22nd annual report - bombay stock exchange · 2014. 9. 12. · mr. sanjay kedia finance director...

Annual ReportAnnual Report2013 - 20142013 - 2014

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GARNET CONSTRUCTION LIMITED

BOARD OF DIRECTORS : Mr. Kishan Kumar Kedia Chairman & Managing Director Mr. Arun Kedia Marketing Director Mr. Sanjay Kedia Finance Director Mr. Shriromani Chauhan Director Mr. Santosh Ginoria Director Mrs. Seema Bhattar Director

AUDITORS : M/s Shankarlal Jain & Associates 12, Engineering Building, 265, Princess Street, Mumbai – 400 002

BANKERS :

Axis Bank Ltd Allahabad Bank Union Bank of India

S.V.Road, S.V.Road, S.V.Road,

Malad West, Andheri West, Jogeshwari (W).

Mumbai – 400 064. Mumbai – 400 058 Mumbai – 400 102.

REGISTRAR & SHARE TRANSFER AGENT: M/s Link Intime India Pvt. Ltd.

C-13, Panalal Silk Mill Compound, LBS Marg, Bhandup, Mumbai – 400 078.

REGISTERED OFFICE : 501/531, Laxmi Mall, Laxmi Industrial Estate, New Link Road, Andheri (West), Mumbai - 400 053.

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Garnet Construction Limited

Annual Report

NOTICE Notice is hereby given that the 22nd Annual General Meeting of the Members of GARNET CONSTRUCTION LIMITED will be held on Tuesday, the 30th September, 2014 at 10.00 a.m. at Ashish –1 Banquet, Land Mark Building, Link Road, Mid Chowky, Malad (West), Mumbai - 400 064, to transact the following business : ORDINARY BUSINESS 1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2014, and the

Profit & Loss Account for the year ended on that date and the reports of Directors’ and Auditors’ thereof.

2. To re - appoint a Director in the place of Shri Arun Kedia (DIN No. 00205183) who retires by

rotation and being eligible offers himself for re-appointment.

3. To re - appoint a Director in the place of Shri Sanjay Kedia (DIN No. 00205220) who retires by rotation and being eligible offers himself for re-appointment.

4. To re - appoint M/s Shankarlal Jain & Associates, Chartered Accountants, as Statutory

Auditor of the Company and to fix their remuneration. SPECIAL BUSINESS 5. To consider and if thought fit, to pass, with or without modification(s), the following

resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, Shri Shiromani Singh (holding DIN 02451817), a Non-Executive Director of the Company whose period of office was liable to determination by retirement of Directors by rotation and in respect of whom the Company has received a notice in writing under Section 160 of the Companies Act, 2013 from a Member proposing his candidature for the office of Director and who has submitted a declaration that he meets the criteria for independence as provided in Section 149 (6) of the Act and Clause 49 of the Listing Agreement and is eligible for appointment, be and is hereby appointed as an Independent Director to hold office for 5 (five) consecutive years from the date of this Annual General Meeting AND THAT he shall not be liable to retire by rotation.”

6. To consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, Shri Sanotosh Ginoria (holding DIN 00205556), a Non-Executive Director of the Company whose period of office was liable to determination by retirement of Directors by rotation and in respect of whom the Company has received a notice in writing under Section 160 of the Companies Act, 2013 from a Member proposing his candidature for the office of Director and who has submitted a declaration that he meets the criteria for independence as provided in Section 149 (6) of the Act and Clause 49 of the Listing

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Agreement and is eligible for appointment, be and is hereby appointed as an Independent Director to hold office for 5 (five) consecutive years from the date of this Annual General Meeting AND THAT he shall not be liable to retire by rotation.”

7. To consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, Smt. Seema Bhattar (holding DIN 06617036), a Non-Executive Director of the Company whose period of office was liable to determination by retirement of Directors by rotation and in respect of whom the Company has received a notice in writing under Section 160 of the Companies Act, 2013 from a Member proposing his candidature for the office of Director and who has submitted a declaration that he meets the criteria for independence as provided in Section 149 (6) of the Act and Clause 49 of the Listing Agreement and is eligible for appointment, be and is hereby appointed as an Independent Director to hold office for 5 (five) consecutive years from the date of this Annual General Meeting AND THAT he shall not be liable to retire by rotation.”

8. To consider and if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution: “RESOLVED THAT in supersession of the earlier resolution passed in the General Meeting of the members of the Company, the consent of the Company be and is hereby accorded under the provisions of Section 180(1)(a) of the Companies Act, 2013 (previously being Section 293(1)(a) of the Companies Act, 1956), and all other applicable provisions, if any, of the Companies Act, 2013 to the Board of Directors of the Company to create such charge by way of hypothecation and / or equitable mortgage on such terms and conditions and at such time(s) and in such form and manner and with such ranking as to priority, as the Board in its absolute discretion thinks fit, on all or any of the movable or immovable properties of the Company, wherever situated, both present and future comprised in any undertaking of the Company or one or more of the undertakings or of all the undertakings, of the Company, as may be agreed to in favour of the Bank (s) / financial institution/(s) (hereinafter referred to as Lenders) to secure repayment of the present Term Loan / Working Capital facilities granted by them and/or such other amount as may be advanced by such Lenders in future as a Cash Credit facility and / or Term Loan up to the extent of sum of Rs. 200 Crores (Rupees Two Hundred Crores only) together with interest on the principal amounts at the respective agreed rates, compound interest, liquidated damages, commitment charges, cost, any other charges, expenses if any, and all other monies payable by the company to the concerned Banks / Institutions under the respective documents entered in to / to be entered in to by the Company. “RESOLVED FURTHER THAT the securities to be created by the Company as aforesaid may rank prior / pari passu / subservient with / to the mortgage and/or charges already created or to be created in future by the Company in favour of any Lender including existing Banks and as may be agreed to between the concerned parties. “RESOLVED FURTHER THAT for the purpose of giving effect to the resolution, the Board or any Committee or Persons authorized by the Board, be and are hereby authorized to finalise, settle and execute such documents / deeds / writings / papers / agreements as may be required and to do all such acts, deeds, matters and things, as it may in its absolute

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discretion deem necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in regard to creating mortgage / charge as aforesaid or otherwise considered to be in the best interest of the Company.”

9. To consider and if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution : “RESOLVED THAT in supersession of the earlier resolution passed in the General Meeting of the members of the Company, the consent of the Company be and is hereby accorded under the provisions of Section 180(1)(c) of the Companies Act, 2013 (previously being Section 293(1)(d) of the Companies Act, 1956) and Article 23 of the Articles of Association of the Company and all other enabling provisions, if any, of the Companies Act, 2013, to the Board of Directors of the Company to borrow for and on behalf of the Company from time to time as they may consider fit any sum or sums of money in any manner and without prejudice to the generality thereof, by way of loans, advances, credits, acceptance of deposits or otherwise in Indian Rupees or any other foreign currency from any bank or banks or any financial institutions, other person or persons and whether the same be unsecured or secured and if secured, whether by way of mortgage, charge, hypothecation, pledge or otherwise in any way whatsoever, in respect of all or any of the Company’s assets and properties (including raw materials, stores, spares and components in stock or transit) notwithstanding that the monies so borrowed together with the monies, if any, already borrowed by the Company (apart from temporary loans and credits obtained from the Company’s bankers in ordinary course of business) may exceed the aggregate of the paid-up capital of the Company and its free reserves i.e. reserves not set apart for any specific purpose, provided that, the total amount so borrowed by the Directors and outstanding at any time shall not exceed Rs. 200.00 Crores (Rupees Two Hundred Crores Only) over and above the paid-up capital of the Company and its free reserves.

By order of the Board For Garnet Construction Limited

Place : Mumbai Kishan Kumar Kedia Dated : 3rd September 2014 Chairman & Managing Director Din No. 00205146 Redg. Office : 501/531, Laxmi Mall, Laxmi Industrial Estate,

New Link Road, Andheri West, Mumbai – 400 053. NOTES : 1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO

ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE PROXY, IN ORDER TO BE EFFECTIVE, MUST BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE MEETING

2. The register of Members and the Share Transfer Book will remain closed from 22nd September, 2014 to 30th September, 2014 (both days inclusive) for the purpose of ensuing Annual General Meeting.

3. The annual report containing accounts for the financial year ended March 31, 2014 together

with the report of Auditors and Directors and the notice of ensuring AGM are available on the company website www.garnetconstructions.com.

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4. Members are requested to:

Immediately , intimate change of address, if any , to company , quoting reference of

registered folio number or client DP ID No.; Produce attendance slip at the entrance of meeting hall; Bring the Annual Report at the entrance of the meeting hall;

5. A member desirous of getting any information on the accounts or operations of the

Company is requested to forward his/her queries to the Company at least ten days prior to the meeting so that the required information can be made available at the meeting.

6. Corporate members intending to send their authorised Representatives to attend the Meeting are requested to send to the Company a certified copy of the Board Resolution authorising their representative to attend and vote on their behalf at the Meeting.

7. Brief resume of Directors including those proposed to be appointed / re-appointed, nature

of their expertise in specific functional areas, names of companies in which they hold directorships and memberships / chairmanships of Board Committees, shareholding and relationships between directors inter-se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, are provided in the Corporate Governance Report forming part of the Annual Report

8. Green Initiative in the Corporate Governance

The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing the Companies the paperless compliance and the said ministry has issued a circular stating that the service of notice / documents including annual reports can be sent by e mail to the members.

In order to abide by the circular, the members are requested to register their e-mail

address, to enable the company to send reports by e mail. The members holding shares in demat form may register their e-mail address with the respective DPs and the members who holds the shares in physical form are requested to register their e-mail with the Company or Registrar & Share Transfer Agent. This will enable the company to send the annual reports by e-mail.

