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Notes to Accounts of Marathon Nextgen Realty Ltd.

Mar 31, 2023

Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when the Company has a present
obligation as a result of past event and it is probable than an
outflow of resources will be required to settle the obligation,
in respect of which the reliable estimate can be made. When a
provision is measured using the cash flows estimated to settle
the present obligation, its carrying amount is the present value
of those cash flows (when the effect of the time value of money
is material) 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 adjusted to reflect the
current best estimates.

Commitments include the amount of purchase order (net of
advances) issued to parties for completion of assets.

Contingent assets usually arise from unplanned or other
unexpected events that give rise to the possibility of an inflow
of economic benefits. Contingent Assets are not recognised
though are disclosed, where an inflow of economic benefits
is probable.

Provisions, contingent liabilities, contingent assets and
commitments are reviewed at each balance sheet date.

2.16 Segment Reporting:

The Chief Operational Decision Maker (CODM) monitors the
operating results of its business segments separately for the
purpose of making decisions about resource allocation and
performance assessment. Segment performance is evaluated
based on profit or loss and is measured consistently with profit
or loss in the financial statements. The operating segments are
identified on the basis of nature of product/services.

Recent accounting pronouncements

Ministry of Corporate Affairs (âMCAâ) notifies new standards or
amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. On 31
March 2023, MCA amended the Companies (Indian Accounting
Standards) Amendment Rules, 2023, as below:

Ind AS 1 - Presentation of Financial Statements - This amendment
requires the entities to disclose their material accounting
policies rather than their significant accounting policies. The
effective date for adoption of this amendment is annual periods
beginning on or after 01 April 2023. The Company has evaluated

the amendment and the impact of the amendment is insignificant
on its standalone financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates
and Errors - This amendment has introduced a definition of
âaccounting estimatesâ and included amendments to Ind AS 8
to help entities distinguish changes in accounting policies from
changes in accounting estimates. The effective date for adoption
of this amendment is annual periods beginning on or after 01
April 2023. The Company has evaluated the amendment and
there is no impact on its standalone financial statements.

Mar 31, 2018

1 Company Overview

Marathon Nextgen Realty Limited (âthe Companyâ) is public limited Company domiciled in India. Its shares are listed on Bombay Stock Exchange (âBSEâ) and National Stock Exchange (âNSEâ). The Company was incorporated on 13th January, 1978 and is primarily engaged in the business of construction, development and sale of commercial and residential real estate projects. The core business activities are carried out under various business model likes own development, through joint ventures and joint development and other arrangements with third parties. The registered office of the Company is located at Marathon Futurex, N. M. Joshi Marg, Lower Parel, Mumbai 400 013. The Company is registered with the Ministry of Corporate Affairs under CIN L65990MH1978PLC020080.

2.1 âPursuant to an agreement, the Company has given advances to explore for the opportunities in a project to Marathon Realty Pvt. Ltd., with whom it is going to jointly execute the said project. At periodic intervals surplus amounts are returned as they are not immediately required for the project.

3.1 The current tax expense for the year ended 31st March 2018 is provided in accordance with the Section 115JB of Income Tax Act 1961 is Rs. 826.52 lakhs (P.Y. Rs. 2420.00 lakhs). The Company is eligible to carry forward MAT Credit aggregating to Rs. 1,500.18 lakhs (P.Y. Rs. 2,073.76 lakhs) as per Section 115JAA of the Income Tax Act 1961. However, the Company has not recognized the same as an asset in the books of account on prudence basis.

3.2 The Company has not created deferred tax assets on long term capital loss of Rs. 10806.16 lakhs (P.Y. Rs. 10806.16 lakhs ) based on the non-availability of virtual certainty of future taxable long term capital gains. Further, the Company has also not created deferred tax assets on provision for doubtful debts / advances of Rs. 670.70 lakhs (P.Y. Rs. 670.70 lakhs ) based on conservative approach for allow ability of expense by tax authority in future.

The Company has entered into an agreement on 20th February, 2007 for development of property in Bangalore with the owner of the land. Development work would commence once the regulatory compliances are met with. The company has paid an advance towards the joint venture on the basis of the agreement signed. The advance paid by the company is adequately secured by a collateral in the form of unencumbered land based on an agreement between the company and the Power of Attorney Holders in the form of a registered document. However, by way of abundant caution, the Company has made a provision in the financials in the earlier period.

a Terms / Rights attached to Equity Shares

i The Company has only one class of equity shares having face value of Rs. 10 each.

ii Each holder of equity shares are entitled to one vote per shares.

iii All shares rank pari passu with regard to dividend.

iv In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preference amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

b Terms / Right attached to Preference Shares

i The Company has only one class of preference shares having face value of Rs. 100 each.

ii The type of preference share is non convertible, redeemable.

iii The preference shares rank ahead of equity shares in the event of liquidation.

iv The presentation of liability and equity portions of these shares is explained in the Summary of Significant Accounting Policy.

d Shares held by the Holding / Ultimate Holding Company and /or their Subsidiaries Name: Ithaca Informatics Pvt. Ltd.

Nature of Relationship: Holding Company

g The shareholders of the Company have approved sub-division of equity shares of the Company from one (1) equity share of face value Rs. 10 each fully paid up to two (2) equity shares of face value Rs. 5 each fully paid up, with effect from April 6, 2018. h During the year the Company completed the buy back scheme of equity shares as sanctioned by the shareholders and approved by the concerned regulatory authorities. In terms of the said scheme the Company bought back 54,37,345 lakhs number of equity shares of Rs. 10/- each at a premium of Rs. 265/- per share. The shares so bought has been extinguished from the paid up equity share capital of the Company and correspondingly the General Reserves have been depleted to the extent of the premium paid. The equity share capital has been reduced by 54,37,345 lakhs number of equity shares of Rs. 10/- each aggregating to Rs. 543.74 lakhs. The General Reserves have been depleted by Rs. 14,408.96 lakhs being premium paid of Rs. 265/- per share of 54.37 lakhs number of equity shares extinguished. Capital redemption reserve was created to the extend of share capital extinguished amounting to Rs. 543.73 lakhs.

b. Nature and Purpose of Reserves

i. Capital Redemption Reserve

Capital Redemption Reserve is the reserve created on account of buy back of shares.

ii. Capital Reserve

Capital Reserve is the reserve created during business combination of Marathon Realty Private Limited with the Company

iii. General Reserve

General Reserve represents the statutory reserve, this is in accordance with Indian Corporate law wherein a portion of profit is apportioned to general reserve. Under Companies Act, 1956 it was mandatory to transfer amount before a company can declare dividend, however under Companies Act, 2013 transfer of any amount to General reserve is at the discretion of the Company.

iv. Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfer to general reserve, dividends or other distributions paid to shareholders.

v. Other Comprehensive Income (OCI)

The Company has elected to recognize changes in the fair value of certain investments in equity shares in other comprehensive income. These changes are accumulated within the FVTOCI equity investment reserve within equity. Also Re-measurement of Defined Benefit Plan in respect of post employment are changed to Other Comprehensive Income

Note:

Provision is created for payment of rent and municipal taxes payable to Bombay Port Trust. The party has not demanded the said liabilities and same are not expected to be paid in next one year.

