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Notes to Accounts of Espire Hospitality Ltd.

Mar 31, 2015

Note No. 1

(A) CORPORATE INFORMATION

The Company was incorporated on October 23, 1991, under the provisions of the Companies Act,1956. The company Registered Office is located at Bhimtal, Dist Nanital (Uttarakhand).The Company has been doing trading and rendering Property Maintenance services.

2.1 The company has not reserved any equity shares for issue under options and contracts/commitments for sale of shares/disinvestment

2.2 The company for the period of five years immediately preceding the Balance Sheet date has not

(i) allotted any equity shares as fully paid up pursuant to contract(s) without payment being received in cash

(ii) alloted any fully paid up shares by way of bonus shares nor has bought back any class of equity shares

2.3 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. The dividend, if any, 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, the equity shareholders are entitled to receive only the residual assets of the company. The distribution of dividend, if any, is in the proportion to the number of equity shares held by the shareholders.

3.1 Bank Balances of Rs 63065/- under the head other bank balance's (in current account) represents bank accounts seized by statutory authorities

3.2 Term deposit of Rs 1,00,000/- has been given as security against the bank gurantee submitted to Department of Trade and Taxes Delhi

4. Commitment & Contingent Liabilities:-

a) LG Electronics India Pvt. Ltd (LG) had filed a suit against the company, Usha India Ltd., and others for the recovery of Rs. 4,65,02,400/- given as security deposit for the premises A-41, Mohan Co-operative Industrial Estate, New Delhi -110044 taken by it on lease from Usha India Ltd. and against the maintenance service agreement for the same premises entered into with the company. The company has denied its liability on the ground that it has already assigned the agreement to Lord Mahadev Trust on 6th August, 1997 and transferred the security deposit of Rs. 87,19,200/- received by the Company to the said Trust. However, Hon'ble High Court of Delhi has passed a part joint decree of Rs. 2,31,25,803/- in favour of LG and the LG filed an execution petition and subsequently the Court directed the ICICI Bank, New friends Colony, New Delhi to transfer a sum of Rs.4,50,000/- to LG. The liability on account of above decree has not been ascertained by the court among the parties to the suit.

However, the management is of the opinion based on legal advices, that the Company shall not be liable to make any payment to L.G, even the amount of Rs 4,50,000/- shall be recovered by the company from LG Electronics India Pvt. Ltd (LG).Presently Rs 4,50,000/- so transferred to LG Electronics has been shown under the head of Long term Loan and Advances.

(b) Other money for which the company is contingently liable

Assessing officer has filed an appeal before the ITAT, New Delhi against the order of Commissioner of Income Tax (Appeals) allowing the appeal for deleting the demand of Rs 6,51,050/- towards the penalty imposed by the Assessing Officer U/s 271(1) (C) relating to the assessment year 2003-04. The case was remanded back to CIT(Appeals) for adjudication on merit vide order dated 06-06-2008 by ITAT. However the CIT(Appeals) has not taken the case till date.

c) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Nil (previous year Nil)

5. Value of Imports on CIF basis : NIL (P. Year Nil)

6. Details of imported and indigenous raw materials, spare parts, and components consumed Raw Materials: NIL(P. Year Nil)

Stores & spares: NIL(P. Year Nil)

7. Expenditure in foreign currency: NIL (P Year Nil).

Earning In Foreign currency: NIL (P Year Nil).

8. Exceptional items of Rs 170,79,554/- represents the Loan & Advances written off in the books of accounts being not recoverable in cash or in kind.

9. Previous year's figures have been regrouped / rearranged wherever necessary.

10. Figures in brackets denotes negative figures.


Mar 31, 2014

Note No. 1

(A) CORPORATE INFORMATION

The Company was incorporated on October 23, 1991, under the provisions of the Companies Act, 1956. The company Registered Office is located at Bhimtal.Dist Nanital (Uttarakhand).The Company has been doing trading of Steel and other products and rendering Property Maintenance services.

