Notes to Accounts of B Nanji Enterprises Ltd.

Mar 31, 2015

1. Term Loan from Bank is secured against Hypothecation of Specific Vehicle purchased.

2. Term Loan from Diwan Housing Finance Corporation Limited is Mortgage of Land and Building of the Project India Colony admeasuring about 1890050.76 Sq. ft. At Sruvey No. 206/1, 206/7, 206/9, 207/8,. 2079-10-11-12-13-14, at Village Vevji, Tal. Talsari, Dist. Thane and Charge of entire receivable of above projects and personal irrevocable guarantee of Shri B N Padsala and Sandeep B Padsala, Directors of the Company.

3. Drop Line Overdrafty Working Capital Limit of Rs.35.00 Crores from State Bank of Indis is secured Hypothecation of Cash Flow of 4 projects being executed by company is Bhilad, Kathlal, Umargaon-Nisarg Weekend Home Project and Geratpur, Ahmedabad which is further secured by Charge over entire Current assets of the Company and personal irrevocable guarantee of Shri B N Padsala and Sandeep B Padsala, Directors of the Company. The same is further collateraly secured by Equitable Mortgage of NA Plot of land admeasuring about 181994 Sq/mtrs.of Plot No. 11-22, 24 to 28, 32,33, 35-50 A1, A2 and D, Survey No. 867 868 to 895 in Navgujarat Industrial Estate P. Ltd. Opp. Mahemdavad rly. Station, Moje Mahemdabad, Dist. Kaira.

4. Contingent Liability:

Company has given guarantee to Tata Capital Financial Services Ltd. for Rs.300.00 lacs and to The Vijay Co.Op. Bank Ltd. for Rs.400.00 lacs for advances taken by M/s. B Nanji, a partnership firm in which compnay is partner having 50% share.

5. Company has valued the work-in-progress at Vevji, Umargaon, site at Direct Cost Plus Borrowing cost, for which no direct nexus for deployment offund borrwed is established, which is not in conformity with the requirement of various accounting standards i. e. AS-2, AS-7 AS-16 issued by the Institute of Chartered Accoutnants of India. Had the company not included the borrowing cost in valuation of stock, the profit for the year would have been lower by Rs. 42 7.48 lacs.

6. In case of Sales of Flats/Apartments of Akansha Flats, scheme at Vevji, Umargam, Dist Thane Maharashtra, sales is accounted at the time of giving possession to the purchasers. However, in view of the provisions of Maharashtra Ownership of Flats Act, 1963, company has to form either co. op. Society or a Company and execute sale deed in favour of society/ company. Company has booked sales in the books of accounts on giving possession to the buyers of the flats. Company has not recovered the contribution from the members for the proposed society as stipulated in the Agreement for Sale.

7. Company has paid an advance payment of Rs. 300.00 lacs against agreement of Rs.486.00 lacs to Sankira Resorls LLP (Previously known as Sankira Resorts P. Ltd. ) a firm in which Managing Diretcor and Executive Directors are partners, on the basis of agreement entered on 13-05-2013 for development of Nisarg - a Weekend Home for which no prior approval of the members has been taken.

8. Amount received Rs.220.55 lacs in earlier year as Advance for sale of land against proposed sale of land has been shown as Advance against Land and the same is not considered as a Deposit within the meaning of Sec.73 of the Companies Act, 2013 read with Rule 2(12)(d).

9. No Provision for bad boubtful interest free loan of Rs.69.07 lacs granted to 20 parties given in earlier years has been made in accounts.

10. Company has also granted interest bearing deposit of Rs.45.86 lacs to 2 parties at a normal rate of Interest. Advances for Purchase of Land in earlier years and amount recoverable in cash or kind or for value to be received is not considered as loan within the meaning of secton 186 of the Companies Act, 2013.

11. Company is making provision for total liability of gratuity payable under The Payment of Gratuity Act on th basis of 15 days salary for completed year of service of eligible employee without considering directors instead of providing the same on the basis of Acturiral Valuation which is not in confirmity of the Accounting Standard AS-15 issued by the Institute of Chartered Accountants of India,

12. Expense in respect of other short-term benefits like Leave Encashment is accounted on Cash Basis which is not in confirmity of the Accounting Standard AS-15 issued by the Institute of Chartered Accountants of India,

13. Related Party Disclosure as required by Accounting Standard AS 18 issued the Institute of Chartered Accountants of India is as under:

14. RELATIONSHIP:

Associate Companies/Firms- Enterprises ownwed by /over which Key Management Personnel are able to exercise significant influences:

B Nanji Construction Pvt. Ltd International Housing Finance Corporation Ltd Siddhi Vinayak Buildcon Pvt. Ltd. B Nanji Finance Ltd Sankira Resorts LLP

Key Management Personnel:

Shri Bhikhubhai Nanjibhai Padsala - Managing Director Shri Sandip Bhikhubhai Padsala - Executive Director Shri Siddarth Bhupendrtabhia Vyas - Chief Financial Officer & Whole Time KMP Shri Fakhruddin Jadaliwal - Company Secretary

15. Balances of Debtors, Creditors, Members Scheme deposit and advances are subject to reconciliation/confirmation and consequential adjustments, if any.

