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Notes to Accounts of Mahindra Lifespace Developers Ltd.

Mar 31, 2017

1. Fair value disclosure on Company’s investment properties

The Company’s investment properties consist of two commercial properties in India, Mahindra Towers at Gurgaon and GE Plaza at Pune. Management determined that the investment properties consist of two classes of assets - office and retail - based on the nature, characteristics and risks of each property.

As at 31st March 2017 and 31st March 2016, the fair values of the Mahindra Tower, Delhi have been arrived at on the basis of a valuation carried out as on the respective dates by Gandhi & Associates, independent valuer not related to the Group. Gandhi & Associates are registered with the authority which governs the valuers in India and they have appropriate qualifications and experience in the valuation of properties in the relevant locations. The Fair value was determined using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data.

As at 31st March 2017 and 31st March 2016, the fair values of the GE Plaza, Pune have been arrived at on the basis of a valuation carried out as on the respective dates by Dixit Valuers & Engineers, independent valuer not related to the Group. Dixit Valuers & Engineers are registered with the authority which governs the valuers in India and they have appropriate qualifications and experience in the valuation of properties in the relevant locations. The Fair value was determined using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data.

Refer Note 31 for disclosures related to credit risk and related financial instrument disclosures.

2. During the year ended 31st March 2015, Other Loans and advances included project advances of Rs. 10,000 lakh pending for over 3 years relating to a project whose commencement had been delayed due to non-performance with respect to the agreed condition precedents by Vendors. The Company had taken legal action against the vendors to protect the interest of the Company where in the H’ble High Court at Mumbai had given order restraining the vendors from creating any third party rights in respect of the suit property or part with possession thereof.

3. During the previous year ended 31st March, 2016, the company had received an award in terms of the consent terms filed by the Company and the Vendors before the H’ble Arbitral Tribunal and the Company had acquired the property. The Company had planned to undertake the redevelopment of the property on completion of all obligation by the Vendors. Consequently the amount of Rs. 10,000 lakh was transferred to Construction Work in Progress in the previous year ended 31st March, 2016.

4. With the approval of the shareholders received at the 17th Annual General Meeting held on 28th July, 2016, the Company has on 27th March, 2017 sold the property in its inventory, situated at South Mumbai for a total consideration upto Rs. 23,721.00 lakh to a related party. The Company has received conveyance consideration of Rs. 17,671.00 lakh. As per the terms of settlement between the Company and the erstwhile landowners, upon completion of certain obligations by them, the Company shall pay an amount upto Rs. 6,050.00 lakh to the erstwhile landowners and the same shall be paid by the related party to the Company as balance consideration. The matter of determination of the factum of completion of the obligations by the erstwhile landowners is presently pending before the Hon’ble Arbitrator. The profit booked from this sale transaction will not be affected by the outcome of such arbitration.

5. The Company had entered into an agreement to acquire a parcel of land near Thane, Maharashtra, at a consideration of Rs. 2,000.00 lakh. While full consideration was paid, the land was not conveyed pending completion of certain formalities. The amount currently standing in the books as a current asset is Rs. 2,879.00 lakh. During the period, Tahsildar (Thane) has issued an order against the registered owner alleging non-adherence of certain conditions pertaining to Bombay Tenancy and Agricultural Lands Act, 1948 and changed the land records to reflect Government of Maharashtra as the holder of the land. The Company has been legally advised that the said order and the demand there under is grossly erroneous and not tenable.

6. Construction Work in Progress represents materials at site and unbilled costs on the projects. 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 inventory are made on projects where the expected revenues are lower than the estimated costs to completion. In the opinion of the management, the net realizable value of the construction work in progress will not be lower than the costs so included therein.

7. The Company had during the year ending 31st March 2015 entered into mutually agreed consent terms with a land-owner in respect of the project, commencement of which had been delayed and in accordance with the consent terms, the Company during the year ending 31st March, 2015 completed the sale of land in relation thereto. Accordingly, the provision for losses to project completion for Rs. 1,023.00 lakh in respect was no longer required and reversed during the year ending 31st March 2015. Further, revenue from operations for the year ended 31st March 2015 includes Rs. 25,263 lakh on sale thereof, net of the advances given and interest thereon. Operating expenses included in the year ended 31st March, 2015 Rs. 2,263 lakh of costs incurred in relation thereto. Other income included in the year ending 31st March 2015 was Rs. 1,550 lakh pertaining to write back of the provision for the interest on the aforesaid advance no longer required.

Consequent to the above, construction work-in-progress of Rs. 765.87 lakh and short term loans and advances and interest accrued on project advances included in other current assets of Rs.4,205.26 lakh and Rs. 2,174.98 lakh, respectively, at 31st March 2014 have been realized during the year ending 31st March 2015.

The cost of inventories recognized as an expense during the year in respect of continuing operations was Rs. 52,343.58 lakh (Previous year ending 31st March, 2016: Rs. 32,754.97 lakh)

8. Shares reserved for issue under options

The Company has 5,53,430 (Previous Year ending 31st March, 2016. 5,58,380) equity shares of Rs. 10/- each reserved for issue under options [Refer Note 26].

9. The allotment of 40,851 (Previous Year ending 31st March, 2016. 40,851) equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956 (Section 126 of the Companies Act 2013), till such time as the title of the bonafide owner of the shares is certified by the concerned Stock Exchange or the Special Court (Trial of Offences relating to Transactions in Securities).

