Alacrity Housing Ltd. के अकाउंट के लिये नोट

Mar 31, 2014

1. Contingent liabilities not provided for:

a. Liability that may arise towards interest as claimed by ESIC is to the extent of Rs.3.50 lacs for the period April 2001 to Sept. 2005.

b. The Provident Fund Department has issued a Show Cause Notice cum Levy Order dated 01.03.2013 to Alacrity Foundations (P) Ltd seeking payment of interest relating to the Company of Rs.28,65,390/- u/s. 7Q of the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952 for delayed remittance of monthly contributions and Rs.32,70,851/- for penalty u/s. 14B of the Act for delayed payment of monthly contributions. Rs.28,65,390/- has been provided for in the books of accounts. No provision is made for the penalty as the Com- pany, given its financial circumstances, has filed an appeal with the Provident Fund Appellate Tribunal, New Delhi for a waiver of penalty and damages.

c. The Company had preferred an appeal for income tax demand for the assessment year (AY) 1993-94 amounting to Rs. 27.10 Lacs excluding interest and penalty thereon with the High Court of Madras. The Hon''ble Court allowed the appeal in favour of the Company. The Company is awaiting revised orders from the assessing officer deleting the demand for tax and interest. As per letter dated 13.10.2006, the Tax authorities had further demanded payment of Rs.243.57 lacs including interest of Rs.32.47 lacs and penalty of Rs.184 lacs for the above AY 1993- 94. The Company had received order dated 12.10.2011 from the Commissioner of Income-Tax, (A)-lll, Chennai deleting the demand for penalty to the extent of Rs.184 lacs.

No provision has also been made for the tax demand of Rs.289.78 lacs including interest of Rs. 44.20 lacs for the AY 1994- 95 which arose due to the disallowance of the brought forward loss and unabsorbed depreciation of the AY 1993-94. The Company is awaiting the revised assessment orders in its favour in the light of the above High Court order.

No provision has also been made for the tax demands for the AY 1995-96 of Rs.39.55 lacs (including interest of Rs.6.03 lacs) which is also consequent to the disallowance of the brought forward loss for AY 1993-94 and the Company is awaiting revised assessment orders in its favour.

d. Interest claim of about Rs.27.11 lacs made by creditors/customers disputed by the Company in courts.

e. Claim against the company of Rs.20 lacs made by a landowner of a property, disputed by the company.

2. The balance shown as dues from Debtors represents the money due mostly from customers with whom the Company had entered into agreements before 2003-04 for many of whom the company would have to execute sale deeds after getting various clearances and hence considered recoverable and no provision made there against even though due for a long period of time.

3. Presently, a total of 37 cases are pending against the company by customers, creditors and other parties before various courts including the State & District Consumer Forum, Metropolitan Magistrate Court, District Munsif Court, Fast Track Court, City Civil Court and High Court of Madras for non-fulfillment of certain obligations by the company. Suitable provisions to the extent of Rs.500.92 lacs (Rs. 530.32 lacs) have been made in the accounts wherever judgments have gone against the company and remain undisputed. Value of claims against the company for which no provision has been made since they are under dispute amounted to Rs.91.35 lacs as at 31.03.2014.

4. Unsecured loan includes a loan viz. Chakiat Agencies Pvt Ltd (Rs. 9.56 lacs) who has approached the courts seeking repayment of loan dues. No provision is made towards interest on the unsecured loan from the year 2003-04.

5. Sundry Creditors include dues to Small Scale Industrial Undertakings Rs. 9.24 lacs (Rs. 9.24 lacs). The Small Scale Industrial Undertakings to whom the amount outstanding for more than 30 days, such due exceeding Rs. 1 lac are as follows:

31.03.2014 (in Lacs) 31.03.2013 (in Lacs)

1 Kailash Hi-Tech Timber India Ltd 1.53 1.53

2 Prosteel Industries 5.63 5.63

3 The Mayuram Timber & General Trading Co. 2.08 2.08

6. Note on Secured Loans:

a. ICICI Bank Ltd - Rs. 1359.91 lacs: The loan outstanding as per books of account as at 31.03.2014 is Rs. 1359.91 lacs after payments amounting to Rs. 531 lacs by Land Marvel Homes (LMH) to whom the Company had transferred Project Paramount Gardens'' (Saligramam) development rights with related liabilities vide agreement dated 31.03.2005. The bank has filed an application before the Debt Recovery Tribunal (DRT). The bank had earlier issued notice under the Securitization and Reconstruction of Financial Assets & Enforcement of Securities Inter- est Act 2002 (SARFAESI) dated 10.07.2008 to recover an amount of Rs.4070.12 lacs including interest up to 22nd May 2008. The claim of the Bank towards interest, penalties and other charges is disputed by the Company and no provision made there against. The properties held by ICICI Bank as collateral security are i) Property in Perambur ii) 55.52% undivided share in the 129 grounds at West Mogappair and 39 flats under construction (from which the Bank ceded 11.84% undivided share to State Bank of Indore). (Note: The landowners who hold 23.86% ownership of the undivided share have not cooperated with the Company for registering the sale deeds in favour of 175 flat owners, 18 of whom have filed suits in various courts for registration of sale deeds) iii) The bank holds a first charge on the property at No 25, Thirumalai Road, Chennai - 600 017 belonging to Alacrity Foundations Private Limited''

b. State Bank of Hyderabad - Rs. 118.56 lacs: The Bank has obtained an order dated 03.02.2010 from the Debt Recovery Tribunal (DRT) directing the Company to pay the Bank Rs. 118.56 lacs including interest @ 15% p.a. until 03.02.2010. 7118.56 lacs has been provided for by the Company in its books of accounts. No provision has been made in the books for interest after 03.02.2010 since the Company is confident of getting necessary waiver from the Bank.

