Prajay Engineers Syndicate Ltd. के अकाउंट के लिये नोट

Mar 31, 2025

Provision and contingent liability

On an ongoing basis, Company reviews pending cases, claims by third parties and other contingencies.
For contingent losses that are considered probable, an estimated loss is recorded as an accrual in financial
statements. Loss Contingencies that are considered possible are not provided for but disclosed as
Contingent liabilities in the financial statements. Contingencies the likelihood of which is remote are not
disclosed in the financial statements. Gain contingencies are not recognized until the contingency has
been resolved and amounts are received or receivable.

Useful lives of depreciable assets

Management reviews the useful lives of depreciable assets at each reporting. As at March 31, 2025
management assessed that the useful lives represent the expected utility of the assets to the Company.
Further, there is no significant change in the useful lives as compared to previous year.

Investment in equity instruments of subsidiary and associate companies

During the year, the Company assessed the investment in equity instrument of subsidiary and associate
companies carried at cost for impairment testing. These companies are expected to generate positive cash
flows in the future years. Detailed analysis has been carried out on the future projections and the
Company is confident that the investments do not require any impairment.

(d) Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Outstanding balances at the year-end are unsecured and interest free. For the year ended
March 31, 2025, the Company has not recorded any impairment of receivables relating to amounts owed
by related parties (March 31, 2024 - Nil). This assessment is undertaken each financial year through
examining the financial position of the related party and the market in which the related party operates.

29. Segment information

The senior management of the Company monitors the operating results of its business units separately for
the purpose of making decisions about resource allocation and performance assessment. Accordingly, the
Company has identified following as its reportable segment for the purpose of Ind AS 108:

a) Real estate segment;

b) Hotels and resorts segment.

Real Estate segment (RE) is into development, sale, management and operation of all or any part of
Town ships, housing projects, also includes leasing of self owned commercial premises.

Hotels and Resorts Segment (HR) is into upkeep and maintenance of Hotels, Restaurants and Resorts.
Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss
in the financial statements. Also, the Company’s financing (including finance costs and finance income)
and income taxes are managed on a overall basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to
transactions with third parties.

The following table’s present revenue and profit information for the Company’s operating segments for
the year ended March 31, 2025 and March 31, 2024 respectively.

30. Gratuity

The Company has a defined benefit gratuity plan (funded). The Company’s defined benefit gratuity plan
is a final salary plan, which requires contributions to be made to a separately administered fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has
completed five years of service is entitled to specific benefit. The level of benefits provided depends on
the member’s length of service and salary at retirement age.

31. Earnings per share

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the
weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted
average number of Equity shares outstanding during the year plus the weighted average number of
Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity
Shares.

32. As stated in Note 3.1(ii) for recognizing profit on projects, stage of completion is determined as a
proportion that project costs incurred for the work performed bear to the estimated total costs. Further, as
stated in that note expected loss on projects is recognized when it is probable that the total project costs
will exceed the total project revenue. For this purpose total project costs are ascertained on the basis of
project costs incurred and costs to completion of projects on progress, which is arrived at by the
Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in
future including for contingencies etc., which being technical matters have been relied on by auditors.
Further, in respect of certain properties where sale agreement has been entered with parties even though
money has not been received as per stipulation in the contract, the Company has recognized revenue and
debtors as management is confident that it shall be able to realize the sale proceeds.

33. As stated in Note.3.1(iii) the method used to recognize the contract revenue is percentage of
completion method measured by survey of work performed. Further, as stated in the note, expected loss
on contracts is recognized when it is probable that the total contract cost will exceed the total contract
revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost
to completion of contract on progress ,which is arrived at by the management, based on current technical

data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc,
which being technical matters have been relied on by auditors.

34. Commitments and contingencies

a. Leases

Operating lease obligations: The Company has taken equipments and motor vehicles under Equipment
/Auto Loan arrangements for which the legal ownership will be transferred to the company at the end of
the Loan period as per the agreement. The Company has paid INR 41.32 lakhs (March 31, 2024 -INR
52.64 lakhs) during the year towards minimum lease payments.

39. (a) Trade Receivables (Note 12), unsecured considered good, includes Rs.8595.11 lakhs (31-03¬
2024: Rs.11,932.34 lakhs), outstanding for more than six months. As a result of economic
slowdown and recession in realty sector, the realizations from customers are slow. The company
has provided in the earlier years Rs.1246.96 lakhs towards doubtful debts against Trade
receivables, unsecured, considered doubtful. During the year the company has written of bad and
doubtful debts to the tune of Rs.1026.22 lakhs (31.03.2024: Rs.1029.69 lakhs).

(b) Non-current assets (Note 10) include advances given to Landlords/ developers towards certain
projects amounting to Rs.6,696.79 lakhs (31-03-2024: Rs.6,181.23 lakhs) and Short Term Loans and
Advances to suppliers, etc amounting to Rs.956.93 lakhs (31-03-2024: Rs.818.13 lakhs) are
outstanding. An amount of Rs.700 lakhs is set aside towards provision for advances considered as
doubtful in the earlier years.

40. Details as required under Schedule III - Part I of the Companies Act, 2013 relating to investment

in partnership firm.

(a) Name of the Partnership Firm - Prajay Binjusaria Estates

(b) Total Capital of the said Firm is Rs.2055.50 lakhs (31-03-2024 : Rs.2055.50 lakhs)

(c) Share of each partner in the Profit or Loss

41. The Secured Loan (Inter Corporate Deposit) of Rs.2000.00 Lakhs from Prajay Properties Private
Limited is continuing as Interest free by virtue of the agreement Dated 6^th October ‘2009.

Since some of the statutory approvals for Prajay Megapolis project are yet to be obtained, crystallization
of loan repayment time schedule has not taken place as on 31.03.25.

In furtherance to the mediation proceedings pertaining to the disputes between the Investor Entities (i.e.
White Stock Limited & Belclare Limited) and Prajay Entities including Prajay Engineers Syndicate
Limited (The Company), The Settlement Agreement has been executed amongst and by the parties, under
the auspices of International Arbitration and Mediation Centre, (IAMC) Hyderabad and the filing of the
compromise terms before the National Company Law Tribunal (NCLT), Hyderabad has been completed.
The cases filed by the Investor Entities before the Hon’ble NCLT Bench, Hyderabad Bench have
accordingly been disposed off.

The Government of Andhra Pradesh (Youth Advancement Tourism & Culture Department, now the
Government of Telangana) and the company along with its subsidiary M/s Secunderabad Golf & Leisure
Resorts Private Limited, a special purpose company to develop Golf Course, had entered into Lease
Agreement and Construction & Management agreement. Subsequently, for the issues that arose between
the company and the Tourism Department, the Company invoked the Arbitration clause as per the
Agreements and the Hon’ble High Court vide its order dated 28.07.2022 appointed Hon’ble S.M.Rafee
(retired District judge) as the Arbitrator in Arbitration Application No.86 of 2022. The Arbitration
proceedings are in progress.

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables.
The main purpose of these financial liabilities is to finance and support Company''s operations. The
Company’s principal financial assets include inventory, trade and other receivables, cash and cash
equivalents and land advances and refundable deposits that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management
oversees the management of these risks. The Board of Directors reviews and agrees policies for managing
each of these risks, which are summarized below.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market prices. Market risk comprises two types of risk: interest rate risk and other
price risk, such as equity price risk and commodity/ real estate risk. Financial instruments affected by
market risk include loans and borrowings and refundable deposits. The sensitivity analysis in the
following sections relate to the position as at March 31, 2025 and March 31, 2024. The sensitivity
analyses have been prepared on the basis that the amount of net debt and the ratio of fixed to floating
interest rates of the debt.

The analysis excludes the impact of movements in market variables on: the carrying values of gratuity
and other post retirement obligations; provisions.

The below assumption has been made in calculating the sensitivity analysis:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market
risks. This is based on the financial assets and financial liabilities held at March 31, 2025 and March 31,
2024.

i. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates. The Company''s exposure to the risk
of changes in market interest rates relates primarily to the Company''s long-term debt
obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and
variable rate loans and borrowings. The Company does not enter into any interest rate swaps.

b) Credit risk

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

Trade receivables

• Receivables resulting from sale of properties: Customer credit risk is managed by requiring
customers to pay advances before transfer of ownership, therefore, substantially eliminating the
Company’s credit risk in this respect.

• Receivables resulting from other than sale of properties: Credit risk is managed by each business
unit subject to the Company’s established policy, procedures and control relating to customer
credit risk management. Outstanding customer receivables are regularly monitored.

The impairment analysis is performed at each reporting date on an individual basis for major clients. In
addition, a large number of minor receivables are grouped into homogeneous groups and assessed for
impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value
of each class of financial assets. The Company does not hold collateral as security. The Company’s credit
period generally ranges from 30-60 days.

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury
department in accordance with the Company’s policy. Investments of surplus funds are made only with
approved counterparties and within credit limits assigned to each counterparty.

Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and
may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits
are set to minimize the concentration of risks and therefore mitigate financial loss through a
counterparty’s potential failure to make payments. The Company’s maximum exposure to credit risk for
the components of the statement of financial position at 31 March 2025 and 2024 is the carrying amounts.

c) Liquidity risk

The Company''s objective is to maintain a balance between continuity of funding and flexibility
through the use of bank deposits and loans.

The table below summarizes the maturity profile of the Company’s financial liabilities based on
contractual undiscounted payments:

43. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share
premium and all other equity reserves attributable to the equity holders of the Company. The primary
objective of the Company’s capital management is to maximize the shareholder value.

