houseâ, Plot No. 66, Marol Co-op. Indl. Estate, Off. M. V. Road, Marol, Andheri (East), Mumbai, Maharashtra, India. The Companyâs shares are listed on two stock exchanges in India- the Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE).
The Company is engaged in providing diverse solutions, activities in e-governance and e-commerce sector through its Vakrangee Kendra with special competencies in handling massive, multi-state, and e-governance enrollment projects, data digitization.
The financial statements were authorized for issue by the Companyâs Board of Directors on May 30, 2017.
Note 2 - Significant Accounting Policies
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements. These accounting policies have been consistently applied to all the years presented by the Company unless otherwise stated.
A. Basis of preparation
i. Statement of compliance
These financial statements are prepared in accordance with Indian Accounting Standards (hereinafter referred to as âInd ASâ) under the provisions of the Companies Act, 2013 (hereinafter referred to as âthe Actâ) (to the extent notified). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
These financial statements for the year ended March 31, 2017 are the first financial statements of the Company prepared in accordance with Ind AS. For all periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with the Generally Accepted Accounting Principles (hereinafter referred to as âprevious GAAPâ) used for its statutory reporting requirement in India. Refer Note 4 for an explanation of how the transition from the previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows. The Company has adopted the Ind AS standards in accordance with Ind AS 101 First time adoption of Indian Accounting Standards.
The accounting policies have been consistently applied by the Company unless otherwise stated or where a newly issued accounting standard is initially adopted.
ii. Basis of measurement
The financial statements have been prepared on historical cost basis except the following
- certain financial assets and liabilities (including derivative instruments) are measured at fair value;
- assets held for sale- measured at fair value less cost to sell;
- defined benefit plans- plan assets measured at fair value; and
- share based payments
Note 3 - Critical Accounting Judgements and Estimates
The preparation of financial statements in conformity with Ind AS requires judgements, estimates and assumptions to be made that affect the reported amount of assets, liabilities, revenue, expenses, accompanying disclosures and the disclosures of contingent liabilities. The estimates and associates assumptions are based on historical experience and other factors that are considered to be relevant. Actual results could differ from those estimates. These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future period.
Application of accounting policies that require critical accounting estimates and the use of assumptions in the financial statements are as follows:
- Share-based payments
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 49.
- Defined benefit plans
The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.
Further details about gratuity obligations are given in Note 48.
- Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 50 for further disclosures.
Note 4 - First-time adoption of Ind AS
These financial statements, for the year ended March 31, 2017, are the first financial statements prepared in accordance with Ind AS.
The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended on March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet at April 1, 2015 these financial statements (the Company date of transition).
In preparing its opening Ind AS balance sheet and in presenting the comparative information for the year ended March 31, 2016, the Company has adjusted the amounts reported previously in the financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). For the purpose of transition from the Indian GAAP to Ind AS, the Company has applied Ind AS 101 - First Time Adoption of Indian Accounting Standards.
An explanation of how the transition from previous GAAP to Ind AS has affected the Company financial position, financial performance and cash flows is set out in the following tables and notes
Exemptions on first time adoption of Ind AS availed in accordance with Ind AS 101 have been described in below.
I. Exemptions and exceptions availed on first time adoption of Ind AS 101
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS - Ind AS optional exemptions
i. Deemed Cost
Ind AS 101 permits, a first time adopter to elect to continue with the carrying values for 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 the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for Investment properties.
Accordingly, the Company has elected to measure all of its property, plant and equipment, Investment properties and intangible assets at their previous GAAP carrying value.
ii. Leases
Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. This assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material.
The Company has elected to apply this exemption for such contracts / arrangements.
iii. Designation of previously recognised financial instruments
Ind AS allows an entity to designate investments in equity instruments (other than equity investments in subsidiaries, associates and joint arrangements and other than held for trading) as at fair value through other comprehensive income (FVTOCI) based on facts and circumstances at the date of transition to Ind AS. Other equity investments are classified as at fair value through profit and loss (FVTPL).
The Company has not elected to apply this exemption for its equity investments (other than equity investments in subsidiaries, associates and joint arrangements and other than held for trading) to designate it as FVTPL
iv. Measurement of Investment in subsidiaries, associates and joint ventures
Ind AS allows entity that subsequently measures an investment in a subsidiary, joint ventures or associate at cost, may measure such investment at cost (determined in accordance with Ind AS 27) or deemed cost (fair value or previous GAAP carrying amount) in its separate opening Ind AS balance sheet.
For investments in equity instruments of subsidiaries the Company has elected to apply separate exemption available under Ind AS 101 by measuring at their previous GAAP carrying amount cost which is the deemed cost at the date of transition to Ind AS.
- Ind AS mandatory exceptions
i. Estimates
An entityâs estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:
- Investment in equity instruments carried at FVTPL or FVTOCI
- Impairment of financial assets based on expected credit loss model.
ii. 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 exist at the date of transition to Ind AS.
Accordingly, the Company has determined the classification of financial assets based on the facts and circumstances that exist on the date of transition.
II. Reconciliations between previous GAAP and Ind AS
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows. The following tables represent the reconciliations from previous GAAP to Ind AS.
III. Notes to first-time adoption
1) Trade receivables
As per Ind AS 109, the Company is required to apply expected credit loss model for recognising the allowance for doubtful debts. As a result, the allowance for doubtful debts increased by Rs.134.89 lakhs as at March 31, 2016 (April 1, 2015 Rs.655.50 lakhs). Consequently, the total equity as at March 31, 2016 decreased by Rs.790.39 lakhs (April 1, 2015 Rs.655.50 lakhs) and profit for the year ended March 31, 2016 decreased by Rs.134.89 lakhs.
2) Proposed dividend
Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered adjusting events. Accordingly, provision for proposed dividend was recognized as a liability.
Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend (excluding corporate dividend tax) of Rs.6,614.95 lakhs as at March 31, 2016 (April 1, 2015 Rs.1,258.71 lakhs) included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.
3) Borrowings
Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the profit and loss over the tenure of the borrowing as part of the finance cost by applying effective interest rate method.
Under previous GAAP, these transaction costs were charged to profit and loss as and when incurred. Accordingly, borrowings as at March 31, 2016 have been reduced by Rs.28.02 lakhs (April 1, 2015 Rs.42.05 lakhs) with a corresponding adjustment to retained earnings. The total equity increased by an equivalent amount. The profit for the year ended March 31, 2016 reduced by Rs.27.98 lakhs as a result of the additional interest expense.
4) Employee stock option
Under the previous GAAP, the cost of equity- settled employee shared-based plan were recognised using the intrinsic value method.
Under Ind AS, the cost of equity settled share-based plan is recognised based on the fair value of the options as at the grant date. Consequently, the amount recognised in share option outstanding account increased by Rs.109.50 lakhs as at March 31, 2016 (April 1, 2015 Rs.54.34 lakhs). The profit for the year ended March 31, 2016 decreased by Rs.55.16 lakhs. There is no impact on equity.
5) Remeasurements of post- employment benefit obligations
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss.
Under the previous GAAP, these remeasurements were forming part of the profit and loss for the year. As a result of this change, the profit for the year ended March 31, 2016 increased Rs.57.64 lakhs. There is no impact on the total equity as at March 31, 2016.
6) Other comprehensive income
Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as âother comprehensive incomeâ includes remeasurement of defined benefit plans and fair value gains or (losses) on FVTOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP
Note 5 - Investment Properties (a) Description
(b) Amount recognised in Statement of Profit & Loss for Investment Property.
(c) For investment property existing on April 1, 2015 i.e. its date of transition to Ind AS, the company has used India GAAP carrying value as deemed cost.
(d) Details of charges
The above assets have been given as first pari-passu charge security for working capital facilities availed from banks.
(e) Fair Value
As at March 31, 2017 and March 31, 2016, the fair value of property is Rs.179.59 lakhs and Rs.122.00 lakhs respectively.
Note 6 - Borrowings (Non - Current)
Terms of repayment of term loans and other loans.
