అకౌంట్స్ గమనికలుJog Engineering Ltd.

Mar 31, 2015

1. Corporate Information

The Company is incorporated on 28th March 1978. The main activity of the company is construction of infrastructure projects. At present the Company has no project in hand. As a policy decision, the Management has decided to explore possibilities of Property Development Projects.

2. Preparation of Accounts on "Going Concern" Assumption

The Company has not received a single contract for last ten years; the Company has incurred continuous losses for last many years, which has eroded net worth of the Company. The Company is passing through severe liquidity crisis and is unable to honour the commitment to Preference Shareholders, Banks, Financial Institutions and Public depositors. The legal matters by and against the Company are in process at various levels of judiciary like DRT, District Courts and Bombay High Court. The Company has defaulted in payment of various statutory dues like Income Tax, FBT, Works Contract Tax, VAT etc. Considering all, Auditors are of opinion that, the Company do not have going concern status. However, the Management's view is that the Company is a going concern although the Company has not secured any contracts for last many years.

The Company has been intermittently repaying the fixed deposit holders but has been unable to repay the fixed depositors as ordered by the Company Law Board vide its order dated June 2010. The Promoters of the Company have sold / decided to sell some of their properties held personally or through other private Companies, inter alia, to meet this requirement. Redemption of Preference Shares has to be done only from distributable profits. Legal matters are ongoing against the Company and also from the Company. Even in the present circumstances, the Company has some property development options.

With this, the management of the Company trusts that it has sound prospects and ought to be considered as a Going Concern. Based on this, the accounts have been prepared on 'going concern' basis.

3. In accordance with the Company's accounting policy, claims for extra work in respect of contracts, which in the opinion of the Management are recoverable,.are recognized in the accounts depending on certainly of receipt. Contract receipts for the year-ended 30/06/2001 and 30/06/2002 include such claims amount to Rs. 206.60 Lac and Rs. 388.58 Lac respectively.

4. Related Party Transactions:

List of Related parties with whom transactions have taken place in the past or in the current year and their relationship:

Name of the Related Party Relationship

Mahakali Flyover Company Ltd. Subsidiary Company

Yashodhan Hotels Pvt. Ltd. Associate Company

Ad-Dict Partner, Vi-MA Productions (Dissolved 23/01/2003)

Late Mr. Madhav V. Jog Key Management Personnel

Mrs. Sonia M. Jog Key Management Personnel

Mrs. Mohini S. Limaye Relative of Key Management Personnel

Mrs. Swaroopa O. Mate Relative of Key Management Personnel

Mr. M. K. Shirude Key Management Personnel

Mr. P. P. Sheth Key Management Personnel

5. There is no earning and expenditure in foreign currency during the year.

6. The information regarding amount overdue to small-scale industrial undertaking and / or ancillary industrial suppliers on account of principal and / or interest as at the close of the period is not available. The Company has not obtained the information regarding their status of the small scale undertaking defined as under "The Industries (Development and Regulation) Act, 1951" and "The interest on delayed payments of small scale and ancillary undertakings Act, 1993."

7. No provision for Income Tax is made in view of carried forward losses of the Company.

8. Balances under the head Loans and Advances, Deposits, Debtors and Creditors are taken as per books and are subject to confirmation and consequent adjustment, if any on reconciliation. In the opinion of the Management, these are realizable / payable In the ordinary course of business at the values stated there against.

9. The previous year's figures have been regrouped / restated wherever necessary to conform with current years classification.

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Mar 31, 2014

1. Corporate Information

The Company is incorporated on 28th March 1978. The main activity of the company is construction of infrastructure projects. At present the Company has no project in hand. As a policy decision, the Management has decided to explore possibilities of Property Development Projects.

2. Defferred Government Grant : During the year ended 30/06/2002, the Company received Government Grant in Aid of Rs. 100 Lac through Shri. Shivaji Raigad Smarak Mandal, a Public Trust for specific asset being Ropeway at Raigad. In accordance with the Accounting Standard: 12 on "Accounting for Government Grants" issued by the Institute of Chartered Accountants of India, deferred income arising from such Government Grant has been allocated to income over the period and in the proportion in which depreciation on related asset is charged. However during current year, Raigad Ropeway alongwith the land situated therein and movable assets wee surrendered before agreed period to Shri Shivaji Raigad Smarak Mandal vide Surrender Deed No.775 of 2014 and 779 of 2014 both dated 3rd March 2014 respectively registered at Sub Registrar, Mahad. So balance amount of Government Grant is credited to P & L.

Capital Reserve : The compromise deed was worked out between Bank Of Maharashtra (BoM) and the Company , on 26th March 2013 , by which Rs. 26 crore is to be paid by the Company before 30th September 2013 , as full and final settlement subject to terms and conditions mentioned in compromise deed.

As per books of accounts, the balance of principal loan outstanding was showing Rs.29,13,70,081/- before compromise deed. So the waived principal portion by BoM , Rs. 3,13,70,081/- was transferred to Capital Reserve during the previous year. As per compromise deed, the Company has paid Rs. 11.76 crore to BoM in previous year. However the Company has made default in paying balance amount till 30th September 2013. So BoM has again opened their Recovery Proceeding No. 29 of 2012 in DRT Pune vide which, the Company''s property at Sangamwadi, and one of the property of the Director is attached.

3. Borrowing from related parties : There is no any formal loan agreement exists between the Company and Lenders, so the terms of repayment are not decided. So we cannot comment on default and repayment schedule of these loans.

4. Fixed deposit from public : The principal amount of Public fixed deposits matured for repayment and claimed by the depositors, which remain unpaid as on 31st March 2014 amount to Rs. 61.91 Lac in case of small depositors and Rs. 43.77 Lac in all other cases. Appropriate intimation of default was sent to the Company Law Board, Mumbai from time to time, in respect of each month since default.

The Company had filed an application under sections 58A & 58AA of Company Act, 1956 to Central Government for granting extension of repayment of deposits. The Company Law Board vide its order dated 14th June 2010, has allowed the Company to repay the overdue and matured deposits upto 31st March 2011. But the Company has not paid the deposits as per the order till date.

5. Secured loan from Bank : The company has made default in repayment of these loans for several years. Balance of Loans / interest outstanding in respect of Bank of Maharashtra (BoM) have been settled by way of a Compromise. Balance of Loans / interest outstanding in respect of Development Credit Bank Limited (DCB), Stressed Assets Stabilization Fund(SASF), as assignee of IDBI Bank and Andhra Bank (AB) were subject to their confirmation. Interest and other charges had been debited and provided in the accounts by the Company on the basis as set out in the earlier years.

(a) BoM filed OA 6/2006 in DRT, Pune for recovery of Rs. 56.73 Crore and the Company has filed a counter-claim against BoM under the same OA 6/2006 in the sum of Rs. 124.17 Crore. The compromise deed was worked out between Bank Of Maharashtra (BoM) and the Company, on 26th March 2013, by which Rs. 26 crore to be paid by the Company before 30th September 2013 , as full and final settlement subject to terms and conditions mention in compromise deed. Out of which The Company has paid Rs. 11.76 crores and the second installment was due on 30th Sept.2013. And as per the sanction letter this one time settlement is valid subject to payment of second and final installment on or before 30th Sept.2013. So BoM has again opened their Recovery Proceeding No. 29 of 2012 in DRT Pune vide which, the Company''s property at Sangamwadi, and one of the properties of the Director is attached. In view of this, the simple interest is charged at 12% p.a. in books of accounts on loan from BoM w.e.f.01.10.2013.

(b) AB''s application for recovery of Rs. 23.76 Crore from The Company and the Company''s counter-claim of Rs. 88.21 Crore are subjudice & under adjudication of DRT, Pune in OA 6/2006.

(c) DCB''s application for recovery of Rs. 15.32 Crore from the Company and the Company''s counter-claim of Rs. 28.34 Crore are subjudice & under adjudication of DRT, Pune in OA 6/2006.

(d) Dues of the Company to SASF stand at Rs. 4.95 Crore.

Simple Interest at 12% p.a. has been provided in books of accounts in the absence of balance confirmation from AB & DCB and on the basis of rate of interest usually granted in judicial.

6. Deferred Tax: The ultimate realization of the deferred tax assets and incurring deferred tax liability is dependant upon the generation of future taxable income during the periods in which the temporary differences become affected. These timing differences result in the net differed tax asset mainly on account of carry forward losses and unabsorbed depreciation under Income Tax Act, 1961. In absence of reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized, deferred tax asset & deferred tax liability has been de-recognized in these accounts.

