1.  Background
 
 Vikas WSP Limited was promoted in the year 1988 under the name and
 style of Vikas Gum Mills Private Limited and subsequently the name was
 changed to Vikas WSP Limited in the year 1992. The Company is an agro
 based Company registered as 100% Export Oriented Unit with Secretariat
 of Industrial Approval, Ministry of Commerce and Industry, Government
 of India, for the manufacture of Guar Gum (pulverized) and its
 derivatives.
 
 2.  Segment reporting disclosure per Accounting Standard 17 Segment
 Reporting as specified in Rule 3 of Companies (Accounting Standard)
 Rules, 2006, is not applicable since the Company primarily operates
 within single primary segment of manufacture of guar gum powder and a
 single geographical segment.
 
 3.  Debts due from a company under the same management within the
 meaning of Section 370(1-B) of the Companies Act, 1956:
 
 4.  Related party disclosures
 
 Related party and nature of related party with whom transactions have
 taken place during the year 
 
 i) Key management personnel and their relatives (KMP)
 
 Mr. B. D. Agarwal - Managing Director
 
 Mr. Megh Raj Jindal - Director
 
 Mrs. Bimla Devi Jindal - Director
 
 ii) Entities controlled by KMPs
 
 Vikas Granaries Limited
 
 Vikas Chemi Gums (India) Limited
 
 Vikas Dall and General Mills (Partnership firm)
 
 iii) Entities over which significant influence is exercised by the KMPs
 
 Vegan Colloids Limited
 
 5.  Charges on the secured loan:
 
 a) During the year, the Company has obtained a packing credit limit and
 foreign documentary bill purchase/ discounting facility of Rs. 150,000
 each from Punjab National Bank secured by hypothecation of inventory,
 demand bill accompanied by invoice and bill of lading evidencing
 shipment of goods and mortgage of immoveable assets of the Company at
 B-86/87 Udyog Vihar, RIICO Industrial Area, Sri Ganga Nagar.
 
 Mr. Meghraj Jindal, Mrs. Bimla Devi Jindal and Mr. B.D. Agarwal, the
 promoters and directors of the Company have also provided their
 personal guarantees.
 
 b) During the previous year, the Company had obtained secured loan for
 general corporate purposes including capital expenditure for expansion
 projects and augmentation of long term working capital of Rs. 800,000
 (sanctioned amount) from IFCI Limited secured by exclusive charge and
 mortgage on all moveable and immoveable fixed assets of the Company
 situated at Plot no. E-255 to 257 in RIICO Industrial Area and Plot no.
 F-92 in Udyog Vihar, Sri Ganga Nagar.
 
 Mr. B.D. Agarwal, Mrs. Bimla Devi Jindal and Mr. Megh Raj Jindal, the
 promoters and directors of the Company have pledged their entire
 shareholding aggregating to 20,346,000 equity shares of Re 1 each and
 have also provided their personal guarantees.
 
 All the promoters and their relatives have pledged their entire
 shareholding in Vikas Granaries Limited (Companies under the same
 management) aggregating 12,340,000 equity shares of Rs. 10 each.
 
 Out of the above, the total draw down amount of loan aggregates to Rs.
 725,000 and the principal and interest amount outstanding as on 31
 March 2011 is Rs. 618,523 and Rs. 24,105 respectively.
 
 c) During the previous year, the Company had obtained packing credit
 limit of Rs. 150,000 from IFCI Factors Limited secured by exclusive
 charge and mortgage on all immoveable fixed assets situated at Plot No
 229 in Chandisar Industrial Estate, Palanpur, Dist. Banaskantha,
 Gujarat.
 
 These assets are owned and controlled by Vikas Granaries Limited, which
 is a related party covered as an entity controlled by KMPs.
 
 d) The demand loan of Rs. 3,399 (previous year Rs. 9,138) obtained from
 Union Bank of India is secured against the fixed deposits (pledged)
 with the bank.
 
 6. The management has initiated the process of identifying enterprises
 which have provided goods and services to the Company and which qualify
 under the definition of micro and small enterprises, as defined under
 Micro, Small and Medium Enterprises Development Act, 2006. The Ministry
 of Micro, Small and Medium enterprises has issued an office Memorandum
 dated 26 August 2008 which recommends that the Micro and Small
 enterprises should mention in their correspondence with its customers
 the entrepreneur''s Memorandum number as allocated after filing of the
 Memorandum.  The Company has not received any claim for interest from
 any supplier under the said Act.
 
