Notes:

1. The company records receivables on account of ' EPC contracts ' and ' Development sales' in the normal course of business and classify the same as “trade receivable”.

2. The average credit period on EPC contracts is 60 days. No Interest is charged on trade receivables.

3. Trade receivables includes receivables from related parties and amount due from directors or other officers of the company either severally or jointly with any other person or any trade or other receivables due from firm or private companies in which any director is a partner, a director or member (Refer Note 33).

4. The concentration of credit risk is limited due to the fact that customer base is large and unrelated.

5. The Company does not provide for expected credit loss allowance development sales and receivables from related parties as the Company does not expect any loss on these sales. There is no historical credit loss experience and the Company does not expect any loss on these trade receivables.

6. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables from EPC contracts based on a provision matrix. The provision matrix takes into account historical credit losses experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per the provision matrix. In addition the Company provides for expected credit loss based on case to case basis

The company has only one class of equity shares having a par value of ' 10 per share. Each holder of equity share is entitled for one vote per share held. In the event of liquidation of the company the holder of the equity share will be entitled to receive remaining asset after deducting all its liabilities in proportion to the number of equity shares held.

*Consequent to and as part of the amalgamation of Angelica Properties Private Limited, Florien Properties Private Limited, Greenstone Premises Private Limited, It-City Info park Private Limited, Just homes india Private Limited, Samara Developers India Private Limited, Sunflower Real Estate Developers Private Limited, Sheri’s Strategists Private Limited, Vascon Dwellings Private Limited, Vashon Price Infrastructures limited, Wind Flower Properties Private Limited with the Company, the Authorized Equity Share Capital of the Company stands increased to ' 26,913 lakhs made up of 26,41,30,000 equity shares of ' 10 each and 5,000,000 Preference Shares of ' 10 each from “effective date” 1 April 2016 (Refer Note 43).

The shares under ESOP - 2015 and ESOP - 2016 totaling to 6,476,530 was allotted on 13/02/2018 and 08/01/2018 and got trading approval from BSE and NSE. On receiving the approval, the shares were credited on 06/03/2018 and 22/01/2018 respectively, to the demit account of employees.

The management assessed that the fair values of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short - term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company determines fair values of financial assets and financial liabilities by discounting the contractual cash inflows/ outflows using prevailing interest rates of financial instruments with similar terms. The initial measurement of financial assets and financial liabilities is at fair value. The fair value of investment is determined using quoted net assets value from the fund. Further, the subsequent measurement of all financial assets and liabilities (other than investment in mutual funds) is at mortised cost, using the effective interest method.

Discount rates used in determining fair value.

The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of the borrower which in case of financial liabilities is the weighted average cost of borrowing of the Company and in case of financial assets is the average market rate of similar credit rated instrument.

The Company maintain policies and procedure to value financial assets or financial liabilities using the best and most relevant data available. In addition, the Company internally reviews valuation, including independent price validation for certain instruments.

Fair value of financial assets and liabilities is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.

The following methods and assumptions were used to estimate fair value:

(a) Fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments.

(b) Security deposit paid are evaluated by the Company based on parameters such as interest rate non performance risk of the customer. The fair value of the Company's security deposit paid are determined by estimating the incremental borrowing rate of the borrower (primarily the landlords). Such rate has been determined using discount rate that reflects the average interest rate of borrowing taken by similar credit rate companies where the risk of non performance risk is more than significant.

(c) Fair value of quoted mutual funds is based on the net assets value at the reporting date. The fair value of other financial liabilities as well as other noncurrent financial liabilities is estimated by discounting future cash flow using rate currently applicable for debt on similar terms, credit risk and remaining maturities.

(d) The fair value of the Company's interest bearing borrowing received are determined using discount rate that reflects the entity's borrowing rate as at the end of the reporting year. The own non performance risk as at the reporting was assessed to be insignificant.

Fair value hierarchy

All financial instruments for which fair value is recognized or disclosed are categorized 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) price is active market for identical assets or liabilities.

Level 2: Valuation technique for which the lowest level input that has a significant effect on the fair value measurement are observed , either directly or indirectly.

Level 3: Valuation technique for which the lowest level input has a significant effect on the fair value measurement is not based on observable market data.

During the year ended March 31, 2018, there were no transfer between Level 1 and Level 2 fair value measurement and no transfer into and out of Level 3 fair value measurement.

Note No. 27 - Financial Instruments and Risk Review Capital Management

For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company's capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company's policy is to keep the gearing ratio between 20% and 50%. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations.