7. Investment in Subsidiary Mahakali Flyover Co. Ltd. (MFCL): As per the Audited Balance Sheet of the MFCL, it has accumulated a loss of Rs. 2.50 Lac. ARCIL and UTI forced MFCL to default in repayment of loans. The matter as aforesaid is subjudice in the Hon''ble DRAT. MFCL''s only project i.e. Andheri Flyover Project is incomplete due to these litigations. Auditors of MFCL while noting MFCL Management''s confidence of reviving the Andheri Flyover Project have stated that they are unable to form an opinion on "going concern" status of the Company and have relied upon MFCL Management''s perception for accepting going concern assumption for drawing up MFCL accounts. Notwithstanding the above, in view of the improved trends in the real estate market in Mumbai, investments in equity of MFCL continue to be stated at cost. Considering the long-term involvement of the Company in MFCL, the Management considers that there is no permanent diminution in value and valuation at cost is fair.

8. Loans and advances to related parties :The Company has not provided any interest on loans and advances to related parties.

Security and other deposits: Rs. 203.41 Lac has been deducted by SPPL towards retention deposits, outstanding for more than 5 years . The Management is making necessary efforts for recovery of the same through judicial processes and is of the opinion that the ultimate loss if any on settlement of the above will not be material and hence no provision is presently considered necessary.

Special deposit kept by PWD, GoM (Rs. 50.41 lacs) for Andheri, outstanding for more than 5 years ,shall become refundable only after related judicial decision is available and when the work is completed in all respect. The Management is making necessary efforts for recovery of the same and is of the opinion that the ultimate loss if any on settlement of the above will not be material and hence no provision is presently considered necessary.

9. Exceptional Item

Assets written off : During the year ended on 30th June 2002, the Company received Government Grant in Aid of Rs.100 Lac through Shri Shivaji Raigad Smarak Mandal, a Public Trust for specific asset being Ropeway at Raigad Fort. During current year, Raigad Ropeway, alongwith the land situated therein and some movable assets, was surrendered to Shri Shivaji Raigad Smarak Mandal, vide Surrender Deed No.775 of 2014 and 779 of 2014, both dated 3rd March 2014,registered at Sub Registrar,Mahad. So, book value of Raigad Ropeway, alongwith the assets surrendered therewith,was written off.

10. Investment in the Capital of a Partnership: The Company had entered into a partnership with Mr.Vinay Apte, under the name and style of VI-MA Productions engaged in the business of TV serials. The firm was voluntarily dissolved vide Deed of Dissolution dated 23/01/2003. In terms of the agreement made with Mr. Vinay Apte, he will pay the Company a lump sum amount of Rs. 45 Lac against Rs. 37.95 Lac shown as due from VI-MA in the Books of Accounts, latest by 31.03.2014. Mr. Apte has paid Rs. 21 Lac in the earlier year. Mr. Apte was bound in terms of a further agreement with the Compnay by which he has to pay further Rs. 12 Lac before 30/09/2013 and Rs. 12 Lac before 30/09/2014. However, these terms were not obeyed by Late Mr.Vinay Apte.

11. In accordance with the Company''s accounting policy, claims for extra work in respect of contracts, which in the opinion of the Management are recoverable, are recognized in the accounts depending on certainly of receipt. Contract receipts for the year-ended 30/06/2001 and 30/06/2002 include such claims amount to Rs. 206.60 Lac and Rs. 388.58 Lac respectively.

12. There is no earning and expenditure in foreign currency during the year.

13. The information regarding amount overdue to small-scale industrial undertaking and / or ancillary industrial suppliers on account of principal and / or interest as at the close of the period is not available. The Company has not obtained the information regarding their status of the small scale undertaking defined as under "The Industries (Development and Regulation) Act, 1951 " and "The Interest on delay payments of small scale and ancillary undertakings Act, 1993".

14. No provision for Income Tax is made in view of carried forward losses of the Company.

15. Balances under the head Loans and Advances, Deposits, Debtors and Creditors are taken as per books and are subject to confirmation and consequent adjustment, if any on reconciliation. In the opinion of the Management, these are realizable / payable in the ordinary course of business at the values stated there against.

16. The previous year''s figures have been regrouped / restated wherever necessary to conform with current years classification.

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Mar 31, 2013

1. Corporate Information

The Company is incorporated on 28''" March 1978. The main activity of the company is construction of infrastructure projects. At present the Company has no project in hand. As a policy decision, the Management has decided to explore possibilities of Property Development Projects.

2. Preparation of Accounts on "Going Concern" Assumption

The Company has not received a single contract for last eight years. The Company has incurred continuous losses for last many years, which has eroded net worth of the Company. The Company is passing through severe liquidity crisis and is unable to honor the " commitment to Preference Shareholders, Banks, Financial Institutions and Public depositors. The legal matters by and against the Company are in process at various levels of judiciary like DRT, DRAT, District Courts, Bombay High Court & the Supreme Court of India.

The Company has defaulted in payment of various statutory dues like Income Tax, FBT, Works Contract Tax, VAT etc. raise the doubts over Company''s going concern status. The Management''s view is that the Company is a going concern although the Company has not secured any contracts for last many years, this is only due to the Management''s conscious decision to replace the construction contracting business with Property Development Business. The Liquidity crisis, and resultant inability of the Company to meet its liabilities to Preference shareholders and other creditors, is expected to change soon.

The Company has been intermittently repaying the fixed deposit holders but has been unable to repay the fixed depositors as ordered by the Company Law Board vide its order dated 14th June 2010. The Promoters of the Company have now decided to sell some of their properties held through their other private Companies, inter alia, to meet this requirement. Redemption of Preference Shares has to be done only from distributable profits. The Company expects to be able to turn the tables completely and to redeem the Preference Shares in near future. Legal matters are ongoing against the Company and also from the. Company. The claims made by the Company in courts of law and in arbitrations primarily against various counter parties are nearly 40 times claims of other parties against the Company. A careful perusal of these various subjudice matters shows that though there have been certain so-called defaults in payments of various Taxes and other dues, the Company has certain legal and sagacious grounds behind the non-payments and once these are settled, the apparent liabilities shall disappear.

Even in the present circumstances, the Company has some property development options to turn itself around in the next 2 to 3 years.

These projects shall generate for the Company sufficient liquidity in the next some years to meet all liabilities of the Company, to wipe off all its losses and to generate a healthy status. With this, the Company trusts that it has sound prospects and ought to be considered as a Going Concern. Based on this, the accounts have been prepared on "going concern" basis.

Notes:

(i) No shares were issued or forfeited or called back during the year.

(ii) Preference shares were redeemable at par on 20th February, 2006. These Shares have not been redeemed to date.

(iii) Of the above, 24,25,000 equity shares (previous period 24,25,000) are allotted as fully paid-up by way of bonus shares by capitalization of Share Premium, General Reserve, etc.

Deterred Government Grant: During the year ended 30/06/2002, the Company received Government Grand in Aid of Rs. 100 Lac through Shri. Shivaji Raigad Smarak Mandal, a Public Trust for specific asset being Ropeway at Raigad. In accordance with the accounting Standard: 12 on "Accounting for Government Grants" issued by the Institute of Chartered Accountants of India, deferred income arising from such Government Grant has been allocated to income over the period and in the proportion in which depreciation on related asset is charged Rs. 4.75 Lac being depreciation charged for the current year on the said asset has been credited to income. Net balance of Deferred Government Grant of Rs. 20.44 Lac is pending for its apportionment to profit and loss account.

Capital Reserve : The compromise deed was worked out between Bank Of Maharashtra (BoM) and the Company , on 26th March 2013 , by which Rs. 26 crore is to be paid by the Company before 30th September 2013 , as full and final settlement subject to terms and conditions mention in compromise deed.

As per books of accounts, the balance of principal of loan outstanding was showing Rs.29,13,70,081/- before compromise deed. So the waived principal portion by BoM , Rs. 3,13,70,081 /- is transferred to Capital Resen/e.

Borrowing from related parties: There is no any formal loan agreement exists between the company and lenders, so the terms of repayment are not decided.

Fixed deposit from public: The principal amount of Public fixed deposits matured for repayment and claimed by the depositors, which remain unpaid as on 31a March 2013 amount to Rs. 62.36 Lac in case of small depositors and Rs. 43.77 Lac in all other cases. Appropriate intimation of default was sent to the Company Law Board, Mumbai from time to time, in respect of each month since default. The Company has stopped accepting / renewing fixed deposits from the date of first default. The Company has been repaying the Deposits as and when cash flow position permits.