The Board of Directors of the Company seek to maintain a balance between the higher returns that might
be possible with higher level of borrowing and advantages by a sound capital position.

45. Prior year comparatives

The figures of the previous year have been regrouped/reclassified, where necessary, to conform with the
current year’s classification.

As per our report of even date attached

For Karumanchi & Associates For and on behalf of the Board of Directors of Prajay Engineers Syndicate Limited.

Chartered Accountants

ICAI Firm Regn.No : 001753S

N.Gopala Krishna D. Vijay Sen Reddy D. Rohit Reddy

Partner Chairman and Managing Director Director

Membership No : 211124 DIN : 00291185 DIN : 07560450

UDIN No: 25211124BMOAZV8573

P. Bhaskara Rao T.Siva Kumar

Place : Hyderabad Chief Financial Officer Company Secretary

Date : 28.05.2025 M.No : CMA 9445 M.No ; A37447

---

Mar 31, 2024

3.14 Provisions

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

3.15 Contingent liabilities & contingent assets

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

Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.

3.16 Financial instruments

Initial recognition

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issues of financial assets and financial liabilities that are not at fair value through profit or loss, are added to the fair value on initial recognition.

Subsequent measurement

Non-derivative financial instruments

• Financial assets carried at amortized cost

A financial asset is subsequently measured at amortized cost if it is held with a business model whose objective to hold the asset in order to collect contractual cash flows, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

• Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held with a business model whose objective is achieved by collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Further in cases where the Company had made an irrevocable election based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.

• Investment in subsidiaries and associates

Investment in subsidiaries and associates are carried at cost in the separate financial statements.

• Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to short maturity of these instruments.

4. Fixed Assets: Freehold land and buildings (properties) were carried in the balance sheet prepared in accordance with Indian GAAP on the basis of carrying cost (cost model) on 31 March 2015. The company has elected to regard those carrying costs of property as deemed cost at the date of transition. Accordingly, the Company has not revalued the property at 1 April 2015.

Investments in associates and subsidiaries: The Company has elected to continue with the carrying value of its investments in subsidiary companies and associate companies as of April 1, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

5. Critical accounting judgements and key sources of estimation uncertainty

6.

In the application of the Company’s accounting policies, which are described in note 3, the management of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the areas of estimation uncertainty and critical judgements that the management has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements:

Provision and contingent liability

On an ongoing basis, Company reviews pending cases, claims by third parties and other contingencies. For contingent losses that are considered probable, an estimated loss is recorded as an accrual in financial statements. Loss Contingencies that are considered possible are not provided for but disclosed as Contingent liabilities in the financial statements. Contingencies the likelihood of which is remote are not disclosed in the financial statements. Gain contingencies are not recognized until the contingency has been resolved and amounts are received or receivable.

Useful lives of depreciable assets

Management reviews the useful lives of depreciable assets at each reporting. As at March 31, 2024 management assessed that the useful lives represent the expected utility of the assets to the Company. Further, there is no significant change in the useful lives as compared to previous year.

Investment in equity instruments of subsidiary and associate companies

During the year, the Company assessed the investment in equity instrument of subsidiary and associate companies carried at cost for impairment testing. These companies are expected to generate positive cash flows in the future years. Detailed analysis has been carried out on the future projections and the Company is confident that the investments do not require any impairment.

(d)Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free. For the year ended March 31,2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2023 - Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

29. Segment information

The senior management of the Company monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Accordingly, the Company has identified following as its reportable segment for the purpose of Ind AS 108:

a) Real estate segment;

b) Hotels and resorts segment.

Real Estate segment (RE) is into development, sale, management and operation of all or any part of Town ships, housing projects, also includes leasing of self owned commercial premises.

Hotels and Resorts Segment (HR) is into upkeep and maintenance of Hotels, Restaurants and Resorts. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Also, the Company’s financing (including finance costs and finance income) and income taxes are managed on a overall basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

The following table’s present revenue and profit information for the Company’s operating segments for the year ended March 31,2024 and March 31,2023 respectively.

30. Gratuity

The Company has a defined benefit gratuity plan (funded). The Company’s defined benefit gratuity plan is a final salary plan, which requires contributions to be made to a separately administered fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age.

31. Earnings per share

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity Shares.

32. As stated in Note 3.1(ii) for recognizing profit on projects, stage of completion is determined as a proportion that project costs incurred for the work performed bear to the estimated total costs. Further, as stated in that note expected loss on projects is recognized when it is probable that the total project costs will exceed the total project revenue. For this purpose total project costs are ascertained on the basis of project costs incurred and costs to completion of projects on progress, which is arrived at by the Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc., which being technical matters have been relied on by auditors. Further, in respect of certain properties where sale agreement has been entered with parties even though money has not been received as per stipulation in the contract, the Company has recognized revenue and debtors as management is confident that it shall be able to realize the sale proceeds.

33. As stated in Note.3.1(iii) the method used to recognize the contract revenue is percentage of completion method measured by survey of work performed. Further, as stated in the note, expected loss on contracts is recognized when it is probable that the total contract cost will exceed the total contract revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost to completion of contract on progress ,which is arrived at by the management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc, which being technical matters have been relied on by auditors.

34. Commitments and contingencies

a. Leases

Operating lease obligations: The Company has taken equipments and motor vehicles under Equipment /Auto Loan arrangements for which the legal ownership will be transferred to the company at the end of the Loan period as per the agreement. The Company has paid INR 52.64 lakhs (March 31, 2023 -INR 64.31 lakhs) during the year towards minimum lease payments.

*The company has disputed the liability and replied to the show cause notice, that the short payment of service tax, if any, demanded by the Service Tax Authorities is not maintainable under law.

Further, as per Circular No.108/02/2009-ST, dated 29.01.2009 issued by CBEC, no service tax is payable on the Construction of Complex Service for the impugned period 2006-07 to 2010-11. During the impugned period, the company had deposited with the Service Tax Authorities, whatever service tax collected from the customers. The Company has filed appeal on 08.04.2013 with CESTAT, Bangalore against order dated 04.01.13 of Commissioner of Service Tax. The CESTAT has allowed the appeal, all penalties imposed are set aside and set aside the impugned order.

**The company has disputed the Income Tax liability for the assessment Year 2020-21 with a demand of Income tax for Rs.51,96,85,380/- by mechanical addition of contingent liabilities of Rs.1,48,05,28,000/-and replied to the demand notice. Further the company has filed a writ petition in the High Court of Telengana and the matter has been stayed by the Honourable High Court of Telangana.

35.Based on the information available with the Company, there are two suppliers who are registered as micro, small or medium enterprises under “The Micro, Small and Medium Enterprises Development Act, 2006” and as at March 31,2024 the amount due to them by the company is nil (March 31,2023 Nil)

The Government of Andhra Pradesh (Youth Advancement Tourism & Culture Department, now the Government of Telangana) and the company along with its subsidiary M/s Secunderabad Golf & Leisure Resorts Private Limited, a special purpose company to develop Golf Course, had entered into Lease Agreement and Construction & Management agreement. Subsequently, for the issues that arose between the company and the Tourism Department, the Company invoked the Arbitration clause as per the Agreements and the Hon’ble High Court vide its order dated 28.07.2022 appointed Hon’ble S.M.Rafee (retired District judge) as the Arbitrator in Arbitration Application No.86 of 2022. The Arbitration proceedings are in progress.

42. Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance and support Company''s operations. The Company’s principal financial assets include inventory, trade and other receivables, cash and cash equivalents and land advances and refundable deposits that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and other price risk, such as equity price risk and commodity/ real estate risk. Financial instruments affected by market risk include loans and borrowings and refundable deposits. The sensitivity analysis in the following sections relate to the position as at March 31, 2024 and March 31,2023. The sensitivity analyses have been prepared on the basis that the amount of net debt and the ratio of fixed to floating interest rates of the debt.

The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other post retirement obligations; provisions.

The below assumption has been made in calculating the sensitivity analysis:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2024 and March 31, 2023.

i. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company does not enter into any interest rate swaps.

Interest rate sensitivity

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

Trade receivables

• Receivables resulting from sale of properties: Customer credit risk is managed by requiring customers to pay advances before transfer of ownership, therefore, substantially eliminating the Company’s credit risk in this respect.

• Receivables resulting from other than sale of properties: Credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored.

The impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company’s credit period generally ranges from 30-60 days.

Financial Instrument and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty.

Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through a counterparty’s potential failure to make payments. The Company’s maximum exposure to credit risk for the components of the statement of financial position at 31 March 2024 and 2023 is the carrying amounts.

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits and loans.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments:

43. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Board of Directors of the Company seek to maintain a balance between the higher returns that might be possible with higher level of borrowing and advantages by a sound capital position.

The Company monitors capital using a ratio of “Net debt to equity”. The Company’s net debt to equity ratio is as follows:

45. Cost of Construction in Inventory includes an amount of Rs.5,62,49,811 /- towards the purchase and development of land at Survey No.361. Shaikpet villiage , Banjara Hills to the extent of Ac 4-26 Gt by registered Sale agreement cum GPA no.1400/2006. Subsequently there was a dispute between the seller and third party, it was admitted before the Supreme Court of India, the suit has been declared in favour of the third party on 21-09-2010. Hence the above said amount could not be realized to the company even after repeated follow up with the seller. On account of this the said amount has been debited to cost of construction.