* The Company has sent letters to suppliers to confirm whether they are covered under Micro, Small and Medium Enterprises Development Act 2006 as well as they have filed required memorandum with the prescribed authorities. Out of the letters sent to the parties, few confirmations have been received till the date of finalization of the Balance Sheet. Based on the confirmations received, the outstanding amount payable to supplierâs covered under Micro, Small and Medium Enterprises Development Act, 2006 are given below:

*The Net loss of Rs.23.70 Lakhs is on account of accidental fire at Marathon Innova IT commercial complex building on November 1,2016 due to which part of the building was damaged. The amount of loss due to fire is after adjusting Insurance claim of Rs.10.74 Lakhs.

4 Financial Risk Management

The Companyâs principal financial liabilities comprise of borrowings, trade and other payable. The main purpose of financial liabilities is to manage finance for the Companyâs operations. The Company has loan and other receivables, trade and other receivable and cash and short term deposits that arise directly from its operations. The Companyâs activities exposes it to variety of financial risk as follows:

i Market Risk

ii Credit Risk

iii Liquidity Risk

i Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risks: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. This is based on the financial assets and financial liabilities held as at March 31, 2018 and March 31, 2017.

The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant Statement of Profit and Loss item is the effect of the assumed changes in the respective market risks. The Companyâs activities expose it to a variety of financial risks, including interest rates. a Interest rate risk and sensitivity

The Companyâs exposure to the risk of changes in market interest rates relates primarily to long term debt. The risk is planned to be managed by having a portfolio mix of floating and fixed rate debt. Borrowings issued at variable rates expose the Company to cash flow interest rate risk.âWith all other variables held constant, the following table demonstrates the impact of borrowing cost on floating rate portion of loans and borrowings and loans on which interest rate swaps are taken.

b Commodity price risk and sensitivity

The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company has in place policies to manage exposure to fluctuations in the prices of the key raw materials used in operations. The Company enter into contracts for procurement of material, most of the transactions are short term fixed price contract and a few transactions are long term fixed price contracts.

c Financial instruments and cash deposits

The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. The Company does not maintain significant cash and deposit balances other than those required for its day to day operations. d Competition and price risk

The Company faces competition from local competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.

ii Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers, loans and investment in debt securities. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.

The Companyâs maximum exposure to credit risk as at 31st March, 2018 and 31st March, 2017 is the carrying value of each class of financial assets.

a Trade and Other Receivables

Customer credit risk for realty sales is managed by entering into sale agreements in the case of sale of under-construction flats/ premises which stipulate construction milestone based payments and interest clauses in case of delays and also by requiring customers to pay the total agreed sale value before handover of possession of the premises/flats, thereby substantially eliminating the Companyâs credit risk in this respect. In the case of sale of finished units, sale agreements are executed only upon/against full payment.

Impairment

Expected credit loss assessment for customers as at 31st March 2017 and 31st March 18:

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macroeconomic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue. Further, management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk. In view of the above, the Company believes that no provision is required as per expected credit loss method.

The movement in the allowance for impairment in respect of trade and other receivables during the year was as follows.

b Loans

The loans and advances are in the nature of advances for project in SPVs where the Company is a stakeholder and hence the risk is minimal. Based on the above factors and historical data, loss on collection of receivables is not material and hence no additional provision was made.

Expected credit loss assessment of loans as at 31 March 2017 and 31st March 18:

Considering the nature of the business, the Company has a policy to provide loans in the nature of project advance to its group entities / related parties for undertaking projects, based on its primary business real estate development through project partners. The loans given to these entities are repayable on demand and there is no past history for any default/delay/irregularity in repayments based on demands made. Moreover, all the group entities to whom loans have been advanced, have substantial potential in the projects to repay the loan based on the valuation of such entities and their activities are controlled and managed by the Company. Accordingly ,on view of such control over operations and underlying security of the project/ assets, these loans are considered adequately secured for repayments. In view of the above, the Company believes that no provision is required to be made using the expected credit loss method.

iii Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

The Companyâs objective is to at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

The Company is required to maintain ratios (including total debt to EBITDA / net worth, EBITDA to gross interest, debt service coverage ratio and secured coverage ratio) as mentioned in the loan agreements at specified levels. In the event of failure to meet any of these ratios these loans become callable at the option of lenders.

The Companyâs overall risk management programmed focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Companyâs financial performance.

Risk management is carried out by the treasury department under policies approved by the Board of Directors. The treasury team identifies, evaluates and hedges financial risks in close co-operation with the Companyâs operating units. The Board lays down principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, and credit risk and investment of excess liquidity.

The following table details the Companyâs remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the company can be required to pay.

* Difference in total outstanding liability and carrying amount is on account reduction of un-amortized borrowing costs from loan balance in view of recognition of Interest Cost on âEffective Interest Rate Methodâ basis as provided in Ind AS.

** Cash outflow within 1 year and thereafter up to 5 years denotes only interest and principal payments.

5 Capital Risk Management

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The primary objective of the Companyâs capital management is to maximize the shareholder value. The Companyâs primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Companyâs ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended 31st March, 2018 and 31st March, 2017.

In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches of the financial covenants of any interest bearing loans and borrowing for reported periods.

For the purpose of the Companyâs capital management, capital includes issued capital, compulsorily convertible debentures, share premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings, trade and other payables less cash and short term deposits

6 Fair Value of Financial Instruments

Set out below is a comparison by class of the carrying amounts and fair value of the Companyâs financial instruments that are recognized in the financial statements.

Fair value hierarchy

The fair value of financial instruments as disclosed above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

The categories used are as under:

Level 1 : Quoted prices for identical instruments in an active market;

Level 2 : Directly or indirectly observable market inputs, other than Level 1 inputs; and Level 3 : Inputs which are not based on observable market data.

Fair value hierarchy for financial assets and liabilities measured at fair value:

Note 1: Carrying amount of financial assets and liabilities other than disclosed above approximate the fair value.

Note 2: Fair value of loans and borrowings approximates the carrying values considering the discount rate which is based on the market rate. The discount rate is equivalent to the Effective Interest Rate of such loans and borrowings. There is no significant change in the market rate for discounting of such loans and borrowings.

Note 3: Fair value of investment in Mutual funds units (Quoted) is based on market value of such instruments on reporting date.