The Company had filed an application under sections 58A & 58AA of Company Act, 1956 to Central Government for granting extension for repayment of deposits. The Company Law Board vide its order dated 1401 June 2010, has allowed the Company to repay the overdue and matured deposits up to 319 March, 2011. But the Company has not paid the deposits as per the order.

Secured loans from Banks: The Company has made default in repayment of these loans for several years. Balance of Loans / interest outstanding in respect of Bank of Maharashtra (BoM) have been settled by way of a Compromise. Balance of Loans / interest outstanding in respect of Development Credit Bank Limited (DCB), Stressed Assets Stabilization Fund (SASF), as assignee of IDBI Bank and Andhra Bank (AB) were subject to their confirmation. Interest and other charges had been debited and provided in the accounts by the Company on the basis as set out in the earlier years.

(a) BoM filed O/A 6/2006 in DRT, Pune for Rs. 56.73 Crore and the Company has filed a counter-claim against BoM under the same OA 6/2006 in the sum of Rs. 124.17 Crore. A compromise was worked out between BoM & the Company on 26/03/2013 by which Rs. 26 Crore tobe paid by the Company before 30lt'' September 2013, as full and final settlement subject to terms and conditions mentioned in Compromise Deed out of which the Company has paid Rs. 11.76 Crore and the second installment is due on 30,h Sept 2013 and as per the sanction letter this one time settlement is valid subject to payment of second and final installment on or before SO* September 2013. In view of this compromise deed, the interest is not charged in books of accounts on loan from BoM.

(b) AB''s application for recovery of Rs. 23.76 Crore from the Company and the Company''s counter-claim of Rs. 88.21 Crore are subjudice & under adjudication of DRT, Pune in OA 6/2006.

(c) DCB''s application for recovery of Rs. 15.32 Crore from the Company and the Company''s counter-claim of Rs. 28.34 Crore are subjudice & under adjudication of DRT, Pune in OA 6/2006.

(d) Dues of the Company to SASF stands at Rs. 4.95 Crore.

Simple interest @ 12 % p.a. has been provided in books of accounts in absence of balance confirmation from AB, DCB & SASF on the basis of rate of interest usually granted in judicial fora.

However, in view of the Company''s counter-claims, provisions made in the books of accounts as sums due to BoM, AB, DCB & SASF are made only as a conservative accounting practice, the Company does not recognize any amount to be in fact payable to BoM, AB, DCB & SASF and therefore these provisions are not any admission of any liability of the Company to BoM, AB, DCB & SASF.

3. Deferred Tax: The ultimate realization of the deferred tax assets and incurring deferred tax liability is dependant upon the generation of future taxable income during the periods in which the temporary differences become affected. These timing differences result in the net differed tax asset mainly on account of carry forward losses and unabsorbed depreciation under Income Tax Act, 1961. In absence of reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized, deferred tax asset & deferred tax liability has been de-recognized in these accounts.

Investment In Subsidiary Mahakall Flyover Co. Ltd. (MFCL): As per the Audited Balance Sheet of the MFCL, it has accumulated a loss of Rs. 2.50 Lac. ARCIL and UTI forced MFCL to default in repayment of loans. The matter as aforesaid is subjudice in the Hon''ble DRAT. MFCL''s only project i.e. Andheri Flyover Project is incomplete due to these litigations. Auditors of MFCL while noting MFCL Management''s confidence of reviving the Andheri Flyover Project have stated that they are unable to form an opinion on "going concem" status of the Company and have relied upon MFCL Management''s perception for accepting going concem assumption for drawing up MFCL accounts. Notwithstanding the above, in view of the improved trends in the real estate market in Mumbai, investments in equity of MFCL continue to be stated at cost. Considering the long-term involvement of the Company in MFCL, the Management considers that there is no permanent diminution in value and valuation at cost is fair.

Loans and advances to related parties: The Company has not provided any interest on above loans and advances to related parties. Despite his assurances, Mr. P. P. Sheth has been able to repay only Rs. 15.00 Lac during the year. Mr. P. P. Sheth has reassured the Company that he will take the best of his efforts to refund this amount in totality as early as possible.

Deposit with Yashodhan Hotels Pvt-Ltd. was placed by the Company as a deposit for use of two floors of Jog Center viz. 4th and 5th floor, basement & stilt admeasuring 45,000 sft. During the year the Company has vacated the 4th and 5th floor and deposit of YHPL is adjusted towards the loan taken from YHPL.

Loans and Advances to other than related parties: During the year advance shown to Shivshahi Punarvasan Prakalp Ltd is write- off as bad-debts.

Security and other deposits: Rs. 203.41 Lac has been deducted by SPPL towards retention deposits, outstanding for more than 5 years. The Management is making necessary efforts for recovery of the same through judicial process and is of the opinion that the ultimate loss if any on settlement of the above will not be material and hence no provision is presently considered necessary.

Special deposit kept by PWD, GoM (Rs. 50.41 Lac) for Andheri, outstanding for more than 5 years, shall become refundable only after related judicial decision is available and when the work is completed in all respect. The Management is making necessary efforts for recovery of the same and is of the opinion that the ultimate loss, if any, on settlement of the above will not be material and hence no provision is presently considered necessary.

- The Inventory of construction material, consumables, stores and spare parts at the Company''s one site having value Rs. 11.51 Lac for which criminal proceeding is on-going in court of law. At the other site, pursuant to termination of a contract, Stocks valued at Rs. 251.20 Lac have been taken over by the Client of that site, which is a Company fully owned by the GoM, and has been valued at the time of taking over by the Client, for which it has to give credit to the Company in the final accounts for that work, it terms of the Contract Conditions.

4. Extra Ordinary Item

The compromise deed was worked out between Bank Of Maharashtra (BoM) and the Copmany , on 26th March 2013 , by which Rs. 26 crore is to be paid by the Company before 30th September 2013 , as full and final settlement subject to terms and conditions mention in compromise deed.

As per books of accounts, the balance of interest on loan from BoM of outstanding was showing Rs. 13,96,95,976/- before compromise deed. So the waived interest portion by BoM, Rs. 13,96,95,976/- is credited iu profit and loss account.

5. bivestmut In the Capful of a Partnership: The Company had entered into a partnership under the name and style of VI-MA Productions engaged in the business of TV serials. The firm was voluntarily dissolved vide Deed of Dissolution dated 23/01/2003. In terms of the agreements made with Mr. Vinay Govind Apte, one of the retiring partners, by 31/03/2014, he will pay the Company a lump sum amount of Rs. 45 Lac against Rs. 37.95 Lac shown as due from VI-MA in the Books of Accounts. Mr. Apte has paid Rs. 21 Lac in the previous year and Mr. Apte is bound in terms of a signed agreement with the Company to pay further Rs. 12 Lac before 30/09/2013 and Rs. 12 Lac before 30/09/2014.

6. In accordance with the Company''s accounting policy, claims for extra work in respect of contracts, which in the opinion of the Management are recoverable, are recognized in the accounts depending on certainly of receipt. Contract receipts for the year-ended 30/06/2001 and 30/06/2002 include such claims amount to Rs. 206.60 Lac and Rs. 388.58 Lac respectively. ,

7. There is no earning and expenditure in foreign currency during the year.

8. The information regarding.amount overdue to small-scale industrial undertaking and / or ancillary industrial suppliers on account of principal and / or interest as at the close of the period is not available. The Company has net obtained the information regarding their status of the small scale undertaking defined as under "The Industries (Development and Regulation) Act, 1951" and "The Interest on delay payments of small scale and ancillary undertakings Act, 1993".

9. No provision for Income Tax is made in view of carried forward losses of the Company.

10. Balances under the head Loans and Advances, Deposits, Debtors and Creditors are taken as per books and are subject to confirmation and consequent adjustment, if any on reconciliation. In the opinion of the Management, these are realizable / payable in the ordinary course of business at the values stated there against.

11. The previous year''s figures have been regrouped / restated wherever necessary to conform with current years classification.

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Mar 31, 2012

1, Corporate information

The Company is incorporated on 28th March 19/8. The main activity of the company is construction of infrastructure projects. At present tho Company has no project in hand As a policy decision, the Management has decided to explore possibilities of Property Development Projects.

2. Preparation of Accounts on 'Going Concern Assumption

The Company has not received a single contract tor last eight years. The Company has incurred continuous losses tor last many years, which has eroded not worth of the Company, f he Company is passing through severe liquidity crisis and is unable to honour the commitment to Preference Shareholders Banks, f inancial Institutions and Public depositors. I he legal matters by and against ihe Company are in process at various levels of judiciary like DRf. DRA1. District Courts, Bombay High Court & the Supreme Court of India. Ihe Company has defaulted in payment ot various statutory dues like Income fax. LBL, Works Contract lax. VAI etc. raise the doubts over Company's going concern status. Ihe Management’s view is that the Company is a going concern although the Company has not secured any contracts for last many years, this is only due to the Management's conscious decision to replace tho construction contracting business with Property Development Business. Ihe l iquidity crisis, and resultant inability of the Company to moot its liabilities to Proforonco shareholders and other creditors, is expected to change soon.