9. Voting Through Electronic Means

In compliance with provisions of Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, the Company is pleased to offer e-voting facility as an alternative mode of voting which will enable the Members to cast their votes electronically on the resolutions mentioned in the notice of 22nd Annual General Meeting of the Company. The instructions for shareholders voting electronically are as under: (i) The shareholders should log on to the e-voting website www.evotingindia.com during the voting period (ii) Click on “Shareholders” tab. (iii) Now, select the “COMPANY NAME” from the drop down menu and click on “SUBMIT” (iv) Now Enter your User ID a. For CDSL: 16 digits beneficiary ID,

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b. Members holding shares in Physical Form should enter Folio Number registered with the Company.

(v) Next enter the Image Verification as displayed and Click on Login.

Explanatory statement, as required under Section 102 of the Companies Act, 2013. ITEM NO.5, 6 & 7 Shiromani Singh, having wide experience of over 30 years in corporate advisory services, has been Independent Director of the Company since 10th March, 2003. Santosh Ginoria, having wide experience of over 20 years in financial and its related filed, has been Independent Director of the Company since 10th March, 2003. Seema Bhattar, having wide experience of over 10 years in marketing and administration, has been Independent Director of the Company since 5th November, 2012. Directors of the Company, had been appointed as Directors liable to retire by rotation and retire by rotation at the ensuing Annual General Meeting in terms of the provisions of the erstwhile Companies Act, 1956. In terms of Section 149 and other applicable provisions of the Companies Act, 2013, all of them being eligible and seeking re-appointment, are proposed to be appointed as Independent Directors for a term up to 31st March, 2019. The Company has received notices in writing under the provisions of Section 160 of the Companies Act, 2013 from members along with a deposit of Rs. 1,00,000/- in each case, proposing candidature of Shri Shiromani Singh, Shri Santosh Ginoria and Mrs. Seema Bhattar for the office of Independent Directors, to be appointed as such under the provisions of Section 149 of the said Act. The Company has received from each of the said Directors, consent in writing to act as director and declaration to the effect that they are not disqualified under Section 164(2) of the Companies Act, 2013 in prescribed Form DIR - 2 and DIR - 8 respectively. Further, the Company has received from each of the said Directors, a declaration to the effect that he meets criteria of independence as provided in Section 149(6) of the said Act. Further, in terms of Sections 149, 152 read with Schedule IV of the Companies Act, 2013, the Board of Directors have reviewed the declaration made by each of the said Directors that he meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and they are not disqualified from being appointed as Directors in terms of Section 164 of the Act and have given their consent to act as Directors. The Board of Directors of your Company is also of opinion that they are independent of the management of the Company. The Board considers that their continued association would be of immense benefit to the Company and it is desirable to continue to avail their services as Independent Directors as the Company is benefitting from their expertise and invaluable experience. In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of these directors as Independent Directors is now being placed before the Members for their approval. Accordingly the Board recommends the resolutions at Item No. 5 to 7 set-out in accompanying notice in relation to their appointment as Independent Directors for your approval. In terms of Provisions of Section 149 (13) of the Act, they shall not be liable to retire by rotation.

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Brief resume of aforesaid appointees, nature of their expertise in specific functional areas and name of Companies in which they hold directorships and membership / chairmanship of Board Committees, shareholding and relationships between directors inter-se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges are provided as a part of this notice. This statement may also be regarded as a disclosure under Clause 49 of the Listing Agreement with the Stock Exchanges. Shri Shiromani Singh, Shri Santosh Ginoria and Smt. Seema Bhattar are interested in the resolutions set out at Item Nos. 5 to 7 of the Notice with regard to their respective appointments. The relatives of aforesaid Directors may be deemed to be interested in above resolutions to the extent of their shareholding interest, if any, in the Company. Save and except the above, none of the other directors / key managerial personnel of the Company / their relatives are in any way, concerned or interested, financially or otherwise, in these resolutions.

ITEM NO. 8 & 9

The consent of the members of the Company by way of Ordinary Resolution was obtained under section 293(1) (a) and Section 293(1) (d) in the earlier years General Meeting of the Company to the Board of Directors for creating mortgage or charge on its movable and immovable properties to secure credit limits upto the extent of sum of Rs. 200 Crores and make borrowings over and above the aggregate of Paid-up Share Capital and Free Reserves of the Company provided that the total amount of such borrowing together with the amounts already borrowed and outstanding at any point of time shall not be in excess of Rs. 200 Crores.

Section 180 of the Companies Act, 2013 was made effective from 12th September, 2013. The Ministry of Corporate Affairs issued a clarification on 25th March, 2014 stating the resolutions passed under section 293 of the Companies Act, 1956 prior to 12th September, 2013 with reference to borrowings and/or creation of security on assets of the Company will be regarded as sufficient compliance of the requirements of section 180 of the Companies Act, 2013 for a period of one year from the date of notification of section 180 of the Act.

The Special Resolutions under Section 180(1)(a) and 180(1)(c) are proposed to accord the consent of the members to the Board to borrow money in excess of limit prescribed therein and create security in favour of the lender by way of mortgage or charge on its movable and immovable properties.

None of the Directors and/or Key Managerial Personnel of the Company and their relatives is concerned or interested, financially or otherwise in aforesaid resolutions.

The Board recommends these resolutions for approval by the Members of the Company.


Place : Mumbai Kishan Kumar Kedia Dated : 3rd September 2014 Chairman & Managing Director DIN No. 00205146

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Annual Report

Annexure to Notice

Details of Directors seeking appointment / re-appointment at the ensuing Annual General Meeting 1 Name Shri Arun Kedia Shri Sanjay Kedia 2 Age 45 Years 44 Years 3 Qualification Under Graduate Graduate 4 Nature of Experience Over two decade of

experience in Marketing of company projects

Over two decade of experience in finance and administration

4 List of other Directorship held

One Two

5 Chairman / Member of the Committee of other Companies

Nil Nil

1 Name Shri Shiromani Singh Shri Santosh Ginoria Smt. Seema Bhattar 2 Age 80 Years 52 Years 37 Years 3 Qualification Graduate Graduate Graduate 4 Nature of Experience Over four decade of

experience in corporate advisory services

Over two decade of experience in finance and administration

Over decade of experience in marketing and administration

4 List of other Directorship held

Nil One Nil

5 Chairman / Member of the Committee of other Companies

Nil Nil Nil

6 No. of Shares held in the Company

1000 900 Nil

7. Relation between director and inter-se

Nil Nil Nil

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Annual Report

DIRECTORS’ REPORT

Dear Shareholders, Your Directors have pleasure in presenting the Twenty-Second Annual Report and Audited Accounts for the year ended 31st March, 2014. FINANCIAL RESULTS

(Rs. In Lacs)

2013-2014 2012-2013 Stand- alone Total Income 1017.07 2112.71 Profit before Depreciation, Int. & Tax 606.46 399.11 Depreciation & Amortization 40.63 37.11 Interest 248.37 226.04 Profit before Tax 317.46 135.96 Provision for Taxation 88.51 27.00 Profit After Tax 228.95 108.96 Share Capital 1390.22 1390.22 Reserves & Surplus 5034.59 4805.64 DIVIDEND The directors of the company has not recommend any dividend for the year. OPERATIONAL REVIEW During the year under review the Company has posted net profit of Rs. 228.95 Lacs as against previous year profit of Rs. 108.96, the same is to due to good response towards the Company’s various project and better marketing strategy adopted by the Company. There is a drastic fall in the sell however due to lower operational expenses compare to previous year, the Company is able to achieve better result. The management is confident in achieving better result in coming financial year. CORPORATE GOVERNANCE A report on the corporate governance along with a certificate from the auditors of the company regarding the compliance of conditions of the corporate governance as stipulated under Clause 49 of the listing agreement is included and forms part of this annual report. All Board members and senior management personnel have affirmed compliance with code of conduct for the year 2013-14. A declaration to this effect certified by the Chairman & Managing Director of the company is also attached in the annual report. The Chairman and the Finance Director of the Company have certified to the Board with regard to the financial statements and other matters as required under clause 49 of the listing agreement and the said certificate is also attached in the annual report.

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MANAGEMENT DISCUSSION AND ANALYSIS A detailed review of operations, performance and future outlook of your company and its businesses is given in the Management Discussion and Analysis, which forms part of this annual report. FIXED DEPOSITS The company has not accepted any deposit from the public during the year under review, within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under. JOINT VENTURE As you are aware that Company has enetered into a Joint Venture agreement with Callista Realty Limited for a 40 storey residential project namely Brillante and the project is located at Panvel. INTERNAL CONTROL SYSTEM & THEIR ADEQUACY The company has in place adequate systems of internal control that are commensurate with its size and nature of the business and documented procedures covering all financial and operating functions. The company being in real estate industry, it has in place clear processes and well-defined roles and responsibilities for its staff at various levels. The Management has a defined reporting system, which facilitates monitoring and adherence to the process and systems in place. AUDITORS

M/s Shankarlal Jain & Associates, Chartered Accountants, Mumbai, Statutory Auditors of the company hold office up to the conclusion of this annual general meeting and are recommended for re-appointment. The company has received a certificate under section 224 (1B) of the Companies Act, 1956 stating that the appointment, if made, will be within the limits as specified in that section.

M/s Shankarlal Jain & Associates, Chartered Accountants, Mumbai Auditors of the Company will retire from the office of the Auditors at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

In accordance with Section 139 of the Companies Act, 2013 (‘the Act’) read with the Rules made there under, M/s Shankarlal Jain & Associates, Chartered Accountants, Mumbai, they have confirmed that their appointment, if made, shall be in accordance with the provisions of Section 139(1) of the Act read with Companies (Audit and Auditors) Rules, 2014. AUDITORS’ REPORT

Your Directors refer to the observations made by the Auditors in their report and wish to state that the notes forming part of accounts are self explanatory and hence do not require any further comments. DIRECTORS

Mr. Arun Kedia and Mr. Sanjay Kedia, Directors of the company, retire by rotation and being eligible offer themselves for reappointment. You are requested to reappoint them.

