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Notes to Accounts of Eldeco Housing & Industries Ltd.

Mar 31, 2015

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 and ranks pari passu. The Dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

*The aforesaid disclosure is based upon percentages computed separately for class of shares outstanding as at the balance sheet date. As per records of the company, including its register of shareholders/members and other declaration received from shareholders regarding beneficial interest, the above shareholding represents both legal & beneficial ownership of shares.

2. Nature of Security of Term Loan :

Term Loan from bank are secured by Equitable Mortgage of Commercial Property of Plot No TC/G-10/10 Group Housing Scheme, Vibhuti Khand, Gomti Nagar, Lucknow.

3. Nature of Security of Working Capital Loans :

(i) Residential and Commercial Land with construction of site office and surrounded by boundary wall and gate at Faizullahganj,Mohibullapur Sitapur Road, near Jankipuram flyover, Lucknow bearing khasra no. 58,59,60 & 85 measuring 15141.54 sq. mts. Land having khasra no. 703,704 & 851 ka Haiwat Mau Mawajya, Pargana Bijnor, Ward Ibrahimpur, Raibareilly Road, Lucknow.

(ii) Further Secured by personal guarantee of Shri S.K.Garg (Chairman) & Shri Pankaj Bajaj (Managing Director).

(iii) Further Secured by First Charge on Block Assets of the Company.

(iv) In overdraft account secured against lien on bank Fixed Deposits and personal guarantee of Directors.

*Includes overdraft facility of Rs 46.07 Lacs from City Cooperative Bank Limited, against fixed deposit of Rs 106.29 Lacs. The said Bank has discontinued its operations, however the company has applied for repayment of fixed deposit after adjustment of the balance outstanding in the overdraft account.

* The Company has not received informations from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/ payable under the Act has not been given.

4. Loans and Advances includes payment to parties (including associates) for acquiring land for development of real estate projects, either on collaboration basis or self- development basis, for bulk booking, and for purchase of commercial space.

(Amount in Rupees

5. Contingent Liability As At As At 31st March, 2015 31st March, 2014

(a) Claims against the company not acknowledge as debt

1 Sales Tax & VAT - 5,195,009.00

2 Income Tax 2,335,398.00 2,339,155.00

(b) Guarantees

1 Earnest Money 15,196,991.00 26,535,217.00

2 Bank Guarantee 12,360,250.00 18,860,250.00

6. Determination of revenues in respect of real estate projects under the 'Percentage of Completion Method' necessarily involves making estimates by management for projected revenues, projected profits, and costs to completion and foreseeable loss. These estimates being of a technical nature have been relied upon by auditors.

7. Inventories, loans & advances , trade receivables and other current/non current assets are in the opinion of the management do not have a value on realization in the ordinary course of the business, less than the amount at which they are stated in the Balance Sheet.

8. Balance in trade receivables, trade payables, current / non current advances given / received are subject to reconciliation and confirmation from respective Parties. The balance of said trade receivables, trade payables, current / non current advances given / received are taken as shown by the books of accounts. The ultimate outcome of such reconciliation and confirmation cannot presently be determined; therefore no provision for any liability that may result of such reconciliation and confirmation has been made in the financial statement.

9. The Company has an investment of Rs.42,000.00 (31.03.2014 Rs.42,000.00) in Lucknow Cement Crafts Private Limited (LCC). There are accumulated losses in LCC. The management of the Company is of the opinion that investment in LCC is long term strategic investment therefore; provision for diminution in value of investment is not made.

10. During the year effective from 1st April, 2014, the Company has revised estimated useful life of all of its fixed assets as per the Schedule II of the Companies Act, 2013. Based on current estimates, depreciation of Rs 543143.79 (net of deferred tax asset of Rs. 268281.00) on account of assets whose useful life has already been exhausted as on 01.04.2014, has been adjusted with opening balance of Reserves and Surplus. Had there not been any change in the useful life of the fixed assets, depreciation for the year ended 31.03.2015 would have been lower by Rs.2000180.41.

11. Interest in Joint Venture

The Company entered in to a 67.58:32.42 (being company share is 32.42%) Joint Venture in Eldeco City Private Limited (incorporated in India) with M/s Xander Investment Holding IV Limited (Mauritius) for development of the Real Estate Project in India. For the purposes of Company's share in assets, liabilities, income & expenses, proportionate consolidation method has been adopted. The Company's interest in the Joint Venture is reported as Non Current Investments (Note no. 13) of the Balance Sheet and stated at cost.

