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Notes to Accounts of Ansal Housing & Construction Ltd.

Mar 31, 2015

A) In respect of certain assessment years upto 2003-04, the Delhi High Court has allowed the appeal of the Income Tax Department filed against the order of the Income Tax Appellate Tribunal, New Delhi, holding that the Notional Annual Letting Value of Flats/Commercial spaces etc. lying unsold in the closing stock is liable to tax under the head 'Income from House Property'. Based on the High Court Order, the tax department has created a demand of Rs, 9,98,56,820/- against the Company and a further liability of Rs, 4,42,62,073/- is estimated in respect of cases which are pending before the ITAT/High Court. The Company has fled special leave petition before the Supreme Court against the order of the Delhi High Court which has been admitted by the Supreme Court.

b) In respect of certain assessment years, Sales tax authorities have held that construction of properties by developer/ builder is liable to sales tax / VAT and have raised a demand of Rs, 10,25,86,168/- against the Company which are being disputed by the Company before the appellate authorities. Against these demands, the Company has paid Rs, 4,19,04,340/- under protest and the balance demand has been stayed by the authorities. The management is of the view that in case the Company becomes liable to pay sales tax /VAT, the same will be recovered from the customers to whom these properties have been sold.

c) Uttar Pradesh Revenue Authorities have raised demands of Rs, 4,93,20,128/- towards deficiency in Stamp Duty on purchase of land / registration of agreements. Against these demands, the Company has paid Rs, 1,53,49,516/- under protest and the balance demand has been stayed by the appellate authorities. Pending final decision in the matter, no provision has been considered necessary.

d) The Company has received a demand from the service tax department levying service tax of Rs, 2,71,30,632/- lacs on transfer charges / administrative charges / processing charges recovered from the customers. The Company has fled an appeal with Custom, Excise and Service Tax Appellate Tribunal New Delhi which is pending. The demand has been stayed by the tribunal.

In respect of various claims against the Company disclosed above, it has been advised that it has a reasonably good case to succeed at various appellate authorities and hence does not expect any material liability when the cases are finally decided.

i) In respect of block assessment for the period 1st April, 1989 to 10th February, 2000, Income Tax Appellate Tribunal (ITAT) has given full relief to the Company and rejected department's ground of appeal, for tax claim of Rs,1,27,06,760/- (Previous year Rs,1,27,06,760/-). Further, in respect of assessment of certain years, demands had been raised by the Income Tax Department against the Company amounting to Rs, 7,54,87,129/- (Previous year Rs,11,97,49,202/-) approx by disallowing deduction under sections 80(IB) of the Income Tax Act, 1961 and other matters. The appeals filed by the Company have been decided in its favor by CIT(Appeals)/ ITAT/ High Court. The tax department has gone for further reference in the above matters to ITAT / High Court/ Supreme Court. The Management has been advised that it has a good case to succeed and no tax liability is likely to be arise in these cases.

1. Capital and Other Commitments

i) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs, Nil (Previous year Rs, 33,54,981/-).

ii) The Company has entered into joint development agreements with owners of land for its construction and development. As stipulated under the agreements, the Company is required to share in area/ revenue from such development in exchange of undivided share in land as stipulated under the agreements. As on March 31, 2015 the Company has paid Rs, 91,46,28,099/- (Previous year Rs, 2,08,78,59,709/-) as refundable deposits against the joint development agreements. Further, the Company has given advances for purchase of land. Under the agreements executed with the land owners, the Company is required to make further payments based on terms/ milestones stipulated in the agreement. The future commitment in respect of purchase of land, to the extent quantifiable, amounts to Rs, 7,00,00,000/-.

2. Inventory of Land includes Rs, 13,48,23,786/- (Previous year Rs, 11,85,57,755/-) acquired by subsidiary companies. The land is registered in the name of the subsidiary companies/ others but is under the possession and control of the Company for development and sale of Real Estate Projects in terms of collaboration agreement with these companies.

3. The Company is engaged primarily in the business of Real Estate development and also running Hospitality Business. However, there are no separate reportable segments as per criterion set out under Accounting Standard 17 on Segment Reporting in the Company. The Company is operating in India, hence there is no reportable geographical segment.

4. The Company has not received intimation from suppliers regarding the status under Micro Small Medium Enterprises Development Act, 2006 and hence disclosure, if any, relating to the amounts unpaid at the yearend together with interest payable as required under the said Act has not been given.

5. Expenditure related to Corporate Social Responsibility as per section 135 of Companies Act, 2013 read with Schedule VII amounts to Rs,1,10,25,000/- 33 The managerial remuneration paid to the Managing Director of the Company during the year is in excess of the limit provided in Section 197 read with Schedule-V of the Companies Act, 2013 by Rs, 84,57,019/- due to the inadequacy of the profit for the year computed in the manner referred to in Section 198 of the Companies Act, 2013. The Company has decided to apply to the Central Government under Section 197(10) of the Companies Act, 2013. 34 In respect of the restaurant division, the Company has closed down three restaurants and is currently operating two restaurants out of which one restaurant is also intended to be closed in the near future. The restaurants which have been closed down are proposed to be leased out along with all the fixed assets and negotiations with the parties are in final stages. The carrying amount of fixed assets (including premises) of the restaurants which have been closed down amounts to Rs, 3,37,98,132/- . In the opinion of the management, there is no impairment in the value of fixed assets of restaurants as the same are proposed to be leased out.