16. Balances of unsecured lenders are subject to reconciliation/confirmation pending settlement with respective lender.

17. In the opinion of the board, current assets, loans and advances are approximately of the value stated if realized in the ordinary course of the business. The provision for all known liabilities is made.

18. The company is operating in single business Real Estate Development s. Therefore the disclosure requirement as required by accounting standard (AS) 17 on "Segment Reporting" is not applicable.

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Mar 31, 2014

1. Term Loan from Bank is secured against Hypothecation of Specific Vehicle purchased.

2. Term Loan from Diwan Housing Finance Corporation Limited is Mortgage of Land and Building of the Project India Colony admeasuring about 1890050.76 Sq. ft. At Sruvey No. 206/1, 206/7, 206/9, 207/8,. 2079-10-11-12-13-14, at Village Vevji, Tal. Talsari, Dist. Thane and Charge of entire receivable of above projects and personal irrevocable guarantee of Shri B N Padsala and Sandeep B Padsala, Directors of the Company.

3. Based on the information available till date the principle amount outstanding of the parties covered under the Micro, Small and Medium Enterprise Development Act, 2006 is Nil (Previous Year Nil).

4. No Provision for VAT Liability on Construction activity prior to the accounting year 2011-12 has been made in the account.As informed Company has not determied the liability for the same.

5. Company has valued the work-in-progress at Umargaon, site at Direct Cost Plus Borrowing cost, for which no direct nexus for deployment of fund borrwed is established, which is not in confirmity with the requirement of various accounting standards i.e. AS-2, AS-7 AS-16 issued by the Institute of Chartered Accoutnants of India. Had the company not included the borrowing cost in valuation of stock, the profit for the year would have been lower by Rs. 468.61 lacs . From the current year, Company has changed the system of valuation of WIP at Bhilad & Kathlal. Last year it has included entire borerowing cost in valation of WIP, however from the current year it has not included the borowing cost in the valuation of WIP of Bhilad & Kathlal to comply with the requirement of As-2 & AS-7 issued by the Institute of CHartered Accountants of India, as result of the same the profit for the year is decreased by Rs. 63-70 lacs.

6. Company has given unsecured interest free loans/ advance to a company under the same management in which Chairman & Managing Director and Executive directors are interested which is not in confirmity of provisions of the Sec. 295 of the Companies Act, 1956 Balance Confirmations

7. Balances of Debtors, Creditors, Members Scheme deposit and advances are subject to reconciliation/confirmation and consequential adjustments, if any.

8. Balances of unsecured lenders are subject to reconciliation/confirmation pending settlement with respective lender.

9. In the opinion of the board, current assets, loans and advances are approximately of the value stated if realized in the ordinary course of the business. The provision for all known liabilities is made.

10. The company is operating in single business Real Estate Developments. Therefore the disclosure requirement as required by accounting standard (AS) 17 on "Segment Reporting" is not applicable.

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Mar 31, 2013

1. No Provision for Undisputed Service Tax and VAT Liability on Construction activity prior to the accounting year 2011-12 has been made in the account. As informed Company has not determined the liability for the same.

2 No Provision for VAT for the year FY 2006-07 as per VAT Assessment order dated 31-03-2011 for Rs.13.22 lacs has been made in the books of accounts.

3 Company has valued the work-in-progress at Umargaon, Bhilad and Kathlal site at Direct Cost Plus Borrowing cost, for which no direct nexus for deployment of fund borrowed is established, which is not in confirmity with the requirement of various accounting standards i.e. AS-2, AS-7 AS-16 issued by the Institute of Chartered Accountants of India. Had the company not included the borrowing cost in valuation of stock, the profit for the year would have been lower by Rs. 444.78 lacs.

4 Up till financial year 31-03-2012 company has availed interest free unsecured loan from directors and hence no interest were paid to the directors. However from current year company has changed the method of accounting and paid interest of Rs. 41.21 lacs to Shri B N Padsala and Rs.75.35 lacs to Shri Sandeep B Padsala. Due to this change in the method, profit for the year is lower by Rs.116.56 lacs.