12. Segment Information

a. Business Segments

Based on similarity of activities/products, risk and reward structure, organisation structure and internal reporting system, the company has structured its operation into the following segments:

b. Real Estate

Promotion, construction, development and sale of townships, residential, commercial property, developed plot etc. Construction

c. Construction of property on behalf of others.

13. Geographic Segment

Operation of the company do not qualify for reporting as geographic segments, under the criteria set out under Accounting Standard 17 on Segment reporting.

14. RELATED PARTY DISCLOSURES:

Details of disclosure as required by "Accounting standard (AS) - 18 on Related Party Disclosures" are as under:- A. Names of related parties and description of relationship:

1. Associate Company

1 M.A.K.Sales Private Limited*

2 Omni Farms Private Limited

*Ceased to be Associate w.e.f 5th July 2014

2. Entities over which key managerial personnel or their relatives exercises significant influence

1 S.K Garg Constructions Pvt. Ltd

2 Lucknow Cement Crafts Private Limited

3 Eldeco Infrastructure & Properties Limited

4 Surya Season Foods Private Limited

5 Eldeco Townships & Housing Limited

6 K L Multimedia Private Limited

7 Eiffel Recreation Club Private Limited

8 Garg Singhal & Associates prop Jyoti Singhal

9 Space Combine prop Manoj Singhal

3. Wholly Owned Subsidiary Companies

1 Aadesh Constructions Private Limited

2 Garv Constructions Private Limited

3 Mahal Constructions Private Limited

4 Milaap Constructions Private Limited

5 Samarpit Constructions Private Limited

6 Suniyojit Constructions Private Limited

7 Halwasiya Agro Industries Limited

8 M.A.K Sales Private Limited *

9 Sushobhit Constructions Private Limited

10 Primacy Constructions Private Limited

11 Prasiddhi Constructions Private Limited

12 Perpetual Constructions Private Limited

13 Khwahish Constructions Private Limited

14 Fixity Constructions Private Limited

15 Facility Constructions Private Limited

16 Deepjyoti Constructions Private Limited

17 Bliss Constructions Private Limited

18 Shivaye Constructions Pvt Ltd

19 Swarg Constructions Private Limited *Become Subsidiary w.e.f 5th July 2014

4. Other Subsidiary Companies

1 Carnation Realtors Private Limited

2 Iris Realtors Private Limited

3 Neo Realtors Private Limited

4 Neptune Infracon Private Limited

5 Numerous Constructions Pvt Ltd

6 Swarnim Nirman Private Limited

7 Villa Constructions Private Limited

5. Joint Venture Company

1 Eldeco City Private Limited

6. Key Management Personnel

1 Mr Shiv Kumar Garg Executive Chairman

2 Mr Pankaj Bajaj Managing Director

3 Mr. Shrikant Jajodia Director

4 Mr Arvind Bajaj Director

7. Relatives of Key Management Personnel

1 Mrs Asha Bajaj Mother of Mr Pankaj Bajaj

2 Mrs Varija Bajaj Sister ofMr Pankaj Bajaj

3 Mrs Rashi Bajaj Wife of Mr Arvind Bajaj

4 Mr Rajeev Bansal Son in Law ofMr S.K.Garg

5 Mr Manoj Singhal Son in Law of Mr S.K.Garg

6 Mrs Jyoti Singhal Daughter of Mr S.K.Garg

7 Mrs Pushpa Gupta Sister of Mr S.K.Garg

8 Ms Shivani Garg Daughter of Mr S.K.Garg

15. A. Employee Benefit

The details of the Company's post-retirement benefit plans for gratuity for its employees are given below which is certified by the actuary and relied upon by auditors:

B. Leave Encashment

Provision for leave encashment in respect of unavailed leaves standing to the credit of employees is made on accrual basis. The Company does not maintain any fund to pay for leave encashment.

Provision of leave encashment as per actuarial is less than the liability provided in books of accounts, therefore provision for leave encashment has been made on accrual basis.

C. Provident Fund

The Company makes contribution to statutory provident fund in accordance with Employees Provident Fund and Misc. Provision Act, 1952.

This is post employment benefit and is in the nature of defined contribution plan.

16. The Company has regrouped/ reclassified previous year figures where necessary to conform to with current year's classification.

17. All notes number 1-41 forms an integral part of the financial statements.


Mar 31, 2014

(Amount in Rupees)

1-Contingent Liability As At As At 31st March, 2014 31st March, 2013

(a) Claims against the company not acknowledge as debt

1 Sales Tax & VAT 5,195,009.00 3,858,454.00

2 Income Tax 1,792,395.00 2,592,330.00

(b) Guarantees

1 Earnest Money 26,535,217.00 26,828,348.00

2 Bank Guarantee 16,812,104.00 90,420,756.00

2. Determination of revenues in respect of real estate projects under the ''Percentage of Completion method'' necessarily involves making estimates by management for projected revenues, projected profits, and costs to completion and foreseeable loss. These estimates being of a technical nature have been relied upon by auditors.