The Company has boon intormittontly repaying the fixed deposit holders but has been unable to repay the fixed depositors as ordered by the Company Law Board vide its order dated M"; June 2010. Ihe Promoters ot tho Company have now docidod to sell some of their properties held through their other private Companies, inter alia, to moot this requirement. Redemption ot Preference Shares has to bo done only from distributable profits fhe Company expects to be able to turn the tables completely and to redeem the Proforonco Shares in near future. Log a I mat tors are ongoing against the Company and also from tho Company. The claims made by tho Company in courts of law and in arbitrations primarily against various counter parties are nearly 40 times claims ot other parties against the Company. A careful perusal of those various subjudice matters shows that though there have been certain so called defaults in payments of various I axes and other duos, the Company has certain legal and sagacious grounds behind the non payments and once those aro settled, the apparent liabilities shall disappear.

Von in the prosont circumstancos, the Company has some property development options to turn itself around in the next 2 to 3 years. Those projocts shall generate for tho Company sufficient liquidity in the next some years to moot all liabilities of tho Company, to wipe off all its losses and to generate a healthy status. With this, the Company trusts that it has sound prospects and ought to be considered as a Going Concern. Based on this, the accounts have boon prepared on “going concern" basis.

Notes:

(i) No shares were issued or forfeited or callod back during tho year.

(ii) Proforonco shares were redeemable at par on 20th Lebruary, 2006. I hose Shares have not boon redeemed to date

(iii) Of tho above, 24.2ij.000 equity shares {previous poriod 24.P5.000) aro allotted as fully paid up by way of bonus shares by capitalization of Sharo Premium. General Reserve, etc.

(iv) Number of shares hold by each shareholder holding more than 5% shares in tho company arc:

Deferred Government Grant: During the year ended 30/06/2002, the Company received Government Grand in Aid of Rs. 100 Lac through Shri. Shivaji Raigad Smarak Mandal, a Public I rust for specific asset boing f topeway at Raigad. In accordance with tho accounting Standard: 12 on "Accounting for Government Grants" issued by the Institute of Chartered Accountants of India, deferred income arising from such Government Grant has been located to income over tho period and in the proportion in which depreciation

borrowing from retatoa parties I hero is no any tormai loan agreement exists between company and lenders, so the terms of repayment are not decided. So wo can not comment on default and repayment schedule of these loans.

Fixed deposit from public: I ho principal amount of Public fixed deposits matured for lepaymenl and claimed by the depositors, which remain unpaid as on 31!il March 2012 amount to Rs. 62.81 Lac in case of small depositors and Rs. 43.77 Lac in all other cases.

Appropriate intimation of default was sent to tho Company Law Board, Mumbai from time to time, in respect of oach month since default, the Company has stopped accepting / renewing fixed deposits from the dato of first default. Ihe Company has boon repaying the Deposits as and whon cash flow position permits.

Ihe Company had filed an application under sections 58A & 58AA of Company Act, 1956 to Central Government for granting extension tor repayment of deposits. I he Company Law Board vide its order dated 14"' June 2010. has allowed the Company to repay tho overdue and matured deposits upto 31s1 March. 2011. But the Company has not paid the deposits as per the order.

Secured loans from Banks: The company has made default in repay men I of these loans for several years. Balance of Loans / interest outstanding in respect of Bank of Maharashtra (BoM) have been settled by way of a Compromise. Balance of Loans ! interest outstanding in respect of Development Credit Bank Limited (DCB), Stressed Assets Stabilization l und (SASI), as assignee of IDBI Bank and Andhra Bank (AB) were subject to their confirmation. Interest and other charges had been debiled and provided in tho accounts by the Company on the basis as set out in tho earlier years.

(a) BoM filed O/A 6/2006 in DR I. Pune for Rs. 56.73 Crorc and the Company has filed a counter claim against BoM under the same OA 6/2006 in the sum of Rs. 124.17 Crore. A compromise was worked out between BoM & the Company in 2009.

In terms of the compromise, duos arc to be paid before 31.03.2012. from sale of property owned by a company of which tho promoters of tho Company are the majority shareholders and receipts from decrees to be obtained from the Courts of Law & same arbitral references. Delays in recovery of these dues, reasons whereof have been informed to BoM from time to time have resulted in tho Compromise to bo not yet consummated. There is no any communication from BoM regarding extension or cancellation of compromise agreement. Simple interest at 12.75% p.a. has been provided in books of accounts i.e. at BPL.R of BoM in terms of tho compromise.

(b) AB’s application for recovery of Rs. 23.76 Croro from the Company and the Company’s counter claim of Rs. 88.21 Crorc 1 are subjudice & under adjudication of DR I. Pune in OA 6/2006.

c) DCB's application for recovery of Rs. 15.32 Croro from the Company and tho Company’s counter claim of Rs. 28.34 Crore are subjudice & under adjudication of DR I, Pune in OA 6/2006.

(d) Dues of the Company to SASf- stands at Rs. 4.95 Crorc.

Simple interest @ 12 % p.a. has boon provided in books of accounts in absence of balance confirmation from AB & DCB and on the basis of rate of interest usually granted in judicial fora.

However, in view of the Company's counter claims, provisions made in the books of accounts as sums due to BoM. AB. DCB & SASI are made only as a conservative accounting practice, the Company does not recognize any amount to be in tact payable to BoM, AB,

DCB & SASh and therefore these provisions are not any admission of any liability of the Company to BoM, AB, DCB & SASk

Deferred Taxes: Ihe ultimate realization of the deferred tax assets and incurring deferred tax liability is dependant upon the generation of future taxable incomo during the periods in which the temporary differences become affected. I hose timing differences result in the net differed tax asset mainly on account of carry forward losses and unabsorbed depreciation under Incomo lax Act. 1961. In absence of reasonable certainty that sufficient future taxable income will bo available against which such deferred tax assets can be realized, deferred tax asset & deferred tax liability has been de recognised in those accounts.

Investment in Subsidiary Mahakali Flyover Co. Ltd. (MFCL): As por tho Audited Balance Shoot ottho Ml CL, it has accumulated a loss of Rs. 2.50 Lac. ARCIL and UH torcod MFCL to default in repayment of loans, Ihe matter as aforesaid is subjudico in the Hon’blo DRAT. MFCL’s only project i.o. Andheri Hyovor Project is incomplete due to those litigations. Auditors of MFCL while noting MFCL. Management's confidence of reviving the Andheri Flyover Project have stated that they arc unable to form an opinion on "going concern" status of the Company and have reiiod upon MFCL Management's perception for accepting going concorn assumption for drawing up MFCL accounts. Notwithstanding the above, in view of the improved trends in the real estate market in Mumbai.

investments in oquity of Ml Cl. continue to be stated at cost. Considering the long term involvement of the Company in Ml CL Ihe Management considers that there is no permanent diminution in value and valuation at cost is fair.

Loans and advances to related parties: Ihe Company has not provided any interest on above loans and advances to related parties. Despite his assurances, Mr. P. P. Shoth has boon able to repay only Rs. 14.70 Lac during the year. Mr. P. P. Shoth has reassured the Company that he will take tho best of his efforts to refund this amount in totality on or before 31.03.2013 Deposit with Yashodhan Hotels Pvt. Ltd. was placed by tho company as a deposit for use of two floors of Jog Center vi/. 4"' and 5!ti floor, basement & stilt admeasuring 45,000 sit. anc^is refundable upon vacating the same.

Security and other deposits: Rs. 203.41 Lac has been deducted by SPPL towards retention deposits, outstanding for more than 5 years. Ihe Management is making necessary efforts for recovery of the same through judicial process and is of tho opinion that tho ultimate loss if any on settlement of the above will not be material and hence no provision is presently considered necessary.

Special deposit kept by PWD, GoM (Hs. 50.41 l ac) for Andhcri, outstanding for more than 5 years, shall become refundable only after rotated judicial decision is available and when tho work is completed in all respect. The Management is making necessary efforts for recovery of the same and is of tho opinion that the ultimate toss, if any. on settlement of the above will not bo material and hence no provision is presently considered necessary.

