Sanathnagar Enterprises Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2025

19 Significant Accounting Judgements, Estimates and Assumptions Judgements, Estimates and Assumptions

The Company makes certain judgement, estimates and assumptions regarding the future. Actual experience may differ from these judgements, estimates and assumptions. The estimates and assumptions that have significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.

(i) Useful Life of Property, Plant and Equipments

The Company determines the estimated useful life of its Property, Plant and Equipments for calculating depreciation. The estimate is determined after considering the expected usage of the assets or physical wear and tear. The Company periodically reviews the estimated useful life and the depreciation method to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from these assets.

(ii) Income Taxes

Significant judgments are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.

(iii) Fair Value Measurement of Financial Instruments

When the fair values of financials assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions.

(iv) Valuation of Inventories

The determination of net realisable value of inventory includes estimates based on prevailing market conditions, current prices and expected date of commencement and completion of the project, the estimated future selling price, cost to complete projects and selling cost.

20 Commitments and contingencies A. Contingent liabilities
	As at	As at
	31-March-25	31-March-24
	'' in Lakhs	''in Lakhs
Claims against the company not acknowledged as debts Disputed Taxation Matters		96.43
Total	-	96.43

(1) The Contingent Liability exclude undeterminable outcome of pending litigations.

(2) The Company has assessed that it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

C. Terms and conditions of outstanding balances with related parties

a) Receivables from Related parties

The trade receivables from related parties arise mainly from sale transactions and services rendered and are received as per agreed terms ranging from 90-180 days.

b) Payable to related parties

The payables to related parties arise mainly from purchase transactions and services received and are paid as per agreed terms ranging from 90-180 days.

c) Loans from related party

The loans from related parties are unsecured, effective interest rate from holding company is Nil. Loans are utilised for general business purpose.

22 Segment information

For management purposes, the Company has only one reportable segment namely, Development of real estate property. The Board of Directors of the Company acts as the Chief Operating Decision Maker (“CODM”). The CODM evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators.

23 Financial Instrument measurement and Risk Management

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

The Company''s principal financial liabilities comprise mainly of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans and advances, trade and other receivables, cash and cash equivalents and Other balances with Bank.

The Company is exposed through its operations to the following financial risks:

- Market risk

- Credit risk, and

- Liquidity risk.

The Company has evoled a risk mitigation framework to identify, assess and mitigate financial risk in order to minimize potential adverse effects on the company''s financial performance. There have been no substantive changes in the company''s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated herein.”

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments. The Company is not exposed to currency risks.

(b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments.

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Company''s customer base, including the default risk of the industry and country, in which customers operate, has less influence on the credit risk.

c) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value. The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company ensures that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.

For the purpose of the Company''s capital management, capital includes issued equity share capital and other equity reserves attributable to Shareholders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings less cash and cash equivalents.

b) There is no outstanding due of MSME Supplier and therefore disclosure required under MSME Act 2006 is not applicable.

28 Other Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off.

(iii) The Company does not have any secured borrowings, hence registration of charges or satisfaction is not applicable.

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the period/year.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(viii) Submission of quarterly return or statement is not applicable as the company does not have borrowings from Banks or financial institutions.

29 Recent Development

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended 31-March-2025, MCA has not notified any new standards or amendments to the existing standards which has a material impact on the Company.

30 Subsequent Events

There are no subsequent events which require disclosure or adjustment subsequent to the Balance Sheet date.

31 During the year, the Company has filed the writ petition against various land & revenue Authorities of Hyderabad including the Greater Hyderabad Municipal Corporation (GHMC) for granting TDR/ compensation against acquisition of 1,292.62 square meters of the Company''s property in earlier years by the GHMC. Further, the Assistant City Planner had visited the site and verified affected portion of the property which was acquired and utilized by the GHMC for road widening purpose. Considering the positive outcome in similar cases, the Company believes that the matter shall be concluded in favour of the Company and adequate compensation is likely to be awarded.

32 The Board of the Company at its meeting held on 30-July-2024, has subject to necessary approvals, considered and approved Scheme of merger by absorption of the Company with Macrotech Developers Limited (“Holding Company”) and their respective shareholders (“Scheme”) under scetion 232 read with section 230 of The Companies Act, 2013.

33 The figures for the corresponding previous year have been regrouped/ reclassified, wherever considered necessary, to make them comparable with current years classification.

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Mar 31, 2024

4 Provisions and Contingencies

The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past
event exists and it is probable that an outflow of resources embodying economic benefits will be required to
settle such obligation and the amount of such obligation can be reliably estimated.

If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognized as a finance cost.

A disclosure of contingent liability is also made when there is a possible obligation or a present obligation that
may, but probably will not, require an outflow of resources. Where there is possible obligation or a present
obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is
made.

5 Impairment of Non-Financial Assets (excluding Inventories, Investment Properties and Deferred Tax
Assets)

Non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate
that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its
recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down
accordingly.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is
carried out on the smallest Group of assets to which it belongs for which there are separately identifiable
cash flows; its cash generating units (‘CGUs'').

6 Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity.

Financial Assets

Initial recognition and measurement

The Company classifies its financial assets in the following measurement categories.

• those to be measured subsequently at fair value (either through OCI, or through profit or loss)

• those measured at amortised cost

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

i) Debt instruments at amortised cost

ii) Debt instruments at fair value through other comprehensive income (FVTOCI)

iii) Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

iv) Equity instruments measured at fair value through other comprehensive income (FVTOCI)

Debt instruments at amortised cost

A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is
included in finance income in the statement of profit or loss. The losses arising from impairment if any, are
recognised in the Statement of Profit and Loss.

Debt instruments at FVTOCI

A ‘debt instrument’ is classified as at the FVTOCI if both of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling
the financial assets, and

b) The asset''s contractual cash flows represent solely payments of principal and interest.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting
date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However,
the Company does not have any debt instruments which meets the criteria for measuring the debt instrument
at FVTOCI.

Debt instrument at FVTPL

Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI,
is classified as at FVTPL.

In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost
or FVTOCI criteria, at FVTPL. However, such election is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred to as ‘Accounting Mismatch''). The Company has not
designated any debt instrument at FVTPL.

Debt instruments included within the FVTPL category are measured at fair value with all changes in Fair
value recognized in the Statement of Profit and Loss.

Equity investments

All equity investments, except investments in fellow subsidiaries and associates are measured at FVTPL.
The Company may make an irrevocable election on initial recognition to present in OCI any subsequent
changes in the fair value. The Company makes such election on an instrument-by-instrument basis.

All Equity Investments in subsidiaries, associates and joint ventures are measured at cost.

Derecognition of Financial Assets

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial
assets) is primarily derecognised (i.e. removed from the Company''s Balance Sheet) when:

i) The rights to receive cash flows from the asset have expired, or

ii) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a ‘pass-through''
arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the
asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of
the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor
transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the
Company''s continuing involvement. In that case, the Company also recognises an associated liability. The
transferred asset and the associated liability are measured on a basis that reflects the rights and obligations
that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that the Company
could be required to repay.

Impairment of Financial Assets

The Company assess on a forward looking basis the expected credit losses associated with its financial
assets carried at amortised cost and FVTOCI debts instruments. The impairment methodology applied
depends on whether there has been significant increase in credit risk. For trade receivables, the Company
is not exposed to any credit risk as the possession of residential and commercial units is handed over to the
buyer only after all the installments are recovered.

For financial assets carried at amortised cost, the carrying amount is reduced and the amount of the loss
is recognised in the statement of profit and loss. Interest income on such financial assets continues to be
accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the
future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as
part of finance income. Financial asset together with the associated allowance are written off when there is
no realistic prospect of future recovery and all collateral has been realised or has been transferred to the
Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases
because of an event occurring after the impairment was recognised, the previously recognised impairment
loss is increased or decreased. If a write-off is later recovered, the recovery is credited to finance costs.

Financial Liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings,
or payables, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of financial liability not recorded at
FVTPL , net of directly attributable transaction costs.

The Company''s financial liabilities include trade and other payables, loans and borrowings.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities measured at FVTPL include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Separated embedded derivatives
are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated
as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities
designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized
in OCI. These gains/ loss are not subsequently transferred to Statement of Profit and loss. However, the
Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such
liability are recognised in the statement of profit and loss. The Company has not designated any financial
liability as at fair value through Statement of Profit and Loss.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised
as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of
Profit and Loss.

Derecognition of Financial Liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or modification is
treated as the derecognition of the original liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in the Statement of Profit and Loss.

Reclassification of Financial Assets and Financial Liabilities

The Company determines classification of financial assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial assets which are equity instruments and financial
liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change
in the business model for managing those assets. Changes to the business model are expected to be
infrequent. The Company''s management determines change in the business model as a result of external or
internal changes which are significant to the Company''s operations. Such changes are evident to external
parties. A change in the business model occurs when the Company either begins or ceases to perform
an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the
reclassification prospectively from the reclassification date which is the first day of the immediately next
reporting period following the change in business model. The Company does not restate any previously
recognised gains, losses (including impairment gains or losses) or interest.

Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Ind AS Balance Sheet
if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle the liabilities simultaneously.

7 Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on
the presumption that the transaction to sell the asset or transfer the liability takes place either:

i) In the principal market for the asset or liability, or-

ii) In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:

i) Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

ii) Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable

iii) Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of
each reporting period.

8 Cash and Cash Equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits
with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

9 Revenue Recognition

The Company has applied five step model as set out in Ind AS 115 to recognise revenue in the Financial
Statements. The Company satisfies a performance obligation and recognises revenue over time, if one of
the following criteria is met:

a. The customer simultaneously receives and consumes the benefits provided by the Company''s
performance as the Company performs; or

b. The Company''s performance creates or enhances an asset that the customer controls as the asset is
created or enhanced; or

c. The Company''s performance does not create an asset with an alternative use to the Company and the
entity has an enforceable right to payment for performance completed to date.

For performance obligations where one of the above conditions are not met, revenue is recognised at the
point in time at which the performance obligation is satisfied.

Revenue is recognised either at point of time and over a period of time based on the conditions in the
contracts with customers.

The specific revenue recognition criteria are described below:

(I) Income from Property Development

The Company has determined that the existing terms of the contract with customers does not meet the
criteria to recognise revenue over a period of time. Revenue is recognized at point in time with respect
to contracts for sale of residential units as and when the control is passed on to the customers which is
linked to the application and receipt of occupancy certificate.

The Company provides rebates to the customers. Rebates are adjusted against customer dues and the
revenue to be recognized. To estimate the variable consideration for the expected future rebates the
company uses the “most-likely amount” method or “expected value method”.

(II) Contract Balances
Contract Assets

The Company is entitled to invoice customers for construction of residential and commercial properties
based on achieving a series of construction-linked milestones. A contract asset is the right to consideration
in exchange for goods or services transferred to the customer. If the company performs by transferring
goods or services to a customer before the payment is due, a contract asset is recognized for the
earned consideration that is conditional. Any receivable which represents the Company''s right to the
consideration that is unconditional is treated as a trade receivable.

Contract Liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company
has received consideration from the customer. If a customer pays consideration before the Company
transfers goods or services to the customer, a contract liability is recognised when the payment is made.
Contract liabilities are recognised as revenue when the Company performs under the contract.

10 Current Income Tax

Current income tax for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities based on the taxable profit for the period. The tax rates and tax laws
used to compute the amount are those that are enacted by the reporting date and applicable for the period.

Deferred Tax

Deferred tax is recognized using the balance sheet approach. Deferred tax assets and liabilities are
recognized for all deductible and taxable temporary differences arising between the tax bases of assets and
liabilities and their carrying amount in financial statements, except when the deferred tax arises from the
initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and
affects neither accounting nor taxable profits or loss at the time of transaction.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when
the asset is realized or the liability is settled, based on tax rates that have been enacted or substantively
enacted at the reporting date.

Deferred tax asset in respect of carry forward of unused tax credits and unused tax losses are recognized
to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax
asset to be utilized.

The Company recognizes deferred tax liabilities for all taxable temporary differences except those associated
with the investments in subsidiaries where the timing of the reversal of the temporary difference can be
controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing
evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each
Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no
longer a convincing evidence to the effect that the Company will pay normal tax during the specified period.

Presentation of Current and Deferred Tax:

Current and deferred tax are recognized as income or an expense in the Statement of Profit and Loss,
except when they relate to items that are recognized in OCI, in which case, the current and deferred tax
income/ expense are recognized in OCI. The Company offsets current tax assets and current tax liabilities,
where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle
on a net basis, or to realize the asset and settle the liability simultaneously. In case of deferred tax assets
and deferred tax liabilities, the same are offset if the Company has a legally enforceable right to set off
corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the same tax authority on the Company.

11 Borrowing Costs

Borrowing costs that are directly attributable to long term project development activities are inventorised /
capitalized as part of project cost.

All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest
and other costs that the Company incurs in connection with the borrowing of funds.

12 Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable equity share
holders to by the weighted average number of equity shares outstanding during the year.For the purpose of
calculating diluted earnings per share, the net profit or loss for the year and the weighted average number of
equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable equity
share holders and the weighted average number of equity shares outstanding during the year are adjusted
for the effects of all dilutive potential equity shares.

20 Significant Accounting Judgements, Estimates and Assumptions
Judgements, Estimates and Assumptions

The Company makes certain judgement, estimates and assumptions regarding the future. Actual experience may
differ from these judgements, estimates and assumptions. The estimates and assumptions that have significant risk
of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year, are
described below.

(i) Useful Life of Property, Plant and Equipments

The Company determines the estimated useful life of its Property, Plant and Equipments for calculating
depreciation. The estimate is determined after considering the expected usage of the assets or physical wear
and tear. The Company periodically reviews the estimated useful life and the depreciation method to ensure that
the method and period of depreciation are consistent with the expected pattern of economic benefits from these
assets.

(ii) Income Taxes

Significant judgments are involved in estimating budgeted profits for the purpose of paying advance tax,
determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax
positions.

(iii) Fair Value Measurement of Financial Instruments

When the fair values of financials assets and financial liabilities recorded in the Balance Sheet cannot be measured
based on quoted prices in active markets, their fair value is measured using valuation techniques, including the
discounted cash flow model, which involve various judgements and assumptions.

(iv) Valuation of Inventories

The determination of net realisable value of inventory includes estimates based on prevailing market conditions,
current prices and expected date of commencement and completion of the project, the estimated future selling
price, cost to complete projects and selling cost.”

C. Terms and conditions of outstanding balances with related parties
Payable to related parties

The payables to related parties arise mainly from purchase transactions and services received, which are unsecured
and are paid as per agreed terms.

23 Segment information

For management purposes, the Company has only one reportable segments namely, Development of real estate
property. The Board of Directors of the Company acts as the Chief Operating Decision Maker (“CODM”). The CODM
evaluates the Company''s performance and allocates resources based on an analysis of various performance
indicators.

24 Financial Instrument measurement and Risk Management

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements
are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts
would be significantly different from the values that would eventually be received or settled.

(I) Fair Value Measurement

The following table provides the fair value measurement hierarchy of the Company''s financial assets and financial
liabilities.

The Company''s principal financial liabilities comprise mainly of borrowings, trade and other payables. The main
purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets
include loans and advances, trade and other receivables, cash and cash equivalents and Other balances with Bank.

The Company is exposed through its operations to the following financial risks:

- Market risk

- Credit risk, and

- Liquidity risk.

The Company has evolved a risk metigation framework to identify, assess and mitigate financial risk in order to
minimize potential adverse effects on the company''s financial performance. There have been no substantive changes
in the company''s exposure to financial instrument risks, its objectives, policies and processes for managing those risks
or the methods used to measure them from previous periods unless otherwise stated herein.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises three types of risks: interest rate risk, currency risk and other price risk.
Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables,
loans and derivative financial instruments. The Company is not exposed to currency risks.

(b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade
receivables) and from its financing activities, including deposits with banks and other financial instruments.

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the Company''s customer base, including the default risk of the industry and country, in which
customers operate, has less influence on the credit risk.

c) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated
with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from
an inability to sell a financial asset quickly at close to its fair value. The Company has an established liquidity risk

For the purpose of the Company''s capital management, capital includes issued equity share capital and other equity
reserves attributable to Shareholders of the Company. The primary objective of the Company''s capital management
is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and
the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the
dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital
using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt,
interest bearing loans and borrowings less cash and cash equivalents.

b) There is no outstanding due of MSME Supplier and therefore disclosure required under MSME Act 2006 is not
applicable.

29 Other Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against
the Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off.

(iii) The Company does not have any secured borrowings, hence registration of charges or satisfaction is not
applicable.

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the period/year.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(viii) Submission of quarterly return or statement is not applicable as the company does not have borrowings from
Banks or financial institutions.

30 (i) Recent Development

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended
31-March-2024, MCA has not notified any new standards or amendments to the existing standards applicable to
the Company.

(ii) Subsequent Events

There are no subsequent events which require disclosure or adjustment subsequent to the Balance Sheet date.

31 The figures for the corresponding previous year have been regrouped/ reclassified, wherever considered necessary,
to make them comparable with current years classification.

As per our attached Report of even date

For M S K A & Associates For and on behalf of the Board of Directors of

Chartered Accountants Sanathnagar Enterprises Limited

Firm Registration Number: 105047W

Sanjyot Rangnekar Ramesh Chechani

(Chairperson) (Director)

DIN : 07128992 DIN : 05179363

Mayank Vijay Jain
(Partner)

Membership No. 512495

Vikash Mundhra Shashank Nagar

Place : Mumbai (Chief Financial Officer) (Company Secretary)

Date : 18-April-2024 (M. No. A50668)

---

Mar 31, 2014

NATURE OF OPERATIONS

Effective 1st April, 2013 the Registered Office of Sanathnagar Enterprises Limited has been transferred from Hyderabad, Andhra Pradesh to Mumbai, Maharashtra. It is primarily engaged in the business of promotion, construction, development and sale of integrated townships, residential and commercial multi-storied buildings, houses, flats, shopping malls etc. It is a subsidiary of Siddhnath Residential Paradise Private Limited, ultimate parent company whereof is Sambhavnath Infrabuild and Farms Private Limited.