In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

Financial Risk Management Framework

Vascon Engineers Limited is exposed primarily to credit risk, liquidity risk, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictably of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

i) Credit Risk

Credit risk is the risk of financial loss arising from counter party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.

Financial instruments that are subject to concentrations of credit risk principally consist of trade payables and borrowings. None of the financial instruments of the Company result in material concentration of credit risk.

Exposure to credit risk

The carrying amount of financial liability represents the maximum credit exposure. The maximum exposure to credit risk was ' 39,289.99 lakhs and ' 38,243.81 lakhs as of March 31, 2018 and March 31, 2017 respectively, being the total of the carrying amount of trade payables and borrowings.

Trade receivables

Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each date of statements of financial position whether a financial asset or a group of financial assets is impaired. The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. Company's exposure to customers is diversified and some customer contributes more than 10% of outstanding accounts receivable as of March 31, 2018 and March 31, 2017, however there was no default on account of those customer in the past. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

Before accepting any new customer, the Company uses an external/internal credit scoring system to assess the potential customer's credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed on periodic basis.

The Company performs credit assessment for customers on an annual basis and recognizes credit risk, on the basis of lifetime expected losses and where receivables are due for more than 1 year.

The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting year is as follows.

ii) Liquidity Risk

a) Liquidity risk management

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Excessive Risk Concentration

Concentrations arise when a number of counter parties are engaged in similar business activities, or activities in the same geographical region, or having economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company's performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company's policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Selective hedging is used within the Company to manage risk concentrations at both the relationship and industry levels.

Note No. 28 - Share Based Payments

Employee stock option scheme (ESOS) - 2014

The ESOS was approved by Board of Directors of the Company on 12th August, 2014 and thereafter by the share holders on 15th Sept, 2014. A compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of Rs. 10/- per share. The maximum exercise period is 1 year from the date of vesting.

Employee stock option scheme (ESOS) - 2015

The ESOS was approved by Board of Directors of the Company on 11th August 2015 and thereafter by the share holders on 29th September 2015. A compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of Rs. 20/- per share. The maximum exercise period is 1 year from the date of vesting.

The fair value of the stock option is calculated through the use of option pricing models, requiring subjective assumptions which greatly affect the calculated values. The said fair value of the options have been calculated using Binomial lattice option pricing model, considering the expected weighted average term of the options to be 1 year from the date of vesting, an expected dividend rate on the underlying equity shares, a risk free rate and weighted average volatility in the share price. The Company's calculations are based on a single option valuation approach, and forfeitures are recognized as they occur. The expected volatility is based on historical volatility of the share price after eliminating the abnormal price fluctuations.

Employee stock option scheme (ESOS) - 2016

The ESOS was approved by Board of Directors of the Company on 17th May 2016 and thereafter by the share holders on 15th September 2016. A compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of Rs. 20/- per share. The maximum exercise period is 1 year from the date of vesting.

The fair value of the stock option is calculated through the use of option pricing models, requiring subjective assumptions which greatly affect the calculated values. The said fair value of the options have been calculated using Binomial lattice option pricing model, considering the expected weighted average term of the options to be 1 year from the date of vesting, an expected dividend rate on the underlying equity shares, a risk free rate and weighted average volatility in the share price. The Company's calculations are based on a single option valuation approach, and forfeitures are recognized as they occur. The expected volatility is based on historical volatility of the share price after eliminating the abnormal price fluctuations.

The fair value of the stock option is calculated through the use of option pricing models, requiring subjective assumptions which greatly affect the calculated values. The said fair value of the options have been calculated using Binomial lattice option pricing model, considering the expected weighted average term of the options to be 1 year from the date of vesting, an expected dividend rate on the underlying equity shares, a risk free rate and weighted average volatility in the share price. The Company's calculations are based on a single option valuation approach, and forfeitures are recognized as they occur. The expected volatility is based on historical volatility of the share price after eliminating the abnormal price fluctuations.

(a) Defined Contribution Plan

The Company makes Provident Fund contributions to defined contribution plan administered by the Regional Provident Fund Commissioner. Under this scheme, the Company is required to contribute a specified percentage of payroll cost to fund the benefits. The Company has recognized ' 99.46 lakhs for Provident Fund contributions (March 31, 2017 : ' 103.79 lakhs) and ' 18.69 lakhs (March 31, 2017: ' 7.63 lakhs) towards ESIC in the Statement of Profit and Loss. The provident fund and ESIC contributions payable by the Company are in accordance with rules framed by the Government from time to time.