3. Inventories, loans & advances, trade receivables and other current/non current assets are in the opinion of the management do not have a value on realization in the ordinary course of the business, less than the amount at which they are stated in the Balance Sheet.

4. Balance in trade receivables, trade payables, current / non current advances given / received are subject to reconciliation and confirmation from respective Parties. The balance of said trade receivables, trade payables, current / non current advances given / received are taken as shown by the books of accounts. The ultimate outcome of such reconciliation and confirmation can not presently be determined; therefore no provision for any liability that may result of such reconciliation and confirmation has been made in the financial statement.

5. The Company has an investment of Rs.42,000.00 (31.03.2013 Rs.42,000.00) in Lucknow Cement Crafts Private Limited (LCC). There are accumulated losses in LCC. The management of the Company is of the opinion that investment in LCC is long term strategic investment therefore; provision for diminution in value of investment is not made.

6. Segment Information

Business Segments

Based on similarity of activities/products, risk and reward structure, organisation structure and internal reporting system, the company has structured its operation into the following segments:

Real Estate

Promotion, construction, development and sale of townships, residential, commercial property, developed plot etc

Note: Figures in bracket represents previous year figures Geographic Segment Operation of the company do not qualify for reporting as geographic segments, under the criteria set out under Accounting Standard 17 on Segment reporting.

7. RELATED PARTY DISCLOSURES:

Details of disclosure as required by "Accounting standard (AS) -18 on Related Party Disclosures'''' are as under:- A. Names of related parties and description of relationship: ''

1. Associates

1 M.A.K.Sales Private Limited

2 Omni Farms Private Limited

3 Awadh Technology Park and SEZ Private Limited*

*Ceased to be Associate w.e.f 30th May 2013

2. Entities over which key managerial personnel or their relatives exercises significant influence

1 S.KGarg Constructions Pvt. Ltd

2 Lucknow Cement Crafts Private Limited

3 Ecodel Projects Private Limited

4 Eldeco Infrastructure & Properties Limited

5 Surya Season Foods Private Limited

6 Eldeco Townships & Housing Limited

7 K L Multimedia Private Limited

8 Eiffel Recreation Club Private Limited

9 Garg Singhal & Associates

10 Space Combine

3. Subsidiaries

1 Aadesh Constructions Private Limited

2 Garv Constructions Private Limited

3 Mahal Constructions Private Limited

4 Milaap Constructions Private Limited

5 Samarpit Constructions Private Limited

6 Suniyojit Constructions Private Limited

7 HalwasiyaAgro Industries Limited

8 Prayatna Constructions Private Limited *

9 Sushobhit Constructions Private Limited

10 Primacy Constructions Private Limited

11 Prasiddhi Constructions Private Limited

12 Perpetual Constructions Private Limited

13 Khwahish Constructions Private Limited

14 Fixity Constructions Private Limited

15 Facility Constructions Private Limited

16 Deepjyoti Constructions Private Limited

17 Bliss Constructions Private Limited

18 Carnation Realtors Private Limited

19 Iris Realtors Private Limited

20 Neo Realtors Private Limited

21 Neptune Infracon Private Limited

22 Numerous Constructions Pvt Ltd

23 Shivaye Constructions Pvt Ltd

24 Swarg Constructions Private Limited

25 SwamimNirman Private Limited

26 Villa Constructions Private Limited *Ceased to be Subsidiary w.e. f 9th April 2013

4. Joint Venture Company

1 Eldeco City Private Limited

5. Key Management Personnel

1 Mr Shiv Kumar Garg Executive Chairman

2 MrPankaj Bajaj Managing Director

3 Mr Shrikant Jaj odia * Director

*Ceased to be Whole Time Director w.e.f 1 st October 2013

6. Relatives of Key Management Personnel

1 MrsAshaBajaj Mother of MrPankaj Bajaj

2 Mrs Varija Bajaj Sister of MrPankaj Bajaj

3 MrO.P.Bajaj Father of MrPankaj Bajaj

4 MrArvindBajaj Brother of MrPankaj Bajaj

5 Mrs Rashi Bajaj Wife of Mr Arvind Bajaj

6 Mrs Vimla Garg WifeofMrS.K.Garg

7 Mr Brijendra Gupta SoninLawofMrS.K.Garg

8 MrRajeevBansal SoninLawofMrS.K.Garg

9 MrManoj Singhal SoninLawofMrS.K.Garg

10 MrA.K.Garg Brother of Mr S.K.Garg

11 Mrs Nirmal Garg Sister in law of Mr S.K.Garg

12 Mrs Pushpa Gupta Sister of Mr S.K.Garg

13 Mr Surya Kumar Gupta Brother in Law of Mr S.K.Garg

14 Ms Shivani Garg Daughter of Mr S.K.Garg

8 Employee Benefit

The details of the Company''s post-retirement benefit plans for gratuity for its employees are given below which is certified by the actuary and relied upon by auditors:

A. Gratuity

B. Leave Encashment

Provision for leave encashment in respect of unavailed leaves standing to the credit of employees is made on accrual basis. The Company does not maintain any fund to pay for leave encashment.

Provision of leave encashment as per actuarial is less than the liability provided in books of accounts, therefore provision for leave encashment has been made on accrual basis.

C. Provident Fund

The Company makes contribution to statutory provident fund in accordance with Employees Provident Fund and Misc. Provision Act, 1952.

This is post employment benefit and is in the nature of defined contribution plan.

9. In earlier year the Company was subjected to search under section 132 of the Income Tax Act, 1961. All the assessments for the assessment years 2006-07 to 2012-13 has been completed u/s 153A& 143(3) of the Income Tax Act, 1961. The total demand of Rs. 1577040/- has been raised which is adjusted by the Income Tax Department from the refunds of the Company. The Company has filed necessary appeal before the appropriate authorities in respect of addition made by the Assessing Officer.

10. Interest in Joint Venture

The Company entered in to a 67.58:32.42 (being company share is 32.42%) Joint Venture in Eldeco City Private Limited (incorporated in India) with M/s Xander Investment Holding IV Limited (Mauritius) for development of the Real Estate Project in India. For the purposes of Company''s share in assets, liabilities, income & expenses, proportionate consolidation method has been adopted. The Company''s interest in the Joint Venture is reported as Non Current Investments (Note no. 13) of the Balance Sheet and stated at cost.

The Company''s share of each of the assets, liabilities, income & expenses (each after elimination of, the effect of transactions between the Company and the Joint Venture) related to its interests in this joint venture based on un- audited results are given here under:

11. The Company has regrouped/ reclassified previous year figures where necessary to conform to with current year''s classification.

12. All notes number 1-41 forms an integral part of the financial statements.


Mar 31, 2013

( Amount in Rupees )

1. Contingent Liability As At As At March 31, 2013 March 31, 2012

(a) Claims against the company not acknowledge as debt

1 Sales Tax & VAT 3,858,454.00 1,618,393.00

2 Income Tax 545,760.00 2,591,330.00

(b) Guarantees

1 Earnest Money 26,928,348.00 38,021,852.00

2 Bank Guarantee 90,420,756.00 89,144,250.00

2. Determination of revenues in respect of real estate projects under the ''Percentage of Completion method'' necessarily

involves making estimates by management for projected revenues, projected profits, and costs to completion and foreseeable loss. These estimates being of a technical nature have been relied upon by auditors.

3. Inventories, loans & advances, trade receivables and other current/non current assets are in the opinion of the management do not have a value on realization in the ordinary course of the business, less than the amount at which they are stated in the Balance Sheet.

4. Balance in trade receivables, trade payables, current / non current advances given / received are subject to reconciliation and confirmation from respective Parties. The balance of said trade receivables, trade payables, current / non current advances given / received are taken as shown by the books of accounts. The ultimate outcome of such reconciliation and confirmation can not presently be determined; therefore no provision for any liability that may result of such reconciliation and confirmation has been made in the financial statement.

5. The Company has an investment of Rs.42,000.00 (31.03.2012 Rs.42,000.00) in Lucknow Cement Crafts Private Limited (LCC). There are accumulated losses in LCC. The management of the Company is of the opinion that investment in LCC is long term strategic investment; therefore provision for diminution in value of investment is not made.

6. Segment Information

Business Segments

Based on similarity of activities/products, risk and reward structure, organisation structure and internal reporting system, the company has structured its operation into the following segments:

Real Estate

Promotion, construction, development and sale of townships, residential, commercial property, developed plot etc

Note: Since this is the first year of application of disclosures as required by AS-17, corresponding previous year figures in respect of Segment Reporting has not been given.

Geographic Segment

Operation of the company do not qualify for reporting as geographic segments, under the criteria set out under Accounting Standard 17 on Segment reporting.

