Notes to Accounts of VSF Projects Ltd.

Mar 31, 2024

7) Provisions, contingent liabilities and contingent assets

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

Contingent liabilities

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

Contingent assets

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

8) Revenue Recognition

Revenue from Construction Contracts

Revenue from Construction contracts is measured at fair value of the consideration received or receivable.

Revenue from construction contracts is recognized only to the extent of contract costs incurred that is probable will be recoverable.

Revenue from construction contracts is recognized only when the revenue can be estimated reliably and contract revenue and contract costs associates with the construction contract is recognized by reference to the stage of completion of the contract activity at the end of the reporting period.

Prior period figures have been regrouped/reclassified wherever necessary for comparative purposes

9) Tax Expenses

Tax expense consists of current and deferred tax.

Income Tax

Income tax expense is recognized in the statement of profit and loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred Tax

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

10) Earnings Per Share

The Company presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

11) Trade receivables

Trade receivables are initially recognized at fair value and subsequently measured at amortized cost using effective interest method, less provision for impairment.

12) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured and are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

13) Recent Accounting Prounncements:

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Group.

For NSVR &ASSOCIATES LLP.,

Chartered Accountants FRN No.008801S/S200060

P. Venkata Ratnam

Partner

M.no:230675

UDIN: 24230675BKBIDI3208

Place: Hyderabad Date:16-05-2024

2.26 Property, Plant and Equipment:

The company has elected revaluation model as its accounting policy for accounting it''s property, plant and equipment.

After recognition as an asset, an item of property, plant and equipment whose fair value can be measured reliably is carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations is made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period.

If an asset''s carrying amount is increased as a result of a revaluation, the increase should be recognised in other comprehensive income and accumulated in equity under the heading of revaluation surplus

The company has carried out revaluation on Land and Building, However after the revaluation the land has been settled against liability to creditors. Hence, the balance amount of property

plant and equipment is continued to be considered carrying amount of property, plant and equipment for the end of the reporting period.

2.27 Investments:

Ind AS 109 requires an entity to measure the investment in equity shares at fair value and recognize the changes in fair value through profit and loss account. However, it also gives an irrevocable option to an entity to recognise the aforesaid changes in fair value through other comprehensive income ("OCI").Accordingly the company has no Investments during the year as there is material uncertainty in respect ability to continue as going concern.

2.28 Financial Risk Management:

The Company''s activities expose it to a variety of financial risks, including credit risk, liquidity risk and Market risk. The Company''s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Board of Directors, risk management committee and the Audit Committee is responsible for overseeing the Company''s risk assessment and management policies and processes.

Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investment securities. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables and investments.

Trade Receivables-The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

Financial assets that are neither past due nor impaired - None of the Company''s cash equivalents, including deposits with banks, were past due or impaired as at 31 March 2024.

Of the total trade and other receivables, Nil as at 31 March 2024 and 0.56 as at 31 March 2023 has been impaired.

The Company''s credit period for customers generally ranges from 60-90 days. The ageing of trade receivables that are past due but not impaired is given below:

Other than trade receivables, the Company has no significant class of financial assets that is past due but not impaired.

On account of adoption of Ind AS 109, the Company uses Expected Credit Loss (ECL) model for assessing the impairment loss. For this purpose, it is weighted average of credit losses with the respective risks of default occurring as weights. The credit loss is the difference between all contractual cash flows that are due to an entity as per the contract and all the contractual cash flows that the entity expects to receive, discounted to the effective interest rate

Reconciliation of allowance for credit losses

The details of changes in allowance for credit losses during the year ended 31 March 2024 and 31 March 2023 are as follows:

Liquidity Risks:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company''s reputation.

As of 31 March 2024, the Company had working capital (current assets less current liabilities) of Rs. (259.46) including cash and cash equivalents of Rs 337.48 lakhs. As of 31 March 2023, the Company had working capital of Rs. (2123.82), including cash and cash equivalents of Rs. 0.61 lakhs.

CAPITAL MANAGEMENT

The Company''s objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long term and other strategic investment plans. The funding requirement is met through equity, borrowings and operating cash flows required.

2.29) Details of dues to Micro, Small and Medium enterprises as defined under the MSMED Act, 2006:

There is no information available to comment on amounts outstanding to any Micro, Small and Medium scale enterprises.

2.30) The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during financial year.