1.1 The company has not reserved any equity shares for issue under options and contracts/commitments for sale of shares/disinvestment

1.2 The company for the period of five years immediately preceding the Balance Sheet date has not

(i) allotted any equity shares as fully paid up pursuant to contract(s) without payment being received in cash (ii) alloted any fully paid up shares by way of bonus shares nor has bought back any class of equity shares

2.0 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. The dividend, if any, 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, the equity shareholders are entitled to receive only the residual assets of the company. The distribution of dividend, if any, is in the proportion to the number of equity shares held by the shareholders.

2.1

Bank Balances of Rs 63065/- under the head other bank balance''s (in current account) represents bank accounts seized by statutory authorities.

2.2

Term deposit of Rs 1,00,000/- has been given as security against the bankgurantee submitted to Department of Trade and Taxes Delhi.

3. Commitment & Contingent Liabilities:-

a) LG Electronics India Pvt. Ltd (LG) had filed a suit against the company, Usha India Ltd., and others for the recovery of Rs. 4,65,02,400/- given as security deposit for the premises A-41, Mohan Co-operative Industrial Estate, New Delhi -110044 taken by it on lease from Usha India Ltd. and against the maintenance service agreement for the same premises entered into with the company. The company has denied its liability on the ground that it has already assigned the agreement to Lord Mahadev Trust on 6th August, 1997 and transferred the security deposit of Rs. 87,19,200/- received by the Company to the said Trust. However, Hon''bleHigh Court of Delhi has passed a part joint decree of Rs. 2,31,25,803/- in favour of LG and the LG filed an execution petition and subsequently the Court directed the ICICI Bank, New friends Colony, New Delhi to transfer a sum of Rs.4,50,000/- to LG. The liability on account of above decree has not been ascertained by the court among the parties to the suit.

However, the management is of the opinion based on legal advices, that the Company shall not be liable to make any payment to L.G, even the amount of Rs 4,50,000/- shall be recovered by the company from LG Electronics India Pvt. Ltd (LG).Presently Rs 4,50,000/- so transferred to LG Electronics has been shown under the head of Long term Loan and Advances.

(b) Other money for which the company is contingently liable

Assessing officer has filed an appeal before the ITAT, New Delhi against the order of Commissioner of Income Tax (Appeals) allowing the appeal for deleting the demand of Rs 6,51,050/- towards the penalty imposed by the Assessing Officer U/s 271(1) (C) relating to the assessment year 2003-04. The case was remanded back to CIT(Appeals) for adjudication on merit vide order dated 06-06-2008 by ITAT. However the CIT(Appeals) has not taken the case till date.

c) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Nil (previous year Nil)

4. Value of Imports on CIF basis: NIL (P. Year Nil)

5. Details of imported and indigenous raw materials, spare parts, and components consumed Raw Materials: NIL(P Year Nil)

Stores & spares: NIL(P. Year Nil)

6. Expenditure in foreign currency: NIL (P Year Nil). Earning In Foreign currency: NIL(P.Year Nil).

7. EMPLOYEE BENEFIT PLAN

Provision for gratuity and leave encashment has not been provided in the books as none of the employees of the company are eligible for these benefits as on 31.03.2014.

8. Previous year''s figures have been regrouped / rearranged wherever necessary.

9. Figures in brackets denotes negative figures.


Mar 31, 2013

1. The company was incorporated on 23.10.1991, and is in the business of Real Estate, Barter Trade & Trading of Chocolates and Beauty products.