46. Prior year comparatives

The figures of the previous year have been regrouped/reclassified, where necessary, to conform with the current year’s classification.

As per our report of even date attached

For Karumanchi & Associates For and on behalf of the Board of Directors of Prajay Engineers Syndicate Limited.

Chartered Accountants

ICAI Firm Regn No : 001753S

Sd/- Sd/-

N.Gopala Krishna D. Vijay Sen Reddy D. Rohit Reddy

Partner Chairman and Managing Director Director

Membership No : 211124 DIN : 00291185 DIN : 07560450

UDIN No : 24211124BKFVWZ5922

Sd/- Sd/-

P. Bhaskara Rao T Siva Kumar

Place : Hyderabad Chief Financial Officer Company Secretary

Date : 28.05.2024 M.No : CMA 9445 M. No. A37447

---

Mar 31, 2023

a) Capitalised borrowing costs

The amount of borrowing costs capitalised during the year ended March 31, 2023 was INR Nil (March 31, 2022 - INR Nil).

b) Charge on Property, plant and equipment

Property, plant and equipment with a carrying amount of INR Nil (March 31,2022 - INR Nil) lakhs and Vehicles with a carrying amount of INR 141.45 lakhs (March 31,2022 - INR 237.53 lakhs) are subject to a first charge to secure the Company’s bank loans.

Note: (a) 1. includes advance to Partnership firm in which the company is partner INR 89.96 lakhs (31.03.2022 : INR 89.96 lakhs)

2. includes advance to Private Companies in which any director is director INR 1628.89 lakhs (31.03.2022 : INR 1710.93 lakhs) Note: (b) includes deposit to Director INR 500.00 lakhs ( 31.03.2022 : INR 500.00 lakhs)

(d) Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free. For the year ended March 31, 2023, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2022 - Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

29. Segment information

The senior management of the Company monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Accordingly, the Company has identified following as its reportable segment for the purpose of Ind AS 108:

a) Real estate segment;

b) Hotels and resorts segment.

Real Estate segment (RE) is into development, sale, management and operation of all or any part of Town ships, housing projects, also includes leasing of self owned commercial premises.

Hotels and Resorts Segment (HR) is into upkeep and maintenance of Hotels, Restaurants and Resorts. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Also, the Company’s financing (including finance costs and finance income) and income taxes are managed on a overall basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

The following table’s present revenue and profit information for the Company’s operating segments for the year ended March 31, 2023 and March 31, 2022 respectively.

30. Gratuity

The Company has a defined benefit gratuity plan (funded). The Company’s defined benefit gratuity plan is a final salary plan, which requires contributions to be made to a separately administered fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age.

31. Earnings per share

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity Shares.

32. As stated in Note 3.1(ii) for recognizing profit on projects, stage of completion is determined as a proportion that project costs incurred for the work performed bear to the estimated total costs. Further, as stated in that note expected loss on projects is recognized when it is probable that the total project costs will exceed the total project revenue. For this purpose total project costs are ascertained on the basis of project costs incurred and costs to completion of projects on progress, which is arrived at by the Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc., which being technical matters have been relied on by auditors. Further, in respect of certain properties where sale agreement has been entered with parties even though money has not been received as per stipulation in the contract, the Company has recognized revenue and debtors as management is confident that it shall be able to realize the sale proceeds.

33. As stated in Note.3.1(iii) the method used to recognize the contract revenue is percentage of completion method measured by survey of work performed. Further, as stated in the note, expected loss on contracts is recognized when it is probable that the total contract cost will exceed the total contract revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost to completion of contract on progress ,which is arrived at by the management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc, which being technical matters have been relied on by auditors.

34. Commitments and contingencies

a. Leases

Operating lease obligations: The Company has taken equipments and motor vehicles under Equipment /Auto Loan arrangements for which the legal ownership will be transferred to the company at the end of the Loan period as per the agreement. The Company has paid INR 64.31 lakhs (March 31, 2022 -INR 94.46 lakhs) during the year towards minimum lease payments.

Future minimum rentals payable under non-cancellable operating lease are as follows:
Particulars	31 March 2023	31 March 2022
Within one year	41.44	96.65
After one year but not more than five years	4.48	3.54
More than five years	NIL	NIL

b. Commitments

The estimated amount of contracts, net of advances remaining to be executed on capital account is Nil (March 31, 2022 -Nil).

c. Contingent liabilities (to the extent not provided for)

Particulars	2022-23	2021-22
	(Rs. in Lakhs)	(Rs. in Lakhs)
The following disputed liabilities are under appeal :
Service tax*	1820.62	1820.62
Income Tax**	5196.85	841.48
Entry Tax	--	13.18

*The company has disputed the liability and replied to the show cause notice, that the short payment of service tax, if any, demanded by the Service Tax Authorities is not maintainable under law.

Further, as per Circular No.108/02/2009-ST, dated 29.01.2009 issued by CBEC, no service tax is payable on the Construction of Complex Service for the impugned period 2006-07 to 2010-11. During the impugned period, the company had deposited with the Service Tax Authorities, whatever service tax collected from the customers. The Company has filed appeal on 08.04.2013 with CESTAT, Bangalore against order dated 04.01.13 of Commissioner of Service Tax. CESTAT has pronounced stay against recovery during the pendency of appeal.

**The company has disputed the Income Tax liability for the assessment Year 2020-21 with a demand of Income tax for Rs.51,96,85,380/- by mechanical addition of contingent liabilities of Rs.1,48,05,28,000/-and replied to the demand notice. Further the company has filed a writ petition in the High Court of Telengana and the matter has been stayed by the Honourable High Court of Telangana.

35.Based on the information available with the Company, there are two suppliers who are registered as micro, small or medium enterprises under “The Micro, Small and Medium Enterprises Development Act, 2006” and as at March 31, 2023 the amount due to them by the company is Nil (March 31, 2022 Nil)

39. (a) Trade Receivables (Note 12), unsecured considered good, includes Rs.15,099.42 lakhs (31-032022: Rs.16,375.58 lakhs), outstanding for more than six months. As a result of economic slowdown and recession in realty sector, the realizations from customers are slow. The company has provided Rs.1246.96 lakhs towards doubtful debts against Trade receivables, unsecured, considered doubtful. During the year the company has written of bad and doubtful debts to the tune of Rs.1094.77 lakhs (31.03.2022: Nil)

(b) Non-current assets (Note 10) include advances given to Landlords/ developers towards certain projects amounting to Rs.5,840.53 lakhs (31-03-2022: Rs.6,090.31 lakhs) and Short Term Loans and Advances to suppliers, etc amounting to Rs.894.87 lakhs (31-03-2022: Rs.1031.46 lakhs) are outstanding. An amount of Rs.700 lakhs is set aside towards provision for advances considered as doubtful.

41. The Secured Loan (Inter Corporate Deposit) of Rs.3,200.00 Lakhs from Prajay Properties Private Limited is continuing as Interest free by virtue of the agreement Dated 6^th October ‘2009.

Since some of the statutory approvals for Prajay Megapolis project are yet to be obtained, crystallization of loan repayment time schedule has not taken place as on 31.03.23.

In furtherance to the mediation proceedings pertaining to the disputes between the Investor Entities (i.e. White Stock Limited & Belclare Limited) and Prajay Entities including Prajay Engineers Syndicate Limited (The Company), The Settlement Agreement has been executed amongst and by the parties, under the auspices of International Arbitration and Mediation Centre, (IAMC) Hyderabad and the filing of the compromise terms before the National Company Law Tribunal (NCLT), Hyderabad has been completed. The cases filed by the Investor Entities before the Hon’ble NCLT Bench, Hyderabad Bench have accordingly been disposed off.

The Government of Andhra Pradesh (Youth Advancement Tourism & Culture Department, now the Government of Telangana) and the company along with its subsidiary M/s Secunderabad Golf & Leisure Resorts Private Limited, a special purpose company to develop Golf Course, had entered into Lease Agreement and Construction & Management agreement. Subsequently, for the issues that arose between the company and the Tourism Department, the Company invoked the Arbitration clause as per the Agreements and the Hon’ble High Court vide its order dated 28.07.2022 appointed Hon’ble S.M.Rafee (retired District judge) as the Arbitrator in Arbitration Application No.86 of 2022. The Arbitration proceedings are in progress.

42. Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance and support Company''s operations. The Company’s principal financial assets include inventory, trade and other receivables, cash and cash equivalents and land advances and refundable deposits that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and other price risk, such as equity price risk and commodity/ real estate risk. Financial instruments affected by market risk include loans and borrowings and refundable deposits. The sensitivity analysis in the following sections relate to the position as at March 31, 2023 and March 31, 2022. The sensitivity analyses have been prepared on the basis that the amount of net debt and the ratio of fixed to floating interest rates of the debt.

The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other post retirement obligations; provisions.

The below assumption has been made in calculating the sensitivity analysis:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31, 2022.

i. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company does not enter into any interest rate swaps.

b) Credit risk

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

Trade receivables

• Receivables resulting from sale of properties: Customer credit risk is managed by requiring customers to pay advances before transfer of ownership, therefore, substantially eliminating the Company’s credit risk in this respect.

• Receivables resulting from other than sale of properties: Credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored.

The impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company’s credit period generally ranges from 30-60 days.

Financial Instrument and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty.

Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through a counterparty’s potential failure to make payments. The Company’s maximum exposure to credit risk for the components of the statement of financial position at 31 March 2023 and 2022 is the carrying amounts.

c) Liquidity risk

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits and loans.

43. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Board of Directors of the Company seek to maintain a balance between the higher returns that might be possible with higher level of borrowing and advantages by a sound capital position.

45. Prior year comparatives

The figures of the previous year have been regrouped/reclassified, where necessary, to conform with the current year’s classification.

---

Mar 31, 2018

1. General information

Prajay Engineers Syndicate Limited (the Company) is a public company domiciled & incorporated under the provisions of the Companies Act, 1956 on April 19, 1994. The Company is engaged primarily in the business of real estate construction, development and maintaining hospitality projects. The shares of the Company are listed on two stock exchanges in India i.e. National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

2. Basis of preparation of financial statements

2.1 Statement of Compliance

The financial statements of the Company have been prepared and presented in accordance with the Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules 2015.

2.2 Accounting convention

These financial statements have been prepared on the historical cost convention and on an accrual basis, except for the following material items in the statement of financial position:

- certain financial assets and liabilities are measured at fair value;

- employee defined benefit assets/(liability) are recognized as the net total of the fair value of plan assets, plus actuarial losses, less actuarial gains and the present value of the defined benefit obligation;

- long term borrowings are measured at amortized cost using the effective interest rate method.

2.3 Functional currency

The financial statements are presented in Indian rupees, which is the functional currency of our Company. Functional currency of an entity is the currency of the primary economic environment in which the entity operates.

2.4 Operating cycle

All the assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria setout in the Schedule III to the Companies Act, 2013.

Assets:

An asset is classified as current when it satisfies any of the following criteria:

a) it is expected to be realized in, or is intended for sale or consumption in, the Company’s normal operating cycle;

b) it is held primarily for the purpose of being traded;

c) it is expected to be realized within twelve months after the reporting date; or

d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

Liabilities:

A liability is classified as current when it satisfies any of the following criteria:

a) it is expected to be settled in the Company’s normal operating cycle;

b) it is held primarily for the purpose of being traded;

c) it is due to be settled within twelve months after the reporting date; or

d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current assets/ liabilities include the current portion of non-current assets/ liabilities respectively. All other assets/ liabilities are classified as non-current.

Note

a) Capitalised borrowing costs

The amount of borrowing costs capitalised during the year ended March 31, 2018 was INR Nil (March 31, 2017 - INR Nil).

b) Charge on Property, plant and equipment

Property, plant and equipment with a carrying amount of INR 189.15 lakhs (March 31, 2017 - INR 217.15) lakhs and Vehicles with a carrying amount of INR 30.81 lakhs (March 31, 2017 - INR 52.67 lakhs) are subject to a first charge to secure the Company’s bank loans.

Note: (a) 1. includes advance to Partnership firm in which the company is partner INR 89.96 lakhs (31.03.2017 : INR 89.96 lakhs)

2. includes advance to Private Companies in which any director is director INR Nil (31.03.17: INR 1,981.84 lakhs)

3. includes advance to Director INR Nil (31.03.2017 : INR 50.00 lakhs)

(b) Terms / rights attached to the equity shares

The Company has one class of equity shares having a par value of Rs.10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(d) Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free. For the year ended March 31, 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2017 - Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

3. Segment information

The senior management of the Company monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Accordingly, the Company has identified following as its reportable segment for the purpose of Ind AS108:

a) Real estate segment;

b) Hotels and resorts segment.

Real Estate segment (RE) is into development, sale, management and operation of all or any part of Town ships, housing projects, also includes leasing of self owned commercial premises.

Hotels and Resorts Segment (HR) is into upkeep and maintenance of Hotels, Restaurants and Resorts.

Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Also, the Company’s financing (including finance costs and finance income) and income taxes are managed on a overall basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

Notes:

1 Segments have been identified in accordance with Ind AS 108 on Segment Reporting , concerning the returns/risk profiles of the business. The company has identified business segments as mentioned below as primary segments for disclosure.

(a) Construction and Development of Property.

(b) Hospitality - Hotels & Resorts.

2 As the operations of the company are only in India, there is no reportable geographical segment.

3 Unallocated corporate expenditure includes common service expenses.

4. Gratuity

The Company has a defined benefit gratuity plan (funded). The Company’s defined benefit gratuity plan is a final salary plan, which requires contributions to be made to a separately administered fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age.

5. Earnings per share

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity Shares.

6. As stated in Note 3.1(ii) for recognizing profit on projects, stage of completion is determined as a proportion that project costs incurred for the work performed bear to the estimated total costs. Further, as stated in that note expected loss on projects is recognized when it is probable that the total project costs will exceed the total project revenue. For this purpose total project costs are ascertained on the basis of project costs incurred and costs to completion of projects on progress, which is arrived at by the Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc., which being technical matters have been relied on by auditors. Further, in respect of certain properties where sale agreement has been entered with parties even though money has not been received as per stipulation in the contract, the Company has recognized revenue and debtors as management is confident that it shall be able to realize the sale proceeds.

7. As stated in Note.3.1(iii) the method used to recognize the contract revenue is percentage of completion method measured by survey of work performed. Further, as stated in the note, expected loss on contracts is recognized when it is probable that the total contract cost will exceed the total contract revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost to completion of contract on progress ,which is arrived at by the management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc, which being technical matters have been relied on by auditors.

An amount of Rs.2,237.20 lakhs (31.03.2017 Rs.3,517.80lakhs) is recognized as contract revenue by the company during the current financial year. The cost incurred in respect of the above is Rs. 1,945.39 lakhs (31.03.2017 Rs.3.059.03 lakhs).

8. Commitments and contingencies

a. Leases

Operating lease obligations: The Company has taken equipments and motor vehicles under Equipment /Auto Loan arrangements for which the legal ownership will be transferred to the company at the end of the Loan period as per the agreement. The Company has paid INR 82.38 lakhs (March 31, 2017 INR 71.20 lakhs) during the year towards minimum lease payments.

b. Commitments

The estimated amount of contracts, net of advances remaining to be executed on capital account is Nil (March 31, 2017-Nil).

* The company has disputed the liability and replied to the show cause notice, that the short payment of service tax, if any, demanded by the Service Tax Authorities is not maintainable under law.

Further, as per Circular No.108/02/2009-ST, dated 29.01.2009 issued by CBEC, no service tax is payable on the Construction of Complex Service for the impugned period 2006-07 to 2010-11. During the impugned period, the company had deposited with the Service Tax Authorities, whatever service tax collected from the customers. The Company has filed appeal on 08.04.2013 with CESTAT, Bangalore against order dated 04.01.13 of Commissioner of Service Tax. CESTAT has pronounced stay against recovery during the pendency of appeal.

9. Based on the information available with the Company, there are no suppliers who are registered as micro, small or medium enterprises under “The Micro, Small and Medium Enterprises Development Act, 2006” as at March 31, 2018.

10. (a) Trade Receivables (Note 12), unsecured considered good, includes Rs.21,059.50 lakhs (31-03-2017: Rs.20,995.33 lakhs), outstanding for more than six months. As a result of economic slowdown and recession in realty sector, the realizations from customers are slow. The company has provided Rs.1246.96 lakhs towards doubtful debts against Trade receivables, unsecured, considered doubtful.

(b) Non-current assets (Note 10) include advances given to Landlords/ developers towards certain projects amounting to Rs. 5,621.56 lakhs (31-03-2017: Rs. 6,015.13 lakhs) and Short Term Loans and Advances to suppliers, etc amounting to Rs. 2,018.77 lakhs (31-03-2017: Rs. 2,078.42 lakhs) are outstanding. An amount of Rs.700 lakhs is set aside towards provision for advances considered as doubtful.

11. The company has not paid or provided for managerial remuneration during the year. The following directors have returned the remuneration received by them a per the details given below, since the company has not received any approval from the Central Government:

12. Details as required under Schedule III - Part I of the Companies Act, 2013 relating to investment in partnership firm.

(a) Name of the Partnership Firm - Prajay Binjusaria Estates

(b) Total Capital of the said Firm is Rs.2055.50 lakhs (31-03-2017 : Rs.2055.50 lakhs)

(c) Share of each partner in the Profit or Loss

13. The Secured Loan of Rs.3,200.00 Lakhs from Prajay Properties Private Limited is continuing as Interest free by virtue of the agreement Dated 6^th October, 2009.

Since some of the statutory approvals for Prajay Megapolis project are yet to be obtained, crystallization of loan repayment time schedule has not taken place as on 31.03.18

14. Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance and support Company’s operations. The Company’s principal financial assets include inventory, trade and other receivables, cash and cash equivalents and land advances and refundable deposits that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and other price risk, such as equity price risk and commodity/ real estate risk. Financial instruments affected by market risk include loans and borrowings and refundable deposits. The sensitivity analysis in the following sections relate to the position as at March 31, 2018 and March 31, 2017. The sensitivity analyses have been prepared on the basis that the amount of net debt and the ratio of fixed to floating interest rates of the debt.

The analysis excludes the impact of movements in market variables on the carrying values of gratuity and other post retirement obligations; provisions.

The below assumption has been made in calculating the sensitivity analysis:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2018 and March 31, 2017.

i. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company does not enter into any interest rate swaps.

b) Credit risk

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

Trade receivables

- Receivables resulting from sale of properties: Customer credit risk is managed by requiring customers to pay advances before transfer of ownership, therefore, substantially eliminating the Company’s credit risk in this respect.