 7.  Commitments and contingent liabilities
 
 a) Firm capital commitments
 
 Estimated amount of contracts remaining to be executed on capital
 account and not provided for (net of advances) is Rs. 28,360 (previous
 year Rs Nil).
 
 b) Corporate guarantees provided
 
 The Company has given guarantees aggregating Rs. 300,000 (previous year
 Rs Nil) to banks on behalf of others. As at 31 March 2011, the
 contingent liabilities under these guarantees amounts to Rs. 300,000
 (previous year Rs. Nil).
 
 c) Claims against the Company not acknowledged as debts in respect of
 Income tax matters, under dispute
 
 The Additional Commissioner of Income Tax, Bhiwani (''the Assessing
 Officer'') had raised an additional demand of Rs. 849 for the Assessment
 Year 1995-96 and interest thereon of Rs. 2,223. The Company filed an
 appeal against the order passed by the Assessing Officer with the
 Commissioner of Income Tax (Appeals), Karnal. The Commissioner of
 Income Tax (Appeals) decided the matter in favour of the Company by
 setting aside the order passed by the Assessing Officer. Subsequently
 the Income Tax Department filed an appeal against the order of CIT
 (Appeals) in the Income Tax Appellate Tribunal (''the ITAT''), New Delhi
 which was accepted by the ITAT. Aggrieved by the order of ITAT, the
 Company has filed an appeal with the Hon''ble High Court of Punjab &
 Haryana (''the Hon''ble High Court''). The matter is currently pending
 before the Hon''ble High Court.
 
 8.  Share based compensation
 
 In accordance with the Securities and Exchange Board of India (Employee
 Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines,
 1999 and the guidance note 18 - Employee share Based Payment issued
 by the Institute of Chartered Accountants of India the following
 information relates to the stock option granted by the Company in the
 2008-09 and exercised in the previous year.
 
 The Company''s Employee Stock Option Schemes known as VESOP - Vikas
 Employees Stock Option Plan - 2007 (''the scheme'') provides for the
 grant of stock options (''the Options'') to eligible employees and
 independent directors of the Company. The scheme is administered by the
 Compensation Committee (''the Committee'') of the Board of Directors of
 the Company. The options are granted on the basis of performance and
 the grade of the employee. The options are granted at the discretion of
 the committee to select employees depending upon certain criterion.
 
 The scheme limits the maximum grant of 52,000 options to an employee in
 any given year. As per the scheme the grant price or exercise price of
 options will be the face value of its equity shares at Re.l each.
 
 The Company had granted 1,450,000 shares during the year 2008-09.
 However, 10,000 shares lapsed during the previous year since they were
 not exercised prior to the expiry date which was 6 months from the
 vesting date in the previous year.
 
 9. The Company''s shareholders had approved a dividend @ 50% in their
 meeting dated 30 September 2009. On pretext of a claim filed by one of
 the Company''s bankers (SBBJ) with Debt Recovery Tribunal (DRT), Jaipur
 against the Company, an interlocutory order was passed on 6 October
 2009 restricting the payment of dividend declared by the Company on 30
 September 2009. The Company filed a counter-claim against the
 interlocutory order of the DRT claiming relief under the provisions of
 Uniform Customs and Practices for Documentary Credits 500 for which DRT
 Jaipur disposed off the original application no. 26/2009 and gave its
 final order in favour of the Company vide order dated 22 July 2010.
 Meanwhile, SBBJ received the entire payment and issued a ''No Objection
 Certificate'' on 8 May 2010. The Company was ordered to pay out the
 dividend within two months from the date of order.
 
 However, the Company further filed an appeal with the DRT Delhi for
 claim of damages along with an application for condonation of delay in
 filing the appeal against the order of DRT Jaipur dated 22 July 2010.
 DRT Delhi passed an order dated 12 November 2010 condoning the delay
 and put a stay on the order of DRT Jaipur. Further, it restrained the
 Company from distributing any dividend till further order.
 
 In the final hearing held on 8 December 2010, DRT Delhi ordered the
 Company to pay off the dividend which it eventually paid out in three
 tranches on 22 December 2010, 23 December 2010 and 1 January 2011.
 
