Notes to Accounts of Vascon Engineers Ltd.

Mar 31, 2025

Determination of lease term & discount rate

Ind AS 116 Leases requires lessee to determine the lease
term as the non-cancellable period of a lease adjusted with
any option to extend or terminate the lease, if the use of
such option is reasonably certain. The Company makes
assessment on the expected lease term on lease by lease
basis and thereby assesses whether it is reasonably certain
that any options to extend or terminate the contract will
be exercised. In evaluating the lease term, the Company
considers factors such as any significant leasehold
improvements undertaken over the lease term, costs
relating to the termination of lease and the importance of the
underlying to the Company’s operations taking into account
the location of the underlying asset and the availability of
the suitable alternatives. The lease term in future periods
is reassessed to ensure that the lease term reflects the
current economic circumstances.

The discount rate is generally based on the incremental
borrowing rate specific to the lease being evaluated or for a
portfolio of leases with similar characteristics

Provisions and contingent liabilities

Provisions are recognized when the Company has a
present legal or constructive obligation as a result of past
events; it is probable that an outflow of resources will be
required to settle the obligation; and the amount can be
reliably estimated.

Provisions are measured at the present value of the
expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects current market
assessments of the time value of money (if the impact
of discounting is significant) and the risks specific to the
obligation. The increase in the provision due to unwinding
of discount over passage of time is recognized as finance
cost. Provisions are reviewed at the each reporting date and
adjusted to reflect the current best estimate. If it is no longer
probable that an outflow of economic resources will be
required to settle the obligation, the provision is reversed.

A provision for onerous contracts is recognized when the
expected benefits to be derived by the Company from a
contract are lower than the unavoidable cost of meeting its
obligations under the contract. The provision is measured
at the present value of the expected net cost of continuing
with the contract. Before a provision is established, the
Company recognizes any impairment loss on the assets
associated with that contract.

A disclosure for a contingent liability is made where there is
a possible obligation that arises from past events and the
existence of which will be confirmed only by the occurrence
or non occurrence of one or more uncertain future events

not wholly within the control of the Company or a present
obligation that arises from the past events where it is either
not probable that an outflow of resources will be required
to settle the obligation or a reliable estimate of the amount
cannot be made. Contingent liabilities are not recognised
in the financial statements. A contingent asset is neither
recognised nor disclosed in the financial statements.

Fair value measurements and valuation processes

Some of the Company’s assets and liabilities are
measured at fair value for financial reporting purposes.
The Company has obtained independent fair valuation for
financial instruments wherever necessary to determine the
appropriate valuation techniques and inputs for fair value
measurements. In some cases the fair value of financial
instruments is done internally by the management of the
Company using market-observable inputs.

In estimating the fair value of an asset or a liability, the
Company uses market-observable data to the extent it
is available. Where Level 1 inputs are not available, the
Company engages third party qualified valuers to perform
the valuation. The qualified external valuers establish the
appropriate valuation techniques and inputs to the model.
The external valuers report the management of the Company
findings every reporting period to explain the cause of
fluctuations in the fair value of the assets and liabilities.

Information about the valuation techniques and inputs used
in determining the fair value of various assets and liabilities
is disclosed in note 26.

2.04 Revenue Recognition / Cost Recognition

Revenue is measured at the fair value of the consideration
received or receivable. Revenue is recognized when (or
as) the company satisfies a performance obligation by
transferring a promised good or service (i.e. an asset) to a
customer. An asset is transferred when (or as) the customer
obtains control of that asset.

When (or as) a performance obligation is satisfied, the
company recognizes as revenue the amount of the transaction
price (excluding estimates of variable consideration) that is
allocated to that performance obligation.

The Company applies the five-step approach for recognition
of revenue:

• Identification of contract(s) with customers;

• Identification of the separate performance obligations
in the contract;

• Determination of transaction price;

• Allocation of transaction price to the separate
performance obligations; and

• Recognition of revenue when (or as) each performance
obligation is satisfied.

a) Construction contracts

Revenue from fixed price construction contracts is
recognised on the Percentage Of Completion Method
(POCM). The stage of completion is determined by
survey of work performed / completion of physical
proportion of the contract work determined by
technical estimate of work done / actual cost incurred
in relation to total estimated contract cost, as the case
may be. The estimate of total contract cost has been
made at the time of commencement of contract work
and reviewed and revised, by the technical experts,
from time to time during period in which the contract
work is executed. Future expected loss, if any, is
recognised immediately as expenditure. In respect
of unapproved revenue recognised, an adequate
provision is made for possible reductions, if any.
Contract revenue earned in excess of billing has been
reflected as unbilled revenue under the head “Other
Financial Assets” " and billing in excess of contract
revenue has been reflected as Unearned Revenue
under the head "Other Current Liabilities" in the
Balance Sheet. The amount of retention money held
by the customers pending completion of performance
milestone is disclosed as part of contract asset and is
reclassified as trade receivables.

Escalation claims raised by the Company are
recognised when negotiations have reached an
advanced stage such that customers will accept the
claim and amount that is probable will be accepted by
the customer can be measured reliably.

b) Real estate development

Revenue from real estate projects is recognised on
''Completed contract method'' of accounting as per
IND AS 115, When - the seller has transfered to the
buyer all significant risk and rewards of ownership and
seller retains no effective control of the real estate to a
degree usally associated with owner ship.

- The seller has effectively handed over possession
of the real estate unit to the buyer forming part of
the transaction.

- No significant uncertianty exists regardging the
amount of consideration that will be derived from
real estate sales;and

- It is not unreasonable to expect ultimate collection
of revenue from buyers.

c) Interest Income

I nterest income from a financial asset is recognised
when it is probable that the economic benefits will flow
to the Company and the amount of income can be
measured reliably. Interest income is accrued on a time
basis, by reference to the principal outstanding and at
the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that
asset’s net carrying amount on initial recognition.

d) Dividend Income

Dividend income from investments is recognised
when the shareholder’s right to receive payment has
been established (provided that it is probable that
the economic benefits will flow to the Group and the
amount of income can be measured reliably).

e) Rental Income

I ncome from letting-out of property is accounted on
accrual basis - as per the terms of agreement and
when the right to receive the rent is established.

f) Income from services rendered is recognised
as revenue when the right to receive the same
is established.

g) Profit on sale of investment is recorded
upon transfer of title by the Company. It is
determined as the difference between the
sale price and the then carrying amount of the
investment.

h) Share of profits/losses in LLP is recognized
when the right to receive/liability to pay the
same is established.

2.05 Cost of contruction / Development

Cost of construction/Development (Including cost of
land) incurred is charged to statement of profit and loss
proportionate to project area sold. Costs incurred for
projects which have not received Occupancy/Completion
certificate is carried over as Project under Development.
Costs incurred for projects which have received Occupancy/
Completion certificate is carried over as completed units

2.06 Leases

Leases are accounted as per Ind AS 116 which has
become mandatory from April 1, 2019.

The Company assesses whether a contract contains
a lease, at the inception of the contract. A contract is,
or contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset,
the Company assesses whether (i) the contract involves the
use of identified asset; (ii) the Company has substantially all
of the economic benefits from the use of the asset through
the period of lease and (iii) the Company has right to direct
the use of the asset

Company as a Lessee

The Company recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the
site on which it is located, less any lease incentives received.

Certain lease arrangements include the option to extend
or terminate the lease before the end of the lease term.
The right-of-use assets and lease liabilities include these
options when it is reasonably certain that the option will
be exercised.

The right-of-use asset is subsequently depreciated using
the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use
asset or the end of the lease term. In addition, the right-
of-use asset is periodically reduced by impairment losses,
if any, and adjusted for certain re-measurements of the
lease liability.

The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the Company’s
incremental borrowing rate. Generally, the Company uses
its incremental borrowing rate as the discount rate.

The lease liability is subsequently measured at amortised
cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising
from a change in an index or rate, if there is a change in the
Company’s estimate of the amount expected to be payable
under a residual value guarantee, or if Company changes
its assessment of whether it will exercise a purchase,
extension or termination option.

When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount

of the right-of-use asset or is recorded in profit or loss if the
carrying amount of the right-of-use asset has been reduced
to zero.

Lease payments have been classified as financing activities
in Statement of Cash Flow.

The Company has elected not to recognise right- of-use
assets and lease liabilities for short term leases that have
a lease term of less than or equal to 12 months with no
purchase option and assets with low value leases. The
Company recognises the lease payments associated with
these leases as an expense in statement of profit and loss
over the lease term. The related cash flows are classified as
operating activities.

2.07 Borrowing Costs

Borrowing costs include interest, amortisation of ancillary
costs in connection with borrowing of funds and is measured
with reference to the effective interest rate applicable to
the respective borrowing. Costs in connection with the
borrowing of funds to the extent not directly related to the
acquisition of qualifying assets are charged to the Statement
of Profit and Loss over the tenure of the loan. Borrowing
costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities
relating to construction / development of the qualifying asset
up to the date of capitalisation of such asset are added to
the cost of the assets. Capitalisation of borrowing costs is
suspended and charged to the Statement of Profit and Loss
during extended periods when active development activity
on the qualifying assets is interrupted.

Advances/deposits given to the vendors under the
contractual arrangement for acquisition/construction of
qualifying assets is considered as cost for the purpose of
capitalization of borrowing cost.

Interest income earned on the temporary investment of
specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible
for capitalisation.

All other borrowing costs are recognised in statement of
profit or loss in the period in which they are incurred.

2.08 Employee benefits

a) Short-term Employee Benefits -

The undiscounted amount of short-term employee
benefits expected to be paid in exchange of services
rendered by the employees is recognised during the
year when the employees render the service.

These benefits include performance incentive and
compensated absences which are expected to occur
within twelve months after the end of the period in
which the employee renders the related service.
The cost of short-term compensated absences is
accounted as under:

(a) i n case of accumulated compensated absences,
when employees render the services that
increase their entitlement of future compensated
absences; and

(b) in case of non-accumulating compensated
absences, when the absences occur.

b) Post Employment Benefits -

(1) Defined Contribution Plan:

Payments to defined contribution retirement benefit
schemes viz. Company''s Provident Fund Scheme and
Superannuation Fund are recognised as an expense
when the employees have rendered the service entitling
them to the contribution. The company has no further
obligation once the contribution have been paid.

(2) Defined Benefit Plan:

For defined benefit retirement benefit plans, the cost
of providing benefits is determined using the projected
unit credit method, with actuarial valuations being
carried out at the end of each annual reporting period.
Remeasurement, comprising actuarial gains and
losses, the effect of the changes to the asset ceiling
(if applicable) and the return on plan assets (excluding
interest), is reflected immediately in the statement of
financial position with a charge or credit recognised
in other comprehensive income in the period in which
they occur.

Remeasurement recognised in other comprehensive
income is reflected immediately in retained earnings
and will not be reclassified to profit or loss. Past service
cost is recognised in profit or loss in the period of a plan
amendment. Net interest is calculated by applying the
discount rate at the beginning of the period to the net
defined benefit liability or asset. Defined benefit costs
are categorised as follows:

• service cost (including current service cost, past
service cost, as well as gains and losses on
curtailments and settlements);

• net interest expense or income; and

• remeasurement.

Gratuity: The Company has an obligation towards
gratuity, a defined benefit retirement plan covering
eligible employees. The plan provides for a lump sum
payment to vested employees at retirement, death
while in employment or on termination of employment
of an amount equivalent to 15/26 days salary payable
for each completed year of service. Vesting occurs
upon completion of five years of service. The
Company accounts for the liability for gratuity benefits
payable in future based on an independent actuarial
valuation. The Company has taken a Group Gratuity
cum Life Assurance Scheme with LIC of India for future
payment of gratuity to the eligible employees.

c) Other Long-term Employee Benefits -

Compensated Absences: The Company provides for
the encashment of compensated absences with pay
subject to certain rules. The employees are entitled
to accumulate compensated absences subject to
certain limits, for future encashment. Such benefits are
provided based on the number of days of unutilised
compensated absence on the basis of an independent
actuarial valuation.

Share-based Payments

The cost of equity-settled transactions is determined
by the fair value at the date when the grant is made
using an appropriate valuation model.

The cost is recognized, together with a corresponding
increase in share-based payment reserves in equity,
over the period in which the performance and / or
service conditions are fulfilled in employee benefits
expense. The cumulative expense recognized for
equity-settled transactions at each reporting date until
the vesting date reflects the extent to which the vesting
period has expired and the Companies best estimate
of the number of equity instruments that will ultimately
vest. The statement of profit and loss expense or credit
for a period represents the movement in cumulative
expense recognised as at the beginning and end of that
period and is recognized in employee benefits expense.

2.09 Taxation

Income tax expense comprises current tax expense
and the net change in the deferred tax asset or liability
during the year. Current and deferred tax are recognised
in profit or loss, except when they relate to items that are
recognised in other comprehensive income or directly in
equity, in which case, the current and deferred tax are also
recognised in other comprehensive income or directly in
equity, respectively. Income tax expense represents the
sum of the tax currently payable and deferred tax.

Current income tax

The tax currently payable is based on taxable profit for the
year. Taxable profit differs from ‘profit before tax’ as reported
in the statement of profit or loss and other comprehensive
income/statement of profit or loss because of items of
income or expense that are taxable or deductible in other
years and items that are never taxable or deductible.

The Company’s current tax is calculated using tax rates
that have been enacted or substantively enacted by the end
of the reporting period.

Advance taxes and provisions for current income taxes are
presented in the balance sheet after off-setting advance
tax paid and income tax provision arising in the same tax
jurisdiction and where the relevant tax paying units intends
to settle the asset and liability on a net basis.

Deferred income taxes

Deferred income tax is recognised using the balance
sheet approach. Deferred income tax assets and liabilities
are recognised for deductible and taxable temporary
differences arising between the tax base of assets and
liabilities and their carrying amount, except when the
deferred income tax arises from the initial recognition of
goodwill or an asset or liability in a transaction that is not
a business combination and affects neither accounting nor
taxable profit or loss at the time of the transaction.

Deferred income tax asset are recognised to the extent that
it is probable that taxable profit will be available against
which the deductible temporary differences and the carry
forward of unused tax credits and unused tax losses can be
utilised. The carrying amount of deferred income tax assets
is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred income tax
asset to be utilised.

Deferred tax assets and liabilities are measured using
substantively enacted tax rates expected to apply to taxable
income in the years in which the temporary differences are
expected to be received or settled.

Deferred tax assets and liabilities are offset when they relate
to income taxes levied by the same taxation authority and
the relevant entity intends to settle its current tax assets
and liabilities on a net basis.

Deferred tax assets include Minimum Alternate Tax (MAT)
paid in accordance with the tax laws in India, which is likely
to give future economic benefits in the form of availability of
set off against future income tax liability. Accordingly, MAT
is recognised as deferred tax asset in the balance sheet
when the asset can be measured reliably and it is probable

that the future economic benefit associated with the asset
will be realised.

The Company recognises interest levied and penalties
related to income tax assessments in income tax expenses.

2.10 Property, Plant and Equipment

Property plant & equipment are stated at cost of acquisition
or construction where cost includes amount added/
deducted on revaluation less accumulated depreciation /
amortization and impairment loss, if any. All costs relating
to the acquisition and installation of fixed assets are
capitalised and include borrowing costs relating to funds
attributable to construction or acquisition of qualifying
assets, up to the date the asset / plant is ready for intended
use. The cost of replacing a part of an item of property,
plant and equipment is recognized in the carrying amount
of the item of property, plant and equipment, if it is probable
that the future economic benefits embodies within the part
will flow to the Company and its cost can be measured
reliably with the carrying amount of the replaced part
getting derecognized. The cost for day-to-day servicing of
property, plant and equipment are recognized in Statement
of Profit and Loss as and when incurred.

Depreciation on tangible property plant & equipment has
been provided on written down value method as per the
useful life prescribed in Schedule II to the Companies Act,
2013 except in respect of plant and machinery, in whose
case the life of the assets has been assessed based on the
technical advice, taking into account the nature of the asset,
the estimated usage of the asset, the operating conditions
of the asset, past history of replacement, anticipated
technological changes, manufacturers warranties and
maintenance support, etc.

Property Plant & Equipment individually costing D 5,000
or less are depreciated fully in the year of acquisition.
Depreciation on assets acquired/purchased, sold/
discarded during the year is provided on a pro-rata basis
from the date of each addition / till the date of sale/discard.

The estimated useful life and depreciation method are
reviewed at the end of each reporting period, with the
effect of any changes in estimate being accounted for on a
prospective basis.

If significant events or market developments indicate an
impairment in the value of the tangible asset, management
reviews the recoverability of the carrying amount of the
asset by testing for impairment. The carrying amount of
the asset is compared with the recoverable amount, which
is defined as the higher of the assets fair value less costs
to sell and its value in use. To determine the recoverable
amount on the basis of value in use, estimated future
cash flows are discounted at a rate which reflects the risk
specific to the asset. If the net carrying amount exceeds
the recoverable amount, an impairment loss is recognised.
When estimating future cash flows, current and expected
future inflows, technological, economic and general
developments are taken into account. If an impairment
test is carried out on tangible assets at the level of a cash¬
generating unit, an impairment loss is recognised, taking
into account the fair value of the assets. If the reason for an
impairment loss recognised in prior years no longer exists,
the carrying amount of the tangible asset is increased to
a maximum figure of the carrying amount that would have
been determined had no impairment loss been recognised.

2.11 Investment Properties

The Company has elected to continue with the carrying
value for all of its investment property as recognized in its
Initial GAAP financial statements as deemed cost at the
transition date. Investment properties are measured initially
at cost, including transaction costs. Subsequent to initial
recognition, investment properties are states at cost less
accumulated depreciation and accumulated impairment
loss, if any.Though the Company measures investment
property using cost based measurement, the fair value of
investment property is disclosed in the notes.

2.12 Intangible Assets

Intangible assets acquired separately:

Intangible assets with finite useful lives that are acquired
separately are carried at cost less accumulated
amortisation and accumulated impairment losses.
Amortisation is recognised on written down value method
over their estimated useful lives. The estimated useful life
and amortisation method are reviewed at the end of each
reporting period, with the effect of any changes in estimate
being accounted for on a prospective basis. Intangible
assets with indefinite useful lives that are acquired separately
are carried at cost less accumulated impairment losses.

2.13 Goodwill

The company records its investments in equity shares
of subsidiaries, joint ventures, and associates at cost
and reviews them for impairment annually. If there''s any
indication of impairment, the value of the investment is
immediately written down to its recoverable amount. When
the company disposes of these investments, any difference
between the net disposal proceeds and the carrying
amounts are recognized in the Statement of Profit and Loss.

2.14 Impairment

Financial assets (other than at fair value)

The Company assesses at each date of balance sheet
whether a financial asset or a group of financial assets
is impaired.

Ind AS 109 requires expected credit losses to be measured
through a loss allowance. The Company recognises lifetime
expected losses for all contract assets and / or all trade
receivables that do not constitute a financing transaction.

"The Company applies the expected credit loss model for
recognising impairment loss on financial assets measured
at amortised cost, trade receivables, other contractual
rights to receive cash or other financial asset and financial
guarantees not designated as at FVTPL.

