1 Company Overview

The Company was incorporated in August 1994 having CIN No. L74120MH1994PLC079971, at Mumbai under The Companies Act, 1956.

The Company is engaged in the e-waste recycling business in an organised manner, with the help of superior technology, complying norms set by the Pollution Control Board for the environmental safety.

2 Basis of preparation of financial statements

2.1 Statement of compliance and basis of preparation:

These financial statements are prepared in accordance with the

Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act 2013 read with Companies (Indian Accounting Standards) Rules 2015, Companies (Indian Accounting Standards) Amendment Rules 2016.

The company prepared its standalone financial statements as per Indian GAAP in accordance with accounting standards notified under Companies (Accounting Standards) Rules 2006. These financial statements are the Company’s first Ind AS standalone financial statements

The date of transition to Ind AS is April 01, 2016.

The standalone financial statements have been prepared on historical cost basis, except for certain items of financial assets and financial liabilities which have been measured at fair values.

The presentation of the standalone Ind AS Balance sheet, Statement of profit and loss and Statement of Changes in equity is as per Schedule III (Division II) notified by the Companies Act 2013.

2.2 Use of accounting estimates, assumption and judgements:

The preparation of the financial statements requires management to make estimates, assumptions and judgments that affect the reported balances of assets and liabilities and disclosures as at the date of the financial statements and the reported amounts of incomes and expenses for the periods presented.

2.3 Useful lives of property plant and equipment:

The useful lives and the residual values of the property plant and equipment are reviewed by the management at least at every financial year end.

2.5 Impairment of Assets

The carrying amount of fixed assets and investments is regularly reviewed by the management and whenever there is an indication of impairment. In case of impairment loss, the asset is reduced to its recoverable amount

2.6 Employee benefit obligation:

The company uses actuarial valuation method to determine its defined employees benefits obligation at the end of each reporting period. 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

3 Notes on Transition to Ind AS:

The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified by the Ministry with effect from April 01, 2016.

The company’s transition date is April 01, 2016 (Opening Ind AS balance sheet).

Ind AS 101 First time adoption to Indian Accounting Standards provides mandatory and optional exemptions, to a first time adopter of the Indian Accounting standards from retrospective application of certain or all aspects of the other standards.

This standard mandates that a first time adopter shall use the same accounting policies in its opening Ind AS balance sheet and throughout all periods presented in its first Ind AS financial statements. Any difference in the carrying value of assets and liabilities between Ind AS and Previous GAAP have been recognised directly in retained earnings (or if appropriate, another category of equity) at the date of transition to Ind AS (i.e. Opening balance sheet as at April 01, 2016).

3.1 Mandatory Exceptions:

a) Estimates: the company’s estimates as at April 01, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP

b) Classification and measurement of financial assets: The company has classified financial assets as subsequently measured at amortised cost or at fair value through other comprehensive income on the basis of facts and circumstances that exist at the date of transition to Ind AS.

c) De-recognition of financial assets and financial liabilities:

The company has decided to apply the de-recognition requirements in Ind AS 109 Financial Instruments prospectively for transactions occurring on or after the date of transition to Ind AS.

3.2 Optional Exceptions:

(a) Property Plant and Equipment:

The company has opted for exemption given under paragraph D7AA of Ind AS 101 for all its property plant and equipment recognised in its financial statements as per previous GAAP on the date of transition to Ind AS. Accordingly all the property plant and equipment are carried at their existing previous GAAP carrying values, which will be their respective deemed costs at the date of transition to Ind AS.

(b) Investments in subsidiaries, associates and joint ventures:

The company has opted for exemption given in paragraph D15 of Ind AS 101. Accordingly the investments in subsidiaries, associates and joint ventures are carried at their respective previous GAAP carrying values, as deemed costs on the date of transition to Ind AS.

(c) Designation of previously recognised financial assets:

Ind AS 101 permits investments in equity instruments to be designated as at fair value through OCI (FVTOCI) in accordance with Ind as 109, on the basis of facts and circumstances that existed at the date of transition to Ind AS. The company has opted to avail this exemption to designate certain equity investments as FVTOCI on the date of transition to Ind AS.

Notes to reconciliation of equity and total comprehensive income:

(a) Fair valuation of investments: Under previous Indian GAAP, current investments are measured at lower of cost and fair value, and long term investments are measured at cost less diminution in value which is other than temporary. Under Ind AS, investments, long term as well as current, are measured at fair market value, with gains or losses recognised either in profit or loss or in other comprehensive income based on the business model of the company for managing these investments.

(b) Deferred tax: Under previous GAAP, deferred tax liabilities and assets was recognised using the income approach i.e. based on timing differences between the accounting profit and taxable profits for the period. Under Ind AS deferred tax calculations are based on balance sheet liability method i.e. based on temporary differences between the carrying amounts of assets and liabilities in the balance sheet and its tax base. This has resulted in recognising deferred tax on temporary differences that were not required to be recognised under previous Indian GAAP.

