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Notes to Accounts of Marathon Nextgen Realty Ltd.

Mar 31, 2015

Corporate Information

Marathon Nextgen Realty Limited ("the Company") is a public Company domiciled in India. The Company was incorporated on January 13,1978 and is primarily engaged in the business of construction, development and sale of commercial and residential real estate projects. The core business activities are carried out under various business models like own development, through associates, joint ventures and joint development and other arrangements with third parties.

1. Share Capital

i. 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 share is entitled to one vote per share. All shares rank parri passu with regard to dividend. In event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

Board Directors have recommended a dividend of Rs. 6/-(P.Y Rs. 5/-) per equity share 60% (P.Y. 50%) of Face value of equity share Rs. 10/- each.

2. Defined Benefit Plan

Reconciliation of opening and closing balances of Defined Benefit Obligations

3. Related Party Disclosures.

Disclosure as required by Accounting Standard 18 - 'Related Party Disclosures' issued by The Institute of Chartered Accountants of India are as follows:

(a) Holding Company

Ithaca Informatics Pvt Ltd

(b) Key Managerial Personnel

Chetan R. Shah - Managing Director

S. Ramamurthi - Whole-Time Director & CFO

K.S. Raghavan - Company Secretary

(c) Relatives of Key Managerial Personnel

Mayur R. Shah (Brother of Managing Director) - Director

Ansuya R. Shah (Mother of Managing Director)

Ramniklal Z. Shah (Father of Managing Director)

Shailaja C. Shah (Wife of Managing Director)

Sonal M. Shah (Wife of Mayur R Shah-Director)

(d) Associates

Columbia Chrome (I) Pvt Ltd

Swayam Realtors & Traders LLP

(e) Enterprises over which key managerial personnel / relatives exercise significant Influence

Citadel Realty & Developers Ltd

Cornell Hsg & Infrastructure Pvt Ltd

Fibre Box (Bombay) Pvt Ltd

Hariyali Estate Pvt. Ltd.

Kanchi Rehab Pvt Ltd

Lark Consultancy Pvt Ltd

Marathon Buildcon LLP

Marathon Construction Co.

Marathon Construction LLP

Marathon Developers

Marathon Ener-Gen LLP

Marathon Energy Pvt Ltd

Marathon Fiscal Pvt Ltd

Marathon Group

Marathon Housing Pvt Ltd

Marathon Infotech Pvt Ltd

Marathon IT Infrastructure Pvt Ltd

Marathon Nextgen Townships Pvt Ltd

Marathon Nexzone Infrastructures Pvt Ltd

Marathon Nexzone Land Pvt Ltd

Marathon Prachin Infrastructures Pvt Ltd

Marathon Realty Pvt Ltd

Marathon Securities & Properties Pvt Ltd

Marathon Ventures Pvt Ltd

Matrix Architects & Engineers

Matrix Enclaves Projects Developments Pvt Ltd

Matrix Fiscal Pvt Ltd

Matrix Green Housing & Commercial Developers LLP

Matrix H2O Management LLP

Matrix Salvage Management LLP

Matrix Waste Management Pvt Ltd

Matrix Water Management Pvt Ltd

Nextgen Buildcon Pvt Ltd

Nextgen City Container Depot Pvt Ltd

Nextgen City Energy Pvt Ltd

Nextgen City Utilities Pvt Ltd

Nextgen City Water Management Pvt Ltd

Matrix Land Hub Pvt Ltd

Nextgen Land Pvt Ltd

Nexzone Builcon LLP

Nexzone Energy Utilities LLP

Nexzone Fiscal Services Pvt Ltd

Nexzone IT Infrastructure Pvt Ltd

Nexzone Land Pvt Ltd

Nexzone Utilities Pvt Ltd

Nexzone Water Management Pvt Ltd

Olympic Enterprises

Parmeka Pvt Ltd

Rare Townships Pvt Ltd

Sanvo Resorts Pvt Ltd

Shree Mulund News Publication

Sonasha Enterprises

Svarnim Enterprises Pvt Ltd

Trident Ozone LLP

United Builders

United Enterprises

Vector Modular System (I) Pvt Ltd

Vector Project (India) Pvt Ltd

Vector Properties Pvt Ltd

Vinotak Investment Pvt Ltd

4. Contingent Liabilities (to the extent not provided for excluding interest, penal charges, if any) (in Rs.)

Particulars 2014-15 2013-14

Claims against the Company not acknowledged as debt:

1. Disputed Liabilities in appeal*

Central Excise Duty 10,541,456 10,546,456

ESIC and PF 4,750,560 4,750,560

Total 15,292,016 15,297,016

* As certified by management and consultants.

The company does not expect any outflow of the resources in respect of the above.

The Employees Provident Fund Authorities have issued a show cause notice against the company raising a claim of Rs. 38,83,486/- purportedly being arrears pertaining to damages and delayed payment interest. The company appealed against the order in the Provident Fund Appellate Tribunal and pending hearing the recovery of the principal interest and damages has been stayed.

The Employees' State Insurance Corporation has raised a claim of Rs. 8,67,074/- purportedly being arrears of contribution, damages and delayed payment interest. The company had made a representation to the Board of Industrial and Financial Reconstruction in this regard besides filing an appeal in the ESIC court.

5. The Tax Expense for the current year worked out in accordance with the provision for Income Tax Act 1961 is Rs.16,72,90,522/- (P.Y15,17,42,312/-) The company is eligible for set off of MAT Credit aggregating to Rs. 4,52,74,846/-(Rs. 5,29,83,377/-) as per Section 115JAA of the Income Tax Act 1961. Accordingly a provision for tax rounded of to Rs. 12,31,00,000/-(P.Y9,88,00,000/-) is provided after netting off MAT Credit entitlement.

6. The Company has a Corporate Social Responsibility (CSR) policy. An amount of Rs. 1,24,78,791/- being attributable to CSR during the current year has remained unspent. At present, the Company is evaluating its options for the purpose of which CSR expenditure needs to be incurred.

7. The Company is operating in a single segment i.e. Real Estate Development, pursuant to which the information required to be disclosed as per AS-17 "Segment Reporting" in case of different segment has not been disclosed here.

8. The Previous years figures have been regrouped / rearranged / reclassified, wherever necessary in accordance with Schedule III of the Companies Act, 2013 to make them comparable with the current year.


Mar 31, 2013

1.1 In the opinion of the management, long term loans and advances are approximately of the value stated, if realised inordinary course of business.

1.2 The Company has entered into an agreement on 20th February, 2007 for development of property in Bangalore with the owner of the land. Development work would commence once the regulatory compliances are met with. The Company has paid an advance towards the joint venture on the basis of the agreement signed.

Note 2 Related Party Disclosures.

Disclosure as required by Accounting Standard 18-''Related Party Disclosures''issued by The Institute of Chartered Accountants of India are as follows:

(a) Holding Company Ithaca Informatics Pvt Ltd

(b) Key Managerial Personnel Chetan R. Shah - Managing Director

S. Ramamurthi -WholeTime Director

(c) Relatives of Key Managerial Personnel Mayur R. Shah (Brother of Managing Director) - Director

Ansuya R. Shah (Mother of Managing Director) Ramniklal Z. Shah (Father of Managing Director) Shailaja C. Shah (Wife of Managing Director) Sonal M. Shah (Wife of Mayur R Shah-Director)

(d) Associates Columbia Chrome (I) Pvt Ltd

Swayam Realtors & Traders LLP

(e) Enterprises over which key managerial personnel / relatives exercise

significant Influence Citadel Realty & Developers Ltd

Cornell Hsg & Infrastructure Pvt Ltd

Fibre Box (Bombay) Pvt Ltd

Hariyali Estate Pvt. Ltd.

Kanchi Rehab Pvt Ltd

Lark Consultancy Pvt Ltd

Marathon Buildcon LLP

Marathon Construction Co.