6. Operating Lease

The Company has taken various residential / commercial premises under cancelable operating leases. These leases are normally renewable on expiry. The rental expenses in respect of operating leases amounting to Rs, 5,85,53,873/- (previous year Rs, 4,76,85,710/-) has been charged to the statement of profit and loss/ project in progress.

7. The disclosures of Employee Benefits as defend in Accounting Standard 15 are given below:

A. Defend Benefit Plan

i) Gratuity: The employees' gratuity fund scheme is a defend benefit plan and is managed by LIC. The present value of the obligation is determined on the basis of year end actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. ii) Leave Encashment: The Company also has a Leave Encashment Scheme with defend benefits for its employees. The Company makes provision for such liability in the books of accounts on the basis of year end actuarial valuation. No fund has been created for this scheme.

NOTES:

8. The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in employment market.

B. Defend Contribution Plan

The Company makes provident fund contribution to defend contribution retirement benefit plan for its employees. Under the scheme, the Company deposits an amount determined as a specified percentage of basic pay with the regional Provident Fund Commissioner. Contribution to defend contribution plan recognized as expense for the year is Rs, 2,17,46,722/- (Previous year Rs, 1,93,43,389/-).

9. The brief particulars other than quantitative details relating to Hospitality Division are given below:

(a) Income from Food and Beverage and Other Services for the year include income from Wine and Liquor Rs,1,29,57,622/- (Previous Year Rs,1,95,50,191/-).

10. Previous year figures:

Previous Year figures have been regrouped/rearranged wherever considered necessary, to make them comparable with Current Year's figures.


Mar 31, 2014

1. Terms/ Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares would be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of the equity shares held by the shareholders.

2. The Company has increased its Authorized Share Capital from Rs. 50 crores to Rs. 100 crores by amending the Capital Clause of the Memorandum of Association of the Company with the consent of the shareholders by means of Postal Ballot on 2nd April, 2013.

3. During the year, pursuant to approval accorded by the Shareholders of the Company vide resolution dated 2nd April, 2013 through Postal Ballot, the Company has made the allotment of 3,95,90,552 bonus equity shares on 12th April, 2013 in the ratio of 2:1 (two new bonus equity shares of Rs. 10/- each for every one existing equity share of Rs. 10/- each held in the Company) to the eligible shareholders of the Company whose names appeared in the Register of Members / Beneficial Owners of the Company as on record date i.e. 12th April, 2013.

4. Equity Shares bought back as per section 77A of Companies Act, 1956 during five years preceding 31st March, 2014

* 1,78,272 Equity Shares bought back during the financial year 2011-12

* 3,97,296 Equity Shares bought back during the financial year 2012-13

5 NOTES:

Term Loan from Bank referred above to the extent of:

* Rs. Nil/- (Previous year: Rs. 3,29,99,998/-) are secured by way of mortgage of project land owned by the Company and its subsidiaries situated at Zirakpur and Meerut and hypothecation of finished goods and receivables of Zirakpur, Meerut and Agra projects.

6. Term Loan from Corporate Bodies referred above to the extent of:

* Rs. 60,00,00,000/- (Previous year: Rs. 85,00,00,000/-) are secured by way of mortgage of land/ building owned by the Company and its subsidiaries situated at Ghaziabad, Mumbai and Agra, mortgage of land/ premises owned by promoter directors and their families situated at Gurgaon and Mumbai, pledge of part of promoters shareholding in the Company and pledge of shares of subsidiary Companies.

* Rs. 1,91,22,13,285/- (Previous year: Rs. 96,48,86,085/-) are secured by way of mortgage of project land owned by the Company and its subsidiaries situated at Agra, Indore, Karnal, Meerut and Gurgaon, mortgage of building situated at Noida, mortgage of premises situated at Delhi owned by promoter directors and their families, assignment of receivables of Agra, Indore, Rewari, Karnal, Meerut and certain Gurgaon projects and pledge of part of promoters shareholding in the Company.

* Rs. Nil (Previous year: Rs. 5,62,49,998/-) are secured by way of mortgage of land owned by the Company and its subsidiaries situated at Yamunanagar location and assignment of receivables of Yamunanagar Project.

* Rs. 10,98,00,000/- (Previous year: Rs. 12,98,00,000/-) are secured by way of mortgage of land owned by the Company and its subsidiaries situated at Jhansi and assignment of receivables of Jhansi Project.

* Rs. 1,15,00,00,000/- (Previous year: Rs. 40,00,00,000/-) are secured by way of mortgage of land owned by the Company and its subsidiaries situated at Gurgaon, assignment of receivables of Gurgaon Projects and pledge of shares of a subsidiary company and associate company.