Expected credit losses are the weighted average of credit
losses with the respective risks of default occurring as the
weights. Credit loss is the difference between all contractual
cash flows that are due to the Company in accordance with
the contract and all the cash flows that the Company expects
to receive (i.e. all cash shortfalls), discounted at the original
effective interest rate (or credit-adjusted - effective interest
rate for purchased, or originated credit impaired financial
assets). The Company estimates cash flows by considering
all contractual term of the financial instrument (for example,
prepayment, extension, call and similar options) through
the expected life of that financial instrument.

The Company measures the loss allowance for a financial
instrument at an amount equal to the lifetime expected
credit losses if the credit risk on that financial instrument has
increased significantly since initial recognition. If the credit
risk on a financial instrument has not increased significantly
since initial recognition, the Company measures the loss
allowance for that financial instrument at an amount equal
to 12-month expected credit losses. 12-month expected
credit losses are portion of the life-time expected credit
losses and represent the lifetime cash shortfalls that will
result if default occurs within the 12 months after the
reporting date and thus, are not cash shortfalls that are
predicted over the next 12 months.

If the Company measured loss allowance for a financial
instrument at lifetime expected credit loss model in the
previous period, but determines at the end of a reporting
period that the credit risk has not increased significantly
since initial recognition due to improvement in credit quality
as compared to the previous period, the Company again
measures the loss allowance based on 12-month expected
credit losses.

When making the assessment of whether there has been a
significant increase in credit risk since initial recognition, the
Company uses the change in the risk of a default occurring
over the expected life of the financial instrument instead
of the change in the amount of expected credit losses. To
make that assessment, the Company compares the risk
of a default occurring on the financial instrument as at the
reporting date with the risk of a default occurring on the
financial instrument as at the date of initial recognition and
considers reasonable and supportable information, that is
available without undue cost or effort, that is indicative of
significant increases in credit risk since initial recognition.

For trade receivables or any contractual right to receive cash
or another financial asset that result from transactions that
are within the scope of Ind AS 11 and Ind AS 18, the Company
always measures the loss allowance at an amount equal to
lifetime expected credit losses. Further, for the purpose of
measuring lifetime expected credit loss allowance for trade
receivables, the Company has used a practical expedient
as permitted under Ind AS 109. This expected credit loss
allowance is computed based on a provision matrix which
takes into account historical credit loss experience and
adjusted for forward-looking information.

Non-financial assets
Tangible and intangible assets

"Property, plant and equipment and intangible assets with
finite life are evaluated for recoverability whenever there
is any indication that their carrying amounts may not be
recoverable. If any such indication exists, the recoverable
amount (i.e. higher of the fair value less cost to sell and the
value-in-use) is determined on an individual asset basis
unless the asset does not generate cash flows that are
largely independent of those from other assets. In such
cases, the recoverable amount is determined for the cash
generating unit (CGU) to which the asset belongs.

If the recoverable amount of an asset (or CGU) is estimated
to be less than its carrying amount, the carrying amount of
the asset (or CGU) is reduced to its recoverable amount.
An impairment loss is recognized in the statement of profit
and loss.

2.15 Inventories

a) Stock of Materials

Stock of materials has been valued at lower of cost
or net realisable value. The cost is determined on
Weighted Average method.

b) Development Work

Stock of Units in completed projects and work in
progress are valued at lower of cost and net realisable
value. Cost is aggregate of land cost, materials,
contract work, direct expenses, provisions and
apportioned borrowing cost.

c) Stock of Trading Goods

Stock of trading goods has been stated at cost or net
realisable whichever is lower. The cost is determined
on Weighted Average Method.

2.16 Financial instruments

Financial assets and liabilities are recognised when the
Company becomes a party to the contractual provisions
of the instrument. Financial assets and liabilities are
initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial
assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit or loss)
are added to or deducted from the fair value measured
on initial recognition of financial asset or financial liability,
except for trade receivables which are initially measured at
transaction price.

Cash and cash equivalents

The Company considers all highly liquid financial
instruments, which are readily convertible into known
amounts of cash that are subject to an insignificant risk
of change in value and having original maturities of three
months or less from the date of purchase, to be cash
equivalents. Cash and cash equivalents consist of balances
with banks which are unrestricted for withdrawal and usage.

Financial assets at amortised cost

Financial assets are subsequently measured at amortised
cost if these financial assets are held within a business
whose objective is to hold these assets in order to collect
contractual cash flows and the contractual terms of the
financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the
principal amount outstanding.

Effective Interest Method

The effective interest method is a method of calculating
the amortised cost of a debt instrument and of allocating
interest income over the relevant period. The effective
interest rate is the rate that exactly discounts estimated
future cash receipts (including all fees and points paid or
received that form an integral part of the effective interest
rate, transaction costs and other premiums or discounts)
through the expected life of the debt instrument, or, where
appropriate, a shorter period, to the net carrying amount
on initial recognition. Income is recognised on an effective
interest basis for debt instruments other than those
financial assets classified as at FVTPL. Interest income is
recognised in profit or loss and is included in the ""Other
income"" line item.

Financial assets at fair value through other
comprehensive income

Financial assets are measured at fair value through other
comprehensive income if these financial assets are held
within a business whose objective is achieved by both
collecting contractual cash flows and selling financial assets
and the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

Financial guarantee contracts:

These are initially measured at their fair values and, are
subsequently measured at the higher of the amount of loss
allowance determined or the amount initially recognised
less, the cumulative amount of income recognised.

Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit or
loss unless it is measured at amortised cost or at fair value
through other comprehensive income on initial recognition.
The transaction costs directly attributable to the acquisition
of financial assets and liabilities at fair value through profit
or loss are immediately recognised in profit or loss.

Investment in subsidiaries

Investment in subsidiaries are measured at cost as per Ind
AS 27 - Separate Financial Statements.

Financial liabilities

Financial liabilities are measured at amortised cost using
the effective interest method.

Effective Interest Method

The effective interest method is a method of calculating
the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated
future cash payments (including all fees and points paid or
received that form an integral part of the effective interest
rate, transaction costs and other premiums or discounts)
through the expected life of the financial liability, or (where
appropriate) a shorter period, to the net carrying amount on
initial recognition.

Equity instruments

An equity instrument is a contract that evidences residual
interest in the assets of the company after deducting all
of its liabilities. Company recognises equity instrument at
proceeds received net of direct issue costs.

Reclassification of Financial Assets

The Company determines classification of financial assets
and liabilities on initial recognition. After initial recognition,
no reclassification is made for financial assets which are
equity instruments and financial liabilities. For financial
assets which are debt instruments, a reclassification is
made only if there is a change in the business model for
managing those assets. Changes to the business model
are expected to be infrequent. The Company’s senior
management determines change in the business model as
a result of external or internal changes which are significant
to the company’s operations. Such changes are evident to
external parties. A change in the business model occurs
when a company either begins or ceases to perform an
activity that is significant to its operations. If the Company
reclassifies financial assets, it applies the reclassification
prospectively from the reclassification date which is the
first day of the immediately next reporting period following
the change in business model. The Company does not
restate any previously recognized gains, losses (including
impairment gains and losses) or interest.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the
net amount is reported in the Balance Sheet if there is
currently enforceable legal right to offset the recognized
amounts and there is an intention to settle on a net basis,
to realize the assets and settle the liabilities simultaneously.

2.17 Earnings Per Share (EPS)

The Company reports basic and diluted earnings per share
in accordance with Ind AS 33 on Earnings per share. Basic
earnings per share is computed by dividing the net profit or

loss for the period by the weighted average number of equity
shares outstanding during the period. Diluted earnings per
share is computed by dividing the net profit or loss for the
period by the weighted average number of equity shares
outstanding during the period as adjusted for the effects of
all diluted potential equity shares except where the results
are anti-dilutive.

2.18 Critical Accounting Judgments and key
sources of estimation, uncertainty

"The preparation of financial statements and related notes
in accordance with Ind AS requires management to make
estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets
and liabilities at the balance sheet date, and revenues
and expenses.

Actual results could differ from those estimates due to
those uncertainties on which assumptions are based.
Estimates and assumptions are reviewed annually in order
to verify they still reflect the best available knowledge of the
Company’s operations and of other factors deriving from
actual circumstances. Changes, if any, are immediately
accounted for in the income statement.

The present economic context, whose effects are spread
into some businesses in which the Group operates,
determined the need to make assumptions related to
future development with a high degree of uncertainty. For
this reason, it is not possible to exclude that, in the next
or in subsequent financial years, actual results may differ
from estimated results. These differences, at present
unforeseeable and unpredictable, may require adjustments
to book values. Estimates are used in many areas, including
accounting for non-current assets, deferred tax assets,
bad debt provisions on accounts receivable, inventory
obsolescence, employee benefits, contingent liabilities and
provisions for risks and contingencies.

2.19 Cash flow statement

The Cash Flow Statement is prepared by the indirect
method set out in Ind AS 7 on Cash Flow Statements and
presents cash flows by operating, investing and financing
activities of the Company.

2.20 Current/Non-Current Classification

The Company presents assets and liabilities in the balance
sheet based on current/non-current classification. An
asset is classified as current when it satisfies any of the
following criteria:

- I t is expected to be realized or intended to be sold or
consumed in normal operating cycle

- It is held primarily for the purpose of trading

- It is expected to be realized within 12 months after the
date of reporting period, or

- Cash and cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12
months after reporting period.

Current assets include the current portion of non¬
current financial assets.

All other assets are classified as non-current.

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

- It is expected to be settled in normal operating cycle

- It is held primarily for the purpose of trading

- It is due to be settled within 12 months after the
reporting period, or

- There is no unconditional right to defer the settlement
of the liability for at least 12 months after the reporting
period Current liabilities include the current portion of
long term financial liabilities.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.

The operating cycle is the time between the acquisition of
assets and their realization in cash and cash equivalents.
The Company has identified 12 months as its operating
cycle. In case of project business, operating cycle is
dependent on life of specific project/ contract/service,
hence current non-current bifurcation relating to project
is based on expected completion date of project which
generally exceeds 12 months

2.21 Share Capital
Ordinary Shares

Ordinary shares are classified as equity. Incremental costs,
if any, directly attributable to the issue of ordinary shares
are recognized as a deduction from other equity, net of any
tax effects.

2.22 Fair Value Measurement

Fair value is the price that would be received from the sale of
an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The
fair value measurement is based on the presumption that
the transaction to sell an asset or transfer the liability takes
place either:

- in the principle market for the asset or liability

- in the absence of principle market, in the most
advantageous market for the asset or liability.

The principle or the most advantageous market must be
accessible by the Company.

The fair value of an asset or a liability is measured using
the assumptions that market participants would use
when pricing the asset or liability, assuming that market
participants act in their economic best interest.

The fair value measurement of a non-financial asset takes
into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best
use or by selling it to another market participant that would
use the asset in its highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximizing the
use of relevant observable inputs and minimizing the use of
unobservable inputs.

All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value
measurement as a whole:

- Level 1 - Quoted (Unadjusted) Market prices in active
markets for incidental assets or liabilities

- Level 2 -Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable

- Level 3 - Valuation Techniques for which the lowest level
input that is significant to the fair value measurement
is unobservable

For assets and liabilities that are recognized in the financial
statements on a recurring basis, the Company determines
whether transfers that have occurred between levels in
the hierarchy by re-assessing categorization (based on
the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.

Determination of Fair Value

1) Financial Assets - Debt Instruments at amortized
cost

After initial measurement the financial assets are
subsequently measured at amortized cost using the
Effective Interest Rate (EIR) method. Amortized cost
is calculated by taking into account any discount or

premium on acquisition and fees or cost that are an
integral part of the EIR.

2) Financial Assets - Debt Instruments at Fair Value
through Other Comprehensive Income (FVTOCI)

Measured initially as well as at each reporting date at
fair value. Fair value movements are recognized in the
Other Comprehensive Income (OCI). On derecognition
of the asset, cumulative gain or loss previously
recognized in OCI is reclassified from the equity to
P&L.

3) Debt instruments, derivatives and equity
instruments at Fair Value through Profit or Loss
(FVTPL)

FVTPL is a residual category for debt instruments. Any
debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is
classified as at FVTPL.

4) Financial Liabilities

Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit & loss,
loans and borrowings, payables, or as derivatives
designated as hedging instruments in an effective
hedge, as appropriate.

All financial liabilities are recognized initially at fair
value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Companies financial liabilities include trade and
other payables, loans and borrowings including bank
overdrafts and derivative financial instruments.

Subsequent Measurement

Fair value through Profit & Loss

Financial liabilities at fair value through profit & loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair
value through profit or loss. All changes in fair value
of such liabilities are recognized in statement of profit
or loss.

Loans and Borrowings

After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortized
cost using the EIR method. Gains and losses are
recognized in profit or loss when the liabilities are
derecognized as well as through the EIR amortization
process. The EIR amortization is included as finance
costs in the statement of profit and loss.

5) Embedded Derivatives

An embedded derivative is a component of a hybrid
(combined) instrument that also includes a non¬
derivative host contract - with the effect that some
of the cash flows of the combined instrument vary in
a way similar to a standalone derivative. If the hybrid
contract contains a host that is a financial asset
within the scope of IND AS 109, the Company does
not separate embedded derivatives. Rather, it applies
the classification requirements contained in IND AS
109 to the entire hybrid contract. These embedded
derivatives are measured at fair value with changes in
fair value recognized in profit or loss.

2.23 Recent accounting pronoucements

The Ministry of Corporate Affairs vide notification dated
9 September 2024 and 28 September 2024 notified
the Companies (Indian Accounting Standards) Second
Amendment Rules, 2024 and Companies (Indian Accounting
Standards) Third Amendment Rules, 2024, respectively,
which amended/ notified certain accounting standards
(see below), and are effective for annual reporting periods
beginning on or after 1 April 2024:

• Insurance contracts - Ind AS 117; and

• Lease Liability in Sale and Leaseback - Amendments
to Ind AS 116

These amendments did not have any material impact on the
amounts recognised in prior periods and are not expected
to significantly affect the current or future periods.

2.24 Dividend

Dividend on share is recorded as liability on the date of
approval by the shareholders.

2.25 Investments

Long Term Investments are carried at cost. Provision for
diminution is made to recognize the decline, other than
temporary in the value of these investments. Current
investments are carried at lower of the cost and fair value.

2.26 Associates and joint ventures

Associates and joint ventures are accounted for under
the equity method at cost at the date of acquisition. In
subsequent periods, the carrying amount is adjusted up or
down to reflect the Company''s share of the comprehensive
income of the investee. Any distributions received from the
investee and other changes in the investees equity reduce
or increase the carrying amount of the investment. If the
losses of an associate or joint venture attributable to the
Company equal or exceed the value of the interest held

in this associate or joint venture, no further losses are
recognised unless the Company incurs an obligation or
makes payments on behalf of the associate or joint venture.
If there are any indications of impairment in the investments
in associates or joint ventures, the carrying amount of the
relevant investment is subject to an impairment test. If the
reason for an impairment loss recognised in prior years
no longer exists, the carrying amount of the investment is
increased to a maximum figure of the share of net assets in
the associate or joint venture.

2.27 Non-current assets held for sale and
discontinued operations

Non-current assets are classified separately in the balance
sheet as held for sale if they are available for sale in their
present condition and the sale is highly probable. Assets
that are classified as held for sale are measured at the
lower of their carrying amount and their fair value less
costs to sell. Liabilities classified as directly related to
non-current assets held for sale are disclosed separately
as held for sale in the liabilities section of the balance
sheet. For discontinued operations, additional disclosures
are required in the Notes, as long as the requirements for
classification as discontinued operations are met.

2.28 Segment Reporting

"The Company identifies primary segments based on
the dominant source, nature of risks and returns and the
internal organisation and management structure. The
operating segments are the segments for which separate
financial information is available and for which operating
profit / loss amounts are evaluated regularly by the Chief
Operating Decision Maker (CODM) in deciding how to
allocate resources and in assessing performance.

''The accounting policies adopted for segment reporting
are in line with the accounting policies of the Company.
Segment revenue, segment expenses, segment assets and
segment liabilities have been identified to segments on the
basis of their relationship to the operating activities of the
segment. Inter-segment revenue is accounted on the basis
of transactions which are primarily determined based on
market / fair value factors. Revenue, expenses, assets and
liabilities which relate to the Company as a whole and are
not allocable to segments on reasonable basis have been
included under “unallocated revenue / expenses / assets /
liabilities”.

Description of Reserves

Retained Earnings: Retained earnings represent the amount of accumulated earnings of the Company

Securities premium reserve: The amount received in excess of the par value of equity

---

Mar 31, 2024

1. The company records receivables on account of ‘ EPC contracts ‘ and ‘ Development sales'' in the normal course of business and classify the same as “trade receivable”.

2. The average credit period on EPC contracts is 60 days. No Interest is charged on trade recivables.

3. Trade receivables includes receivables from related parties and amount due from directors or other officers of the company either severally or jointly with any other person or any trade or other receivables due from firm or private companies in which any director is a partner, a director or member (Refer Note 33).

4. The concentration of credit risk is limited due to the fact that customer base is large and unrelated.

5. The Company does not provide for expected credit loss allowance development sales and receivables from related parties as the Company does not expect any loss on these sales. There is no historical credit loss experience and the Company does not expect any loss on these trade receivables.

6. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables from EPC contracts based on a provision matrix. The provision matrix takes into account historical credit losses experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per the provision matrix. In addition the Company provides for expected credit loss based on case to case basis

Description of Reserves

Retained Earnings: Retained earnings represent the amount of accumulated earnings of the Company

Securities premium reserve: The amount received in excess of the par value of equity shares has been classified as securities premium.

General reserve: The Company created a General Reserve in earlier years pursuant to the provisions of the Companies Act,1956 where in certain percentage of profits was required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General Reserve is a free reserve available to the Company.

Equity-settled employee benefits reserve: The Share options outstanding account is used to record the fair value of equity-settled, share-based payment transactions with employees. The amounts recorded in share options outstanding account are transferred to securities premium upon exercise of stock options and transferred to general reserve on account of stock options not exercised by employees

Capital Redemption Reserve: As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve. The reserve is utilised in accordance with the provisions of section 69 of the Companies Act, 2013.

Note : Pursuant to the announcement made by the Finance Ministry of the Government of India on September 20, 2019, the Company, basis their assessment opted for a lower corporate tax rate as per section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019 from financial year 2020-21 onwards. Accordingly, the Company recognized Provision for Income Tax and re-measured the Deferred Tax Liabilities on the basis of the revised lower tax rate and impact of the same was recognized in the year ended March 31,2024

The management assessed that the fair values of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short - term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company determines fair values of financial assets and financial liabilities by discounting the contractual cash inflows/outflows using prevailing interest rates of financials instruments with similar terms. The initial measurement of financial assets and financial liabilities is at fair value. The fair value of investment is determined using quoted net assets value from the fund. Further, the subsequent measurement of all financial assets and liabilities (other than investment in mutual funds) is at amortised cost, using the effective interest method.

Discount rates used in determining fair value

The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of the borrower which in case of financial liabilities is the weighted average cost of borrowing of the Company and in case of financial assets is the average market rate of similar credit rated instrument.