c. Union Bank of India - Rs. 1216.70 lacs: The Bank has obtained an order from the Debt Recovery Tribunal (DRT) directing the Company to pay the Bank Rs. 1216.70 lacs including interest upto 19.12.2008. Rs. 1216.70 lacs has been provided for by the Company in its books of accounts. No provision has been made in the books for interest after 19.12.2008 since the Company is confident of getting necessary waiver from the Bank.

d. Phoenix ARC Private Limited - the Asset Reconstruction Company had been assigned the Company''s debt and accrued interest thereon along with underlying security earlier by State Bank of India to the extent of 11.84% on the Mogappair (Tarangini project), vide Registrar of Companies, Certificate of Registration for Modification of Mortgage, u/s 132 read with section 135 of the Companies Act, 1956. State Bank of India had earlier obtained an order dated 25.10.2010 from the Debt Recovery Tribunal (DRT) directing the Company to pay the Bank Rs. 585.45 lacs with further interest @ 13.5% p.a from 11.07.2005 until date of settlement. Rs. 585.45 lacs has been provided for by the Company in its books of accounts. No provision has been made in the books towards further interest from 11.07.2005 since the Company is confident of getting necessary waiver now from Phoenix.

7. Status on other Bank Loans

a. Citibank N.A.: The principal amount of Rs. 560 lacs of unsecured loan facility (employee home loans converted vide agreement dated 02.08.2006) is remaining outstanding to the Bank. Even though the Bank has claimed a total due of Rs. 2653.90 lacs as at 31.03.2014 including interest at a compounded rate of 9%, no interest is provided in the books of account since the Company is confident of getting necessary waiver from the 6ank.

b. State Bank of Indlia: The principal loan amount of Rs.97 lacs (balance after repayment by Jam Housing A Constructions Ltd (JHCL) of Rs. 283 lacs to the Bank of the employee home loans converted after transferring project Prasan''s development rights with related liabilities to JHCL vide Agreement dated 06.10.2005) is / remaining outstanding to the Bank. No interest is provided in the books of account since the Company is confident of getting necessary waiver from the Bank. The Bank has obtained an order dated 09.04.2012 from the Debt Recovery Tribunal (DRT) claiming a total of Rs. 216 lacs with further interest @> 10.25% from 04.03.2011. The Bank holds a second charge on the property at No 25, Thirumalai Road, Chennai - 600 017 belonging to Alacrity Foundations Private Limited, (Company in which two of the Directors of the Company are Directors).

8. The Company is engaged in the business of promoting, developing and construction of residential flats which is the significant business segment. There is no other business segment.

9. Due to financial difficulties, the Company had to stop its business of full fledged construction activities during 2003-04. The accounts have been prepared now taking the present position into account as a "going concern" since the Board of Directors are confident that the Company can be revived in due course of time.

10. The present value of gratuity obligation and superannuation benefits payable is not recognized as expense by the Company. The Company shall meet its gratuity and other employee retirement benefits as and when the concerned employee retires. Accordingly, no provision has been made in the accounts of the Company towards employee benefits including gratuity. The company has not deposited the provision created upto March 2004 for Rs. 28.66 lacs towards superannuation fund.

13. Previous year''s figures have been regrouped and rearranged wherever necessary in order to make them

comparable with the current year''s figures. .

14. Balances under sundry debtors, sundry creditors and loans and advances remain to be confirmed and in

absence of evidence to the contrary, book balances have been taken as correct subject to the notes given above. .

15. Related party disclosures under Accounting Standard 18:

Key managerial persons (KMP), their relatives'' 1. Ashok R Karnad - Managing Director names 2. Ajit Hattikudur - Director

3. Dilip Dharmasthal - Director

Relatives of key managerial person

1. Sunil Karnad

2. Nita Hattikudur

16. Since the Company is in losses, there is NIL Liability towards Deferred Tax. No Deferred Tax Asset has also been created as there is no reasonable certainty that the Deferred Tax Asset can be set-off against future income.

17. The nature of business carried on by the Company, viz. construction activity is such that furnishing quantitative details relating to consumption / stock of building materials is not feasible.

18. The Company could not fulfill the requirements of Section 383A of the Companies Act, 1956 relating to appointment of Company Secretary for the Company due to financial difficulties.