7 Vehicle/ Equipment Loan from Bank/ Corporate Bodies referred above are secured by way of hypothecation of respective vehicle/ construction equipment.

8. NOTES:

8 Working Capital Loans of Rs. 61,27,08,061/- (Previous year: Rs. 75,64,35,617/-) from Scheduled Banks are secured by charge over stocks of materials, unsold finished stock, construction work-in-progress, book-debts of the Company and have been guaranteed by promoter directors.

9. NOTES:

9.1 The Advances from Customers referred above includes Rs. 12,08,71,393/- (Previous year: Rs. 21,76,44,087/-) received from subsidiary Companies and Rs. 60,00,000/- (Previous year: Rs. 60,00,000/-) from other related parties.

9.2 The Other payables referred above includes statutory dues, book overdraft, commission payable to directors.

9.3 Other payables also includes Rs. 12,11,52,223/- (Previous year: Rs. 14,08,64,028/-) payable to a subsidiary Companies.

10. During the Financial Year 2013-2014, the Company had acquired equity shares of two new companies i.e. Shamia Automo- biles Pvt. Ltd. on 28.09.2013 and Oriane Developers Pvt. Ltd. on 02.01.2014 and consequently these companies have become Wholly Owned Subsidiaries of the Company.

11 During the Year, the Company has acquired 49% equity shares of M/s Optus Corona Developers Pvt. Ltd. and consequently it has become Associate of the Company.

* Fixed Deposits with Banks includes deposits of Rs. 32,36,221/- (Previous year Rs. 2,34,090/-) with maturity of more than 12 months.

NOTE:

12. Prior Period Adjustment includes remuneration pertaining to earlier years of President (Projects) of the Company amounting to Rs. 1,39,92,448/- which has been readjusted as per the Central Government approval under section 314(1B) of Companies Act, 1956.

CONTINGENT LIABILITIES AND COMMITMENTS

(TO THE EXTENT NOT PROVIDED FOR)

As at 31st As at 31st March, 2014 March, 2013 13. Contingent Liabilities

i) Guarantees

* Guarantees given by the Company to Banks/Financial Institutions against credit facilities extended to third parties. (to the extent of outstanding Loan amount) 19,36,88,136 38,23,95,136

ii) Claims against the Company not acknowledged as Debts

* Income Tax/ Wealth Tax demand being disputed by the Company 13,37,79,171 3,09,66,048

* Sales Tax demand being disputed by the Company 7,11,44,240 3,89,08,619

* Stamp Duty demand being disputed by the Company 10,49,21,503 9,01,46,746

* Service Tax demand being disputed by the Company 2,71,30,632 2,71,30,632

* Claims by customers for refund of amount deposited/ Compensation/Interest (to the extent quantifiable) 9,30,59,797 6,84,62,283

* Other Claims against the Company not acknowledged as debts 66,78,040 66,78,040

63,04,01,518 64,46,87,504

iii) In respect of block assessment for the period 1st April, 1989 to 10th February, 2000, Income Tax Appellate Tribunal (ITAT) has given full relief to the Company and rejected department''s ground of appeal, for tax claim of Rs. 1,27,06,760/- (Previous year Rs. 1,27,06,760/-). Further, in respect of assessment of certain years, demands had been raised by the Income Tax Department against the Company amounting to Rs. 11,97,49,202/- (Previous year Rs. 5,97,39,075/-) approx by disallowing deduction under sections 80(IB) of the Income Tax Act, 1961 and other matters. The appeals filed by the Company have been decided in its favour by CIT(Appeals)/ ITAT/ High Court. The tax department has gone for further reference in the above matters to ITAT / High Court/ Supreme Court. The Management has been advised by the legal counsel that it has a good case to succeed and no tax liability is likely to arise in these cases.

14. Capital and Other Commitments

i) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 33,54,981/- (Previous year Rs. 46,96,654/-)

ii) The Company has entered into joint development agreements with owners of land for its construction and development. As stipulated under the agreements, the Company is required to share in area/ revenue from such development in exchange of undivided share in land as stipulated under the agreements. As on March 31,2014 the Company has paid Rs. 2,08,78,59,709/- (Previous year Rs. 40,31,67,714/-) as refundable deposits against the joint development agreements. Further, the Company has given advances for purchase of land. Under the agreements executed with the land owners, the Company is required to make further payments based on terms/ milestones stipulated in the agreement.

15. Inventory of Land includes Rs. 11,85,57,755/- (Previous year Rs. 14,61,80,262/-) acquired by subsidiary companies. The land is registered in the name of the subsidiary companies but is under the possession and control of the Company for development and sale of Real Estate Projects in terms of collaboration agreement with these companies.

16. The Company is engaged primarily in the business of Real Estate development and also running Hospitality Business. However, there are no separate reportable segments as per criterion set out under Accounting Standard 17 on Segment Reporting in the Company. The Company is operating in India, hence there is no reportable geographical segment.