The Company maintain policies and procedure to value financial assets or financial liabilities using the best and most relevant data available. In addition, the Company internally reviews valuation, including independent price validation for certain instruments.

Fair value of financial assets and liabilities is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.

The following methods and assumptions were used to estimate fair value:

(a) Fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments.

(b) Security deposit paid are evaluated by the Company based on parameters such as interest rate non performance risk of the customer. The fair value of the Company''s security deposit paid are determined by estimating the incremental borrowing rate of the borrower (primarily the landlords). Such rate has been determined using discount rate that reflects the average interest rate of borrowing taken by similar credit rate companies where the risk of non performance risk is more than significant.

(c) Fair value of quoted mutual funds is based on the net assets value at the reporting date. The fair value of other financial liabilities as well as other non current financial liabilities is estimated by discounting future cash flow using rate currently applicable for debt on similar terms, credit risk and remaining maturities.

(d) The fair value of the Company''s interest bearing borrowing received are determined using discount rate that reflects the entity''s borrowing rate as at the end of the reporting year. The own non performance risk as at the reporting was assessed to be insignificant.

Fair value hierarchy

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1: Quoted (unadjusted) price is active market for identical assets or liabilities.

Level 2: Valuation technique for which the lowest level input that has a significant effect on the fair value measurement are observed , either directly or indirectly.

Level 3: Valuation technique for which the lowest level input has a significant effect on the fair value measurement is not based on observable market data.

During the year ended Mar 31,2024, there were no transfer between Level 1 and Level 2 fair value measurement and no transfer into and out of Level 3 fair value measurement.

Note No. 27 - Financial Instruments and Risk Review Capital Management

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

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio between 20% to 50%. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year.

No changes were made in the objectives, policies or processes for managing capital during the Year Ended March 31,2024 and Year Ended March 31,2023.

Financial Risk Management Framework

Vascon Engineers Limited is exposed primarily to credit risk, liquidity risk, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

i) Credit Risk

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.

Financial instruments that are subject to concentrations of credit risk principally consist of trade payables and borrowings. None of the financial instruments of the Company result in material concentration of credit risk.

Exposure to credit risk

The carrying amount of financial asset represents the maximum credit exposure. The maximum exposure to credit risk was '' 76512.54 lakhs and '' 68,965.71 lakhs as at March 31,2024 and March 31,2023 respectively. Trade receivables are typically unsecured and are derived from revenue earned from Development and EPC customers. Credit risk is managed by the Company by continuously monitoring the recovery status of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Group uses expected credit loss model to assess the impairment loss. The Company uses a provisioning policy approved by the Board of Directors to compute the expected credit loss allowance for trade receivables. The policy takes into account available external and internal credit risk factors and the Company''s historical experience for customers.

Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks.

Trade receivables

Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each date of statements of financial position whether a financial asset or a group of financial assets is impaired. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. Company''s exposure to customers is diversified and some customer contributes more than 10% of outstanding accounts receivable as of March 31,2024 and March 31,2023, however there was no default on account of those customer in the past. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

Before accepting any new customer, the Company uses an external/internal credit scoring system to assess the potential customer''s credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed on periodic basis.

The Company performs credit assessment for customers on an annual basis and recognizes credit risk, on the basis of lifetime expected losses and where receivables are due for more than 1 year.

The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting year is as follows.

ii) Liquidity Risk

a) Liquidity risk management

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

b) Maturities of financial liabilities

The following tables detail the remaining contractual maturity for its financial liabilities with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

Excessive Risk Concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or having economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Selective hedging is used within the Company to manage risk concentrations at both the relationship and industry levels.

Note No. 28 - Share Based Payments Employee stock option scheme (ESOS) - 2017

The ESOS was approved by Board of Directors of the Company on 10th Aug 2017 and thereafter by the share holders on 15th September 2017. A compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of '' 28/- per share. The maximum exercise period is 4 year from the date of vesting i.e 30th Sept 2017.

The ESOS granted on 10th August 2017, was repriced on 15th March 2019, at a predetermined rate of '' 15/- per share.The maximum exercise period is 4 year from the date of vesting i.e 30th Sept 2017. The ESOS granted on Feb 2021, was repriced on 8th Sept 2020, at a predetermined rate of '' 10/- share.

Employee stock option scheme (ESOS) - 2020

The ESOS was approved by Board of Directors of Company in its meeting held on 14th july 2020 and further confirmed and approved by members on 8th September 2020. Nomination and Remmuneration Committee Administers the plan.Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of '' 10/- per share. The maximum exercise period is 1 year from the date of vesting.

The fair value of the stock option is calculated through the use of option pricing models, requiring subjective assumptions which greatly affect the calculated values. The said fair value of the options have been calculated using Binomial lattice option pricing model, considering the expected weighted average term of the options to be 1 year from the date of vesting, an expected dividend rate on the underlying equity shares, a risk free rate and weighted average volatility in the share price. The Company''s calculations are based on a single option valuation approach, and forfeitures are recognized as they occur. The expected volatility is based on historical volatility of the share price after eliminating the abnormal price fluctuations.

The Company has elected below practical expedients on transition to Ind AS 116:

(i) Applied a single discount rate to a portfolio of leases with reasonably similar characteristics.

(ii) Applied the exemption not to recognise right of use assets and lease liabilities with less than 12 months of lease term on the date of initial application.

(iii) Excluded the initial direct costs from the measurement of right of use asset at the date of initial application.

(iv) Elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date, the Company relied on its assessment made applying Ind AS 17 Leases.

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified assets for a period of time in exchange for consideration

(v) The Company has elected not to apply the requirements of Ind AS 116 to short term leases of all the assets that have a lease term of twelve months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight line basis over the lease term.

(vi) The weighted average incremental borrowing rate applied to lease liabilities as at 1st April, 2019 is 13% and still continued to this year

(i) The Creditors of the Company have filed a civil suit claiming of '' 88.28 lakhs (Previous year '' 100.67 lakhs) as amount due to them, which claims the Company is disputing.

(ii) One of the labour supplier has filed a criminal complaint in Additional Magistrate Court, Dadar, Mumbai, for recovery of his dues for '' 3.95 lakhs ( Previous year - '' 3.95 lakhs).

(iii) One of the customer has filed arbitration proceeding against the Company for loss on account of wastage i.e. excess consumption of cement and steel, loss on account of escalation of cement and steel, additional cost incurred for completing the balance work, loss for rectifying defective work, refund of amount in VAT and excess duty, loss of reputation and liquidated damages and interest, amounting to '' 2867 lakhs (Previous year - '' 2,867 lakhs).

(v) In earlier years Vascon Dwelling Private Limited (Merged Company) has entered into agreement for sale in respect of plot of land admeasuring 5,016.95 sq mtrs for a consideration of '' 376.27 lakhs.

In respect of the above land one of the original co-owner has filed special civil suit before the Hon''ble Civil Court, Division Nashik against the other co-owners and purchaser of land from whom the company has purchased the said land.

As per the conditional sale the company has to obtain clear enforceable title within 18 months of the execution of the agreement.

In case the company is unable to obtain the permission/clearance the Transferee has right either to terminate the Development Agreement in which case the company will have to refund the sale consideration received amounting to '' 87.80 lakhs along with interest @ 18% p.a. from the date of disbursement of the amount till the date of refund. Alternatively, the Transferee will have right for specific performance along with interest @ 18% p.a. from the date on which amount has been disbursed till the date of curing the breach of contract and in addition to that penalty of '' 3 lakhs per month from the date of breach till the date of curing the breach.

In the Previous Financial Year, the plaintiffs have waived their demands and settled the issues with company. We have to that effect have filed consent terms / compromise terms in the said suit and the matter has been settled. Company also recived the Court Order for the same.

On 31st July 2023, Company have entered into Deed of Conveyance with Ashoka Infraways Ltd. and at present no Pending compliance by the Company.

(vi) In earlier years Vascon Dwelling Private Limited (Merged Company) has transferred Development rights in respect of plot of land admeasuring 3,940 sq mtrs for a consideration of '' 295.50 lakhs

In respect of the above land one of the original co-owner has filed special civil suit before the Hon''ble Civil Court, Division Nashik against the other co-owners and purchaser of land from whom the company has purchased the said land.

As per the conditional sale the company has to obtain clear enforceable title and to obtain certain permission/clearance within 18 months of the execution of the agreement.

In case the company is unable to obtain the permission/clearance the Transferee has right either to terminate the Development Agreement in which case the company will have to refund the sale consideration received amounting to '' 68.95 lakhs along with interest @ 18% p.a. from the date of disbursement of the amount till the date of refund. Alternatively, the Transferee will have right for specific performance along with interest @ 18% p.a. from the date on which amount has been disbursed till the date of curing the breach of contract and in addition to that penalty of '' 2.35 lakhs per month from the date of breach till the date of curing the breach.

In the Previous Financial Year, the plaintiffs have waived their demands and settled the issues with company. We have to that effect have filed consent terms / compromise terms in the said suit and the matter has been settled. Company also recived the Court Order for the same.

On 31st July 2023, Company have entered into Deed of Conveyance with Ashoka Infraways Ltd. and at present no Pending compliance by the Company.

(vii) In earlier years Vascon Dwelling Private Limited (Merged Company) has entered into agreement for sale in respect of plot of land admeasuring 11,377 sq mtrs for a consideration of '' 853.35 lakhs

The company is under obligation to obtain tentative layout approval from corporation, which is subject to new Development Plan to be issued by the corporation.

In case the company is unable to obtain the permission/clearance the Transferee has right either to terminate the Development Agreement in which case the company will have to refund the sale consideration received amounting to '' 100 lakhs along with interest @ 18% p.a. from the date of disbursement of the amount till the date of refund. Alternatively, the Transferee will have right for specific performance along with interest @ 18% p.a. from the date on which amount has been disbursed till the date of curing the breach of contract and right to claim damages.

In respect of the above three agreement to sale of plots the company has recognised the sales amounting to '' 1,525.12 lakhs and profit of '' 659.67 lakhs. As on date of the balance sheet the company has not received any notice from the purchaser/transferee for termination of the agreement or claiming any interest/compensation.

In the Previous financial year the Company obtained NA Order for the land admeasuring about 16950 sq.mtrs., which includes and excess land admeasuring about 1473 sq.mtrs., has also been exempted and have become free hold now final layout has remained so also development of portion of land admeasuring about 4000 sq.mtrs., which the Original owners have kept with them, has remained to be developed and the necessary effect to the 7/12 extract required to be effected.

In the Current Financial year there were various site related compliances remained to be completed by Company. Out of which most of the compliances Company had completed. Now few more compliances have remained to be completed those are as follows :

a) final layout has remained so also development of portion of land admeasuring about 4000 sq.mtrs., which the Original owners have kept with them, has remained to be developed

b) during pendency of our development activities the adjacent owner/ developer of the land bearing S.No. 113/2B part, adm. about 10,000.00 sq.mtrs., has encroached on our plot of land to the tune of adm. about 300.00 sq.mtrs., of an area for which removal of the said encroachment, we have filed Spl. Civil Suit against the said land owners / developers in the Civil Court Nashik, which is pending for compliance by the Defendant developer.

During the process of our compliance Ashoka Infraways had filed a Spl. Civil Suit against Vascon for specific performance for non compliance of various agreed things as per various terms of development agreement. Since Vascon have complied with all terms & conditions as per the said Development Agreement and due to amicable settlement arrived between the parties, Ashoka Infraways have withdrawn the said Spl. Civil Suit unconditionally.

c) after demarcating the said land adm. about 16950.00 sq.mtrs., (inclusive of portion of land adm. about 4000.00 sq.mtrs., remained to be develop for owners) the entier plot will be divided in to various sub plots and accordingly the ultimate effect will be given to the said 7/12 extract.

(f) Tax department initiated prosecution u/s 276B of the Income Tax Act and filed a Court complaint for AY 2016-17 and 2017-18. Vascon paid all the TDS dues along with applicable interest and penalty for late filing there on and applied vide letter dt. 20th December 2019 to the Chief Commissioner of Income tax, Pune for Compounding of offences. Such application of Compounding is pending for disposal with the Chief Commissioner of Income Tax Pune. The amount w.r.t. the above proceeding is not quantifiable

For Development projects and according to the facts:

Pending final decision and interim stay granted by the Hon''ble High Court of Bombay in case of MCHI, the Company , has in case of certain

development projects, neither collected nor paid Maharashtra Value Added Tax and in case of certain development projects, has paid Maharashtra

Value Added Tax

(a) Defined Contribution Plan

The Company makes Provident Fund contributions to defined contribution plan administered by the Regional Provident Fund Commissioner. Under this scheme, the Company is required to contribute a specified percentage of payroll cost to fund the benefits. The Company has recognized '' 172.83 lakhs for Provident Fund contributions (March 31, 2023 : '' 160.27 lakhs) and '' 20.71 lakhs (March 31, 2023 : '' 10.70 lakhs) towards ESIC in the Statement of Profit and Loss. The provident fund and ESIC contributions payable by the Company are in accordance with rules framed by the Government from time to time. Figures stated in the para are after capitalisation.

(b) Defined Benefit Plans:

Gratuity

The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the Payment of Gratuity Act, 1972 or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the fund during the estimated term of obligation.

The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Note No. 32 - Significant estimates and assumptions Estimates and Assumptions

The preparation of the Company''s financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assests or liabilities affected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes will be reflected in the assumptions when they occur.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or Cash Generating Unit (CGU) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amounts sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Defined Benefit Plans (Gratuity Benefits)

The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicaly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Details about gratuity obligations are given in Note 31.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, the fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value target and the discount factor.

The Company has valued its financial instruments through profit & loss which involves significant judgements and estimates such as cash flows for the period for which the instrument is valid, EBITDA of investee company, fair value of share price of the investee company on meeting certain requirements as per the agreement, etc. The determination of the fair value is based on expected discounted cash flows. The key assumptions take into consideration the probability of meeting each performance target and the discount factor.

Note: Figures in bracket relate to the previous year.

• There are no transactions of loans and advances to subsidiaries, associate firms/ companies in which Directors are interested other than as disclosed above.

• There are no Investment by loan in share of parent or subsidiary where Company made loan or advances in the nature of loan.

37 The company enters into “domestic transactions” with specified parties that are subject to the Transfer Pricing regulations under the Income Tax Act, 1961 (‘regulation''). The pricing of such domestic transactions will need to comply with Arm''s length principle under the regulations. These regulations, inter alia, also required the maintenance of prescribed documents and information including furnishing a report from an accountant which is to be filed with the Income tax authorities.

The Company has undertaken necessary steps to comply with the regulations. The management is of the opinion that the domestic transactions are at arm''s length, and hence the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

38 Segment information has been presented in the Consolidated Financial Statements as permitted by Indian Accounting Standard (Ind AS) 108 on operating segment as notified under the Companies (Indian Accounting Standards) Rules, 2015.

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

47 Company had paid the 1st Interim Dividend of Rs.0.25/- (Rupees Twenty Five paise Only) per Equity Share on the entire issued, subscribed and paid up capital of the Company of 217,317,111 Equity Shares having face value of Rs. 10/- each for the Financial Year 2023-24.

48 Undisclosed Income

The company does not have any transaction that are not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961), during the year.

49 Details of crypto currency or virtual currency

The group has not traded or invested in crypto currency or virtual currency during the current or previous year.

50 Other Regulatory Information as per Schedule III of the Division II of the Companies Act, 2013

i. Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

ii. Utilisation of borrowings availed from banks and financial institutions

The borrowings obtained by the Group from banks and financial institutions have been applied for the purposes for which such loans were was taken.

51 he figures for the corresponding period / year have been regrouped and rearranged wherever necessary to make them comparable.

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Mar 31, 2023

1 The company records receivables on account of ‘ EPC contracts ‘ and ‘ Development sales'' in the normal course of business and classify the same as “trade receivable”.

2. The average credit period on EPC contracts is 60 days. No Interest is charged on trade recivables.

3. Trade receivables includes receivables from related parties and amount due from directors or other officers of the company either severally or jointly with any other person or any trade or other receivables due from firm or private companies in which any director is a partner, a director or member (Refer Note 33).

4. The concentration of credit risk is limited due to the fact that customer base is large and unrelated.

5. The Company does not provide for expected credit loss allowance development sales and receivables from related parties as the Company does not expect any loss on these sales. There is no historical credit loss experience and the Company does not expect any loss on these trade receivables.

6. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables from EPC contracts based on a provision matrix. The provision matrix takes into account historical credit losses experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per the provision matrix. In addition the Company provides for expected credit loss based on case to case basis.

Description of Reserves

Retained Earnings: Retained earnings represent the amount of accumulated earnings of the Company

Securities premium reserve: The amount received in excess of the par value of equity shares has been classified as securities premium.

General reserve: The Company created a General Reserve in earlier years pursuant to the provisions of the Companies Act,1956 where in certain percentage of profits was required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General Reserve is a free reserve available to the Company.

Equity-settled employee benefits reserve: The Share options outstanding account is used to record the fair value of equity-settled, share-based payment transactions with employees. The amounts recorded in share options outstanding account are transferred to securities premium upon exercise of stock options and transferred to general reserve on account of stock options not exercised by employees

Capital Redemption Reserve: As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve. The reserve is utilised in accordance with the provisions of section 69 of the Companies Act, 2013.

Note : Pursuant to the announcement made by the Finance Ministry of the Government of India on September 20, 2019, the Company, basis their assessment opted for a lower corporate tax rate as per section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019 from financial year 2020-21 onwards. Accordingly, the Company recognized Provision for Income Tax and re-measured the Deferred Tax Liabilities on the basis of the revised lower tax rate and impact of the same was recognized in the year ended March 31,2023

The management assessed that the fair values of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short - term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company determines fair values of financial assets and financial liabilities by discounting the contractual cash inflows/outflows using prevailing interest rates of financials instruments with similar terms. The initial measurement of financial assets and financial liabilities is at fair value. The fair value of investment is determined using quoted net assets value from the fund. Further, the subsequent measurement of all financial assets and liabilities (other than investment in mutual funds) is at amortised cost, using the effective interest method.

Discount rates used in determining fair value

The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of the borrower which in case of financial liabilities is the weighted average cost of borrowing of the Company and in case of financial assets is the average market rate of similar credit rated instrument.

The Company maintain policies and procedure to value financial assets or financial liabilities using the best and most relevant data available. In addition, the Company internally reviews valuation, including independent price validation for certain instruments.

Fair value of financial assets and liabilities is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.

The following methods and assumptions were used to estimate fair value:

(a) Fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments.

(b) Security deposit paid are evaluated by the Company based on parameters such as interest rate non performance risk of the customer. The fair value of the Company''s security deposit paid are determined by estimating the incremental borrowing rate of the borrower (primarily the landlords). Such rate has been determined using discount rate that reflects the average interest rate of borrowing taken by similar credit rate companies where the risk of non performance risk is more than significant.

(c) Fair value of quoted mutual funds is based on the net assets value at the reporting date. The fair value of other financial liabilities as well as other non current financial liabilities is estimated by discounting future cash flow using rate currently applicable for debt on similar terms, credit risk and remaining maturities.

(d) The fair value of the Company''s interest bearing borrowing received are determined using discount rate that reflects the entity''s borrowing rate as at the end of the reporting year. The own non performance risk as at the reporting was assessed to be insignificant.