Note : 2

Notes on accounts

1 Contingent Liabilities not provided for in respect of :

a) The Company had assigned all the rights and obligations in respect of appeals in Income Tax / Other Taxes / Cases to Bakelite Hylam Ltd (BHL) (formerly Bakelite Resins & Foams Ltd) (i.e. the resulting company, on account of demerger) vide Deed of Assignment dated March 31, 2009 entered into by the Company for a consideration of Rs.5.00 Lakhs and accordingly, any liability arising on this account upto March 31, 2009 would be borne by BHL. The details of contingent liabilities at the time of such assignment are as under:

(Rs.in Lakhs)

Particulars 2013-2014 2012-2013

Disputed Income Tax Liability 14.75 14.75

Disputed Central Excise Liability 158.41 158.41

Disputed Sales Tax Liability 36.31 36.31

b) Civil suits filed by certain buyers of the apartments before various judicial forums for specific performance/s, financial impact whereof is presently not ascertainable.

3 Based on an expert opinion taken, the Company has been advised that VAT on sale of immovable property is payable only at the time of registration and it is being complied with accordingly.

4 The accumulated losses of the Company have far exceeded its entire net worth. The financial statements have, however, been prepared by the management on a going concern basis in view of expected profits to be earned on agreements to sale executed with the customers, improved market conditions and sale of apartments at newly launched buildings.

i) Partnership Firms Under Control:

Lodha Construction (Dombivli)

Lodha Palazzo Mahavir Associates Vivek Enterprises

v) Others (Enterprises owned by controlling shareholder and / or his relatives with whom the Company had transactions):

Lodha Healthy Constructions and Developers Pvt. Ltd.

f) Key Managerial Personnel

Pankajkumar Jain

* converted into Private Limited Company under the provisions of Part IX of the Companies Act, 1956

5 Details of dues to Micro, Small and Medium Enterprises as per The Micro, Small and Medium Enterprises Development Act, 2006 :

The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extend such parties have been identified on the basis of information available with the Company. The amount of principal and interest outstanding is given below :

6 (a) Previous year''s figures have been regrouped / rearranged wherever necessary to conform to the current year''s presentation.

(b) Figures in brackets are related to previous year.

---

Mar 31, 2013

NATURE OF OPERATIONS

Effective 1st April, 2013 the registered office of Sanathnagar Enterprises Limited has been transferred from Hyderabad, Andhra Pradesh to Mumbai, Maharashtra. It is primarily engaged in the business of promotion, construction, development and sale of integrated townships, residential and commercial multi-storied buildings, houses, flats, shopping malls etc. It is a subsidiary of Siddhnath Residential Paradise Private Limited, parent company whereof is Lodha Developers Private Limited.

A. The Company had assigned all the rights and obligations in respect of appeals in Income Tax / Other Taxes / Cases to Bakelite Hylam Ltd (BHL) (formerly Bakelite Resins & Foams Ltd) (i.e. the resulting company, on account of demerger) vide Deed of Assignment dated March 31, 2009 entered into by the Company for a consideration of ? 5.00 Lakhs and accordingly, any liability arising on this account upto March 31, 2009 would be borne by BHL. The details of contingent liabilities at the time of such assignment are as under:

B. The constitutional validity of levy of service tax on Commercial or Industrial Construction Service or Construction of Residential Complexes Service in respect of ''under construction property'' is pending before the Hon''ble Supreme Court. By virtue of the "Agreement for Sale" entered into by the Company with the purchasers of the Flat in commercial or residential complex under construction, the purchaser is liable to bear service tax and interest thereon and hence, no provision for interest for delay in payments has been considered necessary at this stage.

C. Based on an expert opinion taken, the Company has been advised that VAT on sale of immovable property is payable only at the time of registration and accordingly, VAT is not being charged from the customers till such time. This practice is not going to result in any liability as it is collectible from the customers.

D. The accumulated losses of the Company have far exceeded its entire net worth. The Financials have, however, been prepared by the management on a going concern basis considering the fact about the profit made during the year and expected profits in subsequent years based on agreements executed with customers. Besides the present promoters of the company have committed financial, assured technical and administrative support.

E. In the opinion of the management, all of the assets other than Non-Current Assets have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

F. Balances in certain accounts of Trade Payables and Trade Receivables are subject to reconciliation/confirmation and consequent adjustments, if any. The management does not expect any material difference affecting the current period''s financial statements on such reconciliations / adjustments.

G. In terms of Accounting Standard - 17, the Company operates only in one business segment i.e., real estate development and has its projects / assets located in India.

H. Disclosure in respect of related parties pursuant to Accounting Standards 18:

A. List of related parties:

(As identified by the management and relied upon by the auditors) i) Entities as at 1 * April, 2012

Ultimate Holding Company / Parent Company:

Lodha Developers Pvt. Ltd. (Formerly known as Lodha Developers Ltd.)

Holding Company:

Siddhnath Residential Paradise Pvt. Ltd.

Fellow Subsidiaries:

Aasthavinayak Estate Company Pvt. Ltd.

Aasthavinayak Real Estate Pvt. Ltd.

Adinath Builders Pvt. Ltd.

Ajitnath Hi - Tech Builders Pvt. Ltd.

Anantnath Constructions and Farms Pvt. Ltd.

Arihant Premises Pvt. Ltd.

Chetna Infracon Pvt. Ltd.

Cowtown Land Development Pvt. Ltd.

Galaxy Premises Pvt. Ltd.

Gandhar Builders Pvt. Ltd.

Hi-class Buildcon Pvt. Ltd.

Hotel Rahat Palace Pvt. Ltd.

International Airport Builders & Management Services Pvt. Ltd.

Kidderpore Holdings Ltd.

Lodha Attentive Developers and Farms Pvt. Ltd.

Lodha Buildcon Pvt. Ltd.

Lodha Building and Construction Pvt. Ltd.

Lodha Crown Buildmart Pvt. Ltd.

Lodha Designer Construction Pvt. Ltd.

Lodha Developers UK Ltd.

Lodha Dwellers Pvt. Ltd.

Lodha Elevation Buildcon Pvt. Ltd.

Lodha Estate Pvt. Ltd.

Lodha Glowing Construction Pvt. Ltd.

Lodha Hi-Rise Builders Pvt. Ltd.

Lodha Home Developers Pvt. Ltd.

Lodha Home Finance Ltd.

Lodha Home Styles Pvt. Ltd.

Lodha Impression Real Estate Pvt. Ltd.

Lodha Land Developers Pvt. Ltd.

Lodha Novel Buildfarms Pvt. Ltd.

Lodha Pinnacle Buildtech and Farms Pvt. Ltd.

Lodha Prime Buildfarms Pvt. Ltd.

Macrotech Constructions Pvt. Ltd.

Mahavir Build Estate Pvt. Ltd.

Mahavir Premises Pvt. Ltd.

Microtec Constructions Pvt. Ltd.

Nabhiraja Software Design Pvt. Ltd. (Formerly known as Ma Padmavati Software Design Pvt. Ltd.)

Naminath Builders and Farms Pvt. Ltd.

National Standard (India) Ltd.

Odeon Theatres and Properties Pvt. Ltd.

Palava Utilities Pvt. Ltd.

Sahajanand Hi-Tech Constructions Pvt. Ltd.

Sai Ishwer Finvest Pvt. Ltd.

Samvara Buildtech Pvt. Ltd. (Formerly known as Maa Padmavati Buildtech Pvt. Ltd.)

Sarvavasa Buildtech & Farms Pvt. Ltd. (Formerly known as Padmavati Buildtech & Farms Pvt. Ltd.)

Shantinath Designer Construction Pvt. Ltd.

Shreeniwas Cotton Mills Ltd.

Shri Kailash Properties and Agrofarms Pvt. Ltd.

Shri Nakoda Bhirav Realtors Pvt. Ltd.

Shri Vardhvinayak Builders Pvt. Ltd.

Simtools Pvt. Ltd.

Sitaldas Estate Pvt. Ltd.

Suryakrupa Farms and Constructions Pvt. Ltd.

Limited Liability Partnerships under control of Ultimate Holding Company:

Ajeethnath Hi - Tech Buildtech LLP

Lodha Dwellerz LLP

Lodha Fincorp Distribution Services LLP

Partnership Firms under control of Ultimate Holding Company:

Lodha Construction (Dombivli)

Lodha Palazzo

Mahavir Associates

Shree Sainath Enterprises

Vivek Enterprises

Others (with whom the company had transactions):

Dharmanath Buildtech and Farms Pvt. Ltd.

Lodha Healthy Constructions and Developers Pvt. Ltd.

Lodha Pranik Landmark Developers Pvt. Ltd.

I. (i) Figures in brackets are related to previous year

(ii) Previous year''s figures have been regrouped / rearranged wherever necessary to conform current year''s classification.

