Notes to Accounts of Garnet Construction Ltd.

Mar 31, 2015

1. SHARE CAPITAL

a. Terms/rights attached to equity shares

The Company has only one class of Equity Share having value of Rs. 10 each with an entitlement of one vote per share.

In the event of company declares and pays dividends in Indian rupees, the dividend proposed by the Board of Directors are subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts, the distribution will be in proportion to the number of equity shares held by the shareholders.

2. Borrowings

a SICOM Limited - Rs. 5 Gores

Secured by way of first charge on piece or parcel of land admeasuring 25340 square metres located at Village Honad, Taluka Raigad and 1,43,930 square metres located at Village Isambe, Taluka Khalapur. The rate of interest is Medium Term Reference Rate 2% p.a.

b SICOM Limited Rs. 9.995 Gores

Secured by way of hypothecation of receivables from the project - Magic Hills covering the entire loan amount The rate of interest is Medium Term Reference Rate 2% p.a.

c United Bank of India - Rs. 4.5 Gores

Secured by way of registered mortgage of 11 residential bun glows located at Magic Hills bearing plot no. 13,14,15,16 & 17 (part), Ambivali, Khalapur. The rate of interest is Base Rate 1.50% p.a.

d Union Bank of India - Rs. 1445 Gores

Secured by way of first charge on piece or parcel of land admeasuring 1,206,856 square feet located at Village Honad, Taluka Khalapur and hypothecation and escrow of the lease rent receivable. The rate of interest is Base Rate 3.25% p.a.

e India Infoline Finance Limited Rs. 1.52 Gores

Secured against premises situated at Laxmi Industrial Estate. The floating rate of interest is 16.50% p.a.

f Religare Finvest Limited -Rs. 13 Gores

Secured against registered mortgage of entire project of Garnet Paladium, Malad k Gross Proeject Receivables. The rate of interest is 18.00% p.a.

g Religare Finvest Limited Rs. 6 Gores

Secured against registered mortgage of project Magic Enclave, Taluka Khalapur k Gross Proeject Receivables. The rate of interest is 18.00% p.a.

h Kotak Mahindra Bank Ltd. -0.75 Gores

Secured by way of first charge on automobiles. The rate of interest is 18.00% p.a.

3. Contingent liabilities and commitments (to the extent not provided for)

Particulars As at As at 31st March, 31st March, 2015 Rs. 2014 Rs.

Commitments Advance against Property 7,22,88,404 8,15,52,104

Total 7,22,88,404 8,15,52,104

4. Related Party Disclosure

List of Related Parties only with whom transactions are executed.

a) Key Management Personnel/Relative of Managerial Person

Kishan Kumar Kedia Chairman & Managing Director

Arun Kumar Kedia Marketing director

Sanjay Kumar Kedia Finance Director

Kusumdevi Kedia Relative of director

b) Subsidiary Company

Callista Realty Limited Subsidiary Company

c) Associate Concern

S.K.Investment

J.S.Realty Private Limited

Neelkant Industrial Estate

Panchsheel Industrial Estate Associate Concern

Aditya Industrial Estate

Panchdeep Industrial Estate

Kedia Industrial Development Corporation

5. The Company's normal operating cycle in respect of operations relating to under construction real estate projects may vary from project to project depending upon the size of the project, type of development, project complexities and related approvals. Operating cycle for all completed projects and other business is based on 12 months period. Assets and Liabilities have been classified into current and non-current based on the operating cycle of respective businesses.

6. The Company operates in Single Segment i.e. Real Estate Real Estate Development and therefore Segment Reporting as per AS-17' Segment Reporting is not applicable.

7. No provisions are made for liability of gratuity and leave encashment which are treated on cash basis in the accounts and amount for which is unascertained.

8. a. In the opinion of the management, any of the assets other than fixed assets and non- current investments have a value on realisation in the ordinary course of business atleast equal to the amount at which these are stated.

The accounts of certain Trade Receivables, Trade Payables, Loans and Advances and banks are, however, subject to confirmations or

b. reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year's financial statements on such reconciliation/ adjustments.

9. Previous year's figures have been regrouped / rearranged wherever necessary to conform to current year's classification.

