Notes to Accounts of Vikas Ecotech Ltd.
Mar 31, 2023
The company has entered into arena of Green-Enviro-friendly Infrastructure Development Projects in collaboration with M/s Nice Apartment Constructions Pvt Ltd and BG Technocrats Private Limited (a company engaged in Real Estate Development of Commercial and Residential Projects in Delhi NCR) and made an initial Investment of Rs.5500 Lakhs.
Deferred tax assets and deferred tax liabilities have been offset wherever the Company has a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate tc income taxes levied by same taxation authority. During the year the Company has decreased its existing Deffered Tax Assets to Rs. 58.71 lakhs (Valued and certified by the Company''s Management, Independent Cost Accountant and Relied upon by Auditors The Company is in the business of High End additives and rubber-plastic compounds and accordingly deals in numerous items such as Tin Alloy / Ingots, 2EthylhexylThiogycolate, Tinmate, Hydrogen Peroxide, PVC Resin, Styrene Butadiene Copolymer, Styrene Butadiene Styrene, Methyl Chloride (Gas) etc. Keeping in view the nature of industry and vast number of items, it is not practical for the Company to give item wise break up of different type of products.
Trade receivables are subject to confirmation / reconciliation, consequential adjustment if any and verification from Bank realisation certificates
The carrying amount of trade receivables approximates their fair value, is included in note 37.
The Company''s exposure to credit risk and impairment allowances related to trade receivables is disclosed in Note 41.
Terms / rights attached to equity shares
The Company has only one class of equity shares having par value of Re 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company in proportion to the number of equity shares held by the shareholders, after distribution of all preferential amounts.
Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:
The Company has not issued any share for consideration other than cash during the period of five year immediately preceding 31 March 2023.
Secured term loans from banks
a) ICICI LAP A/c No. LBDEL00004899038: Vikas Ecotech Ltd. has taken Loan Against Immovable Commercial property from ICICI Bank during Feburary''2019. Repayable in 91 EMI of Rs 8,67,358.00 each & Date of EMI is 05th of suceeding month. The Term loan was secured against Office No. 404, 405, 408,409 & 410 in the Building known as âExpress Zoneâ, Western Express Highway, Malad (East) Mumbai, Maharashtra and the property is in the name of the Company. The current rate of interest is 7.75% p.a.The loan has been fully repaid in October 2022.
b) Covid Loan of Rs. 200 lakhs has been sanctioned by SBI in the first quater of F.Y 2020-21 in order to meet out contigencies arose due to epedamic ongoing covid crisis. The Term Loan was secured by way of hypothecation of stock, receivable, and advance to suppliers and other current assets on pari-passu basis with consortium members. The current rate of interest is 7.40% p.a. The loan shall be fully repaid in June 2022.
c) Covid Loan of Rs. 582 lakhs has been sanctioned by PNB in the first quater of F.Y 2020-21 in order to meet out contigencies arose due to epedamic ongoing covid crisis. The Term Loan was secured by way of hypothecation of stock, receivable, and advance to suppliers and other current assets on pari-passu basis with consortium members. The current rate of interest is 7.30% p.a. The loan shall be fully repaid in July 2022.
Secured Fund Based (Cash Credit, PCFC etc.) & Non Fund Based limits from Banks
- The Company is availing working capital limits under consortium from Punjab National Bank, Bank of Baroda and State Bank of India with Punjab National Bank as lead banker in consortium and others banks are member.
- The Company is availing a cash credit (Hypothetical) limit of Rs. 4,000 Lacs from Punjab National Bank with a sub limit of PC / PCFC / FBP / FBD of Rs. 500 Lacs under the same Cash Credit limit against Hypothecation of stock, receivable, and advance to suppliers and other current assets on pari-passu basis with consortium members. No DP against stock and Book debts exceeding 180 days to be allowed. Margin @ 25% and the current rate of interest are 1year MCLR 7.25% Spread 6.00% i.e. 13.25% p.a. Further, the Company was also availing LC / DA / DP basis non Fund Based Limit of Rs. 2,250 Lacs (which includes both side inter change ability LC to CC for Rs.1,000 Lacs) for procurement of Raw Material and spares. There are Cash Margins @ 15% in the shape of FDR(s) on LC limits.
- Earlier, The Company was also availing Cash Credit limit of Rs. 995 Lacs from Bank of Baroda as on 31.03.2022, later on in current FY 22-23, limits has been reduced to Rs. 730 lacs. The limit is secured by way of hypothecation of stock, receivables & other current assets on pari-passu basis with consortium members. No DP against stock and Book debts exceeding 180 days to be allowed. Margin @ 25% and the current rate of interest are BRLLR 6.75% Strategic Premium 0.25% Spread 6.00% i.e. 13.00% p.a.
- The Company is also availing Cash Credit limit of Rs.1,350 Lacs from State Bank of India with a sub limit of PC / PCFC / FBP / FBD of Rs. 500 Lacs under the same Cash Credit limit. The limit is secured by way of hypothecation of stock, receivables & other current assets on pari-passu basis with consortium members. No DP against stock and Book debts exceeding 180 days to be allowed. Margin @ 25% and the current rate of interest are EBLR 9.15% Spread 4.75% i.e. 13.90% p.a. Further the Company was availing Non Fund Based LC (Import /Inland /DP/ DA/ BG, Buyers Credit) limits of Rs. 400 lacs for procurement of raw material and spares. There are Cash Margins @ 15% in the shape of FDR''(s) on LC limits.
Further, the Fund Based & Non Fund Based limits from Banks are secured by Mortgage of following Collateral Assets:
a) Industrial property at G-30 RIICO Industrial Area, Vigyan Nagar, Shahjahanpur Dist. Alwar, Rajasthan.
b) Property situated at Khasra no. 710/201 in Village Rithala, Delhi owned by Mr. Vivek Garg.
c) A-28 Khasra No.12/10 and 13/6 Village Kamrudin Nagar Nangloi owned by Ms. Seema Garg and Ms. Usha Garg.
d) 770, Khasra No.142/770, situated at Village Khanjawala, New Delhi owned by Ms. Usha Garg
e) Industrial property at G-24-29 RIICO Industrial Area, Vigyan Nagar, Shahjahanpur Dist. Alwar Rajasthan, owned by Company.
f) Industrial Property No. - F-7 & 8, Vigyan Nagar RIICO Indl. Area, Shahjahanpur, Tehsil Neemrana Distt. Alwar, Rajasthan.
Further, the Fund Based & Non Fund Based limits are guaranteed by personal guarantee of the following persons:
a) Mr. Nand Kishore Garg
b) Mr. Vikas Garg
c) Mr. Vivek Garg
d) Mrs. Usha Garg
e) Mrs. Seema Garg
f) Mrs. Namita Garg
The Company is in the business of High End additives and rubber-plastic compounds and accordingly deals in numerous items such as Tin Alloy / Ingots, 2EthylhexylThiogycolate, Tinmate, Hydrogen Peroxide, PVC Resin, Styrene Butadiene Copolymer, Styrene Butadiene Styrene, Methyl Chloride (Gas) etc. Further, the company is also in trading of TMT Bars, Steel, HR Coils, CR Colis, ERW pipes & Coal. Keeping in view the nature of industry and vast number of items, it is not practical for the Company to give item wise break up of different type of products.
Defined benefit plan
The Company operates a defined benefit gratuity plan, wherein every employee, who has rendered at least five years of continuous service, is entitled to the gratuity benefit equivalent to 15 days of total basic salary last drawn for each completed year of service, in terms of Payments of Gratuity Act, 1972. The Company has taken Group Gratuity Scheme for the employees from the LIC of India. Gratuity liability is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of the each reporting period, as required under Ind-AS 19 - Employee Benefits.
The sensitivity analyses are based on change in above assumption while holding all other assumptions constant. The 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 projected unit credit method at the end of the reporting year) has been applied, as has been applied when calculating the provision for defined benefit plan recognised in the Balance Sheet.
34. Operating lease
The Company has taken various premises on operating leases. The underlying agreements are executed for a period generally ranging from one year to three years except long term leases, renewable at the option of the Company and the lessor. There are no restrictions imposed by such leases and there are no sub leases. The rent charged and minimum rental payments to be made in the future in respect of these operating leases are as under:
b) Claims not acknowledged as debts
With respect to income tax matters, there are no disputed matters pending before any appellate authorties. However, there are certain routine assessments/rectifications matters related to credit mismatch, rectifications of mistakes apprapent from records etc., which are pending for disposal with juridisctional Assessing officers as on date, for which company has already made adequate representations.
The Company has filed civil suit against ADM Agro Industries Kota and Akola Limited supplier of Soya Bean Oil in Saket Court Delhi (Case No-CS OS No.-198/214) amounting Rs. 99,61,516 due to poor supply of soya bean oil. The Company has suffered a loss due to such poor quality of material supplied by them and non-recovery of money from debtors and it also affect goodwill of the Company. ADM Agro Industries Kota and Akola Limited has also filed winding up petition against the Company in High Court (Case No. CO PET N. 64/2014) due to non-payment of Rs. 41,15,664 along with interest at the rate of 18% from the due date of payment. ADM Agro Industries Kota and Akola Limited has also filed a summary suit for recovery of debts in Tis Hazari Court (Summary Suit No. - C S (OS) 3077/2014).
The Directorate of Enforcement, Delhi Zonal Office, New Delhi has issued a provisional attachment order (âOrder") bearing number 04/2020 and file number ECIR/10/DZ-1/2017/16962 under Section 5(1) of the Prevention of Money Laundering Act, 2002 (âPMLA") against our Company and its Promoter/ Director Mr. Vikas Garg and other third parties. Through the said attachment, our bank account UCO Bank at Parliament Street, New Delhi Branch maintained with has been attached for an amount of Rs. 7,15,533/-.
An enquiry from the DGGI was initiated in April''2022 pertaining to verification of certain suppliers, wherein Vikas Ecotech Limited submitted a deposit of Rs. 3.00 crore with the authorities, which is considered as recoverable, if and when the sanctity of the said supplier is verified and the enquiry is concluded favourably. As on balance sheet date the matter is under adjudication.The Income Tax Department has filed an appeal against the Order of Honorable ITAT Delhi with respect to total addition of Rs 339 Lakhs pertains to A.Y 2012-13. Such case is pending before the Honorable Delhi High Court. The total Demand of Income Tax Involves the matter of law whether the compensation received against the compulsory acquisition will be treated as agriculture Income or profit from business as sale of real estate division of the company. The said amount is being reported as contingent liability which is totally based on the outcome of final order of the Honorable Delhi High Court.
* The Company has intended to purchase the property for Rs. 18,25,01,400 at New Rohtak Road, New Delhi. The Company has made the payment of Rs. 17,94,64,646/- for the same till 31 March 2022, which is shown as per Note No. 8 under âother non-current assets" in the Balance Sheet. Balance payment will be done in due course at the time of possession and after successful completion of registration and other legal formalities.
In pursuance of its planning to enter into Green-Enviro-friendly Infrastructure Development Projects, the company has entered into collobolartion agreement with real estate companies and induced funds of Rs. 5500 Lakhs on account of its part contribution. Remaining contribution shall be decided and shall be done at appropriate stages in the project development as required time to time. The said funds contribution has been shown as Investments in Note-6A in the Balance Sheet.
37. Fair value measurement and financial instruments
Financial instruments - by category and fair value hierarchy
The following table shows the carrying amounts of financial assets and financial liabilities, including their levels in the fair value hierarchy:
The following methods / assumptions were used to estimate the fair values:
a) The carrying value of cash and cash equivalents, trade receivables and trade payables and liabilities approximate their fair values mainly due to short-term maturities of these instruments.
b) The fair value of other financial assets and other financial liabilities is estimated by discounting future cash flows using rates applicable to instruments with similar terms, currency, credit risk and remaining maturities. The fair values of other financial assets and other financial liabilities are assessed by the management to be same as their carrying value and is not expected to be significantly different if estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. These are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs.
c) The Company''s borrowings have been contracted at floating rate of interest, which resets at short intervals. Accordingly, the carrying value of such borrowings (including interest accrued but not due)
There are no significant unobservable inputs used in the fair value measurement.
