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Notes to Accounts of DS Kulkarni Developers Ltd.

Mar 31, 2015

1. Related party disclosures

A. Names of related parties and related party relationship

1. Related parties where control exists

Subsidiaries 1. DSK Developers Corporation

2. DSK Township Projects Private Ltd.

3. DSK Southern Projects Pvt. Ltd.

Step-down subsidiaries 1. DSK Woods LLC

Key management personnel 1. Mr. D. S. Kulkarni – Managing Director

2. Mr. Shirish Kulkarni – Executive Director

Relatives of key management personnel

1. Mrs. H. D. Kulkarni

2. Mr. Amit Deepak Kulkarni

3. Mrs. Ashwini Sanjay Deshpande

4. Mrs. Bhagyashree Amit Kulkarni

Enterprises owned or significantly influenced by key management personnel or their relatives

1 Ambiance Ventures Estates & Developments Pvt. Ltd.

2 Amit & Company

3 Ascent Promoters & Developers Pvt. Ltd.

4 Chandradeep Promoters & Developers Pvt. Ltd.

5 D. S. Kulkarni Constructions Pvt. Ltd.

6 D.S.Kulkarni & Associates

7 D.S.Kulkarni & Brothers

8 D.S.Kulkarni & Company

9 D.S.Kulkarni & Sons

10 DSK & Asso

11 DSK & Co.

12 DSK Constructions

13 DSK & Sons

14 DSK Digital Technologies Pvt. Ltd.

15 DSK Entertainment LLC

16 DSK Global Education and Research Ltd.

17 DSK Infotech Pvt. Ltd.

18 DSK Milkotronics Pvt. Ltd.

19 DSK Motors Ltd.

20 DSK Mototrucks Pvt. Ltd.

21 DSK Motowheels Pvt. Ltd.

22 DSK Prabhu Granite LLP

23 DSK Sales & Services

24 DSK Shivajians Football Club Pvt. Ltd.

25 DSK Studios Pvt. Ltd.

26 DSK World Education Council

27 DSK Worldman Projects Ltd.

28 Fairyland Promoters & Developers Pvt. Ltd.

29 Forever Solar Projects Pvt. Ltd.

30 Gharkul

31 Greengold Farms & Forests Pvt. Ltd

32 Growrich Agroforestry Pvt. Ltd.

33 Hexagon Capital Advisors Pvt. Ltd.

34 Holyland Agroforestry Pvt. Ltd.

35 Rasa Group

36 Sapphire Promoters & Developers Pvt. Ltd.

37 Shri Saptashrung Oil Mills Pvt. Ltd.

38 Talisman Hospitality Services Pvt. Ltd.

39 Telesmell

40 Tricone Infracon Ltd.

2. Disclosure for assets taken on lease as per AS 19:

The Company has entered into operating lease arrangements for office space at Pune and Mumbai. There are no future minimum lease payments under non-cancellable operating leases as all the lease arrangements are cancellable at the option of lessee. Details of such leases are as follows:


Mar 31, 2013

1. Corporate Information:

D. S. Kulkarni Developers Ltd. is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956 ("the Act"). The Company is engaged in the business of real estate development in India. The Company is not a Small and Medium Sized Company (SMC) as defined in the General Instructions in respect of Accounting Standards notified under the Act, inasmuch as

a) its turnover (excluding other income) did exceed Rs. 50 crores in the immediately preceding accounting year and in the year under review, and

b) it did have borrowings (including public deposits) in excess of Rs. 10 crores at any time during the immediately preceding accounting year and in the year under review

c) its equity shares are listed on the Mumbai & National Stock Exchanges although

d) it is not the holding or subsidiary company of a company which is not a SMC

e) it is not a bank, financial institution or an insurance company.

2. Basis of Preparation of Financial Statements

These financial statements comply in all material respects with the relevant provisions of the Act, the Generally Accepted Accounting Principles in India, and the Accounting Standards issued by the Institute of Chartered Accountants of India which are prescribed in the Companies (Accounting Standards) Rules 2006 notified by the Central Government u/s 211(3C) read with Sections 210A(1) and 642(1)(a) of the said Act. As required by AS 1 issued by the Institute of Chartered Accountants of India, the accounting policies followed in the preparation of these financial statements are disclosed below.

