12th annual report › mrhpl-ar-2011-12.pdf · to appoint a director in place of sri krishna murty...

12TH ANNUAL REPORT 2011-12

___________________________________________________________________ MANJEERA RETAIL HOLDINGS PRIVATE LIMITED

CONTENTS

Page

1 Notice

3

2 Directors’ Report

5

3 Auditors’ Report

10

4 Balance Sheet as at 31st March, 2012

16

5 Profit & Loss Account for the year ended 31st March, 2012

17

6 Cash Flow Statement for the year ended 31st March, 2012

18

7 Significant Accounting Policies

19

8 Notes to Accounts

23

9 Attendance Slip and Proxy Form

31

MANJEERA RETAIL HOLDINGS PRIVATE LIMITED Annual Report 2011-12

1

BOARD OF DIRECTORS Mr. G. Yoganand - Managing Director Mr. K. Krishna Murty - Director Mr. Mark Stephen Leonard - Director Mr. K V Praveen Kumar - Alternate Director Mr. D. Kiran Kumar - Director Mr. LVS Sudhakar Babu - Nominee Director COMPANY SECRETARY Ms. Arpita Roy STATUTORY AUDITORS M/s. B S R & Company

PRINCIPAL BANKERS / FINANCIAL INSTITUTION Oriental Bank of Commerce Bank of Baroda Indian Bank State Bank of India Housing and Urban Development Corporation Limited (HUDCO) REGISTERED OFFICE ADDRESS # 304, Aditya Trade Centre, Aditya Enclave Road, Ameerpet, Hyderabad - 500 038 Andhra Pradesh, India.


2

NOTICE TO MEMBERS Notice is hereby given that the 12th Annual General Meeting of the Members of M/s. Manjeera Retail Holdings Private Limited will be held on Thursday, the 27th day of September, 2012 at 2.30 P.M. at the Registered Office of the Company situated at # 304, Aditya Trade Centre, Ameerpet, Hyderabad- 38 to transact the following business: Ordinary Business 1. To receive, consider and adopt the Audited Balance Sheet of the Company as at

31st March, 2012 and the Profit & Loss Account for the year ended on that date together with the reports of the Directors and Statutory Auditors thereon.

2. To appoint a Director in place of Sri Krishna Murty Kompella, who retires by

rotation and being eligible, offers himself for re-appointment. 3. To appoint M/s. B S R R & Co, Chartered Accountants, as the new Statutory

Auditors of the Company in place of M/s. BSR & Company, Chartered Accountants, to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and to fix their remuneration and for the purposes, to pass with or without modification(s) the following resolution as Ordinary Resolutions:

“RESOLVED THAT the term of office of M/s. B S R & Company, Chartered Accountants be and is hereby expired from the conclusion of this Annual General Meeting of the Company.”

“RESOLVED THAT M/s. B S R R & Co, Chartered Accountants with Firm registration number 130791W be and is hereby appointed as the Auditors of the Company to hold the office from the conclusion of this meeting until the conclusion of the next Annual General Meeting and the Board of Directors of the Company be and are hereby authorized to fix a suitable remuneration in consultation with the Auditors and the manner of its payment.”

By order of the Board of Directors Place : Hyderabad Arpita Roy Date : 13.08.2012 Company Secretary MANJEERA RETAIL HOLDINGS PRIVATE LIMITED Annual Report 2011-12

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NOTICE TO MEMBERS (Contd.) NOTES 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS

ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. The PROXY FORM duly completed and stamped, in order to be effective, must

be lodged with the Company not less than 48 hours before the commencement of the Annual General Meeting.

3. Corporate Members intending to send their Authorized Representatives to attend

the meeting are requested to send a certified copy of the Board Resolution authorizing their representative to attend and vote on their behalf at the meeting under Section 187 of the Companies Act, 1956.

By order of the Board of Directors Place: Hyderabad Arpita Roy Date : 13.08.2012 Company Secretary

MANJEERA RETAIL HOLDINGS PRIVATE LIMITED Annual Report 2011-12 4

DIRECTORS’ REPORT

To The Members Manjeera Retail Holdings Private Limited # 304, Aditya Trade Centre, Ameerpet, Hyderabad – 500 038 Your Directors hereby present the 12th Annual Report of your company together with the Audited Financial Statements for the financial year ended 31st March, 2012. Operations of the Company During the year under review, your Company has continued the development of 8.295 Acres of APHB’s Land at Kukatpally under special purpose vehicle. The total estimated cost of the project as per revised projections was about Rs.6.378 billons. The Project cope is to construct about 1.982 million Sq.ft. of built-up area of office, retail / multiplex / commercial / residential apart from car parking space of about 0.892 million Sq. ft. The Company has obtained all the required Statutory approvals viz. land use Conversion, Height Clearances from Airport Authority of India, NOC from DGFS for the properties, Building permissions from GHMC and environmental clearances. US Architects R204 DESIGN, Los Angeles, USA have completed the Concept designs for Office Complex and Shopping Mall. The designs for Residential and Office in S-3 Site were completed.

