1. Contingent Liabilities:-
(a) Assessing officer has filed an appeal before the ITAT, New Delhi
against the order of Commissioner of Income Tax (Appeals) allowing the
appeal for deleting the demand of Rs 6,51,050/- towards the penalty
imposed by the Assessing Officer U/s 271(1) (C) relating to the
assessment year 2003-04. The case was remanded back to CIT(Appeals) for
adjudication on merit vide order dated 06-06-2008 by ITAT. However the
CIT(Appeals) have not taken the case till date.
(b) LG Electronics India Pvt. Ltd ( LG) had filed a suit against Usha
India Ltd., Usha Housing Development Co. Ltd. and Others for the
recovery of Rs. 4,65,02,400/- given by it as security deposit for the
premises A-41, Mohan Co- operative Industrial Estate, New Delhi -110044
taken by it on lease from Usha India Ltd. and against the maintenance
service agreement for the same premises entered into with Usha Housing
Development Co. Ltd. The company has denied its liability on the
ground that it has already assigned the agreement to Lord Mahadev Trust
on 6th August, 1997 and transferred the security deposit to the said
Trust. LG was also intimated about this assignment. However, Honorable
Court has passed a part joint decree of Rs. 2,31,25,803/- in favour of
LG and the LG filed an execution petition and subsequently the Court
directed the ICICI Bank, New friends Colony, New Delhi to transfer a
sum of RS.4,50,000/- to LG. The liability on account of above decree
has not been ascertained by the court among the parties to the suit.
Company is contesting the execution petition filed by LG electronics
2. a) C-SCHEME, JAIPUR PROJECT:
The company had entered into an agreement dated 28th September 1993
with R. L. Baiswala & Sons HUF for purchase of a Plot No.D-71, Satya
Villa, Jamuna Lai Bajaj Marg, C-Scheme, Jaipur. But due to objection
raised by the other members of HUF for selling the plot to the company,
the vendor of the land could not transfer the land and hand-over its
possession to the company.
District Trial Court in Jaipur has decreed the suit to the extent of
refund of the money of Rs 17 lacs to company plus interest @18% plus
cost of the suit but dismissed the prayer for specific performance and
thereafter company filed an appeal with the Rajasthan High Court for
specific performance. Meanwhile the company also filed another appeal
with High Court of Rajasthan praying for injunction order against the
defendants restraining them from sale of the property. The amount of
8,39,214/- including the litigation expenses of Rs 755000/- have been
included in work in progress. The High Court has issued an injunction
order dated 08.10.2001 in favour of the Company. There has been no
change in the status of the project during the year.
b) AIRPORT ROAD, BANGALORE PROJECT:
The company had signed a Memorandum of Understanding (MOU) on
28.03.1995 with Mrs. P. Jayamma, Mrs. J. Savithramma, and Mrs. P.
Nagarathna for the purpose of putting up residential and commercial
complex on the property bearing S.No.170 and 172 of Kodihalli Village,
Varthur, Hobli, Bangalore, South Taluk. On completion of the said
project each party was to share 50% of the built-up area including
Company had been forced to keep the project suspended because of the
defect in title deeds of the property and acquisition of some part of
property by the Bangalore Development Authority (BDA).Company had filed
a legal suit against the party in the City Civil Judge at Bangalore,
for the specific performance of the agreement and in the alternative
for recovery of entire amount paid together with interest of 21% per
annum. The company has Paid Rs 30 Lacs against the J V agreement and as
per the agreement the possession of the aforesaid land is with the
company. The amount of Rs. 15,22,878/- including litigation expenses of
Rs 5,20,000/- has been shown under the head work in progress There has
been no change in the status of the project during the year.
C) BROOKEFIELD PROJECT, BANGALORE:
The Company entered into an MOU for joint development of residential
and/or commercial complexes at Hoodi Village, K.R.Puram, Bangalore,
South Taluk on 26th August, 1999 with Mr.Y.Rajendra and others. They
failed to perform his obligations under the MOU and therefore the
company had filed a legal suit against them for specific performance of
Subsequently during the year the company has entered into a transfer
agreement with M/s Windsor Infrastructure Ltd (WIL) for the said
project on 22.10.2010 for transferring all its rights, claims,
entitlements, liabilities etc for a total consideration of Rs 10 crores
out of which Rs 50 Lacs is received from the transferee with the
balance consideration of Rs 9.50 Crores shall be paid by WIL to the
company on successful completion of the development and construction of
project at schedule land without any legal hindrance. The company has
to return the advance of Rs 50 Lacs to WIL without any interest or
charges in case of any legal hindrance in developing the project.
Thereafter Hon''ble Senior Civil Judge, Bangalore Rural District Court
passed an order on 29th November 2010 by directing Mr. Y. Rajendra and
Others to refund the deposit amount along with interest @ 10 % p.a on
the deposit amount from the date of termination of contract till the
date of deposit of amount in court to the company against which the
company and M/s Windsor Infrastructure Ltd jointly filed an appeal
before the Hon''ble High Court of Karnataka which is pending for
As per collaboration agreement dated 7th Jan, 1994, the Company has
completed the project and accordingly, as per terms and conditions of
the agreement, requested the owner of the land Mr. Anil Parashar to
refund of Rs 12 lacs paid to him as refundable security. On his failure
to pay the amount, the company filed a legal suit for recovery of the
above said amount in the District court Delhi. The amount of Rs 12 Lacs
has been shown as deposits.
The company was to recover the amount of Rs 8,50,000/- along with
interest and litigation expenses arising out of our agreement dated 9th
September, 2003 from Mr. Rakesh Sharma and therefore the company
decided to invoke the arbitration clause of the agreement and the
arbitration proceedings started on 26th May, 2007. The arbitrator vide
its order dated 12th March, 2009 has given an award in favor of the
company and accordingly the execution proceedings has been initiated to
recover the amount. Rs 4,25,426/- has been shown under the head Work in
progress being the cost of the property
3. Projects amounting to Rs 40,61,239/- is shown under the head work
in progress against which litigations, are pending in different courts
as explained in note no 2.
4. Balances of Loans and Advances are subject to reconciliation and
Net realizable value is determined project wise and is based upon the
available information with the company, considering the market value of
the flatted area.
5. Additional information pursuant to the provisions under paragraph
3,4C and 4D Part -II of Schedule VI to the Companies Act''1956.
a) The company is engaged in the business of real estate development.
In view of the nature of business it is not practicable to give the
quantitative details regarding the work in progress.
b) The Quantitative information in respect of finished space is not
given as there is no stock of finished space.
6. ASSUMPTION OF THE COMPANY AS GOING CONCERN
Management of the company is of the opinion that company is a going
concern as the management is trying its best to recover some of the
pending dues and is taking suitable steps for revival of the company.
During the year Bombay Stock Exchange has revoked the suspension of
trading in the shares of the company. Accordingly, the securities of
the company are re-admitted to dealings w.e.f. 14.03.2011 subject to
due compliance of Regulations 8 of SEBI (SAST) Regulations,1997.
7. As on date the company has not received confirmation from any of
the suppliers who have registered under the Micro small and Medium
Enterprises Development Act 2006 and hence no disclosures have been
made under the said Act.
8. Provision for gratuity and leave encashment has not been provided
in the books as none of the employees of the company are eligible for
these benefits as on 31.03.2011.
9. Previous year''s figures have been regrouped / rearranged wherever
necessary. Figure in brackets indicate previous year figure. Figures
have been rounded off to the nearest rupee.
10. From Schedule-1 to Schedule-8 form an integral part of the
accounts and duly authenticated.