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Place : MumbaiDated : 29 May, 2013th
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
NOTICE
Notice is hereby given that the 21 Annual General Meeting of the Members of GARNET CONSTRUCTIONLIMITED will be held on Monday, the 30 September, 2013 at 10.00 a.m. at Ashish - 1 Banquet, Land MarkBuilding, Link Road,Mid Chowky, Malad ( West), Mumbai - 400 064, to transact the following business :
ORDINARY BUSINESS
1.
2.
3.
4.
SPECIAL BUSINESS
stTo receive, consider and adopt the Audited Balance Sheet as at 31 March, 2013, and the Profit & Loss Account for the year ended on that date and the reports of Directors’ and Auditors’ thereof
To re- appoint a Director in the place of Shri Shiromani Chauhan who retires by rotation and being eligibleoffers himself for re-appointment.
To re- appoint M/s Shankarlal Jain & Associates, Chartered Accountants, as Statutory Auditor of the Company and to fix their remuneration.
To consider and if thought fit to pass with or without modification, the following resolution as Ordinary Resolution :
“ Resolved that pursuant to Section 257 and other applicable provisions of the Companies Act, 1956 Mrs. Seema Bhattar be and is hereby appointed as Director, who was appointed as an additional director and as such who holds office up to the ensuing annual general meeting.”
By order of the BoardFor Garnet Construction Limited
Kishan Kumar KediaChairman & Managing Director
Regd.Office : 501/531, Laxmi Mall, Laxmi Industrial Estate, New Link Road, Andheri West, Mumbai - 400 053.
NOTES :
1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE PROXY, IN ORDER TO BE EFFECTIVE, MUST BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE MEETING.
rd2. The register of Members and the Share Transfer Book will remain closed from 23 September, 2013 to th 30 September, 2013 (both days inclusive) for the purpose of ensuing Annual General Meeting.
3. The annual report containing accounts for the financial year ended March 31, 2013 together with report of Auditors and Directors and the notice of ensuring AGM are available on the company website: www.garnetconstructions.com.
st
th
1
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
2
Explanatory statement, as requierd under Section 173 (2) of the Companies Act, 1956. ITEM NO. 4
During the year Mrs. Seema Bhattar was appointed as Additional Director in the Board of Directors Meeting and she is having enough knowledge and experience in marketing, the same will help the Company for better marketting of its project. Therefore, it is the interest ofthe Company to appoint her as regular director of the Company. The board recommended theacceptance of the resolution. None of the directors is deemed to be interested or concerned inthe said resolution except Mrs. Seema Bhattar, Director of the Company
By order of the Board
For Garnet Construction Limited
Place : MumbaiDated : 29 May, 2013th
Kishan Kumar Kedia
Chairman & Managing Director
4. Members are requested to :
• Immediately, intimate change of address, if any, to company, quoting reference of registered folio number or client DP ID No.,
• Produce attendance slip at the entrance of meeting hall;• Bring the Annual Report at the entrance of the meeting hall;
5. A member desirous of getting any information on the accounts or operations of the Company is requested to forward his/her queries to the Company at least ten days prior to the meeting so that required information can be made available at the meeting.
6. Green Initiative in the Corporate Governance
The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing the Companies the paperless compliance and the said ministry has issued a circular stating that the service of notice/documents including annual reports can be sent by e-mail to the members.
In order to abide by the circular, the members are the requested to resister their e-mail address, to enable the company to send reports by e-mail. The members holding shares in demat form may register their e-mail address with the respective DPs and the members who holds the shares in physical form are requested to register their e-mail with the Company or Registrar & Share Transfer Agent. This will enable the company to send the annual reports by e-mail.
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
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Annexure to Notice
Details of Directors seeking appointment / re - appointment at the ensuing Annual General Meeting
1
2
3
4
5
6
Name
Age
Qualification
Nature of Experience
List of other Directorship
held (excluding Pvt. Co.)
Chairman / Member of the
Committee of other
Companies
Shri Shiromani Chauhan
79 Years
Graduate
Mrs. Seema Bhattar
36 Years
Graduate
Over four decade of experience in CorporateAdvisory Services
Nil
Nil
Over 10 years of experiencein Marketing and Administration
Nil
Nil
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
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DIRECTORS’REPORTDear Shareholders,
Your Directors have pleasure in presenting the Twenty-First Annual Report and Audited Accounts for the year ended 31st March, 2013.
FINANCIAL RESULTS(Rs. In Lacs)
2012-2013 2011-2012
Stand-alone
Total Income 2102.13 826.28
Profit before Depreciation, Interest & Tax 397.92 378.74
Depreciation 35.92 32.93
Interest 226.04 198.00
Profit before Tax 135.96 147.81
Provision for Taxation 27.00 16.65
Profit after Tax 108.96 131.16
Share Capital 1390.22 1390.22
Reserves & Surplus 4805.64 4696.69
DIVIDEND
The directors of the company has not recommend any dividend for the year.
OPERATIONAL REVIEW
During the year under review the company has posted net profit of Rs. 108.96 Lacs as against previous year profit of Rs. 131.16 lacs, the same is to due good response towards the Company’s various project and better marking strategy adopted by the Company. There is a substantial increase in sales as well as operational expenses compare to previous year, the operational expenses increased mainly due to various ongoing project undertake by the Company. The management is confident in achieving better result in coming financial year..CORPORATE GOVERNANCE
A report on the corporate governance along with a certificate from the auditors of the company regrading the compliance of conditions of the corporate governance as stipulated under Clause 49 of the listing agreement is included and forms part of this annual report.
All Board members and senior management personnel have affirmed compliance with code of conduct for the year 202-13. A declaration to this effect certified by the Chairman & Managing Director of the company is also attached in the annual report. The Chairman and the Finance Director of the company have certified to the Board with regard to the financial statements and other matters as required under clause 49 of the listing agreement and the said certificate is also attached in the annual report.
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
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MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of operations, performance and future outlook of your company and its businesses is given inthe Management Discussion and Analysis, which froms part of this annual report.
FIXED DEPOSITS
The company has not accepted any deposit from the public during the year under review, within the meaning of section 58A of the Companies Act, 1956 and the rules made there under.
JOINT VENTURE
During the financial year, the Company has entered into a Joint Venture agreement with Callista Realty Private Limited for a 40 storey residential project namely Brillante and the project is located at Panvel.
INTERNAL CONTROL SYSTEM & THEIR ADEQUACY
The Company has in place adequate systems of internal control that are commensurate with its size and nature of the business and documented procedures covering all financial and operating functions. The company being in real estate industry, it has in place clear processes and well defined roles and responsibilites for its staff at various levels. The Management has a defined reporting system, which facilitates monitoring and adherence to the process and systems in place.
AUDITORS
M/s Shankarlal Jain & Associates, Chartered Accountants, Mumbai, Statutory Auditors of the company hold office up to the conclusion of this annual general meeting and are recommended for re-appointment. The company has received a certificate under section 224 (1B) of the Companies Act, 1956 stating that the appointment, if made, will be within the limits as specified in that section.
AUDITORS’ REPORT
Your Directors refer to the observations made by the Auditors inthier report and wish to state that the notes forming part of accounts are self explanatory and hence do not require any further comments.
DIRECTORS
Mr. Shiromani Chauhan Director of the company, retire by rotation and being eligible offer himself for reappointment. you are requested to reappoint him. Further during the year Mr. Anil Patel resigned, board place their appreciation to him for his valuable support and contribution. Besides, during the year board has appoint Mrs. Seema Bhattar as additional director, you are requested to consider her re-appointment as regular Director.
DIRECTOR RESPONSIBILITY STATEMENT
Your Director make the following statement to section 217 (2AA) of the Companies Act, 1956:
i) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures ;
ii) Appropriate accounting policies had been selected and applied consistently and made judgements 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 of the company for that period;
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
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iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provision of the Companies Act,1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and
iv) The accounts has been prepared on going concern basis
PARTICULARS OF EMPLOYEES
Statement under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules 1975, as amended by the Companies Amendment Act, 1988, none of the employee drawns salary in excess of Rs. 5,00,000/- per month, hence no disclosure is required.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
The information required under section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to the matters specified therein are not applicable to your company.
FOREIGN EXCHANGE EARNING AND OUTGO
During the year under review, the Company has incurred foreign expenses of Rs. 8.29 lacs towards travelling and subscription.
DELISTING OF SECURITIES FROM JAIPUR STOCK EXCHANGE
During the year under review the Company has received the delisting approval from Jaipur Stock Exchange. Presently, the company shares are only listed at Bombay Stock Exchange Ltd.
LISTING FEES
The Company confirms that the Annual Listing Fees due to Bombay Stock Exchange Ltd., Mumbai for the Financial Year 2013-2014 has been paid.
CUSTODIAN CHARGES
The Company confirms that the custodian charge due to National Securities Depository Ltd. and Central Depository Services (India) Ltd. have been paid for the financial year 2013-14 as applicable and payable as per SEBI circular in this regard.
ACKNOWLEDGMENT
Your Directors are pleased to place on record their deep appreciation towards the sincere services and co-operation extended by employees of the organization at all levels. They also wish to place on record their gratitude for the confidence placed in them by the banks & financial institutions they are associated with. Further, your Directors wish to thank the various regulatory authorities, business associates and clients for the valued co-opreation.