5 Either to Company was accounting Gratuity on Cash Basis. However from the current year company has made provision for Gratuity payable to eligible employee on estimating basis. No Actual Report for the same has been obtained for the same. Due to this profit for the year is lower by Rs.2.37 lacs.

6. Related Party Disclosure as required by Accounting Standard AS 18 issued the Institute of Chartered Accountants of India is as under:Padsala, that he has made the payment to creditors by Cash in earlier years, for which no confirmation have been received from the respective parties.

7. RELATIONSHIP :

Associate Companies/Firms- Enterprises owned by /over which Key Management Personnel are able to exercise significant influences:

- B Nanji Construction Pvt. Ltd.

- International Housing Finance Corporation Ltd.

- Siddhi Vinayak Buildcon Pvt. Ltd.

- B Nanji Finance Ltd.

- Sankira Resorts Pvt.Ltd.

Key Management Personnel :

- Shri Bhikhubhai Nanjibhai Padsala

- Shri Sandeep Bhikhubhai Padsala Relative to Key Management :

- Smt. Subhadraben Bhikhubhai Padsala

- Smt. Vasantiben Sandeep Padsala

8 Balances of unsecured lenders are subject to reconciliation/confirmation pending settlement with respective lender.

9 In the opinion of the board, current assets, loans and advances are approximately of the value stated if realized in the ordinary course of the business. The provision for all known liabilities is made.

10 The company is operating in single business Real Estate Developments. Therefore the disclosure requirement as required by accounting standard (AS) 17 on "Segment Reporting" is not applicable

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Mar 31, 2012

1.1 Term Loan from Bank is secured against Hypothecation of Specific Vehicle purchased.

1.2 Term Loan from Diwan Housing Finance Corporation Limited is Mortgage of Land and Building of the Project India Colony admeasuring about 1890050.76 Sq. ft. At Sruvey No. 206/1, 206/7, 206/9, 207/8,. 2079-10-11-12-13-14, at Village Vevji, Tal. Talsari, Dist. Thane and Charge of entire receivable of above projects and personal irrevocable guarantee of Shri B N Padsala and Sandeep B Padsala, Directors of the Company.

1. Subsequent to Search Operation, company has received Notices u/s.153 fo the Income Tax, 1961 asking the company to file revised return for the period 2004-05 to 2009-10. Accordingly company has informed the department that original return for the respective assessment year, be consdiered a sreturn filed to notice u/ s.153 fo the Income Tax act, 1961. Subsequently Income tax Department has disallowed claim of deduction u/s. 80 I(B) and have raised the demand for Rs.617.69 lacs. Company has preferred an appeal against he higher authorities against the same. Therefore no provision for the same has been made in the account.

2. Company has received notice from Income Tax Department for re-opening the assessment for the asst year 2002-03 to 2005-06 with a Show Cause Notice why Deduction allowed u/s.80(I)B) should not be withdrawn. Against the company has filed Wirte Petition befor High Court of Gujarat challending the re-opening of the cases. Hon’ble High Court of Gujarat has passed an order in favour of the company deleting the addition u/ s.80(I)(B). However it is not known till that date whether departmebnt has gone into furhter appeal before Higher.Court.

3. Company has passed an entry in the books of account debiting certain creditors to the tune of Rs.70.67 lacs bvy crediting the account of Shri Bhikhubhai N Padsala on the baiss of statement given by Shri B N Padsala, that he has made the payment to creditors by Cash in earlier years, for which no confirmation have been received from the respective parties.

4. No Provision for the Gratuity and Other Retirment benefit payable to the employee of the company, since the same is accounted on cash Basis, which is not in confirmity with Accounting Standard AS-15 issued by the Institute of Chartered Accountants of India.

5. No Provision for Current/ Deferred Taxes, if any have been made in the accounts.

6. No provision has been made for VAT and Service Tax Payable on construction Activity for years prior to accounting year 2011-12. As per the provisions of Maharashtra VAT Act, company has to pay M Vat at the time of Execution of Agreement to Sale. Company collect the M VAT and Service Tax at the time of receipt and makes the payment thereof accordingly.

7. Related Party Disclosure as required by Accounting Standard AS 18 issued the Institute of Chartered Accountants of India is as under :

2.1 RELATIONSHIP :

Assocaue Companies/Firms- Enterprises ownwed by /overwhich Key Management Personnel are able to exercise significant influences :

- B Nanji Power Cable Ltd.