Debenture Redemption Reserve: A debenture redemption reserve is a provision created against issue of debentures to protect investors against the possibility of default by the company.

General Reserve: The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer. Items included under General Reserve shall not be reclassified back into the P&L.

Defect Liability Provisions:

Provision for defect liability represents present value of management’s best estimate of the future outflow of economic resources that will be required for rectification of defects, if any, in respect of residential units sold or given under perpetual lease. Management estimates the related provision for future defect liability claims based on historical cost of rectifications and is adjusted regularly to reflect new information. The residential units are generally covered under the defect liability period limited to 1 - 3 years from the date of handover of residential units. It is estimated that most of these costs are likely to be incurred within two years after the reporting date.

Secured Borrowing Nature of Security

The Short Term Loan/ Working Capital Demand Loan (WCDL) is secured by exclusive mortgage charge on immovable properties (part of Work in progress and Inventories) of the company while Cash Credit/Overdraft is secured by first hypothecation charge on all existing and future current assets of the company.

Terms of Repayment

Rate of interest for WCDL 9.25% while CC is MCLR plus 0.35% (presently 8.85%p.a). Cash Credit/ Overdraft facility is repayable on demand from bank.

Unsecured Loan

Includes Short Term Loan from bank for working capital purposes.

31) Financial Instruments Capital management

The Company’s capital management objectives are:

- safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders

- maintain an optimal capital structure to reduce the cost of capital

The Management of the Company monitors the capital structure using debt ratio which is determined as the proportion of total debt to total equity.

CREDIT RISK

10. Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises from cash and cash equivalents, investments carried at amortized cost, deposits with banks and financial institutions as well as credit exposures to customers including outstanding receivables.

Trade Receivables:

The Company’s trade receivables include receivables on sale of residential flats and rent receivable. As per the Company’s flat handover policy, a flat is handed over to a customer only upon payment of entire amount of consideration. The rent receivables are secured by security deposits obtained under the lease agreement. Thus, the Company is not exposed to any credit risk on receivables from sale of residential flats and rent receivables.

Balances with Banks, mutual funds and other financial assets:

For banks and financial institutions, only high rated banks/institutions are accepted. The Company holds cash and cash equivalents with bank and financial institution counterparties, which are having highest safety ratings based on ratings published by various credit rating agencies. The Company considers that its cash and cash equivalents have low credit risk based on external credit ratings of the counterparties.

Disclose - Amount of maximum Exposure to Credit Risk of Each / Company of financial asset where impairment as per Ind AS 109 is not applied

The Company holds mutual funds with financial institution counterparties, which are having highest safety ratings based on ratings published by various credit rating agencies. The Company considers that its mutual funds have low credit risk based on external credit ratings of the counterparties.

For other financial assets, the Company assesses and manages credit risk based on reasonable and supportive forward looking information. The Company does not have significant credit risk exposure for these items.

LIQUIDITY RISK

11. Liquidity risk management

The Company established an appropriate liquidity risk management framework for the management of the Company’s short-, medium- and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

12. Maturities of financial liabilities

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

13. Maturities of financial assets

The following table details the Company’s expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Company’s liquidity risk management as the liquidity is managed on a net asset and liability basis.

MARKET RISK

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk such as equity price risk and commodity price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. All such transactions are carried out within the guidelines set by the Board of Directors. Currency Risk

Foreign currency risk is the risk that the fair value or the future cash flows of an exposure will fluctuate because of changes in the foreign exchange rate. The Company undertakes transactions denominated in foreign currencies only for the purchases of the components which are required to carry out the construction activities. The Company manages its foreign currency risk by forward contracts that are expected to occur within a maximum 12 month from the entering of a contract.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and floating rate loans and borrowings.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected, after the impact of hedge accounting. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:

14. Employee benefits

15. Defined Contribution Plan

The Company’s contribution to Provident Fund and Superannuation Fund aggregating Rs. 347.56 lakh (2016 : Rs.131.47 lakh ) has been recognized in the Statement of Profit or Loss under the head Employee Benefits Expense.

16. Defined Benefit Plans:

Gratuity

The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the Payment of Gratuity Act, 1972 or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. For the year ended 31 March 2017, the Group has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.

17. Prior Period Items

No material events have occurred after the balance sheet date and up to the approval of the financial statements.

18. In respect of real estate projects under long term contracts, determination of profits/ losses and reliability of the construction work in progress & project advances necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentage of completion, costs to completion and the projections of revenues expected from projects / activity and the foreseeable losses to completion. Profit from these contracts and valuation of construction work in progress is based on such estimates.

19. Previous Period Figures

The figures for previous year have been regrouped wherever necessary to conform to current year’s classification.