Term Loan from Banks (March 31, 2016 and April 1, 2015) :
1. The Company had taken a term loan of Rs.2,500.00 lakhs. The rate of interest was 11.95% p.a. The loan was to be repaid in 16 quarterly installments of Rs.156.25 lakhs starting from availability-cum-moratorium period of 15 months from the date of first disbursement (first instalment payable on 31.05.2015), thereby total tenor of the loan will be 63 months. However, the Company has made prepayment of the loan during the year and therefore, there is no amount outstanding towards the said loan as on March 31, 2017.
2. The Company had taken a term loan in the form of External Commercial Borrowings (ECBs) of USD 10 million. The borrowings were made at an interest rate equal to the sum of LIBOR and the Margin as specified in the Term Loan Facility Agreement. The payment of interest to be made quarterly. The rate of interest was 3.561% p.a. The loan was to be repaid in 12 quarterly installments starting from June 30, 2014, with first 11 installments in equal amounts & the amount of the last i.e. twelth installment being the balance of principal pending for repayment, thereby total tenor of the loan to be five years. The Company has made prepayment of the said loan during the year and therefore, there is no amount outstanding towards the said loan as on March 31, 2017.
The Company had entered into a Cross Currency & Interest Rate Swap facility for hedging of the ECB repayments (principal and interest). By way of this swap facility, the rate of interest had been fixed at 9.62% p.a. for complete tenor of the term loan. The spot reference rate for repayment of the said loan had been fixed at Rs.56.08 for 1 USD.
The bank had sanctioned Loan Equivalent Value (LEV) of Rs.649.30 lakhs under currency swap facility. Negative Mark-to-Market threshold limit for margin call had been fixed at Rs.500.00 lakhs.
In case, the net payables exceed the exposure, the Bank has the right to call for additional deposit margin forthwith to maintain the exposure within the threshold limit. The Company shall deposit cash collateral as per Bankâs instructions, if negative MTM exceeds Rs.500.00 lakhsâ
Nature of security of each type of secured loans.
i) Term Loans from Banks (Rs.2500.00 lakhs) :
1. First pari-passu charge by way of hypothecation on micro ATM, Financial Inclusion (FI) kits and assets purchased out of the said rupee term loan.
2. First charge on the designated bank account through which all the revenues and receivables of all the FI centres will be routed.
3. First charge on the Debt Service Reserve account (DSRA) and any other bank account of the company with respect to proposed FI project.
4. Second pari-passu charge on all the present and future current assets of the Company.
5. Second pari-passu charge on the movable fixed assets of the company (present & future), except micro ATMs and other FI kits.
6. Second parri-passu charge through mortgage on the office premises of the Company, situated at Marol CoOperative Industrial Society & Hind Saurashtra Industries Co-Operative Society Limited, Marol, Andheri (East), Mumbai.
7. Second pari-passu charge on office premise of Vakrangee Technologies Limited, situated at Marol CoOperative Industrial Society, Marol, Andheri (East), Mumbai.
8. Second pari-passu charge on property situated at Deer Park, New Delhi.
9. Personal Guarantee of Mr. Dinesh Nandwana, Managing Director & CEO of the Company & Corporate Guarantee of Vakrangee Technologies Limited.
ii) Term Loans from Banks - External Commercial Borrowings (ECB) :
1. First charge on all moveable and immoveable fixed assets financed out of the term loan, with a minimum asset cover ratio of 1.33 times.
2. Second parri-passu charge on all assets of the Company excluding those financed through this term loan.
3. Second pari passu charge on the UID kits procured from existing term loans availed from banks.
4. Personal Guarantee of Mr. Dinesh Nandwana, Managing Director & CEO of the Company.
Details of the aggregate of each loan guaranteed by directors or others, each head-wise.
All the term loans amounting to Rs.Nil (March 31, 2016 : Rs.1,221.98 lakhs, April 1, 2015 : Rs.3,698.55 lakhs) guaranteed by Mr. Dinesh Nandwana, Managing Director & CEO of the Company.
Details of continuing default in the repayment of loans and interest, specifying the period and amount separately in each case.
There has been no default in the repayment of loans or interest thereon as on date.
Nature of security of each type of secured loans. a) Loans repayable on demand from Banks :
The Company had entered into a Security Trustee Agreement for availing the working capital facilities under the consortium banking arrangement and the limit sanctioned is aggregating to Rs.75,000.00 lakhs vide agreement dated June 5, 2015. Based on the operational requirements, the Company has proposed revision in working capital facilities from Rs.51,090.00 lakhs (as at March 31, 2016) to Rs.33,200.00 lakhs (as at March 31, 2017). The Lead Bank vide their letter dated March 27, 2017 has approved the assessment of working capital requirements at the reduced level of Rs.33,200.00 lakhs.
These facilities are secured against the following charge on various assets of the Company :
1. Primary : First pari-passu charge on the entire current assets of the Company, both present & future.
2. Collateral :
- First pari-passu charge on the entire movable fixed assets of the Company, both present & future.
- First pari-passu charge on all the immovable assets of the company acquired after 31.03.2011, both present and future.
- First pari-passu charge on entire lands & office premises of the company, situated at Marol Co-Operative Industrial Estate & Hind Saurashtra Industries Co-Operative Society Limited, Marol, Andheri (East), Mumbai.
- First pari-passu charge on office premises, situated at Marol Co-Operative Industrial Estate, Marol, Andheri (E), Mumbai of Vakrangee Technologies Limited
- First Pari passu charge on residential house at Chandigarh.
3. Corporate Guarantee of Company, Vakrangee Technologies Limited to the extent of value of property.
4. Personal Guarantee of Mr. Dinesh Nandwana, Managing Director & CEO of the Company.
b) Details of the aggregate of each loan guaranteed by directors or others, each head-wise.
All the loans repayable on demand from banks amounting to Rs.14,401.89 lakhs (March 31, 2016 : Rs.28,275.04 lakhs, April 1, 2015 : Rs.29,968.80 lakhs) guaranteed by Mr. Dinesh Nandwana, Managing Director & CEO of the Company.
c) Details of continuing default in the repayment of loans and interest, specifying the period and amount separately in each case.
There has been no default in the repayment of loans or interest thereon as on date.
Note 7 - Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by the Company as per the Act.
Note 8 - Disclosure on Specified Bank Notes (SBNs)
During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December, 30 2016, the denomination wise SBNs and other notes as per the notification is given below:
* For the purposes of this clause, the term âSpecified Bank Notesâ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the November 8, 2016.
** The Company had obtained licence for operating White Label ATMs (WLAs) from the Reserve Bank of India and is currently carrying ATM services in rural, semi-urban and urban areas in India. The Company had cash, both SBNs and other denomination notes, as on the closing hours of November 8, 2016 in the WLA ATMs operated by the Company. Thereafter, the Company has carried out exercise of removing such SBNs from those ATMs and depositing them into the Companyâs specified bank account. The total amount of such specified bank notes deposited into bank by the Company is Rs.777.18 lakhs. This amount has not been included above as the SBN currency was not held as cash balance with the company during the period from November 8, 2016 to December 30, 2016.
Note 9 - Money received against Share warrants
The Company had issued 250.00 lakhs fully convertible warrants to M/s. NJD Capital Private Limited (formerly known as Vakrangee Capital Private Limited) at Rs.100/- per warrant in February, 2014. The warrants issued were convertible into equal no. of equity shares having face value of Rs.1/- with premium of Rs.99/- per share. Those warrants have been converted into 250.00 lakhs fully paid-up equity shares of Rs.1/- each in August, 2015 i.e. before the expiry of 18 months from the date of allotment of warrants. These equity shares are subject to lock-in-period of three years from date of allotment of the equity shares or such reduced period as may be permitted under the SEBI Issue of Capital & Disclosure Requirements (ICDR) Regulations, 2009 as amended time to time.