All the Consultants for Marketing, Mechanical, Electrical and Plumbing (MEP), Vertical Transportation, Project Management Consultant (PMC) and the Civil and Structural Contractors were appointed as per requirement for all the four towers. The construction of One Tower – Majestic Commercial is completed fully in all respects. The construction work for the balance three buildings are in active progress. The residential tower, Majestic Homes is expected to be completed by December’12 and the Trinity Mall is expected to be operational by March, 13. Your Company’s Sales Achievement up to 30-07-2012 is as follows:


Status of Sales Achievement up to 30-07-2012

Project Development

Size (in Sft)

Sales (In Sft)

% of Achievement

Manjeera Majestic Commercial – Shops

100,000 87,129 84%

Manjeera Majestic Commercial – Offices

225,000 103,673 46%

Manjeera Majestic Homes 352,000 263,281 75% Manjeera Trinity Corporate 880,000 53,745 6% Manjeera Trinity Mall 425,000 171,064 40%

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DIRECTORS’ REPORT (Contd.)

Further, in respect of Manjeera Trinity Mall, your Company has entered into LOI’s with various other brands to the extent of 1,00,000 Sft area and has planned to achieve 80% of leasing by December’12. Financials Particulars Year Ended

31.03.2011 (Rs.)

Year Ended 31.03.2012

(Rs.) Profit (loss) before tax 65,662,005 62,987,433 Tax Expenses 20,415,337 26,757,250 Profit (loss) after tax 45,246,668 36,230,183 Add: Balance Bought Forward (7,220,045) 38,026,623 Balance Carried to Balance Sheet 38,026,623 74,256,806

The Directors have pleasure to inform that your Company has recognized income in the current financial year. The Company has made an income from sale of residential and commercial spaces of Rs. 920.80 millions.

The expenditure for the current year stood at Rs. 869.40 millons.

The Earnings per Share of par value Rs. 10 (both Basic and Diluted) is Rs. 0.41. Dividend

Keeping in view the requirement of funds in the business, no dividend is recommended by the Board of Directors of your Company. Shareholding The details of shareholding of the Company is as follows:

Name of the Shareholder / Investor

(%)

of Holding Type of Security

M/s. Manjeera Constructions Limited 51 Equity

M/s. Trinity Capital (Six) Limited 49 Equity

M/s. Trinity Capital (Six) Limited - Cumulative Mandatory

Convertible 14% Investor Debentures.

Public Deposits During the year, your Company has not accepted any deposits from the public and is therefore not required to furnish information in respect of outstanding deposits under Non-Banking Non-Financial Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposits) Rules, 1975. MANJEERA RETAIL HOLDINGS PRIVATE LIMITED Annual Report 2011-12

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DIRECTORS’ REPORT (Contd.)

Directors During the year review, your Company had obtained credit facility from M/s Housing and Urban Development Corporation Limited (HUDCO). Pursuant to the provisions of Article 22E of the Articles of Association of your Company and in terms of the credit facilities of Rs. 1.00 billion sanctioned by HUDCO, a Nominee Director was required to be appointed on the Board of your Company. Accordingly, HUDCO nominated Mr. V. Thirumavalavan, Regional Chief, HUDCO on the Board of your Company with effect 26th July, 2011. During the year under review, as Mr. V. Thirumavalavan was transferred to Thiruvanthapuram Regional Office and HUDCO nominated Mr. LVS Sudhakar Babu in place of Mr. V. Thirumavalavan on the Board of your Company. Mr. LVS Sudhakar Babu was appointed with effect from 6th July, 2012.

During the year under Review, Mr. K.V. Praveen Kumar had vacated the office of the Alternate Director on 26th July, 2011 and was appointed again as an Alternate Director to Mr. Mark S Leonard on 12th August, 2011. Since Mr. Mark S Leonard returned to the office, Mr. K.V. Praveen Kumar had vacated the office as on 18th of January, 2012. Mr. K.V. Praveen Kumar was again appointed on the Board of your Company with effect from 28th May, 2012 and he is continuing as an Alternate Director to Mr. Mark S Leonard till the date of this Report. During the year under review, Mr. Krishna Murty Kompella, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The proposal regarding the re-appointment of the aforesaid Director is placed for your approval.

Director’s Responsibility Statement Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, your Directors hereby state and confirm that:

1. In the preparation of Annual Accounts for the financial year ended on 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures.

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the Annual Accounts for the financial year ended on 31st March, 2012 on a going concern basis.