Marathon Construction LLP

Marathon Developers

Marathon Ener-Gen LLP

Marathon Energy Pvt Ltd

Marathon Fiscal Pvt Ltd

Marathon Group

Marathon Housing Pvt Ltd

Marathon Infotech Pvt Ltd

Marathon IT Infrastructure Pvt Ltd

Marathon Nextgen Townships Pvt Ltd

Marathon Nexzone Infrastructures Pvt Ltd

Marathon Nexzone Land Pvt Ltd

Marathon Prachin Infrastructures Pvt Ltd

Marathon Realty Pvt Ltd

Marathon Securities & Properties Pvt Ltd

Marathon Ventures Pvt Ltd

Matrix Architects & Engineers

Matrix Enclaves Projects Developments Pvt Ltd

Matrix Fiscal Pvt Ltd

Matrix Green Housing & Commercial Developers LLP

Matrix H20 Management LLP

Matrix Salvage Management LLP

Matrix Waste Management Pvt Ltd

Matrix Water Management Pvt Ltd

Nextgen Buildcon Pvt Ltd

Nextgen City Container Depot Pvt Ltd

Nextgen City Energy Pvt Ltd

Nextgen City Utilities Pvt Ltd

Nextgen City Water Management Pvt Ltd

Nextgen Green Housing & Commercial Enclave Pvt Ltd

Nextgen Land Pvt Ltd

Nexzone Builcon LLP

Nexzone Energy Utilities LLP

Nexzone Fiscal Services Pvt Ltd

Nexzone IT Infrastructure Pvt Ltd

Nexzone Land Pvt Ltd

Nexzone Utilities Pvt Ltd

Nexzone Water Management Pvt Ltd

Olympic Enterprises

Parmeka Pvt Ltd

Ra re Town s h i ps Pvt Ltd

Sanvo Resorts Pvt Ltd

Shree Mulund News Publication

Sonasha Enterprises

Svarnim Enterprises Pvt Ltd

Trident Ozone LLP

United Builders

United Enterprises

Vector Molular System (I) Pvt Ltd

Vector Project (India) Pvt Ltd

Vector Properties Pvt Ltd

Vinotak Investment Pvt Ltd

Note 3 Contingent Liabilities (to the extent not provided for excluding interest, penal charges, if any) Rs.

Particulars 2012-13 2011-12

Claims against the Company not acknowledged as debt:

1. Disputed Liabilities in appeal*

Central Excise Duty 10,546,456 15,419,366

ESIC and PF 4,750,560 4,750,560

Total 15,297,016 20,169,926

* As certified by management and consultants.

a. Disputed excise duty claims Rs. 1,05,46,546/- (Previous Year Rs. 1,54,19,366/-) in respect of which the Company made Excise duty payment of Rs. Nil (Previous Year Rs.1,40,424/-). Differencial Excise duty demanded on sale of yarn Rs. 48,72,910/- (Previous Year Rs. Nil) dropped by the Commissioner of Central Excise.

b. The Employees Provident Fund Authorities have issued a show cause notice against the Company raising a claim of Rs.38,83,486/- purportedly being arrears pertaining to damages and delayed payment interest. The Company appealed against the order in the Provident Fund Appelate Tribunal and pending hearing the recovery of principal interest and damages has been stayed.

c. The Employees''State Insurance Corporation has raised a claim of Rs.8,67,074/- purportedly being arrears of contribution, damages and delayed payment interest. The Company had made a representation to the Board for Industrial and Financial Reconstruction in this regard besides filing an appeal in the ESIC court.

Note 4

Provision for tax as per the normal provisions of the IT Act 1961 isRs.11.40croresasagainsttheMATofRs.9.60croresasperthesection115JB. During the past three financial years the company''s provision for tax was computed in accordance with the provisions of Section 115JB of the IT Act 1961 i.e. Minimum Alternate Tax(MAT). In view of this the company is entitled to MAT credit set off of Rs.1.80 Crore calculated in accordance with the provisions of Section 115JAA of the IT Act 1961. Accordingly, the Provision for Tax of Rs.9.60 crore is after netting off to the extent of the MAT Credit Entitlement.

Note 5

The Company is operating in a single segment i.e. Real Estate Development, pursuant to which the information required to be disclosed as per AS-17 "Segment Reporting" in case of different segment have not been disclosed here.


Mar 31, 2012

Note:

i, 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 share is entitled to one vote per share. All shares rank parri passu with regard to dividend.

Board of Director's have recommended a dividend of Rs. 4 (P.Y.Rs. 3.5) per equity share 40% (P.Y.35%) of Face value of equity share of Rs. 10 each.

ii. Terms/rights attached to 6% Non Convertible Cumulative Redeemable Preference Shares:

The Company has only one class of preference shares having par value of Rs. 100 each Preference Shares are Redeemable on or before August 22,2013. The Preference Share holders do not have any voting rights


Mar 31, 2011

1. Contingent liabilities:

Disputed excise duty claims Rs. 1,55,59,790/- (Previous Year Rs. 1,56,81,285/-) in respect of which the Company made payment of Rs. 116,495/- & penalty of Rs. 5,000/- has been dropped by the Commissioner (Appeals), Central Excise.

Claims against the company not acknowledged as debt:

The Employees Provident Fund Authorities have issued a show cause notice against the company raising a claim of Rs. 38,83,486/- purportedly being arrears pertaining to damages and delayed payment interest.The Company has contested this matter in court.

The Employees' State Insurance Corporation has raised a claim of Rs. 8,67,074/- purportedly being arrears of contribution, damages and delayed payment interest. The Company had made a representation to the Board for Industrial and Financial Reconstruction in this regard.

The Company has issued the Counter Guarantees up to a maximum amount of Rs. 10,97,42,111/- (Previous Year Rs. Nil) for Term Loans granted by the Financial Institutions to its Group Concern.

2. The Company has entered into an agreement for development of property in Bangalore with the owner of the land. Development work would commence once the regulatory compliances are met with. The Company has paid an advance towards the joint venture on the basis of the agreement signed.

3. (a) The Govt, of Maharashtra, Directorate of Industries has issued a communication to the effect that an area of 19201 Sq. mts at the Lower Parel facility of the Company be treated as a Private Information Technology Park. This would in effect mean that the Company could develop, maintain or sell double the area i.e. 38402 sq. mtrs, so earmarked. Subject to the conditions laid down, the Income earned from this Private Information Technology Park would be entitled to 100% tax holiday in accordance with Sec.80IA(4)iii ofthe IncomeTax Act 1961.

(b) The Company has made an application to the Central Board of Direct Taxes (CBDT) seeking exemption of taxes payable from profits generated from this Private Information Technology Park which has been granted vide Notification NO.78/2010/F.NO.178/100/2008-ITA-l dated 11th October, 2010.

(c) While computing Provision of Tax for the year ended March 31,2011 the taxable profits fall within the ambit of Section 115JB ofthe IncomeTax Act 1961. Accordingly, Minimum Alternate Tax (MAT) has been provided for. In terms of Section 115JAA of the IncomeTax Act 1961 the Company is entitled to claim MAT credit being the difference between MAT and tax normally computed in accordance with the provisions of the IncomeTax Act 1961.

4. Innova the Commercial project has been completed. Based on management decision unsold office space at Innova is segregated between Finished Stockand LongTerm Investment.

5. In terms of the rehabilitation scheme sanctioned by the Board for Industrial and Financial Reconstruction in May 2003- 25,000 6% Redeemable Cumulative Preference shares of Rs. 100/- each aggregating to were issued to the new management as part ofthe capital restructuring. It is proposed to redeem these Preference Shares and accordingly an amount of Rs. 25,00,000/- has been transferred to the Capital Redemption Reserve Account to facilitate the same.

4.The Company invests its surplus funds in Inter Corporate Deposits (ICD) with group companies. This yields an income that is slightly more than the governing prime lending rate ofthe Company's banks. In order to enhance the rate of return, the Company had entered into a joint venture agreement with Chhaganlal Khimji & Co. Pvt. Ltd (CKCL) a group company wherein ICD upto a maximum of Rs. 125,02,62,000/- be converted as the Company's share in the joint venture and the Company gets an assured annual compounded internal rate of return of 15% to be payable when project turns profitable

CKCL is a 100% subsidiary of Marathon Realty Pvt. Ltd. (MRPL) CKCL has subscribed Rs. 125,02,62,000/- towards the Preference Share Capital of Parmeka Pvt. Ltd (PPL). PPL is a 100% subsidiary of MRPL. MRPL has decided to merge CKCL and PPL with itself. In order to safeguard its interest in the joint venture with CKCL the company has acquired from CKCL the Preference Capital held by it in PPL consisting of 92612-11 %, Redeemable Cumulative Preference Shares of Rs. 100/- each at Premium of Rs. 13400/- per share aggregating to Rs. 1,25,02,62,000/-. MRPL has assured the Company that its interest in the Joint Venture would be protected in the merged entity. A memorandum of understanding to this effect has been signed by the concerned entities.

5. The income Tax Assessments ofthe Company have been completed up to Assessment Year 2008-09. For the Assessment Year 2005-06 the company has preferred an appeal to the Income Tax Appellate Tribunal based on the order of the Commissioner of IncomeTax.The company does not envisage any additional tax liability.

6. SECURED LOANS

(a) Construction Finance Loan is secured by creating a mortgage ofthe 8th and 9th Floor of Marathon Innova, Lower Parel. Mumbai and further counter guaranteed by the promoter directors.

(b) Lease Rent discounting finance is secured by the Mortgage of Emperor Building situated at Lower Parel Mumbai and further counter guaranteed by the promoter directors and Marathon Realty Pvt. Ltd. a group company. The charge was created on Unit No. E-01,E-101, E-201 on lease rent receivables.

The said structure has since been demolished and the company has ceased to receive lease rentals but the Equated Monthly Installments as per original sanction are being honored.The modification of the charge with the Registrar of Companies is yet to be executed.

(c) Working Capital Demand Loan is secured by the mortgage of the 9th & 10th Floor of Marathon Innova, Lower Parel, Mumbai and further counter guaranteed by the promoter directors.

(d) Car loans are secured by hypothecation of the respective cars.

7. Income from operations include.-

(a) SaleofpropertyRs.82,46,50,450/-(Previous Year Rs. 110,59,12,731/-)

(b) Lease rental Rs. 1,70,37,908/- (Previous Year Rs. 9,57,05,239/-)

(c) Sale of property held as long term investment of Rs. 8,73,70,100/-(Previous year Rs. 93,72,20,600)

(d) Saleo f Transfer of Development Rights (TDR)Rs. 4,28,26,980/- (Previous year Rs. NIL)

8. Miscellaneous balances written back of Rs. 2,09,31,209/- [Previous Year Rs. 1,36,84,311/-] is net of balances written off Rs. 4,22,627/- [Previous Year Rs. 29,65,445/-].

9. Disclosure as required by Accounting Standard 18 -'Related Party Disclosures' issued by The Institute of Chartered Accountants of India are as follows:

(a) Where control exists: Holding Company : Ithaca Informatics Pvt. Ltd

(b) Key managerial person of the Company : Chetan R. Shah -Managing Director

(c) Relatives of key managerial personnel : Mayur R. Shah (Brother of Managing Director) - Director Anusuya R. Shah (Mother of Managing Director) Ramniklal Z. Shah (Father of Managing Director) Shailaja C. Shah (Wife of Managing Director) Sonal M. Shah (Wife of Mayur R. Shah - Director)

(d) Associates : Columbia Chrome (I) Pvt. Ltd.

Swayam Realtors & Traders Ltd.

(e) Enterprises over which key managerial person / relatives exercise significant Influence :

Chhaganlal Khimji &Co Pvt. Ltd.

Citadel Realty & Developers Ltd.

Cornell Hsg. & Infrastructure Pvt.Ltd.

Fibre Box (Bombay) Private Limited

Kanchi Rehab Pvt Ltd.

Lark Consultancy Pvt. Ltd.

Marathon Construction Co.

Marathon Developers

Marathon Energy Private Limited

Marathon Fiscal Pvt Ltd.

Marathon Group

Marathon Housing Pvt Ltd.

Marathon Infotech Private Ltd.

Marathon IT Infrastructure Pvt. Ltd.

Marathon Nextgen Township Pvt Ltd.

Marathon Nexzone Infrastructure Pvt Ltd.

Marathon Nexzone Land Pvt Ltd

Marathon Prachin Infrastructures P.Ltd.

Marathon Realty Pvt. Ltd.

Marathon Securities & Properties Pvt Ltd.

Marathon Venture Pvt Ltd.

Matrix Architects & Engineers

Matrix Enclaves Projects Development Private Limited

Matrix Fiscal Pvt Ltd.

Matrix Waste Management Pvt. Ltd.

Matrix Water Management Pvt. Ltd.

Nextgen Buildcon Pvt Ltd.

Nextgen City Container Depot Pvt. Ltd.

Nextgen City Energy Private Limited

Nextgen City Utilities Private Limited

Nextgen City Water Mgt. Private Limited

Nextgen Green Housing & Commercial Enclave Pvt Ltd.

Nextgen Land Pvt Ltd.

Nexzone Fiscal Services Pvt Ltd

Nexzone IT Infrastructure Pvt. Ltd.

Nexzone Land Pvt Ltd

Nexzone Utilities Pvt. Ltd.

Nexzone Water Management Pvt. Ltd.

Olympic Enterprises

Parmeka Private Limited

Rare Townships Pvt. Ltd.

Sanvo Resorts Private Limited

Shree Mulund News Publication

Sonasha Enterprises

Svarnim Enterprises Private Limited

United Builders

United Enterprises

Vector Modular System (I) Pvt. Ltd.

Vector Projects (India) Pvt Ltd

Vector Properties (I) Pvt Ltd

Vinotak Investment Pvt Ltd

10. The Company has entered into operating Leases relating to certain portions of its property situated in Lower Parel. In Accordance with Accounting Standard 19 the Institute of Chartered Accountants of India pertaining to Leases the following information is furnished:-

(a) Premises given on Lease:

I. The Assets are held as Long term investment.

II. The depreciation on Investment property of Rs. 5,03,787/-charged to Profit and Loss Account during the year.

III. Losses on investment property demolished of Rs. 147,51,794/-is charged to Profit and Loss Account during the year.

IV. Carrying cost of investment Rs. 62,06,902/- (P.Y. Rs.3,09,46,453/-)

V. Lease rent received during the year Rs. 1,70,37,908/-

VI. Leaserent Receivable with in one Year Rs.7,89,000/-(P.Y.Rs. 4,05,34,502/-)

VII. Later than one year & not Laterthan Five years Rs. 1,15,500/-(P.Y. Rs. 1,60,25,438/-)

VIII. Later than five years NIL (P.Y. NIL)

(b) Equipment given on Lease:

I. Lease rent received during the year Rs. 2,40,000/- (P.Y. Rs. 2,40,000/-) Disclosure of Assets given on Rent.

11. Based on the information available with the Company, as at the balance sheet date, there are no small and medium enterprises that are registered with the Company. The Company has however by way of abundant caution dispatched to some of its creditor's to confirm whether they come under Micro, Small and Medium Enterprise Development Act 2006 as well as they have filed required Memorandum with the prescribed authority.

12. Balance of Creditors are subject to Confirmation.

13. Previous years figures have been regrouped or rearranged to make theme comparable with the current year.


Mar 31, 2010

1. Contingent liabilities:

Disputed excise duty claims Rs. 1,56,81,285 (Previous Year Rs. 1,69,30,761) in respect of which the Company made payment of Rs. 3,43,034 & Rs. 9,06,442 has been dropped by the Commissioner (Appeals), Central Excise.

The Company has issued the Counter Guarantees up to a maximum amount of Rs. Nil

(Previous Year Rs. 95,00,00,000) for Loans granted by the Financial Institutions to its Associates Concern.

2. The Company has entered into an agreement for development of property in Bangalore on the basis of a joint venture agreement with the owner of the land. Development work would commence once the regulatory compliances are met with. The Company has paid an advance towards the joint venture on the basis of the agreement signed.

3. (a) The Govt, of Maharashtra, Directorate of Industries has issued a communication to the effect that an area of 19201 Sq. mts at the Lower Parel facility of the Company be treated as a Private Information Technology Park. This would in effect mean that the Company could develop, maintain or sell double the area i.e. 38,402 sq. mtrs, so earmarked. Subject to the provisions of the Income Tax Act 1961 100% of the Income earned from a Private Information Technology Park would be exempt from Income Tax under Sec80IA (4)iii of the Income Tax Act 1961. (b )The Company has made an application to the Central Board of Direct Taxes (CBDT) seeking exemption of taxes payable from profits generated from this Private Information Technology Park.

(c) Pending exemption to be obtained from the CBDT the Company has provided for tax on its profits as if the deduction under Section Sec 80IA (4)iii is not available.

(d) If deduction under Section Sec 80IA (4)iii were to be contemplated then Profit after Tax and resultant Earnings per Share would be higher to the extent of the relief obtained.

4. Innova the Commercial project has been completed during the year. Based on management decision Unsold office space at Innova is segregated between Finished Stock and Long Term Investment.

5. In terms of Development Agreement Regualtion 58, which governs the Development of Sick and/ or closed textile mills the Company had in the previous year transferred 1424.54 sq.mt area to Maharshtra Housing and Area Development Authority. During the year the Company has received Transfer of Development Rights for 1894.63 sqmt area which is being shown in Inventories at cost.

6. During the financial year 2008-09 the Company entered into an agreement with a related party, wherein in lieu of the net amount of Rs. 42,56,00,000 due from them, the Company was to receive a built up area of 2000 sq. mtrs. In terms of a mutual understanding between the Company and that party arrived at during the current year, such built up area has been constructed by the Company itself on its commercial project Innova on behalf of the said party and the cost of such construction of Rs. 6,85,44,372/- has been adjusted against a security deposit of Rs. 10,00,00,000/- and the balance of the security deposit has been adjusted against the outstanding. Consequently, the balance amount of Rs. 39,41,44,372/- due from the party has been considered as a part of finished goods.

7. The Company has computed Income Tax on its profits for the year ended March 31, 2010 as per the provisions of the Income tax Act 1961. The computation made by the Company has been verified by an independent firm of Chartered Accountants and the Auditors have taken cognizance of the same.

8. The income Tax Assessments of the Company have been completed upto Assessment Year 2007-08 For the Assessment Year 2005-06 the Company has preferred an appeal to the Income Tax Appellate Tribunal based on the order of the Commissioner of Income Tax. The Company does not envisage any additional tax liability.

9. Income from operations include:-

(a) Sale of property Rs. 110,59,12,731/- (Previous Year Rs. 30,72,81,369/-),

(b) Lease rental Rs. 9,57,05,239/- (Previous Year Rs. 10,75,48,164/-),

(c) Sale of property held as long term investment of Rs. 93,72,20,600/-(Previous year Rs. Nil).

(d) Sale of Development Rights. Rs. NIL (Previous year Rs. 63,56,00,000/-)

10. Property development expenses is net of expenses transferred towards transaction with associate Company of Rs. Nil [Previous Year Rs. 65,77,160/-] towards Material & Rs. Nil [Previous Year Rs. 1,51,87,969/-] towards Direct Expenses.

11. Miscellaneous balances written back of Rs.70,31,214/- [Previous Year Rs. 1,36,84,311/-] is net of balances written off Rs. 29,65,445/- [Previous Year Rs.11,32,701/-].

12. Disclosure as required by Accounting Standard 18 - Related Party Disclosures issued by The Institute of Chartered Accountants of India are as follows:

(a) Where control exists:

Holding Company Ithaca Informatics Pvt. Ltd

(b) Key managerial person Chetan R. Shah - Managing Director

(c) Relatives of key managerial person Mayur R.Shah (Brother of Managing Director) - Director

(d) Associates Columbia Chrome (I) Pvt. Ltd.

Swayam Realtors & Traders Ltd.

(e) Enterprises over which key managerial Marathon Group

person / relatives exercise significant Matrix Architects & Engineers

Influence Olympic Enterprises

Marathon Developers

Sonasha Enterprises

United Builders

United Enterprises

Marathon Construction Co.

Shree Mulund News Publication

Marathon Realty Pvt. Ltd

Vinotak Investment Pvt. Ltd

Marathon Prachin Infrastructures Pvt. Ltd.

Cornell Hsg. & Infrastructure Pvt.Ltd.

Marathon Infotech Private Ltd.

Fibre Box (Bombay) Private Limited

Svarnim Enterprises Private Limited

Sanvo Resorts Private Limited

Parmeka Private Limited

Nextgen City Water Mgt. Private Limited

Nextgen City Utilities Private Limited

Nextgen City Energy Private Limited

Nextgen City Container Depot Pvt. Ltd.

Nexzone Water Management Pvt. Ltd.

Nexzone IT Infrastrucuture Pvt. Ltd.

Nexzone Utilities Pvt. Ltd.

Matrix Waste Management Pvt. Ltd.

Matrix Utilities Private Limited

Matrix Water Management Pvt. Ltd.

Marathon Energy Private Limited

Marathon IT Infrastrucuture Pvt. Ltd.

Marathon Fiscal Pvt. Ltd

Marathon Housing Pvt. Ltd

Marathon Nextgen Township Pvt. Ltd

Marathon Nexzone Infrastructure Pvt. Ltd

Marathon Nexzone Land Pvt. Ltd

Matrix Fiscal Pvt. Ltd

Nextgen Buildcon Pvt Ltd

Nextgen Green Housing & Cmmercial Enclave Pvt Ltd

Nextgen Land Pvt. Ltd

Nexzone Fiscal Services Pvt. Ltd

Nexzone Land Pvt. Ltd

Marathon Venture Pvt. Ltd Kanchi Rehab Pvt. Ltd Lark Consultancy Pvt. Ltd Vector Modular System (I) Pvt.Ltd. Infrastructure Venture India Ltd. Marathon Securities & Properties Pvt. Ltd. Chhaganlal Khimji & Co Ltd Citadel Realty & Developers Ltd Vector Projects (India) Pvt. Ltd Vector Properties (I) Pvt. Ltd

18. The Company has entered into operating Leases relating to certain portions of its property situated in Lower Parel. In Accordance with Accounting Standard 19 The Institute of Chartered Accountants of India pertaining to Leases the following information is fumished:-

(a) Premises given on Lease :

I. The Assets are held as Long term investment.

II. There is no depreciation charged to Profit and Loss A/c during the year.

III. There is no impairment of Losses charged to Profit and Loss Account during the year

IV. Carrying cost of investment Rs. 3,09,46,453/- (P.Y. Rs. 13,17,16,032/-)

V. Lease rent received during the year Rs.9,57,05,239/-

VI. Lease rent Receivable within one Year Rs. 4,05,34,502/- (P.Y.Rs. 11,30,99,944/-)

VII. Later than one year & not Later than Five years Rs. 1,60,25,438/- (PY.Rs. 20,14,12,366/-)

VIII. Later than five years Nil (PY. NIL)

(b) Equipment given on Lease :

I. Lease rent received during the year Rs.2,40,000/- (P.Y. Rs.Nil)

13. Based on the information available with the Company, as at the balance sheet date, there are no small and medium enterprises that are registered with the Company. The Company has however by way of abundant caution dispatched to some of its creditors to confirm whether they comes under Micro, Small and Medium Enterprise Development Act 2006 as well as they have file required Memorandum with the prescribed authority.

14. Balance of Creditors are subject to Confirmation.

15. Previous years figures have been regrouped or rearranged to make them comparable with the current year.

 
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