Fair value hierarchy

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1: Quoted (unadjusted) price is active market for identical assets or liabilities.

Level 2: Valuation technique for which the lowest level input that has a significant effect on the fair value measurement are observed , either directly or indirectly.

Level 3: Valuation technique for which the lowest level input has a significant effect on the fair value measurement is not based on observable market data.

During the year ended Mar 31,2023, there were no transfer between Level 1 and Level 2 fair value measurement and no transfer into and out of Level 3 fair value measurement.

Note No. 27 - Financial Instruments and Risk Review

Capital Management

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

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio between 20% to 50%. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year.

No changes were made in the objectives, policies or processes for managing capital during the Year Ended March 31,2023 and Year Ended March 31,2022.

Financial Risk Management Framework

Vascon Engineers Limited is exposed primarily to credit risk, liquidity risk, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

i) Credit Risk

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.

Financial instruments that are subject to concentrations of credit risk principally consist of trade payables and borrowings. None of the financial instruments of the Company result in material concentration of credit risk.

Exposure to credit risk

The carrying amount of financial asset represents the maximum credit exposure. The maximum exposure to credit risk was ? 68,965.71 lakhs and ? 58,207.53 lakhs as at March 31,2023 and March 31,2022 respectively. Trade receivables are typically unsecured and are derived from revenue earned from Development and EPC customers. Credit risk is managed by the Company by continuously monitoring the recovery status of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Group uses expected credit loss model to assess the impairment loss. The Company uses a provisioning policy approved by the Board of Directors to compute the expected credit loss allowance for trade receivables. The policy takes into account available external and internal credit risk factors and the Company''s historical experience for customers.

Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks.

Trade receivables

Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each date of statements of financial position whether a financial asset or a group of financial assets is impaired. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. Company''s exposure to customers is diversified and some customer contributes more than 10% of outstanding accounts receivable as of March 31,2023 and March 31,2022, however there was no default on account of those customer in the past. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

Before accepting any new customer, the Company uses an external/internal credit scoring system to assess the potential customer''s credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed on periodic basis.

The Company performs credit assessment for customers on an annual basis and recognizes credit risk, on the basis of lifetime expected losses and where receivables are due for more than 1 year.

The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting year is as follows.

ii) Liquidity Risk

a) Liquidity risk management

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

b) Maturities of financial liabilities

The following tables detail the remaining contractual maturity for its financial liabilities with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

Excessive Risk Concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or having economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Selective hedging is used within the Company to manage risk concentrations at both the relationship and industry levels.

Note No. 28 - Share Based Payments

Employee stock option scheme (ESOS) - 2017

The ESOS was approved by Board of Directors of the Company on 10th Aug 2017 and thereafter by the share holders on 15th September 2017. A compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of ? 28/- per share. The maximum exercise period is 4 year from the date of vesting i.e 30th Sept 2017.

The ESOS granted on 10th August 2017, was repriced on 15th March 2019, at a predetermined rate of ? 15/- per share.The maximum exercise period is 4 year from the date of vesting i.e 30th Sept 2017. The ESOS granted on Feb 2021, was repriced on 8th Sept 2020, at a predetermined rate of ? 10/- share.

The fair value of the stock option is calculated through the use of option pricing models, requiring subjective assumptions which greatly affect the calculated values. The said fair value of the options have been calculated using Binomial lattice option pricing model, considering the expected weighted average term of the options to be 1 year from the date of vesting, an expected dividend rate on the underlying equity shares, a risk free rate and weighted average volatility in the share price. The Company''s calculations are based on a single option valuation approach, and forfeitures are recognized as they occur. The expected volatility is based on historical volatility of the share price after eliminating the abnormal price fluctuations.

Note No. 29 - Disclosures under Ind AS 116

The Company has elected below practical expedients on transition to Ind AS 116:

(i) Applied a single discount rate to a portfolio of leases with reasonably similar characteristics.

(ii) Applied the exemption not to recognise right of use assets and lease liabilities with less than 12 months of lease term on the date of initial application.

(iii) Excluded the initial direct costs from the measurement of right of use asset at the date of initial application.

(iv) Elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date, the Company relied on its assessment made applying Ind AS 17 Leases.

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified assets for a period of time in exchange for consideration

(v) The Company has elected not to apply the requirements of Ind AS 116 to short term leases of all the assets that have a lease term of twelve months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight line basis over the lease term.

(vi) The weighted average incremental borrowing rate applied to lease liabilities as at 1st April, 2019 is 13% and still continued to this year

(i) The Creditors of the Company have filed a civil suit claiming of ? 100.67 lakhs (Previous year ? 100.67 lakhs) as amount due to them, which claims the Company is disputing.

(ii) During the year company paid the challan with 90% penalty waiver to Joint District Registrar & Collector of Stamps , Pune. Now NIL short levy of stamp duty including Penalty due to misclassification of conveyance deed as development agreement (Previous year ? 20.14 lakhs).

(iii) One of the labour supplier has filed a criminal complaint in Additional Magistrate Court, Dadar, Mumbai, for recovery of his dues for ? 3.95 lakhs ( Previous year - ? 3.95 lakhs).

(iv) One of the customer has filed arbitration proceeding against the Company for loss on account of wastage i.e. excess consumption of cement and steel, loss on account of escalation of cement and steel, additional cost incurred for completing the balance work, loss for rectifying defective work, refund of amount in VAT and excess duty, loss of reputation and liquidated damages and interest, amounting to ? 2867 lakhs (Previous year - ? 2,867 lakhs).

(v) In earlier years Vascon Dwelling Private Limited (Merged Company) has entered into agreement for sale in respect of plot of land admeasuring 5,016.95 sq mtrs for a consideration of ? 376.27 lakhs.

In respect of the above land one of the original co-owner has filed special civil suit before the Hon''ble Civil Court, Division Nashik against the other co-owners and purchaser of land from whom the company has purchased the said land.

As per the conditional sale the company has to obtain clear enforceable title within 18 months of the execution of the agreement.

In case the company is unable to obtain the permission/clearance the Transferee has right either to terminate the Development Agreement in which case the company will have to refund the sale consideration received amounting to ? 87.80 lakhs along with interest @ 18% p.a. from the date of disbursement of the amount till the date of refund. Alternatively, the Transferee will have right for specific performance along with interest @ 18% p.a. from the date on which amount has been disbursed till the date of curing the breach of contract and in addition to that penalty of ? 3 lakhs per month from the date of breach till the date of curing the breach.

In the Previous Financial Year, the plaintiffs have waived their demands and settled the issues with company. We have to that effect have filed consent terms / compromise terms in the said suit and the matter has been settled. Company also recived the Court Order for the same.

In the Current Financial Year, there were various compliances performed by Company including pending litigations bearing No. SPCS -745/10. Company have complied with each & every compliance. Now this stage of execution of final conveyance has remained. Company has received a draft of the said conveyance deed, which is under finalisation stage by both the parties inter se.

(vi) In earlier years Vascon Dwelling Private Limited (Merged Company) has transferred Development rights in respect of plot of land admeasuring 3,940 sq mtrs for a consideration of ? 295.50 lakhs

In respect of the above land one of the original co-owner has filed special civil suit before the Hon''ble Civil Court, Division Nashik against the other co-owners and purchaser of land from whom the company has purchased the said land.

As per the conditional sale the company has to obtain clear enforceable title and to obtain certain permission/clearance within 18 months of the execution of the agreement.

In case the company is unable to obtain the permission/clearance the Transferee has right either to terminate the Development Agreement in which case the company will have to refund the sale consideration received amounting to ? 68.95 lakhs along with interest @ 18% p.a. from the date of disbursement of the amount till the date of refund. Alternatively, the Transferee will have right for specific performance along with interest @ 18% p.a. from the date on which amount has been disbursed till the date of curing the breach of contract and in addition to that penalty of ? 2.35 lakhs per month from the date of breach till the date of curing the breach.

In the Previous Financial Year, the plaintiffs have waived their demands and settled the issues with company. We have to that effect have filed consent terms / compromise terms in the said suit and the matter has been settled. Company also recived the Court Order for the same.

In the Current Financial Year, there were various compliances performed by Company including pending litigations bearing No. SPCS -745/10. Company have complied with each & every compliance. Now this stage of execution of final conveyance has remained. Company has received a draft of the said conveyance deed, which is under finalisation stage by both the parties inter se.

(vii) In earlier years Vascon Dwelling Private Limited (Merged Company) has entered into agreement for sale in respect of plot of land admeasuring 11,377 sq mtrs for a consideration of ? 853.35 lakhs

The company is under obligation to obtain tentative layout approval from corporation, which is subject to new Development Plan to be issued by the corporation.

In case the company is unable to obtain the permission/clearance the Transferee has right either to terminate the Development Agreement in which case the company will have to refund the sale consideration received amounting to ? 100 lakhs along with interest @ 18% p.a. from the date of disbursement of the amount till the date of refund. Alternatively, the Transferee will have right for specific performance along with interest @ 18% p.a. from the date on which amount has been disbursed till the date of curing the breach of contract and right to claim damages.

In respect of the above three agreement to sale of plots the company has recognised the sales amounting to ? 1,525.12 lakhs and profit of ? 659.67 lakhs. As on date of the balance sheet the company has not received any notice from the purchaser/transferee for termination of the agreement or claiming any interest/compensation.

In the Previous financial year the Company obtained NA Order for the land admeasuring about 16950 sq.mtrs., which includes and excess land admeasuring about 1473 sq.mtrs., has also been exempted and have become free hold now final layout has remained so also development of portion of land admeasuring about 4000 sq.mtrs., which the Original owners have kept with them, has remained to be developed and the necessary effect to the 7/12 extract required to be effected.

In the Current Financial year there were various site related compliances remained to be completed by Company. Out of which most of the compliances Company had completed. Now few more compliances have remained to be completed those are as follows :

a) final layout has remained so also development of portion of land admeasuring about 4000 sq.mtrs., which the Original owners have kept with them, has remained to be developed during pendency of our development activities the adjacent owner/ developer of the land bearing S.No. 113/2B part, adm. about 10,000.00 sq.mtrs., has encroached on our plot of land to the tune of adm. about 300.00 sq.mtrs., of an area for which removal of the said encroachment, we have filed Spl. Civil Suit against the said land owners / developers in the Civil Court Nashik, which is pending for compliance by the Defendant developer.

b) During the process of our compliance Ashoka Infraways had filed a Spl. Civil Suit against Vascon for specific performance for non compliance of various agreed things as per various terms of development agreement. Since Vascon have complied with all terms & conditions as per the said Development Agreement and due to amicable settlement arrived between the parties, Ashoka Infraways have withdrawn the said Spl. Civil Suit unconditionally.

c) After demarcating the said land adm. about 16950.00 sq.mtrs., (inclusive of portion of land adm. about 4000.00 sq.mtrs., remained to be develop for owners) the entier plot will be divided in to various sub plots and accordingly the ultimate effect will be given to the said 7/12 extract.

f) Tax department initiated prosecution u/s 276B of the Income Tax Act and filed a Court complaint for AY 2016-17 and 2017-18. Vascon paid all the TDS dues along with applicable interest and penalty for late filing there on and applied vide letter dt. 20th December 2019 to the Chief Commissioner of Income tax, Pune for Compounding of offences. Such application of Compounding is pending for disposal with the Chief Commissioner of Income Tax Pune. The amount w.r.t. the above proceeding is not quantifiable

For Development projects and according to the facts:

Pending final decision and interim stay granted by the Hon''ble High Court of Bombay in case of MCHI, the Company , has in case of certain development projects, neither collected nor paid Maharashtra Value Added Tax and in case of certain development projects, has paid Maharashtra Value Added Tax

Note No. 31 - Employee benefits

(a) Defined Contribution Plan

The Company makes Provident Fund contributions to defined contribution plan administered by the Regional Provident Fund Commissioner. Under this scheme, the Company is required to contribute a specified percentage of payroll cost to fund the benefits. The Company has recognized ? 160.27 lakhs for Provident Fund contributions (March 31, 2022 : ? 155.01 lakhs) and ? 10.70 lakhs (March 31, 2022 : ? 8.97 lakhs) towards ESIC in the Statement of Profit and Loss. The provident fund and ESIC contributions payable by the Company are in accordance with rules framed by the Government from time to time.

(b) Defined Benefit Plans:

Gratuity

The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the Payment of Gratuity Act, 1972 or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the fund during the estimated term of obligation.

The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Note No. 32 - Significant estimates and assumptions

Estimates and Assumptions

The preparation of the Company''s financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assests or liabilities affected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes will be reflected in the assumptions when they occur.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or Cash Generating Unit (CGU) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amounts sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Defined Benefit Plans (Gratuity Benefits)

The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicaly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Details about gratuity obligations are given in Note 31.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, the fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value target and the discount factor.

The Company has valued its financial instruments through profit & loss which involves significant judgements and estimates such as cash flows for the period for which the instrument is valid, EBITDA of investee company, fair value of share price of the investee company on meeting certain requirements as per the agreement, etc. The determination of the fair value is based on expected discounted cash flows. The key assumptions take into consideration the probability of meeting each performance target and the discount factor.

• There are no transactions of loans and advances to subsidiaries, associate firms/ companies in which Directors are interested other than as disclosed above.

• There are no Investment by loan in share of parent or subsidiary where Company made loan or advances in the nature of loan.

37 The company enters into “domestic transactions” with specified parties that are subject to the Transfer Pricing regulations under the Income Tax Act, 1961 (‘regulation''). The pricing of such domestic transactions will need to comply with Arm''s length principle under the regulations. These regulations, inter alia, also required the maintenance of prescribed documents and information including furnishing a report from an accountant which is to be filed with the Income tax authorities.

The Company has undertaken necessary steps to comply with the regulations. The management is of the opinion that the domestic transactions are at arm''s length, and hence the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

38 Segment information has been presented in the Consolidated Financial Statements as permitted by Indian Accounting Standard (Ind AS) 108 on operating segment as notified under the Companies (Indian Accounting Standards) Rules, 2015.

40 Corporate Social Responsibility Expenditure

As per Section 135 of the Companies Act, 2013 (the Act), a company meeting the applicability threshold, needs to spend atleast 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility (CSR) Activity. A CSR Committe has been formed by the company to undertake CSR activities on 09/11/2016 pursuant to the requirement of the Act.

41 Benami Property

There are no any proceeding initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

42 The Company has borrowings from banks or financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

43 Wilful Defaulter

The company has not declared Wilful Defaulter by any bank or financial institutions or any other lender.

44 Relationship with Struck off Companies

The company has not done any transactions with companies struck off under section 248 of the Companies Act, 2013.

45 Code on Social Security

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which the Code becomes effective and the related rules to determine the financial impact are published.

46 The figures for the corresponding period / year have been regrouped and rearranged wherever necessary to make them comparable.

---

Mar 31, 2018

Notes:

1. The company records receivables on account of '' EPC contracts '' and '' Development sales'' in the normal course of business and classify the same as “trade receivable”.

2. The average credit period on EPC contracts is 60 days. No Interest is charged on trade receivables.

3. Trade receivables includes receivables from related parties and amount due from directors or other officers of the company either severally or jointly with any other person or any trade or other receivables due from firm or private companies in which any director is a partner, a director or member (Refer Note 33).

4. The concentration of credit risk is limited due to the fact that customer base is large and unrelated.

5. The Company does not provide for expected credit loss allowance development sales and receivables from related parties as the Company does not expect any loss on these sales. There is no historical credit loss experience and the Company does not expect any loss on these trade receivables.

6. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables from EPC contracts based on a provision matrix. The provision matrix takes into account historical credit losses experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per the provision matrix. In addition the Company provides for expected credit loss based on case to case basis

The company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity share is entitled for one vote per share held. In the event of liquidation of the company the holder of the equity share will be entitled to receive remaining asset after deducting all its liabilities in proportion to the number of equity shares held.

*Consequent to and as part of the amalgamation of Angelica Properties Private Limited, Florien Properties Private Limited, Greenstone Premises Private Limited, It-City Info park Private Limited, Just homes india Private Limited, Samara Developers India Private Limited, Sunflower Real Estate Developers Private Limited, Sheri’s Strategists Private Limited, Vascon Dwellings Private Limited, Vashon Price Infrastructures limited, Wind Flower Properties Private Limited with the Company, the Authorized Equity Share Capital of the Company stands increased to '' 26,913 lakhs made up of 26,41,30,000 equity shares of '' 10 each and 5,000,000 Preference Shares of '' 10 each from “effective date” 1 April 2016 (Refer Note 43).

The shares under ESOP - 2015 and ESOP - 2016 totaling to 6,476,530 was allotted on 13/02/2018 and 08/01/2018 and got trading approval from BSE and NSE. On receiving the approval, the shares were credited on 06/03/2018 and 22/01/2018 respectively, to the demit account of employees.

The management assessed that the fair values of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short - term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company determines fair values of financial assets and financial liabilities by discounting the contractual cash inflows/ outflows using prevailing interest rates of financial instruments with similar terms. The initial measurement of financial assets and financial liabilities is at fair value. The fair value of investment is determined using quoted net assets value from the fund. Further, the subsequent measurement of all financial assets and liabilities (other than investment in mutual funds) is at mortised cost, using the effective interest method.

Discount rates used in determining fair value.

The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of the borrower which in case of financial liabilities is the weighted average cost of borrowing of the Company and in case of financial assets is the average market rate of similar credit rated instrument.

The Company maintain policies and procedure to value financial assets or financial liabilities using the best and most relevant data available. In addition, the Company internally reviews valuation, including independent price validation for certain instruments.

Fair value of financial assets and liabilities is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.

The following methods and assumptions were used to estimate fair value:

(a) Fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments.

(b) Security deposit paid are evaluated by the Company based on parameters such as interest rate non performance risk of the customer. The fair value of the Company''s security deposit paid are determined by estimating the incremental borrowing rate of the borrower (primarily the landlords). Such rate has been determined using discount rate that reflects the average interest rate of borrowing taken by similar credit rate companies where the risk of non performance risk is more than significant.

(c) Fair value of quoted mutual funds is based on the net assets value at the reporting date. The fair value of other financial liabilities as well as other noncurrent financial liabilities is estimated by discounting future cash flow using rate currently applicable for debt on similar terms, credit risk and remaining maturities.

(d) The fair value of the Company''s interest bearing borrowing received are determined using discount rate that reflects the entity''s borrowing rate as at the end of the reporting year. The own non performance risk as at the reporting was assessed to be insignificant.

Fair value hierarchy

All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1: Quoted (unadjusted) price is active market for identical assets or liabilities.

Level 2: Valuation technique for which the lowest level input that has a significant effect on the fair value measurement are observed , either directly or indirectly.

Level 3: Valuation technique for which the lowest level input has a significant effect on the fair value measurement is not based on observable market data.

During the year ended March 31, 2018, there were no transfer between Level 1 and Level 2 fair value measurement and no transfer into and out of Level 3 fair value measurement.

Note No. 27 - Financial Instruments and Risk Review Capital Management

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

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio between 20% and 50%. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

Financial Risk Management Framework

Vascon Engineers Limited is exposed primarily to credit risk, liquidity risk, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictably of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

i) Credit Risk

Credit risk is the risk of financial loss arising from counter party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.