2. Contingent Liabilities:-

a) LG Electronics India Pvt. Ltd (LG) had filed a suit against the company, Usha India Ltd., and others for the recovery of Rs. 4,65,02,400/- given as security deposit for the premises A-41, Mohan Co-operative Industrial Estate, New Delhi -110044 taken by it on lease from Usha India Ltd. and against the maintenance service agreement for the same premises entered into with the company. The company has denied its liability on the ground that it has already assigned the agreement to Lord Mahadev Trust on 6* August, 1997 and transferred the security deposit of Rs. 87,19,200/- received by the Company to the said Trust. However, Hon''ble High Court of Delhi has passed a part joint decree of Rs. 2,31,25,803/- in favour of LG and the LG filed an execution petition and subsequently the Court directed the ICICI Bank, New friends Colony, New Delhi to transfer a sum of Rs.4,50,000/- to LG. The liability on account of above decree has not been ascertained by the court among the parties to the suit. However, the management is of the opinion that the Company can be liable maximum to the extent of Rs. 87,19,200/- on account of the above recovery suit. Company is contesting the execution petition filed by LG electronics India Pvt. Ltd.Rs 4,50,000/- so transferred from the Company''s Banka/cto LG Electronics has been shown under the head of Long term Loan and Advances.

(b) Other money for which the company is contingently liable:

Assessing officer has filed an appeal before the ITAT, New Delhi against the order of Commissioner of Income Tax (Appeals) allowing the appeal for deleting the demand of Rs 6,51,050/- towards the penalty imposed by the Assessing Officer U/s 271(1) (C) relating to the assessment year 2003-04. The case was remanded back to CIT(Appeals) for adjudication on merit vide order dated 06-06-2008 by ITAT. However the CIT(Appeals) has not taken the case till date.

3. Balances of Loans and Advances are subject to reconciliation and confirmation.

4. During the year there is no transactions with Related Parties as per the requirements of AS-18 Related Party Disclosures'' issued by the Institute of Chartered Accountants of India.

5. Value of Imports on CIF basis: NIL (P. Year Nil)

6. Expenditure in foreign currency: NIL (P Year Nil).

7. Provision for gratuity and leave encashment has not been provided in the books as none of the employees of the company are eligible for these benefits as on 31.03.2013.

8. Previous year''s figures have been regrouped / rearranged wherever necessary.

9. Figures in brackets denotes negative figures.


Mar 31, 2012

1.1 The Company has completed the project the Usha Nike tan, Beni Park Jaipurth as per the collaboration agreement dated 7th Jan, 1994, and as per the terms and conditions of the agreement, requested the owner of the land Mr Anil Parishes to refund of Rs 12 lacs paid to him as refundable security. On his failure to pay the amount, the company filled a legal suit for recovery of the above said amount in the District court Delhi. The amount of Rs 12 Lacs has been grouped under the head' Security Depositsth.

1.2 The company had entered into an agreement dated 28- September 1993 with R. L. Baiswala & Sons HUF for purchase of a Plot No.D-71, Satie Villa, Jamuna Lai Bajaj Marg, C-Scheme, Jaipur. But as the vendor of the land could not transfer the land and hand-over its possession, the company filed a suit against the vendor.

District Trial Court in Jaipur has decreed the suit to the extent of refund of the money of Rs 17 lacs to company pfus interest @18% plus cost of the suit but dismissed the prayer for specific performance and thereafter company filed an appeal with the Rajasthan High Court for specific performance. Meanwhile the company also filed another appeal with High Court of Rajasthan praying for injunction order against the defendants restraining them from sale of the property. The amount of 8,39,214/- including litigation expenses of Rs 755000/- have been shown as other loans and advances. The High Court has issued a injunction order dated 08.10.2001 in favour of the Company. There has been no change in the status of the project during the year.

1.3 The company had signed a Memorandum of Understanding (MOU) on 28.03.1995 with Mrs. P. Jayamma, Mrs. J. Savithramma, and Mrs. P. Nagarathna for the purpose of putting up residential and commercial complex on the property bearing S.No.170and 172 of Kodihalli Village, Varthur, Hobli, Bangalore, South Taluk. On completion of the said project each party was to share 50% of the built-up area including terrace right.

Company had been forced to keep the project suspended because of the defect in title deeds of the property and acquisition of some part of property by the Bangalore Development Authority (BDA).Company had filed a legal suit against the party in the City Civil Judge at Bangalore, for the specific performance of the agreement and in the alternative for recovery of entire amount paid together with interest of 21% per annum. The company has Paid Rs 30 Lacs against the J V agreement and as per the agreement the possession of the aforesaid land is with the company. The amount of Rs. 15,22,878/- including litigation expenses of Rs 5,20,000/- has been shown as thother loans and advancesth. There has been no change in the status of the project during the year.