Note 10 - Segment Reporting
The Companyâs activities predominantly revolve around providing the e-governance related activites of Mission Mode Projects covered under âNational e-Governance Planâ (NeGP). Considering the nature of Companyâs business and operations, there is only one reportable segment (business and / or geographical) in accordance with the requirements of the Indian Accounting Standard 108 - âOperating Segmentsâ However, on the basis of delivery modes, the Companyâs business operations has been classified into two business segments, viz. e-Governance Projects and Vakrangee Kendra.
Revenue and identifiable operating expenses in relation to these segments are categorised based on items that are individually identifiable to those segments. Certain expenses such as depreciation, which form a significant component of total expenses, are not specifically allocable to specific segments as the underlying assets are used interchangeably to utilise the resources optimally. The management believes that it is not practical to provide segment disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as âunallocatedâ and adjusted against the total income of the Company. Fixed assets or liabilities contracted have not been identified to any of the segments as the fixed assets and services are used interchangeably between segments. Accordingly, no disclosure relating to total segment assets and liabilities are made.
The company identifies operating segments based on the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board of directors committee that makes strategic decisions.
The accounting policies adopted for segment reporting are in line with the accounting policies of the company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.
Note 11 - Employee Benefit Obligations
(i) Leave obligations
The leave obligations cover the Companyâs liability for earned leave.
The amount of provision of Rs.101.06 lakhs (March 31, 2016 - Rs.58.95 lakhs) is presented as current and non-current, since the Company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the Company does not expect all employee to take the full amount of accrued leave or require payment within the next 12 months.
(ii) Gratuity (post-employment benefits)
The Company provides for gratuity to employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to recognised/ approved funds in India. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments.
(iii) Defined contribution plans
The Company also has ceratin defined benefit obligations. Contributions are made to provident fund in India for employees at the specified rate of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligations of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan is Rs.134.78 lakhs (March 31, 2016 - Rs.105.63 lakhs).
Gratuity
The following table sets out the amount recognised in the balance sheet and the movements in the net defined benefit obligations over the year are as follows:
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
Maturity profile of gratuity liability and Employer contribution
Expected contributions to post-employment benefit plans for the year ending March 31, 2018 are Rs.81.32 lakhs (as at March 31, 2017 : Rs.57.86 lakhs).
The weighted average duration (based on discounted cash flows) of the defined benefit obligation is 21 years (2016- 20 years). The expected maturity analysis of undiscounted gratuity is as follows :
Note 12 - Share based payments
The company has formulated Employee Stock Option Scheme, 2008 (ESOP Scheme) which was approved by the members/ shareholders of the Company at their annual general meeting held on 23 September, 2008, as modified on 10 January, 2011 and 1 June, 2012 annual report general meeting. Further the company has formulated the new âESOP Scheme 2014â approved by the members of the company through postal ballot on 23rd May, 2014. The Employee Option Plan is designed to provide incentives to all the existing employees serving with the Company. Under the plan, employees are granted options which vest proportionately from 2 - 6 years from the grant date which includes lock in period.
Once vested, the options remain exercisable for a period of 4 years.
Options are granted under the plan for no consideration and carry no dividend or voting rights. When exercisable, each option is convertible into one equity share. The exercise price of the options is a price which is determined at 50% of market price of the scrip of the company (on the highest traded Stock Exchange) or at any other price as decided by the Nomination and Remuneration and Compensation Committee.
The weighted average share price at the date of exercise of options exercised during the year ended March 31, 2017 was Rs.243.95 (March 31, 2016 : Rs.108.06).
No options expired during the periods in the above tables.
Share options outstanding at the end of the year have the following expiry date and exercise prices:
Fair value of options granted
The fair value at grant date of options granted during the year ended March 31, 2017 was NIL per option (March 31, 2016 : Rs.152.51). The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The model inputs for options granted during the year ended March 31, 2017 included:
a) Options are granted for no consideration and vest upon completion of service for a period of two years. Vested options are exercisable for a period of two years after vesting.
b) Exercise price : Rs.Nil (March 31, 2016 - Rs.113.08)
c) Grant date : NIL (March 31, 2016 - March 11, 2016)
d) Expiry date : NIL (March 31, 2016 - March 10, 2025)
e) Share price at grant date : Rs.Nil (March 31, 2016 - Rs.224.50)
f) Expected price volatility of the companyâs shares : NIL (March 31, 2016 - 42.50%)
g) Expected dividend yield : NIL (March 31, 2016 - 0.40%)
h) Risk free interest rate : NIL (March 31, 2016 - 7.60%)
The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information.
b) Expense arising from share based payment transactions
Total expenses arising from share based payment transactions recognized in profit or loss as part of employee benefit expense were as follows:
Note 13 - Financial Risk Management
The Companyâs activities expose it to market risk, liquidity risk and credit risk. The below note explains the sources of risk which the entity is exposed to and how the entity manages the risk :
Note 14 - Income Taxes
(a) A reconciliation of the income tax provision to the amount computed by applying the statutory income tax rate to the income before income taxes is summarized below:
(b) The following table provides the details of income tax liabilities and income tax assets as of March 31, 2017, March 31, 2016 and April 1, 2015
The gross movement in the current income tax liability / (asset) for the year ended March 31, 2017 and March 31, 2016 is as follows:
(c ) The gross movement in the deferred income tax account for the year ended March 31, 2017 and March 31, 2016, are as follows:
The timing differences arising as at year-end are deferred tax assets. There are no items for which there is deferred tax liability as at year-end. Hence, on the basis of reasonable certainty, such deferred tax assets have not been recognised and carried forward.
Note 15 - Previous year / period figures
The financial statements have been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) prescribed under Section 133 of the Companies Act, 2013 and other recognised accounting practices and policies to the extent applicable. The Company has adopted Ind AS on April 1, 2016 with the transition date as April 1, 2015, and adoption was carried out in accordance with Ind-AS 101 - First time adoption of Indian Accounting Standards. The previous periodâs figures have been regrouped or rearranged wherever necessary.
Mar 31, 2016
Note 1 - Dividends
(a) Detailed note on Proposed Equity Dividend and Proposed Preference
Dividend for the period and related amount per share.
The Board of Directors of the Company recommended dividend of Rs.1.25
per share on fully paid up equity share of Rs.1/- each for the
financial year ended 31st March, 2016, subject to members approval in
the ensuing Annual General Meeting.
Note 2 - Value of Raw Materials, Spare Parts and Components Consumed
Since the Company is engaged in providing e-governance related
services, the quantitative details with respect to Opening Stock,
Purchases, Sales and Closing Stock are not applicable to the Company
and hence not given.
Note 3 - Related Party Details
(a) Key Management Personnel
Mr. Dinesh Nandwana Managing Director & CEO (Chairman & Managing
Director upto 26.07.2015)
Dr. Nishikant Hayatnagarkar Whole-Time Director
Mr. Ramesh Mulchand Joshi Director
Mr. Sunil Agarwal Director
Mr. Babulal Meena Director
Ms. Darshi Shah Company Secretary
(b) Relative of key management personnel and Name of the enterprises
having same key management personnel and/ or their relatives as the
reporting enterprises with whom the Company has entered into
transactions during the year
Vakrangee Lacteus & Hortus Limited
Vakrangee Capital Private Limited
Vakrangee Technologies Limited
Mr. Manoj Nandwana
Note 4 - Gratuity & Leave encashment
The Company has provided for Gratuity and leave encashment, in
accordance with revised AS-15, "Employee Benefits" the company has
provided the liability on actuarial basis.
Note 5 - Segment Reporting
The Company''s activities predominantly revolve around providing the
e-governance related activites of Mission Mode Projects covered under
"National e-Governance Plan" (NeGP). Considering the nature of
Company''s business and operations, there is only one reportable segment
(business and / or geographical) in accordance with the requirements of
the Accounting Standard 17 - "Segment Reporting" notified in the
Companies (Accounting Standards) Rules 2006. However, on the basis of
delivery modes, the Company''s business operations has been classified
into two business segments, viz. e-Governance Projects and Vakrangee
Kendra.