Fair value hierarchy
All financial instrument for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Inputs for assets or liabilities that are not based on observable market data (unobservable inputs)
The following table presents the financial instruments measured at fair value, by level within the fair value measurement hierarchy:
39. Status of Insurance Claim
The company has reported exceptional item on account of fire loss of Unit-II of RIICO Industrial Area, Shahjahanpur, Alwar, Rajasthan, in the financial statement for the year ended 31.03.2017. In the FY 2019-20, the Company has already received insurance claim of Rs. 837.30 lakhs and in accordance with the accounting policies, the Company had accounted the proceeds from insurance claim in the Financial year 2019-20. The Company has already filled objection with respect to short amount of insurance claim received from OIC & matter is still under adjudication with National Consumer Forum, Delhi.
40 b). Information on Segment Reporting pursuant to Ind AS 108 - Operating Segments
Operating segments:
Infra fi Energy
Chemical, Polymers fi Special Additives Real Estate
Identification of segments:
The chief operational decision maker monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit and loss of the segment and is measured consistently with profit or loss in these financial statements. Operating segments have been identified on the basis of the nature of products fi services.
Segment revenue and results
The expenses and income which are not directly attributable to any business segment are shown as unallocable expenditure (net of unallocable income).
Segment assets and liabilities:
Assets used by the operating segments mainly consist of property, plant and equipment, trade receivables, cash and cash equivalents and inventories. Segment liabilities include trade payables and other liabilities. Common assets and liabilities which cannot be allocated to any of the segments are shown as a part of unallocable assets/liabilities.
The measurement principles of segments are consistent with those used in preparation of these financial statements. There are no inter-segment transfers
3. Segment Capital employed
The assets and liabilities of the Company are used interchangeably amongst segments. Allocation of such assetsandliabilitiesisnotpracticableandanyforcedallocationwouldnot result inanymeaningfulsegregation. Hence, assets and liabilities have not been identified to any of the reportable segments.
4. Major Customers_
For the year ending 31st March 2022, Revenue from One Customer of the Infra Segment represented approximately Rs. 10,453.94 Lakhs of the total revenue.
For the year ending 31st March 2023, Revenue from Two Customers of the Infra & Energy Segment represented approximately Rs. 10661.19 Lakhs and Rs. 12906.86 Lakhs of the total revenue.
Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.
41. Financial risk management objectives and policies
The Company''s principal financial liabilities comprise borrowings, trade payables etc. The main purpose of these financial liabilities is to manage finances for the Company''s operations. The Company''s principal financial assets include trade and other receivables, cash and cash equivalents, security deposits, etc. that derive directly from its operations.
The Company is exposed to market risk (interest rate risk), credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance frame work for the Company are accountable to the Board Audit Committee. This process provides assurance to the Company''s senior management that the Company''s financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Company''s policies and Company''s risk appetite. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes shall be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below:
Market Risk - Interest rate risk
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates related primarily to the Company''s borrowings with floating interest rates.
Exposure to interest rate risks
The Company''s interest rate risk arises majorly from the borrowings carrying floating rate of interest. These obligations exposes the Company to cash flow interest rate risk. The exposure of the Company''s borrowing to interest rate changes as reported to the management at the end of the reporting period are as follows:
Trade receivables
Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. On adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment gain or loss. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available internal credit risk factors such as the Company''s historical experience of customers. Based on the business environment in which the Company operates, management considers that the trade receivables are not in default (credit impaired) as there is very good track record against sales realisations and further there is Zero bad debts in past, hence the Company based upon past trends determined that an impairment allowance for loss on trade receivables is not required.
Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is exposed to currency risk on account of its borrowings, receivables and other payables in foreign currency. The functional currency of the company is Indian Rupee.
The foreign currency exchange management policy is to minimize economic and transactional exposures arising from currency movements against the US dollar & Euro. The Company manages the risk by netting off naturally-occurring opposite exposures wherever possible, and then dealing with any material residual foreign currency exchange risks if any.
A reasonably possible strengthening (weakening) of the Indian Rupee against US dollar & Euro at reporting date would have affected the measurement of financial instruments denominated in foreign currencies and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company principal sources of liquidity are cash and cash equivalents and the cash flow generated from operations. The Company closely monitors its liquidity position and deploys a robust cash management system.
Capital management
Capital includes equity attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value.
The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No major changes were made in the objectives, policies or processes for managing capital during the year ended 31 March 2023 and 31 March 2022.
42. Re- Grouping
Cretain reclassification have been to the comparitive period Financial statements to enhance comparability with the current financial year financial statements fi enhance compliance with guidance note on the Division-II- Ind AS Shedule III to the companies Act.
43 Other Statutory Informations
a) All the immoveable properties held by the company are in the name of the company (where the company is the lesse and the lease arrangements are duly executed in favour of lessee) as on the balance sheet date except the following :
There is one property of the company located in Jammu state, which is held in the state of Sigma Plastic Industries. The Said Firm was the taken over by the company in the earlier years. The title of the said property could not be transferred in company''s name due to some pending procedural conditions and formalities.
b) The Company does not have any âBenami Property", where any proceeding has been initiated pending against the Company for holding any âBenami Property".
c) The Company has not advanced any loan or advances in the nature of loan to specified persons viz. Promoters, Directors, KMP, and Related Parties which are repayable on demand or where the agreement document not specifies any terms or period of repayment.
d) The Company has not been declared as a wilful defaulter by any lender who has the power to declare a Company as a wilful defaulter at any time during the financial year or after the end of the reporting period but before the date when the financial statements are approved.
e) The Company has utilized funds raised from the issue of securities or borrowings from banks fi financial institutions for the specific purposes, for which they were issued/taken.
f) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies) including foreign entities (intermediaries) with the understanding that the intermediatory shall: -
i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or
ii. Provide any guarantees, securities or the like or on behalf of the ultimate beneficiaries
g) The Company has not received any funds from any person(s) or entity(ies), including foreign entity(ies) (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or
ii. Provide any guarantees, securities or the like or on behalf of the ultimate beneficiaries.
h) There are no transactions and/or balances outstanding with companies struck off under section 248 of the Companies Act''2013.
i) The Company does not have any transaction which is not recorded in the books of accounts but has been surrendered or disclosed as income during the year in the tax assessment under the Income Tax Act''1961.
j) The Company has not traded or invested in cryptocurrency or virtual currency during the financial year.
k) The Company does not have any charges or satisfaction of charges which is yet to be registered with the registrar of companies (ROC) beyond the satisfactory period.
l) The company has borrowings from Banks and accordingly company has submitted monthly stock statements with respective Financial Institutions. Details of security of current assets filed by the Company with banks & their difference is as per table annexued below:-
In FY 22-23, Company has Surplus DP of Rs. 6-7 crs. Approx. in each fi every month from Sanctioned fi utilised limits from Banking Arrangement fi thus in no case where company has availed excess DP due to above variances.
m) The Fair Market value of Investment property is based on valuation by Registererd valuer as defined under Rule 2 companies ( Registered valuer and Valuation) Rule, 2017. The Fair market value is closely approximate to the cost value (net of accumulated depreciation) of investment property. Hence Investment property is shown in books at cost.
Mar 31, 2018
1. Corporate information
Vikas Ecotech Limited (âthe Companyâ) is a Delhi based professionally managed Company incorporated on 30th November, 1984 under the Companies Act, 1956, having its registered office at Vikas Apartments, 34/1, East Punjabi Bagh, New Delhi - 110 026 and is listed on National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE).
The Company is an emerging player in the global arena engaged in the business of high-end specialty chemicals. It is an integrated, multi-specialty product solutions company, producing a wide variety of superior quality, eco-friendly additives and rubber-plastic compounds. Its additives and rubber-plastic compounds are process-critical and value-enabling ingredients used to manufacture a varied cross-section of high-performance, environment-friendly and safety-critical products. From agriculture to automotive, cables to electrical, hygiene to healthcare, polymers to packaging, textiles to footwear, the Companyâs products serve a diverse range of global industry needs. The Company has its manufacturing plants in the state of Rajasthan, Noida SEZ (UP) & Kandla SEZ (Gujrat). Also, the Company has planned for construction of a new State-of-the-art Plant & Innovation Centre at Dahej in Gujarat to cater to Export and Western Indian markets.
2. Basis of preparation
a) Statement of compliance:
The Company has adopted Indian Accounting Standards (Ind AS) with effect from 1st April 2017 with transition date of 1st April 2016, pursuant to notification issued by Ministry of Corporate Affairs dated 16th February 2015, notifying the Companies (Indian Accounting Standards) Rules, 2015. Accordingly, these financial statements have been prepared to comply in all material aspects with the Indian Accounting Standard (Ind AS) notified under section 133 of the Companies Act, 2013 (âthe Actâ), read together with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, as amended and other accounting principles generally accepted in India.
These financial statements are covered by Ind AS 101: First time adoption of Indian Accounting Standards (Ind AS) being first Ind AS annual financial statements for the year ended 31st March 2018 and are prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended. The Ind AS accounting policies are compared to most recent annual financial statements prepared under Indian GAAP (âPrevious GAAPâ). Accounting policies have been consistently applied to all periods presented in the financial statements.
For all periods up to and including the year ended 31st March, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). The transition was carried out from the accounting principles generally accepted in India (Indian GAAP) which is considered as previous GAAP, as defined in Ind AS 101. An explanation of how the transition to Ind AS has impacted the Companyâs equity and profits is provided in Note 41.
The financial statements were authorised for issue by the Companyâs Board of Directors on 31.05.2018.
b) Basis of measurement:
The financial statements have been prepared on accrual and going concern basis and historical cost convention, except for certain financial assets and liabilities which have been measured at fair value or amortised cost, as required under relevant Ind AS.
c) Significant accounting judgements, estimates and assumptions:
The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Judgments
Information about significant areas of estimation/ uncertainty and judgements in applying the Companyâs accounting policies that have the most significant effect on the amounts recognised in the financial statements are as follows:
There are no assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year.
3. Recent accounting pronouncement issued but not yet effective upto the date of issuance of financial statements
a) Amendment to Ind AS 21:
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018, MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind-AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. This amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.
b) Introduction to Ind AS 115:
Ind-AS 115- Revenue from Contracts with Customers: On 28 March 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when âcontrolâ of the goods or services underlying the particular performance obligation is transferred to the customer.
Moreover, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers. The standard permits two possible methods of transition:
- Retrospective approach-Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8-Accounting Policies, Changes in Accounting Estimates and Errors
- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach). The effective date for adoption of Ind AS 115 is financial periods beginning on or after 1 April 2018.
The Company will adopt the standard on 1 April 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended 31st March 2018 will not be retrospectively adjusted.
While, the Company is in the process of implementing Ind AS 115 on financial statement, it is of the view that the accounting policy for certain streams of revenue and related expenses may undergo a change primarily on account of estimating and recognizing extended warranty and unspecified free upgrades in certain contracts, adjusting cost of acquisition of customer, etc.
7,93,000 Equity Shares of Vikas Surya Buildwell Pvt. Ltd. purchased at cost of Rs. 4,76,98,950/- (including stamp duty of Rs. 1,18,950/-). The fair value of shares as on 31st March, 2018 is Rs. 4,76,98,950/7. Taxes
a) Amounts recognised in Statement of profit and loss comprises:
The major component of income tax expense:
Deferred tax assets and deferred tax liabilities have been offset wherever the Company has a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes levied by same taxation authority.
(Valued and certified by the companyâs management, Independent Cost Accountant and Relied upon by Auditors)
The Company is in the business of High End additives and rubber-plastic compounds and accordingly deals in numerous items such as Tin Alloy / Ingots, 2EthylhexylThiogycolate, Tinmate, Hydrogen Peroxide, PVC Resin, Styrene Butadiene Copolymer, Styrene Butadiene Styrene, Methyl Chloride (Gas) etc. Keeping in view the nature of industry and vast number of items, it is not practical for the Company to give item wise break up of different type of products.
(Trade receivables are subject to confirmation / reconciliation, consequential adjustment if any and verification from Bank realisation certificates)
The carrying amount of trade receivables approximates their fair value, is included in note 37.
The Companyâs exposure to credit risk and impairment allowances related to trade receivables is disclosed in note 42.