Financial instruments that are subject to concentrations of credit risk principally consist of trade payables and borrowings. None of the financial instruments of the Company result in material concentration of credit risk.

Exposure to credit risk

The carrying amount of financial liability represents the maximum credit exposure. The maximum exposure to credit risk was '' 39,289.99 lakhs and '' 38,243.81 lakhs as of March 31, 2018 and March 31, 2017 respectively, being the total of the carrying amount of trade payables and borrowings.

Trade receivables

Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each date of statements of financial position whether a financial asset or a group of financial assets is impaired. The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. Company''s exposure to customers is diversified and some customer contributes more than 10% of outstanding accounts receivable as of March 31, 2018 and March 31, 2017, however there was no default on account of those customer in the past. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

Before accepting any new customer, the Company uses an external/internal credit scoring system to assess the potential customer''s credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed on periodic basis.

The Company performs credit assessment for customers on an annual basis and recognizes credit risk, on the basis of lifetime expected losses and where receivables are due for more than 1 year.

The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting year is as follows.

ii) Liquidity Risk

a) Liquidity risk management

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Excessive Risk Concentration

Concentrations arise when a number of counter parties are engaged in similar business activities, or activities in the same geographical region, or having economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Selective hedging is used within the Company to manage risk concentrations at both the relationship and industry levels.

Note No. 28 - Share Based Payments

Employee stock option scheme (ESOS) - 2014

The ESOS was approved by Board of Directors of the Company on 12th August, 2014 and thereafter by the share holders on 15th Sept, 2014. A compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of Rs. 10/- per share. The maximum exercise period is 1 year from the date of vesting.

Employee stock option scheme (ESOS) - 2015

The ESOS was approved by Board of Directors of the Company on 11th August 2015 and thereafter by the share holders on 29th September 2015. A compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of Rs. 20/- per share. The maximum exercise period is 1 year from the date of vesting.

The fair value of the stock option is calculated through the use of option pricing models, requiring subjective assumptions which greatly affect the calculated values. The said fair value of the options have been calculated using Binomial lattice option pricing model, considering the expected weighted average term of the options to be 1 year from the date of vesting, an expected dividend rate on the underlying equity shares, a risk free rate and weighted average volatility in the share price. The Company''s calculations are based on a single option valuation approach, and forfeitures are recognized as they occur. The expected volatility is based on historical volatility of the share price after eliminating the abnormal price fluctuations.

Employee stock option scheme (ESOS) - 2016

The ESOS was approved by Board of Directors of the Company on 17th May 2016 and thereafter by the share holders on 15th September 2016. A compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of Rs. 20/- per share. The maximum exercise period is 1 year from the date of vesting.

The fair value of the stock option is calculated through the use of option pricing models, requiring subjective assumptions which greatly affect the calculated values. The said fair value of the options have been calculated using Binomial lattice option pricing model, considering the expected weighted average term of the options to be 1 year from the date of vesting, an expected dividend rate on the underlying equity shares, a risk free rate and weighted average volatility in the share price. The Company''s calculations are based on a single option valuation approach, and forfeitures are recognized as they occur. The expected volatility is based on historical volatility of the share price after eliminating the abnormal price fluctuations.

The fair value of the stock option is calculated through the use of option pricing models, requiring subjective assumptions which greatly affect the calculated values. The said fair value of the options have been calculated using Binomial lattice option pricing model, considering the expected weighted average term of the options to be 1 year from the date of vesting, an expected dividend rate on the underlying equity shares, a risk free rate and weighted average volatility in the share price. The Company''s calculations are based on a single option valuation approach, and forfeitures are recognized as they occur. The expected volatility is based on historical volatility of the share price after eliminating the abnormal price fluctuations.

(a) Defined Contribution Plan

The Company makes Provident Fund contributions to defined contribution plan administered by the Regional Provident Fund Commissioner. Under this scheme, the Company is required to contribute a specified percentage of payroll cost to fund the benefits. The Company has recognized '' 99.46 lakhs for Provident Fund contributions (March 31, 2017 : '' 103.79 lakhs) and '' 18.69 lakhs (March 31, 2017: '' 7.63 lakhs) towards ESIC in the Statement of Profit and Loss. The provident fund and ESIC contributions payable by the Company are in accordance with rules framed by the Government from time to time.

(b) Defined Benefit Plans:

Gratuity

The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the Payment of Gratuity Act, 1972 or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the fund during the estimated term of obligation.

The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Note No. 32 - Significant estimates and assumptions

Estimates and Assumptions

The preparation of the Company''s financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assists or liabilities affected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes will be reflected in the assumptions when they occur.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or Cash Generating Unit (CGU) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amounts sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Defined Benefit Plans (Gratuity Benefits)

The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the postemployment benefit obligation.

The mortality rate is based on publically available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Details about gratuity obligations are given in Note 31.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, the fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value target and the discount factor.

The Company has valued its financial instruments through profit & loss which involves significant judgments and estimates such as cash flows for the period for which the instrument is valid, EBITDA of investee company, fair value of share price of the investee company on meeting certain requirements as per the agreement, etc. The determination of the fair value is based on expected discounted cash flows. The key assumptions take into consideration the probability of meeting each performance target and the discount factor.

Note 33 : Related Party Transactions

I Names of related parties

1. Subsidiaries

- Marvel Housing Private Limited

- GMP Technical Solution Private Limited

- Almost Corporation Limited

- Marathawada Realtors Private Limited

- GMP Technical Solutions Middle East (FZE)

- GMP Technical Services LLC (up to July 12, 2017)

- Vascon Value Homes Private Limited

2. Joint Ventures

- Phoenix Ventures

- Cosmos Premises Private Limited

- Ajanta Enterprises

- Vascon Qatar WLL

3. Associates

- Mumbai Estate Private Limited

4. Key Management Personnel

- Mr. R. Vasudevan

- Mr. Siddarth Vasudevan (w.e.f 29th March 2018)

- Dr Santosh Sundararajan

- Mr. D.Santhanam

- Mr.M.Krishnamurthi

- Mr.Mukesh Malhotra

5. Relatives of Key Management Personnel

- Mrs. Lalitha Vasudevan

- Ms. Soumya Vasudevan

- Mrs. Thangam Moorthy

- Mrs. Lalitha Sundararajan

- Mrs Shilpa Shivram

- Mrs. Sailaxmi Santhanam Mudaliar

- Ms Mathangi Krishnamuthy

- Ms Aishwarya Santhanam

- Mrs K Jeyanthy

6. Establishments where in which individuals in serial number (4) and (5) exercise significant Influence

- Flora Facilities Private Limited (Formerly known as Flora Premises Private Limited)

- Vastech Consultants Private Limited

- Vastech consultants and engineers LLP

- Vatsalya Enterprises Private Limited

- Bellflower Premises Private Limited

- Cherry Construction Private Limited

- Stresstech Engineers Pvt Ltd.

- Syringa Engineers Private Limited ( Formerly known as Syringa Properties Private Limited)

- Vascon Infrastructure Limited

- Venus Ventures

- Seraphic Design Private Limited

- D. Santanam (HUF)

- M krishnamurthi (HUF)

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

35 Disclosure under Regulation 34(3) of the SEBI (Listing and Disclosure Requirements) Regulations, 2015

Loans and advances in the nature of loans given to subsidiaries, associates, firms / companies in which directors are interested:

Note: Figures in bracket relate to the previous year.

- There are no transactions of loans and advances to subsidiaries, associate firms/ companies in which Directors are interested other than as disclosed above.

- There are no Investment by loaned in share of parent or subsidiary where Company made loan or advances in the nature of loan.

36 The company enters into "domestic transactions" with specified parties that are subject to the Transfer Pricing regulations under the Income Tax Act, 1961 (''regulation''). The pricing of such domestic transactions will need to comply with Arm''s length principle under the regulations. These regulations, inter alia, also required the maintenance of prescribed documents and information including furnishing a report from an accountant which is to be filed with the Income tax authorities.

The Company has undertaken necessary steps to comply with the regulations. The management is of the opinion that the domestic transactions are at arm''s length, and hence the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

37 Segment information has been presented in the Consolidated Financial Statements as permitted by Indian Accounting Standard (In AS) 108 on operating segment as notified under the Companies (Indian Accounting Standards) Rules, 2015.

39 The company has not performed CSR activities as mentioned in Section 135 read with companies ( Corporate Social responsibility) Rules, 2014 (CSR rules) and Notification and circulars issued by the ministry during the financial year as the company is not within the criteria of ''Qualifying company''.

40 During the previous financial year the company has redeemed preference shares from one of the subsidiary " GMP Technical Solutions Private Limited" amounting to Rs. 234 lakhs.

41 In June 2012, the Income Tax Department had initiated proceedings against the Company, under Section 132 of the Income Tax Act, 1961. During the year, the Company has received order from the Income Tax Settlement Commission under Section 245D(4), for the assessment years 2007-08 to 2014-15 (except assessment year 2013-14 which is reverted to respective assessing officer for further assessment) and based on which necessary effects has been given in the accounts.

42 During the current financial year, the company renegotiated and agreed for full and final payment of Rs 5,864 lakhs towards Zero coupon, rupee denominated unrated unlisted secured non convertible debentures of Rs 6,861 Lakhs.

43 Scheme of Amalgamation:

Pursuant to the Scheme of Amalgamation (the Scheme) sanctioned by the National Company Law Tribunal, Mumbai Bench vide its order dated 21 June 2017, Angelica Properties Private Limited (Angelica Properties), Florien Properties Private Limited (Floriana Properties), Greenstone Premises Private Limited (Greenstone Premises), It-Citi Info park Private Limited (It-Citi Info park), Just Homes Hndia Private Limited (Just Homes India), Sansara Developers India Private Limited (Sansara Developers), Sunflower Real Estate Developers Private Limited (Sunflower Real Estate), Shreyas Strategists Private Limited (Shreyas Strategists), Vascon Dwellings Private Limited (Vascon Dwellings), Vascon Price Infrastructures limited (Vascon Price), Wind Flower Properties Private Limited (Wind Flower Properties) have been merged with the Company with effect from 1 April 2016 (the appointed date). The Scheme came into effect on 3 August 2017, the day on which the order was delivered to the Registrar of the Companies, and pursuant thereto the entire business and all the assets and liabilities, duties, taxes and obligations of Angelica Properties, Floriana Properties, Greystone Premises, It-Citi Info park, Just homes india, Sansara Developers, Sunflower Real Estate, Sheri’s Strategists, Vascon Dwellings, Vascon Pricol, Wind Flower Properties have been transferred to and vested in the Company. The scheme has become effective on 3 August 2017 with effect from the appointed date of 1 April 2016, accordingly previous years'' numbers has been restated.

Angelica Properties, Floriana Properties, Greenstone Premises, It-Citi Info park, Just Homes India, Sansara Developers, Sunflower Real Estate, Shreyas Strategists, Vashon Dwellings, Vashon Pricol, Wind Flower Properties were primarily engaged in business of construction of residential, commercial; IT Parks along with renting of immovable properties and providing project management services for managing and developing real estate projects.

The business of Angelica Properties, Florien Properties, Greenstone Premises, It-Citi Info park, Just homes india, Sansara

Developers, Sunflower Real Estate, Shreyas Strategists, Vascon Dwellings, Vascon Pricol, Wind Flower Properties was run in trust by them for the Company and the business of Angelica Properties, Floriana Properties, Greystone Premises, It-Citi Info park, Just homes india, Sansara Developers, Sunflower Real Estate, Shreyas Strategists, Vascon Dwellings, Vascon Pricol, Wind Flower Properties will be carried on by the Company post the effective date.

As the amalgamating companies i.e. Angelica Properties, Floriana Properties, Greenstone Premises, It-Citi Info park, Just Homes India, Sansara Developers, Sunflower Real Estate, Shreyas Strategists, Vascon Dwellings, Vashon Price, Wind Flower Properties are wholly owned subsidiaries of the Company, no consideration is payable on amalgamation with the Company.

The amalgamation is accounted under the ''pooling of interest'' method in terms of the scheme sanctioned by the National Company Law Tribunal, Mumbai bench as under:

- All assets and liabilities and reserves of Angelica Properties, Floriana Properties, Greenstone Premises, It-Citi Info park, Just homes india, Sansara Developers, Sunflower Real Estate, Shreyas Strategists, Vascon Dwellings, Vascon Price, Wind Flower Properties have been recorded in the books of account of the Company at their respective carrying amounts and in the same form.

- Difference between amount of Share capital of the transferor companies and gross value recorded as investments is adjusted and the difference is adjusted in '' Reserves'' in accordance with the Scheme.

- Accordingly, the assets and liabilities of Angelica Properties, Floriana Properties, Greenstone Premises, It-Citi Info park, Just Homes India, Sansara Developers, Sunflower Real Estate, Shreyas Strategists, Vascon Dwellings, Vascon Pricol, Wind Flower Properties are accounted at the following summarized values:

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Mar 31, 2016

1. Employee stock option scheme (ESOS) - 2013

The ESOS was approved by Board of Directors of the Company on 20th May, 2013 and thereafter by the share holders on 12th Sept, 2013. A compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of Rs. 10/- per share. The maximum exercise period is 1 year from the date of vesting.

2. Employee stock option scheme (ESOS) - 2014

The ESOS was approved by Board of Directors of the Company on 12th August, 2014 and thereafter by the share holders on 15th Sept, 2014. Compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of Rs. 10/- per share. The maximum exercise period is 1 year from the date of vesting.

3. Employee stock option scheme (ESOS) - 2015

The ESOS was approved by Board of Directors of the Company on 11th August 2015 and thereafter by the share holders on 29th September 2015. A compensation committee comprising of independent directors of the company administers the ESOS plan. Each option carries with it the right to purchase one equity share of the company. All options have been granted at a predetermined rate of Rs. 20/- per share. The maximum exercise period is 1 year from the date of vesting.

The Compensation cost of stock options granted to employees has been accounted by the company using the intrinsic value method. The guidance note on accounting of employee share based payments issued by the Institute of Chartered Accountants of India requires the disclosure of pro forma net results and EPS both basic & diluted, had the Company adopted the fair value method. Had the Company accounted these options under fair value method, amortizing the stock compensation expense thereon over the vesting period, the reported Profit for the year ended March 31, 2016 would have been lower by Rs. 49.29 lakhs (Previous year: lower loss of Rs. 14.96 lakhs) and Basic and diluted EPS would have been revised to profit of Rs. 0.43 per share (Previous year loss of 14.30 per share) and profit Rs. 0.43 per share (Previous year loss of 14.30 per share) respectively as compared to profit of Rs. 0.47 per share (Previous year loss of 14.31 per share) and profit of Rs. 0.46 per share (Previous year loss of 14.31 per share) without such impact.

The fair value of the stock option is calculated through the use of option pricing models, requiring subjective assumptions which greatly affect the calculated values. The said fair value of the options have been calculated using Binomial lattice option pricing model, considering the expected weighted average term of the options to be 1 year from the date of vesting, an expected dividend rate of 2% on the underlying equity shares, a risk free rate 8.40% and weighted average volatility in the share price in the range of 61.10% - 67.42%. The Company''s calculations are based on a single option valuation approach, and forfeitures are recognized as they occur. The expected volatility is based on historical volatility of the share price after eliminating the abnormal price fluctuations.

* As required by Accounting Standard (AS) 20 - Earning per share, the effect of anti-dilutive potential equity shares are ignored in calculating diluted earnings per share

I) In respect of claim against the Company amounting to Rs.360,00,00,000/- (Previous year Rs 360,00,00,000/-) by a party who was originally claiming interest in a property, no provision has been considered necessary by the Management in view of the legal opinion that the said claim is not tenable on various grounds.

ii) The Creditors of the Company have filed a civil suit claiming of Rs 1,11,49,741/- (Previous year Rs. 1,00,66,624/-) as amount due to them, which claims the Company is disputing.

iii) Short Levy of Stamp Duty due to misclassification of conveyance deed as development agreement amounting to Rs 8,67,370/- (Previous year Rs. 8,67,370/) with Joint District Registrar & Collector of Stamps , Pune.

iv) One of the labour supplier has filed a criminal complaint in Additional Magistrate Court, Dadar, Mumbai, for recovery of his dues for Rs.3,94,840/- ( Previous year - Nil).

v) One of the customer has filed arbitration proceeding against the Company for loss on account of wastage i.e. excess consumption of cement and steel, loss on account of escalation of cement and steel, additional cost incurred for completing the balance work, loss for rectifying defective work, refund of amount in VAT and excess duty, loss of reputation and liquidated damages and interest, amounting to Rs. 28,67,00,100/- (Previous year - Nil).

g) In respect of a development project, as per the terms of land purchase agreement with a land vendor, an additional amount equivalent to 40% of sale proceeds will required to be paid in the event the FSI availed is in excess of 580000 Sq ft. Since such event has not occurred till the date of balance sheet, no provision is required for this additional cost.

h) The levy of Maharashtra Value Added Tax (MVAT) in respect of Real Estate Development sales has been subject to considerable legislative amendments, litigation and administrative action. During the pendency of special leave petition before the Hon''ble Supreme Court against the earlier Hon''ble Mumbai High Court decision, a decision has been pronounced by the Hon''ble Mumbai High Court and the matter has not reached finality.

The Industry, accounting and legal fraternity is examining the implications of the decisions and the way the liability will be worked out under various options provided. In view of such uncertainties, the management has been advised that in the present scenario it is difficult to correctly determine MVAT liability payable in respect of real estate development sales executed during the period 20th June, 2006 to 31st March, 2010. The Company is currently in process of ascertaining the exact applicability of these pronouncements, contractual ability to collect MVAT from past customers and the mechanism of collection of MVAT in respect of real estate development sales executed during the period 20th June, 2006 to 31st March, 2010.

4. Disclosure of particulars of significant leases as required by Accounting Standard 19

The Companies significant leasing arrangements are in respect of operating leases for commercial and residential premises.