DIRECTORS’ REPORT (Contd.) Auditors Since the term of M/s. B S R & Company, Chartered Accountants, the Statutory Auditors of your Company for the financial tear 2011-12 is completed, , your Board has appointed M/s. B S R R& Company, Chartered Accountants, as the new Statutory Auditors of the Company for the financial year 2012-13. The newly appointed Statutory Auditors, M/s. B S R R& Company has expressed their willingness to act as Statutory Auditors of the Company, if appointed at the ensuing Annual General Meeting and confirmed that the said appointment would be in conformity with the provisions of Section - 224 (1B) of the companies Act, 1956. The term of office of said M/s. B S R & Company will be vacated from the conclusion of the ensuing Annual General Meeting of the Company. Auditors’ Report The observations of the Auditor in their report to the shareholders for the year ended 31st March, 2012 are self explanatory and do not require any further clarification from the Board of Directors of the Company. Cost Compliance Certification In order to comply with the General Circular No. 68 / 2011 [52/26/CAB-2010] dated 30th November, 2011 issued by Ministry of Corporate Affairs (MCA), your Company is under process to obtain the Cost Compliance Certificate and the same shall be filed within such timeframe as stipulated by MCA in this regard. Particulars of Employees During the year under review, your Company does not have any employee falling under the category specified under Section 2A of Section 217 of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings Outgo As the Company is not engaged in manufacturing activity, prescribed information regarding compliance of rules relating to conservation of energy and technology absorption pursuant to section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is not provided as the same is not applicable to the company. The Foreign Exchange earnings and outgo of the Company during the financial year 2011-2012 are as follows:

Foreign Exchange earnings: Nil

Foreign Exchange outgo: Rs. 29,978,924/-


8

DIRECTORS’ REPORT (Contd.) Acknowledgements

Your Directors would like to express their sincere appreciation and gratitude for the support and co-operation received from the Central and State Governments, Hyderabad Urban Development Authority, GHMC, HUDCO, HMDA, APHB, Ministry of Corporate Affairs, Registrar of Companies, Shareholders, Bankers, Financial Institutions, Customers, Suppliers, Contractors and other Associates for their continued support to the Company.

The Company enjoyed very cordial and fruitful relations with the employees during the year under review and the Management wishes to place on record its sincere appreciation of the efforts put in by the Company’s employees for achieving good results under demanding circumstances.

For and on behalf of the Board

Place: Hyderabad (G Yoganand) (D Kiran Kumar)

Date : 13-08-2012 Chairman and Managing Director Director


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AUDITORS’ REPORT To the Members of Manjeera Retail Holdings Private Limited We have audited the attached balance sheet of Manjeera Retail Holdings Private Limited (“the Company”) as at 31 March 2012, the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (“the Act”) we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

(a) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) the balance sheet, the profit and loss account and the cash flow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the balance sheet, the profit and loss account and the cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(e) on the basis of written representations received from the directors, as at 31 March 2012 and taken on record by the Board of Directors, we report that none of the directors are disqualified as at 31 March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 on the said date; and

(f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:


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AUDITORS’ REPORT (Contd.) (i) in the case of the balance sheet, of the state of affairs of the Company

as at 31 March 2012;

(ii) in the case of the profit and loss account, of the profit of the Company for the year ended on that date; and

(iii) in the case of the cash flow statement, of the cash flows of the

Company for the year ended on that date.

for B S R & Company Chartered Accountants Firm’s Registration Number: 128032W Zubin Shekary Partner Membership No.: 048814 Hyderabad 28 May 2012 MANJEERA RETAIL HOLDINGS PRIVATE LIMITED Annual Report 2011-12

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ANNEXURE to AUDITORS REPORT

Annexure referred to in our Report to the Members of Manjeera Retail Holdings Private Limited (“the Company”) for the year ended 31 March 2012. We report that:

(i) (a) The Company has maintained proper records showing full particulars,

including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified every year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets were verified during the year. No material discrepancies were noticed on such verification.

(c) The Company has not disposed off any fixed assets during the year.

Accordingly clause 4(i)(c) of the Order is not applicable. (ii) (a) The inventory has been physically verified by the Management during

the year. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventory. The

discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The Company has not granted any loans, secured or unsecured, to

companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 (“the Act”). Accordingly clauses 4(iii)(a) to 4(iii)(d) of the Order are not applicable to the Company.

(b) The Company has taken an unsecured loan from one company covered

in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs 128,137,098 and the year-end balance of such loan was Rs 128,137,098. The Company has not taken any loans from firms or other parties covered in the registers maintained under Section 301 of the Companies Act, 1956.


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ANNEXURE to AUDITORS REPORT (Contd.)

(c) In our opinion, the rate of interest on which loans have been taken from a company listed in the register maintained under Section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company. Tenure and repayment terms have not been specified for such loans.

(d) In case of the loan taken from a company listed in the register maintained

under Section 301, the tenure and repayment terms have not been specified and hence we are unable to comment on paragraph 4(iii)(g) of the Order.

(iv) In our opinion and according to the information and explanations given to us

there is an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchase of inventories, fixed assets and sale of property. The business of the Company does not involve sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations

given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that Section.

(b) In our opinion, and according to the information and explanations

given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 lakhs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii)The Central Government of India has not prescribed the maintenance of cost

records under Section 209(1)(d) of the Companies Act, 1956 for any of the services rendered by the Company.