* The shareholdersâ at the EGM/ AGM of the Company held on 23rd November, 2016 approved increase in the authorised share capital of the Company from Rs. 260,000,000 comprising of 260,000,000 equity shares of Re 1 each to Rs. 320,000,000 comprising 320,000,000 equity shares of Re. 1 each.
** During the year ended 31st March, 2017, the Company has issued 25,660,000 equity shares of face value of Re. 1 each to its existing shareholders in proportion of their existing shareholding on preferential allotment basis for issue price of Rs. 17 per share. The new shares shall rank pari-passu with the existing equity shares of the Company in all respects.
c) Terms / rights attached to equity shares
The Company has only one class of equity shares having par value of Re 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company in proportion to the number of equity shares held by the shareholders, after distribution of all preferential amounts.
On 31st May, 2018, the Board of Directors have proposed a dividend of Rs. 0.05 per equity share (FY 2017-18 - Rs. 0.05 per equity share) to all equity shareholders for the year ended 31st March, 2018. The dividend proposed by the Board of Directors is subject to approval of the shareholders of the Company in the ensuring general meeting.
e) Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:
The Company has not issued any shared for consideration other than cash during the period of five year immediately preceding 31st March 2018.
* Proposed dividend on equity shares are subject to approval at the annual general meeting and are not recognised as a liability as at 31st March, 2018.
Information about the Companyâs exposure to interest rate, foreign currency and liquidity risks is included in Note 42.
* Current portion of secured term loan from banks is disclosed under note 20, âOther financial liabilitiesâ.
* Based on the information presently available with the management, there are no dues outstanding to mirco and small enterprises covered under the âMicro, Small and Medium Enterprises Development Act, 2006â.
The Company exposure to liquidity risk related to the above financial liabilities is disclosed in Note 42.
Trade Payables are subject to confirmation / reconciliation, consequential adjustment if any
Secured term loans from banks
a) HDFC-Vehicle Loan Agreement No 38982281 was taken during 2016 year and carries interest @ 9.4% per annum. The loan is repayable in 36 instalments ofRs. 207,805 each along with interest from the date of Loan. The loan is secured by hypothecation of car of the Company.
b) HDFC-Vehicle Loan Agreement No 24353585 was taken during 2013 year and carries interest @ 15.65% per annum. The loan is repayable in 36 instalments ofRs. 22,837 each along with interest from the date of Loan .The loan is secured by hypothecation of car of the Company. This loan has been discharged completely in F.Y. 2016-17.
c) ICICI Loan No-LADEL00026874591 was taken during 2013 year and carries interest @ 9.09% per annum. The loan is repayable in 36 instalments ofRs. 1,11,450 each along with interest from the date of loan. The loan is secured by hypothecation of car of the Company. This loan has been discharged completely in F.Y. 2016-17.
d) ICICI Loan No-LADEL00035146099 was taken during 2016 year and carries interest @ 9.10% per annum. The loan is repayable in 36 instalments ofRs. 201,906 each along with interest from the date of Loan. The loan is secured by hypothecation of car of the Company.
e) Toyota Financial Services India Ltd - NDEL1085441 was taken during 2016 year and carries interest @ 9.24% per annum. The loan is repayable in 60 instalments of Rs. 35,496 each along with interest from the date of loan. The loan is secured by hypothecation of car of the Company.
f) Term Loan 111-11167015000461 (Oriental Bank of Commerce). The Term Loan is secured on the Plant and Machinery and Land and Building located at G-24-29 & 30, RIICO Industrial Area, Vigyan Nagar, Shahjahanpur, Dist. Alwar, Rajasthan owned by Vikas Ecotech Limited. The rate of interest shall be MCLR 2%. This loan has been discharged completely during the year under consideration.
g) Term Loan IV-8767025001865 (Oriental Bank of Commerce). The Term Loan is secured on the 1 st exclusive charge by way of hypothecation on plant & machinery financed by OBC. The rate of interest shall be MCLR 2%. The period of maturity from the balance sheet date is 24 months.
h) Term Loan V-8767025002281 (Oriental Bank of Commerce). The Term Loan is secured on the 1 st exclusive charge by way of hypothecation on plant & machinery and construction of Building financed by OBC. The rate of interest shall be MCLR 2%. The period of maturity from the balance sheet date is 30 months.
Secured cash credit and PCFC limits from banks
The Company is availing working capital limits under consortium of Oriental Bank of Commerce, Bank of Baroda, Punjab National Bank, Development bank of Singapore and The Hongkong Shanghai Banking Corporation Ltd with Oriental Bank of commerce as lead banker in consortium and others banks are member bank.
The Company is availing a cash credit (Hypothetical) limit of Rs. 6,120 Lacs which include PCFC Limit of RS 2,880 Lacs from Oriental Bank of Commerce against Hypothecation of stock, receivable, and advance to suppliers and other current assets on pari-passu basis with consortium members. No DP against stock and Book debts exceeding 180 days to be allowed. Margin 20% and the rate of interest are Bank MCLR 1.5%. Further the Company is also availing LC / DA / DP basis non Fund Based Limit ofRs. 2,760 Lacs (which includes both side inter change ability LCto CC forRs. 1,000 Lacs) for procurement of Raw Material and spares. Cash Margins is 15% in the shape of FDR on LC limits.
The Company is also availing Cash Credit limit ofRs. 1,550 Lacs from Bank of Baroda with a sublimit of PC / PCFC / FBP / FBD ofRs. 575 Lacs under the same Cash Credit limit. The limit is secured by way of hypothecation of stock, receivables & other current assets on pari-passu basis with consortium members. DP shall be permitted against receivable upto180 days. Margin is 20% & Rate of interest is MCLR SP 1.85%. Further the Company is availing Non Fund Based LC (Import /Inland / DP / DA/ BG, Buyers Credit) limits ofRs. 650 Lacs (which includes both side inter change ability LCto CC forRs. 300 Lacs) for procurement of raw material and spares. Cash Margin isl 5% in the shape of FDR on LC limits.
The Company is also availing Cash Credit limit of Rs. 1,530 Lacs from Punjab National Bank with a sub limit of PC / PCFC/ FBP / FBD of Rs. 720 Lacs under the same Cash Credit limit. The limit is secured byway of hypothecation of stock, receivables & other current assets on pari-passu basis with consortium members. DP shall be permitted against receivable upto 180 days. Margin is 20% & Rate of interest is MCLR 2.65%. Furtherthe Company is availing Non-Fund Based LC (Import /Inland /DP /DA /BG, Buyers Credit) limits ofRs. 690 Lacs (which includes both side inter change ability LC to CC forRs. 170 Lacs) for procurement of raw material and spares. Cash Margin is 15% in the shape of FDR.
The Company is also availing Cash Credit limit ofRs. 1,000 Lacs from Development Bank of Singapore with a sub limit of PC / PCFC / FBP / FBD ofRs. 500 Lacs under the same Cash Credit limit. The limit is secured by way of hypothecation of stock, receivables & other current assets on pari-passu basis with consortium members. DP shall be permitted against receivable upto 180 days. Margin is 20% & Rate of interest is 3 months MCLR 1.35%. Further the Company is availing Non Fund Based LC (Import /Inland /DP/ DA/ BG, Buyers Credit) limits ofRs. 500 (which includes both side inter change ability LCto CC forRs. 500 Lacs) for procurement of raw material and spares .Cash Margin is 15% in the shape of FDR.
The Company is also availing Cash Credit limit ofRs. 1,500 Lacs from The Hongkong Shanghai Banking Corporation Ltd with a sub limit of PC / PCFC / FBP / FBD of Rs. 1,500 Lacs under the same Cash Credit limit. The limit is secured by way of hypothecation of stock, receivables & other current assets on pari-passu basis with consortium members. DP shall be permitted against receivable upto 180 days. Margin is 20% & Rate of interest is 3 months MCLR 1.05%. Further the Company is availing Non Fund Based LC (Import /Inland /DP/ DA/ BG, Buyers Credit) limits of Rs. 700 for procurement of raw material and spares .Cash Margin is 15% in the shape of FDR.
Further, the limit is secured on following collateral properties:
a) Property bearing Khasra No.14/5/2 6min, 15/1/2, 9/2 &10 min Vill Ghevra, Near Mundka Railway Crossing, Delhi owned by Ms. Seema Garg and Ms. Namita Garg.
b) Roof right of Property 34/1, Vikas Apartments, East Punjabi Bagh, New Delhi owned by Company.
c) Industrial property at Industrial Growth Centre, Phasel, Dist. Samba, J&K owned by Company.
d) Land & building situated at Industrial Growth Centre, Phase-1, Dist. Samba, J&K owned by Company.
e) F-5, Vikas Apartment, 34/1,1st Floor, East Punjabi Bagh, New Delhi owned by Ms. Seema Garg.
f) Industrial property at G-30 RIICO Industrial Area, Vigyan Nagar, Shahjahanpur Dist. Alwar, Rajasthan.
g) Property situated at Khasra no. 710/201 in Village Rithala, Delhi owned by Mr. Vivek Garg.
h) A-28 Khasra No.12/10 and 13/6 Village Kamrudin Nagar Nangloi owned by Ms. Seema Garg and Ms. Usha Garg.
i) 770, Khasra No.142/770, situated at Village Khanjawala, New Delhi owned by Ms. Usha Garg j) B-1, 34/1, Vikas Apartment, Punjabi Bagh, New Delhi owned by Ms. Usha Garg.
k) Land situated village Sultanpur Dabas, New Delhi owned by Company.
I) Industrial property at G-24-29 RIICO Industrial Area, Vigyan Nagar, Shahjahanpur Dist. Alwar Rajasthan, owned by Company,
m) Industrial Property at Dahej -II, Industrial Estate, Dist. Bharuch Gujarat owned by Company.
n) Industrial Property No. - F-7 & 8, Vigyan Nagar RIICO Indl. Area, Shahjahanpur, Tehsil Neemrana Distt. Alwar, Rajasthan. Further limit is guaranteed by personal guarantee of the following:
a) Mr. Nand Kishore Garg
b) Mr. Vikas Garg
c) Mr. Vivek Garg
d) Ms. Seema Garg
e) Ms. Usha Garg
f) Ms. Namita Garg
The Company is in the business of High End additives and rubber-plastic compounds and accordingly deals in numerous items such as Tin Alloy / Ingots, 2EthylhexylThiogycolate, Tinmate, Hydrogen Peroxide, PVC Resin, Styrene Butadiene Copolymer, Styrene Butadiene Styrene, Methyl Chloride (Gas) etc. Keeping in view the nature of industry and vast number of items, it is not practical for the Company to give item wise break up of different type of products.
Defined benefit plan
The Company operates a defined benefit gratuity plan, wherein every employee, who has rendered at least five years of continuous service, is entitled to the gratuity benefit equivalent to 15 days of total basic salary last drawn for each completed year of service, in terms of Payments of Gratuity Act, 1972. The Company has taken Group Gratuity Scheme for the employees from the LIC of India. Gratuity liability is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of the each reporting period, as required under Ind-AS 19 - Employee Benefits.
5. Operating lease
The Company has taken various premises on operating leases. The underlying agreements are executed for a period generally ranging from one year to three years except long term leases, renewable at the option of the Company and the lessor. There are no restrictions imposed by such leases and there are no sub leases. The rent charged and minimum rental payments to be made in the future in respect of these operating leases are as under:
* The Company acquired 100% share in Sigma Plastic Industries, which was merged in the Company during financial year 2014-15. Accordingly, pending litigation of Sigma Plastic Industries has also become part of pending litigation of the Company.
**Income Tax Appeal case pending before CIT (A) pertaining to AY 2012-13 has been decided vide order dated 15.03.2018 deleting the additions of Rs. 2,10,05,398 and confirming the additions of Rs. 6,64,416. The CIT (A) has further enhanced income by Rs. 3,39,19,015. Aggrieved by this order, the company has filed an appeal before Honâble ITAT Delhi. The tax demand notice on this confirmed addition and enhanced addition has not been received by the company as on date.
Income Tax Appeal case pending before CIT (A) pertaining to AY 2013-14 has been decided vide order dated 17.05.2018 deleting the additions of Rs. 15,48,731 and confirming the additions of Rs. 1,88,553. The decision to file appeal further before higher authorities against this order has not been taken yet by the management of the company.