20. Figures in brackets represent previous year''s figures.

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Mar 31, 2013

1. Contingent liabilities not provided for:

a. Liability that may arise due to the recovery proceedings initiated by the Provident Fund authorities on Alacrity Foundations Private Limited (AFPL) for recovery of employee/employer PF and pension contributions amounting to ^9.03 lacs for the financial year 2003-04 towards employees seconded to the Company by AFPL. Also the Liability that may arise in respect of PF Contribution estimated at Rs.0.87 Lacs (Rs.0.87 Lacs) for the period 01.07.1992 to 30.04.1995 relating to temporary and casual workers of the contractor employed in the construction work undertaken by the Company, settlement of which depends on the decision of the competent authority constituted for this purpose. Further liability that may arise towards interest as claimed by ESIC is to the extent of Rs.3.50 lacs for the period April 2001 to Sept. 2005.

b. The Provident Fund Department has issued a Show Cause Notice cum Levy Order dated 01.03.2013 to Alacrity Foundations (P) Ltd seeking payment of interest of Rs. 28,65,390/- u/s. 7Q of the Employees'' Provident Funds &. Miscellaneous Provisions Act, 1952 for delayed remittance of monthly contributions and Rs. 32,70,851/- for penalty u/s. 14B of the Act for delayed payment of monthly contributions. Rs. 28,65,390/- has been provided for in the books of accounts. No provision is made for the penalty as the Company, given its financial circumstances, is confident of getting a waiver from the department.

c. The Company had preferred an appeal for income tax demand for the assessment year (AY) 1993-94 amounting to Rs.27.10 Lacs excluding interest and penalty thereon with the High Court of Madras. The Hon''ble Court allowed the appeal in favour of the Company. The Company is awaiting revised orders from the assessing officer deleting the demand for tax and interest. As per letter dated 13.10.2006, the Tax authorities had further demanded payment of Rs.243.57 lacs including interest of Rs.32.47 lacs and penalty of Rs.184 lacs for the above AY 1993-94. The Company had received order dated 12.10.2011 from the Commissioner of Income-Tax, (A)-lll, Chennai deleting the demand for penalty to the extent of Rs.184 lacs.

No provision has also been made for the tax demand of Rs.289.78 lacs including interest of Rs.44.20 lacs for the AY 1994-95 which arose due to the disallowance of the brought forward loss and unabsorbed depreciation of the AY 1993-94. The Company is awaiting the revised assessment orders in the light of the above High Court order.

No provision has also been made for the tax demands for the AY 1995-96 of ^39.55 lacs (including interest of Rs. 6.03 lacs) which is also consequent to the. disallowance of the brought forward loss for AY 1993-94 and the Company is awaiting revised assessment orders in its favour.

d. Interest claim of about ^27.11 lacs made by creditors/customers disputed by the Company in courts.

e. Claim against the company of Rs.20 lacs made by a landowner of a property, disputed by the company.

2. The balance shown as dues from Debtors represents the money due mostly from customers with whom the Company had entered into agreements before 2003-04 for many of whom the company would have to execute sale deeds after getting various clearances and hence considered recoverable and no provision made there against even though due for a long period of time.

3. Presently, a total of 43 cases are pending against the company by customers, creditors and other parties before various courts including the State & District Consumer Forum, Metropolitan Magistrate Court, District Munsif Court, Fast Track Court, City Civil Court and High Court of Madras for non-fulfillment of certain obligations by the company. Suitable provisions to the extent of Rs.530.32 lacs (Rs.597.24 lacs) have been made in the accounts wherever judgments have gone against the company and remain undisputed . Value of claims against the company for which no provision has been made since they are under dispute amounted to Rs.107.35 lacs as at 31.03.2013.

4. Unsecured loan includes a loan viz. Chakiat Agencies Pvt Ltd (Rs.9.56 lacs) who has approached the courts seeking repayment of loan dues. No provision is made towards interest on the unsecured loan from the year 2003-04.

5. Note on Secured Loans :

a. ICICI Bank Ltd - Rs.1359.91 lacs: The loan outstanding as per books of account as at 31.03.2013 is Rs.1359.91 lacs after payments amounting to Rs.531 lacs by Land Marvel Homes (LMH) to whom the Company had transferred Project Paramount Gardens'' (Saligramam) development rights with related liabilities vide agreement dated 31.03.2005. The bank has filed an application before the Debt Recovery Tribunal (DRT). The bank had earlier issued notice under the Securitization and Reconstruction of Financial Assets & Enforcement of Securities Inter- est Act 2002 (SARFAESI) dated 10.07.2008 to recover an amount of Rs.4070.12 lacs including interest up to 22nd May 2008. The claim of the Bank towards interest, penalties and other charges is disputed by the Company and no provision made there against. The properties held by ICICI Bank as collateral security are i) Property in Perambur ii) 55.52% undivided share in the 129 grounds at West Mogappair and 39 flats under construction (from which the Bank ceded 11.84% undivided share to State Bank of Indore). (Note: The landowners who hold 23.86% ownership of the undivided share have not cooperated with the Company for registering the sale deeds in favour of 175 flat owners, 18 of whom have filed suits in various courts for registration of sale deeds) iii) The bank holds a first charge oh the property at No 25, Thirumalai Road, Chennai - 600 017 belonging to Alacrity Foundations Private Limited

b. State Bank of Hyderabad - Rs.118.56 lacs: The Bank has obtained an order dated 03.02.2010 from the Debt Recovery Tribunal (DRT) directing the Company to pay the Bank Rs.118.56 lacs including interest @ 15% p.a. until 03.02.2010. Rs.118.56 lacs has been provided for by the Company in its books of accounts. No provision has been made in the books for interest after 03.02.2010 since the Company is confident of getting necessary waiver from the Bank.