Note 4: Fair value of investment in unquoted instruments is based on independent valueâs report.

*As certified by Management

a The Employees Provident Fund Authorities have issued a show cause notice against the Company raising a claim of Rs. 38.83 lakhs purportedly being arrears pertaining to damages and delayed payment of interest. The Company appealed against the order in the Provident Fund Appellate Tribunal and pending hearing the recovery of principal interest and damages has been stayed.

b The Employeesâ State Insurance Corporation has raised a claim of Rs. 8.67 lakhs purportedly being arrears of contribution, damages and delayed payment interest. The company had made a representation to the Board for Industrial and Financial Reconstruction in this regard, besides filing an appeal in the ESIC court.

c The Sales tax department has issued notice of demand u/s 32 of The Maharashtra Value Added Tax Act, 2002 dated 26th February, 2015 for Rs. 430.46 lakhs for the period 01.04.2008 to 31.03.2009. The said demand is under appeal and the Company expects that there will not be any liability on the same in future.

d The Company had, in the Financial Year 2016-17 availed of the amnesty scheme offered by the Maharashtra Value Added Tax (MVAT) authorities in respect of its liability for the financial years 2006-07,2007-08 and 2009-10. The VAT liability that arose as a result of participating in the said amnesty as assessed by the nodal department has been duly discharged by the Company and same is accounted for in that year.âSubsequently, on September 29,2017 the Assistant Commissioner of Sales Tax - Investigation had suo moto passed an ex parte order raising a demand of Rs. 4590.10 lakhsalong with applicable interest and penalties for the financial years 2006-07, 2007-08 and 2009-10, disregarding the amnesty orders issued for the same periods by the MVAT department. The Company has not discharged this liability as it has been advised that the action of the Investigation wing is ultra vires the amnesty scheme and the Company has preferred an appeal with Deputy Commissioner of Sales Tax for the said years on the orders passed by paying the requisite deposit under protest. The Sales Tax department had granted a stay on the demand raised by the Investigating wing and has remanded the matter to the nodal department to investigate on the merits of the case taking into consideration that the company has already availed of the amnesty scheme. The Company does not envisage any further liability in the matter.

7 Segment Reporting

The âmanagement approachâ as defined in âInd AS 108 - Operating Segmentsâ requires disclosure of segment-wise information based on the manner in which the Chief Operating Decision Maker (CODM) evaluates the performance and allocates resources in cases where a reporting entity operates in more than one business segment. Since the Company is primarily engaged in the business of real estate development which the Management and CODM recognize as the sole business segment, the disclosure of such segment-wise information is not required and accordingly, not provided.

8 Lease

Operating Lease Arrangement

The Company has been operating from the premises owned by group Company Marathon Realty Private Limited. During the year, Company had entered into formal agreement for payment of rent on the premises occupied by it. The rental payable per month has been Rs. 20.00 lakhs per month. The lease does not have any non-cancellable portion. Tenure of the lease agreement is valid till 31st March 2018.âTotal rent charged to the Statement of Profit and loss is Rs. 240.53 lakhs (Previous year Rs. 240.92 lakhs)

9 Employee Benefits

a. Defined Contribution Plans

Amounts recognized in the Statement of Profit and Loss:

b. Defined Benefit Plan (Gratuity) and other Long-term Employee Benefits (Leave Encashment)

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is not funded and payout is done by company on resignation / retirement of employees.

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognized in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

10 List of Related Parties and Transactions during the year as per Ind AS-24 âRelated Party Disclosuresâ

a) Controlling Company

Ithaca Informatics Pvt Ltd (74.96%)

b) Key Management Personnel

Mr. Chetan R. Shah - Managing Director

Mr. S. Ramamurthi - Whole Time Director & CFO

Mr. Mayur R. Shah - Director

Ms. Shailaja C. Shah - Director

Mr. Veeraraghavan Ranganathan - Director

Mr. Anup Shah - Director

Mr. Padmanabha Shetty - Director

Mr. Deepak Shah - Director (w.e.f. 9th February 2017)

Mr. V Nagarajan

c) Relatives of Key Management Personnel having transactions during the year Ms. Ansuya R. Shah (Mother of Managing Director)

Mr. Ramniklal Z. Shah (Father of Managing Director)

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

d) Joint Ventures (% of holding)

Columbia Chrome (I) Pvt Ltd (40%)

Swayam Realtors & Traders LLP (40%)

e) Entities over which Key Management Personnel / their relatives exercise significant influence and having transactions during the year

IXOXI Equip-Hire LLP Marathon Infotech Pvt Ltd Marathon Realty Pvt Ltd Marathon IT Infrastructure Pvt Ltd Sanvo Resorts Pvt Ltd

Matrix Enclaves Projects Developments Pvt Ltd

Matrix Waste Management Pvt Ltd

Nexzone Fiscal Services Pvt Ltd

Nexzone Utilities Pvt Ltd

United Enterprises

Ramniklal Z. Shah Trust

Terrapolis Assets Pvt Ltd

Notes:

i. The leasehold land (999 years lease) is given as security against loan availed by Marathon Realty Pvt. Ltd. However, as at 31st March 2017, the rights relating to the said land have been relinquished by the Company towards Marathon Realty Pvt. Ltd.

ii. As per definitive agreements to be executed w.r.t. 35 acres of land to be developed.

iii. The Managing Director, Mr. Chetan R. Shah and his brother, Mr. Mayur Shah have given unconditional and irrevocable personal guarantee against loan availed by the Company.

iv. The Company has entered into an agreement with Matrix Waste Management Pvt. Ltd. for revenue or area sharing based on 12.5% of revenue generated from the developed area for which development rights have been acquired by the Company.

v. The Company has entered into an agreement with Ithaca Informatics Pvt. Ltd. for revenue or area sharing based on 12.5% of revenue generated from the developed area for which development rights have been acquired by the Company.

vi. All Related Party Transactions entered during the year were in ordinary course of the business and are on armâs length basis.

Vii. For the year ended 31st March, 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (FY 2016-2017: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Viii. Amount appearing as Rs. 0.00 are amounts representing amounts less than Rs. 1000.

11 Corporate Social Responsibility (CSR) Expenditure

a. Gross amount required to be spent during the year: Rs. 183.16 lakhs (P.Y Rs. 140.03 lakhs)

b. Amount spent during the year on:

12 Proposed Dividend

Proposed dividend on Equity Shares not recognized:

** During the year the Company bought back 54,37,345 Lakhs number of equity shares of Rs. 10 each on July 6, 2017.

13 Acquisition of an undertaking by the company Accounting Treatment:

The Company had entered into a Business Transfer Agreement (BTA) w.e.f January 1, 2018 to purchase an undertaking âMarathon Futurex IT Park âtogether with its assets and liabilities for a lump sum consideration of Rs. 9300 lakhs from Marathon Realty Private Limited. This has resulted in transfer of assets, liabilities and reserves in accordance with the terms of the BTA at the following summarized values:

14 The comparative financial information of the Company for the year ended March 31, 2017 prepared in accordance with Indian Accounting Standards, included in these Standalone Financial Statements, have been audited by the predecessor auditors.