(ix) (a) According to the information and explanations given to us and on the

basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, service tax, custom duty and other material statutory dues during the year, have generally been regularly deposited with the appropriate authorities though there


13

ANNEXURE to AUDITORS REPORT (Contd.) has been slight delays in few cases. As explained to us, the provisions of

employees’ state insurance, sales tax, wealth tax, excise duty, cess and investor education and protection fund are not applicable to the Company.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, service tax, customs duty and other material statutory dues were in arrears as at 31 March 2012 for a period of more than six months from the date they became payable. As explained to us, the provisions of employees’ state insurance, sales tax, wealth tax, excise duty, cess and investor education and protection fund are not applicable to the Company.

(b) According to the information and explanations given to us, there are no

dues of income tax and service tax which have not been deposited with the appropriate authorities on account of any dispute. As explained to us, the Company did not have any dues on account of sales tax, wealth tax, and excise duty.

(x) The Company does not have any accumulated losses at the end of the financial

year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to

us, the Company has defaulted in payment of interest on Term Loans to Banks amounting to Rs.12,283,028 by 30 days during the year. The outstanding debentures are not repayable in cash and are compulsorily convertible into equity shares at any time after the expiry of 36 months from the date of issue of the debentures. 245,098 debentures and 122,549 debentures were issued on 22 March 2007 and 29 November 2007 respectively. However, the debenture holders have not exercised the conversion option as of 31 March 2012.

(xii)The Company has not granted any loans and advances on the basis of security

by way of pledge of shares, debentures and other securities. (xiii)In our opinion and according to the information and explanations given to

us, the Company is not a chit fund /nidhi/ mutual benefit fund/ society. (xiv)According to the information and explanations given to us, the Company is not

dealing or trading in shares, securities, debentures and other investments. (xv) According to the information and explanations given to us, the Company has

not given any guarantee for loans taken by others from banks or financial institutions.


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ANNEXURE to AUDITORS REPORT (Contd.)

(xvi)In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

(xvii)According to the information and explanations given to us and on an overall

examination of the balance sheet of the Company, we are of the opinion that the funds raised on short term basis have not been used for long term investment.

(xviii)The Company has not made any preferential allotment of Shares to Companies / firms / parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) According to the information and explanation given to us, the Company has issued unsecured debentures in earlier years and accordingly has not created security or charge in respect of the debentures outstanding during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the information and explanations given to us, no fraud on

or by the Company has been noticed or reported during the course of our audit.

for B S R & Company Chartered Accountants Firm’s Registration Number: 128032W Zubin Shekary Partner Membership No.: 048814 Hyderabad 28 May 2012 MANJEERA RETAIL HOLDINGS PRIVATE LIMITED Annual Report 2011-12

15

- As at As at

31 March 2012 31 March 2011EQUITY AND LIABILITIESShareholders' funds

Share capital 2.1 88,23,52,940 88,23,52,940 Reserves and surplus 2.2 7,42,56,806 3,80,26,623

95,66,09,746 92,03,79,563 Non Current liabilities

Long term borrowings 2.3 12,82,00,538 66,61,79,787 Deferred tax liability 2.9 - 55,337 Long term provisions 2.4 5,19,829 3,23,129

12,87,20,367 66,65,58,253 Current liabilities

Trade payables 2.5 22,21,61,822 13,54,40,853 Other current liabilities 2.6 2,96,62,15,989 1,58,59,49,461 Short term provisions 2.7 2,79,22,026 2,02,20,171

3,21,62,99,837 1,74,16,10,485

4,30,16,29,950 3,32,85,48,301 ASSETS

Non current assetsFixed assets

- Tangible assets 2.8 47,43,107 47,91,146 - Capital work-in-progress 93,21,14,312 -

Deferred tax asset 2.9 3,97,413 - Long term loans and advances 2.10 4,01,06,043 1,87,39,214

97,73,60,875 2,35,30,360 Current assets

Inventories 2.11 3,01,40,56,017 2,90,50,70,450 Trade receivables 2.12 12,55,18,327 3,04,19,249 Cash and bank balances 2.13 3,25,62,419 13,43,76,506 Short term loans and advances 2.14 8,49,15,149 9,91,43,060 Other current assets 2.15 6,72,17,163 13,60,08,676

3,32,42,69,075 3,30,50,17,941

4,30,16,29,950 3,32,85,48,301

Significant accounting policies and Notes to accounts 1 & 2As per our report of even date attachedfor B S R & CompanyChartered AccountantsFirm's Registration Number: 128032W

Zubin Shekary G Yoganand D Kiran KumarPartner DirectorMembership No.: 048814

Hyderabad Hyderabad28-May-12 28-May-12 16

Chairman and Managing Director

Manjeera Retail Holdings Private LimitedBalance Sheet

(All amounts in Indian rupees, except share data and where otherwise stated)

Note

for Manjeera Retail Holdings Private Limited

For the year endedNote 31 March 2012

Revenue from sale of residential and commercial spaces 92,08,51,314 41,59,84,025 Other operating income 2.16 65,54,385 - Other income 2.17 50,07,400 -