Place : MumbaiDated : 29 May, 2013th
By order of the Board
For Garnet Construction Limited
Kishan Kumar Kedia
Chairman & Managing Director
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
7
ANNEXURE TO DIRECTOR’S REPORT
REPORT ON CORPORATE GOVERNANCE
1. Corporate Philosophy
Your Company believes that good corporate governance is essential to achieve long term goals and also to enhance the shareholders value. The Company is engaged in construction activity and rendering good quality of industrial as well as residentail construction at khopoli to strive for continues improvement in all other areas to create value that can sustain over a long term for all its shareholders, employees, customers, government and others.
Your Company cofirms the compliance of corporate governance, in all material aspects, with the revised clause 49 of the listing agreement, the details of which are given below:
2. Board of Directors :
A. Composition of the Board
The Board of your Company consists of Executive Chairman and eminent person with considerable professional experience form varied disciplines. The present strength of the company as on March 31, 2013 is six directors. Fifty percent of the Board consists of non executive independend director.
B. Board Meeting and procedure
The Board of Directors of your Company met eleven times during the year on 26.04.2012, 26.07.2012, 13.08.2012, 03.09.2012, 16.10.2012, 29.10.2012, 30.10.2012, 05.11.2012, 30.11.2012, 29.01.2013 and 25.03.2013. The details pertaining to the name and category of Directors on the Board, their attendance at the Board Meetings held during the financial year 2012-13 and at the last Annual General Meeting of the Company and the no. of Directorship on the Board or membership/chairemanship in committee held by them across all the Companies are as under :
Composition of the Board, attendance record, membership of Board Committees
Name Category AttendanceNo. of OtherDirectorship $
Commitee(as on March 31, 2013)
Mr. Kishan Kumar Kedia Executive Non Independent 11 -
-
-
-
-
-
-
Y
Y
Y
N
Y
N
N
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
11
7
8
4
3
Executive Non Independent
Executive Non Independent
Non Executive Non Independent
Non Executive Non Independent
Non Executive Non Independent
Non Executive Non Independent
Mr. Arun Kedia
Mr. Sanjay Kedia
Mr. Shriromani Chauhan
Mr. Santosh Ginoria
Mr. Anil Patel*
Mrs. Seema Bhattar**
BoardMeeting
LastAGM
MemberShip
ChairmanShip
*Resigned w.e.f. 05.11.2012
**Appointed w.e.f. 05.11.2012
$ Directorship not included in Private Limited Company.
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
8
3. Audit Committee : Terms of Reference
The terms of reference of this committee are wide enough covering the matters specified for Audit Committee under Clause 49 of the Listing Agreement as amended.
• Overseeing of the Company’s financial reporting process and disclosure of financial information.
• Review of quarterly financial statement ensuring compliances with regulatory guidelines before submission to the Board.
• Recommended appointment, removal of statutory auditors and payment of fees to them.
• Preparation of various financial statement for better fund planning.
• Assistance in meeting financial requirement of the Company.
• Statement of significant related party transactions.
Meeting and Attendance
The Audit committee comprises of three members and all are independent Directors, to exercise powers and discharge function as stipulated in section 292A of the Companies Act, 1956. During the year four meeting were head on 26.04.2012, 26.07.2012, 29.10.2012 & 29.01.2013 and all the members attended the meeting. The role and terms of reference of the audit committee covers the matters specified for audit committees under clause 49 of the listing agreement and provisions of Companies Act, 1956.
The Composition of Audit Committee is as under :
4. Remuneration Committee
Non- Executive Directors were neither paid any remuneration nor sitting fees. The Company has no stock Option Scheme for any of its Directors. In view of above, the Board has not felt the need for a separate remuneration commitee.
Details of managerial remuneration paid to its Directors are as under : Salary : Rs. 55,20,000Commission : - Other Perquisite : - Total : Rs. 55,20,000
Sr. No. Name of the Members
Shiromani Chauhan
Santosh Ginoria
Seema Bhattar**
Anil Patel*
Chairman
Member
Member
Member
Non-Executive & Independent
Non-Executive & Independent
Non-Executive & Independent
Non-Executive & Independent
1
2
3
4
Status Director Status
*Resigned w.e.f . 05.11.2012 **Appointed w.e.f. 05.11.2012
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
9
5. Shareholders / Investors Grievance Committee
The Board has constituted a share transfer committee consisting of
Mr. Arun Kedia is designated as Compliance Officer as on 31 March, 2013.
Terms of Reference : • To look into the redressing of Shareholders and Investors complaints regarding non-receipt of
shares sent for transfer, non-receipt of dividend warrants and Annual Reports etc.• To review the share transfer process and status of transfers pending registration.
During the year, the Company has not received any investor complaints.
6. General Body Meeting
The details of last there Annual General Meeting
Postal Ballot :
• No resolution was passed through postal ballot under the provision of Section 192A of theCompanies Act,1956 and the Companies (Passing of Resolutions by Postal Ballot) Rules, 2011
• At the ensuring Annual General Meeting also, no resolution is proposed to be passed through postal ballot.
• The postal ballot exercise shall be conducted from time to time in terms of the provisions referred in respect of matters where applicable.
7. Disclosures
a. Related Party Transaction
The related party transactions are furnished under the notes to forming part of accounts.
b. Accounting treatment in preparation of financial statement
The company follows the Accounting Standards issued by the Institute of Chartered Accountants of India and in the preparation of the financial statement, the company has not adopted a treatment different from that prescribed by the Accounting Standards.
Sr. No.
Year
Name of the Members
Date
Mr. Kishan Kumar Kedia
Mr. Sanjay Kedia
Mr. Arun Kedia
September 28, 2012
September 29,2011
September 29,2010
Chairman
Member
Member
Ashish Banquet, Malad (West), Mumbai- 400 064
Ashish Banquet, Malad (West), Mumbai- 400 064
Ashish Banquet, Malad (West), Mumbai- 400 064
10.00 am
10.00 am
10.00 am
Executive & Non Independent
Executive & Non Independent
Executive & Non Independent
1
2
3
2012
2011
2010
Status
Venue
Director Status
Time
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
10
c. Risk Management
Risk assessment and minimization procedures are periodically reviewed by the Internal Finance Committee and the Board of Directors of the company.
d. There were no instances of non-compliance or penalty / strictures imposed on the Company by Stock Exchanges or SEBI or any statutory authority on any matter related to Capital Markets during the last three years.
e. CEO/CFO Certification
In terms of Clause 49 of Listing Agreement, the Certification by Managing Director and Whole- time Director has been obtained and the said certification has been placed before the Board Members of the Company for perusal.
8. Means of Communication
• Quarterly/Half yearly result are published in English & Marathi newspapers.
• Quarterly, Half Yearly and Annual Financial Results of the Company are sent to the Stock Exchange immediately after they have been approved by the Board. Quarterly and Annual Results are published in the newspaper and also uploaded on company’s website www.garnetcostructions.com
• Management Discussion and Analysis Report form the part of the Annual Report.
9. General Shareholder Information
1) Annual General Meetting :
Day & Date & Time : Monday, 30th September, 2013 at 10.00am.Venue : Ashish Banquet, Malad (West), Mumbai - 400 064
2) Date of Book closure : Monday, 23rd September, 13 to Monday, 30th
September, 13 (both days inclusive. )
3) Dividend payment date : Not applicable since no dividends is recommended by the Board.
4) ISIN No. : INE797D01017
5) Reporting of Un-audited Financial Result : In respect of year 13-14a) First quarter : Last week of July, 13b) Second quarter : Last week of October, 13C) Thirty Quarter : Last week of January ,14d) Fourth quarter : Last week of May, 14e) Annual General Meeting (For 13-14) : By August / September, 14
6) Listing on Stock Exchanges : Bombay Stock Exchanges.During the year Company has received delisting approved from Jaipur Stock Exchange.
7) Stock Code : The Stock Exchange, Mumbai -526727
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
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8) Market Price Data - High/Low during each month of the financial year 2012-2013 are as follows :
9) Registrar & Share Transfer agent ( RTA) : M/s Link Intime India Pvt. Ltd.(for physical & demat shares) C-13, Panalal Silk Mill Compound,
LBS Marg, Bhandup, Mumbai - 400 078.
10) Share Transfer System : All Valid requests for Share transfer have been processed and noting is pending. Share transfer committee meets as and when required depending upon the volume of transfers . Share Certificates in physical mode are sent as statutorily provided.
11) Distribution of shareholding as on 31.03.2013
12) Shareholding pattern as on 31.03.2013
Month Bombay Stock Exchange Ltd.LowHigh
AprilMay JuneJulyAugustSeptemberOctober NovemberDecemberJanuaryFebruaryMarch
14.1917.9721.0520.0019.8016.2516.3015.9516.2515.6614.4213.00
09.7511.6915.2516.5515.0512.6013.5410.6510.7013.0011.3110.50
Share Holding ofNominal Value
Share Holders
No. In Rs. No. % to Total
Share Amount
0
5001
10001
20001
30001
40001
50001
100001 and Above
5000
10000
20000
30000
40000
50000
100000
5183
460
218
59
27
43
43
66
6099
84.98
7.54
3.58
0.97
0.44
0.70
0.71
1.08
100.00
869846
387546
337025
151934
97398
204630
337254
11516567
13902200
6.26
2.79
2.42
1.09
0.70
1.47
2.43
82.84
100.00Total
Category
Promoters
Private Corporate Bodies
Indian Public
NRIs/ OCBs
Clearing Member
Grand Total
56,78,123
41,83,760
38,90,437
1,29,010
20,870
1,39,02,200
40.84
30.09
27.98
0.93
0.15
100.00
No. Of Shares % of Shares
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
12
13) Shares held by Non- Executive Directors as on 31.03.2013
14) Reconciliation of Share Capital Audit Report :
Secretarial Audit is carried out every quarter and the report thereon were placed before the Board of Directors and submitted to the Stock Exchanges. The audit inter-alia confirms that the total listed and paid -up share capital of the Company is in agreement with the aggregate of the total number of shares in dematerialized form and total number of shares in physical form.