- Receivables resulting from other than sale of properties: Credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored.

The impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company’s credit period generally ranges from 30-60 days.

Financial Instrument and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty.

Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through a counterparty’s potential failure to make payments. The Company’s maximum exposure to credit risk for the components of the statement of financial position at 31 March 2018 and 2017 is the carrying amounts.

c) Liquidity risk

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits and loans.

15. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Board of Directors of the Company seek to maintain a balance between the higher returns that might be possible with higher level of borrowing and advantages by a sound capital position.

16. Mrs. D. Hymavathi Reddy, one of the shareholders of the company, has filed a company petition CP No.119/HDB/2018 before the National Company Law Tribunal (NCLT), Hyderabad Bench against the company. The matter is pending before the Hon’ble NCLT and the company has authorised its directors to represent the company before the Hon’ble court and make submissions, in the best interest of the stakeholders of the company.

17. Prior year comparatives

The figures of the previous year have been regrouped/reclassified, where necessary, to conform with the current year’s classification.

---

Mar 31, 2016

1. As stated in Note 1(g)(ii) for recognizing profit on projects, stage of completion is determined as a proportion that project costs incurred for the work performed bear to the estimated total costs. Further, as stated in that note expected loss on projects is recognized when it is probable that the total project costs will exceed the total project revenue. For this purpose total project costs are ascertained on the basis of project costs incurred and costs to completion of projects on progress, which is arrived at by the Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc., which being technical matters have been relied on by auditors. Further, in respect of certain properties where sale agreement has been entered with parties even though money has not been received as per stipulation in the contract, the Company has recognized revenue and debtors as management is confident that it shall be able to realize the sale proceeds.

2. As stated in Note.1(g)(iii) the method used to recognize the contract revenue is percentage of completion method measured by survey of work performed. Further, as stated in the note, expected loss on contracts is recognized when it is probable that the total contract cost will exceed the total contract revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost to completion of contract on progress ,which is arrived at by the management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc, which being technical matters have been relied on by auditors.

An amount of Rs, 5,606.12 Lakhs (31.03.2015 Rs, 4,193.58 Lakhs) is recognized as contract revenue by the company during the current financial year. The cost incurred in respect of the above is Rs, 4,842.22 Lakhs (31.03.2015 Rs, 3.762.27 Lakhs).

3. Trade Payables - Dues to Micro and small enterprises

Trade payables (Note 8) include Rs, Nil (31.03.2015 Rs, Nil) due to micro enterprises and small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006).

The company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the MSMED Act, 2006) claiming their status as micro or small or medium enterprises.

* The company has disputed the liability and replied to the show cause notice, that the short payment of service tax, if any, demanded by the Service Tax Authorities is not maintainable under law.

Further, as per Circular No.108/02/2009-ST, dated 29.01.2009 issued by CBEC, no service tax is payable on the Construction of Complex Service for the impugned period 2006-07 to 2010-11. During the impugned period, the company had deposited with the Service Tax Authorities, whatever service tax collected from the customers. The Company has filed appeal on 08.04.2013 with CESTAT, Bangalore against order dated 04.01.13 of Commissioner of Service Tax. CESTAT has pronounced stay against recovery during the pendency of appeal.

4. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) Rs, 311.80 Lakhs (31.03.2015: Rs, 466.79 Lakhs); Other commitments Nil (31-03-2015: Nil).

5. Related Party Disclosures:

A. List of Related Parties

Party Relationship

(a) Prajay Holdings Private Limited Subsidiary Prajay Developers Private Limited Step down -

subsidiary

Prajay Retail Properties Private Ltd Subsidiary

Prajay Binjusaria Estates Associate

Prajay Properties Pvt Ltd Associate

Genesis Capital Pvt.Ltd.(Mauritius) Associate

(b) Key Management Personnel Designation Relatives (Relation)*

Mr. Vijay Sen Reddy Managing Director Mrs. Sharmila Reddy (Wife)

Mr.Rohit Reddy (Son)

Mr. K. Ravi Kumar Whole time Director -

Mr. Sumit Sen Whole time Director Mrs. Rina Sen (Wife)

* Relatives of key management personnel with whom there were transactions during the year

(c) Other entities under the control of key management personnel and their relatives

Prajay Financial Services Limited Prajay Lifestyle UPVC Windows Private Limited Prajay Princeton Hotel Private Limited Prajay Princeton Developers Private Limited Prajay Velocity Developers Private Limited Prajay Chit Funds Pvt.Ltd.

Secunderabad Golf and Leisure Resorts Private Limited Prajay Land Capital Private Limited VijMohan Constructions Private Limited

6. LEASES:

Equipment / Auto Loans:

(i) The Company has taken plant and machinery, motor vehicles under Equipment / Auto Loan arrangements for which the legal ownership will be transferred to the Company at the end of the Loan period.

(ii) Reconciliation between the total of minimum equipment/auto loan payments at the balance sheet date and the present value:

7. (a) Trade Receivables (Note 15), unsecured considered good, includes Rs, 21,498.93 Lakhs (31-03-2015:

Rs, 23,519.03 Lakhs), outstanding for more than six months. As a result of economic slowdown and recession in realty sector, the realizations from customers are slow. The company has provided Rs, 1246.96 Lakhs towards doubtful debts against Trade receivables, unsecured, considered doubtful.

(b) Long Term Loans and Advances (Note 13) include advances given to Landlords/ developers towards certain projects amounting to Rs, 5,355.14 Lakhs (31-03-2015: Rs, 5,999.05 Lakhs) and Short Term Loans and Advances (Note 17) to suppliers, etc amounting to Rs, 1387.86 Lakhs (31-03-2015: Rs, 727.58 Lakhs) outstanding from earlier years. An amount of Rs, 700 Lakhs is set aside towards provision for advances considered as doubtful.

8. Details as required under Schedule III - Part I of the Companies Act, 2013 relating to investment in partnership firm.

(a) Name of the Partnership Firm - Prajay Binjusaria Estates

(b) Total Capital of the said Firm is Rs, 2055.50 Lakhs (31-03-2015 : Rs, 2055.50 Lakhs)

(c) Share of each partner in the Profit or Loss

9. The Secured Loan of Rs, 3,200.00 Lakhs from Prajay Properties Private Limited is continuing as Interest free by virtue of the agreement Dated 6^th October Rs,2009.

Since some of the statutory approvals for Prajay Megapolis project are yet to be obtained, crystallization of loan repayment time schedule has not taken place as on 31.03.16.

10. Previous year’s figures have been recast / restated, to conform to current year classification.

---

Mar 31, 2015

NOTE : 1

SHARE CAPITAL

2,972,787 shares have been alloted pursuant to a contract without payments being received in cash. Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of Rs. 10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

NOTE : 2

As stated in Note 1(g)(ii) for recognizing profit on projects, stage of completion is determined as a proportion that project costs incurred for the work performed bear to the estimated total costs. Further, as stated in that note expected loss on projects is recognised when it is probable that the total project costs will exceed the total project revenue. For this purpose total project costs are ascertained on the basis of project costs incurred and costs to completion of projects on progress, which is arrived at by the Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc., which being technical matters have been relied on by auditors. Further, in respect of certain properties where sale agreement has been entered with parties even though money has not been received as per stipulation in the contract, the Company has recognised revenue and debtors as management is confident that it shall be able to realize the sale proceeds.

NOTE : 3

As stated in Note. 1 (g)(iii) the method used to recognize the contract revenue is percentage of completion method measured by survey of work performed. Further, as stated in the note, expected loss on contracts is recognised when it is probable that the total contract cost will exceed the total contract revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost to completion of contract on progress ,which is arrived at by the management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc, which being technical matters have been relied on by auditors.

An amount of Rs. 4,193.58 lacs (31.03.2014 Rs. 6,085.47lacs) is recognized as contract revenue by the company during the current financial year. The cost incurred in respect of the above is Rs. 3,762.27 lacs (31.03.2014 Rs. 5,282.16 lacs).

NOTE : 4

Trade Payables - Dues to Micro and small enterprises

Trade payables (Note 8) include Rs. Nil (31.03.2014 Rs. Nil) due to micro enterprises and small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006). The company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the MSMED Act, 2006) claiming their status as micro or small or medium enterprises.

NOTE : 5

Contingent Liabilities (not provided for) Guarantees given to banks (on behalf of Prajay Properties Pvt Ltd) 12,130.00 12,130.00

The following disputed liabilities are under appeal by the Company:

Service tax* 1,820.62 1,820.62

Income Tax 791.71 40.79

VAT 5.77 5.77

* The company has disputed the liability and replied to the show cause notice, that the short payment of service tax, if any, demanded by the Service Tax Authorities is not maintainable under law.

Further, as per Circular No.108/02/2009-ST, dated 29.01.2009 issued by CBEC, no service tax is payable on the Construction of Complex Service for the impugned period 2006-07 to 2010-11. During the impugned period, the company had deposited with the Service Tax Authorities, whatever service tax collected from the customers. The Company has filed appeal on 08.04.2013 with CESTAT, Bangalore against order dated 04.01.13 of Commissioner of Service Tax.

NOTE : 6

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) Rs. 466.79 lacs (31.03.2014: Rs. 520.39 lacs); Other commitments Nil (31-03-2014: Nil).