7. RELATED PARTY DISCLOSURES:

Details of disclosure as required by "Accounting standard (AS) - 18 on Related Party Disclosures" are as under:-

A. Names of related parties and description of relationship:

1. Associates

1 M.A.K.Sales Private Limited

2 Omni Farms Private Limited

3 Awadh Technology Park and SEZ Private Limited

2. Entities over which key managerial personnel or their relatives exercises significant influence

1 S.K Garg Constructions Pvt. Ltd

2 Lucknow Cement Crafts Private Limited

3 Ecodel Projects Private Limited

4 Eldeco Infrastructure & Properties Limited

5 Surya Season Foods Private Limited

6 Eldeco Townships & Housing Limited

7 S.K.Garg (HUF)

3. Subsidiaries

1 Aadesh Constructions Private Limited

2 Garv Constructions Private Limited

3 Mahal Constructions Private Limited

4 Milaap Constructions Private Limited

5 Samarpit Constructions Private Limited

6 Suniyojit Constructions Private Limited

7 Halwasiya Agro Industries Limited

8 Prayatna Constructions Private Limited

9 Sushobhit Constructions Private Limited

10 Primacy Constructions Private Limited

11 Prasiddhi Constructions Private Limited

12 Perpetual Constructions Private Limited

13 Khwahish Constructions Private Limited

14 Fixity Constructions Private Limited

15 Facility Constructions Private Limited

16 Deepjyoti Constructions Private Limited

17 Bliss Constructions Private Limited

18 Carnation Realtors Private Limited

19 Iris Realtors Private Limited

20 Neo Realtors Private Limited

21 Nepture Infracon Private Limited

22 Numerous Constructions Pvt Ltd

23 Shivaye Constructions Pvt Ltd

24 Swarg Constructions Private Limited

25 Swarnim Nirman Private Limited

26 Villa Constructions Private Limited

4. Joint Venture Company

1 Eldeco City Private Limited

5. Key Management Personnel

1 Mr Shiv Kumar Garg Chairman & Executive Director

2 Mr Pankaj Bajaj Managing Director

3 Mr Shrikant Jajodia Whole Time Director

6. Relatives of Key Management Personnel

1 Mrs Asha Bajaj Mother of Mr Pankaj Bajaj

2 Mrs Varija Bajaj Sister of Mr Pankaj Bajaj

3 Mr O.P.Bajaj Father of Mr Pankaj Bajaj

4 Mr Arvind Bajaj Brother of Mr Pankaj Bajaj

5 Mrs Rashi Bajaj Wife of Mr Arvind Bajaj

6 Mrs Vimla Garg Wife of Mr S.K.Garg

7 Mr Brijendra Gupta Son in Law of Mr S.K.Garg

8 Mr Rajeev Bansal Son in Law of Mr S.K.Garg

9 Mr Manoj Singhal Son in Law of Mr S.K.Garg

10 Mr A.K.Garg Brother of Mr S.K.Garg

11 Mrs Nirmal Garg Sister in law of Mr S.K.Garg

12 Mrs Pushpa Gupta Sister of Mr S.K.Garg

13 Mr Surya Kumar Gupta Brother in Law of Mr S.K.Garg

14 Ms Shivani Garg Daughter of Mr S.K.Garg

8. In earlier year the Company was subjected to search under section 132 of the Income Tax Act, 1961. During the course of search, Income Tax authorities taken custody of certain documents/records and recorded statements of certain officials of the Company. The tax officials are examining the records seized and statements recorded during the course of search. The Company has not received any communication or demand notice from the tax department in connection with the said search. Pending completion of search proceedings, tax liability if any that may arise, on this account, which is presently unascertainable, and will be recognized upon conclusion of search proceedings.

9. Interest in Joint Venture

The Company entered in to a 66.67:33.33 (being company share is 33.33%)Joint Venture in Eldeco City Private Limited (incorporated in India) with M/s Xander Investment Holding IV Limited (Mauritius) for development of the Real Estate Project in India. For the purposes of Company''s share in assets, liabilities, income & expenses, proportionate consolidation method has been adopted. The Company''s interest in the Joint Venture is reported as Non Current Investments (Note no. 13) of the Balance Sheet and stated at cost.

The Company''s share of each of the assets, liabilities, income & expenses (each after elimination of, the effect of transactions between the Company and the Joint Venture) related to its interests in this joint venture based on un-audited results are given here under:

10. The Company has regrouped/ reclassified previous year figures where necessary to conform to with current year''s classification.

11. All notes number 1-41 forms an integral part of the financial statements.


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 and ranks pari passu. The Dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding

#The aforesaid disclosure is based upon percentages computed separately for class of shares outstanding as at the balance sheet date. As per records of the company, including its register of shareholders/members and other declaration received from shareholders regarding beneficial interest, the above shareholding represents both legal & beneficial ownership of shares.