Address for Correspondence :
• Shareholders holding shares in physical Mode are requested to lodge share transfer, transmission and intimate changes if any in their registered addresses, residential status etc. quoting their folio no to Company’s Registrar and Share Transfer Agent.
• Query on Annual Report be addressed to Company’s registered office.
• Designated email id : [email protected].
Compliance :
This section of the report together with the information given under Management Discussion and Analysis and brief resume of Directors constituted a detailed report on Corporate Governance.
The Company has complied with Mandatory requirement of Corporate Governance. The Board would review implementation of Non-Mandatory Requirements of Corporate Governance Code in due course of time.
Auditors Certificates regarding compliances of conditions of corporate Governance is annexed to this report.
Declaration on Code of Conduct
The Company has framed a Code of Conduct for the Members of the Board of Directors and the Senior Management personnels of the Company pursuant to Clause 49 of the Listing Agreement with Stock Exchange to further strengthen corporate governance practice in the Company. They have affirmed compliance with the said code.
Sr. No.
Mode Of Holding
1
2
3
Physical
Electronic
Total
Mr. Shiromani Chauhan
Mr. Santosh Ginoria
Mrs. Seema Bhattar
43,53,805
95,48,395
1,39,02,200
1000
900
-
31.32
68.68
100.00
Name of the non-Executive Directors
Number of Shares
No. of Shares Held
% of Share
For Garnet Construction Limited
Place : MumbaiDated : 29 May, 2013th
Kishan Kumar Kedia
Chairman & Managing Director
For Garnet Construction Limited
Kishan Kumar Kedia
Chairman & Managing Director
Place : MumbaiDated : 29 May, 2013th
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
13
CEO & CFO CERTIFICATION
The Board of Directors Garnet Construction Ltd. Mumbai
Re- Financial Statement for the year 2012-2013 -Certification
We, Kishan Kumar Kedia, Chairman & Managing Director and Mr. Sanjay Kedia, Finance Director, on the basic of the review of the financial statements and cash flow statement for the financial year ending March 31, 2013 and to the best of our knowledge and belief, thereby certify that :-
1. These statements do not contain any materially untrue statements or omit any material fact or contains statement that might be misleading.
2. These statements together present a true and fair view of the Company’s affairs and are in Compliance with existing accounting standards, applicable laws and regulations.
3. There are to the best of our knowledge and belief, no transaction entered into by the company during
the year ended March 31,2013 which are fraudulent, illegal or violative of the company’s code of conduct.
4. We accept responsibility for establishing and maintaining internal controls for financial reporting,
and that we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee those deficiencies, of which we are aware, in the design or operation of the internal control systems and that we have taken the required steps to rectify these deficiencies.
5. We further certify that :
a) There have been no significant changes in the internal control over financial reporting during this year.
b) There have been no significant changes in accounting policies during this year and that the same have been disclosed in the notes to the financial statements.
c) There have been no instances of significant fraud of which we have become aware and the involvement therein, of management or an employee having significant role in the Company’s internal control systems over financial reporting.
Kishan Kumar Kedia
Chairman & Managing Director
Sanjay Kedia
Finance Director
Place : MumbaiDated : 29 May, 2013th
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
14
Introduction
Real Estate business was one of the key drivers of growth before we witnessed the present economic slowdown. Now with companies trying to consolidate their positions and finding effective means of sustaining growth. The management of real estate has merged as one of the key challenges for the corporate sector. The economic slowdown in the market have resulted in increasing pressures on the margins of companies operating out of India, which in turn has lead to the companies looking to cut cost though reducing expenditure on the real estate segment.
The real estate sector in India assumed greater prominence with the liberalization of the economy , as the consequent increase in business opportunities and labour migration lead to rising demand for commercial and housing space. At present, the real estate and construction sectors are playing a crucial role in the overall development of India’s core infrastructure.
Industry Structure & Development
The FY2012/13 had a growth of 6.0% for the Indian construction sector. Due to monetary issues and other related policies the Indian construction industry showed a lackluster performance in 2012-13. But the outlook for the construction sector beyond FY2012/13 is brightening up. Not only are monetary conditions likely to improve for construction companies in FY2013/14, but the government is also making pertinent efforts to remove bottlenecks that are delaying infrastructure projects in India. India’s construction sector is to reach 7.6% growth in FY2013-14.
In 2012, the Asian Development Bank (ADB) and India Infrastructure Finance Company Limited (IIFCL) have launched the first version of the credit enhancement scheme or infrastructure bond guarantee scheme. This risk- sharing facility will partially guarantee INR7.2bn (US$128mn) of rupee dominated bonds issued by Indian companies to finance infrastructure projects. In 2012, the government announced that it is planning to set up a National Investment Board (NIB) to speed up infrastructure development within the country.
The NIB will focus on fast-tracking the execution of approved projects by getting all regulatory clearances. In 2012, the Indian government finalized the long-delayed bill for land acquisition, paving the way for the bill to be introduced during the current parliamentary session. The final draft of the bill now proposes that for land for public-private partnership (PPP) and private projects can be acquired with a two-thirds majority from affected landowners-an improvement from the earlier requirement of 80%.
Opportunities and Threats
A. Opportunity :
Real Estate sector is not only the biggest contributor to Gross Domestic Product (‘GDP’) of the country but is also the fifth largest sector in terms of Foreign Direct Investment (‘FDI’) inflows in the country. Real Estate Sector in India Contributes to 6.20% of the nation’s GDP , and this number is projected to increase to 7.1% in the next five (5) years.
There are certain positive developments like parliament’s approval of foreign direct investments (FDI) in multi-brand retail; a sign of cooling down of inflation, RBI is expected to cut interest rates, fuelling real estate demand, etc.
Further, Non-resident Indians and foreign citizens of Indian origin are now allowed to purchase property in India for residential or commercial purposes. Also, Proposed Real Estate (Regulation and Development) Bill to enhance transparency and accountability in real estate transactions, restoring confidence of the public in the industry.
MANAGEMENT DISCUSSIONS AND ANALYSIS
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
15
India has been named the fifth most favourable destination for international retailers, according to the 2012 Global Retail Development Index (GRDI) by AT Kearny. ASSOCHAM predicts that the Indian retail sector will grow by 15 per cent year-on-year for the next five years, due to positive developments like the parliament’s approval of foreign direct investment (FDI) in multi-brand retail, which would help attract foreign investments and boost the retail real estate industry.
On top of that, after completing the Magic Hills Projects successfully the Company is presently dealing in various residential projects such as Magic Life, Magic Heaven, Brillante and also construction has been taken place for company commercial site namely Garnet Palladium. The Company is also planning to start few more residential projects in coming financial years.
B. Threats :
The real estate market in India has been exposed to much changes in government regulations,
especially in recent years. An example is the upcoming Real Estate (Regulation and Development)
Bill 2012, which may dictate that developers have to compensate land owners with twice the value
of the land in urban areas and four times the value in rural areas. Developers will also not be able to
begin executing a housing project until it had acquired all the necessary clearances and submitted
them as proof before a regulatory authority. The bill also restricts developers from collecting any
proceeds from buyers until permission to start on the project had been obtained. Such regulations
cause uncertainty, cost overruns and delays in the execution of projects, and hence affect the cash
flow of the company.
Beside Government policy, a fall in prices in the region due to oversupply or a drop in demand could adversely affect all of its revenue streams and hence, the profitability of the company. However, the Company has a strong belief that a promising and rapidly growing city like Mumbai and its nearby vicinity offers immense opportunity and little risk. The Company is confident in its knowledge of the Mumbai and its surrounding market.
Financial Performance
INCOME: The total income of the company increased by 156.76 percent from 818.70 lacs in 2011-12 to 2102.13 lacs in 2012-13.
EBITDA: The EBITA of the company increased by 5.07 percent from 378.72 lacs in 2011-12 to 397.92 lacs in 2012-13.
PAT: The profit after tax of the company decreased by 16.91 percent from 131.14 lacs in 2011-12 to 108.96 lacs in 2012-13.
Internal Control Systems
The company has always believed in being committed to quality and has continued to keep focus on processes and controls. The accounts team continues to streamline the process and manage risk and comprises of professionals. The company has in place adequate systems of internal control that are commensurate with its size and nature of the business and documented procedures covering all financial and operating functions. The company being in real estate industry, it has in place clear processes and well-defined roles and responsibilities for its staff at various levels. The Management has a defined reporting system, which facilitates monitoring and adherence to the process and systems in place.
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
16
Segment wise Performance and reporting
The Company is engaged in construction and sale of industrial as well residential plots only, hence the segment wise reporting is not applicable. Financial Performance of the Company for the year under review has already covered under the Directors' Report.