Revenue and identifiable operating expenses in relation to these
segments are categorised based on items that are individually
identifiable to those segments. Certain expenses such as depreciation,
which form a significant component of total expenses, are not
specifically allocable to specific segments as the underlying assets
are used interchangeably to utilise the resources optimally. The
management believes that it is not practical to provide segment
disclosures relating to those costs and expenses, and accordingly these
expenses are separately disclosed as ''unallocated'' and adjusted against
the total income of the Company. Fixed assets or liabilities contracted
have not been identified to any of the segments as the fixed assets and
services are used interchangeably between segments. Accordingly, no
disclosure relating to total segment assets and liabilities are made.
Note 6 - Leases Finance Leases
The Company has taken Computer Equipments & other Fixed Assets on
finance lease. Future minimum lease payments & present value of minimum
lease payments towards the finance lease are as below :
Note 7 - Amounts due to Micro, Small and Medium Enterprises:
The Company has not received any intimation from the suppliers under
the The Micro, Small & Medium Enterprises Development Act 2006 and
therefore disclosures, if any, relating to amounts unpaid as at the
year end together with interest paid/payable as required under the said
Act have not been given.
Note 8 - Previous year figures
The figures of the previous year have been re-arranged, re-grouped and
re- classified wherever necessary.
Mar 31, 2015
Note 1. - Contingent Liabilities and Commitments (to the extent not
provided for)
(Rs. in Lacs)
Particulars As at March 31, 2015 As at March 31, 2014
(A) Contingent
Liabilities
(i) Claims against
the company not 27.23 -
acknowledged as debts
(ii) Company has
provided Counter
Guarantee in 1,779.60 2,130.44
relation to Bank
Guarantee to various
parties which is not
acknowledged in
books of accounts
(iii) Other contingent
liabilities - -
( A ) 1,806.83 2,130.44
(B) Commitments
(i) Estimated amount of
contracts remaining
to be 25.00 25.00
executed on capital
account not provided
for
(ii) Uncalled
liabilities
on share and other 10.00 10.00
investments partly
paid up
(iii) Others commitments - -
( B ) 35.00 35.00
TOTAL (A B) 1,841.83 2,165.44
Note :
1. The amount of liabilities, which may occur on levying of penalty
and/or charges by clients for delays in execution of contracts within
the time prescribed in the agreement, is unascertained.
Note 2 - Dividends
(a) Detailed note on Proposed Equity Dividend and Proposed Preference
Dividend for the period and related amount per share.
The Board of Directors of the Company recommended dividend of Rs. 0.25
per share on fully paid up equity share of Rs. 1/- each for the financial
year ended 31st March, 2015, subject to members approval in the ensuing
Annual General Meeting.
Note 3 - Value of Raw Materials, Spare Parts and Components Consumed
Since the Company is engaged in providing e-governance related
services, the quantitative details with respect to Opening Stock,
Purchases, Sales and Closing Stock are not applicable to the Company
and hence not given.
Note 4 - Segment Reporting
The Company''s activities predominantly revolve around providing the
e-governance related activates of Mission Mode Projects covered under
"National e-Governance Plan" (NeGP). Considering the nature of
Company''s business and operations, there is only one reportable segment
(business and / or geographical) in accordance with the requirements of
the Accounting Standard 17 Â "Segment Reporting" notified in the
Companies (Accounting Standards) Rules 2006. However, on the basis of
delivery modes, the Company''s business operations has been classified
into two business segments, viz. e-Governance Projects and Vakrangee
Kendra, for the year.
Revenue and identifable operating expenses in relation to these
segments are categorised based on items that are individually
identifable to those segments. Certain expenses such as depreciation,
which form a significant component of total expenses, are not
specifically allocable to specific segments as the underlying assets are
used interchangeably to utilise the resources optimally. The management
believes that it is not practical to provide segment disclosures
relating to those costs and expenses, and accordingly these expenses
are separately disclosed as ''unallocated'' and adjusted against the
total income of the Company. Fixed assets or liabilities contracted
have not been identified to any of the segments as the fixed assets and
services are used interchangeably between segments. Accordingly, no
disclosure relating to total segment assets and liabilities are made.
Note 5 - Amounts due to Micro, Small and Medium Enterprises:
The Company has not received any intimation from the suppliers under
the The Micro, Small & Medium Enterprises Development Act 2006 and
therefore disclosures, if any, relating to amounts unpaid as at the
year end together with interest paid/payable as required under the said
Act have not been given.
Note 6 - Previous year figures
The figures of the previous year have been re-arranged, re-grouped and
re- classified wherever necessary.
Mar 31, 2014
Note 1 - Contingent Liabilities and Commitments (to the extent not
provided for)
(Rs. in Lacs)
Particulars As at March 31, 2014 As at March 31, 2013
(A) Contingent Liabilities
(i) Claims against the company not - -
acknowledged as debts
(ii)Company has provided Counter
Guarantee in 2,130.44 2,538.79
relation to Bank Guarantee to
various parties which is not
acknowledged in books of accounts
(iii) Other contingent liabilities
(Refer Note 1 below) - 210.27
( A ) 2,130.44 2,749.06
Note :
1. The contingent liabilities were towards Income Tax demand raised
during the course of Block Assessment for the Assessment Year 2005-06
to Assessment Year 2011-12 of Rs. Nil (Previous Year Rs. 210.27 Lacs) for
which the Company has fled rectifcation u/s 154 of the Income Tax Act,
1961 / appeals were pending before the Commissioner of Income Tax
(Appeals).
2. The amount of liabilities, which may occur on levying of penalty
and/or charges by clients for delays in execution of contracts within
the time prescribed in the agreement, is unascertained.
Note 2 - Dividends
(a) Detailed note on Proposed Equity Dividend and Proposed Preference
Dividend for the period and related amount per share.
The Board of Directors of the Company recommended dividend of Rs. 0.25
per share on fully paid up equity share of Rs. 1/- each for the financial
year ended March 31, 2014, subject to members approval in the ensuing
Annual General Meeting.
(b) Detailed note on disclosure as required by AS-15
For details, refer Note No. 37.
Note 3 - Value of Raw Materials, Spare Parts and Components Consumed
Since the Company is engaged in providing e-governance related
activities, the quantitative details with respect to Opening Stock,
Purchases, Sales and Closing Stock are not applicable to the Company
and hence not given.
Note 4 - Related Party Details (a) Key Management Personnel
Mr. Dinesh Nandwana Chairman & Managing Director
Dr. Nishikant Hayatnagarkar Whole-Time Director
Mr. Ramesh Mulchand Joshi Director
Mr. Sunil Agarwal Director
Mr. Anil Patodia * Director
Mr. Babu Lal Meena Director
Mr. Kunnel Prem** Nominee Director (LIC)
* Mr. Anil Patodia resigned w.e.f. September 30, 2013 ** Mr. Kunnel
Prem resigned w.e.f. April 2, 2014
(b) Relative of key management personnel and Name of the enterprises
having same key management personnel and/ or their relatives as the
reporting enterprises with whom the Company has entered into
transactions during the year
Vakrangee Holdings Private Limited Vakrangee Lacteus & Hortus Limited
Vakrangee Capital Private Limited Vakrangee Technologies Limited
Vakrangee Infraprojects Limited Omnis Edu-Health Limited Omnis Infra
Power Limited Mr. Manoj Nandwana
Note 5 - Gratuity & Leave encashment
The Company has provided for Gratuity and leave encashment, in
accordance with revised AS-15, "Employee benefits", the company has
provided the liability on actuarial basis.
Note 6 - Segment Reporting
The Company''s activities predominantly revolve around providing the
e-governance related services. Considering the nature of Company''s
business and operations, there is only one reportable segment (business
and / or geographical) in accordance with the requirements of the
Accounting Standard 17 Â "Segment Reporting" notifed in the Companies
(Accounting Standards) Rules 2006.