20. Additional Information to the Financial Statements Dividend

In respect of the current year, the Board at its meeting held on 22nd April, 2017 has recommended a dividend of Rs. 6 per share on equity shares of Rs. 10 each subject to approval by shareholders at the Annual General Meeting. The same has not been included as a liability in these financial statements. The proposed equity dividend is payable to all shareholders on the Register of Members on 31st March, 2017. The total estimated equity dividend to be paid is Rs. 2,463.26 lakh. The payment of this dividend is estimated to result in payment of dividend tax of Rs. 290.65 lakh @ 20.36% on the amount of dividends grossed up for the related dividend distribution tax. Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges

Loans and advances in the nature of loans given to subsidiaries, associates, firms / companies in which directors are interested:


Mar 31, 2016

a) Shares reserved for issue under options

The Company has 5,58,380 (Previous Year 5,58,430) equity shares of Rs, 10/- each reserved for issue under options [Refer Note
24(b)].

b) The allotment of 40,851 (Previous Year 40,851) equity shares of the Company has been kept in abeyance in accordance with
Section 206A of the Companies Act, 1956 (Section 126 of the Companies Act 2013), till such time as the title of the boned owner
of the shares is certified by the concerned Stock Exchange or the Special Court (Trial of Offences relating to Transactions in
Securities).


The above debentures are secured by an exclusive charge over all assets, including Land & building as identified by the Company
from time to time.

At present the identified assets are land owned by the Company which is accounted as a part of Construction Work in Progress and
land owned by its Subsidiary Mahindra Integrated Township Limited.

Series I Debentures of face value Rs, 12,500 lakh are getting matured on 4th April 2016 and hence they form part of Other Current
Liabilities.

As it stands today on the date of approval of accounts, the same along with its redemption amount has already been repaid on the
due date on 4th April 2016.


Secured Loan

Nature of Security

Short Term Loan/Working Capital Demand Loan and Cash Credit/Overdraft facility. The Short Term Loan/WCDL is secured by exclusive
mortgage charge on immovable properties of the company while Cash Credit/Overdraft is secured by first hypothecation charge on
all existing and future current assets of the company.

Terms of Repayment

Rate of interest is base rate plus 0.20% (presently 9.70%p.a). Cash Credit/ Overdraft facility is repayable on demand from bank.


a) The Company''s investment in the equity shares of New Tirpur Area Development Corporation Limited ("NTADCL") aggregates Rs,
1,550.63 lakh comprising Rs, 50.63 lakh invested directly by the Company and Rs, 1,500 lakh by its wholly owned subsidiary
Mahindra Infrastructure Developers Limited ("MIDL"). Other than the investment in NTADCL, MIDL has no other operations. The net
worth of NTADCL and MIDL is substantially eroded.

NTADCL was exploring the option of supplying industrial water to a textile park proposed to be set up by the state government of
Karnataka which would have contributed substantially to its revenues. Consequent, to the finalization of the financial statements
for the year ended 31st March, 2014 it was expected that there were likely to be delays in setting up the same and the
probability of the whole project being set up was significantly lower as compared to the previous year. As a result, MIDL during
the previous year has made a provision for diminution of its investment in NTADCL of Rs, 1,500 lakh. The Company has also made a
provision for diminution of its investment in MIDL of Rs, 1,800 lakh and Rs, 50.63 lakh of its investment in NTADCL in previous
year ending 31st March, 2015.


*Construction Work in Progress represents materials at site and unbilled costs on the projects. 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 inventory are made on projects where the expected revenues are lower than the estimated costs to completion.
In the opinion of the management, the net realizable value of the construction work in progress will not be lower than the costs
so included therein.

#The Company had during the previous year entered into mutually agreed consent terms with a land-owner in respect of the project,
commencement of which had been delayed and in accordance with the consent terms, the Company during the previous year completed
the sale of land in relation thereto. Accordingly, the provision for losses to project completion for Rs, 1,023.00 lakh in
respect was no longer required and reversed during the previous year. Further, revenue from operations for the previous year
ended 31st March, 2015 includes Rs, 25,263 lakh on sale thereof, net of the advances given and interest thereon. Operating
expenses included in the previous year Rs, 2,263 lakh of costs incurred in relation thereto. Other income included in the
previous year Rs, 1,550 lakh pertaining to write back of the provision for the interest on the aforesaid advance no longer
required.

Consequent to the above, construction work-in-progress of Rs, 765.87 lakh and short term loans and advances and interest accrued
on project advances included in other current assets of Rs, 4,205.26 lakh and Rs, 2,174.98 lakh, respectively, at 31st March,
2014 have been realized during the previous year.

Specified Land owned by the Company is given as security for debentures (Refer note 4).

(b) Balance with Banks includes Unclaimed Dividend of Rs, 112.62 lakh (Previous year Rs, 103.24 lakh)


*Refer note no. 16(#)

# During the previous year Other Loans and advances included project advances of Rs, 10,000 lakh pending for over 3 years
relating to a project whose commencement had been delayed due to non-performance with respect to the agreed condition precedents
by Vendors. The Company had taken legal action against the vendors to protect the interest of the Company where in the H''ble High
Court at Mumbai had given order restraining the vendors from creating any third party rights in respect of the suit property or
part with possession thereof.

During the current year, the company has received an award in terms of the consent terms fled by the Company and the Vendors
before the H''ble Arbitral Tribunal and the Company has acquired the property. The Company shall be undertaking the redevelopment
of the property on completion of all obligation by the Vendors.

Consequently the amount of Rs, 10,000 lakh now stands transferred to Construction Work in Progress in the current year.

The short term loans and advances comprise entirely unsecured loans and advances to related parties for business purpose:

Loans and advances to Holding Company (Mahindra & Mahindra Limited) Rs, 2,000 Lakh

Loans & Advances to Associate


a) Gratuity

The components of the net benefit expense recognized in the statement of Profit and loss, the funded status and the amounts
recognized in the balance sheet in respect of the Company''s gratuity plan is summarized below:

(1) Description of the Plan:

The Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued
by Life Insurance Corporation of India ("LIC'''').Employee at retirement are eligible for a benefit, which will be equal to 15 days
salary for each completed year of service. The balance in the Employee Group Gratuity Assurance Scheme is the plan asset.