17. The Company has not received intimation from suppliers regarding the status under Micro Small Medium Enterprises Development Act, 2006 and hence disclosure, if any, relating to the amounts unpaid at the year end together with interest payable as required under the said Act has not been given.

18. Operating Lease

The Company has taken various residential / commercial premises under cancelable operating leases. These leases are normally renewable on expiry. The rental expenses in respect of operating leases amounting to Rs. 4,76,85,710/- (previous year Rs. 4,71,26,505/-) has been charged to the statement of profit and loss/ project in progress.

19. The disclosures of Employee Benefits as defined in Accounting Standard 15 are given below:

A. Defined Benefit Plan

i) Gratuity: The employees'' gratuity fund scheme is a defined benefit plan and is managed by LIC. The present value of the obligation is determined based on details received from LIC using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit seperately to build up the final obligation.

ii) Leave Encashment: The company also has a leave encashment scheme with defined benefits for its employees. The company makes provision for such liability in the books of accounts on the basis ofyear end acturial valuation. No fund has been created for this scheme.

NOTES:

20. The estimates of rate of esclation in salary considered in acturial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in employment market.

A. Defined Contribution Plan

The Company makes provident fund contribution to defined contribution retirement benefit plan for its employees. Under the scheme, the company deposits an amount determined as a specified percentage of basic pay with the regional provident fund commissioner. Contribution to defined contribution plan recognized as expense for the year is Rs. 1,93,43,389/- (Previous year Rs. 1,23,94,752/-)

21. The brief particulars other than quantitative details relating to Hospitality Division are given below:

(a) Income from Food and Beverage and Other Services for the year include income from Wine and Liquor Rs. 1,95,50,191/- (Previous Year Rs. 2,06,58,243/-).

22. Previous year figures:

Previous Year figures have been regrouped/rearranged wherever considered necessary, to make them comparable with Current Year''s figures.


Mar 31, 2013

NOTE 1 : CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

1.1 Contingent Liabilities

i) Guarantees

- Guarantees given by the Company to Banks/

Financial Institutions against credit facilities extended to third parties. (to the extent of outstanding Loan amount) 38,23,95,136 49,23,95,136

ii) Claims against the Company not acknowledged as Debts

- Income Tax/ Wealth Tax demand being disputed by the Company 3,09,66,048 4,65,09,090

- Sales Tax demand being disputed by the Company 3,89,08,619 2,46,85,005

- Stamp Duty demand being disputed by the Company 9,01,46,746 9,61,46,726

- Service Tax demand being disputed by the Company 2,71,30,632 2,71,30,632

- Claims by customers for refund of amount deposited/

Compensation/ Interest (to the extent quantifable) 6,84,62,283 5,51,86,256

- Other Claims against the Company not acknowledged as debts 66,78,040 68,93,124

64,46,87,504 74,89,45,969

iii) In respect of block assessment for the period 1st April, 1989 to 10th February, 2000, Income Tax Appellate Tribunal (ITAT ) has given full relief to the Company and rejected department''s ground of appeal, for tax claim of Rs.1,27,06,760/- (Previous year Rs.1,27,06,760/-). Further, in respect of assessment of certain years, demands had been raised by the Income Tax Department against the Company amounting to Rs. 5,97,39,075/- (previous year Rs. 7,25,24,050/-) approx by disallowing deduction under sections 80(IB) of the Income Tax Act, 1961. The appeals fled by the Company have been decided in its favour by CIT(Appeals)/ ITAT. The tax department has gone for further reference in the above matters to ITAT / High Court. The Management has been advised by the legal counsel that it has a good case to succeed and no tax liability is likely to be arise in these cases.

iv) In respect of some earlier years the Delhi High Court has allowed the appeal of the Income Tax Department, fled against the order of Income Tax Appellate Tribunal, New Delhi, holding that the Notional Annual Letting Value of Flats/Commercial spaces etc lying unsold in the stock in trade of the company is taxable under the head Income from House Property. The estimated income tax liability in respect of such cases pending at various forums is Rs. 7,61,50,665/- (excluding interest, penalty etc). The company has fled special leave petition before Supreme Court against the order of Delhi High Court. The Supreme Court has accepted the Special Leave Petition of the Company. The Management has been advised by the legal counsel that it has a good case to succeed and no tax liability is likely to be arise in these cases.

1.2 Capital and Other Commitments

i) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 46,96,654/- (Previous year Rs. 26,21,205/-)

ii) The Company has entered into joint development agreements with owners of land for its construction and development. Under the agreements, the Company is required to share in area/ revenue from such development in exchange of undivided share in land as stipulated under the agreements. As on March 31,2013 the Company has paid Rs. 40,31,67,714/- (Previous year Rs. 32,19,43,125/-) as refundable deposits against the joint development agreements. Further, the Company has given advances for purchase of land. Under the agreements executed with the land owners, the Company is required to make further payments based on terms/ milestones stipulated in the agreement.