c. Union Bank of India - Rs.1216.70 lacs: The Bank has obtained an order from the Debt Recovery Tribunal (DRT) directing the Company to pay the Bank Rs.1216.70 lacs including interest upto 19.12.2008. Rs.1216.70 lacs has been provided for by the Company in its books of accounts. No provision has been made in the books for interest after 19.12.2008 since the Company is confident of getting necessary waiver from the Bank.

d. Phoenix ARC Private Limited - the Asset Reconstruction Company had been assigned the Company''s debt and accrued interest thereon along with underlying security earlier by State Bank of India to the extent of 11.84% on the Mogappair (Tarangini project), vide Registrar of Companies, Certificate of Registration for Modification of Mortgage, u/s 132 read with section 135 of the Companies Act, 1956. State Bank of India had earlier ob- tained an order dated 25.10.2010 from the Debt Recovery Tribunal (DRT) directing the Company to pay the Bank Rs.585.45 lacs with further interest @ 13.5% p.a from 11.07.2005 until date of settlement. Rs.585.45 lacs has been provided for by the Company in its books of accounts. No provision has been made in the books towards further interest from 11.07:2005 since the Company is confident of getting necessary waiver now from Phoenix.

6. Status on other Bank Loans

a. Citibank N.A.: The principal amount of Rs.560 lacs of unsecured loan facility (employee home loans converted vide agreement dated 02.08.2006) is remaining outstanding to the Bank. Even though the Bank has claimed a total due of Rs.2653.90 lacs as at 31.03.2013 including interest at a compounded rate of 9%, no interest is provided in the books of account since the Company is confident of getting necessary waiver from the Bank.

b. State Bank of India: The principal loan amount of Rs.97 lacs (balance after repayment by Jain Housing & Constructions Ltd (JHCL) of ^283 lacs to the Bank of the employee home loans converted after transferring project Prasan''s development rights with related liabilities to JHCL vide Agreement dated 06.10.2005) is remaining outstanding to the Bank. No interest is provided in the books of account since the Company is confident of getting necessary waiver from the Bank. The Bank has obtained an order dated 09.04.2012 from the Debt Recovery Tribunal (DRT) claiming a total of Rs.216 lacs with further interest @ 10.25% from 04.03.2011. The Bank holds a second charge on the property at No 25, Thirumalai Road, Chennai - 600 017 belonging to Alacrity Foundations Private Limited, (Company in which one of Directors of the Company is a Director).

7. The Company is engaged in the business of promoting, developing and construction of residential flats which is the significant business segment. There is no other business segment.

8. Due to financial difficulties, the Company had to stop its business of full fledged construction activities during 2003-04. The accounts have been prepared now taking the present position into account as a "going concern" since the Board of Directors are confident that the Company can be revived in due course of time.

9. The present value of gratuity obligation and superannuation benefits payable is not recognized as expense by the Company. The Company shall meet its gratuity and other employee retirement benefits as and when the concerned employee retires. Accordingly, no provision has been made in the accounts of the Company towards employee benefits including gratuity. The company has not deposited the provision created upto March 2004 for Rs.28.66 lacs towards superannuation fund.

10. Previous year''s figures have been regrouped and rearranged wherever necessary in order to make them comparable with the current year''s figures.

11. Balances under sundry debtors, sundry creditors and loans and advances remain to be confirmed and in absence of evidence to the contrary, book balances have been taken as correct subject to the notes given above.

12. Related party disclosures under Accounting Standard 18:

Key managerial persons (KMP), their relatives'' 1. Ashok R Karnad - Managing Director names 2. Ajit Hattikudur—Director

3. Dilip Dharmasthal— Director

Relatives of key managerial person—

1. Sunil Karnad

2. Nita Hattikudur

13. Since the Company is in losses, there is NIL Liability towards Deferred Tax. No Deferred Tax Asset has also been created as there is no reasonable certainty that the Deferred Tax Asset can be set-off against future income.

14. The nature of business carried on by the Company, viz. construction activity is such that furnishing quantitative details relating to consumption / stock of building materials is not feasible.

15. The Company could not fulfill the requirements of Section 383A of the Companies Act, 1956 relating to appointment of Company Secretary for the Company due to financial difficulties.