(8) Amount expected to be contributed to fund in coming year is Rs, 5.59 lakh.

(9) The gratuity fund is entirely invested in a group gratuity policy with the Life Insurance Corporation of India. The
information or the allocation of the fund into major asset classes and the expected return on major classes is not readily
available.


*During the previous year for ESOS 2006 scheme, the Company modified the exercise period of the options whereby the exercise
period of the options granted was extended from 5 years from the date of vesting of the respective tranche of the option to the
last date of the exercise period for the last tranche of the option granted under the said scheme.

@The company has adopted intrinsic value method for computing the compensation cost for the options granted. The Intrinsic value
i.e. the difference between the market price of the share and the exercise price is being amortized as employee compensation cost
over the vesting period.


The disclosure of commitment is given only to the extent of capital commitment and other disclosure relating to commitment has
not been given in order to avoid providing excessive details that may not assist users of Financial Statements.

1) In respect of real estate projects under long term contracts, determination of Profits/ losses and reliability of the
construction work in progress & project advances necessarily involves making estimates by the Company, some of which are of a
technical nature, concerning, where relevant, the percentage of completion, costs to completion and the projections of revenues
expected from projects / activity and the foreseeable losses to completion. Profit from these contracts and valuation of
construction work in progress is based on such estimates.

2) Leases:

The Company''s significant leasing arrangements are in respect of operating leases for Commercial & Residential premises.


Notes:

1. The segment result for Projects, Project Management and Development activity is arrived at after considering an interest
expense of Rs, 552.41 lakh (Previous year Rs, 375.88 lakh), as it formed part of the cost of projects according to the method of
accounting followed by the Company.

3) Related Party Transactions

List of related parties

Enterprises Controlling the Company

Mahindra & Mahindra Limited: Holding Company

Enterprises under the control of the Company

Mahindra Infrastructure Developers Limited Mahindra Integrated Township Limited

Mahindra World City Developers Limited Mahindra Residential Developers Limited

Mahindra World City (Jaipur) Limited Industrial Township (Maharashtra) Limited

Knowledge Township Limited Mahindra Bebanco Developers Limited

Mahindra World City (Maharashtra) Limited Raigad Industrial & Business Park Limited

Anthurium Developers Limited

Industrial Cluster Private Limited (Earlier Known as Mahindra Housing Private Limited)

Mahindra Industrial Park Chennai Limited (w.e.f. 22nd December 2014)

Mahindra Water Utilities Limited* (w.e.f. 27th July 2015)

*With effect from 27th July 2015 Mahindra Water Utilities Limited has been ceased to be joint venture and has become subsidiary.

Fellow Subsidiaries

Bristlecone India Limited

Mahindra Holidays & Resorts India Limited

Mahindra Consulting Engineers Limited

Mahindra Integrated Business Solutions Private Limited

EPC Industries Limited

Mahindra & Mahindra Contech Limited


Associates

Kismat Developers Private Limited Topical Builders Private Limited

Joint Ventures

Mahindra Inframan Water Utilities Private Limited

Mahindra Homes Private Limited (earlier known as Watsonia Developers Private Limited and before that Watsonia Developers Limited)

*With effect from 27th July 2015 Mahindra Water Utilities Limited has been ceased to be joint venture and has become subsidiary.

Key Managerial Personnel

Managing Director & Chief Executive Officer of the Company- Ms. Anita Arjundas Chief Financial Officer- Mr. Jayantt Manmadkar
Company Secretary- Mr. Suhas Kulkarni

Directors

Mr. Arun Nanda, Non-executive Non-Independent Chairman

Mr. Anish Shah, Non-executive Non-Independent Director

Mr. Sanjiv Kapoor, Non-executive Independent Director

Mr. Shailesh Haribhakti, Non-executive Independent Director

Dr. Prakash Hebalkar, Non-executive Independent Director

Enterprises over which key management personnel are able to exercise significant infuence: Nil

Transactions with related parties during the year and balance as on 31st March, 2016:


Mar 31, 2015

A) Equity Shares: The Company has issued one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share.

b) Shares reserved for issue under options

The Company has 5,58,430 (Previous Year 6,12,656) equity shares of Rs. 10/- each reserved for issue under options [Refer Note 25(b)].

c) The allotment of 40,851 (Previous Year 40,851) equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956 (Section 126 of the Companies Act 2013), till such time as the title of the bonafide owner of the shares is certified by the concerned Stock Exchange or the Special Court (Trial of Offences relating to Transactions in Securities).

The Company has during the year ended 31st March 2014, issued Non Convertible Debentures (NCDs) aggregating Rs. 50,000 lakhs which are redeemable at a premium. The total premium on redemption of Rs. 10,244.65 lakhs has been adjusted against the securities premium during the previous financial year as permitted under section 78 of the Companies Act, 1956.

* Term Loan from Bank was repaid on 10th June 2014. The loan was secured by a pari-passu charge on immovable properties of the Company and were also secured by pari-passu charge on specified movable and current assets of the Company, both present and future.