The Company leases / sub-leases office spaces under Non cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessor and lessee.

i) Operating Lease

Notes forming part of the Financial Statements 38 Disclosure of related party transactions as required by Accounting Standard 18

I Names of related parties

1. Subsidiaries

- Marvel Housing Private Limited

- Grey Stone Premises Private Limited

- Vascon Dwellings Private Limited

- IT CITI Info Park Private Limited

- Caspia Hotels Private Limited (Upto May 28,2014)

- Windflower Properties Private Limited

- GMP Technical Solution Private Limited

- Floriana Properties Private Limited

- Vascon Pricol Infrastructure Limited

- Vascon Renaissance EPC Limited Liability Partnership

- Almet Corporation Limited

- Marathawada Realtors Private Limited

- Just Homes (India) Private Limited

- GMP Technical Solutions Middle East (FZE)

- Sunflower Real Estate Developers Pvt Ltd (Wef 31.08.2015)

- Angelica Properties Private Limited (Wef 14.04.2015)

- Shreyas strategists Private limited (Wef 31.08.2015)

- Sansara Development India Private limited (Wef 31.08.2015)

- GMP Technical Services LLC

2. Joint Ventures

- Weikfield IT CITI Infopark ( Upto October 1,2014)

- Phoenix Ventures

- Zenith Ventures

- Zircon Ventures

- Just Homes (AOP)

- Cosmos Premises Private Limited

- Ajanta Enterprises

- Vascon Qatar WLL

3. Associates

- Mumbai Estate Private Limited

4. Key Management Personnel

- Mr. R. Vasudevan

- Dr Santosh Sundararajan

- Mr. D.Santhanam

- Mr.M.Krishnamurthi

5. Relatives of Key Management Personnel

- Mrs. Lalitha Vasudevan

- Ms. Soumya Vasudevan

- Mrs. Thangam Moorthy

- Mrs. Lalitha Sundararajan

- Mr. Siddarth Vasudevan

- Mrs Shilpa Shivram

- Mrs. Sailaxmi Santhanam Mudaliar

- Ms Mathangi Krishnamuthy

6. Establishments where in which individuals in serial number (4) and (5) exercise significant Influence

- Flora Facilities Private Limited (Formerly known as Flora Premises Private Limited)

- Vastech Consultants Private Limited

- Vastech consultants and engineers LLP

- Vatsalya Enterprises Private Limited

- Bellflower Premises Private Limited

- Cherry Construction Private Limited

- Stresstech Engineers Pvt Ltd.

- Syringa Engineers Private Limited ( Formerly known as Syringa Properties Private Limited)

- Vascon Infrastructure Limited

- Venus Ventures

- Seraphic Design Private Limited

- D. Santanam (HUF)

- M krishnamurthi (HUF)

Notes:-

i) Related party relationships are as identified by the Company on the basis of information available and accepted by the auditors.

ii) No provision have been made in respect of receivable from related party as at March 31, 2016.

iii) During the financial year one of the subsidiaries IT CITI Infopark Pvt Litd has purchased 74% equity stake in Angelica Properties Pvt Ltd (In which company holds 26% equity stakes) for a consideration of Rs.241.55 Lakhs.Consequently, Angelica Properties Pvt Ltd has become fully owned subsidiary of the company.

IV) During the year ended 31st March 2016 following acquisition have taken place.

1.The Company had acquired 100% stake in " Sunflower real Estate Developers Private Limited" for a consideration of Rs.100.00 Lakhs on 31st August 2015.

2. The Company had acquired 100% Stake in " Shreyas Strategies Private Limited " through one of its subsidiary Vascon Pricol Infrastructures Limited for a consideration of Rs.1 Lakhs on 31st August 2015.

3. The Company had acquired 35% stake in "Greystone Premises Private Limited" for a consideration of Rs.0.01 lakhs on 20th January 2016.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

7. The company enters into "domestic transactions" with specified parties that are subject to the Transfer Pricing regulations under the Income Tax Act, 1961 (''regulation''). The pricing of such domestic transactions will need to comply with Arm''s length principle under the regulations. These regulations, interalia, also required the maintenance of prescribed documents and information including furnishing a report from an accountant which is to be filed with the Income tax authorities.

The Company has undertaken necessary steps to comply with the regulations. The management is of the opinion that the domestic transactions are at arm''s length, and hence the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

8. Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard (AS) -17 on Segment Reporting as notified under the Companies (Accounting Standard) Rules, 2006.

9. Consequent to non-receipt of necessary approval, the provision for Managerial Remuneration for FY 2014 - 15 amounting to Rs. 587 lakhs and FY 2015 - 16 provided till September, 2015 amounting to Rs. 316 lakhs has been reversed in the quarter ended 31st December, 2015 and credited to Employees benefits expenses.

10. The company has converted unsecured loan of Rs 4,869 lakhs and interest of Rs 1,992 lakhs on November 7,2015 in to Zero Coupon, Rupee denominated, Unrated, unlisted, secured, Non Convertible Debentures of Rs 1,00,000 /- each

11. The company has not performed CSR activities as mentioned in Section 135 read with companies ( Corporate Social responsibility )Rules 2014(CSR rules) and Notification and circulars issued by the ministry during the financial year as the company is not within the criteria of'' Qualifying company''.

12. During the current year the company has redeemed preference shares from one of the subsidiary " GMP Technical Solutions Pvt Ltd" amounting to Rs. 150 lakhs.

13. The Company had issued equity shares of face value of Rs. 10 each at a price of Rs. 15 per share (including premium of Rs. 5 pershare) amounting to '' 10,000 lakhs to the existing shareholders of the Company on rights basis in the ratio of 14 equity shares for every 19 shares held by equity shareholders under Chapter IV of the SEBI ICDR Regulations and provisions of all other applicable laws and regulations. As at31 March, 2016, an amount of'' 1021 lakhs (31 March, 2015'' Nil) is pending utilization in future periods . Accordingly, the unutilized amount has been invested in fixed deposits with banks.

14. During the financial year the company has sold stake in one of its associate Ascent Hotels Private Limited for a consideration of Rs. 30,42,01,680/- (6669492 equity shares of Rs.10/- each fully paid and share application money Rs. 37,500,000).

15. During the financial year the Company has invested an amount of Rs. 30,42,01,680/- (Face Value of Rs 10 each) in Optionally Convertible Redeemable Debentures of Ascent Hotels Private Limited.

16. Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/disclosure

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Mar 31, 2015

I) In respect of claim against the Company amounting to Rs.360,00,00,000/- (Previous year Rs 360,00,00,000/-) by a party who was originally claiming interest in a property, no provision has been considered necessary by the Management in view of the legal opinion that the said claim is not tenable on various grounds.

ii) Two creditors of the Company has filed a civil suit claiming of Rs 88,28,380/- (Previous year Rs. 88,28,380/-) and 12,38,244/-(Previous year- nil) respectively, as amount due to them, which claims the Company is disputing.

iii) Short Levy of Stamp Duty due to misclassification of conveyance deed as development agreement amounting to Rs 8,67,370/- (Previous year Rs. 8,67,370/-) with Joint District Registrar & Collector of Stamps , Pune.

iv) One of the creditors of the Company has filed a winding up petition for nonpayment of Rs. Nil (Previous year Rs. 350,134/-) (including interest) in respect of material supplied by the said party, which claim the Company is disputing. In the current year winding up petition was disposed off.

a) In respect of a development project, as per the terms of land purchase agreement with a land vendor, an additional amount equivalent to 40% of sale proceeds will required to be paid in the event the FSI availed is in excess of 580000 Sq ft. Since such event has not occurred till the date of balance sheet, no provision is required for this additional cost.

b) The levy of Maharashtra Value Added Tax (MVAT) in respect of Real Estate Development sales has been subject to considerable legislative amendments, litigation and administrative action. During the pendency of special leave petition before the Hon'ble Supreme Court against the earlier Hon'ble Mumbai High Court decision, a decision has been pronounced by the Hon'ble Mumbai High Court and the matter has not reached finality. The Industry, accounting and legal fraternity is examining the implications of the decisions and the way the liability will be worked out under various options provided. In view of such uncertainties, the management has been advised that in the present scenario it is difficult to correctly determine MVAT liability payable in respect of real estate development sales executed during the period 20th June, 2006 to 31st March, 2010. The Company is currently in process of ascertaining the exact applicability of these pronouncements, contractual ability to collect MVAT from past customers and the mechanism of collection of MVAT in respect of real estate development sales executed during the period 20th June, 2006 to 31st March, 2010.

1. Disclosure of particulars of significant leases as required by Accounting Standard 19 The Companies significant leasing arrangements are in respect of operating leases for commercial and residential premises.

2. Disclosure of related party transactions as required by Accounting Standard 18

I Names of related parties

1. Subsidiaries

- Marvel Housing Private Limited

- Grey Stone Premises Private Limited

- Vascon Dwellings Private Limited

- IT CITI Info Park Private Limited

- Caspia Hotels Private Limited (Upto May 28,2014)

- Windflower Properties Private Limited

- GMP Technical Solution Private Limited

- Floriana Properties Private Limited

- Vascon Pricol Infrastructure Limited

- Vascon Renaissance EPC Limited Liability Partnership

- Almet Corporation Limited

- Marathawada Realtors Private Limited

- Just Homes (India) Private Limited

- GMP Technical Solutions Middle East (FZE)

2. Joint Ventures

- Weikfield IT CITI Infopark ( Upto October 1,2014)

- Phoenix Ventures

- Zenith Ventures

- Zircon Ventures

- Just Homes (AOP)

- Cosmos Premises Private Limited

- Marigold Premises Private Limited (Up to March 31,2014)

- Ajanta Enterprises

- Vascon Qatar WLL

3. Associates

- Angelica Properties Private Limited

- Mumbai Estate Private Limited

4. Key Management Personnel

- Mr. R. Vasudevan

- Dr Santosh Sundararajan

- Mr. D.Santhanam (Wef 01/04/2014)

- Mr.M.Krishnamurthi (Wef 01/04/2014)

5. Relatives of Key Management Personnel

- Mrs. Lalitha Vasudevan

- Ms. Soumya Vasudevan

- Mrs. Thangam Moorthy

- Mrs. Lalitha Sundararajan

- Mr. Siddarth Vasudevan

- Ms Shilpa Shivram

- Ms. Sailaxmi Santhanam Mudaliar

- Mrs Mathangi Krishnamuthy

3. Establishments where in which individuals in serial number (4), (5) and (6) exercise significant Influence

- Flora Facilities Private Limited (Formerly known as Flora Premises Private Limited)

- Vastech Consultants Private Limited - Vastech consultants and engineers LLP

- Vatsalya Enterprises Private Limited

- Bellflower Premises Private Limited

- Cherry Construction Private Limited

- Stresstech Engineers Pvt Ltd.

- Sunflower Health Services Private Limited

- Syringa Engineers Private Limited ( Formerly known as Syringa Properties Private Limited)

- Vascon Infrastructure Limited

- Venus Ventures

4. The company enters into "domestic transactions" with specified parties that are subject to the Transfer Pricing regulations under the Income Tax Act, 1961 ('regulation'). The pricing of such domestic transactions will need to comply with Arm's length principle under the regulations. These regulations, inter alia, also required the maintenance of prescribed documents and information including furnishing a report from an accountant which is to be filed with the Income tax authorities.

The Company has undertaken necessary steps to comply with the regulations. The management is of the opinion that the domestic transactions are at arm's length, and hence the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that

5. Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard (AS) -17 on Segment Reporting as notified under the Companies (Accounting Standard) Rules, 2006.

6. Effective 1st April, 2014, the Company has revised the useful life of fixed assets based on schedule II of the Companies Act, 2013 ("the Act") except Plant & Machinery for the purpose of provision of depreciation. Useful life of Plant & Machinery has been revised to 15 years based on the Chartered Engineer's evaluation. Accordingly, the carrying amount of the fixed assets as on 1st April, 2014 has been depreciated over the remaining revised useful life. Consequently, the depreciation charge for the year ended 31st March, 2015 is higher by Rs.210.73 lakhs and loss is higher to that effect.

Further, an amount of Rs.32.87 lakhs representing the carrying amount for assets with useful life as nil has been adjusted against the opening balance for retained earnings i.e balance in the statement of profit & loss as per permuted under note 7 (B) to part C of schedule II of Companies Act, 2013.

7. The Company has incurred losses of approximately Rs. 14,469 lakhs during the year ended March 31, 2015 and has continued incurring losses since March, 2013. Further, the Company has incurred cash losses during the year and previous year and there are delays in payment of statutory dues. Also considering deficit in the Statement of Profit and Loss as at the yearend, 15% of the debenture amounts repayable during the year ending March 31, 2016 has not been maintained in one or more methods as prescribed under the Companies (Share Capital and Debenture) Rules, 2014.

However, the financial statements have been prepared on a going concern basis in view of the financial support from some of its shareholders and the future business / growth plans of the Company. The Company has plans to augment its resources by going for rights issue of about Rs. 10,000 lakhs and has got the requisite approval from SEBI and to sale certain noncore assets. The main object of the issue is to reduce debt and complete certain projects. These efforts would result in improving cash flow, strengthen the operations of the Company and reduce the interest burden.

8. The Company has accrued managerial remuneration to managing director amounting to Rs. 620.53 lakhs for the year ended March 31, 2015 in terms of shareholders resolution, which is in excess of limits prescribed in Schedule V of the Companies Act, 2013. The Company has made necessary application to the Central Government for its approval, which is pending.

9. The Company has given loans amounting to Rs. 674.28 lakhs to wholly owned subsidiary company. This subsidiary has accumulated losses and its net worth has been fully eroded and incurred a net loss during the current year and previous year. The repayment of this advances from subsidiary is dependent upon receipt of advance paid to third party for which claim is made by the subsidiary. In the opinion of the management they said advance is fully recoverable, and hence no provision is made as on March 31, 2015.

11. During the year, the Company has converted loan given to one of the subsidiary GMP Technical Solutions Private Limited into Preference Share. The subsidiary is in the process of allotment of preference shares and is pending allotment as on March 31, 2015.

12. During the year, the Company has reduced its stake in one of the associate Company in the scheme of capital reduction. The Company has debited the loss of Rs 223.25 lakhs to the Statement of Profit and Loss as an exceptional item.

13.During the current year, the Company had terminated one of the joint ventures, accordingly all the assets and liabilities of the joint venture are merged with the Company.

14. The previous year's figures were audited by a firm of chartered Accountants other than Deloitte Haskins & Sells LLP on which the existing auditors have relied upon. Previous year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/disclosure.

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Mar 31, 2014

The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/- per Share. Each holder of the equity share, as reflected in the records of the Company as of the date of the shareholder meeting, is entitled to one vote per share.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after discharge of liabilities and distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

The Company vide postal ballat dated 4-3-2014 passed resolution for increase in the authorised capital from Rs.100 crores to Rs.150 crores and has filed form 23 with ROC. The corresponding fees payable on increase in authorised capital is pending as on date.

2 Share application money pending allotment

Company has granted stock options to certain employees pursuant to ESOP 2007 scheme. During the year employees have exercised option to purchase 2,400 (2,400) equity shares of Rs. 10/- each. Allotment of shares will be done in the meeting of Board of Directors of the Company and pursuant to the amendment in ESOP scheme the lock in period of three years from the date of allotment of shares is no more applicable.

Stock options granted to the employees under the stock options scheme are accounted as per the accounting treatment prescribed by ICAI. Accordingly, the excess of fair value over the exercise price of the options is recognised as deferred employee compensation and is charged to the profit and loss account on straight line basis over the vesting period of the options. The amortised portion of the cost is shown under reserves and surplus. Amortised cost proportionate to options exercised will be transferred to share premium account on allotment of shares.

On 18th February 2014,The company had issued 7,300, 18.25% secured non convertable and Non-Transferable debentures of face Value Rs 1,00,000/- each at par against the same we have received subscription through private placement to the extent of 65,00,00,000/-.

Interest Payable is on 15th of each month,the debentures are redeemable from 15th September 2014 to 15th February 2017,This debenture are not listed on stock exchange. The company has not yet created debenture redemption reserve.

Employee benefit plans Gratuity:

In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering certain categories of employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC) (''Insurer''). Under this plan, the settlement obligation remains with the Company, although the Insurer administers the plan and determines the contribution premium required to be paid by the Company.

As per the Agreements, the vendor is entitled to an agreed percentage of sale proceeds of the project as a consideration. No amount is payable if there is no sale. Hence there is no loss to the Company. Since the cost of acquisition of development rights is not ascertainable, the same is not accounted.

In respect of a development project, as per the terms of land purchase agreement with a land vendor, an additional amount equivalent to 40% of sale proceeds will required to be paid in the event the FSI availed is in excess of 580000 Sq ft. Since such event has not occurred till the date of balance sheet, no provision is required for this additional cost.

a) Reversals of employee stock option compensation

During the year under review, the unexercised outstanding Employee Stock Options aggregating to 2250 (1,64,750) Equity Shares relating to those employees who are no longer associated with the Company have been forfeited and accordingly, the provision for compensation amounting to Rs. 84,173/ (Rs. 61,63,298/-) in respect of the same has been written back as exceptional item.

3 Employee stock option plans (ESOP)

The Company has provided share based payment schemes to its employee. During the period ended March 31,2014, the ''ESOS - 2007'' scheme was lapsed on March 31,2014 and consequently no further shares will be issued to employee under this scheme:

(Amount in Rupees) March 31, 2014 March 31, 2013

4 Contingent liabilities

a) Disputed demands for Income Tax 64,460,304 132,574,282

b) Disputed demands for Service Tax 16,339,031 38,971,190

c) Disputed demands for Value Added Tax 3,057,591 3,057,591

d) Performance and financial guarantees given by the 1.466.835.949 1.476.669.527 Banks on behalf of the Company

e) Corporate gurantees given for other companies / 2,061,200,000 2,061,200,000 entities and mobilisation

f) Claims against the Company not acknowledged as debts 3,609,695,750 3,600,000,000

- In respect of claim against the Company amounting to Rs.360,00,00,000/-(Rs 360,00,00,000/-) by a party who was originally claiming interest in a property, no provision has been considered necessary by the Management in view of the legal opinion that the said claim is not tenable on various grounds.

- One of our creditor has filed a civil suit claiming of Rs 88,28,380/- as amount due to him, which claim the company is disputing. - Short Levy of Stamp Duty due to misclassification of conveyance deed as development agreement amounting to Rs 8,67,370/- with Joint District Registrar & Collector of Stamps , Pune

5 Disclosure of particulars of significant leases as required by Accounting Standard 19

The Companys significant leasing arrangements are in respect of operating leases for commercial and residential premises The Company leases / sub-leases office spaces under cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessor and lessee.

a) Lease income from operating leases is recognised on a straight-line basis over the period of lease.

b) Lease expenses from operating leases is recognised on a straight-line basis over the period of lease.

The particulars of significant leases under operating leases are as under

The Company is obligated under non-cancellable leases / sub-leases for office space that arerenewable on a periodic basis at the option of both the lessor and lessee.

Future minimum lease expenses under non-cancellable operating leases

40 Disclosure of related party transactions as required by Accounting Standard 18

I Names of related parties

1. Subsidiaries

- Marvel Housing Private Limited

- Grey Stone Premises Private Limited

- Vascon Dwellings Private Limited

- IT CITi Info Park Private Limited

- Caspia Hotels Private Limited

- Windflower Properties Private Limited

- GMP Technical Solution Private Limited

- Floriana Properties Private Limited

- Vascon Pricol Infrastructure Limited

- Vascon Renaissance EPC Limited Liability Partnership

- Almet Corporation Limited

- Marathawada Realtors Private Limited

- Just Homes (India) Private Limited

- GMP Technical Solutions Middle East (FZE)

2. Joint Ventures

- WeikfieldIT CITI Infopark

- Phoenix Ventures

- Zenith Ventures

- Zircon Ventures

- Marigold Premises Private Limited (Upto 30th September 2013)

- Just Homes (AOP)

- Cosmos Premises Private Limited

- Ajanta Enterprises

3. Associates

- Angelica Properties Private Limited

- Mumbai Estate Private Limited

4. Key Management Personnel

- Mr. R. Vasudevan

- Dr Santosh Sunderrajan

5. Relatives of Key Management Personnel

- Mrs. Lalitha Vasudevan

- Mrs. Thangam Moorthy

- Mrs. Lalitha Sundarrajan

- Mr. Siddarth Vasudevan

- Ms. Soumya Vasudevan

6. Individuals having significant influence over the Company

7. Establishments where which individuals in serial number (4), (5) and (6) exercise significant Influence

- Flora Facilities Private Limited (Formerly known as Flora Premises Private Limited)

- Vastech Consultants Private Limited

- Vatsalya Enterprises Private Limited

- Bellflower Premises Private Limited

- Cherry Construction Private Limited

- Stresstech Engineers Pvt Ltd.