16. Figures in brackets represent previous year''s figures.

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Mar 31, 2010

1. Contingent liabilities not provided for :

a. Liability that may arise due to the recovery proceedings initiated by the Provident Fund authorities on Alacrity Foundations Private Limited (AFPL) for recovery of employee/employer PF and pension contributions amounting to Rs.9.03 lacs for the financial year 2003-04 towards employees seconded to the Company by AFPL. Also the Liability that may arise in respect of PF Contribution estimated at Rs.0.87 Lacs (Rs.0.87 Lacs) for the period 01.07.1992 to 30.04.1995 relating to temporary and casual workers of the contractor employed in the construction work undertaken by the Company, settlement of which depends on the decision of the competent authority constituted for this purpose. Further liability that may arise towards interest as claimed by ESIC is to the extent of Rs.3.50 lacs for the period April 2001 to Sept. 2005.

b. Interest/penalty that may be levied due to delayed settlement of the Provident Fund arrears to employees, for further period, the quantum of which is not determinable as on date.

c. Liability that may arise due to the Corporate Guarantee given by the Company to Canara Bank for a sum not exceeding Rs.400 lacs, being the credit facility by way of loans, overdrafts, discount of bills or otherwise extended by the said Bank to M/s. Alacrity Electronics Limited, a Company in which the Director of the Company is interested as a Director.

d. Income tax demand for the assessment year (AY) 1993-94 amounting to Rs.27.10 Lacs excluding interest and penalty thereon as it has been disputed and appeal pending with the High Court of Madras. The Company has obtained High Court order dated 13.07.2010 staying the recovery of income tax and interest u/s. 234B and 220(2) subject to deposit of Rs.13.10 lacs, being the balance principal tax demand and the Company has also paid this amount on 26.07.2010. As per letter dated 13.10.2006, the Tax authorities have further demanded payment of Rs.243.57 lacs including interest of Rs.32.47 lacs and penalty of Rs.184 lacs for the above AY 1993-94. The condonation of penalty to the extent of Rs.184 lacs by the Commissioner of Income Tax (Appeals) on the basis of High Court order dated 20.07.2010 is awaited.

No provision has also been made for the tax demand of Rs.289.78 lacs including interest of Rs.44.20 lacs for the AY 1994-95 which arose due to the disallowance of the brought forward loss and unabsorbed depreciation of the AY 1993-94. The Company has already filed an appeal with the Commissioner of Income Tax (Appeals) for demand of the above which is pending.

No provision has also been made for the tax demands for the AY 1995-96 of Rs.39.55 lacs (including interest of Rs.6.03 lacs) which is consequent to the disallowance of the brought forward loss for AY 1993-94 and the Company is in the process of filing condonation appeals for the same.

e. Interest claim of about Rs.27.11 lacs made by creditors/customers disputed by the Company in courts.

f. Claim against the company of Rs.20 lacs made by a landowner of a property, disputed by the company.

2. The balance shown as dues from Debtors represents the money due mostly from customers with whom the Company had entered into agreements before 2003-04 for many of whom the company would have to execute sale deeds after getting various clearances and hence considered recoverable and no provision made there against even though due for a long period of time.

3. The balance shown as dues to ‘Sundry Creditors - for Goods and Services represents money owed mostly to suppliers of goods and services before 2003-04.

4. Presently, a total of 80 cases have been filed against the company by customers, creditors and other parties before various courts including the State & District Consumer Forum, Metropolitan Magistrate Court, District Munsif Court, Fast Track Court, City Civil Court and High Court of Madras for non fulfillment of certain obligations by the company. Suitable provision to the extent of Rs.597.24 lacs has been made in the accounts wherever judgments have gone against remaining undisputed by the company. Value of claims against the company for which no provision has been made since they are under dispute amounted to Rs.108.58 lacs as at 31.03.2010.

5. Unsecured loan includes two loans viz. Chakiat Agencies Pvt Ltd (Rs.9.56 lacs) and Vaishnavi Jayakumar (Rs.7.71 lacs) who have approached the courts seeking repayment of loan dues. No provision is made towards interest on the unsecured loans from the year 2003-04.

6. Note on Secured Loans :

a. State Bank of Indore - Rs.444.18 lacs: The Bank has initiated recovery proceedings at the Debt Recovery Tribunal (DRT) claiming Rs.585.45 lacs as due and payable with further interest @ 13.5% p.a from 11.07.2005 until date of settlement. The loan outstanding as per the books of account is Rs.444.18 lacs as at 31.03.2010 after payment of Rs.36.47 lacs by Land Marvel Homes (LMH) to whom the Company has transferred Project Paramount Gardens (Saligramam) development rights with related liabilities vide Agreement dated 31.03.2005. No provision towards interest has been made in the books from the year 2004-05 since the Company is confident of getting necessary waiver from the Bank. The pari passu charge ceded by ICICI Bank to the extent of 11.84% on the Mogappair (Tarangini project) property subsists.

b. State Bank of Hyderabad - Rs.45.73 lacs: The charge with the Bank is on Companys present and future receivables. The principal amount owed to the bank as per their statement dated 05.03.2009 is Rs.45.73 lacs after crediting Rs.18.21 lacs in January 2006 from the proceeds of the sale of the flat mortgaged to the Bank belonging to Mr. Krishna Hattangady, then Director of the Company. DRT (II), Chennai has passed an order dated 04.02.2010 entitling the bank to recover a sum of Rs.66.11 lacs with further interest at 15% p.a with monthly rests from 31.03.2006 till recovery. However, no provision for interest has been made in the books of accounts from the year 2004-05 since the Company is confident of getting necessary waiver from the Bank.

c. Union Bank of India - Rs.252.58 lacs: The Bank has initiated recovery proceedings at the Debt Recovery Tribunal (DRT) claiming Rs.1216.70 lacs which includes Rs.271.04 lacs as principal and Rs.945.66 lacs towards interest. The charge with the Bank is on Companys present and future receivables. The Principal dues were to the extent of Rs.10.50 Crores and the Bank recovered and adjusted Rs.797.42 lacs leaving a principal balance of Rs.252.58 lacs. The Company has disputed the interest claim of the Bank and accordingly not made any provision there against.