# Non Convertible Debentures

The above debentures are secured by an exclusive charge over all assets, including Land & building as identified by the Company from time to time.

At present the identified assets are land owned by the Company which is accounted as a part of Construction Work in Progress and land owned by its Subsidiary Mahindra Integrated Township Limited.

* Previous year amount is cash credit from Bank was repaid on 10th June 2014. The loan was secured by a pari-passu charge on immovable properties of the Company and were also secured by pari-passu charge on specified movable and current assets of the Company, both present and future.

Based on the information available with the Company there are no dues outstanding in respect of Micro, Small and Medium Enterprises as of Balance Sheet date.

a) There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund.

a) The Company''s investment in the equity shares of New Tirpur Area Development Corporation Limited ("NTADCL") aggregates Rs. 1,550.63 lakhs comprising Rs. 50.63 lakhs invested directly by the Company and Rs. 1,500 lakhs by its wholly owned subsidiary Mahindra Infrastructure Developers Limited("MIDL"). Other than the investment in NTADCL, MIDL has no other operations. The net worth of NTADCL and MIdL is substantially eroded.

NTADCL was exploring the option of supplying industrial water to a textile park proposed to be set up by the state government of Karnataka which would have contributed substantially to its revenues. Consequent, to the finalization of the financial statements for the year ended 31st March, 2014 it is expected that there are likely to be delays in setting up the same including the probability of the whole project being set up is significantly lower as compared to the previous year. As a result MIDL has made provision for diminution of its investment in NTADCL of Rs. 1,500 lakhs. The Company has also made a provision for diminution of its investment in MIDL of Rs. 1,800 lakhs and Rs. 50.63 lakhs of its investment in NtaDcL.

Construction Work in Progress represents materials at site and unbilled costs on the projects. 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 inventory are 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 construction work in progress will not be lower than the costs so included therein.

# The Company has during the year entered into mutually agreed consent terms with a land-owner in respect of this project, commencement of which had been delayed and in accordance with the consent terms, the Company during the year has completed the sale of land in relation thereto. Accordingly, the provision for losses to project completion for Rs. 1023.00 lakhs in respect is no longer required and has been reversed during the year. Further, revenue from operations for the year ended 31st March 2015 includes Rs. 25,262.65 lakhs on sale thereof, net of the advances given and interest thereon. Operating expenses include Rs. 2,262.65 lakhs of costs incurred in relation thereto. Other income includes Rs. 1,550.15 lakhs pertaining to write back of the provision for the interest on the aforesaid advance no longer required.

Consequent to the above, construction work-in-progress of Rs. 765.87 lakhs and short term loans and advances and interest accrued on project advances included in other current assets of Rs. 4,205.26 lakhs and Rs. 2,174.98 lakhs, respectively, at 31st March 2014 have been realised during the year.

Specified land owned by the Company is given as security for debentures.(Refer Note 4).

# Other Loans and advances include project advances of Rs. 10,000 lakhs pending for over 3 years relating to a project whose commencement has been delayed due to non performance with respect to the agreed condition precedents by Vendors. The Company has taken legal action against the vendors to protect the interest of the Company where in the H''ble High Court at Mumbai has given order restraining the vendors from creating any third party rights in respect of the suit property or part with possession thereof.

a) Gratuity

The components of the net benefit expense recognized in the statement of profit and loss, the funded status and the amounts recognized in the balance sheet in respect of the Company''s gratuity plan is summarized below

(1) Description of the Plan:

The Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by Life Insurance Corporation of India (''LIC''). Employee at retirement are eligible for benefit, which will be equal to 15 days salary for each completed year of service. The balance in the Employee Group Gratuity Assurance Scheme is the plan asset.

(2) Principal actuarial assumptions:

(3) Amount expected to be contributed to fund in coming year is Rs. 3724 lakh.

(4) The gratuity fund is entirely invested in a group gratuity policy with the Life Insurance Corporation of India. The information or the allocation of the fund into major asset classes and the expected return on major class is not readily available.

The details of the Employee Stock Option Scheme are:

The company has adopted intrinsic value method for computing the compensation cost for the Options granted. The exercise price of the shares is based on the average of the daily high and low of the prices for the Company''s Equity Shares quoted on the Bombay Stock Exchange Limited, during the 15 days preceding the grant of the Options. The Intrinsic value i.e. the difference between the market price of the share and the exercise price is being amortised as employee compensation cost over the vesting period. The details of the same are given here under:

During the year, the Company modified the exercise period of the options granted under ESOS 2006 whereby the exercise period of the options granted was extended from 5 years from the date of vesting of the respective tranche of the option to the last date of the exercise period for the last tranche of the option granted under the said scheme.

b) The Company had granted 10,000 Equity shares on 4th August, 2012 to the eligible employee under the Employee Stock Option Scheme 2006 (ESOS 2006) of the company.

The company has adopted intrinsic value method for computing the compensation cost for the Options granted. The exercise price of the shares is based on the average of the daily high and low of the prices for the Company''s Equity Shares quoted on the Bombay Stock Exchange Limited, during the 15 days preceding the grant of the Options. The Intrinsic value i.e. the difference between the market price of the share and the exercise price is being amortised as employee compensation cost over the vesting period. The details of the same are given here under:

The Fair Value has been calculated using the Black Scholes Options Pricing Model and the significant assumptions made in this regard are as follows:

c) The Company had granted 101,000 Equity shares on 4th August,2012 to the eligible employees under the Employee Stock Option Scheme (ESOS 2012) of the company.