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Mar 31, 2014

1A Trade Receivables include doubtful debts of Rs. 55,05,971 (Previous year Rs. 63,88,103) for which no provision has been made as the management is hopeful to recover the same

2 Borrowings

a SICOM Limited - Rs. 14 Crores

Secured by way of first charge on piece or parcel of land admeasuring 106,907.68 square metres located at Village Honad and 33,913.60 square metres located at Village Isambe, Taluka Khalapur and hypothecation and escrow of the lease rent receivable. The rate of interest is Medium Term Reference Rate 2% p.a.

b SICOM Limited - Rs. 20 Crores

Secured by way of first charge on piece or parcel of land admeasuring 53 acres located at Village Honad and 39 acres located at Village Isambe, Taluka Khalapur and hypothecation and escrow of identified cash flows of receivable of Project Magic Hills. The rate of interest is Medium Term Reference Rate 2% p.a.

c SICOM Limited - Rs. 15 Crores

Secured by way of first charge on piece or parcel of land admeasuring 53 acres located at Village Honad and 39 acres located at Village Isambe, Taluka Khalapur and hypothecation and escrow of identified cash flows of receivable of Project Magic Hills. The rate of interest is Medium Term Reference Rate 2% p.a.

d Union Bank of India - Rs. 14.45 Crores

Secured by way of first charge on piece or parcel of land admeasuring 1,206,856 square feet located at Village Honad, Taluka Khalapur and hypothecation and escrow of the lease rent receivable. The rate of interest isBase Rate 3.25% p.a.

e India Infoline Finance Limited - Rs. 3.5 Crores

Secured against premises situated at Laxmi Industrial Estate. The rate of interest is 18% p.a.

f Allahabad Bank (Overdraft Facility) - Rs. 5 Crores

Secured against plot at Village Dindoshi, Goregaon East and irrecoverable joint and several personal guarantees of two directors. The rate of interest is BPLR 1.5% p.a.

g United Bank of India (Overdraft Facility) - Rs. 3.25 Crores

Secured against premises situated at 11-B Lothse, Juhu. The rate of interest is Base Rate 5.5% p.a.

h Loans repayable on demand

The Company has taken a loan amounting to Rs. Nil (Previous Year Rs. 257,316) @ 15% from a director which are repayable on

3 Contingent liabilities and commitments (to the extent not provided for)

Particulars As at As at 31st March, 2014 31st March, Rs. Rs.

Commitments Estimate amount of contract to be - 3,237,109 executed - Capital WIP

Advance against Property 81,552,104 84,833,405

Total 81,552,104 8,070,514

4 The Company''s normal operating cycle in respect of operations relating to under construction real estate projects may vary from project to project depending upon the size of the project, type of development, project complexities and related approvals. Operating cycle for all completed projects and other business is based on 12 months period. Assets and Liabilities have been classified into current and non- current based on the operating cycle of respective businesses.

5 The Company operates in Single Segment i.e. Real Estate Real Estate Development and therefore Segment Reporting as per AS-17 '' Segment Reporting'' is not applicable.

During the previous financial year due to unfavorable conditions, some of the parties to whom sales had been affected have failed to meet

6 their commitment. Therefore during the previous financial year certain sales agreement effected in 2008-09 & earlier year''s stands cancelled and sales return and reversal of profit thereon has been effected during the previous financial year.

7 No provisions are made for liability of gratuity and leave encashment which are treated on cash basis in the accounts and amount for which is unascertained.

8 Service tax payable on account of Notification No. 36/2010-ST dated 28/06/2010 valid w.e.f 01/07/2010 is collectable from customer who have purchased bunglow/office premises. Such amount payable is provided which will be discharged by the company under the Service Tax Voluntary Compliance Encouragement Scheme,2013 notified on 13/05/2013

9 VAT payable on account of sale of property applicable since 01/04/2010 on all sales enters into on or after the said date has been provided and paid to the authorities. The said amount would be recovered from the customers as and when the amount is recovered from the customer and final possession is handed over as per the relevant clause in the agreements with customers.

10 a.In the opinion of the management, any of the assets other than fixed assets and non- current investments have a value on realisation in the ordinary course of business atleast equal to the amount at which these are stated.