Cautionary Statement
Statements in this report describing the Company's objectives, estimates and expectations may constitute “forward looking statements” within the meaning of applicable laws and regulations. Because such statements deal with future events, they are subject to various risks and uncertainties and company's expectation actual results for fiscal years as shown above could differ materially from company's current expectation. The Company undertakes no obligation to revise or update forward - looking statements as a result of new information since, these statements may no longer be accurate or timely.
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
17
AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE
ToThe Members ofGarnet Construction Limited
We have examined the compliances of Corporate Governance by Garnet Construction Limited stfor the year ended 31 March, 2013 as stipulated in clause 49 of the Listing Agreement of the
said Company with stock exchanges in India.
The Compliance of condition of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the company for ensuing the compliances of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, and the representation made by the directors and management, we certify that the company has complied with the conditions of Corporate Governance stipulated in the above mentioned Listing Agreement.
We state that in respect of investor grievances as per the records maintained by the Company and presented to the Shareholders / Investor Grievance Committee of the Company.
We further state that such compliances is neither an assurance as to the future viability of the company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
Place : Mumbai For Shankarlal Jain & Associates
thDate : 29 May, 2013 Chartered Accountants Firm Regn No: 109901W
Mukesh Sonavane M. No: 143622 Partner
Tel.:2203 6623, 2206 5739 • Fax : 91-22-2208 6269 • Website : sljainindia.com
12, Engineer Building, 265 Princess Street, Mumbai - 400 002. • Email : [email protected]
Chartered Accountants
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
18
Tel.:2203 6623, 2206 5739 • Fax : 91-22-2208 6269 • Website : sljainindia.com
12, Engineer Building, 265 Princess Street, Mumbai - 400 002. • Email : [email protected]
Chartered Accountants
AUDITOR'S REPORTTo,The Members ofGARNET CONSTRUCTION LIMITEDMUMBAI.
Report on the Financial Statements
We have audited the accompanying financial statements of GARNET CONSTRUCTION LIMITED, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments; the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in Order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013(b) In the case of the Statement of Profit and Loss of the Profit for the year ended on that date; and(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
19
Tel.:2203 6623, 2206 5739 • Fax : 91-22-2208 6269 • Website : sljainindia.com
12, Engineer Building, 265 Princess Street, Mumbai - 400 002. • Email : [email protected]
Chartered Accountants
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, 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 purpose 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 to the extent applicable. Except A.S.15 in respect of liabilities for GRATUITY & LEAVE ENCASHMENT which are treated on cash basis.
e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.
For SHANKARLAL JAIN & ASSOCIATES Chartered Accountants
Place: Mumbai Firm Reg. No.109901W Date :
Mukesh Sonavane
(PARTNER) Membership No.143622
th 29 May, 2013
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
20
1. (a) The Company has maintained the proper records showing full particulars including quantitative details and situation of Fixed Assets. However the same is to be updated.
(b) All the assets have been physically verified by the management during the year and in our opinion it is reasonable having regard to the size of the Company and the nature of its assets. No Material discrepancies were noticed on such verification.
(c) In our opinion, the Company has not disposed off a substantial part of Fixed Assets during the year and therefore paragraph 4(i)(c) of the Companies (Auditor’s Report) order, 2003 (hereinafter referred to as order) is not applicable.
2. (a) Physical verification of Inventories was conducted by the management during the year and in our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of it’s business.
(c) The Company is maintaining proper records of inventory and no material discrepancies have been noticed on physical verification of inventories as compared to book records.
3. (a) During the year the Company has not granted loans secured or unsecured to the Companies, Firms or other parties listed in the register maintained under section 301 of the companies Act, 1956 therefore provision of sub clauses (b) (c) (d) (e) & (f) of clause iii of the Companies (Auditors Report) order 2003 are not applicable to the company.
(b) The company has taken loans from five parties of Rs. 52.62 Lacs (Rs. 422.26 Lacs) from the Companies, Firms or other parties listed in the register maintained under section 301 of the companies Act, 1956. The balance outstanding as on 31st March, 2013 is NIL ( Rs. 2.58 Lacs).
(c) In our opinion the rate of interest and other terms and conditions of loans are not prima-facie prejudicial to the interest of the company.
(d) The principal amount and interest has been repaid in time.
4. In our opinion and according to the information and explanations given to us, the internal control procedure of the Company relating to the purchase of Land and Fixed Assets and sale of Land, Plots & Sheds are commensurate with the size of the Company and the nature of its business and we have neither come across nor have we been informed of any major weakness in internal control procedures.
ANNEXURE TO THE AUDITOR’S REPORT FOR THE PERIOD ENDED 31ST MARCH, 2013(Referred to in paragraph 1 of our report of even date)
Tel.:2203 6623, 2206 5739 • Fax : 91-22-2208 6269 • Website : sljainindia.com
12, Engineer Building, 265 Princess Street, Mumbai - 400 002. • Email : [email protected]
Chartered Accountants
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
21
Tel.:2203 6623, 2206 5739 • Fax : 91-22-2208 6269 • Website : sljainindia.com
12, Engineer Building, 265 Princess Street, Mumbai - 400 002. • Email : [email protected]
Chartered Accountants
5 (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered Into the register maintained under section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public as specified under the provisions of section 58-A and 58AA of the Companies Act, 1956 and therefore the Directives issued by the Reserve Bank of India and the provisions of section 58-A and 58AA of the Companies Act, 1956 and rules framed there under is not applicable. As explained to us, the Company has not received any order from the Company Law Board.
7. As per the information and explanations given to us, during the year under audit, the Company did not have an Internal Audit System but had an efficient system for accounting and internal controls.
8 As per the information and explanations given to us, the Central Government has not prescribed the maintenance of costs records under Section 209(1) (d) of the Companies Act, 1956 for the Companies procedures.
9. (a) In our opinion and according to the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees' State insurance, Income-Tax, Sales Tax, Wealth-Tax, Customs Duty, Excise Duty, service tax, cess and other statutory dues, if any, with the appropriate authorities except for liability of service tax which are outstanding and will be paid on collection from the customers
(b) According to the information and explanations given to us no disputed amount payable in respect of dues relating to Provident Fund, sales tax, Customs duty, wealth tax and cess and other
stStatutory dues were in arrears as at 31 March, 2013 for a period of more than six months from the date they become payable except for Rs 31.80 lacs payable toward service tax on sales of property
steffected prior to six months from 31 March 2013 which will be discharged as per Service Tax Voluntary Compliance Encouragement Scheme, 2013 notified on 13/05/2013
st10. The Company does not have accumulated losses as at 31 March, 2013 neither has it has incurred cash
losses during the financial year ended on that date. 11. In our opinion and according to the information and explanations given to us, the Company has not
defaulted in repayment of dues to financial institutions or banks during the year.
12 The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities during the period under review.
13 As per the information and explanation given to us, the provisions of Special Statutes applicable to Chit fund, Nidhi or Mutual benefit society are not applicable to the Company.
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
22
Tel.:2203 6623, 2206 5739 • Fax : 91-22-2208 6269 • Website : sljainindia.com
12, Engineer Building, 265 Princess Street, Mumbai - 400 002. • Email : [email protected]
Chartered Accountants
investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company. All the shares held by the company as investments are in its own name.
15 As explained to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof, are prejudicial to the interest of the Company.
16. In our opinions, the term loans have been applied for the purpose for which they were raised.
17. 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 no funds raised for short term purpose were applied for long term purpose.
18. The company has not made any preferential allotment of shares.
19. According to the information and explanations given to us, the Company has not issued any debentures during the year under review.
20 The company has not raised any funds with a public issue during the year.
21 Based on the Audit Procedures performed and as per the information and explanations given to us by the management, we, report that no fraud on or by the Company has been reported or noticed during the year.