Nature of Security of Working Capital Loans :

(i) Residential and Commercial Land with construction of site office and surrounded by boundary wall and gate at Faizullahganj, Mohibullapur Sitapur Road, near Janakipuram flyover, Lucknow bearing khasra no. 58,59,60,61,& 85 measuring 20500.24 sq. mts.

(ii) Further Secured by personal guarantee of Shri S.K.Garg (Chairman) & Shri Pankaj Bajaj (Managing Director).

(iii) Further Secured by First Charge on Block Assets of the Company (excluding land & building and vehicles)

(iv) In overdraft account secured against lien on bank Fixed Deposits and personal guarantee of Managing Director.

*Includes overdraft facility of Rs 46.07 Lacs from City Cooperative Bank Limited, against fixed deposit of Rs 106.29 Lacs. The said Bank has discontinued its operations, however the company has applied for repayment of fixed deposit after adjustment of the balance outstanding in the overdraft account.

* The Company has not received informations from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/ payable under the Act has not been given.

*Includes deposits of Rs 106.29 Lacs from City Cooperative Bank Limited, against overdraft facility of Rs 46.07 Lacs. The said Bank has discontinued its operations, however the company has applied for repayment of fixed deposit after adjustment of the balance outstanding in the overdraft account.

2.1 Loans and Advances includes payment to parties (including associates) for acquiring land for development of real estate projects, either on collaboration basis or self- development basis, for bulk booking, and for purchase of commercial space

2.2 Particulars in respect of loans and advances to subsidiary companies:

(Amount in Rupees)

3-Contingent Liability

As at March 31, 2012 As at March 31, 2011

(a) Claims against the company not acknowledge as debt

1 Sales Tax & VAT 1,618,393.00 4,621,548.00

2 Income Tax 2,592,330.00 2,045,570.00

(b) Guarantees

1 Earnest Money 38,021,852.00 19,804,679.00

2 Bank Guarantee 89,144,250.00 89,644,250.00

4. Determination of revenues in respect of real estate projects under the 'Percentage of Completion method' necessarily involves making estimates by management for projected revenues, projected profits, and costs to completion and foreseeable loss. These estimates being of a technical nature have been relied upon by auditors.

5. Inventories, loans & advances , trade receivables and other current/non current assets are in the opinion of the management do not have a value on realization in the ordinary course of the business, less than the amount at which they are stated in the Balance Sheet. The classification of assets and liabilities between current and non current have been made based on management perception as to its recoverability/settlement and other criteria as set out in the revised schedule VI to the Companies Act 1956.

6. Balance in trade receivables, trade payables, current/non current advances given/received are subject to reconciliation and confirmation from respective Parties. The balance of said trade receivables, trade payables, current/non current advances given/received are taken as shown by the books of accounts. The ultimate outcome of such reconciliation and confirmation can not presently be determined, therefore no provision for any liability that may result of such reconciliation and confirmation has been made in the financial statement.

7. Segment Information

The Company's business segment is divided into real estate development and Construction Contract respectively. Operations of the Company do not qualify, for reporting as per reportable segment, under the criteria set out under "Accounting Standard (AS)-17 on Segment Reporting".

8. The Company has an investment of Rs.42,000.00 (31.03.2011 Rs.42,000.00) in Lucknow Cement Crafts Private Limited (LCC). There are accumulated losses in LCC. The management of the Company is of the opinion that investment in LCC is long term strategic investment therefore, provision for diminution in value of investment is not made.

9. RELATED PARTY DISCLOSURES:

Details of disclosure as required by "Accounting standard (AS) - 18 on Related Party Disclosures" are as under:-