The accounts of certain Trade Receivables, Trade Payables, Loans and Advances and banks are, however, subject to confirmations or

b. reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year''s financial statements on such reconciliation/adjustments.

11 Previous year''s figures have been regrouped / rearranged wherever necessary to conform to current year''s classification.

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Mar 31, 2013

1 Borrowings

a SICOM Limited - Rs. 14 Crores

Secured by way of first charge on piece or parcel of land admeasuring 106,907.68 square metres located at Village Honad and 33,913.60 square metres located at Village lsambe, Taluka Khalapur and hypothecation and escrow of the lease rent receivable. The rate of interest is Medium Term Reference Rate 2% p.a.

b SICOM Limited-Rs. 25 Crores

Secured by way of first charge on piece or parcel of land admeasuring 53 acres located at Village Honad and 39 acres located at Village lsambe, Taluka Khalapur, hypothecation and escrow of identified cash flows of receivable of Project Magic Hills and irrecoverable joint and several personal guarantees of three directors. The rate of interest is Medium Term Reference Rate 2.75%p.a.

c SICOM Limited-Rs. 20 Crores

Secured by way of first charge on piece or parcel of land admeasuring 53 acres located at Village Honad and 39 acres located at Village lsambe, Taluka Khalapur and hypothecation and escrow of identified cash flows of receivable of Project Magic Hills. The rate of interest is Medium Term Reference Rate 2%p.a.

d India Info line Finance Limited - Rs. 3.5 Crores

Secured against premises situated at Laxmi Industrial Estate. The rate of interest is 18%p.a.

e Allahabad Bank (Overdraft Facility) - Rs. 5 Crores

Secured against plot at Village Dindoshi, Goregaon East and irrecoverable joint and several personal guarantees of two directors. The rate of interest is BPLR 1.5%p.a.

f United Bank of India (Overdraft Facility) - Rs. 3.25 Crores

Secured against premises situated at 11 -B Lothse, Juhu. The rate of interest is Base Rate 5.5% p.a.

g Loans repayable on demand

The Company has taken a loan amounting to Rs. Nil (Previous Year Rs. 257,316) @ 15% from a director which are repayable on demand.

2 Contingent liabilities and commitments (to the extent not provided for)

Particulars As at As at 31st March, 2013 31st March, 2012 Rs. Rs.

Commitments

Estimate amount of contract to be executed

- Capital WIP 32,37,109 -

Advance against Property 8,48,33,405 3,31,67,295

Total! ..... 9,13,07,6231 3,31,67,295

Note: Related parties are identified by the company & relied upon by the auditor.

3. The Company''s normal operating cycle in respect of operations relating to under construction real estate projects may vary from project to project depending upon the size of the project, type of development, project complexities and related approvals. Operating cycle for all completed projects and other business is based on 12 months period. Assets and Liabilities have been classified into current and non-current based on the operating cycle of respective businesses.

4 The Company operates in Single Segment i.e. Real Estate /Real Estate Development and therefore, Segment Reporting as per AS-17 ''Segment Reporting'' is not applicable

5 During the previous financial year due to unfavorable conditions, some of the parties to whom sales has been affected have failed to meet their commitment Therefore during the previous financial year certain sales agreement effected in 2008-09 & earlier year''s stands cancelled and sales return and reversal of profit thereon has been effected during the previous financial year.

6 No provisions are made for liability of gratuity and leave encashment which are treated on cash basis in the accounts and amount for which is unascertained.

7 Service tax payable on account of Notification No. 36/2010-ST dated 28/06/2010 valid w.e.f. 01/07/2010 is collectable from customer who have purchased bun glow/office premises. Such amount payable is provided which will be discharged by the company under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 notified on 13/05/2013

8 VAT payable on account of sales of property applicable since 01 /04/2010 on all sales enters into on or after the said date has been provided and paid to the authorities. The said amount would be recovered from the customers as and when the amount is recovered from the customer and final possession is handed over as per the relevant clause in the agreements with customers.

a) In the opinion of the management any of the assets other than fixed assets and non-current investment have a value on realization in the ordinary course of business at least equal to the amount at which these are stated.

b) The accounts of certain Trade Receivables. Trade Payables, Loans and Advances and banks are, however, subject to confirmations or reconciliations and consequent adjustments, if any The management does not expect any material difference affecting the current years financial statements on such reconciliation/adjustments

9 Previous year''s figures have been regrouped / rearranged wherever necessary to conform to current year''s classification.