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DIRECTOR RESPONSIBILITY STATEMENT Your Director make the following statement to Section 217 (2AA) of the Companies Act, 1956 : i) in the preparation of the annual accounts, the applicable accounting standards had been

followed along with proper explanation relating to material departures; ii) appropriate accounting policies had been selected and applied consistently and made

judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting

records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

iv) the accounts has been prepared on going concern basis PARTICULARS OF EMPLOYEES Statement under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules 1975, as amended by the Companies Amendment Act, 1988, none of the employee draws salary in excess of Rs. 5,00,000/- per month, hence no disclosure is required. CONSEVATION OF ENERGY, TECHNOLOGY ABSORPTION The information required under section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to the matters specified therein are not applicable to your company. FOREIGN EXCHANGE EARNINGS AMD OUTGO During the Year under review the Company has incurred foreign expenses of Rs. 4,68,170 towards travelling and subscription. DELISTING OF SECURITIES FROM JAIPUR STOCK EXCHNAGE During the year under review Company has received the delisting approval from Jaipur Stock Exchange. Presently the company shares are only listed at Bombay Stock Exchange Ltd. LISTING FEES The Company confirms that the Annual Listing Fees due to Bombay Stock Exchange Ltd., Mumbai for the Financial Year 2014- 2015 has been paid. CUSTODIAN CHARGES The Company confirms that the custodian charges due to National Securities Depository Ltd. and Central Depository Services (India) Ltd. have been paid for the financial year 2014-15 as applicable and payable as per SEBI circular in this regard.

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ACKNOWLEDGEMENT Your Directors are pleased to place on record their deep appreciation towards the sincere services and co-operation extended by employees of the organization at all levels. They also wish to place on record their gratitude for the confidence placed in them by the banks & financial institutions they are associated with. Further, your Directors wish to thank the various regulatory authorities, business associates and clients for their valued co-operation.


Place : Mumbai Kishan Kumar Kedia Dated : 3rd September 2014 Chairman & Managing Director DIN No. 00205146

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ANNEXURE TO DIRECTOR’S REPORT REPORT ON CORPORATE GOVERNANCE 1. Corporate Philosophy Your company believes that good corporate governance is essential to achieve long term goals and also to enhance the shareholders value. The Company is engaged in construction activity and rendering good quality of industrial as well as residential construction at Khopoli and panvel to strive for continues improvement in all other areas to create value that can sustain over a long term for all its shareholders, employees, customers, government and others. Your Company confirms the compliance of corporate governance, in all material aspects, with the revised clause 49 of the listing agreement, the details of which are given below: 2. Board of Directors :

A. Composition of the Board

The Board of your Company consists of Executive Chairman and eminent person with considerable professional experience from varied disciplines. The present strength of the company as on March 31, 2014 is six directors. Fifty percent of the Board consists of non executive independent director.

B. Board Meetings and procedure

The Board of Directors of your Company met eight times during the year on 29.05.2013, 14.08.2013, 27.08.2013, 14.11.2013, 27.01.2014, 01.02.2014, 05.02.2014, and 26.03.2014. The details pertaining to the name and category of Directors on the Board, their attendance at the Board Meetings held during the financial year 2013 – 14 and at the last Annual General Meeting of the Company and the no. of Directorship on the Board or membership/chairmanship in committee held by them across all the Companies are as under :

Composition of the Board, attendance record, membership of Board Committees

Name Category Attendance No. of Other

Directorship $ Committee

(as on March 31, 2014)

Board Meeting

Last AGM

Member Ship

Chairman Ship

Mr. Kishan Kumar Kedia Executive Non Independent 8 Yes 1 - - Mr. Arun Kedia Executive Non Independent 8 Yes 1 - - Mr. Sanjay Kedia Executive Non Independent 8 Yes 2 - - Mr. Shriromani Chauhan Non Executive Independent 4 No - - -

Mr. Santosh Ginoria Non Executive Independent 5 Yes 1 - -

Mrs. Seema Bhattar Non Executive Independent 4 No - - -

Directorship not included in Private Limited Company. Shri ArunKedia and Shri Sanjay Kedia and Shri Kishan Kumar Kedia are Promoters and are relatives within the meaning of Section 6 of the Companies Act, 1956 and Schedule 1-A appended to the said Act.

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3. Audit Committee : Terms of Reference

The terms of reference of this committee are wide enough covering the matters specified for Audit Committee under Clause 49 of the Listing Agreement as amended.

Overseeing of the Company’s financial reporting process and disclosure of financial

information.

Review of quarterly financial statement ensuring compliances with regulatory guidelines before submission to the Board

Recommended appointment, removal of statutory auditors and payment of fees to

them.

Preparation of various financial statement for better fund planning

Assistance in meeting financial requirement of the Company

Approval or any subsequent modification of transactions of the company with related parties;

Scrutiny of inter-corporate loans and investments;

Reviewing, with the management, performance of statutory and internal auditors,

adequacy of the internal control systems;

Formulate the scope, functioning, periodicity and methodology for conducting the internal audit in consultation with the internal auditor and discuss with them regarding any significant findings and follow up thereon;

Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;

Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

Meeting and Attendance The Audit committee comprises of three members and all are independent Directors, to exercise powers and discharge their function as stipulated under Companies Act, 2013. During the year four meetings were held on 29.05.2013, 14.08.2013, 14.11.2013 & 05.02.2014 and all the members attended the meeting. The role and terms of reference of the audit committee covers the matter specified for audit committees under clause 49 of the listing agreement and provisions of Companies Act, 1956. The Composition of Audit Committee is as under:

Sr. No. Name of the members Status Director Status

1 Shiromani Chauhan Chairman Non-Executive & Independent 2 Santosh Ginoria Member Non-Executive & Independent

3 Seema Bhattar Member Non-Executive & Independent

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4. Nomination & Remuneration Committee

In compliance with section 178 of Companies Act, 2013 read with the Companies (Meeting of Board and its Powers) Rules, 2014 and revised Clause 49 of the Listing Agreement, a Nomination and Remuneration Committee has been constituted comprising of following three non-exectuive directors :

Shri Shiromani Chauhan – Chairperson Shri Santosh Ginoria - Member Mrs. Seema Bhattar – Member

The Committee’s terms of reference includes :

(i) Identifying persons who are qualified to become directors and who may be appointed in Senior Management in accordance with the criteria laid down and recommended to the Board their appointment and removal;

(ii) Carry on the evaluation of every director’s performance;

(iii) Formulation of the criteria for determining qualifications, positive attributes and independence of a director;

(iv) Recommended to the Board a policy relating to the remuneration of the directors, key managerial personnel and other employees;

(v) Formulation of criteria for evaluation of independent directors and the Board;

v) Any other matter as the Board may decided from time to time.

Details of managerial remuneration paid to its Directors are as under:

Non-Executive Directors were neither paid any remuneration nor sitting fees. The Company has no Stock Option Scheme for any of its Directors. In view of above, the Board has not felt the need for a separate remuneration committee.

Salary : Rs. 54,00,000 Commission : - Other Perquisite : - Total : Rs. 54,00,000

5. Stakeholder Relationship Committee (earlier named as “Shareholders’/Investors’ Grievance Committee”)

Shareholders’ / Investors’ Grievance Committee, specifically looks into redressing of Shareholders’ and Investors’ Complaints regarding transfer of shares, non-receipt of share certificate and Annual Reports.

The nomenclature of Shareholders/ Investors Grievance Committee has been changed to Stakeholders Relationship Committee pursuant to Section 178 of the Companies Act, 2013.

The terms of reference of the Committee pursuant to Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement includes enquiring into and redressal of complaints of shareholders and to resolve the grievance of security holders of the Company.

All the requests, queries and complaints received during the financial year ended 31st March, 2014, were duly addressed by the Company / Registrar & Transfer Agent, Link Intime India Pvt. Ltd., appropriately and no queries are pending for resolution on that date except where they are constrained by dispute or legal impediments or due to incomplete or non submission of documents by the shareholders.

Shri Kishan Kumae Kedia– Chairman Shri Sanjay Kedia – Member Shri Arun Kedia – Compliance Officer

During the year Company has not received any investor complaints.

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6. General Body Meeting The details of last there Annual General Meeting

Year Date Venue Time 2013 September 30, 2013 Ashish Banquet, Malad (West), Mumbai – 400 064 10.00 am 2012 September 28, 2012 Ashish Banquet, Malad (West), Mumbai – 400 064 10.00 am 2011 September 29, 2011 Ashish Banquet, Malad (West), Mumbai – 400 064 10.00 am

Postal Ballot: • No resolution was passed through postal ballot under the provision of Section 192A of the Companies Act, 1956 and the Companies (Passing of Resolutions by Postal Ballot) Rules, 2011. • At the ensuing Annual General Meeting also, no resolution is proposed to be passed through postal ballot. • The postal ballot exercise shall be conducted from time to time in terms of the provisions referred above in respect of matters where applicable.

7. Disclosures

a. Disclosures regarding Materially Significant Related Party Transactions: The Company has entered into contracts with concerns in which some of the Directors of the Company are deemed to be concerned / interested. However, these contracts are in the ordinary course of the Company’s business. Directors have regularly made full disclosures to the Board of Directors regarding the nature of their interest in such concerns. Full particulars of the contract entered with such concerns in which Directors are directly or indirectly concerned or interested are recorded in the Register of Contracts maintained under Section 301 of the Companies Act, 1956 and the same is placed in every Meeting of Directors, for the noting and approval by the Board. Particulars of the Related Party Transactions have been disclosed in Notes of the accounts. b. Disclosure regarding certain Non-Compliances related to Capital Markets :

There are no penalties or strictures imposed on the company by the Stock Exchanges or SEBI or any statutory authorities relating to the above. There were no instances of non-compliance of any matter related to the capital market during the last three (3) years. c. Accounting treatment in preparation of financial statement

The company follows the Accounting Standards issued by the Institute of Chartered Accountants of India and in the preparation of the financial statement, the company has not adopted a treatment different from that prescribed by the Accounting Standards.

