INDEPENDENT AUDITORS REPORT

Transcription

1 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF M/s, Sylvan Acres Reality Private Limited Report on the Financial Statements: We have audited the accompanying financial statements of Sylvan Acres Reality Private Limited ( the company ),which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements: The Company s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ( the Act ) with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company s preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances but not the purpose of expressing any opinion on whether the company has in place an adequate internal financial control system over financial reporting & operating effectiveness of such control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements, Opinion: In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015

2 b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date, Report on other Legal and Regulatory Requirements: As required by the Companies (Auditor s Report) Order, 2015 ( the Order ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable. As required by section 143(3) of the Act, we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, e) On the basis of written representations received from the directors as on 31 March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015, from being appointed as a director in terms of Section 164(2) of the Act, h) With respect to the other matters to be included in the Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014, in our opinion and to the best of our information and according to the explanations given to us : (i) (ii) The Company does not have any pending litigations which would impact its financial position, The Company does not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses, (iii) There are no requirements for transferring amounts required to be transferred, to the Investor Education & Protection Fund by the Company. FOR NSVM & Associates Chartered Accountants Firm Reg. No. : S (V.S Ranganathan) PARTNER Membership No, Place: Bangalore Dated: 26-May-2015

3 Annexure to the Auditors Report The annexure referred to in our report to the members of M/s. Sylvan Acres Realty Private Limited (The Company) for the year ended 31 st March, (i) (ii) (ii) (ii) (iii) (a) to (c) The company does not hold any fixed assets as at and as such the reporting under these clauses are not applicable to this company. a) The physical verification of inventory has been conducted at reasonable intervals by the management. b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification and wherever discrepancies are noticed, the same have been properly dealt with in the books of accounts. According to the information and explanations given to us, the company has granted advances/loans to the wholly owned holding company covered in the register maintained under section 189 of the Companies Act (a) & (b) The loan granted to the above said company does not stipulate any principal repayment term. However the company is charging interest applicable. Hence we are of the opinion that regularity or otherwise does not apply. (iv) (v) (vi) (vii) (vii) (vii) (viii) In our opinion and according to the information and explanation given to us, there are adequate internal controls procedures commensurate with the size of the company and nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. In our opinion and according to the information and explanations given to us the company has not accepted deposits, whether under the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under. Otherwise than purchase of land & process of approval of housing project, the developmental activities has not yet commenced. Hence we are of the opinion,the maintenance of cost records is not relevant. (a) The company is regular in depositing undisputed statutory dues with the appropriate authorities (b) There are no cases wherein the dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess have not been deposited on account of any dispute. c) There are no amounts required to be transferred to Investors education and Protection Fund and as such our comment is nil. The company which has no accumulated losses as at and the company has not incurred any cash loss for the year under audit. However the company has incurred cash losses of Rs 51,177/- for the immediately preceding year.

4 (ix) (x) (xi) (xii) As per our information and opinion, the company has not defaulted in repayment of dues to a financial institution or bank or debenture holders The company has given guarantee for loans taken by holding company from bank or financial institutions & in our opinion the same is not prejudicial interest of the company. The company has not raised any term loans and hence this clause is not applicable. According to the information and explanations given by the company and based on our audit no fraud on or by the company has been noticed or reported during the course of audit. FOR NSVM & Associates Chartered Accountants Firm Reg. No S Place: Bangalore Dated: (VS Ranganathan) PARTNER Membership No

5 SYLVAN ACRES REALTY PVT. LTD. BALANCE SHEET AS AT 31st MARCH, 2015 No. As at As at I EQUITY AND LIABILITIES 1. Shareholder's Funds a. Share Capital 1 100,000, ,000,000 b. Reserves and Surplus 2 489,417, ,116,525 c. Money received against share warrants Non-Current Liabilities - 3. Current Liabilities a. Short term borrowings - - b Trade payables - - c Other current liabilities 3 78, ,472 d Short-term provisions 4 21,300,000 - Total 610,796, ,448,997 II ASSETS 1. Non-current assets a. Fixed assets i. Tangible assets - - ii. Intangible assets - - iii. Capital work-in-progress - - b. Non-current investments - - c. Deferred tax assets (net) - - b. Long term loans and advances - - e. Other non-current assets Current assets a. Current investments - - a. Inventories 5 34,034,095 33,062,265 b. Cash and Cash Equivalents 6 3,606,430 1,918,379 c. Short-term loans and advances 7 573,155, ,468,353 Total 610,796, ,448,997 s to the Accounts 11 In terms of our report attached For NSVM & Associates FRN S Chartered Accountants For and on behalf of the Board (V S Ranganathan) (Shodhan J Lokhande) (Rajkumar P V) Partner Director Director M. No Place : Bangalore Place : Bangalore Date : Date :