Note 7 - Amounts due to Micro, Small and Medium Enterprises:
The Company has not received any intimation from the suppliers under
the The Micro, Small & Medium Enterprises Development Act 2006 and
therefore disclosures, if any, relating to amounts unpaid as at the
year end together with interest paid/payable as required under the said
Act have not been given.
Note 8 - Previous year figures
The figures of the previous year have been re-arranged, re-grouped and
re- classified wherever necessary.
Mar 31, 2013
Note 1 - Dividends
(a) Detailed note on Proposed Equity Dividend and Proposed Preference
Dividend for the period and related amount per share. The Board of
Directors of the Company recommended Dividend of Rs.0.20 per share on
fully paid up equity share of Rs.1 each for the financial year ended
March 31, 2013, subject to members approval in the ensuing Annual
General Meeting.
Note 2 - Value of Raw Materials, Spare Parts and Components Consumed
Since the Company is engaged in providing e-governance related
services, the quantitative details with respect to Opening Stock,
Purchases, Sales and Closing Stock are not applicable to the Company
and hence not given.
Note 3 - Related Party Details
(a) Key Management Personnel
Mr. Dinesh Nandwana Chairman & Managing Director
Dr. Nishikant Hayatnagarkar Whole-Time Director
Mr. Ramesh Mulchand Joshi Director
Mr. Sunil Agarwal Director
Mr. Anil Patodia Director
Mr. Babulal Meena Director
Mr. Kanhaiya Lal Varma** Director
** Resigned w.e.f. 10th October, 2012
(b) Relative of key management personnel and Name of the enterprises
having same key management personnel and/ or their relatives as the
reporting enterprises with whom the Company has entered into
transactions during the year
Vakrangee Holdings Private Limited
Vakrangee Lacteus & Hortus Limited
Vakrangee Capital Private Limited
Vakrangee Technologies Limited
Vakrangee Infraprojects Limited
Omnis Edu-Health Limited
Omnis Infra Power Limited
Mr. Manoj Nandwana
Note 4 - Gratuity & Leave encashment
The Company has provided for Gratuity and leave encashment, in
accordance with revised AS-15, "Employee Benefits", the company has
provided the liability on actuarial basis.
Note 5 - Segment Reporting
The Company''s activities predominantly revolve around providing the
e-governance related services. Considering the nature of Company''s
business and operations, there is only one reportable segment (business
and / or geographical) in accordance with the requirements of the
Accounting Standard 17 - "Segment Reporting" notified in the
Companies (Accounting Standards) Rules 2006.
Note 6 - Leases
I. Operating Leases
The Company has taken Computer Equipments on operating lease under
non-cancellable lease agreement. Lease payments recognized in the
Profit and Loss Account for the year is Rs.4,111.19 lacs (Previous Year
Rs.4,111.19 lacs). Future minimum lease payments under non-cancellable
operating leases are as below:
Note 7 - Amounts due to Micro, Small and Medium Enterprises:
The Company has not received any intimation from the suppliers under
the The Micro, Small & Medium Enterprises Development Act 2006 and
therefore disclosures, if any, relating to amounts unpaid as at the
year end together with interest paid/payable as required under the said
Act have not been given.
Note 8 - Previous year figures
The figures of the previous year have been re-arranged, re-grouped and
re- classified wherever necessary.
Mar 31, 2012
(a) Detailed note on the terms of the rights, preferences and
restrictions relating to each class of shares including restrictions on
the distribution of dividends and repayment of capital.
i) The Company has only one class of Equity Shares having a par value
of Rs.1 (Previous Year Rs.10) per share. Each holder of Equity Share is
entitled to one vote per share. The Company declares and pays dividend
in Indian Rupees. During the year ended March 31, 2012 the amount of
per share dividend recognised as distributions to Equity Shareholders
is Rs.0.20 per share of Rs.1 each including bonus shares (P.Y. Rs.2 per
share of Rs.10 each). The dividend proposed by the Board of Directors
is subject to the approval of the shareholders in the ensuing Annual
General Meeting.
ii) On receipt of shareholders' approval by way of postal ballot on
March 30, 2012, the Company has increased & subdivided its authorised
share capital from Rs.4500 lacs divided into 4,50,00,000 Equity Shares
of Rs.10 each to Rs.7500 lacs divided into 75,00,00,000 Equity Shares
of Rs.1 each & the Company has altered its Memorandum & Articles of
Association accordingly.
iii) The dividend appropriation for the year ended March 31, 2011
provided for in the books of accounts in FY 2010-2011 was Rs.579.75
lacs including corporate dividend tax of Rs.80.92 lacs. However, the
dividend declared & paid was Rs.580.30 lacs including corporate
dividend tax of Rs.81 lacs. These liabilities were higher by Rs.0.55
lacs (including corporate dividend tax of Rs.0.08 lacs) due to issue of
23,733 equity shares as ESOPs on July 16, 2011 i.e. before book closure
date notified for the declaration of dividend. The same has been
accounted for in the current year in Profit & Loss Appropriation
Account.
iv) 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.
(f) Detailed note on shares reserved to be issued under options and
contracts (ESOPs or Loans) / commitment for the sale of shares (without
payment being received in cash) divestments including the terms and
conditions.
The Company has formulated Employees Stock Option Scheme, 2008 (ESOP
Scheme) which was approved by the members of the Company at their
meeting held on September 23, 2008, as modified on January 10, 2011.
Employees covered under Stock Option Plans are granted an option to
purchase shares of the company at the respective exercise prices,
subject to requirements of vesting conditions. These options generally
vest over a period of four years from the date of grant. Upon vesting,
the employees can acquire one equity share for every option.
The stock compensation cost is computed under the intrinsic value
method and amortized on a straight line basis over the total vesting
period of four years. For the year ended March 31, 2012, the company
has recorded stock compensation expense of Rs.124.60 Lacs (Previous
year Rs.26.86 Lacs)
The Remuneration & Compensation committee of the Board evaluates the
performance and other criteria of employees and approves the grant of
options. These options vest with employees over a specified period
subject to fulfillment of certain conditions. Upon vesting, employees
are eligible to apply and secure allotment of Company's shares at a
price determined on the date of grant of options.
On July 31, 2009, company granted 2, 70,700 options ("Grant 1")
convertible into equity shares of Rs.10 each exercisable at Rs.61.90.
On December 30, 2009, company granted 20,600 options ("Grant 2")
convertible into equity shares of Rs.10 each exercisable at Rs.67.85.
On May 18, 2010, company granted 1,56,200 options ("Grant 3")
convertible into equity shares of Rs.10 each exercisable at Rs.146.50.
On November 24, 2010 , company granted 86,750 options ("Grant 4")
convertible into equity shares of Rs.10 each exercisable at Rs.150.00.
On August 12, 2011 company granted 64,850 options ("Grant 5")
convertible into equity shares of Rs.10 each exercisable at Rs.150.00.
The options once granted to an eligible employee gets lapsed with the
resignation / termination of the employment with the Company. However,
the unvested / unexercised portion of the ESOP entitlement to that
employee remain part of the respective grant out of which it was issued
& they can be granted to any other eligible employee as decided by the
Remuneration & Compensation Committee.
(g) Detailed terms of any securities convertible into shares, e.g. in
the case of convertible warrants, debentures, bonds etc.
The Company does not have any securities convertible into shares as on
reporting date.
Note: 1. The short provision for dividend & dividend tax above is
towards dividend declared for the financial year 2010-11.
2. Out of the Securities Premium account balance as on year end, an
amount of Rs.2502.40 lacs will be capitalized and transferred to Share
Capital account pursuant to the resolution passed by the members
through postal ballot for allotment of bonus shares in the ratio of one
equity share of Rs.1 each for every share held as on record date i.e.
April 13, 2012.
The amount of Rs.854.00 lacs received upto March 31, 2011 towards
12,20,000 convertible warrants out of 34,70,000 convertible warrants
issued in the financial year 2009-10, has been converted into
equivalent number of equity shares during the year. Balance 22,50,000
convertible warrants have been converted into equivalent equity shares
upto the end of the financial year 2010-11.