NOTE : 7

Related Party Disclosures:

A. List of Related Parties Party Relationship

(a) Prajay Holdings Private Limited Subsidiary

Prajay Developers Private Limited Step down - Subsidiary

Prajay Retail Properties Private Ltd Subsidiary

Prajay Binjusaria Estates Associate

Prajay Properties Pvt Ltd Associate

Genesis Capital Pvt.Ltd.(Mauritius) Associate

(b) Key Management Personnel Designation Relatives (Relation)*

Mr. Vijay Sen Reddy Managing Director Mrs. Sharmila Reddy (Wife) Mr.Rohit Reddy (Son)

Mr. K. Ravi Kumar Whole time Director -

Mr. Sumit Sen Whole time Director Mrs. Rina Sen (Wife)

* Relatives of key management personnel with whom there were transactions during the year

(c) Other entities under the control of key management personnel and their relatives

Prajay Financial Services Limited

Prajay Lifestyle UPVC Windows Private Limited

Prajay Princeton Hotel Private Limited

Prajay Princeton Developers Private Limited

Prajay Land Capital Private Limited

VijMohan Constructions Private Limited

Prajay Velocity Developers Private Limited

Prajay Chit Funds Pvt.Ltd.

Secunderabad Golf and Leisure Resorts Private Limited

NOTE : 8

Hire Purchase:

(i) The Company has taken plant and machinery, motor vehicles under hire purchase arrangements for which the ownership will be transferred to the Company at the end of the hire purchase term.

(ii) Reconciliation between the total of minimum hire purchase payments at the balance sheet date and the present value:

NOTE : 9

(a) Trade Receivables (Note 15), unsecured considered good, includes Rs. 23,519.03 lacs (31-03-2014: Rs. 24,419.62 lacs), outstanding for more than six months. As a result of economic slowdown and recession in realty sector, the realizations from customers are slow. The company has provided Rs. 896.96 lacs during the year towards doubtful debts against Trade receivables, unsecured, considered doubtful.

(b) Long Term Loans and Advances (Note 13) include advances given to Landlords/ developers towards certain projects amounting to Rs. 5999.05 lacs (31-03-2014: Rs. 6,191.04 lacs) and Short Term Loans and Advances (Note 17) to suppliers, etc amounting to Rs. 727.58 lacs (31-03-2014: Rs. 188.94 lacs) outstanding from earlier years. Due to long term involvement in such projects, no provision has been considered necessary.

NOTE : 10

Details as required under Schedule III - Part I of the Companies Act, 2013 relating to investment in partnership firm.

(a) Name of the Partnership Firm - Prajay Binjusaria Estates

(b) Total Capital of the said Firm is Rs. 2055.50 lacs (31-03-2014 : Rs. 2055.50 lacs)

NOTE : 11

The Secured Loan of Rs. 3,200.00 Lacs from Prajay Properties Private Limited is continuing as Interest free by virtue of the agreement Dated 6th October '2009.

Since some of the statutory approvals for Prajay Megapolis project are yet to be obtained, crystallization of loan repayment time schedule has not taken place as on 31.03.15.

NOTE : 12

Previous years figures have been recast / restated, to conform to current year classification.

---

Mar 31, 2014

1.Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of Rs. 10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Note : Plant & Machinery Costing Rs. 970.26 Lacs (31.03.13 Rs. 704.41 Lacs) and Vehicles Costing Rs. 204.43 Lacs (31.03.13 Rs. 208.57 Lacs) have been acquired on Hire Purchase, the legal Owner Ship of which will be transferred to the Company after the final payment.

(a) includes deposit to Director Rs. 500 Lacs (31.03.13 Rs. 500 Lacs)

(b) 1. includes advance to Partnership firms in which the company is partner Rs. 99.39 Lacs (31.03.13 Rs. 98.45Lacs)

2. includes advance to private companies in which any director is a director Rs. 1,862.60Lacs (31.03.13 Rs. 1,734.65)

a) includes Rs. 213.52 Lacs (31-03-2013: Rs. 199.90 lacs) to Private Companies having Common Director.

1. As stated in Note 1 (g)(ii) for recognizing profit on projects, stage of completion is determined as a proportion that project costs incurred for the work performed bear to the estimated total costs. Further, as stated in that note expected loss on projects is recognised when it is probable that the total project costs will exceed the total project revenue. For this purpose total project costs are ascertained on the basis of project costs incurred and costs to completion of projects on progress, which is arrived at by the Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc., which being technical matters have been relied on by auditors. Further, in respect of certain properties where sale agreement has been entered with parties even though money has not been received as per stipulation in the contract, the Company has recognised revenue and debtors as management is confident that it shall be able to realize the sale proceeds.

2. As stated in Note. 1 (g)(iii) the method used to recognize the contract revenue is percentage of completion method measured by survey of work performed. Further, as stated in the note, expected loss on contracts is recognised when it is probable that the total contract cost will exceed the total contract revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost to completion of contract on progress ,which is arrived at by the management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc, which being technical matters have been relied on by auditors.

An amount of Rs. 6,085.47 lacs (31.03.2013 Rs. 9,073.49 lacs) is recognized as contract revenue by the company during the current financial year. The cost incurred in respect of the above is Rs. 5,282.16 lacs (31.03.2013 Rs. 7,821.60 lacs).

3. Trade Payables - Dues to Micro and small enterprises

Trade payables (Note 8) include Rs. Nil (31.03.2013 Rs. Nil) due to micro enterprises and small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006).

The company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the MSMED Act, 2006) claiming their status as micro or small or medium enterprises.

(Rs. in lacs)

Particulars 2013-14 2012-13

3. Contingent Liabilities (not provided for)

Guarantees given to banks

(on behalf of Prajay Properties Pvt Ltd) 12,130.00 12,130.00

Service Tax demand* 1,820.62 1,820.62

* The company has disputed the liability and replied to the show cause notice, that the short payment of service tax, if any, demanded by the Service Tax Authorities is not maintainable under law.

Further, as per Circular No.108/02/2009-ST, dated 29.01.2009 issued by CBEC, no service tax is payable on the Construction of Complex Service for the impugned period 2006-07 to 2010-11. During the impugned period, the company had deposited with the Service Tax Authorities, whatever service tax collected from the customers. The Company has filed appeal on 08.04.2013 with CESTAT, Bangalore against order dated 04.01.13 of Commissioner of Service Tax.

4. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) Rs. 520.39 lacs, (31.03.2013: Rs. 384.57 lacs); Other commitments Nil (31-03-2013: Nil).

(b) Hire Purchase:

(i) The Company has taken plant and machinery, motor vehicles under hire purchase arrangements for which the ownership will be transferred to the Company at the end of the hire purchase term.

5. Employee Benefits :

Disclosure in respect of gratuity as required under Accounting Standard 15 (Revised) notified by the Companies (Accounting Standards) Rules, 2006.

6. (a) Trade Receivables (Note 15), unsecured considered good, includes Rs. 24,419.62 lacs (31-03-2013: Rs. 27,195.98 lacs), outstanding for more than six months. As a result of economic slowdown and recession in realty sector, the realizations from customers are slow.

(b) Long Term Loans and Advances (Note 13) include advances given to Landlords/ developers towards certain projects amounting to Rs. 6,191.04 lacs (31-03-2013: Rs. 7,833.42 lacs) and Short Term Loans and Advances (Note 17) to suppliers, etc amounting to Rs. 188.94 lacs (31-03-2013: Rs. 275.58 lacs) outstanding from earlier years. Due to long term involvement in such projects, no provision has been considered necessary.

7. Details as required under Schedule VI - Part I of the Companies Act, 1956 relating to investment in partnership firm.

(a) Name of the Partnership Firm - Prajay Binjusaria Estates

(b) Total Capital of the said Firm is Rs. 2055.50 lacs (31-03-2013 Rs. 2685.50 lacs)

(c) Share of each partner in the Profit or Loss

8. The Secured Loan of Rs. 3,200.00 Lacs from Prajay Properties Private Limited is continuing as Interest free by virtue of the agreement Dated 6th October ''2009.

Since some of the statutory approvals for prajay megapolis project are yet to be obtained, crystallization of loan repayment time schedule has not taken place as on 31-03-2014.

9. Previous year''s figures have been recast/restated, to conform to current year classification.

---

Mar 31, 2013

1. As stated in Note 1(g)(ii) for recognizing profi t on projects, stage of completion is determined as a proportion that project costs incurred for the work performed bear to the estimated total costs. Further, as stated in that note expected loss on projects is recognized when it is probable that the total project costs will exceed the total project revenue. For this purpose total project costs are ascertained on the basis of project costs incurred and costs to completion of projects on progress, which is arrived at by the Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc., which being technical matters have been relied on by auditors. Further, in respect of certain properties where sale agreement has been entered with parties even though money has not been received as per stipulation in the contract, the Company has recognized revenue and debtors as management is confi dent that it shall be able to realize the sale proceeds.

2. As stated in Note.1(g)(iii) the method used to recognize the contract revenue is percentage of completion method measured by survey of work performed. Further, as stated in the note, expected loss on contracts is recognized when it is probable that the total contract cost will exceed the total contract revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost to completion of contract on progress, which is arrived at by the management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc,which being technical matters have been relied on by auditors.

An amount of Rs.9,073.49 lacs (31.03.2012 Rs.999.13 lacs) is recognized as contract revenue by the company during the current fi nancial year. The cost incurred in respect of the above is Rs. 7,821.60 lacs (31.03.2012 Rs.672.91 lacs).

3. Trade Payables – Dues to Micro and small enterprises

Trade payables (Note 8) include Rs. Nil (31.03.2012 Rs. Nil) due to micro enterprises and small enterprises as defi ned under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006).