A. Names of related parties and description of relationship:

1. Associates

1 M.A.K.Sales Private Limited

2 Omni Farms Private Limited

3 Awadh Technology Park and SEZ Private Limited

2. Entities over which key managerial personnel or their relatives exercise significant influence

1 S.K Garg Constructions Pvt. Ltd

2 Lucknow Cement Crafts Private Limited

3 Ecodel Projects Private Limited

4 Eldeco Infrastructure & Properties Limited

5 Surya Season Foods Private Limited

6 Eldeco Townships & Housing Limited

7 S.K.Garg (HUF)

3. Subsidiaries

1 Aadesh Constructions Private Limited

2 Garv Constructions Private Limited

3 Mahal Constructions Private Limited

4 Milaap Constructions Private Limited

5 Samarpit Constructions Private Limited

6 Suniyojit Constructions Private Limited

7 Halwasiya Agro Industries Limited

8 Prayatna Constructions Private Limited

9 Sushobhit Constructions Private Limited

10 Primacy Constructions Private Limited

11 Prasiddhi Constructions Private Limited

12 Perpetual Constructions Private Limited

13 Khwahish Constructions Private Limited

14 Fixity Constructions Private Limited

15 Facility Constructions Private Limited

16 Deepjyoti Constructions Private Limited

17 Conviction Constructions Private Limited*

18 Bliss Constructions Private Limited

19 Carnation Realtors Private Limited

20 Iris Realtors Private Limited

21 Neo Realtors Private Limited

22 Nepture Infracon Private Limited

23 Numerous Constructions Pvt Ltd

24 Shivaye Constructions Pvt Ltd.

25 Swarg Constructions Private Limited

26 Swarnim Nirman Private Limited

27 Villa Constructions Private Limited

*Note: Ceased to be subsidiary w.e.f 24.05.2011

4. Joint Venture Company

1 Eldeco City Private Limited

5 Key Management Personnel

1 Shri Shiv Kumar Garg Executive Chairman

2 Shri Pankaj Bajaj Managing Director

3 Shri Srikant Jajodia Whole Time Director

4 Shri Arvind Bajaj Non Executive Director

6 Relatives of Key Management Personnel

1 Asha Bajaj M/o Shri Pankaj Bajaj, Managing Director

2 Varija Bajaj S/o Shri Pankaj Bajaj, Managing Director

3 O.P.Bajaj F/o Shri Pankaj Bajaj, Managing Director

4 Rashi Bajaj W/o Shri Arvind Bajaj

5 Vimla Garg W/o Shri S.K.Garg

6 Brijendra Gupta Son in Law of Sri S.K.Garg

7 Rajeev Bansal Son in Law of Sri S.K.Garg

8 Manoj Singhal Son in Law of Sri S.K.Garg

9 A.K.Garg Brother of Sri S.K.Garg

10 Nirmal Garg Sister In law of Sri S.K.Garg

11 Pushpa Gupta Sister of Sri S.K.Garg

10 Employee Benefit

The details of the Company's post-retirement benefit plans for gratuity for its employees are given below which is certified by the actuary and relied upon by auditors:

Provision of Gratuity as per books is less than the liability provided by acturial, therefore provision for Gratuity is to be made on acturial basis.

B. Leave Encashment

Provision for leave encashment in respect of unavailed leaves standing to the credit of employees is made on accrual basis. The Company does not maintain any fund to pay for leave encashment.

Provision of leave encashment as per actuarial is less than the liability provided in books of accounts, therefore provision for leave encashment is to be made on accrual basis.

C. Provident Fund

The Company makes contribution to statutory provident fund in accordance with Employees Provident Fund and Misc. Provision Act, 1952.

This is post employment benefit and is in the nature of defined contribution plan.

11. During the year the Company was subjected to search under section 132 of the Income Tax Act, 1961. During the course of search, Income Tax authorities took custody of certain documents/records and recorded statements of certain officials of the Company. The tax officials are examining the records seized and statements recorded during the course of search. The Company has not received any communication or demand notice from the tax department in connection with the said search. Pending completion of search proceedings, tax liability if any, that may arise on this account, which is presently unascertainable, and will be recognized upon conclusion of search proceedings.

12. Interest in Joint Venture

The Company entered in to a 66.67:33.33 (being company share is 33.33%)Joint Venture in Eldeco City Private Limited (incorporated in India) with M/s Xander Investment Holding IV Limited (Mauritius) for development of the Real Estate Project in India. For the purposes of Company's share in assets, liabilities, income & expenses, proportionate consolidation method has been adopted. The Company's interest in the Joint Venture is reported as Non Current Investments (Note no. 12) of the Balance Sheet and stated at cost.

The Company's share of each of the assets, liabilities, income & expenses (each after elimination of, the effect of transactions between the Company and the Joint Venture) related to its interests in this joint venture based on un-audited results are given here under:

13. Till the year ended March 31st, 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 March 31st, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has re-grouped/re- classified previous year figures where necessary to conform with current year's classification.

14. All notes number 1-41 form an integral part of the financial statements.


Mar 31, 2010

1. Previous Years figures have been regrouped or rearranged wherever necessary to make them comparable.

2.Balance in various accounts included in sundry debtors, creditors and loans and advances are subject to confirmation from respective parties.

3. In the opinion of the management and to the best of their knowledge and belief the aggregate value of current assets including stocks, stores and loans and advances on realization in the ordinary course of business, will not be less than the amount at which these are stated in the Balance Sheet.

4. Determination of revenues in respect of real estate projects under the Percentage of Completion method necessarily involves making estimates by management for projected revenues, projected profits, and costs to completion and foreseeable loss. These estimates being of a technical nature have been relied upon by auditors.