(b) Terms of repayment of term loans and other loans.
i) Term Loan from Banks:
The Company has entered into a Common Loan Agreement during the year
appointing M/s. Axis Trustee Services Limited as Security Trustee for
reallocation of the Rupee Term Loan amounting to Rs.22500 lacs
sanctioned during the year by Axis Bank Limited, under multiple banking
arrangement.
The said Rupee Term Loan has been allocated to each of the lenders
(parties to the Common Loan Agreement) as follows:
- Axis Bank Limited - Rs.10000 lacs
- Andhra Bank - Rs.7500 lacs
- Punjab National Bank - Rs.5000 lacs
The initial interest rate in respect of all the lenders shall be 13%
p.a. payable with monthly rests irrespective of the individual interest
rates mentioned in respective lenders' sanction letters, subject to
further change in Base Rate till date of documentation. The highest
rate of interest of any lender shall be applicable and payable by the
Company to all the lenders. The interest spread reset shall be done
every 2 years from the date of first disbursement. The loan is to be
repaid in 14 unequal quarterly installments commencing after moratorium
period of six months from the date of first disbursement / LC opening.
First installment shall be due at the end of six months, thereby total
tenor of the loan to be 45 months.
ii) Term Loan from GE Money Financial Services Pvt. Ltd. carries an
interest rate of 11.50% p.a. fixed for the first 6 months of the
tenure, subject to the drawdown being made on or before July 31, 2011.
After the expiry of first 6 months, the rate of interest has been
increased to 12.93% p.a. The interest payment to be made monthly.
Principal repayment shall be in monthly equal instalments for 36 months
from the date of drawdown.
(c) Nature of security of each type of secured loans.
i) Term Loans from Banks:
1. First pari-passu & exclusive charge on entire UID kits purchased
out of the term loan.
2. Second parri-passu charge on current assets of the Company,
including UID project receivables.
3. Second parri-passu charge on moveable assets of the Company.
4. Second parri-passu charge through mortgage on the office premises
of the Company, situated at Marol Co-Operative Industrial Society &
Hind Saurashtra Industries Co-Operative Society Limited, Marol, Andheri
(East), Mumbai.
5. First charge on the office premises of the Company, situated at New
Delhi.
6. Personal Guarantee of Mr. Dinesh Nandwana, Chairman & Managing
Director of the Company.
ii) Term Loans from Others - GE Money Financial Services Pvt Ltd:
1. First pari-passu charge on all present and future fixed assets of
the Company excluding (i) UID kits financed by Axis Bank & (ii)
immovable property on the balance sheet of the Borrower as on March 31,
2011.
2. In the event that the Company acquires any immovable property after
March 31, 2011, it is required to create a charge on the said immovable
property for the due repayment of this facility.
3. Second pari-passu charge on all present and future current assets.
4. Personal Guarantee of Mr. Dinesh Nandwana, Chairman & Managing
Director of the Company.
(d) Details of the aggregate of each loan guaranteed by directors or
others, each headwise.
All the term loans amounting to Rs.15,596.12 lacs (P. Y. Nil)
guaranteed by Mr. Dinesh Nandwana, Chairman and Managing Director of
the Company.
(e) Details of continuing default in the repayment of loans and
interest, specifying the period and amount separately in each case.
There has been no default in the repayment of loans or interest thereon
as on date.
(b) Nature of security of each type of secured loans.
a) Loans repayable on demand from Banks:
The Company had entered into a Security Trustee Agreement appointing
M/s. Axis Trustee Services Limited as Security Trustee for availing the
working capital facilities under the multiple banking arrangement
aggregating to Rs.37500 lacs, with the following bankers:
- Axis Bank Limited
- Union Bank of India
- Barclays Bank PLC
- ICICI Bank Limited
- ING Vyasa Bank Limited
- Dhanlaxmi Bank Limited
These facilities are secured against the following charge on various
assets of the Company:
1. Primary: First pari-passu charge on the entire current assets of
the Company, both present & future.
2. Collateral:
- First pari-passu charge on the entire movable fixed assets of the
Company (excluding UID kits purchased out of the term loan facilities),
both present & future.
- First pari-passu charge on office premises of the company & of
Vakrangee Technologies Limited, situated at Marol Co-Operative
Industrial Society & Hind Saurashtra Industries Co-Operative Society
Limited., Marol, Andheri (East), Mumbai.
3. Personal Guarantee of Mr. Dinesh Nandwana, Chairman & Managing
Director of the Company.
b) Loans repayable on demand from Others: Vehicle loans are secured
against the specific asset (vehicle) finance
c) Loans and advances from Related Parties: For details, refer Note 37.
d) Inter Corporate Deposits: The Inter-Corporate Deposit amounting to
Rs.370.00 lacs is secured against the Bank Guarantee given by the
Company.
(c) Details of the aggregate of each loan guaranteed by directors or
others, each headwise.
1. All the loans repayable on demand from banks amounting to
Rs.19,361.69 lacs (P. Y. Rs.14,880.02 lacs) guaranteed by Mr. Dinesh
Nandwana, Chairman and Managing Director of the Company.
2. Loan from banks repayable on demand (facility from Dhanlaxmi Bank
Limited) amounting to Rs.2490 lacs guaranteed by M/s. Vakrangee
Technologies Limited.
(d) Details of continuing default in the repayment of loans and
interest, specifying the period and amount separately in each case.
There has been no default in the repayment of loans or interest thereon
as on date.
(b) Details of Capital Work-in-Progress
Capital Work-in-Progress represents cost incurred towards purchase of
software (pending installation).
(c) Detailed note on Fixed Assets taken on Lease
The Company has not taken any assets on lease, except computer
equipments assets taken on operating lease under non-cancellable
agreements. As the assets taken on lease are not under finance lease,
the details thereon has not been classified into owned assets & leased
assets above. For further details on operating lease, please refer Note
No. 40.
(d) During the year Company has started prestigious UID Enrolment
project of Government of India. UID Project is highly capital intensive
and required substantial investment in form of fixed assets. For the
purpose company has acquired fixed assets worth approximately 36000
lacs and classified the same as project Assets. The management of the
company envisage that the useful life of these assets assigned to any
project, present or future, will be 4 years and accordingly has
accelerated the depreciation at higher rate. For the purpose of
acquiring these assets company has taken loan from Axis Bank, Punjab
National Bank & Andhra Bank totalling to 22500 lacs.
During previous year, the Company has provided guarantee to Barclays
Bank Pic. in respect of working capital loan of Rs.700.00 Lacs granted
to Vakrangee e-solutions Inc., Philippines (wholly-owned subsidiary of
the Company). The amount of liabilities, which may occur on levying of
penalty and/or charges by clients for delays in execution of contracts
within the time prescribed in the agreement, is unascertained.
Note 1 - Dividends
(a) Detailed note on Proposed Equity Dividend & Proposed Preference
Dividend for the period and related amount per share.
The Board of Directors of the Company recommended Dividend of Rs.0.20
per share on fully paid up equity share of Rs.1 each (including bonus
shares issued after Balance sheet date) for the financial year ended
March 31, 2012, subject to members approval in the ensuing Annual
General Meeting.
Earnings Per Share for the previous year have been reworked to give the
effect of sub-division of equity shares from Rs.10 each into Rs.1 each
and issue of bonus shares in accordance with Accounting Standard (AS)
20 on "Earnings Per Share".
* Bonus Declaration:
Share holders by way of postal ballot have approved issue of bonus
shares on March 30, 2012 in the ratio of one fully paid up equity share
for every equity share held on April 13, 2012 being the record date. In
view of this, the effect of actual allotment of equity shares as bonus
issue out of the Securities Premium Account, has not been given in the
books of accounts for the current year ended March 31, 2012. However,
the Basic & Diluted EPS has been adjusted for both the reporting
periods as per the requirements of Accounting Standard - 20 on "Earning
Per Share" issued by the Institute of Chartered Accountants of India.