8. Means of Communication

Quarterly/Half yearly results are published in English & Marathi newspapers.

Quarterly, Half Yearly and Annual Financial Results of the Company are sent to the Stock Exchange immediately after they have been approved by the Board. Quarterly and

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Annual Results are published in the newspapers and also uploaded on company’s website www.garnetconstructions.com

Management Discussion and Analysis Report form the part of the Annual Report. 9. General Shareholder Information

1) Annual General Meeting :

Day & Date& Time : Tuesday, 30th September, 2014 at 10.00 am. Venue : Ashish Banquet, Malad (West), Mumbai – 400 064

2) Date of Book closure : Monday 22nd September, 14 to Tuesday 30th September, 14.

(both days inclusive.)

3) Dividend payment date : Not applicable since no dividends is recommended by the Board. 4) ISIN No. : INE797D01017 5) Reporting of Un-audited Financial Result : In respect of year 14-15

a) First quarter : Last week of July, 14 b) Second quarter : Last week of October, 14 c) Third quarter : Last week of January, 15 d) Fourth quarter : Last week of May, 15 e) Annual General Meeting (For 14 – 15) : By August / September, 14

6) Listing on Stock Exchanges: Bombay Stock Exchanges.

7) Stock Code : The Stock Exchange, Mumbai - 526727

8) Market Price Data – High/Low during the each month of the financial year 2013 – 2014 are as follows :

Month Bombay Stock Exchange Ltd. High Low

April 12.50 12.00 May 13.12 12.50 June 13.50 12.50 July 13.12 12.50 August 13.12 12.50 September 13.00 12.50

October 15.50 12.85 November 14.25 12.35 December 13.84 12.00 January 13.10 10.50 February 13.25 10.50 March 13.75 10.50

9) Registrar & Share Transfer agent (RTA) : M/s Link Intime India Pvt. Ltd.

(for physical & demat shares) C-13, Panalal Silk Mill Compound, LBS Marg, Bhandup, Mumbai – 400 078.

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10) Share Transfer System : All valid requests for Share transfer have been processed and noting is pending. Share transfer committee meets as and when required depending upon the volume of transfers. Share Certificates in physical mode are sent as statutorily provided.

11) Distribution of shareholding as on 31.03.2014

Share Holding of Nominal Value

Share Holders Share Amount

No. % to Total In Rs. % to Total

0 5000 5034 85.28 838774 6.03

5001 10000 430 7.28 361531 2.60

10001 20000 212 3.59 328897 2.37

20001 30000 55 0.93 142498 1.03

30001 40000 26 0.44 93943 0.68

40001 50000 41 0.69 196088 1.41

50001 100000 38 0.64 291386 2.10 100001 and Above 67 1.15 11649083 83.78

Total 5903 100.00 13902200 100.00

12) Shareholding pattern as on 31.03.2014

Category No. of Shares % of Shares Promoters 63,28,123 45.52

Private Corporate Bodies 33,70,172 24.24

Indian Public 40,48,737 29.12

NRIs/OCBs 1,28,752 0.93

Clearing Member 26,416 0.19

Grand Total 1,39,02,200 100.00

13) Shares held by Non-Executive Directors as on 31 .03.2014

Sr. No. Name of the non-Executive Directors No. of Shares Held 1 Mr. Shiromani Chauhan 1000 2 Mr. Santosh Ginoria 900 3 Mrs. Seema Bhattar -

14) Reconciliation of Share Capital Audit Report:

Secretarial Audit is carried out every quarter and the report thereon were placed before the Board of Directors and submitted to the Stock Exchanges. The audit inter-alia confirms that the total listed and paid-up share capital of the Company is in agreement with the aggregate of the total number of shares in dematerialized form and total number of shares in physical form.

Mode of Holding Number of Shares

% of Share

Physical 39,00,905 28.06 Electronic 1,00,01,295 71.94 Total 1,39,02,200 100.00

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• Details of use of Public Funds obtained in last three years : No funds have been raised from public in last three years. • Dematerialisation of Shares : As on 31st March, 2014 : 71.94 % shares have been dematerialized. • Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, its date of conversion and likely impact on Equity : There are no outstanding instruments and hence there will be no dilution of the equity. Address for Correspondence : Shareholders holding shares in physical Mode are requested to lodge share transfer,

transmission and intimate changes if any in their registered addresses, residential status etc. quoting their folio no to Company’s Registrar and Share Transfer Agent.

Query on Annual Report be addressed to Company’s registered office.

Designated email id : [email protected]. Compliance : This section of the report together with the information given under Management Discussion and Analysis and brief resume of Directors constituted a detailed report on Corporate Governance. The Company has complied with Mandatory requirement of Corporate Governance. The Board would review implementation of Non – Mandatory Requirements of Corporate Governance Code in due course of time. Auditors Certificates regarding compliances of conditions of corporate Governance is annexed to this report.


Place : Mumbai Kishan Kumar Kedia Dated : 3rd September 2014 Chairman & Managing Director

Din No. 00205146

Declaration on Code of Conduct

The Company has framed a Code of Conduct for the Members of the Board of Directors and the Senior Management personnels of the Company pursuant to Clause 49 of the Listing Agreement with Stock Exchange to further strengthen corporate governance practice in the Company. They have affirmed compliance with the said code.

By order of the board

For Garnet Construction Limited

Place : Mumbai Kishan Kumar Kedia Dated : 3rd September 2014 Chairman & Managing Director

Din No. 00205146

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CEO & CFO Certification The Board of Directors Garnet Construction Ltd. Mumbai Re- Financial Statements for the year 2013-14 –Certification We, Kishan Kumar Kedia, Chairman & Managing Director and Mr. Sanjay Kedia, Finance Director, on the basis of the review of the financial statements and the cash flow statement for the financial year ending March 31, 2014 and to the best of our knowledge and belief, thereby certify that:- 1. These statements do not contain any materially untrue statements or omit any material

fact or Contains statements that might be misleading.

2. These statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.

3. There are to the best of our knowledge and belief, no transaction entered into by the company during the year ended March 31, 2014 which are fraudulent, illegal or violative of the Company's code of conduct.

4. We accept responsibility for establishing and maintaining internal controls for financial reporting, we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee those deficiencies, of which we are aware, in the design or operation of the internal control systems and that we have taken the required steps to rectify these deficiencies.

5. We further certify that : a) There have been no significant changes in the internal control over financial

reporting during this year.

b) There have been no significant changes in accounting policies during this year and that the same have been disclosed in the notes to the financial statements.

c) There have been no instances of significant fraud of which we have become aware and the involvement therein, of management or an employee having significant role in the Company's internal control systems over financial reporting.

Kishan Kumar Kedia Sanjay Kedia Chairman & Managing Director Finance Director Place : Mumbai,

Date : 3rd September, 2014

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MANAGEMENT DISCUSSIONS AND ANALYSIS

Introduction

Real Estate business was one of the key drivers of growth before we witnessed the present economic slowdown. Now with companies trying to consolidate their positions and finding effective means of sustaining growth. The management of real estate has merged as one of the key challenges for the corporate sector. The economic slowdown in the market have resulted in increasing pressures on the margins of companies operating out of India, which in turn has lead to the companies looking to cut cost through reducing expenditure on the real estate segment. The real estate sector in India assumed greater prominence with the liberalization of the economy, as the consequent increase in business opportunities and labour migration lead to rising demand for commercial and housing space. At present, the real estate and construction sectors are playing a crucial role in the overall development of India’s core infrastructure.

Industry Structure & Development Indian infrastructure and construction industry has grown exponentially, in part due to massive government impetus and in part due to high market sentiments. The country, which has initially targeted the low-hanging fruits, is now poised to take up more complex and technologically intense projects. The focus has moved from cost efficiency to time and competence. This has created excellent opportunities for foreign construction companies to conduct business in India. The Indian regulatory environment is expected to further boost the construction industry in order to provide the basic physical infrastructure for the nation.

The Indian economy has witnessed considerable progress in the past few decades. Most of the infrastructure development sectors moved forward, but not to the required extent of increasing growth rate up to the tune of 8 to 10 per cent. The Union Government has underlined the requirements of the construction industry. With the present emphasis on creating physical infrastructure, massive investment is planned in this sector. The Planning Commission has estimated that investment requirement in infrastructure to the tune of about 14,500 billion or US$320 billion during the 11th Five Year Plan period. This is a requirement of an immense magnitude. Budgetary sources cannot raise this much resources. Public Private Partnerships (PPP) approach is best suited for finding the resources. Better construction management is required for optimizing resources and maximizing productivity and efficiency. Opportunities and Threats A. Opportunity : Real Estate sector is not only the biggest contributor to Gross Domestic Product (‘GDP’) of the country but is also the fifth largest sector in terms of Foreign Direct Investment (‘FDI’) inflows in the country. Real Estate Sector in India Contributes to 6.20% of the nation’s GDP, and this number is projected to increase to 7.1% in the next five (5) years. Further, Non-resident Indians and foreign citizens of Indian origin are now allowed to purchase property in India for residential or commercial purposes. Also, Proposed Real Estate (Regulation and Development) Bill to enhance transparency and accountability in real estate transactions, restoring confidence of the public in the industry.