 The Company had also declared dividend for the financial year 2009-10
 in its Annual General Meeting held on 28 September 2010. This dividend
 was outstanding as at the balance sheet date which the Company has paid
 out in four tranches on 5 April 2011, 6 April 2011, 27 May 2011 and 30
 May 2011.
 
 - Does not include provision for gratuity, since the amounts have been
 ascertained for the Company as a whole.
 
 10.  The Company has given a corporate guarantee in respect of a loan
 of Rs. 100,000 taken by a public company during the current year from
 the bank, in which directors of the Company were interested as
 directors. Based on an evaluation by management, it appears that
 management inadvertently did not obtain the requisite approval of
 Central Government before entering into such transactions as required
 under section 295 of the Companies Act, 1956. The Company is in the
 process of taking necessary corrective action in this regard.
 
 11.  On 15 May 2009, the Company entered into a term loan agreement
 with IFCI Limited (the lender) for a term loan amount of Rs 800,000
 (sanctioned amount). As per the loan agreement, the loan was repayable
 in 20 equal quarterly instalments along with interest. The loan was
 secured against assets of the Company situated at plot E 255-257 and F
 92 in the RIICO Industrial Area in Sri Ganganagar (pledged assets).
 
 The Company defaulted in repayment of its dues starting from the
 instalment due on 15 August 2010. The table below summarises the
 amounts due along with the dates of repayment made by the Company.
 
 The lender issued a letter dated 7 April 2011 to Recall the loans in
 view of the continuous defaults committed by the Company in payment of
 principal, interest and other moneys along with terms and conditions to
 comply with.  Accordingly, the lender classified the Company''s account
 as a non-performing asset on 7 April 2011. Further, the lender took
 symbolic possession of the assets of the Company under section 13(2) of
 Chapter III of The Securitisation and Reconstruction of Financial
 Assets and Enforcements of Security Interest Act, 2002 on 27 June
 2011.
 
 As part of the recovery proceedings, the lender officials sought
 possession of the fixed assets of the Company situated at E 255-257 and
 F 92 in the RIICO Industrial Area in Sri Ganganagar, which were pledged
 against the loan, vide a possession notice dated 27 June 2011.
 Additionally, the lender published a sale notice, dated 7 July 2011 in
 a local newspaper, in respect of the fixed assets of the Company
 situated at E 255-257 and F 92 in the RIICO Industrial Area in Sri
 Ganganagar, which were pledged against the loan.
 
 In response to the actions of the lender, the Company filed an
 application against the lender in the Debt Recovery Tribunal - II,
 Delhi (DRT) on 6 July 2011 stating that the Company will clear all
 dues with interest by 30 September 2011 and requested to reclassify the
 account as ''standard''. DRT vide its order dated 8 August 2011, set
 aside the proceedings initiated by the lender and directed the
 management to clear the overdues along with interest, as per the
 original repayment schedule by 30 September 2011.
 
 Management has repaid all overdue installments along with interest by
 30 September 2011 in accordance with the directives of the DRT and
 accordingly, the lender has reclassified the Company''s account as a
 ''standard account''.
 
 12.  In accordance with the terms of settlement with financial
 institution as discussed in note 16 above, the reschedulement
 arrangements have also been reached with the financial institution for
 its export packing credit facilities. As per the reschedulement
 arrangement, an understanding has been reached to make the payment to
 the said financial institution of its dues in 12 monthly instalments
 commencing 10 September 2011.
 
 13.  The Company has given a corporate guarantee in respect of loans
 aggregating Rs 100,000 disbursed by public sector bank as per the
 scheme of crop loan under tie up arrangement with the Company. The
 Company acts as business facilitator in disbursement of the credit
 facilities sanctioned to the farmers so that it is able to procure and
 purchase organic guar from such farmers.
 
 Under this scheme, the Company is required to identify eligible
 farmers, who are represented collectively in groups designated as joint
 liability group (JLG). JLGs receive the loan amount from bank which is
 transferred to an escrow account of the Company maintained with the
 bank for further disbursal to the farmers.
 
 During the year, funds aggregating to Rs. 99,520, obtained under the
 said scheme were transferred to the Company''s account. These funds,
 during the year itself, were subsequently paid to the JLG''s accounts.
 
 The Company believes that such arrangement has not resulted in any non
 compliance with any of the provisions of the Companies Act, 1956.
 Further, the individual group leaders have agreed to indemnify the
 Company in all respect against any liability.