Income Tax Appeal case pending before CIT (A) pertaining to AY 2014-15 has been decided vide order dated 23.05.2018 deleting the additions of Rs. 46,17,263 and confirming the additions of Rs. 3,21,594. The decision to file appeal before higher authorities against this order has not been taken yet by the management of the company.
The Company has filed civil suit against ADM Agro Industries Kota and Akola Limited supplier of Soya Bean Oil in Saket Court Delhi (Case No-CS OS No.-198/214) amounting Rs. 9,961,516 due to poor supply of soya bean oil. The Company has suffered a loss due to such poor quality of material supplied by them and non-recovery of money from debtors and it also affect goodwill of the Company. ADM Agro Industries Kota and Akola Limited has also filed winding up petition against the Company in High Court (Case No. CO PET N. 64/2014) due to non-payment of Rs. 4,115,664 along with interest at the rate of 18% from the due date of payment. ADM Agro Industries Kota and Akola Limited has also filed a summary suit for recovery of debts in Tis Hazari Court (Summary Suit No. - C S (OS) 3077/2014).
* The Company has intended to purchase the property for Rs. 16,79,88,400 at New Rohtak Road, New Delhi. The Company has made the payment of Rs. 13,42,62,626 for the same till 31st March 2018, which is shown as per Note No. 8 under âother noncurrent assetsâ in the Balance Sheet. Balance payment and the registration will be done in upcoming years and the same will be registered in the name of the Company after completing all the formalities for taking over the units.
* The Company has intended to purchase the property for Rs. 1,15,54,987/- at Dahej, Gujrat. The Company has made the payment of Rs. 57,68,686/- for the same till 31st March, 2018, which is shown under Current Capital Advances as per Note no. 14 âother current assetsâ in the Balance Sheet. Balance payment and the registration will be done in upcoming years and the same will be registered in the name of the Company after completing all the formalities for taking over the units.
6. Fair value measurement and financial instruments
Financial instruments - by category and fair value hierarchy
The following table shows the carrying amounts of financial assets and financial liabilities, including their levels in the fair value hierarchy:
The following methods / assumptions were used to estimate the fair values:
a) The carrying value of cash and cash equivalents, trade receivables and trade payables and liabilities approximate their fair values mainly due to short-term maturities of these instruments.
b) The fair value of investment in shares, which are acquired during the year itself only, is assessed by the management to be same as carrying value and is not expected to be significantly different.
c) The fair value of other financial assets and other financial liabilities is estimated by discounting future cash flows using rates applicable to instruments with similar terms, currency, credit risk and remaining maturities. The fair values of other financial assets and other financial liabilities are assessed by the management to be same as their carrying value and is not expected to be significantly different if estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. These are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs.
d) The Companyâs borrowings have been contracted at floating rate of interest, which resets at short intervals. Accordingly, the carrying value of such borrowings (including interest accrued but not due) approximates fair value.
There are no significant unobservable inputs used in the fair value measurement.
Fair value hierarchy
All financial instrument for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole;
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: Inputs for assets or liabilities that are not based on observable market data (unobservable inputs)
The following table presents the financial instruments measured at fair value, by level within the fair value measurement hierarchy:
During the year ended 31st March 2018, there were no transfers between Level 1, Level 2 or Level 3 fair value measurements.
7. Related party disclosures
In accordance with the requirements of Ind-AS - 24 âRelated Party Disclosuresâ, the names of the related parties where control exists and/ or with whom transactions have taken place during the year and description of relationships, as identified and certified by the management are as below:
A. List of related parties
1. Company with common Director
Vikas Multicorp Limited (formerly known as Moonlite Technochem Private Limited)
MM Infosystems Pvt. Ltd.
2. Key management personnel (KMP)
Vikas Garg Managing Director
Vivek Garg Whole time Director
Ashutosh Kumar Verma Chief Executive Officer and Whole time Director
Devender Kumar Garg Director (Finance)
Sumit Garg Chief Financial Officer
Anjavi Pandya Ex- Chief Financial Officer
Siddharth Agrawal Company Secretary
3. Relative of Key management personnel (KMP)
Seema Garg
Shashi Prabha Verma
4. Other related parties Vikas Polymer (India)
Related party transactions represent transactions entered into by the Company with directors, key management personnel and relatives of key management personnel. The transactions with these related parties for the year ended 31st March 2018 and balances as at 31st March 2018 are described below:
Terms and conditions of transactions with related parties:
The transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables.
8. Segment reporting
Factors used to identify the entityâs segments, including the basis of organisation
Operating segment is a component of the Company that engages in the business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Companyâs other components, and for which discrete financial information is available. All operating segmentsâ operating results are reviewed regularly by the Companyâs Chief Executive Officer (CEO) to make decisions about resources to be allocated to the segments and assess their performance.
The Company has determined following reportable segments, which are the Companyâs strategic business units. These business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the business units, the Companyâs CEO reviews internal management reports on at least a quarterly basis.
a) Chemical division
i. Manufacturing division
ii. Trading division
b) Real Estate division Information about reportable segments
Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit (before tax), as included in the internal management reports that are reviewed by the Companyâs CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an armâs length basis.
Geographical information
The geographical information analyses the Companyâs revenues and non-current assets by the Companyâs country of domicile (i.e. India) and other countries. In presenting the geographical information, segment revenue has been based on geographical location of customers and segment assets have been based on the geographical location of the assets.
9. Scheme of amalgamation
The scheme of amalgamation was filed under section 391 read with section 394 of the Companies Act 1956 w.e.f 1 April 2007 for the amalgamation of following three transferor companies with the transferee company, Vikas Ecotech Limited (formerly known as Vikas Globalone Limited):
a) Hulchul International Private Limited
b) Vikas Utilities Private Limited
c) South Delhi Projects Private Limited
The scheme was approved by approved by High Court vide order no. 18457/1 dated 17th October, 2008. In absence of any specific guidance under Ind AS with respect to amalgamation under court scheme, the Company has continued to apply the accounting prescribed under the scheme as applied under Indian GAAP. Accordingly, surplus of Rs. 965,934 arising on account of amalgamation is shown under âOther reservesâ.
10. First-time adoption of Ind AS
As stated in note 2, the Company has prepared its first annual Ind AS financial statements for the year ended 31st March 2018. These financial statements for the year ended 31st March 2018 have been prepared in accordance with Ind AS. The preparation of these financial statements resulted in changes to the accounting policies as compared to most recent annual financial statements prepared under prepared under Indian GAAP (âPrevious GAAPâ). Accounting policies have been applied consistently to all periods presented in the financial statements. They have also been applied in preparing the Ind AS opening balance sheet as at 1 April 2016 for the purpose of transition to Ind AS and as required by Ind AS 101: First Time adoption of Indian Accounting Standards.
Exemptions applied
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions with respect to transition to Ind AS:
a) Deemed cost exemption
The Company has elected to continue with the carrying value of all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per previous GAAP and used it as its deemed cost at the date of transition.
b) Merger Accounting
The Company has continued to follow the accounting treatment pursuant to the Merger Scheme prescribed by the Honâble High Court under Ind AS which is in line with Previous GAAP Use of the accounting as mandated by the merger scheme means that the Indian GAAP carrying amounts of assets and liabilities, that are required to be recognised under Ind AS, is their deemed cost at the date of the acquisition. The Company did not recognise or exclude any previously recognised amounts as a result of Ind AS recognition requirements.
Mandatory exceptions availed
Ind AS 101 allows first-time adopters following mandatory exceptions:
a) Estimates
Under Ind AS 101, an entityâs estimates in accordance with Ind AS at the âdate of transition to Ind ASâ (i.e. 1 April 2016) or âthe end of the comparative period presented in the entityâs first Ind AS financial statementsâ (i.e. 31st March, 2017), as the case may be, should be consistent with the estimates made for the same date in accordance with Previous Indian GAAP
The Companyâs Ind AS estimates as at the transition date are consistent with the estimates made as at the same date made under Previous Indian GAAP Key estimates considered in preparation of the financial statements that were not required under the Previous Indian GAAP are listed below:
- Determination of the discounted value for financial instruments carried at amortised cost
b) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exists at the date of transition to Ind AS.
The Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.
Reconciliations between Previous Indian GAAP and Ind AS
Ind AS 101 requires an entity to reconcile equity and total comprehensive income for the previous years. The following table and notes represents the reconciliations from Previous Indian GAAP to Ind AS.
11.1 Proposed dividend
Under Indian GAAP, proposed dividends including Dividend distribution tax (DDT) are recognised as a liability in the period to which they relate, irrespective of when they are declared.
Under Ind AS, a proposed dividend is recognised as a liability in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting) or paid.
The final dividend are declared and approved post the period to which it relates to, therefore, the liability of 15,299,890 for the year ended on 31st March, 2016 recorded for dividend including dividend distribution tax has been derecognised against retained earnings on 1 April 2016. The proposed dividend for the year ended on 31st March, 2017 of Rs. 16,923,411 recognized under Indian GAAP was reduced from Short term provisions and with a corresponding impact in the retained earnings.
11.2 Defined benefit plan on retirement benefits
Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, re-measurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is impacted by Rs. 1,299,822 and re-measurement gains/ losses on defined benefit plans has been recognized in the other comprehensive income (net of tax) for the year ended 31st March 2017.
11.3 Financial Assets at Amortised cost
This category generally applies to trade and other receivables, security deposits, interest accrued on deposits, etc. Under Indian GAAP these kind of financial assets are stated at transaction value.
Under Ind AS, financial assets which are non-derivative with fixed or determinable payments that are not quoted in an active market and recognised initially at fair value. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.
Such financial assets are classified at Amortised cost which needs to be initially recognised at Fair value under Ind AS. The corresponding fair value impact on 1 April 2016 resulting is not considered to be material, for any adjustment.
11.4 Financial Liabilities at Amortised cost
This category applies to Trade payables, security deposits received, etc. Under Indian GAAP, these kind of financial liabilities are stated at transaction value.
Under Ind AS Financial liabilities at amortised cost are non-derivative financial liabilities with fixed or determinable payment that are not quoted in an active market and recognised initially at fair value. After initial measurement, such liability are subsequently measured at amortised cost using the effective interest rate (EIR) method. The EIR amortisation is included in finance cost in the Statement of Profit or Loss.
Such financial assets are classified at Amortised cost which needs to be initially recognised at Fair value under Ind AS. The corresponding fair value impact on 1 April2016 is not considered to be material, for any adjustment.
11.5 Other comprehensive income
Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.
12. Financial risk management objectives and policies
The Companyâs principal financial liabilities comprise borrowings, trade payables etc. The main purpose of these financial liabilities is to manage finances for the Companyâs operations. The Companyâs principal financial assets include trade and other receivables, cash and cash equivalents, security deposits, etc. that derive directly from its operations.
The Company is exposed to market risk (interest rate risk), credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance frame work for the Company are accountable to the Board Audit Committee. This process provides assurance to the Companyâs senior management that the Companyâs financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Companyâs policies and Companyâs risk appetite. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Companyâs policy that no trading in derivatives for speculative purposes shall be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below:
Market Risk - Interest rate risk
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates related primarily to the Companyâs borrowings with floating interest rates.
Exposure to interest rate risks
The Companyâs interest rate risk arises majorly from the borrowings carrying floating rate of interest. These obligations exposes the Company to cash flow interest rate risk. The exposure of the Companyâs borrowing to interest rate changes as reported to the management at the end of the reporting period are as follows:
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.
Credit risk on cash and cash equivalents and bank deposits is generally limited as the Company transacts with Banks having a high credit ratings assigned by domestic credit rating agencies.
Trade receivables
Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. On adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment gain or loss. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available internal credit risk factors such as the Companyâs historical experience of customers. Based on the business environment in which the Company operates, management considers that the trade receivables are not in default (credit impaired) as there is very good track record against sales realisations and further there is Zero bad debts in past, hence the Company based upon past trends determined no default risk for trade receivables and accordingly no impairment allowance for loss on trade receivables is required.