d. ICICI Bank Ltd - Rs.1359.91 lacs: The loan outstanding as per books of account as at 31.03.2010 is Rs.1359.91 lacs after payments amounting to Rs.531 lacs by Land Marvel Homes (LMH) to whom the Company had transferred Project Paramount Gardens (Saligramam) development rights with related liabilities vide agreement dated 31.03.2005. The bank has issued notice under the Securitization and Reconstruction of Financial Assets & Enforcement of Securities Interest Act 2002 (SARFAESI) dated 10.07.2008 to recover an amount of Rs.4070.12 lacs including interest up to 22nd May 2008. The claim of the Bank towards interest, penalties and other charges is disputed by the Company and no provision made there against. The properties held by ICICI Bank as collateral security are i) Property in Perambur ii) 55.52% undivided share in the 129 grounds at West Mogappair and 39 flats under construction (from which the Bank ceded 11.84% undivided share to State Bank of Indore). (Note: The landowners who hold 23.86% ownership of the undivided share have not cooperated with the Company for registering the sale deeds in favour of 175 flat owners, 18 of whom have filed suits in various courts for registration of sale deeds) iii) The bank holds a first charge on the property at No 25, Thirumalai Road, Chennai - 600 017 belonging to Alacrity Foundations Private Limited (Company in which one of Directors of the Company is a Director).

7 Status on other Bank Loans a. Citibank N.A.: The principal amount of Rs.560 lacs of unsecured loan facility (employee home loans converted vide agreement dated 02.08.2006) is remaining outstanding to the Bank. Even though the Bank has claimed a total due of Rs.1,207.87 lacs as at 31.03.2010 including interest at a compounded rate of 9%, no interest is provided in the books of account since the Company is confident of getting necessary waiver from the Bank.

b. State Bank of India: The principal loan amount of Rs.97 lacs (balance after repayment by Jain Housing & Constructions Ltd (JHCL) of Rs.283 lacs to the Bank of the employee home loans converted after transferring project Prasans development rights with related liabilities to JHCL vide Agreement dated 06.10.2005) is remaining outstanding to the Bank. No interest is provided in the books of account since the Company is confident of getting necessary waiver from the Bank. Interest as per the agreement if payable would amount to about Rs.70.57 lacs till 31.03.2010. The Bank holds a second charge on the property at No 25, Thirumalai Road, Chennai - 600 017 belonging to Alacrity Foundations Private Limited, (Company in which one of Directors of the Company is a Director).

8. The Company is engaged in the business of promoting, developing and construction of residential flats which is the significant business segment. There is no other business segment.

9. Due to financial difficulties, the Company had to stop its business of full fledged construction activities during 2003-04 and since most of the employees had left, could not complete the accounts for some time in the past. However, the accounts have been prepared now taking the present position into account as a "going concern" since the Board of Directors are confident that the Company can be revived in due course of time.

10. The present value of gratuity obligation and superannuation benefits payable is not recognized as expense by the Company. The Company shall meet its gratuity and other employee retirement benefits as and when the concerned employee retires. Accordingly, no provision has been made in the accounts of the Company towards employee benefits including gratuity. The company has not deposited the provision created upto March 2004 for Rs.28.66 lacs towards superannuation fund.

11. Previous years figures have been regrouped and rearranged wherever necessary in order to make them comparable with the current years figures.

12. Balances under sundry debtors, sundry creditors and loans and advances remain to be confirmed and in absence of evidence to the contrary, book balances have been taken as correct subject to the notes given above.

13. Related party disclosures under Accounting Standard 18:

Key managerial persons (KMP), their relatives

1. Ashok R Karnad - Director names

2. Ajit Hattikudur—Director

3. Amol Karnad— Director

Relatives of key managerial person-

1. Sunil Karnad

2. Dilip Dharmasthal

3. Nita Hattikudur

4. Anita Karnad

14. Alacrity Foundations Private Limited has waived the Corporate Fees of Rs.48 Lacs payable by the Company for the year 2009-10 in view of the Companys difficult financial position.

15. Since the Company is in losses, there is NIL Liability towards Deferred Tax. No Deferred Tax Asset has also been created as there is no reasonable certainty that the Deferred Tax Asset can be set-off against future income.

16. The nature of business carried on by the Company, viz. construction activity is such that furnishing quantitative details relating to consumption / stock of building materials is not feasible.

17. The Company could not fulfill the requirements of Section 383A of the Companies Act, 1956 relating to appointment of Company Secretary for the Company due to financial difficulties.