2.2 Fixed Assets

2.2.1 Tangible Fixed Assets: In accordance with AS 10 issued by the Institute of Chartered Accountants of India,

i) Tangible Fixed Assets are stated at cost of acquisition or construction net of accumulated depreciation and accumulated impairment losses, if any.

ii) The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable incidental expenses related to acquisition and installation and other pre-operative expenses of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

iii) Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are changed to the statement of profit and loss for the period during which such expenses are incurred.

iv) From accounting periods commencing on or after 7th December, 2006, the Company adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

v) Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

2.2.2 Depreciation on Tangible Fixed Assets: In accordance with AS 6 issued by the Institute of Chartered Accountants of India,

i) Depreciation on Tangible Fixed Assets is provided as per the straight line method at the rates prescribed in Schedule XIV to the Companies Act, 1956, for the period for which the asset is put to use.

ii) Leasehold land is amortized on a straight line basis over the period of the lease

2.2.3 Intangible Fixed Assets: In accordance with AS 26 issued by the Institute of Chartered Accountants of India,

i) Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in an amalgamation in the nature of purchase is their fair value as at the date of amalgamation. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred.

ii) Intangible assets are amortized on a straight line basis over the estimated useful economic life. The Company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use. If the persuasive evidence exists to the effect that useful life of an intangible asset exceeds ten years, the company amortizes the intangible asset over the best estimate of its useful life.

iii) Such intangible assets and intangible assets not yet available for use are tested for impairment annually, either individually or at the cash-generating unit level. All other intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

iv) The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to reflect the changed pattern. Such changes are accounted for in accordance with AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies.

v) Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

2.2.4 Borrowing Costs: In accordance with Accounting Standard 16 issued by the Institute of Chartered Accountants of India,

i) Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

ii) A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale.

iii) Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as an expense in the period in which those are incurred.

2.2.5 Impairment of tangible and intangible assets: In accordance with AS 28 issued by the Institute of Chartered Accountants of India,

i) The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the company estimates the recoverable amount of the asset. Such recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

ii) The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Company''s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.

iii) Impairment losses of continuing operations, including write-down of inventories, are recognized in the statement of profit and loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognized in the revaluation reserve up to the amount of any previous revaluation.

iv) After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

v) An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the asset''s or cash-generating unit''s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.

2.2.6 Research and development costs: In accordance with AS 26 issued by the Institute of Chartered Accountants of India,

i) Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognized as an intangible asset when the Company can demonstrate all the following:

a) The technical feasibility of completing the intangible asset so that it will be available for use or sale.

b) Its intention to complete the asset.

c) Its ability to use or sell the asset.

d) How the asset will generate future economic benefits.

e) The availability of adequate resources to complete the development and to use or sell the asset.

f) The ability to measure reliably the expenditure attributable to the intangible asset during development.

ii) Following the initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized on a straight line basis over the period of expected future benefit from the related project. Amortization is recognized in the statement of profit and loss. During the period of development, the asset is tested for impairment annually.

2.2.7 Leases: In accordance with Accounting Standard 19, issued by the Institute of Chartered Accountants of India,

A. Where the Company is lessee

i) Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized as finance costs in the statement of profit and loss. Lease management fees, legal charges and other initial direct costs of lease are capitalized.

ii) A leased asset is depreciated on a straight-line basis over the useful life of the asset or the useful life envisaged in Schedule XIV to the Companies Act, 1956, whichever is lower. However, if there is no reasonable certainty that the company will obtain the ownership by the end of the lease term, the capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset, the lease term or the useful life envisaged in Schedule XIV to the Companies Act, 1956.

iii) Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.

B. Where the Company is the lessor

i) Leases in which the Company transfers substantially all the risks and benefits of ownership of the asset are classified as finance leases. Assets given under finance lease are recognized as a receivable at an amount equal to the net investment in the lease. After initial recognition, the company apportions lease rentals between the principal repayment and interest income so as to achieve a constant periodic rate of return on the net investment outstanding in respect of the finance lease. The interest income is recognized in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss.

ii) Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income on an operating lease is recognized in the statement of profit and loss on a straight-line basis over the lease term. Costs, including depreciation, are recognized as an expense in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss.