The ageing analysis of trade receivables as of the reporting date is as follows:
Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is exposed to currency risk on account of its borrowings, receivables and other payables in foreign currency. The functional currency of the company is Indian Rupee.
The foreign currency exchange management policy is to minimize economic and transactional exposures arising from currency movements against the US dollar & Euro. The Company manages the risk by netting off naturally-occurring opposite exposures wherever possible, and then dealing with any material residual foreign currency exchange risks if any.
Exposure to currency risk
The currency profile of financial assets and financial liabilities as at 31st March 2018, 31st March 2017 and 1 April 2016 are as below:
Sensitivity analysis
A reasonably possible strengthening (weakening) of the Indian Rupee against US dollar & Euro at reporting date would have affected the measurement of financial instruments denominated in foreign currencies and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.
Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Companyâs objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company principal sources of liquidity are cash and cash equivalents and the cash flow generated from operations. The Company closely monitors its liquidity position and deploys a robust cash management system.
The table below summarizes the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments:-
Capital management
Capital includes equity attributable to the equity holders of the parent. The primary objective of the Companyâs capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value.
The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No major changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2018, 31st March, 2017 and 1st April, 2016.
The Companyâs capital consists of equity attributable to equity holders that includes equity share capital, retained earnings and long term borrowings.
13. Note on Demerger
The Board of Directors of the Company in its meeting held on May 29th, 2017 had approved the âScheme of Arrangementâ for the Demerger of High Volume âRecycled Compounds and Trading Divisionâ of Vikas EcoTech Limited (Demerged Undertaking) (having net assets of approx. book value of Rs. 29.57 Crores as on 1stApril, 2017) into Vikas Multicorp Limited (Resulting Company). An application was moved before the Honâble NCLT principal bench, New Delhi for obtaining necessary orders under Section 230-232 of the Companies Act, 2013, with a view of vesting of demerged undertaking, the appointed date under the Scheme for demerger is 1stApril, 2017. As on date, the said application is pending for approval before Honâble NCLT and the scheme shall be effective only after the final order of Honâble NCLT Principle Bench, Delhi. NCLT has set 1stAugust, 2018 as the final hearing date for the scheme. In view of this, the financials statements are hereby prepared without considering the effect of scheme of Demerger and treating the said division proposed to be demerged as continuing operations. The financial statements are subject to amendment to give effect to the scheme once the same becomes effective after final order of Honâble NCLT.
Mar 31, 2017
Background and Nature of Operations
Vikas Ecotech Limited (VEL) is a Delhi based professionally managed Company incorporated on 30th November, 1984 under the Companies Act, 1956, having its registered office at Vikas Apartments, 34/1, East Punjabi Bagh, New Delhi - 110 026 and is listed on National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE).
Vikas Ecotech is an emerging player in the global arena engaged in the business of High-end specialty chemicals. Itâs an integrated, multispecialty product solutions company, producing a wide variety of superior quality, eco-friendly additives and rubber-plastic compounds. Its additives and rubber-plastic compounds are process-critical and value-enabling ingredients used to manufacture a varied cross-section of high-performance, environment-friendly and safety-critical products. From agriculture to automotive, cables to electricals, hygiene to healthcare, polymers to packaging, textiles to footwear, the companyâs products serve a diverse range of global industry needs. Company has its manufacturing plants in the state of Rajasthan, Jammu and Kashmir and Uttar Pradesh. Also, the company has commenced construction of new State-of-the-art Plant & Innovation Center at Dahej and Kandla in Gujarat to cater to Export and Western & Southern Indian markets.
Equity Shares
The Company has only one class of Equity having a par value Rs.1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the shareholders in ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the Equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
Preferential Equity Allotment
In accordance with the provision of section 39 of the Companies Act, 2013 read together with the Companies (Prospectus and Allotment of Securities) Rules, 2014 and pursuant to the letter of offer for issuance of shares and approval of the company, the Company has issued 2,56,60,000 shares as preferential Equity shares of â 1 per equity share at a premium of Rs.16 per share during the current financial year.
The following is the List of Persons to whom such preferential equity shares are issued:
HDFC - Vehicle Loan Agreement No. 38982281 was taken during 2016 year and carries interest @ 9.4% per annum. The Loan is repayable in 36 instalments of Rs.2,07,805 each along with interest from the date of Loan. The loan is secured by hypothecation of car of the Company.
HDFC - Vehicle Loan Agreement No. 24353585 was taken during 2013 year and carries interest @ 15.65% per annum. The Loan is repayable in 36 instalments of Rs.22,837 each along with interest from the date of Loan. The loan is secured by hypothecation of car of the Company. This Loan has been discharged completely during the year under consideration.
ICICI Loan No. LADEL 00026874591 was taken during 2013 year and carries interest @ 9.09 % per annum. The Loan is repayable in 36 instalments of Rs.1,11,450 each along with interest from the date of Loan. The loan is secured by hypothecation of car of the Company. This Loan has been discharged completely during the year under consideration.
ICICI Loan No. LA DEL 00035146099 was taken during 2016 year and carries interest @ 9.10% per annum. The Loan is repayable in 36 instalments of Rs.2,01,906 each along with interest from the date of Loan. The loan is secured by hypothecation of car of the Company.
Toyota Financial Services India Ltd - NDEL1085441 was taken during 2016 year and carries interest @ 9.24% per annum. The Loan is repayable in 60 instalments of Rs.35,496 each along with interest from the date of Loan. The loan is secured by hypothecation of car of the Company.
Term Loan III - 11167015000461 (Oriental Bank of Commerce) Closing balance limits Rs.40.24 Lacs. The Term Loan is secured on the Plant and Machinery and Land and Building located at G-24-29 & 30, RIICO Industrial Area, Vigyan Nagar, Shahjahanpur, Dist. Alwar, Rajasthan owned by Vikas Ecotech Limited. The rate of interest shall be BR 2% 0.5%. The Period of Maturity from the Balance Sheet date is 7 months.
Term Loan IV - 8767025001865 (Oriental Bank of Commerce) Closing balance limits Rs.166.50 Lacs . The Term Loan is secured on the 1st exclusive charge by way of hypothecation on plant & machinery financed by OBC. The rate of interest shall be BR 2% .5%. The Period of Maturity from the Balance Sheet date is 36 months.
Term Loan V - 8767025002281 (Oriental Bank of Commerce) Closing balance limits Rs.342.65 Lacs. The Term Loan is secured on the 1st exclusive charge by way of hypothecation on plant & machinery and construction of Building financed by OBC. The rate of interest shall be BR 2% .5%. The Period of Maturity from the Balance Sheet date is 42 months.
ICICI Bank Loan No. LADEL 00002038205: By virtue of acquisition of remaining share in Sigma Plastic Industries, the Loan (Firm has taken term loan from ICICI Bank of Rs.500 Lacs repayable in 120 EMI of Rs.7,17,355 each on 12th November, 2013, this is secured against house No. 10, Road No. 4 East Punjabi Bagh, New Delhi. The properties in the name of the Directors of the Company) became part of the capital structure of the Company and the Loan is in the process of transferring in the name of the borrower, from Sigma Plastic Industries to Vikas Ecotech Limited and has not been transferred in the name of Company as on Balance Sheet Date.
CASH CREDIT
Company is availing working capital limits under consortium of Oriental Bank of Commerce, Bank of Baroda, Punjab National Bank & Development Bank of Singapore with Oriental Bank of Commerce as lead banker in consortium and others banks are member banks.
The Company is availing a Cash Credit (Hypo) limit of Rs.6,120 Lacs which include PCFC Limit of â 2,880 Lacs from Oriental Bank of Commerce against hypothecation of stock, receivables, advance to suppliers and other current assets on pari passu basis with consortium members. No. DP against stock and Book Debts exceeding 180 days to be allowed. Margins 20% and the rate of interest is Bank MCLR 2% which at present is 11.60% p.a. Further the Company is also availing LC/DA/DP basis non Fund Based Limit of Rs.2,760 Lacs (which includes both sides inter change ability LC to CC for Rs.1,000 Lacs) for procurement of Raw Material and Spares. Cash Margins is 15% in the shape of FDR on LC limits. The proposal of renewal cum enhancement is under process with Oriental Bank of Commerce as on Balance Sheet date.
The Company is also availing Cash Credit limit of Rs.1,550 Lacs from Bank of Baroda with a sub-limit of PC/PCFC/FBP/FBD of Rs.575 Lacs under the same Cash Credit limit. The limit is secured by way of hypothecation of stock, receivables & other current assets on pari passu basis with consortium members. DP shall be permitted against receivable upto 180 days. Margin is 20% & Rate of interest is MCLR SP 1.85% which is at present 11.50%. Further the Company is availing Non Fund Based LC (Import/Inland/DP/DA/BG, Buyers Credit) limits of Rs.650 Lacs for procurement of raw material and spares. Cash Margin is 15% in the shape of FDR on LC limits.
The Company is also availing Cash Credit limit of Rs.1,530 Lacs from Punjab National Bank with a sub limit of PC/PCFC/FBP/FBD of Rs.720 Lacs under the same Cash Credit limit. The limit is secured by way of hypothecation of stock, receivables & other current assets on pari passu basis with consortium members. DP shall be permitted against receivable upto 180 days. Margin is 20 % & Rate of interest is BR 2.75% which at present is 12.35 %. Further the Company is availing Non Fund Based LC (Import/Inland/DP/DA/BG, Buyers Credit) limits of Rs.690 Lacs for procurement of raw material and spares. Cash Margin is 15% in the shape of FDR.
The Company is also availing Cash Credit limit of Rs.1,000 Lacs from Development Bank of Singapore with a sub limit of PC/PCFC/FBP/FBD of Rs.500 Lacs under the same Cash Credit limit. The limit is secured by way of hypothecation of stock, receivables & other current assets on pari passu basis with consortium members. DP shall be permitted against receivable upto 180 days. Margin is 20% & Rate of interest is MCLR 1.35% which at present is 10.5%. Further the Company is availing Non Fund Based LC (Import/Inland/DP/DA/BG, Buyers Credit) limits of Rs.500 lacs (which includes both side inter change ability LC to CC for Rs.500 Lacs) for procurement of raw material and spares. Cash Margin is 15% in the shape of FDR.
Further the limit is secured on following Collateral Properties:
1) Property bearing Khasra No.14/5/2 6min, 15/1/2, 9/2 &10 min Village Ghevra, near Mundka Railway Crossing, Delhi owned by Ms. Seema Garg and Ms. Namita Garg.
2) Roof right of Property 34/1, Vikas Apartments, East Punjabi Bagh, New Delhi owned by Company.
3) Industrial property at Industrial Growth Centre, Phase 1, Dist. Samba, J&K owned by Company.
4) Land & building situated at Industrial Growth Centre, Phase-1, Dist. Samba, J&K owned by Company.
5) F-5, Vikas Apartment, 34/1, 1st Floor, East Punjabi Bagh, New Delhi owned by Ms. Seema Garg.
6) Industrial property at G-30, RIICO Industrial Area, Vigyan Nagar, Shahjahanpur Dist. Alwar, Rajasthan.
7) Property situated at Khasra no. 710/201 in Village Rithala, Delhi owned by Mr. Vivek Garg.
8) A-28 Khasra No.12/10 and 13/6 Village Kamrudin Nagar, Nangloi owned by Ms. Seema Garg and Ms. Usha Garg.
9) 770, Khasra No.142/770, situated at Village Khanjawala, New Delhi owned by Ms. Usha Garg
10) B-1, 34/1, Vikas Apartment, Punjabi Bagh, New Delhi owned by Ms. Usha Garg.
11) Land situated in village Sultanpur Dabas, New Delhi owned by Company.
12) Industrial property at G-24-29 RIICO Industrial Area, Vigyan Nagar, Shahjahanpur Dist. Alwar, Rajasthan, owned by Company.
13) Industrial Property at Dahej-II, Industrial Estate, Dist. Bharuch, Gujarat owned by Company.
14) Industrial Property No. F-7 & 8, Vigyan Nagar RIICO Indl. Area, Shahjahanpur, Tehsil Neemrana, Distt. Alwar, Rajasthan.