Ihe Inventory of construction material, consumables, stores and spare parts at the Company’s one site having value Rs. 11.51 Lac for which criminal proceeding is on going in court of law. At the other site, pursuant to termination of a contract. Stocks valued at Rs. 251.20 Lac have boon taken over by the Client of that site, which is a Company fully owned by the GoM. and has been valued at tho time of taking over by tho Client, for which it has to give credit to to Company in the final accounts for that work, it terms of the Contract Conditions.

3. Investment in the Capital of a Partnership: Iho Company had entered into a partnership under tho name and style of VI MA Productions engaged in tho business of I V serials. I he firm was voluntarily dissolved vide Deed of Dissolution dated 23/01/2003. In terms of the agreements made with Mr. Vinay Govind Apte. one of the retiring partners, by 31/03/2014, ho will pay the Company a lump sum amount of Rs. 45 l.ac against Rs. 37.95 Lac shown as duo from VI MA in the Books of Accounts. Mr. Apte has paid Rs, 21 Lac in the previous year and Mr. Apte is bound in terms of a signed agreement with the Company to pay further Rs. IP l.ac before 30/09/2013 and Rs. 1 Lac before 30/09/2014.

4. In accordance with the Company's accounting policy, claims for extra work in respect of contracts, which in tho opinion ot tho Management aro recoverable, aro recognized in tho accounts depending on certainly of receipt. Contract recoipts.for the year ended 30/06/2001 and 30/06/2002 include such claims amount to Rs. 206,60 Lac and Rs. 388.58 L ac respectively.

5. Interest on advancos received by tho Company was recovered by SPPL through Company’s Running Account Bills and was duly accounted for by tho Company. Normally, such accounting treatment adequately records charge of interest. However, t!io contract was continuously broached by Shivashahi Punarvasan Prakalp Ltd. (SPPL) ab initio and was terminated in gross violation of tho terms of Contract, tho Company contends that SPPL has recovered interest from the Company, much in excess of what was rightfully due. The Company has not accepted these debits made by SPPL towards recovery of interest amounting to Rs. 470.86 Lac. No further claim has been made by SPPL. As such, no provision there for is considered necessary. The Company has filed a Recovery Suit for a sum of Rs. 23,672 Lac as of 18/03/2008 against SPPL in the Hon’ble Bombay High Court.

6. The information regarding amount overdue to small scale industrial undertaking and / or ancillary industrial suppliers on account of principal and / or interest as at the dose of tho period is not available. The Company has not obtained the information regarding their status of the small scale undertaking defined as under “Ihe Industries {Development and Regulation) Act, 1951" and “ The Interest on delay payments of small scale and ancillary undertakings Act, 1993".

7. No provision for Income Tax is made in view of carried forward losses of tho Company.

8. Balances under the head Loans and Advances, Deposits, Debtors and Creditors are taken as per books and are subject to confirmation and consequent adjustment, if any on reconciliation. In the opinion of the Management, these are realizable / payable in the ordinary course of business at the values stated there against.

9. The previous year’s figures have been regrouped / restated wherever necessary to conform with current years classification.

---

Mar 31, 2011

1. Preparation of Accounts on "Going Concern" Assumption: Although some circumstances such as the Company has not received a single contract for last eight years; the Company has incurred continuous losses for last many years, which has eroded net worth of the Company; the Company is passing through severe liquidity crisis and is unable to honour the commitment to Preference Shareholders, Banks, Financial Institutions and Public depositors; the legal matters against the Company are in process at various levels of judiciary like DRT by the banks; The Company has defaulted in payment of various statutory dues like Income Tax, FBT, Works Contract Tax, VAT etc. raise the doubts over Company's going concern status. The Management's view is that the Company is a going concern although the Company has not secured any contracts for last many years, this is only due to the Management's conscious decision to replace the construction contracting business with Property Development Business. The Liquidity crisis, and resultant inability of the Company to meet its liabilities to Preference shareholders and other creditors, is expected to change soon. The Company has been intermittently repaying the fixed deposit holders but has been unable to repay the fixed depositors as ordered by the Company Law Board vide its order dated 14th June 2010. The Promoters of the Company have now decided to sell some of their properties held through other private Companies, inter alia, to meet this requirement. Redemption of Preference Shares has to be done only from distributable profits. The Company expects to be able to turn the tables completely and to redeem the Preference Shares In near future. Legal matters are ongoing against the Company and also from the Company. The claims made by the Company in courts of law primarily the Government of Maharashtra & its undertakings are nearly 40 times claims of other parties against the Company. A careful perusal shall show that though there have been certain so-called defaults in payments of various Taxes, the Company has certain legal and sagacious grounds behind the non-payments and once these are settled, the apparent liabilities shall disappear. Even in the present circumstances, the Company has at least three ready property development options to turn itself around in the next 2 to 3 years. These projects shall generate for the Company sufficient liquidity in the next three years to meet all liabilities of the Company, to wipe off all its losses and to generate a healthy status. With this, the Company trusts that it has sound prospects and ought to be considered as a Going Concern. Based on this, the accounts have been prepared on 'going concern' basis.

2. In accordance with the Company's accounting policy, claims for extra work In respect of contracts, which in the opinion of the Management are recoverable, are recognized in the accounts depending on certainty of receipt. Contract receipts for the year-ended 30/06/2001 and 30/06/2002 include such claims amounting to Rs. 206.60 Lac and Rs. 388.58 Lac respectively.

3. Sundry Debtors / Other Receivables include the following, the status of which is given below:

(a) Debtors: Debtors outstanding for more than three years are Rs. 5,388.24 Lac, which includes Rs. 8.76 Lac from sub-contractors, Rs. 1,336.81 Lac from clients, Rs. 51.38 Lac from related parties, and Rs. 3,991.30 Lac from subsidiary. The Management is making necessary efforts for recovery of the same and is of the opinion that the ultimate loss if any on settlement of the above will not be material and hence no provision is presently considered necessary.

(b) Loans & advances: Rs. 764.10 Lac include, advance to Mr. P. P. Sheth, director of the company (Rs. 157.15 Lac); a dissolved, firm. Ad-dict, of which the Company was a partner (Rs. 16.95 Lac); advance paid to subsidiary, Mahakali Flyover Company Ltd. (Rs. 550 Lac) and flat booking advance to M&P Associates (A firm in which directors are partners) (Rs. 40 Lac). The Company has not provided any interest on above loans and advances.

4. Deposits: Deposits outstanding for over 3 years: Rs. 253.83 Lac has been deducted by various clients towards retention deposits. The Management is making necessary efforts for recovery of the same and is of the opinion that the ultimate loss if any on settlement of the above will not be material and hence no provision is presently considered necessary.

Rs. 202.13 Lac has been placed by the Company as a deposit with Yashodhan Hotels Pvt. Ltd., landlord of the Company's office premises. This is refundable if and when the Company vacates the premises of Yashodhan.

5. Contingent Liabilities (Not Provided For): Amounts in Rs. Lac

Particulars As on As on Claims against the Company not acknowledged s 31/3/11 31/3/10 as debts

Appeals by Income Tax Department against orders made in favour of the Company. 508 508

Sales Tax demand, against which application 936 - for withdrawal demand is pending with Sales Tax Officer ( For FY 01 -02 to FY 04-05)

Legal matters disputed by the Company: 13,385 3,477 Total of all claims against the Company by all parties incl. Banks. The management does not admit these as liabilities and has filed claims / counter-claims against these and other parties totaling to Rs. 3,90,802 Lac, which all are sub-judlce.

6. Preference share capital of Rs. 150 Lac was redeemable at par on 20/02/2006. These Shares have not yet been redeemed.

7. Investment In the Capital of a Partnership: The Company had entered Into a partnership under the name and style of VI-MA Productions engaged in the business of TV serials. The firm was voluntarily dissolved vide Deed of Dissolution dated 23/01/2003. In terms of the agreements made with Mr. Vinay Govind Apte, one of the retiring partners, by 31/03/2014, he will pay the Company a lump sum amount of Rs. 45 Lac against Rs. 37.95 Lac shown as due from VI-MA in the Books of Accounts. Mr. Apte has paid Rs. 21 Lac in the current year and the Company is confident of making the balance recovery. Necessary entries in the Books of Accounts will be passed only on realization of the amount from time to time.

