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Notes to Accounts of Marg Ltd.

Mar 31, 2015

1.1 Repayment Terms (including current maturities) of Secured Loans:* Term Loans from Banks & Financial Institutions:

a) Loan of Rs, 70.27 crores payable in 123 monthly installments ending Mar-22

b) Vehicle Loan of Rs, 0.17 crores payable in 15 monthly installments ending June-16

Term Loans from Others:

a) Equipment Loan of Rs, 70.35 crores payable in 32 monthly installments ending Nov-17

b) Equipment Loan of Rs, 1.39 crores payable in 27 monthly installments ending Jun-17

1.2 Repayment Terms (including current maturities) of unsecured Loans:

a) Loan of Rs, 0.99 crores payable in 1 monthly installments ending Mar-18 *excludes loans recalled

1.3 Defaults on repayment of Long-term Loans and Interest thereof:

Long term loans of Rs, 0.68 Crores (PY 188.30 Crores) and Rs, 849.99 Crores (PY 66.82 Crores) were overdue for a period of less than 90 days and more than 90 days respectively. Interest of Rs, 37.07 (PY 27.24 Crores) and Rs, 153.98 (PY 17.24 Crores) were overdue for a period of less than 90 days and more than 90 days respectively.

1.4 Defaults on repayment of Short-term Loans and Interest thereof:

Short term loans of Rs 16.33 Crores (PY Rs, 32.50 Crores) and Rs, 247.65 Crores (PY Rs, 15 Crores) were overdue for a period of less than 90 days and more than 90 days respectively. Interest aggregating to Rs, 9.15 Crores (PY Rs, 4.42 Crores) and Rs, 22.08 Crores (PY Rs, 4.12 Crores) were overdue for a period of less than 90 days and more than 90 days respectively.

NOTE 2 : CONTINGENT LIABILITIES

a. Estimated amount of liability on capital contracts: Rs, 3.6 Crores (Previous year Rs, 2.88 Crores)

b. Corporate Guarantees given to Banks in respect of loans taken by other Companies: Rs, 3,247.67 Crores (Previous year Rs, 3,290.54 Crores)

c. Corporate Guarantees given to Banks in respect of performance bank guarantees issued by them: Rs, 104.45 Crores (Previous year Rs, 159.16 Crores)

d. The company has imported capital goods at concessional rate of customs duty under the Export Promotion Credit Guarantee (EPCG) scheme against submission of bank guarantees. In terms of the scheme, the company is obliged to export goods/services of certain FOB value as specified in the said scheme. As at the year end, the company has the following unfulfilled export obligations under the scheme. As at the year end, the company has the following unfulfilled export obligations under the scheme:

NOTE 3 : BORROWINGS FROM BANKS AND OTHERS EPC Consortium Loans:

a) Indian Bank and Allahabad Bank have issued notice under SARFAESI Act, during the year. The outstanding balance in respect of the WCTL and FITL amounting to Rs, 343.38 Crores as on 31st March, 2015 is included in 'Current Maturities of Long term borrowings' in Note 10.

b) Indian Overseas Bankhas assigned the entire loan to Edelweiss Asset Reconstruction Company Limited (ARC). Since the revised terms of restructure with the ARC is yet to be finalised, the outstanding balance in respect of the WCTL and FITL amounting to Rs, 184.24 Crores as on 31st March, 2015 in respect of these loans are included in 'Current Maturities of long term of borrowings' in Note 10 and the Company continues to provide interest at the rates originally charged by the Banks.

c) Oriental Bank of Commerce recalled the entire term loans and cash credit facilities during the year. The outstanding balance in respect of the WCTL and FITL amounting to Rs, 81.39 Crores as on 31st March, 2015 is included in 'Current Maturities of Long term borrowings' in Note 10.

Corporate Loans:

d) ICICI Bank has recalled the term loan and interest amounting to Rs, 50.29 Crores during the year.

e) Punjab National Bank had recalled the term loan, subsequent to which the loan was assigned to Edelweiss Asset Reconstruction Private Limited (ARC). Since the revised terms of restructure with the ARC is yet to be finalized, the outstanding amount of Rs, 41.13 Crores are included in Current Maturities of long term of borrowings in Note 10 and the Company continues to provide interest at the rates originally charged by the Banks.

f) The South Indian Bank had taken possession of property of the Company situated at Thiruvanmiyur, having carrying cost of Rs, 0.45 Crores and issued a tender-cum-auction sale notice for the short term loan of Rs, 15 Crores. Subsequently the loan was assigned to Pegasus Assets Reconstruction Private Limited ('the ARC'). Since the revised terms of restructure with the ARC is yet to be finalized, the Company continues to provide interest at the rates originally charged by the Bank.

g) State Bank of Mauritius Limited had assigned to the loan to Pegasus Assets Reconstruction Private Limited ('the ARC').

Since the revised terms of restructure with the ARC is yet to be finalized, the outstanding amount of Rs, 20.81 Crores is included in Current Maturities of long term of borrowings in Note 10 and the Company continues to provide interest at the rates originally charged by the Bank. Subsequently, the ARC has issued notice under SARFAESI Act.

h) SICOM Limited has issued notice SARFAESI Act in respect of the term loan and interest amounting to Rs, 53.28 Crores during the year.

i) State Bank of Hyderabad has issued notice under SARFAESI Act for cash credit facility of Rs, 9.00 crores outstanding as on 31st March 2015.

j) Equipment loan of Rs, 1.74 Crores has been restructured during the year, with a tenure of 2.5 years, with repayment starting from February, 2015

NOTE 4 : PREPARATION OF FINANCIAL STATEMENTS ON 'GOING CONCERN' BASIS

The Holding Company has recorded a Net Loss of Rs, 172.45 Crores for the year ended 31st March, 2015 and Rs, 263.82 Crores for the year ended 31st March, 2014 and Rs, 36.04 Crores for the year ended 31st March, 2013. The Company has defaulted in the payments due to Banks, Financial Institution and others towards principal and interest, statutory dues and payment to vendors. Further there were lower cash inflows from existing projects and some creditors have filed winding up petitions against the company. Management is confident that the Company will be able to generate profit and cash in future years and meet its financial obligation as they arise. The financial statements have been prepared on a going concern basis based on cumulative input of the following business potential and mitigating factors:

a) The EPC division of the Company has an order book of Rs, 2683.48 Crores. Further local and international bids are being planned leveraging the experience gained through execution of Marine, Infrastructure and Industrial EPC.

b) Many of the EPC loans and corporate loans have been restructured and/or assigned to ARCs. Hence the management is confident that it will help the company to focus on projects in hand and generate cash flows.

c) The Company construction equipment to execute the projects on hand and with the work experience to its credit is eligible to undertake new projects.

d) The Company is also in the process of generating cash through equity disinvestment in operating SPVs and realization of advances given to subsidiaries which have commenced new residential and plotted development projects.

NOTE 5 : INVESTMENT AND ADVANCE/RECEIVABLES DUE FROM SUBSIDIARY COMPANIES

1) The company has invested in equity amounting to Rs, 169.18 Crores (PY Rs, 169.18 Crores) in New Chennai Township Private Limited, a wholly owned subsidiary as on 31st March, 2015. The Company has advanced an amount of Rs, 272.81 Crores (PY Rs, 237.93 Crores) as subordinated loan to the subsidiary and Rs, 58.26 (Rs, 57.32 Crores) is carried forward as receivables as on 31st March, 2015. The said subsidiary has incurred losses which have resulted in negative net-worth as on 31st March, 2015. The subsidiary company has obtained valuation report for the assets of the company, from an approved value, which supports the carrying value of such investment and loan outstanding as on 31st March, 2015. The subsidiary company is exploring possibilities to revive the projects and generate cash flows. Accordingly, the financial statements of the subsidiary company have been prepared on 'Going concern' basis and the management is of the opinion that no provision is considered necessary at this stage in respect of investments, loans and receivables outstanding from the said subsidiary company as at 31st March, 2015.

2) The company has invested in equity amounting to Rs, 136.72 Crores (PY Rs, 136.72 Crores) in Riverside infrastructure (India) Private Limited, subsidiary of the company. The Company has advanced an amount of Rs, 35.42 Crores (PY Rs, 28.59 Crores) as subordinated loan to the subsidiary and Rs, 59.74 Crores (PY Rs, 59.74 Crores) is carried forward as receivables as on 31st March, 2015. The Mall project of the subsidiary continues to be suspended and the company defaulted in payments of dues to Banks/Financial Institutions towards principal and interest. The subsidiary company is discussing with strategic partners and is confident of generating cash flows. Accordingly, the financial statements of the subsidiary company have been prepared on 'Going concern' basis and the management is of the opinion that no provision is considered necessary at this stage in respect of investments, loans and receivables outstanding from the said subsidiary company as at 31st March, 2015.

3) The company has invested in equity amounting to Rs, 54.05 Crores (PY Rs, 54.05 Crores) in Marg Properties Limited, wholly owned subsidiary of the company. The Company has advanced an amount of Rs, 31.33 Crores (PY Rs, 33.84 Crores) as loan to the subsidiary and Rs, 13.74 Crores (PY Rs, 11.94 Crores) is carried forward as receivables as on 31st March, 2015. The Company has negative net-worth as on 31st March, 2015. The loans of the company have been restructured by Banks and the Management is confident that the Company will be able to generate profit from its projects and cash in future year and meet its financial obligation as they arise. Accordingly, the financial statements of the subsidiary company have been prepared on 'Going concern' basis and the management is of the opinion that no provision is considered necessary at this stage in respect of investments, loans and receivables outstanding from the said subsidiary company as at 31st March, 2015.

4) The Company has invested in equity amounting to Rs, 0.14 Crores (PY Rs, 0.14 Crores) and an amount of Rs, 118.31 Crores (PY Rs, 107.92 Crores) is advanced as loan to its subsidiaries/fellow subsidiaries and Rs, 4.38 Crores (PY Rs, 4.38 Crores) is carried forward as receivables as on 31st March 2015, which have provided land owned by them as security for the loans availed from lenders. As the borrowing company defaulted in repayment of such loans, the land owned by these subsidiaries may be attached/sold which may adversely affect the recoverability of the investment/advance. However no such sale has been made by the banks and accordingly, the financial statements of such subsidiaries have been prepared on 'Going concern' basis and management is of the opinion that no provision is considered necessary at this stage in respect of investments, loans and receivables outstanding from these subsidiaries as at 31st March, 2015.

NOTE 6.

a) The company executed a construction contract at Agra for DG MAP, a project of the Government of India which is terminated during last financial year. The company has receivables of Rs, 0.46 crores and work in progress of Rs, 13.99 Crores as on 31st March, 2015 relating to this project. Inventory of materials amounting to Rs, 2.01 Crores and plant and machinery amounting to Rs, 1.99 Crores as on 31st March, 2015 are withheld at site by the client. The management is confident that it will be able to recover the entire dues out of the arbitration process initiated by the company and that the above amount is considered good and recoverable and hence no provision is made as on 31st March, 2015.

b) The company executed a construction contract at Dwaraka for M/s HSCC (India) Limited, a project of the Government of India, in respect of which the company has receivables of Rs, 0.60 Crores and work in progress of Rs, 0.69 Crores as on 31st March, 2015. The company has filed arbitration claim during the year and based on the same a sum of Rs, 0.40 Crores is written off in books, being the amount not included in claim made. The management is of the opinion that the rest of the amount is considered good and recoverable and hence no provision is made as on 31st March 2015.

c) The company has filed arbitration claim for some other projects, in respect of which there is balance of Rs, 7.04 Crores of receivables, Rs, 11.16 Crores of inventory/Work in progress as on 31st March, 2015. The management is of the opinion that no provision is required considering that the claim made is higher than the balance lying in books as on 31st March, 2015.

NOTE 7.

The Work in progress inventory as on 31st March, 2015 includes Rs, 53.92 Crores in respect of EPC work done by the company to one of its subsidiary company, which is pending completion. The management is confident that these projects will be completed in the near future and hence considers it appropriate to carry forward the amount of Rs, 53.92 Crores as work in progress as on 31st March, 2015.

NOTE 8.

The company had pledged shares held in Karaikal Port Private Limited (KPPL), subsidiary of the company for the loan availed by the subsidiary company. The lending Bank invoked the pledge of 16,44,90,000 equity shares and 37,90,000 compulsorily convertible preference shares during the year, having total carrying cost of Rs, 202.39 crores as on 31st March, 2015. The Company filed a writ petition in the Hon'ble High Court of Madras challenging the invocation. The Hon'ble High court passed interim order dated 25-03-2015, restraining the Bank from further transferring/encumbering of the shares and also status quo prevailing of the management of the Subsidiary, until further orders. In view of this, the management considers it appropriate to carry forward the amount of Rs, 202.39 Crores as Investments and no provision is required to be made as on 31st March, 2015. Consequently, KPPL is continued to be classified as a subsidiary of the company in the accounts for the year ended 31st March, 2015.

NOTE 9.

In respect of the equipment loan availed by the company there is un-reconciled amount of Rs, 6.52 crores and the reconciliation of the loan account is under process. The management is of the opinion that the reconciliation will be completed very soon.

NOTE 10: EXCEPTIONAL ITEMS

In accordance with the requirements of Schedule II to the Companies Act, 2013, the Company has re-assessed the useful lives of the depreciable assets. The depreciation for the year ended 31st March,2015 is higher by Rs, 11.06 Crores due to change in useful lives. The Exceptional Item of Rs, 0.34 Crores in the Statement of Profit or Loss represents the amount charged off in respect of assets whose remaining useful life is nil as at 01st April, 2014.

NOTE 11 : INFORMATIONS UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

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

NOTE 12 :

In the opinion of the Management, Current Assets, Loans & Advances have a value on realization equal to the amount at which they are stated in the Balance Sheet and provision for all known liabilities has been made.

NOTE 13: SEGMENT REPORTING

As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

NOTE 14 : REMUNERATION TO DIRECTORS

As the company has incurred losses for the Financial Year 2014-15 no remuneration is paid to the Managing Director. (Previous Year Nil)

NOTE 15: NON-CASH TRANSACTIONS

Bank Guarantees and SBLC invoked/devolved during the year amounting to Rs, 121.54 Crores have been included in liability to banks as on 31st March 2015 and treated as Non cash transactions.

NOTE 16 : CASH & CASH EQUIVALENTS

Cash & Cash Equivalents include the following which are not available for ready use by the Company as at the Balance Sheet date:

NOTE 17 : RELATED PARTY DISCLOSURES

A.List of subsidiaries, where control existed during the Period - Annexure A

B. Associates:

Rajakamanglam Thurai Fishing Harbour Private Limited

C. Key Management Personnel (KMP)

G R K Reddy-Chairman & Managing Director (CMD)

D. Relative of Key Management Personnel

1. V P Rajini Reddy-wife of the CMD

2. G Raghava Reddy-father of the CMD

E. Entities over which KMP and/or their relatives exercise control:

1. Akshya Infrastructure Private Limited

2. Avinash Constructions Private Limited

3. Exemplarr Worldwide Limited

4. Jeevan Habitat Private Limited

5. Marg Capital Markets Limited

6. Marg Foundation

7. Noble Habitat Private Limited

8. Swarnabhoomi Academic Institutions

F. Entities over which KMP and/or their relatives exercise significant influence:

1. Global Infoserv Limited

2. Marg Digital Infrastructure Private Limited

3. Marg Projects and Infrastructure Limited

4. Marg Realities Limited

NOTE 18 : INFORMATIONS PURSUANT TO SECTION 212(8) OF COMPANIES ACT

Information of (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investments (except in case of investment in subsidiaries) (f) turnover (g) profit (loss) before taxation (h) provision for taxation (i) profit (loss) after taxation and (j) proposed dividend for each subsidiary is furnished in Annexure B to the accounts.

NOTE 19 : INFORMATIONS PURSUANT TO CLAUSE 32 OF LISTING AGREEMENT

Disclosure as required by Clause 32 of listing agreement with stock exchanges for loans and advances given by the company are given in Annexure A.

NOTE 20 : INFORMATIONS PURSUANT TO PART II OF SCHEDULE VI OF COMPANIES ACT

The activities of the company are not capable of being expressed in any generic unit and hence, it is not possible to give the quantitative details required under Paragraphs 3, 4C and 4D of Part II of Schedule VI of the Companies Act 1956.

NOTE 21 : PRESENTATION OF PREVIOUS YEAR'S FIGURES

Previous year's figures have been regrouped / reclassified / rearranged wherever necessary to bring them in conformity with the current year figures.


Mar 31, 2014

NOTE 1 : CONTINGENT LIABILITIES

a. Estimated amount of liability on capital contracts: Rs. 2.88 Crores (Previous year Rs. 2.92 Crores)

b. Corporate Guarantees given to Banks in respect of loans taken by other Companies: Rs. 3,290.54 Crores (Previous year Rs. 3,170.22 Crores)

c. Corporate Guarantees given to Banks in respect of performance bank guarantees issued by them: Rs. 159.16 Crores (Previous year Rs. 175.58 Crores)

d. The company has imported capital goods at concessional rate of customs duty under the Export Promotion Credit Guarantee (EPCG) scheme against submission of bank guarantees. In terms of the scheme, the company is obliged to export goods/services of certain FOB value as specified in the said scheme. As at the year end, the company has the following unfulfilled export obligations under the scheme:

NOTE 2 : BORROWINGS FROM BANKS AND OTHERS

a) The South Indian Bank issued notice under SARFAESI Act, in respect of term loan and interest amounting to Rs. 18.92 Crores and subsequently taken posession of the property of the Company situated at Thiruvanmiyur, having carrying cost of Rs. 0.45 Crores on account of continued default by the Company. The Bank had issued a tender-cum-auction sale notice for which the Company has protested that the properties are undervalued.

b) The State Bank of Mauritius Limited recalled the term loan and interest amounting to Rs. 24.45 Crores, since the Company defaulted in payment of principal and interest. Subsequently the loan was assigned to Pegasus Assets Reconstruction Private Limited (''the ARC''). Since the revised terms of restructure with the ARC is yet to be finalised, the loan is included in Current Maturities of long term of borrowings in Note 10 and the Company continues to provide interest at the rates originally charged by the Bank.

c) The Allahabad Bank, one of the EPC Consortium lenders, recalled the Cash Credit facility, WCTL and FITL term loans amounting in total to Rs. 172.02 Crores and subsequently issued notice under SARFAESI Act.

d) SICOM Limited recalled the term loan and interest amounting to Rs. 45.13 Crores during the year and subsequently issued notice under SARFAESI Act.

e) IFCI Venture Capital Limited has recalled the term loan of Rs. 18.64 Crores during the year.

f) The term loan availed from Punjab National Bank having outstanding balance of Rs. 44.61 Crores as on 31-Mar-2014 has become Non Performing Asset during the year.

g) State Bank of Hyderabad has extended time for repayment of cash credit facility of Rs. 10.36 Crores outstanding as on 31-Mar-2014 by nine months ending Dec-2014.

NOTE 3 : PREPARATION OF FINANCIAL STATEMENTS ON ''GOING CONCERN'' BASIS

The Company has recorded a Net Loss of Rs. 263.80 Crores for the year ended 31-Mar-2014 and Rs. 36.03 Crores for the year ended 31-Mar-2013. The Company has defaulted in the payments due to Banks, Financial Institution and others towards principal and interest and statutory dues. Further there were lower cash inflows from existing projects. Management is confident that the Company will be able to generate profit and cash in future years and meet its financial obligation as they arise. The financial statements have been prepared on a going concern basis based on cumulative input of the following business potential and mitigating factors:

a) The EPC division of the Company has an order book of Rs. 2795.08 Crores. Further local and international bids are being planned leveraging the experience gained through execution of Marine, Infrastructure and Industrial EPC.

b) The business of the Company was appraised and due diligence done by Dun & Bradstreet in the previous year.

c) The Company has adequate resources and construction equipments and manpower to execute the projects on hand and with the work experience to its credit is eligible to undertake new projects.

d) The Company is also in the process of generating cash through equity disinvestment in operating SPVs and realisation of advances given to subsidiaries which have commenced new residential and plotted development projects.

NOTE 4 : INVESTMENT AND ADVANCE/RECEIVABLES DUE FROM SUBSIDIARY COMPANIES

1) The Company has invested in equity amounting to Rs.169.18 Crores in New Chennai Township Private Limited, a wholly owned subsidiary as on 31-Mar-2014. The Company has advanced an amount of Rs. 237.93 Crores as subordinated loan to the subsidiary and Rs. 57.32 Crores is carried forward as receivables as on 31-Mar-2014. The said subsidiary has incurred losses in the financial year ended 31-Mar-2014 and 31-Mar-2013, which has resulted in negative net-worth as on 31-Mar-2014. The subsidiary company has obtained valuation report for the assets of the Company, from an approved valuer, which supports the carrying value such investment and loan outstanding as on 31-Mar-2014. The Company has tied up for setting up a world class research institute in the Multi-services SEZ and is negotiating with new customers for its light engineering/multi services SEZ. Accordingly, the financial statements of the subsidiary Company have been prepared on ''Going concern'' basis and the management is of the opinion that no provision is considered necessary at this stage in respect of investments, loans and receivables outstanding from the said subsidiary company as at 31-Mar-2014.

2) The Company has invested in equity amounting to Rs. 136.72 Crores in Riverside infrastructure (India) Private Limited, subsidiary of the Company. The Company has advanced an amount of Rs. 28.59 Crores as subordinated loan to the subsidiary and Rs. 59.74 Crores is carried forward as receivables as on 31-Mar-2014. The Mall project of the subsidiary was suspended throughout the year and the Riverside Mall property of the said company has been taken into possession by the Banks during the year, as the company defaulted in payments of dues to Banks/Financial Institutions towards principal and interest. The management is taking efforts for resuming the project and is in discussion with strategic partners for this purpose. Accordingly, the financial statements of the subsidiary Company have been prepared on ''Going concern'' basis and the management is of the opinion that no provision is considered necessary at this stage in respect of investments, loans and receivables outstanding from the said subsidiary company as at 31-Mar-2014.

3) The Company has invested in equity amounting to Rs. 54.05 Crores in MARG Properties Limited, wholly owned subsidiary of the Company.The Company has advanced an amount of Rs. 33.84 Crores as loan to the subsidiary and Rs. 11.94 Crores is carried forward as receivables as on 31-Mar-2014.The Company has recorded a Net Loss of Rs. 4.54 Crores for the year ended 31-Mar-2014, which has resulted in negative net-worth as on 31-Mar-2014. The loans of the company have been restructured by Banks with moratorium for principal and the Management is confident that the Company will be able to generate profit from its projects and cash in future years and meet its financial obligation as they arise. Accordingly, the financial statements of the subsidiary company have been prepared on ''Going concern'' basis and the management is of the opinion that no provision is considered necessary at this stage in respect of investments, loans and receivables outstanding from the said subsidiary company as at 31-Mar-2014.

4) The Company has invested in equity amounting to Rs. 0.14 Crores and an amount of Rs. 107.92 Crores is advanced as loan to its subsidiaries/fellow subsidiaries and Rs. 4.38 Crores is carried forward as receivables as on 31-Mar-2014, which have provided land owned by them as security for the loans availed from lenders. As the borrowing company defaulted in repayment of such loans, the land owned by these subsidiaries may be attached/sold which may adversely affect the recoverability of the investment/advance. However as on date no such action has been initiated by the banks and accordingly, the financial statements of such subsidiaries have been prepared on ''Going concern'' basis and management is of the opinion that no provision is considered necessary at this stage in respect of investments, loans and receivables outstanding from these subsidiaries as at 31-Mar-2014.

NOTE 5

a) The Company executed a construction contract at Agra for DG MAP, a project of the Government of India which is terminated during the year. The Company has receivables of Rs. 2.02 crores and work in progress of Rs. 13.99 Crores as on 31-Mar-2014 relating to this project. Inventory of materials amounting to Rs. 2.01 Crores and plant and machinery amounting to Rs. 2.14 Crores as on 31-Mar-2014 are withheld at site by the client. The Company is in the process of making claim under arbitration and the management is of the opinion that the above amount is considered good and recoverable and hence no provision is made as on 31-Mar-2014.

b) The Company executed a construction contract at Dwaraka for M/s HSCC (India) Limited, a project of the Government of India, in respect of which the Company has filed arbitration claim.The Company has receivables of Rs. 0.60 Crores and work in progress of Rs. 1.04 Crores as on 31-Mar-2014 relating to this project and the Company has made a claim under arbitration. The management is of the opinion that the above amount is considered good and recoverable and hence no provision is made as on 31-Mar-2014.

NOTE 6 : INFORMATIONS UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

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

NOTE 7 :

In the opinion of the Management, Current Assets, Loans & Advances have a value on realization equal to the amount at which they are stated in the Balance Sheet and provision for all known liabilities has been made.

NOTE 8 : SEGMENT REPORTING

As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

NOTE 9 : REMUNERATION TO DIRECTORS

As the company has incurred losses for the Financial Year 2013-14 no remuneration is paid to the Managing Director. (Previous Year Nil)

NOTE 10 : NON-CASH TRANSACTIONS

During the year loan of Rs. Nil Crores (Previous year Rs. 121.95 Crores) given to subsidiaries of the company was converted into Share Application Money and out of which Rs. Nil Crores (Previos year Rs. 22.95 Crores) were alloted to equity shares.

NOTE 11 : RELATED PARTY DISCLOSURES

A. Subsidiaries, where control existed during the year - Annexure A

B. Associates:

Rajakamanglam Thurai Fishing Harbour Private Limited

C. Key Management Personnel (KMP)

G R K Reddy-Chairman & Managing Director (CMD)

D. Relative of Key Management Personnel

1. V P Rajini Reddy-wife of the CMD

2. G Raghava Reddy-father of the CMD

E. Entities over which KMP and/or their relatives exercise control:

1. Akshya Infrastructure Private Limited

2. Avinash Constructions Private Limited

3. Exemplarr Worldwide Limited

4. Jeevan Habitat Private Limited

5. Marg Capital Markets Limited

6. Marg Foundation

7. Noble Habitat Private Limited

8. Swarnabhoomi Academic Institutions

F. Entities over which KMP and/or their relatives exercise significant influence:

1. Global Infoserv Limited

2. Marg Digital Infrastructure Private Limited

3. Marg Projects and Infrastructure Limited

4. Marg Realities Limited

NOTE 12 : EMPLOYEES STOCK OPTIONS SCHEME(ESOP)

a) The Company has Employee Stock Option Scheme (the "Scheme") for all eligible employees of the Company and its subsidiaries. Options are issued at a price of not less than 50% of the prevailing market price of the shares on the date of the grant of options and the same will vest over a period of three years as under:

NOTE 13: OPERATING LEASES

a) Cancelable Lease:

Total rental charges under cancelable operating lease was Rs. 0.81 Crores and Rs. 3.25 Crores for the 4th quarter and year ended 31-Mar-14 respectively (Previous year Rs. 1.13 Crores and Rs. 3.10 Crores).

NOTE 14 : INFORMATIONS PURSUANT TO SECTION 212(8) OF COMPANIES ACT

Information of (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investments (except in case of investment in subsidiaries) (f) turnover (g) profit (loss) before taxation (h) provision for taxation (i) profit (loss) after taxation and (j) proposed dividend for each subsidiary is furnished in Annexure B to the accounts.

NOTE 15 : INFORMATIONS PURSUANT TO CLAUSE 32 OF LISTING AGREEMENT

Disclosure as required by Clause 32 of listing agreement with stock exchanges for loans and advances given by the company are given in Annexure A.

NOTE 16 : INFORMATIONS PURSUANT TO PART II OF SCHEDULE VI OF COMPANIES ACT

The activities of the company are not capable of being expressed in any generic unit and hence, it is not possible to give the quantitative details required under Paragraphs 3, 4C and 4D of Part II of Schedule VI of the Companies Act 1956.

NOTE 17 : PRESENTATION OF PREVIOUS YEAR''S FIGURES

Previous year''s figures have been regrouped / reclassified / rearranged wherever necessary to bring them in conformity with the current year figures.


Mar 31, 2013

NOTE 1 : CONTINGENT LIABILITIES

a. Estimated amount of liability on capital contracts: Rs. 2.92 Crores (Previous year Rs. 1.36 Crores)

b. Corporate Guarantees given to Banks in respect of loans taken by other Companies: Rs. 3,170.22 Crores (Previous year Rs. 3,101.31 Crores)

c. Corporate Guarantees given to Banks in respect of performance bank guarantees issued by them: Rs. 175.58 Crores (Previous year Rs. 182.79 Crores)

NOTE 2 : INFORMATIONS UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

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

NOTE 3 :

In the opinion of the Management, Current Assets, Loans & Advances have a value on realization equal to the amount at which they are stated in the Balance Sheet and provision for all known liabilities has been made.

NOTE 4 : RELATED PARTY DISCLOSURES

A. Subsidiaries, where control existed during the year - Annexure A

B. Step-down subsidiary, where control existed for part of the year:

Wisdom Constructions Private Limited

C. Associates:

Rajakamanglam Thurai Fishing Harbour Private Limited

D. Key Management Personnel (KMP)

G R K Reddy-Chairman & Managing Director (CMD)

E. Relative of Key Management Personnel

1. V P Rajini Reddy-wife of the CMD

2. G Raghava Reddy-father of the CMD

F. Entities over which KMP and/or their relatives exercise control:

1. Akshya Infrastructure Private Limited

2. Avinash Constructions Private Limited

3. Exemplarr Worldwide Limited

4. Jeevan Habitat Private Limited

5. Marg Capital Markets Limited

6. Marg Foundation

7. Noble Habitat Private Limited

8. Swarnabhoomi Academic Institutions

G. Entities over which KMP and/or their relatives exercise significant influence:

1. Global Infoserv Limited

2. Marg Digital Infrastructure Private Limited

3. Marg Projects and Infrastructure Limited

4. Marg Realities Limited

NOTE 5 : DEBT RESTRUCTURING:

The Fund based and Non-fund based Working Capital facilities of EPC Division of the Company have been restructured by Consortium of banks lead by Indian Bank by sanction of:

a) Working Capital Term Loan (WCTL) of Rs. 556.69 Crores by converting the devolved Letters of Credit and part of Cash Credit.

b) Funded Interest Term Loan (FITL) of Rs. 30.94 Crores to fund the interest from Oct-12 to Mar-13.

c) WCTL and FITL are repayable in 18 quarterly installment commencing Dec-13.

Further to above the Corporate term loans availed by the company from the following banks have been restructured as under:

a) Term Loan from Punjab National Bank for Rs. 35.80 crores payable in 4 and ² years commencing from Dec-13.

b) Funded Interest Term Loan from Punjab National Bank for Rs. 5.33 crores payable in 4 and ² years commencing from Dec-13.

c) Term Loan from State Bank of Mauritius Ltd for Rs. 20.83 crores payable in 3 years commencing from Jan-14.

d) Vendor Bills Discounting Facility from Sicom Ltd has been restructured into a term loan for Rs. 40 crores out of which Rs. 20 crores payable in 12 instalments commencing from Dec-12 and balance of Rs. 20 crores payable in 2 quarters from Dec-13.

e) Short Term Loan from IFCI Venture Capital Funds Ltd for Rs. 18 crores payable in 18 instalments commencing from Nov-13.

NOTE 6 : GOING CONCERN:

The Company has recorded a Net Loss for the Year and has defaulted in the payments due to Banks / Financial Institution towards principal and interest and statutory dues. Further there were lower cash inflows from existing projects. Management is confident that the Company will be able to generate profit and cash in future years and meet its financial obligation as they arise. The financial statements have been prepared on a going concern basis based on cumulative input of the following business potential and mitigating factors:

a) The EPC division of the Company has an order book of Rs. 3221 Crores. Further local and international bids are being planned leveraging the experience gained through execution of Marine, Infrastructure and Industrial EPC.

b) The business of the Company was appraised and due diligence done by Dun & Bradstreet.

c) The Working Capital and other Loans of the Company have been restructured by Banks with moratorum for interest and principal.

d) The Company has adequate resources and construction equipments and manpower to execute the projects on hand and with the work experience to its credit is eligible to undertake new projects.

e) The Company is also in the process of generating cash through equity disinvestment in operating SPVs and realisation of advances given to subsidiaries which have commenced new residential and plotted development projects.

NOTE 7 : INFORMATIONS PERSUANT TO SECTION 212(8) OF COMPANIES ACT:

Information of (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investments (except in case of investment in subsidiaries) (f) turnover (g) profit (loss) before taxation (h) provision for taxation (i) profit (loss) after taxation and (j) proposed dividend for each subsidiary is furnished in Annexure B to the accounts.

NOTE 8 : INFORMATIONS PERSUANT TO CLAUSE 32 OF LISTING AGREEMENT:

Disclosure as required by Clause 32 of listing agreement with stock exchanges for loans and advances given by the company are given in Annexure A.

NOTE 9 : INFORMATIONS PERSUANT TO PART II OF SCHEDULE VI OF COMPANIES ACT:

The activities of the company are not capable of being expressed in any generic unit and hence, it is not possible to give the quantitative details required under Paragraphs 3, 4C and 4D of Part II of Schedule VI of the Companies Act 1956.

NOTE 10 : FOREIGN CURRENCY EXPOSURES

The Company does not use any derivative instruments to hedge its foreign currency exposures.

The details of foreign currency balances which are not hedged as at the balance sheet date are as under:

NOTE 11 : PRESENTATION OF PREVIOUS YEAR''S FIGURES

Previous year''s figures have been regrouped / reclassified / rearranged wherever necessary to bring them in conformity with the current year figures.


Mar 31, 2012

NOTE 27 : CONTINGENT LIABILITIES

a. Estimated amount of liability on capital contracts: Rs. 1.36 Crores (Previous year Rs. 3.06 Crores)

b. Corporate Guarantees given to Banks in respect of loans taken by other Companies: Rs. 3,101.31 Crores (Previous year Rs. 2,277.16 Crores)

c. Corporate Guarantees given to Banks in respect of performance bank guarantees issued by them: Rs. 182.79 Crores (Previous year Rs. 126.56 Crores)

e. Claims not acknowledged as debts by the Company: Rs. 1.02 Crores (Previous year Rs. 1.02 Crores)

NOTE 29 : INFORMATIONS UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

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

NOTE 30 :

In the opinion of the Management, Current Assets, Loans & Advances have a value on realization equal to the amount at which they are stated in the Balance Sheet and provision for all known liabilities has been made.

NOTE 31 : RELATED PARTY DISCLOSURES

A. List of Subsidiaries, where control existed during the year - Annexure A

B. List of Subsidiaries where control existed for part of the year:

1. Aaram Constructions Private Limited

2. Abhinaya Infradevelopers Private Limited

3. Ajani Constructions Private Limited

4. Akarsh Constructions Private Limited

5. Akhil Infrastructure Private Limited

6. Ambar Nivas Private Limited

7. Aparajitha Infrastructure Private Limited

8. Arogya Constructions Private Limited

9. Bay Infradevelopers Private Limited

10. Bhushan Tradelinks Private Limited

11. Giri Infradevelopers Private Limited

12. Goldenview Nivas Private Limited

13. Highrise Housing Projects Private Limited

14. Indraprastha Homes Private Limited

15. Jai Ganesh Infradevelopers Private Limited

16. Kanchanajunga Infradevelopers Private Limited

17. Karaikal Infradevelopers Private Limited

18. Kripa Infrastructure Private Limited

19. MARG Communications Private Limited

20. MARG Constructions (Chennai) Private Limited

21. MARG Port Management Services Private Limited

22. MARG Power Projects Private Limited

23. MARG Renewable Power Projects Private Limited

24. MARG Swarnabhoomi Logistics Private Limited

25. MARG Swarnabhoomi Power Private Limited

26. Marigold Villas Private Limited

27. Mayur Habitat Private Limited

28. Navita Estates Private Limited

29. New Era Land Developers Private Limited

30. Pathang Constructions Private Limited

31. Prospective Constructions Private Limited

32. Rainbow Habitat Private Limited

33. Rupak Constructions Private Limited

34. Sanjog Infrastructure Private Ltd

35. Saptarishi Projects Private Limited

36. Saral Homes Private Limited

37. Sathsang Constructions Private Limited

38. Siddhi Infradevelopers Private Limited

39. Singar Constructions Private Limited

40. Swarnabhoomi Port Private Limited

41. Veda infradevelopers Private Limited

42. Viswadhara Constructions Private Limited

C. Associates:

Rajakamanglam Thurai Fishing Harbour Private Limited.

D. Key Management Personnel (KMP)

G R K Reddy - Chairman & Managing Director (CMD)

E. Relative of Key Management Personnel

1. V P Rajini Reddy - Wife of the CMD

2. G Raghava Reddy - Father of the CMD

F. Entities over which KMP and/or their relatives exercise control:

1. Akshya Infrastructure Private Limited

2. Avinash Constructions Private Limited

3. MARG Capital Markets Limited

4. MARG Digital Infrastructure Private Limited

5. MARG Projects and Infrastructure Limited

6. MARG Foundation

7. Swarnabhoomi Academic Institutions

G. Entities over which KMP and/or their relatives exercise significant influence:

1. Exemplarr Worldwide Limited

2. Global Infoserv Limited

3. MARG Realities Limited

NOTE 32 : SEGMENT REPORTING

As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

NOTE 35 : NON-CASH TRANSACTIONS

During the year loan of Rs. 27.39 Crores (Previous year Rs. 48.13 Crores) given to subsidiaries of the company was converted into Share Application Money and subsequently shares were allotted.

NOTE 38: OPERATING LEASES

a) Cancelable Lease:

Total rental charges under cancelable operating lease was Rs. 1.14 Crores and Rs. 4.23 Crores for the 4th quarter and year ended 31-Mar-2012 respectively (Previous year Rs. 1.24 Crores and Rs. 3.83 Crores).

NOTE 42 : INFORMATIONS PERSUANT TO SECTION 212 (8) OF COMPANIES ACT:

Information of (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investments (except in case of investment in subsidiaries) (f) turnover (g) profit (loss) before taxation (h) provision for taxation (i) profit (loss) after taxation and (j) proposed dividend for each subsidiary is furnished in Annexure B to the accounts.

NOTE 43 : INFORMATIONS PERSUANT TO CLAUSE 32 OF LISTING AGREEMENT:

Disclosure as required by Clause 32 of listing agreement with stock exchanges for loans and advances given by the comapany are given in Annexure A.

NOTE 44 : INFORMATIONS PERSUANT TO PART II OF SCHEDULE VI OF COMPANIES ACT:

The activities of the company are not capable of being expressed in any generic unit and hence, it is not possible to give the quantitative details required under Paragraphs 3, 4C and 4D of Part II of Schedule VI of the Companies Act 1956.

NOTE 46 : PRESENTATION OF PREVIOUS YEAR'S FIGURES

Previous year's figures have been regrouped / reclassified / rearranged wherever necessary to bring them in conformity with the current year figures.


Mar 31, 2011

1. CONTINGENT LIABILITIES

a. Estimated amount of liability on capital contracts as on 31st March 2011 is Rs. 3.06 Crores (Previous year Rs. 6.99 Crores)

b. Corporate Guarantees given to Banks in respect of loans taken by other Companies : Rs. 2277.16 Crores (Previous year Rs. 2017.10 Crores)

c. Corporate Guarantees given to Banks in respect of performance bank guarantees issued by them: Rs. 126.56 Crores (Previous year Rs. 60.65 Crores)

d. The company has imported capital goods at concessional rate of customs duty under the Export Promotion Credit Guarantee (EPCG) scheme against submission of bank guarantees. In terms of the scheme, the company is obliged to export goods/services of certain FOB value as specified in the said scheme. As at the year end, the company has the following unfulfilled export obligations under the scheme:

(Rs. in crores) As at As at Due date of Obligation

31st Mar 2011 31st Mar 2010

Duty saved Export obligation Duty saved Export obligation

0.14 1.14 0.14 1.14 17-Feb-12

0.12 0.95 0.12 0.95 3-Jan-15

0.14 1.11 0.14 1.11 27-Feb-15

1.73 13.83 Nil Nil 20-May-18

0.31 2.47 Nil Nil 20-May-18

e. Claims not acknowledged as debts by the Company: Rs. 1.02 Crores (Previous year Rs. 0.04 crore)

f. Income Tax Demand

Tax on Income

Details of Demand (Rs.)

Amount Paid under Protest

Assessment Demand Raised By Till 31st March 2010 During 2010-11 Total Forum Where Dispute is Year Dept. Pending

2001-02 16,785,003 16,879,719 - 16,879,719 Madras High Court

2002 - 03 8,926,848 9,659,367 - 9,659,367 CIT

2007-08 13,40,625 13,40,625 - 13,40,625 ITAT, Chennai

2008-09 52,76,990 - 52,76,990 52,76,990 CIT(Appeal)

Tax Deducted at Source

Details of Demand (Rs.)

Amount Paid under Protest

Assessment Demand Raised By Till 31st March 2010 During 2010-11 Total Forum Where Dispute is Year Dept. Pending

1996 - 97 21,503 4,931 - 4,931 ITO - TDS

1997 - 98 2,368,619 2,317,682 - 2,317,682 ITO - TDS

1998 - 99 1,628,830 842,934 - 842,934 ITO - TDS

1999 - 00 1,857,640 581,282 - 581,282 ITO - TDS

2000 - 01 442,820 65,440 - 65,440 ITO - TDS

2. DEFERRED TAX LIABILITY

As per the Accounting Standard (AS-22) laid down by the Institute of Chartered Accountants of India, the Company is required to make a provision for deferred tax liability.

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

4. In the opinion of the Management, Current Assets, Loans & Advances have a value on realization equal to the amount at which they are stated in the Balance Sheet and provision for all known liabilities has been made.

5. SEGMENT REPORTING

As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

6. RELATED PARTY DISCLOSURES

A. List of related parties, where control exists is given vide Annexure A

B. Associates:

The Company holds 39% shares in Rajakamanglam Thurai Fishing Harbour Private Limited.

C. Key Management Personnel (KMP)

G R K Reddy-Chairman & Managing Director (CMD)

D. Relative of Key Management Personnel

V P Rajini Reddy-Director and wife of the CMD

G Raghava Reddy-Director and father of the CMD

E. Entities over which KMP and/or their relatives exercise control:

i) Avinash Constructions Private Limited

ii) Noble Habitat Private Limited

iii) Jeevan Habitat Private Limited

iv) Akshya Infrastructure Private Limited

v) MARG Foundation

vi) Swarnabhoomi Academic Institutions

F. Entities over which KMP and/or their relatives exercise significant influence:

i) Exemplarr Worldwide Limited

ii) MARG Digital Infrastructure Private Limited

iii) MARG Realities Limited

7. NON CASH TRANSACTIONS

During the year loan of Rs. 48.13 crore given to subsidiaries of the company was converted into Share application money.

8. QUALIFIED INSTITUTIONAL PLACEMENT (QIP) AND PREFERENTIAL ISSUE OF WARRANTS:

- Consequent to Qualified Institutional Placement (QIP), the Company issued and allotted 56,31,648 Equity Shares of Rs. 10 each at a premium of Rs. 179.88 per share on 3rd May 2010 to Qualified Institutional Buyers (QIB) under Chapter VIII of SEBI's Issue of Capital & Disclosure Regulations, 2009. The entire proceeds of Rs. 106.93 crores received under the QIP issue was utilized in 2010-11.

- During 2009-10 the Company issued 67, 71, 619 warrants convertible into equity shares at the option of the holders, on preferential basis. Out of the above, the Company upon conversion of 15,62,100 warrants allotted equal number of 15,62,100 equity shares in 2009-10 and balance of 52,09,519 warrants were converted into equal number of 52,09,519 equity shares in 2010-11 and the issue price of warrants convertible into equity shares was at ^10 each at a premium of Rs. 51 per share. This includes 49,00,000 equity shares allotted to the promoters. Out of the total Preferential warrant proceeds of Rs. 23.48 crores received during the year, the company utilized Rs. 23.83 crores in the year, including the balance carried forward from last year.

c) During the year 69,390 equity shares were allotted to the employees who exercised the option.

9. Operating Leases

Cancelable Lease:

Total rental charges under cancelable operating lease wasRs. 1.24crore and Rs.3.83 for the quarter and year ended 31 March 2011 respectively. (Previous year Rs. 0.42 crore and Rs. 1.98 crores)

10. In terms of approval granted by Ministry of Company Affairs, Government of India under Section 212(8) of the Companies Act, 1956, a copy of Balance Sheet, Profit & Loss Account, Report of Board of Directors and the Report of the Auditors of the Subsidiary Companies have not been attached with Annual Report of the Company. The Company will make available these documents and the related details upon request by any investor of the Company and its Subsidiary. These documents will also be available for inspection by any investor at the Registered Office of the Company at "Marg Axis", 4/318, Rajiv Gandhi Salai, Kottivakkam, Chennai - 600 041.

11. Disclosure as required by clause 32 of listing agreement with stock exchanges for loans & advances given by the Company are given in Annexure A.

12. The activities of the company are not capable of being expressed in any generic unit and hence, it is not possible to give the quantitative details required under Paragraphs 3, 4C and 4D of Part II of Schedule VI of the Companies Act 1956.

13. Foreign Currency Exposures

The Company does not use any derivative instruments to hedge its foreign currency exposures.

14. Previous year's figures have been regrouped / reclassified / rearranged wherever necessary to bring them in conformity with the current year figures.

 
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