The details of the Employee Stock Option Scheme are:

The company has adopted intrinsic value method for computing the compensation cost for the Options granted. The exercise price of the shares is Rs. 10/- per stock option. The Intrinsic value i.e. the difference between the market price of the share and the exercise price is being amortised as employee compensation cost over the vesting period. The details of the same are given here under:

The details of the Employee Stock Option Scheme are:

The company has adopted intrinsic value method for computing the compensation cost for the Options granted. The exercise price of the shares is Rs. 10/- per stock option. The Intrinsic value i.e. the difference between the market price of the share and the exercise price is being amortised as employee compensation cost over the vesting period. The details of the same are given here under:

The Fair Value has been calculated using the Black Scholes Options Pricing Model and the significant assumptions made in this regard are as follows:

e) The Company had granted 27000 Equity shares on 17th October, 2014 to the eligible employees under the Employee Stock Option Scheme (ESOS 2012) of the company.

The company has adopted intrinsic value method for computing the compensation cost for the Options granted. The exercise price of the shares is Rs. 10/- per stock option. The Intrinsic value i.e. the difference between the market price of the share and the exercise price is being amortised as employee compensation cost over the vesting period. The details of the same are given here under:

The Fair Value has been calculated using the Black Scholes Options Pricing Model and the significant assumptions made in this regard are as follows:

Earnings Per Share as required by Accounting Standard 20 read with the Guidance Note on ''Accounting for Employee share-based Payments" is as follows.

The compensation costs of stock options granted to employees are accounted by the Company using the intrinsic value method.

During the year vesting period of ESOS 2006 was extended by one year hence the number of options cancelled during the year indicates the number of option cancelled netted of with the options revived as the result of such extension.

Information in respect of options outstanding as at 31st March, 2015:

5) Forwards Contracts

The Company enters into foreign currency exposure contract for the purpose of hedging its currency risk. These contracts are not intended for trading or speculation.

The disclosure of commitment is given only to the extent of capital commitment and other disclosure relating to commitment has not been given in order to avoid providing excessive details that may not assist users of Financial Statements.

6) In respect of real estate projects under long term contracts, determination of profits/ losses and realisability of the construction work in progress & project advances necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentage of completion, costs to completion and the projections of revenues expected from projects / activity and the foreseeable losses to completion. Profit from these contracts and valuation of construction work in progress is based on such estimates.

7) Leases:

The Company''s significant leasing arrangements are in respect of operating leases for Commercial & Residential premises.

a) Lease income from operating leases is recognised on a straight-line basis over the period of lease. The particulars of the premises given under operating leases are as under:

8) Contingent Liabilities

Current Year Previous Year Rsin lakhs Rsin lakhs

a) Claims against the Company not acknowledged as debts represent :

i) Claims awarded by the Arbitrator to a civil contractor in respect of a project at Mumbai and the Company''s appeal against the award has been admitted by the Mumbai High Court 93.89 93.89

ii) Demand from local authorities for transfer fees on transfer ofproperty, disputed by the Company 123.99 123.99

iii) Demand from a local authority for energy dues disputed by the Company 2,164.04 2,164.04

iv) Claim from welfare association in connection with project work, disputed by theCompany 4,500.00 4,500.00

b) Income tax matters under appeal

In respect of certain business incomes re-classified by the Income tax Department as income from house property and other disallowances, the Company has partially succeeded in appeal and is pursuing the matterfurther with the higher appellate authorities 584.53 360.43

The liability net of Deferred Tax Asset/Deferred Tax Liability would be Rs 584.53 lakhs (previous year Rs. 360.43 lakhs)

Note:

The segment result for Projects, Project Management and Development activity is arrived at after considering an interest expense of Rs. 375.88 lakhs (Previous year Rs. 1,381.03 lakhs), as it formed part of the cost of projects according to the method of accounting followed by the Company.

9) Related Party Transactions

List of related parties Enterprises Controlling the Company Mahindra & Mahindra Limited: Holding Company

Enterprises under the control of the Company

Mahindra Infrastructure Developers Limited Mahindra Integrated Township Limited.

Mahindra World City Developers Limited Mahindra Residential Developers Limited

Mahindra World City (Jaipur) Limited Industrial Township(Maharashtra) Limited

Knowledge Township Limited Mahindra Bebanco Developers Limited

Mahindra World City (Maharashtra) Limited Raigad Industrial & Business Park Limited

Anthurium Developers Limited

Industrial Cluster Private Limited (Earlier Known as Mahindra Housing Private Limited)

Mahindra Industrial Park Chennai Limited (w.e.f. 22nd December 2014)

Fellow Subsidiaries

Bristlecone India Limited Mahindra Holidays & Resorts India Limited Mahindra Consulting Engineers Limited Mahindra Integrated Business Solutions Private Limited NBS International Private Limited

Associates

Kismat Developers Private Limited Topical Builders Private Limited

Joint Ventures

Mahindra Inframan Water Utilities Private Limited Mahindra Water Utilities Private Limited Mahindra Homes Private Limited (earlier known as Watsonia Developers Private Limited and before that Watsonia Developers Limited )