(b) Defined Benefit Plans:

Gratuity

The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the Payment of Gratuity Act, 1972 or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the fund during the estimated term of obligation.

The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Note No. 32 - Significant estimates and assumptions

Estimates and Assumptions

The preparation of the Company's financial statements requires management to make 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 assists or liabilities affected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes will be reflected in the assumptions when they occur.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or Cash Generating Unit (CGU) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm's length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset's performance of the CGU being tested. The recoverable amounts sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Defined Benefit Plans (Gratuity Benefits)

The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the postemployment benefit obligation.

The mortality rate is based on publically available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Details about gratuity obligations are given in Note 31.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, the fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value target and the discount factor.

The Company has valued its financial instruments through profit & loss which involves significant judgments and estimates such as cash flows for the period for which the instrument is valid, EBITDA of investee company, fair value of share price of the investee company on meeting certain requirements as per the agreement, etc. The determination of the fair value is based on expected discounted cash flows. The key assumptions take into consideration the probability of meeting each performance target and the discount factor.

Note 33 : Related Party Transactions

I Names of related parties

1. Subsidiaries

- Marvel Housing Private Limited

- GMP Technical Solution Private Limited

- Almost Corporation Limited

- Marathawada Realtors Private Limited

- GMP Technical Solutions Middle East (FZE)

- GMP Technical Services LLC (up to July 12, 2017)

- Vascon Value Homes Private Limited

2. Joint Ventures

- Phoenix Ventures

- Cosmos Premises Private Limited

- Ajanta Enterprises

- Vascon Qatar WLL

3. Associates

- Mumbai Estate Private Limited

4. Key Management Personnel

- Mr. R. Vasudevan

- Mr. Siddarth Vasudevan (w.e.f 29th March 2018)

- Dr Santosh Sundararajan

- Mr. D.Santhanam

- Mr.M.Krishnamurthi

- Mr.Mukesh Malhotra

5. Relatives of Key Management Personnel

- Mrs. Lalitha Vasudevan

- Ms. Soumya Vasudevan

- Mrs. Thangam Moorthy

- Mrs. Lalitha Sundararajan

- Mrs Shilpa Shivram

- Mrs. Sailaxmi Santhanam Mudaliar

- Ms Mathangi Krishnamuthy

- Ms Aishwarya Santhanam

- Mrs K Jeyanthy

6. Establishments where in which individuals in serial number (4) and (5) exercise significant Influence

- Flora Facilities Private Limited (Formerly known as Flora Premises Private Limited)

- Vastech Consultants Private Limited

- Vastech consultants and engineers LLP

- Vatsalya Enterprises Private Limited

- Bellflower Premises Private Limited

- Cherry Construction Private Limited

- Stresstech Engineers Pvt Ltd.

- Syringa Engineers Private Limited ( Formerly known as Syringa Properties Private Limited)

- Vascon Infrastructure Limited

- Venus Ventures

- Seraphic Design Private Limited

- D. Santanam (HUF)

- M krishnamurthi (HUF)

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

35 Disclosure under Regulation 34(3) of the SEBI (Listing and Disclosure Requirements) Regulations, 2015

Loans and advances in the nature of loans given to subsidiaries, associates, firms / companies in which directors are interested:

Note: Figures in bracket relate to the previous year.

- There are no transactions of loans and advances to subsidiaries, associate firms/ companies in which Directors are interested other than as disclosed above.

- There are no Investment by loaned in share of parent or subsidiary where Company made loan or advances in the nature of loan.

36 The company enters into "domestic transactions" with specified parties that are subject to the Transfer Pricing regulations under the Income Tax Act, 1961 ('regulation'). The pricing of such domestic transactions will need to comply with Arm's length principle under the regulations. These regulations, inter alia, also required the maintenance of prescribed documents and information including furnishing a report from an accountant which is to be filed with the Income tax authorities.

The Company has undertaken necessary steps to comply with the regulations. The management is of the opinion that the domestic transactions are at arm's length, and hence the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

37 Segment information has been presented in the Consolidated Financial Statements as permitted by Indian Accounting Standard (In AS) 108 on operating segment as notified under the Companies (Indian Accounting Standards) Rules, 2015.

39 The company has not performed CSR activities as mentioned in Section 135 read with companies ( Corporate Social responsibility) Rules, 2014 (CSR rules) and Notification and circulars issued by the ministry during the financial year as the company is not within the criteria of 'Qualifying company'.