Further limits are guaranteed by Personal guarantee of the following:
1) Mr. Nand Kishore Garg
2) Mr. Vikas Garg
3) Mr. Vivek Garg
4) Ms. Seema Garg
5) Ms. Usha Garg
6) Ms. Namita Garg
*Advance to Suppliers includes Rs.96,50,143 (ninety-six lacs fifty thousand one hundred and forty-three only) to Vikas Multicorp Limited (formerly known as Moonlite Technochem Private Limited) & â 1,69,84,258 (one crore sixty-nine lacs eighty four thousand two hundred and & fifty-eight only) to Vikas Polymers (India) in which Director of Vikas Ecotech Ltd is Partner.
**Advance against Capital Assets includes Rs.6,22,220 (six lacs twenty-two thousand two hundred and twenty only) to MM Info Systems Private Limited in which Director of Vikas Ecotech Limited is a Director.
The board of directors, subject to approval of the member has recommended dividend of 5% of face value per Equity Share.
Note 1: Commitments
Capital Commitment: There are no any other contracts remaining to be executed on capital account and not provided for as at 31st March, 2017 except the Company has intended to purchase the property for Rs.8,37,00,000, at New Rohtak road, New Delhi. Company has made the payment of Rs.2,30,25,252 for the same up to 31st March, 2017, remaining payment and the registration will be done in upcoming years and the same will be registered in the name of the Company after completing all the formalities for taking over the units.
Company has contracted with Smart Roof Solar Solution Pvt. Ltd. for the designed, installed & commissioned Grid Connected Solar Roof Top project for Rs.2,20,75,000.The company has paid a sum of Rs.5,00,000 up to 31st March, 2017.
Lease Commitment: The Company has taken various premises on operating leases. The rental of Rs.10,41,031 (Previous year Rs.3,55,241) has been charged to Profit and Loss Account for the year ended 31st March 2017. The under lying agreements are executed for a period generally ranging from one year to three years, renewable at the option of the Company and the Lessor. There are no restrictions imposed by such leases and there are no sub leases.
Note 2:
On 31st March 2017, Companyâs newly opened Poly Propylene manufacturing plant was destroyed in a fire that engulfed this particular section of companyâs manufacturing facility in Shahjahanpur, Rajasthan. The damage was limited to only one building that housed the Poly Propylene section and a material warehouse. The companyâs four other manufacturing units in the same factory Plot are intact and fully operational. No human casualties were reported and all companyâs employees and workers were safe. In fire the stock amounting to Rs.10,65,49,789 was destroyed along with the building and Plant & Machinery worth Rs.1,68,27,173 and Rs.3,97,30,957 respectively was also destroyed. All the Stocks, Plant & Machineries & Building were fully insured with The Oriental Insurance Company Ltd. and the Company has successfully filed and lodged the claim with the Insurance company.
The management of company has recognised the complete loss during this year under review, as the claim is under process for approval as on date. In accordance with the accounting policies, the company shall account for insurance claims in the year in which the same is approved by the Insurance company and accordingly consider the same as Income in the respective financial year.
Note 3:
There is a Contingent Liability of Rs.67 Lacs in the form of Bank Guarantee and Rs.2,736 Lacs in respect of LC and duty saved against Advance License is Rs.509.54 Lacs. LC Limit was utilized against the Trade Payable outstanding in Note No.9.
Company has filed Civil Suit against ADM Agro Industries Kota and Akola Limited, supplier of Soya Bean Oil in the Saket Court, Delhi case No. CS OS No. 198/214 Amounting Rs.99,61,516 due to poor supply of Soya Bean oil. Company has suffered a loss due to such poor quality of material supplied by them and non recovery of money from debtors and it also affected the goodwill of the Company. ADM Agro Industries Kota and Akola Limited has also filed Winding up Petition against Company in High Court case no CO PET No. 64/2014 due to non-payment of Rs.41,15,664 along with interest at the rate of 18% from the due date of payment. ADM Agro Industries Kota and Akola Limited has also filed a summary suit for recovery of debts in Tis Hazari Court, Summary Suit no. - CS(OS) 3077/2014.
*The Company Vikas Ecotech Limited acquired 100% share in Sigma Plastic Industries, and merged the same in the Vikas Eco Tech Limited in FY 2014-15, by virtue of this, pending litigation of Sigma Plastic Industries has also become part of pending litigation of Vikas Ecotech Limited.
Note 4:
Inventory as stated in Note no. 15 includes Real Estate inventory of Rs.266.17 Lacs.
Note 5: Segment Reporting
The segment reporting of the Company has been prepared in accordance with Accounting Standard (AS-17) Accounting for Segment Reporting issued by The Institute of Chartered Accountants of India.
The Company has determined the following business segments as the primary segments for disclosure:
1) Chemical Division
a. Manufacturing Division
b. Trading Division
2) Real Estate Division
The Geographical Segment consists of:
1) Domestic (Sales to customers located in India)
2) Export (Sales to customers located outside India)
The above business segments have been identified and reported considering:
1) The nature of the services
2) The related risk and returns
3) The internal financial reporting systems
Purchase directly attributable to segments is reported based on items that are individually identifiable to that segment. Common allocable costs are allocated to each segment to that common cost.
Segment revenue, results, assets and liabilities include amounts identifiable to each segment and amounts allocated on a reasonable basis based on their relationship to the operating activities of the segment.
Note 6:
The Company had not received information from suppliers regarding their status under the âMicro, Small and Medium Enterprises Development Act 2006â and accordingly no disclosure regarding overdue outstanding of principal amount and interest there on has been given.
Note 7:
In the opinion of the Management of the Company, all current assets, loans and advances appearing in the balance sheet as at 31st March, 2017 have a value on realization in the ordinary course of the Companyâs business at least equal to the amount at which they are stated in the Balance Sheet. Certain balances shown under current assets, current liability, loans and advances and balances with banks are subject to confirmation/reconciliation.
Note 8:
The scheme of amalgamation was filed under section 391 read with section 394 of the companies Act 1956 w.e.f. 1st April, 2007 for the amalgamation of the following three transferor companies a) Hulchul International Private Limited, b) Vikas Utilities Private Limited, c) South Delhi Projects Private Limited, with the transferee company, Vikas Ecotech Limited (formally known as Vikas Globalone Limited). The same had been approved by the High Court wide order no 18457/1 dated 17th October, 2008. The amalgamation has been accounted for the manner specified in the Scheme, the Surplus of Rs.9,65,934 arising out of amalgamation is shown under the head Capital Reserve Account.
In the opinion of the Management, no provision is required to be made against the recoverability of the balances (referred in Note no. 36) except provided.
Note 9: Employees Benefit Obligation:
I. Defined Contribution Plan
During the year the Company has recognized the following amount in the statement of profit and loss under Employee benefit expense to provident fund under defined contributions plan of Employeesâ Provident Fund and Miscellaneous Provisions Act, 1952.
II. Defined Benefit Plan
Principal actuarial assumptions at the balance sheet date:
As per the best estimate of the management, no provision is required to be made as per Accounting Standard 29. Provisions, Contingent Liabilities and Contingent Assets as not specified under the Companies (Accounting Standards) Rules, 2006, as amended, in respect of any present obligation as a result of past event that could lead to a probable out flow of resources, which would be required to settle the obligation.
Disclosure in respect of Accounting Standard (AS) 18 âRelated Party Disclosuresâ as notified under the Companies (Accounting Standards) Rules, 2006, as amended:
Names of related parties and description of relationship:
Note 10:
Earnings per Share:
Basic earnings per share are computed by dividing the net profit/(loss) attributable to equity shareholders, for the year by the weighted average number of equity shares outstanding during the year.
Note 11:
Deferred Tax: Incompliance with Accounting Standard 22 (AS22) - Accounting for Taxes on Income, as notified under the Companies (Accounting Standards) Rules, 2006, as amended, the Company has recognized deferred tax Asset (net) in the Profit and Loss account of Rs.2,00,82,417 (Previous year Rs.17,83,319) during the year ended 31st March, 2017.
Note 12:
The company does not see any material foreseeable losses on any long term contracts entered by the company; therefore no provision is required in this respect. Further the Company has not entered in to any foreign exchange derivative instruments during the year under consideration.
Note 13:
The Company commissioned its new unit at Noida (SEZ) for manufacturing of product naming Organotin Heat Stabilisers and PVC Compounds during the 4th Quarter in March, 2017.
Note 14:
Corporate Social Responsibility
The Company is covered u/s 135 of Companies Act 2013, the details of the expenditure on corporate social responsibility activity is as under:
Gross amount required to be spent by the Company during the year: Rs.32,81,792 Amounts spent during the year: Rs.35,30,120
There is no borrowing cost that is attributable to acquisition or development of qualify intangible/intangibles sets, which is to be capitalized till the date they are put to use.
Mar 31, 2016
Further the limit is secured on following Collateral Properties:
1. Property bearing Khasra No. 14/5/2 6 min, 15/1/2, 9/2 & 10 min Vill Ghevra, Near Mundka Railway Crossing, Delhi owned by Ms. Seema Garg and Ms. Namita Garg.
2. Roof right of Property 34/1, Vikas Apartments, East Punjabi Bagh, New Delhi owned by Vikas Globalone Limited.
3. Industrial property at Industrial Growth Centre, Phase 1, Dist. Samba, J & K owned by Vikas Globalone Limited.
4. Land & building situated at Industrial Growth Centre, Phase-1, Dist. Samba, J & K owned by Sigma Plastic Industries, which has been merged with Vikas GlobalOne Ltd.
5. F-5, Vikas Apartment, 34/1, 1st Floor, East Punjabi Bagh, New Delhi owned by Ms. Seema Garg.
6. EM of industrial property at G-30 RIICO Industrial Area, Vigyan Nagar, Shahjahanpur Dist. Alwar, Rajasthan.
7. Property situated at Khasra No. 710/201 in Village Rithala, Delhi owned by Mr. Vivek Garg.
8. A-28 Khasra No. 12/10 and 13/6 Village Kamrudin Nagar Nangloi owned by Ms. Seema Garg and Ms. Usha Garg.
9. 770, Khasra No. 142/770, situated at Village Khanjawala, New Delhi owned by Ms. Usha Garg
10. B-1, 34/1, Vikas Apartment, Punjabi Bagh, New Delhi owned by Ms. Usha Garg.
11. Mortgage of Agricultural land situated at village Sultanpur Dabas, New Delhi owned by Vikas GlobalOne Limited.
12. EM of industrial property at G-24-29 & G-30 RIICO Industrial Area, Vigyan Nagar, Shahjahanpur Dist. Alwar Rajasthan.
13. Negative lien on plot of 27,840.91 Sq. Mt. at Dahej-II, Industrial Estate, Dist. Bharuch Gujarat.
Properties at Sr. No. 4 & 5 are charged in account of Sigma Plastic Industries. Since this concern has been merged with the Vikas Globalone Limited, the properties shall now be charged to the consortium.
Further limit is guaranteed by Personal guarantee of the following
1. Mr. Nand Kishore Garg
2. Mr. Vikas Garg
3. Mr. Vivek Garg
4. Ms. Seema Garg
5. Ms. Usha Garg
6. Ms. Namita Garg
*Advance to Suppliers includes Rs,35,80,964 (Thirty Five Lacs Eighty Thousand Nine Hundred and Sixty Four only) to Moonlite Technochem Private Limited in which Director of Vikas Globalone Limited is also a Director.
***Advance against Capital Assets includes Rs,4,49,720 (Four Lacs Forty Nine Thousand Seven Hundred and Twenty only) to M M Infosystems Private Limited in which Director of Vikas Globalone Limited is also a Director.
Note No. 1
The board of directors, subject to approval of the members has recommended a dividend of 5% of face value per Equity Share.
Note No. 2
Commitments
Capital Commitment: There are no any other contracts remaining to be executed on capital account and not provided for as at March 31, 2016 except the Company has purchased two Land & Building for through auction on March 19, 2016 for Rs,3,23,50,000 (2,51,00,000.00 72,50,000.00), at Village Rohad Bahadurgad admeasuring measuring 4840 sq mtrs and 1512.50 sq mts. Company has made the payment of Rs,68,00,000 for the same upto March 31, 2016, remaining payment and the registration will be done during the next financial year and the same will be registered in the name of the Company after completing all the formalities for taking over the units.