93,24,13,099 41,59,84,025

ExpensesCost of inventories sold 2.28 84,67,10,990 33,35,21,322 Employee expenses 2.18 43,93,289 30,17,459 Finance costs 2.19 3,85,836 2,84,479 Depreciation expense 2.8 18,53,274 14,97,710 Other expenses 2.20 1,60,82,277 1,20,01,050

86,94,25,666 35,03,22,020

Profit before tax 6,29,87,433 6,56,62,005 Tax expense: - Current tax 2,72,10,000 2,03,60,000 - Deferred tax benefit (4,52,750) 55,337

2,67,57,250 2,04,15,337 Profit for the year 3,62,30,183 4,52,46,668 Earnings per share - par value of Rs.10 per share 2.24

- Basic and diluted 0.41 0.51

Significant accounting policies and Notes to accounts 1 & 2As per our report of even date attachedfor B S R & CompanyChartered AccountantsFirm's Registration Number: 128032W


Hyderabad Hyderabad28 May 2012 28 May 2012 17

Manjeera Retail Holdings Private LimitedStatement of Profit and loss account




For the year ended 31 March 2011

Cash flows from operating activitiesProfit before tax 6,29,87,433 6,56,62,005 Adjustments: Depreciation 18,53,274 14,97,710 Interest income (50,07,400) - Interest expense 73,302 2,16,014 Operating cash flows before changes in assets and liabilities 5,99,06,609 6,73,75,729 Increase in trade receivables (9,50,99,078) (3,04,19,249)

(Increase) / Decrease in loans and advances 6,31,41,160 (19,14,58,130) Increase in liabilities and provisions 54,12,33,899 62,09,28,373 Cash utilised in operations (11,47,87,791) (17,20,66,141) Income taxes paid, net (1,97,52,357) (1,80,921) Net cash utilised in operating activities (13,45,40,148) (17,22,47,062)

Cash flows from investing activitiesPurchase of fixed assets (18,05,235) (20,32,172)

(35,71,29,497) -

Interest received 35,18,834 - Net cash used in investing activities (35,54,15,898) (20,32,172)

Cash flows from financing activitiesProceeds form borrowings 98,82,43,380 25,73,08,047 Repayment of borrowings (60,00,28,119) - Interest paid (73,302) (2,16,014) Net cash from financing activities 38,81,41,959 25,70,92,033

Net increase/(decrease) in cash and cash equivalents (10,18,14,087) 8,28,12,799 Cash and cash equivalents at the beginning of the year 13,43,76,506 5,15,63,707 Cash and cash equivalents at the end of the year (refer note: 2.13) 3,25,62,419 13,43,76,506

As per our report of even date attachedfor B S R & CompanyChartered AccountantsFirm's Registration Number: 128032W


Hyderabad Hyderabad28 May 2012 28 May 2012 18

Manjeera Retail Holdings Private LimitedCash flow statement





Increase in inventories (inclusive of borrowing cost amounting to Rs. 921,885,667 (previous year: Rs. (68,39,70,381) (63,84,92,864)

Increase in capital work-in-progress (inclusive of borrowing cost capitalised amounting to Rs. 247,553,745 (previous year Rs. 149,689,189))


SIGNIFICANT ACCOUNTING POLICIES

1.1 Background and business

Manjeera Retail Holdings Private Limited (“the Company”) was incorporated on 25 February 2000. During the year 2006-07 the Company was reconstituted as a special purpose vehicle (SPV) to carry on the business of construction of property for mixed use. The principal activities of the Company are construction of property being developed for residential, retail and commercial purposes. Manjeera Constructions Limited and Trinity Capital (Six) Limited have entered into debenture cum subscription and shareholders agreement with the Company and hold 51% and 49% respectively in the equity share capital of the Company as at the balance sheet date. Further Manjeera construction Limited also continues to financially support the Company on a need basis.

1.2 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and comply with the Accounting Standards (AS) prescribed by Companies (Accounting Standards) Rules, 2006, other pronouncements of the Institute of Chartered Accountants of India (ICAI) and the relevant provisions of the Companies Act, 1956, (the ‘Act’) to the extent applicable. The financial statements are presented in Indian rupees, unless otherwise stated.

1.3 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

1.4 Inventories

Properties under development comprise of property under development (work-in-progress). Properties under development represent costs incurred in respect of unsold area of properties under development and costs incurred on projects/ portion of projects when revenue is yet to be recognised. Such costs include cost of land, development rights, direct materials, labour, borrowing costs and an appropriate portion of construction overheads based on normal operating capacity.

Properties under development are not written down below cost if the property is expected to be sold at or above costs.

Building materials and consumables are valued as cost. Cost of comprises costs of purchase and other costs incurred in bringing the inventories to their present location and condition


19

SIGNIFICANT ACCOUNTING POLICIES (Contd.)

1.5 Cash flow statement

Cash flows are reported using the indirect method, whereby net profit/ (loss) before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

1.6 Cash and cash equivalents

Cash and cash equivalents in the cash flow statement comprise cash in hand and balance in bank in current accounts, deposit accounts and in margin money deposits.