15 Previous Year Figures

The previous year figures are regrouped, recast and reclassified wherever necessary to make them comparable with the figures of the current year.

Mar 31, 2017

1. Company Overview

Marathon Next gen Realty Limited (âthe Companyâ) is public limited Company domiciled in India. Its shares are listed on Bombay Stock Exchange (âBSEâ) and National Stock Exchange (âNSEâ). The Company was incorporated on 13th January, 1978 and is primarily engaged in the business of construction, development and sale of commercial and residential real estate projects. The core business activities are carried out under various business model likes own development, through joint ventures and joint development and other arrangements with third parties. The registered office of the Company is located at Marathon Futurex, N. M. Joshi Marg, Lower Parel, Mumbai 400 013. The Company is registered with the Ministry of Corporate Affairs under CIN L65990MH1978PLC020080.

2.1 * Pursuant to an agreement, the Company has given advances to Marathon Realty Pvt. Ltd. to explore for the opportunities in a project, with which it is going to jointly execute the said project. At periodic intervals surplus amounts are returned as they are not immediately required for the project. The Company is of the opinion that, project advance of this nature would not attract the provisions of Section 185 of the Act.

3.1 The Company has computed income tax on its profits for the year ended 31st March, 2017 as per the provisions of Income Tax Act, 1961. The computation of tax provision has been made on the legal advice obtained by the Company and such computation has been verified by an independent firm of Chartered Accountants. Auditors have relied upon the same.

3.2 The current tax expense for the year ended 31st March 2017 is provided in accordance with the Section 115JB of Income Tax Act 1961 is Rs. 24,20,00,000 (P.Y. Rs. 23,56,00,000). The Company is eligible to carry forward MAT Credit aggregating to Rs. 20,73,75,843 (P.Y. Rs. 12,37,02,844) as per Section 115JAA of the Income Tax Act 1961. However, the Company has not recognised the same as an asset in the books of account on prudence basis.

3.3 The Company has not created deferred tax assets on long term capital loss of Rs. 1,08,06,16,464 (P.Y. Rs. 53,25,69,761) based on the non availability of virtual certainty of future taxable long term capital gains. Further, the Company has also not created deferred tax assets on provision for doubtful debts / advances of Rs. 6,70,70,982 (P.Y. Rs. 6,70,70,982) based on conservative approach for allow ability of expense by tax authority in future.

a Terms / Rights attached to Equity Shares

i The Company has only one class of equity shares having face value of Rs. 10 each.

ii Each holder of equity shares are entitled to one vote per shares.

iii All shares rank pari passu with regard to dividend.

b Terms / Right attached to Preference Shares

i The Company has only one class of preference shares having face value of Rs. 100 each.

ii The preference shares carry a dividend at 6% and dividend is cumulative.

iii The type of preference share is non convertible, redeemable.

iv The preference shares rank ahead of equity shares in the event of liquidation.

v The presentation of liability and equity portions of these shares is explained in the Summary of Significant Accounting Policy.

b. Nature and Purpose of Reserves

i. Capital Redemption Reserve

Capital redemption reserves are created for buy back of shares. The Company may issue fully paid-up bonus shares to its members out of the Capital Redemption Reserve.

ii. General Reserve

iii. Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfer to general reserve, dividends or other distributions paid to shareholders.

iv. Other Comprehensive Income

The Company has elected to recognise changes in the fair value of certain investments in equity shares in other comprehensive income. These changes are accumulated within the FVTOCI equity investment reserve within equity.

Notes:

i. The loan together with interest and other charges is secured by following:

- First charge by way of mortgage of:

- Development rights of the free sale component of the Project Phase I âMarathon Embraceâ (âthe Projectâ)

- Plot of land of the Project

- First charge on:

- All moveable of the Borrower / Project, both present and future

- Transferable Development Right (âTDRâ) generating out of the Project (including TDR purchased by borrower)

- Entire Receivables of the Project

- All rights, title, interest, claims, benefits demand and privileges under the Project, both present and future

- Escrow account Debt Service Reserve Account (âDSRAâ) and monies deposited therein including any investments made from Escrow Account

- Unconditional and irrevocable Personnel Guarantee of Mr. Chetan Shah and Mr. Mayur Shah

- Demand Promissory Note

ii. The loans is repayable in 84 months with moratorium period on principal payment for a period of 60 months. After the expiry of moratorium period, the loan is repayable in 8 equal quarterly instalments.

iii. The applicable rate of interest is 14.5%. The lender have right to reset the spread on expiry of 12 months from first disbursement and every year thereafter.

* The Company has sent letters to suppliers to confirm whether they are covered under Micro, Small and Medium Enterprises Development Act 2006 as well as they have filed required memorandum with the prescribed authorities. Out of the letters sent to the parties, few confirmations have been received till the date of finalisation of the Balance Sheet. Based on the confirmations received, the outstanding amount payable to supplierâs covered under Micro, Small and Medium Enterprises Development Act, 2006 are given below:

Society Dues payable are after netting off of Fixed Deposit and interest accrued thereon of Rs. 829,39,841 (Rs. 5,37,64,468 as at 31st March 2016 and Rs. 2,03,13,640 as at 1st April 2015) and receivable related to society of Rs. 7,19,94,925 (Rs. 8,44,53,365 as at 31st March 2016 and Rs. 2,17,60,130 as at 1st April 2015).

4.1 The Company has recognized revenue from operations of Rs. 193,10,90,000 (P.Y. ended March 2016 Rs. 191,01,60,000/-, March 2015 âNILâ) on account of relinquishment of its rights in terms of the shareholder agreement dated 10th September, 2015 and addendum thereto dated 20th September, 2015 and 17th September, 2016, entered between the Company, Marathon Realty Pvt. Ltd. and Parmeka Pvt. Ltd. (erstwhile wholly owned subsidiary of the Company) relating to property specified therein. The Company is not aware if such underlying property so relinquished is registered or not by the concerned party. Approval of shareholders will be taken in due course of time.

The Companyâs financial statements for the year ended 31st March, 2017 are the first annual financial statements prepared in compliance with Ind AS.

The adoption of Ind AS was carried out in accordance with Ind AS 101, using 1st April, 2015 as the transition date. Ind AS 101 requires that all Ind AS that are effective for the first Ind AS Financial Statements for the year ended 31st March, 2017, be applied consistently and retrospectively for all fiscal years presented.