FOR SHANKARLAL JAIN &ASSOCIATES CHARTERED ACCOUNTANTS
Firm Reg. No. 109901W
thDate :29 May, 2013 Mukesh SonavanePlace : Mumbai PARTNER
M. No. - 143622
14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
23
Particulars NotesAs at 31st March,
2013As at 31st March,
2012Rs Rs
EQUITY AND LIABILITIES
SHAREHOLDERS’ FUNDSShare Capital 2 13,90,22,000Reserves and Surplus 3 48,05,64,124 46,96,68,893
61,95,86,124 60,86,90,893
NON - CURRENT LIABILITIESLong Term Borrowings 4 12,77,57,121 12,09,49,098Other Long Term Liabilities 5 67,22,999 67,22,997
13,44,80,120 12,76,72,095CURRENT LIABILITIES
Short Term Borrowings 6 27,69,14,619 29,98,02,558Trade Payables 7 3,60,45,057 3,19,37,059Other Current Liabilities 8 89,56,72,517 64,97,91,950Short Term Provisions 9 7,11,028 19,73,94,048
1,20,93,43,221 1,17,88,92,616
TOTAL 1,96,34,09,465 1,91,52,55,604
ASSETS
NON-CURRENT ASSTESFixed Assets
Tangible Assets 10 7,00,52,864 6,86,90,909Capital Work-In-Progress 98,27,891 14,84,317
Non - Current Investments 11 3,05,30,817 9,00,21,884Long Term Loans and Advances 12 1,78,40,810 2,20,23,665
12,82,52,382 18,22,20,775CURRENT ASSETS
Inventories 13 92,65,73,531 84,73,02,317Trade Receivables 14 51,96,60,571 45,32,74,658Cash and Bank Balances 15 2,02,66,323 5,91,19,853Short Term Loans and Advances 16 36,85,61,155 37,31,89,060Other Current Assets 17 95,503 1,48,936
1,83,51,57,083 1,73,30,34,828
TOTAL 1,96,34,09,465 1,91,52,55,604
Significant Accounting Policies 1
13,90,22,000
The accompanying notes including other explanatory information form an integral part of financial statement
As per our attached report of even dateFor Shankarlal Jain & AssociatesChartered AccountantsFirm Reg. No.109901W
For and on behalf of the Board of Directorsof Garnet Construction Limited
Kishan Kumar KediaChairman & Managing Director
Mukesh SonavanePartnerM.No. 143622Place : Mumbai
thDate :29 May, 2013
Arun KediaDirector
Sanjay Kumar KediaDirector
BALANCE SHEET
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
24
Particulars NotesFor the year
ended 31st March,2013
INCOMERevenue from operations 18 21,02,12,505 8,18,69,780Other Income 19 10,58,650 7,58,285
Total Revenue (I) 21,12,71,155 8,26,28,065
EXPENSESOperating costs 20 14,03,20,949 67,02,539Employee benefits expense 21 1,34,18,725 1,52,45,777Finance cost 22 2,26,03,616 1,97,99,822Depreciation and amortisation expense 10 37,10,792 32,92,643Other expenses 23 1,76,21,842 2,28,06,761
Total Revenue (II) 19,76,75,924 6,78,47,542
Profit for the year before tax (I-II) 1,35,95,231 1,47,80,523
Tax Expenses :Current tax 27,00,000 16,65,000
Profit for the year 1,08,95,231 1,31,15,523
Earning per equity share of face value Rs. 10 each: 29Basic 0.78 0.94Diluted 0.78 0.94
Significant Accounting Policies 1
The accompanying notes including other explanatory information form an integral part of financial statement
As per our attached report of even dateFor Shankarlal Jain & AssociatesChartered AccountantsFirm Reg. No.109901W
For and on behalf of the Board of Directorsof Garnet Construction Limited
Kishan Kumar KediaChairman & Managing Director
Mukesh SonavanePartnerM.No. 143622Place : Mumbai
thDate :29 May, 2013
Arun KediaDirector
Sanjay Kumar KediaDirector
STATEMENT OF PROFIT AND LOSS
For the yearended 31st March,
2012
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
25
For the year ended 31st March, 2013
Cash Flow from Operating Activities
Profit Before Tax as per Statement of Profit and Loss 13,595,231 14,780,523
Adjusted for :
Depreciation and Amortisation Expense 3,710,792 3,292,643
Interest Income (1,058,650) (758,285)
Finance Cost 22,603,616 19,799,822
(Profit)/ Loss on Sale of Fixed Assets - 427,955
Expenses directly debited to provision (196,650,020) (216,766,747)
Rent Received (24,691,968) (24,451,991)
Miscellaneous Expenses W/off 55,068 793,602
(196,031,162) (217,663,001)
Operating Profit before Working Capital Changes (182,435,931) (202,882,478)
Adjusted for:
(Increase)/Decrease in Inventories (79,271,214) (275,742,829)
(Increase)/Decrease in Trade Receivables (66,385,916) 109,720,358
(Increase)/Decrease in Other Receivables 6,086,971 2,532,531
Increase/(Decrease) in Trade Payable 4,107,998 4,497,869
Increase/(Decrease) in Other Liabilities and Provisions 245,880,567 110,418,406 174,468,815 15,476,744
Cash Generated From Operations (72,017,526) (187,405,734)
Less: Income tax Refund 4,991,358 -
Income Tax Paid (4,969,204) (2,771,980)
Interest Paid (22,603,616) (19,799,822)
Interest Received 1,058,651 758,285
Net Cash from / (used in) Operating Activities (A) (93,540,337) (209,219,251)
Cash Flow from Investing Activities
Purchase of Fixed Assets (5,072,748) (40,993,414)
Capital WIP (8,343,574) -
Sale of Fixed Assets - 920,000
Sale of Investments 59,660,000 -
Purchase of Investments (50,000) (59,684,810)
Purchase of Gold Coin (118,933) -
Rent Received 24,691,968 24,451,991
70,766,713 (75,306,233)
Net Cash from/(used in) Investing Activities (B) 70,766,713 (75,306,233)
Cash Flow from Financing Activities
(Repayment)/Proceeds From Borrowings (16,079,916) 244,043,581
(16,079,916) 244,043,581
Net Cash from/ (used in ) Financial Activities (C) (16,079,916) 244,043,581
Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) (38,853,540) (40,481,903)
Cash and Cash Equivalents - Opening Balance 59,119,858 99,601,761
Cash and Cash Equivalents - Closing Balance 20,266,318 59,119,585
As per our attached report of even dateFor Shankarlal Jain & AssociatesChartered AccountantsFirm Reg. No.109901W
For and on behalf of the Board of Directorsof Garnet Construction Limited
Kishan Kumar KediaChairman & Managing Director
Mukesh SonavanePartnerM.No. 143622Place : Mumbai
th Date :29 May, 2013
Arun KediaDirector
Sanjay Kumar KediaDirector
For the year ended 31st March, 2012
CASH FLOW STATEMENT
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
26
Significant Accounting Policies forming part of Financial Statements for the year ended 31st March, 2013
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS :
The financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in India under the historical cost convention, on accrual basis. GAAP comprises mandatory Accounting Standards issued by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.
1.2 USE OF ESTIMATES :
The Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Any revision to the accounting estimates is recognized prospectively.
1.3 TANGIBLE ASSETS AND CAPITAL WORK IN PROGRESS :
Tangible assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable/allocable cost of bringing the asset to its working condition for its intended use. The cost also includes direct cost and other related incidental expenses. Revenues earned, if any during trial run of assets is adjusted against cost of the assets.
Capital work in progress is stated at cost less impairment losses, if any. Cost comprises of expenditure incurred in respect of capital projects under development and includes any attributable/allocable cost and other incidental expenses. Revenues earned, if any before capitalization from such capital project are adjusted against the capital work in progress.
1.4 DEPRECIATION AND AMORTIZATION
Depreciation on all assets of the Company has been provided on Straight Line Method at the rates and in the manner specified in schedule XIV of the Companies Act,1956.
1.5 IMPAIRMENT OF ASSETS :
Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceed its recoverable amount, an impairment loss is recognized in the income statement for the items of fixed assets carried at cost. However in the opinion of the management, no provision is required for impairment of asset in the current year.
1.6 INVESTMENTS :
Investments that are readily realizable and intended to be held for not more than one year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost or fair value determined on individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary decline in the value of the investments.
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
27
1.7 INVENTORIES :
a) Construction work in progress
The construction work in progress is valued at lower of cost and net realizable value. Cost includes cost of land, development rights, rates and taxes, construction costs, borrowing costs, other direct expenditure, allocated overheads and other incidental expenses.
b) Finished stock of completed projects (ready units)
Finished stock of completed projects and stock in trade of units is valued at lower of cost and net realizable value.
c) Inventory includes certain land purchased in the name of directors who holds the same in trust for the
Company
1.8 REVENUE RECOGNITION :
i) Revenue for real estate development/sale
The Company being a Development and Construction Company engaged in the construction of the Industrial Plots Sheds and the Residential Bunglows. During the year under review, the Company has followed the method of accounting for the recognizing of sales on the basis completion of sales method prescribed in AS-9 Revenue Recognition. Hence sales are recognized when possession is handed over to the parties. All expenses and incomes not directly related to particular projects are charged to Profit and loss account of the financial year during which the same are incurred.
Further based on the Guidance Note on Accounting for Real Estate Transaction (Revised 2012) issued by the ICAI, company has followed percentage completion method for projects where
stconstruction activity has been commenced from 1 April, 2012.
The estimates relating to percentage of completion, costs of completion, area available for sale etc. being of a technical nature are reviewed and revised periodically by the Management and are considered as change in estimates and accordingly, the effect of such changes in estimates is recognized prospectively in the period in which such changes are determined.
Revenue of open plots / land is recognized on the execution of agreement.
ii) Rent
Rental Income is recognized on a time proportion basis as per the contractual obligations agreed with the respective tenant.
iii) Interest
Interest Income is recognized on a time proportion basis taking into account the amount
outstanding and the rate applicable.
1.9 FOREIGN CURRENCY TRANSACTION :
All the Foreign Currency Transactions are accounted for at the exchange rate prevailing on the date of such transaction.
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
28
1.10 SHARE ISSUE EXPENSES :
Share issue expenses are amortized over a period not exceeding 5 years.
1.11 TAXES ON INCOME :
(a) Provision for Income Tax is made on the basis of income for the current accounting period in
accordance with the Income tax Act, 1961.
(b) Deferred tax resulting from timing difference between book and tax profit is accounted for under
the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize.
(c) The Company has made current tax provision for Minimum Alternate Tax (MAT) under section
115JB of the Income tax Act, 1961. As per the provisions of section 115JAA., MAT Credit receivable has to be recognized as an asset in accordance with the recommendations contained in Guidance note issued by the ICAI. However same is not accounted as receivable in the books of accounts since the management is doubtful of availing the credit against Income tax payable due to uncertainty of taxable profits in the upcoming years
1.12 EARNING PER SHARE:
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
1.13 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
A provision is recognized when an enterprise has a present obligation as a result of past event it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Possible future obligations or present obligations that may but will probably not require outflow of resources or where the same cannot be reliably estimated, is disclosed as contingent liabilities in the notes to accounts of financial statements. Contingent Assets are neither recognized nor disclosed in the financial statements
1.14 BORROWING COSTS
Borrowing costs relating to acquisition and/or construction of qualifying assets are capitalized to the extent that the funds are borrowed and used for purpose of constructing a qualifying asset until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs which are not related to acquisition and/or construction activities nor are incidental thereto are charged to the Statement of profit and loss.