2 In respect of projects commenced on or after 1st April, 2012 and the projects commenced before that date but where revenue was not recognised in earlier years, the Company has followed revenue recognition policy in accordance with the Guidance Note on Accounting for Real Estate transactions (Revised 2012) issued by the Institute of Chartered Accountants of India. However, none of the projects to which Guidance Note applies has reached revenue recognition stage during the year. The impact on the current year revenues and profts, had the Company followed its earlier revenue recognition policy in respect of such projects, has not been quantifed.

3 Inventory of Land includes Rs.14,61,80,262/- (Previous year Rs.15,03,32,469/-) acquired by subsidiary companies. The land is registered in the name of the subsidiary companies but is under the possession and control of the Company for development and sale of Real Estate Projects in terms of collaboration agreement with these companies.

4 The Company is engaged primarily in the business of Real Estate development and also running Hospitality Business. However, there are no separate reportable segments as per criterion set out under Accounting Standard 17 on Segment Reporting in the Company. The Company is operating in India, hence there is no reportable geographical segment.

5 The Company has not received intimation from suppliers regarding the status under Micro Small Medium Enterprises Development Act, 2006 and hence disclosure, if any, relating to the amounts unpaid at the year end together with interest payable as required under the said Act has not been given.

6 Operating Lease

The Company has taken various residential / commercial premises under cancelable operating leases. These leases are normally renewable on expiry. The rental expenses in respect of operating leases amounting to Rs. 4,71,26,505/- (previous year Rs. 5,53,13,402/-) has been charged to the statement of proft and loss.

7 The disclosures of Employee Benefts as defned in Accounting Standard 15 are given below: A. Defned Beneft Plan

i) Gratuity: The employees'' gratuity fund scheme is a defned beneft plan and is managed by LIC. The present value of the obligation is determined based on details received from LIC using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee beneft entitlement and measures each unit seperately to build up the fnal obligation.

ii) Leave Encashment: The company also has a leave encashment scheme with defned benefts for its employees. The company makes provision for such liability in the books of accounts on the basis of year end acturial valuation. No fund has been created for this scheme.

NOTES:

8.1 The estimates of rate of esclation in salary considered in acturial valuation, take into account infation, seniority, promotion and other relevant factors including supply and demand in employment market.

B. Defned Contribution Plan

The Company makes provident fund contribution to defned contribution retirement beneft plan for its employees. Under the scheme, the company deposits an amount determined as a specifed percentage of basic pay with the regional provident fund commissioner. Contribution to defned contribution plan reconized as expense for the year is Rs.1,23,94,752/- (Previous year Rs.1,11,57,053/-)

9 Related Party Disclosures

As per Accounting Standard- 18, the disclosures of transactions with related parties are given below:

a) Names of the related parties where control exists and related parties with whom transactions have taken place and relationships:

1. Wholly Owned Subsidiaries M/s Geo Connect Ltd.

M/s Housing & Construction Lanka Pvt. Ltd.

M/s Maestro Promoters Pvt. Ltd.

M/s Wrangler Builders Pvt. Ltd.

M/s Anjuman Buildcon Pvt. Ltd.

M/s A R Infrastructure Pvt. Ltd.

M/s A R Paradise Pvt. Ltd.

M/s Fenny Real Estates Pvt. Ltd.

M/s Third Eye Media Pvt Ltd.

M/s Sunrise Facility Management Pvt. Ltd.

M/s Aevee Iron & Steel Works Pvt. Ltd.

M/s Enchant Constructions Pvt. Ltd.

M/s Rishu Builtech Pvt. Ltd.

M/s Sonu Buildwell Pvt. Ltd.

M/s Andri Builders & Developers Pvt. Ltd. (w.e.f. 31.08.2012)

M/s VS Infratown Pvt. Ltd. (w.e.f. 04.10.2012)

M/s Cross Bridge Developers Pvt. Ltd. (w.e.f. 01.12.2012)

M/s Identity Buildtech Pvt. Ltd. (w.e.f. 18.12.2012)

2. Key Management Personnel Mr. Deepak Ansal (Chairman & Managing Director)

Mr. Kushagr Ansal (Whole Time Director) Mr. Karun Ansal (President)

3. Relatives of Key Management Personnel Ms. Divya Ansal (wife of Mr. Deepak Ansal)

M/s Deepak Ansal-(H.U.F)- (Karta Mr. Deepak Ansal) Ms. Megha Ansal (wife of Mr. Kushagr Ansal) Ms. Neha Ansal (wife of Mr. Karun Ansal) Mr. Aryan Ansal (Son of Mr. Kushagr Ansal)

4. Associates

4.1 Enterprise in which Key Management personnel having substantial interest M/s Infnet India Ltd.

M/s Akash Deep Portfolios Private Ltd.

M/s Suraj Kumari Charitable Trust

M/s Ansal Clubs Pvt. Ltd.

M/s Sungrace Security Services Private Ltd.

M/s Snow White Cable Network Private Ltd.