All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the financial statements under both Ind AS and Previous GAAP as of the Transition Date have been recognised directly in equity at the Transition Date.

âFor the purposes of reporting we have transitioned our basis of accounting from generally accepted accounting principles in India (âIGAAPâ) to Ind AS. The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31st March 2017, the comparative information presented in these financial statements for the year ended 31st March 2016 and in the preparation of an opening Ind AS balance sheet at 1st April 2015 (the âtransition dateâ).ln preparing our opening Ind AS balance sheet, we have adjusted amounts reported in financial statements prepared in accordance with IGAAP. An explanation of how the transition from IGAAP to Ind AS has affected our financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates previously made under IGAAP except where required by Ind AS.â

a. Optional Exemptions Availed

Ind AS -101 allows certain exemptions to first time adopters from retrospective application of certain requirements under Ind AS. The Company has accordingly applied the following exemptions.

i. Designation of Previously Recognised Financial Instruments

âUnder Ind AS 109, at initial recognition of a financial asset, an entity may make an irrevocable election to present subsequent changes in the fair value of an investment in equity instrument in other comprehensive income. Ind AS 101 allows such designation of previous recognized financial assets as fair value through other comprehensive income on the basis of facts and circumstances existed at the date of transition to Ind AS. Accordingly, the Company has designated investment in Listed Equity Instruments at fair value through other comprehensive income on the basis of facts and circumstances existing on the date of transition.â

ii. Deemed Cost

Company has availed the exemption of recognising and valuing the PPE at the carrying value of previous GAAP as its Deemed cost on the date of transition.

iii. Investment in Subsidiary, Joint Venture and Associates

The Company has availed the exemption of recording and presenting the investment in Subsidiary, Joint Venture and Associates at Previous GAAP carrying amount on the date of transition.

b. Mandatory Exceptions Applied

Ind AS 101 specifies mandatory exceptions from retrospective application of some aspects of other Ind ASs for first-time adopters. Following exception are applicable to the Company:

i. Estimates

âAn entityâs estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).lnd AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Investment in equity instruments carried at FVTOCI in accordance with Ind AS at the date of transition as these were not required under Previous GAAP.â

ii. Classification and Measurement of Financial Assets

As required under Ind AS 101 the company has assessed the classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

vi. Explanatory Notes

a. Fair Valuation of Investment in Equity Instruments

The Company has designated its investment in Listed Equity Instruments at fair value through other comprehensive income (FVTOCI) on the basis of facts and circumstances existing on the date of transition. Resultant loss on fair valuation of investments has been recognised in OCI.

b. Reclassification of Income Tax Assets / Liabilities

Income tax assets (advance tax) and liabilities (provision for tax) have been netted off to show only one balance at the Balance Sheet date.

c. Reclassification of Project Advance

Project advance amounting to Rs. 13,56,95,558 has been reclassified as current as on 31st March 2016.

d. Share of Loss from Joint Venture

Share of loss from joint venture has been reversed in FY 2015-16 and effect has been taken in opening balance sheet to the extent of investment in such joint venture.

e. Proposed Dividend and Distribution Tax thereon

Under Ind AS, dividend to the holders of equity instruments is recognised as a liability in the period in which the obligation to pay is established. Hence, the dividend proposed after the date of Balance Sheet is not recognised in the books of account. The proposed dividend and distribution tax thereon recognised under Previous GAAP have been reversed under Ind AS.

f. Remeasurement of Defined Benefit Obligation

Actuarial gain on remeasurement of defined benefit obligation (Gratuity) has been reclassified from profit or loss to OCI after deducting tax effect thereon.

5. Financial Risk Management

i Market Risk

ii Credit Risk

iii Liquidity Risk i Market Risk

a. Interest rate risk and sensitivity

The Companyâs exposure to the risk of changes in market interest rates relates primarily to long term debt. The risk is planned to be managed by having a portfolio mix of floating and fixed rate debt. As at 31st March 2017, entire borrowings are at floating rate. Borrowings issued at variable rates expose the Company to cash flow interest rate risk. With all other variables held constant, the following table demonstrates the impact of borrowing cost on floating rate portion of loans and borrowings and loans on which interest rate swaps are taken..

b. Commodity price risk and sensitivity

c. Financial instruments and cash deposits

d. Competition and price risk

ii. Credit Risk

The Companyâs maximum exposure to credit risk as at 31st March, 2017, 2016 and 1st April, 2015 is the carrying value of each class of financial assets.

a. Trade and Other Receivables

Customer credit risk for realty sales is managed by entering into sale agreements in the case of sale of under-construction flats/premises which stipulate construction milestone based payments and interest clauses in case of delays and also by requiring customers to pay the total agreed sale value before handover of possession of the premises/flats, thereby substantially eliminating the Companyâs credit risk in this respect. In the case of sale of finished units, sale agreements are executed only upon/against full payment. Further, trade receivables from Marathon Realty Pvt. Ltd. are secured byway of pledge of shares of the Holding Company, Ithaca Informatics Pvt. Ltd., held by Marathon Realty Pvt. Ltd.â

Impairment

Expected credit loss assessment for customers as at 1st April 2015,31st March 2016 and 31st March 2017:

b. Loans

Expected credit loss assessment of loans as at 1 April 2015, 31 March 2016 and 31 March 2017:

iii Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

The Companyâs overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Companyâs financial performance.

6. Capital Risk Management

7. Fair Value of Financial Instruments

Set out below is a comparison by class of the carrying amounts and fair value of the Companyâs financial instruments that are recognised in the financial statements.

Note:

1. Carrying amount of financial assets and liabilities other than disclosed above approximate the fair value.

2. Fair value of loans and borrowings approximates the carrying values considering the discount rate which is based on the market rate. The discount rate is equivalent to the Effective Interest Rate of such loans and borrowings. There is no significant change in the market rate for discounting of such loans and borrowings.

3. Fair value of investment in equity instruments (Quoted) is based on market value of such instruments on reporting date.

4. Fair value of investment in unquoted instruments is based on independent valuerâs report.

* As certified by Management and consultants

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

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

c. The Sales tax department has issued notice of demand u/s 32 of The Maharashtra Value Added Tax Act, 2002 dated 26th February, 2015 for Rs. 4,30,46,633/- for the period 01.04.2008 to 31.03.2009. The said demand is under appeal and the Company expects that there will not be any liability on the same in future.

8. Segment Reporting

The âmanagement approachâ as defined in âInd AS 108 - Operating Segmentsâ requires disclosure of segment-wise information based on the manner in which the Chief Operating Decision Maker (CODM) evaluates the performance and allocates resources in cases where a reporting entity operates in more than one business segment. Since the Company is primarily engaged in the business of real estate development which the Management and CODM recognise as the sole business segment, the disclosure of such segment-wise information is not required and accordingly, not provided.