1.4 The Company entered into an MOU for joint development of residential and/or commercial complexes at Hoodi Village, K.R.Puram, Bangalore, South Taluk on 26-August,1999 with Mr.Y.Rajendraand others. They failed to perform his obligations under the MOU and therefore the company had filed a legal suit against them for specific performance of the agreement.

Subsequently the company has entered into a transfer agreement with M/s Windsor Infrastructure Ltd (WIL) for the said project on 22.10.2010 for transferring all its rights, claims, entitlements, liabilities etc for a total consideration of Rs 10 crores out of which Rs 50 Lacs is received from the transferee with the balance consideration of Rs 9.50 Crores shall be paid by WIL to the company on successful completion of the development and construction of project at schedule land without any legal hindrance. The company has to return the advance of Rs 50 Lacs to WIL without any interest or charges in case of any legal hindrance in developing the project.

Thereafter Honble' Senior Civil Judge, Bangalore Rural District Court passed an order on 29th November 2010 by directing Mr Y Rajendra and Others to refund the deposit amount along with interest @ 10 % p.a on the deposit amount from the date of termination of contract till the date of deposit of amount in court to the company against which the company and M/s Windsor Infrastructure Ltd jointly filed an appeal before the Hon'ble High Court of Karnataka which is pending for admission.

2.1 The company was to recover the amount of Rs 8,50,000/- along with interest and litigation expenses arising out of our agreement dated gth1 September, 2003 from Mr. Rakesh Sharma on account of the company's project located at Basant Kunj, Bhopal in which case the company decided to invoke the arbitration clause of the agreement and the arbitration proceedings started on 26th May, 2007. The arbitrator vide its order dated 12th' March, 2009 has given an award in favor of the company and accordingly the execution proceedings has been initiated to recover the amount Rs 4,25,426/- which has been shown under the head Work in progress being the cost of the property.

3. Contingent Liabilities:-

(a) Claims against the company not acknowledged as debt:

LG Electronics India Pvt. Ltd (LG) had filed a suit against the company, Usha India Ltd., and Others for the recovery of Rs. 4,65,02,400/- given by it as security deposit for the premises A-41, Mohan Co-operative Industrial Estate, New Delhi -110044 taken by it on lease from Usha India Ltd. and against the maintenance service agreement for the same premises entered into with the company. The company has denied its liability on the ground that it has already assigned the agreement to Lord Mahadev Trust on 6'h August, 1997 and transferred the security deposit to the said Trust. LG was also intimated about this assignment. However, Honorable Court has passed a part joint decree of Rs. 2,31,25,803/- in favour of LG and the LG filed an execution petition and subsequently the Court directed the ICICI Bank, New friends Colony, New Delhi to transfer a sum of RS.4,50,000/- to LG. The liability on account of above decree has not been ascertained by the court among the parties to the suit. Company is contesting the execution petition filed by LG Electronics India Pvt. Ltd.

(b) Other money for which the company is contingently liable:

Assessing officer has filed an appeal before the ITAT, New Delhi against the order of Commissioner of Income Tax (Appeals) allowing the appeal for deleting the demand of Rs 6,51,050/- towards the penalty imposed by the Assessing Officer U/s 271(1) (C) relating to the assessment year 2003-04. The case was remanded back to CIT(Appeals) for adjudication on merit vide order dated 06-06-2008 by ITAT. However the CIT(Appeals) have not taken the case till date.

4. Balances of Loans and Advances are subject to reconciliation and confirmation.

5. During the year there is no transactions with Related Parties as per the requirements of AS-18 ‘Related Party Disclosures' issued bythe Institute of Chartered Accountants of India.

6. Value of Imports on CIF basis : NIL (P. Year Nil)

7. Expenditure in foreign currency : NIL (P Year Nil)

8. Provision for gratuity and leave encashment has not been provided in the books as none of the employees of the company are eligible for these benefits as on 31.03.2012.