2.31) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) 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

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

2.32) The Company have not any such transaction which is 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.

2.33) No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended

Schedule III:

(a) Crypto Currency or Virtual Currency

(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and Rules made thereunder

(c) Registration of charges or satisfaction with Registrar of Companies

(d) Relating to borrowed funds:

i. Willful defaulter

ii. Utilization of borrowed funds & share premium

iii. Borrowings obtained on the basis of security of current assets

iv. Discrepancy in utilization of borrowings

v. Current maturities of long term liabilities

2.34) The Company is Constructing a Free Trade & Warehousing Zone (FTWZ) which involves a Total Project Cost of Rs. 6700.74Million (670.074Crs). The Company is planning to invest in a phased manner. The Company is planning to invest Rs. 130Crs in first phase which consists of Promotors Contribution of Rs. 51Cr and Debt of Rs. 83Crs. The Company has invested Rs. 20,86,99,891 till 31-03-2024 which is disclosed in balance sheet as Capital Work in Progress.

2.35) The Previous year''s figures have been regrouped and recast wherever necessary to bring them in with the current year''s figures.

For NSVR &ASSOCIATES LLP For and on behalf of

Chartered Accountants VSF PROJECTS LIMITED

(FRN No.008801S/S200060)

Sd/-

BN MURTHY

Sd/- Managing Director

P. Venkata Ratnam DIN:00073068

Partner

M.no:230675

UDIN: 24230675BKBIDI3208 Sd/-

LAKSHMI NARASIMHA BOBBA CHOWDARY

Place: Hyderabad Whole Time Director & CFO

Date: 16-05-2024. DIN: 02381545

Sd/-

Nandigam Himabindu

Company Secretary

---

Mar 31, 2023

7) Provisions, contingent liabilities and contingent assets

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

Contingent liabilities

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

Contingent assets

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

8) Revenue Recognition

Revenue from Construction Contracts

Revenue from Construction contracts is measured at fair value of the consideration received or receivable.

Revenue from construction contracts is recognized only to the extent of contract costs incurred that is probable will be recoverable.

Revenue from construction contracts is recognized only when the revenue can be estimated reliably and contract revenue and contract costs associates with the construction contract is recognized by reference to the stage of completion of the contract activity at the end of the reporting period.

Prior period figures have been regrouped/reclassified wherever necessary for comparative purposes

9) Tax Expenses

Tax expense consists of current and deferred tax.

Income Tax

Income tax expense is recognized in the statement of profit and loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred Tax

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax

liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

10) Earnings Per Share

The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

11) Trade receivables

Trade receivables are initially recognized at fair value and subsequently measured at amortized cost using effective interest method, less provision for impairment.

12) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured and are presented as current liabilities unless payment is not due within twelve months after

the reporting period. They are recognized initially at fair value and subsequently

measured at amortized cost using the effective interest method.

13) Recent Accounting Prounncements:

There is no such notification which would have been applicable from 1^st April 2022.

For NSVR &ASSOCIATES LLP.,

Chartered Accountants (FRN No.008801S/S200060)

Sd/-

P.Venkata Ratnam

Partner

M.no:230675

UDIN: 23230675BGW GLZ8751

Place: Hyderabad Date: 30-05-2023

In accordance with the provisions of Ind AS 24 “Related Party Disclosures” and the Companies Act, 2013, Company’s Directors, members of the Company’s Management Council and Company Secretary are considered as Key Management Personnel. List of Key Management Personnel of the Company is as below:

• Sri B N Murthy - Managing Director

• Smt. B. Vijaya Lakshmi - Whole time Director

• Sri Ram Shetty Srinivasa Rao-Director

• Ramesh Babu Nemani-Director

• Reshma Kiranmayee Pulapa-Director

• Sri. Lakshmi Narasimha Chowdary Bobba - Director

• Sri. Rahul patibandla - Independent Director

The Company concluded that there is only one operating segment i.e, Construction and Infrastructure development and aqua culture .Hence, the same becomes reportable segment for the Company. Accordingly, the Company has only one operating and reportable segment, the disclosure requirements specified in paragraphs 22 to 30 are not applicable.

2.25 Property, Plant and Equipment:

The company has elected revaluation model as its accounting policy for accounting it’s property, plant and equipment.

After recognition as an asset, an item of property, plant and equipment whose fair value can be measured reliably is carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations is made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period.