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
29
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y sh
ares
of
Rs.
10
each
Ou
tsta
nd
ing
at
the
end
of
the
yea
r
c. D
etai
ls o
f sh
areh
old
ers
hol
din
g m
ore
th
an 5
% s
har
es i
n t
he
com
pan
y
Eq
uit
y sh
ares
of
Rs.
10
each
fu
lly
pai
d
As
at 3
1st
Mar
ch,
2013
Nu
mb
er o
f s
hare
s%
of
hol
din
g sh
ares
As
at 3
1st
Mar
ch,
2012
Nu
mb
er o
f s
har
es%
of
hol
din
g sh
ares
b. T
erm
s/ri
ghts
att
ach
men
ts t
o eq
uit
y sh
ares
The
Com
pany
has
onl
y cl
ass
of E
quit
y S
hare
hav
ing
valu
e of
Rs.
10
each
wit
h an
ent
itle
men
t of
one
vot
e pe
r sh
are.
In t
he e
vent
of
com
pany
dec
lare
s an
d pa
ys d
ivid
ends
in I
ndia
n ru
pees
, the
div
iden
d pr
opos
ed b
y th
e B
oard
of
Dir
ecto
rs a
re s
ubje
ct t
o th
e B
oard
of
Dir
ecto
rs a
re s
ubje
ct t
o th
e ap
prov
alof
the
sha
reho
lder
s in
the
ens
uing
Ann
ual
Gen
eral
Mee
ting
.In
the
eve
n of
Iiq
uida
tion
of
the
Com
pany
, the
hol
der
of e
quit
y sh
ares
wil
l be
ent
itle
d to
rec
eive
any
of
the
rem
aini
ng a
sset
s of
the
com
pany
, aft
er d
istr
ibut
ion
of a
ll p
refe
rent
ail
amou
nts,
the
dis
trib
utio
n w
ill
be i
n pr
opor
tion
to
the
num
ber
of e
quit
y sh
ares
hel
d by
the
sha
reho
lder
s.
Out
stan
ding
at
the
begi
nnin
g of
the
yea
rIs
sued
dur
ing
the
year
Bou
ght
back
dur
ing
the
year
Kus
umde
vi
Ked
iaS
anja
y K
umar
Ked
iaA
run
Kum
ar K
edia
Kis
han
Kum
ar K
edia
15,0
3,38
014
,76,
426
13,
89,1
1713
,09,
100
10.8
1%10
.62%
9.99
%9.
42%
9.95
%9.
54%
9.20
%7.
91%
13,8
3,38
013
,26,
426
12,7
9,11
710
,99,
100
58,0
00,
000
(Pre
viou
s ye
ar 5
8,00
0,000
) E
quit
y S
har
es o
f R
s. 1
0 E
ach
58,0
0,00
,000
58,0
0,00
,000
13,9
0,22
,000
1,39
,02,
200
- -
1,39
,02,
200
- -
13,9
0,22
,000
13,9
0,22
,000
13,9
0,22
,000
1,39
,02,
200
1,39
,02,
200
58,0
0,00
,000
58,0
0,00
,000
Tot
al a
utho
rise
d sh
are
capi
tal
Issu
ed, S
ubsc
ribe
d an
d P
aid u
p
13,9
02,
200
(Pre
viou
s ye
ar 1
3,90
2,200
) E
quit
y S
har
es o
f R
s. 1
0 ea
ch f
ully
pai
d up
Rs.
As
at 3
1st
Mar
ch,
2013
Nu
mb
er o
f S
har
es
As
at 3
1st
Mar
ch,
2012
Nu
mb
er o
f S
har
es
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
30
12
,09
,49
,09
9
3,46
,82,
790
15,5
6,31
,889
2,64
,18,
308
9,45
,30,
791
12
,09
,49
,09
8
12
,09
,49
,09
8
93
,14
,00
5
93
,14
,00
5
13
,02
,63
,10
3
13
,02
,63
,10
32,
78,7
4,76
812
,77,
57,1
21
14,5
6,46
03,
32,2
6,33
0
2012
-201
3
Pa
rtic
ula
rs
Term
Loan (
Sic
om
Loan-I
)
India
Info
line I
nvest
ment
Serv
ices
Lim
ited
To
tal
No
n-c
urre
nt
Po
rti
on
Cu
rre
nt
Ma
turit
yT
ota
lN
on
-cu
rre
nt
Po
rti
on
Cu
rre
nt
Ma
turit
y
To
tal
20
11
-20
12
NO
TE
S T
O F
INA
NC
IAL
ST
AT
EM
EN
TS
Part
icu
lars
As
at
31st
Marc
h,
2013
As
at
31st
Marc
h,
2012
Rs.
3
Rs.
Res
erves
an
d S
urp
lus
Sec
uri
ties
pre
miu
m a
ccou
nt
Bal
ance
as
per
las
t fi
nan
cial
sta
tem
ents
Les
s: U
tili
sed f
or
bonus
issu
e/fr
esh e
quit
y s
har
es
Clo
sing b
alan
ce
Su
rplu
s in
th
e st
ate
men
t of
pro
fit
an
d l
oss
Bal
ance
as
per
las
t fi
nan
cial
sta
tem
ants
Pro
fit
for
the
yea
r
Bal
ance
avai
lable
for
appro
pri
atio
n
Clo
sin
g b
ala
nce
To
tal
rese
rv
es
an
d s
urp
lus
43,3
0,0
0,0
00
43,3
0,0
0,0
00
43,3
0,0
0,0
00
43,3
0,0
0,0
00
3,6
6,6
8,8
93
1,0
8,9
5,2
31
4,7
5,6
4,1
24
3,6
6,6
8,8
93
3,6
6,6
8,8
93
4,7
5,6
4,1
24
2,3
5,5
3,3
70
1,3
1,1
5,5
23
46,9
6,6
8,8
93
48,0
5,6
4,1
24
As
at
31st
Marc
h,
2013
As
at
31st
Marc
h,
2012
12,7
7,5
7,1
21
12,0
9,4
9,0
98
12,7
7,5
7,1
21
12,0
9,4
9,0
98
4L
on
g T
erm
Borro
win
gs
Secu
red
loan
s (R
efe
r N
ote
24)
Term
loans
Fro
m f
inan
cial
in
stit
uti
on
/NB
FC
Tota
l lo
ng t
erm
borro
win
gs
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
31
NOTES TO FINANCIAL STATEMENTS
Particulars
5
As at 31st March,
2013
As at 31st March,
2012
Rs.Rs.
Other Long Term Liabilities
Other
Security desposits received from clients*
Total other long term liabilities
*Security Deposits received are interest free and are repayable after completion of lease term
6 Short Term Borrowings
Secured loan (Refer Note 24)
From bank
From financial institution
Unsecured loan (Refer Note 24)
From other
7 Trade Payables
8 Other Current Liabilities
9 Short Term Provisions
Total short term borrowings
Total trade payables
Trade payables
Body corpotates
Current maturities of long term borrowings (Refer note4)
Others
Statutory dues
Advance received from customers
Total other current liabilities
Provision for Expenses
Development Expenses at Panchdeep Housing Complex
Development Expenses for Plot Construction at Dhamni
Provision for expenses for Bunglow-Magic Hills
Total short term provisions
67,22,999
67,22,999 67,22,999
67,22,999
7,69,14,619
20,00,00,000
4,95,45,242
25,00,00,000
2,57,316
29,98,02,55827,69,14,619
3,60,45,057 3,19,37,059
2,78,74,769
3,60,45,057 3,19,37,059
2,64,95,390
84,13,02,358
93,14,005
5,92,415
63,98,85,530
89,56,72,517 64,97,91,950
6,54,336
56,692
7,11,028 19,73,61,050
33,71,543
6,54,336
19,33,35,171
-
-
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
32
NOTE
S TO
FIN
ANCI
AL S
TATE
MEN
TS
NOTE
NO
.10
Fixe
d Ass
ets
Sr.
No.
Fixe
d Ass
ets
Tang
ible
Asse
ts
As at
1 Ap
ril 20
12
Rs.