9. Previous year's figures have been regrouped / rearranged wherever necessary.

10. Figures in brackets denotes negative figures.


Mar 31, 2010

1. Contingent Liabilities:-

(a) (i) The Income Tax Appellate Tribunal in the matter of block assessment for the block period from 1.4.1990 to 14.2.2001 involving addition of Rs 2,28,55,113/- has set aside the order of Assessing Officer based on corresponding appeals filed by the company for Rs 8,35,313/- and by the income tax department for Rs 2,20,19,800/- and referred back the matter to the Assessing Officer to decide the same afresh after the settlement commission order is available in the case of promoters and othergroup concerns making the tax demand zero.

(ii) Assessing officer has filed an appeal before the Income Tax Appellate Tribunal, New Delhi against the order of Commissioner of Income Tax (Appeals) allowing the appeal for deleting the demand of Rs 6,51,050/- towards the penalty imposed by the Assessing Officer U/s 271(1) (C) relating to the assessment year 2003-04.

(b) LG Electronics India Pvt. Ltd ( LG) had filed a suit against Usha India Ltd., Usha Housing Development Co. Ltd. and Others for the recovery of Rs. 4,65,02,400/-given by it as security deposit for the premises A-41, Mohan Co-operative Industrial Estate, New Delhi -110044 taken by it on lease from Usha India Ltd. and against the maintenance service agreement for the same premises entered into with Usha Housing Development Co. Ltd. The company has denied its liability on the ground that it has already assigned the agreement to Lord Mahadev Trust on 6th August, 1997 and transferred the security deposit to the said Trust. LG was also intimated about this assignment. However, Honorable Court has passed a part joint decree of Rs. 2,31,25,803/- in favour of LG and the LG filed an execution petition and subsequently the Court directed the ICICI Bank, New friends Colony, New Delhi to transfer a sum of RS.4,50,000/- to LG. The liability on account of above decree has not been ascertained by the court among the parties to the suit. Company is contesting the execution petition filed by LG electronics India Pvt.Ltd.

2. a) C- SCHEME, JAIPUR PROJECT :

The company had entered into an agreement dated 28th September 1993 with R. L. Baiswala & Sons HUF for purchase of a Plot No.D-71, Satya Villa, Jamuna Lai Bajaj Marg, C-Scheme, Jaipur. But due to objection raised by the other members of HUF for selling the plot to the company, the vendor of the land could not transfer the land and hand-over its possession to the company.

District Trial Court in Jaipur has decreed the suit to the extent of refund of the money of Rs 17 lacs to company plus interest @18% plus cost of the suit but dismissed the prayer for specific performance and thereafter company filed an appeal with the Rajasthan High Court for specific performance. Meanwhile the company also filed another appeal with High Court of Rajasthan praying for injunction order against the defendants restraining them from sale of the property. The amount of 8,39,214/- including the litigation expenses of Rs 755000/-have been included in work in progress. The High Court has issued a injunction order dated 08.10.2001 in favour of the Company. There has been no change in the status of the project during the year.

b) AIRPORT ROAD, BANGALORE PROJECT:

The company had signed a Memorandum of Understanding (MOU) on 28.03.1995 with Mrs. P. Jayamma, Mrs. J. Savithramma, and Mrs. P. Nagarathna for the purpose of putting up residential and commercial complex on the property bearingS.No. 170 and 172 of Kodihalli Village, Varthur, Hobli, Bangalore, South Taluk. On completion of the said project each party was to share 50% of the built-up area including terrace right.