* During the year ended 31st March, 2016, the Company had made allotment of 94,79,115 equity shares of Rs. 10/- each as bonus shares in proportion of one equity share for every two equity shares held. The earnings per share has been adjusted for both the period presented above.

9. Lease

Operating Lease Arrangement

The Company has been operating from the premises owned by group Company Marathon Realty Private Limited. During the year, Company had entered into formal agreement for payment of rent on the premises occupied by it. The rental payable per month has been Rs. 20,00,000 per month. The lease does not have any non-cancellable portion. Tenure of the lease agreement is valid till 31st March 2017.Total rent charged to the Statement of Profit and loss is Rs. 2,40,92,342 (Previous year Rs. 1,07,572)

10. Employee Benefits a. Defined Contribution Plans Amounts recognised in the Statement of Profit and Loss:

b. Defined Benefit Plan (Gratuity) and other Long-term Employee Benefits (Leave Encashment)

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

Note: Above disclosures with respect to employee benefits have been made to the extent of availability of data, as per actuarial valuation report.

Note:

i. Amounts in bracket are for previous year ended 31st March 2016.

ii. The leasehold land (999 years lease) is given as security against loan availed by Marathon Realty Pvt. Ltd. However, as at 31st March 2017, the rights relating to the said land have been relinquished by the Company towards Marathon Realty Pvt. Ltd.

iii. As per definitive agreements to be executed w.r.t. 35 acres of land to be developed.

iv. The Managing Director, Mr. Chetan R. Shah and his brother, Mr. Mayur Shah have given unconditional and irrevocable personal guarantee against loan availed by the Company.

v. The Company has entered into an agreement with Matrix Waste Management Pvt. Ltd. for revenue or area sharing based on 12.5% of revenue generated from the developed area for which development rights have been acquired by the Company.

vi. The Company has entered into an agreement with Ithaca Informatics Pvt. Ltd. for revenue or area sharing based on 12.5% of revenue generated from the developed area for which development rights have been acquired by the Company.

vii. Trade receivables of the Company are secured by way of pledge of shares of the Holding Company, Ithaca Informatics Pvt. Ltd., which are held by Marathon Realty Pvt. Ltd.

viii. All Related Party Transactions entered during the year were in ordinary course of the business and are on armâs length basis.

ix. For the year ended 31st March, 2017, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (FY 2015-16: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

11. Corporate Social Responsibility (CSR) Expenditure

a. Gross amount required to be spent during the year: Rs. 1,40,03,471 (P.Y. Rs. 1,01,19,085)

b. Amount spent during the year on:

12. Specified Bank Notes

As per Notification of Ministry of Corporate Affairs dated 30th March 2017 details of specified bank notes (SBN) held and transacted during the period from 8th November 2016 to 30th December 2016 are as provided in table below:

Specified Bank Notes is defined as Bank Notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees. The disclosures with respects to âPermitted Receiptsâ, âPermitted Paymentsâ, âAmount Deposited in Banksâ and âClosing Cash in Hand as on 30.12.2016â is understood to be applicable in case of SBNs only.

13. Amalgamation of the Company Name of the Amalgamating Company: Parmeka Pvt Ltd. Nature of Business:

a. Parmeka Pvt Ltd was engaged in the business of Real Estate Development of commercial project Marathon Futurex at Lower Parel through its erstwhile holding Company Marathon Realty Pvt Ltd, owning Leasehold Land under Fixed Assets. The Company has bought 100% equity shares of Parmeka Pvt Ltd from Marathon Realty Pvt Ltd and enabling Parmeka Pvt Ltd its wholly owned subsidiary.

The Scheme of Amalgamation of Parmeka Pvt Ltd (transferor company) with the Company, under Sections 391 to 394 of the Companies Act, 1956 was sanctioned by the Honâble High Courts of Judicature at Bombay vide Order dated 6th October, 2016. The Scheme became effective on the filing of the said order with Registrar of Companies, Maharashtra on 21st October, 2016 seeking approval on 21st November, 2016. Pursuant to the Scheme of Amalgamation and arrangement between the Company, the wholly owned subsidiary Parmeka Pvt Ltd has been amalgamated with Company with effect from 1st October, 2015 (the âAppointed Dateâ), hence no shares were exchanged to effect the amalgamation.

Accounting Treatment:

The amalgamation has been accounted for under the âpooling of interestâ method as prescribed by Accounting Standard 14 specified under Section 133 of the Companies Act, 2013. Accordingly, assets, liabilities and reserves of Parmeka Pvt Ltd as at 1st October, 2015 (the âAppointed Dateâ) have been recorded in the books of the Company at their book value. The difference between the amounts recorded as investments of the Company and the amount of share capital and reserves of Parmeka Pvt Ltd has been adjusted with General Reserve.

Accordingly, amalgamation has resulted in transfer of assets, liabilities and reserves in accordance with the terms of the Scheme at the following summarized values:

b. While approving the merger scheme of Parmeka Pvt Ltd (PPL) with the Company, Honâble High Courts of Judicature at Bombay has stated in its order that at the time of giving effect of the merger in the books of the Company, it should follow Accounting Standard (AS) -14 âAccounting for Amalgamationsâ. The Order further states that any deficit arising on account of elimination should be debited to Goodwill. This second treatment is specified in the court order and not in the merger scheme, which is not in conformity with AS -14. The Company has followed the accounting treatment which is as specified in the merger scheme and as prescribed in AS -14. Accordingly, the deficit is debited to general reserve account and no asset in the nature of goodwill has been created. This treatment is in conformity with AS -14.

c. The Company has computed income tax on its profits for the year ended 31st March, 2016 as per the provisions of Income Tax Act, 1961. The computation of tax provision has been made on the legal advice obtained by the Company and such computation has been verified by an independent firm of Chartered Accountants.

d. The effect of merger scheme has been given w.e.f. its appointed date i.e. 1st October 2015. Therefore, comparative figures for FY 2015-16 have been presented after considering the effect of merger.

14. Previous Year Figures

The previous year figures are regrouped, recast and reclassified wherever necessary to make them comparable with the figures of the current year.

Mar 31, 2016

i. Terms/Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. All shares rank parri passu with regard to dividend. In event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

Board of Director''s have recommended a dividend of Rs.1/-per (P. Y. Rs. 6/-) equity share 10% (P. Y. 60%) of Face valueof equity share Rs.10 each.

* As certified by management and consultants

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

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

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

c. The income tax department has issued notice of demand u/s 156 of the Income Tax Act, 1961 of Rs.2,53,21,050/- for A.Y.2013-14. However, there is no such demand payable by the Company due to TDS credit not considered by the department. The Company has filed rectification application with the department to give the TDS credit effect and annul the demand

Note 1.