- B Nanji Finance Ltd.

- B Nanji Construction Pvt. Ltd.

- International Housing Finance Corporation Ltd.

- Samal Investment Pvt. Ltd.

- Sankira Resorts Pvt. Ltd.

- N.V. Lifecare Pvt. Ltd.

- Siddhi Vinayak Buildcon Pvt. Ltd.

Key Management Personnel :

- Shri Bhikhubhai Nanjibhai Padsala

- Shri Sandeep Bhikhubhai Padalal

Relative to Key Management :

- Smt. Subhadraben Bhikhubhai Padsala

- Smt. Vasantiben Sandeep Padsala

2.2 Balances of Debtors, Creditors, Members Scheme deposit and advances are subject to reconciliation/confirmation and consequential adjustments, if any.

2.3 Balances of unsecured lenders are subject to reconciliation/confirmation pending settlement with respective lender.

2.4 In the opinion of the board, current assets, loans and advances are approximately of the value stated if realized in the ordinary course of the business. The provision for all known liabilities is made.

2.5 Figures of Previous years are not comparable witht hose of current year as previus year figures are for 9 months i.e. from 1.7.2010 to 31.3.2011. Previous year’s figures are regrouped wherever necessary to make them comparable with thouse of current year.

2.6 The company is operating in single business Real Estate Development s. Therefore the disclosure requirement as required by accounting standard (AS) 17 on “Segment Reporting” is not applicable.

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Mar 31, 2009

1. No provision for Bonus, Gratuity and Leave Encashment payable to employees has been made in the accounts which is not in conformity with As-15 the Accounting Standard Issued by The Institute of Chartered Accountants of India.

2. No provision has been made for the demand raised by the Income Tax Department as per the assessment orders for the AY 2005-06 amounting to Rs. 141.84 lacs.

3. No provision has been made for VAT and Service Tax Payable on construction activity. Amount is not determined.

4. The Company had written off Rs, 180.29 lacs advanced funds to Supreme Conchem Ltd., in the year 1994- 95 and interest was charged on this advance up to 1995-96. Thereafter due to unsuccessful take over on account of non clearance by State Bank of India, entire amount got struck and became unrecoverable and as such no interest has been provided thereafter. All the assets of Supreme Conchem Ltd. have been taken over by State Bank of India under Securitisation Act, and as such the Company do not expect to recover even after perusing legal remedies before High Court of Gujarat. Now company does not hope to recover any amount.

5. No provision has been made for diminution in the value of investment in the shares of Supreme Conchem Ltd. other investments. In view of discontinuation of the business by the said company

6. As legally advised company is eligible for deduction u/s.80IB(10) of the Income Tax Act, 1961, no provision for income tax/deferred tax liability has been made in the accounts.

7 Company has accounted sale /purchase of agricultural and/other land for which no legal documents have been executed. But Documents for purchase of land has been executed in the name of Directors/ associate concerns.

8. As remuneration paid to the directors is within the limit prescribed under Schedule XIII of the Companies Act, 1956. calculation of profit and remuneration payable to Directors u/s 198 read together with 349 of the Companies Act, 1956 is not given.

9) Related party disclosures as required by Accounting Standard 18 issued by The Institute of Chartered Accountants of India is as under:

REELATIONSHIP:

Associate Companies / Firms / Enterprises owned by/ over which Key Management Personel are able to exercise significant influence:

Supreme conchem Ltd. B Nanji Power cable Ltd. B Nanji Finance Ltd B Nanji Construction Ltd . B Nanji Housing Construction Ltd. International Housing Finance Corp. Ltd Samal Investment Pvt. Ltd. Sankira Resorts PvtLtd. Aerospace Technologies Pvt. Ltd. Siddhi Vinayak Buiidcon Pvt.Ltd. Key Management Personal: Bhikhubhai Nanjibhai Padsala Sandeepbhai Bhikhubhai Padsala Relative to Key personal. Shubhdraben B Padsala Vasanti Sandeep Padsala

10) In the opinion of the board of Directors, Current Assets, Loans & Advances are approximately of the value stated in the balance sheet, if realized in ordinary course of business.

11) Balances of Debtors, creditors include scheme deposits from members, secured loan, & advances and unsecured loans and some of the banks are subject to confirmation /reconciliation

12) Figures of previous year have been regrouped wherever necessary.

13) The company is engaged in development of plots of land and construction activities, which is neither a manufacturing company or a trading company therefore the information required by clause 3 & 4 of Part U of Schedule VI of the Company Act, 1956 regarding quantity information are not given.