Lease Commitment: The Company has taken various premises on operating leases. The lease rental of Rs,3,55,241 (Previous year Rs,6,12,515) has been charged to Profit and Loss Account for the year ended March 31, 2016. The underlying agreements are executed for a period generally ranging from one year to three years, renewable at the option of the Company and the lessor. There are no restrictions imposed by such leases and there are no sub leases.
Note No 3.
There is no significant event that has been taken place after the date of Balance Sheet.
Note No 4.
There is a Contingent Liability of Rs,398.97 Lacs in the form of Bank Guarantee and Rs,2,375 Lacs in respect of LC and duty saved against advance license is Rs,117.17 Lacs. LC Limit was utilized against the Trade Payable outstanding in Note No. 9.
Company has filed Civil Suit against ADM Agro Industries Kota and Akola Limited supplier of Soya Bean Oil in High Court Delhi case No-CS OS No-198/214 of Amounting Rs,99,61,516 due to poor supply of soya bean oil. Company has suffered a loss due to such poor quality of material supplied by them and non recovery of money from debtors and it also affect goodwill of the Company. The ADM Agro Industries Kota and Akola Limited has also filed winding up Petition against Company in High Court case no CO PET No-64/2014 due to non-payment of Rs,41,15,664 along with interest at the rate of 18% from the due date of payment. The ADM Agro Industries Kota and Akola Limited has also filed a summary suit for recovery of debts in High Court, Summary Suit No. C S (OS) 3077/2014.
*The Company Vikas Ecotech Limited acquired 100% share in Sigma Plastic Industries, and merged the same in the Vikas Ecotech Limited in FY. 2014-15, by virtue of this, pending litigation of Sigma Plastic Industries is also become part of pending litigation of Vikas Ecotech Limited.
Note No 5.
Inventory as stated in note no 15 includes real estate inventory of Rs,266.17 Lacs.
Note No 6.
Segment Reporting
The segment reporting of the Company has been prepared in accordance with Accounting Standard (AS-17) Accounting for Segment Reporting issued by The Institute of Chartered Accountant of India.
The Company has determined the following business segments as the primary segments for disclosure:
- Chemical Division
- Real Estate Division
- Agro Division
- Service Division
The geographical Segment consists of:
- Domestic (Sales to customers located in India)
- International (Sales to customers located outside India)
The above business segments have been identified and reported considering:
- The nature of the services
- The related risk and returns
- The internal financial reporting systems
Purchase directly attributable to segments is reported based on items that are individually identifiable to that segment.
Common allocable costs are allocated to each segment to that common cost.
Note No 7.
The Company has purchased Leasehold Land for sum of Rs,3,02,57,276, at D-2/CH/401-402, Dahej - II, Industrial Estate, District Bharuch, Gujarat. The Company has made the payment of the same, and the registration of lease deed is registered in the name of the Company as on January 7, 2016. A leasehold rights- leasehold land is amortized over the remaining useful life.
The Company has also purchased Leasehold Land for sum of Rs,1,56,91,100, at F 7 & 8 RIICO Industrial Area, Vigyan Nagar, Shahjahanpur Dist. Alwar, Rajasthan. The Company has made the payment of the same, and the registration of lease deed is registered in the name of the Company as on February 6, 2016. A leasehold rights- leasehold land is amortized over the remaining useful life.
Note No 8.
In the opinion of the Management of the Company, all Current Assets, Loans and Advances appearing in the balance sheet as at March 31, 2016 have a value on realization in the ordinary course of the Companyâs business at least equal to the amount at which they are stated in the balance sheet. Certain balances shown under current assets, current liability, loans and advances and balances with banks, are subject to confirmation / reconciliation.
Note No 9.
In the opinion of the Management, no provision is required to be made against the recoverability of these balances except provided. Note No 39.
Employees Benefit Obligation
I. Defined Contribution Plan
During the year the Company has recognized the following amount in the statement of profit and loss under Employee benefit expense to provident fund under defined contributions plan of Employeesâ Provident Fund and Miscellaneous Provisions Act, 1952.
During the year ended March 31, 2016, the Company has made a provision of Rs,8,91,804 in respect of provision for gratuity and defined benefits as per actuarial valuation made as per AS-15. The balance has been reversed & credited to the Profit and Loss A/c.
The Company has taken Group Gratuity Scheme for the employees from the LIC of India. Total Fund Value of the same is Rs,3,86,179. Note No 40.
As per the best estimate of the management, no provision is required to be made as per Accounting Standard 29 (AS 29) Provisions, Contingent Liabilities and Contingent Assets as notified under the Companies (Accounting Standards) Rules, 2006, as amended, in respect of any present obligation as a result of a past event that could lead to a probable outflow of resources, which would be required to settle the obligation.
Note No 10.
Earnings Per Share:-
Basic earnings per share are computed by dividing the net profit/(loss) attributable to equity shareholders, for the year by the weighted average number of equity shares outstanding during the year.
Note No 11.
Deferred Tax:-
In compliance with Accounting Standard 22 (AS 22) - Accounting for Taxes on Income, as notified under the Companies (Accounting Standards) Rules, 2006, as amended, the Company has recognized deferred tax Asset (net) in the Profit and Loss Account of Rs,17,83,319 (Previous year Rs,36,43,842) during the year ended March 31, 2016.
Note No 12.
In the AGM of the Company held on September 28, 2011, the members of the Company passed a resolution for introducing a Stock Compensation Plan called the Employees Stock Option Scheme, 2011 (ESOS 2011), for the benefit of employees of the Company. The resolution also accorded approval for the Board of Directors, to formulate the Scheme as per broad parameters outlined in the resolution, either directly or through a committee. Accordingly, a committee of directors called Compensation Committee was constituted. The Committee, after due deliberations and after studying the provisions of SEBI employee Stock option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended from time to time, has formulated the Employees Stock Option Scheme, 2011 (ESOS 2011). The Scheme has been approved by the Stock Exchange on May 7, 2012 (NSE) and May 2, 2012 (BSE). The Compensation Committee at its meeting held on June 2, 2012 has granted Stock Option to the eligible employees and accordingly the options granted shall vest over a period of 3 years, or as may be decided by the CC, as per schedule as under.
There shall be a minimum period of one year between grant date and the vesting period for the first lot of vesting of granted options. The interval between the subsequent lots shall be one year.
The Employee Stock Options granted by the Company pursuant to its ESOP Scheme, 2011, lapsed on December 1, 2015. No employee opted for ESOP during the year under consideration. consequent to effect of lapse of options, the balance of ''1,05,03,337 appearing in Employee Stock Option Reversal account has been reversed and shown as under the head, Employee Stock Option Compensation account under âOther Incomeâ, Consequent to the same, Other income has been increased and corresponding increase in profit for the year by Rs,1,05,03,337.
Note No 13.
The company does not see any material foreseeable losses on any long term contracts entered by the company, therefore no provision is required in this respect. Further the Company has not entered into any foreign exchange derivative instruments during the year under consideration.
Note No 14.
The unit at Bawana (Delhi) and unit at Sitarganj (Uttrakhand) have been shifted in the manufacturing unit at Shajahanpur, (Rajasthan).
1. In the unit at Bawana (Delhi) wherein two products namely PVC Compounds and V-blend (SOE Compound) are being manufactured (Shifted to Rajasthan Unit 1 w.e.f. February 1, 2016).
2. In the unit at Sitarganj (Uttrakhand) wherein products like V-PET-C (PET-Compound) is being manufactured (Shifted to Rajasthan Unit 1 w.e.f. February 1, 2016).
Note No 15.
Corporate Social Responsibility
The Company is covered u/s 135 of Companies Act 2013, the details of the expenditure on corporate social responsibility activity is as under:
a. Gross amount required to be spent by the Company during the year: Rs,7,02,214
b. Amount spent during the year: Rs,15,00,000
Note No 16.
Borrowing Cost:
There is no borrowing cost that is attributable to acquisition or development of qualifying tangible/intangible assets, which is to be capitalized till the date they are put to use.
Mar 31, 2015
Note No. 1
The board of directors, subject to approval of the members has
recommended a dividend of 5% of face value per Equity Share.
Note No. 2
Commitments
a) Capital Commitment: There are no contracts remaining to be executed
on capital account and not provided for as at 31 March, 2015.
b) Lease Commitment: The Company has taken various premises on
operating leases. The lease rental of f 6,12,515/- (Previous year
12,81,500/-) has been charged to Profit and Loss Account for the year
ended March 31, 2015. The underlying agreements are executed for a
period generally ranging from one year to three years, renewable at the
option of the Company and the lessor. There are no restrictions
imposed by such leases and there are no sub leases
Note No 3.
There is no significant event that has been taken place after the date
of Balance Sheet.
Note No 4.
There is a Contingent Liability of Rs. 19.65 Lacs in the form of Bank
Guarantee and 2,808.69 Lacs/- in respect of LC and duty saved against
advance license is 203.73 Lacs/-. The Company has given Corporate
Guarantee to the Bank of 1,600 Lacs/- for Moonlite Technochem Private
Limited which was 100% Subsidiary of Vikas GlobalOne Limited and the
investment in subsidiary was disposed off as per note no. 12. During
the year the Company Moonlite Technochem Pvt Ltd has requested to bank
to release the corporate guarantee of Vikas GlobalOne Ltd and the
request is under process as on Balance Sheet date and the charge was
pending as corporate guarantee as on Balance Sheet Date.
Company has filed Civil Suit against ADM Agro Industries Kota and Akola
Limited supplier of Soya Bean Oil in High Court Delhi case No-CS OS
No-198/214 of Amounting Rs..99,61,516/- due to poor supply of soya bean
oil. Company has suffered a loss due to such poor quality of material
supplied by them and non recovery of money from debtors and it also
affect goodwill of the Company. The ADM Agro Industries Kota and Akola
Limited has also filed winding up Petition against Company in High
Court case no CO PET No-64/2014 due to non-payment of Rs 41,15,664/-
along with interest at the rate of 18% from the due date of payment.
The ADM Agro Industries Kota and Akola Limited has also filed a summary
suit for recovery of debts in High Court, Summary Suit no - C S (OS)
3077/ 2014.
Note No 5.
The Company has purchased Leasehold Land for sum of .2,55,08,761/-, at
D-2/CH/401-402, Dahej - II, Industrial Estate, District Bharuch,
Gujarat. Though the Company has made the payment of the same, but the
registration of lease deed is still under process and not registered in
the name of the Company as at the Balance Sheet Date. A leasehold
rights- leasehold land is amortized over the remaining useful life.
Note No 6.
Segment Reporting:-
The segment reporting of the Company has been prepared in accordance
with Accounting Standard (AS-17) Accounting for Segment Reporting
issued by The Institute of Chartered Accountant of India.
The Company has determined the following business segments as the
primary segments for disclosure:
1) Chemical Division
2) Real Estate Division
3) Agro Division
4) Service Division
The geographical Segment consists of:
· Domestic (Sales to customers located in India)
· International (Sales to customers located outside India)
The above business segments have been identified and reported
considering:
- The nature of the services
- The related risk and returns
- The internal financial reporting systems
Purchase directly attributable to segments is reported based on items
that are individually identifiable to that segment.
Note No 7.
The Company had not received information from suppliers regarding their
status under the "Micro, Small and Medium Enterprises Development Act
2006" and accordingly no disclosure regarding overdue outstanding of
principal amount and interest thereon has been given.
Note No 8.
Goodwill: Goodwill arises upon the acquisition of subsidiaries,
associates and Joint venture. Goodwill is amortized over the 5 years
from the financial year in which the acquisition is accounted for.
During the year a sum of Rs 584,393/- has been amortized and has been
shown under the schedule of Fixed Assets "Note No - 11".
Note No 9.
In the opinion of the Management of the Company, all Current Assets,
Loans and Advances appearing in the balance sheet as at March 31, 2015
have a value on realization in the ordinary course of the Company's
business at least equal to the amount at which they are stated in the
balance sheet. Certain balances shown under current assets, current
liability, loans and advances and balances with banks, are subject to
confirmation / reconciliation.
Note No 10.
In the opinion of the Management, no provision is required to be made
against the recoverability of these balances except provided.