8. Interest on advances received by the Company was recovered by SPPL through Company's Running Account Bills and was duly accounted for by the Company. Normally, such accounting treatment adequately records charge of interest. However, the contract was continuously breached by Shivashahi Punarvasan Prakalp Ltd. (SPPL) ab initio and was terminated in gross violation of the terms of Contract. The Company contends that SPPL has recovered interest from the Company, much in excess of what was rightfully due. The Company has not accepted these debits made by SPPL towards recovery of interest amounting to Rs. 470.86 Lac. No further claim has been made by SPPL. As such, no provision there for is considered necessary. The Company has filed a Recovery Suit for a sum of Rs. 23,672 Lac as of 18/03/2008 against SPPL in the Hon'ble Bombay High Court.

9. Andheri Flyover Project: Further to the last audit report, ARCIL's illegal action of handing over the Company's subsidiary's (MFCL's) Andheri flyover project has been in its final hearing stages in the Hon'ble Debt Recovery Appellate Tribunal. Auditors of MFCL while noting the confidence of its Management in reviving the project in foreseeable future have expressed their inability to form an opinion in this matter. They have relied on the Management perception while accepting the appropriateness of the "going concern" assumption in drawing up the subsidiary Company's accounts. The Company's debtors include an amount of Rs. 3,991.30 Lac due from MFCL as on 31/03/2011 (P.Y. Rs. 3,991.28 Lac). The Company's auditors have also expressed their inability to opine on the recoverability of this amount. Amount due from MFCL is fully recoverable as per the Management opinion and hence no provision is considered necessary.

10. The Comoanv's Long Term Investment in Subsidiary Mahakali Flyover Co. Ltd. fMFCL): Rs. 69.97 Lac: As per the Audited Balance Sheet of the MFCL, it has accumulated a loss of Rs. 2.50 Lac. ARCIL and UTI forced MFCL to default in repayment of loans. The matter as aforesaid is subjudice in the Hon'ble DRAT. MFCL's only project i.e. Andheri Flyover Project is incomplete due to these litigations. Auditors of MFCL while noting MFCL Management's confidence of reviving the Andheri Flyover Project have stated that they are unable to form an opinion on 'going concern' status of the Company and have relied upon MFCL Management's perception for accepting going concern assumption for drawing up MFCL accounts. Notwithstanding the above, in view of the improved trends in the real estate market in Mumbai, investments in equity of MFCL continue to be stated at cost. Considering the long-term involvement of the Company in MFCL, the Management considers that such valuation at cost is fair.

11. During the year ended 30/06/2002, the Company received Government Grant in Aid of Rs. 100 Lac through Shri. Shivaji Raigad Smarak Mandal, a Public Trust for specific asset being Ropeway at Raigad. In accordance with the Accounting Standard: 12 on "Accounting for Government Grants" issued by the Institute of Chartered Accountants of India, deferred income arising from such Government Grant has been allocated to income over the period and in the proportion in which depreciation on related asset is charged and Rs. 4.75 Lac being depreciation charged for the current year on the said asset has been credited to income. Net balance of Deferred Government Grant of Rs. 29.93 Lac pending its apportionment to profit and loss account has been disclosed as liability in the Balance Sheet.

12. Expenditure in Foreign Currency: Nil (P. Y. Rs. Nil)

13. Earnings in Foreign currency: Nil (P. Y. Rs. Nil)

14. The information regarding amount overdue to small-scale industrial undertaking and / or ancillary industrial suppliers on account of principal and / or interest as at the close of the period is not available. The Company has not obtained the information regarding their status of the small scale undertaking defined as under The Industries (Development and Regulation) Act, 1951" and "The interest on delayed payments of small scale and ancillary undertakings Act, 1993."

15. Balance of Loans / interest outstanding in respect of Bank of Maharashtra (BoM) have been settled by way of a Compromise Deed. Balance of Loans / interest outstanding in respect of Development Credit Bank Limited (DCB), Stressed Assets Stabilization Fund, as assignee of IDBI Bank and Andhra Bank (AB) were subject to their confirmation. Interest and other charges had been debited and provided in the accounts by the Company on the basis as set out in the earlier years.

(a) The agreement dated 15/12/2009 reached by the Company with BOM is under implementation with the last date of repayment re- scheduled from 31/03/2011 to 31/03/2012. However, amounts provided for as payable to BoM by the Company are not an admission by management of the Company's liability to BoM. Simple interest @12.75 p.a. is provided in books of accounts in absence of balance confirmation/ loan statement. Despite provision of certain sums in the books of accounts, the Management of the Company does not recognise these amounts as in fact payable to the Bank in view of the Counter Claims of the company against the Bank and the previsions do not amount to an admission of liability of the Company.

(b) The application filed by Andhra Bank (AB) In the Hon'ble Debts Recovery Tribunal (DRT), Pune under OA 6/2006 and company's counter-claim therein are still under adjudication. However, amounts provided for as payable to AB by the Company are not an admission of management of the Company's liability to AB. The simple interest @12 p.a. is provided in books of accounts in absence of balance confirmation/ loan statement. Despite provision of certain sums in the books of accounts, the Management of the Company does not recognise these amounts as in fact payable to the Bank in view of the Counter Claims of the company against the Bank and the provisions do not amount to an admission of liability of the Company.

(c) The application filed by Development Credit Bank Limited (DCB) (since replaced by Arcil) in the Hon'ble DRT, Mumbai under OA 43/2008 and the Company's counter-claim of Rs. 28.34 Crore as on 20/05/2008 in OA 6/2006 in the Hon'ble DRT, Pune are still under adjudication and hence the.amounts provided for as payable to DCB/ARCIL by the Company are not an admission by management of the Company's liability to DCB/ARCIL. The simple interest @12 p.a. is provided in books of accounts in absence of balance confirmation/ loan statement. Despite provision of certain sums in the books of accounts, the Management of the Company does not recognise these amounts as in fact payable to the Bank in view of the Counter Claims of the company against the Bank and the provisions do not amount to an admission of liability of the Company.

(d) The dues of the Company to Stressed Assets Stabilization Fund, as assignee of IDBI Bank were Rs. 4.95 Crore as on 01/04/2002. The Company has allowed provision of simple interest on the same at 12% p.a. based on principles as above. However, amounts provided for as payable to IDBI by the Company are not an admission by management of the Company's liability to IDBI. The simple interest @12 p.a. is provided in books of accounts in absence of balance confirmation/ loan statement. Despite provision of certain sums in the books of accounts, the Management of the Company does not recoonise these amounts as in fact payable to the Bank and the provisions do not amount to an admission of liability of the Company.

16. Deferred Taxes: The ultimate realization of the deferred tax assets is dependant upon the generation of future taxable income during the periods in which the temporary differences become deductible. These timing differences result in the net differed tax asset mainly on account of carry forward losses and unabsorbed depreciation under Income Tax Act, 1961. In absence of reasonable certainty that sufficient future taxable income will be available against which such deterred tax assets can be realized, deferred tax asset has not been recognized in these accounts.

17. During the year bank account with National Bank of Dubai is showing nil balance. However, no closing certificate from bank is available.

18. The Company's claim in respect of Investment Allowance for various years has been decided in favour of the Company by the Appellate Authorities. The Department is in appeal to higher authorities in respect thereof. Considering the facts of the case, no actual liability is expected to arise.

19. Additional information pursuant to the provisions of Para 3,4C and 4D of. Part II of Schedule VI to the Companies Act, 1956 is not given, as construction being service activity is not covered under Para 3(ii) (C) of Schedule VI to the Companies Act, 1956.

20. Related Party Transaction: As per Accounting Standard-18 on "Related Party Disclosure" issued by the Institute of Chartered Accountants of India, the Company's related parties and transaction with them are disclosed below:

List of Related parties with whom transactions have taken place in the past or in the current year and relationship:

Name of the Related Party Relationship Mahakali Flyover Company Ltd. Subsidiary Company

Yashodhan Hotels Pvt. Ltd. Associate Company

Jog Fabricators Pvt. Ltd. Associate Company Jog Agro Farms Pvt. Ltd. Associate Company

Ad-Dict Partner, VI-MA Productions (Dissolved 23/01/2003. Note 9)

Mr. Madhav V. Jog Key Management Personnel

Mrs. Sonia Madhav Jog Relative of Key Management Personnel

Mrs. Mohini S. Limaye Relative of Key Management Personnel

Mr. M. K. Shirude Key Management Personnel

Mr. P. P. Sheth Key Management Personnel

21. As the Company Is engaged only in one line of business i.e. Infrastructure Projects, no separate reportable segment is identifiable as required by Accounting Standard - 17 on "Segment Reporting".

22. Balances under the head Loans and Advances, Deposits, Debtors and Creditors are taken as per books, and are subject to confirmation and consequent adjustment, if any on reconciliation. In the opinion of the Management, these are realizable / payable in the ordinary course of business at the values stated there against.