2.3 Investments: In accordance with AS 13 issued by the Institute of Chartered Accountants of India,

i) Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

ii) On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.

iii) Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

iv) On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

v) An investment in land or buildings, which is not intended to be occupied substantially for use by, or in the operations of, the Company, is classified as investment property. Investment properties are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

vi) The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the investment property to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

vii) Depreciation on building component of investment property is calculated on a straight-line basis using the rate arrived at based on the useful life estimated by the management, or that prescribed under the Schedule XIV to the Companies Act, 1956, whichever is higher.

viii) On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

2.4 Inventories: In accordance with Accounting Standards 2 & 9 issued by the Institute of Chartered Accountants of India,

i) Construction materials, components, stores and spares are valued at the lower of cost and net realizable value (as certified by the management) after providing for the cost of obsolescence. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above its cost of acquisition. Cost of raw materials, components and stores and spares is determined on FIFO basis.

ii) Inventories of work-in-progress are valued, in accordance with the Percentage of Completion Method. Profit on incomplete projects is not recognized unless 20% expenditure has been incurred in respect of the project. Based on projections and estimates by the Company of the expected revenues and costs to completion, provision for losses to completion and/or write off of costs carried to inventories is made on projects where the expected revenues are lower than the estimated costs to completion. In the opinion of the management, the net realisable value of the work in progress as at the balance sheet date will not be lower than the costs so included therein.

iii) Inventories of finished tenements are valued at the carrying value or estimated net realizable value, (as certified by the management) whichever is the less.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

2.5 Revenue Recognition: In accordance with AS 9 issued by the Institute of Chartered Accountants of India, Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company. The following specific recognition criteria must also be met before revenue is recognized.

i) Income from real estate sales is recognized on the transfer of all significant risks and rewards of ownership to the buyer and it is not unreasonable to expect ultimate collection and no significant uncertainty exists regarding the amount of consideration.

ii) However, if, at the time of transfer, substantial acts are yet to be performed, revenue is recognized on proportionate basis as the acts are performed, that is, on the percentage of completion basis. Determination of revenues under the percentage of completion method necessarily involves making estimates by the Company, some of which are of technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project and the foreseeable losses to completion. As the construction projects necessarily extend beyond one year, revision in estimates of costs and revenues during the year under review are reflected in the accounts of the year.

iii) Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The company collects value added taxes (VAT) and service tax on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue.

iv) Revenues from maintenance contracts are recognized pro-rata over the period of the contract as and when services are rendered. The Company collects service tax on behalf of the government and, therefore, it is not an economic benefit flowing to the Company. Hence, it is excluded from revenue.

v) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss.

vi) Dividend income is recognized when the Company''s right to receive dividend is established by the reporting date.

2.6 Expense Recognition: Project-specific revenue Expenses such as development and construction expenses, interest on borrowings attributable to specific projects etc. are included in the valuation of inventories of work-in-progress. Indirect costs are treated as period costs and are charged to the Profit and Loss Account in the year incurred. Expenses incurred on repairs & maintenance of completed projects are charged to Profit and Loss Account.

2.7 Foreign currency transactions and balances: In accordance with AS 11 issued by the Institute of Chartered Accountants of India,

i) Initial recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

ii) Conversion: Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

iii) Exchange differences: From accounting periods commencing on or after 7 December 2006, the Company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

a) Exchange differences arising on a monetary item that, in substance, forms part of the Company''s net investment in a non-integral foreign operation is accumulated in the foreign currency translation reserve until the disposal of the net investment. On the disposal of such net investment, the cumulative amount of the exchange differences which have been deferred and which relate to that investment is recognized as income or as expenses in the same period in which the gain or loss on disposal is recognized.

b) Exchange differences arising on long-term foreign currency monetary items related to acquisition of a fixed asset are capitalized and depreciated over the remaining useful life of the asset in accordance with the Ministry of Corporate Affairs Notification dated 31st March, 2009. For this purpose, the Company treats a foreign monetary item as "long- term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination.

c) Exchange differences arising on other long-term foreign currency monetary items are accumulated in the "Foreign Currency Monetary Item Translation Difference Account" and amortized over the remaining life of the concerned monetary item.

d) All other exchange differences are recognized as income or as expenses in the period in which they arise.

iv) Translation of integral and non-integral foreign operation: The Company classifies all its foreign operations as either "integral foreign operations" or "non-integral foreign operations." The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Company itself. The assets and liabilities of a non-integral foreign operation are translated into the reporting currency at the exchange rate prevailing at the reporting date and their statement of profit and loss are translated at annual average exchange rates. The exchange differences arising on translation are accumulated in the foreign currency translation reserve. On disposal of a non-integral foreign operation, the accumulated foreign currency translation reserve relating to that foreign operation is recognized in the statement of profit and loss. When there is a change in the classification of a foreign operation, the translation procedures applicable to the revised classification are applied from the date of the change in the classification.