Note 2 - Value of Raw Materials, Spare Parts and Components Consumed
Since the Company is engaged in providing e-governance related
services, the quantitative details with respect to Opening Stock,
Purchases, Sales and Closing Stock are not applicable to the Company
and hence not given.
Note 3 - Segment Reporting
The Company's activities predominantly revolve around providing the
e-governance related services. Considering the nature of Company's
business and operations, there is only one reportable segment (business
and / or geographical) in accordance with the requirements of the
Accounting Standard 17 - "Segment Reporting" notified in the Companies
(Accounting Standards) Rules 2006.
Note 4 - Amounts due to Micro, Small and Medium Enterprises:
The Company has not received any intimation from the suppliers under
the The Micro, Small & Medium Enterprises Development Act 2006 and
therefore disclosures, if any, relating to amounts unpaid as at the
year end together with interest paid/payable as required under the said
Act have not been given.
Note 5-Previous year figures
The figures of the previous year have been re-arranged, re-grouped and
re-classified wherever necessary.
Mar 31, 2011
A) Liabilities in respect of leave encashment are accounted for on cash
basis which is not in conformity with Accounting Standard (AS) 15
(Revised 2005) on Employee Benefits as notified by the Companies
(accounting Standard) Rules, 2006 which requires that Leave Encashment
Liabilities be accounted for on accrual basis.
B) Loans include Rs.93.98 lacs (Previous Year Rs.27.79 lacs) due from
companies in which directors are interested as directors.
C) In the opinion of the Board the Current Assets, Loans & Advances are
realizable in the ordinary course of business at least equaling the
amount at which they are stated in the books of account. The provision
for all known liabilities is adequate and not in excess of the amount
reasonably necessary.
D) In respect of balance confirmations sought by the company from
sundry debtors, sundry creditors and loans and advances, some parties
have not yet responded to the request. As such balances in the accounts
of sundry debtors, sundry creditors, loans and advances are taken as
appearing in the books of accounts and are subject to confirmation and
reconciliation, if any.
E) Secured Loans
a) Working capital loans from banks (i) Cash Credit Loans
Rs.14880.02 Lacs (Previous Year Rs.4435.41Lacs) secured by hypothecation
of, Inventories and book debts.
(ii) Bills Payable
Rs.4505.53 Lacs (Previous year Rs.1251.59 Lacs) secured by hypothecation of
Inventories and book debts. Cash credit and Bills payable are further
collaterally secured by mortgage of office premises of the Company and
of Vakrangee Technologies Limited, situated at Marol Co-operative
Industrial Society, Marol, Andheri (East), Mumbai and Hypothecation of
movable fixed assets of the Company.
The Company has appointed Axis Trustee Services Limited
as a security Trustee for availing the working capital facilities under
the multiple Banking arrangement. The Company has created charge on the
said office premises and movable fixed assets for an amount up to Rs.250
crores. For securing the Rs.150 crores fund based limits and the Rs.100
crores non fund based limits.
The working capital loans are further secured by personal guarantee of
Mr. Dinesh Nandwana, Chairman cum Managing Director of the Company.
b) Vehicle Loan
Rs.8.62 Lacs (Previous year Rs.14.48 Lacs) secured by specific
assets financed (vehicle)
F) Prior Period Items Rs.5.33 lacs (Previous Year Rs.3.00 lacs) include
prior period expenses Rs.5.33 lacs (Previous Year Rs.0.86 lacs)
G) Contingent Liabilities not Provided for:
(a) Guarantees amounting to Rs.472.44 lacs (Previous Year Rs.265.52 lacs)
given by the bank on behalf of the Company.
(b) The amount of liabilities, which may occur on levying of penalty
and/or charges by clients for delays in execution of contracts within
the time prescribed in the agreement, is unascertained.
c) The Company has provided Guarantee to Barclays Bank Plc. In respect
of working capital loan of Rs.700.00 Lacs granted to Vakrangee
e-solutions Inc. (Wholly owned subsidiary of the Company). The
outstanding amount of the loan as on 31st March, 2011 is Rs.379.73 lacs
equivalent to USD 8,35,000.
(Rs. in Lacs)
Particulars 2010-2011 2009-2010
Statutory Audit Fees 7.50 2.00
Tax Audit Fees 2.50 .50
Certification & Other Services 1.75 1,43
Total 11.75 3.93
H) Details of auditors remuneration (Excluding Service Tax)
is as under:
a) Details of loans to subsidiaries
J) Other liabilities include unclaimed dividends amounting to Rs.14.89
lacs (Previous year Rs.12.33 lacs).
*Liability for Gratuity is provided on actuarial basis for the Company
as a whole, the amount pertaining to directors is not ascertainable
and, therefore, not included above.
L) Segment Reporting
The Company's activities predominantly revolve aroundproviding the
e-governance related services. Considering the nature of Company's
business and operations, there is only one reportable segment (business
and / or geographical) in accordance with the requirements of the
Accounting Standard 17 Ã "Segment Reporting" notified in the Companies
(Accounting Standards) Rules 2006.
M) The details of purchases, sales and closing stock of Investments in
mutual funds during the year are given below.
The estimates of future salary increase, considered in actu- arial
valuation, take account of inflation, seniority, promotion and other
relevant factor, such as demand and supply in em- ployment market.
P) Taxes on Income
a) Provision for Taxation for the year has been made in accordance with
the provision of the Income Tax Act, 1961.
b) In terms of Accounting Standard 22 on "Accounting for Taxes on
Income" as notified by the Companies (Account- ing Standard) Rules,
2006 the Company has recognized Deferred Tax liabilities of Rs.431.38
lacs for the year ended 31st March, 2011 in the Profit & Loss account.
The accumulated balance in Net Deferred Tax Liability/ (Assets)
comprises of:
Q) Amounts due to Micro, Small and Medium Enterprises:
The Company has not received any intimation from the suppliers under
the The Micro, Small & Medium Enterprises Development Act 2006 and
therefore disclosures, if any, relating to amounts unpaid as at the
year end together with interest paid/payable as required under the said
Act have not been given.
R) Additional information pursuant to the provision of Part II of the
Schedule VI of the Companies Act 1956 to the extent applicable:
i) Installed Capacity Not Applicable
Since the Company is engaged in providing e-governance related
services, the quantitative details with respect to Opening Stock,
Purchases, Sales and Closing Stock are not applicable to the Company
and hence not given.
b) Relative of key management personnel and Name of the enterprises
having same key management personnel and / or their relatives as the
reporting enterprises with whom the Company has entered into
transactions during the year.
- Vakrangee Technologies Limited
- Vakrangee Infraprojects Limited
- NJD Holdings Private Limited
- Omnis Edu-Health Limited
- Omnis Infra-Power Limited
- Manoj Nandwana
c) Subsidiary Companies with whom the Company has entered
in to transactions during the year.
- Vakrangee IT Solutions Limited
- E Doc Vision InfoTech Private Limited
- Vakrangee e-Solutions Inc., Philippines
- Vakrangee Energy Private Limited
U) Share Warrants
During financial year 2009-10, the Company had issued 34,70,000 Fully
Convertible Warrants ("Warrants") convertible into equivalent number of
Equity Shares having face value of Rs.10/- each at a premium of Rs.60 per
share to M/s. NJD Holdings Private Limited, a promoter group Company.
Of the above, 11,50,000 Warrants (previous year 11,00,000 Warrants)
have been converted into Equity Shares during the current year.
Further, application has been received along with amount for conversion
of balance 12,20,000 Warrants which are pending for conversion at the
end of year.
W) ESOPs
The Company has formulated Employees Stock Option Scheme, 2008 (ESOP
Scheme) which was approved by the members of the Company at their
meeting held on 23rd September, 2008.
Employees covered under Stock Option Plans are granted an option to
purchase shares of the company at the respective exercise prices,
subject to requirements of vesting conditions.
These options generally vest over a period of four years from the date
of grant. Upon vesting, the employees can acquire one equity share for
every option.
