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Notes to Accounts of Shree Ram Urban Infrastructure Ltd.

Mar 31, 2015

1. SHARE CAPITAL:

a) Terms/rights attached to equity shares:

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. In the 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, in proportion to their shareholding.

2. The Debentures issued are secured against second ranking mortgage of Plot Nos. 5B and 6 situated at Shree Ram Mills Premises, Lower Parel Div., Mumbai together with building and structures thereon viz. "Palais Royale," (excluding public parking space and Reliance Building) and further secured by second charge on all plant and machinery attached to the earth together with all the receivables / cash flows arising from the sale of the aforesaid project of developed area as well as pre-sold in favor of the Lender.

3. Term Loans from NBFCs

a) Project loans

The project loans taken from NBFC of Rs. 2,28,28,00,000 (Previous year:Rs. 64,00,00,000) is secured by extension of first charge against registered mortgage of Plot Nos. 5B and 6 situated at Shree Ram Mills Premises, Lower Parel Div., Mumbai together with building and structures thereon, both present and future viz. "Palais Royale" (excluding public parking space and Reliance Building) and further secured by first and exclusive charge on all the receivables /cash flows arising from the sale of the aforesaid project of developed area as well as pre-sold in favor of the Lender and personal guarantee of one of the Director. The tenure of loans is 60 months from the date of disbursements and are repayable as under

i) outstanding loan of Rs.99,00,00,000 is repayable in 12 quarterly Installments of Rs. 8,25,00,000 commencing from March 2016, and

ii) outstanding loan of Rs.1,29,28,00,000 is repayable in a) first, 11 quarterly installments of Rs. 10,77,33,333 b) next one quarter installment of Rs.9,77,33,333 and c) balance two quarters installments of Rs.50,00,000 each, commencing from April, 2016.

The rate of interest is linked to lender's PLR minus 490 basis points (currently applicable rate of interest is 18.10% per annum).

Loan repayable within one year is Rs. 8,25,00,000 (Previous year: Rs. NIL).

b) Equipment Loan

The Equipment Loan taken from NBFC of Rs.1,11,94,84,747 (Previous year:Rs.NIL) is secured by i) Property known as Banatwala Chawl, situated, lying & being at Ferguson Road, Lower Parel, Mumbai admeasuring 1014 Sq. Yds i.e. 847.83 sq.metres, ii) Residential Flat at FLoor Level 21 NW, Palais Royale, Shree Ram Mills Premises, Worli, Mumbai, iii) Pledge of 100% shares of Simoes Business Services Private Limited iv) Personal guarantee of one of the director, v) Corporate guarantee of Encouraging Developers Private Limited and Simoes Business Services Private Limited Loan repayable within one year is Rs.17,95,92,027 (Previous year:Rs.NIL).

c) Vehicle loans

Vehicle Loans (Secured) taken from NBFC amounting to Rs.5,03,322 (Previous year:Rs. 9,57,170) are secured against hypothecation of assets financed. These loans are repayable in 2 to 15 monthly installments from the balance sheet date and carries interest @ 11.17% per annum. Loan repayable within one year is Rs. 4,11,315 (Previous year: Rs. 3,57,966).

4. i. Term loan from NBFCs

a) Project Loan

The project loan taken from NBFC of Rs. 1,01,00,00,000 (Previous year: Rs. 3,85,00,00,000) is secured by first charge against registered mortgage of Plot Nos. 5B and 6 situated at Shree Ram Mills Premises, Lower Parel Div., Mumbai together with building and structures thereon, both present and future viz. "Palais Royale" (excluding public parking space and Reliance Building) and further secured by first and exclusive charge on all the receivables /cash flows arising from the sale of the aforesaid project of developed area as well as pre-sold in favor of the Lender and personal guarantee of one of the Director. The rate of interest is linked to lender's PLR minus 490 basis points (currently applicable rate of interest is 18.10% per annum).

Loan repayable within one year is Rs. 1,01,00,00,000 (Previous year: Rs. 1,65,00,00,000).

b) Equipment Loans

Equipment loans (Secured) taken from NBFCs amounting to Rs.NIL (Previous year: Rs. 62,42,23,904) are secured against hypothecation of assets financed, pledge of NIL shares (Previous year: 36,20,830 shares) of the Company held by promoters and personal guarantee of one of the director. Loans repayable within one year is Rs. NIL (Previous year: Rs. 44,38,28,294).

c) Vehicle Loans

Vehicle Loans (Secured) taken from NBFCs amounting to Rs.3,61,627 (Previous year: Rs.29,83,445) are secured against hypothecation of assets financed i.e., Motor Cars. These loans are repayable in 2 to 9 monthly installments from the balance sheet date and carries interest in the range of 12.00% to 12.63% per annum. Loans repayable within one year is Rs. 3,61,627 (Previous year: Rs. 21,35,538).

ii Term Loans from Bank Vehicle loans

Vehicle loans (Secured) taken from bank amounting to Rs.NIL (Previous year: Rs. 13,52,098) are secured against hypothecation of assets financed and personal guarantee of one of the director. These Loans carries interest in the range of 11.75% to 12.25% per annum. Loans repayable within one year is Rs. NIL (Previous year: Rs. 13,52,098).

iii Unsecured loans

The unsecured loans (intercorporate) are interest free and repayable on demand.

(Amount in Rupees)

5. Contingent Liabilities and Commitment As at As at (to the extent not provided for) 31-Mar-2015 31-Dec-2013

I) Contingent Liabilities

a) Claims against the Company not acknowledged as debts

Income Tax Matters 33,62,27,953 16,52,92,857

Sales Tax Matters 5,58,05,782 85,94,137

Excise and Custom duty matter 10,37,500 10,37,500

Show cause cum demand notice in respect 8,01,34,157 1,32,56,970 of Service Tax

Labour related matters* 32,48,593 12,99,448

Property Tax matters 3,76,98,762 3,00,37,424

Others** 19,00,00,003 9,50,99,770

b) Corporate guarantees given to NBFC 3,84,50,00,000 - in respect of third parties

II) Commitments

Other Commitments 7,94,87,63,308 7,04,27,85,422

III) Dividend in respect of 1,36,877 -11% Redeemable Cumulative 1,22,30,116 1,22,30,116 Preference Shares of Face Value of Rs. 100 each.

* Excludes pending court cases - 4 (Previous year: 5) in respect of claims for Back Wages etc. filed by ex-employees of the Company for which the amount of Contingent Liability is unascertainable.

** Excludes pending court cases - 4 (Previous year: 5) in respect of other matters against the Company for which the amount of Contingent Liability is unascertainable.

In respect of above contingent liabilites, the future cash outflows are determinable only on receipt of judgements pending at various forums / authorities.

6. Arbitration proceedings had been concluded in July, 2014 and the award had been reserved which have been underway since 2005 with Kalpataru Properties Private Limited (KPPL) in respect of development rights of Plot 5A admeasuring 20,955.4 sq.mtrs of the Company's Worli Estate, against which it has received Rs.30,00,00,000. In the meantime, the new draft Development Plan 2034 which has been recently notified (please see note 28) may have adverse effect on the claims of KPPL in the above arbitration and the same has been placed before the Arbitral Tribunal. The outcome is awaited.

7. The draft Development Plan 2034 which was notified by the MCGM in February, 2015 has proposed changes in the designation of the Company's Worli Estate which may have an effect on Plot 5A of the Estate, and which would not have any effect on the ongoing Palais Royale development. The Company has filed appropriate objections before the authorities to protect all the rights of the Company.

8. In the opinion of the Management, no item of current assets has a value on realization in the ordinary course of business, which is less than the amount of value at which it is stated in the balance sheet. The provision for all known and determined liability is adequate and not in the excess of the amount reasonably required.

9. No significant events which could affect the financial position as on March 31, 2015, to a material extent have occurred, after the balance sheet date till the signing of report.

10. Segment Reporting:

The Company operates in single segment i.e. Real Estate and therefore, Segment Reporting as per Accounting Standard 17 - "Segment Reporting" notified under the Companies (Accounting Standard) Rules, 2006 is not applicable.

11. Employee Benefits:

Disclosure under Accounting Standard - 15 "Employee Benefits" (Revised 2005) notified by Companies (Accounting Standards) Rules, 2006.

Defined Contribution Plan

The Company's contribution to provident fund is deposited with the Employees Provident Fund Organization (EPFO). During the reporting period, the Company has recognized Rs. 13,81,089 (Previous year: Rs. 13,05,175) towards provident fund.

Defined Benefit Plan

Gratuity

The gratuity liability arises on retirement, premature withdrawal, resignation and death of an employee. The gratuity liability is calculated on the basis of actuarial valuation as per projected unit credit method.

Other Long Term Benefit

Leave Encashment Plan

The earned leave liability arises as and when services are performed by an employee. The said liability is calculated on the basis of actuarial valuation as per projected unit credit method.

II) The fair value of plan assets is NIL since, retirement benefit plans are wholly unfunded.

12. Related Party Disclosures:

In compliance with Accounting Standard 18 - "Related Party Disclosures" notified by Companies (Accounting Standards) Rules, 2006, the required disclosures are given in the table below:

a) Name of the Related Party and Nature of Related Party Relationship:

Name of the Related Party Nature of Related Party Relationship

a) SRM Sites Private Limited

b) Raghuveer Suburban Infrastructure Subsidiary Private Limited

c) Shree Ram Realinfra Ventures Private Limited

Akhilesh Developers Private Limited Enterprise that directly or indirectly through one or more intermediaries, control, or are controlled by or are under common control with the reporting enterprise.

a) Landmarc Leisure Corporation Limited Enterprises over which key management personnel b) S Kumars Online Limited and their relatives exercise significant c) Vidhi Holdings Private Limited influence where the Company has entered into d) Akhilesh Developers Private Limited transactions during the year e) Hanumesh Realtors Private Limited

f) Mandakini Hospitality Private Limited

g) Yashaswini Leisure Private Limited

h) S.K.M. Real Infra Limited (Formerly known as SKM Fabrics (Andheri)Limited)

i) Aura Realtors Private Limited

j) Goldmount Advisors

k) Vasundhara Hospitality Private Limited

l) Raghuveer Urban Constructions Company Private Limited

m) Charming Realtors Private Limited

n) Determined Hospitality Private Limited

o) Imaginative Leisure Private Limited

p) Nurturing Traders Private Limited

q) Wholesome Developers Private Limited

a) Mr. Vikas S. Kasliwal - Vice-Chairman Key Managerial Personnel & CEO

b) Mr. S. K. Luharuka - Whole-Time Director

13. 'Sundry debit balances written off (net)' amounting to Rs. 10,23,269 (Previous year : Rs.3,42,943 ) are net of 'sundry credit balances written back' amounting to Rs. 5,96,452 (Previous year : Rs.68,607).

14. The Company had received notices in financial year ended December 31, 2011 arising out of inspection u/s. 209A of the Companies Act, 1956 carried out by the Deputy Registrar of Companies pointing out certain irregularities/ contraventions of the Companies Act, 1956. In response, the Company had provided all necessary explanations/ documentary evidences. In order to avoid long drawn litigation, Company without accepting any of the irregularities/ contraventions, had filed application for compounding of offences under section 621A of the Companies Act, 1956. The said applications are pending for hearing. In opinion of the Company, liability in this regard is estimated at Rs. 22,60,000 which was provided in the books of accounts in the year ended December 31, 2011.

15. The Hon. Bombay High Court had passed the order on May 13, 2013 disposing off the Public Interest Litigation (PIL), filed against the Municipal Corporation of Greater Mumbai (MCGM) and the Company which alleged that various building permissions granted by MCGM to the Company for the project including sanction of Public Parking Lot (PPL) are not in accordance with "Development Control Regulations" (DCR). Aggrieved by the said order, the petitioner NGO had filed Special Leave Petition (SLP) before the Hon. Supreme Court. The Hon. Supreme Court passed a dissenting judgement in April 2014 on the said SLP and the matter has now been placed before a three- judge bench of the Hon. Supreme Court. The Matter has yet to be heard. The Writ Petition filed by the Company against the Municipal Commissoner's order holding that only part of PPL will be eligible for grant of incentive FSI and refuge area in excess of 4% of the built up area, structural columns etc. shall be counted in FSI and accordingly directed the Company to submit modified plans is pending in the Hon. Bombay High Court. Based on the legal advice received, the Company is of the view that it has a very strong case, and the financial impact on the Company, if any, is not likely to be material. Accordingly, the accounts have been prepared on a going concern basis.

16. The Company has extended mortgage of its property at Plot Nos. 5B and 6 situated at Shree Ram Mills Premises, Lower Parel Div., Mumbai viz. "Palais Royale" (excluding public parking space and Reliance building) and also is secured by first and exclusive charge on all the receivables of the aforesaid project and personal guarantee of one of the Director for loan availed of Rs. 72,00,00,000 (Previous year: Rs. 1,26,00,00,000) by its wholly owned subsidiary company 'Raghuveer Suburban Infrastructure Private Limited' from others.

17. During the period, the Company has provided Corporate Guarantee and extended mortgage of its property at Plot No.5B and 6 situated at Shree Ram Mills Premises, Lower Parel Div., Mumbai viz. " Palais Royale" together with building and structures thereon (excluding public parking space and Reliance building) and also secured by first and exclusive charge on all the receivable of the aforesaid project and personal guarantee of one of the Director in favor of Lender for extending housing loan to the Customers of Palais Royale under Subvention Scheme for an amount of Rs. 3,84,50,00,000. As per the Subvention Scheme the Company will bear the cost of interest till possession.

18. Some of the balances of deposits, loans and advances, trade receivables, trade payables and other long / short term liabilities are subject to confirmation from the respective parties and consequential reconciliation / adjustments arising therefrom, if any. The management however does not expect any material variation.

19. Figures of the previous year have been re-grouped, re-classified and re-arranged, wherever necessary to confirm to current period's classification.


Dec 31, 2013

1. disclosure is made for a contingent liability when there is a:

(i) Possible obligation, the existence of which will be confirmed by the occurrence / non-occurrence of one or more uncertain events, not fully within the control of the company.

(ii) Present obligation, where it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

(iii) Present obligation where a reliable estimate cannot be made.

t) Other Accounting Policies :

These are consistent with the generally accepted accounting practices.

b) Terms/rights attached to equity shares:

i) The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. In the 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. The distribution will be in proportion to the outstanding equity shares held by the shareholders.

ii) 75,40,400 and 1,29,59,600 equity shares allotted on 15th June 2011 and 29th July 2011 respectively on preferential basis pursuant to exercise of equity warrants are subject to lock-in for a period of three years for the promoters group i.e. 1,60,84,678 equity shares and for the period of one year for other allottees i.e. 44,15,322 equity shares.

d) Demerger of Promoter Companies:

i) Akhilesh Developers Private Limited

Pursuant to scheme of arrangement of demerger between Akhilesh Developers Private Limited and Akhilesh Investfin Private Limited, Akhilesh Developers Private Limited has executed the transfer for 52,73,883 shares on 18.02.2013 and Akhilesh Investfin Private Limited has acquired the shares.

ii) Mandakini Hospitality Private Limited

Pursuant to scheme of arrangement of demerger between Mandakini Hospitality Private Limited and Mandakini Investfin Private Limited, Mandakini Hospitality Private Limited has executed the transfer for 50,84,678 shares on 18.02.2013 and Mandakini Investfin Private Limited has acquired the shares.

iii) Yashaswini Leisure Private Limited

Pursuant to scheme of arrangement of demerger between Yashaswini Leisure Private Limited and Yashaswini Investments Company Private Limited, Yashaswini Leisure Private Limited has executed the transfer for 55,00,000 shares on 18.02.2013 and Yashaswini Investments Company Private Limited has acquired the shares.

iv) Hanumesh Realtors Private Limited

Pursuant to scheme of arrangement of demerger between Hanumesh Realtors Private Limited and Hanumesh Investments Private Limited, Hanumesh Realtors Private Limited has executed the transfer for 61,50,848 shares on 18.02.2013 and Hanumesh Investments Private Limited has acquired the Shares.

i Term loans from NBFCs

a) Project loan

The project loan taken from NBFC of Rs. 64,00,00,000 is secured by extension of first charge against registered mortgage of Plot Nos. 5B and 6 situated at Shree Ram Mills Premises, Lower Parel Div., Mumbai together with building and structures thereon, both present and future viz. "Palais Royale" and further secured by first and exclusive charge on all the receivables /cash flows arising from the sale of the aforesaid project of developed area as well as pre-sold in favor of the Lender and personal guarantee of one of the Director. The tenure of loan is 60 months from the date of disbursement and is repayable in 12 quarterly installments of Rs. 5,33,33,333 commencing from March 2016, whereas interest is payable monthly.

The rate of interest is linked to lender''s PLR minus 490 basis points (currently applicable rate of interest is 18.10% per annum).

Loan repayable within one year is Rs. NIL (Previous year: Rs. NIL).

b) Vehicle loans

Vehicle Loans (Secured) taken from NBFCs amounting to Rs.9,57,170 are secured against hypothecation of assets financed. These loans are repayable in 29 to 30 monthly installments from the balance sheet date and carries interest @ 11.17% per annum. Loan repayable within one year is Rs. 3,57,966 (Previous year: Rs. NIL).

i) Term loan from NBFCs

a) Project Loan

The Project loan taken from NBFC of Rs. 3,85,00,00,000 (Previous year : Rs. 5,50,00,00,000) is secured by first charge against registered mortgage of Plot Nos. 5B and 6 situated at Shree Ram Mills Premises, Lower Parel Div., Mumbai together with building and structure thereon, both present and future viz. "Palais Royale" and further secured by first and exclusive charge on all the receivables / cash flows arising from the sale of the aforesaid project of developed area as well as pre-sold in favor of the Lender and personal guarantee of one of the Director. The loan of Rs. 82,50,00,000 is repayable by 30-June-14, Rs. 82,50,00,000 is repayable by 31-Dec-14, Rs. 1,10,00,00,000 is repayable by 30-June-15 and Rs. 1,10,00,00,000 is repayable by 31-Dec15. The rate of interest is linked to Lender''s PLR minus 490 basis points (currently applicable rate of interest is 18.10% per annum).

Loan repayable within one year is Rs. 1,65,00,00,000 (Previous year : Rs. 1,65,00,00,000).

b) Equipment Loan

Equipment loans (Secured) taken from NBFCs amounting to Rs.62,42,23,904 (Previous year: Rs. 84,29,61,994) are secured against hypothecation of assets financed, pledge of 36,20,830 shares (Previous year: 32,47,830 shares) of the Company held by promoters and personal guarantee of one of the director. These loans are repayable in 8 to 25 monthly installments from the balance sheet date and carries interest in the range of 12.00% to 18.50% per annum. Loans repayable within one year is Rs. 44,38,28,294 (Previous year: Rs. 33,07,21,982).

c) Vehicle loans

Vehicle Loans (Secured) taken from NBFCs amounting to Rs.29,83,445 (Previous year: Rs. 50,32,217) are secured against hypothecation of assets financed i.e., Motor Cars. These loans are repayable in 7 to 21 monthly installments from the balance sheet date and carries interest in the range of 12.00% to 12.63% per annum. Loans repayable within one year is Rs. 21,35,538 (Previous year: Rs. 20,48,773).

ii Term Loan from Banks

Vehicle loans

Vehicle loans (Secured) taken from banks amounting to Rs.13,52,098 (Previous year: Rs. 32,32,713) are secured against hypothecation of assets financed and personal guarantee of one of the director. These loans are repayable in 2 to 11 monthly installments from the balance sheet date and carries interest in the range of 11.75% to 12.25% per annum. Loans repayable within one year is Rs. 13,52,098 (Previous year: Rs. 18,63,163).

iii Unsecured loans

The loans taken from related parties are unsecured. These loans are interest free and repayable on demand.

2. Contingent Liabilities and Commitments:

A) Contingent Liabilities: (Amount in Rupees)

Sr. No. Particulars 31-Dec-2013 31-Dec-2012

a) Claims against the Company not acknowledged as debts 9,50,99,770 6,02,98,513

b) Labour Matters:

i) Pending in court in respect of claims for Retrenchment Compensation etc. 12,99,448 15,98,886

ii) Pending court cases - 5 (Previous year: 7) in respect of claims for Back Wages etc. filed by ex-employees of the Company for which the amount of Contingent Liability is unascertainable.

c) Income Tax Matters:

i) Disputed demand of Income Tax for assessment year 2003-04, where the department is in appeal. 23,24,613 23,24,613

ii) Disputed demand of Income Tax for assessment year 2003-04, where the Company has filed application for rectification. 1,08,86,963 1,08,86,963

iii) Disputed demand of Income Tax for assessment year 2004-05, where the department is in appeal. 1,22,09,858 1,22,09,858

iv) Disputed demand of Income Tax for assessment year 2004-05, where the Company is in appeal. 1,29,46,164 1,29,46,164

v) Disputed demand of Income Tax for assessment year 2005-06, where the department is in appeal. 8,74,93,855 8,74,93,855

vi) Disputed demand of Income Tax for assessment year 2007-08, where the Company is in appeal. 1,21,75,306 43,58,910

vii) Disputed demand of Income Tax for assessment year 2009-10, where the Company is in appeal. 90,49,260 90,49,260

viii) Income tax demand for short deduction of tax at source and interest thereon for various assessment years, where the Company is in appeal. 1,82,06,838 2,98,52,478

d) i) Property Tax disputed with BMC where the Company is in appeal. 2,64,58,176 2,09,64,798 ii) Property Tax disputed with BMC. - 4,43,81,754 iii) Property Tax disputed with BMC where the Company has filed Complaint. 35,79,248 26,34,934

e) Excise Duty demand [Bank guarantee provided for the same] 3,39,250 3,39,250

f) Customs Duty demand [Bank guarantee provided for the same] 6,98,250 6,98,250

g) Bank guarantee 10,00,000 10,00,000

h) Dividend in respect of 1,36,877 -11% Redeemable Cumulative Preference Shares of Face Value of Rs. 100 each. 1,22,30,116 1,22,30,116

i) Interest liability on VAT 85,94,137 -

j) Interest liability on service tax amounting to Rs. 1,32,56,970 (Previous year : Rs. 1,34,29,366) has not been provided for, as the matter is pending before the Hon. Supreme Court on writ petition filed by the Maharashtra Chamber Housing Industry (MCHI) to which the Company is a member, challenging levy of service tax on real estate business.

k) Pending court cases - 5 (Previous year: 4) in respect of other matters against the Company for which the amount of Contingent Liability is unascertainable.

B) Capital and Other Commitments (Amount in Rupees)

Particulars 31-Dec-2013 31-Dec-2012

Capital Commitments

Estimated amount of contracts remaining to be executed on Capital Account and not provided for: - 2,32,03,406

Other Commitments 7,04,27,85,422 5,17,05,88,216

3. Arbitration proceedings have been underway since 2005 with Kalpataru Properties Private Ltd. (KPPL) in respect of development rights of Plot 5A admeasuring 20,955.4 sq.mtrs of the Company''s World Estate, against which it has received Rs. 30,00,00,000. The Bombay High Court had passed a status quo order on about 23,500 sq. mtrs. of the said estate. Subsequently, KPPL had filed a claim of compensation for Rs. 15,28,93,00,000 along with interest as an alternative to their original claim for specific performance. The Company has received legal advice that the said claim for compensation is not tenable, and the chances of it being held against the Company are highly remote. As regards the Company''s own counter-claim of Rs. 26,77,32,00,000 against KPPL, the Arbitral Tribunal has held that claim of Rs. 7,60,36,00,000 is under their jurisdiction under the present Arbitration proceeding and for the balance amount of Rs. 19,16,96,00,000, alternative remedies will have to be sought. The Company is in discussion with its legal advisors on the most optimum course to follow for the said balance claim.

4. In the opinion of the Management, no item of current assets has a value on realization in the ordinary course of business, which is less than the amount of value at which it is stated in the balance sheet. The provision for all known and determined liability is adequate and not in the excess of the amount reasonably required.

5. No significant events which could affect the financial position as on 31st December, 2013, to a material extent have been occurred, after the balance sheet date till the signing of report.

6. Segment Reporting

The Company operates in single segment i.e. Real Estate and therefore, Segment Reporting as per Accounting Standard 17 - "Segment Reporting" notified under the Companies (Accounting Standard) Rules, 2006 is not applicable.

7. Employee Benefits

Disclosure under Accounting Standard - 15 "Employee Benefits" (Revised 2005) notified by Companies (Accounting Standards) Rules, 2006.

Defined Contribution Plan

The Company''s contribution to provident fund is deposited with the Employees Provident Fund Organization (EPFO). During the year, the Company has recognized Rs. 13,05,175 (Previous year: Rs. 12,97,990) towards provident fund.

Defined Benefit Plan

Gratuity

The gratuity liability arises on retirement, premature withdrawal, resignation and death of an employee. The gratuity liability is calculated on the basis of actuarial valuation as per projected unit credit method.

Other Long Term Benefit

Leave Encashment Plan

The earned leave liability arises as and when services are performed by an employee. The said liability is calculated on the basis of actuarial valuation as per projected unit credit method.

The Company does not have any potential dilutive equity shares. Consequently, the basic and diluted earnings per share remains the same.

8. "Sundry debit balances written off (net)" amounting to Rs. 3,42,943 are net of ''sundry credit balances written back amounting to Rs. 68,607 (Previous year: ''Sundry Credit balances written back (net)'' amounting to Rs. 1,20,14,267 are net of ''sundry debit balances written off'' amounting to Rs. 606).

9. The Company had received notices in financial year ended 31st December 2011 arising out of inspection u/s. 209A of the Companies Act, 1956 carried out by the Deputy Registrar of Companies pointing out certain irregularities / contraventions of the Companies Act, 1956. In response, the Company had provided all necessary explanations / documentary evidences. In order to avoid long drawn litigation, Company without accepting any of the irregularities / contraventions, had filed application for compounding of offences under section 621A of the Companies Act, 1956. The said applications are pending for hearing. In opinion of the Company, liability in this regard is estimated at Rs. 22,60,000 which was provided in the books of accounts in the year ended 31st December 2011.

10. The Hon. Bombay High Court has passed the order on 13.05.2013 disposing off the Public Interest Litigation (PIL), filed against the Municipal Corporation of Greater Mumbai (MCGM) and the Company which alleged that various building permissions granted by MCGM to the Company for the project including sanction of Public Parking Lot (PPL) are not in accordance with "Development Control Regulations" (DCR). Aggrieved by the said order, the petitioner NGO has filed Special Leave Petition before the Hon. Supreme Court which is pending. The Hon''ble Bombay High Court has, inter alia, held that the PPL cannot be held illegal and the Company cannot be deprived from claiming incentive FSI and directed the Municipal Commissioner (MC) to review the points raised by the MCGM in their affidavit. The MC has passed an order on 12.09.2013 holding that only part of PPL will be eligible for grant of incentive FSI and refuge area in excess of 4% of the built up area, structural columns, etc. shall be counted in FSI and accordingly directed the Company to submit modified plans. Against the said order of the MC, the Company has filed a Writ Petition before Hon. Bombay High Court and the matter is pending.

As various interlinked & revised FSI computations would be required to be computed on the final outcome of the case, it is not possible to ascertain the financial impact at this stage and hence no effect has been considered in these financial statements. Based on legal advise obtained from experts, management is of the view that, the Company has a very strong case and the financial impact if any, is not likely to be material. Accordingly, the accounts have been prepared on a going concern basis.

11. The Company has extended mortgage of its property at Plot Nos. 5B and 6 situated at Shree Ram Mills Premises, Lower Parel Div., Mumbai viz. "Palais Royale" and also is secured by first and exclusive charge on all the receivables of the aforesaid project and personal guarantee of one of the Director for loan availed of Rs. 1,26,00,00,000 (Previous year: Rs. 1,11,00,00,000) by its wholly owned subsidiary company ''Raghuveer Suburban Infrastructure Private Limited'' from others.

12. Some of the balances of deposits, loans and advances, trade receivables, trade payables and other long / short term liabilities are subject to confirmation from the respective parties and consequential reconciliation / adjustments arising there from, if any. The management however does not expect any material variation.

13. Figures of the previous year have been re-grouped, re-classified and re-arranged, wherever necessary.


Dec 31, 2012

Company Profile:-

Shree Ram Urban Infrastructure Ltd. (''The Company") is a Company incorporated under the Companies Act, 1956 and having its registered office at Shree Ram Mills Premises, Ganpatrao Kadam Marg, Lower Parel, Mumbai - 400013. The Company is in the business of real estate and listed on the Bombay Stock Exchange, Mumbai.

a) Terms / rights attached to equity shares:

i) The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. In the 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. The distribution will be in proportion to the outstanding equity shares held by the shareholders.

ii) 75,40,400 and 1,29,59,600 equity shares allotted on 15th June 2011 and 29th July 2011 respectively on preferential basis pursuant to exercise of equity warrants are subject to lock-in for a period of three years for the promoters group i.e. 1,60,84,678 equity shares and for the period of one year for other allottees i.e. 44,15,322 equity shares.

b) Demerger of Promoter Companies:

i) Akhilesh Developers Private Limited

Pursuant to scheme of arrangement of demerger between Akhilesh Developers Pvt. Ltd and Akhilesh Investfin Pvt. Ltd, Akhilesh Developers Pvt. Ltd has executed the transfer for 52,73,883 shares on 18.02.2013 and Akhilesh Investfin Pvt. Ltd has acquired the shares.

ii) Mandakini Hospitality Private Limited

Pursuant to scheme of arrangement of demerger between Mandakini Hospitality Private Limited and Mandakini Investfin Pvt. Ltd, Mandakini Hospitality Private Limited has executed the transfer for 50,84,678 shares on 18.02.2013 and Mandakini Investfin Pvt. Ltd has acquired the shares.

iii) Yashaswini Leisure Private Limited

Pursuant to scheme of arrangement of demerger between Yashaswini Leisure Private Limited and Yashaswini Investments Company Pvt. Ltd, Yashaswini Leisure Private Limited has executed the transfer for 55,00,000 shares on 18.02.2013 and Yashaswini Investments Company Pvt. Ltd has acquired the shares.

iv) Hanumesh Realtors Private Limited

Pursuant to scheme of arrangement of demerger between Hanumesh Realtors Private Limited and Hanumesh Investments Pvt. Ltd, Hanumesh Realtors Private Limited has executed the transfer for 61,50,848 shares on 18.02.2013 and Hanumesh Investments Pvt. Ltd has acquired the shares.

Note:

As a matter of prudence, the Company has not recognised deferred tax asset being timing differences on account of unabsorbed depreciation, carried forward losses and depreciation on fixed assets and others as per Accounting Standard (AS) - 22 "Accounting for Taxes on Income", as notified by Companies (Accounting Standards) Rules, 2006.

i Term loans from Banks

Vehicle loans

Vehicle loans taken from banks are secured against hypothecation of assets financed and personal guarantee of one of the director. These loans are repayable in 36 equated monthly installments from the date of disbursement. These loans carries interest in the range of 10.25% per annum to 12.25% per annum. Loan repayable within one year is Rs. 18,63,163 (Previous Year: Rs. 16,08,089).

ii Term loans from NBFCs

a) Project loan

The project loan taken from NBFC of Rs. 5,50,00,00,000 is secured against registered mortgage of Plot Nos. 5B and 6 situated at Shree Ram Mills Premises, Lower Parel Div., Mumbai together with building and structures thereon, both present and future viz. "Palais Royale" and further secured by first and exclusive charge on all the receivables / cash flows arising from the sale of the aforesaid project of developed area as well as pre-sold in favor of the lender and personal guarantee of one of the Director. The loan is repayable within 60 months from the date of disbursement.

The rate of interest is linked to lenders'' PLR minus 320 basis points (currently 18.80% per annum).

Loan repayable within one year is Rs. 1,65,00,00,000 (Previous Year : Rs. NIL).

b) Equipment loans

The equipment loans taken from NBFCs are secured against hypothecation of assets financed, pledge of 32,47,830 shares (Previous Year: 17,47,830 shares) of the Company held by promoters and personal guarantee of one of the director. These loans are repayable in 35 to 40 equated monthly installments from the date of disbursement.

Theses loans carries interest in the range of 12% per annum to 18.50% per annum.

Loan repayable within one year is Rs. 33,07,21,982 (Previous Year: Rs. 13,45,24,812).

c) Vehicle loans

Vehicle loans taken from NBFCs are secured against hypothecation of assets financed. These loans are repayable in 36 equated monthly installments from the date of disbursement.

These loans carries interest in the range of 12% per annum to 12.70 % per annum.

Loan repayable within one year is Rs. 20,48,773 (Previous Year: Rs. 3,93,744).

iii Unsecured loans

The loans taken from related parties are unsecured. These loans are repayable on demand. These loans are interest free.

2. Arbitration proceedings have been underway since 2005 with Kalpataru Properties Pvt Ltd. (KPPL) in respect of development rights of Plot 5A admeasuring 20,955.4 sq.mtrs of the Company''s Worli Estate, against which it has received Rs. 30,00,00,000. The Bombay High Court had passed a status quo order on about 23,500 sq. mtrs. of the said estate. Subsequently, KPPL had filed a claim of compensation for Rs. 15,28,93,00,000 along with interest as an alternative to their original claim for specific performance. The Company has received legal advice that the said claim for compensation is not tenable, and the chances of it being held against the Company are highly remote. As regards the Company''s own counter-claim of Rs. 26,77,32,00,000 against KPPL, the Arbitral Tribunal has held that claim of Rs. 7,60,36,00,000 is under their jurisdiction under the present Arbitration proceeding and for the balance amount of Rs. 19,16,96,00,000, alternative remedies will have to be sought. The Company is in discussion with its legal advisors on the most optimum course to follow for the said balance claim.

3. In the opinion of the Management, no item of current assets has a value on realization in the ordinary course of business, which is less than the amount of value at which it is stated in the balance sheet. The provision for all known and determined liability is adequate and not in the excess of the amount reasonably required.

4. The Company has achieved more than 30% of the total estimated project cost and accordingly revenue is recognized on proportionate basis as per its accounting policy in respect of real estate sales.

5. No significant events which could affect the financial position as on 31st December, 2012, to a material extent have been occurred, after the balance sheet date till the signing of report.

6. Hitherto, the Company was recognizing revenue from real estate activity, only in respect of agreement registered for the sale of flat. However, during the year, the Company has also recognized revenue in respect of unregistered agreements / letter of allotment for the sale of flat, where substantial amount has been received. As a result of this change "Revenue" and "Profit before tax" for the current year are higher by Rs. 30,57,12,996 and Rs. 11,93,58,525 respectively.

7. Segment Reporting

During the year, the Company has identified one reportable segment i.e. "Real Estate" (Previous Year: Real Estate and Textile) as per Accounting Standard - 17 notified by Companies (Accounting Standards) Rules, 2006, detailed as under:

8. Employee Benefits

Disclosure under Accounting Standard - 15 "Employee Benefits" (Revised 2005) notified by Companies (Accounting Standards) Rules, 2006.

Defined Contribution Plan

The Company''s contribution to provident fund is deposited with the Employees Provident Fund Organization (EPFO). During the year, the Company has recognized Rs. 12,97,990 (Previous Year: Rs. 11,62,888) towards provident fund.

Defined Benefit Plan Gratuity

The gratuity liability arises on retirement, premature withdrawal, resignation and death of an employee. The gratuity liability is calculated on the basis of actuarial valuation as per projected unit credit method.

Other Long Term Benefit

Leave Encashment Plan

The earned leave liability arises as and when services are performed by an employee. The said liability is calculated on the basis of actuarial valuation as per projected unit credit method.

The Company does not have any potential dilutive equity shares. Consequently, the basic and diluted earnings per share remains the same.

9. ''Sundry Credit balances written back (Net)'' amounting to Rs. 1,20,14,267 are net of ''Sundry Debit balances written off'' amounting to Rs. 14,267 (Previous Year: ''Sundry Credit balances written back (Net)'' amounting to Rs.18,60,312 are net of ''Sundry Debit balances written off'' amounting to Rs. 1,13,417)

10. During the previous year, the Company has received notices arising out of inspection u/s. 209A of the Companies Act, 1956 carried out by the Deputy Registrar of Companies pointing out certain irregularities / contraventions of the Companies Act, 1956. In response, the Company has provided all necessary explanations /documentary evidences. In order to avoid long drawn litigation, Company without accepting any of the irregularities / contraventions, has filed application for compounding of offences under section 621A of the Companies Act, 1956. The said applications are pending for hearing. In opinion of the Company, liability in this regard is estimated at Rs. 22,60,000 which was provided in the books of accounts in the previous year.

11. Public Interest Litigation 43 of 2012 ("PIL") in the high court Filed by Janhit Manch against Shree Ram Urban Infrastructure Limited (SRUIL), Mumbai Municipal Corporation and others. The PIL is filed by Janhit Manch the Non Government Organization (NGO), against Municipal Corporation of Greater Mumbai (MCGM) and Shree Ram Urban Infrastructure Limited (SRUIL) alleging that various building permissions granted by MCGM to SRUIL for the said project including sanction of Public Parking Lot are not in accordance with Development Control Regulations. The order has been reserved since January 2013. Based on legal advice received, the management is hopeful that the Public Interest Litigation would be dismissed.

12. The Company has extended mortgage of its property at Plot Nos. 5B and 6 situated at Shree Ram Mills Premises, Lower Parel Div. .Mumbai viz. "Palais Royale" and also is secured by first and exclusive charge on all the receivables of the aforesaid project and personal guarantee of one of the Director for loan availed of Rs. 1,11,00,00,000 (Previous Year: Rs. 35,00,00,000) by its wholly owned subsidiary company ''Raghuveer Suburban Infrastructure Private Limited'' from others.

13. The Company had received Letter of Intent / Intimation of Disapproval / Commencement Certificate from the Govt, of Maharashtra - Municipal Corporation of Greater Mumbai (MCGM) for construction of Public Parking Lot under DCR.33(24) and had commenced construction accordingly. On 29th November, 2011, the MCGM issued a show-case notice to the Company regarding the Public Parking Lot asking why it should not be cancelled / modified in keeping with the revised policies of the state government / MCGM. Subsequently, the MCGM issued stop work notice to the Company which was stayed by the Hon''ble City Civil Court. The matter is pending before the Hon''ble Court. In the meanwhile, as per the Hon''ble Court''s directions, the construction of the Public Parking Lot completed and the Company has already informed MCGM to take over the possession of Public Parking Lot. The Company has been advised that the MCGM actions are not tenable under law.

14. Some of the balances of deposit, loans and advances, trade receivables, trade payables and other long / short term liabilities are subject to confirmation from the respective parties and consequential reconciliation / adjustments arising therefrom, if any. The management however does not expect any material variation.

15. Till the year ended December 31, 2011, the Company was using pre-revised Schedule VI of the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended December 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has became applicable to the Company. The Company has reclassified previous year''s figures to conform to current year''s classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed by the Company for preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of Balance Sheet.


Dec 31, 2011

1. Preferential Issue:

During the year, the Company has allotted 75,40,400 Equity Shares on 15th June 2011 and 1,29,59,600 Equity Shares on 29th July 2011 on preferential allotment basis upon conversion of 205,00,000 Equity Share Warrants into equivalent number of Equity Shares of Rs.10 each fully paid at a premium of Rs. 130 per share to the Promoters and Others. Consequent to the above allotment of shares, the issued and Paid-up share capital of the Company now stands at Rs. 41,13,45,400. The Difference between the issue price and the face value of the equity shares amounting to Rs. 266,50,00,000 has been credited to Shares Premium Account. The aforesaid equity share issue shall rank pari passu in all respect with the existing equity shares of the Company. During the year, the Company has adjusted share issue expenses of Rs. 28,70,000 against the balance of share premium account.

Equity shares allotted pursuant to exercise of equity warrants are subject to lock-in for a period of three years for the promoters group i.e. 1,60,84,678 equity shares and for the period of one year for other allottees i.e. 44,15,322 equity shares.

The amount received during the year has been utilized towards the objects of the issue. Detail of the amount received is as under:

2. Contingent Liabilities in respect of :

(Amount in Rupees)

Sr.No. Particulars Current Year Previous Year

a) Claims against the Company not acknowledged as debts 4,81,10,732 4,86,10,732

b) Labour Matters :

i) Pending in court in respect of claims 14,69,751 4,87,240 for Retrenchment Compensation etc.

ii) Pending Court cases - 6 (Previous Year - 5) in respect of claims for Back Wages etc. filed by ex-employees of the Company for which the amount of Contingent Liability is unascertainable

c) Income Tax Matters :

i) Disputed demand of Income Tax for assessment 1,08,86,963 NIL year 2003-04, where the department is in appeal.

ii) Disputed demand of Income Tax for assessment 79,57,942 79,57,942 year 2004-05, where the department is in appeal.

iii)Disputed demand of Income Tax for assessment 8,74,93,855 NIL year 2005-06, where the department is in appeal.

iv) Disputed demand of Income Tax for assessment 43,58,910 43,58,910

year 2007-08, where the Company is in appeal.

v) Disputed demand of Income Tax for assessment 90,49,260 NIL year 2009-10, where the Company is in appeal.

vi) Income tax demand for short deduction of tax at 1,92,24,278 NIL source and interest thereon for various assessment years, where the Company is in appeal.

d) Property Tax disputed with BMC where the 1,61,23,536 1,02,60,432 Company is in appeal.

ii) Property tax disputed with BMC. 3,49,32,964 2,54,84,173

e) Excise Duty demand [Bank Guarantee provided for the 3,39,250 3,39,250 the same Rs. 3,39,250 (Previous Year: Rs. 3,39,250)]

f) Customs Duty demand [Bank Guarantee provided for the 6,98,250 6,98,250 same Rs. 6,98,500 (Previous Year: Rs. 6,98,500)]

g) Dividend in respect of 1,36,877 1,22,30,116 1,07,90,470 11% Redeemable Cumulative Preference Shares of Face Value of Rs. 100 each

h Pending court cases- 4 (Previous Year: 5) in respect of other matters against the Company for which the amount of Contingent Liability is unascertainable.

3. Arbitration proceedings have been underway since 2005 with Kalpataru Properties Pvt Ltd. (KPPL) in respect of development rights of Plot 5A admeasuring 20,955.40 sq.mtrs of the Company's World Estate, against which it has received Rs. 30 crores. The Bombay High Court had passed a status quo order on about 23,500 sq. mtrs. of the said Estate. Subsequently, KPPL had filed a claim of compensation for Rs. 1,528.93 crores along with interest as an alternative to their original claim for specific performance. The Company has received legal advice that the said claim for compensation is not tenable, and the chances of it being held against the Company are highly remote. As regards the Company's own counter-claim of Rs. 2,677.32 crores against KPPL , the Arbitral Tribunal has held that claim of Rs. 760.36 crores is under their jurisdiction under the present Arbitration proceeding, and for the balance amount of Rs.1,916.96 crores, alternative remedies will have to be sought. The Company is in discussion with its legal advisors on the most optimum course to follow for the said balance claim.

4. In the opinion of the Management, no item of current assets has a value on realization in the ordinary course of business, which is less than the amount of value at which it is stated in the Balance Sheet. The provision for all known and determined liability is adequate and not in the excess of the amount reasonably required.

5. Shares held as investment by the company have been classified as Long Term Investment. Provision for the diminution in the value of investment has been made in the accounts where the management is of the view that such diminution is of permanent nature.

6. The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If recoverable amount of such asset is less than the carrying amount, then the carrying amount is reduced to its recoverable amount and such difference between recoverable amount and carrying amount is treated as impairment loss and is charged to Profit and Loss account. For the current year ended 31st December 2011 impairment loss charged to Profit and Loss account is of Rs. Nil (Previous year: Rs. 7,28,34,724).

7. During the year, the Company has achieved more than 30% of the total estimated project cost and accordingly revenue is recognized on proportionate basis as per its accounting policy in respect of real estate sales.

8. No significant events which could affect the financial position as on 31st December, 2011, to a material extent have been occurred, after the balance sheet date till the signing of report.

As a matter of prudence, the Company has not recognized deferred tax asset being timing differences on account of unabsorbed depreciation, carried forward losses and depreciation on fixed' assets and others, under Accounting Standard (AS)-22 "Accounting for Taxes on Income".

9. Segment Reporting:

The Company has recognized the "Textile" and "Real Estate" as segments for Segment Reporting as at 31st December, 2011 as per Accounting Standard -17 issued by the Institute of Chartered Accountants of India as detailed under:

10. Employee Benefits:

Disclosure under Accounting Standard 15 "Employee Benefits" (Revised 2005) issued by the Institute of Chartered Accountants of India:

Defined Contribution Plan:

The Company's contribution to Provident Fund is deposited with the Employees Provident Fund Organisation (EPFO). During the year, the Company has recognized Rs. 10,56,761 (Previous year: Rs. 8,73,042) towards provident fund.

Defined Benefit Plan:

Gratuity

The gratuity liability arises on retirement, premature withdrawal, resignation and death of an employee. The gratuity liability is calculated on the basis of actuarial valuation as per projected unit credit method.

Other Long Term Benefit:

Leave Encashment Plan

The earned leave liability arises as and when services are performed by an employee. The said liability is calculated on the basis of actuarial valuation as per projected unit credit method.

II) The fair value of plan assets is Nil since, retirement benefit plans are wholly unfunded.

III) Amount recognised in Balance Sheet

The discount rate is based upon the bench mark rate available on Government Securities having maturity equal to the tenure of benefits.

The estimate of salary growth rate considered in actuarial valuation takes into account inflation, seniority and other relevant factors on long term basis.

11. Related Party Disclosures:

In compliance with Accounting Standard 18 - 'Related Party Disclosures' issued by the Institute of Chartered Accountants of India, the required disclosures are given in the table below:

b) Details of transactions between the Company and related parties and the status of outstanding balances As on 31st December, 2011.

As on 31st December, 2010 - 2,05,00,000 equity share warrants were outstanding and as there was a loss during period year ended December 2010, the effect of exercise of equity share warrants was anti- dilutive and hence the same had not been considered in the computation of diluted earnings per share. Accordingly basic and diluted EPS were same.

12. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues on account of principal amount together with interest as at the Balance sheet date. This has been determined to the extent such parties have been identified on the basis of information available with the Company.

13. 'Sundry credit balances written back (Net)' amounting to Rs. 18,60,312 are net of 'Sundry debit balances written off' amounting to Rs. 1,35,442. (Previous Year: 'Sundry debit balances written off (Net)' amounting to Rs. 3,42,612 are net of 'Sundry credit balances written back' amounting to Rs. 4,50,192).

14. During the year, the Company has received notices arising out of inspection u/s. 209A of the Companies Act, 1956 carried out by the Deputy Registrar of Companies pointing out certain irregularities / contraventions of the Companies Act, 1956. In response, the Company has provided all necessary explanations / documentary evidences. In order to avoid long drawn litigation, Company without accepting any of the irregularities / contraventions, has filed application for compounding of offences under section 621A of the Companies Act, 1956. The said applications are pending for hearing. In opinion of the Company, liability in this regard is estimated at Rs. 22,60,000 which have been provided for in the books of accounts.

15. The 'Maharashtra Chamber of Housing Industry' (MCHI) has also filed a writ petition in Bombay High Court challenging the levy of VAT under MVAT Act, 2002 on property under construction. The Hon'ble High Court has directed that the members of the MCHI should not be treated as 'Dealers' liable to tax under the MVAT Act, 2002 in respect of flats on ownership basis under the Maharashtra Ownership Flats Act, 1963 (MOFA Act), and members of MCHI have been absolved from assessments till the disposal of the petition. Pending the final outcome of the said writ petition, the Company has neither recovered separately nor deposited MVAT on advances collected towards sale of residential flat / unit, the MVAT liability, in respect of the same amounts to Rs. 7,87,67,685 (Previous Year : Rs. 3,02,48,570).

16. The Company has extended mortgage of its property at Plot Nos.5B and 6 situated at Shree Ram Mills Premises, Lower Parel Div.Mumbai viz. "Palais Royale" and also is secured by first and exclusive charge on all the receivables of the aforesaid project and personal guarantee of one of the Director for loan availed of Rs. 35,00,00,000 by its subsidiary Company 'Raghuveer Suburban Infrastructure Private Limited' from others.

17. The Company had received Letter of Intent / Intimation of Disapproval / Commencement Certificate from the Govt, of Maharashtra - Municipal Corporation of Greater Mumbai (MCGM) for construction of Public Parking Lot under DCR 33(24) and had commenced construction accordingly. On 29th November, 2011, the MCGM issued a show-cause notice to the Company regarding the Public Parking Lot asking why it should not be cancelled / modified in keeping with the revised policies of the state Govt. / MCGM. Subsequently, the MCGM issued stop work notice to the Company which was stayed by the Hon'ble City Civil Court. The matter is pending before the Hon'ble Court. In the meanwhile, as per the Hon'ble Court's directions, the construction of the Public Parking Lots is continuing and is almost complete. The company has been advised that the MCGM actions are not tenable under law.

18. The Company is regular in depositing all the statutory dues including provident fund, employee's state insurance, property tax, income-tax, wealth tax, service tax, sales tax, custom duty, tax deducted at source, works contract tax, cess and other statutory dues. However, due to administrative reason, there are delays in few cases in depositing Tax deducted at source.

19. Some of the balances of deposit, loans and advances, sundry debtors and sundry creditors are subject to confirmation from the respective parties and consequential reconciliation / adjustments arising there from, if any. The management however does not expect any material variation.

20. The Company is a real estate developer Company and not a manufacturing Company hence in respect of activities of real estate division, quantitative and other disclosures as required by paragraph 3 (ii) (a), (b) and paragraph 4C of Part II of Schedule VI to the Companies Act, 1956 are not applicable to the Company.

21. Additional information pursuant to the Provision of Paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 in respect of trading division of the Company.

22. Previous year's figures are regrouped wherever necessary in order to bring them in conformity with the current year classification.


Dec 31, 2009

1. Contingent Liabilities in respect of :

Amt. in Rupees

Sr. No. Particulars Current Year Previous Year

a) Claims against the company not acknowledged as debts 4,87,69,366/- 4,94,44,903/-

b) Bank Guarantees 3,00,00,000/- 3,00,00,000/-

c) Outstanding Letter of Credit facility availed 48,25,309/- Nil

d) Labour Matters :

i) Pending in court in respect of claims 4,87,240/- 4,87,240/- for Retrenchment Compensation etc.

ii) Pending Court cases - 5 (Previous Year - 5) in respect of claims for Back Wages etc. filed by ex-employees of he Company for which the amount of Contingent Liability is unascertainable.

e) Income Tax Matters :

i) Income Tax demand for Asst. Year 2003-04 Nil 24,80,459/-

ii) Income Tax demand for Asst. Year 2007-08 43,58,910/- Nil for which appeal has been filed with CIT (Appeal)

f) i) Water Tax dispute with BMC 27,48,330/- Nil

ii) Sewerage Tax dispute with BMC 16,48,998/- Nil

iii) Property Tax dispute with BMC 1,60,35,383/- Nil

g) Excise Duty demand [Bank Guarantee 3,39,250/- 3,39,250/- provided for the same Rs.3,39,250/- (Previous Year Rs.3,39,250/-) not included above]

h) Customs Duty demand [Bank Guarantee 6,98,250/- 6,98,250/- provided for the same Rs.6,98,500/- (Previous Year Rs.6,98,500/-) not included above]

i) Pending court cases- 3 (Previous Year - 3) in respect of other matters against the Company for which the amount of Contingent Liability is unascertainable.

2 (a) Arbitration proceedings are underway which have been filed by Kalpataru Properties (Pvt) Ltd [formerly known as Kalpataru Construction (Overseas) Pvt Ltd] in respect of development rights of Plot 5A admeasuring 20,955.4 sq.mtrs of the Companys Worli Estate for which it has received Rs.30 crores. The Bombay High Court had passed a status quo order on about 23,500 sq. mtrs of the said Estate. Recently, Kalpataru Properties (Pvt) Ltd have filed a claim of compensation for Rs. 1,528.93 crores alongwith interest as alternative to their original claim for specific performance. The Company has received legal advice from its lawyers that the said claim for compensation is not tenable, and the chances of it being held against the Company are highly remote. The Company has since filed papers for a counter-claim for Rs.2,677.32 crores from the said Kalpataru Properties (Pvt) Ltd.

(b) Arbitration proceedings filed by Utility Premises Pvt Ltd and Cogent Ventures (India) Ltd [formerly known as Bhupendra Capital & Finance Ltd] in respect of Plot 2 admeasuring 4,848.5 sq. mtrs. of the Companys Worli Estate are underway. The said claimants have filed a claim for compensation of Rs.36.03 crores alongwith interest as an alternate to specific performance. The Company has given a Bank Guarantee of Rs.3 crores in favour of the Arbitration Tribunal towards the pending arbitration proceedings. The Company has received legal advice from its lawyers that the said claim for compensation is not tenable, and the chances of it being held against the Company are highly remote.

3. In the opinion of the Management, no item of current assets has a value on realization in the ordinary course of business, which is less than the amount of value at which it is stated in the Balance Sheet. The provision for all known and determined liability is adequate and not in the excess of the amount reasonably required.

4. Shares held as investment by the company have been classified as Long term Investment. Provision for the diminution in the value of investment has been made in the accounts where the management is of the view that such diminution is of permanent nature.

5. The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If recoverable amount of such asset is less than the carrying amount, then the carrying amount is reduced to its recoverable amount and such difference between recoverable amount and carrying amount is treated as impairment loss and is charged to profit & loss account. For the current year ended 31st December 2009 impairment loss charged to Profit and Loss account is Rs.2,32,46,755/- (Previous Year Rs.3,16,36,990/-).

6. As at 31st December, 2009 the percentage of completion with respect to actual cost incurred for the project including cost of land as against the total estimated cost of the project under execution, is less than 30% of the total estimated cost. Accordingly no revenue has been recognized in relation to the sold areas. Further the management is of the view that .the total estimated project cost is within the total estimated revenues from the project.

7. No significant events which could affect the financial position as on 31st December, 2009, to a material extent have been occurred, after the balance sheet date till the signing of report.

The Company has loss and unabsorbeo depreciation. However, on a prudent basis, as per Accounting Standard 22 (Accounting for Taxes on Income), Deferred Tax Asset is recognized only to the extent of deferred tax liability.

8. Segment Reporting :

The Company has recognized the Textile & Real Estate Segments as at 31st Dec, 2009 as per Accounting Standard -17 "Segment Reporting" ssued by the Institute of Chartered Accountants of India as detailed under:

9. Employee Benefits :

Disclosure under Accounting Standard 15 "Employee Benefits" (Revised 2005) issued by the Institute of Chartered Accountants of India :

Defined Contribution Plan

The companys contribution to Provident Fund is deposited with the Employees Provident Fund Organization (EPFO). During the year the company has recognized Rs.9,27,519/- (Previous year Rs. 10,94,893/-) towards provident fund.

Defined Benefit Plan

Gratuity

The Gratuity liability arises on retirement, premature withdrawal, resignation and death of an employee. The gratuity liability is calculated on the basis of actuarial valuation as per projected unit credit method.

Other Long Term Benefit

Leave Encashment Plan

The earned leave liability arises as and when services are performed by an employee. The said liability is calculated on the basis of actuarial valuation as per projected unit credit method.

10. Related Party Disclosures:

In compliance with Accounting Standard 18 - Related Party Disclosures issued by the Institute of Chartered Accountants of India, the required disclosures are given in the table below:

a) Name of the Related Party and Nature of Related Party Relationship

Name of the Related Party Nature of Related Party Relationship

a) SRM Sites Pvt. Ltd. Subsidiary

b) Raghuveer Urban Infrastructure Pvt. Ltd. (From 18th March, 2009 to 24th September, 2009)

Akhilesh Developers Pvt. Ltd. Enterprise that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the reporting enterprise

a) Landmarc Leisure Corporation Limited Enterprises over which key management

b) S. Kumars Online Limited personnel & their Relatives exercise significant

c) Vidhi Holdings Pvt. Ltd. influence where the Company has entered into

d) Akhilesh Developers Pvt. Ltd. transactions during the year

e) Hanumesh Realtors Pvt. Ltd.

f) Mandakini Hospitality Pvt. Ltd.

g) Yashaswini Leisure Pvt. Ltd.

h) SKM Fabrics (Andheri) Ltd.

a) Mr. Vikas S. Kasliwal - Vice Chairman & CEO Key Management Personnel

b) Mr. S. K. Luharuka - Whole Time Director

11. There are no Micro, Small & Medium Enterprises, to whom the Company owes dues on account of principal amount together with interest as at the Balance sheet date. This has been determined to the extent such parties have been identified on the basis of information available with the Company.

12. Sundry Credit balances written back (Net) amounting to Rs.1,30,120/- (Previous Year Rs.2,94,633/-) are net of sundry debit balances written off amounting to Rs.3,35,489/- (Previous Year Rs.4,96,449/-).

13. The Company has maintained the Debt Service Reserve Account (DSR) with the banks from whom the Company has borrowed the money for the real estate project. An amount equal to three months interest on each disbursement under the rupee term loan is being transferred directly by the lender to the DSR Account out of the proceeds of such disbursement. The Company is required to maintain and operate this account during the entire tenure of the facility. As at 31st December, 2009, the outstanding balance in DSR Account is Rs.12,67,00,420/- (Previous Year Rs.5,62,78,000/-) and is included in the balances lying in Fixed Deposit Accounts.

14. The Company is a real estate developer Company and not a manufacturing Company hence in respect of activities of real estate division, quantitative and other disclosures as required by paragraph 3 (ii) (a), (b) and paragraph 4C of Part II of Schedule VI to the Companies Act, 1956 are not applicable to the Company.

15. Additional information pursuant to the Provision of Paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 in respect of trading division of the Company.

16. Previous years figures are regrouped wherever necessary in order to bring them in conformity with the current year classification.

 
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