5. Loans and Advances includes payment to parties (including associates) for acquiring land for development of real estate projects, either on collaboration basis or self- development basis, for bulk booking, and for purchase of commercial space.

6. Advance recoverable in cash or in kind include advances due from companies in which directors is a director or member.

7. EMPLOYEE BENEFIT

The Details of the Companys post retirement benefit plans for its employees are given below which is certified by the actuary and relied upon by the auditors.

B. Leave Encashment

Provision for leave encashment in respect of unavailed leaves standing to the credit of employees is made on actuarial basis. The Company does not maintain any fund to pay for leave encashment.

C. Provident Fund

The Company makes contribution to statutory provident fund in accordance with Employees Provident Fund and Misc. Provision Act, 1952. This is post employment benefit and is in the nature of defined contribution plan.

8. Principal of consolidation

The financial statements of the following subsidiaries have been consolidated as per the Accounting Standard 21 on Consolidated Financial Statements.

The financial statements of the following Joint Venture Entity have been consolidated as per the Accounting Standard 27 on Financial Reporting of interests in Joint Ventures.

9. Micro, Small Scale Business Entities

The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act has not been given.

10. SEGMENT REPORTING:

The Company has only one segment of real estate development and building construction and accordingly the disclosure requirements as prescribed in the "Accounting Standard (AS)-17 on Segment Reporting" are not applicable.

11 RELATED PARTY DISCLOSURES:

Details of disclosure as required by "Accounting standard (AS) -18 on Related Party Disclosures" are as under:

A. Names of related parties and description of relationship:

1. Associate

M.A.K. Sales Private Limited

2. Entities over which key managerial personnel or their relatives exercises significant influence

S.K Garg Constructions Pvt. Ltd (Previously known as Eldeco Constructions Private Limited)

Lucknow Cement Crafts Private Limited

Ecodel Projects Private Limited

Eldeco Infrastructure & Properties Limited

Surya Season Foods Private Limited

Eldeco Townships & Housing Limited

S.K.Garg (HUF)

3. Key Management Personnel

Shri Shiv Kumar Garg Executive Chairman

Shri Pankaj Bajaj Managing Director

ShriSrikantJajodia Whole Time Director

Shri Arvind Bajaj Non Executive Director

4. Relatives of Key Management Asha Baj aj

Personnel mother of Shri Pankaj Bajaj, Managing Director Varija Bajaj

sister of Shri Pankaj Bajaj, Managing Director O. P. Bajaj Father of Shri Pankaj Bajaj, Managing Director

12 CONTINGENT LIABILITIES:

Current Year Previous Year (31.03.2010) (31.03.2009) (Rs) (Rs.)

(i) Outstanding Bank Guarantees 10,40,35,750 6,72,85,000

(ii) Sales Tax Cases pending with Addl. Commissioner Appeals, Agra

For the F/Y 2004-2005 11,77,958 NIL

F/Y 2005-2006 996,576 NIL

F/Y2006-2007 9,88,184 NIL

(iii) Income Tax Cases pending with CIT(A),AgraforA.Y.2006-07&2007-08 20,45,570 6,96,903

(iv) Earnest Money 2,41,43,034 1,09,56,629



(v) Cases have been filed by some of the buyers for damages, quality differences, etc., which have been disputed by the Company. Pending disposal of these cases, liability, if any, could not be determined and hence provision thereof could not be made.

13. The Company has an investment of Rs.42,000.00 (31.03.2009 Rs.42,000.00) in Lucknow Cement Crafts Private Limited (LCC). There are accumulated losses in LCC. The management of the Company is of the opinion that investment in LCC is long term strategic investment therefore; provision for diminution in value of investment is not made.

14. Interest in Joint Venture

The Company entered into a 33.33:66.67 Joint Venture in Eldeco City Private Limited (incorporated in India) with M/s Xander Investment Holding IV Limited (Mauritius) for development of the Real Estate Project in India. For the purposes of Companys share in assets, liabilities, income & expenses, proportionate consolidation method has been adopted.

15. During the year Eldeco City Private Limited (the said company) become the joint venture entity of the company by virtue of substantial control over the affairs of the said company.

16. Cash and Bank Balances include fixed deposits amounting to Rs.100.00 lacs with City Co-operative Bank Ltd., against which the Company had availed an overdraft facility of Rs.50.00 lacs. The said Bank has discontinued its operations. The Company has however applied for repayment of the Fixed Deposit after adjustment of the balance outstanding in the overdraft account.

17. The schedules referred to in Balance Sheet and Profit & Loss Account form an integral part of the accounts.



 
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