M/s Global Consultant & Designers Private Ltd.

M/s Glorious Properties Private Ltd.

M/s Toptrack Infotech Private Ltd.

M/s Toptrack Real Estate Private Ltd.

M/s Ansal Land & Housing Private Ltd.

M/s Shree Satya Sai Construction and Development Private Ltd.

4.2 Enterprises in which relative of Key Management personnel having substantial interest M/s Ansal Buildwell Ltd.

10 Previous year fgures:

Previous Year fgures have been regrouped/rearranged wherever considered necessary, to make them comparable with Current Year''s fgures.


Mar 31, 2012

1.1 Terms/ Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares would be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of the equity shares held by the shareholders.

2.2 On 30.10.2010, the Company issued 12,00,000 warrants of Rs. 70/- each to the Promoters of the Company. Each warrant was convertible at a premium of Rs.60/- per share of face value of Rs.10/- each at the option of the holder within 18 months from date of allotment. Out of the 12,00,000 warrants issued, the company allotted 10,00,000 equity shares on exercise of part op- tion by conversion of warrants at a premium of Rs. 60/- per share of face value of Rs.10/- each to the Promoters on 08.08.2011. On 10.01.2012, the Promoters surrendered the balance 2,00,000 warrants which were then cancelled by the Company and Rs. 35,00,000/- received against these warrants was forfeited.

NOTE:

2.1 The Board of Directors of the Company, in the meeting held on 02.12.2011, approved buy back of 25,00,000 equity shares of Rs. 10/- each at maximum price of Rs. 45/- per share for an amount not exceeding Rs. 11,25,00,000/-.

Persuant to the buy back scheme, the Company during the year ending 31st March, 2012 purchased 1,78,272 equity shares of Rs. 10/- each at a cost of Rs. 75,80,530/-. Out of this amount Rs. 17,82,720/- has been set off against issued, subscribed and paid up share capital and the balance of Rs. 57,97,810/- has been debited to the securities premium account. The Company has extinguished 1,16,848 equity shares upto March 31,2012 and the remaining 61,424 equity shares have been extinguished subsequent to the close of the year.

In terms of Section 77AA of the Companies Act, 1956, an amount of Rs. 17,82,720/- has been transferred to Capital Redemption Reserve.

NOTES:

3.1 Term Loan from Bank referred above to the extent of:

- Rs. 9,98,00,000/- are secured by way of mortgage of project land owned by the Company and its subsidiaries situated at Zirakpur & Meerut and hypothecation of finished goods & receivables of Zirakpur, Meerut and Agra projects.

3.2 Term Loan from Corporate Bodies referred above to the extent of:

- Rs. 65,00,00,000/- are secured by way of mortgage of land/ building owned by the Company and its subsidiaries situated at Ghaziabad, Mumbai and Agra, mortgage of land/ premises owned by promoter directors and their families situated at Gurgaon and Mumbai, pledge of part of promoters shareholding in the Company and pledge of shares of subsidiary Companies.

- Rs. 82,50,24,461/- are secured by way of mortgage of project land owned by the Company and its subsidiaries situated at Agra, Indore and Meerut, mortgage of building situated at Noida, mortgage of premises situated at Delhi owned by promoter directors and their families, assignment of receivables of Agra, Meerut and Indore projects and pledge of part of promoters shareholding in the Company.

- Rs. 11,25,00,000/- are secured by way of mortgage of land owned by the Company and its subsidiaries situated at Yamunanagar, assignment of receivable of Yamunanagar Project.

3.3 Vehicle/ Equipment Loan from Bank/ Corporate Bodies referred above are secured by way of hypothecation of respective vehicle/ construction equipment.

3.4 Term Loan from Bank referred above to the extent of:

Rs. 9,98,00,000 have been guaranteed by the promoter directors.

Rs. 9,98,00,000 have been guaranteed by the subsidiary companies.

3.5 Term Loan from Corporate Bodies referred above to the extent of:

Rs. 1,58,75,24,461 have been guaranteed by the promoter directors.

Rs. 76,25,00,000 have been guaranteed by the subsidiary companies

Rs. 65,00,00,000 have been guaranteed by the relatives of promoter directors.

3.6 Public Deposits referred above to the extent of:

Rs. 21,83,32,000 have been guaranteed by the chairman and managing director.

NOTES:

4.1 Working Capital Loans from Scheduled Banks are secured by charge over stocks of materials, unsold finished stock, construction work-in-progress, book-debts of the Company.

4.2 Term Loan from Corporate Bodies are secured by way of mortgage of project land owned by Collaborator at Gurgaon and extension of mortgage of building located at Noida.

4.3 Working Capital Loan referred above to the extent of Rs. 67,28,39,669/- have been guaranteed by promoter directors.

4.4 Term Loan from Corporate Bodies referred above to the extent of Rs. 20,00,00,000/- have been guaranteed by promoter directors.