Company had been forced to keep the project suspended because of the defect in title deeds of the property and acquisition of some part of property by the Bangalore Development Authority (BDA).Company had filed a legal suit against the party in the City Civil Judge at Bangalore, for the specific performance of the agreement and in the alternative for recovery of entire amount paid together with interest of 21 % per annum. The company has Paid Rs 30 Lacs against the J V agreement and as perthe agreement the possession of the aforesaid land is with the company. The amount of Rs.13,72,878/- including litigation expenses of Rs 3,70,000/- has been shown under the head work in progress There has been no change in the status of the project during the year.

c) BROOKEFIELD PROJECT, BANGALORE :

The Company entered into an MOU for joint development of residential and/or commercial complexes at Hoodi Village, K.R.Puram, Bangalore, South Taluk on 26th August, 1999 with Mr.Y.Rajendra and others.

However the project has not yet been sanctioned by the Bangalore Development Authority due to some defect in the title of the property, which is to be complied by the owners. As per agreement, the possession of aforesaid land is already with the company. The company served legal notice to the Second Party to go ahead as perthe terms and conditions of MOU. In spite of this legal notice, Second Party failed to perform his obligations under the MOU and the company filed a legal suit against them for specific performance of the agreement. The amount of Rs. 12,48,721/-including litigation expenses of Rs 6,19,000/- has been shown under the head work in progress. There has been no change in the status of project during the year.

d) USHA NIKETAN, D-76, GHIA MARG, BENIPARK.JAIPUR:

As per collaboration agreement dated 7th Jan, 1994, the Company has completed the project and accordingly, as perterms and conditions of the agreement, requested the owner of the land Mr Anil Parasharto refund of Rs 12 lacs paid to him as refundable security. On his failure to pay the amount, the company filled a legal suit for recovery of the above said amount in the District court Delhi. The amount of Rs 1200000/-has been shown as deposits.

e) BASANT KUNJ , BHOPAL:

The company was to recover the amount of Rs 8,50,000/-along with interest and litigation expenses arising out of our agreement dated 9th September, 2003 from Mr. Rakesh Sharma and therefore the company decided to invoke the arbitration clause of the agreement and the arbitration proceedings started on 26th May, 2007. The arbitrator vide its order dated 12th March, 2009 has given an award in favor of the company and accordingly the execution proceedings has been initiated to recoverthe amount. Rs 4,25,426/-has been shown underthe head Work in progress being the cost of the property

3. Projects amounting to Rs 38,86,239/- is shown under the head work in progress against which litigations are pending in different courts as explained in note no 3.

4. Balances of Loans and Advances are subject to reconciliation and confirmation.

5. As per AS 17 on segment Reporting there is no reportable segment other than the business of real estate. Hence no separate disclosure has been made.

6. During the year there is no transactions with Related Parties as per the requirements of AS-18 Related Party Disclosuresissued by the Institute of Chartered Accountants of India.

7. In accordance with the provisions of the Accounting Standard-22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the company has recognised deferred tax assets of Rs 86,00,803/- and

8. No Remuneration was paid to directors during the year.

9. Net realizable value is determined project wise and is based upon the available information with the company, considering the market value of the flatted area.

10. Additional information pursuant to the provisions under paragraph 3,4C and 4D Part -II of Schedule VI to the Companies Act1956.

a) The company is engaged in the business of real estate development. In view of the nature of business it is not practicable to give the quantitative details regarding the work in progress.

b) The Quantitative information in respect of finished space is not given as there is no stock of finished space.

11. ASSUMPTION OF THE COMPANY AS GOING CONCERN

Management of the company is of the opinion that company is a going concern as the management is trying its best to recover some of the pending dues and is taking suitable steps for revival of the company. During the year Delhi Stock Exchange has revoked the suspension of trading in the shares of the company. Accordingly, the securities of the company are re-admitted to dealings w.e.f. 12.10.2009 subject to due compliance of Regulations 8 of SEBI (SAST) Regulations,1997.

12. There is no Small Scale Industrial undertaking to which the company owes sum, which is outstanding for more than 30 days as on 31.03.2010 as per information available with the company.

13. Provision for gratuity and leave encashment has not been provided in the books as none of the employees of the company are eligible forthese benefits as on 31.03.2010.

14. Previous years figures have been regrouped / rearranged wherever necessary. Figure in brackets indicate previous year figure. Figures have been rounded off to the nearest rupee.