1.7 Revenue recognition

Revenue is recognised when all significant risks and rewards of ownership of residential/commercial properties are transferred, and it is probable that economic benefits associated with the transaction will flow to the enterprise and the amount of revenue can be measured reliably.

In case the Company is obliged to perform any substantial act after transfer of all significant risks and rewards of ownership, revenue from sale of residential/commercial properties is recognised on proportionate basis by applying percentage of completion method. The percentage of completion is determined with reference to the costs incurred to date to the total estimated costs.

1.8 Unbilled receivables

Unbilled receivables represents revenue recognised based on Percentage of completion method, over and above the amount due as per the payment plans agreed with the customers. Advances received in excess of revenue recognised are shown as advances.

1.9 Fixed assets and depreciation

Fixed assets are carried at cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes purchase price, non-refundable taxes, duties, freight and other incidental expenses related to the acquisition or installation of the respective assets. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised. Depreciation on fixed assets is provided using the written down value method at the rates specified in Schedule XIV to the Companies Act, 1956. In the opinion of the management, the rates specified in Schedule XIV reflect the economic useful lives of these assets. Depreciation is calculated on a pro-rata basis from/upto the date the assets are purchased/sold. Individual assets costing Rs. 5,000 or less are depreciated in full in the year of acquisition.


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1.10 Foreign exchange transactions

Foreign currency transactions are recorded using the exchange rates prevailing on the date of the respective transactions. Exchange differences arising on foreign currency transactions settled during the year are recognised in the profit and loss account. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by forward exchange contracts, are translated at year-end rates. The resultant exchange differences are recognised in the profit and loss account. Non-monetary assets are recorded at the rates prevailing on the date of the transaction.

1.11 Employee benefits The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The liabilities with regard to the gratuity plan are determined by actuarial valuation, carried by an independent actuary, as of the balance sheet date.

1.12 Borrowing costs Borrowing costs directly attributable to the acquisition/ construction of the qualifying asset are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred

1.13 Leases Leases where the lessor effectively retains substantially all the risks and rewards of ownership of the leased asset are classified as operating leases. Operating lease payments are recognised as an expense in the profit and loss account on a straight-line basis over the lease term.

1.14 Earnings per share The basic and diluted earnings per share are computed by dividing the net profit attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.15 Taxation Income tax expense comprises current tax and deferred tax. Current tax The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company. Deferred tax Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the year. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantially enacted by the balance sheet date.


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Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each balance sheet date and is written-down or written up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realised. The break-up of the major components of the deferred tax assets and liabilities as at balance sheet date has been arrived at after setting off deferred tax assets and liabilities where the Company has a legally enforceable right to set-off assets against liabilities and where such assets and liabilities relate to taxes on income levied by the same governing taxation laws.

1.16 Impairment of assets

The Company assesses at each balance sheet date whether there is any indication that an asset (including goodwill) or a group of assets comprising a cash generating unit may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. For an asset or group of assets that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. An impairment loss is reversed only to the extent that the carrying amount of asset does not exceed the net book value that would have been determined, if no impairment loss had been recognised.

1.17 Provisions and contingent liabilities The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is 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. Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event, based on a reliable estimate of such obligation.


Manjeera Retail Holdings Private Limited2. Notes to accounts(All amounts in Indian rupees, except share data and where otherwise stated)

As at As at31 March 2012 31 March 2011

2.1 Share capital

Authorised90,000,000 (previous year: 90,000,000) equity shares of Rs. 10/- each 90,00,00,000 90,00,00,000

Issued, subscribed and paid - up share capital88,235,294 (previous year: 88,235,294) of Rs. 10/- each, fully paid-up 88,23,52,940 88,23,52,940

Note:


Manjeera Constructions Limited: Number of shares 4,50,00,000 4,50,00,000 % of shares held 51.00% 51.00%Trinity Capital (Six) Limited: Number of shares 4,32,35,294 4,32,35,294 % of shares held 49.00% 49.00%

b. Terms and rights attached to the equity shares

2.2 Reserves and surplus

Surplus balance in the statement of profit and loss account:Opening Balance 3,80,26,623 (72,20,045) Add: Net profit after tax transferred from statement of profit and loss 3,62,30,183 4,52,46,668 Closing Balance 7,42,56,806 3,80,26,623

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The Company has only one class of equity shares having par value of Rs. 10/- each. Each holder of equityshare is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shareswill be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. Thedistribution will be in proportion to the number of equity shares held by equity shareholders.

a. Equity shareholders holding more than 5% of equity shares along with the number of equity shares held are :

Name of the shares holder

Manjeera Retail Holdings Private LimitedNotes to accounts (continued)(All amounts in Indian rupees, except share data and where otherwise stated)

2.3 Long term borrowings

As at As at

31 March 2012 31 March 2011

- from banks - 49,91,07,601 - from others Housing and Urban Development Corporation Ltd

- 16,66,01,634

Vehicle Loans (refer to note c below) 63,440 4,70,552 Loan from holding company 12,81,37,098 -

12,82,00,538 66,61,79,787

b. All the term loans are repayable with in next twelve

e. Loan from holding company payable after 31 March 2013.