During the year ended 31st March 2015, the Company has made a provision
of Rs 17,04,743/- in respect of provision for gratuity and defined
benefits as per actuarial valuation made as per AS-15.
The Company has taken Group Gratuity Scheme for the employees from the
LIC of India. Total Contribution payable is Rs 17,76,133/- is payable
in next Financial Year.
Note No 11.
As per the best estimate of the management, no provision is required to
be made as per Accounting Standard 29 (AS 29) Provisions, Contingent
Liabilities and Contingent Assets as notified under the Companies
(Accounting Standards) Rules, 2006, as amended, in respect of any
present obligation as a result of a past event that could lead to a
probable outflow of resources, which would be required to settle the
obligation.
In accordance with AS 18, disclosures in respect of transactions with
identified related parties are given only for such period during which
the relationship existed.
Note No 12. Earnings Per Share:- Basic earnings per share are computed
by dividing the net profit/ (loss) attributable to equity shareholders,
for the year by the weighted average number of equity shares
outstanding during the
*During the period under consideration, the Company has announced 3
bonus shares for every 2 held, thus the capital of the Company has
increased to Rs. 2542.39 Lacs from Rs. 1016.96 Lacs. ** As per
accounting Standard - 20, Earning Per Share and Book Value per share,
EPS of the previous period has been revised for make it comparable with
the current year.
Note No 13. Deferred Tax:- In compliance with Accounting Standard 22
(AS 22) - Accounting for Taxes on Income, as notified under the
Companies (Accounting Standards) Rules, 2006, as amended, the Company
has recognized deferred tax Asset (net) in the Profit and Loss Account
of Rs. 36,43,842/- (Previous year Rs. -1,18,162/ -) during the year
ended March 31, 2015.
Note No 14.
In the AGM of the Company held on 28th September 2011, the members of
the Company passed a resolution for introducing a Stock Compensation
Plan called the Employees Stock Option Scheme,2011(ESOS 2011), for the
benefit of employees of the Company. The resolution also accorded
approval for the Board of Directors, to formulate the Scheme as per
broad parameters outlined in the resolution, either directly or through
a committee. Accordingly, a committee of directors called Compensation
Committee was constituted. The Committee, after due deliberations and
after studying the provisions of SEBI employee Stock option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999 as amended from time
to time, has formulated the Employees Stock Option Scheme'2011( ESOS
2011). The Scheme has been approved by the Stock Exchange on 7th May
2012 (NSE) and 2nd May 2012 (BSE). The Compensation Committee at its
meeting held on 2nd June 2012 has granted Stock Option to the eligible
employees and accordingly the options granted shall vest over a period
of 3 years, or as may be decided by the CC, as per schedule as under
Note No 15.
The Company has not entered into any foreign exchange derivative
instruments during the year.
Note No 16.
The scheme of amalgamation was filed under section 391 read with
section 394 of the Companies Act 1956 effective from April 1, 2007 for
the amalgamation of the three transferor Companies a) Hulchul
International Private Limited, b) Vikas Utilities Private Limited, c)
South Delhi Projects Private Limited, With the transferee Company Vikas
GlobalOne Limited (formally known as Vikas Profit Limited).The same has
been approved by the High Court wide order no 18457/1 dated October 17,
2008. The amalgamation has been accounted for in the manner specified
in the Scheme, The Surplus of Rs.965,934/- arising out of amalgamation is
shown under the head Capital Reserve Account.
Note No 17.
The Company has acquired balance 25% share of its associate concern
"Sigma Plastic Industries" on 1st April, 2014 and now the Company holds
100% stake and thereby has taken over business of its earlier associate
"Sigma Plastic Industries". The Financial Statements for the period
2014-15 include financials of Sigma Plastic Industries. Consequent to
acquisition of business of Sigma Plastic Industries all its liabilities
and unsecured loans aggregating to . 95.27/- Lacs were taken over by
the Company which has been duly refunded.
Note No 18.
Additional information to the extent applicable are as follows:-
Note No 19.
The Company has a unit in Sitarganj (Uttrakhand) where Excise duty on
manufacturing from Plastic scrap is Nil and the Company has not taken
Excise Registration number in Sitarganj, though there is no impact of
the same on the financial statements of the Company
Note No 20.
Pursuant to the extant provisions of the Companies Act 2013 (the
'Act'), effective from 1st April 2014, the Company has changed the
method of depreciation and revised the estimated useful lives of its
fixed assets, generally in accordance with Schedule II to the Act.
Consequent to change of useful lives an amount of Rs. 11.20 Lacs
representing Written Down Book Value of those assets whose useful life
had already expired as on 1st April 2014 has been adjusted against
General Reserve & Surpluses. Due to this change in method of charging
Depreciation for the year ended 31st March, 2015 additional
depreciation of . 133.29 Lacs has been charged to the profit and loss
account and thereby the profit for the year has been reduced by such an
amount.
Note No 21.
Discontinuing Operations
The Company was C & F agent of Lupin Limited from past number of years.
During the year under consideration the Company has earned franchise
revenue and profit (before allocation of common expenditure) till
December 2014 of . 214.08 Lacs and 117.90 Lacs (P.Y. 246.71 lacs and
115.95 lacs) respectively which is shown under Service Division in
Segmental reporting. The Company has discontinued its service division
activities and the carrying and forwarding agreement has been
terminated with Lupin Limited w.e.f. 31/12/2014. Therefore there will
be no revenue from franchise business in service division from Lupin
Limited.
Note No 22.
Corporate Social Responsibility
The Company is covered u/s 135 of Companies Act 2013, the details of
the expenditure on corporate social responsibility activity is as
under:
a. Gross amount required to be spent by the Company during the year :
10,31,232
b. Amount spent during the year: . 12,00,000
Mar 31, 2013
1. Background and nature of operations
Vikas GlobalOne Limited (VGL) is a Delhi based professionally managed
company incorporated on 30th November, 1984 under the Companies Act,
1956, having its registered office at Vikas House, 34/1, East Punjabi
Bagh, New Delhi- 110026 and is actively engaged in the business of
Manufacturing and Distribution of Specialty Polymers Compounds and
Additives. The company is listed in National Stock Exchange of India,
Bombay Stock Exchange and Delhi Stock Exchange.
The company is manufacturing high end products used in Agricultural
Pipes, Auto Parts, Wires and Cables, Artificial Leather, Footwear,
Organic Chemicals, Polymers, Pharmaceuticals and Packaging industries
while alongside acting as distributor of global conglomerates with
niche in specialty chemicals and polymers.
Manufacturing plants of the company are spread in various geographical
locations across India, in the state of J&K and Rajasthan. This has
been done keeping in mind the strategic and location advantages with
regard to availability of raw material, tax incentives, subsidy grants
as well as market potential for finished goods. These industrial units
have speedy connectivity to Road, Rail and Air transport. The company
has built the plants with the best of the machineries and technical
knowhow available from the world''s leading suppliers. The manufactured
products of the company have been well received in the market and have
further scope of greater development with increased production
capacities. The products manufactured by the Company are environmental
friendly.
2. Commitments
a) Capital commitment: There are no contracts remaining to be executed
on capital account and not provided for as at 31 March, 2013.
b) Lease commitment: The Company has taken various premises on
operating leases. The lease rental of Rs. 1,470,000/- (Previous year
Rs. 1,103,000/-) has been charged to Profit and Loss Account for the
year ended March 31, 2013. The underlying agreements are executed for a
period generally ranging from one year to three years, renewable at the
option of the Company and the lessor. There are no restrictions
imposed by such leases and there are no subleases.
3. There is no significant event that has been taken place after the
date of Balance Sheet.
4. There is a Contingent Liability in form of Bank Guarantee of Rs.
1,412,200/- and Rs. 147,261,887/- in respect of LC and duty saved
against Advance License is Rs. 57,735,526/-.
5. Segmental reporting:- The segment reporting of the company has been
prepared in accordance with accounting standard (AS-17) Accounting for
Segment Reporting issued by The Institute of Chartered Accountant of
India. The Company has determined the following business segments as
the primary segments for disclosure:
1) Chemical Division
2) Real estate Division
The above business segments have been identified and reported
considering:
- The nature of the services
- The related risk and returns
- The internal financial reporting systems
Segment revenue, results, assets and liabilities include amounts
identifiable to each segment and amounts allocated on a reasonable
basis based on their relationship to the operating activities of the
segment.
6. The company had not received information from suppliers regarding
their status under the ''Micro, Small and Medium Enterprises Development
Act 2006'' and accordingly no disclosure regarding overdue outstanding
of principal amount and interest thereon has been given.
7. In the opinion of the Board of Directors of the Company, all
Current Assets, Loans and Advances appearing in the balance sheet as at
March 31, 2013 have a value on realization in the ordinary course of
the Company''s business at least equal to the amount at which they are
stated in the balance sheet. Certain balances shown under current
assets, current liability, loans and advances and balances with banks,
are subject to confirmation / reconciliation.
8. In the opinion of the Board of Directors, no provision is required
to be made against the recoverability of these balances except
provided.
9. Employee Benefit Obligation: During year ended March 31, 2013 the
Company has contributed Rs. 420,310/- to provident fund under defined
contributions plan of Employees'' Provident Fund and Miscellaneous
Provisions Act, 1952. During the year ended 31st March 2013, the
Company has made a provision of Rs 706,274/- in respect of provision
for gratuity and defined benefits as per actuarial valuation made as
per AS-15
10. In the opinion of the Board of Directors, provision for diminution
in the value of investment is Rs. 50,000/- (Previous year Rs. NIL)
required in current year towards diminution in value of Long Term
Investments, where the decline in value is temporary in nature but 100
% provision has been made for the same.
11. As per the best estimate of the management, no provision is
required to be made as per Accounting Standard 29 (AS 29) Provisions,
Contingent Liabilities and Contingent Assets as notified under the
Companies (Accounting Standards) Rules, 2006, as amended, in respect of
any present obligation as a result of a past event that could lead to a
probable outflow of resources, which would be required to settle the
obligation.
12. Deferred Tax: In compliance with Accounting Standard 22 (AS 22) -
Accounting for Taxes on Income, as notified under the Companies
(Accounting Standards) Rules, 2006, as amended, the Company has
recognised deferred tax liabilities (net) in the Profit and Loss
Account of Rs. 538,511/- (Previous year Rs. 865,305/-) during the year
ended March 31, 2013.
13. In the AGM of the Company held on 28th September 2011, the members
of the company passed a resolution for introducing a Stock Compensation
Plan called the Employees Stock Option Scheme 2011(ESOS 2011), for the
benefit of employees of the Company. The resolution also accorded
approval for the Board of Directors, to formulate the Scheme as per
board parameters outlined in the resolution, either directly or through
a committee. Accordingly, a committee of directors called Compensation
committee was constituted. The Committee, after due deliberations and
after studying the provisions of SEBI employee Stock option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999 as amended from time
to time, has formulated the Employees Stock Option Schemre''2011( ESOS
2011). The Scheme has been approved by the Stock exchange on 7th May
2012 (NSE) and 2nd May 2012 (BSE). The Compensation Committee at its
meeting held on 2nd June 2012 has granted Stock Option to the eligible
employees and accordingly the option will be granted shall vest over a
period of 3 years, or as may be decided by the CC, as per schedule as
under
There shall be a minimum period of one year between grant date and the
vesting period for the first lot of vesting of granted options. The
interval between the subsequent lots shall be one year.
14. The Company has not entered into any foreign exchange derivative
instruments during the year.
15. The scheme of amalgamation was filed under section 391 read with
section 394 of the companies Act 1956 w.e.f. April 1, 2007 for the
amalgamation of the following three transferor companies a) Hulchul
International Private Limited, b) Vikas Utilities Private Limited, c)
South Delhi Projects Private Limited, With the transferee company Vikas
Globalone Limited (formally known as Vikas Profin Limited). The same
has been approved by the High Court wide order no 18457/1 dated October
17, 2008. The amalgamation has been accounted for the manner specified
in the Scheme, The Surplus of Rs. 965,934/- arising out of amalgamation
is shown under the head Capital Reserve Account.
16. Previous year''s figures have been regrouped, where necessary to
confirm with current year''s classification.
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