---

Mar 31, 2012

NATURE OF OPERATIONS

Sanathnagar Enterprises Limited having its registered office at Hyderabad is primarily engaged in the business of promotion, construction, development and sale of integrated townships, residential and commercial multi-storied buildings, houses, flats, shopping malls etc. It is a subsidiary of Siddhnath Residential Paradise Private Limited, parent company whereof is Lodha Developers Limited.

(a) Rights and preferences attached to Equity Shares

The Company has equity shares having a par value of Rs - 10. Each Shareholder is entitled for one vote per share. The shareholders have the right to receive interim dividends declared by the Board of Directors and final dividend proposed by the Board of Directors and approved by the Shareholders.

In the event of liquidation by the Company, the shareholders will be entitled in proportion to the number of equity shares held by them to receive remaining assets of the Company, after distribution to those it was secured.

The Company has not received any intimation from suppliers regarding their status J under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year-end together with interest paid / payable as required under the said Act have not been given.

Note : 1

Other Notes on Accounts

A. The Company had assigned all the rights and obligations in respect of appeals in Income Tax/ Other Taxes/ Cases to Bakelite Hylam Ltd (BHL) (formerly Bakelite Resins & Foams Ltd) (i.e. the resulting company, on account of demerger) vide Deed of Assignment dated March 31, 2009 entered into by the Company for a consideration of Rs - 500,000 and accordingly, any liability arising on this account upto March 31, 2009 would be borne by BHL. The details of contingent liabilities at the time of such assignment are as under:

B. The Hon'ble Bombay High Court has vide its Order dated January 19/20,2012 dismissed the writ petition of the Maharashtra Chamber of Housing Industry (MCHI) challenging the constitutional validity of levy of Service tax on any commercial or industrial construction or construction of residential complexes under construction. Subsequently, the Hon'ble Supreme Court of India has admitted Special Leave Petition of the MCHI on March 30, 2012 challenging the said Order and the same is pending before the Apex court.

By virtue of the “Agreement for sale" entered into by the Company with the purchasers of the unit in commercial or residential complex under construction, the purchaser is liable to bear Service tax that may be leviable on the aforesaid transactions.

Interest payable for delayed payment of service tax will be provided for as and when the Apex court upholds the levy of Service Tax.

Meanwhile, amount wherever received from customers in respect of the above are being deposited with authorities under protest.

C. Based on an expert opinion taken, the Company has been advised that VAT on sale of immovable property is payable at the time of registration and consequently, VAT is not being charged from the customers till such time. There will be no liability on this account as the same is going to be collected from the customers.

D. The accumulated losses of the Company have far exceeded its entire net worth. The accounts have, however, been prepared by the management on a going concern basis considering the fact about the profit made during the year and expected profits in subsequent years based on agreements executed with customers. Besides the present promoters of the company have assured technical and administrative support.

E. In the opinion of the management, all of the assets other than Fixed Assets and Non - Current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

F. Balances in Trade Payables, Trade Receivables and Other Loans and Advances are subject to reconciliation / confirmation. In the opinion of the management, the difference as may be noticed on such reconciliation will not be material.

G. The Holding Company and Dharmanath Buildtech and Farms Pvt Ltd (a company under the same management) had incurred certain expenses (including interest) off 156,724,194 in earlier periods relating to real estate development, which have been approved/accepted and acknowledged by the Board of Directors in their meeting held on May 31, 2010 and the same have been inventorised based on an expert opinion taken in this regard.

H. The Company has recognised revenue in respect of its real estate project at Sanathnagar, Hyderabad during the year in accordance with the Revenue Recognition policy being followed by the Company. Consequently, the results of the year are not comparable with corresponding Losses for the yea'.

I. The Company has only single reportable business segment i.e. real estate development in terms of requirements of AS -17.

J. Disclosure in respect of related parties pursuant to Accounting Standards 18:

I. List of related parties: (from 25th May, 2010 unless otherwise stated)

(As identified by the management and relied upon by the auditors)

a) Enterprises Controlling the Company:

Ultimate Holding Company / Parent Company:

Lodha Developers Ltd.

Holding Company:

Siddhnath Residential Paradise Pvt. Ltd. (Formerly known as Paraswanath Residential Paradise Pvt. Ltd.)

b) Parties where control exists:

i) Other Fellow Subsidiary Companies:

Aasthavinayak Real Estate Pvt. Ltd.

Aasthavinayak Estate Company Pvt. Ltd.

Adinath Builders Pvt. Ltd.

Ajitnath Hi-tech Builders Pvt. Ltd.

Anantnath Constructions and Farms Pvt. Ltd. (from 22/11/10)

Arihant Premises Pvt. Ltd.

Bahubali Real Estate and Precast Pvt. Ltd., (Formerly known as Bahubali Real Estate and Farms Management Pvt. Ltd.) (from 13/11/11)

Bellissimo Holdings Singapore Pte Ltd. (up to 31/03/11)

Chetna Infracon Pvt. Ltd. (from 31/03/12)

Cowtown Land Development Pvt. Ltd.

Galaxy Premises Pvt. Ltd.

Gandhar Builders Pvt. Ltd.

Hi-Class Buildcon Pvt. Ltd.

Hi-Class Developers Pvt. Ltd. (up to 30/03/12)

Hotel Rahat Palace Pvt. Ltd.

International Airport Builders & Management Services Pvt. Ltd. (Formerly known as Lodha Quality Buildmart Pvt. Ltd.) (from 01/10/10)

Kidderpore Holdings Ltd. (from 08/11/10)

Kundan Realtors Pvt. Ltd. (from 3103/12)

Lodha Attentive Developers and Farms Pvt. Ltd.

Lodha Buildcon Pvt. Ltd.

Lodha Builders Pvt. Ltd. (up to 30/06/10)

Lodha Building and Construction Pvt. Ltd.

Lodha Crown Buildmart Pvt. Ltd.

Lodha Designer Construction Pvt. Ltd.

Lodha Developers UK Ltd.

Lodha Dwellers Pvt. Ltd.

Lodha Elevation Buildcon Pvt. Ltd.

Lodha Estate Pvt. Ltd.

Lodha Glowing Construction Pvt. Ltd.

Lodha Healthy Constructions and Developers Pvt. Ltd. (up to 30/03/12)

Lodha Hi-Rise Builders Pvt. Ltd.

Lodha Home Developers Pvt. Ltd.

Lodha Home Finance Ltd. (from 01/03/12)

Lodha Home Styles Pvt. Ltd.

Lodha Impression Real Estate Pvt. Ltd.

Lodha Land Developers Pvt. Ltd.

Lodha Novel Buildfarms Pvt. Ltd.

Lodha Pinnacle Buildtech and Farms Pvt. Ltd.

Lodha Pranik Landmark Developers Pvt. Ltd. (Converted from Lodha Pranik Landmark Developers w.e.f 17/06/11)

Lodha Prime Buildfarms Pvt. Ltd. (from 12/11/10)

Lodha Properties Development Pvt. Ltd. (up to 30/03/12)

Lodha Ultimate Buildtech and Farms Pvt. Ltd. (from 10/06/10 to 30/03/12)

Ma Padmavati Software Design Pvt. Ltd. (from 01/04/11)

Maa Padmavati Buildtech Pvt. Ltd.

Macrotech Constructions Pvt. Ltd.

Mahavir Build Estate Pvt. Ltd.

Mahavir Premises Pvt. Ltd.

Microtec Constructions Pvt. Ltd.

Naminath Builders and Farms Pvt. Ltd.

National Standard (India) Ltd. (from 19/05/11)

Odeon Theatres and Properties Pvt. Ltd. (Formerly known as Odeon Theatres Pvt. Ltd.)

Padmavati Buildtech & Farms Pvt. Ltd. (from 30/03/11)

Palava Utilities Pvt. Ltd. (Formerly known as Lodha Structure Developers Pvt. Ltd.) (from 01/07/10) Sahajanand Hi-tech Constructions Pvt. Ltd. (Formerly known as Parasnath Hi-Tech Constructions Pvt. Ltd.) Sai Ishwer Finvest Pvt. Ltd. (Formerly known as Shree Adinath Builders Pvt. Ltd.) (from 14/04/11) Shantinath Designer Construction Pvt. Ltd.

Shri Nakoda Bhirav Realtors Pvt. Ltd.

Shripal Realty Pvt. Ltd.

Shreeniwas Cotton Mills Ltd.

Shri Vardhvinayak Builders Pvt. Ltd.

Shri Kailash Properties and Agrofarms Pvt. Ltd. (from 01/10/10)

Simtools Pvt. Ltd.

Sitaldas Estate Pvt. Ltd.

Suryakrupa Farms and Constructions Pvt. Ltd. (from 21/03/11)

ii) Limited Liability Partnerships under Control:

Ajeethnath Hi - Tech Buildtech LLP (from 05/10/11)

Lodha Dwellerz LLP (from 03/10/11)

Lodha Fincorp Distribution Services LLP (Formerly known as Lodha Skyscrapers LLP) (from 18/11/11)

iii) Partnership Firms under control:

Datta Pooja Builders and Developers (from 11/10/10 to 13/10/10)

Lodha Construction (Dombivli)

Lodha Palazzo,

Shree Sainath Enterprises

Vivek Enterprises

iv) Associates (with whom the company had transactions):

Dharmanath Buildtech and Farms Pvt. Ltd.