2.8 Retirement and other employee benefits: In accordance with Accounting Standard 15 issued by the Institute of Chartered Accountants of India,

i) Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to the provident fund are charged to the statement of profit and loss for the year when the contributions are due. The Company has no obligation, other than the contribution payable to the provident fund.

ii) The Company operates one defined benefit plan for its employees, viz., gratuity. The cost of providing benefits under this plan are determined on the basis of actuarial valuation at each year- end using the projected unit credit method. The Company has obtained a policy from the Life Insurance Corporation of India in respect of the gratuity obligation and the annual contribution paid by the Company to LIC is charged to the profit and loss statement. The actuarial gains and losses for the defined benefit plan are not recognized in the period in which they occur in the statement of profit and loss.

2.9 Tax Expense: In accordance with Accounting Standard 22 issued by the Institute of Chartered Accountants of India,

i) Tax expense comprises current and deferred tax.

ii) Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

iii) Deferred tax assets and liabilities are recognized for future tax consequences attributable to the timing differences between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using tax rates enacted or substantively enacted as at the balance sheet date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

iv) Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

v) In the situations where the Company is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of timing differences which reverse during the tax holiday period, to the extent the Company''s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of timing differences which reverse after the tax holiday period is recognized in the year in which the timing differences originate. However, the company restricts recognition of deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the timing differences which originate first are considered to reverse first.

vi) At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

vii) The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available

viii) Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

ix) Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available for a particular assessment year as an asset only after the assessment for that year is complete and such credit is finally quantified and only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income- tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement" under the head "Current Assets". The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down its carrying amount to the extent such credit is set-off u/s 115JAA or to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

2.10 Consolidated Financial Statements: In accordance with AS 21 and AS 27 issued by the Institute of Chartered Accountants of India, separate consolidated financial statements of the Company and its Subsidiaries have been prepared by combining on a line-to-line basis by adding together the book values of like items of assets, liabilities, incomes and expenses after fully eliminating intra-group balances, intra-group transactions and unrealised profits and losses.

2.11 Earnings Per Share: In accordance with Accounting Standard 20, issued by the Institute of Chartered Accountants of India.

i) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

ii) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

2.12 Provisions: In accordance with Accounting Standard 29 issued by the Institute of Chartered Accountants of India,

i) A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

ii) Warranty provisions: Provisions for warranty-related costs are recognized when the product is sold or service provided. Provision is based on historical experience. The estimate of such warranty-related costs is revised annually.

2.13 Contingent Liabilities and Contingent Assets: In accordance with Accounting Standard 29 issued by the Institute of Chartered Accountants of India,

i) A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

ii) Contingent assets are not recognized.

2.14 Measurement of EBITDA

i) As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The Company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.

2.15 Accounting Standards not applicable to the Company during the year under review:

i) Construction Contracts: AS 7 is not applicable since the Company is not engaged in execution of construction contracts.

ii) Accounting for Government Grants: AS 12 is not applicable since the Company has not received any Government Grants.

iii) Accounting for Amalgamations: AS 14 is not applicable since the Company has not so far entered into any amalgamation.

iv) Segment reporting: AS 17 is not applicable since the Company operates only in one segment, to wit, real estate development.

v) Accounting for Investments in Associates in Consolidated Financial statements: AS 23 is not applicable since the Company is not required to consolidate its financial statements.

vi) Discontinuing Operations: AS 24 is not applicable since the Company has not so far discontinued operations.

vii) Interim Financial Reporting: AS 25 is not applicable to the financial statements under review.

viii) Financial Reporting of Interests in Joint Ventures: AS 27 is not applicable since the Company has no joint ventures.