6 SYLVAN ACRES REALTY PVT. LTD. STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED ON 31ST MARCH, 2015 No. For the year ended For the year ended I. Revenue from operations- Gross - - II. Other Income 8 55,705,382 65,340 III. Total Revenue (I +II) 55,705,382 65,340 IV. Expenses: Finance costs - - Cost of Construction Other expenses , ,517 Total Expenses 104, ,517 V. Profit before exceptional and extraordinary items and tax (III - IV) 55,600,875 (51,177) VI. Profit before extraordinary items and tax (V - VI) 55,600,875 (51,177) VII. Extraordinary Items * - VIII. Profit before tax (VII - VIII) 55,600,875 (51,177) IX. IX. Tax expense: X. (1) Current tax - 21,300,000 - X. Profit(Loss) for the period from continuing operations (VIII- IX) 34,300,875 (51,177) XI. XI. Profit/(Loss) for the period 34,300,875 (51,177) XII. XII. Earning per equity share (Face Value per share Rs.100/-): (1) Basic & Diluted (0.10) In terms of our report attached For NSVM & Associates FRN S Chartered Accountants For and on behalf of the Board (V S Ranganathan) (Shodhan J Lokhande) (Rajkumar P V) Partner Director Director M. No Place : Bangalore Place : Bangalore Date : Date :

7 SYLVAN ACRES REALTY PVT. LTD. Cash Flow Statement for the year ended 31 March, 2015 For the year ended 31 March, 2015 For the year ended 31 March, 2014 Amount in Rs Amount in Rs Amount in Rs Amount in Rs A. Cash flow from operating activities Net Profit / (Loss) before extraordinary items and tax 55,600,875 (51,177) Adjustments for: Interest income (55,705,382) (55,705,382) (65,340) (65,340) Operating profit / (loss) before working capital changes (104,507) (116,517) Changes in working capital: Adjustments for (increase) / decrease in operating assets: Decrease in Current Liability - 309,884 Decrease in Short term provisions (23,877) Increase in Inventories - (33,062,265) Increase in long term loans and advances (5,222,622) Decrease in Short-term loans and advances 33,068,353 Increase in Short-term loans and advances - - (4,930,527) Net cash flow from / (used in) operating activities (A) (104,507) (5,047,044) B. Cash flow from investing activities Proceeds from sale of investments 5,000,000 Net cash flow from / (used in) investing activities (B) - 5,000,000 C. Cash flow from financing activities Interest Received 55,705,382 65,340 Net cash flow from / (used in) financing activities (C) 55,705,382 65,340 Net increase / (decrease) in Cash and cash equivalents (A+B+C) 55,600,875 18,296 Cash and cash equivalents at the beginning of the year 1,918,379 1,900,083 Cash and cash equivalents at the end of the year 57,519,254 1,918,379 Cash and cash equivalents at the end of the year 57,519,254 1,918,379 Comprises: (a) Cash on hand 10,982 (b) Balances with banks 3,606,430 1,907,397 3,606,430 1,918,379 See accompanying notes forming part of the financial statements In terms of our report attached. For N S V M & Associates, Chartered Accountants Firm Registration No S For and on behalf of the Board of Directors (V.S.Ranganathan) (Shodhan J Lokhande) (Rajkumar P V) Partner Director Director M.No Place : Bangalore Place : Bangalore Date : Date :