Lodha Healthy Constructions and Developers Pvt. Ltd. (from 31/03/12)

v) Key Management Personnel:

Deepak Chitnis (from 22/07/10)

N. P. S. Shinh (up to 24/05/10)

M. (i) Figures in brackets are related to previous year

(ii) The revised Schedule VI has become effective from April 1, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Accordingly, the company has reclassified the previous year figures to this year classification. The adoption of revised Schedule VI does not impact revenue recognition and measurement principles followed for preparation of financial statements.

---

Mar 31, 2011

NATURE OF OPERATIONS

Sanathnagar Enterprises Limited having its registered office at Hyderabad is primarily engaged in the business of promotion, construction, development and sale of integrated townships, residential and commercial multistoried buildings, houses, flats, shopping malls etc. It is a subsidiary of Siddhnath Residential Paradise Private Limited, parent company whereof is Lodha Developers Limited.

1. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year-end together with interest paid/payable as required under the said Act have not been given.

2. a) Based on an expert opinion taken, the Company has been advised that VAT on sale of immovable property is payable at the time of registration and consequently, VAT is not being charged from the customers till such time. There will be no liability on this account as the same is going to be collected from the customers.

b) The Finance Bill, 2010, has amended the provisions of Finance Act, 1994 with effect from 1st July, 2010 (as per Notification No. 24/2010 dated 22nd June, 2010) by adding explanation to Section 65(105) (zzq) and (zzzh) to introduce the Service Tax concept of "deemed service" for any commercial or industrial construction or construction of residential complexes done prior to obtaining a completion certificate.

The Constitutional validity of the above amendment has been challenged in the Hon'ble Mumbai High Court and interim orders with regard to non collection/payment have been passed.

By virtue of the Premises Ownership Agreement to be entered into by the Company with the purchasers of the unit in residential complex under construction, the purchaser is liable to pay and the Company is entitled to recover Service Tax that may be leviable on the said transactions.

In view of the aforesaid and pending the disposal of the Writ Petition challenging the validity of above amendment, no liability has been provided for Service Tax on sale of units in Residential complex under construction. Meanwhile, amounts wherever received from customers separately in respect of the above are being deposited with respective authorities under protest.

3. In accordance with the tripartite "Deed of Assignmenf made on 31st March, 2011 the outstanding balance of Secured Loan as at 31.03.2011 of Rs. 851,443,033 due to Dharamanath Buildtech & Farms Private Limited - a company under the same management stands assigned to Siddhnath Residential Paradise Private Limited, the Holding Company. The release / creation of charge on account of such assignment is in process.

4. The Company had entered into an Assignment Deed dated 31st March, 2010 with Bakelite Coatings and Paints Pvt Ltd (BCPPL), Bakelite Hyiam Ltd (BHL), Bakelite Hylam Laminates Ltd (BHLL) and National Standard Tyre Moulds (India) Ltd (NSTML) whereby a sum of Rs. 650,000 payable to NSTML was assigned to BHL, a sum of Rs. 2,182,295, Rs. 3,293,153 receivable from BCPPL and BHLL, respectively was assigned to BHL and Net Current Assets of Rs. 1,140,332 was assigned to BHL resulting into a sum of Rs. 2,038,770 being receivable from BHL as at 31st March, 2010 after adjusting opening outstanding of Rs. 8,004,550 as at 1st July, 2009 which had been shown under 'Loan and Advances'.

5. The accumulated losses of the Company have far exceeded its entire net worth. The accounts have, however, been prepared by the management on a going concern basis considering inter alia, the change in the line of business activity namely real estate development and accordingly, the Company has already launched a project on its land at Hyderabad.

6. In the opinion of the Management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. The provision for depreciation and all other known liabilities is adequate and not in excess of what is required.

7. The Rehabilitation Scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) vide Order dated 22nd August,.2005, inter alia, provided for the Scheme of Arrangement involving demerger of the various businesses of the Company upon complying with certain conditions stipulated therein to the resulting companies as specified in the Scheme i.e., Panel Boards & Laminates Ltd for Particie Board Business and Bakelite Hylam Ltd (formerly Bakelite Resins & Foams Ltd) for Resins and Foam Business.

The Appointed Date of the Scheme was 1st December, 2007 and Effective Date was 13th April, 2009. The Scheme had been given effect to in the financial statements for the period ended 30th June, 2008.

The title deeds, licenses, agreements etc. are in the process of being transferred in the name of the resulting companies.

8. In view of a Rehabilitation Scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) vide Order dated 22nd August, 2005, which inter alia, provided for the diversification into real estate activity, the Company had discontinued the erstwhile business activities in an earlier year. The land situated at Sanathnagar, Hyderabad, which was revalued earlier, was transferred to Current Assets from Fixed Assets at its book value of Rs. 19,336,240 during the period ended 31st March, 2010.

The Holding Company and Dharmanath Buildtech and Farms Pvt Ltd (a company under the same management) had incurred certain expenses (including interest) of Rs. 156,724,194 in earlier periods relating to real estate development, which have been approved/accepted and acknowledged by the Board of Directors in their meeting held on 31st May 2010 and the same have been inventorized based on an expert opinion taken in this regard.

9. a) The Company has recognized deferred tax asset during the year considering the flats booked/ sold by the Company and accordingly, the management is virtually certain that sufficient future taxable income would be available against which brought forward business losses and unabsorbed depreciation would to be absorbed.

10. A sum of Rs. 39,960,104 receivable on account of Loans and Advances by the Company from Panel Boards and Laminates Ltd has been assigned to Mystic Woods Holdings and Trading Pvt Ltd, both erstwhile group companies, for a sum of Rs. 1,000,000. The balance sum of Rs. 38,960,104 had been written off and shown as an exceptional item in the previous period this being an event occurring after the balance sheet date.

11. The Company has only single reportable business segment i.e. real estate development in terms of requirements of AS-17.

12. Disclosure in respect of related parties pursuant to Accounting Standards 18:

A. List of related parties: (From 25th May, 2010 unless otherwise stated)

(As identified by the management and relied upon by the auditors)

a) Enterprises / Individual Controlling the Company: Ultimate Holding / Parent Company: Lodha Developers Ltd Holding Company:

Siddhnath Residential Paradise Pvt Ltd (Formerly known as Paraswanath Residential Paradise Pvt Ltd)

b) Parties where control exists:

a. Other Fellow Subsidiary Companies:

Aasthavinayak Real Estate Pvt Ltd

Aasthavinayak Estate Company Pvt Ltd

Ajitnath Hi-tech Builders Pvt Ltd

Anantnath Constructions and Farms Pvt Ltd (from 22/11/10)

Adinath Builders Pvt Ltd

Arihant Premises Pvt Ltd

Bellissimo Holdings Singapore Pte Ltd (up to 31/03/2011)

Cowtown Land Development Pvt Ltd

Galaxy Premises Pvt Ltd

Gandhar Builders Pvt Ltd

Hi-Class Buildcon Pvt Ltd

Hi-Class Developers Pvt Ltd

Hotel Rahat Palace Pvt Ltd

Infratech Builders and Agro Pvt Ltd

Kidderpore Holdings Ltd (from 08/11/10)

Lodha Attentive Developers and Farms Pvt Ltd

Lodha Buildcon Pvt Ltd

Lodha Builders Pvt Ltd (up to 30/06/10)

Lodha Building and Construction Pvt Ltd

Lodha Crown Buildmart Pvt Ltd

Lodha Designer Construction Pvt Ltd Lodha Developers UK Ltd

Lodha Dwellers Pvt Ltd

Lodha Elevation Buildcon Pvt Ltd Lodha Estate Pvt Ltd

Lodha Glowing Construction Pvt Ltd

Lodha Healthy Constructions and Developers Pvt Ltd

Lodha Hi-Rise Builders Pvt Ltd

Lodha Home Developers Pvt Ltd

Lodha Home Styles Pvt Ltd

Lodha Impression Real Estate Pvt Ltd

Lodha Land Developers Pvt Ltd Lodha Novel Buildfarms Pvt Ltd

Lodha Pinnacle Buiidtech and Farms Pvt Ltd

Lodha Properties Development Pvt Ltd

Lodha Prime Buildfarms Pvt Ltd (from 12/11/10)

Lodha Quality Buildmart Pvt Ltd (from 01/10/10)

Lodha Ultimate Buiidtech And Farms Pvt Ltd (from 10/06/10)

Lodha Structure Developers Pvt Ltd (from 01/07/10)

Maa Padmavati Buiidtech Pvt Ltd

Macrotech Constructions Pvt Ltd

Mahavir Build Estate Pvt Ltd

Mahavir Premises Pvt Ltel

Microtech Constructions Pvt Ltd

Naminath Builders and Farms Pvt Ltd Odeon Theatres and Properties Pvt Ltd (Formerly known as Odeon Theatres Pvt Ltd)