NOTES:

5.1 The Advances from Customers referred above includes Rs. 9,67,65,014/- received from subsidiary Companies.

5.2 The Other payables referred above includes statutory dues, book overdraft, commission payable to directors.

5.3 Other payables also includes Rs. 11,01,07,354/- payable to subsidiary Companies.

NOTE 6 : CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

A) Contingent Liabilities

i) Guarantees

- Guarantees given by the Company to Banks/

Financial Institutions against credit facilities extended to third parties. (to the extent of outstanding Loan amount) 49,23,95,136 36,23,95,136

ii) Claims against the Company not acknowledged as Debts

- Income Tax/ Wealth Tax demand being disputed by the Company 4,65,09,090 4,46,25,110

- Sales Tax demand being disputed by the Company 2,46,85,005 8,37,77,000

- Stamp Duty demand being disputed by the Company 9,61,46,726 9,78,28,068

- Service Tax demand being disputed by the Company 2,71,30,632 2,71,30,632

- Claims by customers for refund of amount deposited/ Compensation/ Interest 5,51,86,256 3,45,24,217

- Other Claims against the Company not acknowledged as debts 68,93,124 69,75,525

74,89,45,969 65,72,55,688

B) Capital and Other Commitments

i) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 26,21,205/- (Previous year Rs. Nil)

ii) The Board of Directors of the Company, in the meeting held on 02.12.2011, approved buy back of 25,00,000 equity shares of Rs.10/- each at a maximum price of Rs. 45/- per share for an amount not exceeding Rs.11,25,00,000/-. During the year, the Company has bought back 1,78,272 shares. The balance commitment of the Company under buy-back scheme is 23,21,728 shares at a maximum price of Rs. 45/- per share.

iii) The Company has entered into joint development agreements with owners of land for its construction and development. Under the agreements, the Company is required to share in area/ revenue from such development in exchange of undivided share in land as stipulated under the agreements. As of March 31,2012 the Company has paid Rs. 32,19,43,125/- (Previous year Rs. 39,70,10,905/-) as refundable deposits against the joint development agreements. Further, the Company has given advances for purchase of land. Under the agreements executed with the land owners, the Company is required to make further payments under the agreements based on terms/ milestones stipulated under the agreement.

7 In respect of block assessment for the period 1st April, 1989 to 10th February, 2000, Income Tax Appellate Tribunal (ITAT) has given full relief to the Company and rejected department's ground of appeal, for tax claim of Rs.1,27,06,760/- (Previous year Rs.1,27,06,760/-). Further, in respect of assessment of certain years, demands had been raised by the Income Tax Department against the Company amounting to Rs. 7,25,24,050/-( previous year Rs. 7,51,90,731/-) approx by disallowing deduction under sections 80(IB) of the Income Tax Act, 1961. The appeals filed by the Company have been decided in its favour by CIT(Appeals)/ ITAT. The tax department has gone for further reference in the above matters to ITAT / High Court. The Company has been legally advised that it has a good case to succeed in the above matters.

8 Inventory of Land includes Rs.15,03,32,469/- (Previous year Rs.20,06,41,591/-) acquired by subsidiary companies. The land is registered in the name of the subsidiary companies but is under the possession and control of the Company for development and sale of Real Estate Projects in terms of collaboration agreement with these companies.

9 The Company is engaged primarily in the business of Real Estate development and also running Hospitality Business. However, there are no separate reportable segments as per criterion set out under Accounting Standard 17 on Segment Reporting in the Company. The Company is operating in India, hence there is no reportable geographical segment.

10 During the previous year, the company sold its entire shareholding consisting of 48,00,000 equity shares of Rs.10/- each representing 40% of investment in Capital Cars Pvt. Ltd. for a consideration of Rs. 12,82,68,093/-. Consequent to this sale, Capital Cars Pvt Ltd ceased to be a joint venture of the company with effect from 29th September, 2010. The profit on sale of investment of Rs. 8,02,68,093/- lacs was shown under " Other Income" in the Statement of Profit and Loss.

11 The Company has not received intimation from suppliers regarding the status under Micro Small Medium Enterprises Development Act, 2006 and hence disclosure, if any, relating to the amounts unpaid at the year end together with interest payable as required under the said Act have not been given.

Note : The Company has issued warrants to promoters of the Company which are convertible into equity shares at the option of the holder within 18 months of the allotment of warrants. Since the warrants have been issued at fair value, these are considered neither dilutive nor anti-dilutive and hence, these have not been considered in the computation of diluted earnings per share in accordance with Accounting Standard 20 on 'Earning Per Share'.

12 Buy-Back of Equity Shares

The Board of Directors of the Company, during their meeting held on 02.12.2011, approved the buy back of 25,00,000 equity shares of Rs.10/- each at maximum price of Rs. 45/- per share for an amount not exceeding Rs.11,25,00,000/- The Board decided to implement the buy-back offer through the open market purchases in the Stock Exchanges.