2.4 Long term provisions

5,19,829 3,23,129 5,19,829 3,23,129

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Notes:

Particulars

Secured Term loans: (refer to note a below)

- Provision for gratuity (refer to note 2.26)Provision for employee benefits

a. Term loans are secured by a pari passu charge on:(i) project immovable properties viz. project land, building etc by way of a mortgage by deposit of titledeeds;(ii) assignment of rights of the land and project documents and insurance policies relating to the project;(iii) personal guarantee of the promoter director Mr G Yoganand and Corporate guarantee of ManjeeraConstructions Limited, the holding company;(iv) pledge of shares of entire shareholding of Manjeera Constructions Limited in Manjeera Retail HoldingsPrivate Limited; and (v) assignment of Escrow account and charge on receivables.c. Vehicle loan is secured by way of hypothecation of vehicle purchased by the Company.d. As on 31 March 2012, the Company has defaulted in paying the interest towards term loan from banks amounting to Rs. 1,22,83,028


As at As at 31 March 2012 31 March 2011

2.5 Trade payables

- due to micro and small enterprises (refer to note 2.27) - - - others creditors 22,21,61,822 13,54,40,853

22,21,61,822 13,54,40,853

2.6 Other current liabilities

36,76,47,000 36,76,47,000

Current maturities of long-term debt 1,77,61,05,296 84,99,10,786 Advances from customers 23,45,51,184 6,73,13,711 Interest accrued and due on borrowings 2,83,69,096 1,08,30,000 Interest accrued but not due 43,33,55,028 24,33,13,166 Accrued expenses 1,94,55,336 1,26,75,578 Other liabilities 10,66,07,863 3,40,09,791 Book overdraft 1,25,186 2,49,429

2,96,62,15,989 1,58,59,49,461 Note:

2.7 Short term provisions

Provision for income tax (net of advance tax) 2,76,36,722 2,01,79,079 Provision for gratuity (refer note: 2.26) 2,85,304 41,092

2,79,22,026 2,02,20,171

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Particulars

Trade payables

367,647 (previous year: 367,647) 14%, cumulative mandatorily convertible debentures of Rs 1,000 each (refer

14% cumulative mandatorily convertible debentures shall be compulsorily converted into such numberof equity shares as would be determined by dividing the aggregate amount received for thedebentures by the conversion price as would be determined as per then applicable valuationguidelines and at the lowest certifiable value, at any time post expiry of 36 months from the date ofissue of such debentures. 245,098 debentures and 122,549 debentures were issued on 22 March2007 and 29 November 2007 respectively. As of 31 March 2012, the debenture holders have notexercised their right to convert the debentures into equity shares. These debentures are unsecured.


2.8 Fixed assets

As at 1 April 2011 Additions Disposal

As at 31 March 2012

As at 1 April 2011

Charge for the year Disposal

As at 31 March 2012

As at 31 March 2012

As at 31 March 2011

Tangible:Plant and machinery 84,470 - - 84,470 33,781 7,051 - 40,832 43,638 50,689 Furniture and fixtures 7,15,356 4,20,760 - 11,36,116 2,04,025 4,70,577 - 6,74,602 4,61,514 5,11,331 Vehicles 34,31,907 - - 34,31,907 11,87,472 5,81,085 - 17,68,557 16,63,350 22,44,435 Electrical equipment 1,01,066 5,90,220 - 6,91,286 30,231 42,785 - 73,016 6,18,270 70,835 Office equipment 8,55,830 4,17,865 - 12,73,695 1,83,458 1,35,076 - 3,18,534 9,55,161 6,72,372 Computer equipment 22,32,835 3,76,390 - 26,09,225 9,91,351 6,16,700 - 16,08,051 10,01,174 12,41,484

Total 74,21,464 18,05,235 - 92,26,699 26,30,318 18,53,274 - 44,83,592 47,43,107 47,91,146 Previous year 53,89,292 20,32,172 - 74,21,464 11,32,608 14,97,710 - 26,30,318 47,91,146 42,56,684

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Description Gross block Accumulated depreciation Net block



2.9 Deferred tax asset/(liability)

Deferred tax asset comprises: - fixed assets 1,36,188 - - other timing differences 2,61,225

Deferred tax liability comprises: - fixed assets - 55,337

3,97,413 (55,337)

2.10 Long term loans and advances(Unsecured, considered good)

Security deposits (refer note given below) 3,97,29,607 1,82,64,407 Prepaid expenses 3,76,436 4,74,807

4,01,06,043 1,87,39,214

Note

2.11 Inventories

Properties under development 2,98,72,04,997 2,90,48,95,608 Building materials and consumables 2,68,51,020 1,74,842

3,01,40,56,017 2,90,50,70,450 27

Security deposits includes an amount of Rs. 36,688,000 (previous year: Rs. 17,000,000) with Housingand Urban Development Corporation Ltd (HUDCO) is deposited as security against one quarter intereston term loan taken from HUDCO.