8 SYLVAN ACRES REALTY PVT. LTD. s forming part of the Balance Sheet as on 31st March, 2015 NOTE 1 - SHARE CAPITAL As at As at Authorised: 5,00,000 (Previous year 5,00,000) Equity shares of Rs. 100/- each 50,000,000 50,000,000 50,00,000 (Previous year 50,00,000) Optionally convertible redemable preference shares 50,000,000 50,000,000 of Rs. 10/- each 100,000, ,000,000 Issued: 5,00,000 (Previous year 5,00,000) Equity shares of Rs. 100/- each 50,000,000 50,000,000 50,00,000 (Previous year 50,00,000) Optionally convertible redemable preference shares 50,000,000 50,000,000 of Rs. 10/- each 100,000, ,000,000 Subscribed and Paid up: 5,00,000 (Previous period 5,00,000) Equity shares of Rs. 100/- each 50,000,000 50,000,000 50,00,000 (Previous year 50,00,000) Optionally convertible redemable preference shares of Rs. 10/- each 50,000,000 50,000,000 Total 100,000, ,000,000 Reconciliation of the no. of shares outstanding at the beginning and at the end of the year: As at As at As at As at No of shares Amount No of shares Amount No of shares outstanding at the beginning of the year - Equity shares 500,000 50,000, ,000 50,000,000 - Preference shares 5,000,000 50,000,000 5,000,000 50,000,000 Add: Additional shares issued during the year - Equity shares Preference shares Less: Shares forfeited/bought back during the year - Equity shares Preference shares No of shares outstanding at the end of the year - Equity shares 500,000 50,000, ,000 50,000,000 - Preference shares 5,000,000 50,000,000 5,000,000 50,000,000 s: (b)the Company has two classes of shares namely equity and preference shares. The Rights attached to equity shareholders are as under: 1. Each shareholder is eligible for one vote for per share held 2 Dividends are to be approved in the general meeting based on and not exceeding the recommendation of the board of directors 3. In the event of liquidation, the equity shareholders are eligible to receive the remaining asset of the company after distribution of all preferential amounts in proportion to their shareholding 4. Each Share holder has a right to inspect the statutory registers of the company as per the provisions of the Companies act, Each and every share holder has a right to participate in the share holders's meetings as and when called by the company subject to provisions of the companies act, iii) Number of shares held by each shareholder holding more than 5% shares in the company are as follows: Holding As at Holding As at % % No of shares No of shares Equity Shares: Kolte Patil Developers Ltd. 100% 500, % 500,000 Preference Shares: Kolte Patil Developers Ltd. 100% 5,000, % 5,000,000 (d) Shares reserved for issue under options & contracts/commitments for sale of shares /disinvestment, including the terms & amounts - NIL and Not Applicable (e) For period of 5 years immediately preceding the balance sheet date aggregate number and class of shares - Allotted as fully paid up pursuant to contract (s) without payment being received in cash - NIL and Not Applicable - Alloted as fully paid up by way of bonus shares -NIL and Not Applicable - Bought back.-nil and Not Applicable (f) Terms of any securities convertible into equity /preference shares issued along with the earliest date of conversion descending order startig from the farthest such date - NIL and Not Applicable. (g)issue of securities made for a specific purpose, the whole or part of the amount has not been used for the specific at the balance sheet date - NIL (h).the Company has total Rs. 5,00,00,000/- preference share capital divided into 50,00,000 shares of Rs. 10 each. (i) % Optionally Convertible Redeemable Preference Shares (OCRPS) (j).these OCRPS are redeemable at the end of 5 years from the date of allotment of the OCRPS or such revised period as may be decided at the sole discretion and consent of the investor, the Company is liable to redeem the OCRPS at a premium as may be decided at the time of redemption, the Company may redeem OCRPS before the redemption period. (k).the investor has right to convert the OCRPS the whole or part of the OCRPS into such number of fully paid up equity shares as may be decided by the Board of Directors of the Company upon expiry of 3 years from the date of allotment but prior to redemption period. The Board of Directors along with subscribers shall decide at the time of conversion, the premium, if any to be offered to the subscribers upon conversion of the OCRPS.