Sahajanand Hi-tech Constructions Pvt Ltd (Formerly known as Parasnath Hi-Tech Constructions Pvt Ltd)

Shantinath Designer Construction Pvt Ltd

Shri Nakoda Bhirav Realtors Pvt Ltd

Shreeniwas Cotton Mills Ltd

Shri Vardhvinayak Builders Pvt Ltd

Shri Kailash Properties and Agrofarms Pvt Ltd (from 01/10/10)

Shripal Reality Pvt Ltd

Simtools Pvt Ltd (Formerly known as Simtools Ltd)

Sitaldas Estate Pvt Ltd

Suryakrupa Farms and Constructions Pvt Ltd (from 21/03/11)

b. Partnership Firms under control:

Datta Pooja Builders and Developers (from 11/10/10 to 13/10/10)

Lodha Construction (Dombivli)

Lodha Palazzo

Shree Sainath Enterprises

Vivek Enterprises

Pranik Landmark Associates (Converted to Lodha Pranik Landmark Developers Pvt Ltd w.e.f 17/06/11)

c. Associates (with whom the company had transactions):

Avaya Holdings & Trading Pvt Ltd (up to 24/05/10)

Panel Boards & Laminates Ltd (up to 24/05/10)

Bakolite Hylam Ltd (Formerly known as Bakeiite Resins & Foams Ltd) (up to 24/05/10)

Siddhnath Residential Paradise Pvt Ltd (Formerly known as Paraswanath Residential Paradise Pvt Ltd) (up to 24/05/10)

National Standard Tyre Moulds India Ltd (up to 24/05/10)

Bakeiite Coatings & Paints Pvt Ltd (up to 24/C5/10)

Dharmanath Buildiech and Farms Pvt Ltd

d. Key Management Personnel: Mr. N.P.S.Shinh (up to 24/05/10)

13. Figures of the previous period have been rearranged/ regrouped wherever necessary so as to conform to the current year's presentation. The figures of the previous period are not comparable with those of the current year as previous period figures comprise of nine months.

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Mar 31, 2010

1. The Company had assigned all the rights and obligations in respect of appeals in Income Tax/ Other Taxes/ Cases to Bakelite Hylam Limited (BHL) (formerly Bakelite Resins & Foams Limited) (i.e. the resulting company, on account of demerger) vide Deed of Assignment dated 31st March, 2009 entered into by the Company for a consideration of Rs. 5,00,000 and accordingly, any liability arising on this account upto 31.03.2009 would be borne by the BHL.

2. SCHEME OF ARRANGEMENT

In view of a Rehabilitation Scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) vide Order dated 22.08.2005, which, inter-alia, provided for the Scheme of Arrangement involving de-merger of the various businesses of the Company upon complying with certain conditions stipulated therein to the resulting companies as specified in the Scheme i.e., Panel Boards & Laminates Limited for Particle Board Business and Bakelite Hylam Limited (formerly Bakelite Resins & Foams Limited) for Resins and Foam Business.

The Appointed Date of the Scheme was 1st December 2007 and Effective Date was 13th April, 2009. The Scheme had been given effect to in the financial statements for the period ended 30th June, 2008.

The title deeds, licenses, agreements etc. are in the process of being transferred in the name of the resulting companies.

3. The accumulated losses of the Company have far exceeded its entire net worth. The accounts have, however, been prepared by the management on a going concern basis considering inter alia, the implementation of Rehabilitation Scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) fully resulting into the De-merger / Divestment of various businesses in earlier years as mentioned in note no. 4 above & 6 below and also in view of proposed change in the line of business activity namely real estate development.

4. In terms of Rehabilitation Scheme of the Company sanctioned by BIFR, in an earlier year, the Company divested the Surface Texture Business to Bakelite Coatings and Paints Private Limited (BCPPL) (a Group Company) by selling plant and machinery for a sum of Rs. 89,62,000 vide agreement dated 31.03.2009 and also by transferring all the current assets and liabilities for a sum of Rs. 53,29,481 vide agreement dated 31.03.2009. As mutually agreed, the said aggregate consideration of Rs. 1,42,91,481 receivable by the Company had been set off against the amount payable by the Company to National Standard Tyre Moulds India Limited (NSTML) in view of the Deed of Assignment dated 31.03.2009 executed amongst the Company, BCPPL and NSTML.

5. a) In terms of Rehabilitation Scheme of the Company sanctioned by BIFR in an earlier year, the Company had assigned 1) rights relating to Transferable Development Rights, 2) Intellectual Property Rights, 3) Claims, Receivables, Deposits etc., 4) Receivable of consideration on account of sale of certain items of plant and machinery and 5) HP Project Rights by executing Deed of Assignment dated 31.03.2009 between the Company and Bakelite Hylam Limited (BHL) (formerly Bakelite Resins and Foam Limited), the resulting company for a sum of Rs. 10,00,000 , Rs. 10,00,000 , Rs. 5,00,000, Rs. 1,02,64,260, and Rs. 10,00,000 for the aforesaid items, respectively.

b) In view of an agreement dated 31.03.2009 entered into between the Company and Bakelite Hylam Limited (BHL) (formerly Bakelite Resins and Foam Limited) residual machinery / scrap etc. had been sold for a sum of Rs 50,00,000 by the Company and given effect to in the financial statements of the previous year.

c) In view of a Deed of Assignment dated 31.03.2009 entered into between the Company, Bakelite Hylam Limited (BHL) (formerly Bakelite Resins and Foam Limited) and National Standard Tyre Moulds (India) Limited (NSTML), a group company, a sum of Rs. 85,00,000 payable by the Company to NSTML had been assigned to the BHL and consequently, the amount receivable from BHL stood adjusted-to that extent.

d) In view of a Deed of Assignment dated 01.04.2009 executed between the Company and Bakelite Hylam Limited (BHL) (formerly Bakelite Resins and Foam Limited), a sum of Rs. 3,03,31,839 payable as at 31.03.2009 on account of VRS liability payable as pension over the years by way of future monthly installments by the Company has been assigned at par to the Bakelite Hylam Limited (BHL) (formerly Bakelite Resins and Foam Limited).

e) In view of a Deed of Assignment dated 31.03.2009 executed between the Company and Bakelite Hylam Limited (BHL) (formerly Bakelite Resins and Foam Limited), Net Current Assets of Rs. 32,76,216 had been assigned to the BHL and the same had been given effect in the financial statements of the previous year.

After considering the above transactions, a sum of Rs. 2,33,43,839 was payable by the Company to BHL.

6. The Company has entered into an Assignment Deed dated 31.03.2010 with Bakelite Coatings and Paints Private Limited (BCPPL), Bakelite Hylam Limited (BHL), Bakelite Hylam Laminates Limited (BHHL) and National Standard Tyre Moulds (India) Limited (NSTML) whereby a sum of Rs. 6,50,000 payable to NSTML was assigned to BHL, a sum of Rs. 21,82,295, Rs. 32,93,153 receivable from BCPPL and BHLL, respectively was assigned to BHL and Net Current Assets of Rs. 11,40,332 was assigned to BHL resulting into a sum of Rs. 20,38,770 being receivable from BHL at the end of the period after adjusting opening outstanding of Rs. 80,04,550 which has been shown under Loan and Advances.

7. In view of Memorandum of Settlement (MoS) had on 26Jn March 2007 under Section 12(3) read with Section 18(3) of Industrial Disputes Act, 1947 and Rule 60 of Andhra Pradesh Industrial Disputes Rules, 1958 effective from 26th March, 2007 to 25th March, 2008 with the Union of permanent workmen, staff and sub-staff of Sanathnagar Unit stipulating, inter-alia, the Company had provided for a sum of Rs. 17,45,19,918 on account of VRS compensation in earlier years. A sum of Rs 14,41,88,079 had been charged off completely to Profit and Loss Account upto 31.03.2009. Further, in view of a Deed of Assignment dated 01.04.2009 executed between the Company and Bakelite Hylam Limited (formerly Bakelite Resins & Foams Limited) whereby the amount payable on VRS liability as on 01.04.2009 of Rs 3,03,31,839 had been assigned at par and consequently, there exists no liability on this account.

8. a) Land of Sanathnagar Unit admeasuring 4114 sq. yards of the cost of Rs. 31,000 had been acquired in an earlier year by the Special Deputy Land Acquisition Officer under the Land Acquisition Act, on the request of Municipal Corporation of Hyderabad for development of railway station under M.M.T.S. project and the Company was awarded a compensation of Rs. 40,68,000. The compensation being much lower than the actual market price, the matter had been taken up for revision of compensation as per the prevailing law in the State. The matter is pending before the Courts at present.

b) Further 4526 Sq. yards (3784.18 Sq. Mtrs) of land was surrendered free of cost for road widening against transferable development rights. The Company was awarded a compensation of Rs. 62,60,000 in the month of July 2007 and TDRs in accordance with State Government guidelines.

In view of a Deed of Assignment dated 31.03.2009 executed between the Company and Bakelite Hylam Limited (formerly Bakelite Resins & Foams Limited) whereby all the claims, legal cases, receivable had been assigned for a sum of Rs 5,00,000 and TDR for Rs 10,00,000 to a resulting company viz. Bakelite Hylam Limited (formerly Bakelite Resins & Foams Limited). Consequently, the aforesaid case is being pursued by them.