3. Related party disclosures

A. Names of related parties and related party relationship

1. Related parties where control exists

Subsidiaries 1 DSK Developers Corporation

2 DSK Township Projects Private Ltd. (Formerly known as DSK SEZ Projects (Pune) Private Ltd.)

3 DSK Southern Projects Pvt. Ltd.

Step-down subsidiaries 1 DSK Woods LLC

Key management personnel 1 Mr. D. S. Kulkarni – Managing Director

2 Mr. S. D. Kulkarni – Executive Director

Relatives of key management personnel 1 Mrs. Hemanti D. Kulkarni Enterprises owned or significantly influenced by key management personnel or their relatives

1 Ambiance Ventures Estates & Developments Pvt. Ltd.

2 Amit & Company

3 Ascent Promoters & Developers Private Limited

4 Crystal Promoters & Developers Private Limited

5 Chandradeep Promoters & Developers Private Limited

6 D.S. Kulkarni & Associates

7 D.S. Kulkarni & Company

8 D. S. Kulkarni Constructions Pvt. Ltd.

9 DSK Digital Technologies Private Limited

10 DSK Global Education and Research Pvt. Ltd.

11 DSK Infotech Private Limited

12 DSK Milkotronics Private Limited

13 DSK Motors Limited

14 DSK Mototrucks Private Limited

15 DSK Motowheels Private Limited

16 DSK Prabhu Granite LLP

17 DSK Sales & Services

18 DSK Tricone Infrastructure and Construction Ltd.

19 DSK Worldman Projects Pvt. Ltd. (Formerly known as DSK Worldman Computers Pvt. Ltd.)

20 Fairyland Promoters & Developers Private Limited

21 Gharkul

22 Greengold Farms & Forests Pvt. Ltd.

23 Growrich Agroforestry Private Limited

24 Hexagon Capital Services Private Limited

25 Holyland Agroforestry Private Limited

26 Mangesh Agencies

27 Mangesh Enterprises

28 Mangesh Sales Corporation

29 Sapphire Promoters & Developers Private Limited

30 Shri Saptashrungi Oil Mills Pvt. Ltd.

31 Telesmell

4. Investments in subsidiaries: In the opinion of the management, no loss is expected to arise in respect of investments in subsidiaries for which an additional provision is required.

5. Amounts due to Investor Education & Protection Fund: As at the balance sheet date, there are no amounts due and outstanding to this Fund.


Mar 31, 2012

Notes to the Balance Sheet as at 31-Mar-12 31-Mar-12 31-Mar-11 31-Mar-11 Rs. Rs. Rs. Rs.

1. Contingent Liabilities not provided for:

1) Guarantee in respect of secured loans 1,000,000,000 1,088,400,000 obtained by subsidiary

Balance of secured loans as at end of year 1,022,394,000 1,012,427,000

2) Tax Matters under appeal" 42,513,000 44,663,000

3) Cases filed against the Company 72,015,000 72,106,000

4) Bills discounted by the Company's suppliers - 50,000,000

Balance as at end of year - 49,790,000

Total at the end of the reporting period 1,136,922,000 1,178,986,000

** Income tax demands comprise demand from the Indian tax authorities for payment of additional tax upon completion of their tax review for the financial years 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10. The tax demands are mainly on account of disallowance of a portion of the tax holiday claimed by the Company under the Income-tax Act. The matter is pending before the Commissioner of Income tax (Appeals)/income Tax Appellate Tribunal. The Company is contesting the demands and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company's financial position and results of operations.

2. Investments in subsidiaries: In the opinion of the management, no loss is expected to arise in respect of investments in subsidiaries for which an additional provision is required

3. Amounts due to Investor Education & Protection Fund: As at the balance sheet date, there are no amounts due and outstanding to this Fund


Mar 31, 2011

1 Security for Term Loans from Banks / Institutions / Others :

1.1 All the Term Loans / Corporate Loans for construction projects are secured by equitable / registered mortgage of specific immovable properties and are also secured by a hypothecation charge on the Company's movables at the respective sites

1.2 The term loans for acquisition of vehicles are secured by hypothecation of the respective vehicles.

1.3 The charges securing the term loans obtained from Bank of Maharashtra, Central Bank of India, Indian Overseas Bank and Kalyan Janata Sahakari Bank include a collateral pari passu charge on a specific immovable property.

1.4 Repayment of all the term loans and payment of interest thereon is personally guaranteed by the Company's Chairman & Managing Director and in certain cases, other specified individuals.