3.3 Long term investments in unquoted equity instruments (other than investment in subsidiary)

Under previous Indian GAAP, non current investments are carried at cost with provision for diminution in their value which is other than temporary. under Ind AS, the company has designated unquoted equity instruments as financial assets at fair value through other comprehensive income and certain unquoted preference shares as financial assets at fair value through profit and loss. The company has not performed a fair valuation of its unquoted investments in equity shares and preference shares, as the company believes that the impact of change on account of the fair valuation of such investments is insignificant

3.4 Fair value disclosures for financial assets and financial liabilities

The company believes that the fair values of non-current financial assets (security deposits, lease rental deposits) , current financial assets (trade receivables etc.) and non current financial liabilities approximate their carrying amounts

3.5 Investment in quoted equity shares The company has designated investments in quoted equity shares as subsequently measured at fair value through other comprehensive income FVTOCI. On transition date, the difference between the existing carrying amount and fair value has been recognised as an adjustment to opening retained earnings. Subsequent adjustment to the fair values of such quoted equity investments is recognised in other comprehensive and accumulated separately under other equity in the balance sheet

3.6 Financial Guarantee contracts Under previous Indian GAAP, financial guarantee given by parent on behalf of its subsidiaries is recognised as “Contingent liability”

Under Ind AS, corporate / financial guarantee is treated as a financial liability and is recognised at fair value on initial as well as subsequent recognition. The fair value of the financial guarantee is treated as “investment in subsidiary”. Finance income is recognised over the term of the guarantee using the effective interest method.

The company has given a corporate / financial guarntee to National Skills Development Corporation (NSDC) on behalf of its 100% subsidiary Ecoreco Enviro Education P.Ltd. The company has however not done a fair valuation of the financial guarantee given to NSDC, as the company feels that its impact on the financial statements is insignificant

Note 4.1: The Company had set up a small facility for recycling of e-waste near Mumbai and were carrying out R&D for the recovery of various metals from printed circuit boards & other complicated e-waste. In the process we approached Department of Scientific & Industrial Research (DSIR) for their financial support to complete technology development and commercialize the same with an optimum capacity to recycle. DSIR was kind enough to sanction Rs.1186 lacs as grant payable back on commercialization of the above project. To implement the above project Company had withdrawn Rs.900 lacs from the above grant and invested its own funds of Rs. 2134.53 lacs to develop / procure required Plant & Machineries. Unfortunately, we could not develop / commercialize the project so far because access road to the Project Site has been blocked by the local villagers who also owns some parcel of land around the above project site. The company has approached to practically all the levels of Administration at the Local & State level for their kind intervention and resolution. The Company has also appealed to the office of the PMO and the same has been forwarded to the Ministry of Environment & Forests for their attention.

Note 5: Disclosure in Respect of Leases:

Operating Lease: Company as Lessee

The Company’s leasing arrangements are in respect of operating leases for factory, office premises and guest house occupied by the Company. These leasing arrangements are cancellable except during the lock in period, and are renewable on a periodic basis by mutual consent on mutually acceptable terms.

a) The total of future minimum lease payments during lock in period of operating leases for each of the following periods:

Note 6: The Company had been dealing with Keynote Capital Limited (Keynote) for its Share transactions. A substantial portion i.e 20,56,234 Nos. of shares amounting to Rs.4,48,55,092/- out of the investment portfolio maintained by the company in demat form with Keynote has been misappropriated by the Keynote against the loss booked by Keynote on account of transactions in the F&O Segment carried out by Keynote on its own without any authorisation of the company. In this matter Company has won both the appeals of Arbitration Committee of The National Stock Exchange. In the month of August, 2014 Keynote has filed an appeal u/s 34 in the Bombay High Court against the second appellate award passed by the Arbitration Committee of The National Stock Exchange of India Limited, which is still pending. The matter is now pending with Bombay High Court and the disposal of the same in favour of Company is expected.

Note 7: The Company had entered in to an agreement with KUD Realtors Pvt. Ltd, Mumbai for purchase of 10 acres of land for a consideration of Rs.650 lacs for setting up its e-waste recycling project at Kharbao, Bhiwandi and paid Rs.615 lacs against the above. As of now, M/s KUD Realtors Pvt Ltd, could conveyance 5.78 acres of land in favor of the company and for the remaining amount they have offered some warehouses and incomplete construction at the same site.

All the above land, warehouses and incomplete building are yet to be physically received because of incomplete documents for which the company has taken appropriate steps with the concerned authorities.

Note 8: Balances of some of the trade receivables, trade payables and creditor of expenses, loans and advances (given and taken) and loans, are subject to confirmation from the respective parties and consequential adjustments arising from reconciliation, if any. The management, however is of the view that there will be no material adjustments in this regards.

Note 9: The company is in the business of E-waste and Asset Management.

Note 10: Related Party Transactions

Related party disclosures as required by AS - 18, “Related Party Disclosures”, are given below “

i) Relationships :

(a) Holding Company :-

Ecoreco Ventures Private Limited

(b) Associates (by common director):-

Reverse Logistics & Warehousing Private Limited

Ecoreco Park Private Limited

Eco Remarketing Pvt Ltd

Data De-End Private Limited

WEEE India Pvt Ltd

Reverse E-Commerce Private Limited

EPR Compliance Private Limited

(c) Subsidiary(100%):-

Ecoreco Enviro Education Pvt Ltd

(e) Key Management Personnel :-

Mr. Brijkishor Soni - C.M.D.

Mrs. Aruna Soni - Director Mr. Srikrishna B. - Director Mr.Shashank Soni - Director Mr. Vijay Acharya - Director

Note 11: Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with the current year’s classification/disclosure.