The company has not received any memorandum (as required to be fi led by the suppliers with the notifi ed authority under the MSMED Act, 2006) claiming their status as micro or small or medium enterprises.

4. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) Rs. 384.57 lacs, (31.03.2012: Rs.387.35 lacs); Other commitments Nil (31.03.2012 : Nil).

5. Details as required under Schedule VI - Part I of the Companies Act, 1956 relating to investment in partnership fi rm.

(a) Name of the Partnership Firm - Prajay Binjusaria Estates

(b) Total Capital of the said Firm is Rs.2,685.50 lacs

(c) As at March 31, 2013 the partnership fi rm has not commenced any activities

(d) Share of each partner in the Profi t or Loss

6. The Secured Loan of Rs.3,200.00 Lacs from Prajay Properties Private Limited is continuing as Interest free by virtue of the agreement Dated 6th October ''2009.

7. Previous years fi gures have been recast / restated, to conform to current year classifi cation.

---

Mar 31, 2012

1. As stated in Note 1(g) (ii) for recognizing profit on projects, stage of completion is determined as a proportion that project costs incurred for the work performed bear to the estimated total costs. Further, as stated in that note expected loss on projects is recognised when it its probable that the total project costs will exceed the total project revenue. For this purpose total project costs are ascertained on the basis of project costs incurred and costs to completion of projects on progress, which is arrived at by the Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc., which being technical matters have been relied on by auditors. Further, in respect of certain properties where sale agreement has been entered with parties even though money has not been received as per stipulation in the contract, the Company has recognised revenue and debtors as management is confident that it shall be able to realize the sale proceeds.

2 As stated in Note 1(g) (iii) the method used to recognize the contract revenue is percentage of completion method measured by survey of work performed. Further, as stated in the note expected loss on contracts is recognised when it is problem that the total contract cost will exceed the total contract revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost to completion of contract on progress ,which is arrived at by the management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc,which being technical matters have been relied on by auditors.

An amount of Rs. 999.13 lacs (31.03.2011 Rs.2327.53 lacs) is recognized as contract revenue by the company during the current financial year. The cost incurred in respect of the above is Rs. 672.91 lacs (31.03.2011 Rs.1439.97 lacs) .

3. Trade Payables - Dues to Micro and small enterprises

Trade payables (Note 8) include Rs. Nil (31.03.2011 Rs. Nil) due to micro enterprises and small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006).

The company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the MSMED Act, 2006) claiming their status as micro or small or medium enterprises.

* The company has disputed the liability and replied to the show cause notice, that the short payment of service tax, if any, demanded by the Service Tax Authorities is not maintainable in law.

Further, as per Circular No.108/02/2009-ST, dated 29.01.2009 issued by CBEC, no service tax is payable on the Construction of Complex Service for the impugned period 2006-07 to 2010-11. During the impugned period, the company had deposited with the Service Tax Authorities, whatever service tax collected from the customers.

4 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) Rs. 387.35 lacs, (31.03.2011: Rs.2632.27 lacs), other commitments Nil. (31-03-2011: Nil).

5. Disclosure as required by Accounting Standard 19 - "Leases" notified by the Companies (Accounting Standards) Rules, 2006.

(a) Operating Lease:

i. Where the Company is a Iessee:

The Company's significant leasing arrangements are in respect of operating leases for premises (residences, office, etc.). The leasing arrangements, which are not non-cancellable, range generally between 11 months to 5 years and are usually renewable by mutual consent on agreed terms.

The aggregate lease rents payable are recognized in the Profit and Loss Account for the year and included as Rent (Note 24)

The Company has taken a building under a non-cancellable lease

(b) Hire Purchase:

(i) The Company has taken plant and machinery, motor vehicles under hire purchase arrangements for which the ownership will be transferred to the Company at the end of the hire purchase term.

(ii) Reconciliation between the total of minimum hire purchase payments at the balance sheet date and the present value:

6. (a) Trade Receivables - (Note.no.16) unsecured, considered good, includes Rs. 27,213.09 lacs (31.03.2011 year Rs.26,421.37), outstanding for more than six months. As a result of economic slowdown and recession in realty sector, the realizations from customers are slow.

(b) Revenue from operations (Note 19) Sales Include sale of constructed properties Rs.235.68 lacs wherein sales revenue (in respect of alterations or additional works requested by customers) has been recognized, pending completion of relevant documentation. The company is in the process of completing the documentation in this regard.

(c) Long Term Loans and Advances (Note 13) include advances given to Landlords/ developers towards certain projects amounting to Rs.7,858.42 lacs (31-03-2011: Rs.8,514.32 lacs) and Short Term Loans and Advances (Note 18) to suppliers, etc amounting to Rs.1,205.17 lacs (31-03-2011: Rs.1,671.20 lacs) outstanding from earlier years. Due to long term involvement in such projects, no provision has been considered necessary.

7. Details as required under Schedule VI - Part I of the Companies Act, I956 relating to investment in partnership firm.

(a) Name of the Partnership Firm - Prajay Binjusaria Estates

(b) Total Capital of the said Firm is Rs.2685.50 lacs

(c) As at March 31, 2012 the partnership firm has not commenced any activities

(d) Share of each partner in the Profit or Loss

8. The Secured Loan of Rs.3200.00 Lacs from Prajay Properties Private Limited is continuing as Interest free by virtue of the agreement Dated 6 th October '2009.

9. These financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956. Previous years figures have been recast/restated.

---

Mar 31, 2011

1. As stated in note A (7) (ii) for recognizing profit on projects, stage of completion is determined as a proportion that project costs incurred for the work performed bear to the estimated total costs. Further, as stated in that note expected loss on projects is recognised when it its probable that the total project costs will exceed the total project revenue. For this purpose total project costs are ascertained on the basis of project costs incurred and costs to completion of projects on progress, which is arrived at by the Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc., which being technical matters have been relied on by auditors. Further, in respect of certain properties where sale agreement has been entered with parties even though money has not been received as per stipulation in the contract, the Company has recognised revenue and debtors as management is confident that it shall be able to realize the sale proceeds.

2. As stated in note A(7)(iii) the method used to recognize the contract revenue is percentage of completion method measured by survey of work performed. Further, as stated in the note expected loss on contracts is recognised when it is problem that the total contract cost will exceed the total contract revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost to completion of contract on progress ,which is arrived at by the management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc,which being technical matters have been relied on by auditors.

An amount of Rs. 2327.53 lacs (31.03.2010 Rs.1689.94 lacs) is recognized as contract revenue by the company during the current financial year. The cost incurred in respect of the above is Rs.1439.97 lacs (31.03.2010 Rs.953.26 lacs) .The amount of advances received against these contracts is Rs . Nil.(31.03.2010 Rs. Nil).

3. Sundry Creditors - Dues to Micro and small enterprises

Sundry Creditors (Schedule 11, Current Liabilities and Provisions) include Rs. Nil (31.03.2010 Rs. Nil) due to micro enterprises and small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006).

The company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the MSMED Act, 2006) claiming their status as micro or small or medium enterprises.

4. (a) As the Company is not a manufacturing/trading Company, additional information as required under Part II of Schedule VI to Companies Act, 1956 relating to capacities, production, sales, consumption of materials etc., is not applicable to it.

(b) The Company has applied for exemption from giving the quantity wise details of turnover in respect of supply of Accommodation, Food & Beverage and Liquor & Wines, for which approval is awaited.

5. Contingent Liabilities (not provided for)

(Rs. in lacs)

2010-11 2009-10

(a) Guarantees given to Banks on behalf of Prajay Properties Pvt ltd 12130.00 –

6. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) Rs. 2632.27 lacs (31.03.2010: Rs.2436.14 lacs).

7. Related Party Disclosures:

Information relating to Related Party Transactions as per Accounting Standard 18 notified by the Companies (Accounting Standards) Rules, 2006.

A. List of Related Parties

Party Relationship

(a) Prajay Holdings Private Limited Subsidiary

Prajay Developers Private Limited Step down - Subsidiary

Prajay Realty Private Limited Subsidiary

Prajay Retail Properties Private Ltd Subsidiary

Prajay Binjusaria Estates Associate

Prajay Properties Pvt Ltd Associate

(b) Key Management Personnel Designation Relatives (Relation)*

Mr. Chandra Mohan Reddy Managing Director Mrs. Hymavathi Reddy (Wife)

Mr. Vijay Sen Reddy Executive Director Mrs. Sharmila Reddy (Wife)

Mr. Ravinder Reddy Director Operations Mr. Hanumanth Reddy (Father)

Mr. K. Ravi Kumar Whole time Director –

Mr. Sumit Sen Whole time Director Mrs. Rina Sen (Wife)

*Relatives of key management personnel with whom there were transactions during the year

(c) Other entities under the control of key management personnel and their relatives

Prajay Financial Services Limited

Prajay Estates Private Limited

Prajay Hotels Limited

Prajay Arnav Shelter Private Limited

Prajay Velocity Developers Private Limited

VijMohan Constructions Private Limited

Prajay Resorts and Amusement Park Limited

Money Tree Entertainment Limited

Prajay Resorts and Hotels Limited

Prajay Township Private Limited

Prajay Techpark Private Limited

Prajay Chit Funds Private Limited

Prajay ARRF Estates Private Limited

Money Tree Investments & Holdings Pvt. Ltd.