1.5 The cash credit limit from Bank of Maharashtra is secured by personal guarantee of the Company's Chairman & Managing Director and other specified individuals. The said limit is also collaterally secured by mortgage of some immoveable properties.

1.6 The Promoters have pledged 63,05,210 (P.Y. 38,75,805) equity shares held by them in order to secure loans advanced to Company by certain lenders for the purposes of the Company's business

4 Investments in Subsidiary: In the opinion of the management, no loss is expected to arise in respect of investments for which an additional provision is required

5 Current assets, loans and advances: In the opinion of the management the current assets, loans and advances are stated at the value which will be realized if they are sold in the ordinary course of the Company's business.

8 Amounts due to Investor Education & Protection Fund: As at the balance sheet date, there are no amounts due and outstanding to this Fund.

9 Contingent Liabilities not provided for: Rs. Lacs

2010-11 2009-10

a) Claims against the Company not acknowledged as debts - -

b) Guarantees - -

c) Guarantee is respect of secured loans obtained by subsidiary 10,884.00 10,884.00

Balance of secured loans as at 31/03/2011 10,124.47 8,510.06

d) Tax Matters under appeal 958.27 748.83

e) Cases filed against the Company 721.06 796.64

Estimated amount of contracts remaining to be f) executed on capital account - -

g) Bills discounted by the Company's suppliers 500.00 500.00

Balance on 31/03/2011 497.90 497.96

13,063.33 12,929.47

19 Disclosure for assets taken on lease as per AS 19:

The Company has entered into operating lease arrangements for office space at Pune, Mumbai, Chennai and Bangalore.There are no future minimum lease payments under non-cancellable operating leases as all the lease arrangements are cancellable at the option of lessee.

ii) General description of the lessee's significant leasing arrangements:

Certain lease arrangements provide a clause for price escalation.

20 Disclosure for assets given on lease as per AS 19:

The company has given its land on operating lease to its subsidiary, DSK Global Education & Research Pvt Ltd for a period of 99 years.

21 The company has not so far entered into any finance lease as at the balance sheet date.

22 Related Party Disclosures:

(I) The Company has identified following related parties:

A Subsidiaries:

(i) DSK Developers Corporation

(ii) DSK Woods LLC

(iii) DSK SEZ Projects (Pune) Private Ltd.

(iv) DSK Global Education and Research Pvt. Ltd.

(v) DSK Southern Projects Pvt. Ltd.

B Jointly Controlled Entities

i) DSK Tricone Infrastructure and Construction Ltd.

C Key Management Personnel

(i) Mr. D. S. Kulkarni Managing Director

(ii) Mrs. J. D. Kulkarni Whole-time Director

(iii) Mr. S. D. Kulkarni Executive Director

D Relatives of Key Management Personnel having control or significant control over the Company by reason of voting power.

None

E Companies / Other Organisations under the control of KMP / relatives where transactions are entered into and / or outstanding balance exists as at the Balance sheet date:

(i) Amit & Company

(ii) Calcutta Boarding House

(iii) D. S. Kulkarni Constructions Pvt. Ltd.

(iv) DSK Developers Corporation

(v) DSK Digital Technologies Private Limited

(vi) DSK Global Education & Research Pvt Ltd

(vii) DSK Infotech Private Limited

(viii) DSK Motors Limited

(ix) DSK Sales & Services

(x) DSK SEZ Project ( Pune ) Pvt Ltd

(xi) DSK Southern Projects Pvt. Ltd.

(xii) DSK Tricone Infrastructure and Construction Ltd.

(xiii) DSK Worldman Computers Private Limited

(xiv) Hexagon Capital Services Private Limited

(xv) Mangesh Agencies

(xvi) Sanjeevani Developers

(xvii) Shri Saptashrungi Oil Mills Pvt. Ltd.

F Companies / Other Organisations under the control of KMP / relatives where no transactions are entered into and / or no outstanding balance exists as at the Balance sheet date.

(i) Ambiance Ventures Estates & Development Pvt. Ltd.

(ii) Ascent Promoters & Developers Private Limited

(iii) DSK Woods LLC

(iv) Gharkul

(v) Greengold Farms & Forests Pvt. Ltd

(vi) Growrich Agroforestry Private Limited

(vii) Holyland Agroforestry Private Limited

(viii) Sapphire Promoters & Developers Private Limited

(ix) Telesmell

 
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