http://en.wikipedia.org/wiki/Economy_of_India

http://en.wikipedia.org/wiki/Infrastructural_capital

http://en.wikipedia.org/wiki/Five-Year_Plans_of_India

http://en.wikipedia.org/wiki/Five-Year_Plans_of_India

http://en.wikipedia.org/wiki/Construction_management

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Besides infrastructure, the construction industry in India has seen sustained demand from the Industrial Sector and Real Estate Sector. Demand from Real Estate has currently plateaued after unprecedented boom in the last decade. The real estate developers have traditionally employed contractors for construction of projects. However, several large contractors are now transitioning towards becoming real estate developers. The Indian Construction sector offers quite an attractive proposition for foreign developers. The Indian Government has decided to allow 100% Foreign Direct Investment (FDI) in the real estate industry, thereby stimulating construction activities throughout the country. Further, the boom in demand for private sector housing and commercial building provide an opportunity to tap into a lot of the nascent demand in this sector. B. Threats : The real estate market in India has been exposed to much changes in government regulations, especially in recent years. An example is the upcoming Real Estate (Regulation and Development) Bill 2012, which may dictate that developers have to compensate land owners with twice the value of the land in urban areas and four times the value in rural areas. Developers will also not be able to begin executing a housing project until it had acquired all the necessary clearances and submitted them as proof before a regulatory authority. The bill also restricts developers from collecting any proceeds from buyers until permission to start on the project had been obtained. Such regulations cause uncertainty, cost overruns and delays in the execution of projects, and hence affect the cash flow of the company. Construction majors are currently experiencing liquidity constraints due to tightening funding norms being employed by institutional financers. The industry is also facing squeezing margins due to increasing commodity prices. Recent trends show that this is primarily due to increase in international prices and are thus unlikely to go down in the near future. Nevertheless, industries based in India producing materials such as cement, steel and glass have shown strong growth of around 10% per annum, indicating sustained demand. Further, availability of skilled labour at key locations is also becoming increasingly challenging for the construction majors. Financial Performance INCOME: The total income of the company decreased by appx. 50 percent from 2112.71 lacs in 2012-13 to 1017.07 lacs in 2013-14.

EBITDA: The EBITA of the company increased by appx. 152.07 percent from 399.11 lacs in 2012-13 to 606.46 lacs in 2013-14.

PAT: The profit after tax of the company increased by almost double from 108.96 lacs in 2012-13 to 228.95 lacs in 2013-14 . Segment wise Performance and reporting The Company is engaged in construction and sale of industrial as well residential plots only, hence the segment wise reporting is not applicable. Financial Performance of the Company for the year under review has already covered under the Directors’ Report. Cautionary Statement Statements in this report describing the Company’s objectives, estimates and expectations may constitute “forward looking statements” within the meaning of applicable laws and regulations. Because such statements deal with future events, they are subject to various risks and uncertainties and company’s expectation actual results for fiscal years as shown above could

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differ materially from company’s current expectation. The Company undertakes no obligation to revise or update forward - looking statements as a result of new information since, these statements may no longer be accurate or timely.

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AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE

To The Members of Garnet Construction Limited

We have examined the compliances of Corporate Governance by Garnet Construction Limited (“the Company”) for the year ended 31st March, 2014 as stipulated in clause 49 of the Listing Agreement of the said Company with stock exchanges.

The Compliance of condition of Corporate Governance is the responsibility of the management. Our examinations were limited to procedures and implementation thereof, adopted by the company for ensuring compliance of the conditions of Corporate Governance as stipulated in the said clause. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, and based on the representation made by the directors and management, we certify that the company has complied with the conditions of Corporate Governance as stipulated in clause 49 of the above mentioned Listing Agreement.

We state that in respect of investor grievances as per the records maintained by the Company and presented to the Shareholders / Investor Grievance Committee of the Company.

We further state that such compliances is neither an assurance as to the future viability of the company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

Place : Mumbai For Sankarlal Jain & Associates Date : 30th May, 2014 Chartered Accountants Firm Regn No: 109901W Mukesh Sonavane Partner M. No: 143622

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INDEPENDENT AUDITOR'S REPORT

To, The Members of GARNET CONSTRUCTION LIMITED MUMBAI

Report on the Financial Statements We have audited the accompanying financial statements of GARNET CONSTRUCTION LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements The Company’s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments; the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so

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required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) in the case of the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended

on that date.

Report on Other Legal and Regulatory Requirements

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

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purpose of our audit. b) In our opinion proper books of account as required by law have been kept by the

Company so far as appears from our examination of those books.

c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 to the extent applicable read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. Except AS 15 in respect of liabilities for GRATUITY & LEAVE ENCASHMENT which are treated on cash basis.

e) On the basis of written representations received from the directors as on March 31,

2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For SHANKARLAL JAIN & ASSOCIATES CHARTERED ACCOUNTANTS Firm Registration No. 109901W Mukesh Sonavane Partner M. No. 143622

Place : Mumbai Dated : 30th May, 2014

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ANNEXURE TO THE AUDITORS’ REPORT

As required by the Companies (Auditors Report) order, 2003 issued by the Company Law Board in terms of sections 227 (4A) of the Act and on the basis of such checks as we considered appropriate, we report that: -- (i) In respect of the Company’s Fixed Assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) According to the information and explanations given to us, all the assets have been physically verified by the management during the year. To the best of our knowledge, no material discrepancies were noticed on such verification.

(c) In our opinion, the Company has not disposed off substantial part of fixed assets during the year.

(ii) In respect of the Company’s Inventories:

(a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

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

Company is maintaining proper records of inventory and no material discrepancies have been noticed.

(iii) (a) According to the information and explanations given to us, the Company has granted loans of Rs 66 lacs (P.Y. Nil) to fives parties covered in the register maintained under section 301 of the Companies Act, 1956. The Balance outstanding as on 31st March, 2014 is Nil (P.Y. Nil).

(b) According to the information and explanations given to us, the Company has taken unsecured loan of Rs 981.75 lacs (P.Y. Rs 523.45 lacs) from six parties covered under section 301 of the Companies Act, 1956. The amount of Loan outstanding as on 31st March 2014 is Rs. Nil (P.Y. Rs 2.57 lacs).

(c) In our opinion the terms of loan are prima facie not prejudicial to the interest of the company.

(d) According to information and explanations provided to us the company is regular in repaying the principal amounts and interest as stipulated.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases and sales of land, plots and sheds and fixed assets. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal control systems.

(v) (a) According to the information and explanations given to us, we are of the opinion

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that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and hence the provisions of Section 58A and Section 58AA of the Companies Act, 1956 and rules framed thereunder are not applicable.

(vii) As per information and explanations given to us, during the year under audit, the Company did not have an internal audit system but had an efficient system of accounting and internal controls.

(viii) In our opinion and according to information and explanations given to us, the Central Government has not prescribed the maintenance of costs records under section 209(1)(d) of the Companies Act, 1956 for the companies procedures.

(ix) (a) According to the information and explanations provided to us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, the company has no disputed statutory liability in arrears as at 31st March, 2014 for the period of more than six months from the date they become payable.

(x) The Company does not have accumulated losses and has not incurred cash losses during the financial year covered by our audit.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders during the year.

(xii) According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company. All the shares held by the company as investments are in its own name.

(xv) According to information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

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(xvi) In our opinion and according to the information and explanations given to us, the term

loans have been applied for the purpose for which they were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the no funds raised for short-term purpose were applied for long-term purpose.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Act during the year.

(xix) According to the information and explanations given to us, the Company has not issued any debentures during the year. Accordingly, the provisions of clause (xix) of the Order are not applicable to the Company.

(xx) According to the information and explanations given to us, the Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For SHANKARLAL JAIN & ASSOCIATES

CHARTERED ACCOUNTANTS Firm Registration No. 109901W Mukesh Sonavane Partner M. No. 143622

Place : Mumbai Dated : 30th May, 2014

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Particulars

As at 31st March,

2014

As at 31st March,

2013

Rs Rs

EQUITY AND LIABILITIES

SHAREHOLDERS' FUNDS

Share Capital 2 139,022,000 139,022,000

Reserves and Surplus 3 503,458,650 480,564,126

642,480,650 619,586,126

NON - CURRENT LIABILITIES

Long Term Borrowings 4 242,383,146 127,757,121

Deferred Tax Liabilities (Net) 25 3,102,312 -

Other Long Term Liabilities 5 5,722,999 6,722,999

251,208,456 134,480,120

CURRENT LIABILITIES

Short Term Borrowings 6 56,233,903 276,914,619

Trade Payables 7 53,778,450 36,045,057

Other Current Liabilities 8 1,054,272,228 895,672,514

Short Term Provisions 9 654,336 711,028

1,164,938,918 1,209,343,218

TOTAL 2,058,628,024 1,963,409,464

ASSETS

NON - CURRENT ASSETS

Fixed Assets

Tangible Assets 10 86,011,784 70,052,864

Capital Work -In -Progress - 9,827,891

Non - Current Investments 11 30,731,117 30,530,817

Long Term Loans and Advances 12 14,940,664 17,840,810

131,683,565 128,252,383

CURRENT ASSETS

Inventories 13 1,188,131,580 926,573,529

Trade Receivables 14 413,652,447 519,707,634

Cash and Bank Balances 15 9,834,936 20,266,323

Short Term Loans and Advances 16 315,315,115 368,514,091

Other Current Assets 17 10,380 95,502

1,926,944,458 1,835,157,081

TOTAL 2,058,628,024 1,963,409,464

Significant Accounting Policies 1

BALANCE SHEET

Notes

The accompanying notes including other explanatory information form an integral part of financial statement As per our attached report of even date For Shankarlal Jain & Associate For and on behalf of the Board of Directors Chartered Accountants of Garnet Construction Limited Firm Reg. No.109901W Kishan Kumar Kedia Chairman & Managing Director Mukesh Sonavane Arun Kedia Sanjay Kumar Kedia Partner Director Director M. No.143622 Place : Mumbai Date : 30th May, 2014

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The accompanying notes including other explanatory information form an integral part of financial statement As per our attached report of even date For Shankarlal Jain & Associate For and on behalf of the Board of Directors Chartered Accountants of Garnet Construction Limited Firm Reg. No.109901W Kishan Kumar Kedia Chairman & Managing Director Mukesh Sonavane Arun Kedia Sanjay Kumar Kedia Partner Director Director M. No.143622 Place : Mumbai Date : 30th May, 2014