The Tax Expense for the current year worked out in accordance with the provision for Income Tax Act 1961 is Rs.38,00,37,885/-(P.Y. ^16,72,90,522/-) The Company is eligible for set off of MAT Credit aggregating to Rs.3,26,23,496/-(P.Y. Rs.4,52,74,846/-) as per Section 115JAA of the Income Tax Act 1961. Accordingly a provision for tax rounded off to Rs.34,75,00,000/- (P.Y. Rs.12,31,00,000/-) is provided after netting off MAT Credit entitlement.

Note 2.

The Board of Director''s of the Company at their meeting held on 3rd November, 2015 have approved the Scheme of Amalgamation of its 100% subsidiary, Parmeka Pvt Ltd with the Company. The appointed date of proposed Scheme is 1st October, 2015. The Scheme is subject to the sanction of petition filed by the Company with the Hon''ble High Court of Bombay.

Note 3.

The Company has a Corporate Social Responsibility (CSR) policy. An amount of Rs.1,01,19,085/- (Rs.1,24,78,791/-) being attributable to CSR during the current year and previous year has remained unspent. At present, the Company is evaluating its options for the purpose of which CSR expenditure needs to be incurred.

Note 4.

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

Note 5.

The financial statements of two joint ventures i.e. Swayam Realtors and Traders LLP and Columbia Chrome(l) Pvt Ltd were not available as on the reporting period, hence the disclosure requirements in accordance with AS-27 Financial Reporting of Interest in Joint Ventures has not been made.

Note 6.

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

Mar 31, 2015

Corporate Information

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

1. Share Capital

i. Terms/Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. All shares rank parri passu with regard to dividend. In event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

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

2. Defined Benefit Plan

Reconciliation of opening and closing balances of Defined Benefit Obligations

3. Related Party Disclosures.

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

(a) Holding Company

Ithaca Informatics Pvt Ltd

(b) Key Managerial Personnel

Chetan R. Shah - Managing Director

S. Ramamurthi - Whole-Time Director & CFO

K.S. Raghavan - Company Secretary

(c) Relatives of Key Managerial Personnel

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

Ansuya R. Shah (Mother of Managing Director)

Ramniklal Z. Shah (Father of Managing Director)

Shailaja C. Shah (Wife of Managing Director)

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

(d) Associates

Columbia Chrome (I) Pvt Ltd

Swayam Realtors & Traders LLP

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

Citadel Realty & Developers Ltd

Cornell Hsg & Infrastructure Pvt Ltd

Fibre Box (Bombay) Pvt Ltd

Hariyali Estate Pvt. Ltd.

Kanchi Rehab Pvt Ltd

Lark Consultancy Pvt Ltd

Marathon Buildcon LLP

Marathon Construction Co.

Marathon Construction LLP

Marathon Developers

Marathon Ener-Gen LLP

Marathon Energy Pvt Ltd

Marathon Fiscal Pvt Ltd

Marathon Group

Marathon Housing Pvt Ltd

Marathon Infotech Pvt Ltd

Marathon IT Infrastructure Pvt Ltd

Marathon Nextgen Townships Pvt Ltd

Marathon Nexzone Infrastructures Pvt Ltd

Marathon Nexzone Land Pvt Ltd

Marathon Prachin Infrastructures Pvt Ltd

Marathon Realty Pvt Ltd

Marathon Securities & Properties Pvt Ltd

Marathon Ventures Pvt Ltd

Matrix Architects & Engineers

Matrix Enclaves Projects Developments Pvt Ltd

Matrix Fiscal Pvt Ltd

Matrix Green Housing & Commercial Developers LLP

Matrix H2O Management LLP

Matrix Salvage Management LLP

Matrix Waste Management Pvt Ltd

Matrix Water Management Pvt Ltd

Nextgen Buildcon Pvt Ltd

Nextgen City Container Depot Pvt Ltd

Nextgen City Energy Pvt Ltd

Nextgen City Utilities Pvt Ltd

Nextgen City Water Management Pvt Ltd

Matrix Land Hub Pvt Ltd

Nextgen Land Pvt Ltd

Nexzone Builcon LLP

Nexzone Energy Utilities LLP

Nexzone Fiscal Services Pvt Ltd

Nexzone IT Infrastructure Pvt Ltd

Nexzone Land Pvt Ltd

Nexzone Utilities Pvt Ltd

Nexzone Water Management Pvt Ltd

Olympic Enterprises

Parmeka Pvt Ltd

Rare Townships Pvt Ltd

Sanvo Resorts Pvt Ltd

Shree Mulund News Publication

Sonasha Enterprises

Svarnim Enterprises Pvt Ltd

Trident Ozone LLP

United Builders

United Enterprises

Vector Modular System (I) Pvt Ltd

Vector Project (India) Pvt Ltd

Vector Properties Pvt Ltd

Vinotak Investment Pvt Ltd

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

Particulars 2014-15 2013-14

Claims against the Company not acknowledged as debt:

1. Disputed Liabilities in appeal*

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

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

Total 15,292,016 15,297,016

* As certified by management and consultants.

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

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

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

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

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

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

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

Mar 31, 2013

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

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

Note 2 Related Party Disclosures.

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

(a) Holding Company Ithaca Informatics Pvt Ltd

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

S. Ramamurthi -WholeTime Director

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

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

(d) Associates Columbia Chrome (I) Pvt Ltd

Swayam Realtors & Traders LLP

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

significant Influence Citadel Realty & Developers Ltd

Cornell Hsg & Infrastructure Pvt Ltd

Fibre Box (Bombay) Pvt Ltd

Hariyali Estate Pvt. Ltd.

Kanchi Rehab Pvt Ltd

Lark Consultancy Pvt Ltd

Marathon Buildcon LLP

Marathon Construction Co.