9. a) Certain Land, Buildings and Plant and Machinery were earlier revalued in June 1985. The total increase as a result of the revaluation was transferred to Revaluation Reserve. The Company again revalued its Buildings and Plant & Machinery as on 31st March, 2001 and the resultant net increase in value amounting to Rs.2,94,79,841 for Buildings and Rs.23,00,38,000 for Plant & Machinery were transferred to Revaluation

Reserve which stood adjusted. All the aforesaid revaluations were carried out by an external approved valuer on replacement basis using standard indices and after considering the obsolescence and age of individual assets.

10. In the opinion of the Board, the Current Assets, Loans and advances have a value on realization in the ordinary course of the business at least equal to the amount at which they are carried in the books and provision for all known and determined liabilities (except otherwise stated) are adequate and not in the excess of the amount reasonably stated.

11. Various statutory records/ procedures as required to be maintained / compiled with under various sections of Companies Act, 1956 and allied fiscal laws are in the process of completion/ compliance. This, however, does not have any material impact on the results of the Company.

12. The Company has not recognized deferred tax assets in respect of unabsorbed depreciation, carry forward business losses, disallowances under various sections of Income Tax Act, 1961 and long term capital loss of earlier years, on a prudent basis, there being no virtual / reasonable certainty supported by convincing evidence that sufficient future taxable income will be available against which such DTAs can be realized.

13. a) In view of a Rehabilitation Scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) vide Order dated 22.08.2005 in an earlier year, which, inter-alia, provided for the diversification into real estate activity, the Company has already started developing the land at Sanathnagar for suitable real estate venture after getting all the assets lying at Sanathnagar dismantled / sold / discarded and consequently, land owned by the Company has been transfeef to cuurent asset from fixed assets at book value. Further, a sum of Rs. 87,18,617 (Previous Year Nil) has been incurred towards development of the said land during the period which has been added to the cost of the land.

b) In view of what is stated in sub-para (a) above, a sum of Rs. 24,50,000, the realizable value of the Sanathangar building, was shown as Asset Held for Disposal in the previous year. However, the Company has again started using such building for its business purposes and consequently, the said asset has been re-classified under "Fixed Assets" and deprecation has been charged accordingly.

14. A sum of Rs. 3,99,60,104 receivable on account of Loans and Advances by the Company from Panel Boards and Laminates Limited has been assigned to Mystic Woods Holdings and Trading Private Limited, both group companies, for a sum of Rs. 10,00,000 subsequent to the close of the financial year. Consequently, the balance sum of Rs. 3,89,60,104 has been written off during the year and shown as an exceptional item.

15. In view of The Company has made an application to Income Tax Directorate for confirming remissions arising out of the Scheme as referred to in para 4 above, to extend the period of carry forward of losses in terms of Section 72 by five years and to grant exemption from capital gain tax for the sale of assets of the Company and the same being rejected, the Company is in the process of filing an appeal before the appropriate forum.

16. During the period, the Company has started the real estate activities on its land at Sanathnagar, Hyderabad. The Company has, however, incurred expense for real estate activity as well as expense for lamination business and the same have been segregated accordingly.

17. At the request of Bakelite Hylam Limited (formerly Bakelite Resins & Foams Limited) (BHL), the Company has given on long lease, two plots of the total area 1762 sq. yards (1473 sq.mtrs) to enable the BHL to have access to lease land and for other requirements subsequent to the close of the financial year.

18. Disclosure in respect of related parties pursuant to Accounting Standards 18:

(A) List of related parties:

I. Parties where control exists - Nil

II Other parties with whom company entered into transactions during the period or there are outstanding balances due to / from them.

Associates/ Group Companies:

Avaya Holdings & Trading (P) Limited

Panel Board & Laminates Limited

Bakelite Hylam Limited (formerly Bakelite Resins & Foams Limited)

Paraswanath Residential Paradise (P) Limited

Dharmanath Buildtech and Farms Private Limited

III a) Key Management Personnel:

Shri N.P.S.Shinh, the Managing Director

Shri S.P.S.Shinh, the Whole time Director (Upto 31.12.2009)

b) Enterprises / Entities having common Key Management Personnel:

N.P.S.Shinh (HUF)

National Standard (India) Limited

Bakelite Resins & Foams Limited.

Bakelite Coating & Paints (P) Limited

Bakelite Hylam Laminates (India) Limited

Panel Board & Laminates Ltd

National Standard Tyre Mould Ltd

Bakelite Properties Ltd

Mountain Dew Properties (P) Ltd

c) Relatives of Key Management Personnel:

Smt. Gurpreet Kaur -Wife of Shri N.P.S.Shinh

Smt. Amrita Shinh - Wife of Shri S.P.S.Shinh

Ms Harsimran Shinh - Daughter of Shri N.P.S.Shinh

Note: (a) Related parties are as identified by the Management and relied upon by the auditors.

(b) No amount pertaining to related parties has been provided for as doubtful debts nor written off / back during the period except what is stated in above.

19. Previous years figures have been regrouped / rearranged wherever necessary to conform to the current periods presentation. The figures of the current period are not comparable with those of previous year as the current periods figures comprise of 9 months.

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Jun 30, 2009

1. Contingent liabilities not provided for in respect of: As at As at 30.06.2009 30.06.2008 Rs. in lacs Rs. in lacs

i) Disputed Income Tax Liability 14.75 14.75

ii) Disputed Central Excise Duty 158.41 158.41

iii) Disputed Sales Tax liability 36.31 36.31

All the rights and obligations in respect of appeals in Income Tax/ Other Taxes/ Cases being defended have been assigned to Bakelite Resins & Foams Limited (BRFL) (i.e. the resulting company, on account of demerger) vide Deed of Assignment dated 31s,March, 2009 entered into by the Company for a consideration of Rs. 5 lacs and accordingly, any liability arising on this account would be borne by the BRFL.

2. SCHEME OF ARRANGEMENT

A Rehabilitation Scheme was sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) vide Order dated 22.08.2005 in view of an application made by Company and subsequent modification thereof consequent to the Order dated 10.04.2007 passed by the Appellate Authority for Industrial & Financial Reconstruction providing for, inter-alia, the Scheme of Arrangement involving de- merger of the various businesses of the Company upon complying with certain conditions stipulated therein with all the respective related / specified assets, liabilities and employees of the businesses including items specifically listed in the Scheme along with share of common liabilities being transferred at book value to the resulting companies as specified in the Scheme i.e., Panel Boards & Laminates Limited for Particle Board Business and Bakelite Resins & Foams Limited for Resins and Foam Business.

The said transfer and vesting of the businesses and its assets were deemed to be on a going concern basis.

The Appointed Date of the Scheme is 1st December 2007 and Effective Date is 13lh April, 2009. The businesses of the resulting companies were deemed to have been carried out by the Company in trust upto the effective date. Net profit / (loss) of Rs. (575.57) lacs for the period from the appointed date to the effective date have been transferred to the respective resulting companies.

Accordingly, the Scheme has been given effect to in the above financial statements in terms of which the following Assets and Liabilities were transferred at book values and the difference has been adjusted / written off against the General Reserve as provided for in the Scheme.

5. Rehabilitation Scheme of the Company was sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) vide its Order dated 22nd August, 2005 fixing the cut off date as 31st July, 2005 and the same was also been upheld by the Appellate Authority for Industrial and Financial Reconstruction (AAFIR) vide its Order dated 10.04.2007 which inter alia, provided for various reliefs and concessions as well as restructuring of dues to Banks, leasing Companies, FD holders, statutory dues, unsecured creditors etc. The followings have been implemented during the year:

i) Fixed Deposit Holders have been settled on OTS basis and other deposit holders who have opted for the BIFR payment terms are being paid the installments as per the Sanctioned Scheme 2005 (SS-05). The outstanding liability as on 30.06.2009 is Nil (Previous Period Rs. 7.70 lacs).

ii) The Unsecured Creditors - The Company has completed the settlement / assignment of all the creditors.

iii) In view of an application made by the Company to Income Tax Directorate for confirming remissions arising out of the Scheme, to extend the period of carry forward of losses in terms of Section 72 by five years and to grant exemption from capital gain tax for the sale of assets of the Company being rejected, the Company is in the process of filing an appeal before the appropriate forum.

3. The accumulated losses of the Company have far exceeded its entire net worth. The accounts have, however, been prepared by the management on a going concern basis considering inter alia, the implementation of Rehabilitation Scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) fully resulting into the De-merger / Divestment of various businesses as mentioned in note no.4 & 7(a) above and also in view of proposed change in the line of business activity namely real estate development. The Company ceases to be a Sick industrial undertaking within the meaning of Section 3(1 )(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 and has been de-registered from BIFR. The company is no longer an "Industrial Company" as it does not have any industrial operations or manufacturing activity since April 1 2009.