9 SYLVAN ACRES REALTY PVT. LTD. s forming part of the Balance Sheet as on 31st March, 2015 NOTE 2 - RESERVES AND SURPLUS As at As at a) Securities Premium Account on preference share capital : Opening Balance 450,000, ,000,000 Additions on shares issued during the year - 450,000, ,000,000 b) Surplus i.e. Balance in Profit and Loss statement As per last Balance Sheet 5,116,525 5,167,702 Add : Profit/(Loss) for the period 34,300,875 (51,177) 39,417,400 5,116,525 Total 489,417, ,116,525 NOTE 3 - OTHER CURRENT LIABILITES As at As at a) Provision for audit fees 73,652 16,854 b) Professional fees payable - 5,618 c) TDS Payable 5, ,000 Total 78, ,472 NOTE 4 - SHORT TERM PROVISIONS As at As at a)provision for employee benefit - - b) Provision-Others (other than employee benefits): ii) Provision for Income tax(net of Advance Tax Rs.NIL/- 21,300,000 - AY ) Total 21,300,000 -

10 SYLVAN ACRES REALTY PVT. LTD. s forming part of the Balance Sheet as on 31st March, 2015 NOTE 5 - INVENTORIES As at As at Work in Progess 34,034,095 33,062,265 Total 34,034,095 33,062,265 *WIP valued at lower of cost or market value) NOTE 6 - CASH AND CASH EQUIVALENTS As at As at 1) Balances with banks 3,606,430 1,907,397 2) Cash on hand - 10,982 Total 3,606,430 1,918,379

11 SYLVAN ACRES REALTY PVT. LTD. s forming part of Statement of Profit and Loss for the Period ended 31st March, 2015 NOTE 7 - SHORT TERM LOANS & ADVANCES As at As at Unsecured, considered good unless otherwise stated A) Loans and Advances to related parties: i) Kolte Patil Developers Ltd. 562,231, ,515,615 B) Other Loans and Advances: i) TDS Receivable 10,923,756 6,952,738 ii) Other Advances - Total 573,155, ,468,353 NOTE 8 - OTHER INCOME As at As at a) Interest on Fixed Deposit - 65,340 b) Interest on Intercorporate loan 55,602,526 - c) Interest on Income Tax Refund 102,856 Total 55,705,382 65,340 NOTE 9 - Cost of Construction As at As at Opening work in progress 33,062,265 - Add: Cost incurred during the year Developent charges 718,380 33,062,265 professional fees site 253,450-34,034,095 33,062,265 Less : Transferred to closing work in progress 34,034,095 33,062,265 Total - - NOTE 10 - OTHER EXPENSES As at As at a) Miscellaneous expenses 34,377 94,045 b) Interest on TDS 13,950 b) Payment to auditors i) Audit Fees 56,180 22,472 Total 104, ,517

12 SYLVAN ACRES REALTY PVT LTD s forming part of the financial statements I II Corporate information Syvlan Acres Realty Private Limited (SARPL' or 'The Company') was incorporated on 27th October 2005 as a closely held private limited company under the Companies Act 1956, to carry on the business of construction and development of residential and commercial complexes, flats, shoping malls etc Significant accounting policies The company is a medium sized company as defined in Accounting Standards as notified under section 133 of Comapnies Act Accordingly, the company has complied with the Accounting Standards as applicable thereon and accounting policies suitably applicable thereto. 1 Basis of accounting and preparation of financial statements a) 'The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under section 133 of Companies Act b) The financial statements are prepared under the historical costs convention, on the accounting principles of a going concern. c) Accounting Policies not specifically referred to otherwise are consistent and in consonance with the applicable accounting standards prescribed by the Companies Act 2013 under section 133. d) All expenses and income to the extent ascertainable with reasonable certainity are accounted for on accrual basis. e) The preparation of financial statements in confirmity with generally accepted accounting principles ( GAAP) requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual result could differ from these estimates. Any revision to accounting estimates is recognised prospectively. f) All assets and liabilities have been classified as current and non-current as per the company's normal operating cycle and other criteria set out in the schedule III to the companies Act, Based on the nature of products and the time between the acquisition of assets for processing and their realisiation in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities. 2 Inventories Inventories are valued at the lower of cost and the net realisable value. 3 Cash and cash equivalents Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. Continued..