As at As at 31 March 2012 31 March 2011

2.12 Trade receivables (Unsecured, considered good)

Debts outstanding for period exceeding six months 5,56,80,877 - Other debts 6,98,37,450 3,04,19,249

12,55,18,327 3,04,19,249

2.13 Cash and bank balances

Cash and cash equivalents:Cash on hand - - Balance with banks: - in current accounts 6,21,463 1,75,756 - in deposit accounts - 7,50,00,000

Other bank balances:Balance with banks: - in current accounts (refer note: a) 54,19,456 3,46,79,250 - Margin money deposits (refer note: b and c) 2,65,21,500 2,45,21,500

3,25,62,419 13,43,76,506

Notes:

2.14 Short term loans and advances(Unsecured, considered good)

Advance to suppliers and service providers (refer note below) 2,60,49,745 6,28,20,937 Prepaid expenses 13,46,527 26,43,460 Cenvat receivable 5,68,90,926 3,26,40,436 Other advances 6,27,951 10,38,227

8,49,15,149 9,91,43,060

Note:

2.15 Other current assets

Unbilled receivables 6,37,03,411 13,39,83,490 Interest accrued but not due 35,13,752 20,25,186

6,72,17,163 13,60,08,676 28

a) Balance with banks in current accounts includes an amount of Rs. 5,419,456 (previous year: Rs.34,679,250) in ESCROW account, which has been assigned to lenders as per sanction terms with the b) Balance with banks in deposit accounts includes restricted bank balance of Rs. 26,521,500(previous year: Rs. 24,521,500) towards margin money deposits against bank guarantees. c) Balance with banks in deposit accounts includes fixed deposits with maturity for more than 12months is Nil (previous year: 24,521,500).

Includes Rs. Nil (previous year: Rs. 24,828,600) paid as a mobilisation advance for construction worksto Manjeera Constructions Limited, the holding company. Maximum amount outstanding during theyear Rs. 24,828,600.


2.16 Other operating income

Scrap sales 65,54,385 -

65,54,385 - 2.17 Other income

Interest income: - from banks 33,35,512 - - from others 16,71,888 -

50,07,400 -

2.18 Employee expenses

Salaries and wages 36,93,300 27,35,105 Contribution to provident and other funds 1,64,089 1,21,517 Staff welfare expenses 94,988 36,061 Gratuity 4,40,912 1,24,776

43,93,289 30,17,459 29

For the year ended31 March 2011




2.19 Finance costs

Interest expense 73,302 2,16,014 Bank charges 3,12,534 68,465

3,85,836 2,84,479

2.20 Other expenses

Legal and professional 9,34,187 11,81,145 Rent 33,43,900 33,43,695 Travelling 30,45,298 8,61,759 Office maintenance 17,68,874 11,47,887 Sales commission 16,74,031 9,65,196 Communication 10,54,682 14,09,560 Conveyance 9,71,516 3,81,761 Security charges 6,76,420 5,90,835 Printing and stationery 5,41,029 6,25,774 Donations 2,27,116 - Miscellaneous 18,45,224 14,93,438

1,60,82,277 1,20,01,050 30


M/s. MANJEERA RETAIL HOLDINGS PRIVATE LIMITED # 304, Aditya Trade Centre, Ameerpet, Hyderabad – 50038

ATTENDANCE SLIP

PLEASE COMPLETE THE ATTENDANCE SLIP AND HAND IT OVER AT

THE ENTRANCE OF THE MEETING HALL

Folio-No: DP ID*: No. of. Shares Held: Client-ID*: Name & Address of the Shareholder/Proxy: I/We hereby record my/our presence at the 12th Annual General Meeting of the Company to be held on Thursday, the 27th day of September, 2012 at 2.30 P.M. at the Registered Office of the Company situated at # 304, Aditya Trade Centre, Ameerpet, Hyderabad- 500 038. Signature of Shareholder/Proxy: * Applicable for Investors holding shares in electronic form.

…………………………………………………………………………………………….

M/s. MANJEERA RETAIL HOLDINGS PRIVATE LIMITED # 304, Aditya Trade Centre, Ameerpet, Hyderabad – 50038

PROXY FORM

Folio-No: DP ID*: No. of. Shares Held: Client-ID*: I/We hereby record my/our presence at the 12th Annual General Meeting of the Company to be held on Thursday, the 27th day of September, 2012 at 2.30 P.M. at the Registered Office of the Company situated at # 304, Aditya Trade Centre, Ameerpet, Hyderabad- 500 038. Signed this ……….. day of September, 2012. Signature …………………………. ................. * Applicable for Investors holding shares in electronic form.

Note:

The proxy in order to be effective should be duly stamped, completed & signed across the stamp and must be deposited at the Registered Office of the Company not less than 48 hours before the time for holding the aforesaid meeting. The proxy need not be a member of the Company.

Affix Re.1 Revenue Stamp

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