STATEMENT OF PROFIT AND LOSS

Particulars Notes For the year ended 31st

March, 2014

For the year ended 31st

March, 2013

INCOME Revenue from operations 18 59,320,527 210,212,505

Other income 19 42,386,751 1,058,650

Total Revenue (I) 101,707,278 211,271,156

EXPENSES

Operating costs 20 8,201,729 140,320,948

Employee benefits expense 21 12,598,361 13,418,725

Finance cost 22 24,837,457 22,603,616

Depreciation and amortization expense 10 4,062,672 3,710,792

Other expenses 23 20,261,187 17,621,842

Total Expenses (II) 69,961,407 197,675,923

Profit for the year before tax (I - II) 31,745,870 13,595,233

Tax Expenses :

Current tax 6,500,000 2,700,000

Deferred tax 3,102,312 - (Excess) / short tax related to earlier years (750,965) -

Profit for the year 22,894,523 10,895,233

Earning per equity share of face value Rs. 10 each: 29

Basic 1.65 0.78

Diluted 1.65 0.78 Significant Accounting Policies 1

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Cash Flow from Operating Activities

Profit Before Tax as per Statement of Profit and Loss 31,745,870 13,595,233

Adjusted for:

Depreciation and Amortisation Expense 4,062,672 3,710,792

Interest Income (195,018) (1,058,650)

Finance Cost 24,837,457 22,603,616

(Profit) / Loss on Sale of Fixed Assets (41,177,399) -

Expenses directly debited to provision (56,692) (196,650,020)

Miscellaneous Expenses W/off 93,872 55,068

(12,435,107) (171,339,194)

Operating Profit before Working Capital Changes 19,310,764 (157,743,961)

Adjusted for:

(Increase)/Decrease in Inventories (261,068,265) (79,271,214)

(Increase)/Decrease in Trade Receivables 106,055,187 (66,385,916)

(Increase)/Decrease in Other Receivables 53,688,576 6,086,971

Increase/(Decrease) in Trade Payable 17,733,393 4,107,998

Increase/(Decrease) in Other Liabilities and Provisions 142,701,940 59,110,831 245,880,567 110,418,405

Cash Generated From Operations 78,421,595 (47,325,556)

Less: Income tax Refund 1,847,596 4,991,358

Income Tax Paid (5,194,832) (4,969,204)

Net Cash from / (used in) Operating Activities (A) 75,074,359 (47,303,402)

Cash Flow from Investing Activities

Purchase of Fixed Assets (30,694,194) (5,072,748)

Capitalisation of Capital WIP 17,886,301 -

Purchase against Capital WIP (8,058,410) (8,343,574)

Sale of Fixed Assets 51,360,215 -

Sale of Investments - 59,660,000

Purchases of Investments (200,300) (50,000)

Purchase of Gold Coin - (118,933)

Interest Received 195,018 1,058,651

30,488,629 47,133,396

Net Cash from / (used in) Investing Activities (B) 30,488,629 47,133,396

Cash Flow from Financing Activities

Repayment From Borrowings (342,971,928) (16,079,916)

Interest Paid (24,837,457) (22,603,616)

Proceeds From Borrowings 251,815,011 (115,994,375) - (38,683,533)

Net Cash from / (used in) Financial Activities (C) (115,994,375) (38,683,533) Net Increase/ (Decrease) in Cash and Cash Equivalents

(A+B+C) (10,431,387) (38,853,540)

Cash and Cash Equivalents - Opening Balance 20,266,322 59,119,862

Cash and Cash Equivalents - Closing Balance 9,834,935 20,266,322

As per our attached report of even date For and on behalf of the Board of Directors

For Shankarlal Jain & Associates of Garnet Construction Limited

Chartered Accountants

Firm Reg. No.109901W

Kishan Kumar Kedia

Chairman & Managing Director

Mukesh Sonavane

Partner

M. No.143622

Place: Mumbai Arun Kedia Sanjay Kumar Kedia

Date : 30th May, 2014 Director Director

CASH FLOW STATEMENT

For the year ended 31st March, 2014 For the year ended 31st March, 2013

As per our attached report of even date For Shankarlal Jain & Associate For and on behalf of the Board of Directors Chartered Accountants of Garnet Construction Limited Firm Reg. No.109901W Kishan Kumar Kedia Chairman & Managing Director Mukesh Sonavane Arun Kedia Sanjay Kumar Kedia Partner Director Director M. No.143622 Place : Mumbai

Date : 30th May, 2014

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Annual Report

Significant Accounting Policies forming part of Financial Statements for the year ended 31st March, 2014

1. SIGNIFICANT ACCOUNTING POLICIES

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS : The financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in India under the historical cost convention, on accrual basis. GAAP comprises mandatory Accounting Standards issued by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

1.2 USE OF ESTIMATES :

The Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Any revision to the accounting estimates is recognized prospectively.

1.3 TANGIBLE ASSETS AND CAPITAL WORK IN PROGRESS : Tangible assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable/allocable cost of bringing the asset to its working condition for its intended use. The cost also includes direct cost and other related incidental expenses. Revenues earned, if any during trial run of assets is adjusted against cost of the assets.

1.4 DEPRECIATION AND AMORTIZATION :

Depreciation on all assets of the Company has been provided on Straight Line Method at the rates and in the manner specified in schedule XIV of the Companies Act,1956.

1.5 IMPAIRMENT OF ASSETS :

Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceed its recoverable amount, an impairment loss is recognized in the income statement for the items Of fixed assets carried at cost. However in the opinion of the management, no provision is required for impairment of asset in the current year.

1.6 INVESTMENTS :

Investments that are readily realizable and intended to be held for not more than one year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost or fair value determined on individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary decline in the value of the investments.

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1.7 INVENTORIES :

a) Construction work in progress The construction work in progress is valued at lower of cost and net realizable value. Cost includes cost of land, development rights, rates and taxes, construction costs, borrowing costs, other direct expenditure, allocated overheads and other incidental expenses.

b) Finished stock of completed projects (ready units)

Finished stock of completed projects and stock in trade of units is valued at lower of cost and net realizable value.

c) Inventory includes certain land purchased in the name of directors who holds the

same in trust for the Company

1.8 REVENUE RECOGNITION : i) Revenue for real estate development/sale

The Company being a Development and Construction Company engaged in the construction of the Industrial Plots Sheds and the Residential Bungalows. During the year under review, the Company has followed the method of accounting for the recognizing of sales on the basis completion of sales method prescribed in AS-9 Revenue Recognition. Hence sales are recognized when possession is handed over to the parties. All expenses and incomes not directly related to particular projects are charged to Profit and loss account of the financial year during which the same are incurred. Further based on the Guidance Note on Accounting for Real Estate Transaction (Revised 2012) issued by the ICAI, company has followed percentage completion method for projects where construction activity has been commenced from 1st April,2012. The estimates relating to percentage of completion, costs of completion, area available for sale etc. being of a technical nature are reviewed and revised periodically by the Management and are considered as change in estimates and accordingly, the effect of such changes in estimates is recognized prospectively in the period in which such changes are determined. Revenue of open plots / land is recognized on the execution of agreement.

ii) Rent Rental Income is recognized on a time proportion basis as per the contractual obligations agreed with the respective tenant.

iii) Interest Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.9 FOREIGN CURRENCY TRANSACTION :

All the Foreign Currency Transactions are accounted for at the exchange rate prevailing on the date of such transaction.

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Annual Report

1.10 SHARE ISSUE EXPENSES :

Share issue expenses are amortized over a period not exceeding 5 years.

1.11 TAXES ON INCOME :

(a) Provision for Income Tax is made on the basis of income for the current accounting period in accordance with the Income tax Act, 1961.

(b) Deferred tax resulting from timing difference between book and tax profit is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize.

(c) The Company has made current tax provision for Minimum Alternate Tax (MAT) under section 115JB of the Income tax Act, 1961. As per the provisions of section 115JAA. MAT Credit receivable has to be recognized as an asset in accordance with the recommendations contained in Guidance note issued by the ICAI. However same is not accounted as receivable in the books of accounts since the management is doubtful of availing the credit against Income tax payable due to uncertainty of taxable profits in the upcoming years

1.12 EARNING PER SHARE:

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.13 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

A provision is recognized when an enterprise has a present obligation as a result of past event it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Possible future obligations or present obligations that may but will probably not require outflow of resources or where the same cannot be reliably estimated, is disclosed as contingent liabilities in the notes to accounts of financial statements. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.14 BORROWING COSTS

Borrowing costs relating to acquisition and/or construction of qualifying assets are capitalized to the extent that the funds are borrowed and used for purpose of constructing a qualifying asset until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs which are not related to acquisition and/or construction activities nor are incidental thereto are charged to the Statement of profit and loss.

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Annual Report

Particulars As at 31st March,

2014

As at 31st March,

2013

Rs. Rs.