Money Tree Life Style Destinations pvt. Ltd

Prajay Constructions Limited

Secunderabad Golf and Leisure Resorts Private Ltd.

Prajay Land Capital Private Limited

Money Tree Media Ventures Private Limited

8. Disclosure as required by Accounting Standard 19 - "Leases" notified by the Companies (Accounting Standards) Rules, 2006.

(a) Operating Lease:

i. Where the Company is a lessee:

The Company's significant leasing arrangements are in respect of operating leases for premises (residences, office, etc.). The leasing arrangements, which are not non-cancellable, range generally between 11 months to 5 years and are usually renewable by mutual consent on agreed terms.

The aggregate lease rents payable are recognized in the Profit and Loss Account for the year and included as Rent (disclosed under Establishment and Other Expenses in Schedule - 16)

(b) Hire Purchase:

(i) The Company has taken plant and machinery, motor vehicles under hire purchase arrangements for which the ownership will be transferred to the Company at the end of the hire purchase term.

9. (a) Sundry Debtors - Schedule 8, unsecured, considered good, includes Rs. 26421.37 lacs, outstanding for more than six months. As a result of economic slowdown and recession in realty sector the realisations from customers are slow.

(b) Loans and Advances - Schedule 10 include advances given to Landlords/developers towards certain projects amounting to Rs. 8514.32 lacs and to suppliers, etc. amounting to Rs. 1671.20 lacs outstanding from earlier years. Due to long term involvement in such projects, no provision has been considered necessary.

10. Details as required under Schedule VI - Part I of the Companies Act, 1956 relating to investment in partnership firm.

(a) Name of the Partnership Firm - Prajay Binjusaria Estates

(b) Total Capital of the said Firm is Rs.2685.50 lacs

(c) As at March 31, 2011 the partnership firm has not commenced any activities

(d) Share of each partner in the Profit or Loss

11. The company has entered into Rupee Facility Agreement with Prajay Properties Private Limited (PPPL) on 22nd August 2008 and taken a Loan of Rs.3200 Lacs in terms of a Facility Agreement dated 17.06.2008 between the PPPL and Lehman Brothers Capital Private Limited. In terms of the revised Rupee Facility Agreement dated 6th October 2009 with PPPL on account of settlement reached by PPPL with the lender Lehman brothers capital Private limited, no Interest is payable on the loan taken from PPPL. However during the year additional security cover has been provided for the loan taken thereby changing the category of the loan to a secured loan and hence depicted accordingly.

12. During the year 97,59,985 Share Warrants were forfeited as the warrant holders did not opt to convert them into equity shares . Consequently the amount of Rs.475.80 Lacs received against these Share warrants have been transferred to Capital Reserve.

13. Previous year figures have been regrouped/reclassified wherever necessary to conform to current year classification.

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Mar 31, 2010

1. As stated in note A (7) (ii) for recognizing profit: on projects stage of completion is determined as a proportion that project costs incurred for the work performed bear to the^estimatedtotahDosts. Further, as stated in that noteexpectec[ loss on projects is recognised when it is probable that the total project costs will exceed the total project revenue. For this purpose total project costs are ascertained[on the basis of project costs incurred and costs to corcipletiqn of projects on progress, which is arrived at by the Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc., which being technical matters have been relied on by auditors. Further, in respect of certain properties where sale agreement has been entered with parties even though money has not been received as per stipulation in the contract, the Company has recognised revenue and debtors as management is confident that it shall be able to realize the sale proceeds.

2. As stated in note A (7) (Hi) the method used to recognize the contract revenue is percentage of completion method measured by survey of work performed. Further, as stated in the note expected loss on contracts is recognised when it is probable that the total contract cost will exceed the total contract revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost to completion of contract on progress, which is arrived at by the Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc., which being technical matters have been relied on by auditors.

An amount of Rs. 1689.94 lacs is recognized as contract revenue by the company during the current financial year. The aggregate amount of costs incurred in respect of contracts in progress as on 31.03.2010 is Rs.953.26 lacs. The amount of advances received against these contracts is Rs.nil.

3. Sundry Creditors - Dues to Micro and small enterprises

Sundry Creditors (Schedule 11, Current Liabilities and Provisions) include Rs. Nil due to micro enterprises and small enterprises as defined underthe Micro, Small and Medium Enterprises Development Act, 2006 (MSJMED Act, 20J36.

The panyhas not received any memorandurn (asjequired to be filed by thie suppliers with thejiotifjed authority under the MSMED Act, 2006) claiming their status as micro or small or medium enterprises.

4. (a) As the Company is not a manufacturing/trading Company, additional information as required under Part II of Schedule VI to Companies Act, 1956 relating to capacities, production, sales, consumption of materials etc., is not applicable to it.

Rs. in Lacs 2009-10 2008-09

5. Contingent Liabilities (Not provided for) Nil Nil

6. Estimated amount of contracts remaining to be executed on capital account and not Provided for (net of advance) ps;2436.74 lara]3lT03.2u0RsTnac

7. Related Party Disclosures:

Information relating to Related Party Transactions as per Accounting Standard 18 notified by the Companies (Accounting Standards) Rules, 2006.

A. List of Related Parties

Party

(a) Prajay Holdings

Private Limited Prajay

Properties Private Limited

Prajay Realty Private Limited

Dillu Cine Enterprises Private Ltd

Prajay Developers Private Limited

Prajay Land Capital Private Limited

Prajay Binjusaria Estates

Relationship

Subsidiary

Subsidiary

Subsidiary

Subsidiary

StepDown Subsidiary

StepDown Subsidiary

Associate

(b) Key Management Personnel

Mr. Chandra Mohan Reddy

Mr. Vijay Sen Reddy

Mr. Ravinder Reddy

Mr. K. Ravi Kumar

Mr.SumitSen



Designation

Managing Director

Executive Director

Director Operations

Whole time Director

Whole time Director

Relatives (Relation)*

Mrs. Hymavathi Reddy (Wife)

Mrs. Sharmila Reddy (Wife)

Mr. Hanumanth Reddy (Father)

Mrs. Rina Sen (Wife)

* Heiatives ot key management personnel witn wnom mere were transactions during trie year (c) Other entities under the control of key management personnel and their relatives

Prajay Constructions Limited

Vijmohan Constructions Private Limited

Prajay Estates Private Limited

Prajay Hotels Limited

Prajay Arnav Shelter Private Limited

Prajay Velocity Developers Private Limited

Prajay Resorts and Amusement Park Limited

Money Tree Entertainment Limited

Money Tree Investment & Holdings Private Limited

Prajay Resorts and Hotels Limited

Prajay Township Private Limited

Prajay Urban Private Limited

Prajay Techpark Private Limited

Prajay Financial Services Limited

Prajay Chit Funds Private Limited

Prajay ARRF Estates Private Limited

Secunderabad Golf and Leisure Resorts Private Limited

Money Tree Media Ventures Private Limited

Money Tree Lifestyle Destinations Private Limited Prajay Binjusaria Estates

8. Disclosure as required by Accounting Standard 19 - "Leases" notified by the Companies (Accounting Standards) rules, 2006.

(a) Operating Lease:

i. Where the Company is a lessee:

The Companys significant leasing arrangements are in respect of operating leases for premises (residences, office, etc.). The leasing arrangements, which are not non-cancellable, range generally between 11 months to 5 years and are usually renewable by mutual consent on agreed terms. The aggregatejease rents^payable are recognized in the Profit and Loss Account for the year and included as Rent (disclosed under Establishment and Other Expenses in Schedule -16)

9. (a) Sundry Debtors - Schedule 8, unsecured, considered good, includes

six months. As a result of economic slowdown and recession in realty sector the realisations from...customers are slow.

(b) Loans and Advances - ScheduleMO include ...advancesi given to Landlords/developers toward amounting to Rs. 8310.62 lacs, outstanding from earlier years. Due to long term involvement in such projects, no provision has been considered necessary

10. Details as required under Schedule VI - Part I of the Companies Act, 1956 relating^investment in partnership firm.

(a) Name of the Partnership Firm - Prajay Binjusaria Estates

(b) Total Capital of the said Firm is Rs.2281.50 lacs

(c) As at March 31,2010 the partnership firm has not commenced any activities

11. The company has entered into Rupee Facility agreement with its subsidiary company Prajay Properties Private Limited on 22nd August ,2008 and taken a loan of Rs.3200 lacs in terms of a facility agreement dated 17.06.2008 between the subsidiary company and Lehman Brothers Capital Private Limited. In terms of Revised Rupee Facility agreement dated 6th October,2009 with the subsidiary company on account of settlement reached by the subsidiary company with the lender Lehman Brothers Capital Private Limited, the company has not provided interest during the current financial year on the loan taken from subsidiary company.

12. Share Warrants represent the amount received against 400 lacs warrants on preferential basis after conversion of 86,35,084 warrants into shares during the year. The warrants are issued at a price of Rs. 19.50 per warrant with a right to apply and be allotted equity shares of the company of Rs. 10 each at a premium of Rs.9.50 per share.

Terms of Issue of Share Warrants on preferential basis:

a. Share warrants can be converted at any time within a period of 18 months from the date of allotment.

b. An amount equal to 25% be payable on allotment and balance amount is payable at the time of conversion.

c. The amount paid as upfront money i.e.25% be forfeited if the conversion is not exercised within 18 months

d. Other terms like lock-in period are as per SEBI guidelines/regulat -ions, as amended from time to time.

13. Previous year figures have been regrouped/ reclassified wherever necessary to conform to current year classification.