Key Managerial Personnel

Managing Director & Chief Executive Officer of the Company- Ms. Anita Arjundas Chief Financial Officer - Mr. Jayantt Manmadkar Company Secretary - Mr. Suhas Kulkarni

Directors

Mr. Arun Nanda, Non-executive Non-Independent Chairman Mr. Uday Y Phadke, Non-executive Non-Independent Director Mr. Sanjiv Kapoor,Non-executive Independent Director Mr. Shailesh Haribhakti,Non-executive Independent Director Mr. Anil Harish, Non-executive Independent Director Dr. Prakash Hebalkar, Non-executive Independent Director

Enterprises over which Key Managerial Personnel are able to exercise significant influence: Nil

10) Information in respect of Jointly Controlled Operations and Joint Venture

a) Jointly Controlled operations

i) Development of the following residential projects:

G. E. Gardens, Mumbai

Kukattpally, Hyderabad

ii) Project for providing potable drinking water and sewerage facilities at Tirupur, Tamil Nadu.

b) Joint Venture

Sector 59, Gurgaon Bannerghatta Road, Bangalore


Mar 31, 2014

1) In respect of real estate projects under long term contracts, determination of Profits/ losses and reliability of the construction work in progress & project advances necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentage of completion, costs to completion and the projections of revenues expected from projects / activity and the foreseeable losses to completion. Profit from these contracts and valuation of construction work in progress is based on such estimates.

2) Leases:

The Company''s Significant leasing arrangements are in respect of operating leases for Commercial & Residential premises.

3) Contingent Liabilities

Matter Current Year Previous Year Rs. in lakhs Rs. in lakhs

a) Claims against the Company not acknowledged as debts represent:

i) Claims awarded by the Arbitrator to a civil contractor in respect of a project at Mumbai and the Company''s appeal against the award has been admitted by the Mumbai High Court 93.89 182.33

ii) Demand from local authorities for transfer fees on transfer of property, disputed by the Company 123.99 123.99

iii) Demand from a local authority for energy dues disputed by the Company 2,164.04 2,164.04

iv) Claim from welfare association in connection with project work, disputed by the Company 4,500.00 -

b) Income tax matters under appeal

In respect of certain business incomes re-classifed by the Income tax Department as income from house property and other disallowances, the Company has partially succeeded in appeal and is pursuing the matter further with the higher appellate authorities 360.43 935.60

The liability net of Deferred Tax Asset/Deferred Tax Liability would be Rs. 360.43 lakhs (previous year Rs. 524.17 lakhs)

4) Related Party Transactions

List of related parties

Enterprises Controlling the Company

Mahindra & Mahindra Limited: Holding Company

Enterprises under the control of the Company

Mahindra Infrastructure Developers Limited Mahindra Integrated Township Limited.

Mahindra World City Developers Limited Mahindra Residential Developers Limited

Mahindra World City (Jaipur) Limited Industrial Township (Maharashtra) Limited

Knowledge Township Limited Mahindra Bebanco Developers Limited

Mahindra World City (Maharashtra) Limited Raigad Industrial & Business Park Limited

Anthurium Developers Limited Mahindra Housing Private Limited

Mahindra Homes Private Limited (earlier known as Watsonia Developers Private Limited and before that Watsonia Developers Limited)*

*With effect from 20th July 2013 Mahindra Homes Private Limited has been ceased to be subsidiary and has become joint venture.

Fellow Subsidiaries

Bristlecone India Limited

Mahindra Holidays & Resorts India Limited

Mahindra Consulting Engineers Limited

Mahindra Integrated Business Solutions Private Limited

Associates

Kismat Developers Private Limited

Topical Builders Private Limited

Joint Ventures

Mahindra Inframan Water Utilities Private Limited

Mahindra Water Utilities Private Limited

Mahindra Homes Private Limited (earlier known as Watsonia Developers Private Limited and before that Watsonia Developers Limited)*

*With effect from 20th July 2013 Mahindra Homes Private Limited has been ceased to be subsidiary and has become joint venture.

5) Information in respect of Jointly Controlled Operations

i) Development of the following residential projects:

G.E. Gardens, Mumbai

Kukattpally, Hyderabad

ii) Project for providing potable drinking water and sewerage facilities at Tirupur, Tamil Nadu.

6) The figures for previous year have been regrouped wherever necessary to conform to current year''s classification


Mar 31, 2013

1) In respect of real estate projects under long term contracts, determination of profits/ losses and realisability of the construction work in progress & project advances necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentage of completion, costs to completion and the projections of revenues expected from projects / activity and the foreseeable losses to completion. Profit from these contracts and valuation of construction work in progress is based on such estimates.

2) Leases:

The Company''s significant leasing arrangements are in respect of operating leases for Commercial & Residential premises.

3) Information in respect of Jointly Controlled Operations

i) Development of the following residential projects:

G.E. Gardens, Mumbai

Kukattpally, Hyderabad

ii) Project for providing potable drinking water and sewerage facilities at Tirupur, Tamil Nadu.

4) The figures for previous year have been regrouped wherever necessary to conform to current year''s classification


Mar 31, 2012

A) Shares reserved for issue under options

Refer note 22(#) for details of shares to be issued under the Employee Stock Option Plan

b) The allotment of 45,351 (Previous Year 45,351) Equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956, till such time as the title of the bonfire owner of the shares is certified by the concerned Stock Exchange or the Special Court (Trial of Offences relating to Transactions in Securities).