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Mar 31, 2012

1 No provisions are made for liability of gratuity and leave encashment which are treated on cash basis in the accounts and amount for which is unascertained.

2 Service tax payable on account of Notification No. 36/2010-ST dated 28-6-2010 valid w.e.f 01/07/2010 is neither provided nor paid by the assessee since as per the relevant clause in the agreements with customers, the same would be recovered from the customers & paid to the authorities as and when the amount is recovered from the customer and final possession is handed over.

3 VAT payable on account of sale of Property applicable since 01/04/2010 on all sale agreements entered as on or after 01/04/2010 is neither provided for nor paid by the assessee as per the relevant clause in the agreements with customers, the same would be recovered from the customers & paid to the authorities as and when the amount is recovered from the customer and final possession Is handed over

4 Segment information under Accounting Standard-17 Segment Reporting is not applicable to the Company having only one segment of Properties Development.

5 Debtors Creditors and loans & advances are subject to confirmation and reconciliation. All the debtors are unsecured and considered good except those as notified in Note 14A.

Pursuing to Accounting Standard-22 issued by the Institute of Chartered Accountants of India, current tax is determined at the amount of tax payable in respect of estimated taxable income forthe year.

Deferred tax resulting from 'Timing Difference' between book profit and taxable profit for the year is accounted for, using the tax rates and laws that have been enacted as on the balance sheet date. During the year company has not recognized the deferred tax Assets following prudence concept.

6 Expenditure in Foreign Currency

Rs. 2,36,977/- (P.Y. 1,83,572/-) towards on Foreign Travel Expenses.

7 Contingent Liability

Capital Commitment yet to be executed amounting to Rs. 3,31,67,295/-(P.Y. Rs. 1,95,68,545/-)

8 Figures have been regrouped or rearranged wherever necessary forthe comparison purposes.

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Mar 31, 2010

1. No provisions are made for liability of gratuity and leave encashment which are treated on cash basis in the accounts and amount for which is unascertained.

2. cihaThe Car Loan from the HDFC Bank, ICICI Bank & Kotak Mahindra Bank Ltd is secured by the first

(ii) Term loan taken from Reliance Capital Ltd -1 is secured against mortgage of immovable properties of the company and personally guaranteed by theDirectors.

And Term loan taken from Reliance Capital Ltd - II is secured against Mortgage of Property owned by director and Personal guarantee by the director.

(iii) Secured against mortgage of Goregaon (Dindoshi) Property and personal guarantee of two of the directors.

3. During the year under review and as per the information and explanation provided by the management, the Company has Converted all the share warrants into 60,00,000 equity shares at a premium of Rs.68.

4. Segment information under Accounting Standard -17 segment reporting is not applicable to the company as the company having only one segment of Properties Development.

5. Sundry debtors include doubtful debts of Rs 11686634/-for which no provision has been made as the management is hopeful to recover the same.

6. Deferred Tax Liabilities pursuant to AS 22 is calculated as under

7. Debtors, Creditors and Loans & Advances are subject to Confirmation and reconciliation. All the Debtors are unsecured and considered good.

8. Expenditure in Foreign Currency: The Company has incurred an expenditure of Rs.47,266/- (P.Y,Rs3,44,443/-)towards Travelling & Lodging & Boarding Expenses on Foreign

9. Contingency Liabilities not provided- Income Tax demand 14,75,445 being disputed hence not provided. Company has given advance against the property to be purchased and further amount payable to the suppliers on completion of projects is Rs.31 12Crore. Companys banker has charged Rs. 33,666/- as charges for overdraft & Cheque bouncing charges which are disputed hence not provided.

10. Balance Sheet Abstract and Companys General Business Profile as required in terms of Part IV of Schedule VI of the Companies Act,1956 is attached here with.

11. Figures has been regrouped or rearranged wherever necessary for the compar is on purposes.