Addi
tions
Dedu
ctio
n
Gro
ss B
lock
As at
31 M
arch
2013
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Up to
1 A
pril
2012
For t
he ye
arDe
duct
ion
Upto
31 M
arch
2013
As a
t 31
Mar
ch20
13As
at 3
1 M
arch
2012
Net B
lock
Depr
ecia
tion
/ Am
ortis
atio
n
Capi
tal W
IP
Tota
l
Prev
ous Y
ear
a
Build
ing
Plan
t and
equi
pmen
t
Furn
iture
and
fixtu
res
Vehi
cles
Offic
e equ
ipm
ent
Com
puter
s and
Per
iphe
rals
5,14
,51,
515 -
43,9
3,64
6
2,23
,20,
709
18,4
7,24
7,
11,9
7,89
8
8,12
,11,0
15
4,36
,99,
040
14,8
4,31
7
-
9,90
,000 -
30,7
6,95
5
1,24
,631
8,81
,162
50,7
2,74
8
3,95
,09,
097
83,4
3,57
4
- - - - - - -
19,9
7,12
2 -
5,14
,51,
515
9,90
,000
43,9
3,64
6
2,53
,97,
664
19,7
1,87
8
20,7
9,06
0
8,62
,83,
763
8,12
,11,0
15
98,2
7,89
1
34,7
8,78
6 -
12,3
6,59
7
66,5
1,93
9
4,95
,660
6,57
,125
1,25
,20,
106
98,7
6,62
9 -
8,38
,660
3,22
1
2,78
,118
22,8
6,08
3
91,3
71
2,13
,339
37,1
0,79
2
32,9
2,64
3 -
- - - - - - -
6,49
,167
,29 -
43,1
7,44
6
3,22
1
15,1
4,71
5
89,3
8,02
2
5,87
,031
8,70
,465
1,62
,30,
899
1,25
,20,
105 -
4,71
,34,
069
9,86
,779
28,7
8,93
2
1,64
,59,
642
13,8
4,84
7
12,0
8,59
5
7,00
,52,
864
6,86
,90,
910
98,2
7,89
1
4,79
,72,
729 -
31,5
7,04
9
1,56
,68,
770
13,5
1587
5,40
,773
6,86
,90,
909
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
33
ParticularsFor the year
ended 31st March,2013
11. Non-Current Investments
Unquoted equity instruments
Investment in shares
Varaha Infrastructure Limited 3,00,00,000 3,00,00,000
3,00,00,000 (Previous year 30,000) equity shares of Rs. 10 each fully paid up
Callista Realty Private Limited 50,000 -
5,000 (Previous year Nil) equity shares of Rs. 10 each fully paid up
Shri Siddhi Vinayak Enterprises Private Limited - 5,96,60,000
Nil (Previous year 45,026) equity shares of Rs. 100 each fully paid up
Other long term investments (valued at cost unless stated otherwise)
Unqouted
Investment in others
Gold coins 4,80,817 3,61,884
Total non current investments 3,05,30,817 9,00,21,884
Notes
Aggregate amount of unquoted investments 3,05,30,817 9,00,21,884
12. Long Term Loan and Advances
Unsecured, considered good
Security deposit 82,21,289 96,81,990
Other
Advance income tax (net of provision of Rs. 2,740,000
Pervious year Rs. 1,665,000) 96,19,521 1,23,41,675
Total long term loan and advances 1,78,40,810 2,20,23,665
13. Inventories (valued at lower of cost and net realizable value)
(As certified by management)
Finished goods 49,60,51,364 55,45,49,059
Construction work - in progress 43,05,22,168 29,27,53,258
Total inventories 92,65,73,531 84,73,02,317
14. Trade Receivables
Outstanding for a period exceeding six months from the date they are due for payment
Secured, considered good - -
Unsecured considered good 51,96,60,571 45,32,74,658
Other
Secured, considered good - -
Unsecured, considered good - -
Total trade receivables 51,96,60,571 45,32,74,658
NOTES TO FINANCIAL STATEMENTS
For the yearended 31st March,
2012
14ATrade Receivables include doubtful debts of Rs. 63,88,103, (Previous year Rs. 63,88,103) for which no provision has been made as the management is hopeful to recover the same
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
34
NOTES TO FINANCIAL STATEMENTS
Particulars
15
As at 31st March,
2013
As at 31st March,
2012
Rs.Rs.
Cash and Bank Balances
i) Cash and equivalents
Balances with bank
Cash on hand
ii) Cash and Bank Balances
Fixed Depositwith Bank
Deposit with Original maturity for less than 12 months
Total cash and bank balances
1,00,000 -
1,98,26,257
3,40,065
5,89,73,743
1,46,110
16 Short Term Loans and Advances
Unsecured, considered good
Advances recoverable in cash or in kind or for value to be received
Security deposits
Others
Advances to employees
Advances towards Capital expenditure
Advances against property
Prepaid expenses
Duties and taxes receivable
8,35,50,533
21,73,500
13,13,015
39,67,061
26,20,19,120
71,54,817
83,83,109
36,85,61,155
95,503
Total short term loans and advances
Total other current assets
17 Other Current Assets
Share issue expenses to the extent not written off
Interest accrued on fix deposit
18. Revenue From Operations Sale of land / plots Sale of commercial units Rent on immovable property
93,873
1,630
8,51,55,19410,03,65,3432,46,91,968
1,63010,57,020
2,17,8095,40,476
1,48,936
-
5,74,17,789-
2,44,51,991
7,14,45,672
-
8,68,850
89,84,412
27,87,07,564
1,31,82,562
-
2,01,66,323
1,00,000
5,91,19,853
-
5,91,19,853
37,31,89,060
1,48,936
21,02,12,505 8,18,69,780
10,58,650 7,58,285
2,02,66,323
Total revenue from operations
19. Other IncomeInterest income onFixed deposit with bankOthers
Total other income
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
35
ParticularsFor the year
ended 31st March,2013
20. Operating costs Project relate expenses: 5,87,53,047 1,54,58,464,Goregaon : (Refer note 28) Cost of sales : Stock of finished goods
a) Stock of land (Without N.A.) 6,00,17,988 50,86,322b)Cost pf Plots Sold (Panchdeep Housing Complex) 27,94,156 4,86,689c) Cost of Plots sold (Neelkanth Industrial estate) - 5,30,343
6,28,12,143 61,03,354
Land & Construction Cost:a) Crystal Spring Bunglow Scheme 82,80,023 98,93,903b) Magic Hill 8,04,28,772 2,33,63,057c) Magic Heaven 6,78,15,875 -
15,65,24,670 3,32,56,960
Purchase for Resale 46,30,685 77,18,278Change in Inventories (14,23,99,596) (5,58,34,517)
Total cost of construction, land and development expenses 14,03,20,949 67,02,539
21. Employee Benefits ExpenseSalaries and wages 1,27,66,399 1,46,57,620Staff welfare expenses 6,52,326 5,88,157
Total employee benefit expense 1,34,18,725 1,52,45,777
22. Finance CostsInterest expenses 2,23,15,316 1,93,34,107Other borrowing cost 2,88,300 4,65,715
Total finance costs 2,26,03,616 1,97,99,822
.23 Other Expenses
Advertisement expenses 3,89,172 10,76,550Auditors remuneration 3,39,047 7,29,425Bank Charges 90,725 25,120Business promotion expenses 2,14,561 18,02,374Commission and brokerage expenses 6,10,800 9,74,840Donations 3,98,761 1,52,665Electricity expenses 7,42,944 6,68,388Legal and professional fees 2,03,463 25,25,993Membership fees and entrance fees 33,926 64,104Rent expenses 82,63,112 77,65,944Maintenance charges 3,80,156 3,54,743Loss on sale of assets - 4,27,743Rates and taxes 3,95,510 -Repairs to Others 4,30,098 4,91,300Telephone and communication expenses 5,00,138 6,20,571Traveling and conveyance expenses 18,65,403 21,47,282Insurance 2,12,141 2,93,827Miscellaneous expenses 25,51,886 26,85,680
Total other expenses 1,76,21,842 2,28,06,761
NOTES TO FINANCIAL STATEMENTS
For the yearended 31st March,
2012
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
20
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
37
NOTES TO FINANCIAL STATEMENTS
24 Borrowings
a SICOM Limited - Rs. 14 CroresSecured by way of first charge on piece or parcel of land admeasuring 106,907.68 square metres located at Village Honad and 33,913.60 square metres located at Village lsambe, Taluka Khalapur and hypothecation and escrow of the lease rent receivable. The rate of interest is Medium Term Reference Rate + 2% p.a.
b SICOM Limited - Rs. 25 CroresSecured by way of first charge on piece or parcel of land admeasuring 53 acres located at Village Honad and 39 acres located at Village Isambe, Taluka Khalapur, hypothecation and escrow of identified cash flows of receivable of Project Magic Hills and irrecoveable joint and several personal guarantees of three directors. The rate of interest is Medium Term Reference Rate + 2.75%p.a.
c SICOM Limited - Rs. 20 CroresSecured by way of first charge on piece or parcel of land admeasuring 53 acres located at Village Honad and 39 acres located at Village Isambe, Taluka Khalapur and hypothecation and escrow of identified cash flows of receivable of Project Magic Hills. The rate of interest is Medium Term Reference Rate +2%p.a.
d India Infoline Finance Limited - Rs. 3.5 CroresSecured against premises situated at Laxmi Industrial Estate. The rate of interest is 18%p.a.
e Allahabad Bank (Overdraft Facility) - Rs. 5 CroresSecured against plot at Village Dindoshi, Goregaon East and irrecoverable joint and several personal guarantees of two directors. The rate of interest is BPLR + 1.5%p.a.
f United Bank of India (Overdraft Facility) - Rs. 3.25 CroresSecured against premises situated at 11-B Lothse, Juhu. The rate of interest is Base Rate +5.5% p.a.
g Loans repayable on demand The Company has taken a loan amounting to Rs. Nil (Previous Year Rs. 257,316) @ 15% from a director which are repayable on demand.
25 Contingent liabilities and commitments (to the extent not provided for)
Particulars As at31st March, 2013
As at31st March, 2012
CommitmentsEstimate amount of contract to be executed - Capital WIPAdvance against Property
32,37,1098,48,33,405
9,13,07,623
-3,31,67,295
3,31,67,295
Rs.