23. No provision for Income Tax is made in view of carried forward losses of the Company.

24. Previous period figures have been regrouped and / or re-arranged wherever considered necessary.

25. The current accounting year ends on 31st March 2011 i.e. is of 12 months. The previous accounting period is from 01st January 2009 to 31st March 2010 i.e. of 15 months.

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Mar 31, 2010

1. Preparation of Accounts on "Going Concern* Assumption:

Although some circumstances such as the Company has not received a single contract for last eight years: the Company has incurred continuous losses for last many years, which has eroded net worth of the Company; the Company is passing through severe liquidity crisis and is unable to honour the commitment to Preference Shareholders, Banks, Financial Institutions and Public depositors; the legal matters against the Company are in process at various levels of judiciary like DRT by the banks; The Company has defaulted in payment of various statutory dues like Income Tax, FBT, Works Contract Tax, VAT etc. raise the doubts over Companys going concern status.

The Managements view is that the Company is a going concern because the Company has not secured any contracts for last many years only due to the Managements conscious decision to replace the construction contracting business with Property Development Business. Compromise recently entered into with Bank of Maharashtra (BoM) warranted reversal of entries made for provision towards interest to BoM as well as Andhra Bank (AB) and Development Credit Bank (DCB). Such reversals cause the losses to come down substantially to help the Companys net worth. The Liquidity crisis and resultant inability of the Company to meet is liabilities to Preference shareholders and other creditors is expected to change soon. The Company has been intermittently repaying the fixed deposit holders and expects to repay the fixed depositors as ordered by the Company Law Board vide its order dated 14* June 2010. Redemption of Preference Shares shall have to be done only from distributable profits. The Company expects to be able to turn the tables completely and to redeem the Preference Shares in near future. Legal matters are ongoing against the Company and also from the Company. The claims made by the Company in courts of law primarily the Government of Maharashtra & its undertakings are nearly 40 times claims of other parties against the Company. A careful perusal shall show that though there have been certain so-called defaults in payments of various Taxes, the Company has certain legal and sagacious grounds behind the non-payments and once these are settled, the apparent liabilities shall disappear. Even in the present circumstances, the Company has at least three ready property development options to turn itself around in the next 2 to 3 years. These Andheri Flyover, Sangamwadi and Kharadi projects together shall generate for the Company sufficient liquidity in the next three years to meet all liabilities of the Company, to wipe off all its losses and to generate a healthy status. With this, the Company trusts that it has sound prospects and ought to be considered as a Going Concern.

Based on this, the accounts have been prepared on going concern basis.

2. During the period, the Company has reviewed of all old and non-moving balances of receivables and payables

(a) Account of each and every receivable was scrutinized by Management in details based on the data available with the Company. As a result of such scrutiny, the Company has property accounted for and written off receivables of Rs. 432 Lac comprised of Rs. 12 Lac from associates, Rs. 200 Lac from a Bank and Rs. 220 Lac from others.

(b) Account of each and every present and past employee was scrutinized by Management in details based on the personal data available with the Company. As a result of this detailed scrutiny and verification, following emerged and has been corrected where necessary:

i) In several cases, when the employees left, they owed money to the Company, which was appearing as recoverable. Due to unavailability of details of their present location, such recoverable amounts have been written off.

ii) In several cases, employees full and final settlements were already done and paid. But the accounting had remained to be done. This has been corrected.

iii) Actual working of present and ex-employee for Gratuity payable, Bonus payable and leave encashment payable is done.

iv) In several cases where balance dues were less than Rs. 2,000/- per person and where the employees whereabouts are unknown, balances were written back.

As result of above, receivable of Rs. 3.59 Lac is written off and payable of Rs. 81.06 Lac is written back.

(c) The Company has made write back of payable of Rs. 935 Lac, which includes deposits, advances and other payables. These include creditors whose balances had remained unclaimed and static for five years or more and whose supplies were not accepted by the Company etc.

3. In accordance with the Companys accounting policy, claims for extra work in respect of contracts, which in the opinion of the Management are recoverable, are recognized in the accounts depending on certainty of receipt. Contract receipts for the year-ended 30/06/2001 and 30/06/2002 include such claims amounting to Rs. 206.60 Lac and Rs. 388.58 Lac respectively.

4. Sundry Debtors / Other Receivables include the following, the status of which is given below:

(a) Debtors: Debtors outstanding for more than three years are Rs. 5,393.04 Lac which includes Rs. 8.76 Lac from sub-contractors, Rs. 1,336.81 Lac from clients, Rs. 64.88 Lac from related parties and Rs. 3,991.28 Lac from subsidiary. The Management is making necessary efforts for recovery of the same and is of the opinion that the ultimate loss if any on settlement of the above will not be material and hence no provision is presently considered necessary.

(b) Loans & advances: Rs. 745.10 Lac include, advance to Mr. Sheth (Rs. 157.15 Lac); a dissolved firm, Ad-dict, of which the Company was a partner (Rs. 37.95 Lac); advance paid to subsidiary, Mahakali Flyover Company Ltd. (Rs. 550 Lac) and flat booking advance to M&P Associates (A firm in which directors are partners) (Rs. 40 Lac). The Company has not provided any interest on above loans and advances.

5. Advances and Deposits: Deposits outstanding for over 3 years: Rs. 253.83 Lac has been deducted by various clients towards retention deposits. The Management is making necessary efforts for recovery of the same and is of the opinion that the ultimate loss if any on settlement of the above will not be material and hence no provision is presently considered necessary. Rs. 200.54 Lac has been placed by the Company as a deposit with Yashodhan Hotels Pvt. Ltd., landlord of the Companys office premises. This is refundable if and when the Company vacates the premises of Yashodhan.

6. Contingent Liabilities (Not Provided For):

Particulars As on As on 31/03/2010 31/12/2008 Claims against the Company not acknowledged as debts (Rs.Lac) (Rs.Lac)

Appeals by Income Tax Department against orders made in favour of the Company. 50.8 50.8

Corporate Guarantee given on behalf of Subsidiary Company Nil 1,100

Legal matters disputed by the Company: This totals all claims against the Company by all parties including Banks. The Company does not admit these as liabilities and has files claims / counter-claims against these 3,477 29

and other parties totaling to Rs. 3, 92,387 Lac, which all are sub-judice.

Principal amount and Interest to a party Nil 2,632

Undercharge Interest on Loans (Refer Note no. 21a) 806 Nil



Preference share capital of Rs. 150 Lac was redeemable at par on 20/02/2006. These Shares have not yet been redeemed and dividend has not been paid on the same after 2002.

7. Public fixed deposits matured for repayment and claimed by the depositors which remain unpaid as on 31/03/2010 amount to Rs. 69.55 Lac in case of small depositors and Rs. 45.53 Lac in all other cases. Appropriate intimation of default has been sent to the Company Law Board, Mumbai, in respect of each month since default. The Company has stopped accepting / renewing fixed deposits from the date of default. The Company has been repaying the Deposits as and when possible. The Company applied under section 58A (9) of Company Act, 1956 to Central Government for granting extension of repayment of deposits. The Company Law Board vide its order dated 14/06/2010, was allowed the Company to repay the overdue deposits by 31/03/2011, subject to that half of the deposits have to be repaid by 31/12/2010.

8. Investment in the Capital of a Partnership: The Company had entered into a partnership under the name and style of VI-MA Productions engaged in the business of TV serials. The firm was voluntarily dissolved vide Deed of Dissolution dated 23/01/2003. In terms of the agreements made with Mr. Vinay Govind Apte, one of the retiring partners, he will compensate the Company by payment of a lump sum amount of Rs. 45 Lac latest by 31/03/2014. Mr. Apte has paid first installment of Rs. 4 Lac in the current year and the Company is hopeful of making the balance recovery. Necessary entries in the Books of Accounts will be passed only on realization of the amount or on confirmation of ultimate recoverability of the same.

9. Interest on advances received by the Company was recovered by SPPL through Companys Running Account Bills and was duly accounted for by the Company. Normally, such accounting treatment adequately records charge of interest. However, the contract was continuously breached by Shivashahi Punarvasan Prakalp Ltd. (SPPL) ab initio and was terminated in gross violation of the terms of Contract. The Company contends that SPPL has recovered interest from the Company, much in excess of what was rightfully due. The Company has not accepted these debits made by SPPL towards recovery of interest amounting to Rs.470.86 Lac. No further claim has been made by SPPL. As such, no provision there for is considered necessary. The Company has filed a Recovery Suit for a sum of Rs. 23,672 Lac as of 18/03/2008 against SPPL in the Honble Bombay High Court.