If an asset’s carrying amount is increased as a result of a revaluation, the increase should be recognized in other comprehensive income and accumulated in equity under the heading of revaluation surplus

However, the company has not carried out any revaluation of it’s items of property, plant and equipment and hence, the previous balance amount of property plant and equipment is continued to be considered carrying amount of property, plant and equipment for the end of the reporting period.

2.26 Investments:

Ind AS 109 requires an entity to measure the investment in equity shares at fair value and recognize the changes in fair value through profit and loss account. However, it also gives an irrevocable option to an entity to recognise the aforesaid changes in fair value through other comprehensive income (“OCI”).Accordingly the company has no Investments during the year as there is material uncertainty in respect ability to continue as going concern.

2.27 Financial Risk Management:

The Company’s activities expose it to a variety of financial risks, including credit risk, liquidity risk and Market risk. The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Board of Directors, risk management committee and the Audit Committee is responsible for overseeing the Company’s risk assessment and management policies and processes.

Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables and investments.

Trade Receivables-The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

Financial assets that are neither past due nor impaired - None of the Company’s cash equivalents, including deposits with banks, were past due or impaired as at 31 March 2023.

Of the total trade and other receivables, 0.56 as at 31 March 2023 and Nil as at 31 March 2022 has been impaired.

The Company’s credit period for customers generally ranges from 60-90 days. The ageing of trade receivables that are past due but not impaired is given below:

As on 31-03-2023

Liquidity Risks:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.

The Company’s objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long term and other strategic investment plans. The funding requirement is met through equity, borrowings and operating cash flows required.

2.30) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

2.31) The Company have not any such transaction which is 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.

2.32) No transactions to report against the following disclosure requirements as notified by MCApursuant to amended Schedule III:

(a) Crypto Currency or Virtual Currency

(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and

Rules made thereunder

(c) Registration of charges or satisfaction with Registrar of Companies

(d) Relating to borrowed funds:

i. Willful defaulter

ii. Utilization of borrowed funds & share premium

iii. Borrowings obtained on the basis of security of current assets

iv. Discrepancy in utilisation of borrowings

v. Current maturities of long term liabilities

2.33) The Company is Constructing a Free Trade & Warehousing Zone (FTWZ) which involves a Total Project Cost of Rs. 6700.74Million (670.074Crs). The Company is planning to invest in a phased manner. The Company is planning to invest Rs. 130Crs in first phase which consists of Promotors Contribution of Rs. 51Cr and Debt of Rs. 83Crs. The Company has invested Rs. 1,58,06,771 till 31-03-2023 which is disclosed in balance sheet as Capital Work in Progress.

2.34) The Previous year’s figures have been regrouped and recast wherever necessary to bring them in with the current year’s figures.

For NSVR &ASSOCIATES LLP.,

Chartered Accountants (FRN No.008801S/S200060)

P.Venkata Ratnam

Partner

M.no:230675

UDIN: 23230675BGW GLZ8751 Place: Hyderabad Date: 30-05-2023

---

Mar 31, 2014

1. Terms attached to equity shares:

The company has one class of equity shares having a par value of Rs.10/- per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholdings, The legal title in respect of farm land to the extent of 30.84 acres is yet to be registered in favour of the company.

NOTE NO.2

The company has given land on lease an extent of 175 Acres situated at Ankulapatur Village, Chillakur Mandal, SPSR Nellore District, Andhra Pradesh for 30 years to its subsidiary company viz., VSF Energy Projects Private Limited. The land lease amount is fixed at Rs.25.50 Crores for 30 years. The company got allotted shares in its subsidiary for the said lease amount. The Land lease will be apportioned over a period of 30 years in the books of account of the company.

NOTE NO.3

Particulars of Employees required in pursuant to the Provisions of Sec. 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

NOTE NO.4

There are no separate reportable segments (business and/or geographical) in accordance with the requirements of Accounting Standard 17 - ''Segment Reporting'', notified in the companies (Accounting Standards) Rules 2006.

NOTE NO.5

Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2014. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

NOTE NO.6

Balances of Sundry Debtors, Advances and Sundry Creditors are subject to confirmation with the respective parties.

NOTE NO.7

Taxes on Income:

(a) Provision has been made for tax as per the normal provisions of the Income Tax Act, 1961.