15. From Schedule-1 to Schedule-8 form an integral part of the accounts and duly authenticated.


Mar 31, 2009

1. Contingent Liabilities:-

(a)(i) An appeal is pending before the Income Tax Appellate Tribunal for the deletion of demand of Rs.8,35,313/- raised by Commissioner of Income Tax, (Appeals) New Delhi for the block assessment of block period from 1.4.1990 to 14.2.2001.

(ii) Assessing officer has also filed an appeal before the Income Tax Appellate Tribunal, New Delhi against the relief of Rs 2,20,19,800/- allowed to the company by the Commissioner of Income Tax (Appeals) for the block assessment of block period from 1.4.1990 to 14.2.2001.

(iii) Assessing officer has filed an appeal before the Income Tax Appellate Tribunal, New Delhi against the order of Commissioner of Income Tax (Appeals) allowing the appeal for deleting the demand of Rs 6,51,050/- towards the penalty imposed by the Assessing Officer U/s 271(1) (C) relating to the assessment year 2003-04.

2-. LG Electronics India Pvt. Ltd ( LG) had filed a suit against Usha India Ltd., Usha Housing Development Co. Ltd. and Others for the recovery of Rs. 4,65,02,400/- given by it as security deposit for the premises A-41, Mohan Co-operative Industrial Estate, New Delhi -110044 taken by it on lease from Usha India Ltd. and against the maintenance service agreement for the same premises entered into with Usha Housing Development Co. Ltd. The company has denied its liability on the ground that it has already assigned the agreement to Lord Mahadev Trust on 6th August, 1997 and transferred the security deposit to the said Trust. LG was also intimated about this assignment. However, Honorable Court has passed a part joint decree of Rs. 2,31,25,803/- in favour of LG and the LG filed an execution petitipn and subsequently the Court directed the ICICI Bank, New friends Colony, New Delhi to transfer a sum of RS.4,50,000/- to LG. The liability on account of above decree has not been ascertained by the court among the parties to the suit. Company is contesting the execution petition filed by LG electronics India Pvt.Ltd.

3. a) C- SCHEME, JAIPUR PROJECT :

The company had entered into an agreement dated 28th September 1993 with R. L. Baiswala & Sons HUF for purchase of a Plot No.D-71, Satya Villa, Jamuna Lai Bajaj Marg, C-Scheme, Jaipur . But due to objection raised by the other members of HUF for selling the plot to the company, the vendor of the land could not transfer the land and hand-over its possession to the company.

District Trial Court in Jaipur has decreed the suit to the extent of refund of the money of Rs 17 lacs to company plus interest @ 18% plus cost of the suit, but dismissed the prayer for specific performance and thereafter company filed an appeal with the Rajasthan High Court for specific performance. Meanwhile the company also filed another appeal with High Court of Rajasthan praying for injunction order against the defendants restraining them from sale of the property. The amount of 8,39,214/- including the litigation expenses of Rs 755000/- have been included in work in progress. The High Court has issued a injunction order dated 08.10.2001 in favour of the Company. There has been no change in the status of the project during the year.

b) AIRPORT ROAD. BANGALORE PROJECT:

The company had signed a Memorandum of Understanding (MOU) on 28.03.1995 with Mrs. P. Jayamma, Mrs. J. Savithramma, and Mrs. P. Nagarathna for the purpose of putting up residential and commercial complex on the property bearing S.No. 170 and 172 of Kodihalli Village, Varthur, Hobli, Bangalore, South Taluk. On completion of the said project each party was to share 50% of the built-up area including terrace right.

Company had be,en forced to keep the project suspended because of the defect in title deeds of the property and acquisition of some part of property by the Bangalore Development Authority (BDA).Company had filed a legal suit against the party in the City Civil Judge at Bangalore, for the specific performance of the agreement and in the alternative for recovery of entire amount paid together with interest of 21% per annum. The company has Paid Rs 30 Lacs against the J V agreement and as per the agreement the possession of the aforesaid land is with the company. The amount of Rs. 13,72,878/- including litigation expenses of Rs 3,70,000/- has been shown under the head work in progress There has been no change in the status of the project during the year.

c) BROOKEFIELD PROJECT, BANGALORE :

The Company entered into an MOU for joint development of residential and/or commercial complexes at Hoodi Village, K.R.Puram, Bangalore, South Taluk on 26th August, 1999 with Mr.Y.Rajendra and others.