2 Share Capital

Authorised

580,000,000 580,000,000

Total authorised share capital 580,000,000 580,000,000

Issued, Subscribed and Paid up

139,022,000 139,022,000

139,022,000 139,022,000

a. Reconciliation of shares outstanding at the beginning and at the end of the year

Equity shares of Rs. 10 each

As at 31st March,

2014

As at 31st March,

2013

Number of Shares Number of Shares

Outstanding at the beginning of the year 13,902,200 13,902,200

Issued during the year - -

Bought back during the year - -

Outstanding at the end of the year 13,902,200 13,902,200

b. Terms/rights attached to equity shares

Equity shares of Rs. 10 each fully paid

As at 31st March,

2014

% of holding

shares

As at 31st March,

2013

% of holding

shares

Number of shares Number of shares

Kusumdevi Kedia 1,653,380 11.89% 1,503,380 10.81%

Sanjay Kumar Kedia 1,651,426 11.88% 1,476,426 10.62%

Arun Kumar Kedia 1,564,117 11.25% 1,389,117 9.99%

Kishan Kumar Kedia 1,459,100 10.50% 1,309,100 9.42%

3 Reserves and Surplus

Securities premium account

Balance as per last financial statements 433,000,000 433,000,000

Less: Utilised for bonus issue/fresh equity shares - -

Closing balance 433,000,000 433,000,000

Surplus in the statement of profit and loss

Balance as per last financial statements 47,564,126 36,668,893

Profit for the year 22,894,523 10,895,233

Balance available for appropriation 70,458,650 47,564,126

Closing balance 70,458,650 47,564,126

Total reserves and surplus 503,458,650 480,564,126

c. Details of shareholders holding more than 5% shares in the company

NOTES TO FINANCIAL STATEMENTS

13,902,200 (Previous year 13,902,200) Equity Shares of Rs. 10 each fully paid

Total issued, subscribed and fully paid up share capital

58,000,000 (Previous year 58,000,000) Equity Shares of Rs. 10 each

The Company has only one class of Equity Share having value of Rs. 10 each with an entitlement of one vote per share.

In the event of company declares and pays dividends in Indian rupees, the dividend proposed by the Board of Directors are

subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive any of the remaining

assets of the company, after distribution of all preferential amounts, the distribution will be in proportion to the number of

equity shares held by the shareholders.

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Annual Report

4 Long Term Borrowings

As at 31st

March,

2014

As at 31st

March,

2013

Secured loans (Refer Note 24)

Term loans

From bank 110,815,011 -

From financial institution/NBFC 131,568,135 127,757,121

Total long term borrowings 242,383,146 127,757,121

Non-current

Portion

Current

Maturity

Total Non-current

Portion

Current

Maturity

Total

110,815,011 100,000 110,915,011 - - -

- - - 94,530,791 26,418,308 120,949,099

99,950,000 40,950,000 140,900,000 - - -

31,618,135 1,722,542 33,340,677 33,226,330 1,456,460 34,682,790

242,383,146 42,772,542 285,155,688 127,757,121 27,874,768 155,631,889

Union Bank of India

India Infoline Investment Services Limited

Total

2013-2014

SICOM

SICOM

2012-2013

Particulars

5 Other Long Term Liabilities

Other

Security deposits received from clients* 5,722,999 6,722,999

Total other long term liabilities 5,722,999 6,722,999

6 Short Term Borrowings

Secured loan (Refer Note 24)

From bank 56,233,903 76,914,619

From financial institution - 200,000,000

Total short term borrowings 56,233,903 276,914,619

7 Trade Payables

53,778,450 36,045,057

Total trade payables 53,778,450 36,045,057

8 Other Current Liabilities

Current maturities of long term borrowings (Refer note 4) 42,772,542 27,874,768

Others

Statutory dues 10,073,467 26,495,390

Advance received from customers 1,001,426,219 841,302,356

Total other current liabilities 1,054,272,228 895,672,514

9 Short Term Provisions

Provision for Expenses

Development Expenses for Plot Construction at Dhamni 654,336 654,336

Provision for expenses for Bunglow -Magic Hills - 56,692

Total short term provisions 654,336 711,028

Trade payables

*Security Deposits received are interest free and are repayable

after completion of lease term

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Annual Report

11 Non - Current Investments

Unquoted equity instruments

Investment in shares

Varaha Infrastructure Limited 30,000,000 30,000,000

30,000 (Previous year 30,000) equity shares of Rs. 1000 each fully paid up

Callista Realty Limited 250,300 50,000

25,030 (Previous year 5,000) equity shares of Rs. 10 each fully paid up

Other long term investments (valued at cost unless stated otherwise)

Unqouted

Investment in others

Gold coins 480,817 480,817

Total non current investments 30,731,117 30,530,817

Notes

Aggregate amount of unquoted investments 30,731,117 30,530,817

12 Long Term Loan and Advances

Unsecured, considered good

Security deposits 7,722,939 8,221,289

Others

7,217,725 9,619,521

Total long term loan and advances 14,940,664 17,840,810

13 Inventories (valued at lower of cost and net realizable value)

(As certified by management)

Finished goods 577,356,500 496,051,363

Construction work - in - progress 610,775,080 430,522,167

Total inventories 1,188,131,580 926,573,529

14 Trade Receivables

Outstanding for a period exceeding six months from the date they are due for payment

Secured, considered good - -

Unsecured, considered good 413,652,447 519,707,634

Others

Secured, considered good - -

Unsecured, considered good - -

Total trade receivables 413,652,447 519,707,634

14A

Trade Receivables include doubtful debts of Rs. 55,05,971 (Previous year Rs. 63,88,103) for which no provision has been

made as the management is hopeful to recover the same

Advance income tax (net of provision of Rs. 6,500,000; Previous year Rs.

2,740,000)

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Annual Report

15 Cash and Bank Balances

i) Cash and cash equivalents

Balances with bank 9,599,557 19,826,257

Cash on hand 134,379 340,065

9,733,936 20,166,323

ii) Cash and bank balances

Fixed Deposit with Bank

Deposit with original maturity for less than 12 months 101,000 100,000

101,000 100,000

Total cash and bank balances 9,834,936 20,266,323

16 Short Term Loans and Advances

Unsecured, considered good

Advances recoverable in cash or in kind or for value to be received 38,018,025 45,351,142

Security deposits 2,250,000 2,173,500

Others

Advances to employees 1,125,720 2,470,025

Advances towards capital expenditure 1,702,501 3,878,113

Advances against property 257,229,801 299,103,386

Prepaid expenses 7,587,005 7,154,816

Duties and taxes receivable 7,402,063 8,383,109

Total short term loans and advances 315,315,115 368,514,091

17 Other Current Assets

Share issue expenses to the extent not written off - 93,872

Interest accrued on fixed deposit 10,380 1,630

Total other current assets 10,380 95,502

Particulars For the year ended

31st March, 2014

For the year ended

31st March, 2013

18 Revenue From Operations

Sale of land / plots 6,599,641 85,155,194

Sale of commercial units 26,864,006 100,365,343

Rent on immovable property 25,856,880 24,691,968

Total revenue from operations 59,320,527 210,212,505

19 Other Income

Interest income on

Fixed deposit with bank 8,750 1,630

Others 186,268 1,057,020

Net gain on sale of fixed assets 41,177,399 -

Liabilities no longer required written back 50,003 -

Other income 964,331 -

Total other income 42,386,751 1,058,650

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Annual Report

Particulars For the year ended

31st March, 2014

For the year ended

31st March, 2013

20 Operating costs

Project related expenses:

Goregaon: (Refer note 28) 32,568,744 58,753,047

Cost of sales:

Stock of finished goods

a) Stock of land (Without N.A.) 3,663,851 60,017,988

b) Cost of Plots Sold (Panchdeep Housing Complex) - 2,794,155

c) Cost of Plots sold (Neelkanth Industrial estate) 271,019 -

d) Cost of Plots sold (Emerald Industrial estate) 117,032 -

4,051,903 62,812,142

Land & Construction Cost:

a) Crystal Spring Bunglow Scheme 2,358,034 8,280,023

b) Magic Hill 137,793,565 80,428,772

c) Magic Heaven 1,190,119 67,815,875

d) Magic Life 2,600,248 -

143,941,965 156,524,670

Purchase for Resale - 4,630,685

Change in Inventories (Refer Note 28) (172,360,883) (142,399,596)

Total cost of construction, land and development expenses 8,201,729 140,320,948

21 Employee Benefits Expense

Salaries and wages 12,090,968 12,766,399

Staff welfare expenses 507,393 652,326

Total employee benefit expense 12,598,361 13,418,725

22 Finance Costs

Interest expenses 23,836,557 22,315,316

Other borrowing cost 1,000,900 288,300

Total finance costs 24,837,457 22,603,616

23 Other Expenses

Advertisement expenses 172,362 389,172

Auditors remuneration 389,608 339,047

Bank charges 109,641 90,725

Business promotion expenses 1,688,776 214,561

Commission and brokerage expenses - 610,800

Donations - 398,761

Electricity expenses 793,346 742,944

Legal and professional fees 656,538 203,463

Membership fees and entrance fees 84,048 33,926

Rent expenses 7,226,000 8,263,112

Maintenance charges 463,581 380,156

Rates and taxes 1,869,019 395,511

Repairs to

Others 1,442,792 430,098

Telephone and communication expenses 521,569 500,138

Traveling and conveyance expenses 2,315,620 1,865,403

Insurance 365,789 212,141

Miscellaneous expenses 2,162,497 2,551,885

Total other expenses 20,261,187 17,621,842

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Annual Report

24 Borrowings

a SICOM Limited - Rs. 14 Crores

b SICOM Limited - Rs. 20 Crores

c SICOM Limited - Rs. 15 Crores

d Union Bank of India - Rs. 14.45 Crores

e India Infoline Finance Limited - Rs. 3.5 Crores

f Allahabad Bank (Overdraft Facility) - Rs. 5 Crores

g United Bank of India (Overdraft Facility) - Rs. 3.25 Crores

h Loans repayable on demand

25 Contingent liabilities and commitments (to the extent not provided for)

As at

31st March, 2014

As at

31st March,

Rs. Rs.

- 3,237,109

Advance against Property 81,552,104 84,833,405

81,552,104 88,070,514

26 Deferred Tax Liability / (Asset)

As at

31st March, 2014

As at

31st March,

2013Rs. Rs.

Deferred tax liability

Related to Fixed assets (Depreciation / Amortization) 15,462,875 1,398,877

Gross deferred tax liability 15,462,875 1,398,877

Deferred tax asset

Unabsorbed Losses (To the extent of Deferred Tax Liabilities) 12,360,563 1,398,877

Gross deferred tax asset 12,360,563 1,398,877

Net Deferred Tax Liability / (Asset) 3,102,312 -

Secured by way of first charge on piece or parcel of land admeasuring 106,907.68 square metres located at Village Honad and

33,913.60 square metres located at Village Isambe, Taluka Khalapur and hypothecation and escrow of the lease rent receivable.