Total
Rs.
As at31st March, 2013
As at31st March, 2012
Rs. Rs.
26 Deferred Tax Liability / (Asset)
Deferred tax liability
Related to Fixed assets (Depreciation / Amortization)
Gross deferred tax liability
Deferred tax asset
Impact of expenditures charged to the statement of profit and loss in the current year but
allowed for tax purposes on payment basis
Unabsorbed Losses (To the extent of Deferred Tax Liabilities)
Gross deferred tax asset
Net Deferred Tax Liability / (Asset)
13,98,877
13,98,877
17,18,249
17,18,249
-
17,18,249
17,18,249
-
13,98,877
13,98,877
-
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
38
a) Subsidiary Company
Callista Realty Private Limited
b) Key Management Personnel/Relative of Managerial
Person
Kishan Kumar Kedia Chairman & Managing Director
Arun kumar Kedia Marketing director
Sanjay Kumar Kedia Finance Director
Santosh kumar Ginoria Director
Kusum devi Kedia Relative of director
c) Associate Concern
S.K.Investment
J.S.Realty Private Limited
Neelkant Industrial Estate
Panchsheel Industrial Estate Associate Concern
Aditya Industrial Estate
Panchdeep Industrial Estate
Kedia Industrial Development Corporation
27. Related Party Disclosure
List of Related Parties only with whom transactions are executed.
Previous year figures shown in bracket (Amount in Rs. Lakhs)
Particulars of transactions
Relative Openingbalance
Transaction during the year Closingbalance
Purchase ofInvestment
Remuneration
Intsteret
SubsidiaryCompany
KeyManagementPersonnel
Loan Received
AssociateConcerns
Advance GivenKeyManagementPersonnel
AssociateConcerns
Relative ofDirector
Nil(Nil)
Nil(Nil)
Nil(Nil)
Nil(Nil)
Nil(Nil)
Nil(Nil)
Nil(Nil)
0.50 Dr.(Nil)
Nil(0.15 Cr.)
55.68 Dr.(55.80 Dr.)
Nil(Nil)
0.18 Dr.(0.96 Dr.)
Nil(Nil)
Nil(Nil)
Nil(Nil)
Nil(Nil)
Nil(Nil)
Nil(Nil)
Nil(Nil)
Nil(Nil)
2.57 Dr.(36.44 Dr.)
523.45 Dr.(115.00 Dr.)
545.02 Dr.(240.16 Dr.)
72.20 Dr.(190.78 Dr.)
10.50 Dr.(37.50 Dr.)
2.57 Cr.(10.26 Cr.)
523.45 Cr.(115.00 Cr.)
545.02 Cr.(240.16 Cr.)
72.20 Cr.(190.78 Cr.)
10.50 Cr.(37.50 Cr.)
Nil(28.75 Cr.)
Nil(2.57 Cr.)
Note: Related parties are identified by the company & relied upon by the auditor.
NOTES TO FINANCIAL STATEMENTS
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
39
Land Cost
Legal and professional fees
Finance costs
Employee benefits expenses
Other project related expenses
Total
3,65,53,061
15,20,272
9,25,528
8,56,004
1,88,98,182
5,87,53,047
-
13,309
3,55,721
4,22,100
1,46,67,334
1,54,58,464
28 Operating Cost:
(a) Goregaon Project Expense out during the year based on Percentage of Completion Method
Particulars As at
31st March, 2013
Rs.
As at
31st March, 2012
Rs.
a) Inventories at the end of the year:
stock-in- trade (trading)
Work-in-progress
b) Inventories at the beginning of the year :
stock-in- trade (trading)
Work-in-progress
(b) Change in inventories
ParticularAs at
31st March, 2013
Net (increase)/decrease
As at
31st March, 2012
1,23,48,965
43,05,22,167
77,18,278
29,27,53,258
(14,23,99,596)
77,18,278
29,27,53,258
24,46,37,019
(5,58,34,517)
NOTES TO FINANCIAL STATEMENTS
29 Earnings per share (EPS)
Particulars
Profit after tax
Weighted average number of equity shares in calculating basic and diluted EPS
Basic EPS
Diluted EPS
For the year ended 31
March 2013
For the year ended 31March
2012
Rs. Rs.
1,08,95,242
1,39,02,200
0.78
0.78
1,31,15,518
1,39,02,200
0.94
0.94
30 Auditors’ Remuneration
ParticularsFor the year ended
31st March, 2013For the year ended
31st March, 2012
Rs. Rs.
2,00,000
50,000
89,047
7,29,425
1,00,000
50,000
5,79,425
3,39,047
Auditors’Remuneration
Total auditors remuneration
As auditor
Audit fee
Tax audit fee
In other capacity
31 Expenditure in Foreign Currency (accrual basis)
ParticularsFor the year ended31st March, 2013
For the year ended31st March, 2012
Rs.Rs.
8,29,294
8,29,294 2,36,977
2,36,977Foreign travel, subscription, etc.
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
40
NOTES TO FINANCIAL STATEMENTS
32. The Company’s normal operating cycle in respect of operations relating to under construction real estate projects may
vary from project to project depending upon the size of the project, type of development, project complexities and related
approvals. Operating cycle for all completed projects and other business is based on 12 months period. Assets and Liabilities
have been classified into current and non-current based on the operating cycle of respective businesses.
33 The Company operates in Single Segment i.e. Real Estate /Real Estate Development and therefore, Segment Reporting as
per AS-17 ‘Segment Reporting’ is not applicable
.
34 During the previous financial year due to unfavorable conditions, some of the parties to whom sales has been affected have
failed to meet their commitment Therefore during the previous financial year certain sales agreement effected in 2008-09 &
earlier year’s stands cancelled and sales return and reversal of profit thereon has been effected during the previous financial
year.
35 No provisions are made for liability of gratuity and leave encashment which are treated on cash basis in the accounts and
amount for which is unascertained.
36 Service tax payable on account of Notification No. 36/2010-ST dated 28/06/2010 valid w.e.f. 01/07/2010 is collectable
from customer who have purchased bunglow/office premises. Such amount payable is provided which will be discharged
by the company under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 notified on 13/05/2013
37 VAT payable on account of sales of property applicable since 01/04/2010 on all sales enters into on or after the said date has
been provided and paid to the authorities. The said amount would be recovered from the customers as and when the amount
is recovered from the customer and final possession is handed over as per the relevant clause in the agreements with
customers.
38
a) In the opinion of the management any of the assets other than fixed assets and non-current investment have a value on
realisation in the ordinary course of business at least equal to the amount at which these are stated.
b) The accounts of certain Trade Receivables. Trade Payables, Loans and Advances and banks are, however, subject to
confirmations or reconciliations and consequent adjustments, if any The management does not expect any material
difference affecting the current years financial statements on such reconciliation/adjustments
.
39 Previous year’s figures have been regrouped / rearranged wherever necessary to conform to current year’s classification.
Signature to Notes No.1 to 39
For SHANKARLAL JAIN & ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Reg. No. 109901W
Mukesh Sonavane
PARTNER
Membership No. 143622
Place : Mumbaith Date : 29 May, 2013
For and on behalf of
the board of Directors of Garnet Construction Limited
Kishan Kumar Kedia
Chairman & Managing Director
Arun Kedia
Marketing Director
Sanjay Kedia
Finance Director
GARNET CONSTRUCTION LIMITED ANNUAL REPORT
41
GARNET CONSTRUCTION LIMITEDRegd. Office : 501/531, Laxmi Mall, Laxmi Ind. Estate, New Link Road, Andheri (W), Mumbai - 400 053
stI hereby record my presence at the 21 Annual General Meeting of the Company held at Ashish – 1 Banquet, thLand Mark Building, Link Road, Mid Chowky, Malad (West), Mumbai – 400064 on Monday, the 30 September,
2013 at 10.00 a.m.
1. Full Name of the member (In Block Letter)______________________________________________________________________
2. Full name of the joint – Holders (s) (In Block Letter)______________________________________________________________
3. Full Name of the Proxy (In Block Letter)___________________________________________________________________________
4. Signature of the Member/Proxy attending the Meeting __________________________________________________________
-----------------------------------------------------Tear Here -----------------------------------------------------
GARNET CONSTRUCTION LIMITEDRegd. Office : 501/531, Laxmi Mall, Laxmi Ind. Estate, New Link Road, Andheri (W), Mumbai - 400 053
I/We____________________________________________of __________________________________being a Member / Members of Garnet Construction Limited, hereby appoint_______________________________________ of _________________________or
st failing him / her of ___________________as my/our Proxy to vote for me /us on my/our behalf at the 21 Annual thGeneral Meeting of the Company to be held on Monday, the 30 September, 2013 at Ashish-1 Banquet, Land
Mark Building, Link Road, Mid Chowky, Malad (West), Mumbai – 400064 at 10.00 a.m. and at any adjourned thereof.
AffixSigned this __________Day ____________, 2013. One Rs.
Revenue Stamp
Note : Member/Proxy attending the Meeting must fill – in this Attendance Slip and hand it over at the entrance of the venue of the Meeting.
ATTENDANCE SLIP
Regd. Folio No.
DP ID
Client ID
No. of Shares held
PROXY FORM
Regd. Folio No.
DP ID
Client ID
No. of Shares held