10. After publication of an Arbitration Award favouring a sub-contractor, Rs. 1,889.89 Lac was payable. The Company entered into consent terms with the sub-contractor, in supercession of the Arbitration Award. As per consent terms, amounts were payable to the sub-contractors upon the Company receiving its dues out of an Arbitration Award from its Client. However, consequent to the unfair attitude of this subcontractor to file unnecessary Contempt Petitions against the Company and its Directors, which have since been summarily dismissed by the Court of Law, the Company considers itself not bound to implement the said consent terms any more and hence considers no provisions to be necessary on that account.

11. Andheri Flyover Project: Further to the last audit report, ARCILs illegal action of handing over the Companys subsidiarys (MFCLs) Andheri flyover project has been in its final hearing stages in the Honble Debt Recovery Appellate Tribunal. Auditors of MFCL while noting the confidence of its Management in reviving the project in foreseeable future have expressed their inability to form an opinion in this matter. They have relied on the Management perception while accepting the appropriateness of the "going concern" assumption in drawing up the subsidiary Companys accounts. The Companys debtors include an amount of Rs. 3991.28 Lac due from MFCL as on 31/03/2010 (P.Y. Rs.3,991.11 Lac). The Companys auditors have also expressed their inability to opine on the recoverability of this amount. Amount due from MFCL is fully recoverable as per the Management opinion and hence no provision is considered necessary.

12. The Companys Long Term Investment in Subsidiary Mahakali Flyover Co. Ltd. (MFCL): Rs. 69.97 Lac: As per the Audited Balance Sheet of the MFCL, it has accumulated a loss of Rs. 2.50 Lac. ARCIL and UTI forced MFCL to default in repayment of loans. The matter as aforesaid is subjudice in the Honble DRAT. MFCLs only project i.e. Andheri Flyover Project is incomplete due to these litigations. Auditors of MFCL while noting MFCL Managements confidence of reviving the Andheri Flyover Project have stated that they are unable to form an opinion on going concern status of the Company and have relied upon MFCL Managements perception for accepting going concern assumption for drawing up MFCL accounts. Notwithstanding the above, in view of the improved trends in the real estate market in Mumbai, investments in equity of MFCL continue to be stated at cost. Considering the long term involvement of the Company in MFCL, the Management considers that such valuation at cost is fair.

13. During the year ended 30/06/2002, the Company received Government Grant in Aid of Rs. 100 Lac through Shri. Shivaji Raigad Smarak Mandal, a Public Trust for specific asset being Ropeway at Raigad. In accordance with the Accounting Standard: 12 on "Accounting for Government Grants" issued by the Institute of Chartered Accountants of India, deferred income arising from such Government Grant has been allocated to income over the period and in the proportion in which depreciation on related asset is charged and Rs. 5.93 Lac being depreciation charged for the current year on the said asset has been credited to income. Net balance of Deferred Government Grant of Rs. 34.69 Lac pending its apportionment to profit and loss account has been disclosed as liability in the Balance Sheet.

14. The information regarding amount overdue to small-scale industrial undertaking and / or ancillary industrial suppliers on account of principal and / or interest as at the close of the period is not available. The Company has not obtained the information regarding their status of the small scale undertaking defined as under "The Industries (Development and Regulation) Act, 1951" and "The interest on delayed payments of small scale and ancillary undertakings Act, 1993."

15. Balance of Loans / interest outstanding in respect of Bank of Maharashtra (BoM) have been settled by way of a Compromise Deed. Balance of Loans / interest outstanding in respect of Development Credit Bank Limited (DCB), Stressed Assets Stabilization Fund, as assignee of IDBI Bank and Andhra Bank (AB) were subject to their confirmation. Interest and other charges had been debited and provided in the accounts by the Company on the basis as set out earlier.

(a) Vide an agreement dated 15/12/2009, the Company reached an agreement with BOM for all its dues, whereby the Companys total liability is fixed at Rs. 30 Crore as on 31/03/2009 plus simple future interest on reducing balance at 12.75% p.a. against BoMs claim on 22/12/2008 of Rs. 41.68 Crore. In view of this above, interest is charged on Rs. 30 Crore on the above basis from 31/03/2009.

In the unlikely event of failure of this agreement, latest claim of BoM against the Company of Rs. 41.68 Crore as of 22/12/2008 is countered by the Companys counter-claim of Rs. 124.18 Crore as on 20/05/2008. Hence, in such event the Company does not recognise either the principal or the interest or any other sum to be due payable by it to BoM and to the contrary the Company contends the adjudicated net final sum to be due to it from BoM, which of course has not been taken any cognisance of in the preparation of the accounts.

Hence, amounts provided for as payable to BoM by the Company are not an admission of the Companys liability to BoM.

(b) Andhra Bank (AB) proceeded against the Company in the Honble Debts Recovery Tribunal (DRT), Pune under OA 6/2006 with a claim of Rs. 23.38 Crore as on 31/10/2006. This includes an ex-facie error of inclusion of returned / expired Bank Guarantees of Rs. 3.64 Crore. The Company treats the claim of the Bank with the exclusion of this amount of Bank Guarantee to be Rs. 19.74 Crore. The Company has provided for simple interest on this amount at 12% p.a. from the date of filing of the suit i.e. 31/10/2006.

This claim of AB is countered by the Companys counter-claim of Rs. 88.22 Crore as on 20/05/2008 and hence, the Company does not recognise either the principal or the interest or any other sum to be due payable by it to AB and to the contrary the Company contends the adjudicated net final sum to be due to it from AB, which of course has not been taken any cognisance of in the preparation of the accounts.

Hence, amounts provided for as payable to AB by the Company are not an admission of the Companys liability to AB.

(c) Development Credit Bank Limited (DCB) assigned its Company related portfolio to Assets Reconstruction Company India Limited (ARCIL) and proceeded against the Company to DRT, Mumbai under OA 43/2008 with a claim of Rs. 14.91 Crore as on 27/02/2008. The Company has provided for simple interest on this amount at 12% p.a. from the date of filing of the suit i.e. 27/02/2008.

This claim of DCB / ARCIL is countered by the Companys counter-claim of Rs. 28.34 Crore as on 20/05/2008 and hence the Company does not recognise either the principal or the interest or any other sum to be due payable by it to DCB / ARCIL and to the contrary the Company contends the adjudicated net final sum to be due to it from DCB / ARCIL, which of course has not been taken any cognisance of in the preparation of the accounts.

Hence, amounts provided for as payable to DCB/ARCIL by the Company are not an admission of the Companys liability to DCB / ARCIL

(d) The dues of the Company to Stressed Assets Stabilization Fund, as assignee of IDBI Bank were Rs. 4.95 Crore as on 01/04/2002. The Company has allowed provision of simple interest on the same at 12% p.a. based on principles as above.

Amounts as provided for as payable to IDBI by the Company are not an admission of the Companys liability to IDBI.

16. Bank Balances include, a balance with National Bank of Dubai of Rs. 1,90,630/- as per books of accounts. Bank statement or balance confirmation certificate regarding this account is not available.

17. Deferred Taxes: The ultimate realization of the deferred tax assets is dependant upon the generation of future taxable income during the periods in which the temporary differences become deductible. These timing differences result in the net differed tax asset mainly on account of carry forward losses and unabsorbed depreciation under Income Tax Act, 1961. In absence of reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized, deferred tax asset has not been recognized in these accounts.

18. The Companys claim in respect of Investment Allowance for various years has been decided in favour of the Company by the Appellate Authorities. The Department is in appeal to higher authorities in respect thereof. Considering the facts of the case, no actual liability is expected to arise.

19. Additional information pursuant to the provisions of Para 3, 4C and 4D of, Part II of Schedule VI to the Companies Act, 1956 is not given as construction being service activity is not covered under Para 3(ii) (C) of Schedule VI to the Companies Act, 1956.

20. As the Company is engaged only in one line of business i.e. Infrastructure Projects, no separate reportable segment is identifiable as required by Accounting Standard - 17 on "Segment Reporting".

21. Balances under the head Loans and Advances, Deposits, Debtors and Creditors are taken as per books, and are subject to confirmation and consequent adjustment, if any on reconciliation. In the opinion of the Management, these are realizable / payable in the ordinary course of business at the values stated there against.

22. The Companys accounting period is from 01/01/2009 to 31/03/2010. Consequently, the accounting period consists of 15 months. The previous period being of 12 months upto 31/12/2008.

23. No provision for Income Tax is made in view of carried forward losses of the Company.

24. Previous period figures have been regrouped and / or re-arranged wherever considered necessary. Schedule A to M form an integral part of the accounts.