However the project has not yet been sanctioned by the Bangalore Development Authority due to some defect in the title of the property, which is to be complied by the owners. As per agreement, the possession of aforesaid land is already with the company. The company served legal notice to the Second Party to go ahead as per the terms and conditions of MOU. In spite of this legal notice, Second Party failed to perform his obligations under the MOU and the company filed a legal suit against them for specific performance of the agreement. The amount of Rs. 12,48,721/- including litigation expenses of Rs 6,19,000/- has been shown under the head work in progress. There has been no change in the status of project during the year.

d) USHA NIKETAN, D-76, GHIA MARG, BENIPARKJAIPUR:

As per collaboration agreement dated 7th Jan, 1994, the Company has completed the project and accordingly, as per terms and conditions of the agreement, requested the owner of the land Mr Anil Parashar to refund of Rs 12 lacs paid to him as refundable security. On his failure to pay the amount, the company filled a legal suit for recovery of the above said amount in the District court Delhi. The amount of Rs 1200000/-has been shown as deposits.

e) BASANT KUNJ . BHOPAL:

The company was to recover the amount of Rs 8,50,000/- along with interest and litigation expenses arising out of our agreement dated 9 September, 2003 from Mr. Rakesh Sharma and therefore the company decided to invoke the arbitration clause of the agreement and the arbitration proceedings started on 26th May, 2007. The arbitrator vide its order dated 12th March, 2009 has given an award in favor of the company and accordingly the execution proceedings has been initiated to recover the amount. Rs 4,25,426/- has been shown under the head Work in progress being the cost of the property

4. Projects amounting to Rs 38,86,239/- is shown under the head work in progress against which litigations are pending in different courts as explained in note no 3.

5. Balances of Loans and Advances are subject to reconciliation and confirmation.

6. As per AS 17 on segment Reporting there is no reportable segment other than the business of real estate. Hence no separate disclosure has been made.

7. During the year there is no transactions with Related Parties as per the requirements of AS-18 Related Party Disclosures issued by the Institute of Chartered Accountants of India.

8. Provision for deferred tax on account of carry forward losses has not been made as it is not reasonably certain that sufficient future taxable income will be available against which deferred tax assets can be realized

9. No Remuneration was paid to directors during the year.

10. Net realizable value is determined project wise and is based upon the available information with the company, considering the market value of the flatted area.

11. Additional information pursuant to the provisions under paragraph 3,4C and 4D Part -II of Schedule VI to the Companies Act1956.

a) The company is engaged in the business of real estate development. In view of the nature of business it is not practicable to give the quantitative details regarding the work in progress.

b) The Quantitatiye information in respect of finished space is not given as there is no stock of finished space.

12. ASSUMPTION OF THE COMPANY AS GOING CONCERN

In spite of the continuous losses, pending legal cases, suspension of listing from Bombay Stock Exchange and Delhi Stock Exchange, management of the company is of the opinion that company is a going concern as the management is trying its best to recover some of the pending dues and is taking suitable steps for revival of the company. The company has also applied to Delhi Stock Exchange for re-listing/trading of its shares under the amnesty scheme of Delhi stock exchange.

13. There is no Small Scale Industrial undertaking to which the company owes sum, which is outstanding for more than 30 days as on 31.03.2009 as per information available with the company.

14. Since there is no taxable income, no provision for income tax has been made.

15. Previous years figures have been regrouped / rearranged wherever necessary. Figure in brackets indicate previous year figure. Figures have been rounded off to the nearest rupee.

16. From schedule -1 to schedule-6 form an integral part of the accounts and duly authenticated.

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