Pursuant to the offer, the Company from January 25,2012 to March 31,2012, has bought back 1,78,272 equity shares of Rs.10/- each aggregating to Rs. 75,80,530/-. The Company had extinguished 1,16,848 equity shares upto March 31,2012 and the balance 61,424 equity shares were extinguished subsequent to the year end. Accordingly, Rs.17,82,720 has been reduced from paid-up equity share capital and in accordance with the provisions of section 77A of the Companies Act, 1956, Rs. 57,97,810/- has been utilized from Securities Premium Account.

In terms of Section 77AA of the Companies Act, 1956, an amount of Rs. 17,82,720/- has been transferred to Capital Redemption Reserve.

13 Operating Lease

The Company has taken various residential / commercial premises under cancelable operating leases. These leases are normally renewable on expiry. The rental expenses in respect of operating leases amounting to Rs. 5,53,13,402/- (previous year Rs. 4,91,00,046/-) has been charged to the statement of profit and loss.

14 The disclosures of Employee Benefits as defined in Accounting Standard 15 are given below:

A. Defined Benefit Plan

i) Gratuity: The employees' gratuity fund scheme managed by Trust is a defined benefit plan. The present value of the obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

ii) Leave Encashment- The company also has a leave encashment scheme with defined benefits for its employees. The company makes provision for such liability in books of accounts on the basis of year end actuarial valuation. No fund has been created for this scheme.

NOTES:

15.1 The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in employment market.

15.2 The Company has introduced leave encashment policy for its employees in the current year. Hence there are no corresponding figures for leave encashment in the previous year.

B. Defined Contribution Plan

The Company makes provident fund contribution to defined contribution retirement benefit plan for its employees. Under the scheme, the company deposits an amount determined as a specified percentage of basic pay with the regional provident fund commissioner. Contribution to defined contribution plan recognized as expense for the year is Rs.1,11,57,053/- (Previous year Rs. 90,93,608/-).

16 Related Party Disclosures

As per Accounting Standard- 18, the disclosures of transactions with related parties are given below: a) Names of the related parties where control exists and related parties with whom transactions have taken place and relationships:

1. Wholly Owned Subsidiaries M/s Geo Connect Ltd.

M/s Housing & Construction Lanka Pvt. Ltd.

M/s Maestro Promoters Pvt. Ltd.

M/s Wrangler Builders Pvt. Ltd.

M/s Anjuman Buildcon Pvt. Ltd.

M/s A R Infrastructure Pvt. Ltd.

M/s A R Paradise Pvt. Ltd.

M/s Fenny Real Estates Pvt. Ltd.

M/s Third Eye Media Pvt Ltd.

M/s Sunrise Facility Management Pvt. Ltd.

M/s Aevee Iron & Steel Works Pvt. Ltd.

M/s Enchant Constructions Pvt. Ltd.

M/s Rishu Builtech Pvt. Ltd.

M/s Sonu Buildwell Pvt. Ltd.

2. Key Management Personnel Mr. Deepak Ansal (Chairman & Managing Director)

Mr. Kushagr Ansal (Whole Time Director)

Mr. Karun Ansal (President)

3. Relatives of Key Management Personnel Ms. Divya Ansal (wife of Mr. Deepak Ansal)

M/s Deepak Ansal-(H.U.F)- (Karta Mr. Deepak Ansal)

Ms. Megha Ansal (wife of Mr. Kushagr Ansal)

Ms. Neha Ansal (wife of Mr. Karun Ansal)

4. Joint Venture M/s Capital Cars Pvt. Ltd.

(upto 29.09.2010, Refer Note No. 30)

5. Associates

5.1 Enterprise in which Key Management personnel having substantial interest

M/s Infinet India Ltd.

M/s Akash Deep Portfolios Pvt. Ltd.

M/s Suraj Kumari Charitable Trust M/s Ansal Clubs Pvt. Ltd.

M/s Sungrace Security Services Pvt. Ltd.

M/s Snow White Cable Network Pvt. Ltd. M/s Global Consultant & Designers Pvt. Ltd. M/s Glorious Properties Pvt. Ltd.

5.2 Enterprises in which relative of Key Management personnel having substantial interest

M/s Ansal Buildwell Ltd.

Note:

During the previous year, the company sold its entire shareholding in Capital Cars Pvt. Ltd. Consequently, the Capital Cars Pvt. Ltd. has ceased to be a Joint Venture of the Company wef 29.09.2010 & hence the share in Assets & Liabilities have not been shown.

17 The brief particulars other than quantitative details relating to Hospitality Division are given below:

(a) Income from Food and Beverage and Other Services for the year include income from Wine and Liquor Rs. 2,35,03,525/- (Previous Year Rs. 2,28,26,177/-).

(b) The break-up of consumption of Provisions, Beverages, Stores, Wines & Smokes are as follows :

18 Previous year figures:

Till the year ended 31st March 2011, the Company was using pre-revised Schedule-VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended 31st March 2012, the revised Schedule-VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has re-classified previous year figures to conform to this year's classification. The adoption of revised Schedule-VI doesn't impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosure made in the financial statements particularly presentation of Balance Sheet.

 
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