13 SYLVAN ACRES REALTY PVT LTD s forming part of the financial statements 4 Depreciation and amortisation Schedule II to the Companies Act 2013, requires systematic allocation of the depreciable amount on an asset over its useful life. The Depreciable amount of an Asset is the cost of the asset or other amount substituted for cost less its residual value. The Ministry of Corporate Affairs (MCA) vide its notification dated has appointed as the date from which Schedule II comes into force.the Company has adopted useful life for various category of Assets as specified in Part C of Schedule II of the Act. Part C of Schedule II also lays down that the residual value should be taken at not more than 5 % of the cost of the Asset. In respect of existing assets transition provisions have been specified in the Act. The Company has accordingly provided depreciation keeping in view the provisions of the Act, and the transition provisions as specified. Where there is a contradiction or divergence of views between the Accounting standards as specifed and the provisions of the Act the Company has followed the provisions as laid down in the Act. Retirement/Disposal : As a matter of consistent policy adopted by the company in respect of assets which are no more in existence or ceased to exist, the same have been discarded from the fixed assets. Further in cases where the depreciation on the assets have been fully written off, the residual value of 5% or the value continued in the books are carried forward without applying further depreciation on the same. Transition Provision : In cases where the written down value of asset is more than 5% even after expiry of useful life of the asset, then diffence amount of the asset is adjusted as transitional loss and charged to Profit and Loss & Shown as an exceptional item. Addition to fixed assets : Where asset value is less than Rs. 5000/- the same is treated as revenue expenditure. Addition/Disposal of an asset : In case of Addition/sale of asset including assets discarded,demolished or destroyed during the financial year, the depreciation on such asset shall be calculated on a prorata basis from the date of such addition or as the case maybe upto the date such asset has been sold, discarded, demolished or destroyed. Method of Depreciation : SLM method of depreciation is followed as per Companies Act, However there are no fixed assets during the year Continued..

14 SYLVAN ACRES REALTY PVT LTD s forming part of the financial statements 5 Revenue recognition Sale of goods The company is in the business of real estate development and in the year under review, the company has not earned any revenue from its main line of business to be recognised on booking of flats and on completion of atleast 25% of the construction cost, thereafter based on proportionate basis. 6 Other income Interest income is accounted on accrual basis. 7 Tangible fixed assets Fixed assets, are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance. However there are no fixed assets as at Capital work-in-progress: Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.however there is no capital WIP as at the end of the year. 8 Intangible assets Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset. However there is no Intangible assets during the year Continued..

15 SYLVAN ACRES REALTY PVT LTD s forming part of the financial statements 9 Foreign currency transactions and translations Foreign Currency transactions are recorded at the exchange rates prevailing on the date of the transaction. At the year end, all monetary assets and liabilities are denominated in foreign currency & restated at the yearend exchange rates except those which are covered by forward contracts derivatives which are stated at the contracted rates. Exchange difference arising on actual payment/realization and year end reinstatement referred to above are adjusted in the profit and loss account. However there is no foreign currency transactions and translations during the year. 10 Investments Long-term investments (excluding investment properties), are carried individually at cost. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties. Investment properties are carried individually at cost. However the company has no investments. 11 Employee benefits Short-term employee benefits The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. 'Long-term employee benefits 'Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability. 12 Borrowing costs Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted. The borrowing costs in respect of working capital requirements are charged to revenue. However there are no borrowing costs during the year Continued

16 SYLVAN ACRES REALTY PVT LTD s forming part of the financial statements 13 Earnings per share Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate. 14 Taxes on income Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company. Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability. Continued

17 SYLVAN ACRES REALTY PVT LTD s forming part of the financial statements 15 Impairment of assets The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets. However there are no impairment loss during the year Provisions and contingencies A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. There are no contingent liabilities. 17 Previous year figures are regrouped/reclassified wherever necessary. 18 The Information required to be disclosed in respect of Micro,Small and medium enterprises development Act, 2006, is not available with the company and the company has requested for moretime to provide the same by writing to the creditors. for determining the status in respect of investment in Plant & Machinery. In view of the same, the audit is unable to provide the required particulars.