(b) In compliance with the Accounting Standard AS 22 Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India, the company has recognized Rs.57,617/- towards deferred tax asset in the year 2013-14. The major components of deferred tax asset / liability are on account of timing differences in depreciation, carried forward of losses and Minimum alternate tax.

NOTE NO.8

Previous year figures have been regrouped wherever if thought necessary in conformity with the current year groupings. Paise have been rounded off to the nearest rupee.

Notes to the financial statements, Cash Flow Statement and statement on accounting policies form an integral part of the balance sheet and profit and loss statement.

---

Mar 31, 2013

NOTE NO. 1

The legal title in respect of farm land to the extent of 30.84 acres is yet to be registered in favour of the company.

NOTE NO. 2

Contingent Liabilities not provided for in respect:

Claims not acknowledged as debts in respect of direct tax matters in appeals - Rs. 179.74 lakhs

NOTE NO. 3

Particulars of Employees required in pursuant to the Provisions of Sec. 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

NOTE NO. 4

There are no separate reportable segments (business and/or geographical) in accordance with the requirements of Accounting Standard 17 - ''Segment Reporting'', notified in the companies (Accounting Standards) Rules 2006.

NOTE NO. 5

Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

NOTE NO. 6

Balances of Sundry Debtors, Advances and Sundry Creditors are subject to confirmation with the respective parties.

NOTE NO. 7

Taxes on Income:

(a) Provision has been made for tax as per the normal provisions of the Income Tax Act, 1961.

(b) In compliance with the Accounting Standard AS 22 Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India, the company has provided Rs. 15,50,188/ - towards deferred tax liability in the year 2012-13. The major components of deferred tax asset / liability are on account of timing differences in depreciation, carried forward of losses and Minimum alternate tax.

NOTE NO. 8

Previous year figures have been regrouped wherever if thought necessary in conformity with the current year groupings. Paise have been rounded off to the nearest rupee.

Notes to the financial statements, Cash Flow Statement and statement on accounting policies form an integral part of the balance sheet and profit and loss statement.

---

Mar 31, 2012

NOTE NO. 1

The legal title in respect of farm land to the extent of 30.84 acres is yet to be registered in favour of the company.

NOTE NO. 2 Contingent Liabilities not provided for in respect:

Claims not acknowledged as debts in respect of direct tax matters in appeals - Rs.179.74 lakhs

NOTE NO. 3

Particulars of Employees required in pursuant to the Provisions of Sec. 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

NOTE NO. 4

There are no separate reportable segments (business and/or geographical) in accordance with the requirements of Accounting Standard 17 - Segment Reporting', notified in the companies (Accounting Standards) Rules 2006.

NOTE NO. 5 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

NOTE NO. 6

Balances of Sundry Debtors, Advances and Sundry Creditors are subject to confirmation with the respective parties.

NOTE NO. 7

Taxes on Income:

(a) Provision has been made for tax as per the normal provisions of the Income Tax Act, 1961.

(b) In compliance with the Accounting Standard AS 22 Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India, the company has provided Rs.15,71,779/- towards deferred tax liability in the year 2011-12. The major components of deferred tax asset / liability are on account of timing differences in depreciation, carried forward of losses and Minimum alternate tax.

NOTE NO. 8

These financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956. Previous year figures have been regrouped wherever if thought necessary in conformity with the current year groupings. Paise have been rounded off to the nearest rupee.

Notes to the financial statements, Cash Flow Statement and statement on accounting policies form an integral part of the balance sheet and profit and loss statement.

---

Mar 31, 2011

1. Contingent Liabilities : NIL

2. Subsidiary Company:

The company has got approval for setting up of thermal power project at Nellore District. In this regard, the company has incorporated the subsidiary company "VSF Energy Projects Private Limited" on 7th March, 2011.

3. Particulars of Employees required in pursuant to the Provisions of Sec. 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

4. There are no separate reportable segments (business and/or geographical) in accordance with the requirements of Accounting Standard 17 – ‘Segment Reporting', notified in the companies (Accounting Standards) Rules 2006.

5. Consolidated Financial Statements: The subsidiary "VSF Energy Projects Private Limited" has incorporated on 7th March, 2011. The first year accounts of the subsidiary company will be closed by 31st March, 2012, therefore the consolidation of financial statements for the year ended 31st March, 2011 is not applicable.

6. Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

7. Balances of Sundry Debtors, Advances and Sundry Creditors are subject to confirmation with the respective parties.

8. Transactions with the Related Parties pursuant to Accounting Standard 18:

i. List of Related Parties

Key Management Personnel : Sri. B.N.Murthy,

Managing Director

Whole-Time Director B. Vijaya Lakshmi

ii. Transactions with Related Parties

Remuneration to Managing Director Rs. 12,00,000/-

Remuneration to Whole-Time Director Rs. 4,20,000/-

iii. Balance as on 31st March, 2011 Rs. 1,79,109/-

9. Taxes on Income:

(a) Provision has been made for tax as per sec. 115JB.

(b) In compliance with the Accounting Standard AS 22 Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India, the company has provided Rs.13,83,500/- to- wards deferred tax liability in the year 2010-11. The major components of deferred tax asset / liability are on account of timing differences in depreciation, carried forward of losses and Mini- mum alternate tax.

10. Paise have been rounded off to the nearest rupee.

11. Previous year figures have been regrouped wherever necessary.

12. Additional information pursuant to Provisions of Part II of Schedule – VI of the Companies Act, 1956 is not applicable to this company since the company is involved in contract work activities and farm is on lease.

Notes, Schedules, Cash Flow Statement and statement on accounting policies form an integral part of the balance sheet and profit and loss account.

---

Mar 31, 2010

1. Contingent Liabilities not provided for in respect:

Claims not acknowledged as debts in respect of direct tax matters in appeals - Rs.179.74 lakhs

2. Transactions with the Related Parties pursuant to Accounting Standard 18:

i. List of Related Parties

Key Management Personnel Sri. B.N.Murthy,

Managing Director ii. Transactions with Related Parties

Remuneration to Managing Director Rs. 4,80,000/-

iii. Balance as on 31st March, 2010 Rs.Nil

3. Taxes on Income:

(a) Provision has been made for tax as per sec. 115JB.

(b) In compliance with the Accounting Standard AS 22 Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India, the company has provided Rs.13,86,581/- towards deferred tax liability in the year 2009-10. The major compo- nents of deferred tax asset / liability are on account of timing differences in deprecia- tion, carried forward of losses and Minimum alternate tax.

4. Paise have been rounded off to the nearest rupee.

5. Previous year figures have been regrouped wherever necessary.

6. Additional information pursuant to Provisions of Part II of Schedule - VI of the Companies Act, 1956 is not applicable to this company since the company is involved in contract work activities and farm is on lease.

---

Mar 31, 2009

1. The legal title in respect of farm land to the extent of 89.72 acres valued at Rs.28,43,520/- is yet to be registered in favour of the company.

2. Contingent Liability: Disputed Income Tax Liability to the extent of Rs.1,79,73,617/-.

3. Particulars of Employees rec ired in pursuant to the Provisions of Sec. 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975-Nil.

4. Segment reporting as per AS 17 is not applicable to this company.

5. Disclosure under Micro, Small an-1 Medium Enterprises Development Act, 236 There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31,2009. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

6. Taxes on Income:

(a) Provision has been made for tax as per sec. 115JB.

(b) In compliance with the Accounting Standard AS 22 Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India, the company has recognised Rs.14,54,850/- towards deferred tax asset in the year 2008-09. The major components of deferred tax asset / liability are on account of timing differences in depreciation and carried forward of losses.

7. As per the Honble Andhra Pradesh High Court order dated 11.11.2009 vide CP No.159 of 2009, the companys share capital of Rs.4,30,71,000/- divided into 43,07,100 equity shares of Rs.10/- each reduced to Rs.2,15,35,500/- divided into 21,53,550 equity shares of Rs.10/- each and such reduction is effected by cancelling the equity share capital of Rs.2,15,35,500/ - which have been lost or unrepresented by available assets. The effect of capital reduction is adjusted in the accumulated losses of the company to the tune of Rs.2,15,35,500/-.

8. Paise have been rounded off to the nearest rupee.

9. Previous year figures are not comparable with the current year figures as the company diversified its activities into contract works during the year Previous year figures have been regrouped wherever necessary.

10. Additional information pursuant to Provisions of Part II of Schedule - VI of the Companies Act, 1956 is not applicable to this company since the company is involved in contract work activities and farm is on lease.

Notes, Schedules, Cash Flow Statement and statement on accounting policies form an integral part of the balance sheet and profit and loss account.