4. a) Further in terms of Rehabilitation Scheme of the Company sanctioned by BIFR, during the year, the Company divested the Surface Texture Business to Bakelite Coatings and Paints Private Limited (BCPPL) (a Group Company) by selling plant and machinery for a sum of Rs. 89.62 lacs vide agreement dated 31.03.2009 and also by transferring all the current assets and liabilities for a sum of Rs. 53.27 lacs vide agreement dated 31.03.2009. As mutually agreed, the said aggregate consideration of Rs. 142.89 lacs receivable by the Company has been set off against the amount payable by the Company to National Standard Tyre Moulds India Limited (NSTML) in view of the Deed of Assignment dated 31.03.2009 executed amongst the Company, BCPPL and NSTML.

b) Further in terms of Rehabilitation Scheme of the Company sanctioned by BIFR during the year, the Company had assigned 1) rights relating to Transferable Development Rights, 2) Intellectual Property Rights, 3) Claims, Receivables, Deposits etc.,as well as liabilities/ contingent liabilities 4) Receivables of consideration on account of sale of certain items of plant and machinery by executing Deed of Assignment dated 31.03.2009 at par, and 5) Sale of residual machinery/scrap etc. between the Company and Bakelite Resins and Foam Limited, the resulting company for a sum of Rs. 10 lacs, Rs. 10 lacs, Rs. 5 lacs, Rs. 102 lacs and Rs 50 lacs for the aforesaid items, respectively.

The total consideration of Rs 177 lacs is receivable on account of assignment / sale as mentioned beforehand. A sum of Rs. 85 lacs out of the total consideration has been set off against the amount payable by the Company to NSTML (a Group Company) vide Deed of Assignment dated 31.3.2009.

A further sum of Rs. 303 lacs representing the VRS residual liability as per books was assigned to BRFL, a Group Company. After considering transactions on behalf of BRFL, an amount of Rs 244 lacs is payable by the Company to BRFL on this account.

5. The Company entered into Memorandum of Settlement (MoS) on 26,h March 2007 under Section 12(3) read with Section 18(3) of Industrial Disputes Act, 1947 and Rule 60 of Andhra Pradesh Industrial Disputes Rules, 1958 effective from 26th March, 2007 with the Union of permanent workmen, staff and sub-staff of Sanathnagar Unit stipulating, interalia, that the workmen will take VRS in phases as per the list finalized by the management in co-operation with the union from time to time. It has also been approved by AAIFR vide its Order dated 10m April, 2007. Consequently, the Company had provided for a sum of Rs.1745.19 lacs on account of VRS compensation in earlier years against which a sum of Rs 1,442 lacs (including Rs. 678.48 lacs during the year) has been charged off to Profit and Loss Account on proportionate basis.

In view of a Deed of Assignment dated 31.3.2009 executed between the Company and Bakelite Resins & Foams Limited whereby the amount payable on VRS liability as on 31.03.2009 of Rs 303 lacs has been assigned at par and consequently, there exists no liability on this account.

6. a) Land of Sanathnagar Unit admeasuring 4114 sq. yards of the cost of Rs. 0.31 lac had been acquired in an earlier year by the Special Deputy Land Acquisition Officer under the Land Acquisition Act, on the request of Municipal Corporation of Hyderabad for development of railway station under M.M.T.S. project and the Company was awarded a compensation of Rs. 40.68 lacs. The compensation being much lower than the actual market price, the matter had been taken up for revision of compensation as per the prevailing law in the State. The matter is pending before the Courts at present and will be pursued by BRFL in view of the assignment mentioned in note 7 (b) above.

b) Further 4526 Sq. yards (3784.18 Sq. Mtrs) of land was surrendered free of cost for road widening against transferable development rights. The Company was awarded a compensation of Rs. 62.60 lacs in the month of July 2007 and TDRs in accordance with State Government guidelines. The TDRs have been assigned to BRFL as per the deed of assignment mentioned in note 7 (b) above.

7. In view of de-merger of Particle Board Business at Balarshah to Panel Boards and Laminates Limited as mentioned in note no. 4 above, eligibility for deferment of sales tax payable in accordance with Maharashtra Package Scheme of Incentives, 1993 pursuant to the Eligibility Certificate No. FINC (l)/1993/DEFERRAL/EC-4235 dated 31.08.2000 and the liability to date on this account stands transferred to the aforesaid resulting company. (The Company had deferred a sum of Rs. 806.94 lacs up to 30th June, 2008).

8. Addition of Rs. 30 lacs to Capital Reserve in an earlier year that represented capital subsidy received by Ballarshah Unit of the Company which was sanctioned in an earlier year under an incentive scheme of Maharashtra Government has been transferred to Panel Boards & Laminates Limited on account of de-merger as mentioned in note no.4 above.

9. a) Certain Land, Buildings and Plant and Machinery were earlier revalued in June 1985. The total increase as a result of the revaluation was transferred to Revaluation Reserve. The Company again revalued its Buildings and Plant & Machinery as on 31st March, 2001 and the resultant net increase in value amounting to Rs.294.80 lacs for Buildings and Rs.2300.38 lacs for Plant & Machinery were transferred to Revaluation Reserve which stood adjusted. All the aforesaid revaluations were carried out by an external approved valuer on replacement basis using standard indices and after considering the obsolescence and age of individual assets.

10. During the year, the Company has changed the accounting policy relating to write off of Miscellaneous Expenditure (VRS) not beyond 30lh June,2009 as against 31st March, 2010 on account of de-merger / divestment of various businesses of the Company as mentioned in note nos. 4 and 7 (a) above and also in view of assignment of VRS liability as per the Deed of Assignment dated 31.03.2009 executed between the Company and Bakelite Resins and Foams Limited, the de-merged entity for a sum of Rs 303 Lacs.

Had the Company continued the earlier policy of write off, the loss for the year, accumulated losses would have been lower by Rs 547.42 lacs and Miscellaneous Expenditure would have been Rs 547.42 lacs.

11. The Company is in the process of obtaining / compiling information from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence the disclosure, if any, relating to amounts unpaid as at the end of the year together with interest paid / payable as required under the Act could not be furnished.

12. Accounts of secured loans and unsecured loans are subject to confirmations, reconciliations and adjustments, if any, having consequential impact on the loss for the year, assets and liabilities, the amounts whereof are presently not ascertainable. However, the management does not expect any material difference affecting the current years financial statements.

13. In the opinion of the Board, the Current Assets, Loans and advances have a value on realization in the ordinary course of the business at least equal to the amount at which they are carried in the books and provision for all known and determined liabilities (except otherwise stated) are adequate and not in the excess of the amount reasonably stated.

14. Various statutory records/ procedures as required to be maintained / compiled with under various sections of Companies Act, 1956 and allied fiscal laws are in the process of completion/ compliance. This, however, does not have any material impact on the results of the Company.

15. The Company has not recognized deferred tax assets in respect of unabsorbed depreciation, carry forward business losses, disallowances under various sections of Income Tax Act, 1961 and long term capital loss of earlier years, on a prudent basis, there being no virtual / reasonable certainty supported by convincing evidence that sufficient future taxable income will be available against which such DTAs can be realized.

16. The amount of exchange difference (Net) Credited / Debited to the Profit and Loss account is Nil (Previous Year Debited Rs. 0.05 lac).

17. Disclosure in respect of related parties pursuant to Accounting Standards 18:

(A) List of related parties:

I. arties where control exists - Nil

II. Other parties with whom company entered into transactions during the period or there are outstanding balances due to / from them. Associates/ Group Companies:

Avaya Holdings & Trading (P) Ltd Bakelite Coating & Paints (P) Ltd Bakelite Hylam Laminates (India) Ltd Bakelite Properties Pvt Ltd Panel Board & Laminates Ltd National Standard (India) Ltd National Standard Tyre Moulds (India) Ltd Bakelite Resins & Foams Ltd Paraswanath Residential Paradise (P) Ltd Dharmanath Buildtech & Farms Pvt Ltd Mountain Dew Properties Pvt Ltd

III. a) Key Management Personnel:

Shri N.P.S.Shinh, the Managing Director Shri S.P.S.Shinh, the Whole time Director

b) Enterprises / Entities having common Key Management Personnel:

N.P.S.Shinh (HUF)

National Standard (India) Limited

Bakelite Resins & Foams Ltd.

Bakelite Coating & Paints (P) Ltd

Bakelite Hylam Laminates (India) Ltd

Panel Board & Laminates Ltd

National Standard Tyre Moulds (India) Ltd

Bakelite Properties (P) Ltd

Mountain Dew Properties (P) Ltd

c) Relatives of Key Management Personnel:

Smt. Gurpreet Kaur -Wife of Shri N.P.S.Shinh Smt. Amrita Shinh - Wife of Shri S.P.S.Shinh

Ms Harsimran Shinh - Daughter of Shri N.P.S.Shinh Ms Manita Shinh - Daughter of Shri N.P.S.Shinh

(B) During the period, the following transactions excluding reimbursement were carried out with the related parties in the ordinary course of business and at arms length:

18. Previous periods figures have been regrouped / rearranged wherever necessary to conform to the current years presentation. The figures of the current year are not comparable with those of previous period as the previous period figures comprised of 15 months.