The rate of interest is Medium Term Reference Rate + 2% p.a.

Secured by way of first charge on piece or parcel of land admeasuring 53 acres located at Village Honad and 39 acres located at

Village Isambe, Taluka Khalapur and hypothecation and escrow of identified cash flows of receivable of Project Magic Hills.


Secured by way of first charge on piece or parcel of land admeasuring 1,206,856 square feet located at Village Honad, Taluka

Khalapur and hypothecation and escrow of the lease rent receivable. The rate of interest isBase Rate + 3.25% p.a.

Secured by way of first charge on piece or parcel of land admeasuring 53 acres located at Village Honad and 39 acres located at

Village Isambe, Taluka Khalapur and hypothecation and escrow of identified cash flows of receivable of Project Magic Hills.


Secured against premises situated at Laxmi Industrial Estate. The rate of interest is 18% p.a.

Total

Secured against plot at Village Dindoshi, Goregaon East and irrecoverable joint and several personal guarantees of two

directors. The rate of interest is BPLR + 1.5% p.a.

Secured against premises situated at 11-B Lothse, Juhu. The rate of interest is Base Rate + 5.5% p.a.

The Company has taken a loan amounting to Rs. Nil (Previous Year Rs. 257,316) @ 15% from a director which are repayable on

Particulars

Commitments

Estimate amount of contract to be executed - Capital WIP

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Annual Report

27. Related Party Disclosure List of Related Parties only with whom transactions are executed.

a) Key Management Personnel/Relative of Managerial Person

Kishan Kumar Kedia Chairman & Managing Director Arun kumar Kedia Marketing director Sanjay Kumar Kedia Finance Director Kusum devi Kedia Relative of director

b) Subsidiary Company Callista Realty Limited Subsidiary Company

c) Associate Concern S.K. Investment

Associate Concern

J.S. Realty Private Limited Neelkant Industrial Estate Panchsheel Industrial Estate Aditya Industrial Estate Panchdeep Industrial Estate Kedia Industrial Development Corporation

Previous year figures shown in bracket (Amount in Rs. Lakhs) Particulars of transactions

Relative Opening balance

Transaction during the year

Closing balance

Purchase of investment

Subsidiary Company

0.50 Dr. (Nil)

2.00 Dr. (0.50 Dr.)

Nil (Nil)

2.50 Dr. (0.50 Dr.)

Remuneration

Key Management Personnel

Nil (Nil)

54.00 Dr. (55.68 Dr.)

Nil (Nil)

Nil (Nil)

Interest Nil (Nil)

Nil (0.18 Dr.)

Nil (Nil)

Nil (Nil)

Loan Received

Nil (2.57 Cr.)

305.75 Dr. (2.57 Dr.)

305.75 Cr. (Nil)

Nil (Nil)

Associate Concerns

Nil (Nil)

676.99 Dr. (523.45 Dr.)

676.99 Cr. (523.45 Cr.)

Nil (Nil)

Advance Given

Key Management Personnel

Nil (Nil)

Nil (545.02 Dr.)

Nil (545.02 Cr.)

Nil (Nil)

Associate Concerns

Nil (Nil)

66.00 Dr. (72.20 Dr.)

66.00 Cr. (72.20 Cr.)

Nil (Nil)

Relative of Director

Nil (Nil)

Nil (10.50 Dr.)

Nil (10.50 Cr.)

Nil (Nil)

Note: Related parties are identified by the company & relied upon by the auditor.

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Annual Report

28 Operating Cost:

(a) Goregaon Project Expense out during the year based on Percentage of Completion Method

ParticularsAs at

31st March, 2014

As at

31st March, 2013

Rs Rs

Land Cost - 36,553,061

Legal and professional fees 1,611,981 1,520,272

Finance costs 1,542,238 925,528

Employee benefits expenses 239,910 856,004

Other project related expenses 29,174,616 18,898,182

Total 32,568,744 58,753,047

(b) Change in inventories

ParticularAs at

31st March, 2014

As at

31st March, 2013

a) Inventories at the end of the year:

Stock-in- trade (trading) 4,456,935 12,348,965

Work-in-progress 610,775,080 430,522,167

b) Inventories at the beginning of the year:

Stock-in- trade (trading) 12,348,965 7,718,278

Work-in-progress 430,522,167 292,753,258

Net (increase)/decrease (172,360,883) (142,399,596)

29 Earnings per share (EPS)

Particulars

For the year ended 31

March 2014


March 2013

Rs. Rs.

Profit after tax 22,894,523 10,895,233

Weighted average number of equity shares in calculating basic and diluted EPS13,902,200 13,902,200

Basic EPS 1.65 0.78

Diluted EPS 1.65 0.78

30 Auditors' Remuneration

Particulars


March 2014


March 2013

Rs. Rs.

Auditors' Remuneration

As auditor

Audit fee 224,720 224,720

Tax audit fee 56,180 56,180

In other capacity 401,687 58,147

Total auditors remuneration 682,587 339,047

NOTES TO FINANCIAL STATEMENTS

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Annual Report

31 Expenditure in Foreign Currency (accrual basis)

Particulars


March 2014


March 2013

Rs. Rs.

Foreign travel, subscription, etc. 468,170 829,294

468,170 829,294

32

33

34

35

36

37

38

a.

b.

39

Signature to Notes No 1 to 39

For SHANKARLAL JAIN & ASSOCIATES For and on behalf of

CHARTERED ACCOUNTANTS the Board of Directors of Garnet Construction Limited

Firm Reg. No.109901W

Kishan Kumar Kedia

Mukesh Sonavane Chairman & Managing Director

PARTNER

Membership No.143622

Arun Kedia Sanjay Kedia

Marketing Director Finance Director

Place : Mumbai

Date : 30th May, 2014

The Company's normal operating cycle in respect of operations relating to under construction real estate projects may vary from project to

project depending upon the size of the project, type of development, project complexities and related approvals. Operating cycle for all

completed projects and other business is based on 12 months period. Assets and Liabilities have been classified into current and non-

current based on the operating cycle of respective businesses.

The Company operates in Single Segment i.e. Real Estate \ Real Estate Development and therefore Segment Reporting as per AS-17 '

Segment Reporting' is not applicable.

During the previous financial year due to unfavorable conditions, some of the parties to whom sales had been affected have failed to meet

their commitment. Therefore during the previous financial year certain sales agreement effected in 2008-09 & earlier year’s stands

cancelled and sales return and reversal of profit thereon has been effected during the previous financial year.

No provisions are made for liability of gratuity and leave encashment which are treated on cash basis in the accounts and amount for

which is unascertained.

Service tax payable on account of Notification No. 36/2010-ST dated 28/06/2010 valid w.e.f 01/07/2010 is collectable from customer who

have purchased bunglow/office premises. Such amount payable is provided which will be discharged by the company under the Service

Tax Voluntary Compliance Encouragement Scheme,2013 notified on 13/05/2013

VAT payable on account of sale of property applicable since 01/04/2010 on all sales enters into on or after the said date has been

provided and paid to the authorities. The said amount would be recovered from the customers as and when the amount is recovered from

the customer and final possession is handed over as per the relevant clause in the agreements with customers.

In the opinion of the management, any of the assets other than fixed assets and non- current investments have a value on realisation in the

ordinary course of business atleast equal to the amount at which these are stated.

The accounts of certain Trade Receivables, Trade Payables, Loans and Advances and banks are, however, subject to confirmations or

reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year’s

financial statements on such reconciliation/adjustments.

Previous year's figures have been regrouped / rearranged wherever necessary to conform to current year's classification.

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Annual Report


Regd. Office : 501/531, Laxmi Mall, Laxmi Ind. Estate, New Link Road, Andheri (W), Mumbai - 400 053.

I hereby record my presence at the 22nd Annual General Meeting of the Company held at Ashish – 1 Banquet, Land Mark Building, Link Road, Mid Chowky, Malad (West), Mumbai – 400064 on Tuesday, the 30th September, 2014 at 10.00 a.m. 1. Full Name of the member (In Block Letter)___________________________________________________________ 2. Full name of the joint – Holders (s) (In Block Letter)________________________________________________ 3. Full Name of the Proxy (In Block Letter)______________________________________________________________ 4. Signature of the Member/Proxy attending the Meeting _____________________________________________ -----------------------------------------------------Tear Here -----------------------------------------------------


Regd. Office : 501/531, Laxmi Mall, Laxmi Ind. Estate, New Link Road, Andheri (W), Mumbai - 400 053.

I/We____________________________________________of __________________________________being a Member / Members of Garnet Construction Limited, hereby appoint_______________________________________ of _________________________or failing him / her of ___________________as my/our Proxy to vote for me /us on my/our behalf at the 22nd Annual General Meeting of the Company to be held on Tuesday, the 30th September, 2014 at Ashish-1 Banquet, Land Mark Building, Link Road, Mid Chowky, Malad (West), Mumbai – 400064 at 10.00 a.m. and at any adjourned thereof.

Affix Signed this __________Day ____________, 2014. One Rs.

Revenue Stamp

Note : Member/Proxy attending the Meeting must fill – in this Attendance Slip and hand it

over at the entrance of the venue of the Meeting.

ATTENDANCE SLIP

Regd. Folio No._______________________

DP ID_______________________________

Client ID ____________________________

No. of Shares held_____________________

ATTENDANCE SLIP Regd. Folio No.___________________________________ DP ID_______________________________________________ Client ID ________________________________________ No. of Shares held_____________________________

PROXY FORM Regd. Folio No.___________________________________ DP ID_______________________________________________ Client ID ________________________________________ No. of Shares held_____________________________

22nd annual report - bombay stock exchange · 2014. 9. 12. · mr. sanjay kedia finance director...

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