- Sunflower Health Services Private Limited

- Syringa Engineers Private Limited

(Formerly known as Syringa Properties Private Limited)

- Vascon Infrastructure Limited

8. Venturer in respect of which Company is associate or joint venture

- There are no parties under this category.

9 Based on the guiding principles enunciated in paragraph 4 of Accounting Standard - 17 (AS - 17), ''Segment Reporting'', if a single financial report contains both consolidated financial statements and the separate financial statements of the parent, disclosure required by AS 17 is given in consolidated financial statements.

10 Particulars of the Joint Ventures undertaken by the Company as required in AS 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the annexed statement.

11 Other additional information required by schedule VI of the Companies Act, 1956 are not applicable to the company for the year.

12 Corresponding figures for previous periods presented have been regrouped, where necessary, to conform to the current year classification.

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Mar 31, 2013

1. Contingent liabilities

a) Disputed demands for Income Tax 132,574,282 64,460,304

b) Disputed demands for Service Tax 38,971,190 24,153,822

c) Disputed demands for Value Added Tax 3,057,591 2,780,140

d) Performance and fnancial guarantees given by the Banks on behalf of the Company 1,476,669,527 1,648,316,752

2. Disclosure of related party transactions as required by Accounting Standard 18 Names of related parties

1. Subsidiaries

- Marvel Housing Private Limited

- Grey Stone Premises Private Limited

- Vascon Dwellings Private Limited

- IT Citi Info Park Private Limited

- Caspia Hotels Private Limited

- Windfower Properties Private Limited

- GMP Technical Solutions Private Limited

- Floriana Properties Private Limited

- Vascon Pricol Infrastructures Limited

- Vascon Renaissance EPC Limited Liability Partnership

- Almet Corpotation Limited

- Marathawada Realtors Private Limited

2. Joint Ventures

- Weikfeld IT Citi Infopark

- Phoenix Ventures

- Zenith Ventures

- Zircon Ventures

- Marigold Premises Private Limited

- Just Homes (India) Private Limited

- Cosmos Premises Private Limited

- Ajanta Enterprises

3. Associates

- Angelica Properties Private Limited

- Mumbai Estate Private Limited

4. Key Management Personnel

- Mr. R. Vasudevan

- Dr Santosh Sunderrajan

5. Relatives of Key Management Personnel

- Mrs. Lalitha Vasudevan

- Mrs. Thangam Moorthy

- Mrs. Lalitha Sundarrajan

- Mr. Siddarth Vasudevan

- Ms. Soumya Vasudevan

6. Individuals having signifcant infuence over the Company

7. Establishments where which individuals in serial number (4), (5) and (6) exercise signifcant Infuence

- Flora Facililites Private Limited (Formally known as Flora Premises Private Limited)

- Vastech Consultants Private Limited

- Vatsalya Enterprises Private Limited

- Bellfower Premises Private Limited

- Cherry Construction Private Limited

- Sunfower Health Services Private Limited (Formally known as Sunfower Premises Private Limited)

- Syringa Engineers Private Limited ( Formally known as Syringa Properties Private Limited)

- Vascon Infrastructure Limited

3. Sales includes an amount of Rs. 20,14,52,104/- (Rs. Nil/-) being material supplied at a site during the earlier period. Since due to the temporary suspension no work was performed during that period, the same was carried as stock at site and no revenue in that respect was recognized in accordance with applicable Accounting Standard in spite of advance payment been received against the same in terms of the Contract. However, during the quarter under review, the materials for which payments have been made by the customer have been recognized as revenue since the stock ceased to be in control of the Company.

4. Based on the guiding principles enunciated in paragraph 4 of Accounting Standard - 17 (AS - 17), ‘Segment Reporting'', if a single fnancial report contains both consolidated fnancial statements and the separate fnancial statements of the parent, disclosure required by AS 17 is given in consolidated fnancial statements.

5. Particulars of the Joint Ventures undertaken by the Company as required in AS 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the annexed statement.

6. Other additional information required by schedule VI of the Companies Act, 1956 are not applicable to the company for the year.

7. Corresponding fgures for previous periods presented have been regrouped, where necessary, to conform to the current year classifcation.

8. The Company Overview

Vascon Engineers Limited (Company) was incorporated on January 1, 1986. The Company is engaged in the business of Engineering, Procurement and Construction services (EPC) and Real Estate Development directly or indirectly through its Subsidiaries, Joint Ventures and Associates. The shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange.

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Mar 31, 2012

1. The Company Overview

Vascon Engineers Limited (Company) was incorporated on 1st January, 1986. The Company is engaged in the business of Engineering, Procurement and Construction services (EPC) and Real Estate Development directly or indirectly through its Subsidiaries, Joint Ventures and Associates. The shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange.

Amount in Rupees

Particulars March 31, 2012 March 31, 2011

2 Contingent liabilities

a) Disputed demands for Income Tax 132,574.282 61,595,900

b) Disputed demands for Service Tax 24,153,822 18,677,086

c) Disputed demands for Value Added Tax 2,780,140 -

d) Performance and financial guarantees given by the

Banks on behalf of the Company 1,648,316,752 2,442,487,374

e) Corporate guarantees given for other companies /entities 1,946,300,000 891,300,000

f) Claims against the Company not acknowledged as debts 3,600,000,000 6,087,783,351

i) The assignee of a development rights relating to a property had filed an arbitration proceedings making a claim of Rs. 248,77,83,351/- plus interest . During the year under review, the parties were negotiating Consent Terms which have been finally executed after the balance sheet date. The settlement accepts the finality of all the actions taken and no amount is payable by the Company to the claimants. The said consent terms are in the process of being filed with the Arbitral Tribunal for its order. Since the parties to the dispute have agreed to the settlement, the Company has been legally advised that, pending final order of the Arbitral Tribunal, no claim or contingency exists as of now.

ii) In respect of claim against the Company amounting to Rs.360,00,00,000/- (Rs 360,00,00,000/-) by a party who was originally claiming interest in a property, no provision has been considered necessary by the Management in view of the legal opinion that the said claim is not tenable on various grounds.

3 Disclosure of particulars of significant leases as required by Accounting Standard 19

The Company's significant leasing arrangements are in respect of operating leases for commercial and residential premises.

The Company leases / sub-leases office spaces under non-cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessor and lessee.

a) Lease income from operating leases is recognised on a straight-line basis over the period of lease.

4 Disclosure of related party transactions as required by Accounting Standard 18

Names of related parties

1. Subsidiaries

- Marvel Housing Private Limited

- Grey Stone Premises Private Limited

- Vascon Dwellings Private Limited

- IT CITI Info Park Private Limited

- Caspia Hotels Private Limited

- Windflower Properties Private Limited

- GMP Technical Solution Private Limited

- Floriana Properties Private Limited

- Vascon Pricol Infrastructure Limited

- Vascon Renaissance EPC Limited Liability Partnership

- Almet Corporation Limited

- Marathwada Realtors Private Limited

2. Joint Ventures

- Weikfield IT CITI Infopark

- Phoenix Ventures

- Zenith Ventures

- Zircon Ventures

- Marigold Premises Private Limited

6. Individuals having significant influence over the Company

7. Establishments where individuals in serial number (4), (5) and (6) exercise significant Influence

- Flora Facilities Private Limited (Formerly known as Flora Premises Private Limited)

- Vastech Consultants Private Limited

- Vatsalya Enterprises Private Limited

- Bellflower Premises Private Limited

- Cherry Construction Private Limited

- Sunflower Premises Private Limited

- Syringa Engineers Private Limited (Formerly known as Syringa Properties Private Limited)

- Vascon Infrastructure Limited

5 Based on the guiding principles enunciated in paragraph 4 of Accounting Standard - 17 (AS - 17), 'Segment Reporting', if a single financial report contains both consolidated financial statements and the separate financial statements of the parent, disclosure required by AS 17 is given in consolidated financial statements.

6 During the course of audit of a project, the technical audit team of the Company detected certain irregularities at one of the sites where Company's work is going on since the year 2007. While preparing escalation bills, certain cost overruns relating to technical matters under investigation were checked and it was found that the same portion could not be charged. With some further investigations, the Company noticed that there was a significant deviation with actual cost being higher than the budgeted cost. It was detected that there was a criminal breach of trust by some staff members at different levels including a vice president of the Company, together acting in concert against the interest of the Company over a period of 5 years. The amount involved is estimated at about Rs. 34,82,00,000 (Rs.Nil/-) on account of deviation aforesaid. The matter is under investigation. As the impact of the same has already been considered in the accounts in the relevant years, the management is of the opinion that no further provision in this regard is necessary.

7 Particulars of the Joint Ventures undertaken by the Company as required in AS 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the annexed statement.

8 Other additional information required by schedule VI of the Companies Act, 1956 are not applicable to the Company for the year.

9 Corresponding figures for previous periods presented have been regrouped, where necessary, to conform to the current year classification.

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Mar 31, 2010

(Figures in bracket pertains to previous year)

1) Background

Vascon Engineers Limited (Company) was incorporated on 1st January, 1986. The Company is engaged in the business of Engineering, Procurement and Construction services (EPC) and Real Estate Development directly or indirectly through its Subsidiaries, Joint Ventures and Associates.

2 Employee Stock Option Scheme

Stock options granted to the employees

under the stock options scheme are accounted as per the accounting treatment prescribed by ICAI. Accordingly, the excess of fair value over the exercise price of the options is recognised as deferred employee compensation and is charged to the profit and loss account on straight line basis over the vesting period of the options. The amortised portion of the cost is shown under reserves and surplus.

2.1 Provisions

A provision is recognised 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 except the provision required under AS - 15 "Employee Benefits", 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.

3. OTHER NOTES

3.1 Managerial Remuneration

(c) Employees compensation expenses relating to issue of shares under Employee Stock option scheme is not required to be included in managerial remuneration for the purpose of Section 349 of the Companies Act, 1956.

3.2 Contingent Liabilities:

The Company has not considered necessary to make provision in respect of:

(a) Income tax demand of Rs. 67,70,000/- (Rs. Nil) and Service Tax demand of Rs. 1,81,33,336/- (Rs. 99,61,823/-) not accepted by the Company as the same have been disputed by the Company in Appeal before higher authorities.

(b) Securities/guarantees provided to the bankers:



Particulars Year Ended March 31,

2010 2009

(i) for other companies Rs. Rs. 5,00,00,000

(ii) for performance Rs. 1,11,05,18,289 Rs. 32,16,71,193

(c) Corporate Guarantee given for other Companies Rs. 30,00,00,000 Rs. 20,00,00,000

(d) Claims against the Company not acknowledgeed Rs. 2,48,77,83,351 Rs.1,95,47,10,453 as debts (Refer Note 3.10 below) (e) Uncalled liabliity on Rs. 9,00,000 Rs. 9,00,000 shares partly paid

No dues were outstanding for more than 30 days from the date they were payable to the above parties.

3.4 Provision for Contingency

The Company had entered into a development agreement with a party in March 2007 pursuant to which a property which the Company had undertaken to develop with a vendor was assigned to the party for being developed on certain terms and conditions contained in the said development agreement. In the Companys account for the year ended 31st March 2007 since the property undertaken by the Company was accounted as purchases and the subsequent transaction entered into with the party was recognized as sales; a profit of Rs.20,00,00,000/- on this transaction was taken as surplus in the profit and loss account. During earlier year a member of a predecessor in title of the company trespassed and illegally entered into possession of the subject property. Consequently the party has sought to annul the entire arrangement. Arbitration proceedings were instituted during the earlier year. The proceedings are pending. The companys stand is that the members action is illegal since it has the effect of making the entire transaction a nullity.

However, without prejudice to the Companys rights and privilege arising under the agreements, by way of prudence, profit on the transaction recognized in the accounts for the year ended 31 st March 2007 is recognized as provision for contingency and included in the provisions in the accounts for the year ended 31 st March 2009. Further no provision is considered necessary in respect of claim of Rs. 248,77,83,351 /- plus interest (Previous Year Rs. 195,47,10,453/-) on the company, as in the managements opinion the said claim in not tenable. In any event, as per advice received by the Company the liability if any, would be on the member precedent in title, and not on the Company in view of the members illegal action.

Sundry Debtors includes an amount of Rs. 56,50,00,000/- (Rs. 56,50,00,000/-) receivable from the party for which provision has not been considered necessary in view of the corresponding matching liability payable to the vendor and the contingency provision.

3.5 Capital

a) During the year, Company has completed its Initial Public Offer (IPO) and consequently, the Company has allotted 1,08,00,000 equity shares of Rs. 10/- each at a price of Rs. 165/- per share on February 8, 2010. Equity shares of the Company were listed for trading on National Stock Exchange and Bombay Stock Exchange on February 15,2010.

b) The Company had issued 33,00,677 Unsecured Debentures of Rs. 152/- each on July 21,2008 for a period of 5 years from the date of allotment. Debenture holders has an option to convert the debentures in to equity shares of the Company in the ratio of one equity share for one debenture held which can be exercised after a period of 18 months from the date of allotment. Coupon rate of debentures was 15% p.a. payable half yearly on 30th June and 31 st December every year.

The debenture holders have exercised the option to convert the Unsecured Convertible Debentures to Equity Shares and accordingly the same are converted to Equity Shares in the ratio of 1:1 on 27.08.2009.

3.6 In respect of a development project, as per the terms of land purchase agreement with a land vendor, an additional amount equivalent to 40% of sale proceeds will required to be paid in the event the FSI availed is in excess of 580000 Sq ft. Since such event has not occurred till the date of balance sheet, no provision is required for this additional cost.

3.7 Related Party disclosures have been set out in a separate statement annexed to this schedule. The related parties as defined by AS 18 Related Party Disclosure issued by The ICAI, in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key managerial persons taken on record by the Board.

3.8 Particulars of the Contract Revenue as required in AS 7 "Accounting for Construction Contracts" issued by the ICAI, in respect of which disclosures have been made are given in the Annexed Statement.

3.9 Particulars of the Joint Ventures undertaken by the Company as required in AS 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the Annexed Statement.

3.10 The Loans & Advances include an amount of Rs. 475752284/- (Rs.4328 -81579/-) paid as advances/deposits to the vendors while acquiring development rights for various projects. As per the Agreements, the vendor is entitled to an agreed percentage of sale proceeds of the project as a consideration. No amount is Payable if there is no sale. Hence there is no loss to the Company. Since the cost of acquisition of development rights is not ascertainable, the same is not accounted.

3.11 The companys significant leasing arrangements are in respect of operating leases for Commercial premises. The particulars of such leases are given in the Annexed Statement.

3.12 The particulars of investments made/sold during the year are given in the Annexed Statement.

3.13 The particulars of employee benefits as required under AS 15 "Accounting for Employee Benefits" issued by the ICAI are given in the Annexed Statement.

3.14 a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances, Rs. 34633169/- (Rs. 5354000/-)

3.15 The Company has 9 subsidiaries. During the year Vascon Pricol Infrastructure Limited, subsidiary of the Company has acquired 100% stake in Caspia Hotels Private Limited formerly known as Compress Infocom Private Limited and by which the same has become subsidiary of the Company. The Company has sold its stake in Rose Premises Private Limited, one of the wholly owned subsidiary and accordingly the said subsidiary has become a joint venture instead of a subsidiary.

The Ministry of Affairs vide its letter No. 47/161/2010-CL-lll dt. 15th March 2010 granted approval to the Company for not attaching copies of the Balance Sheet and Profit & Loss Account, Directors Report and Auditors Report of the subsidiary companies for the financial year 2009 - 2010. As per condition no. (i) of the above said letter Consolidated Financial Statements duly audited by the Statutory Auditors is enclosed with the statement of summarised financial of all the subsidiaries.

3.16 Other additional information required by schedule VI part II of the Companies Act, 1956 are not applicable to the com pany for the year.

3.17 Balance Sheet abstract and Companys General Business Profile, in form prescribed in part III of Scheduled VI of the Companies Act 1956, as amended by notification GSR No. 388(E) (F.No. 3/24/94-CLB) Dated 15/05/95 is attached herewith as Annexure.

3.18 Correspoding figures of the previous year have been regourped, renamed rearranged wherever necessary.

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Mar 31, 2009

1 Contingent Liabilities:

(a) It has not been considered necessary to make a provision in respect of Service Tax demand not accepted by the Company for Rs.99,61,823/-. (Rs. Nil/-) as the same has been disputed by the Company in Appeal.

(b) Securities/guarantees provided to the bankers:

(i) forothercompanies Rs. Nil Rs. Nil

(ii)for performance Rs. 371,671,193 Rs. 388,786,495

(c) Corporate Guarantee given for other companies Rs. 250,000,000 Rs. Nil

(d) Claims againstthe Company Rs 1,954,710,453 Rs. Nil not acknowledged as debts (Refer Note 12 below)

(e) Uncalled liability on shares partly paid Rs - Rs. 110,556,680

2 Prior Period Adjustments

The profit for the year includes net (income)/expense of Rs. 22,08,288/- Previous year (Rs 79,40,324/-)) in respect of prior years.

3 Installments in respect of Term Loan due in next 12 months Rs. 4,89,99,264/- (Rs.3,39,66,229/-).

4 The quantitative information in respect of trading activity of the company is given in annexed statement.

5 Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the statusofthe suppliers as defined under the "Micro, Small and Medium Enterprises DevelopmentAct,2006". Amount overdue as on 31st March, 2009, to Micro, Small and Medium Enterprises on account of principal amount together with interest, aggregate to Rs. Nil (Rs. Nil).

6 Provision for Contingency:

The Company had entered into a development agreement with a party in March 2007 pursuant to which a property which the Company had undertaken to develop with a vendor was assigned to the party for being developed on certain terms and conditions contained in the said development agreement. In the Companys account for the year ended 31 st March 2007 since the property undertaken by the Company was accounted as purchases and the subsequent transaction entered into with the party was recognized as sales; a profit of Rs.20 cr on this transaction was taken as surplus in the profit and loss account. During the year a member of a predecessor in title of the company trespassed and illegally entered into possession of the subject property. Consequently the party has sought to annul the entire arrangement. Arbitration proceedings were instituted during the year. The proceedings are pending. The companys stand is that the members action is illegal since it has the effect of making the entire transaction a nullity.

However, without prejudice to the Companys rights and privilege arising under the agreements, by way of prudence, profit on the transaction recognized in the accounts for the year ended 31st March 2007 is recognized as provision for contingency and included in the provisions in the current years account. Further no provision is considered necessary in respect of claim of Rs. 195.47 cr on the company, as in the managements opinion the said claim in not tenable. In any event, as per advice received by the Company the liability if any, would be on the member precedent in title, and not on the Company in view of the members illegal action.