The stock compensation cost is computed under the intrinsic value
method and amortized on a straight line basis over the total vesting
period of four years. For the year ended March 31, 2011, the company
has recorded stock compensation expense of Rs.26.86 Lacs (Previous year
Nil).
The Remuneration & Compensation committee of the board evaluates the
performance and other criteria of employees and approves the grant of
options. These options vest with employees over a specified period
subject to fulfillment of certain conditions. Upon vesting, employees
are eligible to apply and secure allotment of Company's shares at a
price determined on the date of grant of options.
On 31st July 2009, company granted 2, 70,700 options ("Grant 1")
convertible into equity shares of Rs.10 each exercisable at Rs.61.90.
During the year, the employees have exercised 65,348 options on 29th
January, 2011. The Company has received an amount aggregating to Rs.40.45
Lacs against allotment of 65,348 equity shares and Rs.4.41 Lacs as share
application money against allotment of 7,132 equity shares to be
allotted on April 29, 2011.
On 30th December 2009, company granted 20,600 options ("Grant 2")
convertible into equity shares of Rs.10 each exercisable at Rs.67.85. The
Company has received an amount aggregating to Rs.2.11 lacs as share
application money against allotment of 3,116 equity shares to be
allotted on April 29, 2011.
During current year, the company has granted options for 1, 56,200
("Grant 3") and 86,750 ("Grant 4") options convertible into Equity
shares of Rs.10. The exercise price of the options was fixed at Rs.146.50
and Rs.150 respectively for conversion into one equity share of the
company.
X) The figures of the previous year have been re-arranged, re-grouped
and re- classified wherever necessary.
Mar 31, 2010
A) Liabilities in respect of leave encashment are accounted for on cash
basis which is not in conformity with Accounting Standard (AS) 15
(Revised 2005) on Employee Benefits as notified by the Companies
(accounting Standard) Rules, 2006 which requires that Leave Encashment
Liabilities be accounted for on accrual basis.
B) Loans include Rs. 27.79 lacs (Previous Year Rs. Nil) due from
companies in which directors are interested as directors.
C) In the opinion of the Board the Current Assets, Loans & Advances are
realizable in the ordinary course of business at least equaling the
amount at which they are stated in the books of account. The provision
for all known liabilities is adequate and not in excess of the amount
reasonably necessary.
D) Confirmation letters have been sent by the Company in respect of
balances reflected under Sundry Debtors, Sundry Creditors and Loans and
Advances. In view of confirmations having not been received from some
of the parties, the balances under these heads have been shown as per
books of accounts and are subject to reconciliation and adjustment if
any.
E) Secured Loans
a) Cash Credit & Bills Payable Facilities from Bank:
Rs. 5687.00 lacs (Previous Year Rs. 2245.41 lacs) secured by
Hypothecation of Book debts, Stock in Trade Stores & spares,
collaterally Secured by office Premises of the Company and of Vakrangee
Technologies Limited, situated at Marol Co- Operative Indi. Society,
Marol, Andheri (East), Mumbai.
The above working capital facilities are further collaterally secured
by personal Guarantee of Mr. Dinesh Nandwana, the Chairman cum Managing
Director of the Company,
b) Vehicle Loan:
Rs. 14.48 lacs (Previous Year Rs. Nii) Secured by Hypothecation of
specific vehicle financed,
F) Prior Period Items Rs. 3.00 lacs (Previous Year Rs. 422.84 lacs)
includes Prior Period Expenses Rs. 0.86 lacs (Previous Year Rs. 6.88
lacs).
G) Contingent Liabilities not Provided for:
a) Guarantees amounting to Rs. 265.52 lacs (Previous Year Rs. 395.66
lacs) given by the bank on behalf of the Company.
b) The amount of liabilities, which may occur on levying of penalty
and/or charges by clients for delays in execution of contracts within
the time prescribed in the agreement, is unascertained.
c) The Company has provided Guarantee to Barclays Bank Pic, In respect
of working capital loan of USD 20,50,000 granted to Vakrangee
e-solutions Inc. (Wholly owned subsidiary of the Company), The
outstanding amount of the loan as on 31st March, 2010 is Rs. 704.36
lacs,
H) Other liabilities include unclaimed dividends amounting to Rs. 9.79
lacs (Previous year Rs. 35.84 lacs).
I) Managerial Remuneration :
The Company does not have any dilutive potential equity shares in the
previous year. Consequently the basic and diluted earning per share of
the Company remain the same.
J) Employee Benefits:
The Company has provided for Gratuity, covering eligible employees, in
accordance with the Payment of Gratuity Act, 1972 only during the year.
Accordingly, the previous years figures relating to actuarial
assumptions and liabilities have not been given below. In accordance
with revised AS-15, "Employee Benefits", the company has provided the
liability on actuarial basis. As per the actuarial certificate the
details of unfunded post employment defined benefit plan in respect of
Gratuity are as follows:
The estimates of future salary increase, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factor, such as demand and supply in employment market,
K) Taxes on Income
a) Provision for Taxation for the year has been made in accordance with
the provision of the Income Tax Act, 1961.
b) In terms of Accounting Standard 22 on "Accounting for Taxes on
Income" as notified by the Companies (Accounting Standard) Rules, 2006
the Company has recognized Deferred Tax liabilities Rs. 329.50 lacs
for the year ended 31st March, 2010 in the Profit & Loss A/c
L) Amounts due to Micro, Small and Medium Enterprises:
The Company has not received any intimation from the suppliers under
the The Micro, Small & Medium Enterprises Development Act 2006 and
therefore disclosures, if any, relating to amounts unpaid as at the
year end together with interest paid/payable as required under the said
Act have not been given.
Since the Company is engaged in providing various project-related
services, the quantitative details with respect to Opening Stock,
Purchases, Sales and Closing Stock are not applicable to the Company
and hence not given.
b) Relative of key management personnel and Name of the enterprises
having same key management personnel and / or their relatives as the
reporting enterprises with whom the company has entered into
transactions during the year.
* Dream River (Neral) Developers Private Limited
* Vakrangee Technologies Limited
* Vakrangee Energy Private Limited
* Vakrangee Infraprojects Limited
* NJD Holdings Private Limited
* NJD Biotech Private Limited
* Mr. Manoj Nandwana
c) Subsidiary Companies with whom the Company
has entered in to transactions during the year.
* Vakrangee IT Solutions Limited
* E Doc Vision Infotech Private Limited
* Vakrangee e-Solutions Inc., Philippines
(w.e.f. 8th May, 2009)
M) During the year, the Company has, by way of Postal Ballot pursuant
to Section 192A of the Companies Act, 1956, passed a special resolution
on 11th March, 2010 authorizing issue of 34, 70,000 fully convertible
warrants having face value of Rs. 10/- each at a premium of Rs. 60/-
per share, on preferential basis to M/s NJD Holdings Private Limited, a
promoter group company.
The Company has converted 11,00,000 warrants into equity shares on 29th
March, 2010 and issued equivalent fully paid equity shares at an
exercise price of Rs. 70 per share. The Company has received an amount
aggregating to ? 770.00 lacs against allotment of Equity Shares and Rs.
414.75 lacs as 25 % upfront money against allotment of balance 23, 70,
000 convertible Warrants.
Total proceeds as above amounting Rs. 1184.75 lacs after deducting the
issue expenses will be utilized for Business and Development purposes.
N) The Company has, during the year, formulated Employees Stock Option
Scheme, 2008 (ESOP Scheme) which was approved by the members of the
Company at their meeting held on 23rd September, 2008. The resolutions
were passed by the Remuneration & Compensation Committee on 30th July,
2009 and 30th December, 2009 granting options for 2, 70,700 and 20,600
options respectively. The ESOP Scheme provides for the grant of stock
options to eligible employees. The options granted vests after the
expiry of a period of one year from the date they are granted. The
options vested should be exercised within four years from the date they
are vested. The options lapse if they are not exercised prior to the
expiry date.
O) The figures of the previous year have been re-arranged, re-grouped
and re-classified wherever necessary.