Marathon Construction LLP

Marathon Developers

Marathon Ener-Gen LLP

Marathon Energy Pvt Ltd

Marathon Fiscal Pvt Ltd

Marathon Group

Marathon Housing Pvt Ltd

Marathon Infotech Pvt Ltd

Marathon IT Infrastructure Pvt Ltd

Marathon Nextgen Townships Pvt Ltd

Marathon Nexzone Infrastructures Pvt Ltd

Marathon Nexzone Land Pvt Ltd

Marathon Prachin Infrastructures Pvt Ltd

Marathon Realty Pvt Ltd

Marathon Securities & Properties Pvt Ltd

Marathon Ventures Pvt Ltd

Matrix Architects & Engineers

Matrix Enclaves Projects Developments Pvt Ltd

Matrix Fiscal Pvt Ltd

Matrix Green Housing & Commercial Developers LLP

Matrix H20 Management LLP

Matrix Salvage Management LLP

Matrix Waste Management Pvt Ltd

Matrix Water Management Pvt Ltd

Nextgen Buildcon Pvt Ltd

Nextgen City Container Depot Pvt Ltd

Nextgen City Energy Pvt Ltd

Nextgen City Utilities Pvt Ltd

Nextgen City Water Management Pvt Ltd

Nextgen Green Housing & Commercial Enclave Pvt Ltd

Nextgen Land Pvt Ltd

Nexzone Builcon LLP

Nexzone Energy Utilities LLP

Nexzone Fiscal Services Pvt Ltd

Nexzone IT Infrastructure Pvt Ltd

Nexzone Land Pvt Ltd

Nexzone Utilities Pvt Ltd

Nexzone Water Management Pvt Ltd

Olympic Enterprises

Parmeka Pvt Ltd

Ra re Town s h i ps Pvt Ltd

Sanvo Resorts Pvt Ltd

Shree Mulund News Publication

Sonasha Enterprises

Svarnim Enterprises Pvt Ltd

Trident Ozone LLP

United Builders

United Enterprises

Vector Molular System (I) Pvt Ltd

Vector Project (India) Pvt Ltd

Vector Properties Pvt Ltd

Vinotak Investment Pvt Ltd

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

Particulars 2012-13 2011-12

Claims against the Company not acknowledged as debt:

1. Disputed Liabilities in appeal*

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

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

Total 15,297,016 20,169,926

* As certified by management and consultants.

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

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

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

Note 4

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

Note 5

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

Mar 31, 2012

Note:

i, Terms/Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. All shares rank parri passu with regard to dividend.

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

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

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

Mar 31, 2011

1. Contingent liabilities:

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

Claims against the company not acknowledged as debt:

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

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

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

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

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

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

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

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

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

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

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

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

6. SECURED LOANS

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

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

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

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

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

7. Income from operations include.-

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

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

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

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

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

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

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

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

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

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

Swayam Realtors & Traders Ltd.

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

Chhaganlal Khimji &Co Pvt. Ltd.

Citadel Realty & Developers Ltd.

Cornell Hsg. & Infrastructure Pvt.Ltd.

Fibre Box (Bombay) Private Limited

Kanchi Rehab Pvt Ltd.

Lark Consultancy Pvt. Ltd.

Marathon Construction Co.

Marathon Developers

Marathon Energy Private Limited

Marathon Fiscal Pvt Ltd.

Marathon Group

Marathon Housing Pvt Ltd.

Marathon Infotech Private Ltd.

Marathon IT Infrastructure Pvt. Ltd.

Marathon Nextgen Township Pvt Ltd.

Marathon Nexzone Infrastructure Pvt Ltd.

Marathon Nexzone Land Pvt Ltd

Marathon Prachin Infrastructures P.Ltd.

Marathon Realty Pvt. Ltd.

Marathon Securities & Properties Pvt Ltd.

Marathon Venture Pvt Ltd.

Matrix Architects & Engineers

Matrix Enclaves Projects Development Private Limited

Matrix Fiscal Pvt Ltd.

Matrix Waste Management Pvt. Ltd.

Matrix Water Management Pvt. Ltd.

Nextgen Buildcon Pvt Ltd.

Nextgen City Container Depot Pvt. Ltd.

Nextgen City Energy Private Limited

Nextgen City Utilities Private Limited

Nextgen City Water Mgt. Private Limited

Nextgen Green Housing & Commercial Enclave Pvt Ltd.

Nextgen Land Pvt Ltd.

Nexzone Fiscal Services Pvt Ltd

Nexzone IT Infrastructure Pvt. Ltd.

Nexzone Land Pvt Ltd

Nexzone Utilities Pvt. Ltd.

Nexzone Water Management Pvt. Ltd.

Olympic Enterprises

Parmeka Private Limited

Rare Townships Pvt. Ltd.

Sanvo Resorts Private Limited

Shree Mulund News Publication

Sonasha Enterprises

Svarnim Enterprises Private Limited

United Builders

United Enterprises

Vector Modular System (I) Pvt. Ltd.

Vector Projects (India) Pvt Ltd

Vector Properties (I) Pvt Ltd

Vinotak Investment Pvt Ltd

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

(a) Premises given on Lease:

I. The Assets are held as Long term investment.

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

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

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

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

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

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

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

(b) Equipment given on Lease:

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

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

12. Balance of Creditors are subject to Confirmation.

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

Mar 31, 2010

1. Contingent liabilities:

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

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

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

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

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

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

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

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

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

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

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

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

9. Income from operations include:-

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

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

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

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

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

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

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

(a) Where control exists:

Holding Company Ithaca Informatics Pvt. Ltd

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

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

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

Swayam Realtors & Traders Ltd.

(e) Enterprises over which key managerial Marathon Group

person / relatives exercise significant Matrix Architects & Engineers

Influence Olympic Enterprises

Marathon Developers

Sonasha Enterprises

United Builders

United Enterprises

Marathon Construction Co.

Shree Mulund News Publication

Marathon Realty Pvt. Ltd

Vinotak Investment Pvt. Ltd

Marathon Prachin Infrastructures Pvt. Ltd.

Cornell Hsg. & Infrastructure Pvt.Ltd.

Marathon Infotech Private Ltd.

Fibre Box (Bombay) Private Limited

Svarnim Enterprises Private Limited

Sanvo Resorts Private Limited

Parmeka Private Limited

Nextgen City Water Mgt. Private Limited

Nextgen City Utilities Private Limited

Nextgen City Energy Private Limited

Nextgen City Container Depot Pvt. Ltd.

Nexzone Water Management Pvt. Ltd.

Nexzone IT Infrastrucuture Pvt. Ltd.

Nexzone Utilities Pvt. Ltd.

Matrix Waste Management Pvt. Ltd.

Matrix Utilities Private Limited

Matrix Water Management Pvt. Ltd.

Marathon Energy Private Limited

Marathon IT Infrastrucuture Pvt. Ltd.

Marathon Fiscal Pvt. Ltd

Marathon Housing Pvt. Ltd

Marathon Nextgen Township Pvt. Ltd

Marathon Nexzone Infrastructure Pvt. Ltd

Marathon Nexzone Land Pvt. Ltd

Matrix Fiscal Pvt. Ltd

Nextgen Buildcon Pvt Ltd

Nextgen Green Housing & Cmmercial Enclave Pvt Ltd

Nextgen Land Pvt. Ltd

Nexzone Fiscal Services Pvt. Ltd

Nexzone Land Pvt. Ltd

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

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

(a) Premises given on Lease :

I. The Assets are held as Long term investment.

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

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

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

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

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

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

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

(b) Equipment given on Lease :

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

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

14. Balance of Creditors are subject to Confirmation.

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

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