Sundry Debtors includes an amount of Rs. 56.50 cr receivable from the party for which provision has not been considered necessary in view of the corresponding matching liability payable to the vendor and the contingency provision.

7 The Company has issued 33,00,677 Unsecured Debentures of Rs. 152/- each for a period of 5 years from the date of allotment. Option to convert the debentures in to equity shares of the Company in the ratio of one equity share for one debenture held can be exercised after a period of 18 months from the date of allotment.Coupon rate of debentures is 15% p.a. payable half yearly on 30th Juneand31stDecembereveryyear.

8 As per the terms of an agreement with a land vendor, an additional amount equivalent to 40% of sale proceeds will required to be paid in the event the FSI availed is in excess of 580000 Sq ft. Since such event has not occurred till the date of balance sheet,no provision is required for this additional cost.

9 Related Party disclosures have been set out in a separate statement annexed to this schedule. The related parties as defined by Accounting Standard 18 Related Party Disclosure issued by The Institute of Chartered Accountants of India, in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key managerial persons taken on record by the Board.

10 Particulars of the Contract Revenue as required in Accounting Standard 7 "Accounting for Construction Contracts" issued by the Institute of Chartered Accountants of India, in respect of which disclosures have been made are given in the Annexed Statement.

11 Particulars of the Joint Ventures undertaken by the Company as required in Accounting Standard 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the Annexed Statement.

12 The Loans & Advances includes an amount of Rs. 43,28,81,579/- (Rs.55,22,33,051/-) paid as advances/deposits to the vendors by the Company for acquiring land for its various projects under Single Joint Venture agreements. As per such Agreements the company has to work out the consideration for acquisition of land on the basis of sale proceeds at the time of receipts of the such proceeds of the developed area, in other words, no amount is payable if there is no sale. There is no event of any loss by the Company or by the vendor since as such the liability is not presently quantifiable.

13 The companys significant leasing arrangements are in respect of operating leases for Commercial premises.The particulars of such leases are given in the Annexed Statement.

14 The particulars of investments made/sold during the yearare given in the Annexed Statement.

15 The particulars of employee benefits as required under Accounting Standard 15 "Accounting for Employee Benefits" are given in theAnnexed Statement.

16 Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances , Rs.5,35,40,000/- (previous year Rs. 1,49,90,973/-)

As per the arrangement with a customer, the assets provided by it for the relevant contract will be acquired by the Company at 50% of the cost at the end of the project. The estimated amount of such commitment at the year end is Rs.3,55,67,814/- (Rs.2,70,00,000/-)

17 The Company has 9 subsidiaries. During the year Company has acquired additional 30% shares of Floriana Properties Private Limited and by which the same has become wholly owned subsidiary of the Company.

The Ministry of Affairs vide its letter No. 47/113/2009-CL-lll dt. 20th April 2009 granted approval to the Company for not attaching copies of the Balance Sheet and Profits Loss Account, Directors Report and Auditors Report of the subsidiary companies for the financial year 2008 - 2009. As per condition no. (i) of the above said letter Consolidated Financial Statements duly audited by the Statutory Auditors is enclosed with the statement of summarised financial of all the subsidiaries.

18 During the year Company has changed the method of valuation of Stock of materials etc from FIFO to Weighted Average. Due to change in method of valuation of stock, stock and profit for the year has increased by Rs. 35,07,008/- and Rs. 23,14,976/- respectively.

19 Other additional information required by schedule VI part II of the Companies Act, 1956 are not applicable to the company for the year.

20 Balance Sheet abstract and Companys General Business Profile, in form prescribed in part III of Scheduled VI of the Companies Act 1956, as amended by notification GSR No. 388(E) (F.No. 3/24/94-CLB) Dated 15/05/95 is attached herewith as Annexure.

21 Corresponding figures of the previous year have been regrouped, renamed or rearranged wherever necessary.

Note : Names of related parties and description of relationship

Sr.No. Particulars Name of the Party

1 Joint Venture Weikfeilds ITCITI Info Park (AOP) Phoenix Ventures Zenith Ventures Zircon Ventures Marigold Premises Pvt Ltd Just Homes (India) Pvt Ltd Viorica Properties Pvt Ltd Cosmos Premises Pvt Ltd

2 Key Management Personnel Mr. R. Vasudevan

3 Relatives of Key Management Personnel Mrs. Lalitha Vasudevan Mr. N. R Moorthy Mrs. Thangam Moorthy Mrs. Lalitha Sundarrajan Mr. Siddarth Vasudevan

4 Associates Angelica Properties Pvt Ltd Syringa Properties Pvt Ltd Mumbai Estate Pvt Ltd Ajanta Enterprises

5 Enterprise where key management personnel and their relatives exercise Iris Propeties Private Limited significant influence One Stop Shop (I) Pvt Ltd Flora Premises Pvt Ltd Vastech Consultants Pvt Ltd Core Fitness Pvt Ltd Cipla Limited

6 Subsidiary Marvel Housing Pvt Ltd Greystone Premises Pvt Ltd Vascon Dwellings Pvt Ltd IT CITI Info Park Pvt Ltd Rose Properties Pvt Ltd Windflower Properties Pvt Ltd Calypso Premises Pvt Ltd Floriana Properties Pvt Ltd Vascon Pricol Infrastructures Ltd.

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Mar 31, 2008

1. OTHER NOTES

(c) Employees compensation expenses relating to issue of shares under Employee Stock Option Scheme is not required to be included in managerial remuneration for the purpose of Section 349 of the Companies Act, 1956.

2 Contingent Liabilities :

(a) It has not been considered necessary to make a provision in respect of Income Tax demand not accepted by the Company for Rs. Nil. (Rs. 67,68,000/-) as the same has already been paid and disputed by the Company in Appeal.

(b) Securities/guarantees provided to the bankers :

(i) for other companies Rs. Nil Rs. Nil

(ii) for performance Rs.388,786,495 Rs. 89,577,268

(c) Corporate Guarantee Rs. Nil Rs. Nil given for other Companies

(d) Claims against the Company Rs. Nil Rs. Nil not acknowledged as debts

(e) Uncalled liability on Rs.110,556,680 Rs. Nil shares partly paid

3 Prior Period Adjustments :

The profit for the year includes net income/(expense) of Rs. 79,40,324/- ((Rs10,32,471/-)) in respect of prior years.

4 Instalments in respect of Term Loan due in next 12 months Rs.3,39,66,229/- (Rs.11,565,571/-)

5 As the company is not a manufacturing company, the clauses 3(ii)(a) and (b) of Part II of Schedule VI of the Companies Act, relating to quantitative information do not apply.

6 The quantitative information in respect of trading activity of the company is given in annexed statement.

7 Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act,2006". Amount overdue as on 31st March, 2008, to Micro, Small and Medium Enterprises on account of principal amount together with interest, aggregate to Rs. Nil (Rs. Nil).

8 Sundry Debtors includes Rs 56,50,00,000/- being amount not yet due for payment in terms of the arrangement with the customer.

9 The Board has approved a scheme for granting stock option to employees (ESOS). As per the said scheme 2,000,000 shares are proposed to be offered to eligible employees. Out of the above 1,983,500 shares are offered and 1,650,000 was accepted by employees during the year.

10 As per the terms of an agreement with a land vendor, an additional amount equivalent to 40% of sale proceeds will required to be paid in the event the FSI availed is in excess of 580000 Sq ft. Since such event has not occurred till the date of balance sheet,no provision is required for this additional cost.

11 Related Party disclosures have been set out in a separate statement annexed to this schedule. The related parties as defined by Accounting Standard 18 ‘Related Party Disclosure’ issued by The Institute of Chartered Accountants of India, in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key managerial persons taken on record by the Board.

12 Particulars of the Contract Revenue as required in Accounting Standard 7 "Accounting for Construction Contracts" issued by the Institute of Chartered Accountants of India, in respect of which disclosures have been made are given in the Annexed Statement.

13 Particulars of the Joint Ventures undertaken by the Company as required in Accounting Standard 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the Annexed Statement.

14 The Loans & Advances includes an amount of Rs. 55,22,33,051/- (Rs. 255,732,610/-) paid as advances/deposits to the vendors by the Company for acquiring land for its various projects under Single Joint Venture Agreements. As per such Agreements the company has to work out the consideration for acquisition of land on the basis of sale proceeds at the time of receipts of the such proceeds of the developed area, in other words, no amount is payable if there is no sale. There is no event of any loss by the Company or by the vendor.

15 The companys significant leasing arrangements are in respect of operating leases for Commercial premises. The particulars of such leases are given in the Annexed Statement.

16 The particulars of investments made/sold during the year are given in the Annexed Statement.

17 The particulars of employee benefits as required under Accounting Standard 15 "Accounting for Employee Benefits" are given in the Annexed Statement.

18 Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances , Rs. 1,49,90,973/- ( previous year Rs. 2,157,686/-)

As per the arrangement with a customer, the assets provided by it for the relevant contract will be acquired by the Company at 50% of the cost at the end of the project. The estimated amount of such commitment at the year end is Rs. 2,70,00,000/- (Rs. Nil)

19. Subsidiary Companies

The companies had 8 subsidiaries at the beginning of the year. During the year company set up / acquired two new subsidiaries which are Greystone Premises Pvt. Ltd. and Vascon Pricol Infrastructures Ltd. The company de-registered one of the its subsidiaries, Cosmos Premises Pvt. Ltd. Following this action, the company has 9 subsidiaries as on 31st March, 2008

The Ministry of company affairs vide its letter No 47 / 102 / 2008 - Cl-III dt 25th March, 2008 granted approval to the company for not attaching copies of the Balance Sheet and Profit and loss Account, Director’s Report and Auditor’s Report of the subsidiary companies for the year 2007-08. However, on requested financial statements duly audited, at its corporate office. A per condition no. (I) above said letter consolidated financial statements duly audited by the Statutory Auditors is enclosed with the statement of summarized financial of all the subsidiaries.

20 Other additional information required by schedule VI part II of the Companies Act, 1956 are not applicable to the company for the year.

21 Balance Sheet abstract and Companys General Business Profile, in form prescribed in part III of Scheduled VI of the Companies Act 1956, as amended by notification GSR No. 388(E) (F.No. 3/24/94-CLB) Dated 15/05/95 is attached herewith as Annexure.

22 Corresponding figures of the previous year have been regrouped, renamed or rearranged wherever necessary.

Note : Names of related parties and description of relationship

Sr.No. Particulars Name of the Party

1 Joint Venture Weikfeilds ITCITI Info Park (AOP) Phoenix Ventures Zenith Ventures Zircon Ventures Marigold Premises Pvt Ltd Just Homes (India) Pvt Ltd Viorica Properties Pvt Ltd Cosmos Premises Pvt Ltd

2 Key Management Personnel Mr. R. Vasudevan

3 Relatives of Key Management Personnel Mrs. Lalitha Vasudevan Mr. N. R Moorthy Mrs. Thangam Moorthy Mrs. Lalitha Sundarrajan Mr. Siddarth Vasudevan

4 Associates Angelica Properties Pvt Ltd Syringa Properties Pvt Ltd Mumbai Estate Pvt Ltd Ajanta Enterprises

5 Enterprise where key management personnel and their relatives exercise Iris Propeties Private Limited significant influence One Stop Shop (I) Pvt Ltd Flora Premises Pvt Ltd Vastech Consultants Pvt Ltd Core Fitness Pvt Ltd Cipla Limited

6 Subsidiary Marvel Housing Pvt Ltd Greystone Premises Pvt Ltd Vascon Dwellings Pvt Ltd IT CITI Info Park Pvt Ltd Rose Properties Pvt Ltd Windflower Properties Pvt Ltd Calypso Premises Pvt Ltd Floriana Properties Pvt Ltd Vascon Pricol Infrastructures Ltd.

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Mar 31, 2007

1 Contingent Liabilities

(a) It has not been considered necessary to make a provision in respect of Income-Tax demands not accepted by company for Rs.6,768,000/- (Rs.6,768,000/-) as the same has already been paid and disputed by the company in appeal.

March 2007 March 2006 Rs. Rs.

(b) Securities/guarantees provided to the bankers :

(i) for other companies 89,577,268 (2,000,000) (ii) for performance Nil (30,895,000)

( c) Corporate Guarantee given for other Companies Nil (60,00,000)

(D) Claims against the Company not acknowledged as debts Nil Nil

2 Unsecured loans include an amount of Rs. Nil due to directors of the Company.

3 Prior Period Adjustments

The profit for the year includes net expense of Rs.1,032,471/- (Rs1,244,785/-) in respect of prior years.

4 The particulars of the Partnership Firms where the Company is a partner as on the year end are as follows: Asset existing on the Balance Sheet date have not been changed.

5 Instalments in respect of Term Loan due in next 12 months are Rs.11,565,571/- (Rs.681,763,432)

6 As the company is not a manufacturing company, the clauses 3(ii)(a) and (b) of Part II of Schedule VI of the Companies Act, relating to quantitative information do not apply.

7 The quantitative information in respect of trading activity of the company is given in annexed statement.

8 Current Liabilities includes dues to SSI units amounting to Rs. 1,475,880/- (Rs. 52,982/-). There were no overdues to such units exceeding 30 days. This information has been compiled in respect of parties to the extent to which they could be identified as small scale industrial undertakings on the basis of information available with the Company.

9 Related Party disclosures have been set out in a separate statement annexed to this schedule. The related parties as defined by AS 18 "Related Party Disclosure" issued by The Institute of Chartered Accountants of India, in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key managerial persons taken on record by the Board.

10 Particulars of the Contract Revenue as required in AS 7 “Accounting for Construction Contracts" issued by the Institute of Chartered Accountants of India, in respect of which disclosures have been made are given in the Annexed Statement.

11 Particulars of the Joint Ventures undertaken by the Company as required in AS 27 "Financial Reporting of Interest in Joint Venture", in respect of which disclosures have been made are given in the Annexed Statement.

12 Joint Development : The Company has entered into arrangement for joint development of properties with the land owners and under such arrangements paid Rs.280,732,610/- (Rs.86,103,961/-) as advances/deposits to the joint venture partners out of which an amount of Rs.25,000,000/-(Nil) being non refundable deposit is debited to the cost of land and the balance Rs.255,732,610/- (Rs.86,103,961/-) is shown as advance/deposit under the head Loans and Advances. As per such Agreements the company has to work out the sharing of joint venture revenue on the basis of sale proceeds at the time of receipts of such proceeds of the developed area, in other words, no amount is payable if there is no sale. There is no event of any loss by the Company or by the vendor, except to the extent of non refundable amount of Rs.25,000,000/- which has been accordingly debited to the land cost. In view of the nature of these agreements, as a policy, the company will reduce the proceeds and account for the profit in the respective year to the extent of sale by the company. All monies received from the buyer and paid to the vendor earlier to this event will be considered advances received and paid, respectively.

13 The Companys significant leasing arrangements are in respect of operating leases for commercial premises. The particulars of such leases are given in the Annexed Statement.

14 The particulars of investments made/sold during the year are given in the Annexed Statement.

15 Amalgamation of Clover Resort Pvt. Ltd. with Vascon Engineers Ltd. Pursuant to the Scheme of Amalagamation approved by the shareholders of the Company and the Honourable High Court of Judicature at Bombay, vide its order dated January 19, 2007, all assets and liabilities and reserves of erstwhile Clover Resorts Private Limited wholly owned subsidiary of the Company having been vested in the Company from April 1, 2006 as per scheme of amalgamation sanctioned by the High Court, have been incorporated in these accounts.

Salient Features of the Amalgamation Scheme are detailed below:

a) Name and general nature of business of Transferor Company: Clover Resorts Pvt. Ltd.

b) Appointed date of amalgamation for accounting purpose: April 1, 2006

c) Method of accounting used to reflect the amalgamation: Purchase Method

d) Particulars of Scheme sanctioned by the statue:

I) With effect from April 1, 2006 the entire business and undertaking including all assets and liabilities of Clover Resort Pvt. Ltd. and rights and obligations, all books of account and documents and records relaing thereto, are tranferred to the Transferee Company pursuant to Section 394 (2) of the Companies Act,1956; and

ii) With effect from the appointed date, all proceedings, if any, pending by or against Clover Resort Pvt. Ltd. be continued by or against the Transferee Company; and consequent to giving effect to this scheme, the Companys investment in the share capital of Clover Resort has been cancelled against Share Capital of Clover Resort Pvt. Ltd. No Goodwill or Capital Reserve has arisen on account of this amalgamation.

16 The particulars of employee benefits as required under AS 15 "Accounting for Employee Benefits" are given in the Annexed Statement. Although the application of this standard is not mandatory for this accounting period, the Company has chosen voluntarily to apply the same.

17 Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances, Rs.2,157,686/- ( previous year Rs. Nil)

18 During the year, the Company has changed the method of providing leave encashment by adopting Actuarial Valuation as against estimated method in accordance with the AS 15 (Revised) - "Employee Benefits", although the same is not mandatory. Had the Company continued to follow the method of such provision as per previous year, the profit would have been higher by Rs. 175,335/-(net of deferred tax gain) and correspodingly reserves would have been higher by Rs. 175,335/-

19 Value of development as on 31st March, 2006, includes cost of 10,000 shares of Clover Resorts Private Limited acquired by the Company for a sum of Rs. 686,643,040/- (net of deferred tax gain) with an object of acquiring the underlying asset of the Company for development of a project. Pursuant to the order of the Bombay High Court, the said Company has been merged with our Company.

20 Other additional information required by schedule VI part II of the Companies Act, 1956 are not applicable to the company for the year.

21 Balance Sheet Abstract and Companys General Business Profile, in form prescribed in part III of Scheduled VI of the Companies Act, 1956, as amended by notification GSR No. 388(E) (F.No. 3/24/94-CLB) Dated 15/05/95 is attached herewith as Annexure.

22 Corresponding figures of the previous year have been regrouped, renamed or rearranged wherever necessary.

Sr. No. Particulars Name of the Party

1 Joint Venture Weikfield IT Citi Info Park

Phoenix Ventures Zenith Ventures Zircon Ventures Vascon Hadapsar Ventures

2 Key Management Personnel Mr. R. Vasudevan

3 Relatives of Key Management Personnel Mrs. Lalitha Vasudevan

Mr. N. R. Moorthy Mrs. Thangam Moorthy Mrs. Lalitha Sundarrajan Mr. Siddarth Vasudevan

4 Associates Marigold Premises Pvt. Ltd.

Just Homes (India) Pvt. Ltd. Viorica Properties Pvt. Ltd. Angelica Properties Pvt. Ltd. Syringa Properties Pvt. Ltd. Mumbai Estate Pvt. Ltd.

5 Enterprise where key management Iris Properties Pvt. Ltd. personnel and their relatives exercise One Stop Shop (I) Pvt. Ltd. significant influence Flora Premises Pvt. Ltd.

Vastech Consultants Pvt. Ltd. Core Fitness Pvt. Ltd.

6 Subsidiary companies Marvel Housing Pvt. Ltd.

Vascon Dwellings Pvt. Ltd. Cosmos Premises Pvt. Ltd. IT Citi Info Park Pvt. Ltd. Wind Flower Premises Pvt. Ltd. Rose Premises Pvt. Ltd. Calypso Premises Pvt. Ltd. Floriana Properties Pvt. Ltd.