* Nature of Security

Secured borrowings are secured by a pari-passu charge on immovable properties of the company and are also secured by pari-passu charge on specified movable and current assets of the company, both present and future.

# Terms of Repayment

The said loan amount is repayable quarterly on prorated basis after one year starting from June 30, 2013. Interest is payable on monthly basis.

* The Company has, in case of certain projects, provided for Rs 1,023.00 lakh (previous year Rs 1,023.00 lakh) as provision for losses to project completion. The amount has been determined using best estimates with regard to percentage of completion, foreseeable costs to completion and revenues from the project activity. However, considering future business scenario, inflation in construction costs and market movement causing changes in realizations, which cannot be presently quantified, the final outcome may differ from that presently estimated. The probability and the timing of the outflow with regard to this matter depends on the completion of the project and conclusion of the arbitration proceedings.

In the opinion of the Management, no loss is expected to arise in respect of other long term investments for which an additional provision is required to be made in the accounts.

The Company has made investment in equity shares of Rs 180,000,000 in the wholly owned subsidiary Mahindra Infrastructure Developers Limited("MIDL"). MIDL has further invested Rs 150,000,000 in the equity shares of New Tirupur Area Development Corporation Limited (NTADCL). Due to adverse business conditions, NTADCL has been making losses and there has been an erosion in the net worth of NTADCL. The various steps taken by the stakeholders such as infusion of equity capital, debt restructuring, increase in tariff rates of water etc and various other concessions from Tamil Nadu Government will lead to a turnaround in the operations of NTADCL and improve its financial position. Thus in view of the management there is no permanent diminution in the value of the investments in NTADCL and in the value of the investments in MIDL.

* Construction Work in Progress represents materials at site and unbilled costs on the projects. 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 inventory are made on projects where the expected revenues are lower than the estimated costs to completion. In the opinion of the management, the net realizable value of the construction work in progress will not be lower than the costs so included therein.

# Construction Work-in-Progress include Rs 765.87 lakh (previous year Rs 765.87 lakh) on account of a project, where commencement of construction has been delayed on account of a dispute between the land-owner and the Company. The dispute has been referred to arbitration.

* Other Loans & Advances include Rs 4,205.26 lakh (previous year Rs 4,205.26 lakh) on account of a project, where commencement of construction has been delayed on account of a dispute between the land-owner and the Company. The dispute has been referred to arbitration.

* Interest accrued thereon represents the amounts recoverable from the proceeds of projects undertaken/financed by the Company as per the contracted terms. The advances as well as the interest thereon are considered good and fully recoverable based on inter-alia estimates and projections by the Company of the project costs and revenues.

# Interest accrued include Rs 2,174.98 lakh (previous year Rs 2,174.98 lakh) on account of a project, where commencement of construction has been delayed on account of a dispute between the land-owner and the Company. The dispute has been referred to arbitration.

* Gratuity

(1) Description of the Plan:

The Company has covered its gratuity liability by a Group Gratuity Policy named 'Employee Group Gratuity Assurance Scheme' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defined benefit plan and the aforesaid insurance policy is the plan asset.

The disclosure of commitment is given only to the extent of capital commitment and other disclosure relating to commitment has not been given in order to avoid providing excessive details that may not assist users of Financial Statements.

1) In respect of real estate projects under long term contracts, determination of profits/ losses and reliability of the construction work in progress & project advances necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentage of completion, costs to completion and the projections of revenues expected from projects / activity and the foreseeable losses to completion. Profit from these contracts and valuation of construction work in progress is based on such estimates.

2) Leases:

The Company's significant leasing arrangements are in respect of operating leases for Commercial & Residential premises.

3) Conttngsm

Matter Current Year Previous Year

Rs.in lakh Rs.in lakh

a) Claims against the Company not acknowledged as debts represent:

i) A suit filed by a party in the Delhi High Court, and disputed by the Company, for recovery of brokerage in respect of a transaction relating to operating of commercial complexes. In the opinion of the management the above claim is not sustainable 42.67 42.67

ii) Claims awarded by the Arbitrator to a civil contractor in respect of a project at Mumbai and the Company's appeal against the award has been admitted by the Mumbai High Court 88.44 88.44

iii) Demand from local authorities for transfer fees on transfer of property, disputed by the Company 123.99 123.99

iv) Demand from a local authority for energy dues disputed by the company 2,164.04 2,164.04

b) Income tax matters under appeal

In respect of certain business incomes reclassified by the Income tax Department as income from house property and other disallowances, the Company has partially succeeded in appeal and is pursuing the matter further with the higher appellate authorities 1,321.80 1,218.65

The liability net of Deferred Tax Asset/Deferred Tax Liability would be Rs 846.49 lakh (previous year t 743.34 lakh)

Notes:

1. The segment result for Projects, Project Management and Development activity is arrived at after considering an interest expense ofRs 1,381.03 lakh (Previous year Rs 187.36 lakh), as it formed part of the cost of projects according to the method of accounting followed by the Company.

2. The Company has discontinued the Operations of its segment - Business Centre during the quarter ended 31st December, 2010.

4) Information in respect of Jointly Controlled Operations

i) Development of the following residential projects:

G.E. Gardens, Mumbai

Kukattpally, Hyderabad

ii) Project for providing potable drinking water and sewerage facilities at Tirupur, Tamil Nadu.

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