40 During the previous financial year the company has redeemed preference shares from one of the subsidiary " GMP Technical Solutions Private Limited" amounting to Rs. 234 lakhs.

41 In June 2012, the Income Tax Department had initiated proceedings against the Company, under Section 132 of the Income Tax Act, 1961. During the year, the Company has received order from the Income Tax Settlement Commission under Section 245D(4), for the assessment years 2007-08 to 2014-15 (except assessment year 2013-14 which is reverted to respective assessing officer for further assessment) and based on which necessary effects has been given in the accounts.

42 During the current financial year, the company renegotiated and agreed for full and final payment of Rs 5,864 lakhs towards Zero coupon, rupee denominated unrated unlisted secured non convertible debentures of Rs 6,861 Lakhs.

43 Scheme of Amalgamation:

Pursuant to the Scheme of Amalgamation (the Scheme) sanctioned by the National Company Law Tribunal, Mumbai Bench vide its order dated 21 June 2017, Angelica Properties Private Limited (Angelica Properties), Florien Properties Private Limited (Floriana Properties), Greenstone Premises Private Limited (Greenstone Premises), It-Citi Info park Private Limited (It-Citi Info park), Just Homes Hndia Private Limited (Just Homes India), Sansara Developers India Private Limited (Sansara Developers), Sunflower Real Estate Developers Private Limited (Sunflower Real Estate), Shreyas Strategists Private Limited (Shreyas Strategists), Vascon Dwellings Private Limited (Vascon Dwellings), Vascon Price Infrastructures limited (Vascon Price), Wind Flower Properties Private Limited (Wind Flower Properties) have been merged with the Company with effect from 1 April 2016 (the appointed date). The Scheme came into effect on 3 August 2017, the day on which the order was delivered to the Registrar of the Companies, and pursuant thereto the entire business and all the assets and liabilities, duties, taxes and obligations of Angelica Properties, Floriana Properties, Greystone Premises, It-Citi Info park, Just homes india, Sansara Developers, Sunflower Real Estate, Sheri’s Strategists, Vascon Dwellings, Vascon Pricol, Wind Flower Properties have been transferred to and vested in the Company. The scheme has become effective on 3 August 2017 with effect from the appointed date of 1 April 2016, accordingly previous years' numbers has been restated.

Angelica Properties, Floriana Properties, Greenstone Premises, It-Citi Info park, Just Homes India, Sansara Developers, Sunflower Real Estate, Shreyas Strategists, Vashon Dwellings, Vashon Pricol, Wind Flower Properties were primarily engaged in business of construction of residential, commercial; IT Parks along with renting of immovable properties and providing project management services for managing and developing real estate projects.

The business of Angelica Properties, Florien Properties, Greenstone Premises, It-Citi Info park, Just homes india, Sansara

Developers, Sunflower Real Estate, Shreyas Strategists, Vascon Dwellings, Vascon Pricol, Wind Flower Properties was run in trust by them for the Company and the business of Angelica Properties, Floriana Properties, Greystone Premises, It-Citi Info park, Just homes india, Sansara Developers, Sunflower Real Estate, Shreyas Strategists, Vascon Dwellings, Vascon Pricol, Wind Flower Properties will be carried on by the Company post the effective date.

As the amalgamating companies i.e. Angelica Properties, Floriana Properties, Greenstone Premises, It-Citi Info park, Just Homes India, Sansara Developers, Sunflower Real Estate, Shreyas Strategists, Vascon Dwellings, Vashon Price, Wind Flower Properties are wholly owned subsidiaries of the Company, no consideration is payable on amalgamation with the Company.

The amalgamation is accounted under the 'pooling of interest' method in terms of the scheme sanctioned by the National Company Law Tribunal, Mumbai bench as under:

- All assets and liabilities and reserves of Angelica Properties, Floriana Properties, Greenstone Premises, It-Citi Info park, Just homes india, Sansara Developers, Sunflower Real Estate, Shreyas Strategists, Vascon Dwellings, Vascon Price, Wind Flower Properties have been recorded in the books of account of the Company at their respective carrying amounts and in the same form.

- Difference between amount of Share capital of the transferor companies and gross value recorded as investments is adjusted and the difference is adjusted in ' Reserves' in accordance with the Scheme.

- Accordingly, the assets and liabilities of Angelica Properties, Floriana Properties, Greenstone Premises, It-Citi Info park, Just Homes India, Sansara Developers, Sunflower Real Estate, Shreyas Strategists, Vascon Dwellings, Vascon Pricol, Wind Flower Properties are accounted at the following summarized values: