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Notes to Accounts of Vascon Engineers Ltd.

Mar 31, 2016

1. Employee stock option scheme (ESOS) - 2013

The ESOS was approved by Board of Directors of the Company on 20th May, 2013 and thereafter by the share holders on 12th Sept, 2013. A compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of Rs. 10/- per share. The maximum exercise period is 1 year from the date of vesting.

2. Employee stock option scheme (ESOS) - 2014

The ESOS was approved by Board of Directors of the Company on 12th August, 2014 and thereafter by the share holders on 15th Sept, 2014. Compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of Rs. 10/- per share. The maximum exercise period is 1 year from the date of vesting.

3. Employee stock option scheme (ESOS) - 2015

The ESOS was approved by Board of Directors of the Company on 11th August 2015 and thereafter by the share holders on 29th September 2015. A compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of Rs. 20/- per share. The maximum exercise period is 1 year from the date of vesting.

The Compensation cost of stock options granted to employees has been accounted by the company using the intrinsic value method. The guidance note on accounting of employee share based payments issued by the Institute of Chartered Accountants of India requires the disclosure of pro forma net results and EPS both basic & diluted, had the Company adopted the fair value method. Had the Company accounted these options under fair value method, amortizing the stock compensation expense thereon over the vesting period, the reported Profit for the year ended March 31, 2016 would have been lower by Rs. 49.29 lakhs (Previous year: lower loss of Rs. 14.96 lakhs) and Basic and diluted EPS would have been revised to profit of Rs. 0.43 per share (Previous year loss of 14.30 per share) and profit Rs. 0.43 per share (Previous year loss of 14.30 per share) respectively as compared to profit of Rs. 0.47 per share (Previous year loss of 14.31 per share) and profit of Rs. 0.46 per share (Previous year loss of 14.31 per share) without such impact.

The fair value of the stock option is calculated through the use of option pricing models, requiring subjective assumptions which greatly affect the calculated values. The said fair value of the options have been calculated using Binomial lattice option pricing model, considering the expected weighted average term of the options to be 1 year from the date of vesting, an expected dividend rate of 2% on the underlying equity shares, a risk free rate 8.40% and weighted average volatility in the share price in the range of 61.10% - 67.42%. The Company''s calculations are based on a single option valuation approach, and forfeitures are recognized as they occur. The expected volatility is based on historical volatility of the share price after eliminating the abnormal price fluctuations.

* As required by Accounting Standard (AS) 20 - Earning per share, the effect of anti-dilutive potential equity shares are ignored in calculating diluted earnings per share

I) In respect of claim against the Company amounting to Rs.360,00,00,000/- (Previous year Rs 360,00,00,000/-) by a party who was originally claiming interest in a property, no provision has been considered necessary by the Management in view of the legal opinion that the said claim is not tenable on various grounds.

ii) The Creditors of the Company have filed a civil suit claiming of Rs 1,11,49,741/- (Previous year Rs. 1,00,66,624/-) as amount due to them, which claims the Company is disputing.

iii) Short Levy of Stamp Duty due to misclassification of conveyance deed as development agreement amounting to Rs 8,67,370/- (Previous year Rs. 8,67,370/) with Joint District Registrar & Collector of Stamps , Pune.

iv) One of the labour supplier has filed a criminal complaint in Additional Magistrate Court, Dadar, Mumbai, for recovery of his dues for Rs.3,94,840/- ( Previous year - Nil).

v) One of the customer has filed arbitration proceeding against the Company for loss on account of wastage i.e. excess consumption of cement and steel, loss on account of escalation of cement and steel, additional cost incurred for completing the balance work, loss for rectifying defective work, refund of amount in VAT and excess duty, loss of reputation and liquidated damages and interest, amounting to Rs. 28,67,00,100/- (Previous year - Nil).

g) In respect of a development project, as per the terms of land purchase agreement with a land vendor, an additional amount equivalent to 40% of sale proceeds will required to be paid in the event the FSI availed is in excess of 580000 Sq ft. Since such event has not occurred till the date of balance sheet, no provision is required for this additional cost.

h) The levy of Maharashtra Value Added Tax (MVAT) in respect of Real Estate Development sales has been subject to considerable legislative amendments, litigation and administrative action. During the pendency of special leave petition before the Hon''ble Supreme Court against the earlier Hon''ble Mumbai High Court decision, a decision has been pronounced by the Hon''ble Mumbai High Court and the matter has not reached finality.

The Industry, accounting and legal fraternity is examining the implications of the decisions and the way the liability will be worked out under various options provided. In view of such uncertainties, the management has been advised that in the present scenario it is difficult to correctly determine MVAT liability payable in respect of real estate development sales executed during the period 20th June, 2006 to 31st March, 2010. The Company is currently in process of ascertaining the exact applicability of these pronouncements, contractual ability to collect MVAT from past customers and the mechanism of collection of MVAT in respect of real estate development sales executed during the period 20th June, 2006 to 31st March, 2010.

4. Disclosure of particulars of significant leases as required by Accounting Standard 19

The Companies significant leasing arrangements are in respect of operating leases for commercial and residential premises.

The Company leases / sub-leases office spaces under Non cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessor and lessee.

i) Operating Lease

Notes forming part of the Financial Statements 38 Disclosure of related party transactions as required by Accounting Standard 18

I Names of related parties

1. Subsidiaries

- Marvel Housing Private Limited

- Grey Stone Premises Private Limited

- Vascon Dwellings Private Limited

- IT CITI Info Park Private Limited

- Caspia Hotels Private Limited (Upto May 28,2014)

- Windflower Properties Private Limited

- GMP Technical Solution Private Limited

- Floriana Properties Private Limited

- Vascon Pricol Infrastructure Limited

- Vascon Renaissance EPC Limited Liability Partnership

- Almet Corporation Limited

- Marathawada Realtors Private Limited

- Just Homes (India) Private Limited

- GMP Technical Solutions Middle East (FZE)

- Sunflower Real Estate Developers Pvt Ltd (Wef 31.08.2015)

- Angelica Properties Private Limited (Wef 14.04.2015)

- Shreyas strategists Private limited (Wef 31.08.2015)

- Sansara Development India Private limited (Wef 31.08.2015)

- GMP Technical Services LLC

2. Joint Ventures

- Weikfield IT CITI Infopark ( Upto October 1,2014)

- Phoenix Ventures

- Zenith Ventures

- Zircon Ventures

- Just Homes (AOP)

- Cosmos Premises Private Limited

- Ajanta Enterprises

- Vascon Qatar WLL

3. Associates

- Mumbai Estate Private Limited

4. Key Management Personnel

- Mr. R. Vasudevan

- Dr Santosh Sundararajan

- Mr. D.Santhanam

- Mr.M.Krishnamurthi

5. Relatives of Key Management Personnel

- Mrs. Lalitha Vasudevan

- Ms. Soumya Vasudevan

- Mrs. Thangam Moorthy

- Mrs. Lalitha Sundararajan

- Mr. Siddarth Vasudevan

- Mrs Shilpa Shivram

- Mrs. Sailaxmi Santhanam Mudaliar

- Ms Mathangi Krishnamuthy

6. Establishments where in which individuals in serial number (4) and (5) exercise significant Influence

- Flora Facilities Private Limited (Formerly known as Flora Premises Private Limited)

- Vastech Consultants Private Limited

- Vastech consultants and engineers LLP

- Vatsalya Enterprises Private Limited

- Bellflower Premises Private Limited

- Cherry Construction Private Limited

- Stresstech Engineers Pvt Ltd.

- Syringa Engineers Private Limited ( Formerly known as Syringa Properties Private Limited)

- Vascon Infrastructure Limited

- Venus Ventures

- Seraphic Design Private Limited

- D. Santanam (HUF)

- M krishnamurthi (HUF)

Notes:-

i) Related party relationships are as identified by the Company on the basis of information available and accepted by the auditors.

ii) No provision have been made in respect of receivable from related party as at March 31, 2016.

iii) During the financial year one of the subsidiaries IT CITI Infopark Pvt Litd has purchased 74% equity stake in Angelica Properties Pvt Ltd (In which company holds 26% equity stakes) for a consideration of Rs.241.55 Lakhs.Consequently, Angelica Properties Pvt Ltd has become fully owned subsidiary of the company.

IV) During the year ended 31st March 2016 following acquisition have taken place.

1.The Company had acquired 100% stake in " Sunflower real Estate Developers Private Limited" for a consideration of Rs.100.00 Lakhs on 31st August 2015.

2. The Company had acquired 100% Stake in " Shreyas Strategies Private Limited " through one of its subsidiary Vascon Pricol Infrastructures Limited for a consideration of Rs.1 Lakhs on 31st August 2015.

3. The Company had acquired 35% stake in "Greystone Premises Private Limited" for a consideration of Rs.0.01 lakhs on 20th January 2016.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

7. The company enters into "domestic transactions" with specified parties that are subject to the Transfer Pricing regulations under the Income Tax Act, 1961 (''regulation''). The pricing of such domestic transactions will need to comply with Arm''s length principle under the regulations. These regulations, interalia, also required the maintenance of prescribed documents and information including furnishing a report from an accountant which is to be filed with the Income tax authorities.

The Company has undertaken necessary steps to comply with the regulations. The management is of the opinion that the domestic transactions are at arm''s length, and hence the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

8. Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard (AS) -17 on Segment Reporting as notified under the Companies (Accounting Standard) Rules, 2006.

9. Consequent to non-receipt of necessary approval, the provision for Managerial Remuneration for FY 2014 - 15 amounting to Rs. 587 lakhs and FY 2015 - 16 provided till September, 2015 amounting to Rs. 316 lakhs has been reversed in the quarter ended 31st December, 2015 and credited to Employees benefits expenses.

10. The company has converted unsecured loan of Rs 4,869 lakhs and interest of Rs 1,992 lakhs on November 7,2015 in to Zero Coupon, Rupee denominated, Unrated, unlisted, secured, Non Convertible Debentures of Rs 1,00,000 /- each

11. The company has not performed CSR activities as mentioned in Section 135 read with companies ( Corporate Social responsibility )Rules 2014(CSR rules) and Notification and circulars issued by the ministry during the financial year as the company is not within the criteria of'' Qualifying company''.

12. During the current year the company has redeemed preference shares from one of the subsidiary " GMP Technical Solutions Pvt Ltd" amounting to Rs. 150 lakhs.

13. The Company had issued equity shares of face value of Rs. 10 each at a price of Rs. 15 per share (including premium of Rs. 5 pershare) amounting to '' 10,000 lakhs to the existing shareholders of the Company on rights basis in the ratio of 14 equity shares for every 19 shares held by equity shareholders under Chapter IV of the SEBI ICDR Regulations and provisions of all other applicable laws and regulations. As at31 March, 2016, an amount of'' 1021 lakhs (31 March, 2015'' Nil) is pending utilization in future periods . Accordingly, the unutilized amount has been invested in fixed deposits with banks.

14. During the financial year the company has sold stake in one of its associate Ascent Hotels Private Limited for a consideration of Rs. 30,42,01,680/- (6669492 equity shares of Rs.10/- each fully paid and share application money Rs. 37,500,000).

15. During the financial year the Company has invested an amount of Rs. 30,42,01,680/- (Face Value of Rs 10 each) in Optionally Convertible Redeemable Debentures of Ascent Hotels Private Limited.

16. Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/disclosure


Mar 31, 2015

I) In respect of claim against the Company amounting to Rs.360,00,00,000/- (Previous year Rs 360,00,00,000/-) by a party who was originally claiming interest in a property, no provision has been considered necessary by the Management in view of the legal opinion that the said claim is not tenable on various grounds.

ii) Two creditors of the Company has filed a civil suit claiming of Rs 88,28,380/- (Previous year Rs. 88,28,380/-) and 12,38,244/-(Previous year- nil) respectively, as amount due to them, which claims the Company is disputing.

iii) Short Levy of Stamp Duty due to misclassification of conveyance deed as development agreement amounting to Rs 8,67,370/- (Previous year Rs. 8,67,370/-) with Joint District Registrar & Collector of Stamps , Pune.

iv) One of the creditors of the Company has filed a winding up petition for nonpayment of Rs. Nil (Previous year Rs. 350,134/-) (including interest) in respect of material supplied by the said party, which claim the Company is disputing. In the current year winding up petition was disposed off.

a) In respect of a development project, as per the terms of land purchase agreement with a land vendor, an additional amount equivalent to 40% of sale proceeds will required to be paid in the event the FSI availed is in excess of 580000 Sq ft. Since such event has not occurred till the date of balance sheet, no provision is required for this additional cost.

b) The levy of Maharashtra Value Added Tax (MVAT) in respect of Real Estate Development sales has been subject to considerable legislative amendments, litigation and administrative action. During the pendency of special leave petition before the Hon'ble Supreme Court against the earlier Hon'ble Mumbai High Court decision, a decision has been pronounced by the Hon'ble Mumbai High Court and the matter has not reached finality. The Industry, accounting and legal fraternity is examining the implications of the decisions and the way the liability will be worked out under various options provided. In view of such uncertainties, the management has been advised that in the present scenario it is difficult to correctly determine MVAT liability payable in respect of real estate development sales executed during the period 20th June, 2006 to 31st March, 2010. The Company is currently in process of ascertaining the exact applicability of these pronouncements, contractual ability to collect MVAT from past customers and the mechanism of collection of MVAT in respect of real estate development sales executed during the period 20th June, 2006 to 31st March, 2010.

1. Disclosure of particulars of significant leases as required by Accounting Standard 19 The Companies significant leasing arrangements are in respect of operating leases for commercial and residential premises.

2. Disclosure of related party transactions as required by Accounting Standard 18

I Names of related parties

1. Subsidiaries

- Marvel Housing Private Limited

- Grey Stone Premises Private Limited

- Vascon Dwellings Private Limited

- IT CITI Info Park Private Limited

- Caspia Hotels Private Limited (Upto May 28,2014)

- Windflower Properties Private Limited

- GMP Technical Solution Private Limited

- Floriana Properties Private Limited

- Vascon Pricol Infrastructure Limited

- Vascon Renaissance EPC Limited Liability Partnership

- Almet Corporation Limited

- Marathawada Realtors Private Limited

- Just Homes (India) Private Limited

- GMP Technical Solutions Middle East (FZE)

2. Joint Ventures

- Weikfield IT CITI Infopark ( Upto October 1,2014)

- Phoenix Ventures

- Zenith Ventures

- Zircon Ventures

- Just Homes (AOP)

- Cosmos Premises Private Limited

- Marigold Premises Private Limited (Up to March 31,2014)

- Ajanta Enterprises

- Vascon Qatar WLL

3. Associates

- Angelica Properties Private Limited

- Mumbai Estate Private Limited

4. Key Management Personnel

- Mr. R. Vasudevan

- Dr Santosh Sundararajan

- Mr. D.Santhanam (Wef 01/04/2014)

- Mr.M.Krishnamurthi (Wef 01/04/2014)

5. Relatives of Key Management Personnel

- Mrs. Lalitha Vasudevan

- Ms. Soumya Vasudevan

- Mrs. Thangam Moorthy

- Mrs. Lalitha Sundararajan

- Mr. Siddarth Vasudevan

- Ms Shilpa Shivram

- Ms. Sailaxmi Santhanam Mudaliar

- Mrs Mathangi Krishnamuthy

3. Establishments where in which individuals in serial number (4), (5) and (6) exercise significant Influence

- Flora Facilities Private Limited (Formerly known as Flora Premises Private Limited)

- Vastech Consultants Private Limited - Vastech consultants and engineers LLP

- Vatsalya Enterprises Private Limited

- Bellflower Premises Private Limited

- Cherry Construction Private Limited

- Stresstech Engineers Pvt Ltd.

- Sunflower Health Services Private Limited

- Syringa Engineers Private Limited ( Formerly known as Syringa Properties Private Limited)

- Vascon Infrastructure Limited

- Venus Ventures

4. The company enters into "domestic transactions" with specified parties that are subject to the Transfer Pricing regulations under the Income Tax Act, 1961 ('regulation'). The pricing of such domestic transactions will need to comply with Arm's length principle under the regulations. These regulations, inter alia, also required the maintenance of prescribed documents and information including furnishing a report from an accountant which is to be filed with the Income tax authorities.

The Company has undertaken necessary steps to comply with the regulations. The management is of the opinion that the domestic transactions are at arm's length, and hence the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that

5. Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard (AS) -17 on Segment Reporting as notified under the Companies (Accounting Standard) Rules, 2006.

6. Effective 1st April, 2014, the Company has revised the useful life of fixed assets based on schedule II of the Companies Act, 2013 ("the Act") except Plant & Machinery for the purpose of provision of depreciation. Useful life of Plant & Machinery has been revised to 15 years based on the Chartered Engineer's evaluation. Accordingly, the carrying amount of the fixed assets as on 1st April, 2014 has been depreciated over the remaining revised useful life. Consequently, the depreciation charge for the year ended 31st March, 2015 is higher by Rs.210.73 lakhs and loss is higher to that effect.

Further, an amount of Rs.32.87 lakhs representing the carrying amount for assets with useful life as nil has been adjusted against the opening balance for retained earnings i.e balance in the statement of profit & loss as per permuted under note 7 (B) to part C of schedule II of Companies Act, 2013.

7. The Company has incurred losses of approximately Rs. 14,469 lakhs during the year ended March 31, 2015 and has continued incurring losses since March, 2013. Further, the Company has incurred cash losses during the year and previous year and there are delays in payment of statutory dues. Also considering deficit in the Statement of Profit and Loss as at the yearend, 15% of the debenture amounts repayable during the year ending March 31, 2016 has not been maintained in one or more methods as prescribed under the Companies (Share Capital and Debenture) Rules, 2014.

However, the financial statements have been prepared on a going concern basis in view of the financial support from some of its shareholders and the future business / growth plans of the Company. The Company has plans to augment its resources by going for rights issue of about Rs. 10,000 lakhs and has got the requisite approval from SEBI and to sale certain noncore assets. The main object of the issue is to reduce debt and complete certain projects. These efforts would result in improving cash flow, strengthen the operations of the Company and reduce the interest burden.

8. The Company has accrued managerial remuneration to managing director amounting to Rs. 620.53 lakhs for the year ended March 31, 2015 in terms of shareholders resolution, which is in excess of limits prescribed in Schedule V of the Companies Act, 2013. The Company has made necessary application to the Central Government for its approval, which is pending.

9. The Company has given loans amounting to Rs. 674.28 lakhs to wholly owned subsidiary company. This subsidiary has accumulated losses and its net worth has been fully eroded and incurred a net loss during the current year and previous year. The repayment of this advances from subsidiary is dependent upon receipt of advance paid to third party for which claim is made by the subsidiary. In the opinion of the management they said advance is fully recoverable, and hence no provision is made as on March 31, 2015.

11. During the year, the Company has converted loan given to one of the subsidiary GMP Technical Solutions Private Limited into Preference Share. The subsidiary is in the process of allotment of preference shares and is pending allotment as on March 31, 2015.

12. During the year, the Company has reduced its stake in one of the associate Company in the scheme of capital reduction. The Company has debited the loss of Rs 223.25 lakhs to the Statement of Profit and Loss as an exceptional item.

13.During the current year, the Company had terminated one of the joint ventures, accordingly all the assets and liabilities of the joint venture are merged with the Company.

14. The previous year's figures were audited by a firm of chartered Accountants other than Deloitte Haskins & Sells LLP on which the existing auditors have relied upon. Previous year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2014

The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/- per Share. Each holder of the equity share, as reflected in the records of the Company as of the date of the shareholder meeting, is entitled to one vote per share.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after discharge of liabilities and distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

The Company vide postal ballat dated 4-3-2014 passed resolution for increase in the authorised capital from Rs.100 crores to Rs.150 crores and has filed form 23 with ROC. The corresponding fees payable on increase in authorised capital is pending as on date.

2 Share application money pending allotment

Company has granted stock options to certain employees pursuant to ESOP 2007 scheme. During the year employees have exercised option to purchase 2,400 (2,400) equity shares of Rs. 10/- each. Allotment of shares will be done in the meeting of Board of Directors of the Company and pursuant to the amendment in ESOP scheme the lock in period of three years from the date of allotment of shares is no more applicable.

Stock options granted to the employees under the stock options scheme are accounted as per the accounting treatment prescribed by ICAI. Accordingly, the excess of fair value over the exercise price of the options is recognised as deferred employee compensation and is charged to the profit and loss account on straight line basis over the vesting period of the options. The amortised portion of the cost is shown under reserves and surplus. Amortised cost proportionate to options exercised will be transferred to share premium account on allotment of shares.

On 18th February 2014,The company had issued 7,300, 18.25% secured non convertable and Non-Transferable debentures of face Value Rs 1,00,000/- each at par against the same we have received subscription through private placement to the extent of 65,00,00,000/-.

Interest Payable is on 15th of each month,the debentures are redeemable from 15th September 2014 to 15th February 2017,This debenture are not listed on stock exchange. The company has not yet created debenture redemption reserve.

Employee benefit plans Gratuity:

In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering certain categories of employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC) (''Insurer''). Under this plan, the settlement obligation remains with the Company, although the Insurer administers the plan and determines the contribution premium required to be paid by the Company.

As per the Agreements, the vendor is entitled to an agreed percentage of sale proceeds of the project as a consideration. No amount is payable if there is no sale. Hence there is no loss to the Company. Since the cost of acquisition of development rights is not ascertainable, the same is not accounted.

In respect of a development project, as per the terms of land purchase agreement with a land vendor, an additional amount equivalent to 40% of sale proceeds will required to be paid in the event the FSI availed is in excess of 580000 Sq ft. Since such event has not occurred till the date of balance sheet, no provision is required for this additional cost.

a) Reversals of employee stock option compensation

During the year under review, the unexercised outstanding Employee Stock Options aggregating to 2250 (1,64,750) Equity Shares relating to those employees who are no longer associated with the Company have been forfeited and accordingly, the provision for compensation amounting to Rs. 84,173/ (Rs. 61,63,298/-) in respect of the same has been written back as exceptional item.

3 Employee stock option plans (ESOP)

The Company has provided share based payment schemes to its employee. During the period ended March 31,2014, the ''ESOS - 2007'' scheme was lapsed on March 31,2014 and consequently no further shares will be issued to employee under this scheme:

(Amount in Rupees) March 31, 2014 March 31, 2013

4 Contingent liabilities

a) Disputed demands for Income Tax 64,460,304 132,574,282

b) Disputed demands for Service Tax 16,339,031 38,971,190

c) Disputed demands for Value Added Tax 3,057,591 3,057,591

d) Performance and financial guarantees given by the 1.466.835.949 1.476.669.527 Banks on behalf of the Company

e) Corporate gurantees given for other companies / 2,061,200,000 2,061,200,000 entities and mobilisation

f) Claims against the Company not acknowledged as debts 3,609,695,750 3,600,000,000

- In respect of claim against the Company amounting to Rs.360,00,00,000/-(Rs 360,00,00,000/-) by a party who was originally claiming interest in a property, no provision has been considered necessary by the Management in view of the legal opinion that the said claim is not tenable on various grounds.

- One of our creditor has filed a civil suit claiming of Rs 88,28,380/- as amount due to him, which claim the company is disputing. - Short Levy of Stamp Duty due to misclassification of conveyance deed as development agreement amounting to Rs 8,67,370/- with Joint District Registrar & Collector of Stamps , Pune

5 Disclosure of particulars of significant leases as required by Accounting Standard 19

The Companys significant leasing arrangements are in respect of operating leases for commercial and residential premises The Company leases / sub-leases office spaces under cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessor and lessee.

a) Lease income from operating leases is recognised on a straight-line basis over the period of lease.

b) Lease expenses from operating leases is recognised on a straight-line basis over the period of lease.

The particulars of significant leases under operating leases are as under

The Company is obligated under non-cancellable leases / sub-leases for office space that arerenewable on a periodic basis at the option of both the lessor and lessee.

Future minimum lease expenses under non-cancellable operating leases

40 Disclosure of related party transactions as required by Accounting Standard 18

I Names of related parties

1. Subsidiaries

- Marvel Housing Private Limited

- Grey Stone Premises Private Limited

- Vascon Dwellings Private Limited

- IT CITi Info Park Private Limited

- Caspia Hotels Private Limited

- Windflower Properties Private Limited

- GMP Technical Solution Private Limited

- Floriana Properties Private Limited

- Vascon Pricol Infrastructure Limited

- Vascon Renaissance EPC Limited Liability Partnership

- Almet Corporation Limited

- Marathawada Realtors Private Limited

- Just Homes (India) Private Limited

- GMP Technical Solutions Middle East (FZE)

2. Joint Ventures

- WeikfieldIT CITI Infopark

- Phoenix Ventures

- Zenith Ventures

- Zircon Ventures

- Marigold Premises Private Limited (Upto 30th September 2013)

- Just Homes (AOP)

- Cosmos Premises Private Limited

- Ajanta Enterprises

3. Associates

- Angelica Properties Private Limited

- Mumbai Estate Private Limited

4. Key Management Personnel

- Mr. R. Vasudevan

- Dr Santosh Sunderrajan

5. Relatives of Key Management Personnel

- Mrs. Lalitha Vasudevan

- Mrs. Thangam Moorthy

- Mrs. Lalitha Sundarrajan

- Mr. Siddarth Vasudevan

- Ms. Soumya Vasudevan

6. Individuals having significant influence over the Company

7. Establishments where which individuals in serial number (4), (5) and (6) exercise significant Influence

- Flora Facilities Private Limited (Formerly known as Flora Premises Private Limited)

- Vastech Consultants Private Limited

- Vatsalya Enterprises Private Limited

- Bellflower Premises Private Limited

- Cherry Construction Private Limited

- Stresstech Engineers Pvt Ltd.

- Sunflower Health Services Private Limited

- Syringa Engineers Private Limited

(Formerly known as Syringa Properties Private Limited)

- Vascon Infrastructure Limited

8. Venturer in respect of which Company is associate or joint venture

- There are no parties under this category.

9 Based on the guiding principles enunciated in paragraph 4 of Accounting Standard - 17 (AS - 17), ''Segment Reporting'', if a single financial report contains both consolidated financial statements and the separate financial statements of the parent, disclosure required by AS 17 is given in consolidated financial statements.

10 Particulars of the Joint Ventures undertaken by the Company as required in AS 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the annexed statement.

11 Other additional information required by schedule VI of the Companies Act, 1956 are not applicable to the company for the year.

12 Corresponding figures for previous periods presented have been regrouped, where necessary, to conform to the current year classification.


Mar 31, 2013

1. Contingent liabilities

a) Disputed demands for Income Tax 132,574,282 64,460,304

b) Disputed demands for Service Tax 38,971,190 24,153,822

c) Disputed demands for Value Added Tax 3,057,591 2,780,140

d) Performance and fnancial guarantees given by the Banks on behalf of the Company 1,476,669,527 1,648,316,752

2. Disclosure of related party transactions as required by Accounting Standard 18 Names of related parties

1. Subsidiaries

- Marvel Housing Private Limited

- Grey Stone Premises Private Limited

- Vascon Dwellings Private Limited

- IT Citi Info Park Private Limited

- Caspia Hotels Private Limited

- Windfower Properties Private Limited

- GMP Technical Solutions Private Limited

- Floriana Properties Private Limited

- Vascon Pricol Infrastructures Limited

- Vascon Renaissance EPC Limited Liability Partnership

- Almet Corpotation Limited

- Marathawada Realtors Private Limited

2. Joint Ventures

- Weikfeld IT Citi Infopark

- Phoenix Ventures

- Zenith Ventures

- Zircon Ventures

- Marigold Premises Private Limited

- Just Homes (India) Private Limited

- Cosmos Premises Private Limited

- Ajanta Enterprises

3. Associates

- Angelica Properties Private Limited

- Mumbai Estate Private Limited

4. Key Management Personnel

- Mr. R. Vasudevan

- Dr Santosh Sunderrajan

5. Relatives of Key Management Personnel

- Mrs. Lalitha Vasudevan

- Mrs. Thangam Moorthy

- Mrs. Lalitha Sundarrajan

- Mr. Siddarth Vasudevan

- Ms. Soumya Vasudevan

6. Individuals having signifcant infuence over the Company

7. Establishments where which individuals in serial number (4), (5) and (6) exercise signifcant Infuence

- Flora Facililites Private Limited (Formally known as Flora Premises Private Limited)

- Vastech Consultants Private Limited

- Vatsalya Enterprises Private Limited

- Bellfower Premises Private Limited

- Cherry Construction Private Limited

- Sunfower Health Services Private Limited (Formally known as Sunfower Premises Private Limited)

- Syringa Engineers Private Limited ( Formally known as Syringa Properties Private Limited)

- Vascon Infrastructure Limited

3. Sales includes an amount of Rs. 20,14,52,104/- (Rs. Nil/-) being material supplied at a site during the earlier period. Since due to the temporary suspension no work was performed during that period, the same was carried as stock at site and no revenue in that respect was recognized in accordance with applicable Accounting Standard in spite of advance payment been received against the same in terms of the Contract. However, during the quarter under review, the materials for which payments have been made by the customer have been recognized as revenue since the stock ceased to be in control of the Company.

4. Based on the guiding principles enunciated in paragraph 4 of Accounting Standard - 17 (AS - 17), ‘Segment Reporting'', if a single fnancial report contains both consolidated fnancial statements and the separate fnancial statements of the parent, disclosure required by AS 17 is given in consolidated fnancial statements.

5. Particulars of the Joint Ventures undertaken by the Company as required in AS 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the annexed statement.

6. Other additional information required by schedule VI of the Companies Act, 1956 are not applicable to the company for the year.

7. Corresponding fgures for previous periods presented have been regrouped, where necessary, to conform to the current year classifcation.

8. The Company Overview

Vascon Engineers Limited (Company) was incorporated on January 1, 1986. The Company is engaged in the business of Engineering, Procurement and Construction services (EPC) and Real Estate Development directly or indirectly through its Subsidiaries, Joint Ventures and Associates. The shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange.


Mar 31, 2012

1. The Company Overview

Vascon Engineers Limited (Company) was incorporated on 1st January, 1986. The Company is engaged in the business of Engineering, Procurement and Construction services (EPC) and Real Estate Development directly or indirectly through its Subsidiaries, Joint Ventures and Associates. The shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange.

Amount in Rupees

Particulars March 31, 2012 March 31, 2011

2 Contingent liabilities

a) Disputed demands for Income Tax 132,574.282 61,595,900

b) Disputed demands for Service Tax 24,153,822 18,677,086

c) Disputed demands for Value Added Tax 2,780,140 -

d) Performance and financial guarantees given by the

Banks on behalf of the Company 1,648,316,752 2,442,487,374

e) Corporate guarantees given for other companies /entities 1,946,300,000 891,300,000

f) Claims against the Company not acknowledged as debts 3,600,000,000 6,087,783,351

i) The assignee of a development rights relating to a property had filed an arbitration proceedings making a claim of Rs. 248,77,83,351/- plus interest . During the year under review, the parties were negotiating Consent Terms which have been finally executed after the balance sheet date. The settlement accepts the finality of all the actions taken and no amount is payable by the Company to the claimants. The said consent terms are in the process of being filed with the Arbitral Tribunal for its order. Since the parties to the dispute have agreed to the settlement, the Company has been legally advised that, pending final order of the Arbitral Tribunal, no claim or contingency exists as of now.

ii) In respect of claim against the Company amounting to Rs.360,00,00,000/- (Rs 360,00,00,000/-) by a party who was originally claiming interest in a property, no provision has been considered necessary by the Management in view of the legal opinion that the said claim is not tenable on various grounds.

3 Disclosure of particulars of significant leases as required by Accounting Standard 19

The Company's significant leasing arrangements are in respect of operating leases for commercial and residential premises.

The Company leases / sub-leases office spaces under non-cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessor and lessee.

a) Lease income from operating leases is recognised on a straight-line basis over the period of lease.

4 Disclosure of related party transactions as required by Accounting Standard 18

Names of related parties

1. Subsidiaries

- Marvel Housing Private Limited

- Grey Stone Premises Private Limited

- Vascon Dwellings Private Limited

- IT CITI Info Park Private Limited

- Caspia Hotels Private Limited

- Windflower Properties Private Limited

- GMP Technical Solution Private Limited

- Floriana Properties Private Limited

- Vascon Pricol Infrastructure Limited

- Vascon Renaissance EPC Limited Liability Partnership

- Almet Corporation Limited

- Marathwada Realtors Private Limited

2. Joint Ventures

- Weikfield IT CITI Infopark

- Phoenix Ventures

- Zenith Ventures

- Zircon Ventures

- Marigold Premises Private Limited

6. Individuals having significant influence over the Company

7. Establishments where individuals in serial number (4), (5) and (6) exercise significant Influence

- Flora Facilities Private Limited (Formerly known as Flora Premises Private Limited)

- Vastech Consultants Private Limited

- Vatsalya Enterprises Private Limited

- Bellflower Premises Private Limited

- Cherry Construction Private Limited

- Sunflower Premises Private Limited

- Syringa Engineers Private Limited (Formerly known as Syringa Properties Private Limited)

- Vascon Infrastructure Limited

5 Based on the guiding principles enunciated in paragraph 4 of Accounting Standard - 17 (AS - 17), 'Segment Reporting', if a single financial report contains both consolidated financial statements and the separate financial statements of the parent, disclosure required by AS 17 is given in consolidated financial statements.

6 During the course of audit of a project, the technical audit team of the Company detected certain irregularities at one of the sites where Company's work is going on since the year 2007. While preparing escalation bills, certain cost overruns relating to technical matters under investigation were checked and it was found that the same portion could not be charged. With some further investigations, the Company noticed that there was a significant deviation with actual cost being higher than the budgeted cost. It was detected that there was a criminal breach of trust by some staff members at different levels including a vice president of the Company, together acting in concert against the interest of the Company over a period of 5 years. The amount involved is estimated at about Rs. 34,82,00,000 (Rs.Nil/-) on account of deviation aforesaid. The matter is under investigation. As the impact of the same has already been considered in the accounts in the relevant years, the management is of the opinion that no further provision in this regard is necessary.

7 Particulars of the Joint Ventures undertaken by the Company as required in AS 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the annexed statement.

8 Other additional information required by schedule VI of the Companies Act, 1956 are not applicable to the Company for the year.

9 Corresponding figures for previous periods presented have been regrouped, where necessary, to conform to the current year classification.


Mar 31, 2010

(Figures in bracket pertains to previous year)

1) Background

Vascon Engineers Limited (Company) was incorporated on 1st January, 1986. The Company is engaged in the business of Engineering, Procurement and Construction services (EPC) and Real Estate Development directly or indirectly through its Subsidiaries, Joint Ventures and Associates.

2 Employee Stock Option Scheme

Stock options granted to the employees

under the stock options scheme are accounted as per the accounting treatment prescribed by ICAI. Accordingly, the excess of fair value over the exercise price of the options is recognised as deferred employee compensation and is charged to the profit and loss account on straight line basis over the vesting period of the options. The amortised portion of the cost is shown under reserves and surplus.

2.1 Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions except the provision required under AS - 15 "Employee Benefits", are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

3. OTHER NOTES

3.1 Managerial Remuneration

(c) Employees compensation expenses relating to issue of shares under Employee Stock option scheme is not required to be included in managerial remuneration for the purpose of Section 349 of the Companies Act, 1956.

3.2 Contingent Liabilities:

The Company has not considered necessary to make provision in respect of:

(a) Income tax demand of Rs. 67,70,000/- (Rs. Nil) and Service Tax demand of Rs. 1,81,33,336/- (Rs. 99,61,823/-) not accepted by the Company as the same have been disputed by the Company in Appeal before higher authorities.

(b) Securities/guarantees provided to the bankers:



Particulars Year Ended March 31,

2010 2009

(i) for other companies Rs. Rs. 5,00,00,000

(ii) for performance Rs. 1,11,05,18,289 Rs. 32,16,71,193

(c) Corporate Guarantee given for other Companies Rs. 30,00,00,000 Rs. 20,00,00,000

(d) Claims against the Company not acknowledgeed Rs. 2,48,77,83,351 Rs.1,95,47,10,453 as debts (Refer Note 3.10 below) (e) Uncalled liabliity on Rs. 9,00,000 Rs. 9,00,000 shares partly paid

No dues were outstanding for more than 30 days from the date they were payable to the above parties.

3.4 Provision for Contingency

The Company had entered into a development agreement with a party in March 2007 pursuant to which a property which the Company had undertaken to develop with a vendor was assigned to the party for being developed on certain terms and conditions contained in the said development agreement. In the Companys account for the year ended 31st March 2007 since the property undertaken by the Company was accounted as purchases and the subsequent transaction entered into with the party was recognized as sales; a profit of Rs.20,00,00,000/- on this transaction was taken as surplus in the profit and loss account. During earlier year a member of a predecessor in title of the company trespassed and illegally entered into possession of the subject property. Consequently the party has sought to annul the entire arrangement. Arbitration proceedings were instituted during the earlier year. The proceedings are pending. The companys stand is that the members action is illegal since it has the effect of making the entire transaction a nullity.

However, without prejudice to the Companys rights and privilege arising under the agreements, by way of prudence, profit on the transaction recognized in the accounts for the year ended 31 st March 2007 is recognized as provision for contingency and included in the provisions in the accounts for the year ended 31 st March 2009. Further no provision is considered necessary in respect of claim of Rs. 248,77,83,351 /- plus interest (Previous Year Rs. 195,47,10,453/-) on the company, as in the managements opinion the said claim in not tenable. In any event, as per advice received by the Company the liability if any, would be on the member precedent in title, and not on the Company in view of the members illegal action.

Sundry Debtors includes an amount of Rs. 56,50,00,000/- (Rs. 56,50,00,000/-) receivable from the party for which provision has not been considered necessary in view of the corresponding matching liability payable to the vendor and the contingency provision.

3.5 Capital

a) During the year, Company has completed its Initial Public Offer (IPO) and consequently, the Company has allotted 1,08,00,000 equity shares of Rs. 10/- each at a price of Rs. 165/- per share on February 8, 2010. Equity shares of the Company were listed for trading on National Stock Exchange and Bombay Stock Exchange on February 15,2010.

b) The Company had issued 33,00,677 Unsecured Debentures of Rs. 152/- each on July 21,2008 for a period of 5 years from the date of allotment. Debenture holders has an option to convert the debentures in to equity shares of the Company in the ratio of one equity share for one debenture held which can be exercised after a period of 18 months from the date of allotment. Coupon rate of debentures was 15% p.a. payable half yearly on 30th June and 31 st December every year.

The debenture holders have exercised the option to convert the Unsecured Convertible Debentures to Equity Shares and accordingly the same are converted to Equity Shares in the ratio of 1:1 on 27.08.2009.

3.6 In respect of a development project, as per the terms of land purchase agreement with a land vendor, an additional amount equivalent to 40% of sale proceeds will required to be paid in the event the FSI availed is in excess of 580000 Sq ft. Since such event has not occurred till the date of balance sheet, no provision is required for this additional cost.

3.7 Related Party disclosures have been set out in a separate statement annexed to this schedule. The related parties as defined by AS 18 Related Party Disclosure issued by The ICAI, in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key managerial persons taken on record by the Board.

3.8 Particulars of the Contract Revenue as required in AS 7 "Accounting for Construction Contracts" issued by the ICAI, in respect of which disclosures have been made are given in the Annexed Statement.

3.9 Particulars of the Joint Ventures undertaken by the Company as required in AS 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the Annexed Statement.

3.10 The Loans & Advances include an amount of Rs. 475752284/- (Rs.4328 -81579/-) paid as advances/deposits to the vendors while acquiring development rights for various projects. As per the Agreements, the vendor is entitled to an agreed percentage of sale proceeds of the project as a consideration. No amount is Payable if there is no sale. Hence there is no loss to the Company. Since the cost of acquisition of development rights is not ascertainable, the same is not accounted.

3.11 The companys significant leasing arrangements are in respect of operating leases for Commercial premises. The particulars of such leases are given in the Annexed Statement.

3.12 The particulars of investments made/sold during the year are given in the Annexed Statement.

3.13 The particulars of employee benefits as required under AS 15 "Accounting for Employee Benefits" issued by the ICAI are given in the Annexed Statement.

3.14 a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances, Rs. 34633169/- (Rs. 5354000/-)

3.15 The Company has 9 subsidiaries. During the year Vascon Pricol Infrastructure Limited, subsidiary of the Company has acquired 100% stake in Caspia Hotels Private Limited formerly known as Compress Infocom Private Limited and by which the same has become subsidiary of the Company. The Company has sold its stake in Rose Premises Private Limited, one of the wholly owned subsidiary and accordingly the said subsidiary has become a joint venture instead of a subsidiary.

The Ministry of Affairs vide its letter No. 47/161/2010-CL-lll dt. 15th March 2010 granted approval to the Company for not attaching copies of the Balance Sheet and Profit & Loss Account, Directors Report and Auditors Report of the subsidiary companies for the financial year 2009 - 2010. As per condition no. (i) of the above said letter Consolidated Financial Statements duly audited by the Statutory Auditors is enclosed with the statement of summarised financial of all the subsidiaries.

3.16 Other additional information required by schedule VI part II of the Companies Act, 1956 are not applicable to the com pany for the year.

3.17 Balance Sheet abstract and Companys General Business Profile, in form prescribed in part III of Scheduled VI of the Companies Act 1956, as amended by notification GSR No. 388(E) (F.No. 3/24/94-CLB) Dated 15/05/95 is attached herewith as Annexure.

3.18 Correspoding figures of the previous year have been regourped, renamed rearranged wherever necessary.


Mar 31, 2009

1 Contingent Liabilities:

(a) It has not been considered necessary to make a provision in respect of Service Tax demand not accepted by the Company for Rs.99,61,823/-. (Rs. Nil/-) as the same has been disputed by the Company in Appeal.

(b) Securities/guarantees provided to the bankers:

(i) forothercompanies Rs. Nil Rs. Nil

(ii)for performance Rs. 371,671,193 Rs. 388,786,495

(c) Corporate Guarantee given for other companies Rs. 250,000,000 Rs. Nil

(d) Claims againstthe Company Rs 1,954,710,453 Rs. Nil not acknowledged as debts (Refer Note 12 below)

(e) Uncalled liability on shares partly paid Rs - Rs. 110,556,680

2 Prior Period Adjustments

The profit for the year includes net (income)/expense of Rs. 22,08,288/- Previous year (Rs 79,40,324/-)) in respect of prior years.

3 Installments in respect of Term Loan due in next 12 months Rs. 4,89,99,264/- (Rs.3,39,66,229/-).

4 The quantitative information in respect of trading activity of the company is given in annexed statement.

5 Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the statusofthe suppliers as defined under the "Micro, Small and Medium Enterprises DevelopmentAct,2006". Amount overdue as on 31st March, 2009, to Micro, Small and Medium Enterprises on account of principal amount together with interest, aggregate to Rs. Nil (Rs. Nil).

6 Provision for Contingency:

The Company had entered into a development agreement with a party in March 2007 pursuant to which a property which the Company had undertaken to develop with a vendor was assigned to the party for being developed on certain terms and conditions contained in the said development agreement. In the Companys account for the year ended 31 st March 2007 since the property undertaken by the Company was accounted as purchases and the subsequent transaction entered into with the party was recognized as sales; a profit of Rs.20 cr on this transaction was taken as surplus in the profit and loss account. During the year a member of a predecessor in title of the company trespassed and illegally entered into possession of the subject property. Consequently the party has sought to annul the entire arrangement. Arbitration proceedings were instituted during the year. The proceedings are pending. The companys stand is that the members action is illegal since it has the effect of making the entire transaction a nullity.

However, without prejudice to the Companys rights and privilege arising under the agreements, by way of prudence, profit on the transaction recognized in the accounts for the year ended 31st March 2007 is recognized as provision for contingency and included in the provisions in the current years account. Further no provision is considered necessary in respect of claim of Rs. 195.47 cr on the company, as in the managements opinion the said claim in not tenable. In any event, as per advice received by the Company the liability if any, would be on the member precedent in title, and not on the Company in view of the members illegal action.

Sundry Debtors includes an amount of Rs. 56.50 cr receivable from the party for which provision has not been considered necessary in view of the corresponding matching liability payable to the vendor and the contingency provision.

7 The Company has issued 33,00,677 Unsecured Debentures of Rs. 152/- each for a period of 5 years from the date of allotment. Option to convert the debentures in to equity shares of the Company in the ratio of one equity share for one debenture held can be exercised after a period of 18 months from the date of allotment.Coupon rate of debentures is 15% p.a. payable half yearly on 30th Juneand31stDecembereveryyear.

8 As per the terms of an agreement with a land vendor, an additional amount equivalent to 40% of sale proceeds will required to be paid in the event the FSI availed is in excess of 580000 Sq ft. Since such event has not occurred till the date of balance sheet,no provision is required for this additional cost.

9 Related Party disclosures have been set out in a separate statement annexed to this schedule. The related parties as defined by Accounting Standard 18 Related Party Disclosure issued by The Institute of Chartered Accountants of India, in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key managerial persons taken on record by the Board.

10 Particulars of the Contract Revenue as required in Accounting Standard 7 "Accounting for Construction Contracts" issued by the Institute of Chartered Accountants of India, in respect of which disclosures have been made are given in the Annexed Statement.

11 Particulars of the Joint Ventures undertaken by the Company as required in Accounting Standard 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the Annexed Statement.

12 The Loans & Advances includes an amount of Rs. 43,28,81,579/- (Rs.55,22,33,051/-) paid as advances/deposits to the vendors by the Company for acquiring land for its various projects under Single Joint Venture agreements. As per such Agreements the company has to work out the consideration for acquisition of land on the basis of sale proceeds at the time of receipts of the such proceeds of the developed area, in other words, no amount is payable if there is no sale. There is no event of any loss by the Company or by the vendor since as such the liability is not presently quantifiable.

13 The companys significant leasing arrangements are in respect of operating leases for Commercial premises.The particulars of such leases are given in the Annexed Statement.

14 The particulars of investments made/sold during the yearare given in the Annexed Statement.

15 The particulars of employee benefits as required under Accounting Standard 15 "Accounting for Employee Benefits" are given in theAnnexed Statement.

16 Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances , Rs.5,35,40,000/- (previous year Rs. 1,49,90,973/-)

As per the arrangement with a customer, the assets provided by it for the relevant contract will be acquired by the Company at 50% of the cost at the end of the project. The estimated amount of such commitment at the year end is Rs.3,55,67,814/- (Rs.2,70,00,000/-)

17 The Company has 9 subsidiaries. During the year Company has acquired additional 30% shares of Floriana Properties Private Limited and by which the same has become wholly owned subsidiary of the Company.

The Ministry of Affairs vide its letter No. 47/113/2009-CL-lll dt. 20th April 2009 granted approval to the Company for not attaching copies of the Balance Sheet and Profits Loss Account, Directors Report and Auditors Report of the subsidiary companies for the financial year 2008 - 2009. As per condition no. (i) of the above said letter Consolidated Financial Statements duly audited by the Statutory Auditors is enclosed with the statement of summarised financial of all the subsidiaries.

18 During the year Company has changed the method of valuation of Stock of materials etc from FIFO to Weighted Average. Due to change in method of valuation of stock, stock and profit for the year has increased by Rs. 35,07,008/- and Rs. 23,14,976/- respectively.

19 Other additional information required by schedule VI part II of the Companies Act, 1956 are not applicable to the company for the year.

20 Balance Sheet abstract and Companys General Business Profile, in form prescribed in part III of Scheduled VI of the Companies Act 1956, as amended by notification GSR No. 388(E) (F.No. 3/24/94-CLB) Dated 15/05/95 is attached herewith as Annexure.

21 Corresponding figures of the previous year have been regrouped, renamed or rearranged wherever necessary.

Note : Names of related parties and description of relationship

Sr.No. Particulars Name of the Party

1 Joint Venture Weikfeilds ITCITI Info Park (AOP) Phoenix Ventures Zenith Ventures Zircon Ventures Marigold Premises Pvt Ltd Just Homes (India) Pvt Ltd Viorica Properties Pvt Ltd Cosmos Premises Pvt Ltd

2 Key Management Personnel Mr. R. Vasudevan

3 Relatives of Key Management Personnel Mrs. Lalitha Vasudevan Mr. N. R Moorthy Mrs. Thangam Moorthy Mrs. Lalitha Sundarrajan Mr. Siddarth Vasudevan

4 Associates Angelica Properties Pvt Ltd Syringa Properties Pvt Ltd Mumbai Estate Pvt Ltd Ajanta Enterprises

5 Enterprise where key management personnel and their relatives exercise Iris Propeties Private Limited significant influence One Stop Shop (I) Pvt Ltd Flora Premises Pvt Ltd Vastech Consultants Pvt Ltd Core Fitness Pvt Ltd Cipla Limited

6 Subsidiary Marvel Housing Pvt Ltd Greystone Premises Pvt Ltd Vascon Dwellings Pvt Ltd IT CITI Info Park Pvt Ltd Rose Properties Pvt Ltd Windflower Properties Pvt Ltd Calypso Premises Pvt Ltd Floriana Properties Pvt Ltd Vascon Pricol Infrastructures Ltd.


Mar 31, 2008

1. OTHER NOTES

(c) Employees compensation expenses relating to issue of shares under Employee Stock Option Scheme is not required to be included in managerial remuneration for the purpose of Section 349 of the Companies Act, 1956.

2 Contingent Liabilities :

(a) It has not been considered necessary to make a provision in respect of Income Tax demand not accepted by the Company for Rs. Nil. (Rs. 67,68,000/-) as the same has already been paid and disputed by the Company in Appeal.

(b) Securities/guarantees provided to the bankers :

(i) for other companies Rs. Nil Rs. Nil

(ii) for performance Rs.388,786,495 Rs. 89,577,268

(c) Corporate Guarantee Rs. Nil Rs. Nil given for other Companies

(d) Claims against the Company Rs. Nil Rs. Nil not acknowledged as debts

(e) Uncalled liability on Rs.110,556,680 Rs. Nil shares partly paid

3 Prior Period Adjustments :

The profit for the year includes net income/(expense) of Rs. 79,40,324/- ((Rs10,32,471/-)) in respect of prior years.

4 Instalments in respect of Term Loan due in next 12 months Rs.3,39,66,229/- (Rs.11,565,571/-)

5 As the company is not a manufacturing company, the clauses 3(ii)(a) and (b) of Part II of Schedule VI of the Companies Act, relating to quantitative information do not apply.

6 The quantitative information in respect of trading activity of the company is given in annexed statement.

7 Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act,2006". Amount overdue as on 31st March, 2008, to Micro, Small and Medium Enterprises on account of principal amount together with interest, aggregate to Rs. Nil (Rs. Nil).

8 Sundry Debtors includes Rs 56,50,00,000/- being amount not yet due for payment in terms of the arrangement with the customer.

9 The Board has approved a scheme for granting stock option to employees (ESOS). As per the said scheme 2,000,000 shares are proposed to be offered to eligible employees. Out of the above 1,983,500 shares are offered and 1,650,000 was accepted by employees during the year.

10 As per the terms of an agreement with a land vendor, an additional amount equivalent to 40% of sale proceeds will required to be paid in the event the FSI availed is in excess of 580000 Sq ft. Since such event has not occurred till the date of balance sheet,no provision is required for this additional cost.

11 Related Party disclosures have been set out in a separate statement annexed to this schedule. The related parties as defined by Accounting Standard 18 ‘Related Party Disclosure’ issued by The Institute of Chartered Accountants of India, in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key managerial persons taken on record by the Board.

12 Particulars of the Contract Revenue as required in Accounting Standard 7 "Accounting for Construction Contracts" issued by the Institute of Chartered Accountants of India, in respect of which disclosures have been made are given in the Annexed Statement.

13 Particulars of the Joint Ventures undertaken by the Company as required in Accounting Standard 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the Annexed Statement.

14 The Loans & Advances includes an amount of Rs. 55,22,33,051/- (Rs. 255,732,610/-) paid as advances/deposits to the vendors by the Company for acquiring land for its various projects under Single Joint Venture Agreements. As per such Agreements the company has to work out the consideration for acquisition of land on the basis of sale proceeds at the time of receipts of the such proceeds of the developed area, in other words, no amount is payable if there is no sale. There is no event of any loss by the Company or by the vendor.

15 The companys significant leasing arrangements are in respect of operating leases for Commercial premises. The particulars of such leases are given in the Annexed Statement.

16 The particulars of investments made/sold during the year are given in the Annexed Statement.

17 The particulars of employee benefits as required under Accounting Standard 15 "Accounting for Employee Benefits" are given in the Annexed Statement.

18 Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances , Rs. 1,49,90,973/- ( previous year Rs. 2,157,686/-)

As per the arrangement with a customer, the assets provided by it for the relevant contract will be acquired by the Company at 50% of the cost at the end of the project. The estimated amount of such commitment at the year end is Rs. 2,70,00,000/- (Rs. Nil)

19. Subsidiary Companies

The companies had 8 subsidiaries at the beginning of the year. During the year company set up / acquired two new subsidiaries which are Greystone Premises Pvt. Ltd. and Vascon Pricol Infrastructures Ltd. The company de-registered one of the its subsidiaries, Cosmos Premises Pvt. Ltd. Following this action, the company has 9 subsidiaries as on 31st March, 2008

The Ministry of company affairs vide its letter No 47 / 102 / 2008 - Cl-III dt 25th March, 2008 granted approval to the company for not attaching copies of the Balance Sheet and Profit and loss Account, Director’s Report and Auditor’s Report of the subsidiary companies for the year 2007-08. However, on requested financial statements duly audited, at its corporate office. A per condition no. (I) above said letter consolidated financial statements duly audited by the Statutory Auditors is enclosed with the statement of summarized financial of all the subsidiaries.

20 Other additional information required by schedule VI part II of the Companies Act, 1956 are not applicable to the company for the year.

21 Balance Sheet abstract and Companys General Business Profile, in form prescribed in part III of Scheduled VI of the Companies Act 1956, as amended by notification GSR No. 388(E) (F.No. 3/24/94-CLB) Dated 15/05/95 is attached herewith as Annexure.

22 Corresponding figures of the previous year have been regrouped, renamed or rearranged wherever necessary.

Note : Names of related parties and description of relationship

Sr.No. Particulars Name of the Party

1 Joint Venture Weikfeilds ITCITI Info Park (AOP) Phoenix Ventures Zenith Ventures Zircon Ventures Marigold Premises Pvt Ltd Just Homes (India) Pvt Ltd Viorica Properties Pvt Ltd Cosmos Premises Pvt Ltd

2 Key Management Personnel Mr. R. Vasudevan

3 Relatives of Key Management Personnel Mrs. Lalitha Vasudevan Mr. N. R Moorthy Mrs. Thangam Moorthy Mrs. Lalitha Sundarrajan Mr. Siddarth Vasudevan

4 Associates Angelica Properties Pvt Ltd Syringa Properties Pvt Ltd Mumbai Estate Pvt Ltd Ajanta Enterprises

5 Enterprise where key management personnel and their relatives exercise Iris Propeties Private Limited significant influence One Stop Shop (I) Pvt Ltd Flora Premises Pvt Ltd Vastech Consultants Pvt Ltd Core Fitness Pvt Ltd Cipla Limited

6 Subsidiary Marvel Housing Pvt Ltd Greystone Premises Pvt Ltd Vascon Dwellings Pvt Ltd IT CITI Info Park Pvt Ltd Rose Properties Pvt Ltd Windflower Properties Pvt Ltd Calypso Premises Pvt Ltd Floriana Properties Pvt Ltd Vascon Pricol Infrastructures Ltd.


Mar 31, 2007

1 Contingent Liabilities

(a) It has not been considered necessary to make a provision in respect of Income-Tax demands not accepted by company for Rs.6,768,000/- (Rs.6,768,000/-) as the same has already been paid and disputed by the company in appeal.

March 2007 March 2006 Rs. Rs.

(b) Securities/guarantees provided to the bankers :

(i) for other companies 89,577,268 (2,000,000) (ii) for performance Nil (30,895,000)

( c) Corporate Guarantee given for other Companies Nil (60,00,000)

(D) Claims against the Company not acknowledged as debts Nil Nil

2 Unsecured loans include an amount of Rs. Nil due to directors of the Company.

3 Prior Period Adjustments

The profit for the year includes net expense of Rs.1,032,471/- (Rs1,244,785/-) in respect of prior years.

4 The particulars of the Partnership Firms where the Company is a partner as on the year end are as follows: Asset existing on the Balance Sheet date have not been changed.

5 Instalments in respect of Term Loan due in next 12 months are Rs.11,565,571/- (Rs.681,763,432)

6 As the company is not a manufacturing company, the clauses 3(ii)(a) and (b) of Part II of Schedule VI of the Companies Act, relating to quantitative information do not apply.

7 The quantitative information in respect of trading activity of the company is given in annexed statement.

8 Current Liabilities includes dues to SSI units amounting to Rs. 1,475,880/- (Rs. 52,982/-). There were no overdues to such units exceeding 30 days. This information has been compiled in respect of parties to the extent to which they could be identified as small scale industrial undertakings on the basis of information available with the Company.

9 Related Party disclosures have been set out in a separate statement annexed to this schedule. The related parties as defined by AS 18 "Related Party Disclosure" issued by The Institute of Chartered Accountants of India, in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key managerial persons taken on record by the Board.

10 Particulars of the Contract Revenue as required in AS 7 “Accounting for Construction Contracts" issued by the Institute of Chartered Accountants of India, in respect of which disclosures have been made are given in the Annexed Statement.

11 Particulars of the Joint Ventures undertaken by the Company as required in AS 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the Annexed Statement.

12 Joint Development : The Company has entered into arrangement for joint development of properties with the land owners and under such arrangements paid Rs.280,732,610/- (Rs.86,103,961/-) as advances/deposits to the joint venture partners out of which an amount of Rs.25,000,000/-(Nil) being non refundable deposit is debited to the cost of land and the balance Rs.255,732,610/- (Rs.86,103,961/-) is shown as advance/deposit under the head Loans and Advances. As per such Agreements the company has to work out the sharing of joint venture revenue on the basis of sale proceeds at the time of receipts of such proceeds of the developed area, in other words, no amount is payable if there is no sale. There is no event of any loss by the Company or by the vendor, except to the extent of non refundable amount of Rs.25,000,000/- which has been accordingly debited to the land cost. In view of the nature of these agreements, as a policy, the company will reduce the proceeds and account for the profit in the respective year to the extent of sale by the company. All monies received from the buyer and paid to the vendor earlier to this event will be considered advances received and paid, respectively.

13 The Companys significant leasing arrangements are in respect of operating leases for commercial premises. The particulars of such leases are given in the Annexed Statement.

14 The particulars of investments made/sold during the year are given in the Annexed Statement.

15 Amalgamation of Clover Resort Pvt. Ltd. with Vascon Engineers Ltd. Pursuant to the Scheme of Amalagamation approved by the shareholders of the Company and the Honourable High Court of Judicature at Bombay, vide its order dated January 19, 2007, all assets and liabilities and reserves of erstwhile Clover Resorts Private Limited wholly owned subsidiary of the Company having been vested in the Company from April 1, 2006 as per scheme of amalgamation sanctioned by the High Court, have been incorporated in these accounts.

Salient Features of the Amalgamation Scheme are detailed below:

a) Name and general nature of business of Transferor Company: Clover Resorts Pvt. Ltd.

b) Appointed date of amalgamation for accounting purpose: April 1, 2006

c) Method of accounting used to reflect the amalgamation: Purchase Method

d) Particulars of Scheme sanctioned by the statue:

I) With effect from April 1, 2006 the entire business and undertaking including all assets and liabilities of Clover Resort Pvt. Ltd. and rights and obligations, all books of account and documents and records relaing thereto, are tranferred to the Transferee Company pursuant to Section 394 (2) of the Companies Act,1956; and

ii) With effect from the appointed date, all proceedings, if any, pending by or against Clover Resort Pvt. Ltd. be continued by or against the Transferee Company; and consequent to giving effect to this scheme, the Companys investment in the share capital of Clover Resort has been cancelled against Share Capital of Clover Resort Pvt. Ltd. No Goodwill or Capital Reserve has arisen on account of this amalgamation.

16 The particulars of employee benefits as required under AS 15 "Accounting for Employee Benefits" are given in the Annexed Statement. Although the application of this standard is not mandatory for this accounting period, the Company has chosen voluntarily to apply the same.

17 Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances, Rs.2,157,686/- ( previous year Rs. Nil)

18 During the year, the Company has changed the method of providing leave encashment by adopting Actuarial Valuation as against estimated method in accordance with the AS 15 (Revised) - "Employee Benefits", although the same is not mandatory. Had the Company continued to follow the method of such provision as per previous year, the profit would have been higher by Rs. 175,335/-(net of deferred tax gain) and correspodingly reserves would have been higher by Rs. 175,335/-

19 Value of development as on 31st March, 2006, includes cost of 10,000 shares of Clover Resorts Private Limited acquired by the Company for a sum of Rs. 686,643,040/- (net of deferred tax gain) with an object of acquiring the underlying asset of the Company for development of a project. Pursuant to the order of the Bombay High Court, the said Company has been merged with our Company.

20 Other additional information required by schedule VI part II of the Companies Act, 1956 are not applicable to the company for the year.

21 Balance Sheet Abstract and Companys General Business Profile, in form prescribed in part III of Scheduled VI of the Companies Act, 1956, as amended by notification GSR No. 388(E) (F.No. 3/24/94-CLB) Dated 15/05/95 is attached herewith as Annexure.

22 Corresponding figures of the previous year have been regrouped, renamed or rearranged wherever necessary.

Sr. No. Particulars Name of the Party

1 Joint Venture Weikfield IT Citi Info Park

Phoenix Ventures Zenith Ventures Zircon Ventures Vascon Hadapsar Ventures

2 Key Management Personnel Mr. R. Vasudevan

3 Relatives of Key Management Personnel Mrs. Lalitha Vasudevan

Mr. N. R. Moorthy Mrs. Thangam Moorthy Mrs. Lalitha Sundarrajan Mr. Siddarth Vasudevan

4 Associates Marigold Premises Pvt. Ltd.

Just Homes (India) Pvt. Ltd. Viorica Properties Pvt. Ltd. Angelica Properties Pvt. Ltd. Syringa Properties Pvt. Ltd. Mumbai Estate Pvt. Ltd.

5 Enterprise where key management Iris Properties Pvt. Ltd. personnel and their relatives exercise One Stop Shop (I) Pvt. Ltd. significant influence Flora Premises Pvt. Ltd.

Vastech Consultants Pvt. Ltd. Core Fitness Pvt. Ltd.

6 Subsidiary companies Marvel Housing Pvt. Ltd.

Vascon Dwellings Pvt. Ltd. Cosmos Premises Pvt. Ltd. IT Citi Info Park Pvt. Ltd. Wind Flower Premises Pvt. Ltd. Rose Premises Pvt. Ltd. Calypso Premises Pvt. Ltd. Floriana Properties Pvt. Ltd.