18. Figures in brackets represent previous years figures. Signatures to Schedules 1 to 17

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Mar 31, 2009

1. Contingent liabilities not provided for :

a. Liability that may arise due to the recovery proceedings initiated by the Provident Fund authorities on Alacrity Foundations Private Limited (AFPL) for recovery of employee/employer PF and pension contributions amounting to Rs. 9.03 lacs for the financial year 2003-04 towards employees seconded to the Company by AFPL. Also the Liability that may arise in respect of PF Contribution estimated at Rs.0.87 Lacs (Rs. 0.87 Lacs) for the period 01.07.92 to 30.04.95 relating to temporary and casual workers of the contractor employed in the construction work undertaken by the Company, settlement of which depends on the decision of the competent authority constituted for this purpose. Liability that may arise towards further interest claimed by ESIC to the extent of Rs.3.50 lacs for the period April 2001 to Sept. 2005.

b. Interest/penalty that may be levied due to delayed settlement of the Provident Fund arrears to employees, the quantum of which is not determinable as on date.

c. Liability that may arise due to the Corporate Guarantee given by the Company to Canara Bank for a sum not exceeding Rs. 400 lacs, being the credit facility by way of loans, overdrafts, discount of bills or otherwise extended by the said Bank to M/s. Alacrity Electronics Limited, a Company in which the Director of the Company is interested as a Director.

d. Income tax demand for the assessment year (AY) 1993-94 amounting to Rs.10.33 Lacs excluding interest and penalty thereon as it has been disputed and appeal pending with the High Court of Madras. As per letter dated 13-10-2006, the Tax authorities have demanded payment of Rs.243.57 lacs including interest of Rs.32.47 lacs and penalty of Rs. 184 lacs for the above AY 1993-94. No provision has also been made for the tax demand of Rs.289.78 lacs including interest of Rs.44.20 lacs for the AY 1994-95 which arose due to the disallowance of the brought forward loss and unabsorbed depreciation of the AY 1993-94. No provision has also been made for the tax demands for the AY 1995-96 of Rs.39.55 lacs (including interest of Rs.6.03 lacs)

e. Interest claim of about Rs. 27.11 lacs made by creditors/customers disputed by the Company in courts.

f. Claim against the company of Rs. 20 lacs made by a landowner of a property, disputed by the company.

2. The balance shown as dues from Debtors represents the money due mostly from customers with whom the Company had entered into agreements before 2003-04 for many of whom the company would have to execute sale deeds after getting various clearances and hence considered recoverable and no provision made there against even though due for a long period of time.

3. The balance shown as dues to Sundry Creditors - for Goods and Services represents money owed mostly to suppliers of goods and services before 2003-04.

4. Presently, a total of 143 cases have been filed against the company by customers, creditors and other parties before various courts including the State & District Consumer Forum, Metropolitan Magistrate Court, District Munsif Court, Fast Track Court, City Civil Court and High Court of Madras for non fulfillment of certain obligations by the company. Suitable provision to the extent of Rs. 642.47 lacs has been made in the accounts wherever judgments have gone against remaining undisputed by the company. Value of claims against the company for which no provision has been made since they are under dispute amounted to Rs. 253.38 lacs as at 31.03.09.

5. Unsecured loan includes two loans viz. Chakiat Agencies Pvt Ltd (Rs. 9,56,445) and Vaishnavi Jayakumar (Rs. 7,70,865) who have approached the courts seeking repayment of loan dues. No provision is made towards interest on the unsecured loans from the year 2003-04 except on the unsecured loans taken from Mr. Ajit Karnad, Mr. Santosh Aroor and Mr. Vinay Karnad to the extent of Rs. 12.15 lacs, Rs. 3.17 lacs and Rs. 1.00 lac respectively (principal amounts borrowed) totaling to Rs. 16.32 lacs being loans obtained from Banks and given to the company by them.

6. Note on Secured Loans :

a. State Bank of Indore - Rs.444.18 lacs: The Bank has initiated recovery proceedings at the Debt Recovery Tribunal (DRT) claiming Rs. 585.45 lacs as due and payable with further interest @ 13.5% p.a with penal interest until date of settlement. The loan outstanding as per the books of account is Rs. 444.18 lacs as at 31.03.2009 after payment of Rs. 36.47 lacs by Land Marvel Homes (LMH) to whom the Company has transferred Project Paramount Gardens (Saligramam) development rights with related liabilities vide Agreement dated 31.03.2005. No provision towards interest has been made in the books from the year 2004-05 since the Company is confident of getting necessary waiver from the Bank. The pari passu charge ceded by ICICI Bank to the extent of 11.84% on the Mogappair (Tarangini project) property subsists.

b. State Bank of Hyderabad - Rs. 45.73 lacs: The charge with the Bank is on Companys present and future receivables. The principal amount owed to the bank as per their statement dated 05.03.2009 is Rs. 45.73 lacs after crediting Rs. 18.21 lacs in January 2006 from the proceeds of the sale of the flat mortgaged to the Bank belonging to Mr. Krishna Hattangady, then Director of the Company. DRT (II), Chennai has passed an order dated 04.02.2010 entitling the bank to recover a sum of Rs.66.11 lacs with further interest at 15% p.a with monthly rests from 31.03.2006 till recovery. However, no provision for interest has been made in the books of accounts from the year 2004-05 since the Company has decided to appeal/ file revision petition against the above order of the DRT.

c. Union Bank of India - Rs. 271.04 lacs: The Bank has initiated recovery proceedings at the Debt Recovery Tribunal (DRT) claiming Rs. 1216.70 lacs which includes Rs. 271.04 lacs as principal and Rs. 945.66 lacs towards interest. The charge with the Bank is on Companys present and future receivables. The Principal dues were to the extent of Rs. 10.50 Crores and the Bank recovered and adjusted Rs. 778.96 lacs leaving a principal balance of Rs. 271.04 lacs. The Company has disputed the interest claim of the Bank and accordingly not made any provision there against.

d. ICICI Bank Ltd - Rs. 1359.91 lacs: The loan outstanding as per books of account as at 31-3-2009 is Rs. 1359.91 lacs after payments amounting to Rs. 531 lacs by Land Marvel Homes (LMH) to whom the Company has transferred Project Paramount Gardens (Saligramam) development rights with related liabilities vide agreement dated 31.03.2005. The bank has issued notice under the Securitization and Reconstruction of Financial Assets & Enforcement of Securities Interest Act 2002 (SARFAESI) dated 10.07.2008 to recover an amount of Rs. 4070.12 lacs including interest up to 22nd May 2008. The claim of the Bank towards interest, penalties and other charges is disputed by the Company and no provision made there against. The properties held by ICICI Bank as collateral security are i) Property in Perambur ii) 55.52% undivided share in the 129 grounds at West Mogappair and 39 flats under construction (from which the Bank ceded 11.84% undivided share to State Bank of Indore). (Note: The landowners who hold 23.86% ownership of the undivided share have not cooperated with the Company for registering the sale deeds in favour of 175 flat owners, 18 of whom have filed suits in various courts for registration of sale deeds) iii) The bank holds a first charge on the property at No 25, Thirumalai Road, Chennai - 600 017 belonging to Alacrity Foundations Private Limited (Company in which one of Directors of the Company is a Director).

7 Status on other Bank Loans

a. Citibank N.A.: The principal amount of Rs.560 lacs of unsecured loan facility (employee home loans converted vide agreement dated 02.08.2006) is remaining outstanding to the Bank. Even though the Bank has claimed a total due of Rs. 929.18 lacs as at 31-3-2009 including interest at a compounded rate of 9%, no interest is* provided in the books of account since the Company is confident of getting necessary waiver from the Bank.

b. State Bank of India: The principal loan amount of Rs.97 lacs (balance after repayment by Jain Housing & Constructions Ltd (JHCL) of Rs. 283 lacs to the Bank of the employee home loans converted after transferring project Prasans development rights with related liabilities to JHCL vide Agreement dated 06.10.2005) is remaining outstanding to the Bank. No interest is provided in the books of account since the Company is confident of getting necessary waiver from the Bank. Interest as per the agreement if payable would amount to about Rs. 60.63 lacs till 31.03.2009. The Bank holds a second charge on the property at No 25, Thirumalai Road, Chennai - 600 017 belonging to Alacrity Foundations Private Limited, (Company in which one of Directors of the Company is a Director).

8. The Company is engaged in the business of promoting, developing and construction of residential flats which is the significant business segment. There is no other business segment.

9. Due to financial difficulties, the Company had to stop its business of full fledged construction activities during 2003-04 and since most of the employees had left, could not complete the accounts till now. However, the accounts have been prepared now taking the present position into account as a "going concern" since the Board of Directors are confident that the Company can be revived in due course of time.

10. The present value of gratuity obligation and superannuation benefits payable is not recognized as expense by the Company. The Company shall meet its gratuity and other employee retirement benefits as and when the concerned employee retires. Accordingly, no provision has been made in the accounts of the Company towards employee benefits including gratuity. The company has not deposited the provision created upto March 2004 for Rs.28.66 lacs towards superannuation fund.

11. Previous years figures have been regrouped and rearranged wherever necessary in order to make them comparable with the current years figures.

12. Balances under sundry debtors, sundry creditors and loans and advances remain to be confirmed and in absence of evidence to the contrary, book balances have been taken as correct subject to the notes given above.

13. Related party disclosures under Accounting Standard 18:

Associates

Alacrity Foundations Private Ltd Alacrity Electronics Limited

Key managerial persons (KMP), their relatives names

1. Ashok R Karnad - Director

2. Ajit Hattikudur—Director

3. Amol Karnad— Director

Relatives of key managerial person—

1. Anita Karnad

2. Dilip Dharmasthal

3. Nita Hattikudur

4. Sunil Karnad

14. Alacrity Foundations Private Limited has waived the Corporate Fees of Rs.48 Lacs payable by the Company for the year 2008-09 in view of the Companys difficult financial position.

15. Since the Company is in losses, there is NIL Liability towards Deferred Tax. No Deferred Tax Asset has also been created as there is no reasonable certainty that the Deferred Tax Asset can be set-off against future income.

16. The nature of business carried on by the Company, viz, construction activity is such that furnishing quantitative details relating to consumption / stock of building materials is not feasible.

17. The Company could not fulfill the requirements of Section 383A of the Companies Act, 1956 relating to appointment of Company Secretary for the Company due to financial difficulties.

18. Earnings per share as per Accounting Standard 20 is calculated by dividing the profit attributable to the equity shareholders by the number of equity shares outstanding as at the end of the year. The numbers used in calculating the earnings per equity share are stated below:

19. Figures in brackets represent previous years figures. Signatures to Schedules 1 to 17